ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of October, 1997, by and Graver,
Bokhof, Xxxxxxx & Xxxxxxxx, an Illinois limited partnership (the "Adviser"), and
Sunstone Financial Group, Inc., a Wisconsin corporation ("Sunstone").
WHEREAS, Universal Capital Investment Trust, a Massachusetts business trust
(the "Trust") is an open-end investment company registered under the Investment
Company Act of 1940, as amended (the "Act") currently consisting of one
investment portfolio: the Universal Capital Growth Fund (the "Fund");
WHEREAS, pursuant to an Investment Advisory Agreement, the Adviser serves
as the manager and investment adviser for the Fund;
WHEREAS, pursuant to the Investment Advisory Agreement, the Adviser, at its
own expense, furnishes the following services and facilities to the Trust: The
Adviser (i) furnishes continuously an investment program of the Fund, (ii)
determines (subject to the overall supervision and review of the Board of
Trustees of the Trust (the "Trustees")) what investments shall be purchased,
held, sold or exchanged by the Fund and what portion, if any, of the assets of
the Fund shall be held uninvested, and (iii) makes changes on behalf of the
Trust in the investments of the Fund. The Adviser also manages, supervises, and
conducts the other affairs and business of the Trust and the Fund and matters
incidental thereto, subject always to the control of the Trustees and to the
provisions of the Declaration of Trust and Bylaws and the Act. The Adviser
furnishes the Trust office space in the offices of the Adviser, or in such other
place or places as may be agreed upon from time to time, and all necessary
office facilities, simple business equipment, supplies, utilities, and telephone
service for managing the affairs and investments of the Trust. These services
are exclusive of the necessary services and records of any dividend disbursing
agent, transfer agent, registrar, custodian or fund accounting agent; and
WHEREAS, the Adviser and Sunstone desire to enter into an agreement
pursuant to which Sunstone shall provide on behalf of the Adviser certain
administration services for the Fund.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. APPOINTMENT
The Adviser hereby appoints Sunstone as administrator for the Fund for the
period and on the terms set forth in this Agreement. Sunstone accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
1
2. SERVICES AS ADMINISTRATOR
(a) Subject to the direction and control of the Adviser and utilizing
information provided or caused to be provided by the Adviser and its agents,
Sunstone will: (1) provide office space, facilities, equipment and personnel to
carry out its services hereunder; (2) compile data for, prepare and file with
respect to the Fund Notices to the Securities and Exchange Commission (the
"Commission") required pursuant to Rule 24f-2 under the Act and Semi-Annual
Reports on Form N-SAR; (3) prepare for execution by the Trust and file all
federal income and excise tax returns and state income tax returns (and such
other required tax filings as may be agreed to by the parties) other than those
required to be made by the Trust's custodian or transfer agent, subject to
review and approval of the Trust and the Trust's independent accountants; (4)
prepare the financial statements for the Annual and Semi-Annual Reports required
pursuant to Section 30(d) under the Act; (5) prepare, with the assistance of the
Trust's legal counsel, the Registration Statement for the Trust (on Form N-1A or
any replacement therefor) and any amendments thereto; (6) determine and
periodically monitor the Fund's expense accruals and cause all appropriate
expenses to be paid from Trust assets on proper authorization from the Trust;
(7) monitor the amount of the Trust's fidelity bond required by the Act and make
the necessary Commission filings related thereto; (8) from time to time as
Sunstone deems appropriate, check the Fund's compliance with the policies and
limitations of the Fund relating to the portfolio investments as set forth in
the Prospectus and Statement of Additional Information and monitor the Fund's
status as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (but these functions shall not relieve the
Trust's investment adviser and sub-advisers, if any, of their primary day-to-day
responsibility for assuring such compliance); (9) maintain, and/or coordinate
with the other service providers the maintenance of, the accounts, books and
other documents required pursuant to Rule 31a-1(a) and (b) under the Act; (10)
prepare and/or file all documents to be filed with states to register and
maintain the Fund's securities registration, including, without limitation,
sales reports, updated prospectuses, Form U-1s; (11) develop with legal counsel
and the secretary of the Trust, and the Adviser, an agenda for each board
meeting and, if requested by the Trustees, attend board meetings and prepare
minutes; (12) coordinate the preparation of other matters required to be
reported to the board, including, without limitation, details of Rule 12b-1
payments, code of ethics compliance and broker commissions; (13) prepare Form
1099s for trustees and other fund vendors; (14) calculate dividend and capital
gains distributions, subject to review and approval by the Trust and its
independent accountants; and (15) generally assist in the Trust's administrative
operations as mutually agreed to by the parties. The duties of Sunstone shall be
confined to those expressly set forth herein, and no implied duties are assumed
by or may be asserted against Sunstone hereunder.
(b) The Adviser shall cause the officers, adviser, legal counsel,
independent accountants and custodian for the Fund to cooperate with Sunstone
and to provide Sunstone, upon request, with such information, documents and
advice relating to the Fund and the Trust as is within the possession or
knowledge of such persons, in order to enable Sunstone to perform its duties
hereunder. In connection with its duties hereunder, Sunstone shall be entitled
to rely, and shall be held harmless by the Adviser when acting in reliance, upon
the instruction, advice, information or any documents relating to the Fund
provided to Sunstone by a representative of the Adviser or the Trust or by any
of the aforementioned persons. Fees charged by such persons shall be an expense
of the Adviser. Sunstone shall be entitled to rely on any document which it
reasonably believes to be genuine and to
2
have been signed or presented by the proper party. Sunstone shall not be held
to have notice of any change of authority of any officer, agent, representative
or employee of the Adviser or the Trust until receipt of written notice thereof
from the Adviser or the Trust.
(c) In compliance with the requirements of Rule 31a-3 under the Act,
Sunstone hereby agrees that all records which it maintains for the Trust are the
property of the Trust and further agrees to surrender promptly to the Trust any
of such records upon the Trust's request. Subject to the terms of Section 6,
Sunstone further agrees to preserve for the periods prescribed by Rule 31a-2
under the Act the records described in (a) above which are maintained by
Sunstone on behalf of the Trust.
(d) The Trust's Board of Trustees and the Adviser have and retain primary
responsibility for all compliance matters relating to the Fund including but not
limited to compliance with the Act, the Internal Revenue Code of 1986, as
amended, and the policies and limitations of the Fund relating to the portfolio
investments as set forth in the Trust's Registration Statement, as may be
amended from time to time.
3. FEES; DELEGATION; EXPENSES
(a) In consideration of the services rendered pursuant to this Agreement,
the Adviser will pay Sunstone a fee, computed daily and payable monthly, as
provided in Schedule A hereto, plus out-of-pocket expenses. Out-of-pocket
expenses include, but are not limited to, travel, lodging and meals in
connection with travel on behalf of the Adviser or the Trust, programming and
related expenses (previously incurred or to be incurred by Sunstone) in
connection with providing electronic transmission of data between Sunstone and
the Fund's other service providers, brokers, dealers and depositories, fees and
expenses of pricing services, and photocopying, postage and overnight delivery
expenses.
(b) For the purpose of determining fees payable to Sunstone, net asset
value shall be computed in accordance with the Trust's Prospectuses and
resolutions of the Trust's Board of Trustees. The fee for the period from the
day of the month this Agreement is entered into until the end of that month
shall be pro-rated according to the proportion which such period bears to the
full monthly period. Upon any termination of this Agreement before the end of
any month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. Should the Trust be
liquidated, merged with or acquired by another fund or investment company, any
accrued fees shall be immediately payable.
3
4. PROPRIETARY AND CONFIDENTIAL INFORMATION
Sunstone agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records relative
to the Fund and prior, present or potential shareholders of the Trust (and
clients of said shareholders), and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Adviser, which
approval may not be withheld where Sunstone may be exposed to civil or criminal
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, when subject to governmental or regulatory audit
or investigation, or when so requested by the Trust or the Adviser. Records and
information which has become known to the public through no wrongful act of
Sunstone or any of its employees, agents or representatives shall not be subject
to this paragraph.
5. REPRESENTATIONS
The Adviser represents (i) that it is empowered under applicable laws, its
Partnership Agreement, and all other relevant documents and agreements, to enter
into and perform this Agreement, (ii) that all requisite proceedings have been
taken by it and the Trust to authorize it to enter into and perform this
Agreement.
6. LIMITATION OF LIABILITY
(a) Sunstone shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement. Furthermore, Sunstone shall not be liable for any action taken or
omitted to be taken in accordance with instructions received by Sunstone or from
an officer or representative of the Trust or the Adviser or any of those persons
identified in Section 2(b).
(b) Sunstone assumes no responsibility hereunder, and shall not be liable,
for any damage, loss of data, errors, delay or any other loss whatsoever caused
by events beyond its reasonable control. Sunstone will, however, take all
reasonable steps to minimize service interruptions for any period that such
interruption continues beyond Sunstone's control.
4
7. TERM
(a) This Agreement shall become effective as of the date hereof and,
unless terminated as provided herein, shall continue in effect until September
30, 1998. Thereafter, if not terminated as provided herein, this Agreement shall
continue automatically in for successive annual periods.
(b) This Agreement may be terminated without penalty (i) upon mutual
consent of the parties, or (ii) by either party upon not less than sixty (60)
days' written notice to the other party (which notice may be waived by the party
entitled to the notice). This Agreement shall also terminate immediately upon
the termination of the Investment Advisory Agreement between the Adviser and
the Trust. The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by a written instrument
signed by the parties. This Agreement shall not be assignable by either party
without the written consent of the other party except that Sunstone may assign
this Agreement to an affiliate with advance written notice to the Adviser.
(c) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement or the liquidation of the Trust, Sunstone shall deliver the
records of the Trust to the Adviser or person(s) designated by the Adviser and
thereafter the Adviser or its designee shall be solely responsible for
preserving the records for the periods required by all applicable laws, rules
and regulations. In addition, in the event of termination of this Agreement, or
the proposed liquidation or merger of the Trust, and the Adviser requests
Sunstone to provide services in connection therewith, Sunstone shall provide
such services and be entitled to such compensation as the parties may mutually
agree.
8. NON-EXCLUSIVITY
The services of Sunstone hereunder are not deemed to be exclusive.
Sunstone may render such services and any other services to others, including
other advisers, administrators and investment companies. The Adviser recognizes
that from time to time directors, officers and employees of Sunstone may serve
as trustees, directors, officers and employees of other entities (including
other investment companies), that such other entities may include the name of
Sunstone as part of their name and that Sunstone or its affiliates may enter
into administration or other agreements with such other entities.
9. GOVERNING LAW; INVALIDITY
This Agreement shall be governed by Wisconsin law. To the extent that the
applicable laws of the State of Wisconsin, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control,
and nothing herein shall be construed in a manner inconsistent with the Act or
any rule or order of the Commission thereunder. Any provision of this Agreement
which may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
5
10. NOTICES
Any notice required or to be permitted to be given by either party to the
other shall be in writing and shall be deemed to have been given when sent by
registered or certified mail, postage prepaid, return receipt requested, as
follows: Notice to Sunstone shall be sent to Sunstone Financial Group, Inc.,
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX, 00000, Attention Xxxxxx X.
Xxxxxxx, and notice to the Adviser shall be sent to Graver, Bokhof, Xxxxxxx &
Xxxxxxxx, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxxxx III.
11. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original agreement but such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
GRAVER, BOKHOF, XXXXXXX & XXXXXXXX
(the "Adviser")
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
President
SUNSTONE FINANCIAL GROUP, INC.
("Sunstone")
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
President
6
SCHEDULE A
TO THE
ADMINISTRATION AGREEMENT
BY AND BETWEEN
GRAVER, BOKHOF, XXXXXXX & XXXXXXXX
AND
SUNSTONE FINANCIAL GROUP, INC.
MINIMUM
NAME OF FUND AVERAGE NET ASSETS ANNUAL FEES ANNUAL
------------ ------------------ ----------- ------
--------------------------------------------------------------------------------------------
Universal Capital
Growth Fund Up to $50 Million 17.0 basis points ******
Over $50 Million to $100 Million 10.0 basis points
Over $100 Million 0.05 basis points
--------------------------------------------------------------------------------------------
The annual fees are subject to an annual minimum fee of $20,000 for the first
year of this Agreement, $30,000 for the second year of this Agreement, and
$45,000 for the third year of this Agreement and each year thereafter. The
minimum annual fee is subject to an automatic annual escalation of 5% beginning
at the end of the third year of this Agreement and each year thereafter.
Sunstone will notify the Adviser of each such escalation but no amendment of
this Schedule A shall be required. The Adviser shall pay/reimburse Sunstone's
out-of-pocket expenses as described in the Agreement. The foregoing fee schedule
assumes a single class of shares for the Fund. If additional investment
portfolios or classes are added, the terms, services and fees will be separately
negotiated.
7
