FUND ACCOUNTING SERVICING AGREEMENT
This Agreement between Xxxxxxxx Funds, Inc., a Maryland
Corporation, hereinafter called the "Fund," and Firstar Trust
Company, a Wisconsin corporation, hereinafter called "FTC," is
entered into on this third day of October 1995.
WHEREAS, Xxxxxxxx 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 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 Trustees and apply
those prices to the portfolio positions. For those securities
where market quotations are not readily available, the Board
of Trustees 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 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 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 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 Xxxxxxxx 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.
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 Fund desires to provide a price which varies from the
pricing source, the Fund shall promptly notify and supply FTC
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.
3. Changes in Accounting Procedures. Any resolution passed by
the Board of Trustees 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 Fund 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.
6. Performance of Service.
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 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 Fund 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 Fund, 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 Fund.
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 appro-
priate 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.
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 Fund 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 Fund. The Fund shall
have the option to defend FTC against any claim which may be
the subject of this indemnification. In the event that the
Fund so elects, it will so notify FTC and thereupon the Fund
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 Fund will be asked to indemnify FTC
except with the Fund's prior written consent.
C. FTC shall indemnify and hold the Fund 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 Fund 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 Fund 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 Fund 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 Fund 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 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.
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 Xxxxxxxx Funds,
Inc. by written notice to FTC, FTC will promptly, upon such
termination and at the expense of Xxxxxxxx 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 Xxxxxxxx Funds,
Inc. (if such form differs from the form in which FTC has
maintained the same, Xxxxxxxx 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.
13. 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
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to _____________________________ shall be sent to:
14. 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: Xxxxxxxx Funds, Inc.
_____________________________ By _______________________________
