PORTFOLIO ACCOUNTING AND ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made as of the ___day ___of by and between EAI SELECT
MANAGERS EQUITY FUND, a Massachusetts business trust having its principal place
of business in Norwalk, Connecticut (the "Trust") and XXX XXX ASSOCIATES
CORPORATION ("the Administrator"), a Delaware corporation having its principal
place of business in New York, New York.
W I T N E S S E T H :
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust wishes to retain the Administrator to provide certain
accounting and administrative services, and the Administrator is willing to
furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
The Trust hereby appoints the Administrator to provide certain accounting and
administrative services to the Trust with respect to its investment portfolio
for the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to furnish the services herein set forth.
The Administrator agrees to comply with all relevant provisions of the 1940 Act
and applicable rules and regulations thereunder. The Trust currently offers
one series and one class of shares, but may, from time to time, issue separate
series or classes or classify and reclassify shares of such series or class.
The Administrator shall identify to each such Series or class of shares
property belonging to such series or class and shall prepare such reports,
confirmations and notices to the series called for under this Agreement and
shall identify the series or class of shares to which such report, confirmation
or notice pertains in the event it is engaged by the series to perform the
services herein contained respecting such series or class of shares.
2. Delivery of Documents.
The Trust will furnish the Administrator with properly certified or
authenticated copies of such documents, resolutions and agreements and any
amendments or supplements thereto, as the Administrator may, from time to time,
request.
3. Services on a Continuing Basis.
(a) The Administrator will perform the following accounting functions on an
ongoing basis:
(i) Journalize the Trust's investment, capital share and income and
expense activities;
(ii) Maintain individual ledgers for investment securities; record
all Trust security
transactions and corporate actions;
(iii) Reconcile cash and investment balances of the Trust with the
Trust's custodian, and provide the Trust with the beginning cash
balance available for investment purposes;
(iv) Post to and prepare the Trust's Statement of Assets and
Liabilities and the Statement of Operations;
(v) Calculate various contractual expenses (e.g., transfer agency
fees of the Trust);
(vi) Control all disbursements from the Trust and authorize such
disbursements upon written instructions from authorized Trust
officers and agents;
(vii) Calculate the Trust's capital gains and losses; recommend
capital gain distributions;
(viii) Determine the Trust's net income; recommend dividend
distributions;
(ix) Compute the net asset value on each business day of the Trust
utilizing security market quotes, obtained at the Trust's
expense and risk from commercially available pricing services
or, if such quotes are unavailable, obtain such prices from the
Trust's investment advisor, sub-advisor or from brokers or
market-makers in such securities; proof net asset value
calculations and security pricing daily;
(x) Deliver a copy of the daily portfolio valuation to the Trust;
(xi) Compute the Trust's yields, total return, expense ratios and
portfolio turnover rate;
(xii) Monitor the expense accruals and notify the Trust of any
proposed adjustments; and
(xiii) Prepare periodic unaudited financial statements.
(b) In addition to the accounting services described in the foregoing
Paragraph 3(a), the Administrator will provide, assist third-parties in
providing or arrange for the following services:
(i) Preparation of periodic audited financial statements;
(ii) Supplying various statistical data as requested by the Board of
Trustees of the Trust on an ongoing basis;
(iii) Preparation for execution and filing of the Trust's Federal and
state tax returns;
preparation of form 1099-MISC to independent contractors and
Trustees, as
required;
(iv) Preparation and filing the Trust's Semi-Annual Reports with the
Securities and Exchange Commission ("SEC") on Form N-SAR;
(v) Preparation and filing with the SEC the Trust's annual,
semi-annual, and quarterly shareholder reports;
(vi) Filing registration statements on Form N-1A and other filings
relating to the registration of Shares and maintenance of
federal and state registrations;
(vii) Monitoring the Trust's status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as
amended;
(viii) Reviewing periodically the Trust's fidelity bond and errors and
omission insurance coverage as required by the 1940 Act;
(ix) Preparation of materials for and recording the proceedings of,
in conjunction with the officers of the Trust, the meetings of
the Trust's Board of Trustees and the Trust's shareholders;
(x) Maintaining the Trust's existence and good standing under state
law;
(xi) Review and negotiate on behalf of the Trust normal course of
business contracts and agreements;
(xii) Assist the Trust in developing and maintaining a compliance
program; provide periodic reviews of compliance program,
potential regulatory issues, and brokerage allocation;
(xiii) Coordinate purchase and redemption orders with the Trust's
transfer agent;
(xiv) Furnishing the office space in the offices of the Administrator
and office facilities, simple business equipment, supplies,
utilities, and telephone service for administering the affairs
and investments of the Trust. These services are exclusive of
the necessary services and records of any dividend disbursing
agent, transfer agent, registrar or custodian, and accounting
and bookkeeping services which may be provided by the custodian;
(xv) Providing executive and clerical personnel for
administering the affairs of the Trust, and compensating
officers and Trustees of the Trust if such persons are also
employees of the Administrator or its affiliates, except as
provided in Paragraph 3(a);
(xvi) Preparation of any other regulatory reports to and for any
federal, local, state or foreign governmental agency or
regulatory body as may be required; and
(xvii) Monitor Trust holdings for compliance with prospectus and SAI
investment restrictions and assist in preparation of periodic
compliance reports (i.e., 12 d-3 procedures).
(c) The Administrator shall provide such other services and assistance
relating to the affairs of the Trust as the Trust or the Trust's
investment advisor may, from time to time, reasonably request.
(d) In carrying out its duties hereunder, as well as any other activities
undertaken on behalf of the Trust pursuant to this Agreement, the
Administrator shall at all times be subject to the control and
direction of the Board of Trustees of the Trust.
4. Expenses of the Administrator and the Trust.
(a) Expenses of the Administrator.
The Administrator shall bear the ordinary and usual expenses of
providing the services set forth in Paragraph 3(a), 5 (except to the
extent provided otherwise therein) of this Agreement (except such
expenses which are expressly excluded) and in Paragraph 3(b) (iv) -
(xi), (xiii) -(xv), (xvii), which shall include the salary costs and
related expenses of the Administrator's employees, but shall exclude
all reasonable out-of-pocket expenses incurred by or on behalf of the
Administrator for the benefit of the Trust. All costs and expenses not
expressly assumed by the Administrator and all extraordinary expenses
associated with the services hereunder shall be borne by the Trust or
series thereof.
(b) Expenses of the Trust.
The Administrator shall be responsible for providing or arranging for a
third party to provide the services set forth herein. Unless expressly
set forth in this Agreement the Administrator shall not bear the
responsibility for, or expenses associated with, operational,
accounting or administrative services on behalf of the Trust, which
expenses are to be borne by the Trust such expenses include, without
limitation:
(i) The charges and expenses of any registrar, stock, transfer or
dividend disbursing agent, custodian, depository or other agent
appointed by the Trust for the safekeeping of its cash,
portfolio securities and other property;
(ii) Except as provided in Section 4(a) hereof,
general operational, administrative and accounting costs, such
as the costs incident in calculating the Trust's net asset
value, the preparation of the Trust's tax filings with relevant
authorities and of compliance with any and all regulatory
authorities;
(iii) The charges and expenses of auditors and outside accountants;
(iv) Brokerage commissions for transactions in the portfolio
securities of the Trust;
(v) All taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to federal, state or other U.S. or
foreign governmental agencies;
(vi) The cost of the Trust's stock certificates representing shares;
(vii) Expenses involved in registering and maintaining registrations
of the Trust and of its shares with the SEC and various states
and other jurisdictions, if applicable;
(viii) All expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type,
printing and mailing proxy statements, quarterly reports,
semi-annual reports, annual reports and other communications to
shareholders;
(ix) All expenses of preparing and setting in type offering
documents, and expenses of printing and mailing the same to
shareholders;
(x) Compensation and travel expenses of Trustees who are not
"interested persons" of the Administrator within the meaning of
the 1940 Act and travel expenses of Trustees who are "interested
persons" of the Administrator and officers and employees of the
Administrator when traveling on Trust business, such as
attending shareholders' or Trustees' meetings, beyond one
hundred miles from such person's principal place of business;
(xi) The expense of furnishing, or causing to be furnished, to each
shareholder, statements of account;
(xii) Charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal
services rendered in connection with the Trust's corporate and
financial structure, day-to-day legal affairs of the Trust and
relations with its shareholders, issuance of Trust shares, and
registration and qualification of securities under federal,
state and other laws;
(xiii) The expenses of attendance at meetings of professional and trade
organizations, such as the Investment Company Institute and
regulatory agencies by officers and Trustees of the Trust, and
the membership or association dues of such organizations;
(xiv) The cost and expense of maintaining the books and records of the
Trust, except those costs and expenses expressly assumed by the
Administrator under this Agreement;
(xv) The expense of the Trust's obtaining and maintaining a fidelity
bond as required by Section 17(g) of the 1940 Act, the expense
of the Trust's obtaining and maintaining an errors and omissions
policy and other insurance as may be appropriate;
(xvi) Interest payable on Trust borrowing;
(xvii) Postage; and
(xviii)Any other reasonable costs and expenses incurred by the
Administrator for Trust operations and activities.
5. Records.
The books and records pertaining to the Trust which are in the possession of
the Administrator shall be the property of the Trust. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Trust, or the Trust's
authorized representatives, shall have access to such books and records at all
times during the Administrator's normal business hours. Upon the reasonable
request of the Trust, copies of any such books and records shall be provided by
the Administrator to the Trust or its authorized representative at the Trust's
expense.
6. Liaison With Accountants.
The Administrator shall, at its own expense, act as liaison with the Trust's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit related schedules. The Administrator shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their opinion, as such may be required by the Trust from time
to time.
7. Right to Receive Advice.
(a) Advice of Trust. If the Administrator shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive,
from the Trust directions or advice.
(b) Advice of Counsel. If the Administrator or the Trust shall be in doubt
as to question of law involved in any action to be taken or omitted by
the Administrator, it may request advice at the Trust' cost from
counsel of its own choosing (who may be counsel for the Trust or, after
consultation with the Trust's officers, counsel to the Administrator).
(c) Protection of the Administrator. The Administrator shall be
protected in any action or inaction which it takes in reliance on any
directions or advice received pursuant to subsections (a) or (b) of
this paragraph, provided that, in the case of subsection (b), it has
chosen counsel prudently, which the Administrator, after receipt of any
such directions or advice, in good faith believes to be consistent with
such directions or advice as the case may be. However, nothing in this
paragraph shall be construed as imposing upon the Administrator any
obligation (i) to seek such directions, or advice or (ii) to act in
accordance with such directions or advice when received. Nothing in
this subsection shall excuse the Administrator when an action or
omission on the part of the Administrator constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by the
Administrator of its duties under this Agreement.
8. Compliance with Governmental Rules and Regulations.
The Trust assumes full responsibility for insuring that it complies with all
applicable requirements of the Securities Act of 1933 ( the "1933 Act"), the
Securities Exchange Act of 1934 (" the 1934 Act"), the 1940 Act, and any
applicable laws, rules and regulations of governmental authorities having
jurisdiction.
9. Compensation
As compensation for the services rendered by the Administrator during the term
of this Agreement, the Trust will pay to the Administrator a fee, calculated
and payable monthly, at an annual rate of .20% of average daily net assets if
average daily assets during such month are less than $100 million; .19% if such
assets are $100 million or greater but less than $120 million, or a fixed
amount, payable monthly, based on the preceding fee level maximum fee, if
greater; .18% if such assets are $120 million or greater but less than $140
million, or a fixed amount, payable monthly, based on the preceding fee level
maximum fee, if greater; .17% if such assets are $140 million or greater but
less than $160 million, or a fixed amount, payable monthly, based on the
preceding fee level maximum fee, if greater; .16% if such assets are $160
million or greater but less than $180 million or a fixed amount, payable
monthly, based on the preceding fee level maximum fee, if greater; .15% if such
assets are $180 million or greater but less than $200 million, or a fixed
amount, payable monthly, based on the preceding fee level maximum fee, if
greater; .14% if such assets are $200 million or greater but less than $220
million, or a fixed amount, payable monthly, based on the preceding fee level
maximum fee, if greater; .13% if such assets are $220 million or greater but
less than $260 million, or a fixed amount, payable monthly, based on the
preceding fee level maximum fee, if greater; and .12% on average daily net
assets of $260 million or more, or a fixed amount, payable monthly, based on
the preceding fee level maximum fee, if greater; or a fixed annual amount,
payable monthly, of $100,000, if greater.
10. Indemnification.
The Trust agrees to indemnify and hold harmless the Administrator and its
employees, agents and nominees from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising
under the 1933 Act, the 1934 Act, the 1940 Act, and any state and foreign
securities laws, all as or to be amended from time to time) and expenses,
including (without limitation) attorneys' fees and disbursements, arising
directly or indirectly from any action or thing which the Administrator takes
or does or omits to take or do (i) at the request or on the direction of or in
reliance on the advice of the Trust, (ii) upon oral or written instruction from
an authorized agent, or (III) otherwise in connection with this Agreement,
provided, that neither the Administrator nor any of its employees, agents or
nominees shall be indemnified against any liability arising out of the
Administrator's own willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties and obligations under this Agreement.
11. Liability of the Administrator.
The Administrator shall be under no duty to take any action on behalf of the
Trust except as specifically set forth herein or as may be specifically agreed
to by the Administrator in writing. In the performance of its duties
hereunder, the Administrator shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within reasonable limits
in performing services provided for under this Agreement, but the Administrator
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Administrator or
reckless disregard by the Administrator of its duties under this Agreement.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the Administrator in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or authority
or lack thereof of any oral or written instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which the
Administrator reasonably believes to be genuine; (b) delays or errors or loss
of data occurring by reason of circumstances beyond the Administrator's
control, including acts of civil or military authority, national emergencies,
labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply. In the event of equipment failures beyond the
Administrator's control, the Administrator shall, at no additional expense to
the Trust, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto.
12. Duration and Termination.
This Agreement shall continue until termination by either party on 90 days
written notice to the other; provided that this Agreement may be terminated by
either party on 7 days written notice in the event of a material breach by the
other party which remains uncured for 30 days following written notice thereof,
which notice shall specify in reasonable detail the factual and/or legal basis
for the breach.
13. Further Action.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
14. Amendments.
This Agreement or any part hereof may be changed or waived only by an
instrument in writing signed by the party against which enforcement of such
change or waiver is sought.
15. Miscellaneous.
This Agreement embodies the entire agreement and understanding between the
parties thereto, and supersedes all prior agreements and understandings,
relating to the subject matter hereof, provided that the parties hereto may
embody in one or more separate documents their agreement, if any, with respect
to delegation and/or oral instructions. 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 or effect.
This Agreement shall be deemed to be a contract made in New York and governed
by New York law. 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 and
shall inure to the benefit of the parties hereto and their respective
successors.
16. Limitation of Liability
It is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally but bind only the assets and property of the
Trust, as provided in the Declaration of Trust. 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 of the
Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Trust as
provided in its Declaration of Trust. The execution and delivery of this
Agreement has been authorized by the Administrator and signed by an authorized
officer of the Administrator.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
[SEAL] EAI SELECT MANAGERS EQUITY FUND
Attest: By:
President
[SEAL] XXX XXX ASSOCIATES CORPORATION
Attest: By:
President
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