PROSPECT SERVICING AGREEMENT
THIS
AGREEMENT is made and entered into as of this 15th
day of
August, 2005, by and between Baird
Funds, Inc.,
a
Wisconsin corporation (the “Company”), U.S.
Bancorp Fund Services, LLC,
a
Wisconsin limited liability company (“USBFS”), and, with respect to Section 4
only, Xxxxxx
X. Xxxxx & Co. Incorporated,
a
Wisconsin corporation (the “Advisor”).
WHEREAS,
the Company 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 common stock 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 fulfillment services
to mutual funds; and
WHEREAS,
the Company desires
to
retain USBFS to provide fulfillment services to
each
series of the Company 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 to Provide Fulfillment
Services
|
The
Company hereby
appoints
USBFS to
provide fulfillment services to the Company 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. |
Duties
and Responsibilities of
USBFS
|
USBFS
shall provide the following fulfillment services to
the
Fund:
| A. |
Answer
all prospective shareholder calls concerning the
Fund.
|
| B. |
Send
all available Fund material requested by a prospective
shareholder
within 24 hours from time of call.
|
| C. |
Receive
and update all Fund fulfillment literature to
ensure
that the most current information is sent and
quoted.
|
| D. |
Provide
24 -hour
answering service to record prospective
shareholder
calls made after hours (7 p.m. to 8 a.m. Central
Time
is
“after hours”).
|
| E. |
Maintain
and store Fund fulfillment
inventory.
|
| F. |
Send
periodic fulfillment reports to the Company as agreed upon between
the
parties.
|
| G. |
Send
to shareholders of the Funds all prospectuses, annual reports, semi-annual
reports, proxy statements and other information required by the 1940
Act.
|
| 3. |
Duties
and Responsibilities of the
Company
|
The
Company shall:
| A. |
Provide
Fund fulfillment literature updates to USBFS as
necessary.
|
| B. |
File
with the National Association of Securities Dealers, Inc., the Securities
and Exchange Commission (the “SEC”) and state regulatory agencies, as
appropriate, all fulfillment literature that the Fund requests
USBFS to
send
to prospective shareholders.
|
| C. |
Supply
USBFS with sufficient inventory of fulfillment materials as requested
by
USBFS from
time
to time.
|
| D. |
Provide
USBFS with various
information about the Fund in order to answer prospective
shareholder
questions.
|
| 4. |
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
Company
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 Company shall notify USBFS in writing
within 30
calendar
days following receipt of each invoice if the Company is disputing any amounts
in good faith. The Company 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 Company
is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of 1½%
per
month
after
the due date. To the extent any
portion of such
fees
are not
paid
or
payable
by the Company,
the
Advisor
shall be
responsible for paying the amounts
to
USBFS. Notwithstanding
anything to the contrary, amounts owed by the Company
to USBFS
shall only be paid out of assets and property of the particular Fund involved.
2
| 5. |
Representations
and Warranties
|
| A. |
The
Company
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
Company
in
accordance with all requisite action and constitutes a valid and
legally
binding obligation of the Company,
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;
|
|
(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; and
|
|
(4)
|
A
registration statement under the 1940 Act and the Securities Act
of 1933,
as amended (the “Securities Act”), will be made effective prior to the
effective date of this Agreement and will remain effective during
the term
of this Agreement, and appropriate state securities law filings will
be
made prior to the effective date of this Agreement and will continue
to be
made during the term of this Agreement as necessary to enable the
Company
to
make a continuous public offering of its
shares.
|
| B. |
USBFS
hereby represents and warrants to the Company,
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
|
(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.
|
| 6. |
Standard
of Care; Indemnification;
Limitation of Liability
|
| A. |
USBFS
shall exercise reasonable care and act in accordance with industry
standards in the performance of its
duties under this Agreement.
USBFS shall not be liable for any error of judgment or mistake of
law or
for any loss suffered by the Company
in
connection with its duties under this Agreement, including losses
resulting from mechanical breakdowns or the failure of communication
or
power supplies beyond USBFS’
control,
except a loss arising out of or relating to USBFS’
refusal or
failure to comply with the terms of this Agreement or applicable
law or
from its bad faith, negligence, or willful misconduct in the performance
of its duties under this Agreement. Notwithstanding any other provision
of
this Agreement, if USBFS has exercised reasonable care and otherwise
act
in accordance with industry standards in the performance of its duties
under this Agreement, the Company
shall indemnify
and
hold harmless USBFS from and against any and all claims, demands,
losses,
expenses, and liabilities of any and every nature (including reasonable
attorneys’ fees) that USBFS may sustain or incur or that may be asserted
against USBFS 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 USBFS by any duly authorized officer of the
Company,
as approved by the Board of Directors of the Company (the “Board of
Directors”), except for any and all claims, demands, losses, expenses, and
liabilities arising out of or relating to USBFS’
refusal or
failure to comply with the terms of this Agreement or applicable
law or
from its bad faith, negligence or willful misconduct in the performance
of
its duties under this Agreement. In addition, the Company
shall indemnify and hold harmless USBFS from and against
any liability arising out of the distribution of fulfillment literature
that has not been filed with the appropriate federal and state regulatory
authorities.
This indemnity shall be a continuing obligation of the Company,
its successors and assigns, notwithstanding the termination of this
Agreement.
As
used in this paragraph, the term “USBFS” shall include USBFS’
directors,
officers and employees.
|
USBFS
shall indemnify and hold the Company
and the
Advisor harmless from and against any and all claims, demands, losses, expenses,
and liabilities of any and every nature (including reasonable attorneys’ fees)
that the Company
or the
Advisor may sustain or incur or that may be asserted against the Company
or the
Advisor by any person arising out of any action taken or omitted
to be taken by USBFS as a result of USBFS’ refusal
or
failure to comply with the terms of this Agreement or applicable law, or from
its bad faith, negligence, or willful misconduct in
the
performance of its duties under
this Agreement. 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 “Company”
and
the
“Advisor” shall include the Company’s and the Advisor’s directors, trustees,
officers and employees.
4
Neither
party to this Agreement shall be liable to the other party for consequential,
special or punitive damages under any provision of this Agreement.
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 Company
and the
Advisor shall be entitled to inspect USBFS’ premises
and
operating capabilities at any time during regular business hours of USBFS,
upon
reasonable notice to USBFS. Moreover, USBFS shall provide the Company,
at such
times as the Company
may
reasonably require, copies of reports rendered by independent accountants on
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.
| 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.
|
5
| C. |
The
indemnity and defense provisions set forth in this Section 6 shall
indefinitely survive the termination and/or assignment of this
Agreement.
|
| D. |
If
USBFS is acting in another capacity for the Company
pursuant to a separate agreement, nothing herein shall be deemed
to
relieve USBFS of any of its obligations in such other
capacity.
|
| 7. |
Data
Necessary to Perform Services
|
The
Company
or its
agent shall furnish to USBFS at its request the data necessary to perform the
services described herein at such times and in such form as mutually agreed
upon.
| 8. |
Proprietary
and Confidential
Information
|
USBFS
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 (i)
after
prior notification to and approval in writing by the Company,
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 Company.
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
Company
or its
agent, shall not be subject to this paragraph.
Further,
USBFS will adhere to the privacy policies adopted by the Company
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
Company
and
its shareholders.
| 9. |
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 Company,
but not
inconsistent with
the
rules
and regulations of appropriate government authorities. 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 Company
and will
be preserved, maintained, and made available to the Company,
and
will be promptly surrendered to the Company
or its
designee on and in accordance with its request.
6
| 10. |
Compliance
with Laws
|
The
Company
has and
retains primary responsibility for all compliance matters relating to the
Fund,
including but not limited to
compliance with the 1940 Act, the Securities Act, the Internal Revenue Code
of
1986, the Xxxxxxxx-Xxxxx Act of 2002, the USA PATRIOT Act and the policies
and
limitations of the Fund relating to its portfolio investments as set forth
in
its prospectus and statement of additional information. USBFS’ services
hereunder shall not relieve the Company
of its
responsibilities for assuring such compliance or the Board of Director’s
oversight responsibility with respect thereto.
| 11. |
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 three
years.
Subsequent to the initial three-year
term, this Agreement may be terminated by either
the Company
or
USBFS
upon
giving 90
days
prior written notice to the non-terminating party
or such
shorter period as is mutually agreed upon by the parties. Notwithstanding
the foregoing,
this
Agreement may
be
terminated by
the
Company at any time upon giving 90 days prior written notice to USBFS, or
by
any
party upon the breach of the other party of any material term of this Agreement
(including, without limitation, the standard of care set forth in Section 6.A
hereof) 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 Company,
and
authorized or approved by the Board of Directors. In the event that such
amendment or modification affects the Advisor, the written agreement shall
also
be signed by the Advisor.
| 12. |
Duties
in the Event of
Termination
|
In
the
event that, in connection with termination, a successor to any of USBFS’ duties
or
responsibilities hereunder is designated by the Company
by
written notice to USBFS, USBFS will promptly, upon such termination and at
the
expense of the Company,
transfer to such successor all relevant books, records,
correspondence,
fulfillment materials
and
other data established or maintained by USBFS under this Agreement in a form
reasonably acceptable to the Company
(if such
form differs from the form in which USBFS has maintained the same, the
Company
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’ personnel
in the
establishment of books, records and other data by such successor.
If no
such successor is designated, then such books, records, fulfillment materials
and other data shall be returned to the Company.
7
| 13. |
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 Company
or the
Advisor without the written consent of USBFS, or by USBFS without the written
consent of the Company
accompanied by the authorization or approval of the Company’s
Board
of Directors, and the Advisor.
| 14. |
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.
| 15. |
No
Agency Relationship
|
Nothing
herein contained shall be deemed to authorize or empower any
party
to act
as agent for any other party to this Agreement, or to conduct business in the
name, or for the account, of any other party to this Agreement.
| 16. |
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.
| 17. |
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.
| 18. |
Notices
|
Any
notice required or permitted to be given by any party to the others 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 parties’ addresses set forth below:
8
Notice
to
USBFS shall be sent to:
U.S.
Bancorp Fund Services, LLC
000
Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
and
notice to the Company
and
Advisor shall be sent to:
Baird
Funds, Inc.
000
Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxx 00000
Attn:
General Counsel
Facsimile:
(000) 000-0000
| 19. |
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.
| BAIRD FUNDS, INC. | XXXXXX X. XXXXX & CO. INCORPORATED |
| By: /s/ Xxxx Xxxxx Xxxxxx | By: /s/ J. Xxxx Xxxxxx |
| Title: President | Title: Managing Director |
U.S.
BANCORP FUND SERVICES, LLC
By:
/s/ Xxx X.
Xxxxxxx
Title:
President
9
Exhibit
A
to
the
Fund
Names
Separate
Series of Baird Funds
| Advisor | |
|
Name
of Series
|
Date Added |
|
Xxxxx
Intermediate Bond Fund
|
September 29, 2000 |
|
Xxxxx
Core Plus Bond Fund
|
September 29, 2000 |
|
Xxxxx
Aggregate Bond Fund
|
September 29, 2000 |
|
Xxxxx
Short-Term Bond Fund
|
September 29, 2000 |
|
Xxxxx
Intermediate Municipal Bond Fund
|
September 29, 2000 |
| Company | |
|
Name
of Series
|
Date Added |
|
Baird
LargeCap Fund
|
September 29, 2000 |
|
Xxxxx
XxxXxx Fund
|
December 29, 2000 |
|
Baird
SmallCap Fund
|
June 30, 2004 |
