Exhibit (h)(i)
THIS
FUND ADMINISTRATION SERVICING AGREEMENT (this “Agreement”) is made and
entered into as of this 7th day of August, 2004, by and between Xxxxxxx
Funds, Inc., a Maryland corporation (the “Corporation”), and U.S. Bancorp
Fund Services, LLC, a Wisconsin limited liability company (“USBFS”).
RECITALS
WHEREAS,
the Corporation is registered under the Investment Company Act of 1940, as amended (the
“1940 Act”), as an open-end management investment company, and is authorized to
issue shares of common stock in separate series, with each such series representing
interests in a separate portfolio of securities and other assets;
WHEREAS,
USBFS is, among other things, in the business of providing mutual fund administration
services to investment companies; and
WHEREAS,
the Corporation desires to retain USBFS to provide mutual fund administration services for
each series of the Corporation listed on Exhibit A hereto (as amended from time to time)
(each a “Fund”).
AGREEMENT
NOW,
THEREFORE, in consideration of the promises and mutual covenants herein contained,
and other good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto, intending to be legally bound, do hereby agree as follows:
1. Appointment
of USBFS as Administrator
| |
The
Corporation hereby appoints USBFS as administrator of each Fund on the terms and
conditions set forth in this Agreement, and USBFS 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. Services
and Duties of USBFS
| |
USBFS
shall provide the following fund administration services for each Fund, and such other
services as the parties may agree to: |
| |
A. |
General
Fund Management: |
| |
(1) |
Act
as liaison among all Fund service providers. |
| |
(2) |
Coordinate
the Corporation’s Board of Directors’ (the “Board of
Directors” or the “Directors”) communications, such as: |
1
| |
a. |
Prepare Board
Meeting Minutes. |
| |
b. |
Prepare Board Meeting materials. |
| |
(3) |
Pay
Fund expenses as required pursuant to the performance of the duties of USBFS
pursuant to this Agreement, subject to that certain Custody Agreement of
the Corporation. |
| |
(1) |
Regulatory
Compliance: |
| |
a. |
Maintain
and manage a regulatory compliance calendar. |
| |
b. |
Maintain
awareness of applicable regulatory and operational service issues and recommend
dispositions. |
| |
a. |
Prepare and
file with the appropriate state securities authorities any and all required
compliance filings relating to the qualification of the securities of the
Corporation, the Fund , or class of shares of the Fund, as applicable, so as to
enable the Corporation to make a continuous offering of its shares in all
states. |
| |
b. |
Monitor status and maintain registrations in each state. |
| |
c. |
Monitor
laws related to restrictions on Fund expenses and provide information regarding
material developments in state securities regulation regarding such
restrictions and any other material developments in state securities
regulation. |
| |
(3) |
Securities
and Exchange Commission (“SEC”) Registration and Reporting: |
| |
a. |
Assist
Fund counsel in updating the Prospectus and SAI and in preparing proxy
statements and Rule 24f-2 notices. |
| |
b. |
Prepare
and file annual and semiannual reports on Forms N-CSR, N-PX, N-Q and N-SAR and
such other periodic reports as may be required by applicable federal securities
laws and regulations. |
| |
(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 Boards of Directors, the SEC, and independent
auditors. |
2
| |
(3) |
Supervise
the Corporation’s custodian and fund accountant in the maintenance of the
Corporation’s general ledgers 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 Corporation’s net assets and
of the Corporation’s shares, and of the declaration and payment of
dividends and other distributions to shareholders, but only in the event that
USBFS is not such custodian and/or fund accountant. |
| |
(4) |
Compute
the yield, total return and expense ratio of each class of the Fund, and the
Fund’s portfolio turnover rate. |
| |
(5) |
Monitor
the expense accruals and notify the Corporation’s 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. |
| |
f. |
Schedule
of Capital Gains and Losses. |
| |
(7) |
Prepare
quarterly broker security transaction summaries. |
3. Compensation
| |
USBFS
shall be compensated for providing the services set forth in this Agreement in accordance
with the fee schedule set forth on Exhibit B hereto (as amended from time to time). The
Corporation shall pay all fees and reimbursable expenses within thirty (30) calendar days
following receipt of the billing notice, except for any fee or expense subject to a good
faith dispute. The Corporation shall notify USBFS 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 (1½%)
per month, after the due date. Notwithstanding anything to the contrary, amounts owed by
the Corporation to USBFS shall only be paid out of the assets and property of the
particular Fund involved. |
3
4. 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 Corporation or any Fund 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 Corporation 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 Corporation, 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. Notwithstanding anything to the
contrary, any such indemnification payment shall be made only from the
assets of the particular Fund to which the indemnification obligation
relates. |
| |
USBFS
shall indemnify and hold the Corporation 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 Corporation or any Fund may sustain or incur or
that may be asserted against the Corporation by any person arising out of any action
taken or omitted to be taken by USBFS as a result of USBFS’ refusal or failure to
comply with the terms of this Agreement, its bad faith, negligence, or willful
misconduct. Notwithstanding anything to the contrary, any such indemnification payment
shall be made only to the particular Fund to which the indemnification obligation relates. |
| |
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’ 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 will maintain a disaster
recovery plan and procedures, including provisions for emergency use of electronic data
processing equipment, which is reasonable in light of the services to be provided under
this Agreement. Representatives of the Corporation shall be entitled to inspect USBFS’ premises
and operating capabilities at any time during regular business hours of USBFS, upon
reasonable notice to USBFS. |
4
| |
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. |
5. 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 Corporation and the Funds all
records and other information relative to the Corporation and the Funds and prior,
present, or potential shareholders of the Corporation and 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 Corporation, 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 Corporation. |
| |
Further,
USBFS will adhere to the privacy policies adopted by the Corporation and the Funds
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from time to time
(the “Xxxxx-Xxxxx Act”). Notwithstanding the foregoing, USBFS will not share
any nonpublic personal information 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 Xxxxx-Xxxxx Act. |
5
6. Term of
Agreement; Amendment
| |
This
Agreement shall become effective as of the date first written above and, unless sooner
terminated as provided herein, will continue in effect for a period of two years.
Subsequent to the two year term, this Agreement will renew automatically for an annual
period, subject to the approval of the Board of Directors of the Corporation. 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. This Agreement may be amended by mutual written consent of the parties. |
7. 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
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. 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 Corporation
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 Corporation on
and in accordance with its request. |
8. 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. |
9. Duties in
the Event of Termination
| |
In
the event that, in connection with termination, a successor to any of USBFS’s duties
or responsibilities hereunder is designated by the Corporation by written notice to
USBFS, USBFS 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 USBFS under this Agreement in a form reasonably acceptable
to the Corporation (if such form differs from the form in which USBFS has maintained, the
Corporation 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. |
6
10. No
Agency Relationship
| |
Nothing
herein contained shall be deemed to authorize or empower USBFS to act as agent for the
other party to this Agreement, or to conduct business in the name, or for the account, of
the other party to this Agreement. |
11. Data
Necessary to Perform Services
| |
The
Corporation or its agent, which may be USBFS, 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 Corporation, 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) calendar days after sent by registered or certified mail, postage
prepaid, return receipt requested, to the other party’s address set forth below: |
| |
Notice
to USBFS shall be sent to: |
| |
U.S.
Bancorp Fund Services, LLC
Attention: President
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 |
| |
and
notice to the Corporation prior to September 1, 2004 shall be sent to: |
| |
Xxxxxxx
Capital Management, Inc.
Attention: President
00 X. Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 |
| |
and
notice to the Corporation after September 1, 2004 shall be sent to: |
| |
Xxxxxxx
Capital Management, Inc.
Attention: President
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 |
7
14. Miscellaneous
| |
A. |
Headings
in this Agreement are included for convenience only and are not to be used to
construe or interpret this Agreement. |
| |
B. |
This
Agreement constitutes the complete agreement of the parties hereto as to the
subject matter covered by this Agreement, and supersedes all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein. |
| |
C. |
This
Agreement may be executed in counterparts, each of which shall be an original,
but all of which, taken together, shall constitute one and the same agreement. |
| |
D. |
Every
reference to a Fund will be deemed a reference solely to the particular Fund in
question. Under no circumstances shall the rights, obligations or remedies with
respect to a particular Fund constitute a right, obligation or remedy
applicable to any other Fund. In particular, USBFS shall not have any right to
set off claims of a Fund by applying the property of any other Fund. |
8
IN
WITNESS WHEREOF, the parties hereto have caused this Fund Administration Servicing
Agreement to be executed by a duly authorized officer on one or more counterparts as of
the date first above written.
|
|
| XXXXXXX FUNDS, INC |
|
|
U.S. BANCORP FUND SERVICES, LLC |
|
|
By: /s/ Xxxxxxx X. Xxxxxxx
| | |
By: /s/ Xxx X. Xxxxxxx
| | |
| | | |
Xxx X. Xxxxxxx | | |
Title: President
| | |
Title: President
|
|
|
9
Exhibit A
to the
Fund Administration Servicing Agreement
Fund Names
|
|
| Name of Series |
|
|
Date Added |
|
|
Xxxxxxx Emerging Opportunities Fund, a series of Xxxxxxx Funds, Inc. | | |
August 7, 2004 | | |
10
Xxxxxxx Funds, Inc.
PARTIAL SERVICE
FUND ADMINISTRATION & COMPLIANCE SERVICES
ANNUAL FEE SCHEDULE
Services (one fund, one class,
domestic securities):
° Maintain and manage a regulatory compliance calendar
° Blue Sky compliance services
° Prepare semi-annual and annual financial statements
° Prepare and file Form N-CSR, N-PX, N-Q and N-SAR
° Calculate and distribute all standard pre-tax performance information (monthly)
° Calculate and distribute after-tax performance information (monthly)
° Prepare annual Fund expense budget and monthly accruals
° Monitor and adjust as necessary all Fund expense accruals
° Validate and approve all Fund expense payments
° Process all Fund expense payments
° Includes post-effective amendments to the registration.
° ;Prepare Fund Board materials
Annual fee based upon assets per
Fund:
Base fee: $5,000 plus:
2.5 basis points on the first $300 million
1.75 basis points on the balance
Extraordinary services
° Additional classes - 25% additional per class
° Additional services quoted separately
Plus out-of-pocket expenses at the
direction Fund Management, including but not limited to:
Postage, Stationery
Programming, Special Reports
Proxies, Insurance
XXXXX filing
Retention of records
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Blue Sky conversion expenses (if necessary)
All other out-of-pocket expenses
Fees are billed monthly.
CPI Increase - annual increase based
upon the Milwaukee MSA.
11
