Exhibit (h)(3)
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of November
2001, by and between AHA Investment Funds, Inc., a corporation organized under
the laws of the State of Maryland (the "Corporation") and Firstar Mutual Fund
Services, LLC, a limited liability company organized under the laws of the State
of Wisconsin ("FMFS").
WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Corporation is authorized to create separate series, each with
its own separate investment portfolio;
WHEREAS, FMFS is a limited liability company and, among other things, is in
the business of providing mutual fund accounting services to investment
companies; and
WHEREAS, the Corporation desires to retain FMFS to provide accounting
services to each series of the Corporation listed on Exhibit A attached hereto,
(each hereinafter referred to as a "Fund"), as it may be amended from time to
time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Corporation and FMFS agree as follows:
1. Appointment of Fund Accountant
The Corporation hereby appoints FMFS as Fund Accountant of the Corporation
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) Verify investment trade tickets and maintain portfolio records
for each Fund on a trade date+1 basis using security trade
information communicated from the investment manager.
(2) For each valuation date as stated in the Funds prospectus, or as
otherwise directed by the Corporation, (i) obtain prices from a
pricing source approved by the Board of Directors of the
Corporation and apply those prices to the portfolio positions or,
in the case of a money market fund, (ii) confirm that the market
value of a Fund's assets does not deviate from the amortized cost
value of those assets by more than 0.5%. For those securities
where market quotations are not readily available, the Board of
Directors of the Corporation 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
for each class of shares of each Fund as directed by the
Corporation as to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Corporation.
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by
FMFS and the Corporation.
(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 Corporation.
(3) Determine net investment income (earnings) for each 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 each Fund in the form as agreed upon.
(5) Determine the net asset value of each 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 each 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 each
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 Corporation.
(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 each Fund's accounting records
available to the Corporation, 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. FMFS 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,
review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings and reconcile
security identifier, units, maturities and rates at least monthly
with the Corporation's custodian;
(2) Supply various Corporation, Fund and class statistical data as
requested by the Corporation 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 Directors and apply those prices to the
portfolio positions of each Fund. For those securities where market
quotations are not readily available, the Board of Directors of the
Corporation shall approve, in good faith, the method for determining the
fair value for such securities.
If the Corporation desires to provide a price that varies from the pricing
source, the Corporation shall promptly notify and supply FMFS with the
valuation of any such security on each valuation date. All pricing changes
made by the Corporation 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 Directors of the Corporation 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 Corporation 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 B
and as mutually agreed upon and amended from time to time. The Corporation
agrees to pay all fees and reimbursable expenses within thirty (30)
calendar days following the receipt of the billing notice, except for any
fee or expense subject to a good faith dispute. The Corporation shall
notify FMFS in writing within thirty (30) calendar days following receipt
of each invoice if the Corporation is disputing any amounts in good faith.
The Corporation shall settle such disputed amounts within ten (10) calendar
days of the day on which the parties agree to the amount to be paid. With
the exception of any fee or expense the Corporation is disputing in good
faith as set forth above, unpaid invoices shall accrue a finance charge of
one and one-half percent (1 1/2%) per month, after the due date.
Notwithstanding anything to the contrary, amounts owed by the Corporation
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 and good faith 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
Corporation 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 and acted in
good faith in the performance of its duties under this Agreement, the
Corporation 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
authorized by the Corporation and provided to FMFS by any duly
authorized officer of the Corporation, 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
Directors of the Corporation.
FMFS shall indemnify and hold the Corporation, its officers, directors
and agents harmless from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) which the Corporation, its officers,
directors and agents may sustain or incur or which may be asserted
against the Corporation, its officers, directors and agents 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 promptly take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS will promptly
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 contingency plans
that are consistent with industry standards with appropriate parties,
making reasonable provision for emergency use of electrical data
processing equipment to the extent appropriate equipment is available.
Representatives of the Corporation 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 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.
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 agrees that obligations assumed by the Corporation pursuant to
this Agreement shall be limited in all cases to the Corporation 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 Corporation, or from the Directors or
any individual Director of the Corporation or from any agent of the
Corporation.
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 Corporation
all records and other information relative to the Corporation and prior,
present, or potential shareholders of the Corporation (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
Corporation, 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
Corporation.
Further, FMFS will adhere to the privacy policies adopted by the
Corporation pursuant to Title V of the Xxxxxx-Xxxxx-Xxxxxx Act (the "Act")
and Regulation S-P, as may be modified from time to time. Notwithstanding
the foregoing, FMFS will not share any nonpublic personal information as
defined under Regulation S-P concerning any of the Corporation's
shareholders to any third party unless specifically directed by the
Corporation or allowed under one of the exceptions noted under the Act and
Regulation S-P.
9. Term of Agreement; Amendment; Assignment
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of one year. Subsequent to the initial
one-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. All
representations in Section 8 of this Agreement shall survive the
termination of this Agreement.
This Agreement and any right or obligation hereunder may not be assigned by
either party without the prior written consent of the other party. This
Agreement constitutes the entire agreement between the parties hereto and
supercedes any prior agreement with respect to the subject matter hereof,
whether oral or written.
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 Corporation 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 Corporation 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
Corporation 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
Corporation by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Corporation transfer to such
successor all relevant books, records, correspondence and other data
established or maintained by FMFS under this Agreement (collectively, the
"Records") in a form reasonably acceptable to the Corporation (if such form
differs from the form in which FMFS has maintained the same, the
Corporation shall pay any reasonable 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 Corporation 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 Corporation, nothing herein shall be deemed to relieve
FMFS of any of its obligations in such capacity.
15. Notification of Error
The Corporation will notify FMFS of any discrepancy between FMFS and the
Corporation, including, but not limited to, failing to account for a
security position in a Fund's portfolio, by the later of: within three (3)
business days after receipt of any reports rendered by FMFS to the
Corporation; 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 Corporation shall be sent to:
AHA Investment Funds, Inc.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 60603Attn: Xxxxxxx Xxxxxxx
17. Additional Funds
In the event the Corporation establishes additional series or classes of
shares than those listed on the attached Exhibit A, and the Corporation
desires to have FMFS act as Fund Accountant to such series or class under
the terms hereof, the Corporation shall so notify FMFS in writing and, if
FMFS agrees in writing to provide such services, such series or class shall
be covered by this Agreement.
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.
aha investment funds, inc. FIRSTAR MUTUAL FUND SERVICES, LLC
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxx Xxxxxxx
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Title: President Title: President
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