Exhibit No. EX. 99.h.2.A
AMENDED AND RESTATED
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT originally made and entered into on February 2, 1998, by and
between THE XXXXXXX FUNDS, a Delaware statutory trust (the "Trust") and U.S.
BANCORP FUND SERVICES, LLC, a Wisconsin limited liability company ("USBFS") is
amended and restated as of May 24, 2006.
WHEREAS, the Trust 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 beneficial interest 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 accounting services to investment companies; and
WHEREAS, the Trust desires to retain USBFS to provide accounting services
to each series of the Trust listed on Exhibit A hereto (as amended from time to
time) (each a "Fund" and collectively, the "Funds").
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 Fund Accountant
The Trust hereby appoints USBFS as fund accountant of the Trust 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. The services and duties of USBFS shall be confined to those
matters expressly set forth herein, and no implied duties are assumed by or
may be asserted against USBFS hereunder.
2. Services and Duties of USBFS
USBFS shall provide the following accounting services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis using security
trade information communicated from the Fund's investment
adviser.
(2) For each valuation date, obtain prices from a pricing source
approved by the board of trustees of the Trust (the "Board of
Trustees") and apply those prices to the portfolio positions. For
those securities where market quotations are not readily
available, the Board of Trustees shall approve, in good faith,
procedures 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
each 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.
(5) On a daily basis, reconcile cash of the Fund with the Fund's
custodian.
(6) Transmit a copy of the portfolio valuation to the Fund's
investment adviser daily.
(7) Review the impact of current day's activity on a per share basis,
and review changes in market value.
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) Process and 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
USBFS 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 Fund's 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
current 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 to the Trust, at an agreed upon time, the per share
net asset value for each valuation date.
(8) Prepare monthly reports that document the adequacy of accounting
detail to support month-end ledger balances.
(9) Prepare monthly security transactions listings.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of the
Fund to support the tax reporting required for "regulated
investment companies" under the Internal Revenue Code of 1986, as
amended (the "Code").
(2) Maintain tax lot detail for the Fund's 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 calculate the
taxable components of income and capital gains distributions 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
(the "SEC"), and the independent accountants.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder.
(3) Perform its duties hereunder in compliance with all applicable
laws and regulations and provide any sub-certifications
reasonably requested by the Trust in connection with any
certification required of the Trust pursuant to the
Xxxxxxxx-Xxxxx Act of 2002 (the "SOX Act") or any rules or
regulations promulgated by the SEC thereunder, provided the same
shall not be deemed to change USBFS's standard of care as set
forth herein.
(4) Cooperate with the Trust's independent accountants and take all
reasonable action in the performance of its obligations under
this Agreement to ensure that the necessary information is made
available to such accountants for the expression of their opinion
on the Fund's financial statements without any qualification as
to the scope of their examination.
3. License of Data; Warranty; Termination of Rights
A. The valuation information and evaluations being provided to the Trust
by USBFS pursuant hereto (collectively, the "Data") are being
licensed, not sold, to the Trust. The Trust has a limited license to
use the Data only for purposes necessary to valuing the Trust's
assets, providing relevant data to its lawyers, accountants and Board
of Trustees, and reporting to regulatory bodies (the "License"). The
Trust does not have any license nor right to use the Data for purposes
beyond the intentions of this Agreement including, but not limited to,
resale to other users or use to create any type of historical
database. The License is non-transferable and not sub-licensable. The
Trust's right to use the Data cannot be passed to or shared with any
other entity, except as provided above.
The Trust acknowledges the proprietary rights that USBFS and its
suppliers have in the Data.
B. THE TRUST HEREBY ACCEPTS THE DATA AS IS, WHERE IS, AND USBFS MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY OR FITNESS FOR
ANY PURPOSE OR ANY OTHER MATTER.
C. USBFS may stop supplying some or all Data to the Trust if USBFS's
suppliers terminate any agreement to provide Data to USBFS. Also,
USBFS may stop supplying some or all Data to the Trust if USBFS
reasonably believes that the Trust is using the Data in violation of
the License, or breaching its duties of confidentiality provided for
hereunder, or if any of USBFS's suppliers demand that the Data be
withheld from the Trust. USBFS will provide notice to the Trust of any
termination of provision of Data as soon as reasonably possible. USBFS
will use its best efforts to obtain an alternative Data source for the
Trust, in the event some or all Data becomes unavailable.
4. Pricing of Securities
A For each valuation date, USBFS shall obtain prices from a pricing
source recommended by USBFS and 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 shall approve, in good faith, procedures for
determining the fair value for such securities.
If the Trust desires to provide a price that varies from the price
provided by the pricing source, the Trust shall promptly notify and
supply USBFS with the price 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.
B. In the event that the Trust at any time receives Data containing
evaluations, rather than market quotations, for certain securities or
certain other data related to such securities, the following
provisions will apply: (i) the Trust acknowledges that there may be
errors or defects in the software, databases, or methodologies
generating the evaluations that may cause resultant evaluations to be
inappropriate for use in certain applications; and (ii) the Trust
assumes all responsibility for edit checking, external verification of
evaluations, and ultimately the appropriateness of using Data
containing evaluations, regardless of any efforts made by USBFS and
its suppliers in this respect.
5. Changes in Accounting Procedures
Any resolution passed by the Board of Trustees that affects accounting
practices and procedures under this Agreement shall be effective upon
written receipt of notice and acceptance by USBFS.
6. Changes in Equipment, Systems, Etc.
USBFS reserves the right to make changes from time to time, as it deems
advisable, relating to its systems, programs, rules, operating schedules
and equipment, so long as such changes do not adversely affect the services
provided to the Trust under this Agreement.
7. 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). USBFS shall also be compensated for such
out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by
USBFS in performing its duties hereunder. The Trust shall pay all such fees
and reimbursable expenses within 30 calendar days following receipt of the
billing notice, except for any fee or expense subject to a good faith
dispute. The Trust shall notify USBFS in writing within 30 calendar days
following receipt of each invoice if the Trust is disputing any amounts in
good faith. The Trust shall pay such disputed amounts within 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 Trust is disputing in good faith as
set forth above, unpaid invoices shall accrue a finance charge of 1 1/2%
per month after the due date. Notwithstanding anything to the contrary,
amounts owed by the Trust to USBFS shall only be paid out of the assets and
property of the particular Fund involved.
8. Representations and Warranties
A. The Trust hereby represents and warrants to USBFS, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(2) This Agreement has been duly authorized, executed and delivered
by the Trust in accordance with all requisite action and
constitutes a valid and legally binding obligation of the Trust,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and
secured parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
B. USBFS hereby represents and warrants to the Trust, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(2) This Agreement has been duly authorized, executed and delivered
by USBFS in accordance with all requisite action and constitutes
a valid and legally binding obligation of USBFS, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured
parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
9. Standard of Care; Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement and any related agreement between USBFS and its
Data suppliers. Neither USBFS nor its Data suppliers shall be liable
for any error of judgment or mistake of law or for any loss suffered
by the Trust or any third party in connection with their duties under
this Agreement and any related agreement between USBFS and its Data
suppliers, 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 its or its Data
suppliers' bad faith, negligence, or willful misconduct in the
performance of its duties under this Agreement. Notwithstanding any
other provision of this Agreement, and any related agreement between
USBFS and its Data suppliers, if USBFS has exercised reasonable care
in the performance of its duties under this Agreement, the Trust shall
indemnify and hold harmless USBFS and its Data suppliers from and
against any and all claims, demands, losses, expenses, and liabilities
of any and every nature (including reasonable attorneys' fees) that
USBFS or its Data suppliers may sustain or incur or that may be
asserted against USBFS or its Data suppliers by any person arising out
of or related to (X) any action taken or omitted to be taken by it in
performing the services hereunder (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 Trust, as
approved by the Board of Trustees of the Trust, or (Y) the Data, or
any information, service, report, analysis or publication derived
therefrom, except for any and all claims, demands, losses, expenses,
and liabilities arising out of or relating to USBFS's or its Data
suppliers' refusal or failure to comply with the terms of this
Agreement and any related agreement between USBFS and its Data
suppliers or from their bad faith, negligence or willful misconduct in
the performance of their duties under this Agreement or any related
agreement between USBFS and its Data suppliers. This indemnity shall
be a continuing obligation of the Trust, its successors and assigns,
notwithstanding the termination of this Agreement. As used in this
paragraph, the term "USBFS" shall include USBFS's directors, officers
and employees.
The Trust acknowledges that the Data are intended for use as an aid to
institutional investors, registered brokers or professionals of
similar sophistication in making informed judgments concerning
securities. The Trust accepts responsibility for, and acknowledges it
exercises its own independent judgment in, its selection of the Data,
its selection of the use or intended use of such, and any results
obtained. Nothing contained herein shall be deemed to be a waiver of
any rights existing under applicable law for the protection of
investors.
USBFS shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities of any and
every nature (including reasonable attorneys' fees) that the Trust may
sustain or incur or that may be asserted against the Trust by any
person arising out of any action taken or omitted to be taken by USBFS
or its suppliers as a result of USBFS's or its suppliers' refusal or
failure to comply with the terms of this Agreement or any related
agreement between USBFS and its suppliers, or from its bad faith,
negligence, or willful misconduct in the performance of their duties
under this Agreement or any related agreement between USBFS and its
suppliers. This indemnity shall be a continuing obligation of USBFS,
its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term "Trust" shall include
the Trust's trustees, officers and employees.
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. 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 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
USBFS's premises and operating capabilities at any time during regular
business hours of USBFS, upon reasonable notice to USBFS. Moreover,
USBFS shall provide the Trust, at such times as the Trust may
reasonably require, copies of reports rendered by independent
accountants on the internal controls and procedures of USBFS relating
to the services provided by USBFS under this Agreement.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
In no case shall either party be liable to the other for (i) any
special, indirect or consequential damages, loss of profits or
goodwill (even if advised of the possibility of such); or (ii) any
delay by reason of circumstances beyond its control, including acts of
civil or military authority, national emergencies, labor difficulties,
fire, mechanical breakdown, flood or catastrophe, acts of God,
insurrection, war, riots, or failure beyond its control of
transportation or power supply.
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.
C. The indemnity and defense provisions set forth in this Section 9 shall
indefinitely survive the termination and/or assignment of this
Agreement.
D. If USBFS is acting in another capacity for the Trust pursuant to a
separate agreement, nothing herein shall be deemed to relieve USBFS of
any of its obligations in such other capacity.
10. Notification of Error
The Trust will notify USBFS of any discrepancy between USBFS and the Trust,
including, but not limited to, failing to account for a security position
in the Fund's portfolio, upon the later to occur of: (i) three business
days after receipt of any reports rendered by USBFS to the Trust; (ii)
three business days after discovery of any error or omission not covered in
the balancing or control procedure; or (iii) three business days after
receiving notice from any shareholder regarding any such discrepancy.
11. Data Necessary to Perform Services
The Trust or its agent shall furnish to USBFS the data necessary to perform
the services described herein at such times and in such form as mutually
agreed upon.
12. Proprietary and Confidential Information
A. USBFS 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 (i) after prior notification to and approval
in writing by the Trust, 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, (ii) when
requested to divulge such information by duly constituted authorities,
or (iii) when so requested by the Trust. Records and other information
which have become known to the public through no wrongful act of USBFS
or any of its employees, agents or representatives, and information
that was already in the possession of USBFS prior to receipt thereof
from the Trust or its agent, shall not be subject to this paragraph.
Further, USBFS will adhere to the privacy policies adopted by the
Trust pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time. In this regard, USBFS shall have in place
and maintain physical, electronic and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of,
and to prevent unauthorized access to or use of, records and
information relating to the Trust and its shareholders.
B. The Trust, on behalf of itself and its trustees, officers, and
employees, will maintain the confidential and proprietary nature of
the Data and agrees to protect it using the same efforts, but in no
case less than reasonable efforts, that it uses to protect its own
proprietary and confidential information.
13. 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 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. 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 Trust 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 Trust or its designee on and in accordance with its
request.
14. Compliance with Laws
The Trust has and retains primary responsibility for all compliance matters
relating to the Fund, including but not limited to compliance with the 1940
Act, the Code, the SOX Act, the USA Patriot Act of 2002 and the policies
and limitations of the Fund relating to its portfolio investments as set
forth in its current prospectus and statement of additional information.
USBFS's services hereunder shall not relieve the Trust of its
responsibilities for assuring such compliance or the Board of Trustee's
oversight responsibility with respect thereto.
15. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
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 90 days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties. Notwithstanding the
foregoing, this Agreement may be terminated by any party upon the breach of
the other party of any material term of this Agreement if such breach is
not cured within 15 days of notice of such breach to the breaching party.
This Agreement may not be amended or modified in any manner except by
written agreement executed by USBFS and the Trust, and authorized or
approved by the Board of Trustees.
16. 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 Trust by
written notice to USBFS, USBFS 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 USBFS
under this Agreement in a form reasonably acceptable to the Trust (if such
form differs from the form in which USBFS has maintained the same, the
Trust 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. If
no such successor is designated, then such books, records and other data
shall be returned to the Trust.
17. Assignment
This Agreement shall extend to and be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Trust without the written consent
of USBFS, or by USBFS without the written consent of the Trust accompanied
by the authorization or approval of the Trust's Board of Trustees.
18. 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.
19. No Agency Relationship
Nothing herein contained shall be deemed to authorize or empower either
party 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.
20. Services Not Exclusive
Nothing in this Agreement shall limit or restrict USBFS from providing
services to other parties that are similar or identical to some or all of
the services provided hereunder.
21. Invalidity
Any provision of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the
parties.
22. 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 days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax No.: __________________
and notice to the Trust shall be sent to:
Xxxxxxx Xxxxx
Executive Vice President
Xxxxxxx & Associates, L.P.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
23. Multiple Originals
This Agreement may be executed on two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
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 date
first above written.
THE XXXXXXX FUNDS U.S. BANCORP FUND SERVICES, LLC
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxxxx
Title: Treasurer and Chief Accounting Officer Title: SVP
Exhibit A
to the
Fund Accounting Servicing Agreement
Fund Names
Separate Series of THE XXXXXXX FUNDS
Name of Series
Xxxxxxx Financial Alert Fund
