Exhibit k.7
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of November,
2002, by and between MeVC Xxxxxx Xxxxxx Jurvetson Fund I, Inc., a Delaware
corporation (the "Fund"), and U.S. Bancorp Fund Services, LLC, a Wisconsin
limited liability company ("USBFS").
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a closed-end management investment company,
which has elected to do business as a business development company;
WHEREAS, USBFS is, among other things, in the business of providing mutual
fund accounting services to investment companies; and
WHEREAS, the Fund desires to retain USBFS to provide accounting services
to the Fund.
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 AS FUND ACCOUNTANT
The Fund hereby appoints USBFS as fund accountant of the Fund 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.
2. SERVICES AND DUTIES OF USBFS
USBFS shall provide the following fund accounting services for the Funds,
including but not limited to:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis using
security trade information communicated from the Fund.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Directors of the Fund (the "Board of
Directors" or the "Directors") and apply those prices to the
portfolio positions. For those securities where market
quotations are not readily available, the Board of Directors,
or a designee thereof, shall provide, in good faith, 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 Fund as to methodology, rate or dollar
amount.
(2) Record payments for expenses upon receipt of written
authorization from the Fund.
(3) Account for expenditures and maintain expense accrual balances
at the level of accounting detail, as agreed upon by USBFS and
the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share repurchases, tenders, sales, exchanges,
transfers, dividend reinvestments, and other Fund share
activity as reported by the Fund's transfer agent on a timely
basis.
(2) Apply equalization accounting as directed by the Fund.
(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 or other operative documents.
(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.
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(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 Fund's investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Fund.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions
to the Fund's 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 Fund, the Securities and Exchange Commission
(the "SEC"), and the outside auditors.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder.
F. USBFS will perform the following accounting functions on a daily basis:
(1) Reconcile cash and investment balances of the Fund with the
Fund's custodian, and provide the Fund with the beginning cash
balance available for investment purposes.
(2) Transmit or mail a copy of the portfolio valuation to the
Fund.
(3) Review the impact of current day's activity on a per share
basis, and review changes in market value.
G. In addition, USBFS will:
(1) Prepare monthly security transactions listings.
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(2) Supply various statistical data as requested by the Fund on an
ongoing basis.
(3) Prepare monthly a reconciliation between the Fund's cash
portfolio as held on USBFS's accounting records and the Fund's
internal records.
3. PRICING OF SECURITIES
For each valuation date, USBFS shall obtain prices from a pricing source
selected by USBFS but approved by the 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 Board of Directors shall
provide, in good faith, the fair value for such securities.
If the Fund desires to provide a price that varies from the pricing
source, the Fund shall promptly notify and supply USBFS with the valuation
of any such security on each valuation date. All pricing changes made by
the Fund 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 that affects accounting
practices and procedures under this Agreement shall be effective upon
written receipt by USBFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
USBFS 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 Fund under this Agreement.
6. COMPENSATION
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit A
hereto (as amended from time to time). The Fund shall pay all fees and
reimbursable expenses within thirty (30) calendar days following receipt
of the billing notice, except for any fee or expense subject to a good
faith dispute. The Fund shall notify USBFS in writing within thirty (30)
calendar days following receipt of each invoice if the Fund is disputing
any amounts in good faith. The Fund shall settle such disputed amounts
within ten (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 Fund is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of one and one-half percent (1-1/2%) per month, after the
due date.
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Notwithstanding anything to the contrary, amounts owed by the Fund to
USBFS shall only be paid out of the assets and property of the particular
Fund involved.
7. INDEMNIFICATION; LIMITATION OF LIABILITY
A. USBFS shall exercise reasonable care 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 Fund
in connection with matters to which this Agreement relates,
including losses resulting from mechanical breakdowns or the failure
of communication or power supplies beyond USBFS's control, except a
loss arising out of or relating to USBFS'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 USBFS has exercised reasonable care in the
performance of its duties under this Agreement, the Fund 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 standard of care
set forth herein, or (ii) in reliance upon any written or oral
instruction provided to USBFS by any duly authorized officer of the
Fund, such duly authorized officer to be included in a list of
authorized officers furnished to USBFS and as amended from time to
time in writing by resolution of the Board of Directors, except for
any and all claims, demands, losses, expenses, and liabilities
arising directly or indirectly out of or relating to USBFS'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.
USBFS shall indemnify and hold the Fund, its officers, directors and
employees harmless from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) that the Fund may sustain or incur or
that may be asserted against the Fund by any person arising directly
or indirectly out of any action taken or omitted to be taken by
USBFS as a result of USBFS'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, USBFS shall take all
reasonable steps to minimize service interruptions for any period
that such interruption continues beyond USBFS's control. 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
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equipment is available. Representatives of the Fund shall be
entitled to inspect USBFS's premises and operating capabilities at
any time during regular business hours of USBFS, upon reasonable
notice to USBFS.
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 with counsel reasonably satisfactory to indemnitee
unless the legal rights and defenses available to indemnitor and
indemnitee present a conflict for joint counsel. 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; provided however, that the
indemnitor shall not settle a claim that results in any admission of
wrongdoing by indemnitee without indemnitee's prior written consent.
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
Fund all records and other information relative to the Fund and prior,
present, or potential shareholders of the Fund (and clients of said
shareholders) including all shareholder trading information, 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 Fund, 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, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. USBFS acknowledges that it
may come into possession of material nonpublic information with respect to
the Fund and confirms that it has in place effective procedures to prevent
the use of such information in violation of applicable xxxxxxx xxxxxxx
laws.
Further, USBFS will adhere to the privacy policies adopted by the Fund
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time (the
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"Act"). Notwithstanding the foregoing, USBFS will not share any nonpublic
personal information concerning any of the Fund's shareholders to any
third party unless specifically directed by the Fund or allowed under one
of the exceptions noted under the Act.
9. 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; provided however,
the Fund may terminate the agreement by giving USBSF ninety (90) days
prior written notice in the event that USBFS breaches the standard of care
set forth herein. 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
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 Fund, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. 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
Fund and will be preserved, maintained, and made available in accordance
with such applicable sections and rules of the 1940 Act and will be
promptly surrendered to the Fund on and in accordance with its request.
USBFS agrees to provide any records necessary to the Fund to comply with
the Fund's disclosure controls and procedures adopted in accordance with
the Xxxxxxxx-Xxxxx Act. Without limiting the generality of the foregoing,
the USBFS shall cooperate with the Fund and assist the Fund as necessary
by providing information to enable the appropriate officers of the Fund to
execute any required certifications.
11. 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.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Fund by
written notice to USBFS, USBFS
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will promptly, upon such termination and at the expense of the Fund,
transfer to such successor all relevant books, records, correspondence and
other data established or maintained by USBFS under this Agreement in a
form reasonably acceptable to the Fund (if such form differs from the form
in which USBFS has maintained the same, the Fund 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 USBFS'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 USBFS to
act as agent for the other party to this Agreement, or to conduct business
in the name, or for the account, of the other party to this Agreement.
14. DATA NECESSARY TO PERFORM SERVICES
The Fund or its agent shall furnish to USBFS the data necessary to perform
the services described herein at such times and in such form as mutually
agreed upon. If USBFS is also acting in another capacity for the Fund,
nothing herein shall be deemed to relieve USBFS of any of its obligations
in such capacity.
15. NOTIFICATION OF ERROR
The Fund will notify USBFS of any discrepancy between USBFS and the Fund,
including, but not limited to, failing to account for a security position
in the Fund's portfolio, by the later of: within five (5) business days
after receipt of any reports rendered by USBFS to the Fund; within five
(5) business days after discovery of any error or omission not covered in
the balancing or control procedure, or within five (5) business days of
receiving notice from any shareholder.
16. ASSIGNMENT
This Agreement may not be assigned by either party without the prior
written consent of the other party.
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17. NOTICES
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or upon delivery 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 party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Fund shall be sent to:
MeVC Xxxxxx Xxxxxx Jurvetson Fund I, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
18. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements,
arrangements and understandings, whether written or oral.
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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.
MEVC XXXXXX XXXXXX JURVETSON FUND I, INC. U.S. BANCORP FUND SERVICES, LLC
By: __________________________________ By: _________________________________
Xxx X. Xxxxxxx
Title: ________________________________ Title: President
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EXHIBIT A
TO THE
FUND ACCOUNTING SERVICING AGREEMENT
AND THE
FUND ADMINISTRATION SERVICING AGREEMENT
With respect to the minimum annual fee, the Fee Schedule for the Fund
Administration Servicing Agreement shall be read in conjunction with the Fee
Schedule for the Fund Accounting Servicing Agreement between the same parties
and entered into as of the same date. That schedule in full is reproduced below:
ANNUAL FEE SCHEDULE
Aggregate Minimum Annual Fee of $85,000 or an asset based fee of 9.3 basis
points to first $100 million, 6 basis points thereafter, whichever is greater
(out-of-pockets not included).
FUND ACCOUNTING
All out-of-pocket expenses are billed monthly, included, but not limited to:
$.15 Domestic and Canadian Equities, Options
$.50 Corp/Gov/Agency Bonds, International Equities and Bonds
$.80 CMO's, Municipal Bonds, Money Market Instruments
$125 Per fund per month - Mutual Funds
Corporate Action Services
$2.00 Per equity security per month
Manual Security Pricing
$125 per month - greater than 10/day
Factor Services (BondBuyer)
Per CMO - $1.50/month
Per Mortgage Backed - $0.25/month
Minimum - $300/month
FUND ADMINISTRATION
Postage, Stationery
Programming, Special Reports
Proxies, Insurance
XXXXX filing - Approx. $11.00/page
Retention of records
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Blue Sky conversion expenses (if necessary)
All other out-of-pocket expenses
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