FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 12th day of
December, 2000, by and between Xxxx Xxxxx Funds, a business trust organized
under the laws of the State of Delaware (hereinafter the "Trust") and Firstar
Mutual Fund Services, LLC, a limited liability company organized under the laws
of the State of Wisconsin (hereinafter "FMFS").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each with
its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing mutual fund accounting services to
investment companies; and
WHEREAS, the Trust desires to retain FMFS to provide accounting
services to each series of the Trust 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 Trust and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Trust hereby appoints FMFS as Fund Accountant of the Trust on the
terms and conditions set forth in this Agreement, and FMFS 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 FMFS
A. Portfolio Accounting Services:
(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 Trust
and apply those prices to the portfolio positions.
For those securities where market quotations are not
readily available, the Board of Trustees of the Trust
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 Trust as to
methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Trust.
(3) Account for Fund expenditures and maintain expense
accrual balances at the level of accounting detail,
as agreed upon by FMFS and the Trust.
(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 the transfer agent on a
timely basis.
(2) Apply equalization accounting as directed by the Trust.
(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.
(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:
(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 the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the
tax lot relief method designated by the Trust.
(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:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund's
accounting records available to the Trust, the
Securities and Exchange Commission, and the outside
auditors.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder
F. FMFS will perform the following accounting functions on a daily
basis:
(1) Reconcile cash and investment balances of each Fund
with the Custodian, and provide the Advisor with the
beginning cash balance available for investment
purposes;
(2) Transmit or mail a copy of the portfolio valuation to the
Advisor;
(3) Review the impact of current day's activity on a per
share basis, review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
(2) Supply various Trust, Fund and class statistical data as
requested by the Trust on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected
by FMFS but approved by the 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 Board of Trustees of the
Trust shall approve, in good faith, the method for determining the fair
value for such securities.
If the Trust desires to provide a price which varies from the pricing
source, the Trust shall promptly notify and supply FMFS with the
valuation of any such security on each valuation date. All pricing
changes made by the Trust 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 Trust that
affects accounting practices and procedures under this Agreement shall
be effective upon written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS 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 Trust under this
Agreement.
6. COMPENSATION
FMFS 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.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
Notwithstanding anything to the contrary, amounts owed by the Trust to
FMFS shall only be paid out of the assets and property of the
particular Fund involved.
7. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any
error of judgment or mistake of law or for any loss suffered by
the Trust in connection with matters to which this Agreement
relates, including losses resulting from mechanical breakdowns
or the failure of communication or power supplies beyond FMFS's
control, except a loss arising out of or relating to FMFS'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 FMFS
has exercised reasonable care in the performance of its duties
under this Agreement, the Trust shall indemnify and hold harmless
FMFS 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 FMFS may sustain or incur or which may be asserted
against FMFS 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 FMFS'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 FMFS by any duly
authorized officer of the Trust, such duly authorized officer to
be included in a list of authorized officers furnished to FMFS
and as amended from time to time in writing by resolution of the
Board of Trustees of the Trust.
FMFS shall indemnify and hold the Trust 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 Trust may
sustain or incur or which may be asserted against the Trust by
any person arising out of any action taken or omitted to be taken
by FMFS as a result of FMFS'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, FMFS shall
take all reasonable steps to minimize service interruptions
for any period that such interruption continues beyond FMFS's
control. FMFS 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 FMFS. FMFS 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
Trust shall be entitled to inspect FMFS's premises and
operating capabilities at any time during regular business
hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS 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. 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. FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration
of the Trust and agrees that obligations assumed by the Trust
pursuant to this Agreement shall be limited in all cases to
the Trust and its assets, and if the liability relates to one
or more series, the obligations hereunder shall be limited to
the respective assets of such series. FMFS further agrees that
it shall not seek satisfaction of any such obligation from the
shareholder or any individual shareholder of a series of the
Trust, nor from the Trustees or any individual Trustee of the
Trust.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and
prior, present, or potential shareholders of the Trust (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 Trust, which approval shall not be unreasonably withheld and may
not be withheld where FMFS 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 Trust.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. Subsequent to the
initial three year 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.
However, this Agreement may be amended by mutual written consent of the
parties.
10. RECORDS
FMFS 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 Trust but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act, and the rules thereunder. FMFS
agrees that all such records prepared or maintained by FMFS relating to
the services to be performed by FMFS hereunder are the property of the
Trust 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 Trust on and in accordance with its
request.
11. 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.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that in connection with termination, a successor to any of
FMFS's duties or responsibilities hereunder is designated by the Trust
by written notice to FMFS, FMFS will promptly, upon such termination
and at the expense of the Trust transfer to such successor all relevant
books, records, correspondence and other data established or maintained
by FMFS under this Agreement in a form reasonably acceptable to the
Trust (if such form differs from the form in which FMFS has maintained
the same, the Trust 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
FMFS's personnel in the establishment of books, records and other data
by such successor.
13. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS
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.
14. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the
data necessary to perform the services described herein at such times
and in such form as mutually agreed upon. If FMFS is also acting in
another capacity for the Trust, nothing herein shall be deemed to
relieve FMFS of any of its obligations in such capacity.
15. NOTIFICATION OF ERROR
The Trust will notify FMFS of any discrepancy between FMFS and the
Trust, including, but not limited to, failing to account for a security
position in the fund's portfolio, by the later of: within three (3)
business days after receipt of any reports rendered by FMFS to the
Trust; 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.
16. 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 FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Trust shall be sent to:
Xxxx Xxxxx Xxxxx
x/x Xxxx X. Xxxxx
Xxxx Xxxxx Securities, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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 day and year first written above.
XXXX XXXXX FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx Rock
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Title: President Title: Senior Vice President
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