XXXXX' FUNDS
ACCOUNTING SERVICES AGREEMENT
THIS ACCOUNTING SERVICES AGREEMENT (the "Agreement") is made as of the 13th
day of February, 1996, by and between XXXXX' FUNDS (the "Fund"), a Massachusetts
Business Trust (the "Trust"), and DECLARATION SERVICE COMPANY (the "Accounting
Services Agent"), a Pennsylvania corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and is registering its shares of common stock under the Securities Act of 1933,
as amended (the "1933 Act") in one or more distinct series of shares (the
"Portfolio" or "Portfolios");
WHEREAS, the Fund and the Accounting Services Agent desire to enter into
this Agreement pursuant to which the Accounting Services Agent will provide
portfolio accounting services to the Portfolios of the Fund identified on
Schedule A hereto, as may be amended from time to time, on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund and the Accounting Services Agent,
intending to be legally bound hereby, agree as follows
1. APPOINTMENT OF ACCOUNTING SERVICES AGENT. The Fund hereby appoints the
Accounting Services Agent to perform the services described in this Agreement
for the Portfolios identified on Schedule A, and the Accounting Services Agent
hereby accepts such appointment. The Accounting Services Agent shall act under
such appointment pursuant to the terms and conditions hereinafter set forth.
2. FUND DOCUMENTS. The Fund has provided to the Accounting Services Agent,
properly certified or authenticated copies of the following Fund related
documents in effect on the date hereof: the Fund's organizational documents,
including Indenture of Trust and By-Laws; the Fund's Registration Statement on
Form N-1A, including all exhibits thereto; the Fund's Prospectus and Statement
of Additional Information; all contracts with the Fund's investment adviser,
custodian, administrator, transfer agent/shareholder servicing agent, and
distributor; if applicable, notice filed with or granted by the Commodity
Futures Trading Commission relating to the Fund's status as a commodity pool
operator; and resolutions of the Fund's Board of Trustees authorizing the
appointment of the Accounting Services Agent and approving this Agreement
(members of the Board of Trustees being referred to herein as "Trustees"). The
Fund shall promptly provide to the Accounting Services Agent copies, properly
certified or authenticated, of all additions, amendments or supplements to the
foregoing, if any.
3. PORTFOLIO ACCOUNTING SERVICES. The Accounting Services Agent shall
provide the portfolio accounting services set forth on Schedule B hereto, as may
be amended from time to time. The Fund shall provide, and shall cause its
investment adviser, custodian, transfer agent/shareholder servicing agent,
distributor, legal counsel and independent public accountants to cooperate with
the Accounting Services Agent and to provide it with, such information,
documents and advice as the Accounting Services Agent may reasonably request in
order to enable the Accounting Services Agent to perform its duties hereunder.
4. RECORDKEEPING AND OTHER INFORMATION. The Accounting Services Agent shall
create and maintain all necessary records in accordance with all applicable
laws, rules and regulations, including, but not limited to, records required by
Section 31(a) of the 1940 Act and the rules thereunder, as the same may be
amended from time to time, relating to the various services performed by it and
not otherwise created and maintained by another party pursuant to contract with
the Fund. All records shall be the property of the Fund at all times and shall
be available for inspection and use by the Fund. Where applicable, such records
shall be maintained by the Accounting Services Agent for the periods and in the
places required by Rule 31a-2 under the 1940 Act.
5. AUDIT, INSPECTION AND VISITATION. The Accounting Services Agent shall
make available during regular business hours all records and other data created
and maintained pursuant to this Agreement for reasonable audit and inspection by
the Fund or any person retained by the Fund. Upon reasonable notice by the Fund,
the Accounting Services Agent shall make available during regular business hours
its facilities and premises employed in connection with its performance of this
Agreement for reasonable visitation by the Fund, or any person retained by the
Fund.
6. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as otherwise
provided herein, the Fund assumes full responsibility for ensuring that the Fund
complies with all applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended, the 1940 Act and the rules thereunder, and any
other applicable laws, rules and regulations.
7. COMPENSATION. The Fund shall pay to the Accounting Services Agent as
compensation for services rendered hereunder the annual accounting services fee
set forth in Schedule A. The fee shall be calculated and accrued daily, and paid
monthly. The Fund shall also reimburse the Accounting Services Agent for its
out-of-pocket expenses related to the performance of its duties hereunder,
including, without limitation, telecommunications charges, postage and delivery
services, record retention costs, reproduction charges and price quotation
costs. The Fund shall pay the Accounting Services Agent's monthly invoices for
accounting services fees and out-of-pocket expenses within five days of the
respective month-end. If this Agreement becomes effective subsequent to the
first day of a month or terminates before the last day of a month, the Fund
shall pay the Accounting Services Agent an accounting services fee that is
prorated for that part of the month in which this Agreement is in effect. All
rights of compensation and reimbursement under this Agreement for services
performed by the Accounting Services Agent as of the termination date shall
survive the termination of this Agreement.
8. APPOINTMENT OF AGENTS. The Accounting Services Agent may at any time or
times in its discretion appoint (and may at any time remove) other parties as
its agent to carry out such provisions of this Agreement as the Accounting
Services Agent may from time to time direct; provided, however, that the
appointment of any such agent shall not relieve the Accounting Services Agent of
any of its responsibilities or liabilities hereunder.
9. USE OF ACCOUNTING SERVICES AGENT'S NAME. The Fund shall not use the name
of the Accounting Services Agent or any of its affiliates in the Prospectus,
Statement of Additional Information, sales literature or other material relating
to the Fund in a manner not approved prior thereto in writing by the Accounting
Services Agent; provided, however, that the Accounting Services Agent shall
approve all uses of its and its affiliates' names that merely refer in accurate
terms to their appointments or that are required by the Securities and Exchange
Commission (the "SEC") or any state securities commission; and further provided,
that in no event shall such approval be unreasonably withheld.
10. USE OF FUND'S NAME. Neither the Accounting Services Agent nor any of
its affiliates shall use the name of the Fund or material relating to the Fund
on any forms (including any checks, bank drafts or bank statements) for other
than internal use in a manner not approved prior thereto in writing by the Fund;
provided, however, that the Fund shall approve all uses of its name that merely
refer in accurate terms to the appointment of the Accounting Services Agent
hereunder or that are required by the SEC or any state securities commission;
and further provided, that in no event shall such approval be unreasonably
withheld.
11. LIABILITY OF ACCOUNTING SERVICES AGENT. The duties of the Accounting
Services Agent shall be limited to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Accounting Services
Agent hereunder. The Accounting Services Agent may, in connection with this
Agreement, employ agents or attorneys in fact, and shall not be liable for any
loss arising out of or in connection with its actions under this Agreement so
long as it acts in good faith and with due diligence, and is not negligent or
guilty of any willful misconduct. The Accounting Services Agent may consult
counsel to the Fund or the Fund's independent public accountants or other
experts with respect to any matter arising in connection with the Accounting
Services Agent's duties, and the Accounting Services Agent shall not be liable
for any action taken or omitted by the Accounting Services Agent in good faith
in reliance on the oral or written advice of such counsel, accountants or other
experts. The Accounting Services Agent shall not be liable for any action taken
or omitted in reliance on the oral or written instruction, authorization,
approval or information provided to the Accounting Services Agent by any person
reasonably believed by the Accounting Services Agent to be authorized by the
Fund to give such instruction, authorization, approval or information. The
Accounting Services Agent shall not be liable for any loss, liability, damage or
cost arising out of the inaccuracy of prices quoted or corporate action
information supplied by any pricing service or the Fund and used by the
Accounting Services Agent in calculating the daily net asset value of the Fund.
Moreover, the Accounting Services Agent shall have no responsibility or duty to
include information or valuations to be provided by the Fund in any computation
unless and until it is timely supplied to the Accounting Services Agent in
useful form and shall have no duty to gather or record corporate action
information not supplied by the Fund, custodian or pricing service. The
Accounting Services Agent shall not be liable or responsible for any acts or
omissions of any predecessor accounting services agent or any other persons
having responsibility for matters to which this Agreement relates prior to the
effective date of this Agreement nor shall the Accounting Services Agent be
responsible for reviewing any such acts or omissions. Any person, even though
also an officer, trustee, employee or agent of the Accounting Services Agent or
any of its affiliates, who may be or become an officer or Trustee of the Fund,
shall be deemed, when rendering services to the Fund as such officer or Trustee
to be rendering such services to or acting solely for the Fund and not as an
officer, trustee, employee or agent or one under the control or direction of the
Accounting Services Agent or any of its affiliates, even though paid by one of
those entities. As used in this Section 12 (except the preceding sentence) and
in Section 13, the term "Accounting Services Agent" shall include trustees,
officers, employees and other agents of the Accounting Services Agent.
12. INDEMNIFICATION. The Trust hereby agrees to indemnify and hold harmless
the Accounting Services Agent from and against all claims, demands, expenses
(including attorney's fees) and liabilities, whether with or without basis in
fact or law, of any and every nature which the Accounting Services Agent may
sustain or incur or which may be asserted against the Accounting Services Agent
by any person by reason of, or as a result of: (i) any action taken or omitted
to be taken by the Accounting Services Agent in good faith in reliance upon any
certificate, instrument, order or stock certificate believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized person, upon
the oral instructions or written instructions of an authorized person of the
Trust or upon the opinion of legal counsel for the Trust or its counsel; or (ii)
any action taken or permitted to be taken by the Accounting Services Agent in
connection with its appointment in good faith in reliance upon any law, act,
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended or repealed. However, indemnification
hereunder shall not apply to actions or omissions of the Accounting Services
Agent or its directors, officers, employees or agents in cases of its own
negligence, willful misconduct, bad faith, or reckless disregard of its or their
own duties hereunder. The right to indemnity hereunder shall include the right
to advancement of defense expenses in the event of any pending or threatened
litigation; provided, however, that the Accounting Services Agent shall agree
that any advancement of expenses shall be returned to the Fund if it is
ultimately determined by an administrative or judicial tribunal that the
expenses (and related liability, if any) resulted from the Administrator's own
willful misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement.
The Accounting Services Agent shall give prompt written notice to the Fund
of a written assertion or claim of any threatened or pending legal proceeding
which may be subject to indemnity under this Section; provided, however, that
failure to notify the Fund of such written assertion or claim shall not operate
to relieve the Fund of any liability arising hereunder. The Fund shall be
entitled, if it so elects, to assume the defense of any suit brought to enforce
a claim subject to this Indemnity, and such defense shall be conducted by
counsel chosen by the Fund and satisfactory to the Accounting Services Agent;
provided, however, that if the defendants include both the Accounting Services
Agent and the Fund, and the Accounting Services Agent shall have reasonably
concluded that there may be one or more legal defenses available to it which are
different from or additional to those available to the Fund ("conflict of
interest"), the Fund shall not have the right to elect to defend such claim on
behalf of the Accounting Services Agent, and the Accounting Services Agent shall
have the right to select separate counsel to defend such claim on behalf of the
Accounting Services Agent. In the event that the Fund elects to assume the
defense of any claim pursuant to the preceding sentence and retains counsel
satisfactory to the Accounting Services Agent, the Accounting Services Agent
shall bear the fees and expenses of additional counsel retained by it, except
for reasonable investigation costs which shall be borne by the Fund. If the Fund
(i) does not elect to assume the defense of a claim, (ii) elects to assume the
defense of a claim but chooses counsel that is not satisfactory to the
Accounting Services Agent, or (iii) has no right to assume the defense of a
claim because of a conflict of interest, the Fund shall advance or reimburse the
Accounting Services Agent, at the election of the Accounting Services Agent,
reasonable fees and expenses of any counsel retained by the Accounting Services
Agent, including reasonable investigation costs.
13. SCOPE OF DUTIES. The Accounting Services Agent and the Fund shall
regularly consult with each other regarding the Accounting Services Agent's
performance of its obligations and its compensation under the foregoing
provisions. In connection therewith, the Fund shall submit to the Accounting
Services Agent at a reasonable time in advance of filing with the SEC copies of
any amended or supplemented Registration Statement of the Fund (including
exhibits) under the 1940 Act and the 1933 Act, and, at a reasonable time in
advance of their proposed use, copies of any amended or supplemented forms
relating to any plan, program or service offered by the Fund. Any change in such
materials that would require any change in the Accounting Services Agent's
obligations under the foregoing provisions shall be subject to the Accounting
Services Agent's approval. In the event that a change in such documents or in
the procedures contained therein increases the cost or burden to the Accounting
Services Agent of performing its obligations hereunder, the Accounting Services
Agent shall be entitled to receive reasonable compensation therefor.
14. DURATION. This Agreement shall become effective as of the date first
written above and shall continue in force for two years from that date (the
"Initial Term"). Thereafter, this Agreement shall continue in force from year to
year (each a "Successive Term"), provided continuance after the Initial Term is
approved at least annually by (i) the vote of a majority of the Trustees of the
Fund and (ii) the vote of a majority of those Trustees of the Fund who are not
"interested persons" of the Fund, and who are not parties to this Agreement or
"interested persons" of any such party, cast at a meeting called for the purpose
of voting on the approval.
15. TERMINATION. This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of its
assignment.
b. Either the Fund or the Accounting Services Agent may terminate this
Agreement without penalty prior to the commencement of any Successive
Term by providing to the other party 90 days prior written notice of
such termination.
c. Either party (the "terminating party") may terminate this Agreement
during the Initial Term or any Successive Term in the event of a
material breach of this Agreement by the other party (the "breaching
party"), provided that the terminating party has given to the
breaching party notice of such breach, and the breaching party has not
remedied such breach within 45 days after receipt of such notice.
Upon the termination of this Agreement, the Fund shall pay to the
Accounting Services Agent such compensation and out-of-pocket expenses as may be
payable for the period prior to the effective date of such termination. In the
event that the Fund designates a successor to any of the Accounting Services
Agent's obligations hereunder, the Accounting Services Agent shall, at the
expense and direction of the Fund, transfer to such successor all relevant
books, records and other data established or maintained by the Accounting
Services Agent under the foregoing provisions.
Sections 7, 9, 10, 11, 12, 15, 16, 20, 21, 22, 23, 24 and 25 shall
indefinitely survive any termination of this Agreement.
16. FORCE MAJEURE. The Accounting Services Agent shall not be liable for
any delays or errors in the performance of its obligations hereunder occurring
by reason of circumstances not reasonably foreseeable and beyond its control,
including, but not limited to, acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot or failure of communication or power supply. In the
event of equipment breakdowns which are beyond the reasonable control of the
Accounting Services Agent and not primarily attributable to the failure of the
Accounting Services Agent to reasonably maintain or provide for the maintenance
of such equipment, the Accounting Services Agent shall, at no additional expense
to the Fund, take reasonable steps in good faith to minimize service
interruptions, but shall have no liability with respect thereto.
17. AMENDMENT. The terms of this Agreement shall not be waived, altered,
modified, amended or supplemented in any manner whatsoever except by a written
instrument signed by the Accounting Services Agent and the Fund.
18. NON-EXCLUSIVE SERVICES. The types of services rendered by the
Accounting Services Agent hereunder are not exclusive. The Accounting Services
Agent may render such services to any other investment company and have other
businesses and interests.
19. DEFINITIONS. As used in this Agreement, the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules enacted thereunder as now in effect or hereafter amended.
20. CONFIDENTIALITY. The Accounting Services Agent shall treat
confidentially and as proprietary information of the Fund all records and other
information relating to the Fund and prior, present or potential shareholders
and shall not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except as may be
required by administrative or judicial tribunals or as requested by the Fund.
21. NOTICE. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section 21 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Fund:
Xxxxx' Funds
C/X Xxxxx' Capital Management Co.
00000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000-0000
ATTN: Xx. Xxxxxx X. Xxxxx'
President and Trustee
(b) if to the Accounting Services Agent:
Declaration Service Company
Xxxxx 0000
000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxx, President
or to such other respective addresses as the Fund or the Accounting Services
Agent shall designate by like notice, provided that notice of a change of
address shall be effective only upon receipt
thereof.
22. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
23. GOVERNING LAW. This Agreement shall be administered, construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania to the
extent that such law is not preempted by the provisions of any law of the United
States heretofore or hereafter enacted, as the same may be amended from time to
time.
24. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached
hereto) contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes all prior written or oral
agreements and understandings with respect thereto.
25. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction. This Agreement may be executed in two counterparts,
each of which taken together shall constitute one and the same instrument.
26. LIMITATION OF LIABILITY. The term "Xxxxx' Funds" means and refers to
the Trustees from time to time serving under the Master Trust Agreement of the
Trust dated October 15, 1993, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that obligations of the
Trust hereunder shall not be binding upon any Trustee, Shareholder, nominees,
officers, agents or employees of the Trust, personally, but bind only the assets
and property of the Trust, as provided in the Master Trust Agreement. The
execution and delivery of this Agreement have been authorized by the Trustees
and signed by an authorized officer of the Trust, acting as such, and neither
such authorization nor such execution and delivery shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the assets and property of the Trust as provided
in the Master Trust Agreement. The Master Trust Agreement is on file with the
Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
Xxxxx' Funds
By: /S/
----------------------------------------------
Xxxxxx X. Xxxxx', President and Trustee
DECLARATION SERVICE COMPANY
By: /S/
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Xxxxxxx X. Xxxxx, President
SCHEDULE A
XXXXX' FUNDS
Portfolio and Fee Schedule
Portfolios covered by Accounting Services Agreement:
XXXXX' U. S. GOVERNMENT TOTAL RETURN BOND FUND
Fees for accounting services on behalf of the Portfolios:
System set-up, conversion of records, Time & Materials
transfer of historical accounting data
and portfolio tax lots to
system.
Annual Fee, Accounting Services:
First Class of Shares, per portfolio ............ $22,000
Second Class of Shares, per portfolio ........... 15,000
Each additional Class, per portfolio ............ 10,000
Plus standard out-of-pocket expenses including (but not limited to): postage,
courier, telephone line, travel, price quotation services, Fund specific costs
related to Fund/SERV and Networking, printing, bank service charges, wire
charges, and other standard miscellaneous items.
SCHEDULE B
Accounting Services Provided by Declaration Services Company
1. Journalize each Portfolio's investment, capital share and income and
expense activities;
2. Verify investment buy/sell trade tickets when received from the adviser and
transmit trades to the Fund's custodian for proper settlement;
3. Maintain individual ledgers for investment securities;
4. Maintain historical tax lots for each security;
5. Reconcile cash and investment balances of each Portfolio with the
custodian, and provide the adviser with the beginning cash balance
available for investment purposes;
6. Update the cash availability throughout the day as required by the adviser;
7. Post to and prepare each Portfolio's Statement of Assets and Liabilities
and Statement of Operations;
8. Calculate expenses payable pursuant to the Fund's various contractual
obligations;
9. Control all disbursements from the Fund on behalf of each Portfolio and
authorize such disbursements upon instructions of the Fund;
10. Calculate capital gains and losses;
11. Determine each Portfolio's net income;
12. At the Portfolio's expense, obtain security market prices or if such
market prices are not readily available, then obtain such prices from
services approved by the adviser, and in either case calculate the market
or fair value of each Portfolio's investments;
13. Where applicable, calculate the amortized cost value of debt instruments;
14. Transmit or mail a copy of the portfolio valuations to the adviser;
15. Compute the net asset value of each Portfolio;
16. Report applicable net asset value and performance data to performance
tracking organizations;
17. Compute each Portfolio's yields, total returns, expense ratios and
portfolio turnover rate;
18. Prepare and monitor the expense accruals and notify Fund management of any
proposed adjustments;
19. Prepare monthly financial statements, which will include, without
limitation, the Schedule of Investments, the Statement of Assets and
Liabilities, the Statement of Operations, the Statement of Changes in Net
Assets, the Cash Statement, and the Schedule of Capital Gains and Losses;
20. Prepare monthly security transactions listings;
21. Prepare monthly broker security transactions summaries;
22. Supply various Fund and Portfolio statistical data as requested on an
ongoing basis;
23. Assist in the preparation of support schedules necessary for completion of
Federal and state tax returns;
24. Assist in the preparation and filing of the Fund's annual and semiannual
reports with the SEC on Form N-SAR;
25. Assist in the preparation and filing of the Fund's annual and semiannual
reports to shareholders and proxy statement;
26. Assist with the preparation of amendments to the Fund's Registration
Statements on Form N-1A and other filings relating to the registration of
shares;
27. Monitor each Portfolio's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended from time to
time ("Code");
28. Determine the amount of dividends and other distributions payable to
shareholders as necessary to, among other things, maintain the
qualification as a regulated investment company of each Portfolio of the
Fund under the Code; and
29. Prepare monthly or quarterly reports of funds disbursed under the Fund's
Rule 12b-1 Plan(s); and
30. Provide other accounting services as may be agreed from time to time in
writing by the Fund and the Accounting Services Agent.
