EXHIBIT 23(H)(2)
FUND ACCOUNTING SERVICING AGREEMENT
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of December,
1999, by and between The Legacy Funds, Inc., a Delaware business trust
(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
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,
mutual fund accounting services to investment companies; and
WHEREAS, the Company desires to retain Firstar to provide accounting
services to The Legacy Growth Fund and each additional series of the Company
listed on Exhibit A attached hereto (each, a "Fund"), as it 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 FUND ACCOUNTANT
The Company hereby appoints Firstar as Fund Accountant 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. In performing its duties hereunder, Firstar will (i) comply with all
applicable requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Investment Company Act
of 1940, as amended, and the applicable rules and regulations thereunder and
any laws, rules and regulations of governmental authorities having
jurisdiction, (ii) with respect to accounting matters, comply with generally
accepted accounting principles as from time to time in effect and (iii) act
in conformity with the instructions and directions of the Board of Trustees
of the Company and such officers of the Company as may be designated for such
purpose by the Board of Trustees from time to time which are timely delivered
to Firstar.
2. DUTIES AND RESPONSIBILITIES OF FIRSTAR
A. Portfolio Accounting Services. Firstar shall:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Trustees of the Company and apply those
prices to the portfolio positions in a manner consistent with the
Company's registration statement. For those securities where market
quotations are not readily available, the Board of Trustees of the Company
shall approve, in good faith, the method for determining the fair value
for such securities, and Firstar shall value such securities in accordance
with such method.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them
as, short-term or long-term; account for periodic distributions of gains
or losses to shareholders and maintain undistributed gain or loss balances
as of each valuation date.
B. Expense Accrual and Payment Services. Firstar shall:
(1) For each valuation date, calculate the expense accrual
amounts as directed or approved by the Company as to methodology, rate or
dollar amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Company.
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by Firstar and
the Company.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services. Firstar shall:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Company.
(3) Determine net investment income (earnings) for the Fund as
of each valuation date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances as
of each valuation date.
(4) Maintain a general ledger and other accounts, books, and
financial records for the Fund in accordance with good accounting
practices and the accounting and regulatory requirements applicable to the
Fund.
(5) Determine the net asset value of the Fund on the days and
according to the accounting policies and procedures set forth in the
Fund's registration statement.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of Fund operations at
such time as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price
for each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services. Firstar shall:
(1) Maintain accounting records for the investment portfolio
of the Fund to support the tax reporting required by Subchapter M of the
Internal Revenue Code.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the
tax lot relief method designated by the Company.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services. Firstar shall:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund's accounting records
available to the Company, the Securities and Exchange Commission (the
"SEC"), and the outside auditors of the Company.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder.
F. Other. Firstar shall:
(1) Record and journalize investment, capital share and income
and expense activities;
(2) Enter into the fund accounting system investment buy/sell
trade tickets when received from the investment adviser for the Fund;
(3) Maintain individual ledgers for investment securities;
(4) Reconcile cash and investment balances of the Fund with
the Custodian;
(5) Provide the General Ledger and the Statement of
Operations;
(6) Calculate capital gains and losses and foreign exchange
gains and losses;
(7) Transmit or mail a copy of the daily portfolio valuation
to the investment adviser;
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source approved by
the Company's Board of Trustees and apply those prices to the portfolio
positions of the Fund. For those securities where market quotations are not
readily available, the Company's Board of Trustees shall approve, in good faith,
the method for determining the fair value for such securities, and Firstar shall
value such securities in accordance with such method.
If the Company desires to provide a price which varies from the pricing
source, the Company shall promptly notify and supply Firstar with the valuation
of any such security on each valuation date. All pricing changes made by the
Company will be in writing and must specifically identify the securities to be
changed by CUSIP, name of security, new price or rate to be applied, and, if
applicable, the time period for which the new price(s) is/are effective.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the Board of Trustees of the Company that affects
accounting practices and procedures under this Agreement shall be effective upon
receipt and written acceptance by Firstar.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
Firstar reserves the right to make changes from time to time, as it deems
advisable, relating to its systems, programs, rules, operating schedules and
equipment, so long as such changes do not adversely affect the services provided
to the Company under this Agreement.
6. COMPENSATION
Firstar shall be compensated for providing the services set forth in this
Agreement in accordance with the Fee Schedule attached hereto as Exhibit A and
as mutually agreed upon and amended from time to time. Such fees shall be
effective and begin to accrue upon the first public offering and sale of shares
of the Fund. The Company agrees to pay all fees and reimbursable expenses within
ten (10) business days following the receipt of the billing notice.
7. 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) except as provided in
the first two sentences of this paragraph, or (ii) in reliance upon any
written or oral instruction for a proper corporate purpose provided to
Firstar by any duly authorized officer of the Company not employed by
Firstar or any of its affiliates, 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
Trustees of the Company.
Firstar shall indemnify and hold the Company, each controlling
person of the Company and their respective directors, trustees and
officers (each a "Firstar Indemnitee") 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 such Firstar Indemnitee may sustain or
incur or which may be asserted against such Firstar Indemnitee 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 and tested 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 if it acknowledges such responsibility for such claim.
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 (i) initiate no
further legal or other expenses for which it shall seek indemnification
under this section and (ii) not 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.
The trustees and shareholders of the Company shall not be personally
liable for any of the obligations of the Fund or the Company under this
Agreement or in connection with any matter arising under or in connection
with this Agreement.
8. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower Firstar
to act as agent for the other party to this Agreement, or to conduct business in
the name of, or for the account of the other party to this Agreement.
9. 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.
10. 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 such times and in
such form as mutually agreed upon. If Firstar is also acting as the transfer
agent for the Company, nothing herein shall be deemed to relieve Firstar of any
of its obligations under the Transfer Agent Servicing Agreement. Firstar shall
provide to the Company's transfer agent, administrator, custodian, investment
adviser and distributor such information and data produced or maintained by it
under this Agreement as may be necessary for such other persons to perform their
duties and obligations under their respective agreements with the Company and in
such form as may be required by such persons.
11. NOTIFICATION OF ERROR
The Company will notify Firstar of any balancing or control error caused
by Firstar within three (3) business days after receipt of any reports rendered
by Firstar to the Company, or within three (3) business days after discovery of
any error or omission not covered in the balancing or control procedure, or
within three (3) business days of receiving notice from any shareholder.
12. 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, after being
requested to divulge such information by duly constituted authorities, or when
so requested by the Company.
13. 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. This Agreement may be terminated by the Company
upon giving ninety (90) days prior written notice to the other party.
14. 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:
The Legacy Funds, Inc.
00 Xxxxxxxx
Xxx Xxxx, X.X. 00000-0000
Attn: President
or such other address of a party as may be specified by such party by written
notice hereunder.
15. 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 same, the Company
shall pay any expenses associated with transferring the same 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.
16. GOVERNING LAW
This Agreement shall be construed 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 SEC
thereunder.
17. ASSIGNMENT
This Agreement may not be assigned by Firstar, nor may Firstar delegate
its duties hereunder, without the prior written consent of the Company, and any
assignment not in compliance with this Section shall be void. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
18. AMENDMENT; WAIVER
This Agreement may not be amended or changed except by a written
instrument signed by the parties hereto. No omission or delay on the part of
either party in requiring the due and punctual fulfillment by the other party of
any of its obligations hereunder shall constitute a waiver by the omitting or
delaying party of any of its rights to require such due and punctual fulfillment
of any obligation hereunder, whether similar or otherwise, or a waiver of any
remedy it may have hereunder or otherwise.
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.
THE LEGACY FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By: _____________________________ By: _______________________________
Print: _____________________________ Print: _______________________________
Title: _____________________________ Title: _______________________________
Date: _____________________________ Date: _______________________________
Attest: _____________________________ Attest: _______________________________
FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
EXHIBIT A
Separate Series of The Legacy Funds, Inc.
NAME OF SERIES DATE ADDED
Legacy Growth Fund December __, 1999
Domestic Equity Funds
$23,000 for the first $40 million
1.5 basis points on the next $200 million
1 basis point on the balance
Out-of-pocket expenses, including daily pricing service
Fees and out-of-pocket expenses are billed to the Fund monthly.
