FUND ACCOUNTING SERVICING AGREEMENT
This Agreement between The Xxxxx Funds, a Delaware business trust, hereinafter
called the "Trust" and Firstar Mutual Fund Services, LLC, a Wisconsin limited
liability company, hereinafter called "Firstar," is entered into on this 5th day
of October, 1998.
WHEREAS, the Trust is an open-ended management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, Firstar is in the business of providing, among other things,
mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. Services. Firstar agrees to provide the following mutual fund
accounting services to the Trust:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis
using security trade information communicated from the
investment manager on a timely basis.
(2) For each valuation date, obtain prices from a
pricing source approved by the Board of Trustees of the Trust
(the "Board") and apply those prices to the portfolio
positions. For those securities where market quotations are
not readily available, the Board 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 to short-short, short- or long-term status; 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 Firstar 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
Trust 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 for the Trust in the form
as agreed upon.
(5) For each day the Trust is open as defined in the
prospectus, determine the net asset value of the according to
the accounting policies and procedures set forth in the
prospectus.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of fund
operation at such time as required by the nature and
characteristics of the Trust.
(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
portfolios of the Trust 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.
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E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the fund 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.
2. Pricing of Securities. For each valuation date, obtain prices from a
pricing source selected by Firstar but approved by the Trust's Board and apply
those prices to the portfolio positions. For those securities where market
quotations are not readily available, the Trust's Board shall approve, in good
faith, the method for determining the fair value for such securities.
If the Trust desires to provide a price which varies from the
pricing source, the Trust shall promptly notify and supply Firstar 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 prices are effective.
3. Changes in Accounting Procedures. Any resolution passed by the Board
that affects accounting practices and procedures under this agreement shall be
effective upon written receipt and acceptance by the Firstar.
4. Changes in Equipment, Systems, Service, Etc. Firstar 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.
5. Compensation. Firstar 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. If the
Trust elects to terminate this Agreement prior to the first anniversary of this
Agreement, the Trust agrees to reimburse Agent for the difference between the
standard fee schedule and the discounted fee schedule agreed to between the
parties.
6. Performance of Service.
A. Firstar shall exercise reasonable care in the performance of its
duties under this Agreement. Firstar 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 Firstar's control, except a loss resulting from
Firstar'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 Trust shall indemnify and hold harmless
Firstar from and against any and all claims, demands, losses, expenses,
and liabilities (whether with or without basis in fact or law) of any and
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every nature (including reasonable attorneys' fees) which Firstar may
sustain or incur or which may be asserted against Firstar 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 Firstar
by any duly authorized officer of the Trust, such duly authorized officer
to be included in a list of authorized officers furnished to Firstar and
as amended from time to time in writing by resolution of the Board.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, Firstar shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond Firstar's control. Firstar 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 Firstar. Firstar
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
Firstar's premises and operating capabilities at any time during regular
business hours of Firstar, upon reasonable notice to Firstar.
Regardless of the above, Firstar 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 Trust may be
asked to indemnify or hold Firstar harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that Firstar will use all
reasonable care to notify the Trust promptly concerning any situation
which presents or appears likely to present the probability of such a
claim for indemnification against the Trust. The Trust shall have the
option to defend Firstar against any claim which may be the subject of
this indemnification. In the event that the Trust so elects, it will so
notify Firstar and thereupon the Trust shall take over complete defense of
the claim, and Firstar shall in such situation initiate no further legal
or other expenses for which it shall seek indemnification under this
section. Firstar shall in no case confess any claim or make any compromise
in any case in which the Trust will be asked to indemnify Firstar except
with the Trust's prior written consent.
C. Firstar 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 may be asserted against the
Trust by any person arising out of any action taken or omitted to be taken
by Firstar as a result of Firstar's refusal or failure to comply with the
terms of this Agreement, its bad faith, negligence, or willful misconduct.
7. Records. Firstar 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.
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Firstar agrees that all such records prepared or maintained by Firstar relating
to the services to be performed by Firstar hereunder are the property of the
Trust and will be preserved, maintained, and made available with such section
and rules of the 1940 Act and will be promptly surrendered to the Trust on and
in accordance with its request.
8. Confidentiality. Firstar shall handle in confidence all information
relating to the Trusts' or `s business, which is received by Firstar during the
course of rendering any service hereunder.
9. Data Necessary to Perform Services. The Trust or its agent, which may
be Firstar, shall furnish to Firstar the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
10. Notification of Error. The Trust will notify Firstar of any balancing
or control error caused by Firstar within three (3) business days after receipt
of any reports rendered by Firstar to the Trust, 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.
11. Additional Series. In the event that the Trust establishes one or more
series of shares with respect to which it desires to have Firstar render
accounting services, under the terms hereof, it shall so notify Firstar in
writing, and if Firstar agrees in writing to provide such services, such series
will be subject to the terms and conditions of this Agreement, and shall be
maintained and accounted for by Firstar on a discrete basis. The portfolios
currently covered by this Agreement are: the U.S. Equity Fund, the International
Equity Fund and the Global Equity Fund.
12. Term of Agreement. 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.
13. Duties in the Event of Termination. In the event that in connection
with termination a Successor to any of Firstar's duties or responsibilities
hereunder is designated by the Trust by written notice to Firstar, Firstar 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 Firstar under this Agreement in a form reasonably
acceptable to the Trust (if such form differs from the form in which Firstar 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 Firstar's
personnel in the establishment of books, records and other data by such
successor.
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 Firstar shall be sent to:
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Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to Trust shall be sent to:
The Xxxxx Funds
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
15. Choice of Law. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
16. Year 2000 Compliance. Firstar represents that it has examined and
tested its internal systems which have been developed to support the services
outlined herein, and as of the date of this Agreement, has no knowledge of any
situation or circumstance that will inhibit the systems' ability to perform the
expected functions, or inhibit Firstar's ability to provide the expected
services as a result of any business interruptions or other business problems
relating to dates or days before, during, and after the year 2000. In connection
with the foregoing, Firstar represents that it has made reasonable inquiry of
its business partners and other entities with whom it conducts business and has
carefully considered the responses of those third-parties.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
The Xxxxx Funds Firstar Mutual Fund Services, LLC
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxx X. Xxxxxxx
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Print: Xxxxxx X. Xxxxxxxx Print: Xxx X. Xxxxxxx
Title: CFO Title: Senior Vice President
Date: October 5, 1998 Date: October 5, 1998
Attest: /s/ Xxxxx Xxxx Attest: /s/ Xxxxxxx X. Xxxxxx
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