MONEY MANAGER AGREEMENT
Effective Date: January 1, 2005
Termination Date: One year after Effective Date
Fund and Account: ACCESSOR Intermediate
Fixed-Income FUND
Xxxxxx Xxxx
President & Chief Investment Officer
Cypress Asset Management
00000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Re: Accessor Funds, Inc. Money Manager Agreement
Dear Xx. Xxxx:
Accessor Funds, Inc., a Maryland corporation (the "Accessor Funds"), is
an open-end management investment company of the series type registered as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and subject to the rules and regulations promulgated thereunder.
Accessor Funds issues shares in separate diversified portfolios, each with a
different investment objective and policies.
Accessor Capital Management LP, a Washington limited partnership (the
"Manager") acts as the manager and administrator of Accessor Funds pursuant to
the terms of a Management Agreement, and is an "investment adviser," as that
term is defined in Section 2(a)(20) of the 1940 Act, to Accessor Funds. The
Manager is responsible for the day-to-day management and administration of
Accessor Funds and for the coordination of investments of each portfolio's
assets; however, specific portfolio purchases and sales for each portfolio's
investment portfolio, or a portion thereof, are to be made by the portfolio
management organizations recommended and selected by the Manager, subject to the
approval of the Board of Directors of Accessor Funds (the "Board").
1. Appointment as a Money Manager. The Manager and Accessor Funds hereby
appoint and employ Cypress Asset Management, a California corporation (the
"Money Manager"), as a discretionary money manager to Accessor Funds'
Intermediate Fixed-Income Fund, on the terms and conditions set forth herein.
The Manager determines from time to time that portion of the assets of the
Intermediate Fixed-Income Fund that are to be assigned to the Money Manager (the
"Account"). The Account and those assets of the Intermediate Fixed-Income Fund
managed by the Manager or another money manager as determined by the Manager are
referred to as the "Fund".
2. Acceptance of Appointment; Standard of Performance. The Money Manager
accepts the appointment as a discretionary money manager and agrees to use its
best professional judgment to make and implement investment decisions for
Accessor Funds with respect to the investments of the Account in accordance with
the provisions of this Agreement.
3. Fund Management Services of the Money Manager. The Money Manager is
hereby employed and authorized to select portfolio securities for investment by
the Fund, to determine to purchase and sell securities for the Account, and upon
making any purchase or sale decision, to place orders for the execution of such
portfolio transactions in accordance with Accessor Funds' operational
procedures, as it may be amended in writing by the parties from time to time).
In providing portfolio management services to the Account, the Money Manager
shall be subject to such investment restrictions as are set forth in the 1940
Act and rules thereunder, the supervision and control of the Board, such
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specific instructions as the Board may adopt and communicate to the Money
Manager, the investment objectives, policies and restrictions of the Fund
furnished pursuant to paragraph 4, and instructions from the Manager. The Money
Manager shall maintain on behalf of Accessor Funds all accounts, books, records
or other documents that are required to be maintained pursuant to the 1940 Act,
and the Investment Advisers Act of 1940, as amended (the "Advisers Act") or any
rule or regulation thereunder and Accessor Funds' policies and procedures, as
may be amended in writing from time to time. At Accessor Funds's or the
Manager's reasonable request (as communicated by the Board or the officers of
such entities), the Money Manager will consult with the officers of Accessor
Funds or the Manager, as the case may be, with respect to any decision made by
it with respect to the investments of the Account.
4. Investment Objectives, Policies and Restrictions. Accessor Funds
shall provide the Money Manager with a statement of the investment objectives
and policies of the Fund and any specific investment restrictions applicable
thereto as established by Accessor Funds, including those set forth in its
Prospectus as amended from time to time. Accessor Funds retains the right, on
reasonable prior written notice to the Money Manager from Accessor Funds or the
Manager, to modify any such objectives, policies or restrictions in any manner
at any time. The Money Manager shall have no duty to investigate any
instructions received from Accessor Funds, the Manager, or both, and, absent
manifest error, such instructions shall be presumed reasonable.
5. Transaction Procedures. All transactions will be consummated by
payment to or delivery by Accessor Funds' custodian (the "Custodian"), or such
depositary or agents as may be designated by the Custodian, as custodian for
Accessor Funds, of all cash and/or securities due to or from the Account, and
the Money Manager shall not have possession or custody thereof or any
responsibility or liability with respect thereto. The Money Manager shall advise
the Custodian in writing or by electronic transmission or facsimile of all
investment orders for the Fund placed by it with broker/dealers at the time and
in the manner and as set forth in Exhibit A hereto. Accessor Funds shall issue
to the Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Money Manager. Accessor Funds
shall be responsible for all custodial arrangements and the payment of all
custodial charges and fees and, upon the Money Manager giving proper
instructions to the Custodian, the Money Manager shall have no responsibility or
liability with respect to custodial arrangements or the acts, omissions or other
conduct of the Custodian.
6. Allocation of Brokerage. The Money Manager shall have authority and
discretion to select broker/dealers to execute portfolio transactions initiated
by the Money Manager, and for the selection of the markets on/in which the
transaction will be executed.
A. In doing so, the Money Manager's primary objective shall be
to select a broker/dealer that can be expected to obtain the best net
price and execution for Accessor Funds. However, this responsibility
shall not be deemed to obligate the Money Manager to solicit competitive
bids for each transaction; and the Money Manager shall have no
obligation to seek the lowest available commission cost to Accessor
Funds, so long as the Money Manager believes in good faith, based upon
its knowledge of the capabilities of the firm selected, that the
broker/dealer can be expected to obtain the best price on a particular
transaction and that the commission cost is reasonable in relation to
the total quality and reliability of the brokerage and research services
made available by the broker/dealer to the Money Manager viewed in terms
of either that particular transaction or of the Money Manager's overall
responsibilities with respect to its clients, including Accessor Funds,
as to which the Money Manager exercises investment discretion,
notwithstanding that Accessor Funds may not be the direct or exclusive
beneficiary of any such services or that another broker/dealer may be
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willing to charge Accessor Funds a lower commission on the particular
transaction.
B. Accessor Funds shall retain the right to request that
transactions involving the Account that give rise to brokerage
commissions in an annual amount of up to 50% of the Money Manager's
executed brokerage commissions, shall be executed by broker/dealers
which provide brokerage or research services to Accessor Funds or its
Manager, or as to which an ongoing relationship will be of value to
Accessor Funds with respect to the Fund, which services and relationship
may, but need not, be of direct benefit to the Fund so long as (i) the
Money Manager believes in good faith, based upon its knowledge of the
capabilities of the firm selected, that the broker/dealer can be
expected to obtain the best price on a particular transaction and (ii)
Accessor Funds determines that the commission cost is reasonable in
relation to the total quality and reliability of the brokerage and
research services made available to Accessor Funds, or to the Manager
for the benefit of its clients for which it exercises investment
discretion, notwithstanding that the Fund may not be the direct or
exclusive beneficiary of any such service or that another broker/dealer
may be willing to charge Accessor Funds a lower commission on the
particular transaction. The Money Manager may reject any request for
directed brokerage that does not appear to it to be reasonable.
C. Accessor Funds agrees that it will provide the Money Manager
with a list of broker/dealers which are "affiliated persons" of Accessor
Funds and its other money managers. Upon receipt of such list, the Money
Manager agrees that it will not execute any portfolio transactions with
a broker/dealer which is an "affiliated person" (as defined in the 1940
Act) of Accessor Funds or of any money manager for Accessor Funds unless
it is in accordance with the procedures of Accessor Funds.
D. As used in this paragraph 6, "brokerage and research
services" shall be those services described in Section 28(e)(3) of the
Securities Exchange Act of 1934, as amended.
7. Transactions with Affiliated Persons of the Funds. The Money Manager
is prohibited from consulting with the money manager of another Accessor Fund or
the money manager of the portion of the Fund not managed by the Money Manager,
if applicable, concerning transactions entered into by the Money Manager (or its
affiliates) in accordance with Rule 17a-10, 17e-1, 12d3-1 and 10f-3 of the 1940
Act. Further, for the purposes of Rule 12d3-1 of the 1940 Act, where the Money
Manager is one of multiple money managers managing a Fund, the Money Manager's
responsibility to providing investment advice is limited to providing investment
advice to the portion of the Fund over which it is appointed by Accessor.
8. Proxies. Unless the Manager gives written instructions to the
contrary, the Money Manager shall vote all proxies solicited by or with respect
to the issuers of securities held by the Fund. The Money Manager shall use its
best good faith judgment to vote such proxies in a manner which best serves the
interests of the Fund's shareholders. The Manager shall provide to the Fund,
upon request, a copy of its voting policies and procedures if it is required to
adopt such policies and procedures. For the year beginning July 1, 2003 and
ending June 30, 2004, and for each year thereafter, the Manager shall create and
maintain, and provide to the Fund within 45 days after year-end and in an
electronic format, the information required by Item 1 of Form N-PX under the
1940 Act if it casts any votes by proxy on any securities held by the Fund.
9. Reports to the Money Manager. Accessor Funds and the Manager shall
furnish or otherwise make available to the Money Manager such information
relating to the business affairs of Accessor Funds, including periodic reports
concerning the Fund, as the Money Manager at any time, or from time to time, may
reasonably request in order to discharge its obligations hereunder.
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10. Fees for Services. The compensation of the Money Manager for its
services under this Agreement shall be calculated and paid by Accessor Funds in
accordance with Exhibit A attached hereto and incorporated by this reference
herein. The Money Manager acknowledges that any such fee is payable solely out
of assets of the Fund's Account.
11. Other Investment Activities of the Money Manager. Accessor Funds
acknowledges that the Money Manager, or one or more of its affiliates, may have
investment responsibilities or render investment advice to, or perform other
investment advisory services for, other individuals or entities (the "Affiliated
Accounts"). Subject to the provisions of paragraph 2 hereof, Accessor Funds
agrees that the Money Manager and its affiliates may give advice, exercise
investment responsibility and take other action with respect to the Affiliated
Accounts which may differ from the advice given or the timing or nature of
action taken with respect to the Account, provided that the Money Manager acts
in good faith, and provided further that it is the Money Manager's policy to
allocate, within its reasonable discretion, investment opportunities to the
Account over a period of time on a fair and equitable basis relative to the
Affiliated Accounts, taking into account the investment objectives and policies
of the Fund and any specific investment restrictions applicable thereto.
Accessor Funds acknowledges that one or more of the Affiliated Accounts may at
any time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Account may have an interest from time to
time, whether in transactions which may involve the Account or otherwise. The
Money Manager shall have no obligation to acquire for the Account a position in
any investment which any Affiliated Account may acquire, and the Fund shall have
no first refusal, co-investment or other rights in respect of any such
investment, either for the Account or otherwise.
12. Certificate of Authority. Each of Accessor Funds, the Manager and
the Money Manager shall furnish to the others from time to time certified copies
of the resolutions of its Board of Directors, Board of Trustees, Managing
Partner or executive committee, as the case may be, evidencing the authority of
its officers and employees who are authorized to act on behalf of it.
13. Limitation of Liability. The Money Manager shall not be liable for,
and shall be indemnified by Accessor Funds for any action taken, omitted or
suffered to be taken by it in its reasonable judgment, in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement, or in accordance with (or in the absence
of) specific directions or instructions from Accessor Funds or the Manager;
provided, however, that such acts or omissions shall not have resulted from the
Money Manager's willful misfeasance, bad faith or gross negligence, violation of
applicable law, or reckless disregard of its duty or of its obligations
hereunder. The rights and obligations that are provided for in this Paragraph 12
shall survive the cancellation, expiration or termination of this Agreement.
14. Confidentiality. Subject to the right of each money manager and
Accessor Funds to comply with applicable law, including any demand or request of
any regulatory or taxing authority having jurisdiction over it, the parties
hereto shall treat as confidential all information pertaining to the Fund and
the actions of each money manager, the Manager and Accessor Funds in respect
thereof, other than any such information which is or hereafter becomes
ascertainable from public or published information or trade sources. The rights
and obligations that are provided for in this Paragraph 13 shall survive the
cancellation, expiration or termination of this Agreement.
15. Use of the Money Manager's Name. Accessor Funds and the Manager
agree to furnish the Money Manager at its principal office prior to use thereof
copies of all prospectuses, proxy statements, reports to stockholders, sales
literature, or other material prepared for distribution to stockholders of
Accessor Funds or the public that refer in any way to the Money Manager, and not
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to use such material if the Money Manager reasonably objects in writing within
three business days (or such other time as may be mutually agreed) after receipt
thereof. In the event of termination of this Agreement, Accessor Funds and the
Manager will continue to furnish to the Money Manager copies of any of the
above-mentioned materials that refer in any way to the Money Manager, and will
not use such material if the Money Manager reasonably objects in writing within
three business days (or such other time as may be mutually agreed) after receipt
thereof.
16. Assignment. No assignment, as that term is defined in Section
2(a)(4) of the 1940 Act, of this Agreement shall be made by the Money Manager,
and this Agreement shall terminate automatically in the event that it is
assigned. The Money Manager shall notify the Manager and Accessor Funds in
writing sufficiently in advance of any proposed change of control, as defined in
Section 2(a)(9) of the 1940 Act, to enable the Manager and Accessor Funds to
consider whether an assignment, as that term is defined in Section 2(a)(4) of
the 1940 Act, will occur, and to take the steps necessary to enter into a new
money manager agreement with the Money Manager.
17. Representations, Warranties and Agreements of the Investment
Company. Accessor Funds represents, warrants and agrees that:
A. The Money Manager has been duly appointed by the Board to
provide investment services to the Account as contemplated hereby.
B. Accessor Funds will deliver to the Money Manager a true and
complete copy of its current prospectus as effective from time to time,
such other documents or instruments governing the investments of Fund,
and such other information as is necessary for the Money Manager to
carry out its obligations under this Agreement.
C. The organization of Accessor Funds and the conduct of the
business of the Fund as contemplated by this Agreement, materially
complies, and shall at all times materially comply, with the
requirements imposed upon Accessor Funds by applicable law.
18. Representations, Warranties and Agreements of Manager. Manager
represents, warrants and agrees that:
A. The Manager acts as an "investment adviser," as that term is
defined in Section 2(a)(20) of the 1940 Act, pursuant to a Management
Agreement with Accessor Funds.
B. The appointment of the Money Manager by the Manager to
provide the investment services as contemplated hereby has been approved
by the Board.
C. The Manager is registered as an "investment adviser" under
the Investment Advisers Act of 1940, as amended (the "Advisers Act").
19. Representations, Warranties and Agreements of Money Manager. The
Money Manager represents, warrants and agrees that:
A. The Money Manager is registered as an "investment adviser"
under the Advisers Act; or it is a "bank" as defined in Section
202(a)(2) of the Advisers Act or an "insurance company" as defined in
Section 202(a)(12) of the Advisers Act and is exempt from registration
thereunder.
B. The Money Manager will maintain, keep current and preserve on
behalf of Accessor Funds, the records required to be maintained pursuant
to Section 3 of this Agreement and shall timely furnish to the Manager
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all information relating to the Money Manager's services under this
Agreement needed by the Manager to keep the other books and records of
the Fund required by the 1940 Act, and the Advisors Act, or any rule or
regulation thereunder and Accessor Funds' policies and procedures (as
may be amended in writing from time to time) in the manner required by
such rule, regulation, policy or procedure. The Money Manager agrees
that such records are the property of Accessor Funds and will be
surrendered to Accessor Funds promptly upon request.
C. The Money Manager will adopt or has adopted a written code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act,
will provide to Accessor Funds a copy of the code of ethics and evidence
of its adoption, and will make such reports to Accessor Funds as
required by Rule 17j-1 under the 1940 Act. The Money Manager has
policies and procedures sufficient to enable the Money Manager to detect
and prevent the misuse of material, nonpublic information by the Money
Manager or any person associated with the Money Manager, in compliance
with the Xxxxxxx Xxxxxxx and Securities Fraud Enforcement Act of 1988.
D. The Money Manager will notify Accessor Funds of any changes
in the membership of its partnership or in the case of a corporation in
the ownership of more than five percent of its voting securities, within
a reasonable time after such change.
X. The Money Manager understands that it may receive certain
non-public information about clients of Accessor Capital and Accessor
Funds under Section 248.14 of Regulation S-P and understands and agrees
that it will disclose that information only as permitted by Section
248.11 of Regulation S-P.
20. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Money Manager, the Manager and the Fund, which
amendment, must be approved by the Board in the manner required by the 1940 Act.
21. Effective Date; Term. This Agreement shall become effective for the
Fund on the effective date set forth on page 1 of this Agreement, and shall
continue in effect until the termination date set forth on page 1 of this
Agreement. Thereafter, the Agreement shall continue in effect for successive
annual periods only so long as its continuance has been specifically approved at
least annually (a) by a vote of a majority of the Board or (b) by a vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the Fund for which the Money Manager acts as money manager, and in either case
by a majority of the directors who are not parties to the Agreement or
interested persons of any parties to the Agreement (other than as directors of
Accessor Funds) cast in person at a meeting called for purposes of voting on the
Agreement.
22. Termination. This Agreement may be terminated, without the payment
of any penalty, by the Board, the Manager, the Money Manager or by the vote of a
majority of the outstanding voting securities (as that term is defined in the
1940 Act) of the Fund for which the Money Manager acts as money manager, upon 60
days' prior written notice to the other parties hereto. Any such termination
shall not affect the status, obligations or liabilities of any party hereto to
any of the other parties that accrued prior to such termination.
23. Applicable Law. To the extent that state law shall not have been
preempted by the provisions of any laws of the United States heretofore or
hereafter enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of the State
of Washington.
24. Entire Agreement. This Agreement constitutes the entire
understanding between the parties relating to the Fund and supercedes all prior
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understandings, arrangements, representations, proposals or communications
between the parties, whether written or oral.
25. Notices. Any notice, advice, or report to be given pursuant to this
Agreement shall be delivered or mailed:
To Accessor Capital at: Accessor Capital Management LP
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxxx
To Accessor Funds at: Accessor Funds, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxxx
To Money Manager at: Cypress Asset Management
00000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxx
26. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
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ACCESSOR FUNDS, INC.
BY:
-----------------
Xxxxxxxx X. Xxx
Vice President
DATE:
-------------------------------------------
Accepted and agreed to:
CYPRESS ASSET MANAGEMENT
By:
-----------------------------------------
Xxxxxx Xxxx
President & Chief Investment Officer
DATE:
----------------------------------------------------------------
ACCESSOR CAPITAL
MANAGEMENT LP
By Accessor Capital Corporation
Its Managing General Partner
BY:
-----------------
X. Xxxxxxx Xxxxxxx, III
President
DATE:
-------------------------------------------
Page 8
EXHIBITS: A. Fee Schedule.
Page 9
EXHIBIT A
MONEY MANAGER FEE
The Fund will pay to the Money Manager as compensation for the Money
Manager's services rendered, a fee, computed daily and paid quarterly at the
annual rate of 0.10% of the aggregate daily net assets of the Fund. Such fee
shall be paid by the Fund and no fees shall be paid to Accessor Capital
Management LP under this agreement. Such fee shall be payable for each quarter
within 60 days after the end of each quarter. If the Money Manager shall serve
for less than the whole of a quarter, the foregoing compensation shall be
prorated.
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