SENIOR FUNDS(TM)
ACCOUNTING SERVICES AGREEMENT
THIS ACCOUNTING SERVICES AGREEMENT (the "Agreement") is made as of the ___
day of _______, 2001, by and between SENIOR FUNDS(TM) (the "Trust"), a
Massachusetts Business Trust (the "Trust"), and FUND SERVICES, INC. d/b/a
Champion Fund Services (the "Accounting Services Agent"), a Texas corporation.
WITNESSETH THAT:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and is registering its shares of common stock under the Securities Act of 1933,
as amended (the "1933 Act") in one or more distinct series of shares (the "Fund"
or Funds");
WHEREAS, the Trust and the Accounting Services Agent desire to enter into
this Agreement pursuant to which the Accounting Services Agent will provide
portfolio accounting services to the Funds identified on Schedule A hereto, as
may be amended from time to time, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and the Accounting Services Agent,
intending to be legally bound hereby, agree as follows:
1. APPOINTMENT OF ACCOUNTING SERVICES AGENT. The Trust hereby appoints
the Accounting Services Agent to perform the services described in this
Agreement for the Funds identified on Schedule A, and the Accounting Services
Agent hereby accepts such appointment. The Accounting Services Agent shall act
under such appointment pursuant to the terms and conditions hereinafter set
forth.
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2. FUND DOCUMENTS. The Trust has provided to the Accounting Services
Agent, properly certified or authenticated copies of the following Trust related
documents in effect on the date hereof: the Trust's organizational documents,
including Indenture of Trust and By-Laws; the Trust's Registration Statement on
Form N-1A, including all exhibits thereto; the Trust's Prospectuses and
Statements of Additional Information; all contracts with the Trust's investment
adviser(s), custodian, administrator, transfer agent/shareholder servicing
agent, and distributor; if applicable, notice filed with or granted by the
Commodity Futures Trading Commission relating to the Trust's status as a
commodity pool operator; and resolutions of the Trust's Board of Trustees
authorizing the appointment of the Accounting Services Agent and approving this
Agreement (members of the Board of Trustees being referred to herein as
"Trustees"). The Trust will promptly provide to the Accounting Services Agent
copies, properly certified or authenticated, of all additions, amendments or
supplements to the foregoing, if any.
3. FUND ACCOUNTING SERVICES. The Accounting Services Agent shall provide
the Fund accounting services set forth on Schedule B hereto, as may be amended
from time to time. The Trust shall provide, and shall cause its investment
adviser(s), custodian, transfer agent/shareholder servicing agent, distributor,
legal counsel and independent public accountants to cooperate with the
Accounting Services Agent and to provide it with, such information, documents
and advice as the Accounting Services Agent may reasonably request in order to
enable the Accounting Services Agent to perform its duties hereunder.
4. RECORDKEEPING AND OTHER INFORMATION. The Accounting Services Agent
shall create and maintain all necessary records in accordance with all
applicable laws, rules
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and regulations, including, but not limited to, records required by Section
31(a) of the 1940 Act and the rules thereunder, as the same may be amended from
time to time, relating to the various services performed by it and not otherwise
created and maintained by another party pursuant to contract with the Trust. All
records shall be the property of the Trust at all times and shall be available
for inspection and use by the Trust. Where applicable, such records shall be
maintained by the Accounting Services Agent for the periods and in the places
required by Rule 31a-2 under the 1940 Act.
5. AUDIT, INSPECTION AND VISITATION. The Accounting Services Agent shall
make available during regular business hours all records and other data created
and maintained pursuant to this Agreement for reasonable audit and inspection by
the Trust or any person retained by the Trust. Upon reasonable notice by the
Fund, the Accounting Services Agent shall make available during regular business
hours its facilities and premises employed in connection with its performance of
this Agreement for reasonable visitation by the Trust, or any person retained by
the Fund.
6. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as
otherwise provided herein, the Trust assumes full responsibility for ensuring
that the Trust complies with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended, the 1940 Act and the rules
thereunder, and any other applicable laws, rules and regulations.
7. COMPENSATION. The Trust shall pay to the Accounting Services Agent as
compensation for services rendered hereunder the annual accounting services fee
set forth in Schedule A. The fee shall be calculated and accrued daily, and paid
monthly. The Trust shall also reimburse the Accounting Services Agent for its
out-of-pocket expenses related to the performance of its duties hereunder,
including, without
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limitation, telecommunications charges, postage and delivery services, record
retention costs, reproduction charges and price quotation costs. The Trust shall
pay the Accounting Services Agent's monthly invoices for accounting services
fees and out-of-pocket expenses on the first business day following the
respective month-end. If this Agreement becomes effective subsequent to the
first day of a month or terminates before the last day of a month, the Trust
shall pay the Accounting Services Agent an accounting services fee that is
prorated for that part of the month in which this Agreement is in effect. All
rights of compensation and reimbursement under this Agreement for services
performed by the Accounting Services Agent as of the termination date shall
survive the termination of this Agreement.
8. APPOINTMENT OF AGENTS. The Accounting Services Agent may at any time
or times in its discretion, appoint (and may at any time remove) other parties
as its agent to carry out such provisions of this Agreement as the Accounting
Services Agent may from time to time direct; provided, however, that the
appointment of any such agent shall not relieve the Accounting Services Agent of
any of its responsibilities or liabilities hereunder.
9. USE OF ACCOUNTING SERVICES AGENT'S NAME. The Fund shall not use the
name of the Accounting Services Agent or any of its affiliates in the
Prospectuses, Statements of Additional Information, sales literature or other
material relating to the Trust in a manner not approved prior thereto in writing
by the Accounting Services Agent; provided, however, that the Accounting
Services Agent shall approve all uses of its and its affiliates' names that
merely refer in accurate terms to their appointments or that are required by the
Securities and Exchange Commission (the "SEC") or any state securities
commission; and further provided, that in no event shall such approval be
unreasonably withheld.
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10. USE OF THE FUND'S NAME. Neither the Accounting Services Agent nor any
of its affiliates shall use the name of the Trust or any of the Funds or
material relating to the Trust or any of the Funds on any forms (including any
checks, bank drafts or bank statements) for other than internal use in a manner
not approved prior thereto in writing by the Trust; provided, however, that the
Trust shall approve all uses of its name or the name of any of the Funds that
merely refer in accurate terms to the appointment of the Accounting Services
Agent hereunder or that are required by the SEC or any state securities
commission; and further provided, that in no event shall such approval be
unreasonably withheld.
11. LIABILITY OF ACCOUNTING SERVICES AGENT. The duties of the Accounting
Services Agent shall be limited to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Accounting Services
Agent hereunder. The Accounting Services Agent may, in connection with this
Agreement, employ agents or attorneys in fact, and shall not be liable for any
loss arising out of or in connection with its actions under this Agreement so
long as it acts in good faith and with due diligence, and is not negligent or
guilty of any willful misconduct. The Accounting Services Agent may consult
counsel to the Trust or the Trust's independent public accountants or other
experts with respect to any matter arising in connection with the Accounting
Services Agent's duties, and the Accounting Services Agent shall not be liable
for any action taken or omitted by the Accounting Services Agent in good faith
in reliance on the oral or written advice of such counsel, accountants or other
experts. The Accounting Services Agent shall not be liable for any action taken
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or omitted in reliance on the oral or written instruction, authorization,
approval or information provided to the Accounting Services Agent by any person
reasonably believed by the Accounting Services Agent to be authorized by the
Trust to give such instruction, authorization, approval or information. The
Accounting Services Agent shall not be liable for any loss, liability, damage or
cost arising out of the inaccuracy of prices quoted or corporate action
information supplied by any pricing service or the Trust and used by the
Accounting Services Agent in calculating the daily net asset value of the Trust.
Moreover, the Accounting Services Agent shall have no responsibility or duty to
include information or valuations to be provided by the Trust in any computation
unless and until it is timely supplied to the Accounting Services Agent in
useful form and shall have no duty to gather or record corporate action
information not supplied by the Trust, custodian or pricing service. The
Accounting Services Agent shall not be liable or responsible for any acts or
omissions of any predecessor accounting services agent or any other persons
having responsibility for matters to which this Agreement relates prior to the
effective date of this Agreement nor shall the Accounting Services Agent be
responsible for reviewing any such acts or omissions. Any person, even though
also an officer, trustee, employee or agent of the Accounting Services Agent or
any of its affiliates, who may be or become an officer or Trustee of the Trust,
shall be deemed, when rendering services to the Trust as such officer or Trustee
to be rendering such services to or acting solely for the Trust and not as an
officer, trustee, employee or agent or one under the control or direction of the
Accounting Services Agent or any of its affiliates, even though paid by one of
those entities. As used in this Section 12 (except the preceding sentence) and
in Section 13, the term "Accounting Services Agent" shall include directors,
officers, employees and other agents of the Accounting Services Agent.
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12. INDEMNIFICATION. The Trust hereby agrees to indemnify and hold
harmless the Accounting Services Agent from and against all claims, demands,
expenses (including attorney's fees) and liabilities, whether with or without
basis in fact or law, of any and every nature which the Accounting Services
Agent may sustain or incur or which may be asserted against the Accounting
Services Agent by any person by reason of, or as a result of: (i) any action
taken or omitted to be taken by the Accounting Services Agent in good faith in
reliance upon any certificate, instrument, order or stock certificate believed
by it to be genuine and to be signed, countersigned or executed by any duly
authorized person, upon the oral instructions or written instructions of an
authorized person of the Trust or upon the opinion of legal counsel for the
Trust or its counsel; or (ii) any action taken or permitted to be taken by the
Accounting Services Agent in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of the same even though
the same may thereafter have been altered, changed, amended or repealed.
However, indemnification hereunder shall not apply to actions or omissions of
the Accounting Services Agent or its directors, officers, employees or agents in
cases of its own negligence, willful misconduct, bad faith, or reckless
disregard of its or their own duties hereunder. The right to indemnity hereunder
shall include the right to advancement of defense expenses in the event of any
pending or threatened litigation; provided, however, that the Accounting
Services Agent shall agree that any advancement of expenses shall be returned to
the Trust if it is ultimately determined by an administrative or judicial
tribunal that the expenses (and related liability, if any) resulted from the
Administrator's own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this Agreement.
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The Accounting Services Agent shall give prompt written notice to the Trust
of a written assertion or claim of any threatened or pending legal proceeding
which may be subject to indemnity under this Section; provided, however, that
failure to notify the Trust of such written assertion or claim shall not operate
to relieve the Trust of any liability arising hereunder. The Trust shall be
entitled, if it so elects, to assume the defense of any suit brought to enforce
a claim subject to this Indemnity, and such defense shall be conducted by
counsel chosen by the Trust and satisfactory to the Accounting Services Agent;
provided, however, that if the defendants include both the Accounting Services
Agent and the Trust, and the Accounting Services Agent shall have reasonably
concluded that there may be one or more legal defenses available to it which are
different from or additional to those available to the Trust ("conflict of
interest"), the Trust shall not have the right to elect to defend such claim on
behalf of the Accounting Services Agent, and the Accounting Services Agent shall
have the right to select separate counsel to defend such claim on behalf of the
Accounting Services Agent. In the event that the Trust elects to assume the
defense of any claim pursuant to the preceding sentence and retains counsel
satisfactory to the Accounting Services Agent, the Accounting Services Agent
shall bear the fees and expenses of additional counsel retained by it, except
for reasonable investigation costs which shall be borne by the Trust. If the
Trust (i) does not elect to assume the defense of a claim, (ii) elects to assume
the defense of a claim but chooses counsel that is not satisfactory to the
Accounting Services Agent, or (iii) has no right to assume the defense of a
claim because of a conflict of interest, the Trust shall advance or reimburse
the Accounting Services Agent, at the election of the Accounting Services Agent,
reasonable fees and expenses of any counsel retained by the Accounting Services
Agent, including reasonable investigation costs.
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13. SCOPE OF DUTIES. The Accounting Services Agent and the Trust shall
regularly consult with each other regarding the Accounting Services Agent's
performance of its obligations and its compensation under the foregoing
provisions. In connection therewith, the Trust shall submit to the Accounting
Services Agent at a reasonable time in advance of filing with the SEC copies of
any amended or supplemented Registration Statement of the Trust (including
exhibits) under the 1940 Act and the 1933 Act, and, at a reasonable time in
advance of their proposed use, copies of any amended or supplemented forms
relating to any plan, program or service offered by the Trust. Any change in
such materials that would require any change in the Accounting Services Agent's
obligations under the foregoing provisions shall be subject to the Accounting
Services Agent's approval. In the event that a change in such documents or in
the procedures contained therein increases the cost or burden to the Accounting
Services Agent of performing its obligations hereunder, the Accounting Services
Agent shall be entitled to receive reasonable compensation therefor.
14. DURATION. This Agreement shall become effective as of the date first
written above and shall continue in force for two years from that date (the
"Initial Term"). Thereafter, this Agreement shall continue in force from year to
year (each a "Successive Term"), provided continuance after the Initial Term is
approved at least annually by (i) the vote of a majority of the Trustees of the
Trust and (ii) the vote of a majority of those Trustees of the Trust who are not
"interested persons" of the Trust, and who are not parties to this Agreement or
"interested persons" of any such party, cast at a meeting called for the purpose
of voting on the approval.
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15. TERMINATION. This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of its
assignment.
b. Either the Trust or the Accounting Services Agent may terminate
this Agreement without penalty prior to the commencement of any Successive Term
by providing to the other party 90 days prior written notice of such
termination.
c. Either party (the "terminating party") may terminate this
Agreement during the Initial Term or any Successive Term in the event of a
material breach of this Agreement by the other party (the "breaching party"),
provided that the terminating party has given to the breaching party notice of
such breach, and the breaching party has not remedied such breach within 45 days
after receipt of such notice
Upon the termination of this Agreement, the Trust shall pay to the
Accounting Services Agent such compensation and out-of-pocket expenses as may be
payable for the period prior to the effective date of such termination. In the
event that the Trust designates a successor to any of the Accounting Services
Agent's obligations hereunder, the Accounting Services Agent shall, at the
expense and direction of the Trust, transfer to such successor all relevant
books, records and other data established or maintained by the Accounting
Services Agent under the foregoing provisions.
Sections 7, 9, 10, 11, 12, 15, 16, 20, 21, 22, 23, 24 and 25 shall
indefinitely survive any termination of this Agreement.
16. FORCE MAJEURE. The Accounting Services Agent shall not be liable for
any delays or errors in the performance of its obligations hereunder occurring
by reason of
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circumstances not reasonably foreseeable and beyond its control, including, but
not limited to, acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot or
failure of communication or power supply. In the event of equipment breakdowns
which are beyond the reasonable control of the Accounting Services Agent and not
primarily attributable to the failure of the Accounting Services Agent to
reasonably maintain or provide for the maintenance of such equipment, the
Accounting Services Agent shall, at no additional expense to the Trust, take
reasonable steps in good faith to minimize service interruptions, but shall have
no liability with respect thereto.
17. AMENDMENT. The terms of this Agreement shall not be waived, altered,
modified, amended or supplemented in any manner whatsoever except by a written
instrument signed by the Accounting Services Agent and the Trust.
18. NON-EXCLUSIVE SERVICES. The types of services rendered by the
Accounting Services Agent hereunder are not exclusive. The Accounting Services
Agent may render such services to any other investment company and have other
businesses and interests.
19. DEFINITIONS. As used in this Agreement, the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules enacted thereunder as now in effect or hereafter amended.
20. CONFIDENTIALITY. The Accounting Services Agent shall treat
confidentially and as proprietary information of the Trust all records and other
information relating to the Trust and prior, present or potential shareholders
and shall not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except as may be
required by administrative or judicial tribunals or as requested by the Trust.
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21. NOTICE. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section 21 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Trust:
Senior Funds(TM)
00000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxx
President and Trustee
(b) if to the Accounting Services Agent:
Fund Services, Inc.
d/b/a Champion Fund Services
00000 Xxxxxx Xxxxx, XXX 000
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx
Vice President
Or to such other respective addresses as the Trust or the Accounting Services
Agent shall designate by like notice, provided that notice of a change of
address shall be effective only upon receipt thereof.
22. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
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23. GOVERNING LAW. This Agreement shall be administered, construed and
enforced in accordance with the laws of the State of Texas to the extent that
such law is not preempted by the provisions of any law of the United States
heretofore or hereafter enacted, as the same may be amended from time to time.
24. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached
hereto) contains the entire Agreement and understanding of the parties with
respect to the subject matter hereof and supersedes all prior written or oral
agreements and understandings with respect thereto.
25. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction. This Agreement may be executed in two counterparts,
each of which taken together shall constitute one and the same instrument.
26. LIMITATION OF LIABILITY. The term "Senior Funds" means and refers to
the Trustees from time to time serving under the Master Trust Agreement of the
Trust dated December 13, 2000, as the same may subsequently thereto have been,
or subsequently hereto be, amended. It is expressly agreed that obligations of
the Trust hereunder shall not be binding upon any Trustee, Shareholder,
nominees, officers, agents or employees of the Trust, personally, but bind only
the assets and property of the Trust, as provided in the Master Trust Agreement.
The execution and delivery of this Agreement have been authorized by the
Trustees and signed by an authorized officer of the Trust, acting as such, and
neither such authorization nor such execution and delivery shall be deemed to
have been made by any of them individually or to impose any liability on any of
them
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personally, but shall bind only the assets and property of the Trust as provided
in the Master Trust Agreement. The Master Trust Agreement is on file with the
Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
SENIOR FUNDS(TM)
By: ____________________________________________
Xxxxxx X. Xxxxx, President and Trustee
FUND SERVICES, INC. (D/B/A CHAMPION FUND SERVICES)
By: ____________________________________________
Xxxxxxxx X. Xxxxxx, Vice President
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SCHEDULE A
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SENIOR FUNDS (TM)
-----------------
ACCOUNTING SERVICES FEES
------------------------
Annual Base Fee: $245,000 for the Funds and Classes of Shares listed
below, plus $30,000 for each fund in addition to those
listed below
Annual Asset Based Fee: Based on average net assets of the SENIOR FUNDS(TM)
ASSETS BASIS POINT FEE
First $100 Million 0 basis points (.00%)
Next $100 Million 8 basis points (.08%)
Next $300 Million 6 basis points (.06%)
Next $500 Million 4 basis points (.04%)
Over $1 Billion 2 basis points (.02%)
Out-of-pocket costs: Standard out-of-pocket costs including, but not limited
to price and corporate actions quotation services, bank
service charges, wire charges, postage, courier,
telephone, travel, printing, copying, filing fees,
record retention and other miscellaneous items.
Conversion cost: None
Existing Funds and Classes of Shares:
Senior U. S. Government Fund
Classes: No Load-Institutional
No Load-Retail
Senior Corporate Bond Fund
Classes: No Load-Institutional
No Load-Retail
Senior Large Cap Equity Fund
Classes: No Load-Institutional
No Load-Retail
Senior Balanced 50 Fund
Classes: No Load-Institutional
No Load-Retail
Senior Balanced 60 Fund
Classes: No Load-Institutional
No Load-Retail
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Senior Balanced 70 Fund
Classes: No Load-Institutional
No Load-Retail
Senior Money Market Fund
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SCHEDULE B
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SENIOR FUNDS(TM)
----------------
Accounting Services Provided by Fund Services, Inc.
1. Journalize each Fund's investment, capital share and income and expense
activities;
2. Verify investment buy/sell trade tickets when received from the adviser(s)
and transmit trades to the Trust's custodian for proper settlement;
3. Maintain individual ledgers for investment securities;
4. Maintain historical tax lots for each security;
5. Reconcile cash and investment balances of each Fund with the custodian, and
provide the adviser(s) with the beginning cash balance available for
investment purposes;
6. Update the cash availability throughout the day as required by the
adviser(s);
7. Post to and prepare each Fund's Statement of Assets and Liabilities and
Statement of Operations;
8. Calculate expenses payable pursuant to the Trust's various contractual
obligations;
9. Control all disbursements from the Trust on behalf of each Fund and
authorize such disbursements upon instructions of the Trust;
10. Calculate capital gains and losses;
11. Determine each Fund's net income;
12. At each Fund's respective expense, obtain security market prices or if such
market prices are not readily available, then obtain such prices from
services approved by the adviser(s), and in either case calculate the
market or fair value of each Fund's investments;
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13. Where applicable, calculate the amortized cost value of debt instruments;
14. Transmit or mail a copy of the portfolio valuations to the adviser(s);
15. Compute the net asset value of each Fund;
16. Report applicable net asset value and performance data to performance
tracking organizations;
17. Compute each Fund's yields, total returns, expense ratios and portfolio
turnover rate;
18. Prepare and monitor the expense accruals and notify Trust management of any
proposed adjustments;
19. Prepare monthly financial statements, which will include, without
limitation, the Schedule of Investments, the Statement of Assets and
Liabilities, the Statement of Operations, the Statement of Changes in Net
Assets, the Cash Statement, and the Schedule of Capital Gains and Losses;
20. Prepare monthly security transactions listings;
21. Prepare monthly broker security transactions summaries;
22. Supply various Trust and Fund statistical data as requested on an ongoing
basis;
23. Assist in the preparation of support schedules necessary for completion of
Federal and state tax returns;
24. Assist in the preparation and filing of the Trust's annual and semiannual
reports with the SEC on Form N-SAR;
25. Assist in the preparation and filing of the Trust's annual and semiannual
reports to shareholders and proxy statement;
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26. Assist with the preparation of amendments to the Trust's Registration
Statements on Form N-1A and other filings relating to the registration of
shares;
27. Monitor each Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended from time to
time ("Code");
28. Determine the amount of dividends and other distributions payable to
shareholders as necessary to, among other things, maintain the
qualification as a regulated investment company of each Fund of the Trust
under the Code;
29. Prepare monthly or quarterly reports of funds disbursed under the Trust's
Rule 12b-1 Plan(s); and
30. Provide other accounting services as may be agreed from time to time in
writing by the Trust and the Accounting Services Agent.
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