FUND ACCOUNTING AGREEMENT
AGREEMENT made this 23rd day of May 2000, between FIRST EAGLE FUNDS (the
"Trust"), a Delaware business trust, having its principal place of business
at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and BISYS FUND
SERVICES OHIO, INC. ("Fund Accountant"), a corporation organized under the
laws of the State of Ohio and having its principal place of business at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust desires that Fund Accountant perform certain fund
accounting services for each currently existing series of the Trust, and such
additional series as now or hereafter may be established from time to time
(individually referred to herein as the "Fund" and collectively as the
"Funds"); and
WHEREAS, Fund Accountant is willing to perform such services on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. SERVICES AS FUND ACCOUNTANT.
(a) MAINTENANCE OF BOOKS AND RECORDS. Fund Accountant will keep
and maintain the following books and records of each Fund
pursuant to Rule 31a-1 under the Investment Company Act of 1940
(the "Rule"):
(i) Journals containing an itemized daily record in detail
of all purchases and sales of securities, all receipts
and disbursements of cash and all other debits and
credits, as required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts,
including interest accrued and interest received, as
required by subsection (b)(2)(i) of the Rule;
(iii) Separate ledger accounts required by subsection
(b)(2)(ii) and (iii) of the Rule; and
(iv) A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8)
of the Rule.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES. In addition to the
maintenance of the books and records specified above, Fund
Accountant shall perform the following accounting services
daily for each Fund:
(i) Calculate the net asset value per share utilizing
prices obtained from the sources described in
subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services, or if such quotes are unavailable, then obtain
such prices from each Fund's investment adviser or its
designee, as approved by the Trust's Board of Trustees/
Directors (hereafter referred to as "Directors");
(iii) Verify and reconcile with the Funds' custodian all
daily trade activity;
(iv) Compute, as appropriate, each Fund's net income and
capital gains, dividend payables, dividend factors,
7-day yields, 7-day effective yields, 30-day yields,
and weighted average portfolio maturity;
(v) Review daily the net asset value calculation and
dividend factor (if any) for each Fund prior to release
to shareholders, check and confirm the net asset values
and dividend factors for reasonableness and deviations,
and distribute net asset values and yields to NASDAQ;
(vi) Report to the Trust the daily market pricing of
securities in any money market Funds, with the
comparison to the amortized cost basis;
(vii) Determine unrealized appreciation and depreciation on
securities held in variable net asset value Funds;
(viii) Amortize premiums and accrete discounts on securities
purchased at a price other than face value, if requested
by the Trust;
(ix) Update fund accounting system to reflect rate
changes, as received from a Fund's investment adviser,
on variable interest rate instruments;
(x) Post Fund transactions to appropriate categories;
(xi) Accrue expenses of each Fund according to
instructions received from the Trust's Administrator;
(xii) Determine the outstanding receivables and payables
for all (1) security trades, (2) Fund share transactions
and (3) income and expense accounts;
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(xiii) Provide accounting reports in connection with the
Trust's regular annual audit and other audits and
examinations by regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall
agree upon, as set forth in a separate schedule.
(c) SPECIAL REPORTS AND SERVICES.
(i) Fund Accountant may provide additional special
reports upon the request of the Trust or a Fund's
investment adviser, which may result in an additional
charge, the amount of which shall be agreed upon between
the parties.
(ii) Fund Accountant may provide such other similar
services with respect to a Fund as may be reasonably
requested by the Trust, which may result in an
additional charge, the amount of which shall be agreed
upon between the parties.
(d) ADDITIONAL ACCOUNTING SERVICES. Fund Accountant shall also
perform the following additional accounting services for each
Fund:
(i) Provide monthly a download (and hard copy thereof) of
the financial statements described below, upon request
of the Trust. The download will include the following
items:
Statement of Assets and Liabilities,
Statement of Operations,
Statements of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal
excise tax returns;
(B) the Trust's semi-annual reports with the
Securities and Exchange Commission ("SEC") on
Form N-SAR;
(C) the Trust's annual, semi-annual and quarterly
(if any) shareholder reports;
(D) registration statements on Form N-1A and other
filings relating to the registration of shares;
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(E) the Administrator's monitoring of the Trust's
status as a regulated investment company under
Subchapter M of the Internal Revenue Code, as
amended;
(F) annual audit by the Trust's auditors; and
(G) examinations performed by the SEC.
2. SUBCONTRACTING.
Fund Accountant may, at its expense, subcontract with any entity or
person concerning the provision of the services contemplated hereunder;
provided, however, that Fund Accountant shall not be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that Fund Accountant shall be responsible, to the extent
provided in Section 7 hereof, for all acts of such subcontractor as if such
acts were its own.
3. COMPENSATION.
The Trust shall pay Fund Accountant for the services to be provided
by Fund Accountant under this Agreement in accordance with, and in the manner
set forth in, Schedule A hereto, as such Schedule may be amended from time to
time.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Fund Accountant the fees described in Section
3 hereof, the Trust agrees to reimburse Fund Accountant for its out-of-pocket
expenses in providing services hereunder, including without limitation the
following:
(a) All freight and other delivery and bonding charges incurred by Fund
Accountant in delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by Fund Accountant in
communication with the Trust, the Trust's investment adviser or
custodian, dealers or others as required for Fund Accountant to
perform the services to be provided hereunder;
(c) The cost of obtaining security market quotes pursuant to Section
1(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other materials;
(e) All systems-related expenses associated with the provision of
special reports and services pursuant to Section 1(c) herein;
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(f) Any expenses Fund Accountant shall incur at the written direction
of an officer of the Trust thereunto duly authorized; and
(g) Any additional expenses reasonably incurred by Fund Accountant in
the performance of its duties and obligations under this Agreement.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Fund as of
the date first written above (or, if a particular Fund is not in existence on
that date, on the date such Fund commences operation) (the "Effective Date").
6. TERM.
This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
April 29, 2001 (the "Initial Term"). Thereafter, unless otherwise terminated
as provided herein, this Agreement shall be renewed automatically for
successive one-year periods ("Rollover Periods"). This Agreement may be
terminated without penalty (i) by provision of a notice of nonrenewal in the
manner set forth below, (ii) by mutual agreement of the parties or (iii) for
"cause," as defined below, upon the provision of sixty (60) days advance
written notice by the party alleging cause. Written notice of nonrenewal must
be provided within sixty (60) days of the end of the Initial Term or any
Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been remedied for thirty (30) days
following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or
unethical behavior in the conduct of its business; or (c) financial
difficulties on the part of the party to be terminated which are evidenced by
the authorization or commencement of, or involvement by way of pleading,
answer, consent or acquiescence in, a voluntary or involuntary case under
Title 11 of the United States Code, as from time to time is in effect, or any
applicable law, other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or alteration
of the rights of creditors.
After such termination for so long as Fund Accountant, with the
written consent of the Trust, in fact continues to perform any one or more of
the services contemplated by this Agreement or any schedule or exhibit
hereto, the provisions of this Agreement, including without limitation the
provisions dealing with indemnification, shall continue in full force and
effect. Compensation due Fund Accountant and unpaid by the Trust upon such
termination shall be immediately due and payable upon and notwithstanding
such termination. Fund Accountant shall
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be entitled to collect from the Trust, in addition to the compensation
described under Sections 3 and 4 hereof, the amount of all of Fund
Accountant's cash disbursements for services in connection with Fund
Accountant's activities in effecting such termination, including without
limitation, the delivery to the Trust and/or its designees of the Trust's
property, records, instruments and documents.
If, for any reason other than nonrenewal, mutual agreement of the
parties or "cause," as defined above, Fund Accountant is replaced as fund
accountant, or if a third party is added to perform all or a part of the
services provided by Fund Accountant under this Agreement (excluding any
sub-accountant appointed by Fund Accountant as provided in Section 2 hereof),
then the Trust shall make a one-time cash payment, in consideration of the
fee structure and services to be provided under this Agreement, and not as a
penalty, to Fund Accountant equal to the balance due Fund Accountant for the
remainder of the then-current term of this Agreement, assuming for purposes
of calculation of the payment that such balance shall be based upon the
average amount of the Trust's assets for the twelve months prior to the date
Fund Accountant is replaced or a third party is added.
In the event the Trust is merged into another legal entity in part
or in whole pursuant to any form of business reorganization or is liquidated
in part or in whole prior to the expiration of the then-current term of this
Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which
Fund Accountant is not retained to provide fund accounting services
consistent with this Agreement. The one-time cash payment referenced above
shall be due and payable on the day prior to the first day in which Fund
Accountant is replaced or a third party is added.
The parties further acknowledge and agree that, in the event Fund
Accountant is replaced, or a third party is added, as set forth above, (i) a
determination of actual damages incurred by Fund Accountant would be
extremely difficult, and (ii) the liquidated damages provision contained
herein is intended to adequately compensate Fund Accountant for damages
incurred and is not intended to constitute any form of penalty.
7. STANDARD OF CARE; RELIANCE ON RECORDS AND INSTRUCTIONS;
INDEMNIFICATION.
Fund Accountant shall use its best efforts to insure the accuracy
of all services performed under this Agreement, but shall not be liable to
the Trust for any action taken or omitted by Fund Accountant in the absence
of bad faith, willful misfeasance, negligence or from reckless disregard by
it of its obligations and duties. A Fund agrees to indemnify and hold
harmless Fund Accountant, its employees, agents, directors, officers and
nominees from and against any and all claims, demands, actions and suits,
whether groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses
of every nature and character arising out of or in any way relating to Fund
Accountant's actions taken or nonactions with respect to the performance of
services under this Agreement with respect to such Fund or based, if
applicable, upon reasonable reliance on information, records, instructions or
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requests with respect to such Fund given or made to Fund Accountant by a duly
authorized representative of the Trust; provided that this indemnification
shall not apply to actions or omissions of Fund Accountant in cases of its
own bad faith, willful misfeasance, negligence or from reckless disregard by
it of its obligations and duties, and further provided that prior to
confessing any claim against it which may be the subject of this
indemnification, Fund accountant shall give the Company written notice of and
reasonable opportunity to defend against said claim in its own name or in the
name of Fund Accountant.
8. RECORD RETENTION AND CONFIDENTIALITY.
Fund Accountant shall keep and maintain on behalf of the Trust all
books and records which the Trust and Fund Accountant is, or may be,
required to keep and maintain pursuant to any applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended (the "1940 Act"), relating to the
maintenance of books and records in connection with the services to be
provided hereunder. Fund Accountant further agrees that all such books and
records shall be the property of the Trust and to make such books and records
available for inspection by the Trust or by the Securities and Exchange
Commission at reasonable times and otherwise to keep confidential all books
and records and other information relative to the Trust and its shareholders;
except when requested to divulge such information by duly-constituted
authorities or court process.
9. UNCONTROLLABLE EVENTS.
Fund Accountant assumes no responsibility hereunder, and shall not
be liable, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
10. REPORTS.
Fund Accountant will furnish to the Trust and to its properly
authorized auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the Trust
in writing, such reports and at such times as are prescribed pursuant to the
terms and the conditions of this Agreement to be provided or completed by
Fund Account, or as subsequently agreed upon by the parties pursuant to an
amendment hereto. The Trust agrees to examine each such report or copy
promptly and will report or cause to be reported any errors or discrepancies
therein.
11. RIGHTS OF OWNERSHIP.
All computers programs and procedures developed to perform services
required to be
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provided by Fund Accountant under this Agreement are the property of Fund
Accountant. All records and other data except such computer programs and
procedures are the exclusive property of the Trust and all such other records
and data will be furnished to the Trust in appropriate form as soon as
practicable after termination of this Agreement for any reason.
12. RETURN OF RECORDS.
Fund Accountant may at its option at any time, and shall promptly
upon the Trust's demand, turn over to the Trust and cease to retain Fund
Accountant's files, records and documents created and maintained by Fund
Accountant pursuant to this Agreement which are no longer needed by Fund
Accountant in the performance of its services or for its legal protection. If
not so turned over to the Trust, such documents and records will be retained
by Fund Accountant for six years from the year of creation. At the end of
such six-year period, such records and documents will be turned over to the
Trust unless the Trust authorizes in writing the destruction of such records
and documents.
13. REPRESENTATIONS OF THE TRUSTS.
The Trust certifies to Fund Accountant that: (1) as of the close of
business on the Effective Date, each Fund that is in existence as of the
Effective Date has authorized unlimited shares, and (2) this Agreement has
been duly authorized by the Trust and, when executed and delivered by the
Trust, will constitute a legal, valid and binding obligation of the Trust,
enforceable against the Trust in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
14. REPRESENTATIONS OF FUND ACCOUNTANT.
Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other
cause the records, and other data of the Trust and Fund Accountant's records,
data, equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its
obligations hereunder, and (2) this Agreement has been duly authorized by
Fund Accountant and, when executed and delivered by Fund Accountant, will
constitute a legal, valid and binding obligation of Fund Accountant,
enforceable against Fund Accountant in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
15. INSURANCE.
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Fund Accountant shall maintain a fidelity bond covering larceny and
embezzlement and an insurance policy with respect to directors and officers
errors and omissions coverage in amounts that are appropriate in light of its
duties and responsibilities hereunder. Fund Accountant shall notify the Trust
should any of its insurance coverage be canceled or reduced. Such
notification shall include the date of change and the reasons therefor. Fund
Accountant shall notify the Trust of any material claims against it with
respect to services performed under this Agreement, whether or not they may
be covered by insurance, and shall notify the Trust from time to time as may
be appropriate of the total outstanding claims made by Fund Accountant under
its insurance coverage.
16. INFORMATION TO BE FURNISHED BY THE TRUST AND FUNDS.
The Trust has furnished to Fund Accountant the following:
(a) Copies of the Declaration of Trust or Articles of Incorporation
of the Trust and of any amendments thereto, certified by the
proper official of the state in which such document has been
filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Directors covering
the approval of this Agreement, authorization of a
specified officer of the Trust to execute and deliver this
Agreement and authorization for specified officers of the
Trust to instruct Fund Accountant thereunder.
(c) A list of all the officers of the Trust, together with specimen
signatures of those officers who are authorized to instruct Fund
Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
17. INFORMATION FURNISHED BY FUND ACCOUNTANT.
(a) Fund Accountant has furnished to the Trust the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments thereto.
(b) Fund Accountant shall, upon request, furnish certified copies of
corporate
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actions covering the following matters:
(i) Approval of this Agreement, and authorization of a
specified officer of Fund Accountant to execute and
deliver this Agreement; and
(ii) Authorization of Fund Accountant to act as fund accountant
for the Trust and to provide accounting services for the
Trust.
18. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16
hereof forthwith upon such amendments or changes becoming effective. In
addition, the TRUST agrees that no amendments will be made to the
Prospectuses or Statements of Additional Information of the Trust which might
have the effect of changing the procedures employed by Fund Accountant in
providing the services agreed to hereunder or which amendment might affect
the duties of Fund Accountant hereunder unless the Trust first obtains Fund
Accountant's approval of such amendments or changes.
19. COMPLIANCE WITH LAW.
Except for the obligations of Fund Accountant set forth in Section
8 hereof, the Trust assumes full responsibility for the preparation, contents
and distribution of each prospectus of the Trust as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Trust's
shares. The Trust represents and warrants that no shares of the Trust will be
offered to the public until the Trust's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
20. NOTICES.
Any notice provided hereunder shall be sufficiently given when sent
by registered or certified mail to the party required to be served with such
notice, at the following address: if to the Trust, at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; and if to Fund Accountant, at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, or at such other address as such party
may from time to time specify in writing to the other party pursuant to this
Section.
21. HEADINGS.
Paragraph headings in the Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
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22. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto expect by
the specific written consent of the other party. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
23. GOVERNING LAW:
This Agreement shall be governed by and provisions shall be
construed in accordance with law of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
FIRST EAGLE FUNDS
By:
Title:
BISYS FUND SERVICES OHIO, INC.
By:
Title:
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
FIRST EAGLE FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
FEES
FEES:
Fund Accountant shall be entitled to receive from the Trust on the first
business day of each month, or at such time(s) as Fund Accountant shall
request and the parties hereto shall agree, a fee computed daily at the
annual rate set forth below:
Two one-hundredths of one percent (.02%) of the
Trust's average daily net assets.
OUT-OF-POCKET EXPENSES:
The fees set forth above shall be in addition to the payment of
out-of-pocket expenses, as provided for in Section 4 of this Agreement.
A-1
