Exhibit 23(h)(5)
TRANSFER AGENCY AGREEMENT
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THIS TRANSFER AGENCY AGREEMENT is made as of the 9th day of January, 2001,
by and between The Oberweis Funds, a Massachusetts business trust (the "Trust"),
and Sunstone Financial Group, Inc., a Wisconsin corporation, its successors and
assigns ("Sunstone").
R E C I T A L S:
WHEREAS, the Trust is registered under the 1940 Act as an open-end
management investment company; and
WHEREAS, the Trust desires to retain Sunstone to render certain transfer
agency, shareholder servicing and dividend disbursement services, and Sunstone
is willing to render such services, all in accordance with the terms of this
Agreement.
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein 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:
ARTICLE I
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DEFINITIONS
In addition to any terms defined in the body of this Agreement, the
following capitalized terms shall have the meanings set forth hereinafter
whenever they appear in this Agreement:
1.01 1940 Act shall mean the Investment Company Act of 1940, as amended
from time to time.
1.02 Authorized Person shall mean any individual who is authorized to
provide Sunstone with Instructions and requests on behalf of the Trust, whose
name shall be certified to Sunstone from time to time pursuant to Section 7.01
of this Agreement.
1.03 Board of Trustees shall mean the Board of Trustees of the Trust.
1.04 Custodian shall mean the financial institution appointed as custodian
under the terms and conditions of the custody agreement between the financial
institution and the Trust, or its successor.
1.05 Declaration of Trust shall mean the Declaration of Trust or other
similar operational document of the Trust, as the case may be, as the same may
be amended from time to time.
1.06 Exchange Act shall mean the Securities Exchange Act of 1934, as
amended from time to time.
1.07 Fund shall mean each separate series of Shares offered by the Trust
representing interests in a separate portfolio of securities and other assets
for which the Trust has appointed Sunstone as transfer agent, shareholder
servicing and dividend disbursing agent under this Agreement.
1.08 Fund Business Day shall mean each day on which the New York Stock
Exchange, Inc. is open for trading.
1.09 Instructions shall mean an oral communication from an Authorized
Person or a written communication signed by an Authorized Person and actually
received by Sunstone. Instructions shall include manually executed originals,
telefacsimile transmissions of manually executed originals or electronic
communications.
1.10 Prospectus shall mean the current Prospectus and Statement of
Additional Information with respect to a Fund (including any applicable
supplement) actually received by Sunstone from the Trust with respect to which
the Trust has indicated a registration statement has become effective under the
Securities Act and the 1940 Act.
1.11 Securities Act shall mean the Securities Act of 1933, as amended from
time to time.
1.12 Shares shall mean such shares of beneficial interest, or class
thereof, of each respective Fund of the Trust as may be issued from time to
time.
1.13 Shareholder shall mean a record owner of Shares of each respective
Fund of the Trust.
ARTICLE II
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APPOINTMENT OF TRANSFER AGENT
2.01 Appointment. The Trust hereby appoints Sunstone as transfer agent
and shareholder servicing and dividend disbursing agent of all the Shares of the
Trust during the term of this Agreement with respect to each Fund listed on
Schedule A hereto, and any additional Fund the Trust and Sunstone may agree to
include on any amended Schedule A. Sunstone hereby accepts such appointment as
transfer agent and dividend disbursing agent and agrees to perform the duties
thereof as hereinafter set forth.
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2.02 Duties.
A. Sunstone shall perform the transfer agent and shareholder
servicing and dividend disbursement services described on Schedule B hereto and
such additional services as may be agreed to by the parties from time to time
and set forth in an amendment to Schedule B (collectively, the "Services").
Sunstone shall have no duties or responsibilities other than those specifically
set forth in this Agreement, and no covenant or obligation to carry out any
other duties or responsibilities shall be implied in this Agreement against
Sunstone. In the event Sunstone is asked to correct any action taken or
omission of any prior service provider, then Sunstone shall provide such
services and be entitled to such reasonable compensation as the parties may
mutually agree.
B. Sunstone may, in its discretion, appoint other parties to carry
out some or all of its responsibilities under this Agreement; provided, however,
that unless the Trust shall enter into a written agreement with any such party,
the party shall be the agent of Sunstone and not the agent of the Trust. In
such event, Sunstone shall be fully responsible for the acts or omissions of
such party and shall not be relieved of any of its responsibilities hereunder by
the appointment of such party.
2.03 Deliveries.
A. In connection with Sunstone's appointment as transfer agent and
shareholder servicing and dividend disbursing agent, the Trust shall deliver or
cause the following documents to be delivered to Sunstone:
(1) A copy of the Declaration of Trust and By-laws of the Trust and
all amendments thereto, certified by the Secretary of the Trust;
(2) A certificate signed by the President and Secretary of the Trust
specifying the number of authorized Shares and the number of such authorized
Shares issued and currently outstanding, if any, and the names and specimen
signatures of the officers of the Trust authorized to sign written stock
certificates;
(3) In the event the Trust issues Share certificates, specimen Share
certificates for each Fund in the form approved by the Board of Trustees (and
in a form compatible with Sunstone's operating system), together with a
certificate signed by the Secretary of the Trust as to such approval;
(4) A certified copy of the resolutions of the Board of Trustees of
the Trust appointing Sunstone as transfer agent and dividend disbursing agent
and authorizing the execution of this Transfer Agency Agreement on behalf of the
Trust;
(5) Copies of the Trust's Registration Statement, as amended to date,
and the most recently filed Post-Effective Amendment thereto, filed by the Trust
with the Securities and
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Exchange Commission under the Securities Act and the 1940 Act, together with any
applications filed in connection therewith;
(6) An opinion of counsel for the Trust with respect to the Trust's
organization and existence under the laws of its state of organization, the
validity of the authorized and outstanding Shares, whether such Shares are fully
paid and non-assessable and the status of such Shares under the Securities Act
and any other applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the Registration Statement
has become effective, or if exempt, the specific grounds therefor); and
(7) The certificate required by Section 7.01 of this Agreement,
signed by an officer of the Trust and designating the names of the Trust's
initial Authorized Persons.
B. The Trust agrees to deliver or to cause to be delivered to
Sunstone in Milwaukee, Wisconsin, at the Trust's expense, all of its Shareholder
account records in a format acceptable to Sunstone, as well as all other
documents, records and information that Sunstone may reasonably request in order
for Sunstone to perform the Services hereunder.
ARTICLE III
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COMPENSATION & EXPENSES
3.01 Compensation. As compensation for the performance of the Services,
the Trust agrees to pay Sunstone the fees set forth on Schedule C attached
hereto. The prices for the Services set forth on Schedule C shall be fixed
through the end of the Initial Term of the Agreement, as hereinafter defined.
The parties may amend Schedule C at any time to include fees for any additional
services requested by the Trust, or to add Funds for which Sunstone has been
retained. The Trust agrees to pay Sunstone's then current rate for any Services
added to, or any enhancements to existing Services set forth on, Schedule C,
after the execution of this Agreement. Sunstone shall present the Trust with a
revised Schedule C reflecting Sunstone's fees for the upcoming term at least one
hundred fifty (150) days prior to the end of the Initial Term and each
subsequent term of the Agreement.
3.02 Expenses. The Trust also agrees to promptly reimburse Sunstone for
all out-of-pocket expenses or disbursements incurred by Sunstone in connection
with the performance of Services under this Agreement. Out-of-pocket expense
shall include, but not be limited to, those items specified on Schedule C
hereto. If requested by Sunstone, out-of-pocket expenses are payable in
advance. Payment of postage expenses, if prepayment is requested, is due at
least one day prior to the anticipated mail date or the date on which Sunstone
is required to make such payment, whichever is earlier. In the event Sunstone
requests advance payment, Sunstone shall not be obligated to incur such expenses
or perform the related Service(s) until payment is received.
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3.03 Payment Procedures.
A. The Trust agrees to pay all amounts due hereunder within fifteen
days of receipt of the statement for such Services (the "Due Date"). Sunstone
shall xxxx Service fees monthly, and out-of-pocket expenses as incurred (unless
prepayment is requested by Sunstone). Sunstone may, with the prior approval of
the Trust, arrange to have various service providers submit invoices directly to
the Trust for payment of reimbursable out-of-pocket expenses.
B. The Trust is aware that its failure to remit to Sunstone all
amounts due on or before the Due Date will cause Sunstone to incur costs not
contemplated by this Agreement, including, but not limited to carrying,
processing and accounting charges. Accordingly, in the event that Sunstone does
not receive any amounts due hereunder by the Due Date, the Trust agrees to pay a
late charge on the overdue amount equal to one and one-half percent (1.5%) per
month or the maximum amount permitted by law, whichever is less. In addition,
the Trust shall pay Sunstone's reasonable attorney's fees and court costs if any
amounts due Sunstone are collected by or through an attorney. The parties
hereby agree that such late charge represents a fair and reasonable computation
of the costs incurred by reason of the Trust's late payment. Acceptance of such
late charge shall in no event constitute a waiver by Sunstone of the Trust's
default or prevent Sunstone from exercising any other rights and remedies
available to it.
Notwithstanding the above, in the event that any charges are disputed, the
Trust shall, on or before the Due Date, pay all undisputed amounts due hereunder
and notify Sunstone in writing of any disputed charges that it is disputing in
good faith. Payment for such disputed charges shall be due on or before the
close of the fifth (5th) business day after the day on which Sunstone provides
to the Fund documentation, which an objective observer would agree reasonably
supports the disputed charges.
3.04 Allocation of Risk. The Trust acknowledges that the fees charged by
Sunstone under this Agreement reflect the allocation of risk between the
parties, including the exclusion of remedies and limitations on liability in
Article VIII. Modifying the allocation of risk from what is stated herein would
affect the fees that Sunstone charges. Accordingly, in consideration of those
fees, the Trust agrees to the stated allocation of risk.
ARTICLE IV
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PROCESSING AND PROCEDURES
4.01 Issuance, Redemption and Transfer of Shares.
A. Sunstone agrees to accept purchase orders and redemption requests
with respect to the Shares of each Fund via postal mail, telephone or personal
delivery on each Fund Business Day in accordance with such Fund's Prospectus;
provided, however, that Sunstone shall only accept purchase orders from states
in which the Shares are qualified for sale, as indicated from time to time by
the Trust. Sunstone shall, as of the time at which the net asset value of each
Fund is computed on each Fund Business Day, issue to and redeem from the
accounts specified in a
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purchase order or redemption request in proper form and accepted by the Fund the
appropriate number of full and fractional Shares based on the net asset value
per Share of the respective Fund specified in an advice received on such Fund
Business Day from or on behalf of the Fund. Sunstone shall not be responsible
for the payment of any original issue or other taxes required to be paid by the
Trust in connection with the issuance of any Shares in accordance with this
Agreement. Sunstone shall not be required to issue any Shares after it has
received from an Authorized Person or from an appropriate federal or state
authority written notification that the sale of Shares has been suspended or
discontinued, and Sunstone shall be entitled to rely upon such written
notification. Payment for Shares shall be in the form of a check, wire
transfer, Automated Clearing House transfer or such other methods to which the
parties shall mutually agree.
B. Upon receipt of a redemption request and monies paid to it by the
Custodian in connection with a redemption of Shares, Sunstone shall cancel the
redeemed Shares and after making appropriate deduction for any withholding of
taxes required of it by applicable federal law, make payment in accordance with
the Fund's redemption and payment procedures described in the Prospectus.
C. Except as otherwise provided in this paragraph, Sunstone will
transfer or redeem Shares upon presentation to Sunstone of Share certificates,
if any, or instructions endorsed for exchange, transfer or redemption,
accompanied by such documents as Sunstone deems necessary to evidence the
authority of the person making such transfer or redemption. Sunstone reserves
the right to refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the stock certificate, if any, or instructions are valid and
genuine. For that purpose, it will require, unless otherwise instructed by an
Authorized Person or except as otherwise provided in this paragraph, a guarantee
of signature by an "Eligible Guarantor Institution" as that term is defined by
SEC Rule 17Ad-15. Sunstone also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or redemption is
legally authorized, and it shall incur no liability for the refusal, in good
faith, to make transfers or redemptions which Sunstone, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no reasonable
basis to any claims adverse to such transfer or redemption. Sunstone may, in
effecting transfers and redemptions of Shares, rely upon those provisions of the
Uniform Act for the Simplification of Fiduciary Security Transfers (or such
other statutes which protect it and the Trust in not requiring complete
fiduciary documentation) and shall not be responsible for any act done or
omitted by it in good faith in reliance upon such laws. Notwithstanding the
foregoing or any other provision contained in this Agreement to the contrary,
Sunstone shall be fully protected by each Fund in not requiring any instruments,
documents, assurances, endorsements or guarantees, including, without
limitation, any signature guarantees, in connection with a redemption, exchange
or transfer of Shares whenever Sunstone reasonably believes that requiring the
same would be inconsistent with the transfer and redemption procedures described
in the Prospectus.
D. Notwithstanding any provision contained in this Agreement to the
contrary, Sunstone shall not be required or expected to require, as a condition
to any transfer or redemption of any Shares pursuant to a computer tape or
electronic data transmission which Sunstone reasonably believes to be genuine
transfer or redemption requests, any documents to evidence the authority of
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the person requesting the transfer or redemption and/or the payment of any stock
transfer taxes, and shall be fully protected in acting in accordance with the
applicable provisions of this Article.
E. In connection with each purchase and each redemption of Shares,
Sunstone shall send such statements as are prescribed by the Federal securities
laws applicable to transfer agents or as described in the Prospectus. If the
Prospectus indicates that certificates for Shares are available and if
specifically requested in writing by any Shareholder, or if otherwise required
hereunder, Sunstone will countersign, issue and mail to such Shareholder at the
address set forth in the records of Sunstone a Share certificate for any full
share requested.
F. Sunstone and the Trust shall establish procedures for effecting
purchase, redemption or transfer transactions accepted from investors by
telephone or other methods consistent with the terms of the Prospectus.
Sunstone may establish such additional procedures, rules and regulations
governing the transfer or registration of Share certificates, if any, or the
purchase, redemption or transfer of Shares, as it may deem advisable and
consistent with the Prospectus and industry practice. Sunstone shall not be
liable, and shall be held harmless by the Trust, for its actions or omissions
which are consistent with the foregoing procedures.
G. (i) The Trust agrees to provide Sunstone with prior notice of any
increase or decrease in the total number of Shares authorized to be issued, or
the issuance of any additional Shares of a Fund pursuant to stock dividends,
stock splits, recapitalizations, capital adjustments or similar transactions,
and to deliver to Sunstone such documents, certificates, reports and legal
opinions as Sunstone may reasonably request.
(ii) In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share certificates,
Sunstone will issue Share certificates in the new form in exchange for, or upon
transfer of, outstanding Share certificates in the old form, upon receiving:
(a) A certificate of an Authorized Person authorizing the issuance of
the Share certificates in the new form, a certified copy of any amendment to the
Declaration of Trust with respect to the change, and such other documents and
information as Sunstone may reasonably request.
(b) In the event the Trust issues Share certificates, specimen Share
certificates for each Fund in the new form approved by the Board of Trustees,
with a certificate signed by the Secretary of the Trust as to such approval.
(iii) In the event a Fund issues Share certificates, the Fund at its
expense shall furnish Sunstone with a sufficient supply of blank Share
certificates in the new form and from time to time will replenish such supply
upon the request of Sunstone. Such blank Share certificates shall be compatible
with Sunstone's system and shall be properly signed by facsimile or otherwise by
an officer of the Trust authorized by law or by the By-laws to sign Share
certificates and, if required, shall bear the corporate Seal or facsimile
thereof. The Trust agrees to indemnify and exonerate, save
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and hold Sunstone harmless, from and against any and all claims or demands that
may be asserted against Sunstone with respect to the genuineness of any Share
certificate supplied to Sunstone.
(iv) In the event a Fund issues Share certificates, Sunstone may
issue new Share certificates in place of certificates represented to have been
lost, stolen, or destroyed upon receiving written instructions from the
shareholder accompanied by proof of an indemnity or surety bond issued by a
recognized insurance institution specified by the Fund or Sunstone. If Sunstone
receives written notification from the shareholder or broker dealer that the
certificate issued was never received, and such notification is made within 30
days of the date of issuance, Sunstone may reissue the certificate without
requiring a surety bond. Sunstone may also reissue certificates which are
represented as lost, stolen, or destroyed without requiring a surety bond
provided that the notification is in writing and accompanied by an
indemnification signed on behalf of a member firm of the New York Stock Exchange
and signed by an officer of said firm with the signature guaranteed.
Notwithstanding the foregoing, Sunstone will reissue a certificate upon written
authorization from an officer of the Trust.
4.02 Dividends and Distributions.
A. The Trust shall give or cause to be given to Sunstone a copy of a
resolution of its Board of Trustees, that either:
(i) sets forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, thereof, the
record date as of which Shareholders entitled to payment or accrual, as the case
may be, shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any, payable to Sunstone on
such payment date, or
(ii) authorizes the declaration of dividends and distributions on a
daily or other periodic basis and further authorizes Sunstone to rely on a
certificate of an Authorized Person setting forth the information described in
subsection (i) of this paragraph.
B. In connection with a reinvestment of a dividend or distribution
of Shares of a Fund, Sunstone shall as of each Fund Business Day, as specified
in a certificate or resolution described in paragraph A, issue Shares of the
Fund based on the net asset value per Share of such Fund specified in an advice
received from or on behalf of the Fund on such Fund Business Day.
C. Upon the mail date specified in such certificate or resolution,
as the case may be, the Trust shall, in the case of a cash dividend or
distribution, cause the Custodian to deposit in an account in the name of
Sunstone on behalf of a Fund, an amount of cash sufficient for Sunstone to make
the payment, as of the mail date specified in such certificate or resolution, as
the case may be, to the Shareholders who were of record on the record date.
Sunstone will, upon receipt of any such cash, make payment of such cash
dividends or distributions to the Shareholders as of the record date. Sunstone
shall not be liable for any improper payments made in accordance with a
certificate or resolution described in the preceding paragraph. If Sunstone
shall not receive from the Custodian sufficient cash to make payments of any
cash dividend or distribution to all Shareholders of a Fund
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as of the record date, Sunstone shall, upon notifying the Trust, withhold
payment to such Shareholders until sufficient cash is provided to Sunstone.
D. It is understood that Sunstone in its capacity as transfer agent
and shareholder servicing and dividend disbursing agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the Shareholders pursuant to the terms of this
Agreement. It is further understood that Sunstone shall file with the Internal
Revenue Service and Shareholders such appropriate federal tax forms concerning
the payment of dividend and capital gain distributions but shall in no way be
responsible for the collection or withholding of taxes due on such dividends or
distributions due to shareholders, except and only to the extent required by
applicable federal law.
4.03 Records.
A. Sunstone shall keep those records specified in Schedule D hereto,
and those records received by Sunstone from the Trust's former transfer agency
service providers (i.e., Investors Fiduciary Trust Company and State Street Bank
& Trust Company), in the form and manner, and for such period, as it may deem
advisable but not inconsistent with the rules and regulations of appropriate
government authorities, in particular Rules 31a-2 and 31a-3 under the 1940 Act.
Sunstone may deliver to the Trust from time to time as mutually agreed upon by
the parties at the Trust's sole expense, for safekeeping or disposition by the
Trust in accordance with law, such records, papers and documents accumulated in
the execution of its duties as transfer agent or received from former service
providers, as Sunstone may deem expedient, other than those which Sunstone is
itself required to maintain pursuant to applicable laws and regulations. The
Trust shall assume all responsibility for any failure thereafter to produce any
record, paper, or other document so returned, if and when required. To the
extent required by Section 31 of the 1940 Act and the rules and regulations
thereunder, the records specified in Schedule D hereto maintained by Sunstone,
which have not been previously delivered to the Trust pursuant to the foregoing
provisions of this paragraph, shall be considered to be the property of the
Trust, shall be made available upon request for inspection by the officers,
employees, and auditors of the Trust, and shall be delivered to the Trust
promptly upon request and in any event upon the date of termination of this
Agreement, in the form and manner kept by Sunstone (to the extent permitted
under applicable license agreements) on such date of termination or such earlier
date as may be requested by the Trust. Notwithstanding anything contained
herein to the contrary, Sunstone shall be permitted to maintain copies of any
such records, papers and documents to the extent necessary to comply with the
recordkeeping requirements of federal and state securities laws, tax laws and
other applicable laws.
B. Sunstone agrees to keep all records and other information
relative to the Trust's Shareholders confidential, except when requested to
divulge such information by duly-constituted authorities or court process, or
when requested by a Shareholder or Shareholder's agent with respect to
information concerning an account as to which such Shareholder has either a
legal or beneficial interest, or when requested by the Trust, the Shareholder,
the Shareholder's agent or the dealer of record with respect to such account.
In case of any requests or demands for the inspection of the Shareholder records
of the Trust, Sunstone will endeavor to notify the Trust promptly and to secure
instructions from an Authorized Person as to such inspection. Sunstone
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reserves the right, however, to exhibit the Shareholder records to any person
whenever it believes there is a reasonable likelihood that Sunstone will be held
liable for the failure to exhibit the Shareholder records to such person;
provided, however, that in connection with any such disclosure Sunstone shall
promptly notify the Trust that such disclosure has been made or is to be made.
Records and information which have become known to the public through no
wrongful act of Sunstone or any of its employees, agents or representatives, and
information which was already in the possession of Sunstone prior to receipt
thereof, shall not be subject to this paragraph. The obligations of Sunstone
under Section 4.03 B shall survive the termination of the Agreement.
ARTICLE V
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REPRESENTATION AND WARRANTIES
5.01 Representations of Trust. The Trust represents and warrants to
Sunstone that:
A. It is a business trust duly organized and existing under the laws
of the State of Massachusetts; it is empowered under applicable laws and by its
Declaration of Trust and By-laws to enter into and perform this Agreement; and
all requisite corporate proceedings have been taken to authorize it to enter
into and perform this Agreement.
B. The President, Executive Vice President or Senior Vice President
of the Trust has the authority to appoint additional Authorized Persons, to
limit or revoke the authority of any previously designated Authorized Person,
and to certify to Sunstone the names of such Authorized Persons.
C. It is duly registered as an investment company under the 1940
Act.
D. A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate state securities laws
filings have been made and will continue to be made, with respect to Shares of
the Trust being offered for sale.
E. All outstanding Shares are validly issued, fully paid and non-
assessable and when Shares are hereafter issued in accordance with the terms of
the Trust's Declaration of Trust and its Prospectus with respect to each Fund,
such Shares shall be validly issued, fully paid and non-assessable.
5.02 Representations of Sunstone. Sunstone represents and warrants to the
Trust that:
A. It is a corporation duly organized and existing under the laws of
the State of Wisconsin; it is empowered under applicable law and by its Articles
of Incorporation and By-laws to enter into and perform this Agreement; and all
requisite proceedings have been taken to authorize it to enter into and perform
this Agreement.
B. It is duly registered as a transfer agent under Section 17A of
the 1934 Act to the extent required.
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C. It has received a copy of each Fund's Prospectus which describes
how sales and redemptions of Shares shall be made.
ARTICLE VI
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ADDITIONAL COVENANTS AND AGREEMENTS
6.01 Information Updates. During the term of this Agreement the Trust
shall have the ongoing obligation to provide Sunstone with the following
documents as soon as they become effective: (i) certified copies of all
amendments to its Declaration of Trust and By-laws made after the date of this
Agreement; (ii) written notice of any change in officers authorized to sign
Share certificates, if any, together with a specimen signature of each new
officer. In the event any officer who shall have signed manually or whose
facsimile signature shall have been affixed to blank Share certificates shall
die, resign or be removed prior to issuance of such Share certificates, Sunstone
may issue such Share certificates of the Fund notwithstanding such death,
resignation or removal and the Trust shall promptly deliver to Sunstone such
approval, adoption or ratification as may be required by law; (iii) a copy of
each Fund's currently effective Prospectus. For purposes of this Agreement,
Sunstone shall not be deemed to have notice of any information contained in any
such Prospectus until a reasonable time after it is actually received by
Sunstone.
6.02 Share Registration. The Trust agrees to take or cause to be taken
all requisite steps to qualify the Shares for sale in all states in which the
Shares shall at the time be offered for sale and require qualification. If the
Trust receives notice of any stop order or other proceeding in any such state
affecting such qualification or the sale of Shares, or of any stop order or
other proceeding under the federal securities laws affecting the sale of Shares,
the Trust will give prompt notice thereof to Sunstone.
6.03 Compliance with Laws. The Trust will comply with all applicable
requirements of the Securities Act, the Exchange Act, the 1940 Act, blue sky
laws, and any other applicable laws, rules and regulations.
6.04 Additional Duties. The Trust agrees that it shall advise Sunstone at
least 30 days prior to effecting any change in the Prospectus which would
increase or alter the duties and obligations of Sunstone hereunder, and shall
proceed with such change only if it shall have received the written consent of
Sunstone thereto.
6.05 Transfer Agent System. Sunstone shall retain all right, title and
interest in and any and all computer programs, screen formats, report formats,
procedures, data bases, interactive design techniques, derivative works,
inventions, discoveries, patentable or copyrightable matters, concepts,
expertise, trade secrets, trademarks and other related legal rights provided,
developed or utilized by Sunstone in connection with the Services provided by
Sunstone to the Trust hereunder.
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ARTICLE VII
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TRUST INSTRUCTIONS
7.01 Authorized Persons. Upon the execution of this Agreement, the Trust
shall provide Sunstone with a certificate containing the names of the initial
Authorized Persons in a form acceptable to Sunstone. The President, Executive
Vice President or Senior Vice President has the authority to appoint additional
Authorized Persons, to limit or revoke the authority of any previously
designated Authorized Person, and to certify to Sunstone the names of the
Authorized Persons from time to time. The Trust shall provide Sunstone with an
updated certificate evidencing the appointment, removal or change of authority
of any Authorized Person, it being understood Sunstone shall not be held to have
notice of any change in the authority of any Authorized Person until receipt of
written notice thereof from the Trust.
7.02 Acceptance of Instructions. Sunstone, its officers, agents or
employees shall accept Instructions given to them by any person representing or
acting on behalf of the Trust only if such representative is an Authorized
Person. The Trust agrees that when oral Instructions are given, it shall, upon
the request of Sunstone, confirm such Instructions in writing.
7.03 Request for Instructions. At any time, Sunstone may request
Instructions from the Trust with respect to any matter arising in connection
with this Agreement. If such Instructions are not received within a reasonable
time, then Sunstone may seek advice from legal counsel for the Trust, or its own
legal counsel at the expense of the Trust, and it shall not be liable for any
action taken or not taken by it in good faith in accordance with such
Instructions or in accordance with advice of counsel.
7.04 Reliance on Instructions. Sunstone shall not be liable for acting
upon any written Instructions reasonably believed by it to be genuine and to
have been signed or made by an Authorized Person or oral Instructions which the
individual receiving the instructions on behalf of Sunstone reasonably believes
to have been given by an Authorized Person.
ARTICLE VIII
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LIMITATION OF LIABILITY; INDEMNIFICATION
8.01 Limitation of Liability. Notwithstanding anything contained in this
Agreement to the contrary, Sunstone shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust or the Funds in
connection with the matters to which this Agreement relates, except for a loss
resulting from Sunstone's willful misfeasance, bad faith or negligence 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 it from an officer or representative of the Trust.
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8.02 Indemnification. The Trust agrees to indemnify and hold harmless
Sunstone, its employees, agents, officers, directors and nominees from and
against any and all claims, demands, actions and suits, and from and against any
and all judgments, liabilities, losses, damages, costs, charges, counsel fees
and other expenses of every nature and character which may be asserted against
Sunstone or for which Sunstone may be held liable (a "Claim") arising out of or
in any way relating to any of the following:
(a) any action of Sunstone required to be taken, or omitted to be
taken, pursuant to the Agreement, unless a Claim resulted from Sunstone's
willful misfeasance, bad faith, negligence in the performance of its duties or
from reckless disregard by it of its obligations and duties hereunder;
(b) Sunstone's reliance on, or use of information, data, records and
documents received by Sunstone from the Trust, or any third party acting on
behalf of the Trust, in the performance of Sunstone's duties and obligations
hereunder;
(c) the reliance on, or the implementation of, any Instructions or
any other requests of the Trust on behalf of the applicable Fund;
(d) Sunstone's acting upon telephone or electronic instructions
relating to the purchase, exchange or redemption of Shares received by Sunstone
in accordance with procedures established by Sunstone and the Trust;
(e) any action taken by or omission of any prior service provider;
(f) the offer or sale of Shares in violation of any requirement under
the securities laws or regulations of any state that such Shares be qualified in
such state or in violation of any stop order or determination or ruling by any
state with respect to the offer or sale of such Shares in such state; or
(g) the Trust's refusal or failure to comply with the terms of the
Agreement, or any Claim that arises out of the Trust's negligence or misconduct
or breach of any representation or warranty of the Trust made herein.
8.03 Indemnification Procedures. Sunstone will notify the Trust promptly
after identifying any situation which it believes presents or appears likely to
present a Claim for which the Trust may be required to indemnify or hold
Sunstone harmless hereunder. In such event, the Trust shall have the option to
defend Sunstone against any Claim, and, in the event that the Trust so elects,
such defense shall be conducted by counsel chosen by the Trust and approved by
Sunstone in its reasonable discretion. Sunstone shall not confess any Claim or
make any compromise in any case in which the Trust will be asked to provide
indemnification, except with the Trust's prior written consent. The obligations
of the parties under Sections 8.02 and 8.03 shall survive the termination of
this Agreement.
13
8.04 Force Majeure. 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.
8.05 Consequential Damages. In no event and under no circumstances shall
Sunstone, its affiliates or any of its or their officers, directors, agents or
employees be liable to anyone, including, without limitation, the other party,
under any theory of tort, contract, strict liability or other legal or equitable
theory for lost profits, exemplary, punitive, special, indirect or consequential
damages for any act or failure to act under any provision of this Agreement
regardless of whether such damages were foreseeable and even if advised of the
possibility thereof.
8.06 Additional Limitations and Exclusions. Notwithstanding any other
provision of this Agreement, Sunstone shall have no duty or obligation under
this Agreement to inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency
of the amount to be received therefor, or the authority of the Trust, as the
case may be, to request such sale or issuance;
(b) The legality of a transfer of Shares or of a purchase or
redemption of any Shares, the propriety of the amount to be paid therefor, or
the authority of the Trust, as the case may be, to request such transfer or
redemption;
(c) The legality of the declaration of any dividend by the Trust, or
the legality of the issue of any Shares in payment of any stock dividend;
(d) The legality of any recapitalization or readjustment of Shares;
or
(e) Processing Share certificates, if any, which bear the proper
countersignature of Sunstone and which it reasonably believes to bear the proper
manual or facsimile signature of an authorized officer of the Trust.
ARTICLE IX
----------
TERM AND TERMINATION
9.01 Term. This Agreement shall remain in full force and effect until
April 30, 2003 (the "Initial Term") and thereafter shall automatically extend
for additional, successive twelve (12) month terms unless earlier terminated as
provided below.
9.02 Termination. Either party may terminate this Agreement at any time
after the Initial Term by giving the other party a written notice specifying the
date of such termination (the "Termination Date"), which shall be not less than
one hundred-twenty (120) days after the date notice is deemed given in
accordance with Section 10.01. In the event such notice is given by the
14
Trust, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Trust, certified by the Secretary or any Assistant Secretary,
electing to terminate this Agreement and designating the successor transfer
agent or transfer agents. In the event such notice is given by Sunstone, the
Trust shall on or before the Termination Date, deliver to Sunstone a copy of a
resolution of its Board of Trustees certified by the Secretary or any Assistant
Secretary designating a successor transfer agent or transfer agents. In the
absence of such designation by the Trust, the Trust shall be deemed to be its
own transfer agent as of the Termination Date and Sunstone shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement. Fees
and out-of-pocket expenses incurred by Sunstone, but unpaid by the Trust upon
such termination, shall be immediately due and payable upon and notwithstanding
such termination.
9.03 Effect of Termination. Upon the termination of the Agreement as
provided herein, Sunstone, upon the written request of the Trust, shall deliver
the records of the Trust to the Trust or its successor transfer agent in the
form maintained by Sunstone (to the extent permitted by applicable license
agreements) at the expense of the Trust, except as otherwise provided. The
Trust shall be responsible to Sunstone for all out-of-pocket costs and expenses
associated with the preparation and delivery of such media, including, but not
limited to: (a) transportation of forms and other materials used in connection
with the processing of Trust transactions by Sunstone; and (b) transportation of
records and files in the possession of Sunstone. Notwithstanding the foregoing,
Sunstone shall be responsible for the aforementioned expenses of delivering the
Trust's records to the Trust or its successor transfer agent during the first
five (5) years the Agreement is in effect, if the Agreement is terminated by
Sunstone during such time period. In addition to any amounts payable pursuant
to Section 9.04 hereof, Sunstone shall be entitled to such compensation as the
parties may mutually agree for any services other than the preparation and
delivery of such media requested by the Trust and agreed to by Sunstone in
connection with the termination of this Agreement or the liquidation or merger
of the Trust, including, but not limited to any custom programming requested by
the Trust in connection with the preparation of such media and agreed upon by
Sunstone, which agreement shall not be unreasonably withheld. Sunstone shall
not reduce the level of service provided to the Trust prior to termination
following notice of termination by the Trust.
9.04 Deconversion Damages. If the Trust replaces Sunstone as the transfer
agent for the Fund for any reason other than solely due to the gross negligence
of Sunstone in the performance of its duties hereunder, or upon the expiration
of the Initial Term or any successive twelve-month term, or if a third party is
added to perform all or part of the Services provided by Sunstone under this
Agreement (excluding any sub-transfer agent appointed by Sunstone as provided in
Section 2.02 hereof), then the Trust shall make a one-time cash payment to
Sunstone as liquidated damages in an amount equal to the balance of account
fees, transaction fees and servicing fees that would otherwise have been due
Sunstone for the remainder of the term of this Agreement, had it not been
terminated. For purposes of calculating the payment of account and servicing
fees, the parties shall assume that the number of Shareholder accounts will
remain constant for the balance of the contract term. For purposes of
calculating the payment of transaction fees, the parties shall assume usage per
month for the remaining months in the contract term based on an average of the
prior six months' usage. The parties understand and agree that no liquidated
damages shall be due in the event Sunstone's services hereunder continue beyond
the expiration of the Initial Term or any successive twelve-month term for a
reasonable period of time; provided that the Trust has given timely notice to
15
terminate pursuant to Sections 9.02 and 10.01 hereof; and provided further that
the Trust has taken all steps reasonably necessary to ensure that the
deconversion shall occur by the end of the then current term. This liquidated
damages provision shall also apply in the event the Trust is merged into another
legal entity in part or in whole pursuant to any form of business reorganization
or is liquidated in part or in whole prior to the expiration of the Initial Term
or any subsequent term of this Agreement, and Sunstone is not retained to
provide transfer agency services. The parties acknowledge and agree that, in
the event Sunstone ceases to be retained as set forth above, (i) determination
of actual damages incurred by Sunstone would be extremely difficult, and (ii)
the liquidated damages provision contained herein is intended to adequately
compensate Sunstone for damages incurred and is not intended to constitute any
form of penalty. Any such payment shall be due and payable on or before the day
the Agreement terminates, a third party is added, or Trust is merged or
liquidated, as applicable.
ARTICLE X
---------
MISCELLANEOUS
10.01 Notices. Any notice required or permitted to be given by either
party to the other under this Agreement shall be in writing and shall be deemed
to have been given when sent by either an overnight delivery service or by
registered or certified mail, postage prepaid, return receipt requested, to the
addresses listed below, or to such other location as either party may from time
to time designate in writing:
If to Sunstone: Sunstone Financial Group, Inc.
-------------- 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
If to the Trust: The Oberweis Funds
--------------- 000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Executive Vice President
10.02 Amendments/Assignments.
A. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties with the
formality of this Agreement.
B. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns.
10.03 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin, without regard to
its conflict of law provisions.
16
10.04 Severability. If any part, term or provision of this Agreement is
determined by the courts or any regulatory authority having jurisdiction over
the issue to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
10.05 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
10.06 Non-Exclusivity; Other Agreements. The services of Sunstone
hereunder are not deemed exclusive and Sunstone shall be free to render similar
and other services to others. Except as specifically provided herein, this
Agreement does not in any way affect any other agreements entered into among the
parties hereto and any actions taken or omitted by any party hereunder shall not
affect any rights or obligations of any other party hereunder.
10.07 Captions. The captions in the Agreement are included for convenience
of reference only, and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
10.08 Trust Limitations. This Agreement is executed by the Trust with
respect to each of the Funds and the obligations hereunder are not binding upon
any of the trustees, officers or shareholders of the Trust individually but are
binding only upon the Fund to which such obligations pertain and the assets and
property of such Fund. All obligations of the Trust under this Agreement shall
apply only on a Fund-by-Fund basis, and the assets of one Fund shall not be
liable for the obligations of another Fund. The Fund's Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SUNSTONE FINANCIAL GROUP, INC. THE OBERWEIS FUNDS
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------- -----------------------------------------
(Signature) (Signature)
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx
---------------------------------------------- ----------------------------------------------
(Name) (Name)
President Executive Vice President
---------------------------------------------- ----------------------------------------------
(Title) (Title)
01/09/2001 01/09/2001
---------------------------------------------- ----------------------------------------------
(Date Signed) (Date Signed)
18
Schedule A
to the
Transfer Agency Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
FUNDS
-----
Oberweis Emerging Growth Portfolio
Oberweis Micro-Cap Portfolio
Oberweis Mid-Cap Portfolio
A-1
Schedule B
to the
Transfer Agency Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
SERVICE SCHEDULE
Services
. Set up and maintain shareholder accounts and records, including IRAs and
other retirement accounts
. Maintain and store account documents, including all information reasonably
required by the Fund to account for all transactions in Fund shares,
electronically
. Receive and promptly respond to investor account inquiries by telephone or
mail, or by e-mail if the response does not require the reference to
specific shareholder account information
. Process purchase and redemption orders, transfers, and exchanges, including
automatic purchases and redemptions via postal mail, telephone and personal
delivery, provided payment for shares is in the form of a check, wire
transfer or requested Automated Clearing House transfer, or such other
methods to which the parties mutually agree
. Reject promptly any requests not received in proper order
. Process dividend payments by check, wire or ACH, or reinvest dividends
(income dividends and capital gains distributions)
. Issue daily transaction confirmations and monthly or quarterly statements
to shareholders and dealers in accordance with fund instructions, in
Sunstone's standard format
. Mail prospectus, annual and semiannual reports, and other shareholder
communications to existing shareholders
. File IRS Forms 1099, 5498, 1042, 1042-S and 945 with shareholders and/or
the IRS
. Handle load and multi-class processing, including rights of accumulation
and purchases by letters of intent
B-1
. Calculate 12b-1 plan fees and provide summary and account detail level
reports on no less than a quarterly basis in Sunstone's standard report
format
. Provide standards to structure forms and applications for efficient
processing
. Promptly provide or make available Sunstone's standard on-line daily and
monthly reports as provided by Sunstone's systems
. Personal follow-up calls to prospects who return incomplete applications
. Follow-up on IRAs, soliciting beneficiary and other information and sending
required minimum distribution reminder letters
. Money market funds for short-term investment or exchanges
. Give dealers access through NSCC's Fund/SERV and Networking
. 0.xxx Access Suite and Transaction Suite Services.
. Tier I, II and III 4.prompt services (basic and automated account
information).
B-2
Schedule C
to the
Transfer Agency Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
FEE SCHEDULE
Base fees
. Open account fee (per year)
. No load equity and non-daily accrual fixed income funds $ 8.50
. Additional for 12b-1 fee or Service Plan $ 0.75
. Additional for redemption fee $ 0.75
. Additional for front-end load
. Additional for CDSC or back-end load
. Monthly dividend payments $ 1.00
. Money market and daily accrual fixed income funds $11.00
. Additional for 12b-1 fee or Service Plan $ 0.75
. Additional for front-end load
. Additional for CDSC or back-end load
. Monthly dividend payments $ 1.00
. Closed account fee (per year) $ 3.00
. Monthly base (per fund)
. One to three funds in fund family $1,500
. 4 or more funds in fund family $1,000
. Add for multiclass (per class) 25%
Account maintenance fees (per occurrence)
. New account set-up $ 3.00
. Financial transactions $ 1.50
. On-Line Financial transactions $ 1.20
. Maintenance transactions $ 1.00
. On-Line Maintenance transactions $ .80
. Research/correspondence $ 2.50
. Transfer on death (XXX) set-up $ 7.50
. Fund/SERV
. Initial set-up per fund family $3,500
. Set-up fee per subsequent CUSIP $1,000
. New account set-up $ 1.00
. Per transaction - no load fund $ 0.25
. Per transaction - load fund $ 0.35
. Adjustments and rebills $ 2.50
. Fund/SERV direct charges at cost
. Commission/SERV (per check) $ 0.25
. ACH/AIP/SWP/automatic exchanges
. Set-up $ 1.00
C-1
. Per transaction $ 0.25
. Withholding per eligible account per year $ 0.25
. Account transcripts older than 2 years $ 5.00
(may be charged to shareholders)
. Locating lost shareholders $ 8.00
Shareholder Servicing fees
. Telephone calls (per call) $ 2.50
. Annual maintenance per omnibus account $ 150
Tax and retirement fees
. Retirement accounts (XXX/Xxxx/others)
. Annual maintenance per account (may be charged to shareholders) $12.50
. Account distribution (may be charged to shareholders) $12.50
. XXX transfer/rollover $ 7.50
Document Services
. Per statement, confirmation and check processing $ 0.25
. Per tax form processing $ 0.25
. Per label printing for proxy or marketing purposes $ 0.10
. Bulk mailings/insert handling charge
. 1 insert $ 0.06
. 2 - 3 inserts $ 0.08
. 4 or more inserts as quoted
. Production of ad hoc reports starting at $100
. Postal clean-up per account $ 3.00
Fund Serv
. Use of Sunstone Fund/SERV membership (per fund/per year)
. First three funds in fund family $2,000
. 4 or more funds $1,000
Tax and retirement
. Required minimum distribution (age 70 1/2)
. Correspondence letters $ 2.50
. Per calculation $ 7.50
. Removal of excess contributions
. Correspondence letters $ 2.50
. Per calculation $ 7.50
. Other solicitation letters
. Beneficiary information $ 2.50
. Birthday information $ 2.50
. Retirement plan documents as quoted
. Transfer on Death documents as quoted
Money market exchange vehicles
. One-time set-up per money market fund used $2,000
. Monthly base fee per money market fund used $ 650
C-2
. Money market checkbooks at cost
. Signature verification of check writing $ 2.00
Stock Certificates
. Set-up fee* $6,000
. New certificate issuance fee (per certificate)* $ 6.00
. Annual fee per outstanding certificate $ 5.00
Forms and Applications
. Standard applications and forms in electronic format no charge
. Customized forms as quoted
Sunstone 4prompt(R) Services (monthly fees)
. Tier I and II - Basic Service
. Monthly maintenance fee $ 125
. One time set-up fee** $ 375
. Tier III - Automated Account Information
. Monthly maintenance fee $ 500
. One time set-up fee** $1,750
Reprocessings due to NAV errors
This charge applies when shareholder transactions are required to be reprocessed as a result of NAV errors
caused by the adviser or other entity unaffiliated with Sunstone.
. Base fee (per occurrence, per day, per fund) $ 750
. Transaction fee $ 1.00
Additional fees at $150 per hour or quoted by project may apply for special programming to meet your servicing
requirements or to create custom reports.
Out-of-pocket expenses
Document Charges
. Copying charges (per page) $ 0.15
. Facsimile charges (per fax) $ 1.25
. Inventory and records storage $20.00/pallet
Supplies and Services
. Statement paper, check stock, envelopes, tax forms at cost
. Postage and express delivery charges at cost
. Tape/disk storage at cost
. Telephone and long distance at cost
. P.O. box rental at cost
. Toll-free number at cost
Bank charges
. Bank account service fees and any other bank charges at cost
C-3
. Outgoing wire fee varies by bank
. Non-sufficient funds varies by bank
. Stopped check on money market funds $25.00
Insurance Charges
. Mail insurance for stock certificates at cost
* Only applicable if Trust issues new certificates.
**The above-asterisked set-up fees (the "Fees") shall be billed in twenty-four
(24) equal monthly installments, beginning with the first month transfer agency
fees are billed under the Transfer Agency Agreement, and continuing until all
such Fees are paid in full. In the event the Transfer Agency Agreement is
terminated prior to the time all such Fees have been repaid, the outstanding but
unpaid Fees shall be immediately due and payable in accordance with the
procedures set forth in Section 3.03(B) of the Transfer Agency Agreement.
C-4
Schedule D
to the
Transfer Agent Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
RECORDS MAINTAINED BY SUNSTONE
Account applications
Canceled certificates plus stock powers and supporting documents
Checks including check registers, reconciliation records, any adjustment records
and tax withholding documentation
Indemnity bonds for replacement of lost or missing stock certificates and checks
Liquidation, redemption, withdrawal and transfer requests including stock
powers, signature guarantees and any supporting documentation
Shareholder correspondence
Shareholder transaction records
Share transaction history of the Funds
D-1
ADDENDUM
TO
TRANSFER AGENCY AGREEMENT
SUNSTONE INTERNET SERVICES SCHEDULE
The undersigned desire to amend the Transfer Agency Agreement dated January
9, 2001, between The Oberweis Funds (the "Fund") and Sunstone Financial Group,
Inc. ("Sunstone"), to include the Internet services described in this Addendum.
1. Additional Services and Fees.
A. Sunstone agrees to provide such additional services to the Fund, and the
Fund agrees to pay Sunstone additional fees for such services, as are set forth
in Exhibit A to this Addendum and made a part hereof by this reference. New
exhibits describing additional Internet services may be added to this Addendum
from time to time by the mutual agreement of the parties.
B. The Fund agrees to provide, at its cost, all computers,
telecommunications equipment and other equipment and software necessary to
develop and maintain its web site, to design and develop the web site
functionality necessary to facilitate and maintain hypertext links between its
web site and Sunstone's web site, and to provide Sunstone with such written
instructions as it may request from time to time in connection with the
performance of Sunstone's obligations hereunder.
2. Ownership of System. The Fund acknowledges that Sunstone has proprietary
rights in and to any and all computer programs, screen formats, report formats,
interactive design techniques, procedures, data bases, derivative works,
inventions, discoveries, patentable or copyrightable matters, concepts,
expertise, trade secrets, trademarks and other related legal rights provided,
developed or utilized by Sunstone in connection with the services provided by
Sunstone to the Fund pursuant to this Addendum, including, without limitation,
any changes or modifications thereto (collectively, the "Internet Products"),
and that the Internet Products constitute confidential material and trade
secrets of Sunstone. The Fund agrees to maintain the confidentiality of the
Internet Products. The Fund shall not copy, decompile or reverse engineer any
software provided to the Fund by Sunstone as part of the Internet Products. The
Fund agrees that it will not mask, delete or otherwise alter any disclaimers,
trademark or service xxxx notifications embedded in or describing the Internet
Products.
3. Limited License. The Internet Products are licensed, not sold, and Sunstone
shall retain all right, title and interest in the Internet Products. Sunstone
hereby grants the Fund a nonexclusive, limited license to use the Internet
Products for the sole and limited purpose of having Sunstone provide services to
the Fund hereunder. Such license shall immediately terminate upon the
termination of the Transfer Agency Agreement between the Fund and Sunstone.
i
4. Limitation of Liability. SUNSTONE IS PROVIDING THE INTERNET PRODUCTS TO
THE FUND ON AN "AS IS" BASIS, AND SPECIFICALLY DISCLAIMS ALL REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE INTERNET PRODUCTS AND THE SERVICES
TO BE PROVIDED HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE OPERATION OF THE INTERNET PRODUCTS
WILL BE ERROR FREE OR WILL NOT BE INTERRUPTED FROM TIME TO TIME BY REASON OF A
DEFECT THEREIN. The parties acknowledge that Sunstone's ability to provide the
services described herein depends upon a number of factors beyond Sunstone's
control, including, but not limited to, the Internet and equipment, software,
data and services provided by telecommunications carriers, firewall providers,
encryption system developers and other unrelated vendors and third parties.
Sunstone shall not be liable for its failure to perform any of the services or
for the delay or interruption of any such services, if the failure, delay or
interruption in caused by circumstances beyond Sunstone's reasonable control.
The terms and conditions of this Section shall supersede and control any
conflicting provisions in the Transfer Agency Agreement.
5. No Other Changes. Other than as provided in this Addendum, all other terms
and conditions of the Transfer Agency Agreement shall remain in full force and
effect.
Intending to be legally bound, the parties hereby adopt this Addendum effective
this 9th day of January, 2001.
THE OBERWEIS FUNDS SUNSTONE FINANCIAL GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------- ---------------------
Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx
Title: Executive Vice President Title: President
ii
EXHIBIT A
Internet Services and Fees
--------------------------
Sunstone 0.xxx(R) Transactions Suite
(Normal transaction processing fees are discounted by 20% from standard transactions when trades are placed
online.)
Transactions for Existing Accounts
. Set-up* $6,125
. Maintenance (monthly) $500
Sunstone 0.xxx(R) Access Suite
Shareholder Access
. Set-up* $5,000
. Maintenance (monthly)
Less than 5,000 total shareholder accounts $400
5,001 to 25,000 total shareholder accounts $500
25,001 to 50,000 total shareholder accounts $650
over 50,000 total shareholder accounts $800
Adviser Access
. Set-up* $3,750
. Maintenance (monthly)
Less than 5,000 total shareholder accounts $400
5,001 to 25,000 total shareholder accounts $500
25,001 to 50,000 total shareholder accounts $650
over 50,000 total shareholder accounts $800
*The above-asterisked set-up fees (the "Fees") shall be billed in twenty-four
(24) equal monthly installments, beginning with the first month transfer agency
fees are billed under the Transfer Agency Agreement, and continuing until all
such Fees are paid in full. In the event the Transfer Agency Agreement is
terminated prior to the time all such Fees have been repaid, the outstanding but
unpaid Fees shall be immediately due and payable in accordance with the
procedures set forth in Section 3.03(B) of the Transfer Agency Agreement.
iii
Exhibit 23(h)(5)
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 9th day of January, 2001, by and between
The Oberweis Funds, a Massachusetts business trust (the "Trust"), and Sunstone
Financial Group, Inc., a Wisconsin corporation ("Sunstone").
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and is authorized to
issue shares of beneficial interests (the "Shares") in separate series with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Trust and Sunstone desire to enter into an agreement pursuant
to which Sunstone shall provide fund accounting services to such investment
portfolios of the Trust as are listed on Schedule A hereto and any additional
investment portfolios the Trust and Sunstone may agree upon and include on
Schedule A as such Schedule may be amended from time to time (such investment
portfolios and any additional investment portfolios are individually referred to
as a "Fund" and collectively the "Funds").
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 Trust hereby appoints Sunstone as fund accountant of the Funds 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.
2. Services as Fund Accountant
(a) Subject to the direction and control of the Trust's Board of Trustees
and utilizing information provided by the Trust and its agents, Sunstone will:
(1) perform the functions and provide the information/reports set forth on
Schedule B; (2) calculate daily net asset values of each Fund in accordance with
the procedures in the Funds' prospectus; (3) maintain all general ledger
accounts and related subledgers needed as a basis for the calculation of each
Fund's net asset value; (4) perform security valuations based on information
provided by the Trust, its Board, the Trust's investment adviser, and pricing
service(s), as provided herein; (5) communicate at an agreed upon time the net
asset values for each Fund to parties as agreed upon from time to time; and (6)
provide the necessary information to assist the Trust in complying with the
rules under Sections 30 and 31 under the 1940 Act. 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. In the event
Sunstone is asked to correct any action taken or inaction by any prior service
provider then Sunstone shall provide such services and be entitled to such
compensation as the parties may mutually agree.
(b) It is understood that in determining security valuations, Sunstone
employs one or more pricing services to determine valuations of portfolio
securities for purposes of calculating net asset values of the Funds. Sunstone
shall identify to the Trust and the Board of Trustees any such pricing
service(s) utilized on behalf of the Trust. Sunstone shall price the securities
and other holdings of the Funds for which market quotations are available by the
use of such services. For those securities where market quotations are not
readily available, the Trust's Board shall approve, in good faith, the method
for determining the fair value for such securities and representatives of the
Trust shall deliver to Sunstone the prices determined in accordance with the
procedures established by the Board. Sunstone is authorized to rely on the
prices provided by such service(s) or by the Funds' investment adviser or other
authorized representative of the Funds, and shall not be liable for losses to
the Trust or its shareholders or otherwise as a result of its reliance on the
valuations provided by pricing service(s) or representatives of the Trust.
(c) The Trustees of the Trust shall cause the officers, investment adviser,
legal counsel, independent accountants, transfer agent, custodian and other
service providers for the Funds to cooperate with Sunstone and to provide
Sunstone with such information, documents and advice relating to the Funds and
the Trust as requested by Sunstone, 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 Trust when acting in
reliance (without investigation or verification), upon the instruction, advice,
information or any documents relating to the Funds or the Trust provided to
Sunstone by an officer or representative of the Funds or by any of the
aforementioned persons. Sunstone shall be entitled to rely on any document that
it reasonably believes to be genuine and to have been signed or presented by the
proper party. Fees charged by such persons shall be an expense of the Trust.
Sunstone shall not be held to have notice of any change of authority of any
officer, agent, representative or employee of the Trust until receipt of written
notice thereof from the Trust.
(d) To the extent required by Rule 31a-3 under the 1940 Act, Sunstone
hereby agrees that all records which it maintains for the Trust pursuant to its
duties hereunder 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, and where applicable, Sunstone further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
which are maintained by Sunstone for the Trust. Sunstone shall also preserve,
in a readily accessible location, those records received by Sunstone from the
Trust's former Fund Accountants (i.e. Investors Fiduciary Trust Company and
State Street Bank and Trust Company) that it, in its sole and reasonable
discretion, deems necessary to refer to in connection with the performance of
its services under the Agreement. All other records shall, at the option of the
Trust and at the Trust's sole expense, be (a) returned to the Trust or (b)
stored in a mutually acceptable storage facility.
(e) The Trust's Board of Trustees and the Funds' investment adviser have
and retain primary responsibility for all compliance matters relating to the
Funds including, but not limited to, compliance with the 1940 Act, the Internal
Revenue Code of 1986, as amended, and the policies and
2
limitations of each Fund relating to the portfolio investments as set forth in
the Prospectus and Statement of Additional Information. Sunstone's functions
hereunder shall not relieve the Board and the investment adviser of their
primary day-to-day responsibility for assuring such compliance.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this Agreement,
the Trust will pay Sunstone a fee, computed daily and payable monthly, plus out-
of-pocket expenses, each as provided in Schedule C hereto. Fees shall be paid
by each Fund at a rate that would aggregate at least the applicable minimum fee
for each Fund.
(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 that 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.
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 Funds' 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 by the Trust, which approval
shall not be unreasonably withheld and 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. Records and information which have become known to the public through no
wrongful act of Sunstone or any of its employees, agents or representatives, and
information which was already in the possession of Sunstone prior to receipt
thereof, shall not be subject to this paragraph. The obligations of Sunstone
under this Section 4 shall survive the termination of this Agreement.
5. Limitation of Liability
(a) Sunstone shall not be responsible or liable for any error of judgment
or mistake of law or for any loss suffered by the Funds in connection with the
matters to which this Agreement relates, except for a loss resulting from
Sunstone's willful misfeasance, bad faith or negligence 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 (i) any action
taken or omitted to be taken in accordance with written or oral instructions
received by Sunstone from an officer or representative of the Trust, or (ii) any
action taken or omission by any prior service provider.
3
(b) Sunstone assumes no responsibility hereunder, and shall not be liable,
for any default, 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 its control.
(c) The Trust agrees to indemnify and hold harmless Sunstone, its
employees, agents, officers, directors and nominees from and against any and all
claims, demands, actions and suits, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character which may be asserted against Sunstone or
for which Sunstone may be held liable (a "Claim") arising out of or in any way
relating to (i) Sunstone's actions or omissions except to the extent a Claim
resulted from Sunstone's willful misfeasance, bad faith, or negligence in the
performance of its duties or from reckless disregard by it of its obligations
and duties hereunder; (ii) Sunstone's reliance on, or use of information, data,
records and documents received by Sunstone from any party referenced in Section
2 hereof or other representative of the Trust; or (iii) the reliance on, or the
implementation of, any instructions, directions or any other requests of the
Trust.
(d) In no event and under no circumstances shall Sunstone, its affiliates
or any of its or their officers, directors, members, agents or employees be
liable to anyone, including, without limitation, the other party, under any
theory of tort, contract, strict liability or other legal or equitable theory
for lost profits, exemplary, punitive, special, indirect or consequential
damages for any act or failure to act under any provision of this Agreement
regardless of whether such damages were foreseeable and even if advised of the
possibility thereof.
6. Term
(a) This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date hereof and, with respect to each Fund not in
existence on that date, on the date an amendment to Schedule A to this Agreement
relating to that Fund is executed. This Agreement shall continue in effect with
respect to each Fund until April 30, 2003 (the "Initial Term"). Thereafter, if
not terminated as provided herein, this Agreement shall continue automatically
in effect as to each Fund for successive annual periods.
(b) This Agreement may be terminated with respect to any one or more
particular Funds without penalty after the Initial Term (i) upon mutual consent
of the parties, or (ii) by either party upon not less than ninety (90) days'
written notice to the other party (which notice may be waived by the party
entitled to the notice). 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 Sunstone and the Trust.
(c) Upon the termination of the Agreement as provided herein, Sunstone,
upon the written request of the Trust, shall deliver the records of the Trust to
the Trust or its successor Fund Accountant in the form maintained by Sunstone
(to the extent permitted by applicable license agreements) at the expense of the
Trust, except as otherwise provided and thereafter the Trust or its designee
shall be solely responsible for preserving the records for the periods required
by all
4
applicable laws, rues and regulations. The Trust shall be responsible to
Sunstone for all out-of-pocket costs and expenses associated with the
preparation and delivery of such media, including, but not limited to (a)
transportation of forms and other materials used in connection with the
processing of Trust transactions by Sunstone; and (b) transportation of records
and files in the possession of Sunstone. Notwithstanding the foregoing,
Sunstone shall be responsible for the aforementioned expenses of delivering the
Trust's records to the Trust or its successor Fund Accountant during the first
five (5) years the Agreement is in effect, if the Agreement is terminated by
Sunstone during such time period. Sunstone shall be entitled to such
compensation as the parties may mutually agree for any services other than the
preparation and delivery of such media requested by the Trust and agreed to by
Sunstone in connection with the termination of this Agreement or the liquidation
or merger of the Trust, including, but not limited to any custom programming
requested by the Trust in connection with the preparation of such media and
agreed upon by Sunstone, which agreement shall not be unreasonably withheld.
Sunstone shall not reduce the level of service provided to the Trust prior to
termination following notice of termination by the Trust.
7. Non-Exclusivity
The services of Sunstone rendered to the Trust are not deemed to be
exclusive. Sunstone may render such services and any other services to others,
including other investment companies. The Trust 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), and that Sunstone or its affiliates may enter into other agreements
with such other entities.
8. Governing Law; Invalidity
This Agreement shall be governed by Wisconsin law, excluding the laws on
conflicts of laws. 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 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 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 without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the parties.
9. Notices
Any notice required or 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 Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxx, 00000, Attention:
Xxxxxx X. Xxxxxxx, with a copy to General Counsel, and notice to the Trust shall
be sent to The Oberweis
5
Funds, 951 Ice Xxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxx, 00000, Attention: Xxxxxxx X.
Xxxxx, Executive Vice President.
10. Entire Agreement
This Agreement constitutes the entire Agreement of the parties hereto.
11. Trust Limitations
This Agreement is executed by the Trust with respect to each of the Funds
and the obligations hereunder are not binding upon any of the Trustees, officers
or shareholders of the Trust individually but are binding only upon the Fund to
which such obligations pertain and the assets and property of such Fund. All
obligations of the Trust under this Agreement shall apply only on a Fund-by-Fund
basis, and the assets of one Fund shall not be liable for the obligations of
another Fund.
12. 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.
THE OBERWEIS FUNDS
(the "Trust")
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Executive Vice President
SUNSTONE FINANCIAL GROUP, INC.
("Sunstone")
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
President
6
Schedule A
to the
Fund Accounting Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
FUNDS
Oberweis Mid-Cap Portfolio
Oberweis Emerging Growth Portfolio
Oberweis Micro-Cap Portfolio
A-1
Schedule B to the
Fund Accounting Agreement
by and between
The Oberweis Bunds
and
Sunstone Financial Group, Inc.
In its capacity as the Fund Accountant, Sunstone shall perform the
following responsibilities on a daily basis:
1. Prepare available cash forecasts and communicate balances to the Fund.
2. Review investment portfolio for cash and stock dividends and stock
splits.
3. Review failed security transaction report; investigate failed
transactions and report status to Fund.
4. Process Fund invoices for payment on proper authorization for each
Fund.
5. Post Fund Capital to the Fund's general ledger.
6. Reconcile ending share balance from transfer agent reports to general
ledger; report differences to Fund and resolve with the transfer agent.
7. Enter security transactions reported by the Fund.
8. Review trade affirmation and research discrepancies.
9. Post bank activity to general ledger; account for all items on bank
statements, and prepare and complete daily bank reconciliations, including
documentation of reconciling items.
10. Post manual journal entries to the general ledger.
11. Review current daily security transactions for dividends, splits and
other corporate activity.
12. Prepare Net Asset Value rollforward.
13. Review individual components of the change in the Fund's Net Asset
Value for accuracy and reasonableness.
14. Enter manual prices.
15. Review pricing stratification report for unusual price movements in
individual securities; investigate and trace items to the particular pricing
sources; and consult with Fund.
B-1
Review pricing report for detection of stock splits and dividends, cash
dividends and corporate action.
16. Review for ex-dividend items indicated by pricing sources.
17. Communicate required pricing information to Fund, quotation/publication
services and to transfer agent. Communicate NAV to newspapers and quotation
services in time for publication and to the transfer agent in time to run the
shareowner accounts by the beginning of the next day. Communicate the NAV and
corresponding worksheet to the Fund.
18. Attend to routine matters in connection with the calculation of the net
asset value and aggregate asset value of the Fund.
19. Maintain and preserve the books, records and accounts that provide the
basis for the above noted items.
Information/Reports to be transmitted electronically to Fund:
CATEGORY INFORMATION PROVIDED FREQUENCY*
------------------------------------------------------------------------------------------------
Pricing Reports Detail valuation data and the Net Asset Value Daily
Calculation
------------------------------------------------------------------------------------------------
Position Reports Securities owned detailed by position or tax Daily and/or Monthly
lot
------------------------------------------------------------------------------------------------
Transaction Reports Purchases, sales, maturities, opening or Daily and/or Monthly
closing of positions for the time frame and/or Year to Date
specified
------------------------------------------------------------------------------------------------
Income Reports Journal of interest, amortization or dividend Daily and/or Monthly
accruals for the portfolios
------------------------------------------------------------------------------------------------
Trial Balance General ledger account activity Daily and/or Monthly
------------------------------------------------------------------------------------------------
Capital Activity List of fund share activity for the period Monthly
------------------------------------------------------------------------------------------------
* Available at times specified by the mutual agreement of the parties.
B-2
Schedule C
to the
Fund Accounting Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
FEES
Asset Based Fees
Name of Fund Average Net Assets Basis Points Minimum
Annual Fee
--------------------------------------------------------------------------------------------------
Mid-Cap Portfolio Up to $100 Million 4.0 basis points $22,000
--------------------------------------------------------------------------------------------------
$100 Million to $250 Million 2.0 basis points
--------------------------------------------------------------------------------------------------
Over $250 Million 0.5 basis points
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Name of Fund Average Net Assets Basis Points Minimum
Annual Fee
--------------------------------------------------------------------------------------------------
Emerging Growth Up to $100 Million 4.0 basis points $22,000
Portfolio
--------------------------------------------------------------------------------------------------
$100 Million to $250 Million 2.0 basis points
--------------------------------------------------------------------------------------------------
Over $250 Million 0.5 basis points
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Name of Fund Average Net Assets Basis Points Minimum
Annual Fee
--------------------------------------------------------------------------------------------------
Miro-Cap Portfolio Up to $100 Million 4.0 basis points $22,000
--------------------------------------------------------------------------------------------------
$100 Million to $250 Million 2.0 basis points
--------------------------------------------------------------------------------------------------
Over $250 Million 0.5 basis points
--------------------------------------------------------------------------------------------------
The minimum annual fee is subject to an annual escalation of five percent (5%),
which escalation shall be effective commencing two years from the date Sunstone
commences providing fund accounting services pursuant to this Agreement and the
corresponding date each year thereafter. No amendment of this Schedule C shall
be required with each escalation. The foregoing fee schedule assumes a single
class of shares for each Fund. Additional fees shall apply when adding any
additional Fund(s) and/or classes including compensation for Sunstone's
services, if any, in connection with the organization of the new Fund(s) or
classes. Sunstone shall provide such services and be entitled to such
compensation as the parties may mutually agree in writing.
C-1
Out-of-Pocket and Other Related Expenses
The Trust shall also pay/reimburse Sunstone's out-of-pocket and other related
expenses. Out-of-pocket expenses include, but are not limited to, travel,
lodging and meals in connection with travel in connection with Board meetings
and otherwise on behalf of the Trust, programming and related expenses
(previously incurred or to be incurred by Sunstone) in connection with providing
electronic transmission of data between the Sunstone and the Funds' other
service providers, brokers, dealers, depositories and others, fees and expenses
of pricing services, fees of research services including Lexis/Nexis,
Morningstar and Lipper, NASDAQ and other service interface fees, XXXXX related
fees, long distance telephone charges, and photocopying, faxes, postage and
overnight delivery expenses. Such out-of-pocket expenses shall be charged back
to the Trust at cost with no handling or markup charge included. The expenses
include the following daily pricing of securities:
. Common Stocks $0.15
. Corporate/Government Bonds/ Foreign Stocks $0.50
. Municipal Securities $0.55
. CMOs $1.00
. Manual Price From Broker $2.50
. Domestic Corporate Action $0.05
. Foreign Corporate Action $0.15
Sunstone 4.NAV(r) Services (daily uploads of NAVs to Website)
. Set Up Fee (per fund family) $2,000
. Monthly maintenance fee (per fund) $ 150
. Set Up Fee, daily and historical NAV (per fund family) $3,000
. Monthly maintenance fee (per class) $ 200
The above fees shall be fixed through the end of the Initial Term of the
Agreement, as defined in Section 6 of the Agreement. Sunstone shall present the
Trust with a revised Schedule C reflecting Sunstone's fees for the upcoming term
at least one hundred fifty (150) days prior to the end of the Initial Term and
each subsequent term of the Agreement.
C-2
Exhibit 23(h)(5)
BLUE SKY FILING SERVICES AGREEMENT
THIS BLUE SKY FILING SERVICES AGREEMENT is made as of the 9th day of
January, 2001, by and between The Oberweis Funds, a Massachusetts business trust
("Trust") and Sunstone 4Compliance, a division of Sunstone Financial Group,
Inc., a Wisconsin corporation ("Sunstone").
R E C I T A L S:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and is
authorized to issue shares of beneficial interests (the "Shares") in separate
series with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust and Sunstone desire to enter into an agreement pursuant
to which Sunstone shall provide certain services with respect to the
establishment and/or maintenance of state securities law filings on behalf of
such investment portfolios of the Trust as are listed on Schedule A hereto and
any additional investment portfolios the Trust and Sunstone may agree upon and
include on Schedule A as such Schedule may be amended from time to time (such
investment portfolios and any additional investment portfolios are individually
referred to as a "Fund" and collectively the "Funds").
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. Appointment. The Trust hereby appoints Sunstone to provide the
services to the Funds described in Section 4 of this Agreement, for the period
and on the terms set forth herein. Sunstone accepts such appointment and agrees
to furnish the services described in Section 4 of this Agreement in return for
the compensation set forth on Schedule B attached hereto. In the event that the
Trust decides to create one or more new portfolios, series or classes with
respect to which it wishes to retain Sunstone to provide services hereunder, the
Trust shall notify Sunstone in writing. Sunstone shall notify the Trust in
writing of any terms and compensation that differ from the provisions of this
Agreement. Upon acceptance by the Trust of such terms, the portfolio, series or
class shall become a Fund hereunder.
2. Delivery of Documents. The Trust will furnish Sunstone with copies of
each of the following, as applicable, upon the commencement of this Agreement:
(a) A listing of all jurisdictions in which the Trust desires Sunstone
to effect a notice filing for each Fund or a listing of all jurisdictions in
which each Fund that has commenced operations is lawfully available for sale as
of the date of this Agreement (the "Filing List"). The Trust represents and
warrants to Sunstone that each Fund's Shares are lawfully eligible for sale in
each jurisdiction indicated for such Fund on the list furnished to Sunstone
pursuant to this Section 2(a);
(b) Each Fund's most recent Registration Statement or Post-Effective
Amendment, as applicable, filed under the Securities Act of 1933 and the
Investment Company Act of 1940 with the Securities and Exchange Commission (the
"SEC");
(c) Each Fund's most recent prospectus and statement of additional
information and, if applicable, most recent annual report;
(d) If applicable, those documents necessary to obtain and/or maintain
issuer agent/dealer registrations including, but not limited to, fingerprint
cards, photos, examination score reports and surety bonds; and
(e) A certified copy of the resolutions of the Funds' Board of
Trustees approving the execution of this Agreement and appointment of Sunstone
to perform the services set forth hereunder.
3. Obligations of Trust. To enable Sunstone to perform its duties
hereunder, the Trust agrees to assume the following obligations:
(a) To provide Sunstone with written instructions regarding (i) the
amount of Shares to be qualified for sale, from time to time, for each Fund in
each jurisdiction listed on the Filing List; (ii) the warning threshold to be
maintained with respect to each Fund in each such jurisdiction; and (iii) any
other matter upon which Sunstone requests direction or advice from the Trust in
connection with the performance of its duties hereunder (collectively, "Written
Instructions"); and
(b) To provide Sunstone with amendments and supplements to each of the
documents required to be delivered under Section 2 of this Agreement, as soon as
the same become available, in such quantities as Sunstone shall determine are
reasonably necessary to perform its obligations under Section 4 hereof.
4. Services and Duties. Sunstone agrees to perform the specific services
listed in this Section 4. In performing such services, Sunstone will act under
the supervision and control of, and in accordance with the instructions and
directions of the Trust. Unless otherwise provided in this Agreement, Sunstone
shall act only upon Written Instructions.
(a) Sunstone shall effect and maintain, as the case may be, the
qualification of Shares of the Funds for sale under the securities laws of the
jurisdictions indicated for each Fund on the Filing List furnished to Sunstone
pursuant to Section 2(a) of this Agreement by filing Form NF or such other
form(s) as a jurisdiction may require, in such amounts as are set forth from
time to time in the Trust's Written Instructions, as well as all amendment
applications, together with required issuer agent/dealer applications, if
applicable (collectively, "Blue Sky Filings"), and, subject to the
2
limitations of Section 5, remitting fees to such jurisdictions as required under
applicable Blue Sky laws.
(b) Sunstone shall file with each jurisdiction on the Filing List, as
required, the appropriate materials relating to the Funds, including, but not
limited to, the Funds' Registration Statements or Post-Effective Amendments,
definitive copies of the Funds' prospectuses and statements of additional
information and any supplements thereto, annual reports, and the documents
necessary to procure issuer agent/dealer registrations, if applicable.
(c) Sunstone shall monitor sales in each jurisdiction set forth on the
Filing List for each Fund on a daily basis. Unless it receives Written
Instructions to the contrary, Sunstone typically maintains an offering amount
equal to one and a half times the amount sold during the current notice period
or the immediately preceding notice period in each jurisdiction that does not
permit the qualification of an indefinite offering amount. In the event sales
of Shares in a particular jurisdiction reach or exceed the warning levels
provided in the Written Instructions, Sunstone will promptly prepare an
amendment to the Fund's notice permit to increase the offering amount.
(d) In connection with the foregoing, the Trust hereby grants to
Sunstone limited power of attorney on behalf of the Funds to sign all Blue Sky
forms and other related documents.
(e) As requested by the Trust, Sunstone shall provide reports of sales
activities in each jurisdiction on the Filing List for each Fund. Sales will be
reported by state of shareholder residence for sales to individual shareholders
or to omnibus accounts whose account owners transmit underlying shareholder
information to Sunstone via electronic interfaces. Trades by all other omnibus
accounts will be reported by the trustee's or other omnibus account owner's
state of residence. NSCC trades will be reported by the state provided by the
dealer at the point of sale.
(f) Sunstone shall keep those records prepared pursuant to its
obligations under this Agreement and those records received by Sunstone from the
Trust's former Blue Sky service providers (i.e. Investors Fiduciary Trust
Company and State Street Bank and Trust Company), in the form and manner, and
for such period as it may deem advisable but not inconsistent with the rules and
regulations of appropriate government authorities, in particular Rules 31a-2 and
31a-3 under the 1940 Act. Sunstone may deliver to the Trust from time to time
as mutually agreed upon by the parties, at the Trust's sole expense, for
safekeeping or disposition by the Trust in accordance with law, such records,
papers and documents accumulated in the execution of its duties or received from
former service providers, as Sunstone may deem expedient, other than those which
Sunstone is itself required to maintain pursuant to applicable laws and
regulations. The Trust shall assume all responsibility for any failure
thereafter to produce any record, paper, or other document so returned, if and
when required. To the extent required by Section 31 of the 1940 Act and the
rules and regulations thereunder, the records maintained by Sunstone, which have
not been previously delivered to the Trust pursuant to the foregoing provisions
of this paragraph, shall be considered to be the property of the Trust, shall be
made available upon request for inspection by the officers, employees, and
auditors of the Trust, and shall be delivered to the Trust promptly upon request
and in any event upon the date of termination of this Agreement, in the form and
manner kept by Sunstone (to the extent permitted under applicable license
agreements) on such date of termination
3
or such earlier date as may be requested by the Trust. Notwithstanding anything
contained herein to the contrary, Sunstone shall be permitted to maintain copies
of any such records, papers and documents to the extent necessary to comply with
the recordkeeping requirements of federal and state securities laws, tax laws
and other applicable laws.
Sunstone shall be entitled to rely on any Written Instructions it receives
from the Trust pursuant to this Agreement, and shall be protected in any action
it takes or does not take in reliance upon directions, advice or Written
Instructions it receives from the Trust; provided, however, that Sunstone shall
remain liable for any action or inaction on its part that constitutes bad faith,
negligence or willful misconduct in connection with the performance of its
duties hereunder. In the event Sunstone is asked to correct any action or
inaction by any prior service provider, then Sunstone shall provide such
services and be entitled to such reasonable compensation as the parties may
mutually agree.
5. Payment of Fees. Subject to payment to Sunstone in advance, Sunstone
will remit to the respective jurisdictions the appropriate fees for each Blue
Sky Filing. The Trust will, from time to time as specifically agreed between
the parties, send checks to Sunstone for the payment of such fees promptly upon
request by Sunstone. Sunstone intends to prepare and file applications to renew
notice permits and issuer agent/dealer registrations, if applicable, at least
one month prior to the expiration dates, or sooner in jurisdictions that require
earlier receipt of renewal applications. Whenever possible, Sunstone will
request the funds necessary for the payment of renewal fees ten business days in
advance of the date the fees are required by Sunstone to accommodate a filing
date well in advance of the applicable expiration date. Sunstone may, in its
sole discretion, advance fees due for a Blue Sky Filing where such amount does
not exceed $5000. Any amounts so advanced will appear on the Trust's next
regular monthly invoice, and are payable in accordance with the terms of Section
6 hereof.
6. Compensation. For the services provided by Sunstone under this
Agreement, the Trust agrees to pay Sunstone the fees set forth on Schedule B
hereto. The prices for the services set forth on Schedule B shall be fixed
through the end of the Initial Term of the Agreement, as hereinafter defined.
Sunstone shall present the Trust with a revised Schedule B reflecting Sunstone's
fees for the upcoming term at least one hundred fifty (150) days prior to the
end of the Initial Term and each subsequent term of the Agreement. The fees
shall be calculated in arrears and billed on a monthly basis. The Trust agrees
to pay all fees within thirty days of receipt of each invoice. Sunstone retains
the right to charge interest in the amount of 1-1/2 percent per month on any
amounts that remain unpaid beyond such thirty day period.
7. Limitation of Liability. Sunstone shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Funds or the Trust in
connection with the matters to which this Agreement relates, so long as it acts
in good faith and with due diligence and is not negligent or guilty of any
willful misconduct in connection with the performance of its duties. Without
limiting the generality of the foregoing or any other provision of this
Agreement, Sunstone shall not be liable for (i) losses beyond its control,
provided that it has acted in accordance with the standard of care set forth
above; (ii) the validity or invalidity or authority or lack thereof of any
Written Instruction, which Sunstone reasonably believes to be genuine, (iii) the
failure to file on a
4
timely basis any material or pay a filing fee to be provided by the Trust that
was not received on a timely basis from the Trust; (iv) the accuracy or adequacy
of materials it receives from the Trust for filing; or (v) subject to Section 9,
delays or errors or other loss of data occurring by reason of circumstances
beyond Sunstone's control, including acts of civil or military authority,
national emergencies, labor difficulties, fire, flood, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
Notwithstanding anything in this Agreement to the contrary, neither
Sunstone nor its affiliates shall be liable to the Trust or any Fund for any
consequential, special or indirect losses or damages which the Trust or any Fund
may incur or suffer by or as a consequence of Sunstone's performance of its
services hereunder, whether or not the likelihood of such losses or damages was
known by Sunstone or its affiliates.
8. Indemnification. The Trust agrees and acknowledges that Sunstone has
not prior to the date hereof assumed, and will not assume, any obligations or
liabilities arising out of the conduct of the Trust prior to the date hereof of
those duties which Sunstone has agreed to perform pursuant to this Agreement.
The Trust further agrees to indemnify Sunstone against any losses, claims,
damages or liabilities to which Sunstone may become subject in connection with
or arising out of (i) the conduct by the Trust with respect to such duties
prior to the date hereof; (ii) a breach of any of the Trust's obligations,
representations or warranties hereunder; and (iii) any action or omission to act
which Sunstone takes at the request or direction of the Fund or in reliance on
Written Instructions.
9. Disaster Recovery. Sunstone shall make reasonable provision for
emergency electronic data processing equipment. In the event of equipment
failures, Sunstone shall take reasonable steps to minimize services
interruptions. Sunstone shall have no liability with respect to the loss of
data or service interruptions caused by equipment failure, provided such loss or
interruption is not caused by Sunstone's own bad faith, negligence or willful
disregard of its duties under this Agreement.
10. Service to Other Companies or Accounts. The Trust understands that
the persons employed by Sunstone to assist in the performance of Sunstone's
duties hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of Sunstone or
any affiliate of Sunstone to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature, including services
of the type provided hereunder.
11. Notices. Any notice or other instrument or materials authorized or
required by this Agreement to be given in writing to the Trust or to Sunstone
shall be sufficiently given if addressed to such party and received by it at its
office set forth below or at such other party and received by it at its office
set forth below or at such other place as it may, from time to time, designate
in writing.
5
To the Trust:
The Oberweis Funds
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Executive Vice President
To Sunstone:
Sunstone Financial Group, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx X. Styles
12. Files. All files maintained by Sunstone with respect to the Funds
shall be the property of the Trust and shall be returned to the Trust at the
termination of this Agreement or as mutually agreeable to Sunstone and the
Trust. Notwithstanding the foregoing, Sunstone shall be permitted to keep
copies of any documents to the extent required by federal and state securities
and tax laws, and other applicable laws.
13. Term and Termination. This Agreement shall commence on the date
hereof and shall continue in effect until April 30, 2003 (the "Initial Term").
Thereafter, the Agreement shall automatically renew for additional one year
terms unless earlier terminated as specified hereinafter. Either party may
terminate this Agreement at any time after the Initial Term by giving the other
party a written notice specifying the date of such termination (the "Termination
Date"), which shall be not less than one hundred-twenty (120) days after the
date notice is deemed given in accordance with Section 11.
Upon the termination of the Agreement as provided herein, Sunstone, upon
the written request of the Trust, shall deliver the records of the Trust to the
Trust or its successor Blue Sky service provider in the form maintained by
Sunstone (to the extent permitted by applicable license agreements) at the
expense of the Trust, except as otherwise provided. The Trust shall be
responsible to Sunstone for all out-of-pocket costs and expenses associated with
the preparation and delivery of such media, including, but not limited to: (a)
transportation of forms and other materials used in connection with the
maintenance of the qualification of the Shares by Sunstone; and (b)
transportation of records and files in the possession of Sunstone.
Notwithstanding the foregoing, Sunstone shall be responsible for the
aforementioned expenses of delivering the Trust's records to the Trust or its
successor Blue Sky service provider during the first five (5) years the
Agreement is in effect, if the Agreement is terminated by Sunstone during such
time period. In addition to any amounts payable pursuant to the following
paragraph, Sunstone shall be entitled to such compensation as the parties may
mutually agree for any services other than the preparation and delivery of such
media requested by the Trust and agreed to by Sunstone in connection with the
termination of this Agreement or the liquidation or merger of the Trust,
including, but not limited to, any custom programming requested by the Trust in
connection with the preparation of such media
6
and agreed upon by Sunstone which agreement shall not be unreasonably withheld.
Sunstone shall not reduce the level of service provided to the Trust prior to
termination following notice of termination by the Trust.
If the Trust replaces Sunstone as the Blue Sky service provider for the
Fund for any reason other than solely due to the gross negligence of Sunstone in
the performance of its duties hereunder, or upon the expiration of the Initial
Term or any successive twelve-month term, or if a third party is added to
perform all or part of the services provided by Sunstone under this Agreement,
then the Trust shall make a one-time cash payment to Sunstone as liquidated
damages in an amount equal to the balance of the permit fees and filing fees
that would otherwise have been due Sunstone for the remainder of the term of
this Agreement, had it not been terminated. For purposes of calculating the
payment of permit fees, the parties shall assume that the number of permits will
remain constant for the balance of the contract term. For purposes of
calculating the payment of filing fees, the parties shall assume the number of
filings per month for the remaining months in the contract equal to an average
of the prior six months' filings. The parties understand and agree that no
liquidated damages shall be due in the event Sunstone's services hereunder
continue beyond the expiration of the Initial Term or any successive twelve-
month term for a reasonable period of time; provided that the Trust has given
timely notice to terminate pursuant to the above and Section 11 hereof; and
provided further that the Trust has taken all steps reasonably necessary to
ensure that the deconversion shall occur by the end of the then current term.
This liquidated damages provision shall also apply in the event the Trust is
merged into another legal entity in part or in whole pursuant to any form of
business reorganization or is liquidated in part or in whole prior to the
expiration of the Initial Term or any subsequent term of this Agreement, and
Sunstone is not retained to provide Blue Sky services. The parties acknowledge
and agree that, in the event Sunstone ceases to be retained as set forth above,
(i) determination of actual damages incurred by Sunstone would be extremely
difficult, and (ii) the liquidated damages provision contained herein is
intended to adequately compensate Sunstone for damages incurred and is not
intended to constitute any form of penalty. Any such payment shall be due and
payable on or before the day the Agreement terminates, a third party is added,
or Trust is merged or liquidated, as applicable.
14. Amendment to this Agreement. This Agreement may be amended only by the
written agreement of both parties hereto.
15. Governing Law. This Agreement shall be governed by the internal laws of
the State of Wisconsin without regard to its conflict of law provisions.
16. Confidentiality. Sunstone agrees to maintain all information about the
Funds that Sunstone acquires pursuant to this Agreement in confidence, and
Sunstone agrees not to use, or permit the use of, any such information for any
purpose except as set forth herein, or to disclose any such information to any
person except as required to perform its duties hereunder, without the prior
consent of the Trust, which consent shall not be unreasonably withheld and may
not be withheld where Sunstone may be exposed to civil or criminal contempt
proceedings or is required to divulge such information to duly constituted
authorities. Information that is generally known to the public or has become
known to the public through no wrongful act of Sunstone or any of its employees,
7
agents or representatives shall not be subject to this Section. The obligations
of Sunstone under this Section 16 shall survive the termination of this
Agreement.
17. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their constructions or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
19. Trust Limitations. This Agreement is executed by the Trust with
respect to each of the Funds and the obligations hereunder are not binding upon
any of the trustees, officers or shareholders of the Trust individually but are
binding only upon the Fund to which such obligations pertain and the assets and
property of such Fund. All obligations of the Trust under this Agreement shall
apply only on a Fund-by-Fund basis, and the assets of one Fund shall not be
liable for the obligations of another Fund. The Fund's Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date and year first above
written.
THE OBERWEIS FUNDS
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Title: Executive Vice President
--------------------------
SUNSTONE FINANCIAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Title: President
--------------------------
8
Schedule A
to the
Blue Sky Filing Services Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
FUNDS
Oberweis Emerging Growth Portfolio
Oberweis Micro-Cap Portfolio
Oberweis Mid-Cap Portfolio
Schedule B
to the
Blue Sky Filing Services Agreement
by and between
The Oberweis Funds
and
Sunstone Financial Group, Inc.
FEES
. Per Permit Fee
. The per permit fee is as follows:
$50.00 per permit up to 2,000 permits;
$40.00 per permit from 2,001 permits to 5,000 permits; and
$30.00 per permit from 5,001 permits and beyond.
Includes preparing and filing all renewal notice applications and amendment
applications to increase offering amounts; daily sales monitoring; and ongoing
analysis to manage offering amounts.
. Per Filing Fees
. $50 per filing for initial notice applications for a new fund or
portfolio or class.
. $50 per filing for amendment applications to reflect changes in fund
names or addresses, to merge or terminate funds, to remove classes,
portfolios or prospectuses, to change fiscal year ends or to change
distributors.
. $25 per filing of the definitive prospectus and statement of
additional information, annual report, post-effective amendment, and
supplements to the states that still require the filing of such documents.
. $50 for each claim of exemption filing.
. Research
. $150 per hour. Includes determining availability of exemptions and
research on other Blue Sky issues, done only upon request or with the
Trust's prior approval.
. Out-of-pocket expenses
. Out-of-pocket expenses include, but are not limited to, postage,
photocopying, express delivery, facsimile charges (CommScan), and
other out-of-pocket expenses.
. Customized Reports
. No charge, typically. Reports requiring an unusually large amount of
programming time, in Sunstone's sole discretion, may require the payment of
programming fees not to exceed $150 per hour. Programming fees will not be
incurred without the Trust's prior approval.
2
