Exhibit 99.B(9)(b)
ACCOUNTING SERVICES AGREEMENT
This Agreement, dated as of the 25th day of July , 1996 made by and
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between Trainer, Xxxxxxx First Mutual Funds, (the "Trust") duly organized and
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existing under the laws of the State of Delaware and operating as an open end
management investment company registered under the Investment Company Act of
1940, as amended, and Fund/Plan Services, Inc. ("Fund/Plan"), a corporation duly
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organized and existing under the laws of the State of Delaware (collectively,
the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its By-Laws to issue separate series of
shares representing interests in separate investment portfolios (the "Series")
attached hereto as Schedule "C" and which may be amended from time to time by
mutual agreement of the Trust and Fund/Plan; and
WHEREAS, the Trust desires to appoint Fund/Plan as Accounting Services
Agent to maintain and keep current the books, accounts, records, journals or
other records of original entry relating to the business of the Trust (the
"Accounts and Records") and to perform certain other functions in connection
with such Accounts and Records; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below; and
WHEREAS, the Trust will provide all necessary information concerning the
Series to Fund/Plan so that Fund/Plan may appropriately execute its
responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. For purposes of this Agreement:
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Oral Instructions shall mean an authorization, instruction, approval, item
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or set of data, or information of any kind transmitted to Fund/Plan in person or
by telephone, telegram, telecopy, or other mechanical or documentary means
lacking an original signature, by a person or persons reasonably identified to
Fund/Plan to be a person or persons authorized by a resolution of the Board of
Trustees of the Trust, to give such Oral instructions on behalf of the Trust.
Written Instructions shall mean an authorization, instruction, approval,
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item or set of data or information of any kind transmitted to Fund/Plan in
original writing containing an original signature or a copy of such document
transmitted by telecopy including transmission of such signature reasonably
identified to Fund/Plan to be the signature of a person authorized by a
resolution of the Board of Trustees of the Trust to give written instructions on
behalf of the Trust.
The Trust shall file with Fund/Plan a certified copy of each resolution of
its Board of Trustees authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
Section 2. To the extent Fund/Plan receives the necessary information from
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the Trust or its agents by Written or Oral Instructions, Fund/Plan shall
maintain and keep current the following Accounts and Records relating to the
business of the Trust in such form as may be mutually agreed upon between the
Trust and Fund/Plan:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid and Payable Schedule
(d) Purchase and Sales Journals - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers - Transaction Report and Tax Lot Holdings Report
(g) Broker Ledger - Commission Report
(h) Daily Expense Accruals
(i) Daily Interest Accruals
(j) Daily Trial Balance
(k) Portfolio Interest Receivable and Income Journal
(l) Portfolio Dividend Receivable and Income Register
(m) Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security.
(n) Average Daily Net assets provided on monthly basis.
The necessary information to perform the above functions and the
calculation of the net asset value of each Series as provided below, is to be
furnished by Written or Oral Instructions to Fund/Plan daily (in accordance with
the time frame identified in Section 7) prior to the close of regular trading on
the New York Stock Exchange.
Section 3. Fund/Plan shall perform the ministerial calculations necessary
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to calculate each of the Series' net asset value each day that the New York
Stock Exchange is open for business, in accordance with (i) each Series' current
Prospectus and Statement of Additional Information and (ii) procedures with
respect thereto approved by the Board of Trustees of the Trust and supplied in
writing to Fund/Plan. Portfolio items for which market quotations are available
by Fund/Plan's use of an automated financial information service (the "Service")
shall
be based on the closing prices of such Service except where the Trust has given
or caused to be given specific Written or Oral Instructions to utilize a
different value subject to the appropriate provisions in the Trust's
prospectuses and statements of additional information then in effect. All of the
portfolio securities shall be given such values as the Trust provides by Written
or Oral Instructions including all restricted securities and other securities
requiring valuation not readily ascertainable solely by such Service subject to
the appropriate provisions in the Trust's prospectuses and statements of
additional information then in effect. Fund/Plan shall have no responsibility
or liability for the accuracy of prices quoted by such Service; for the accuracy
of the information supplied by the Trust; or for any loss, liability, damage, or
cost arising out of any inaccuracy of such data. Fund/Plan shall have no
responsibility or duty to include information or valuations to be provided by
the Trust in any computation unless and until it is timely supplied to Fund/Plan
in usable form. Fund/Plan shall record corporate action information as received
from the custodian of the Trust's assets (the "Custodian"), the Service, or the
Trust. Fund/Plan shall have no duty to gather or record corporate action
information not supplied by these sources.
Fund/Plan will assume no liability for price changes caused by: the
investment adviser(s), custodian, suppliers of security prices, corporate action
and dividend information, or any party other than Fund/Plan itself.
In the event an error is made by Fund/Plan which creates a price change of
an amount greater than or equal to one half of one percent of the correct net
asset value ("NAV"), consideration must be given to the effect of the price
change as described below. Notwithstanding the provisions of Section 11, the
following provisions govern Fund/Plan's liability for errors in calculating the
NAV of the Series:
If the NAV should have been higher for a date or dates in the past, the
error would have the effect of having given more shares to subscribers and less
money to redeemers to which they were entitled. Conversely, if the NAV should
have been lower, the error would have the effect of having given less shares to
subscribers and overpaying redeemers.
If the error affects the prior business day's NAV only, and if Fund/Plan
can rerun the prior day's work before the shareholder statements and checks are
mailed, the Trust hereby accepts this manner of correcting the error.
If the error spans five (5) business days or less, Fund/Plan shall
reprocess shareholder purchases and redemptions where redeeming shareholders
have been underpaid. Fund/Plan shall assume liability to the Trust for
overpayments to shareholders who have redeemed.
If the error spans more than five (5) business days, Fund/Plan would bear
the liability to the Trust for, 1) buying in for excess shares given to
shareholders if the NAV should have been higher, or, 2) funding overpayments to
shareholders who have redeemed if the NAV should have been lower. The cost of
any reprocessing required for shareholders who have been credited with fewer
shares than appropriate, or for redeeming shareholders who are due additional
amounts of money will also be borne by Fund/Plan.
Section 4. For all purposes under this Agreement, Fund/Plan is authorized
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to act upon receipt of the first of any Written or Oral Instruction it receives
from the Trust or its agents on behalf of the Trust. In cases where the first
instruction is an Oral Instruction that is not in the form of a document or
written record, a confirmatory Written Instruction or Oral Instruction in the
form of a document or written record shall be delivered, and in cases where
Fund/Plan receives an Instruction, whether Written or Oral, to enter a portfolio
transaction on the records, the Trust shall cause the broker/dealer to send a
written confirmation to the Custodian. Fund/Plan shall be entitled to rely on
the first Instruction received, and for any act or omission undertaken in
compliance therewith shall be free of liability and fully indemnified and held
harmless by the Trust, provided however, that in the event a Written or Oral
Instruction received by Fund/Plan is countermanded by a timely received
subsequent Written or Oral Instruction prior to acting upon such countermanded
Instruction, Fund/Plan shall act upon such subsequent Written or Oral
Instruction. The sole obligation of Fund/Plan with respect to any follow-up or
confirmatory Written Instruction, Oral Instruction in documentary or written
form, shall be to make reasonable efforts to detect any such discrepancy between
the original Instruction and such confirmation and to report such discrepancy to
the Trust. The Trust shall be responsible, at the Trust's expense, for taking
any action, including any reprocessing, necessary to correct any discrepancy or
error. To the extent such action requires Fund/Plan to act, the Trust shall
give Fund/Plan specific Written Instruction as to the action required.
Section 5. The Trust shall cause its Custodian to forward to Fund/Plan a
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daily statement of cash and portfolio transactions. At the end of each month,
the Trust shall cause the Custodian to forward to Fund/Plan a monthly statement
of portfolio positions, which will be reconciled with the Trust's Accounts and
Records maintained by Fund/Plan on its behalf. Fund/Plan will report any
discrepancies to the Custodian, and report any unreconciled items to the Trust.
Section 6. Fund/Plan shall promptly supply daily and periodic reports to
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the Trust as requested by the Trust and agreed upon by Fund/Plan.
Section 7. The Trust shall provide and shall require each of its agents
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(including the Custodian) to provide Fund/Plan as of the close of each business
day, or on such other schedule as the Trust determines is necessary, with
Written or Oral Instructions (to be delivered to Fund/Plan by 11:00 a.m.,
Eastern time, the next following business day) containing all data and
information necessary for Fund/Plan to maintain the Trust's Accounts and Records
and Fund/Plan may conclusively assume that the information it receives by
Written or Oral Instructions is complete and accurate. Fund/Plan, as Transfer
Agent, accepts responsibility for providing reports of share purchases,
redemptions, and total shares outstanding, on the next business day after each
net asset valuation.
Section 8. The Accounts and Records, in the agreed-upon format, maintained
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by Fund/Plan shall be the property of the Trust and shall be made available to
the Trust promptly upon request and shall be maintained for the periods
prescribed in Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as
amended. Fund/Plan shall assist the Trust's independent auditors, or upon
approval of the Trust, or upon demand, any regulatory body, in any requested
review of the Trust's Accounts and Records but shall be reimbursed for all
expenses and employee time invested in any such review outside of routine and
normal periodic review and audits. Upon receipt from the Trust of the necessary
information, Fund/Plan shall supply the necessary data for the Trust or an
independent auditor's completion of any necessary tax returns, questionnaires,
periodic reports to Shareholders and such other reports and information requests
as the Trust and Fund/Plan shall agree upon from time to time.
Section 9. In case of any request or demand for the inspection of the
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records of the Trust, Fund/Plan, shall endeavor to notify the Trust and to
secure instructions as to permitting or refusing such inspection. Fund/Plan may
however, exhibit such records to any person in any case where it is advised by
its counsel that it may be held liable for failure to do so after notice to the
Trust.
Section 10. Fund/Plan and the Trust may from time to time adopt such
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procedures as agreed upon in writing, and Fund/Plan may conclusively assume that
any procedure approved by the Trust or directed by the Trust, does not conflict
with or violate any requirements of the Trust's Prospectuses, Trust Instrument,
By-Laws, or any rule or regulation of any regulatory body or governmental
agency. The Trust shall be responsible for notifying Fund/Plan of any changes
in regulations or rules which might necessitate changes in Fund/Plan's
procedures, and for working out with Fund/Plan such changes.
Section 11.
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(a) Fund/Plan, its directors, officers, employees, shareholders, and
agents shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust in connection with the performance of this
Agreement, except losses resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of Fund/Plan in the performance of
its obligations and duties under this Agreement.
(b) Any person, even though also a director, trustee, officer,
employee, shareholder or agent of Fund/Plan, who may be or become an officer,
trustee, employee or agent of the Trust shall be deemed, when rendering services
to the Trust or acting on any business of the Trust (other than services or
business in connection with Fund/Plan's duties hereunder), to be rendering such
services to or acting solely for the Trust, and not as a director, officer,
employee, shareholder or agent of, or one under the control or direction of
Fund/Plan even though receiving a salary from Fund/Plan.
(c) Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless Fund/Plan, its directors, officers, employees,
shareholders and agents from and against any and all claims, demands, expenses
and liabilities (whether with or without basis in fact or law) of any and every
nature which Fund/Plan may sustain or incur or which may be asserted against
Fund/Plan by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by Fund/Plan except
matters resulting from willful misfeasance, bad faith, gross negligence or
reckless disregard on the part of Fund/Plan in the performance of its
obligations and duties under this Agreement; or
(ii) in reliance upon any certificate, instrument, order or stock
certificate or other document reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized person of the Trust or
upon the written opinion of legal counsel for the Trust or Fund/Plan; or
(iii) any action taken or omitted to be taken in good faith by
Fund/Plan in connection with its appointment, in reliance upon any law, act,
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended, or repealed. Indemnification under this
subparagraph shall not apply, however, to actions or omissions of Fund/Plan or
its directors, officers, employees, shareholders, or agents in cases of its or
their own gross negligence, willful misconduct, bad faith, or reckless disregard
its or their own duties hereunder.
(d) Fund/Plan shall give written notice to the Trust within thirty
(30) business days of receipt by Fund/Plan of a written assertion or claim of
any threatened or pending legal proceeding which may be subject to this
indemnification. The failure to so notify the Trust of such written assertion or
claim shall not, however, operate in any manner whatsoever to relieve the Trust
of any liability arising from this Section or otherwise, except to the extent
failure to give notice prejudices the Trust.
(e) For any legal proceeding giving rise to this indemnification,
the Trust shall be entitled to defend or prosecute any claim in the name of
Fund/Plan at its own expense and through counsel of its own choosing if it gives
written notice to Fund/Plan within thirty (30) business days of receiving notice
of such claim. Notwithstanding the foregoing, Fund/Plan may participate in the
litigation at its own expense through counsel of its own choosing. If the Trust
chooses to defend or prosecute such claim, then the Parties shall cooperate in
the defense or prosecution thereof and shall furnish such records and other
information as are reasonably necessary.
Section 12. All financial data provided to, processed by, and reported by
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Fund/Plan under this Agreement shall be stated in United States dollars.
Fund/Plan shall have no obligation to convert to, equate, or deal in foreign
currencies or values, and expressly assumes no liability for any currency
conversion or non-U.S. dollar denominated computations relating to the affairs
of the Trust.
Section 13. The Trust agrees to pay Fund/Plan compensation for its
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services and to reimburse it for expenses, at the rates and amounts as set forth
in Schedule "B" attached hereto, and as shall be set forth in any amendments to
such Schedule "B" approved by the Trust and Fund/Plan. The Trust agrees and
understands that Fund/Plan's compensation be comprised of two components,
payable on a monthly basis, as follows:
(i) An asset based fee subject to a stated minimum fee, which the
Trust hereby authorizes Fund/Plan to collect by debiting the Trust's custody
account for invoices which are rendered for the services performed for the
applicable function. The invoices for the services performed will be sent to the
Trust after such debiting with the indication that payment has been made; and
(ii) reimbursement of any reasonable out-of-pocket expenses paid by
Fund/Plan on behalf of the Trust, which out-of-pocket expenses will be billed to
the Trust within the first ten calendar days of the month following the month in
which such out-of-pocket expenses were incurred. The Trust agrees to reimburse
Fund/Plan for such expenses within ten
calendar days of receipt of such xxxx.
For the purpose of determining fees payable to Fund/Plan, the value of the
Series' net assets shall be computed at the times and in the manner specified in
Series' Prospectuses and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services or
functions in addition to those outlined above or in Schedule "A" attached, a
written amendment to this Agreement specifying the additional services and
corresponding compensation shall be executed by both Fund/Plan and the Trust.
Section 14. Nothing contained in this Agreement is intended to or shall
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require Fund/Plan, in any capacity hereunder, to perform any functions or duties
on any holiday, day of special observance or any other day on which the New York
Stock Exchange is closed. Functions or duties normally scheduled to be performed
on such days shall be performed on, and as of, the next succeeding business day
on which the New York Stock Exchange is open. Notwithstanding the foregoing,
Fund/Plan shall compute the net asset value of each Series on each day required
pursuant to (i) Rule 22c-1 promulgated under the Investment Company Act of 1940,
as amended, and (ii) such Series' then-current Prospectus and Statement of
Additional Information.
Section 15.
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(a) The term of this Agreement shall be for a period of two (2)
years, commencing on the date which the Trust's registration statement is
declared effective by the U.S. Securities and Exchange Commission ("Effective
Date")and shall continue thereafter on a year to year term subject to
termination by either Party as set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed
for (2) years commencing on the Effective Date of this Agreement and shall
continue thereafter subject to review and adjustment of the fee schedule and
termination notice as set forth in section (c) below.
(c) After the initial term of this Agreement, the Trust or Fund/Plan
may give written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice, which date shall
not be less than one hundred eighty (180) days after the date of receipt of such
notice. Upon the effective termination date, the Trust shall pay to Fund/Plan
such compensation as may be due as of the date of termination and shall likewise
reimburse Fund/Plan for any out-of-pocket expenses and disbursements reasonably
incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities
under this Agreement is designated by the Trust by written notice to Fund/Plan
in connection with the termination of this Agreement, Fund/Plan shall promptly
upon such termination and at the expense of the Trust, transfer all Required
Records and shall cooperate in the transfer of such duties and responsibilities.
Section 16. Except as otherwise provided in this Agreement, any notice or
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other communication required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in person or sent by first
class mail, postage prepaid to the respective parties as follows:
If to Trainer, Xxxxxxx First Mutual Funds: If to Fund/Plan:
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Trainer, Xxxxxxx First Mutual Funds Fund/Plan Services, Inc.
000 Xxxxx Xxxxxx 0 Xxxx Xxx Xxxxxx
0xx Xxxxx Xxxxxxxxxxxx, XX 00000
Xxx Xxxx, XX 00000 Attention: Xxxxxxx X. Xxxxx
Attention: Xxxxx X. Xxxx President
President
Section 17. This Agreement may be amended from time to time by
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supplemental agreement executed by the Trust and Fund/Plan and the compensation
stated in Schedule "B" attached hereto may be adjusted accordingly as mutually
agreed upon.
Section 18. The Trust represents and warrants to Fund/Plan that the
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execution and delivery of this Agreement by the undersigned officers of the
Trust has been duly and validly authorized by resolution of the Board of
Trustees of the Trust.
Section 19. This Agreement may be executed in two or more counterparts,
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each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 20. This Agreement shall extend to and shall be binding upon the
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parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of Fund/Plan or by Fund/Plan without the written consent of the Trust,
authorized or approved by a resolution of its respective Boards of Trustees.
Section 21. This Agreement shall be governed by the laws of the
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Commonwealth of Pennsylvania and the venue of any action arising under this
Agreement shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 22. No provision of this Agreement may be amended or modified, in
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any manner except by a written agreement properly authorized and executed by
Fund/Plan and the Trust.
Section 23. If any part, term or provision of this Agreement is held by
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any court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of ten type written pages, together with Schedules "A", "B" and "C",
to be signed by their duly authorized officers as of the day and year first
above written.
Trainer, Xxxxxxx First Mutual Funds Fund/Plan Services, Inc.
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____________________________________ -------------------------------
By: Xxxxx X. Xxxx, President By: Xxxxxxx X. Xxxxx, President
SCHEDULE "A"
============
Fund Accounting and Portfolio Valuation Services
for
Trainer, Xxxxxxx First Mutual Funds
Daily Accounting Services
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1) Calculate Net Asset Value ("NAV"):
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. Update the daily market value of securities held by the Trust using
Fund/Plan's standard agents for pricing domestic equity and bond
securities. The domestic equity pricing services are Reuters, Inc.,
Xxxxxx Data Corporation, X.X. Xxxxx Co., Inc. and Interactive Data
Corporation (IDC). Xxxxxx Data, Telerate Systems, Inc. X.X. Xxxxx Co.,
Inc. and IDC are used for bond and money market prices/yields.
Bloomberg is available and used for price research.
. Enter limited number of manual prices supplied by the Trust and/or
broker.
. Prepare NAV proof sheet. Review components of change in NAV for
reasonableness.
. Review variance reporting on-line and in hard copy for price changes in
individual securities using variance levels established by the Trust.
Verify US dollar security prices exceeding variance levels by notifying
the Trust and pricing sources of noted variances.
. Review for ex-dividend items indicated by pricing sources; trace to
general ledger for agreement.
. Communicate required pricing information, NAV to the Trust's Transfer
Agent and, electronically, to NASDAQ.
2) Determine and Report Cash Availability to Trust by Approximately 9:30 AM
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Eastern Time:
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. Receive daily cash and transaction statements from the Custodian by
8:30 AM Eastern time.
. Receive previous day shareholder activity reports from the Transfer
Agent by 8:30 AM Eastern time.
. Fax hard copy cash availability calculations with all details to the
Trust.
. Supply the Trust with 3-day cash projection report.
. Prepare and complete daily bank cash reconciliations including
documentation of any reconciling items and notify the Custodian and the
Trust.
3) Reconcile and Record All Daily Expense Accruals:
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. Accrue expenses based on budget supplied by the Trust either as
percentage of net assets or specific dollar amounts.
. If applicable, monitor expense limitations established by the Trust.
. If applicable, accrue daily amortization of Organizational expense.
. If applicable, complete daily accrual of 12b-1 expenses.
4) Verify and Record All Daily Income Accruals for Debt Issues:
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. Review and verify all system generated Interest and Amortization
reports.
. Establish unique security codes for bond issues to permit segregated
Trial Balance income reporting.
5) Monitor Domestic Securities Held for Cash Dividends, corporate actions and
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capital changes such as splits, mergers, spinoffs, etc. and process
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appropriately.
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. Monitor electronically received information from Xxxxxx Data for all
domestic securities.
. Review current daily security trades for dividend activity.
. Interface with Custodian to monitor timely collection and postings of
corporate actions, dividends and interest.
6) Enter All Security Trades on Investment Accounting System (IAS) based on
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written instructions from the Trust's advisor.
. Review system verification of trade and interest calculations.
. Verify settlement through the statements supplied by the Custodian.
. Maintain security ledger transaction reporting.
. Maintain tax lot holdings.
. Determine realized gains or losses on security trades.
. Provide complete broker commission reporting.
7) Enter All Trust Share Transactions on IAS:
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. Process activity identified on reports supplied by the Transfer Agent.
. Verify settlement through the statements supplied by the Custodian.
. Reconcile to Fund/Plan Services' Transfer Agent report balances.
8) Prepare and Reconcile/Prove Accuracy of the Daily Trial Balance (listing
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all asset, liability, equity, income and expense accounts)
. Post manual entries to the general ledger.
. Post custodian bank activity.
. Post shareholder and security transactions.
. Post and verify system generated activity, i.e., income and expense
accruals.
. Prepare general ledger net cash proof used in NAV calculation.
9) Review and Reconcile With Custodian Statements:
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. Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. (Discrepancies will be reported to and
resolved by the Custodian.)
. Post all cash settlement activity to the Trial Balance.
. Reconcile to ending cash balance accounts.
. Clear IAS subsidiary reports with settled amounts.
. Track status of past due items and failed trades handled by the
Custodian.
10) Submission of Daily Accounting Reports to the Trust: (Additional reports
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readily available.)
. Trial Balance.
. Portfolio Valuation (listing inclusive of holdings, costs, market
values, unrealized appreciation/depreciation and percentage of
portfolio comprised of each security).
. NAV calculation report.
. Cash Availability and 3-day Cash Projection Report.
Monthly Accounting Services
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1) Full Financial Statement Preparation (automated Statements of Assets and
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Liabilities, of Operations and of Changes in Net Assets) and submission
to the Trust by 10th business day.
2) Submission of Monthly Automated IAS Reports to the Trust:
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. Security Purchase/Sales Journal
. Interest and Maturity Report
. Brokers Ledger (Commission Report)
. Security Ledger Transaction Report with Realized Gains/Losses
. Security Ledger Tax Lot Holdings Report
. Additional reports available upon request
3) Reconcile Accounting Asset Listing to Custodian Asset Listing:
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. Report any security balance discrepancies to the Custodian/the Trust.
4) Provide Monthly Analysis and Reconciliation of Additional Trial Balance
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Accounts, such as:
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. Security cost and realized gains/losses
. Interest/dividend receivable and income
. Payable/receivable for securities purchased and sold
. Payable/receivable for trust shares; issued and redeemed
. Expense payments and accruals analysis
5) If Appropriate, Prepare and Submit to the Trust: (additional fees may
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apply)
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. SEC yield reporting (non-money market funds with domestic and ADR
securities only).
. Income by state reporting.
. Standard Industry Code Valuation Report.
. Alternative Minimum Tax Income segregation schedule.
Annual (and Semi-Annual) Accounting Services
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1) Assist and supply auditors with schedules supporting securities and
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shareholder transactions, income and expense accruals, etc. during the
year in accordance with standard audit assistance requirements.
2) Provide NSAR Reporting (Accounting Questions):
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If applicable, answer the following items:
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53, 55, 62, 63,
64B, 71, 72, 73, 74, 75, and 76.
NOTE: All NSAR questions are completed by Fund/Plan Services when
Fund/Plan's Administration Group is retained.
Accounting Services Unit (ASU) Basic Assumptions
for
Trainer, Xxxxxxx First Mutual Funds
The Fund/Plan Accounting Services Unit (ASU) is pleased to offer the above named
Trust the comprehensive level of service necessary for proper portfolio
accounting and valuation.
The Accounting Fees as proposed, are based on certain assumptions made upon
review of the Trust's draft Prospectuses and Statement of Additional Information
and discussions with Fund Management. To the extent these assumptions and
requirements should change, fee revisions may be necessary.
Basic Assumptions:
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1) Compliance reporting (Sub-Chapter "M") shall be maintained by Fund/Plan
Services as Fund Administrator.
2) The Trust's security trading activity will be comparable to the statistics
for fiscal year 06/30/96 with turnover expected to be less than 100%.
3) The number of securities and portfolio asset composition in the Trust will
remain comparable to the current portfolio investments, primarily domestic
equity and bonds.
4) The Trust has a tax year-end which coincides with its fiscal year-end. No
additional accounting requirements are necessary to identify or maintain
book-tax differences. ASU does not provide security tax accounting which
differs from its book accounting.
5) The Trust foresees no difficulty in using Fund/Plan's standard current
pricing services for domestic equity, bond, and ADR securities. Fund/Plan
currently uses Reuters Inc., Xxxxxx Data Corporation or Interactive Data
Corporation (IDC) for domestic equities and listed ADR's. Xxxxxx Data
Corporation, X.X. Xxxxx Co., Inc., Telerate Systems, Inc., and IDC are
used for bonds. Bloomberg is also available for price research and backup.
It is assumed that ASU will work closely with the Trust to ensure the
accuracy of the Trust's NAV and to obtain the most satisfactory pricing
sources and specific methodologies prior to the actual start-up date. We
would propose that the Trust establish clear cut security variance
procedures to minimize NAV miscalculations.
6) To the extent the Trust requires daily security prices (limited in number)
from specific brokers for domestic securities, these manual prices will be
obtained by the Trust's investment advisor and faxed to ASU by
approximately 4:00 PM Eastern time for inclusion in the NAV calculations.
The Trust will supply ASU with the appropriate pricing contacts for these
manual quotes.
7) ASU will supply daily Portfolio Valuation Reports to the Trust's
investment advisor or manager identifying current security positions,
original/amortized cost, security market values and changes in unrealized
appreciation/depreciation. It will be the responsibility of the Trust's
investment advisor to review these reports and to promptly notify ASU of
any possible problems, trade discrepancies, incorrect
security prices or corporate action/capital change information that could
result in a misstated Trust NAV.
8) The Trust does not expect to invest in Open-end Regulated Investment
Company's (RIC's), Futures, Swaps, Xxxxxx, Derivatives or Foreign (non-US
dollar denominated) Securities and Currency. To the extent these
investment strategies should change, additional fees will apply after the
appropriate procedural discussions have taken place between ASU and Trust
management. (Two weeks advance notice is required should the Trust
commence trading in these investments.)
9) It is assumed for all debt issues that the investment advisor will supply
ASU with critical income information such as accrual methods, interest
payment frequency details, coupon payment dates, floating rate reset
dates, and complete security descriptions with issue types and CUSIP
numbers. If applicable, for proper income accrual accounting, ASU will
look to the Trust's investment advisor to supply the yield to maturity and
related cash flow models for any mortgage/asset-backed securities held in
the Trust.
10) With respect to Mortgage/Asset-Backed securities including GNMA's,
FHLMC's, FNMA's, CMO's, ARM's, the Trust shall direct the Custodian or a
Trust supplied source, to provide ASU with current principal repayment
factors on a timely basis in accordance with the appropriate securities'
schedule. Income accrual adjustments (to the extent necessary) based upon
initial estimates will be completed by ASU when actual principal/income
payments are collected by the Custodian and reported to ASU.
11) To the extent applicable, ASU will maintain on a daily basis US dollar
denominated qualified covered call options and index options reporting on
the daily Trial Balance and value the respective options and underlying
positions. This proposal does not provide for tax classifications if they
are required.
If the Trust commences investment in domestic options or designated
xxxxxx, two weeks advance notice is required to clarify operational
procedures between ASU and the investment advisor.
12) To the extent the Trust should establish a Line of Credit in segregated
accounts with the Custodian for temporary administrative purposes, and/or
leveraging/hedging the portfolio, it is not the responsibility under this
proposal for ASU to complete the appropriate paperwork/monitoring for
segregation of assets and adequacy of collateral. The Trust shall direct
the investment advisor to execute such responsibilities. ASU will,
however, reflect appropriate Trial Balance account entries and interest
expense accrual charges on the daily Trial Balance adjusting as necessary
at month-end.
13) If the Trust commences participation in Security Lending, Leveraging, or
Short Sales, within their portfolio securities, additional fees will
apply. (Two weeks advance notice to ASU is required should the Trust
desire to participate in the above.)
14) The Trust shall direct the investment advisor or Fund/Plan Services as
Administrator to supply ASU with portfolio specific expense accrual
procedures and monitor the expense accrual balances for adequacy based on
outstanding liabilities monthly. The
Administrator will promptly communicate to ASU any adjustments needed.
15) Specific deadlines shall be met and complete information shall be supplied
by the Trust in order to minimize any settlement problems, NAV
miscalculations or income accrual adjustments.
The Trust shall direct the investment advisor to provide to ASU Trade
Authorization Forms, with the appropriate officer's signature on all
security trades placed by the Trust no later than 12:30 PM Eastern time on
settlement/value date for short term money market securities issues
(assuming that trade date equals settlement date); and by 11:00 AM Eastern
time on trade date plus one for non-money market securities. Receipt by
ASU of trade information within these identified deadlines may be via
telex, fax, or on-line system access. The investment advisor will also
communicate all trade information directly to the Fund/Plan Custody
Administrator. The Advisor and/or Fund/Plan's Custody Administrator will
supply ASU with the trade details in accordance with the above stated
deadlines.
The Trust shall direct the investment advisor to include all information
required by ASU; including CUSIP numbers and/or ticker symbols for all US
dollar denominated trades on the Trade Authorization, telex or on-line
support. ASU will supply the investment advisor with recommended trade
ticket documents to minimize receipt of incomplete information. ASU will
not be responsible for NAV changes or distribution rate adjustments that
result from incomplete trade information.
16) To the extent the Trust utilizes Purchases In-Kind (U.S. dollar
denominated securities only) as a method for shareholder subscriptions,
ASU will provide the Trust with procedures to properly handle and process
securities in-kind. Should the Trust prefer procedures other than those
provided by ASU, additional fees may apply. Discussions should take place
at least two weeks in advance between ASU and the Trust to clarify the
appropriate In-Kind operational procedures to be followed.
17) It is assumed that the Trust's investment advisor or Fund/Plan Services as
Administrator will complete the applicable performance and rate of return
calculations as required by the SEC for the Trust.
18) We would establish mutually agreed upon amortization procedures and
accretion requirements for debt issues held by the Trust. Adjustments for
financial statements regarding any issues with Original Issue Discount
(OID) are not included under this agreement. The Trust shall direct its
independent auditors to complete the necessary OID adjustments for
financial statements and/or tax reporting.
19) The Trust is not currently expected to issue separate classes of shares.
To the extent they do so, additional fees will be negotiated.
Schedule "B"
============
Fund Accounting and Portfolio Valuation Services Fee Schedule
This Fee Schedule is fixed for a period of two (2) years from the Effective Date
as that term is defined in the Agreement. The Accounting Fees as set forth
below are based on the "Basic Assumptions" as set forth in Schedule "A." To the
extent that those assumptions are inaccurate or requirements change, fee
revisions may be necessary.
FUND ACCOUNTING AND PORTFOLIO VALUATION FEES (US dollar denominated securities
--------------------------------------------
only) All Accounting Services fees are quoted with the assumption that Transfer
Agent and Custody Administration Services will be provided by Fund/Plan
Services, Inc.
I. Annual Fee Schedule Per Domestic Portfolio: U.S. Dollar Denominated
------------------------------------------
Securities only (1/12th payable monthly)
$24,000 Minimum to $ 10 Million of Average Net
Assets
.0004 On Next $ 40 Million of Average Net
Assets
.0003 On Next $ 50 Million of Average Net
Assets
.0001 Over $100 Million of Average Net
Assets
II. Pricing Services Quotation Fee: Specific costs will be identified
------------------------------
based upon options selected by the Trust and will be billed monthly.
================================================================================
Xxxxxx Data Interactive X.X. Xxxxx
Security Types Corp.* Data Corp.* Co., Inc.*
------------------------------------------------------------------------------
Government Bonds $ .50 $ .50 $.25 (a)
------------------------------------------------------------------------------
Mortgage-Backed .50 .50 .25 (a)
(evaluated, seasoned,
closing)
------------------------------------------------------------------------------
Corporate Bonds (short and .50 .50 .25 (a)
long term)
------------------------------------------------------------------------------
U.S. Municipal Bonds .55 .80 .50 (b)
(short and long term)
------------------------------------------------------------------------------
CMO's/ARM's/ABS 1.00 .80 1.00 (a)
------------------------------------------------------------------------------
Convertible Bonds .50 .50 1.00 (a)
------------------------------------------------------------------------------
High Yield Bonds .50 .50 1.00 (a)
------------------------------------------------------------------------------
Mortgage-Backed Factors 1.00 n/a n/a
(per Issue per Month)
------------------------------------------------------------------------------
Domestic Equities (d)* .15 n/a
------------------------------------------------------------------------------
Domestic Options n/a .15 n/a
------------------------------------------------------------------------------
Domestic Dividends &
Capital Changes (d)* 3.50 n/a
(per Issue per Month)
------------------------------------------------------------------------------
Foreign Securities .50 .50 n/a
------------------------------------------------------------------------------
Foreign Securities
Dividends & Capital 2.00 4.00 n/a
Changes
(per Issue per Month)
------------------------------------------------------------------------------
Set-up Fees n/a n/a .25 (c)
------------------------------------------------------------------------------
All Added Items n/a n/a .25 (c)
==============================================================================
* Based on current Vendor costs, subject to change. Costs are quoted
based on individual security CUSIP/identifiers and are per issue per day.
(a) $35.00 per day minimum
(b) $25.00 per day minimum
(c) $ 1.00, if no CUSIP
(d) At no additional cost to Fund/Plan clients
A) Futures and Currency Forward Contracts $2.00 per Issue per Day
B) Telerate Systems, Inc.* (if applicable)
*Based on current vendor costs, subject to change.
Specific costs will be identified based upon options selected by the
Trust and will be billed monthly.
C) Reuters, Inc.*
*Based on current vendor costs, subject to change.
Fund/Plan does not currently pass along the charges for the domestic
security prices supplied by Reuters, Inc.
III. SEC Yield Calculation: (if applicable)
---------------------
Provide up to 12 reports per year to reflect the yield calculations for non-
money market funds required by the SEC, $1,000 per year per Fund. Daily SEC
yield reporting is available at $3,000 per year per Fund. (US dollar denominated
securities only).
IV. Out-of-Pocket Expenses:
----------------------
The Funds will reimburse Fund/Plan Services, Inc. monthly for all reasonable
out-of-pocket expenses, including telephone, postage, overdraft charges, XXXXX
filings, Fund/SERV and Networking expenses, telecommunications, special reports,
record retention, special transportation costs, copying and sending materials to
auditors and/or regulatory agencies as incurred and approved.
V. Additional Services:
-------------------
To the extent the Funds commence using investment techniques such as Futures,
Security Lending, Swaps, Leveraging, Short Sales, Derivatives, Precious Metals,
or foreign trading (non U.S. dollar denominated securities and currency),
additional fees will apply. Activities of a non-recurring nature such as
shareholder in kinds, fund consolidations, mergers or reorganizations will be
subject to negotiation. To the extent that the Funds should decide to issue
multiple/separate classes of shares, additional fees will apply. Any
additional/enhanced services, programming requests, or reports will be quoted
upon request.
Schedule "C"
============
IDENTIFICATION OF SERIES
========================
Below are listed the Series to which services under this Agreement are to be
performed as of the execution date of this Agreement:
TRAINER, XXXXXXX FIRST MUTUAL FUNDS
-----------------------------------
First Mutual Fund
Trainer, Xxxxxxx Emerging Growth Fund
Trainer, Xxxxxxx Total Return Bond Fund
