EXHIBIT 9.2
ADMINISTRATIVE SERVICE AGREEMENT
BETWEEN
THE CANANDAIGUA FUNDS
AND
AMERICAN DATA SERVICES, INC.
INDEX
1. DUTIES OF THE ADMINISTRATOR.
2. COMPENSATION OF THE ADMINISTRATOR.
3. RESPONSIBILITY AND INDEMNIFICATION.
4. REPORTS.
5. ACTIVITIES OF THE ADMINISTRATOR.
6. RECORDS.
7. CONFIDENTIALITY.
8. DURATION AND TERMINATION OF THE AGREEMENT.
9. ASSIGNMENT.
10. NEW YORK LAWS TO APPLY
11. AMENDMENTS TO THIS AGREEMENT.
12. MERGER OF AGREEMENT
13. NOTICES.
SCHEDULE A
(A) ADMINISTRATIVE SERVICE FEE:
FEE INCREASES
(B) EXPENSES.
(c) STATE REGISTRATION (BLUE SKY) SURCHARGE:
(D) SPECIAL REPORTS.
(e) SECURITY DEPOSIT.
SCHEDULE B
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 2nd day of December 1997, by and between The Canandaigua
Funds, a Delaware Business Trust, having its principal office and place of
business at 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxxx Xxx Xxxx, 00000 (the "Fund"), and
American Data Services, Inc., a New York corporation having its principal
office and place of business at the Hauppauge Corporate Center, 000 Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx 00000 (the "Administrator").
BACKGROUND
WHEREAS, the Fund is a diversified open-end management investment
company registered with the United States Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Administrator is a corporation experienced in
providing administrative services to mutual funds and possesses facilities
sufficient to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience,
assistance and facilities of the Administrator and to have the Administrator
perform for the Fund certain services appropriate to the operations of the Fund
and the Administrator is willing to furnish such services in accordance with
the terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the Fund and the Administrator hereby agree to
the following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for
the Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and
annual financial statements;
(c) Prepare selected management reports for performance and
compliance analyses as agreed upon by the Fund and Administrator
from time to time;
(d) Prepare selected financial data required for directors'
meetings as agreed upon by the Fund and the Administrator from time
to time and coordinate directors meeting agendas with outside legal
counsel to the Fund;
(e) Determine income and capital gains available for
distribution and calculate distributions required to meet
regulatory, income, and excise tax requirements, to be reviewed by
the Fund's independent public accountants;
(f) Prepare the Fund's federal, state, and local tax returns
to be reviewed by the Fund's independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget
to determine proper expense accruals to be charged to the Fund in
order to calculate it's daily net asset value;
(h) 1940 ACT filings -
In conjunction with the Fund's outside legal counsel the
Administrator will:
Prepare the Fund's Form N-SAR reports;
Update all financial sections of the Fund's Statement of
Additional Information and coordinate its completion;
Update all financial sections of the Fund's prospectus and
coordinate its completion;
Update all financial sections of the Fund's proxy statement and
coordinate its completion;
Prepare an annual update to Fund's 24f-2 filing
(if applicable);
(i) Monitor services provided by the Fund's custodian bank as
well as any other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by
the Fund's independent public accountants or SEC examiners),
coordinate the Fund's annual or SEC audit, and provide office
facilities as may be required;
(k) Attend management and board of directors meetings as
requested;
(l) The preparation and filing (filing fee to be paid by the
Fund) of applications and reports as necessary to register
or maintain the Funds registration under the securities or "Blue
Sky" laws of the various states selected by the Fund or its
Distributor.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by ADS as set forth
herein for each portfolio listed in Schedule B, ADS shall be entitled to
receive compensation and reimbursement for all reasonable out-of-pocket
expenses. The Fund agrees to pay ADS the fees and reimbursement of out-of-
pocket expenses as set forth in the fee schedule attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall be without liability to
the Fund for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel
for the Fund and upon statements of the Fund's independent accountants, and
shall be without liability for any action reasonably taken or omitted pursuant
to such records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state
laws or regulations, and provided further that such action is taken without
gross negligence, bad faith, willful misconduct or reckless disregard of its
duties.
(b) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission
by the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security
holders to which the Administrator shall otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence in the performance of its
duties on behalf of the Fund, reckless disregard of the Administrator's
obligations and duties under this Agreement or the willful violation of
any applicable law.
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such persons
harmless from and against, any liability for and any damages, expenses or
losses incurred by reason of the inaccuracy of information furnished to
the Administrator by the Fund or its authorized agents or in connection with
any error in judgment or mistake of law or any act or omission in the course
of, connected with or arising out of any services to be rendered hereunder,
except by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties, by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement or the willful
violation of any applicable law.
4. REPORTS.
(a) The Fund shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator
shall not be responsible for the accuracy of any information furnished to
it by the Fund, and the Fund shall hold the Administrator harmless in regard to
any liability incurred by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the
Fund, on a quarterly basis, a report, in such a form as the Administrator and
the Fund shall from time to time agree, representing that, to its knowledge,
the Fund was in compliance with all requirements of applicable federal and
state law, including without limitation, the rules and regulations of the
Securities and Exchange Commission and the Internal Revenue Service, or
specifying any instances in which the Fund was not so in compliance. Whenever,
in the course of performing its duties under this Agreement, the Administrator
determines, on the basis of information supplied to the Administrator by the
Fund, that a violation of applicable law has occurred, or that, to its
knowledge, a possible violation of applicable law may have occurred or, with
the passage of time, could occur, the Administrator shall promptly notify the
Fund and its counsel of such violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
6. RECORDS.
The records maintained by the Administrator shall be the property of the
Fund, and shall be made available to the Fund promptly upon request by the Fund
in the form in which such records have been maintained or preserved. The
Administrator shall upon approval of the Fund assist the Fund's independent
auditors, or, any regulatory body, in any requested review of the Fund's
accounts and records. The Administrator shall preserve the records in its
possession (at the expense of the Fund) as required by Rule 31a-1 of the 1940
Act.
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto, as confidential and such information
shall not be disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, upon
ninety (90) days prior written notice.
Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, ADS reserves the right to charge for any other
reasonable expenses associated with such termination.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the prior written
consent of the Administrator, or by the Administrator without the prior written
consent of the Fund.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable
law of the State of New York, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing, shall
be deemed to have been given when delivered in person or by certified mail,
return receipt requested, and shall be given to the following addresses (or
such other addresses as to which notice is given):
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE CANANDAIGUA FUNDS AMERICAN DATA SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
Xxxxxx Xxxxxxxx, Secretary and Treasurer Xxxxxxx Xxxxx, President
SCHEDULE A
(A) ADMINISTRATIVE SERVICE FEE:
For the services rendered by ADS in its capacity as administrator, as
specified in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the Fund shall pay ADS
within ten (10) days after receipt of an invoice from ADS at the beginning of
each month, a fee equal to the greater of:
NOTE: THE FOLLOWING FEES ARE PER PORTFOLIO SERVICED.
MINIMUM FEE:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
EACH
PORTFOLIO
Under $5 million .......................... $1,500
From $5 million to $10 million..... 1,750
From $10 million to $20 million....... 2,000
From $20 million on......................... 2,500
OR,
NET ASSET CHARGE:
1/12th of 0.012% (12 basis points) of average net assets of portfolio for
month.
FEE INCREASES
On each annual anniversary date of this Agreement, the fees enumerated above
will be increased by the change in the Consumer Price Index for the Northeast
region (CPI) for the twelve month period ending with the month preceding such
annual anniversary date.
(B) EXPENSES.
The Fund shall reimburse ADS for any out-of-pocket expenses , exclusive
of salaries, advanced by ADS in connection with but not limited to the printing
or filing of documents for the Fund, travel, telephone, quotation services,
facsimile transmissions, stationery and supplies, record storage,
postage, telex, and courier charges, incurred in connection with the
performance of its duties hereunder. ADS shall provide the Fund with a monthly
invoice of such expenses and the Fund shall reimburse ADS within fifteen (15)
days after receipt thereof.
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:
The fees enumerated in paragraph (a) above include the initial state
registration, renewal and maintenance of registrations (as detailed in
Paragraph 1(l) DUTIES OF THE ADMINISTRATOR) for three (3) states. Each
additional state registration requested will be subject to the following fees:
Initial registration ............... $295.00
Registration renewal ........... $150.00
Sales reports (if required) ... $ 25.00
(D) SPECIAL REPORTS.
All reports and /or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund administrative activities
as specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
(E) SECURITY DEPOSIT.
The Fund will remit to ADS upon execution of this Agreement a security
deposit equal to one (1) month's minimum fee under this Agreement, computed in
accordance with the number of portfolios listed in Schedule B of this
Agreement. The Fund will have the option to have the security deposit applied
to the last month's service fee, or applied to any new contract between the
Fund and ADS.
However, if the Fund elects or is forced to terminate this Agreement for any
reason what-so-ever (including, but not limited to, the voluntary or
involuntary termination of the Fund, liquidation of the Fund's assets, the sale
or merger of the Fund or it's assets to any successor entity) prior to the
termination date of this Agreement as specified in Paragraph 8 of this
Agreement, the Fund will forfeit the Security Deposit paid to ADS upon
execution of this Agreement
SCHEDULE B
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
The Equity Fund
The Bond Fund
