Exhibit 9.3
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Xxxxx Xxxx & Associates, which acts as Investment
Advisor for The Prudent Bear Fund, Inc., a Maryland Corporation,
hereinafter called the "Fund," and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this _________
day of _______________, 1995.
WITNESSETH:
WHEREAS, Xxxxx Xxxx & Associates, is a financial services company
providing investment opportunities through mutual funds to various
investors; and
WHEREAS, the manager has entered into an Investment Advisory
Agreement with the Fund (the "Investment Advisory Agreement") whereby
manager has agreed to make certain payments and pay certain expenses on
behalf of the Fund and portfolios;
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 Fund:
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 Fund as to methodology, rate or
dollar amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Fund.
(3) Account for fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed
upon by FTC and the Fund.
(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 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 for the Fund in the form as
agreed upon.
(5) For each day the Fund is open as defined in the
prospectus, determine the net asset value of the Fund 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 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.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain tax 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 investment portfolio.
(3) Calculate taxable gain/loss on security sales using the
tax cost basis designated by the Fund.
(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 Xxxxx Xxxx & Associates, 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. 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.
3. 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 Fund under this Agreement.
4. 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 as mutually agreed upon and amended from
time to time.
5. Performance of Service. FTC shall exercise reasonable care in
the performance of its duties under the Agreement. The Fund agrees to
reimburse and make FTC whole for any loss or damages (including reasonable
fees and expenses of legal counsel) arising out of or in connection with
its actions under this Agreement so long as FTC acts in good faith and is
not negligent or guilty of any willful misconduct.
FTC shall not be liable or responsible for delays or errors
occurring by reason of circumstances beyond its control, including acts of
civil or military authority, natural or state emergencies, fire,
mechanical breakdown, flood or catastrophe, acts of God, insurrection,
war, riots or failure of transportation, communication or power supply.
In the event of a mechanical breakdown 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 the
correcting of any errors resulting from such a breakdown will be 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 Fund shall be
entitled to inspect FTC's premises and operating capabilities at any time
during regular business hours of FTC, upon reasonable notice to FTC.
This indemnification includes any act, omission to act, or delay by
FTC in reliance upon, or in accordance with, any written or oral
instruction it receives from any duly authorized officer of the fund.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
6. No Agency Relationship. Nothing herein contained shall be deemed
to authorize or empower FTC to act as agent for any other party to this
Agreement, or to conduct business in the name of, or for the account of,
any other party to this Agreement.
7. Ownership of Records. All records prepared or maintained by
FTC on behalf of the Fund remain the property of the Fund and will be
surrendered promptly on the written request of an authorized officer of
the Fund.
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 Fund 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 Fund 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 Fund, 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. 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. In the event the Fund elects to terminate
its relationship with FTC prior to the first anniversary of this
Agreement, the Fund agrees to reimburse FTC for those fees representing a
discount to FTC's standard fee schedule as provided to the Fund and given
as a concession to the Fund as part of a one year fee arrangement.
12. 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 Xxxxx Xxxx & Associates by
written notice to FTC, FTC 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 FTC
under this Agreement in a form reasonably acceptable to Xxxxx Xxxx &
Associates (if such form differs from the form in which FTC has maintained
the same, Xxxxx Xxxx & Associates 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.
13. 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: Xxxxx Xxxx & Associates
____________________________ By _______________________________
