Exhibit 23(h)(ii)
FORM OF
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of ________, 2002 by and between PFPC INC., a
Massachusetts corporation ("PFPC"), and SMITHGRAHAM INSTITUTIONAL FUNDS a
Delaware business trust (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide administration and
accounting services to its investment portfolios listed on Exhibit A attached
hereto and made a part hereof, as such Exhibit A may be amended from time to
time (each a "Portfolio"), and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound hereby the parties
hereto agree as follows:
1. Definitions. As Used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund's Board of Trustees to give
Oral Instructions and Written Instructions on behalf of the Fund.
An Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by both
parties hereto.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by PFPC from
an Authorized Person or from a person reasonably believed by PFPC
to be an Authorized Person. PFPC may, in its sole discretion in
each separate instance, consider and rely upon instructions it
receives from an Authorized Person via electronic mail as Oral
Instructions.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(h) "Shares" means the shares of beneficial interest of any series or
class of the Fund.
(i) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to provide administration
and accounting services to each of the Portfolios, in accordance with
the terms set forth in this Agreement. PFPC accepts such appointment
and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) at PFPC's request, certified or authenticated copies of the
resolutions of the Fund's Board of Trustees, approving the
appointment of PFPC or its affiliates to provide services to each
Portfolio and approving this Agreement;
(b) a copy of Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement or agreements;
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(d) a copy of the distribution/underwriting agreement with respect to
each class of Shares representing an interest in a Portfolio;
(e) a copy of each additional administration agreement with respect to
a Portfolio;
(f) a copy of each distribution and/or shareholder servicing plan and
agreement made in respect of the Fund or a Portfolio; and
(g) copies (certified or authenticated, where applicable) of any and
all amendments or supplements to the foregoing.
4. Compliance with Rules and Regulations.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be
performed by PFPC hereunder. Except as specifically set forth herein,
PFPC assumes no responsibility for such compliance by the Fund or other
entity.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives from an Authorized Person (or from
a person reasonably believed by PFPC to be an Authorized Person)
pursuant to this Agreement. PFPC may assume that any Oral
Instruction or Written Instruction received hereunder is not in
any way inconsistent with the provisions of organizational
documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Trustees or of the Fund's
shareholders, unless and until PFPC receives Written Instructions
to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions (except where such Oral
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Instructions are given by PFPC or its affiliates) so that PFPC
receives the Written Instructions by the close of business on
the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not
received by PFPC or differ from the Oral Instructions shall in
no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions or PFPC's
ability to rely upon such Oral Instructions.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or
advice, including Oral Instructions or Written Instructions,
from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC may request advice from counsel of its own
choosing (who may be counsel for the Fund, the Fund's
investment adviser or PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions or advice or Oral Instructions or Written
Instructions PFPC receives from the Fund and the advice PFPC
receives from counsel, PFPC may rely upon and follow the
advice of counsel.
(d) Protection of PFPC. PFPC shall be indemnified by the Fund and
without liability for any action PFPC takes or does not take
in reliance upon directions or advice or Oral Instructions or
Written Instructions PFPC receives from or on behalf of the
Fund or from counsel and which PFPC believes, in good faith,
to be consistent
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with those directions or advice and Oral Instructions or
Written Instructions. Nothing in this section shall be
construed so as to impose an obligation upon PFPC (i) to seek
such directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written
Instructions.
7. Records; Visits.
(a) The books and records pertaining to the Fund and the
Portfolios which are in the possession or under the control of
PFPC shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws, rules and regulations.
The Fund and Authorized Persons shall have access to such
books and records at all times during PFPC's normal business
hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by PFPC to the Fund
or to an Authorized Person, at the Fund's expense.
(b) PFPC shall keep the following records:
(i) all books and records with respect to each
Portfolio's books of account;
(ii) records of each Portfolio's securities transactions;
and
(iii) all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act in
connection with the services provided hereunder.
8. Confidentiality. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that
is competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing
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strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Fund or PFPC, their respective subsidiaries and
affiliated companies and the customers, clients and suppliers of any of
them; (b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and
secret in the sense that its confidentiality affords the Fund or PFPC a
competitive advantage over its competitors; (c) all confidential or
proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be subject to such
confidentiality obligations if it: (a) is already known to the
receiving party at the time it is obtained; (b) is or becomes publicly
known or available through no wrongful act of the receiving party; (c)
is rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of confidentiality;
(d) is released by the protected party to a third party without
restriction; (e) is required to be disclosed by the receiving party
pursuant to a requirement of a court order, subpoena, governmental or
regulatory agency or law (provided the receiving party will provide the
other party written notice of such requirement, to the extent such
notice is permitted); (f) is relevant to the defense of any claim or
cause of action asserted against the receiving party; or (g) has been
or is independently developed or obtained by the receiving party.
9. Liaison with Accountants. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses,
fiscal year summaries, and other
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audit-related schedules with respect to each Portfolio. PFPC shall take
all reasonable action in the performance of its duties under this
Agreement to assure that the necessary information is made available to
such accountants for the expression of their opinion, as required by
the Fund.
10. PFPC System. PFPC shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC in connection with the services provided by PFPC to
the Fund.
11. Disaster Recovery. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In the event of
equipment failures, PFPC shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions. PFPC shall
have no liability with respect to the loss of data or service
interruptions caused by equipment failure, provided such loss or
interruption is not caused by PFPC's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
12. Compensation. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund, on behalf of each Portfolio, will pay
to PFPC a fee or fees as may be agreed to in writing by the Fund and
PFPC.
13. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify, defend and hold harmless PFPC and its affiliates, including
their respective officers, directors, agents and employees, from all
taxes, charges, expenses, assessments, claims and liabilities
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(including, without limitation, attorneys' fees and disbursements and
liabilities arising under the Securities Laws and any state and foreign
securities and blue sky laws) arising directly or indirectly from any
action or omission to act which PFPC takes in connection with the
provision of services to the Fund. Neither PFPC, nor any of its
affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) caused by PFPC's or its affiliates' own
willful misfeasance, bad faith, gross negligence or reckless disregard
in the performance of PFPC's activities under this Agreement. Any
amounts payable by the Fund hereunder shall be satisfied only against
the relevant Portfolio's assets and not against the assets of any other
investment portfolio of the Fund. The provisions of this Section 13
shall survive termination of this Agreement.
14. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action hereunder on
behalf of the Fund or any Portfolio except as specifically set
forth herein or as may be specifically agreed to by PFPC and
the Fund in a written amendment hereto. PFPC shall be
obligated to exercise care and diligence in the performance of
its duties hereunder and to act in good faith in performing
services provided for under this Agreement. PFPC shall be
liable only for any damages arising out of PFPC's failure to
perform its duties under this Agreement to the extent such
damages arise out of PFPC's willful misfeasance, bad faith,
gross negligence or reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC shall not be liable for losses, delays, failure,
errors, interruption or loss of data occurring directly or
indirectly by reason of circumstances beyond its reasonable
control,
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including without limitation acts of God; action or inaction
of civil or military authority; public enemy; war; terrorism;
riot; fire; flood; sabotage; epidemics; labor disputes; civil
commotion; interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by a
third party; and (ii) PFPC shall not be under any duty or
obligation to inquire into and shall not be liable for the
validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
(i) neither PFPC nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether
or not the likelihood of such losses or damages was known by
PFPC or its affiliates and (ii) PFPC's cumulative liability to
the Fund for all losses, claims, suits, controversies,
breaches or damages for any cause whatsoever (including but
not limited to those arising out of or related to this
Agreement) and regardless of the form of action or legal
theory shall not exceed the lesser of $100,000 or the fees
received by PFPC for services provided hereunder during the 12
months immediately prior to the date of such loss or damage.
(d) No party may assert a cause of action against PFPC or any of
its affiliates that allegedly occurred more than 12 months
immediately prior to the filing of the suit (or, if
applicable, commencement of arbitration proceedings) alleging
such cause of action.
(e) Each party shall have a duty to mitigate damages for which the
other party may
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become responsible.
(f) The provisions of this Section 14 shall survive termination of
this Agreement.
15. Description of Accounting Services on a Continuous Basis.
PFPC will perform the following accounting services with respect to
each Portfolio:
(i) Journalize investment, capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from
the investment adviser for a Portfolio (the "Adviser") and
transmit trades to the Fund's custodian (the "Custodian") for
proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with the
Custodian, and provide the Adviser with the beginning cash
balance available for investment purposes;
(vi) Update the cash availability throughout the day as required by
the Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities
and the Statement of Operations;
(viii) Calculate various contractual expenses (e.g., advisory and
custody fees);
(ix) Monitor the expense accruals and notify an officer of the Fund
of any proposed adjustments;
(x) Control all disbursements and authorize such disbursements
upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing
services approved by the Adviser, or if such quotes are
unavailable, then obtain such prices from the Adviser, and in
either case calculate the market value of each Portfolio's
Investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to
the Adviser;
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(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which will include the
following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
16. Description of Administration Services on a Continuous Basis.
PFPC will perform the following administration services with respect to
each Portfolio:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund
statistical data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and state
tax returns;
(v) Monitor each Portfolio's status as a regulated investment
company under Sub-chapter M of the Internal Revenue Code of
1986, as amended;
(vi) Prepare and file with the SEC the Fund's annual, semi-annual,
and quarterly shareholder reports;
(vii) Prepare, coordinate with the Fund's counsel and file with the
SEC Post-Effective Amendments to the Fund's Registration
Statement, prepare reports to the SEC including, the
preparation and filing of (i) semi-annual reports on Form
N-SAR and (ii) Notices pursuant to Rule 24f-2;
(viii) Assist in the preparation of notices of Annual or Special
Meetings of Shareholders and Proxy materials relating to such
meetings;
(ix) Assist in obtaining the fidelity bond and directors' and
officers'/errors and omissions insurance policies for the Fund
in accordance with the requirements of Rule 17g-1 and
17d-1(d)(7) under the 1940 Act as such bond and policies are
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approved by the Fund's Board of Trustees;
(x) Monitor the Fund's assets to assure adequate fidelity bond
coverage is maintained;
(xi) Draft agendas, resolutions and materials for quarterly and
special Board meetings;
(xii) Coordinate the preparation, assembly and mailing of Board
materials;
(xiii) Maintain the Fund's corporate calendar to assure compliance
with various filing and Board approval deadlines;
(xiv) Coordinate contractual relationships and communications
between the Fund and its contractual service providers; and
(xv) Monitor the Fund's compliance with the amounts and conditions
of each state qualification.
17. Duration and Termination.
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of four (4) years (the
"Initial term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year
("Renewal Term") each, unless the Fund or PFPC provides
written notice to the other of its intent not to renew. Such
notice must be received not less then ninety (90) days prior
to the expiration of the Initial term or the then current
Renewal Term.
(c) In the event a termination notice is given by the Fund, all
expenses associated with the movement of records and material
and conversion thereof to a successor service provider will be
borne by the Fund.
(d) If the party hereto is guilty of a material failure to perform
its duties and obligations hereunder (a "Defaulting Party")
the other party (the "Non-Defaulting Party") may give written
notice thereof to the Defaulting Party, and if such material
breach shall
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not have been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may terminate this
Agreement by giving thirty (30) days written notice of such termination
of the Defaulting Party. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting party of any other rights it might have under this
Agreement or otherwise against the Defaulting Party.
18. Notices. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President; (b) if to
the Fund, at ____________, Attention:___________ or (c) if to neither
of the foregoing, at such other address as shall have been given by
like notice to the sender of any such notice or other communication by
the other party. If notice is sent by confirming telegram, cable, telex
or facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed
to have been given three days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it
is delivered.
19. Amendments. 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.
20. Assignment. PFPC may assign its rights hereunder to any majority-owned
direct or indirect subsidiary of PFPC or of The PNC Financial Services
Group, Inc., provided that PFPC gives the Fund 30 days prior written
notice of such assignment.
21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the
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same instrument.
22. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
23. Miscellaneous.
(a) Notwithstanding anything in this Agreement to the contrary,
the Fund agrees not to make any modifications to its
registration statement or adopt any policies which would
affect materially the obligations or responsibilities of PFPC
hereunder without the prior written approval of PFPC, which
approval shall not be unreasonably withheld or delayed.
(b) Except as expressly provided in this Agreement, PFPC hereby
disclaims all representations and warranties, express or
implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose
or otherwise (irrespective of any course of dealing, custom or
usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents
their agreement, if any, with respect to delegated duties. 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
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construction or effect. Notwithstanding any provision hereof,
the services of PFPC are not, nor shall they be, construed as
constituting legal advice or the provision of legal services
for or on behalf of the Fund or any other person.
(d) This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(e) 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.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors
and permitted assigns.
(f) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such
party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:_______________________
Title:____________________
SMITHGRAHAM INSTITUTIONAL FUNDS
By:_______________________
Title:____________________
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EXHIBIT A
THIS EXHIBIT A, dated as of _________, 2002 is Exhibit A to that
certain Administration and Accounting Services Agreement dated as of ________,
2002 between PFPC Inc. and SmithGraham Institutional Funds.
PORTFOLIOS
SG Government Money Market Fund
SG Prime Money Market Fund
SG Yield Plus Fund
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