EXHIBIT 23(H)(1)
FUND ADMINISTRATION SERVICING AGREEMENT
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 2nd day of August,
1999, by and between XYZ Funds, Inc., a Maryland corporation (hereinafter
referred to as the "Company"), and Firstar Mutual Fund Services, LLC, a
Wisconsin limited liability company (hereinafter referred to as "Firstar").
WHEREAS, the Company is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create separate series, each with
its own separate investment portfolio;
WHEREAS, Firstar is in the business of providing, among other things, fund
administration services to investment companies; and
WHEREAS, the Company desires to retain Firstar to act as Administrator for
the XYZ Fund and for each additional series of the Company listed on Exhibit A
attached hereto (each, a "Fund"), as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and Firstar agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Company hereby appoints Firstar as Administrator of the Company on the
terms and conditions set forth in this Agreement, and Firstar hereby accepts
such appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FIRSTAR
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Coordinate board communication by:
a. Assisting Company counsel in establishing meeting
agendas
b. Preparing board reports based on financial and
administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and
officer liability coverage, and making the necessary SEC
filings relating thereto
e. Preparing minutes of meetings of the board and
shareholders
3. Audits
a. Prepare appropriate schedules and assist independent
auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Fund
5. Pay Fund expenses upon written authorization from the Company
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including:
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of Ethics for the disinterested directors of
the Fund (if requested by the Fund)
b. Monitor Fund's compliance with the policies and
investment limitations of the Company as set forth in
its Prospectus and Statement of Additional Information
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings
relating to the registration of the securities of the
Company so as to enable the Company to make a continuous
offering of its shares in all states
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a. Assist Company counsel in updating Prospectus and
Statement of Additional Information and in preparing
proxy statements and Rule 24f-2 notices
b. Prepare annual and semiannual reports
c. Coordinate the printing of publicly disseminated
Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
4. IRS Compliance
a. Monitor Company's status as a regulated investment
company under Subchapter M through review of the
following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and
Statement of Additional Information
2. Prepare financial reports for shareholders, the board, the
SEC, and independent auditors
3. Supervise the Company's Custodian and Company Accountants
in the maintenance of the Company's general ledger and in
the preparation of the Fund's financial statements,
including oversight of expense accruals and payments, of
the determination of net asset value of the Company's net
assets and of the Company's shares, and of the declaration
and payment of dividends and other distributions to
shareholders
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including Forms 1120/8610 with any necessary
schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to directors and
other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
3. COMPENSATION
The Company, on behalf of the Fund, agrees to pay Firstar for the
performance of the duties listed in this Agreement, the fees and out-of-pocket
expenses as set forth in the attached Exhibit A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Company and Firstar.
The Company agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. Firstar shall exercise reasonable care in the performance of its duties
under this Agreement. Firstar shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with
matters to which this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power supplies beyond
Firstar's control, except a loss resulting from Firstar's refusal or failure to
comply with the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, the Company
shall indemnify and hold harmless Firstar from and against any and all claims,
demands, losses, expenses, and liabilities (whether with or without basis in
fact or law) of any and every nature (including reasonable attorneys' fees)
which Firstar may sustain or incur or which may be asserted against Firstar by
any person arising out of any action taken or omitted to be taken by it in
performing the services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction provided to
Firstar by any duly authorized officer of the Company, such duly authorized
officer to be included in a list of authorized officers furnished to Firstar and
as amended from time to time in writing by resolution of the Board of Directors
of the Company.
Firstar shall indemnify and hold the Company harmless from and
against any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which the Company may sustain or incur or which may
be asserted against the Company by any person arising out of any action taken or
omitted to be taken by Firstar as a result of Firstar's refusal or failure to
comply with the terms of this Agreement, its bad faith, negligence, or willful
misconduct.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, Firstar shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond Firstar's control. Firstar will make every reasonable effort to restore
any lost or damaged data and correct any errors resulting from such a breakdown
at the expense of Firstar. Firstar agrees that it shall, at all times, have
reasonable contingency plans with appropriate parties, making reasonable
provision for emergency use of electrical data processing equipment to the
extent appropriate equipment is available. Representatives of the Company shall
be entitled to inspect Firstar's premises and operating capabilities at any time
during regular business hours of Firstar, upon reasonable notice to Firstar.
Regardless of the above, Firstar reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all reasonable care to
notify the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for indemnification. The
indemnitor shall have the option to defend the indemnitee against any claim
which may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the indemnitor
will be asked to indemnify the indemnitee except with the indemnitor's prior
written consent.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
Firstar agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Company
all records and other information relative to the Company and prior, present, or
potential shareholders of the Company (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 Firstar may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Company.
6. DATA NECESSARY TO PERFORM SERVICES
The Company or its agent, which may be Firstar, shall furnish to Firstar
the data necessary to perform the services described herein at times and in such
form as mutually agreed upon.
7. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in effect for
successive two year periods. The Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the two year anniversary to
the other party.
If the Company elects to terminate this Agreement prior to the two year
anniversary of this Agreement, for reasons other than unacceptable service
levels, the Company agrees to reimburse Firstar for the difference between the
termination date and the anniversary date in the two year fees based on the
current fees of the Company.
8. NOTICES
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered as follows: Notice
to Firstar shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Legacy Funds, Inc.
00 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Corporate Secretary
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
Firstar's duties or responsibilities hereunder is designated by the Company by
written notice to Firstar, Firstar will promptly, upon such termination and at
the expense of the Company, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by Firstar
under this Agreement in a form reasonably acceptable to the Company (if such
form differs from the form in which Firstar has maintained, the Company shall
pay any expenses associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from Firstar's personnel in the establishment of books,
records, and other data by such successor.
10. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
11. RECORDS
Firstar shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Company but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
the 1940 Act and the rules thereunder. Firstar agrees that all such records
prepared or maintained by Firstar relating to the services to be performed by
Firstar hereunder are the property of the Company and will be preserved,
maintained, and made available in accordance with such section and rules of the
1940 Act and will be promptly surrendered to the Company on and in accordance
with its request.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer in one or more counterparts as of the day
and year first written above.
XYZ FUNDS, INC. FIRSTAR MUTUAL FUND
By: By:
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Print: Print:
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Title: Title:
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Date: Date:
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Attest: Attest:
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FUND ADMINISTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE - DOMESTIC FUNDS
EXHIBIT A
Separate Series of XYZ Funds, Inc.
NAME OF SERIES DATE ADDED
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XYZ Fund August 2, 1999
Class A
Annual fee based upon average assets per Fund
7 basis points on the first $200 million
6 basis points on the next $500 million
4 basis points on the balance
Minimum annual fee: $30,000 per Fund or Class
Plus out-of-pocket expense reimbursements, including but not limited to:
Postage
Programming
Stationery
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Fees and out-of-pocket expense reimbursements are billed to the Fund monthly.
