FUND ACCOUNTING SERVICING AGREEMENT
This contract between Xxxxxxxx Funds, Inc., a Maryland
Corporation currently sponsoring the Xxxxxxxx Balanced Fund, hereinafter
called the "Fund," and Firstar Trust Company, a Wisconsin corporation,
hereinafter called "FTC," is entered into on this _________ day of
______________, 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 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,
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
is effective.
3. 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 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
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 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. No Agency Relationship. Nothing herein contained shall be
deemed to authorize or empower FTC to act as agent for any other party to
this Agreement, or to conduct business in the name of, or for the account
of, any 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 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.
9. 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.
10. 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.
11. 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.
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 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.
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
___________________, and notice to the Fund shall be sent to
___________________.
15. 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: By:
ATTEST: XXXXXXXX FUNDS, INC.
By: By:
