FUND ACCOUNTING AGREEMENT
AGREEMENT made this 30th day of May 2003, between each entity that has
executed this Agreement, as listed on the signature page hereto (each the
"Company"), each of which has its principal place of business at 000 Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxx XX 00000, and BISYS FUND SERVICES, LP. ("BISYS"), an
Ohio limited partnership having its principal place of business at 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000. This Agreement shall be considered a separate
agreement between BISYS and each Company, and references to the "Company", shall
refer to each Company separately. No Company shall be liable for the
obligations of, nor entitled to the benefits of, any other Company under this
Agreement.
WHEREAS, the Company desires that BISYS perform fund accounting services
for the Company and each investment portfolio of the Company as now in existence
and listed on Schedule A, or as hereafter may be established from time to time
(individually referred to herein as the "Fund" and collectively as the "Funds");
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement; and
WHEREAS, BISYS and the Company wish to enter into this Agreement in order
to set forth the terms under which BISYS will perform the fund accounting
services set forth herein for the Company.
NOW, THEREFORE, in consideration of the covenants hereinafter contained,
the Company and BISYS hereby agree as follows:
1. Services as Fund Accountant
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(a) Maintenance of Books and Records. BISYS will keep and
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maintain the following books and records of each Fund pursuant to Rule 31a-1
(the "Rule") under the Investment Company Act of 1940, as amended (the 1940
Act"):
(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;
(iv) A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of the
Rule; and
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(v) A record of any puts, calls, straddles, and options as required
by subsection (b)(7)
(b) Performance of Daily Accounting Services. In addition to the
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maintenance of the books and records specified above, BISYS shall perform the
following accounting services daily for each Fund:
(i) Calculate the net asset value per share utilizing prices obtained
from the sources described in subsection 1(b)(ii) below in
accordance with the subject Fund's prospectus; BISYS shall
generally follow SEC guidance for dealing with any pricing errors
unless otherwise agreed with the Company;
(ii) Obtain security prices from independent pricing services, or if
such quotes are unavailable, then obtain such prices from each
Fund's investment adviser or its designee, as approved by the
Company's Board of Directors or Trustees (hereafter referred to
as the "Board");
(iii) Verify and reconcile with the Funds' custodian all daily trade
activity;
(iv) 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;
(v) 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;
(vi) Report to the Company the daily market pricing of securities in
any money market Funds, with the comparison to the amortized cost
basis;
(vii) Determine unrealized appreciation and depreciation on securities
held in variable net asset value Funds;
(viii) Amortize premiums and accrete discounts on securities purchased
at a price other than face value;
(ix) Update fund accounting system to reflect rate changes, as
received from a Fund's investment adviser, on variable interest
rate instruments;
(x) Post Fund transactions to appropriate categories;
(xi) Accrue expenses of each Fund according to instructions received
from the Company's Administrator or Sub-Administrator;
(xii) Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income and
expense accounts;
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(xiii) Provide accounting reports in connection with the Company's
regular annual audit and other audits and examinations by
regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall agree upon,
as set forth in a separate schedule or otherwise agreed in
writing.
(c) Special Reports and Services.
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(i) BISYS may provide additional special reports upon the request of
the Company 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) BISYS may provide such other similar services with respect to a
Fund as may be reasonably requested by the Company, which may
result in an additional charge, the amount of which shall be
agreed upon between the parties.
(d) Additional Accounting Services. BISYS shall also perform the
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following additional accounting services for each Fund, without additional
compensation:
(i) Provide monthly a hard copy of the unaudited financial statements
described below. The unaudited financial statements will include
the following items:
(A) Unaudited Statement of Assets and Liabilities,
(B) Unaudited Statement of Operations,
(C) Unaudited Statement of Changes in Net Assets, and
(D) Unaudited Condensed Financial Information;
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal excise tax
returns;
(B) the Company's semi-annual reports with the Securities and
Exchange Commission ("SEC") on Form N-SAR and N-CSR;
(C) the Company'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) monitoring of the Company's status as a regulated investment
Company under Subchapter M of the Internal Revenue Code of
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1986, as amended, (the "Code") and, when applicable,
compliance with Section 817(h) of the Code, as amended;
(F) annual audit by the Company's auditors; and
(G) examinations performed by the SEC.
2. Subcontracting
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BISYS may, at its expense and with prior consent of the Company,
subcontract with any entity or person concerning the provision of fund
accounting services contemplated hereunder (a "Sub-Fund Accountant"); provided,
however, that BISYS shall not be relieved of any of its duties and obligations
under this Agreement by the appointment of such Sub-Fund Accountant and provided
further, that, subject to Section 5 hereof, BISYS shall be responsible, for all
acts of such subcontractor as if such acts were its own. The Sub-Fund
Accountant shall be the agent of BISYS and shall not be the agent of the Company
or any Fund.
3. Compensation
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The Trust shall pay BISYS compensation for the services to be provided
by BISYS under this Agreement in accordance with, and in the manner set forth in
Schedule B attached hereto.
4. Reimbursement of Expenses and Miscellaneous Service Fees
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(a) In addition to paying BISYS the fees provided in Section 3 and
Schedule B, the Trust agrees to reimburse BISYS for its reasonable out-of-pocket
expenses in providing services hereunder, including without limitation the
following:
(i) All freight and other delivery and bonding charges incurred by
BISYS in delivering materials to and from the Company;
(ii) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by BISYS in
communication with the Company, the Company's investment adviser
or custodian, dealers or others as required for BISYS to perform
the services to be provided hereunder;
(iii) The cost of microfilm or microfiche of records or other
materials;
(iv) Systems-related expenses associated with the provision of special
reports and services as agreed pursuant to Section 1(c) herein;
(v) Any expenses BISYS shall incur at the written direction of an
officer of the Company (other than an employee of BISYS)
thereunto duly authorized; and
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(vi) Any additional expenses reasonably incurred by BISYS in the
performance of its duties and obligations under this Agreement
(but not including any amounts related to pricing information,
other than as provided in paragraph 4(b)(iii), below) with prior
consent of Funds if over $1500.
(b) In addition, BISYS shall be entitled to receive the following
amounts:
(i) Systems development fees billed at an hourly rate of $150 per
hour, as approved by the Company;
(ii) Ad hoc reporting fees billed at an agreed upon rate; and
(iii) Charges for the pricing information obtained from third party
vendors for use in pricing the securities of each Fund's
portfolio pursuant to Section 1(b)(ii) of this Agreement, which
shall not exceed the amounts that would be incurred if the Fund
were to obtain the information directly from the relevant vendor
or vendors.
5. Standard of Care; Uncontrollable Events; Limitation of
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Liability
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(a) BISYS shall use reasonable best efforts to ensure the accuracy
and timely performance of all services performed under this Agreement, but shall
not be liable to the Company for any action taken or omitted by BISYS in the
absence of bad faith, willful misfeasance, negligence or reckless disregard by
it of its obligations and duties.
(b) BISYS shall maintain adequate and reliable computer and other
equipment necessary or appropriate to carry out its obligations under this
Agreement. Upon the Trust's reasonable request, BISYS shall provide
supplemental information concerning the aspects of its disaster recovery and
business continuity plan that are relevant to the services provided hereunder.
Notwithstanding the foregoing or any other provision of this Agreement, BISYS
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. Events beyond BISYS's reasonable control include, without
limitation, force majeure events. Force majeure events include natural
disasters, actions or decrees of governmental bodies, and communication lines
failures that are not the fault of either party. In the event of force majeure,
computer or other equipment failures or other events beyond its reasonable
control, BISYS shall follow applicable procedures in its disaster recovery and
business continuity plan and use all commercially reasonable efforts to minimize
any service interruption. BISYS 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 BISYS. Representatives of the Company shall be entitled to
inspect BISYS's premises and operating capabilities during regular business
hours of BISYS, upon reasonable notice and provision of a request for
information document to BISYS. Such inspection shall be limited to once per
year.
(c) BISYS shall provide the Company, at such times as the Company may
reasonably require, copies of reports rendered by independent public accountants
on the
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internal controls and procedures of BISYS relating to the services provided by
BISYS under this Agreement.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL BISYS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR SPECULATIVE OR CONSEQUENTIAL
DAMAGES, OR LOST PROFITS, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE
PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER
PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6. Term
----
This Agreement shall become effective as of the date first written
above and shall continue in effect until May 31, 2006 (the "Initial Term").
During the Initial Term this Agreement may be terminated only (i) by provision
of a notice of nonrenewal at least one hundred twenty (120) days prior to the
end of the Initial Term, (ii) by mutual agreement of the parties, (iii) for
"cause," as set forth below, or (iv) automatically with respect to any Fund (or
Class) upon termination of the Fund with respect to such Fund (or Class) due to
merger or restructuring of the Companies and/or the Funds with one or more of
the other Companies and/or Funds or for reasons of economic viability of such
Fund. After the Initial Term, the agreement may be terminated by either party
with one hundred twenty (120) days' advance written notice.
For purposes of this Agreement, termination for "cause" shall be
permissible (a) immediately by the non-breaching party upon a material breach of
this Agreement that has not been remedied for thirty (30) days following written
notice of such breach from the non-breaching party; (b) immediately by the other
party upon a final 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) immediately by the other party upon
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 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, provided, however, that in the event of an involuntary case, the
party to be terminated shall not be terminated if such party diligently contests
the case within 60 days' of service of notice of the filing of such case and for
so long as such diligent contest continues, or (d) immediately by the other
party in the event of any circumstance which has substantially impaired the
performance of the obligations and duties of the party to be terminated or the
ability to perform these obligations and duties, as contemplated in this
Agreement, in each case for a period of more than thirty (30) days. BISYS shall
not terminate this Agreement pursuant to clause (a) above based solely upon the
Company's failure to pay an amount to BISYS which is the subject of a good faith
dispute, if (i) the Company is attempting in good faith to resolve such dispute
with as much expediency as
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may be possible under the circumstances, and (ii) the Company continues to
perform its obligations hereunder in all other material respects (including
paying all fees and expenses not subject to reasonable dispute hereunder).
Notwithstanding the foregoing, following any such termination, in the event
that BISYS in fact continues to perform any one or more of the services
contemplated by this Agreement (or any Schedule or exhibit hereto) with the
consent of the Company, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Fees and out-of-pocket expenses incurred by BISYS but unpaid
by the Company upon such termination shall be due upon and notwithstanding such
termination and shall be payable prior to the final conversion of data and/or
delivery of records. BISYS shall be entitled to collect from the Company, in
addition to the fees and disbursements provided by Sections 3 and 4 hereof, the
amount of all of BISYS's cash disbursements in connection with BISYS's
activities in effecting such termination, including without limitation, the
delivery to the Company and/or its distributor or investment adviser and/or
other parties of the Company's property, records, instruments and documents.
7. Indemnification
---------------
The Company agrees to indemnify and hold harmless BISYS and its
employees, agents, directors, officers and nominees from and against any and all
claims, demands, actions and suits, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other reasonable
expenses (including reasonable investigation expenses) of every nature and
character (collectively, "Losses") arising out of or in any way relating to or
resulting from BISYS's actions taken or omissions with respect to the
performance of services under this Agreement or based, if applicable, upon
reasonable reliance on information, records, instructions or requests given or
made to BISYS by the Company, the investment adviser, administrator,
sub-administrator or custodian thereof; provided that this indemnification shall
not apply to actions or omissions of BISYS in cases of its own bad faith,
willful misfeasance, negligence or reckless disregard by it of its obligations
and duties.
Subject to Section 5(d) BISYS shall indemnify, defend, and hold the Company
and its employees, agents, directors, officers, and nominees harmless from and
against any and all Losses arising out of or in any way relating to or resulting
from BISYS's willful misfeasance, bad faith or negligence in the performance of
its duties, or by reason of reckless disregard of its obligations and duties
hereunder.
The indemnification rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provisions contained herein shall
apply, however, it is understood that if in any case a party may be asked to
indemnify or hold the other party harmless, the indemnifying party shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnified party will use all
reasonable care to identify and notify the indemnifying party promptly
concerning any
7
situation which presents or appears likely to present the probability of such a
claim for indemnification against the indemnifying party, but failure to do so
in good faith shall not affect the rights hereunder except to the extent the
indemnifying party is materially prejudiced thereby. As to any matter eligible
for indemnification, an indemnified party shall act reasonably and in accordance
with good faith business judgment and shall not effect any settlement or confess
judgment without the consent of the indemnifying party, which consent shall not
be withheld or delayed unreasonably.
The indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by it and reasonably satisfactory to the indemnified
party, whose approval shall not be unreasonably withheld. In the event that the
indemnifying party elects to assume the defense of any suit and retain counsel,
the indemnified party shall bear the fees and expenses of any additional counsel
retained by it. If the indemnifying party does not elect to assume the defense
of suit, it will reimburse the indemnified party for the reasonable fees and
expenses of any counsel retained by the indemnified party. The indemnity and
defense provisions set forth herein shall indefinitely survive the termination
of this Agreement.
8. Record Retention and Confidentiality
---------------------------------------
BISYS shall keep and maintain on behalf of the Company all books and
records which the Company or BISYS 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 1940 Act, relating to the maintenance
of books and records in connection with the services to be provided hereunder.
Any records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by BISYS on behalf of
the Company shall be prepared and maintained at the expense of BISYS, but shall
be the property of the Company and will be surrendered promptly to the Company
on request, and made available for inspection by the Company or by the
Commission at reasonable times.
In case of any request or demand for the inspection of such records by
another party, BISYS shall notify the Company and follow the Company's
instructions as to permitting or refusing such inspection; provided that BISYS
may exhibit such records in any case where (i) disclosure is required by law,
(ii) BISYS is advised by counsel that it may incur liability for failure to make
a disclosure, (iii) BISYS is requested to divulge such information by
duly-constituted authorities or court process, or (iv) BISYS is requested to
make a disclosure by the Company. BISYS shall otherwise keep confidential all
books and records relating to the Funds. BISYS shall provide the Company with
reasonable advance notice of disclosure pursuant to items (i) - (iii) of the
previous sentence, to the extent reasonably practicable.
8
9. Activities of BISYS
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The services of BISYS rendered to the Company hereunder are not to be
deemed to be exclusive. BISYS is free to render such services to others and to
have other businesses and interests. It is understood that Board members,
officers, employees and Shareholders of the Company are or may be or become
interested in BISYS, as officers, employees or otherwise and that partners,
officers and employees of BISYS and its counsel are or may be or become
similarly interested in the Company, and that BISYS may be or become interested
in the Company as a shareholder or otherwise
10. Reports
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BISYS shall furnish to the Company and to its properly authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Company 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 BISYS, or as
subsequently agreed upon by the parties pursuant to an amendment hereto. The
Company agrees to examine such report or copy within twenty (20) days and will
promptly report or cause to be reported any errors or discrepancies therein.
11. Rights of Ownership
---------------------
All computer programs and procedures employed or developed by or on
behalf of BISYS to perform services required to be provided by BISYS under this
Agreement are the property of BISYS. All records and other data except such
computer programs and procedures are the exclusive property of the Company and
all such other records and data shall be furnished to the Company in appropriate
form as soon as practicable after termination of this Agreement for any reason
and in accordance with Section 12.
12. Return of Records
-------------------
BISYS may at its option at any time, and shall promptly upon the
Company's demand, turn over to the Company and cease to retain BISYS's files,
records and documents created and maintained by BISYS pursuant to this Agreement
which are no longer needed by BISYS in the performance of its services or for
its legal protection. If not so turned over to the Company, such documents and
records will be retained by BISYS 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 Company unless the Company authorizes in writing the destruction of such
records and documents.
13. Representations and Warranties
--------------------------------
(a) The Company represent and warrants that: (1) as of the close
of business on the effective date of this Agreement, 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 Company and, when executed and
delivered by the Company, will constitute a legal, valid and binding obligation
of the Trust, enforceable against the Company in accordance
9
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 (3) it is a trust or corporation duly organized
and in good standing under the laws of the jurisdiction of its formation and
qualified to do business in any jurisdiction where its activities so require.
(b) BISYS represents and warrants that: (1) the various procedures
and systems which BISYS 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 BISYS'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 reasonably
required for the secure performance of its obligations hereunder; (2) this
Agreement has been duly authorized by BISYS and, when executed and delivered by
BISYS, will constitute a legal, valid and binding obligation of BISYS,
enforceable against BISYS 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; and (3) in
accordance with Section 5(b) it has in place and will continue to maintain, and
update as necessary, a reasonable disaster recovery program designed to minimize
disruptions in services contemplated under this Agreement.
14. Insurance
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BISYS shall maintain a fidelity bond covering larceny and embezzlement
and an insurance policy with respect to directors and officers errors and
omissions coverage in amounts that are appropriate in light of its duties and
responsibilities hereunder. Upon the request of the Company, BISYS shall
provide evidence that coverage is in place. BISYS shall notify the Company
should its insurance coverage with respect to professional liability or errors
and omissions coverage be canceled or reduced in any material respect. Such
notification shall include the date of cancellation and the reasons therefore.
BISYS shall notify the Company 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 Company should the total outstanding claims made
by BISYS under its insurance coverage materially impair, or threaten to
materially impair, the adequacy of its coverage.
15. Information Furnished by the Company
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The Company has furnished to BISYS the following, as amended and
current as of the effective date of this Agreement:
(a) Copies of the Declaration of Trust or Articles of
Incorporation of the Company and of any amendments thereto, certified by the
proper official of the state in which such document has been filed.
(b) Certified copies of the following documents:
(i) The Company's Bylaws and any amendments thereto;
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(ii) Resolutions of the Board covering (A) approval of this Agreement
and authorization of one or more officers of the Company to
execute and deliver this Agreement and authorization for
specified officers of the Company to instruct BISYS hereunder,
and (B) authorization of BISYS to act as fund accountant for the
Company.
(c) A list of all officers of the Company and any other persons
(who may be associated with the Company or its investment advisor), together
with specimen signatures of those officers and other persons, who are authorized
to instruct BISYS in all matters.
(d) Two copies of the Prospectuses and Statement of Additional
Information of each Fund.
16. Information Furnished by BISYS
---------------------------------
BISYS has furnished to the Trust evidence of the following:
(a) Approval of this Agreement by BISYS, and authorization of a
specified officer of BISYS to execute and deliver this Agreement;
(b) Authorization of BISYS to act as fund accountant for the
Company.
17. Amendments to Documents
-------------------------
The Company shall give BISYS reasonable advance notice of any
amendments to, or changes in, any of the items referred to in Section 15 and
shall provide BISYS with a written copy thereof forthwith upon such amendments
or changes becoming effective. In addition, the Company agrees that no
amendments will be made to the Prospectuses or Statements of Additional
Information of the Company which might have the effect of materially changing
the procedures employed by BISYS in providing the services agreed to hereunder
or which amendment might materially affect the duties of BISYS hereunder. In
the event Company desires to make any such amendment that would materially
change BISYS procedures or materially affect BISYS's duties, the parties will
use reasonable best efforts to promptly agree the actions necessary by each
party to effect such amendment and the appropriate allocation between them of
all costs and expenses associated therewith.
18. Legal Advice; Reliance on Prospectus and Instructions
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BISYS may apply to the Company at any time for instructions and may
consult with counsel for the Company and with accountants and other experts with
respect to any matter arising in connection with BISYS's duties, and BISYS shall
not be liable nor accountable for any action taken or omitted by it in good
faith in accordance with such instruction or with such instructions or the
opinion of such counsel, accountants or other experts.
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As to the services to be provided hereunder, BISYS may rely conclusively
upon the terms of the Prospectuses and Statement of Additional Information of
the Company relating to the relevant Funds to the extent that such services are
described therein, as well as the minutes of Board meetings (if applicable) and
other records of the Company unless BISYS receives written instructions to the
contrary in a timely manner from the Company.
Also, BISYS shall be protected in acting upon any document which it
reasonably believes to be genuine and to have been signed or presented by an
officer or other authorized agent (including the investment advisor, custodian
and auditor) of the Company or by any other person with appropriate legal or
regulatory authority regarding the Company. BISYS will not be held to have
notice of any change of authority of any officers, employees or agents of the
Trust until receipt of written notice thereof from the Company.
19. Compliance with Law
---------------------
(a) Except as otherwise expressly set forth herein, the Company
assumes full responsibility for the preparation, contents and distribution of
each prospectus of the Company 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. BISYS shall have no obligation to take cognizance of any laws
relating to the sale of the Company's shares.
(b) Subject to Section 19(a), BISYS undertakes to comply with all
applicable requirements of the securities laws and any laws, rules and
regulations applicable to the duties to be performed by BISYS hereunder.
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: if to the Company, to the address specified on the
signature page hereto; and if to BISYS, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000; Attn: President, 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. Assignment
----------
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.
22. Governing Law
--------------
This Agreement shall be governed by and provisions shall be construed
in accordance with the laws of the State of New York and the applicable
provisions of the
12
1940 Act. To the extent that the applicable laws of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
23. Privacy
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Nonpublic personal financial information relating to consumers or
customers of the Company provided by, or at the direction of the Company to
BISYS, or collected or retained by BISYS to perform its duties shall be
considered confidential information. BISYS shall not give, sell or in any way
transfer such confidential information to any person or entity, other than
affiliates of BISYS involved in performing its obligations under this Agreement
except at the direction of the Trust or as required or permitted by law. BISYS
shall have in place and maintain physical, electronic and procedural safeguards
reasonably designed to protect the security, confidentiality and integrity of,
and to prevent unauthorized access to or use of records and information relating
to consumers or customers of the Trust. The Trust represents to BISYS that it
has adopted a Statement of its privacy policies and practices as required by the
Commission's Regulation S-P and agrees to provide BISYS with a copy of that
statement annually.
24. Miscellaneous
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(a) Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the
parties hereto as to the subject matter covered by this Agreement, and
supercedes all prior negotiations, understandings and agreements bearing upon
the subject matter covered herein.
(c) This Agreement may be executed in counterparts, each of which
shall be an original but all of which, taken together, shall constitute one and
the same agreement.
(d) No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto. Without limiting the foregoing,
BISYS may conclusively assume that any special procedure which has been approved
by an executive officer of the Company (other than an officer or employee of
BISYS) does not conflict with or violate any requirements of the Company's
Articles of Incorporation or Declaration of Trust, By-Laws or then-current
prospectuses, or any rule, regulation or requirement of any regulatory body.
(e) Notwithstanding any other provision of this Agreement, the
parties agree that the assets and liabilities of each Fund are separate and
distinct from the assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising out of this Agreement, or otherwise.
(f) The provisions of section 5, 7, 8, 20, 22, 23 and 24 shall
survive the termination of this Agreement.
13
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed all as of the day and year first above written.
BABSON ENTERPRISE FUND, INC. BABSON ENTERPRISE FUND II, INC.
By: __________________________________ By: ____________________________________
Name: Name:
Title: Title:
XXXXX X. XXXXXX GROWTH FUND, INC. SHADOW STOCK FUND, INC.
By: __________________________________ By: ____________________________________
Name: Name:
Title: Title:
BABSON VALUE FUND, INC. XXXXXX-XXXXXXX IVORY INTERNATIONAL
FUND, INC.
By: __________________________________ By: ____________________________________
Name: Name:
Title: Title:
X.X. XXXXXX BOND TRUST X.X. XXXXXX MONEY MARKET FUND, INC.
By: __________________________________ By: ____________________________________
Name: Name:
Title: Title:
X.X. XXXXXX TAX-FREE INCOME FUND, INC. INVESTORS XXXX SERIES FUND, INC.
By: __________________________________ By: ____________________________________
Name: Name:
Title: Title:
J&B FUNDS BISYS FUND SERVICES, LP
By: __________________________________ By: ____________________________________
Name: Name:
Title: Title:
14
SCHEDULE A
FUNDS
-----
Babson Family of Funds
-------------------------
- Babson Enterprise Fund, Inc.
- Babson Enterprise Fund II, Inc.
- Xxxxx X. Xxxxxx Growth Fund, Inc.
- Shadow Stock Fund, Inc.
- Babson Value Fund, Inc.
- Xxxxxx-Xxxxxxx Ivory International Fund, Inc.
- X.X. Xxxxxx Bond Trust
o S Portfolio
o L Portfolio
- X.X. Xxxxxx Money Market Fund, Inc.
- X.X. Xxxxxx Tax-Free Income Fund, Inc.
Investors Xxxx Family of Funds
----------------------------------
- Investors Xxxx Series Fund, Inc.
o Balanced Portfolio
o Global Fixed Income Portfolio
o Growth & Income Portfolio
o Intermediate Fixed Income Portfolio
o Large Cap Value Portfolio
o Large Cap Growth Portfolio
o Mid Cap Equity Portfolio
o Money Market Portfolio
o Small Cap Equity Portfolio
15
J&B Family of Funds
----------------------
- J&B Funds
o J&B Mid-Cap Aggressive Growth Fund
o J&B Small-Cap Aggressive Growth Fund
o J&B Small Cap International Fund
16
SCHEDULE B
FEES
----
Each Fund will pay BISYS fees in accordance with the following schedule:
J&B AND BABSON FAMILY OF FUNDS
On Incremental Assets of Basis points
--------------------------- -------------
$0-1 billion 4.0
>$1 billion - $2 billion 3.0
>$2 billion 2.0
Incremental assets are aggregated across all Funds in both the J&B and the
Babson families of Funds to determine the fee for each Fund.
The Fund Accounting Fees, when combined with fees paid pursuant to the
Sub-Administration Agreement between BISYS and Xxxxx & Xxxxxx, Inc. (the
"Sub-Administration Agreement") are subject to an aggregate minimum for the J&B
and Babson Families of Funds of $45,500 times the total number of Funds in both
families.
INVESTORS XXXX FAMILY OF FUNDS
On Incremental Assets of Basis points
--------------------------- -------------
$0-500 million 7.5
>$500 million 6.5
Incremental assets are aggregated across the entire family of Funds to determine
the fee for each Fund.
The Fund Accounting Fees, when combined with fees paid pursuant to the
Sub-Administration Agreement between BISYS and Xxxxx & Babson, Inc. (the
"Sub-Administration Agreement") are subject to an aggregate minimum for the
Investors Xxxx Family of Funds of $45,500 times the number of Funds in the
family.
OUT OF POCKET EXPENSES AND MISCELLANEOUS CHARGES
------------------------------------------------------
Each Fund will reimburse BISYS for its reasonable out-of-pocket expenses in
providing services under each agreement.
17
