FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 23rd day of May, 2001,
by and between 1-800-MUTUALS Advisor Series, a business trust organized under
the laws of the State of Delaware (hereinafter referred to as the "Trust") and
Firstar Mutual Fund Services, LLC, a limited liability company organized under
the laws of the State of Wisconsin (hereinafter referred to as "FMFS").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust 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 Trust desires to retain FMFS to provide accounting services to
each series of the Trust 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
Trust and FMFS agree as follows:
1. Appointment of Fund Accountant
The Trust hereby appoints FMFS as Fund Accountant of the Trust 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) Maintain portfolio records on a trade date+1 basis using security
trade information communicated from the investment manager.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees of the Trust and apply those
prices to the portfolio positions. For those securities where
market quotations are not readily available, the Board of
Trustees of the Trust 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 as
directed by the Trust as to methodology, rate or dollar amount.
(2) 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
FMFS 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 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
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, 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 the
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 Trust.
(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 the Fund's accounting records
available to the Trust, the Securities and Exchange Commission,
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;
(2) Supply various Trust, Fund and class statistical data as
requested by the Trust 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 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 of the Trust
shall approve, in good faith, the method for determining the fair value for
such securities.
If the Trust desires to provide a price that varies from the pricing
source, the Trust shall promptly notify and supply FMFS with the valuation
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.
4. Changes in Accounting Procedures
Any resolution passed by the Board of Trustees of the Trust 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 Trust 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 A
and as mutually agreed upon and amended from time to time. The Trust agrees
to pay all fees and reimbursable expenses within ten (10) business days
following the receipt of the billing notice. Notwithstanding anything to
the contrary, amounts owed by the Trust 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 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 Trust 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 in the performance of its duties
under this Agreement, the Trust 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 provided to FMFS by any duly authorized
officer of the Trust, 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 Trustees of the
Trust.
FMFS shall indemnify and hold the Trust harmless 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 the Trust may sustain or
incur or which may be asserted against the Trust 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 take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond FMFS's control. FMFS 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 FMFS. FMFS
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 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 which
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 is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of the
Trust and agrees that obligations assumed by the Trust pursuant to
this Agreement shall be limited in all cases to the Trust 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 Trust, nor from the Trustees or any
individual Trustee of the Trust.
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 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 after
prior notification to and approval in writing by the Trust, 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 Trust.
9. Term of Agreement
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. Subsequent to the initial
three-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.
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 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. 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 Trust 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 Trust 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 Trust by
written notice to FMFS, FMFS 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 FMFS
under this Agreement in a form reasonably acceptable to the Trust (if such
form differs from the form in which FMFS has maintained the same, the Trust
shall pay any 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 Trust 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 Trust, nothing herein shall be deemed to relieve FMFS of
any of its obligations in such capacity.
15. Notification of Error
The Trust will notify FMFS of any discrepancy between FMFS and the Trust,
including, but not limited to, failing to account for a security position
in the fund's portfolio, by the later of: within three (3) business days
after receipt of any reports rendered by FMFS to the Trust; 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 Trust shall be sent to:
1-800-MUTUALS Advisor Series
c/o XXXXXXX.xxx, Inc.
Plaza of the Americas
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
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.
1-800-MUTUALS ADVISOR SERIES FIRSTAR MUTUAL FUND SERVICES, LLC
By: /s/ Xxxxxx Xxxxxxxxx By: /s/ Xxx X. Xxxxxxx
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Title: President Title: President
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