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FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of January 1, 1998, by and
between Light Index Fund, Inc., a Maryland 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 Light Index 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, in consideration of the mutual agreements herein made,
the Company and FTC agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Company hereby appoints FTC as Fund Accountant of the Company on
the terms and conditions set forth in this Agreement, and FTC hereby accepts
such appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FTC
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
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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.
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 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.
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(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.
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 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.
3. 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
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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 of the Company that affects
accounting practices and procedures under this Agreement shall be effective upon
written receipt and acceptance by the FTC.
5. 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.
6. 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.
7. 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
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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.
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 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.
8. NO AGENCY RELATIONSHIP
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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.
9. 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.
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. 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.
13. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless sooner
terminated as provided herein, shall continue automatically in effect for
successive annual periods. This
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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.
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:
Light Index Investment Company
Attn.: Xxxxx Xxxxxx
704 Court A
Xxxxxx, XX 00000
15. 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.
16. GOVERNING 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 SEC thereunder.
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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.
LIGHT INDEX FUND, INC. FIRSTAR TRUST COMPANY
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
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FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
EXHIBIT A
Separate Series of Light Index Fund, Inc.
NAME OF SERIES ADDED AS OF
Light Index Fund January 1, 1998
Domestic Equity Funds
$22,000 for the first $40 million
1/100 of 1% (1 basis point)
on the next $200 million
.5/100 of 1% (.5 basis point) on 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
Fees and out-of-pocket expenses are billed to the fund monthly.
