ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this 31st day of March, 2003,
by and between the Berkshire Funds (the "Trust"), a Delaware business trust
having its principal place of business at 000 Xxxxx Xxxxx, Xxxxx #000, Xxx
Xxxx, XX 00000, and Mutual Shareholder Services, LLC, a Delaware Limited
Liability Company ("MSS").
RECITALS:
A. The Trust is an 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 Trust desires to avail itself of the experience, assistance and
facilities of MSS and to have MSS perform the Trust certain services approp-
riate to the operations of the Trust, 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 con-
tained, the parties hereby agree as follows:
1. DUTIES OF MSS.
MSS will provide the Trust with the necessary office space, communica-
tion facilities and personnel to perform the following services for the Trust:
(a) Timely calculate and transmit to NASDAQ the daily net asset
value of each class of shares of each portfolio of the Trust, and comm-
unicate such value to the Trust and its transfer agent;
(b) Maintain and keep current all books and records of the Trust
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 app-
licable regulations as may be mutually agreed to between the Trust 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 Trust or its authorized agents:
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* Cash receipts journal
* Cash disbursements journal
* Dividend record
* Purchase and sales - portfolio securities journals
* Subscription and redemption journals
* Security ledgers
* Broker ledger
* General ledger
* Daily expense accruals
* Daily income accruals
* Securities and monies borrowed or loaned and collateral
* Foreign currency journals
* Trial balances
(c) Provide the Trust 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 Trust or its investment advisor of
the following:
1. Semi-annual and annual financial statements;
2. Semi-annual forms N-SAR;
3. Annual tax returns;
4. Financial data necessary to update form N-1A;
5. Annual proxy statement.
(e) Notwithstanding paragraph 1 (d), prepare the following:
1. Semi-annual and annual financial statements;
2. Semi-annual forms N-SAR;
(f) Edgarize and file with the SEC the following:
1. Semi-annual and annual financial statements;
2. Semi-annual forms N-SAR;
3. N-1A and other necessary filings.
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(g) 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 author-
ity to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
2. FEES AND EXPENSES.
(a) In consideration of the services to be performed by MSS pur-
suant to this Agreement, the Trust 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
Trust 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 Trust will be reimbursed by
the Trust.
(c) The Trust 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 Trust for any action taken or omitted by it in good faith
without 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 Trust, advice
of the Trust, or of counsel for the Trust and upon statements of the
Trust'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 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 Trust to which MSS shall otherwise be
subject by reason of willful misfeasance, bad faith, negligence in the
performance of its duties to the Trust, reckless disregard of its obli-
gations and duties under this Agreement or the willful violation of any
applicable law.
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(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 Trust 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 Trust or its authorized agents.
4. REPORTS.
(a) The Trust shall provide to MSS on a quarterly basis a report
of a duly authorized officer of the Trust representing that all infor-
mation 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 Trust or its
authorized agents, and the Trust 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 Trust 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 Trust and its counsel of such
violation.
5. ACTIVITIES OF MSS.
The services of MSS under this Agreement are not to be deemed ex-
clusive, 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
Trust, and shall be surrendered to the Trust promptly upon request by the
Trust 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
Trust (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 Trust's independent auditors, or, upon approval of the
Trust, any regulatory body, in any requested review of the Trust's accounts
and records. MSS shall preserve the accounts and records as they are required
to be maintained and preserved by Rule 31a-1.
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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 Trust.
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 Trust exercise its right to terminate, all out-
of-pocket expenses associated with the movements of records and
material will be borne by the Trust. 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 here-
under 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 pro-
visions 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.
(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 Trust: To MSS:
The Berkshire Funds Mutual Shareholder Services, LLC
000 Xxxxx Xxxxx 0000 Xxxxxxxxxxx Xxxx
Xxxxx #000 Xxxxx X
Xxx Xxxx, XX 00000 Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
The Berkshire Funds Mutual Shareholder Services, LLC
By: /s/ Xxxxxxx X. Xxxxx III By: /s/ Xxxxxxx X. Xxxxx
Its: President Its: President
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EXHIBIT A
If the average value of the Fund
is between the following: Annual Fee
$0 to $25,000,000 $21,000
$25,000,000 to $100,000,000 $30,000
$100,000,000 to $300,000,000 $30,000 plus .01% on assets
greater than $100,000,000
$300,000,000 and above $50,000 plus .005% on assets
greater than $300,000,000
