INVESTMENT ACCOUNTING AGREEMENT
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THIS AGREEMENT made and effective as of this ___ day of __________, 2000,
by and between FREMONT MUTUAL FUNDS, INC., a Maryland corporation, having its
principal place of business at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 ("Fund"), and STATE STREET BANK AND TRUST COMPANY, a state
chartered trust company organized and existing under the laws of the
Commonwealth of Massachusetts, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("State Street").
WHEREAS, Fund is registered as an "investment company" under the Investment
Company Act of 1940 (the "1940 Act"); and
WHEREAS, State Street performs certain investment accounting and
recordkeeping services on a computerized accounting system (the "System") which
is suitable for maintaining certain accounting records of the Portfolios of the
Fund; and
WHEREAS, Fund desires to appoint State Street as investment accounting and
recordkeeping agent for the assets of the Fund's investment portfolio or
portfolios (each a "Portfolio" and collectively the "Portfolios") of the Fund,
and State Street is willing to accept such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto, intending to be legally bound, mutually covenant and agree
as follows:
1. APPOINTMENT OF RECORDKEEPING AGENT. Fund hereby constitutes and appoints
State Street as investment accounting and recordkeeping agent for the
Portfolios to perform accounting and recordkeeping functions related to
portfolio transactions required of Fund under Rule 31a of the 1940 Act and
to calculate the net asset value of the Portfolios.
2. REPRESENTATIONS AND WARRANTIES OF FUND. Fund hereby represents, warrants
and acknowledges to State Street:
A. That it is a corporation duly organized and existing and in good
standing under the laws of Maryland, and that it is registered under
the 1940 Act;
B. That it has the requisite power and authority under applicable law,
its charter and its bylaws to enter into this Agreement; that it has
taken all requisite action necessary to appoint State Street as
investment accounting and recordkeeping agent for the Portfolios of
the Fund; that this Agreement has been duly executed and delivered by
Fund; and that this Agreement constitutes a legal, valid and binding
obligation of Fund, enforceable in accordance with its terms; and
C. That it has determined to its satisfaction that the System is
appropriate and suitable for its needs.
3. REPRESENTATIONS AND WARRANTIES OF STATE STREET. State Street hereby
represents, warrants and acknowledges to Fund:
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A. That it is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts;
B. That it has the requisite power and authority under applicable law,
its charter and its bylaws to enter into and perform this Agreement;
that this Agreement has been duly executed and delivered by State
Street; and that this Agreement constitutes a legal, valid and binding
obligation of State Street, enforceable in accordance with its terms;
and
C. That the accounts and records maintained and preserved by State Street
shall be the property of Fund and that it will not use any information
made available to it under the terms hereof for any purpose other than
complying with its duties and responsibilities hereunder or a
specifically authorized by Fund in writing.
4. DUTIES AND RESPONSIBILITIES OF FUND.
A. Fund shall turn over to State Street all of each Portfolio's accounts
and records previously maintained, if any.
B. Fund shall provide to State Street the information necessary to
perform State Street's duties and responsibilities hereunder in
writing or its electronic or digital equivalent prior to the close of
the New York Stock Exchange on each day on which State Street prices
the Portfolios' securities and foreign currency holdings.
C. Fund shall furnish State Street with the declaration, record and
payment dates and amounts of any dividends or income and any other
special actions required concerning the securities in the Portfolios
when such information is not readily available from generally accepted
securities industry services or publications.
D. Fund shall pay to State Street such compensation at such time as may
from time to time be agreed upon in writing by State Street and Fund.
Fund shall also reimburse State Street on demand for all out-of-pocket
disbursements, costs and expenses incurred by State Street in
connection with services performed pursuant to this Agreement.
E. Fund shall notify State Street of any changes in statutes, rules,
regulations, requirements, or policies which may necessitate changes
in State Street's responsibilities or procedures.
F. Fund shall provide to State Street, as conclusive proof of any fact or
matter required to be ascertained from Fund as determined by State
Street, a certificate signed by Fund's president or other officer of
Fund, or other authorized individual, as requested by State Street.
G. Fund shall preserve the confidentiality of the System and the tapes,
books, reference manuals, instructions, records, programs,
documentation and information of, and other materials relevant to, the
System and the business of State Street ("Confidential Information").
Fund shall not voluntarily disclose such Confidential Information to
any other person other than its own employees
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who reasonably have a need to know such information pursuant to his
Agreement. Fund shall return all such Confidential Information to
State Street upon termination or expiration of this Agreement.
H. Fund has been informed that the System is licensed for use by State
Street from a third party ("Licensor"), and Fund acknowledges that
State Street and Licensor have proprietary rights in and to the System
and all other State Street or Licensor programs, code, techniques,
know-how, data bases, supporting documentation, data formats and
procedures, including without limitation any changes or modifications
made at the request or expense or both of Fund (collectively, the
"Protected Information"). Fund acknowledges that the Protected
Information constitutes confidential material and trade secrets of
State Street and Licensor. Fund shall preserve the confidentiality of
the Protected Information, and Fund hereby acknowledges that any
unauthorized use, misuse, disclosure or taking of Protected
Information, residing or existing internal or external to a computer,
computer system, or computer network, or the knowing and unauthorized
accessing or causing to be accessed of any computer, computer system,
or computer network, may be subject to civil liabilities and criminal
penalties under applicable law. Fund shall so inform employees and
agents who have access to the Protected Information or to any computer
equipment capable of accessing the same. Licensor is intended to be
and shall be a third party beneficiary of the Fund's obligations and
undertakings contained in this paragraph.
5. DUTIES AND RESPONSIBILITIES OF STATE STREET.
A. State Street shall calculate each Portfolio's (as applicable) net
asset value, public offering price, dividend distribution rates and
yields in accordance with Fund's instructions utilizing the pricing
sources designated by Fund on Exhibit A hereto. State Street will
price the securities and foreign currency holdings of the Portfolios
for which market quotations are available by the use of outside
services designated by Fund which are normally used and contracted
with for this purpose; all other securities and foreign currency
holdings will be priced in accordance with Fund's instructions.
B. State Street shall prepare and maintain, with the direction and as
interpreted by Fund or Fund's accountants and/or other advisors, in
complete, accurate, and current form, all accounts and records needed
to be maintained as a basis for the calculations to be done pursuant
to Section 5.A., and as further agreed upon by the parties in writing,
and shall preserve such records in the manner and for the periods
required by law or for such longer period as the parties may agree
upon in writing. Fund shall advise State Street in writing of all
applicable record retention requirements, other than those set forth
in the 1940 Act.
C. State Street will reconcile all accounts and records to Fund's
custodian's records on a monthly basis and report any discrepancies to
both the custodian and Fund. Also, State Street will reconcile on a
daily basis share purchases, redemptions, total shares outstanding and
accrued dividends/distributions payable to the Fund's transfer agent's
records and report any discrepancies to both the transfer agent and
Fund.
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D. State Street shall make available to Fund for inspection or
reproduction within a reasonable time, upon demand, all accounts and
records of Fund maintained and preserved by State Street.
E. State Street shall be entitled to rely conclusively on the
completeness and correctness of any and all accounts and records
turned over to it by Fund.
F. State Street shall assist Fund's independent accountants, or upon
approval of Fund or upon demand, any regulatory body, in any requested
review of Fund's accounts and records maintained by State Street but
shall be reimbursed by Fund for all expenses and employee time
invested in any such review outside of routine and normal periodic
reviews.
G. Upon receipt from Fund of any necessary information or instructions,
State Street shall provide information from the books and records it
maintains for Fund that Fund needs for tax returns, questionnaires, or
periodic reports to shareholders and such other reports and
information requests as Fund and State Street shall agree on from time
to time.
H. State Street shall not have any responsibility hereunder to Fund,
Fund's shareowners or any other person or entity for moneys or
securities of Fund, whether held by Fund or custodians of Fund.
6. INDEMNIFICATION. State Street shall not be responsible or liable for, and
Fund shall indemnify and hold State Street harmless from and against, any
and all costs, expenses, losses, damages, charges, counsel fees, payments
and liabilities, which may be asserted against or incurred by State Street
or for which it may be liable, arising out of or attributable to:
A. State Street's action or omission to act pursuant hereto, except for
any loss or damage arising from any negligent act or willful
misconduct of State Street.
B. State Street's payment of money as requested by Fund, or the taking of
any action which might make State Street liable for payment of money;
provided, however, that State Street shall not be obligated to expend
its own moneys or to take any such action except in State Street's
sole discretion.
C. State Street's action or omission to act hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been
properly executed.
D. The purchase or sale of any securities or foreign currency positions.
Without limiting the generality of the foregoing, State Street shall
be under no duty or obligation to inquire into:
(1) The validity of the issue of any securities purchased by or for
Fund, or the legality of the purchase thereof, or the propriety
of the purchase price;
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(2) The legality of the sale of any securities by or for Fund, or the
propriety of the sale price;
(3) The legality of the issue, sale or purchase of any shares of
Fund, or the sufficiency of the purchase or sale price; or
(4) The legality of the declaration of any dividend by Fund, or the
legality of the issue of any shares of Fund in payment of any
stock dividend.
E. Any error, omission, inaccuracy or other deficiency in Fund's accounts
and records provided to State Street pursuant to Section 4.A.
hereunder or otherwise, or in the failure of Fund to provide, or
provide in a timely manner, any accounts, records, or information
needed by State Street to perform its function hereunder.
F. The Fund's refusal or failure to comply with the terms of this
Agreement (including without limitation the Fund's failure to pay or
reimburse State Street under this indemnification provision), the
Fund's negligence or willful misconduct, or the failure of any
representation or warranty of the Fund hereunder to be and remain true
and correct in all respects at all times.
G. State Street shall indemnify and hold the Fund harmless from and
against any and all costs, expenses, losses, damages, charges, counsel
fees, payments and liabilities which may be asserted against or
incurred by Fund or for which it may be liable to the extent arising
out of or attributable to any negligent act or willful misconduct of
State Street; provided, however, that State Street shall not be liable
for consequential, special or punitive damages in any event.
7. LIMITATION OF LIABILITY. State Street shall not be responsible or liable
for:
A. Its failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation: any interruption, loss or malfunction of any utility,
transportation or communication service; inability to obtain material,
equipment or transportation, or a delay in mails; governmental or
exchange action, statute, ordinance, rulings, regulations or
direction; war, riot, emergency, civil disturbance, terrorism,
vandalism, explosions, labor disputes, freezes, floods, fires,
tornados, acts of God or public enemy, revolutions, or insurrection.
B. Its action or omission to act in good faith reliance on the advice or
opinion of counsel for Fund or its own counsel, which advice or
opinion may be obtained by State Street at the expense of Fund, or on
the advice and statements of Fund, Fund's accountants and officers or
other authorized individuals, and others believed by it in good faith
to be expert in matters upon which they are consulted.
8. PROCEDURES. State Street and Fund may from time to time adopt procedures as
they agree upon, and State Street may conclusively assume that any
procedure approved or directed by Fund or its accountants or other advisors
does not conflict with or violate any requirements of Fund's prospectus,
charter or declaration of trust, bylaws, any applicable
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law, rule or regulation, or any order, decree or agreement by which the
Fund may be bound.
9. TERM AND TERMINATION. The initial term of this Agreement shall be a period
of one (1) year commencing on the effective date hereof. This Agreement
shall continue thereafter until terminated by either party by notice in
writing received by the other party not less than ninety (90) days prior to
the date upon which such termination shall take effect. Upon termination of
this Agreement:
A. Fund shall pay to State Street its fees and compensation due hereunder
and its reimbursable disbursements, costs and expenses paid or
incurred to such date.
B. Fund shall designate a successor (which may be Fund) by notice in
writing to State Street on or before the termination date.
C. State Street shall deliver to the successor, or if none has been
designated, to Fund, at State Street's office, all records, funds and
other properties of Fund deposited with or held by State Street
hereunder. In the event that neither a successor nor Fund takes
delivery of all records, funds and other properties of Fund by the
termination date, State Street's sole obligation with respect thereto
from the termination date until delivery to a successor or Fund shall
be to exercise reasonable care to hold the same in custody in its form
and condition as of the termination date, and State Street shall be
entitled to reasonable compensation therefor, including but not
limited to all of its out-of-pocket costs and expenses incurred in
connection therewith.
10. NOTICES. Notices, requests, instructions and other writings addressed to
Fund at the address set forth above or at such address as Fund may have
designated to State Street in writing, shall be deemed to have been
properly given to Fund hereunder; and notices, requests, instructions and
other writings addressed to State Street at its offices at 000 Xxxxxxxxxxxx
Xxxxxx, Xxxxxx Xxxx, XX 00000, Attn: Xxxxx Xxxxxx, or to such other address
as it may have designated to Fund in writing, shall be deemed to have been
properly given to State Street hereunder.
11. MULTIPLE PORTFOLIOS.
A. Each Portfolio shall be regarded for all purposes hereunder as a
separate party apart from each other Portfolio. Unless the context
otherwise requires, with respect to every transaction covered by this
Agreement, every reference herein to the Fund shall be deemed to
relate solely to the particular Portfolio to which such transaction
relates. Under no circumstances shall the rights, obligations or
remedies with respect to a particular Portfolio constitute a right,
obligation or remedy applicable to any other Portfolio. The use of
this single document to memorialize the separate agreement of each
Portfolio is understood to be for clerical convenience only and shall
not constitute any basis for joining the Portfolios for any reason.
B. Fund may appoint State Street as its investment accounting and
recordkeeping agent for additional Portfolios from time to time by
written notice, provided that State Street consents to such addition.
Rate or charges for each additional Portfolio shall be as agree upon
by State Street and Fund in writing.
12. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Massachusetts, without reference to the choice of laws
principles thereof.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, the indemnification extended
hereunder, and the provisions of Sections 4.G and 4.H. are intended to
and shall continue after and survive the expiration, termination or
cancellation of this Agreement.
D. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by each party hereto.
E. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed as
a continuing or permanent waiver of any such terms, conditions, rights
or privileges, but the same shall continue and remain in full force
and effect as if no such forbearance or waiver had occurred. No
waiver, release or discharge of any party's rights hereunder shall be
effective unless contained in a written instrument signed by the party
sought to be charged.
F. 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.
G. This Agreement may be executed in two or more separate counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
H. If any part, term or provision of this Agreement is determined by the
courts or any regulatory authority to be illegal, in conflict with any
law or otherwise invalid, the remaining portion or portions shall be
considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held
to be illegal or invalid.
I. This Agreement may not be assigned by either party without the prior
written consent of the other.
J. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between Fund
and State Street.
K. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by any party hereunder shall not
affect any rights or obligations of any other party hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective and duly authorized officers, to be effective as of the day
and year first above written.
STATE STREET BANK AND TRUST COMPANY
By:________________________________
Title:_____________________________
FREEMONT MUTUAL FUNDS, INC.
By:________________________________
Title:_____________________________
EXHIBIT A
Pricing Source
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Security Type Pricing Source
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Domestic Equities* Reuters
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Foreign Equities Interactive Data Corp.
Foreign Bonds
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Municipal Bonds X.X. Xxxxx Co., Inc.
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Corporate Xxxxx Xxxxxxx Xxxxx
Interactive Data Corp.
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Short Term** Amortized Cost
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Futures Options*** Bloomberg
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ADRs Interactive Data Corp.
If unavailable from interactive Data
Corp - use
Reuters
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Mortgage-Backed Securities Interactive Data Corp.
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* If a problem arises with the Reuters transmission Fremont has contracted to
receive prices from interactive Data Corp.
** Amortized Cost is used for securities with a maturity date that is less than
60 days.
*** Futures prices are obtained from Bloomberg and manually input into PAS Vs an
automated transmission.
There are additional manual prices that are received from various brokers,
Bloomberg and subadvisors as instructed by the client.
