FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this
1st day of October, 1997, by and between Xxxx Funds,
Inc., a Minnesota corporation (hereinafter referred to
as the "Company") and Firstar Trust Company, a
corporation organized under the laws of the State of
Wisconsin (hereinafter referred to as "FTC").
WHEREAS, the Company is an open-end management
investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company is authorized to create
separate series, each with its own separate investment
portfolio;
WHEREAS, FTC is in the business of providing, among
other things, mutual fund accounting services to
investment companies; and
WHEREAS, the Company desires to retain FTC to
provide accounting services to the Emerging Growth Fund
(the "Fund") and each additional series of the Company
listed on Exhibit A attached hereto, as it may be
amended from time to time.
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.
(2) For each valuation date, obtain prices from a
pricing source approved by the Board of
Directors of the Company and apply those
prices to the portfolio positions. For those
securities where market quotations are not
readily available, the Board of Directors of
the Company 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, 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 Company as
to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Company.
(3) Account for Fund expenditures and maintain
expense accrual balances at the level of
accounting detail, as agreed upon by FTC and
the Company.
(4) Provide expense accrual and payment reporting.
X.Xxxx 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
Company.
(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.
(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.
(8) Prepare monthly reports which document the
adequacy of accounting detail to support month-
end ledger balances.
X.Xxx 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 investment
portfolio.
(3) Calculate taxable gain/loss on security sales
using the tax lot relief method designated by
the Company.
(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's accounting records available to the
Company, 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
FTC but approved by the Company's 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 Company's Board of
Directors shall approve, in good faith, the method for
determining the fair value for such securities.
If the Company desires to provide a price which
varies from the pricing source, the Company shall
promptly notify and supply FTC with the valuation of
any such security on each valuation date. All pricing
changes made by the Company 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.
3. Changes in Accounting Procedures. Any
resolution passed by the Board of Directors of the
Company 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 Company 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 as mutually agreed upon and amended from
time to time. The Company agrees to pay all fees and
reimbursable expenses within ten (10) business days
following the receipt of the billing notice.
6. Performance of Service; Limitation of
Liability
A.FTC shall exercise reasonable care 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
Company 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 Company 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 by any duly
authorized officer of the Company, 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
Company.
FTC shall indemnify and hold the Company 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 the Company may sustain
or incur or which may be asserted against the
Company 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.
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 Company 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.
Regardless of the above, FTC reserves the right to
reprocess and correct administrative errors at
its own expense.
X.Xx 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 which 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 which 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. 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.
7. No Agency Relationship. Nothing herein
contained shall be deemed to authorize or empower FTC
to act as agent for the other party to this Agreement,
or to conduct business in the name of, or for the
account of the other party to this Agreement.
8. 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 Company but not inconsistent
with the rules and regulations of appropriate
government authorities, in particular, Section 31 of
the 1940 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 Company and will be
preserved, maintained, and made available in accordance
with such section and rules of the 1940 Act and will be
promptly surrendered to the Company on and in
accordance with its request.
9. Proprietary and Confidential Information. FTC
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 after prior notification to and
approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be
withheld where FTC 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
Company.
10. Data Necessary to Perform Services. The
Company or its agent, which may be FTC, shall furnish
to FTC the data necessary to perform the services
described herein at such times and in such form as
mutually agreed upon. If FTC is also acting as the
transfer agent for the Company, nothing herein shall be
deemed to relieve FTC of any of its obligations under
the Transfer Agent Servicing Agreement.
11. Notification of Error. The Company 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 Company, 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.
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 the Company by written notice to FTC, FTC
will promptly, upon such termination and at the expense
of the Company 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 the Company (if such
form differs from the form in which FTC has maintained
the same, the Company 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:
Firstar Trust Company
Attn.: Mutual Fund Services
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Xxxx Investment Advisors
Attn.: Xxxxxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
15. Choice of Law. This Agreement shall be
construed in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed
in a manner inconsistent with the 1940 Act or any rule
or regulation promulgated by the Securities and
Exchange Commission thereunder.
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 day and
year first written above.
XXXX FUNDS, INC. FIRSTAR TRUST COMPANY
By: /s/ XxXxx X. Xxxx By: /s/ Xxx Xxxxxxxxx
----------------------- ------------------------
XxXxx X. Xxxx Xxx Xxxxxxxxx
Attest: /s/ Xxxxx X. Xxxx Attest: /s/ Xxxxx X. Xxxx
-------------------------- ---------------------------
Fund Accounting Services
Annual Fee Schedule
Exhibit A
Separate Series of Xxxx Funds, Inc.
Name of Series Date Added
Emerging Growth Fund October 1, 1997
Class A
Class I
Domestic Equity Funds
$27,500 for the first $40 million
1.25/100 of 1% (1.25 basis points) on the next $200 million
.625/100 of 1% (.625 basis points) on average net assets
exceeding $240 million
Plus out-of-pocket expenses, including pricing service:
Domestic and Canadian Equities $.15
Options $.15
Corp/Gov/Agency Bonds $.50
CMO's $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
All fees are billed monthly
