MASTER SERVICES AGREEMENT
BUFFALO FUNDS
This Agreement is made as of this day of April 25, 2003, between U.S.
Bancorp Fund Services, LLC ("USBFS") and Xxxxxxxxx - Capital Management, Inc.
(the "Adviser"), as investment adviser and manager of Buffalo Balanced Fund,
Inc., Buffalo Large Cap Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo USA
Global Fund, Inc., Buffalo Small Cap Fund, Inc., and Buffalo Funds (the Delaware
trust comprised of the Buffalo Mid Cap Fund and the Buffalo Science & Technology
Fund Series) (collectively the "Funds").
WHEREAS, the Funds engage in business as open-end management investment
companies and are so registered under the Investment Company Act of 1940, as
amended ("1940 Act"); and
WHEREAS, certain of the Funds are authorized to issue shares in separate
series with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 and is the investment adviser and manager of the
Funds, and is responsible under management agreements for providing or obtaining
and bearing the costs of certain key services the Funds; and
WHEREAS, USBFS has the experience and competence to provide administrative,
fund accounting, transfer agent, prospect services, Internet access and MFx
access services to each of the Funds and is a registered transfer agent under
the Securities Exchange Act of 1934 Act, as amended ("1934 Act"); and
WHEREAS, the Adviser desires to retain USBFS to furnish administrative,
fund accounting, transfer agent, prospect services, Internet access, MFx access
and paying agent services for the Funds (or series thereof) listed in Appendix I
and USBFS willing to furnish such services;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment, Acceptance and Services.
The Adviser appoints USBFS as Administrative Manager. As Administrative Manager,
USBFS will provide administrative services and act as paying agent on behalf of
the Manager. When providing these services, USBFS will act in conformity with
requirements of the 1940 Act and all other applicable federal and state law
regulations.
A. Administrative Services. The Adviser appoints USBFS to provide
administrative services for the Funds, and USBFS accepts such
appointment and agrees to render the services, hereby set forth in
Exhibit A attached hereto and incorporated by reference, for the
compensation herein provided. Service will be provided in accordance
with the policy and procedures set forth in Exhibit A.
B. Fund Accounting. The Adviser appoints USBFS to provide fund accounting
services for the Funds, and USBFS accepts such appointment and agrees
to render the services, hereby set forth in Exhibit B attached hereto
and incorporated by reference, for the compensation herein provided.
Service will be provided in accordance with the policy and procedures
set forth in Exhibit B.
C. Transfer Agent Services. The Adviser appoints USBFS to provide
transfer agent services for the Funds, and USBFS accepts such
appointment and agrees to render the services, hereby set forth in
Exhibit C attached hereto and incorporated by reference, for the
compensation herein provided. Service will be provided in accordance
with the policy and procedures set forth below and in Exhibit C.
D. Prospect Services. The Adviser appoints USBFS to provide prospect
services for the Funds, and USBFS accepts such appointment and agrees
to render the services, hereby set forth in Exhibit D attached hereto
and incorporated by reference, for the compensation herein provided.
Service will be provided in accordance with the policy and procedures
set forth in Exhibit D.
E. Internet Access Services. The Adviser appoints USBFS to purchase those
electronic interactive transaction processing services described on
Exhibit E hereto that the Adviser may select, from time to time, for
use by the Funds' shareholders ("End Users") to make inquiries and
perform transactions to their account(s) with the Funds.
F. MFx Access Services. The Adviser appoints USBFS to provide access to
one or more computer systems listed on Exhibit F hereto (as amended or
supplemented from time to time) that are provided and maintained by
USBFS.
G. Paying Agent Services. The Adviser appoints USBFS as paying agent to
be responsible for administering payments for services provided to the
Adviser or the Funds by certain third-party vendors engaged directly
by the Adviser or the Funds, as further explained on Exhibit G hereto.
2. Compensation to USBFS
A. For all services provided under this Agreement, whether such services
are provided by USBFS, its affiliates or other vendors, the Adviser
agrees to pay USBFS an annual fee equal to 0.45 percent (0.45%) of
each Fund's average daily net assets. From this compensation, USBFS
will administer payments to third-party vendors as described in
Exhibit G.
B. Additions of more than three new funds (or series), any classes,
administering proxies or any other function not addressed under this
Agreement will be considered extraordinary services and will be
subject to negotiation.
C. The Adviser shall pay all fees within thirty (30) calendar days
following receipt of the billing notice. Notwithstanding anything to
the contrary, amounts owed by the Adviser to USBFS shall only be paid
out of the assets and property of the Funds involved.
3. Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Adviser and
the Funds in connection with matters to which this Agreement relates,
including losses resulting from mechanical breakdowns or the failure
of communication or power supplies beyond USBFS's control, except a
loss arising out of or relating to USBFS'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, if USBFS has exercised reasonable care in the performance
of its duties under this Agreement, the Adviser and the Funds shall
indemnify and hold harmless USBFS from and against any and all claims,
demands, losses, expenses, and liabilities of any and every nature
(including reasonable attorneys' fees) which USBFS may sustain or
incur or which may be asserted against USBFS by any person arising out
of any action taken or omitted to be taken by it in performing the
services hereunder, except for any and all claims, demands, losses,
expenses, and liabilities arising out of or relating to USBFS's
refusal or failure to comply with the terms of this Agreement or from
bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to USBFS by any duly authorized officer of the
Adviser and the Funds, such duly authorized officer to be included in
a list of authorized officers furnished to USBFS and as amended from
time to time in writing by resolution of the Board of
Directors/Trustees.
USBFS shall indemnify and hold the Adviser and the Funds harmless from
and against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable attorneys'
fees) that the Adviser and the Funds may sustain or incur or that may
be asserted against the Adviser and the Funds by any person arising
out of any action taken or omitted to be taken by USBFS as a result of
USBFS'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, USBFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond USBFS's control. USBFS 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 USBFS. USBFS
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 Adviser and the Funds
shall be entitled to inspect USBFS's premises and operating
capabilities at any time during regular business hours of USBFS, upon
reasonable notice to USBFS.
Notwithstanding the above, USBFS 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 that 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 that
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.
C. The parties understand that additional indemnification provisions,
described in Exhibit E, apply with regard to Internet Access Services.
To the extent that the indemnifications decribed in Exhibit E conflict
with the above, the Internet Access indemnification clauses, as it
pertains to Internet Access, shall control.
4. Proprietary and Confidential Information
USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Funds all
records and other information relative to the Funds and prior, present, or
potential shareholders of the 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 Funds, which approval
shall not be unreasonably withheld and may not be withheld where USBFS 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 Adviser or the Funds.
Further, USBFS will adhere to the privacy policies adopted by the Funds
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time (the "Act"). Notwithstanding the foregoing, USBFS will not
share any nonpublic personal information concerning any of the Funds'
shareholders to any third party unless specifically directed by the Adviser
or the Funds or allowed under one of the exceptions noted under the Act.
5. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of three years ("Initial Term").
Subsequent to the Initial Term, this Agreement shall renew automatically
for subsequent one-year periods. This Agreement may be amended by mutual
written consent of the parties.
6. Duties in the Event of Termination
After the Initial Term, this Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. In the event
that, in connection with termination, a successor to any of USBFS's duties
or responsibilities hereunder is designated by the Funds by written notice
to USBFS, USBFS will promptly, upon such termination and at the expense of
the Adviser, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by USBFS under
this Agreement in a form reasonably acceptable to the Adviser and the Funds
(if such form differs from the form in which USBFS has maintained, the
Adviser 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 USBFS's personnel
in the establishment of books, records, and other data by such successor.
7. Effect of Termination
Upon the termination of the Agreement as provided herein, USBFS, upon the
written request of the Adviser, shall deliver the records of the Funds to
the Adviser or to USBFS successor in the form maintained by USBFS (to the
extent permitted by applicable license agreements) at the expense of the
Adviser. In addition to any amounts payable pursuant to Section 6 hereof,
the Adviser shall be responsible to USBFS for all costs and expenses
associated with the preparation and delivery of such media, including, but
not limited to:
A. out-of-pocket expenses;
B. any custom programming requested by the Adviser or the Funds in
connection with the preparation of such media and agreed upon by
USBFS;
C. transportation of forms and other material used in connection with the
processing of Fund transactions by USBFS; and
D. transportation of records and files in the possession of USBFS.
In addition, USBFS shall be entitled to such compensation as the parties
may mutually agree for any services other than the preparation and delivery
of such media requested by the Funds and agreed to by USBFS in connection
with the termination of this Agreement or the liquidation or merger of the
Funds. USBFS shall not reduce the level of service provided to the Funds
prior to termination following notice of termination by the Funds.
8. Early Termination
If the Adviser replaces USBFS as the service provider for the Funds for any
reason other than upon the expiration of the Initial Term then the Adviser
shall pay to USBFS as liquidated damages an amount equal to the balance of
servicing fees that would otherwise have been due USBFS for the remainder
of the Initial Term of this Agreement, had it not been terminated. For
purposes of calculating the amount of the balance of servicing fees under
this paragraph, the parties shall base the fees on each fund's average
annual daily net asset at the end of the most recent calendar year. This
liquidated damages provision shall also apply in the event the Funds are
merged into another legal entity in part or in whole pursuant to any form
of business reorganization prior to the expiration of the Initial Term, and
USBFS is not retained to provide services. The parties acknowledge and
agree that, in the event USBFS ceases to be retained as set forth above,
(A) determination of actual damages incurred by USBFS would be extremely
difficult, and (B) the liquidated damages provision contained herein is
intended to adequately compensate USBFS for damages incurred and is not
intended to constitute any form of penalty. Any such payment shall be due
and payable on or before the day the Agreement terminates, or Funds are
merged, as applicable. If USBFS or Adviser materially fails to perform its
duties and obligations under this Agreement, the non-defaulting party may
give written notice thereof to the defaulting party, and if such material
breach shall not have been remedied to the reasonable satisfaction of the
non-defaulting party, within thirty (30) days after such written notice is
given, then the non-defaulting party may terminate this Agreement, without
liquidated damages, by giving thirty 30 days notice of such termnation to
the defaulting party.
9. Records
USBFS 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 Funds, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Funds and will be
preserved, maintained, and made available in accordance with such
applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Funds on and in accordance with its request. Further,
federal examiners shall have access to information and records relating to
anti-money laundering activities performed by USBFS hereunder and USBFS
consents to any inspection authorized by law or regulation in connection
thereof.
10. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. 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 SEC thereunder.
11. Data Necessary to Perform Services
The Funds or its agent shall furnish to USBFS the data necessary to perform
the services described herein at such times and in such form as mutually
agreed upon. If USBFS is also acting in another capacity for the Funds,
nothing herein shall be deemed to relieve USBFS of any of its obligations
in such capacity.
12. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
13. 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 on the date
delivered personally or by courier service, or three (3) days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Funds shall be sent to:
Xxxxxxxxx Capital Management
0000 Xxxx 00xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer on one or more counterparts as of the date first
above written.
Xxxxxxxxx Capital Management, Inc. U.S. BANCORP FUND SERVICES, LLC
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxx Xxxxxxx
----------------------- ------------------------
Title: President Title: President
--------------------- ----------------------
Appendix I
Series
Buffalo Balanced Fund, Inc.
Buffalo High Yield Fund, Inc.
Buffalo Large Cap Fund, Inc.
Buffalo Mid Cap Fund (a series of Buffalo Funds)
Buffalo Science & Technology Fund (a series of Buffalo Funds)
Buffalo Small Cap Fund, Inc.
Buffalo USA Global Fund, Inc.
Exhibit A
FUND ADMINISTRATION SERVICES
Services and Duties of USBFS
USBFS shall provide the following fund administration services for the Funds,
including but not limited to:
A. General Fund Management:
(1) Act as liaison among all Fund service providers.
(2) Supply:
a. Corporate secretarial services.
b. Office facilities (which may be in USBFS's or its
affiliate's own offices).
c. Non-investment-related statistical and research data as
needed.
(3) Coordinate the Funds' Board of Directors/Trustees' (the "Board of
Directors/Trustees" or the "Directors/Trustees") communication:
a. Establish meeting agendas.
b. Prepare reports for the Board of Directors/Trustees based on
financial and administrative data.
c. Evaluate independent auditor.
d. Secure and monitor fidelity bond and director and officer
liability coverage, and make the necessary Securities and
Exchange Commission (the "SEC") filings relating thereto.
e. Prepare minutes of meetings of the Board of
Directors/Trustees and Fund shareholders.
f. Recommend dividend declarations to the Board of
Directors/Trustees, prepare and distribute to appropriate
parties notices announcing declaration of dividends and
other distributions to shareholders.
g. Provide personnel to serve as officers of the Funds if so
elected by the Board of Directors/Trustees, attend Board of
Directors/Trustees meetings and present materials for
Directors/Trustees' review at such meetings.
(4) Audits:
a. Prepare appropriate schedules and assist independent
auditors.
b. Provide information to the SEC and facilitate audit process.
c. Provide office facilities.
(5) Assist in overall operations of the Fund.
(6) Monitor arrangements under shareholder services or similar plan.
(7) Provide Legal services including:
a. In-house legal services.
b. Coordinate with Fund counsel.
c. Corporate secretarial services
d. Monitor and report on sales of Fund shares and ensure that
sufficient authorized shares are available.
B. Compliance:
(1) Regulatory Compliance:
a. Monitor compliance with the 1940 Act requirements,
including:
(i) Asset diversification tests.
(ii) Total return and SEC yield calculations.
(iii) Maintenance of books and records under Rule 31a-3.
(iv) Code of Ethics for the disinterested Directors/Trustees
of the Fund.
b. Monitor Fund's compliance with the policies and investment
limitations of the Funds as set forth in its current
prospectus (the "Prospectus") and statement of additional
information (the "SAI").
c. Maintain awareness of applicable regulatory and operational
service issues and recommend dispositions.
(2) SEC Registration and Reporting:
a. Assist Corporate counsel in updating the Prospectus and SAI
and in preparing proxy statements.
b. Prepare annual and semiannual reports, and Form N-SAR
filings.
c. Coordinate the printing, filing and mailing of publicly
disseminated Prospectuses and reports.
d. File fidelity bond under Rule 17g-1.
e. File shareholder reports on Form N-CSR under Rule 30b2-1.
f. Monitor sales of each Fund's shares and ensure that such
shares are properly registered with the SEC and the
appropriate state authorities.
(3) IRS Compliance:
a. Monitor the Funds' status as a regulated investment company
under Subchapter M, including without limitation, review of
the following:
(i) Asset diversification requirements.
(ii) Qualifying income requirements.
(iii) Distribution requirements.
b. Calculate required distributions (including excise tax
distributions).
C. Financial Reporting:
(1) Provide financial data required by the Fund's Prospectus and
SAI.
(2) Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the Board of
Directors/Trustees, the SEC, and independent auditors.
(3) Supervise the Funds' custodian and fund accountants in the
maintenance of the Funds' 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 Funds' net assets
and of the Funds' shares, and of the declaration and payment
of dividends and other distributions to shareholders.
(4) Compute the yield, total return and expense ratio of each
class of each Fund, and each Fund's portfolio turnover rate.
(5) Monitor the expense accruals and notify the Funds'
management of any proposed adjustments.
(6) Prepare monthly financial statements, which include without
limitation the following items:
a. Schedule of Investments.
b. Statement of Assets and Liabilities.
c. Statement of Operations.
d. Statement of Changes in Net Assets.
e. Cash Statement.
f. Schedule of Capital Gains and Losses.
(7) Prepare quarterly broker security transaction summaries.
D. Tax Reporting:
(1) Prepare and file on a timely basis appropriate federal and
state tax returns including, without limitation, Forms
1120/8610 with any necessary schedules.
(2) Prepare state income breakdowns where relevant.
(3) File Form 1099 Miscellaneous for payments to
Directors/Trustees and other service providers.
(4) Monitor wash losses.
(5) Calculate eligible dividend income for corporate
shareholders.
EXHIBIT B
FUND ACCOUNTING SERVICES
1. Services and Duties of USBFS
USBFS shall provide the following fund accounting services for the Funds,
including but not limited to:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis using security
trade information communicated from the Adviser.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Directors/Trustees of the Funds (the
"Board of Directors/Trustees" or the "Directors/Trustees") and
apply those prices to the portfolio positions. For those
securities where market quotations are not readily available, the
Board of Directors/Trustees shall approve, in good faith, the
method for determining the fair value for such securities.
(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:
(1) For each valuation date, calculate the expense accrual amounts as
directed by the Funds as to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Funds.
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by
USBFS and the Funds.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges, transfers,
dividend reinvestments, and other Fund share activity as reported
by each Fund's transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Funds.
(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 the form as agreed upon.
(5) Determine the net asset value of the Fund according to the
accounting policies and procedures set forth in the Fund's
Prospectus and Pricing Procedures.
(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 that document the adequacy of accounting
detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of the
Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for each Fund's investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax lot
relief method designated by the Funds.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to
the Fund's transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the Fund's accounting records
available to the Funds, the Securities and Exchange Commission
(the "SEC"), and the outside auditors.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder.
F. USBFS will perform the following accounting functions on a daily
basis:
(1) Reconcile cash and investment balances of each Fund with the
Fund's custodian, and provide the Fund's investment adviser with
the beginning cash balance available for investment purposes.
(2) Transmit or mail a copy of the portfolio valuation to the Fund's
investment adviser.
(3) Review the impact of current day's activity on a per share basis,
and review changes in market value.
G. In addition, USBFS will:
(1) Prepare monthly security transactions listings.
(2) Supply various Funds, Fund and class statistical data as
requested by the Funds on an ongoing basis.
2. Pricing of Securities
For each valuation date, USBFS shall obtain prices from a pricing source
selected by USBFS but approved by the Board of Directors/Trustees and apply
those prices to the portfolio positions of the Fund. For those securities
where market quotations are not readily available, the Board of
Directors/Trustees shall approve, in good faith, the method for determining
the fair value for such securities.
If the Funds desires to provide a price that varies from the pricing
source, the Funds shall promptly notify and supply USBFS with the valuation
of any such security on each valuation date. All pricing changes made by
the Funds 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.
3. Changes in Accounting Procedures
Any resolution passed by the Board of Directors/Trustees that affects
accounting practices and procedures under this Agreement shall be effective
upon written receipt and acceptance by USBFS.
4. Changes in Equipment, Systems, Service, Etc.
USBFS reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect
the service provided to the Funds under this Agreement.
EXHIBIT C
TRANSFER AGENT SERVICES
1. Services and Duties of USBFS
USBFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent for the Funds, and as relevant, agent in
connection with accumulation, open account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to:
A. Receive orders for the purchase of shares.
B. Process purchase orders with prompt delivery, where appropriate, of
payment and supporting documentation to the Funds' custodian, and
issue the appropriate number of uncertificated shares with such
uncertificated shares being held in the appropriate shareholder
account.
C. Arrange for issuance of shares obtained through transfers of funds
from Fund shareholders' accounts at financial institutions and arrange
for the exchange of shares for shares of other eligible investment
companies, when permitted by the Fund's current prospectus.
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Funds' custodian.
E. Pay monies upon receipt from the Funds' custodian, where relevant, in
accordance with the instructions of redeeming shareholders.
F. Process transfers of shares in accordance with the shareholder's
instructions.
G. Process exchanges between Funds and/or classes of shares of Funds both
within the same family of funds and with a First American Money Market
Fund, if applicable.
H. Prepare and transmit payments for dividends and distributions declared
by the Funds with respect to the Fund, after deducting any amount
required to be withheld by any applicable laws, rules and regulations
and in accordance with shareholder instructions.
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (e.g., systematic withdrawal, automatic
investment, dividend reinvestment).
J. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17Ad-10(e) promulgated under the 1934 Act, a record of the total
number of shares of the Fund which are authorized, issued and
outstanding.
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies.
L. Mail shareholder reports and Prospectuses to current shareholders.
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders.
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Funds.
O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and distributions
paid by the Funds, all as required by applicable federal tax laws and
regulations.
P. Provide a Blue Sky system that will enable the Funds to monitor the
total number of shares of the Fund sold in each state. In addition,
the Funds or its agent, including USBFS, shall identify to USBFS in
writing those transactions and assets to be treated as exempt from the
Blue Sky reporting for each state. The responsibility of USBFS for the
Funds' Blue Sky state registration status is solely limited to the
initial compliance by the Funds and the reporting of such transactions
to the Funds or its agent.
Q. Answer correspondence from shareholders, securities brokers and others
relating to USBFS's duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between USBFS and the
Funds.
R. Reimburse the Fund each month for all material losses resulting from
"as of" processing errors for which USBFS is responsible in accordance
with the "as of" processing guidelines set forth on Exhibit C hereto.
2. Anti-Money Laundering Program
The Adviser acknowledges that it has had an opportunity to review, consider
and comment upon the procedures provided by USBFS describing various tools
designed to promote the detection and reporting of potential money
laundering activity by monitoring certain aspects of shareholder activity
(the "Monitoring Procedures") as well as written procedures for verifying a
customer's identity (the "Customer Identification Procedures"), together
referred to as the "Procedures," and the Adviser has determined that the
Procedures, as part of the Funds' overall anti-money laundering program,
are reasonably designed to prevent the Fund from being used for money
laundering or the financing of terrorist activities and to achieve
compliance with the applicable provision of the Bank Secrecy Act and the
implementing regulations thereunder.
Based on this determination, the Adviser hereby instructs and directs USBFS
to implement the Procedures on the Funds' behalf, as such may be amended or
revised from time to time.
It is contemplated that these Procedures will be amended from time to time
by the parties as additional regulations are adopted and/or regulatory
guidance is provided relating to the Funds' anti-money laundering
responsibilities. USBFS agrees to provide to the Funds:
A. Prompt written notification of any transaction or combination of
transactions that USBFS believes, based on the Procedures, evidence
money laundering activity in connection with the Funds or any
shareholder of the Fund;
B. Prompt written notification of any customer(s) that USBFS reasonably
believes, based upon the Procedures, to be engaged in money laundering
activity, provided that the Funds agrees not to communicate this
information to the customer;
C. Any reports received by USBFS from any government agency or applicable
industry self-regulatory organization pertaining to USBFS's anti-money
laundering monitoring on behalf of the Funds;
D. Prompt written notification of any action taken in response to
anti-money laundering violations as described in (a), (b) or (c); and
E. An annual report of its monitoring and customer identification
activities on behalf of the Funds. USBFS shall provide such other
reports on the monitoring and customer identification activities
conducted at the direction of the Funds as may be agreed to from time
to time by USBFS and the Funds.
The Adviser hereby directs, and USBFS acknowledges, that USBFS shall (i)
permit federal regulators access to such information and records maintained
by USBFS and relating to USBFS's implementation of the Procedures on behalf
of the Funds, as they may request, and (ii) permit such federal regulators
to inspect USBFS's implementation of the Procedures on behalf of the Funds.
EXHIBIT D
PROSPECT SERVICES
1. Duties and Responsibilities of USBFS
USBFS shall provide the following fulfillment services for the Funds,
including but not limited to:
A. Answer all prospective shareholder calls concerning the Funds;
B. Send all available Fund material requested by a prospect within 24
hours from time of call;
C. Receive and update all Fund fulfillment literature so that the most
current information is sent and quoted;
D. Provide 24 hour answering service to record prospect calls made after
hours (7 p.m. to 8 a.m. Central Time);
E. Maintain and store Fund fulfillment inventory; and
F. Send periodic fulfillment reports to the Funds as agreed upon between
the parties.
2. Duties and Responsibilities of the Funds
The Funds shall:
A. Provide Fund fulfillment literature updates to USBFS as necessary;
B. Supply USBFS with sufficient inventory of fulfillment materials as
requested from time to time by USBFS; and
C. Provide USBFS with any sundry information about the Fund in order to
answer prospect questions.
EXHIBIT E
INTERNET ACCESS SERVICES
1. Duties and Responsibilities of USBFS
USBFS shall:
A. Make certain electronic interactive and processing services as defined
below ("Services") available 24 hours a day, 7 days a week, subject to
scheduled maintenance and events outside of USBFS's reasonable
control. Unless an emergency is encountered, no routine maintenance
will occur during the hours of 8:00 a.m. to 3:00 p.m. Central Time.
B. "Services" shall include
(1) FAN WEB - Shareholder internet access to account information and
transaction capabilities. Internet service is connected directly
to the fund group's web site through a transparent hyperlink.
Shareholders can access account information, portfolio listing
within a fund family, view transaction history, purchase
additional shares through ACH, etc.
(2) VISION MUTUAL FUND GATEWAY - Permits broker/dealers, financial
planners, and RIAs to us a web-based system to perform order and
account inquiry, execute trades, print applications, review
prospectuses, and establish new accounts.
(3) FAN MAIL - Financial planner mailbox provides transaction,
account and price information to financial planners and small
broker/dealers for import into a variety of financial planning
software packages.
C. Issue to each shareholder who desires to make inquiries and perform
transactions to their account(s) with the Funds using the services
("End User") a unique personal identification number ("PIN") for
authentication purposes, which may be changed upon End User's
reasonable request in accordance with policies to be determined by
USBFS and the Funds. USBFS will require an End User to provide his/her
PIN in order to access the Services.
D. Provide the End User with a transaction confirmation number for each
completed purchase, redemption, or exchange of mutual fund shares.
E. Utilize encryption and secure transport protocols intended to prevent
fraud and ensure confidentiality of End User accounts and
transactions. In no event shall USBFS use encryption weaker than
40-bit RC4 Stream. USBFS will take reasonable actions to protect the
Internet web site that provides the Services, and its related network,
against viruses, worms and other data corruption or disabling devices,
and unauthorized, fraudulent or illegal use, by using appropriate
virus detection and destructive software and by adopting such other
security procedures as may be necessary.
F. Establish and provide to the Funds written procedures, which may be
amended from time to time by USBFS with the written consent of the
Funds, regarding End User access to the Services. The current
procedures are attached and incorporated herein by reference to this
Agreement. Such written procedures shall establish security standards
for the Services, including, without limitation:
(1) Encryption/secure transport protocols.
(2) End User lockout standards (e.g., lockout after three
unsuccessful attempts to gain access to the Services).
(3) PIN issuance and reissuance standards.
(4) Access standards, including limits on access to End Users whose
accounts are coded for privilege.
(5) Automatic logoff standards (e.g., if the session is inactive for
longer than 15 minutes).
G. Provide the Funds and the Adviser with daily reports of transactions
listing all purchases or transfers made by each End User separately.
USBFS shall also furnish the Funds and the Adviser with monthly
reports summarizing shareholder inquiry and transaction activity
without listing all transactions.
H. Annually engage a third party to audit its internal controls for the
services and provide the Funds and the Adviser with a copy of the
auditor's report promptly.
2. Duties and Responsibilities of the Adviser
The Adviser assumes exclusive responsibility for the consequences of any
instructions it may give to USBFS, for the Funds' or its End Users' failure
to properly access the Services in the manner prescribed by USBFS, and for
the Funds' or Advisers' failure to supply accurate information to USBFS.
3. Duties and Responsibilities of the Adviser
The Adviser shall:
A. Be responsible for maintaining one or more Fund web sites through
which End Users may access the Services. The Adviser shall provide
USBFS with the name of the host of the Funds' web site server and
shall notify USBFS of any change to the Funds' web site server host.
B. Provide USBFS with such information and/or access to each Fund's web
site(s) as is necessary for USBFS to provide the Services to End
Users.
C. Promptly notify the Funds and USBFS of any problems or errors with the
Services reported by End Users.
The Adviser's responsibility under this Agreement shall not extend beyond
the terms and conditions specifically stated herein.
4. File Security and Retention; Confidentiality
A. USBFS and its agents will provide reasonable security provisions to
ensure that third parties do not have access to the Funds' data bases,
files, and other information provided by the Funds to USBFS for use
with the Services, or to End User transaction or account data
(collectively "Trust Files"). USBFS's security provisions for the
Funds and the Funds' End Users will be no less protective than USBFS's
security provisions with respect to its own proprietary information.
USBFS agrees that any and all Trust Files maintained by USBFS for the
Funds pursuant to this Agreement shall be available for inspection by
the Funds' regulatory authorities during regular business hours, upon
reasonable prior written notice to USBFS, and will be maintained and
retained in accordance with applicable requirements of the 1940 Act.
Except in the normal course of business and in conformity with federal
copyright law or with the Funds' consent, USBFS shall not copy,
decompile or reverse engineer any software provided to USBFS by the
Funds. USBFS will take such actions as are necessary to protect the
intellectual property contained within the Funds' web site or any
software, written materials, or pictorial materials describing or
creating the Funds' web site, including all interface designs or
specifications. The Funds grant USBFS a non-exclusive license for the
duration of this Agreement to copy the appearance of the Funds' web
site interface for the limited purpose of emulating the look and feel
of that web site. Such emulation is solely for the purpose of ensuring
seamless integration between the Funds' web site and the web site on
which the Services will be provided. USBFS will take such actions as
are necessary to protect all rights to the source code and interface
of the Funds' web site.
B. USBFS agrees, in accordance with its own policies used to protect its
own information of similar confidentiality, to use its best efforts to
refrain from and prevent the use or disclosure of any confidential
information of the Funds, except when such use or disclosure is for
the purpose of providing the Services. Without limiting the foregoing,
USBFS will not use, or permit the use of, names of End Users for the
purpose of soliciting any business, product, or service whatsoever
except where the communication is necessary and appropriate for
USBFS's delivery of the Services.
C. USBFS shall treat as confidential and not disclose or otherwise make
available any of the Funds' lists, information, trade secrets,
processes, proprietary data, information or documentation
(collectively the "Confidential Information"), in any form, to any
person other than agents, employees or consultants of USBFS. USBFS
will instruct its agents, employees and consultants who have access to
the Confidential Information to keep such information confidential by
using the same care and discretion that USBFS uses with respect to its
own confidential property and trade secrets. Upon termination of this
Agreement for any reason and upon the Funds' request, USBFS shall
return to the Funds, or destroy and certify to the Funds that it has
destroyed, any and all copies of the Confidential Information which
are in its possession.
D. Notwithstanding the above, USBFS will not have an obligation of
confidentiality under this Section with regard to information that (1)
was known to it prior to disclosure under this Agreement, (2) is or
becomes publicly available other than as a result of a breach of this
Agreement, (3) is disclosed to it by a third party not subject to a
duty of confidentiality, or (4) is required to be disclosed under law
or by order of court or governmental agency.
5. Additional Indemnification; Limitation of Liability
A. USBFS CANNOT AND DOES NOT GUARANTEE AVAILABILITY OF THE SERVICES.
Accordingly, USBFS's sole liability to the Adviser or any third party
(including End Users) for any claims, notwithstanding the form of such
claims (e.g., contract, negligence, or otherwise), arising out of the
delay of or interruption in the Services provided or to be provided by
USBFS hereunder shall be to use its best reasonable efforts to
commence or resume the Services as promptly as is reasonably possible.
USBFS shall, at its sole cost and expense, defend, indemnify, and hold
harmless the Funds, its affiliates, their respective assigns, and
their respective officers, Directors, employees, agents, and
representatives, from and against any and all claims, actions, suits,
proceedings, costs, expenses, damages and liabilities, including
without limitation, reasonable attorneys' fees and expenses arising
out of or relating to (a) any infringement, or claim of infringement,
of any United States patent, trademark, copyright, trade secret, or
other proprietary rights based on the use or potential use of the
Services, (b) USBFS's negligence, intentional wrongful acts and
willful misconduct in the performance of its services hereunder, and
(c) the provision of confidential information of any End User to a
person other than a person who has provided proper identification for
such End User as specified in Section 1(C) above.
B. If an injunction shall be obtained against the Funds' use of the
Services by reasons of infringement of a patent, copyright, trademark,
or other proprietary rights of a third party, USBFS shall, at its own
option and expense, either (i) procure for the Funds the right to
continue to use the Services on substantially the same terms and
conditions as specified in this Agreement, or (ii) after notification
to the Funds, replace or modify the Services so that they become
noninfringing, provided that, in the Funds' sole judgment, such
replacement or modification does not materially and adversely affect
the performance of the Services or significantly lessen their utility
to the Funds. If in the Funds' sole judgment, such replacement or
modification does materially adversely affect the performance of the
Services or significantly lessen their utility to the Funds, the Funds
may terminate this Agreement immediately on written notice to USBFS.
C. Each party hereto shall be excused from performance hereunder for any
period and to the extent that it is prevented from performing any
services pursuant hereto, in whole or in part, as a result of
unforeseen events beyond the control and without fault or negligence
of the party including, without limitation, delays caused by the other
party or an act of God, war, civil disturbance, court order, labor
dispute or third party nonperformance, and such nonperformance shall
not be a default hereunder or grounds for termination hereof so long
as the nonperforming party shall undertake all reasonable efforts to
rectify the situation that is the cause of the nonperformance.
D. USBFS shall not be responsible for the accuracy of input material nor
the resultant output derived from inaccurate input. The accuracy of
input and output shall be judged as received at USBFS's data center as
determined by the records maintained by USBFS.
E. In no event will either party be responsible for special, incidental,
indirect, or consequential damages that the other party may incur or
experience on account of entering into, relying on, or performing this
Agreement, regardless of whether the damages are founded in contract,
negligence, or other form of action, even if such party has been
advised of the possibility of such damages. Without limiting the
generality of the foregoing, neither party shall be liable for lost
profits, lost business, or lost goodwill of the other party.
6. Warranties
USBFS warrants and represents that the Services it will perform as
described and/or any other documentation provided to the trust by
USBFS with respect to the services. Except as otherwise provided in
this Agreement, the services are provided by USBFS "as is" without
warranty of any kind and USBFS expressly disclaims all warranties,
express or implied, with respect to the services including, without
limitation, warranties of merchantability and fitness for a particular
purpose. USBFS will promptly notify the trust of any problems or
errors with the services of which USBFS becomes aware.
EXHIBIT F
MFx ACCESS SERVICES
1. Duties and Responsibilities of USBFS
USBFS shall:
A. Provide access to each System during the regular business hours of
USBFS or such other time periods as agreed upon from time to time
between the parties.
B. Supply necessary software to access the Systems.
C. Provide training and connectivity support as mutually agreed upon.
D. Maintain all Systems and provide data security for the Funds' access.
2. Duties and Responsibilities of the Adviser
The Adviser shall:
A. Provide and maintain, at its own expense and for the benefit of the
Funds, one or more personal computers for accessing the Systems that
will accommodate and be compatible with the software provided by
USBFS.
B. Follow any and all procedures necessary to access each of the Systems
as may be set forth in any user guide or instruction manual provided
and which may be amended or supplemented from time to time.
C. Provide for the security of all codes and system access mechanisms
relating to each of the Systems and implement such security procedures
and/or devices to ensure the integrity of the Systems being accessed.
3. System Maintenance
The Adviser understands that USBFS will have to perform periodic
maintenance to the hardware and software of the Systems being accessed,
which may cause temporary service interruptions. USBFS shall notify the
Adviser of all planned outages and, to the extent possible, will perform
any necessary maintenance during non-business hours.
The Adviser acknowledges that all programs, software, manuals, and other
written information provided pursuant to this Agreement shall remain at all
times the exclusive property of USBFS.
4. Warranties
The Adviser acknowledges that it is responsible for determining the
suitability and accuracy of the information provided through its access to
the Systems. USBFS makes no warranties or representations, expressed or
implied, with respect to the Systems' suitability and accuracy. However,
USBFS will assist the Adviser in verifying the accuracy of any of the
information available to the Funds through any of the Systems accessed and
covered by this Agreement.
EXHIBIT G
FUND PAYING AGENT
1. Duties and Responsibilities of USBFS
From the compensation USBFS receives pursuant to this Agreement, USBFS
shall provide certain services directly as described in the Agreement, and
shall also administer payment of the following fees to third parties:
A. Fund Directors/Trustees' fees;
B. XXX Trustee's fees;
C. Custodian fees;
D. Distributor fees;
E. Independent public accountant fees and Fund counsel fees (but not
legal and audit fees and other costs in contemplation of or arising
out of litigation or administrative actions to which any Fund, its
officers or Directors/Trustees are a party or incurred in anticipation
of becoming a party);
F. Third-party pricing vendor fees;
G. NSCC charges; and
H. Any other common industry-related expenses of third-party vendors
engaged by the Funds to which the parties agree.
2. The Funds shall bear the following costs directly:
A. Costs of any interest, taxes, dues, fees and other charges of
governments and their agencies, including the cost of qualifying the
Fund's shares for sale in any jurisdiction (including blue sky
registration fees and 24f-2 fees);
B. Brokerage commissions;
C. Insurance coverage, including fidelity bond and liability insurance
for Directors & Officers (D&O) and Errors and Omissions (E&O) premiums
and fees; and
D. Any other expenses incurred by the Funds which are not specifically
assumed herein by USBFS.
