FUND ACCOUNTING SERVICING AGREEMENT
This contract between X'Xxxxxxxxxxx Funds, Inc., a Maryland Corporation,
hereinafter called the ("Funds"), and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this eighth day of
October, 1996.
WHEREAS, X'Xxxxxxxxxxx Funds, Inc., is an open-ended management
investment company registered under the Investment Company Act of 1940; and
WHEREAS, Firstar Trust Company ("FTC") 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. FTC agrees to provide the following mutual fund
accounting services to the Funds:
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 Directors and apply those prices
to the portfolio positions. For those securities where market
quotations are not readily available, the Board of Directors
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 Funds as to methodology, rate or
dollar amount.
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(2) Record payments for Fund expenses upon receipt of
written authorization from the Funds.
(3) Account for fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed
upon by FTC and the Funds.
(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 Funds.
(3) Determine net investment income (earnings) for the
Funds 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 Funds in the form
as agreed upon.
(5) For each day the Funds are open as defined in the
prospectuses, determine the net asset value of the Funds
according to the accounting policies and procedures set forth in
the prospectuses.
(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 Funds.
(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 Funds to support
the tax reporting required for IRS-defined regulated investment
companies.
(2) Maintain tax lot detail for the Funds.
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(3) Calculate taxable gain/loss on security sales using
the tax lot relief method designated by the Funds.
(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 accounting
records available to X'Xxxxxxxxxxx Funds Inc., the Securities and
Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the
Investment Company Act of 1940 and regulations provided
thereunder.
2. Pricing of Securities. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Fund's Board and apply those
prices to the portfolio positions in accordance with the Fund's valuation
procedures. For those securities where market quotations are not readily
available, the Fund's Board shall approve, in good faith, the method for
determining the fair value for such securities.
If the Funds desire to provide a price which varies from the
pricing source, in accordance with the Fund's valuation procedures, the Funds
shall promptly notify and supply FTC with the valuation of any such security on
each valuation date. All pricing changes made by the Funds 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 of Directors that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by the FTC.
4. Changes in Equipment, Systems, Service, Etc. FTC 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 Funds under
this Agreement.
5. Compensation. FTC shall be compensated for providing the services
set forth in this Agreement in accordance with the Fee Schedule attached hereto
as Exhibit A and A.1 and as mutually agreed upon and amended from time to time.
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6. Performance of Service.
A. FTC shall exercise reasonable care and diligence, act
in good faith and use its best efforts within reasonable limits
in the performance of its duties under this Agreement. FTC 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 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 Funds
shall indemnify and hold harmless FTC 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 FTC may sustain or
incur or which may be asserted against FTC 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 FTC which the agent reasonably believes
to have been executed by any duly authorized officer of the
Funds, such duly authorized officer to be included in a list of
authorized officers furnished to FTC and as amended from time to
time in writing by resolution of the Board of Directors of the
Funds.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FTC shall
take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond FTC's control.
FTC 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 FTC. FTC 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 Funds shall be
entitled to inspect FTC's premises and operating capabilities,
and any and all of FTC's books and records which relate to any
transaction or function performed by FTC pursuant to this
agreement, at any time during regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC 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 Fund may be asked to indemnify or hold FTC harmless, the
Funds shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that FTC will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears
likely to present the probability of such a claim for
indemnification against the Funds. The Funds shall have the
option to defend FTC against any claim which may be the subject
of this indemnification. In the event that the Funds so elects,
it will so notify FTC and thereupon the Funds shall take over
complete defense of the claim, and FTC shall in such situation
initiate no further legal or other expenses for which it shall
seek indemnification under this section. FTC shall in no case
confess any claim or make any compromise in any case in which the
Funds will be asked to indemnify FTC except with the Fund's prior
written consent.
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C. FTC shall indemnify and hold the Funds 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 Funds by any person arising out of any
action taken or omitted to be taken by FTC as a result of FTC's
refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
7. Records. FTC 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 Funds but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. FTC agrees that all such records prepared or
maintained by FTC relating to the services to be performed by FTC hereunder are
the property of the Funds and will be preserved, maintained, and made available
with such section and rules of the Investment Company Act and will be promptly
surrendered to the Funds on and in accordance with its request.
8. Confidentiality. FTC shall handle in confidence all information
relating to the Fund's business, which is received by FTC during the course of
rendering any service hereunder.
9. Data Necessary to Perform Services. The Funds or its agent, which
may be FTC, shall furnish to FTC the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
10. Notification of Error. The Funds will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Funds, 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 X'Xxxxxxxxxxx Funds Inc.,
establishes one or more series of shares with respect to which it desires to
have FTC render accounting services, under the terms hereof, it shall so notify
FTC in writing, and if FTC 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 FTC on a discrete basis. The portfolios
currently covered by this Agreement are listed on Schedule A.
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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 FTC's duties or responsibilities
hereunder is designated by X'Xxxxxxxxxxx Funds Inc., by written notice to FTC,
FTC will promptly, upon such termination and at the expense of X'Xxxxxxxxxxx
Funds Inc., transfer to such Successor all relevant books, records,
correspondence and other data established or maintained by FTC under this
Agreement in a form reasonably acceptable to X'Xxxxxxxxxxx Funds Inc., (if such
form differs from the form in which FTC has maintained the same, X'Xxxxxxxxxxx
Funds Inc., 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.
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 FTC shall be sent to 000 X Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000 and notice to the Funds shall be sent to X'Xxxxxxxxxxx Funds
Inc., 00 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000.
15. Choice of Law. This Agreement shall be construed in accordance
with the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
__________________________________ By ________________________________
ATTEST: X'Xxxxxxxxxxx Funds Inc.
__________________________________ By ________________________________
Date:______________________________ Date:_____________________________
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