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ADMINISTRATIVE SERVICES AGREEMENT
between the
ADVISORONE FUNDS
and
GEMINI FUND SERVICES, LLC
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INDEX
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1. DUTIES OF THE ADMINISTRATOR................................................3
2. COMPENSATION OF THE ADMINISTRATOR..........................................4
3. RESPONSIBILITY AND INDEMNIFICATION.........................................4
4. REPORTS....................................................................5
5. ACTIVITIES OF THE ADMINISTRATOR............................................5
6. RECORDS....................................................................5
7. CONFIDENTIALITY............................................................6
8. DURATION AND TERMINATION OF THE AGREEMENT..................................6
9. ASSIGNMENT.................................................................6
10. NEW YORK LAWS TO APPLY.....................................................6
11. AMENDMENTS TO THIS AGREEMENT...............................................6
12. MERGER OF AGREEMENT........................................................6
13. NOTICES....................................................................6
SCHEDULE A (fund listing)......................................................8
SCHEDULE B.....................................................................9
(A) ADMINISTRATIVE SERVICE FEE:................................................8
FEE INCREASES..............................................................8
(B) STATE REGISTRATION (BLUE SKY) SURCHARGE:...................................9
(C) EXPENSES...................................................................9
(D) SPECIAL REPORTS...........................................................10
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ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 23rd day of June 2003, by and between the AdvisorOne Funds, a
Delaware Business Trust, having its principal office and place of business 0000
Xxxxx 000xx Xxxxxx, Xxxxx, XX 00000 (the "Trust"), and Gemini Fund Services,
LLC, a Nebraska limited liability company 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 Trust(1) consists of various series listed in Schedule A
(collectively referred to as the "Funds") of diversified and non-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 limited liability company experienced in
providing administrative services to mutual funds and possesses facilities
sufficient to provide such services; and
WHEREAS, the Trust desires to avail itself of the experience, assistance
and facilities of the Administrator and to have the Administrator perform for
the Trust certain services appropriate to the operations of its Funds 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 Trust and the Administrator hereby agree to the
following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Trust with the necessary office space,
communication facilities and personnel to perform the following services for the
Trust:
(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 Trust and Administrator from time to
time;
(d) Prepare selected financial data required for trustee' meetings as
agreed upon by the Trust and the Administrator from time to time and
coordinate trustees meeting agendas with outside legal counsel to
the Trust;
(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 Trust's independent
public accountants;
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(1) The term "Trust" shall refer to the AdvisorOne Funds, and each series of the
AdvisorOne Funds that is approved by the Board of Trustees of the AdvisorOne
Funds for inclusion under the terms of this agreement, and each series that is
so approved shall be subject to the terms of this Agreement without the need for
an amendment of or addition to this Agreement.
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(f) Prepare the Trust's federal, state, and local tax returns to be
reviewed by the Trust's independent public accountants;
(g) Prepare and maintain the Trust's operating expense budget to
determine proper expense accruals to be charged to its Funds in
order to calculate their daily net asset value;
(h) 1940 ACT filings -
In conjunction with the Trust's outside legal counsel the
Administrator will:
o Prepare the Trust's Form N-SAR reports;
o Update all financial sections of the Trust's Statement
of Additional Information and coordinate its completion;
o Update all financial sections of the Trust's prospectus
and coordinate its completion;
o Update all financial sections of the Trust's proxy
statement and coordinate its completion;
o Prepare an annual update to Trust's 24f-2 filing (if
applicable);
(i) Monitor services provided by the Trust's custodian bank as well as
any other service providers to the Trust;
(j) Provide appropriate financial schedules (as requested by the Trust's
independent public accountants or SEC examiners), coordinate the
Trust's annual or SEC audit, and provide office facilities as may be
required;
(k) Attend management and board of trustees meetings as requested;
(l) The preparation and filing (filing fee to be paid by the Trust) of
applications and reports as necessary to register or maintain the
Trusts registration under the securities or "Blue Sky" laws of the
various states selected by the Trust 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 Trust in any way or otherwise be deemed an
agent of the Trust.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by the Administrator as
set forth herein for each portfolio approved for inclusion hereunder by the
Board of Trustees of the Trust, the Administrator shall be entitled to receive
compensation and reimbursement for all reasonable out-of-pocket expenses. The
Trust agrees to pay the Administrator the fees and reimbursement of
out-of-pocket expenses as set forth in the fee schedule attached hereto as
Schedule B.
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 Trust 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 Trust, advice of the Trust, or of counsel
for the Trust and upon statements of the Trust'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.
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(b) The Administrator shall not be liable to the Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Trust 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
Trust, and the Trust 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 Trustees of the Trust,
on a quarterly basis, a report, in such a form as the Administrator and the
Trust shall from time to time agree, representing that, to its knowledge, the
Trust 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 Trust 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 Trust, 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 Trust 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
Trust, and shall be surrendered to the Trust, at the expense of the Trust,
promptly upon request by the Trust, provided that all service fees and expenses
charged by the Administrator in the performance of its duties hereunder have
been fully paid to the satisfaction of the Administrator, in the form in which
such accounts and records have been maintained or preserved. The Administrator
agrees to maintain a back-up set of accounts and records of the Trust (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. The Administrator
shall assist the Trust's independent auditors, or, upon approval of the Trust,
any regulatory body, in any requested review of the Trust's
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accounts and records. The Administrator shall preserve the accounts and records
as they are required to be maintained and preserved by Rule 31a-1.
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 Trust.
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 and shall continue in effect for
successive twelve-month periods thereafter with the approval of the Board or by
a vote of a majority of the outstanding voting securities of the Fund.
Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust. Additionally, the Administrator 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 Trust without the prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Trust.
10. NEW YORK LAWS TO APPLY.
The laws of the State of New York shall govern this Agreement without
giving effect to the principles of conflict of laws. Any controversy or claim
arising out of, or related to, this Agreement, its termination or the breach
thereof, shall be settled by binding arbitration by three arbitrators (or by
fewer, if the parties subsequently agree thereto) in the City of New York, New
York, in accordance with the rules then obtaining of the American Arbitration
Association, and the arbitrators' decision shall be binding and final, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof.
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):
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To the Trust: To the Administrator:
Xxxxx Xxxxxxx Xxxxx Xxxxxx
Secretary President
AdvisorOne Funds Gemini Fund Services, LLC
0000 Xxxxx 000xx Xxxxxx 000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxx, XX 00000 Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ADVISORONE FUNDS GEMINI FUND SERVICES, LLC
By:____________________________ By:__________________________
W. Xxxxxxx Xxxxxx, President Xxxxx X. Xxxxxx, President
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SCHEDULE A
FUND LISTING
The Xxxxxxx Fund
The Clermont Fund
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SCHEDULE B
ADMINISTRATIVE SERVICE FEE SCHEDULE
ADMINISTRATIVE SERVICE FEE
For the services rendered by the Administrator in its capacity as
administrator, the Trust shall pay the Administrator within ten (10) days after
receipt of an invoice from the Administrator at the beginning of each month, a
fee equal to the greater of the following, for each series of the Trust approved
by the Board of Trustees of the Trust for inclusion hereunder:
NET ASSET CHARGE (except for the Cash Reserves Fund) (based upon prior month
average net assets):
Assets up to $100 million...................... 10 basis points (.10%)
Assets from $100 million to $250 million....... 8 basis points (.08%)
Assets from $250 million to $500 million ...... 5 basis points (.05%)
Greater than $500 million on................... 3 basis points (.03%)
OR
MINIMUM FEE:
$40,000 per Fund per year
On each anniversary date of this Agreement, the fees enumerated above may 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. Any CPI increases not charged in any given year may be
included in prospective CPI fee increases in future years. For the first year of
this Agreement, fees will be adjusted to include CPI increases for the following
years: 2000, 2001, 2002, and 2003.
STATE REGISTRATION (BLUE SKY) FEES
The fees enumerated 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
OUT OF POCKET EXPENSES
The Trust shall reimburse the Administrator for any out-of-pocket
expenses, exclusive of salaries, advanced by the Administrator in connection
with but not limited to the printing or filing of documents for the Trust,
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
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hereunder. The Administrator shall provide the Trust with a monthly invoice of
such expenses and the Trust shall reimburse the Administrator within fifteen
(15) days after receipt thereof.
SPECIAL REPORTS
All reports and /or analyses requested by the Trust, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Trust, 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.
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