MUTUAL FUND SUBACCOUNTING SERVICES
AGREEMENT
CHASE GLOBAL FUNDS SERVICES COMPANY
JULY 18, 1997
MUTUAL FUND SUBACCOUNTING SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
----------- ---------------------------------------------- --------
1. AGREEMENT...................................... 1
2. REPRESENTATIONS AND WARRANTIES................. 2
3. DELIVERY OF DOCUMENTS ......................... 3
4. SERVICES PROVIDED ............................. 4
5. FEES AND EXPENSES ............................. 5
6. LIMITATION OF LIABILITY AND INDEMNIFICATION .. 6
7. TERM .......................................... 9
8. NOTICES ....................................... 9
9. WAIVER......................................... 9
10. FORCE MAJEURE.................................. 9
11. AMENDMENTS..................................... 10
12. SEVERABILITY................................... 10
13. GOVERNING LAW.................................. 10
14. STATUS OF TRUST................................ 10
15. EFFECT ON OTHER AGREEMENTS .................... 10
MUTUAL FUND SUBACCOUNTING SERVICES AGREEMENT
AGREEMENT made as of July 18, 1997 by and between Alliance Capital
Management L.P. (the "Adviser"), a Delaware limited partnership, and Chase
Global Funds Services Company ("Chase"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, The Xxxxxx River Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Trust has arranged with the Adviser to provide certain
accounting services to the Trust, subject to the supervision of the Board of
Trustees of the Trust (the "Board");
WHEREAS, the arrangements between the Trust and the Adviser contemplate
that the Adviser will subcontract some or all of its responsibilities with
respect to accounting services provided to the Trust; and
WHEREAS, the Adviser wishes to contract with Chase to provide certain
subaccounting services with respect to the Trust;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. AGREEMENT. The Adviser hereby contracts with Chase to provide services,
as described hereinafter, for each series ("Portfolio") of the Trust, as set
forth on Schedule A hereto (as from time to time amended by written notice to
Chase), subject to the supervision of the Adviser and the Board, for the
period and on the terms set forth in this Agreement. Chase agrees to furnish
the services herein set forth in return for compensation as provided in
Section 5 of and Schedule A to this Agreement.
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2. REPRESENTATIONS AND WARRANTIES.
(a) Chase represents and warrants to the Adviser that:
(i) Chase is a corporation, duly organized and existing under the laws
of the State of Delaware;
(ii) Chase is duly qualified to carry on its business in The
Commonwealth of Massachusetts;
(iii) Chase is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(iv) all requisite corporate proceedings have been taken to authorize
Chase to enter into and perform this Agreement;
(v) Chase has, and will continue to have, access to the facilities,
personnel and equipment required to fully perform its duties and obligations
hereunder;
(vi) no legal or administrative proceedings have been instituted or
threatened which would impair Chase's ability to perform its duties and
obligations under this Agreement; and
(vii) Chase's entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or obligation of
Chase or any law or regulation applicable to Chase;
(b) The Adviser represents and warrants to Chase that:
(i) the Adviser is a limited partnership, duly organized and in good
standing under the laws of Delaware;
(ii) the Adviser is empowered under applicable laws and by its
organizational documents and By-Laws to enter into and perform this
Agreement;
(iii) all requisite proceedings have been taken to authorize the Adviser
to enter into and perform this Agreement;
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(iv) the Trust is an investment company properly registered under the
1940 Act;
(v) a registration statement relating to the Trust and shares of
beneficial interest therein under the Securities Act of 1933, as amended
("1933 Act") and the 1940 Act on Form N-1A has been filed, is effective and
will remain effective during the term of this Agreement, and all necessary
filings under the laws of the states will have been made and will be current
during the term of this Agreement;
(vi) no legal or administrative proceedings have been instituted or
threatened which would impair the Adviser's ability to perform its duties and
obligations under this Agreement;
(vii) the Trust's registration statement complies in all material
respects with the 1933 Act and the 1940 Act (including the rules and
regulations thereunder) and neither the Trust's prospectus nor statement of
additional information contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements therein not
misleading; and
(viii) the Adviser's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of the Adviser or any law or regulation applicable to it.
3. DELIVERY OF DOCUMENTS. The Adviser will promptly furnish to Chase such
copies, properly certified or authenticated, of contracts, documents and
other related information as Chase may reasonably request or require to
properly discharge its duties. Such documents may include but are not limited
to the following:
(a) Resolutions of the Board approving the accounting agreement between
the Trust and the Adviser, which contemplates this Agreement;
(b) The Trust's Agreement and Declaration of Trust;
(c) the Trust's By-Laws; and
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(d) The Trust's current prospectus(es) and statement(s) of additional
information relating to all Portfolios and classes, as applicable, and all
amendments and supplements thereto (such Prospectus(es) and Statement(s) of
Additional Information and supplements thereto, as presently in effect and as
from time to time hereafter amended and supplemented, herein called the
"Prospectuses").
4. SERVICES PROVIDED.
(a) Chase will provide the subaccounting services described in Schedule B
to this Agreement, as amended from time to time, subject to the control,
direction and supervision of the Adviser and the Board and in compliance with
the objectives, policies and limitations set forth in the Trust's
Registration Statement, Agreement and Declaration of Trust and By-Laws;
applicable laws and regulations; and all applicable resolutions and policies
implemented by the Board of which Chase is properly notified, provided that
any such resolutions or policies adopted after the execution of this
Agreement that materially and adversely affect the cost to Chase of providing
such subaccounting services shall be deemed "additional services" requested
by the Adviser, and shall be subject to the provision of Section 5 of this
Agreement.
(b) Chase will also:
(i) provide office facilities with respect to the provision of the
services contemplated herein (which may be in the offices of Chase or a
corporate affiliate of Chase);
(ii) provide or otherwise obtain personnel sufficient for provision of
the services contemplated herein;
(iii) furnish equipment and other materials which are necessary or
desirable for provision of the services contemplated herein; and
(iv) maintain and keep current the books, accounts and other documents,
if any, listed in Schedule B hereto, as such schedule may be amended from
time to time. Chase agrees that all such books, accounts and other documents
are the property of the Fund and will be preserved for the
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periods prescribed under Rule 31a-2 under the 1940 Act, maintained at the
Fund's expense, and made available in accordance with Section 31 of the 1940
Act and the rules thereunder.
5. FEES AND EXPENSES.
(a) As compensation for the services rendered to the Fund pursuant to this
Agreement the Adviser shall pay Chase monthly fees determined as set forth in
Schedule C to this Agreement. Such fees are to be billed monthly and shall be
due and payable upon receipt of the invoice. Upon any termination of the
provision of services under this Agreement before the end of any month, the
fee for the part of the month before such termination shall be prorated
according to the proportion which such part bears to the full monthly period
and shall be payable upon the date of such termination.
(b) For the purpose of determining fees calculated as a function of the
Fund's assets, the value of the Fund's assets and net assets shall be
computed as required by its currently effective Prospectuses, generally
accepted accounting principles, and resolutions of the Board.
(c) The Adviser may from time to time request additional services,
additional processing, or special reports, with such specifications and
requirements documentation as may be reasonably required by Chase. If Chase
elects to provide such services or arrange for their provision, it shall be
entitled to additional fees and expenses at its customary rates and charges.
(d) Chase will bear its own expenses in connection with the performance of
the services under this Agreement except as provided herein or as agreed to
by the parties. The Adviser agrees to promptly reimburse Chase for any
additional services, equipment or supplies ordered by or for the Adviser
through Chase and for any other expenses that Chase may incur on the Trust's
behalf at the Adviser's request or as consented to by the Adviser. Such other
expenses to be incurred in the operation of the Trust and to be borne by the
Adviser include, but are not limited to: postage and mailing costs; charges
and expenses of pricing and data services and independent public accountants;
any processing services and related fees; costs and expenses of any special
telephone and data lines and devices;
5
reprocessing costs to Chase caused by the Adviser's error; and any
extraordinary expenses and other customary Trust expenses. In addition, Chase
may, pursuant to the Trust's pricing procedures in effect from time to time
and delivered to Chase, pursuant to instructions received by Chase from the
Adviser, or pursuant to the Prospectuses, utilize one or more independent
pricing services to obtain securities prices and to act as backup to the
primary pricing services, in connection with determining the net asset values
of each class of the Portfolios. The Adviser will reimburse Chase for the
Adviser's share of the cost of such services based upon the actual usage, or
a pro-rata estimate of the usage, of the services for the benefit of the
Trust.
(e) All fees, out-of-pocket expenses, or additional charges of Chase shall
be billed on a monthly basis and shall be due and payable upon receipt of the
invoice.
(f) Chase will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such
month. Charges remaining unpaid after thirty (30) days shall bear interest in
finance charges equivalent to, in the aggregate, the Prime Rate (as
determined by Chase) and all costs and expenses of effecting collection of
any such sums, including reasonable attorney's fees, shall be paid by the
Adviser to Chase.
(g) In the event that the Adviser is more than sixty (60) days delinquent
in its payments of monthly xxxxxxxx in connection with this Agreement (with
the exception of specific amounts which may be contested in good faith by the
Adviser), this Agreement may be terminated upon thirty (30) days' written
notice to the Adviser by Chase. The Adviser must notify Chase in writing of
any contested amounts within thirty (30) days of receipt of a billing for
such amounts. Disputed amounts are not due and payable while they are being
investigated.
6. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) Chase shall not be liable for any error of judgment or mistake of law
or for any loss or expense suffered by the Trust or the Adviser, in
connection with the matters to which this Agreement
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relates, except to the extent a loss or expense is caused by or results from
negligence, or from willful misfeasance or bad faith, on Chase's part in the
performance of its duties or from reckless disregard by Chase of its
obligations and duties under this Agreement. [In no event shall Chase]
[Unless a loss or expense is the result of wilful misfeasance or bad faith,
Chase shall not] be liable for any indirect, incidental, special or
consequential losses or damages of any kind whatsoever (including but not
limited to lost profits), even if Chase has been advised of the likelihood of
such loss or damage and regardless of the form of action.
(b) Subject to Section 6(a) above, Chase shall not be responsible for, and
the Adviser shall indemnify and hold Chase harmless from and against, any and
all [direct] losses, damages, costs, reasonable attorney's fees and expenses,
payments, reasonable expenses and liabilities incurred by Chase, any of its
agents, or the Adviser's agents in the performance of its/their duties
hereunder, including but not limited to those arising out of or attributable
to:
(i) any and all actions of Chase or its officers or agents required to
be taken pursuant to this Agreement;
(ii) the good faith reliance on or use by Chase or its officers or
agents of information, records, or documents which are received by Chase or
its officers or agents and furnished to it or them by or on behalf of the
Adviser or the Trust, and which have been prepared or maintained by the
Trust, the Adviser or any third party on behalf of the Trust;
(iii) the Adviser's refusal or failure to comply with the terms of this
Agreement or the Adviser's lack of good faith, or its actions, or lack
thereof, involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of the Adviser
hereunder;
(v) the reliance on or the carrying out by Chase or its officers or
agents of any proper instructions reasonably believed to be duly authorized,
or requests of the Adviser;
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(vi) any delays, inaccuracies, errors in or omissions from information
or data provided to Chase by data, corporate action pricing services or
securities brokers and dealers;
(vii) the offer or sale of shares by the Trust in violation of any
requirement under the Federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop
order or other determination or ruling by any Federal agency or any state
agency with respect to the offer or sale of such shares in such state (1)
resulting from activities, actions, or omissions by the Trust or its other
service providers and agents, or (2) existing or arising out of activities,
actions or omissions by or on behalf of the Trust prior to the effective date
of this Agreement;
(viii) any failure of the Trust's registration statement to comply with
the 1933 Act and the 1940 Act (including the rules and regulations
thereunder) and any other applicable laws, or any untrue statement of a
material fact or omission of a material fact necessary to make any statement
therein not misleading in the Trust's prospectus or statement of additional
information;
(ix) the actions taken by the Trust, the Adviser, and the Trust's
distributors in compliance with applicable securities, tax, commodities and
other laws, rules and regulations, or the failure to so comply; and
(x) all actions, inactions, omissions, or errors caused by third parties
to whom Chase or the Adviser has assigned any rights and/or delegated any
duties under this Agreement at the request of the Adviser.
(c) In performing its services hereunder, Chase shall be entitled to rely
on any oral or written instructions, notices or other communications,
including electronic transmissions, from the Adviser, its employees, officers
or directors which Chase reasonably believes to be genuine, valid and
authorized, and, subject to the foregoing shall be indemnified by the Adviser
for any loss or expense caused by such reliance. Chase shall also be entitled
to consult with and rely on the advice and opinions of outside legal counsel
retained by the Adviser, as necessary or appropriate.
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7. TERM. This Agreement shall become effective on the date first
hereinabove written and may be modified or amended from time to time by
mutual agreement between the parties hereto. The Agreement shall continue in
effect unless terminated by either party on 90 days' prior written notice.
Upon termination of this Agreement, the Adviser shall pay to Chase such
compensation and any out-of-pocket or other reimbursable expenses which may
become due or payable under the terms hereof as of the date of termination or
after the date that the provision of services ceases, whichever is later.
8. NOTICES. Any notice required or permitted hereunder shall be in writing
and shall be deemed effective on the date of personal delivery (by private
messenger, courier service or otherwise) or upon confirmed receipt of telex
or facsimile, whichever occurs first, or upon receipt if by mail to the
parties at the following address (or such other address as a party may
specify by notice to the other):
If to the Adviser:
Alliance Capital Management L.P.
Avenue of the Americas
New York, N.Y. 10105
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
Fax: (000) 000-0000
If to Chase:
Chase Global Funds Services Company
Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
9. WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
10. FORCE MAJEURE. Chase shall not be responsible or liable for any harm,
loss or damage suffered by the Adviser, the Trust, its investors, or other
third parties or for any failure or delay in
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performance of Chase's obligations under this Agreement arising out of or
caused directly or indirectly by circumstances beyond Chase's reasonable
control.
11. AMENDMENTS. Except as described in this section, this Agreement may be
modified or amended from time to time only by mutual written agreement
between the parties. No provision of this Agreement, other than Schedule A,
which may be amended to reflect the addition or deletion of one or more
series of the Trust by written notice from the Adviser to Chase, may be
changed, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change,
discharge or termination is sought.
12. SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK.
14. STATUS OF TRUST. The Trust and each Portfolio are intended to be third
party beneficiaries of this Agreement and, subject to Section 6 of this
Agreement, may proceed directly against Chase to secure the benefits of this
Agreement intended to be conferred by this Agreement on the Trust and the
Portfolios. Adviser is solely responsible for payment of compensation as
provided in Section 5 and Schedule C to this Agreement and for all other
liabilities, if any, of the Adviser arising out of this Agreement; in no event
shall the Trust, its Trustees or officers of any Portfolio or any shareholder
have any liability hereunder.
15. EFFECT ON OTHER AGREEMENTS. This Agreement shall have no effect on any
other agreements which may from time to time be entered into by Chase and the
Adviser and/or the Trust, including, without limitation, the Custodian
Agreement dated August 25, 1988 between Chase and the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written
above.
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ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management Corporation,
its General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Operating Officer
CHASE GLOBAL FUNDS
SERVICES COMPANY
By:
------------------------------------------
Name:
Title:
12
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management Corporation,
its General Partner
By:
------------------------------------------
Name:
Title:
CHASE GLOBAL FUNDS
SERVICES COMPANY
By: /s/ W. Xxxxxx Xxxx
------------------------------------------
Name: W. Xxxxxx Xxxx
Title: President
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MUTUAL FUND SUBACCOUNTING SERVICES AGREEMENT
SCHEDULE A
PORTFOLIOS
Alliance Conservative Investors
Alliance Balanced
Alliance Growth Investors
Alliance Growth and Income
Alliance Equity Index
Alliance Common Stock
Alliance Global
Alliance International
Alliance Aggressive Stock
Alliance Small Cap Growth
Alliance Intermediate Government Securities
Alliance Quality Bond
Alliance High Yield
A-1
MUTUAL FUND SUBACCOUNTING SERVICES AGREEMENT
SCHEDULE B
DESCRIPTION OF FUND SUBACCOUNTING SERVICES AND REPORTS
Chase shall provide the following subaccounting services to the Adviser
for the Trust:
(a) Maintenance of the books and records for the Fund's assets, including
records of all securities transactions.
(b) Calculation of each funds', portfolios' or classes' Net Asset Value in
accordance with the Prospectus, and after the fund, portfolio or class meets
eligibility requirements, transmission to NASDAQ and to such other entities
as directed by the Fund.
(c) Accounting for dividends and interest received and distributions made
by the Fund.
(d) Coordinate with the Fund's independent auditors with respect to the
annual audit, and as otherwise requested by the Fund.
(e) As mutually agreed upon, Chase will provide domestic and/or
international reports.
The services and reports described in (a) through (e) above include,
without limitation, the following on an as requested basis:
1. Daily and Month-End Trial Balances -- For each Portfolio of the Trust.
2. Statement of Investments -- Displaying (i) market value and unrealized
gain and loss and (ii) identified cost for each investment held in each
Portfolio.
3. Cash Transaction Statement -- Each cash transaction statement should
be reconciled to the cash in bank balances as they appear on the respective
trial balances.
4. Dividend and Interest Receivable (Interest Purchased and Sold) Report
-- To properly accrue for dividends on the ex-dividend date and timely
receipt of same. Interest on long-term bonds which consist of corporate and
government bonds should be calculated as follows:
Corporate Bonds -- Interest on corporate bonds will be calculated
on a 360-day basis (30-day month).
Government Bonds -- Actual over Actual should be the method for
accruing interest. If the coupon is June 30th, the accrual should be as
follows: January 1-June 30 = 181 days in normal years and 182 days in
leap years.
5. Dividend and Income Summary Reports -- This report shall show
dividends and income by line item.
6. Open Trade Report -- This report lists all trades that have not
settled.
B-1
7. Portfolio Purchase Journal -- All trades made during the month,
quarter and annually.
8. Portfolio Sales Journal -- All trades made during the month, quarter
and annually.
9. Realized Gain and Loss Report -- Using the identified cost method
showing the realized gain or loss by security when the security is sold.
10. Unrealized Gain and Loss Report -- Using the identified cost method
showing the realized gain or loss by security. In addition, Chase must
provide a gross unrealized appreciation and depreciation report for each
Portfolio.
11. Brokerage Allocation/Commission Report -- A summary showing, for each
Portfolio, the broker's name, the commission received and the transaction
amount of each trade.
12. Monthly Capital Stock Subscription and Redemption Report -- This shall
show the amount received for shares acquired and shares redeemed in the
annual and semi-annual Statement of Changes in Net Assets.
13. "As of" Trades -- "As of" trades that settle at the end of a quarter
must be included as part of each Portfolio's net assets, e.g., if a trade
settles on April 1 and the trade date is March 25, this trade should be
included in the March trial balance.
14. Operating Expenses and Fees -- Expenses and fees related to
administering the series. The accruals should be reported in the same format.
15. Corporate Actions -- The listing should disclose all corporate actions
during the month including cost basis adjustments (stock splits, spin-offs,
etc.).
16. Trade Tickets -- Verification of purchases and sales for each series.
17. Futures and Options -- Chase will xxxx-to-market all futures
transactions to include: (i) detailed worksheet showing all open positions
and variation margin due or payable on such date, (ii) acquisitions, and
(iii) disposition.
18. Options on Securities and Indices -- Chase will value all options
positions and provide a summary of (i) open position report, (ii) options
acquired during the month and (iii) options sold, exercised or closed during
the month.
Chase will clearly identify option transactions and positions as follows:
Purchase of calls
Purchase of puts
Sale of calls
Sale of puts
19. Foreign Securities -- Foreign securities not traded directly, or in
American Depository Receipt (ADR) form in the United States, will be valued
at the last sale price in the local currency translated into U.S. dollars at
current exchange rate.
B-2
20. Foreign Currency -- Foreign currency will be converted into U.S.
dollar equivalent at current exchange rates.
B-3
MUTUAL FUND SUBACCOUNTING SERVICES AGREEMENT
SCHEDULE C
FEES AND EXPENSES
FUND SUBACCOUNTING FEES
A. For the services rendered under this Agreement, the Adviser shall pay
to Chase an annual fee per Portfolio (except as noted in B. below)
based on the following schedule and subject to the minimum and maximum
annual fees per Portfolio as set forth:
.025 of 1% on the first $75 million of the Portfolio's total assets,
plus
.007 of 1% on the next $425 million of the Portfolio's total assets,
plus
.0025 of 1% of the next $2.5 billion of the Portfolio's total assets
Minimal annual fee per Portfolio: $15,000
Maximum annual fee per Portfolio: $100,000
B. With respect to the Alliance Small Cap Growth Portfolio, for the first
6 months of services under this Agreement, the Adviser shall pay to
Chase an annual fee equal to .025 of 1% of the Portfolio's total
assets. After the initial 6 month period, the Adviser shall pay to
Chase an annual fee based on the fee schedule set forth in A. above.
The minimum annual fee for the Alliance Small Cap Growth Portfolio
shall be calculated as follows:
First 3 months of services: None
Next 3 months of services: $7,500
Each month thereafter: $15,000
The Small Cap Growth Portfolio will be subject to a $100,000 maximum
annual fee.
C. The foregoing calculations are based on the average daily net assets of
each Portfolio. The fees will be computed, billed and payable monthly.
X. Xxxxx shall pass through to the Adviser on a monthly basis all fees and
expenses billed to Chase by pricing services in connection with this
Agreement. These pass through charges will be payable monthly and shall
not exceed $100,000 annually.
E. Out-of-pocket expenses, including but not limited to those in Section
5(d), will be computed, billed and payable monthly.
C-1
