AMENDED AND RESTATED
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of October __, 1999, by and between The
Xxxxxxxx Funds, Inc., a Maryland corporation (the "Company"), and Sunstone
Financial Group, Inc., a Wisconsin Corporation (the "Administrator").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end management investment company and is
authorized to issue shares of common stock (the "Shares") in separate series
with each such series representing the interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Company and the Administrator desire to enter into an
agreement pursuant to which the Administrator shall provide administration and
fund accounting services to such investment portfolios of the Company as are
listed on Schedule A hereto and any additional investment portfolios the Company
and the Administrator 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 " Xxxxxxxx Fund" and
collectively the " Xxxxxxxx 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 Company hereby appoints the Administrator as administrator and fund
accountant of the Xxxxxxxx Funds for the period and on the terms set forth in
this Agreement. The Administrator accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. Services as Administrator
(a) Subject to the direction and control of the Company's Board of
Directors and utilizing information provided by the Company and its agents, the
Administrator will: (1) provide office space, facilities, equipment and
personnel to carry out its services hereunder; (2) compile data for and prepare
with respect to the Xxxxxxxx Funds timely Notices to the Securities and Exchange
Commission (the "Commission") required pursuant to Rule 24f-2 under the Act and
Semi-Annual Reports on Form N-SAR; (3) prepare for execution by the Company and
file all federal income and excise tax returns and state income tax returns (and
such other required tax filings as may be agreed to by the parties) other than
those required to be made by the Company's custodian or transfer agent; (4)
prepare compliance filings relating to the registration of the securities of the
Xxxxxxxx Funds pursuant to state securities laws with the advice of the
Company's counsel; (5) perform securities valuations; (6) determine the income
and
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expense accruals of the Xxxxxxxx Funds; (7) calculate daily net asset values and
income factors of the Xxxxxxxx Funds; (8) maintain all general ledger accounts
and related subledgers; (9) prepare financial statements for the Annual and
Semi-Annual Reports required pursuant to Section 30(d) under the Act; (10)
review, to the extent requested by the Company, drafts of the Registration
Statement for the Company (on Form N-1A or any replacement therefor) and any
amendments thereto, and proxy materials; (11) prepare and monitor each Xxxxxxxx
Fund's expense accruals and cause all appropriate expenses to be paid from the
Xxxxxxxx Fund's assets on proper authorization from the Company; (12) assist in
the acquisition of the Company's fidelity bond required by the Act, monitor the
amount of the bond and make the necessary Commission filings related thereto;
(13) from time to time, as the Administrator deems appropriate, check each
Xxxxxxxx Fund's compliance with the policies and limitations relating to
portfolio investments as set forth in the Prospectus, Statement of Additional
Information, and Articles of Incorporation and monitor each Xxxxxxxx Fund's
status as a regulated investment company under Subchapter M of the Internal
Revenue Code, as amended (but this function shall not relieve the Company's
investment adviser of its primary day-to-day responsibility for assuring such
compliance); (14) maintain, and/or coordinate with the other service providers
the maintenance of, the accounts, books and other documents required pursuant to
Rule 31a-1(a) and (b) under the Act; and (15) generally assist in each Xxxxxxxx
Fund's administrative operations. In addition, the Administrator will monitor
the Company's arrangements with respect to services provided pursuant to any
plan of distribution, including reporting to the Board of Directors with respect
to the amounts paid or payable by the Xxxxxxxx Funds from time to time under the
plan and the nature of the services provided, and maintaining appropriate
records in connection with its monitoring duties. The duties of the
Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder.
(b) The Directors of the Company shall cause the officers and employees
of the Company, the adviser, legal counsel, independent accountants, custodian
and transfer agent and other agents and representatives of the Company to
cooperate with the Administrator and to provide the Administrator, upon request,
with such information, documents and advice relating to the Xxxxxxxx Funds as is
within the possession or knowledge of such persons, in order to enable the
Administrator to perform its duties hereunder. In connection with its duties
hereunder, the Administrator shall be entitled to rely, shall not be liable or
responsible for any losses from its reliance, and shall be held harmless by the
Company when acting in reliance, upon the instruction, advice, information or
any documents relating to the Xxxxxxxx Funds provided to the Administrator by
any of the aforementioned persons or their representatives. Fees charged by such
persons shall be an expense of the Xxxxxxxx Funds. The Administrator shall be
entitled to rely on any document which it reasonably believes to be genuine and
to have been signed or presented by the proper party. The Administrator shall
not be held to have notice of any change of authority of any officer, agent or
employee of the Company until receipt of written notice thereof from the
Company.
(c) In compliance with the requirements of Rule 31a-3 under the Act,
the Administrator hereby agrees that all records which it maintains for the
Xxxxxxxx Funds are the property of the Company and further agrees to surrender
promptly to the Company any of such records upon the Company's request. The
Administrator further agrees to preserve for the periods prescribed by Rule
31a-2 under the Act the records described in (a) above which are maintained by
the Administrator for the Xxxxxxxx Funds.
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(d) The Company's Board of Directors and the Xxxxxxxx Funds' investment
adviser have and retain responsibility for all compliance matters relating to
the Xxxxxxxx Funds including but not limited to compliance with the Investment
Company Act of 1940, as amended, the Internal Revenue Code of 1986, as amended,
and the policies and limitations of each Xxxxxxxx Fund relating to the portfolio
investments as set forth in the Prospectus and Statement of Additional
Information. The Administrator's monitoring and other functions hereunder shall
not relieve the Board of Directors and the investment adviser of their
respective duties to act in good faith, in a manner reasonably believed to be in
the best interests of the Xxxxxxxx Funds and with the care that an ordinary
prudent person in a like position would use under similar circumstances.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this
Agreement, the Company will pay the Administrator a fee, computed daily and
payable monthly, at the annual rate specified in Schedule B plus reasonable
out-of-pocket expenses. Fees shall be paid at a rate that would aggregate at
least the applicable minimum fee. Out-of-pocket expenses include, but are not
limited to, travel, lodging and meals, in connection with travel on behalf of
the Company, security pricing and corporate action services utilized by the
Administrator, programming and related expenses (previously incurred or to be
incurred by Administrator) in connection with providing electronic transmission
of data between the Administrator and the Xxxxxxxx Funds' other service
providers, brokers, dealers and depositories, and photocopying and overnight
delivery expenses.
(b) For the purpose of determining fees payable to the Administrator,
net asset value shall be computed in accordance with the Company's Prospectuses
and resolutions of the Company's Board of Directors. The fee for the period from
the day of the month this Agreement is entered into until the end of that month
shall be pro-rated according to the proportion which such period bears to the
full monthly period. Upon any termination of this Agreement before the end of
any month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. Such fee as is
attributable to each Xxxxxxxx Fund shall be a separate charge to such Xxxxxxxx
Fund and shall be the several (and not joint or joint and several) obligation of
each such Xxxxxxxx Fund.
(c) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise provided
herein. Costs and expenses to be incurred in the operation of the Xxxxxxxx
Funds, including, but not limited to: taxes; interest; brokerage fees and
commissions, if any; salaries, fees and expenses of Officers and Directors;
Commission fees and state Blue Sky fees; advisory and administration fees;
charges of custodians, transfer agents and dividend disbursing agents; insurance
premiums; outside auditing and legal expenses; costs of organization and
maintenance of corporate existence; typesetting, proofing, printing and mailing
of prospectuses, statements of additional information, supplements, notices and
proxy materials for regulatory purposes and for distribution to current
shareholders; typesetting, proofing, printing, mailing and other costs of
shareholder reports; expenses incidental to holding meetings of shareholders and
Directors; and any extraordinary expenses; will be borne by the Xxxxxxxx Funds.
Expenses incurred for distribution of securities of the Xxxxxxxx Funds,
including the typesetting, proofing, printing and mailing of
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prospectuses for persons who are not shareholders of the Xxxxxxxx Funds, will be
borne by the Xxxxxxxx Funds' investment adviser.
4. Proprietary and Confidential Information
The Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Company all records and
other information relative to the Xxxxxxxx Funds and prior, present or potential
shareholders of the Xxxxxxxx Funds (and clients of said shareholders), and not
to use such records and information for any purpose other than the performance
of its responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Administrator may be exposed to civil
or criminal proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the
Company.
5. Limitation of Liability
The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Notwithstanding any other provision of this
Agreement, and so long as the Administrator acts in good faith and without gross
negligence, the Company assumes full responsibility and shall indemnify and hold
harmless the Administrator from and against any and all actions, suits, claims,
demands, losses, expenses and liabilities whether with or without basis in fact
or law (including the costs of investigating or defending any alleged actions,
suits, claims, demands, losses, expenses and liabilities) of any and every
nature which the Administrator may sustain or incur or which may be asserted
against the Administrator by any person arising directly or indirectly out of
any action taken or omitted to be taken by it in performing the services
hereunder, or in reliance upon the instruction, advice, information or documents
provided to the Administrator by any party described in Section 2(b). (As used
in this Section 5(a), the term "Administrator" shall include past and present
directors, officers, employees and other corporate agents of the Administrator
as well as the corporation itself.) The indemnity and defense provisions set
forth herein indefinitely survive the termination of this Agreement.
6. Term
(a) This Agreement shall become effective with respect to each Xxxxxxxx
Fund listed on Schedule A hereof as of the date indicated in Schedule A and,
with respect to each other Xxxxxxxx Fund not presently in existence, on the date
specified in an amendment to Schedule A to this Agreement. Unless sooner
terminated as provided herein, this Agreement shall continue in effect with
respect to each Xxxxxxxx Fund until September 30, 2000. Thereafter, if not
terminated, this Agreement shall continue automatically in effect as to each
Xxxxxxxx Fund for successive annual periods unless terminated as provided
herein.
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(b) This Agreement may be terminated with respect to any one or more
particular Xxxxxxxx Funds without penalty by either party upon not less than
ninety (90) days written notice to the other party. The terms of this Agreement
shall not be waived, altered, modified, amended or supplemented in any manner
whatsoever except by a written instrument signed by the Administrator and the
Company.
7. Non-Exclusivity
The services of the Administrator rendered hereunder are not deemed to
be exclusive. The Administrator may render such services and any other services
to others, including other investment companies. The Company recognizes that,
from time to time, directors, officers and employees of the Administrator may
serve as directors, trustees, officers and employees of other corporations or
trusts (including other investment companies), that such other entities may
include the name of the Administrator as part of their name and that the
Administrator or its affiliates may enter into administration, distribution,
fund accounting or other agreements with such other corporations or trusts.
8. Governing Law; Invalidity
This Agreement shall be governed by the laws of the state of New York.
To the extent that the applicable laws of the state of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control, and nothing herein shall be construed in a manner
inconsistent with the Act or any rule or order of the Commission thereunder. Any
provision of this Agreement which may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability, 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.
9. Notices
Any notice required or to be permitted to be given by either party to
the other shall be in writing and shall be deemed to have been given when sent
by registered or certified mail, postage prepaid, return receipt requested, as
follows: Notice to the Administrator shall be sent to Sunstone Financial Group,
Inc., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX, 00000, Attention:
Xxxxxx X. Xxxxxxx, and notice to the Company shall be sent to The Xxxxxxxx
Funds, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxxxxx
X. Xxxxxxxx.
10. Counterparts
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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 XXXXXXXX FUNDS, INC.
("Company")
By:__________________________________________
Xxxxxxxxx X. Xxxxxxxx
President
SUNSTONE FINANCIAL GROUP, INC.
("Administrator")
By:__________________________________________
Xxxxxx X. Xxxxxxx
President
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Schedule A
to the
Amended and Restated
Administration and Fund Accounting Agreement
by and between
The Xxxxxxxx Funds, Inc.
and
Sunstone Financial Group, Inc.
Name of Fund Effective Date
The Xxxxxxxx Growth Fund August 1, 1994
The Xxxxxxxx Focus Fund October _, 1999
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Schedule B
to the
Amended and Restated
Administration and Fund Accounting Agreement
by and between
The Xxxxxxxx Funds, Inc.
and
Sunstone Financial Group, Inc.
Fee Schedule
Pursuant to Section 3, the Company shall pay the Administrator fees, computed
daily and payable monthly, based on the aggregate average net assets of each
Xxxxxxxx Fund at the annual rate as follows:
Minimum
Name of Fund Annual Fees Annual Fee
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Xxxxxxxx Growth Fund Up to $50 Million 15.0 basis points $60,000
$50 Million to $100 Million 12.5 basis points
$100 Million to $200 Million 7.5 basis points
$200 Million to $250 Million 5.0 basis points
Over $250 Million 3.0 basis points*
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Xxxxxxxx Focus Fund Up to $50 Million 15.0 basis points $60,000
$50 Million to $100 Million 12.5 basis points
$100 Million to $200 Million 7.5 basis points
$200 Million to $250 Million 5.0 basis points
Over $250 Million 3.0 basis points
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*The fee for the Xxxxxxxx Growth Fund for assets over $250 million shall be 5.0
basis points until such time as the Xxxxxxxx Focus Fund commences operations.
The Company shall also pay/reimburse the Administrator's out-of-pocket expenses
as described in the Agreement. The fee schedule for additional investment
portfolios or additional classes of shares of a portfolio will be such schedule
as the parties may agree, as reflected in an amended Schedule B.
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