FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 30th day of June, 2003, by and between
XXX XXXXX TRUST (the "Trust"), a Massachusetts business trust having its
principal place of business at 0000 Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxx Xxxxxxxx
00000, and ULTIMUS FUND SOLUTIONS, LLC ("Ultimus"), a limited liability company
organized under the laws of the State of Ohio and having its principal place of
business at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires that Ultimus perform certain fund accounting
services for each series of the Trust, listed on Schedule A attached hereto and
made part of this Agreement, as such Schedule A may be amended from time to time
(individually referred to herein as the "Portfolio" and collectively as the
"Portfolios"); and
WHEREAS, Ultimus 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. RETENTION OF ULTIMUS.
The Trust hereby retains Ultimus to act as the fund accountant of the Trust
and to furnish the Trust with the services as set forth below. Ultimus hereby
accepts such retention to perform such duties.
(a) MAINTENANCE OF BOOKS AND RECORDS.
Ultimus shall maintain and keep current the accounts, books, records and
other documents relating to the Trust's financial and portfolio
transactions as may be required by the rules and regulations of the
Securities and Exchange Commission (the "SEC") adopted under Section 31(a)
of the 1940 Act. Ultimus shall cause the subject records of the Trust to be
maintained and preserved pursuant to the requirements of the 1940 Act.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES.
In addition to the maintenance of the books and records specified above,
Ultimus shall perform the following accounting services daily for each
Portfolio:
(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, or if
such quotes are unavailable, then obtain such prices from each
Portfolio's investment adviser or its designee, as approved by
the Trust's Board of Trustees (hereafter referred to as
"Trustees");
(iii)Verify and reconcile with the Portfolios' custodian all daily
trade activity;
(iv) Compute, as appropriate, each Portfolio's net income and capital
gains, dividend payables, dividend factors, yields, and weighted
average portfolio maturity;
(v) Review daily the net asset value calculation and dividend factor
(if any) for each Portfolio 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) Determine unrealized appreciation and depreciation on securities
held by the Portfolios;
(vii)Amortize premiums and accrete discounts on securities purchased
at a price other than face value, if requested by the Trust;
(viii) Update fund accounting system to reflect rate changes, as
received from a Portfolio's investment adviser, on variable
interest rate instruments;
(ix) Post Portfolio transactions to appropriate categories;
(x) Accrue expenses of each Portfolio according to instructions
received from the Trust's administrator;
(xi) Determine the outstanding receivables and payables for all (1)
security trades, (2) Portfolio share transactions and (3) income
and expense accounts;
(xii)Provide accounting reports in connection with the Trust's
regular annual audit and other audits and examinations by
regulatory agencies; and
(xiii) Provide such periodic reports as the parties shall agree upon.
(c) SPECIAL REPORTS AND SERVICES.
(i) Ultimus may provide additional special reports upon the request
of the Trust or a Portfolio's investment adviser, which may
result in an additional charge, the amount of which shall be
agreed upon between the parties.
(ii) Ultimus may provide such other similar services with respect to a
Portfolio as may be reasonably requested by the Trust, which may
result in an additional charge, the amount of which shall be
agreed upon between the parties.
(d) ADDITIONAL ACCOUNTING SERVICES.
Ultimus shall also perform the following additional accounting services for
each Portfolio:
(i) Provide monthly (or as frequently as may reasonably be requested
by the Trust or a Portfolio's investment adviser) a set of
financial statements for each Portfolio as described below, upon
request of the Trust:
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Security Purchases and Sales Journals
Portfolio Holdings Reports
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(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal excise tax
returns;
(B) the Trust's applicable regulatory reports with the SEC
(including, but not limited to, Form N-SAR and Form N-CSR);
(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) Ultimus' 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.
Ultimus may, at its expense and upon prior written approval from the Trust,
subcontract with any entity or person concerning the provision of the services
contemplated hereunder; provided, however, that Ultimus shall not be relieved of
any of its obligations under this Agreement by the appointment of such
subcontractor and provided further, that Ultimus 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.
The Trust shall pay for the services to be provided by Ultimus under this
Agreement in accordance with, and in the manner set forth in, Schedule B
attached hereto, as such Schedule may be amended from time to time.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, Ultimus' compensation for that
part of the month in which the Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above. Payment
of Ultimus' compensation for the preceding month shall be made promptly.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Ultimus the fees described in Schedule B attached
hereto, the Trust agrees to reimburse Ultimus for its reasonable out-of-pocket
expenses in providing services hereunder, including without limitation the
following:
(a) All freight and other delivery and bonding charges incurred by Ultimus
in delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by Ultimus in communication
with the Trust, the Trust's investment adviser or custodian, dealers
or others as required for Ultimus to perform the services to be
provided hereunder;
(c) The cost of obtaining security market quotes;
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(d) All expenses incurred in connection with any custom
programming or systems modifications required to provide any
special reports or services requested by the Trust;
(e) Any expenses Ultimus shall incur at the written direction of
an officer of the Trust thereunto duly authorized other than
an employee or other affiliated person of Ultimus who may
otherwise be named as an authorized representative of the
Trust for certain purposes; and
(f) Any additional expenses reasonably incurred by Ultimus in the
performance of its duties and obligations under this
Agreement.
Ultimus agrees that it shall obtain approval from the Trust prior to
incurring any out-of-pocket expense that is expected to exceed $500.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Portfolio as of the
date first written above (or, if a particular Portfolio is not in existence on
that date, on the date such Portfolio commences operation) (the "Effective
Date").
6. TERM OF THIS AGREEMENT.
The term of this Agreement shall continue in effect, unless earlier
terminated by either party hereto as provided hereunder, for a period of two
years. Thereafter, unless otherwise terminated as provided herein, this
Agreement shall be renewed automatically for successive one-year periods.
This Agreement may be terminated without penalty: (i) by provision of sixty
(60) days' written notice; (ii) by mutual agreement of the parties; or (iii) for
"cause" (as defined herein) upon the provision of thirty (30) days' advance
written notice by the party alleging cause.
For purposes of this Agreement, "cause" shall mean: (i) a material breach
of this Agreement that has not been remedied within thirty (30) days following
written notice of such breach from the non-breaching party, (ii) a series of
negligent acts or omissions or breaches of this Agreement which, in the
aggregate, constitute in the reasonable judgment of the Trust, a serious failure
to perform satisfactorily Ultimus' obligations hereunder; (iii) 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; or (iv) 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 the modification or alteration of the rights of
creditors.
Notwithstanding the foregoing, after such termination and for so long as
Ultimus, 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 without limitation
the provisions dealing with indemnification, shall continue in full force and
effect. Compensation due Ultimus and unpaid by the Trust upon such
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termination shall be immediately due and payable upon and notwithstanding such
termination. Ultimus shall be entitled to collect from the Trust, in addition to
the compensation described in Schedule B, the amount of all of Ultimus'
reasonable cash disbursements for services in connection with Ultimus'
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.
7. STANDARD OF CARE.
The duties of Ultimus shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against Ultimus
hereunder. Ultimus shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in performing the
services provided for under this Agreement. Ultimus shall be liable for any
damages arising directly or indirectly out of Ultimus' failure to perform its
duties under this Agreement to the extent such damages arise directly or
indirectly out of Ultimus' willful misfeasance, bad faith, negligence in the
performance of its duties, or reckless disregard of its obligations and duties
hereunder. (As used in this Article 7, the term "Ultimus" shall include
directors, officers, employees and other agents of Ultimus as well as Ultimus
itself.)
Without limiting the generality of the foregoing or any other provision of
this Agreement, (i) Ultimus shall not be liable for losses beyond its reasonable
control, provided that Ultimus has acted in accordance with the standard of care
set forth above; and (ii) Ultimus shall not be liable for the validity or
invalidity or authority or lack thereof of any instruction, notice or other
instrument that Ultimus reasonably believes to be genuine and to have been
signed or presented by a duly authorized representative of the Trust (other than
an employee or other affiliated persons of Ultimus who may otherwise be named as
an authorized representative of the Trust for certain purposes).
Ultimus may apply to the Trust at any time for instructions and may consult
with counsel for the Trust or its own counsel and with accountants and other
experts with respect to any matter arising in connection with Ultimus' duties
hereunder, and Ultimus shall not be liable or accountable for any action taken
or omitted by it in good faith in accordance with such instruction or with the
reasonable opinion of such counsel, accountants or other experts qualified to
render such opinion.
8. INDEMNIFICATION.
The Trust agrees to indemnify and hold harmless Ultimus from and against
any and all actions, suits, claims, losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) (collectively, "Losses") arising directly or
indirectly out of any action or omission to act which Ultimus takes (i) at any
request or on the direction of or in reliance on the reasonable advice of the
Trust, (ii) upon any instruction, notice or other instrument that Ultimus
reasonably believes to be genuine and to have been signed or presented by a duly
authorized representative of the Trust (other than an employee or other
affiliated person of Ultimus who may otherwise be named as an authorized
representative of the Trust for certain purposes) or (iii) on its own
initiative, in good faith and in accordance with the standard of care set forth
herein, in connection with the performance of its duties or obligations
hereunder; provided, however that the Trust shall have no obligation to
indemnify or reimburse Ultimus under this Article 8 to the extent that Ultimus
is entitled to reimbursement or indemnification for such Losses under any
liability insurance policy described in this Agreement or otherwise.
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Ultimus shall not be indemnified against or held harmless from any Losses
arising directly or indirectly out of Ultimus' own willful misfeasance, bad
faith, negligence in the performance of its duties, or reckless disregard of its
obligations and duties hereunder. (As used in this Article 8, the term "Ultimus"
shall include directors, officers, employees and other agents of Ultimus as well
as Ultimus itself.)
9. RECORD RETENTION AND CONFIDENTIALITY.
Ultimus shall keep and maintain on behalf of the Trust all books and
records which the Trust and Ultimus 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.
Ultimus 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 SEC at reasonable times and otherwise to keep confidential all
books and records and other information relative to the Trust and its
shareholders; except when required to divulge such information by
duly-constituted authorities or court process.
10. FORCE MAJEURE.
Ultimus 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, including acts of civil or military authority,
national emergencies, fire, flood, catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply;
provided, however, that upon the occurrence of any such event, Ultimus shall use
commercially reasonable best efforts to limit such damages, loss of data, delays
or other losses.
11. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
All records and other data except computer programs and procedures
developed to perform services required to be provided by Ultimus are the
exclusive property of the Trust and all such records and data will be furnished
to the Trust in appropriate form as soon as practicable after termination of
this Agreement for any reason. Ultimus may at its option at any time, and shall
promptly upon the Trust's demand, turn over to the Trust and cease to retain
Trust files, records and documents created and maintained by Ultimus pursuant to
this Agreement which are no longer needed by Ultimus in the performance of its
services or for its legal protection. If not so turned over to the Trust, (1)
such documents and records will be copied and complete copies shall be delivered
to the Trust by Ultimus as soon as reasonably practical, and (2) the original
documents and records will be retained by Ultimus 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.
12. REPRESENTATIONS OF THE TRUST.
The Trust certifies to Ultimus that: (1) as of the close of business on the
Effective Date, each Portfolio 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
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and other laws of general application affecting the rights and remedies of
creditors and secured parties.
13. REPRESENTATIONS OF ULTIMUS.
Ultimus represents and warrants that: (1) the various procedures and
systems which Ultimus 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 Ultimus'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, (2) this Agreement has been
duly authorized by Ultimus and, when executed and delivered by Ultimus, will
constitute a legal, valid and binding obligation of Ultimus, enforceable against
Ultimus 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, (3) it is duly registered
with the appropriate regulatory agency as a transfer agent and such registration
will remain in full force and effect for the duration of this Agreement, and (4)
it has and will continue to have access to the necessary facilities, equipment
and personnel to perform its duties and obligations under this Agreement.
14. INSURANCE.
Ultimus shall furnish the Trust with pertinent information concerning the
professional liability insurance coverage that it maintains. Such information
shall include the identity of the insurance carrier(s), coverage levels and
deductible amounts. Ultimus 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. Ultimus 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
Ultimus under its insurance coverage.
Further, Ultimus shall furnish the Trust with a Certificate of Insurance or
a copy of the policy evidencing such coverage, which insurance shall name the
Trust as an Insured Investment Company under the policy, and shall contain a
60-day "cancellation" clause and a "changes in exposure" clause. Such policy
shall be primary coverage as between Ultimus and the Trust and such insurance
coverage shall not limit the liability of Ultimus to the Trust for any damages.
In the event of any payment of damages to the Trust, Ultimus hereby waives any
right to be subrogated to the rights of the Trust against any third party.
15. INFORMATION TO BE FURNISHED BY THE TRUST.
The Trust has furnished to Ultimus the following:
(a) Copies of the Declaration of 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:
(1) The Trust's Bylaws and any amendments thereto; and
(2) Certified copies of resolutions of the Trustees covering the
approval of this Agreement, authorization of a specified
officer of the Trust to execute
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and deliver this Agreement and authorization for specified
officers of the Trust to instruct Ultimus thereunder.
(c) A list of all the officers of the Trust, together with specimen
signatures of those officers who are authorized to instruct
Ultimus in all matters.
(d) Copies of the Prospectus and Statement of Additional Information
for each Portfolio.
16. AMENDMENTS TO AGREEMENT.
This Agreement, or any term thereof, may be changed or waived only by
written amendment signed by the party against whom enforcement of such change or
waiver is sought.
For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and Ultimus
may conclusively assume that any special procedure which has been approved by
the Trust does not conflict with or violate any requirements of its Declaration
of Trust or then current prospectuses, or any rule, regulation or requirement of
any regulatory body.
17. COMPLIANCE WITH LAW.
Except for the obligations of Ultimus otherwise set forth herein, 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. 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.
18. NOTICES.
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 Trust, at 0000 Xxxxx Xxxxxxxxx,
Xxxxxx, Xxxxx Xxxxxxxx 00000, and if to Ultimus, at 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxx 00000, Attn: Xxxxxx X. Xxxxxx; or at such other address as
such party may from time to time specify in writing to the other party pursuant
to this Section.
19. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party, and any assignment in violation of this section will be void. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
20. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of New York without giving effect to the provisions thereof relating to
conflicts of law. To the extent that the
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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.
21. LIMITATION OF LIABILITY.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees of the Trust and
not individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders individually but are binding
only upon the assets and property of the Trust (or if the matter relates only to
a particular Portfolio, that Portfolio), and Ultimus shall look only to the
assets of the Trust, or the particular Portfolio, for the satisfaction of such
obligations.
22. MULTIPLE ORIGINALS.
This Agreement may be executed in two or more counterparts, 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
XXX XXXXX TRUST
By: /s/ Xxxxx X. Xxxxx, Xx.
-----------------------------
Title: President
ULTIMUS FUND SOLUTIONS, LLC
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Title: President
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
XXX XXXXX TRUST
AND
ULTIMUS FUND SOLUTIONS, LLC
FUND PORTFOLIOS
---------------
Xxx Xxxxx Fund
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SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
XXX XXXXX TRUST
AND
ULTIMUS FUND SOLUTIONS, LLC
FEES AND EXPENSES
-----------------
FEES:
Ultimus shall be entitled to receive a fee from the Trust on the first
business day following the end of each month, or at such time(s) as Ultimus
shall request and the parties hereto shall agree, a fee computed with respect to
each Portfolio as follows:
BASE FEE PER YEAR FOR FUND WITH:
One class of shares = $24,000 ($2,000 per month), or
Two classes of shares = $30,000 ($2,500 per month), or
Three classes of shares = $36,000 ($3,000 per month), plus
ASSET BASED FEE AT AN ANNUAL RATE OF OF:
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AVERAGE DAILY NET ASSETS ASSET BASED FEE
-------------------------------------------------------------------------
First $500 million .010%
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In excess of $500 million .005%
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The foregoing fees include 100 portfolio trades per month (exclusive of
daily cash investments). For Portfolios with more than 100 trades in a month,
Ultimus will charge $5.00 for each trade in excess of 100.
For Performance Reporting (including After-Tax Performance Reporting),
Ultimus charges each Portfolio a fee of $250 per month.
OUT-OF-POCKET EXPENSES:
The fees set forth above shall be in addition to the payment of reasonable
out-of-pocket expenses, as provided for in Section 4 of this Agreement.
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