EXHIBIT (H)(2)
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 3rd day of March, 2003, by and between
Lifetime Achievement Fund, Inc. a Maryland corporation (the "Company"), and UMB
Fund Services, Inc., a Wisconsin corporation (the "Administrator").
WHEREAS, the Company 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 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 Fund
and 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 "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 Company hereby appoints the Administrator as administrator and fund
accountant of the 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 current and
prior agents and service providers, the Administrator will provide the services
listed on Schedule B hereto. The duties of the Administrator shall be confined
to those expressly set forth therein, 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, directors,
investment adviser(s) and sub-advisers, legal counsel, independent accountants,
transfer agent, custodian and other service providers and agents, past or
present, for the Funds to cooperate with the Administrator and to provide the
Administrator with such information, documents and advice relating to the
Company and the Company as necessary and/or appropriate or as requested by the
Administrator, in order to enable the Administrator to perform its duties
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hereunder. In connection with its duties hereunder, the Administrator shall
(without investigation or verification) be entitled and is hereby instructed to,
rely upon any and all instructions, advice, information or documents provided to
the Administrator by an officer or representative of the Funds or by any of the
aforementioned persons. The Administrator 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 Company. The Administrator shall not be held to have notice of any change
of authority of any officer, agent, representative or employee of the Company,
investment adviser(s) or service provider until receipt of written notice
thereof from the Company. As used in this Agreement, the term "Investment
Adviser" includes all sub-advisers or persons performing similar services.
(c) To the extent required by Rule 31a-3 under the 1940 Act, the
Administrator hereby agrees that all records which it maintains for the Company
pursuant to its duties hereunder are the property of the Company and further
agrees to surrender promptly to the Company any of such records upon the
Company's request. Subject to the terms of Section 6, and where applicable, the
Administrator further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records described in Schedule B which are
maintained by the Administrator for the Company.
(d) It is understood that in determining security valuations, the
Administrator employs one or more pricing services, as directed by the Company,
to determine valuations of portfolio securities for purposes of calculating net
asset values of the Company. The Company shall identify to the Administrator the
pricing service(s) to be utilized on behalf of the Company. The Administrator
shall price the securities and other holdings of the Company for which market
quotations or prices are available by the use of such services. For those
securities where prices are not provided by the pricing service(s) utilized by
the Administrator, the Company shall approve, in good faith, the method for
determining the fair value of the securities. The Company's investment adviser
shall determine or obtain the valuation of the securities in accordance with
those procedures and shall deliver to the Administrator the resulting prices for
use in its calculation of net asset values. The Administrator is authorized to
rely on the prices provided by such service(s) or by the Company's investment
adviser(s) or other authorized representative of the Company without
investigation or verification.
(e) The Company's Board of Directors and the Funds' investment adviser(s) 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 limitations of each 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 and the investment adviser(s) of
their primary day-to-day responsibility for assuring such compliance.
(f) The Company hereby certifies that each Fund is lawfully eligible for sale in
each jurisdiction indicated for such Fund on the list furnished to the
Administrator as of the date of this Agreement.
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, plus out-of-pocket expenses, each as provided in Schedule C hereto. In
addition, to the extent that the Administrator corrects, verifies or addresses
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any prior actions or inactions by any Fund or by any prior service provider, the
Administrator shall be entitled to additional fees as provided in Schedule C.
Fees shall be paid by each Fund at a rate that would aggregate at least the
applicable minimum fee for each Fund. Basis point fees and minimum annual fees
apply separately to each Fund, and average net assets are not aggregated in
calculating the applicable basis point fee per Fund or the applicable minimum.
Fees shall be adjusted in accordance with Schedule C or as otherwise agreed to
by the parties from time to time. The parties may amend this Agreement to
include fees for any additional services requested by the Company, enhancements
to current services, or to add Funds for which the Administrator has been
retained. The Company agrees to pay the Administrator's then current rate for
additional services provided, or for enhancements to existing services currently
provided, after the execution of this Agreement.
(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 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 Company be
liquidated, merged with or acquired by another fund or investment company, any
accrued fees shall be immediately payable.
(c) The Administrator will bear all expenses incurred by it in connection with
the performance of its services under Section 2, except as otherwise provided
herein. The Administrator shall not be required to pay or finance any costs and
expenses incurred in the operation of the Funds, including, but not limited to:
taxes; interest; brokerage fees and commissions; salaries, fees and expenses of
officers and Directors; Securities and Exchange Commission (the "Commission")
fees and state Blue Sky fees; advisory fees; charges of custodians, transfer
agents, dividend disbursing and accounting services agents and other service
providers; security pricing services; insurance premiums; outside auditing and
legal expenses; costs of organization and maintenance of corporate existence;
taxes and fees payable to federal, state and other governmental agencies;
preparation, typesetting, printing, proofing and mailing of prospectuses,
statements of additional information, supplements, notices, forms and
applications and proxy materials for regulatory purposes and for distribution to
current shareholders; preparation, typesetting, printing, proofing and mailing
and other costs of shareholder reports; expenses in connection with the
electronic transmission of documents and information including electronic
filings with the Commission and the states; research and statistical data
services; expenses incidental to holding meetings of the Fund's shareholders and
Directors; fees and expenses associated with internet, e-mail and other related
activities; and extraordinary expenses. Expenses incurred for distribution of
shares, including the typesetting, printing, proofing and mailing of
prospectuses for persons who are not shareholders of the Fund, will be borne by
the Funds' investment adviser, except for such expenses permitted to be paid by
the Company under a distribution plan adopted in accordance with applicable
laws. The Administrator shall not be required to pay any Blue Sky fees or take
any related Blue Sky actions unless and until it has received the amount of such
fees from the Fund.
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(d) Except as otherwise specified, fees payable hereunder shall be calculated in
arrears and billed on a monthly basis. The Company agrees to pay all fees within
thirty days of receipt of each invoice. The Administrator 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.
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
relative to the Funds' shareholders, not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
and not to disclose such information except 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 court process,
when subject to governmental or regulatory audit or investigation, or when so
requested by the Company. In case of any requests or demands for inspection of
the records of the Funds, the Administrator will endeavor to notify the Company
promptly and to secure instructions from a representative of the Company as to
such inspection. Records and information which have become known to the public
through no wrongful act of the Administrator or any of its employees, agents or
representatives, and information which was already in the possession of the
Administrator prior to receipt thereof, shall not be subject to this paragraph.
5. LIMITATION OF LIABILITY
(a) The Administrator shall not be 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 the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Furthermore, the Administrator shall not be
liable for (i) any action taken or omitted to be taken in accordance with or in
reliance upon written or oral instructions, advise, data, documents or
information (without investigation or verification) received by the
Administrator from an officer or representative of the Company, or from a
representative of any of the parties referenced in Section 2, (ii) its reliance
on the security valuations without investigation or verification provided by
pricing service(s), the Company's investment adviser(s) or representatives of
the Company, or (iii) any action taken or omission by a Fund, the Company,
investment adviser(s) or any past or current service provider.
(b) The Administrator assumes no responsibility hereunder, and shall
not be liable, for any default, damage, loss of data or documents, errors, delay
or any other loss whatsoever caused by events beyond its reasonable control. The
Administrator will, however, take all reasonable steps to minimize service
interruptions for any period that such interruption continues beyond its
control.
(c) The Company agrees to indemnify and hold harmless the Administrator,
its employees, agents, officers, directors, affiliates and nominees
(collectively, the "Indemnified Parties") 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 or incurred
by any Indemnified Party or for which any Indemnified Party may be held liable
(a "Claim") arising out of or in any way relating to (i) the Administrator's
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actions or omissions except to the extent a Claim resulted from the
Administrator's willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder or from reckless disregard by it of its
obligations and duties hereunder; (ii) the Administrator's reliance on,
implementation of or use of (without investigation or verification) advice,
instructions, requests, directions, information, data, records and documents
received by the Administrator from any party referenced in Section 2 hereof or
other representative of the Company, (iii) any breach of any of the Company's
obligations, representations or warranties hereunder, or (iv) any action taken
by or omission of the Company, investment adviser(s) or any past or current
service provider.
(d) In no event and under no circumstances shall the Administrator, 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. The indemnity and defense provisions set forth in this
Section 5 shall indefinitely survive the termination and/or assignment of this
Agreement.
6. TERM
(a) This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date this Agreement is executed 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 terminated as provided
herein.
(b) Either party may terminate this Agreement at any time by giving the
other party a written notice not less than sixty (60) days prior to the date the
termination is to be effective. 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.
(c) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement or the liquidation of a Fund or the Company, the Administrator
shall deliver the records of the Fund(s) and/or Company as the case may be, in
the form maintained by the Administrator (to the extent permitted by applicable
license agreements) to the Company or person(s) designated by the Company at the
Company's cost and expense, and thereafter the Fund or its designee shall be
solely responsible for preserving the records for the periods required by all
applicable laws, rules and regulations. The Company shall be responsible for all
expenses associated with the movement (or duplication) of records and materials
and conversion thereof to a successor fund accounting and administrative
services agent, including all reasonable trailing expenses incurred by the
Administrator. In addition, in the event of termination of this Agreement, or
the proposed liquidation or merger of the Company or a Fund(s), and the Company
requests the Administrator to provide additional services in connection
therewith, the Administrator shall provide such services and be entitled to such
compensation as the parties may mutually agree.
(d) Notwithstanding any other provision of this Agreement, in the event
of an agreement to enter into a transaction that would result in a Change of
Control, as hereinafter defined, of the Company's investment adviser or sponsor,
the Company's ability to terminate this Agreement pursuant to this Section 6
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shall be suspended from the time of such agreement until eighteen months after
the Change of Control. For purposes of this Agreement, a "Change of Control" of
the investment adviser or sponsor means a change in ownership or control of more
than fifty percent (50%) of the common stock or shares of beneficial interest of
such investment adviser or sponsor or its parent company.
7. NON-EXCLUSIVITY
The services of the Administrator rendered to the Company 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 trustees, directors, officers and employees of other entities
(including other investment companies), and that the Administrator 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 the Administrator shall be sent to UMB Fund Services, Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇, with a copy to General Counsel, and notice to the Company shall be sent
to Lifetime Achievement Fund, Inc.,11605 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇, ▇▇▇▇▇,
Attention: President.
10. ENTIRE AGREEMENT
This Agreement, together with the Schedules attached hereto, constitutes
the entire Agreement of the parties hereto.
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11. FUND LIMITATIONS
This Agreement is executed by the Company with respect to each of the
Fund(s) and the obligations hereunder are not binding upon any of the Directors,
officers or shareholders of the Company 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 Company 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 Articles of Incorporation are on file
with the Secretary of State of Maryland.
12. MISCELLANEOUS
(a) 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. The facsimile signature of any party
to this Agreement shall constitute the valid and binding execution hereof by
such party.
(b) The Company hereby grants to the Administrator the limited power of attorney
on behalf of the Funds to sign Blue Sky forms and related documents in
connection with the performance of its obligations under this Agreement.
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.
LIFETIME ACHIEVEMENT FUND, INC.
(the "Company")
By:
------------------------------------
President
UMB FUND SERVICES, INC.
("Administrator")
By:
------------------------------------
President
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SCHEDULE A
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
LIFETIME ACHIEVEMENT FUND, INC.
AND
UMB FUND SERVICES, INC.
NAME OF FUNDS
Lifetime Achievement Fund
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SCHEDULE B
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
LIFETIME ACHIEVEMENT FUND. INC.
AND
UMB FUND SERVICES, INC.
SERVICES
Subject to the direction and control of the Fund's Board of Directors and
utilizing information provided by the Company and its agents, the Administrator
will:
o provide office space, facilities, equipment and personnel to carry out its
services hereunder;
o compile data for and prepare with respect to the Funds timely Notices to
the Commission required pursuant to Rule 24f-2 under the 1940 Act and
Semi-Annual Reports on Form N-SAR;
o assist in the preparation 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, subject
to the review and approval of the Company and the Company's independent
accountants;
o prepare the financial statements for the Annual and Semi-Annual Reports
required pursuant to Section 30(d) under the 1940 Act, subject to the
review and approval of the Company and the Company's independent
accountants;
o provide financial and Fund performance information for inclusion in the
Registration Statement for the Company (on Form N-1A or any replacement
therefor) and any amendments thereto, subject to the review of Company
counsel;
o determine and periodically monitor each Fund's income and expense accruals
and cause all appropriate expenses to be paid from Company assets on proper
authorization from the Company;
o calculate income factors and daily net asset values of each Fund (i) in
accordance with the Company's operating documents as provided to the
Administrator, and (ii) based on security valuations provided by the
Company, the Company's investment adviser, and pricing service(s), as
provided herein;
o maintain all general ledger accounts and related subledgers;
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o assist in the acquisition of the Company's fidelity bond required by the
1940 Act, monitor the amount of the bond and make the necessary Commission
filings related thereto;
o from time to time as the Administrator deems appropriate, check each Fund's
compliance with the policies and limitations of each Fund relating to the
portfolio investments as set forth in the Prospectus and Statement of
Additional Information and monitor each Fund's status as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended (but these functions shall not relieve the Company's investment
adviser and sub-advisers, if any, of their primary day-to-day
responsibility for assuring such compliance);
o 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 1940 Act;
o prepare and/or file state securities registration compliance filings, with
the advice of the Company's legal counsel, upon and in accordance with
instructions from the Company, which instructions will include the states
to qualify in, the amounts of Shares to initially and subsequently qualify
and the warning threshold to be maintained;
o develop with legal counsel and the secretary of the Company an agenda for
each board meeting and, if requested by the Directors, attend board
meetings and prepare minutes;
o prepare Form 1099s for Directors and other fund vendors;
o calculate dividend and capital gains distributions subject to review and
approval by the Company and its independent accountants; and
o generally assist in the Company's administrative operations as mutually
agreed to by the parties.
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. These services do not include correcting, verifying or
addressing any prior actions or inactions by any Fund or by any prior service
provider. To the extent the Administrator agrees to take such actions, those
actions taken shall be deemed part of the Schedule B.
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SCHEDULE C
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
LIFETIME ACHIEVEMENT FUND, INC.
AND
UMB FUND SERVICES, INC.
Annual Asset-Based Fees (per portfolio)
o Up to $250 million 9.0* basis points, plus
o Next $250 million 6.5* basis points, plus
o Next $250 million 4.0* basis points, plus
o Over $750 million 3.0* basis points
* Fees may be higher or require customization for more complex portfolios (i.e.
international, mortgage-backed, hedge funds, etc.)
MINIMUM ANNUAL FEE
$110,000 minimum annual asset-based fee for each fund. Minimum fees are
aggregated and applied pro-rata across all funds.
MULTI-CLASS
$1,500 per class, per month
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, portfolio pricing
services, ▇▇▇▇▇ filing fees, designing, typesetting and printing of shareholder
reports and prospectuses, express delivery charges and travel on behalf of fund
business.
Fees for services not contemplated by this schedule will be negotiated on a
case-by-case basis.
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