ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of April, 1999, by and
between The Xxxxxxx Funds, Inc., a registered management investment company (the
"Fund"), and Mutual Shareholder Services LLC ("MSS"), an Ohio corporation.
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. MSS is a corporation experienced in providing accounting services to
mutual funds and possesses facilities sufficient to provide such services; and
C. The Fund desires to avail itself of the experience, assistance and
facilities of MSS and to have MSS perform the Fund certain services appropriate
to the operations of the Fund, and MSS is willing to furnish such services in
accordance with the terms hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MSS.
MSS will provide the Fund with the necessary office space, communication
facilities and personnel to perform the following services for the Fund:
(a) Timely calculate and transmit to NASDAQ the daily net asset value
of each class of shares of each portfolio of the Fund, and communicate such
value to the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the Fund as
required by Rule 31a-1 under the 1940 Act, as such rule or any successor
rule may be amended from time to time ("Rule 31a-1"), that are applicable
to the fulfillment of MSS's duties hereunder, as well as any other
documents necessary or advisable for compliance with applicable regulations
as may be mutually agreed to between the Fund and MSS. Without limiting the
generality of the foregoing, MSS will prepare and maintain the following
records upon receipt of information in proper form from the Fund or its
authorized agents:
o Cash receipts journal
o Cash disbursements journal
o Dividend record
o Purchase and sales - portfolio securities journals
o Subscription and redemption journals
o Security ledgers
o Broker ledger
o General ledger
o Daily expense accruals
o Daily income accruals
o Securities and monies borrowed or loaned and collateral therefore
o Foreign currency journals
o Trial balances
(c) Provide the Fund and its investment adviser with daily portfolio
valuation, net asset value calculation and other standard operational
reports as requested from time to time.
(d) Provide all raw data available from its fund accounting system for
the preparation by the Fund or its investment advisor of the following:
1. Semi-annual financial statements;
2. Semi-annual form N-SAR;
3. Annual tax returns;
4. Financial data necessary to update form N-1A;
5. Annual proxy statement.
(e) Provide facilities to accommodate annual audit and any audits or
examinations conducted by the Securities and Exchange Commission or any
other governmental or quasi-governmental entities with jurisdiction.
MSS shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. FEES AND EXPENSES.
(a) In consideration of the services to be performed by MSS pursuant
to this Agreement, the Fund agrees to pay MSS the fees set forth in the fee
schedule attached hereto as Exhibit A.
(b) In addition to the fees paid under paragraph (a) above, the Fund
agrees to reimburse MSS for out-of-pocket expenses or advances incurred by
MSS in connection with the performance of its obligations under this
Agreement. In addition, any other expenses incurred by MSS at the request
or with the consent of the Fund will be reimbursed by the Fund.
2
(c) The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice.
3. LIMITATION OF LIABILITY OF MSS.
(a) MSS shall be held to the exercise of reasonable care in carrying
out the provisions of the Agreement, but shall not be liable to the Fund
for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its
duties hereunder. It shall be entitled to rely upon and may act upon the
accounting records and reports generated by the Fund, advice of the Fund,
or of counsel for the Fund and upon statements of the Fund's independent
accountants, and shall not be liable for any action reasonably taken or
omitted pursuant to such records and reports or advice, provided that such
action is not, to the knowledge of MSS, in violation of applicable federal
or state laws or regulations, and provided further that such action is
taken without gross negligence, bad faith, willful misconduct or reckless
disregard of its duties.
(b) Nothing herein contained shall be construed to protect MSS against
any liability to the Fund to which MSS shall otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence in the performance of
its duties to the Fund, reckless disregard of its obligations and duties
under this Agreement or the willful violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither MSS
nor its stockholders, officers, directors, employees or agents shall be
subject to, and the Fund shall indemnify and hold such persons harmless
from and against, any liability for and any damages, expenses or losses
incurred by reason of the inaccuracy of information furnished to MSS by the
Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to MSS on a quarterly basis a report of a
duly authorized officer of the Fund representing that all information
furnished to MSS during the preceding quarter was true, complete and
correct in all material respects. MSS shall not be responsible for the
accuracy of any information furnished to it by the Fund or its authorized
agents, and the Fund shall hold MSS harmless in regard to any liability
incurred by reason of the inaccuracy of such information.
(b) Whenever, in the course of performing its duties under this
Agreement, MSS determines, on the basis of information supplied to MSS by
the Fund or its authorized agents, that a violation of applicable law has
occurred or that, to its knowledge, a possible violation of applicable law
may have occurred or, with the passage of time, would occur, MSS shall
promptly notify the Fund and its counsel of such violation.
3
5. ACTIVITIES OF MSS.
The services of MSS under this Agreement are not to be deemed exclusive,
and MSS shall be free to render similar services to others so long as its
services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by MSS shall be the property of the
Fund, and shall be surrendered to the Fund promptly upon request by the Fund in
the form in which such accounts and records have been maintained or preserved.
MSS agrees to maintain a back-up set of accounts and records of the Fund (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. MSS shall assist
the Fund's independent auditors, or, upon approval of the Fund, any regulatory
body, in any requested review of the Fund's accounts and records. MSS shall
preserve the accounts and records as they are required to be maintained and
preserved by Rule 31a-1.
7. CONFIDENTIALITY.
MSS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and not to be disclosed to any
person except as may be authorized by the Fund.
8. TERM OF AGREEMENT.
(a) This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that
each party to this Agreement have the option to terminate the Agreement,
without penalty, upon 90 days prior written notice.
(b) Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movements of records and material will be
borne by the Fund. Additionally, MSS reserves the right to charge for any
other reasonable expenses associated with such termination.
9. MISCELLANEOUS.
(a) Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party.
This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
(b) The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio as at the time
in effect and the applicable provisions of the 1940 Act. To the extent that
the applicable law of the State of Ohio, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
(c) This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
4
(d) This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject matter hereof whether oral or written.
(e) All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by
telex or facsimile, and shall be given to the following addresses (or such
other addresses as to which notice is given):
To the Fund: To MSS:
The Xxxxxxx Funds, Inc. Mutual Shareholder Services
0000 Xxxxxx Xxxxxx 0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
The Xxxxxxx Funds, Inc. Mutual Shareholder Services, LLC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------------- ---------------------------------
Its: Chairman Its: President
------------------------------- ---------------------------------
5
