FUND ACCOUNTING SERVICING AGREEMENT
This contract between the AMquest Matrix Funds,
Inc., a Maryland corporation (hereinafter called the
"Company") and Firstar Trust Company, a Wisconsin
corporation (hereinafter called "FTC") is entered into
on this 27th day of September, 1996.
WHEREAS, the Company is an open-ended 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 each series of the
Company listed on Schedule A attached hereto
(hereinafter collectively called the "Funds"), as 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
Company and each of the Funds:
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 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 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 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 each 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 each Fund in the form as agreed upon.
(5) Determine the net asset value
of each Fund according to the accounting
policies and procedures set forth in the
Funds' 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 each 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 Funds 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 Funds'
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
each 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 is 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 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
Schedule B 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
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.
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 Company
may be asked to indemnify or hold FTC harmless,
the Company 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 Company
promptly concerning any situation which presents
or appears likely to present the probability of
such a claim for indemnification against the
Company. The Company shall have the option to
defend FTC against any claim which may be the
subject of this indemnification. In the event
that the Company so elects, it will so notify FTC
and thereupon the Company 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 Company will be asked to indemnify FTC
except with the Company's prior written consent.
C. 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 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.
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, main
tained, 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 confidentiality 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.
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 X.X. Xxx 0000,
Xxxxxxxxx, Xxxxxxxxx 00000 and notice to the Company
shall be sent to Xxxxxxx X. Xxxxx, AMquest Matrix
Funds, Inc., 0000 XX 00xx Xxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000.
15. Miscellaneous. The captions in this
Agreement are included for convenience of reference
only and in no way define or limit any of the
provisions hereof or otherwise affect their
construction or effect. If any provision of this
Agreement shall be held invalid by a court or
regulatory agency decision, statute, rule, or
otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be governed by
Wisconsin law, provided, however, that nothing herein
shall be construed in a manner inconsistent with the
1940 Act or any rule or regulation promulgated by the
SEC thereunder. This Agreement constitutes the entire
Agreement of the parties hereto.
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.
AMquest Matrix Funds, Inc. Firstar Trust Company:
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. XxXxx
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Xxxxxxx X. Xxxxx, President Xxxxxxx X. XxXxx, Vice President
Attest: /s/ Xxxxxx X. Xxxxxx, Xx. Attest: /s/ Xxxx X. Xxxx
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Xxxxxx X. Xxxxxx, Xx., Secretary Xxxx X. Xxxx
Schedule A
SEPARATE SERIES OF AMQUEST MATRIX FUNDS, INC.
Name of Series Date Added
AMquest Matrix Income Fund September 27, 1996
AMquest Matrix Total Return September 27, 1996
AMquest Matrix Growth Fund September 27, 1996
Schedule B
Fund Valuation and Accounting
Domestic Portfolios
Annual Fee Schedule
Fixed Income Funds
Annual fee per fund based on market value of assets:
$25,000 for the first $40,000,000
2/100 of 1% (2 basis points) on the next $200,000,000
1/100 of 1% (1 basis point) on the balance
Out-of-pocket expenses, including daily pricing service
Equity/Balance Funds
Annual fee per fund based on market value of assets:
$22,000 for the first $40,000,000
1/100 of 1% (1 basis point) on the next $200,000,000
5/1000 of 1% (1/2 basis point) on the balance
Out-of-pocket expenses, including daily pricing service
Money Market Funds
Annual fee per fund based on market value of assets:
$25,000 for the first $40,000,000
1/100 of 1% (1 basis point) on the next $200,000,000
5/1000 of 1% (1/2 basis point) on the balance
Out-of-pocket expenses, including daily pricing service
All fees and out-of-pocket expenses are billed monthly.
Fund Valuation and Accounting
Asset Pricing Cost
Charge per Item and Valuation
Asset Type (daily, weekly, etc.)
Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Government/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
Pricing costs are billed monthly.
