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Exhibit (h)(5)
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of April 1, 1999, between REPUBLIC FUNDS (the
"Trust"), a Massachusetts business trust, and BISYS FUND SERVICES OHIO, INC.
("Fund Accountant"), an Ohio corporation.
WHEREAS, the Trust desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Trust, all as now or
hereafter may be established from time to time (individually referred to herein
as the "Fund" and collectively as the "Funds"); and
WHEREAS, Fund Accountant is willing to perform such services on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Fund Accountant.
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(a) Maintenance of Books and Records. Fund Accountant will
keep and maintain the following books and records of each
Fund pursuant to Rule 31a-1 under the Investment Company
Act of 1940 (the "Rule"):
(i) Journals containing an itemized daily record in
detail of all purchases and sales of securities,
all receipts and disbursements of cash and all
other debits and credits, as required by
subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and
expense accounts, including interest accrued and
interest received, as required by subsection
(b)(2)(I) of the Rule;
(iii) Separate ledger accounts required by subsection
(b)(2)(ii) and (iii) of the Rule; and
(iv) A monthly trial balance of all ledger accounts
(except shareholder accounts) as required by
subsection (b)(8) of the Rule.
(b) Performance of Daily Accounting Services. In addition to
the maintenance of the books and records specified above,
Fund Accountant shall perform the following accounting
services daily for each Fund:
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(i) Calculate the net asset value per share utilizing
prices obtained from the sources described in
subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services, as approved by the Trust's Board of
Trustees, or if such quotes are unavailable, then
obtain such prices from each Fund's designee, as
approved by the Trust's Board of Trustees;
(iii) Compute, as appropriate, each Fund's net income
and capital gains, dividend payables, dividend
factors, 7-day yields, 7-day effective yields,
30-day yields, and weighted average portfolio
maturity;
(iv) Review daily the net asset value calculation and
dividend factor (if any) for each Fund prior to
release to shareholders, check and confirm the net
asset values and dividend factors for
reasonableness and deviations, and distribute net
asset values and yields to NASDAQ;
(v) Post Fund transactions to appropriate categories;
(vi) Accrue expenses of each Fund according to
instructions received from the Trust's
Administrator;
(vii) Determine the outstanding receivables and payables
for all (1) security trades, (2) Fund share
transactions and (3) income and expense accounts;
(viii) Provide accounting reports in connection with the
Trust's regular annual audit and other audits and
examinations by regulatory agencies; and
(ix) Provide such periodic reports as the parties shall
agree upon, as set forth in a separate schedule.
(c) Special Reports and Services.
(i) Fund Accountant may provide additional special
reports upon the request of the Trust or a Fund's
investment adviser, which may result in an
additional charge, the amount of which shall be
agreed upon between the parties.
(ii) Fund Accountant may provide such other similar
services with respect to a Fund as may be
reasonably requested by the Trust, which may
result in an additional charge, the amount of
which
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shall be agreed upon between the parties.
(d) Additional Accounting Services. Fund Accountant shall
also perform the following additional accounting services
for each Fund:
(i) Provide monthly a download (and hard copy thereof)
of the financial statements described below, upon
request of the Trust. The download will include
the following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and
federal excise tax returns;
(B) the Trust's semi-annual reports with the
Securities and Exchange Commission
("SEC") on Form N-SAR;
(C) the Trust's annual, semi-annual and
quarterly (if any) shareholder reports;
(D) registration statements on Form N-1A and
other filings relating to the
registration of shares;
(E) the Administrator's monitoring of the
Trust's status as a regulated investment
company under Subchapter M of the
Internal Revenue Code, as amended;
(F) annual audit by the Trust's auditors;
and
(G) examinations performed by the SEC.
2. Subcontracting.
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Fund Accountant may, at its expense, upon the prior written
approval of the Trust, which approval shall not be unreasonably withheld,
subcontract with any entity or person concerning the provision of the services
contemplated hereunder; provided, however, that Fund Accountant shall not be
relieved of any of its obligations under this Agreement by the appointment of
such subcontractor and provided further, that Fund Accountant shall be
responsible, to the extent provided in Section 7 hereof, for all acts of such
subcontractor as if such acts were its own.
3. Compensation.
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The Trust shall pay Fund Accountant for the services to be
provided by Fund Accountant under this Agreement in accordance with, and in the
manner set forth in, Schedule A hereto, as such Schedule may be amended from
time to time.
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4. Reimbursement of Expenses.
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In addition to paying Fund Accountant the fees described in
Section 3 hereof, the Trust agrees to reimburse Fund Accountant for its
out-of-pocket expenses in providing services hereunder, including without
limitation the following:
(a) All freight and other delivery and bonding charges incurred by
Fund Accountant in delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by Fund
Accountant in communication with the Trust, the Trust's
investment advisor or custodian, dealers or others as required
for Fund Accountant to perform the services to be provided
hereunder;
(c) The cost of obtaining security market quotes pursuant to Section
l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other
materials;
(e) Any expenses Fund Accountant shall incur at the written
direction of an officer of the Trust thereunto duly authorized;
and
(f) Any reasonably unforeseen additional expenses reasonably
incurred by Fund Accountant in the performance of its duties and
obligations under this Agreement.
5. Effective Date.
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This Agreement shall become effective with respect to a Fund as
of the date first written above (or, if a particular Fund is not in existence on
that date, on the date such Fund commences operation) (the "Effective Date").
6. Term.
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This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
March 31, 2003 (the "Initial Term").Thereafter, this Agreement shall continue in
effect unless and until it is terminated as set forth in this paragraph. This
Agreement may be terminated without penalty (i) by provision of advance written
notice of nonrenewal to the other party at least 60 days prior to the end of the
Initial Term, (ii) by mutual agreement of the parties, (iii) for "cause," as
defined below, upon the provision of 60 days advance written notice by the party
alleging cause, (iv) in accordance with the interim evaluation procedures set
forth below or (v) by provision of 60 days advance written notice to the other
party following the Initial Term.
For purposes of this Agreement, "cause" shall mean (a) willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the party to be terminated with respect
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to its obligations and duties set forth herein; (b) a final, unappealable
judicial, regulatory or administrative ruling or order in which the party to be
terminated has been found guilty of criminal or unethical behavior in the
conduct of its business; (c) financial difficulties on the part of the party to
be terminated which are evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent or acquiescence in, a voluntary
or involuntary case under Title 11 of the United States Code, as from time to
time is in effect, or any applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors; or (d) a material breach
of this Agreement that has not been remedied within forty-five (45) days
following receipt of written notice of such breach from the non-breaching party.
Following July 1, 2001, the Trust may conduct an interim
evaluation of (i) Fund Accountant's performance under this Agreement (the
"Performance Evaluation") and (ii) the market conditions for the services
provided under this Agreement (the "Market Evaluation").
(a) If the Trust's Performance Evaluation indicates that the quality
of service provided by the Fund Accountant is significantly less
than that contemplated by this Agreement (but otherwise not
constituting a material breach), the Trust shall, on or before
October 1, 2001, provide written notice to the Fund Accountant
specifying the areas in which the quality of service has been
less than that contemplated by this Agreement. The Fund
Accountant shall have a period of 90 days in which to restore,
to the reasonable satisfaction of the Trust, the quality of
service to that contemplated by this Agreement. If, at the end
of such 90-day period, the Fund Accountant has not restored the
quality of service to that contemplated by this Agreement, the
Trust may by written notice to the Fund Accountant terminate
this Agreement without penalty effective upon the later (i) of
April 1, 2002 or (ii) 90 days after such termination notice is
provided to the Fund Accountant.
(b) If the Trust's Market Evaluation indicates that the market for
the services provided pursuant to this Agreement by established
service providers, at comparable levels of service, has changed
since the date of this Agreement such that mutual fund families
of a comparable size have secured and are then able to secure
significantly better terms for such services under agreements
having the same initial term as this Agreement, the Trust may,
on or before October 1, 2001, provide written notice to the Fund
Accountant of such evaluation. At the Trust's request, the Fund
Accountant and the Trust shall negotiate in good faith an
amendment to bring this Agreement into conformity with
then-current market terms effective not sooner than April 1,
2002, which amendment shall also extend the Initial Term of the
Agreement until March 31, 2005.
After such termination for so long as Fund Accountant, with the
written consent of the Trust, in fact continues to perform any one or more of
the services contemplated by this Agreement or any schedule or exhibit hereto,
the provisions of this Agreement, including
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without limitation the provisions dealing with indemnification, shall continue
in full force and effect. Compensation due Fund Accountant and unpaid by the
Trust upon such termination shall be immediately due and payable upon and
notwithstanding such termination. Upon termination Fund Accountant shall deliver
to the Trust or its designee, the Trust's property, records, instruments and
documents. Fund Accountant shall be entitled to collect from the Trust, in
addition to the compensation described under Section 3 hereof, the amount of all
of Fund Accountant's cash disbursements for services in connection with Fund
Accountant's activities in effecting such termination, including without
limitation, the delivery to the Trust and/or its designees of the Trust's
property, records, instruments and documents, or any copies thereof. Subsequent
to such termination, for a reasonable fee, Fund Accountant will provide the
Trust with reasonable access to any Trust documents or records remaining in its
possession.
If, during the Initial Term, for any reason other than as
provided in the first paragraph of this Section 6, Fund Accountant is replaced
as Fund Accountant, or if a third party is added to perform all or a part of the
services provided by Fund Accountant under this Agreement (excluding any
sub-accountant appointed by Fund Accountant as provided in Section 2 hereof),
then the Trust shall make a one-time cash payment, in consideration of the fee
structure and services to be provided under this Agreement, and not as a
penalty, to Fund Accountant equal to the amount due Fund Accountant for the
remainder of the Initial Term of this Agreement, assuming for purposes of
calculation of the payment that the amount due Fund Accountant for the remainder
of the Initial Term shall be based upon the average amount of the Trust's assets
for the twelve months prior to the date Fund Accountant is replaced or a third
party is added.
In the event the Trust is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the Initial Term of
this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which Fund
Accountant is not retained to provide fund accounting services consistent with
this Agreement. The one-time cash payment referenced above shall be due and
payable on the day prior to the first day in which Fund Accountant is replaced
or a third party is added.
7. Standard of Care; Reliance on Records and Instructions;
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Indemnification.
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Fund Accountant shall use its best efforts to insure the accuracy
of all services performed under this Agreement, but shall not be liable to the
Trust for any action taken or omitted by Fund Accountant in the absence of bad
faith, willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties. The Trust agrees to indemnify and hold harmless Fund
Accountant, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Fund Accountant's actions
taken or nonactions with respect to the performance of services under this
Agreement with respect to such Fund or based, if applicable, upon reasonable
reliance on information, records, instructions or requests with respect to such
Fund given or made to Fund
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Accountant by a duly authorized representative of the Trust; provided that this
indemnification shall not apply to actions or omissions of Fund Accountant in
cases of its own bad faith, willful misfeasance, negligence or from reckless
disregard by it of its obligations and duties, and further provided that prior
to confessing any claim against it which may be the subject of this
indemnification, Fund Accountant shall give the Trust written notice of and
reasonable opportunity to defend against said claim in its own name or in the
name of Fund Accountant.
8. Record Retention and Confidentiality.
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Fund Accountant shall keep and maintain on behalf of the Trust
all books and records which the Trust and Fund Accountant is, or may be,
required to keep and maintain pursuant to any applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2 under the
Investment Trust Act of 1940, as amended (the "1940 Act"), relating to the
maintenance of books and records in connection with the services to be provided
hereunder. Fund Accountant further agrees that all such books and records shall
be the property of the Trust and to make such books and records available for
inspection by the Trust or by the Securities and Exchange Commission at
reasonable times and otherwise to keep confidential all books and records and
other information relative to the Trust and its shareholders; except when
requested to divulge such information by duly-constituted authorities or court
process.
9. Uncontrollable Events; Maintenance of Systems and Equipment.
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Fund Accountant assumes no responsibility hereunder, and shall
not be liable, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control. Fund Accountant agrees to
perform comprehensive date testing on the systems it utilizes to provide the
services hereunder to simulate the actual turning of the century and leap year.
These tests shall be intended to identify any operational issues regarding the
accurate processing of date/time data from, into and between the Twentieth and
Twenty-First Century, including leap year calculations. Fund Accountant agrees
to use all commercially reasonable efforts to implement all necessary updates
and changes for its mission critical systems, if any, to accommodate the turn of
the century and leap year and shall have substantially tested such upgrades and
changes by March 31, 1999. Fund Accountant agrees to provide the Trust quarterly
updates on the status of its Year 2000 readiness project and to make its
personnel reasonably available to address any questions or concerns.
10. Reports.
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Fund Accountant will furnish to the Trust and to its properly
authorized auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the Trust
in writing, such reports and at such times as are prescribed pursuant to the
terms and the conditions of this Agreement to be provided or completed by Fund
Accountant, or as subsequently agreed upon by the parties pursuant to an
amendment hereto. The Trust agrees to cause the Trust's investment adviser(s) to
examine each such report or copy promptly and will report or cause to be
reported any errors or discrepancies therein.
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11. Rights of Ownership.
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All computer programs and procedures developed to perform
services required to be provided by Fund Accountant under this Agreement are the
property of Fund Accountant. All records and other data except such computer
programs and procedures are the exclusive property of the Trust and all such
other records and data will be furnished to the Trust in appropriate form as
soon as practicable after termination of this Agreement for any reason.
12. Return of Records.
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Fund Accountant may at its option at any time, and shall promptly
upon the Trust's demand, turn over to the Trust and cease to retain Fund
Accountant's files, records and documents created and maintained by Fund
Accountant pursuant to this Agreement which are no longer needed by Fund
Accountant in the performance of its services or for its legal protection. If
not so turned over to the Trust, such documents and records will be retained by
Fund Accountant for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Trust
unless the Trust authorizes in writing the destruction of such records and
documents.
13. Representations of the Trust.
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The Trust certifies to Fund Accountant that: (1) as of the close
of business on the Effective Date, each Fund that is in existence as of the
Effective Date has authorized unlimited shares, and (2) this Agreement has been
duly authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
14. Representations of Fund Accountant.
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Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other cause
the records, and other data of the Trust and Fund Accountant's records, data,
equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its obligations
hereunder, and (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
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15. Insurance.
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Fund Accountant represents that its insurance coverage is
adequate given its existing and planned business volumes. Fund Accountant shall
notify the Trust should any of its insurance coverage be canceled or reduced.
Such notification shall include the date of change and the reasons therefor.
Fund Accountant shall notify the Trust of any material claims against it with
respect to services performed under this Agreement, whether or not they may be
covered by insurance, and shall notify the Trust from time to time as may be
appropriate of the total outstanding claims made by Fund Accountant under its
insurance coverage.
16. Information to be Furnished by the Trust and Funds.
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The Trust has furnished to Fund Accountant the following:
(a) Copies of the Declaration of Trust of the Trust and of
any amendments thereto, certified by the proper official
of the state in which such document has been filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Board of
Trustees covering the approval of this Agreement,
authorization of a specified officer of the Trust
to execute and deliver this Agreement and
authorization for specified officers of the Trust
to instruct Fund Accountant thereunder.
(c) A list of all the officers of the Trust, together with
specimen signatures of those officers who are authorized
to instruct Fund Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of
Additional Information for each Fund.
17. Information Furnished by Fund Accountant.
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(a) Fund Accountant has furnished to the Trust the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments
thereto.
(b) Fund Accountant shall, upon request, furnish certified
copies of corporate actions covering the following
matters:
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(i) Approval of this Agreement, and authorization of a
specified officer of Fund Accountant to execute
and deliver this Agreement; and
(ii) Authorization of Fund Accountant to act as fund
accountant for the Trust and to provide accounting
services for the Trust.
18. Amendments to Documents.
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The Trust shall furnish Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16 hereof
forthwith upon such amendments or changes becoming effective. In addition, the
Trust agrees that no amendments will be made to the Prospectuses or Statements
of Additional Information of the Trust which might have the effect of changing
the procedures employed by Fund Accountant in providing the services agreed to
hereunder or which amendment might affect the duties of Fund Accountant
hereunder unless the Trust first obtains Fund Accountant's approval of such
amendments or changes, which approval will not be unreasonably withheld, or
unless such amendments are required by regulatory action, including, but not
limited to, requirements imposed by the SEC, the NASD or developments in
generally accepted accounting practices.
19. Compliance with Law.
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Except for the obligations of Fund Accountant set forth in
Section 8 hereof, the Trust assumes full responsibility for the preparation,
contents and distribution of each prospectus of the Trust as to compliance with
all applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Trust's
shares. The Trust represents and warrants that no shares of the Trust will be
offered to the public until the Trust's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
20. Notices.
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Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice, at the following address: 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.
21. Headings.
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Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
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22. Assignment.
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This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. Governing Law.
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This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed all as of the day and year first above written.
REPUBLIC FUNDS
By:
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Title:
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BISYS FUND SERVICES OHIO, INC.
By:
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Title:
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Dated: April 1, 1999
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
REPUBLIC FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
FEES
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Fund Accountant shall be entitled to receive fees from each Fund in accordance
with the following schedule:
Annual Per Fund Fee: $10,000 plus one one-hundredths of one percent
-------------------- (.01%) of each Fund's daily net asset value.
Multiple Classes of Shares: $5,000 annual fee for each additional class per
--------------------------- Fund.
Out-of-Pocket Expenses: Fund Accountant shall be entitled to be reimbursed
----------------------- for all reasonable out-of-pocket expenses,
including, but not limited to, the expenses set
forth in Section 4 of the Fund Accounting
Agreement to which this Schedule A is attached.
A-1
