EXHIBIT 99.k(3)
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of December,
2003, by and between, TORTOISE ENERGY INFRASTRUCTURE CORPORATION, a Maryland
corporation (the "Company" or "Fund") and U.S. BANCORP FUND SERVICES, LLC, a
Wisconsin limited liability company ("USBFS").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end management investment
company, and is authorized to issue shares of common stock;
WHEREAS, USBFS is, among other things, in the business of providing
mutual fund accounting services to investment companies; and
WHEREAS, the Company desires to retain USBFS to provide accounting
services to the Company.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. APPOINTMENT OF USBFS AS FUND ACCOUNTANT
The Company hereby appoints USBFS as fund accountant of the Company on
the terms and conditions set forth in this Agreement, and USBFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement.
2. SERVICES AND DUTIES OF USBFS
USBFS shall provide the following fund accounting services for the
Fund, including but not limited to:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis
using security trade information communicated from
the investment adviser.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Directors of the
Company (the "Board of Directors" or the "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, procedures for determining
the fair value for such securities.
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(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 USBFS and the Company.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share repurchases, tenders, sales,
exchanges, transfers, dividend reinvestments, and
other Fund share activity as reported by the Fund's
transfer agent on a timely basis.
(2) 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.
(3) Maintain a general ledger and other accounts, books,
and financial records for the Fund in the form as
agreed upon.
(4) Determine the net asset value of the Fund according
to the accounting policies and procedures set forth
in the Fund's Prospectus.
(5) 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.
(6) Communicate, at an agreed upon time, the per share
price for each valuation date to parties as agreed
upon from time to time.
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(7) Prepare monthly reports that 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 Fund's 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 Fund's 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 (the "SEC"), and
the outside auditors.
(2) Maintain accounting records according to the 1940 Act
and regulations provided thereunder.
F. USBFS will perform the following accounting functions on a
daily basis:
(1) Reconcile cash and investment balances of the Fund
with the Fund's custodian, and provide the Fund's
investment adviser with the beginning cash balance
available for investment purposes.
(2) Transmit or mail a copy of the portfolio valuation to
the Fund's investment adviser.
(3) Review the impact of current day's activity on a per
share basis, and review changes in market value.
G. In addition, USBFS will:
(1) Prepare monthly security transactions listings.
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(2) Supply various Company, Fund and class statistical
data as requested by the Company on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, USBFS shall obtain prices from a pricing
source recommended by USBFS and approved by Fund's investment adviser
and ratified by the 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 Board of Directors shall
approve, in good faith, procedures for determining the fair value for
such securities.
If the Company desires to provide a price that varies from the pricing
source, the Company shall promptly notify and supply USBFS 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.
4. 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
receipt of written notice thereof by USBFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
USBFS 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.
6. COMPENSATION
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit A
hereto (as amended from time to time). The Company shall pay all fees
and reimbursable expenses within thirty (30) calendar days following
receipt of the billing notice, except for any fee or expense subject to
a good faith dispute. The Company shall notify USBFS in writing within
thirty (30) calendar days following receipt of each invoice if the
Company is disputing any amounts in good faith. The Company shall
settle such disputed amounts within ten (10) calendar days of the day
on which the parties agree to the amount to be paid. With the exception
of any fee or expense the Company is disputing in good faith as set
forth above, unpaid invoices shall accrue a finance charge of one and
one-half percent (1-1/2%) per month, after the due date.
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7. INDEMNIFICATION; LIMITATION OF LIABILITY
A. USBFS shall exercise reasonable care in the performance of its
duties under this Agreement. USBFS 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 USBFS's control, except a loss arising out of or
relating to USBFS'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, if USBFS has exercised reasonable
care in the performance of its duties under this Agreement,
the Company shall indemnify and hold harmless USBFS from and
against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable
attorneys" fees) that USBFS may sustain or incur or that may
be asserted against USBFS by any person arising out of any
action taken or omitted to be taken by it in performing the
services hereunder, except for any and all claims, demands,
losses, expenses, and liabilities arising out of or relating
to USBFS's refusal or failure to comply with the terms of this
Agreement or from bad faith, negligence or from willful
misconduct on its part in performance of its duties under this
Agreement, (i) in accordance with the foregoing standards, or
(ii) in reliance upon any written or oral instruction provided
to USBFS by any duly authorized officer of the Company, such
duly authorized officer to be included in a list of authorized
officers furnished to USBFS and as amended from time to time
in writing by resolution of the Board of Directors.
USBFS shall indemnify and hold the Company harmless from and
against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable
attorneys" fees) that the Company may sustain or incur or that
may be asserted against the Company by any person arising out
of any action taken or omitted to be taken by USBFS as a
result of USBFS'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, USBFS
shall take all reasonable steps to minimize service
interruptions for any period that such interruption continues
beyond USBFS's control. USBFS 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
USBFS. USBFS 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 USBFS's premises and operating capabilities at any
time during regular business hours of USBFS, upon reasonable
notice to USBFS.
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Notwithstanding the above, USBFS 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
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 that 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 that 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.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
USBFS 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 USBFS 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.
Further, USBFS will adhere to the privacy policies adopted by the
Company pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time (the "Act"). Notwithstanding the foregoing,
USBFS will not share any nonpublic personal information concerning any
of the Company's shareholders to any third party unless specifically
directed by the Company or allowed under one of the exceptions noted
under the Act.
9. TERM OF AGREEMENT; AMENDMENT
This Agreement shall become effective as of the date first written
above and will continue in effect for a period of one year. Subsequent
to the initial one-year term, this Agreement may be terminated by
either party upon giving ninety (90) days prior written notice to the
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other party or such shorter period as is mutually agreed upon by the
parties. However, this Agreement may be amended by mutual written
consent of the parties.
10. RECORDS
USBFS 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. USBFS
agrees that all such records prepared or maintained by USBFS relating
to the services to be performed by USBFS hereunder are the property of
the Company and will be preserved, maintained, and made available in
accordance with such applicable sections and rules of the 1940 Act and
will be promptly surrendered to the Company on and in accordance with
its request.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin, without regard to conflicts of law principles. To
the extent that the applicable laws of the State of Wisconsin, or any
of the provisions herein, conflict with the applicable provisions of
the 1940 Act, the latter shall control, and nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or
order of the SEC thereunder.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of USBFS's duties or responsibilities hereunder is designated by the
Company by written notice to USBFS, USBFS 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 USBFS under this Agreement in a form
reasonably acceptable to the Company (if such form differs from the
form in which USBFS 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 USBFS's personnel in the
establishment of books, records and other data by such successor.
13. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower USBFS
to act as agent for the other party to this Agreement, or to conduct
business in the name, or for the account, of the other party to this
Agreement.
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14. DATA NECESSARY TO PERFORM SERVICES
The Company or its agent shall furnish to USBFS the data necessary to
perform the services described herein at such times and in such form as
mutually agreed upon. If USBFS is also acting in another capacity for
the Company, nothing herein shall be deemed to relieve USBFS of any of
its obligations in such capacity.
15. NOTIFICATION OF ERROR
The Company will notify USBFS of any discrepancy between USBFS and the
Company, including, but not limited to, failing to account for a
security position in the fund's portfolio, by the later of: within
three (3) business days after receipt of any reports rendered by USBFS
to the Company; 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.
16. ASSIGNMENT
This Agreement may not be assigned by either party without the prior
written consent of the other party.
17. NOTICES
Any notice required or permitted to be given by either party to the
other shall be in writing and shall be deemed to have been given on the
date delivered personally or by courier service, or three (3) days
after sent by registered or certified mail, postage prepaid, return
receipt requested, or on the date sent and confirmed received by
facsimile transmission to the other party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Tortoise Capital Advisors
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, XX 00000
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 date first
above written.
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TORTOISE ENERGY INFRASTRUCTURE U.S. BANCORP FUND SERVICES, LLC
CORPORATION
By: ________________________________ By: ______________________________
Title: _____________________________ Title: ___________________________
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EXHIBIT A
FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
(CLOSED-END FUND)
DOMESTIC EQUITY FUNDS*
$24,000 for the first $50 million
1.25 basis point on the next $200 million
..75 basis point on the balance
DOMESTIC BALANCED FUNDS*
$33,000 for the first $100 million
1.5 basis points on the next $200 million
1 basis point on the balance
DOMESTIC FIXED INCOME FUNDS*
FUNDS OF FUNDS*
SHORT OR DERIVATIVE FUNDS*
INTERNATIONAL EQUITY FUNDS*
TAX-EXEMPT MONEY MARKET FUNDS*
$39,000 for the first $100 million
2 basis points on the next $200 million
1 basis point on the balance
TAXABLE MONEY MARKET FUNDS*
$39,000 for the first $100 million
1 basis point on the next $200 million
1/2 basis point on the balance
INTERNATIONAL INCOME FUNDS*
$42,000 for the first $100 million
3 basis points on the next $200 million
1.5 basis points on the balance
MULTIPLE CLASSES
Each class is an additional 25% of the charge of the initial class.
MASTER/FEEDER FUNDS
Each master and feeder is charged according to the schedule.
MULTIPLE MANAGER FUNDS
Additional base fee:
$12,000 per manager/sub-advisor per fund
Extraordinary services - quoted separately
Conversion Estimate - one month's fee (if necessary)
NOTE - All schedules subject to change depending upon the use of derivatives -
options, futures, short sales, etc.
All fees are billed monthly plus out-of-pocket expenses, including pricing
service:
$.15 Domestic and Canadian Equities
$.15 Options
$.50 Corp/Gov/Agency Bonds
$.80 CMO's
$.50 International Equities and Bonds
$.80 Municipal Bonds
$.80 Money Market Instruments
$125 Per fund per month - Mutual Funds
Corporate Action Services
$2.00 Per equity security per month
Manual Security Pricing
$125 per month - greater than 10/day
Factor Services (BondBuyer)
Per CMO - $1.50/month
Per Mortgage Backed - $0.25/month
Minimum - $300/month
* Subject to CPI increase, Milwaukee MSA.
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