EXHIBIT 9(c)
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Security Capital Employee REIT Fund Incorporated, a
Maryland corporation hereinafter called the "Fund" and Firstar Trust Company, a
Wisconsin corporation, hereinafter called "FTC," is entered into on this _____
day of ______________, 1997.
WHEREAS, the Fund is an open-ended management investment company registered
under the Investment Company Act of 1940; and
WHEREAS, ("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
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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
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 in a manner consistent with the Fund's Prospectus
and Statement of Additional Information (Collectively, the
"Prospectus") as may be amended from time to time. 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) Determine the net asset value of the Fund according to the
pricing, valuation and 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.
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E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the fund accounting records available
to 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
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pricing source selected by FTC but approved by the Fund's Board of Directors and
apply those prices to the portfolio position in a manner consistent with the
Prospectus. For those securities where market quotations are not readily
available, the Fund's Board of Directors 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 prices are effective.
3. Changes in Accounting Procedures. Any resolution passed by the Board
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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
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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 and provided notice is given to the Fund describing such changes.
5. Compensation. FTC shall be compensated for providing the services set
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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.
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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
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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 Fund's Board of Directors.
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 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 attorney's 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
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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 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
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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
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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
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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 use its best efforts to notify
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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 Classes. In the event that the Fund establishes one or
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more classes 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 services 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 Fund currently has one class
of common stock issued, which is intended to be covered by this Agreement.
12. Term of Agreement. This Agreement may be terminated by either party
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upon giving sixty (60) 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
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with termination a successor to any of FTC's duties or responsibilities
hereunder is designated by the Fund 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 the
Fund (if such form differs from the form in which FTC 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 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
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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, Xxxxxxxxx 00000, and notice to the Fund shall be sent to
Xxxxxx X. Xxxxxxx, Security Capital Employee REIT Fund Incorporated, 00 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, XX 00000.
15. Choice of Law. This Agreement shall be construed in accordance with
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the laws of the State of Wisconsin.
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IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
Security Capital Employee REIT Fund Firstar Trust Company
Incorporated
By
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Vice President
Attest:
By
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