Exhibit 6 - FUND ACCOUNTING AGREEMENT
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of January, 1999, by
and between Texas Capital Value Funds, Inc., a Maryland corporation (hereinafter
referred to as the "Company") and Firstar Mutual Fund Services, LLC, a
corporation organized under the laws of the State of Wisconsin (hereinafter
referred to as "FMFS").
WHEREAS, the Company is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company is authorized to create separate series, each with its own
separate investment portfolio;
WHEREAS, FMFS is in the business of providing, among other things, mutual fund
accounting services to investment companies; and
WHEREAS, the Company desires to retain FMFS to provide accounting services to
the Value & Growth Portfolio (the "Fund") and each additional series of the
Company listed on Exhibit A attached hereto, as it may be amended from time to
time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and FMFS agree as follows:
1. Appointment of Fund Accountant
The Company hereby appoints FMFS as Fund Accountant of the Company 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 Directors of the Company and apply those prices to the portfolio
positions. For those securities where market quotations are not readily
available, the Board of Directors of the Company 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 Company as to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written authorization
from the Company.
(3) Account for Fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed upon by FMFS and
the Company.
(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 Company.
(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 which 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 Company.
(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 Company,
the Securities and Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the 1940 Act and regulations
provided thereunder.
3. Pricing of Securities
For each valuation date, obtain prices from a pricing source selected by FMFS
but approved by the Company's Board of Directors and apply those prices to the
portfolio positions of the Fund. For those securities where market quotations
are not readily available, the Company's Board of Directors shall approve, in
good faith, the method for determining the fair value for such securities.
If the Company desires to provide a price which varies from the pricing source,
the Company shall promptly notify and supply FMFS with the valuation of any such
security on each valuation date. All pricing changes made by the Company 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 Directors of the Company 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 Company 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 Company agrees to pay all fees
and reimbursable expenses within ten (10) business days following the receipt of
the billing notice.
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 Company in connection with matters to
which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond FTC's
control, except a loss resulting from FTC'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, the Company 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 (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 Company, 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 Directors of the Company.
FMFS shall indemnify and hold the Company 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 Company may sustain or incur or which may be asserted against
the Company by any person arising out of any action taken or omitted to be taken
by FMFS as a result of FTC'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
FTC'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 Company shall be entitled to
inspect FTC'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.
8. 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.
9. 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 Company 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 Company 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 Company on and in accordance with its request.
10. Data Necessary to Perform Services
The Company 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 as the transfer agent for
the Company, nothing herein shall be deemed to relieve FMFS of any of its
obligations under the Transfer Agent Servicing Agreement.
11. Notification of Error
The Company will notify FMFS of any balancing or control error caused by FMFS
within three (3) business days after receipt of any reports rendered by FMFS to
the Company, or 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.
12. 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 Company all records
and other information relative to the Company and prior, present, or potential
shareholders of the Company (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 Company, 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
Company.
13. Term of Agreement
This Agreement shall become effective as of the date hereof and, unless sooner
terminated as provided herein, shall continue for a period of two years, and
thereafter shall continue automatically in effect for successive annual periods.
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 replaced or modified
by a subsequent agreement between the parties.
14. 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 Company shall be sent to:
Texas Capital Value Funds
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
15. Duties in the Event of Termination
In the event that in connection with termination, a successor to any of FTC's
duties or responsibilities hereunder is designated by the Company by written
notice to FMFS, FMFS will promptly, upon such termination and at the expense of
the Company 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 Company (if such form differs
from the form in which FMFS has maintained the same, the Company 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 FTC's personnel in the establishment of books, records and other
data by such successor.
16. 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.
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.
texas capital value funds, Inc. FIRSTAR MUTUAL FUND SERVICES,
LLC
By:______________________________ By: ________________________________
Attest: __________________________
Attest:_____________________________
Fund Accounting Services
Annual Fee Schedule
Exhibit A
Separate Series of Texas Capital Value Funds, Inc.
Name of Series Date Added
Value & Growth Portfolio January 1, 1999
Mid-Cap Focus Portfolio -
Domestic Equity Funds (per fund, one class each fund)
$22,000 for the first $40 million
1 basis point on the next $200 million
.5 basis point on the balance
Plus out-of-pocket expenses, including pricing service:
Domestic and Canadian Equities $.15
Options $.15
Corp/Gov/Agency Bonds $.50
CMO's $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
Fees and out-of-pocket expenses are billed to the fund monthly
