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Exhibit (h-5)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of October, 1998, between PACIFIC CAPITAL
FUNDS, a Massachusetts business trust (the "Trust") and BISYS FUND SERVICES
OHIO, INC., an Ohio corporation ("Fund Accountant").
WHEREAS, the Trust desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Trust, all 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;
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(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;
(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;
(xiii) Provide accounting reports in connection
with the Trust's regular annual audit and
other audits and examinations by regulatory
agencies; and
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(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,
Statement 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.
(e) Independent Contractor. Fund Accountant shall, for
all purposes herein, be deemed to be an independent
contractor and, unless otherwise expressly provided
or authorized herein, shall have no authority to act
for or represent the Trust in any way and shall not
be deemed an agent of the Trust.
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 advisor 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 l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other
materials;
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(e) Any expenses Fund Accountant shall incur at the written
direction of an officer of the Trust thereunto duly
authorized; and
(f) Any additional out-of-pocket 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 December 31, 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 60 days advance written notice
by the party alleging cause. Written notice of nonrenewal must be provided
within 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) willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the party to be terminated with respect to its obligations and duties set forth
herein; (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; (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; (d) a material breach of this Agreement that has not been cured
within 30 days following written notice of such breach from the non-breaching
party; or (e) any other circumstance which substantially impairs the performance
of the obligations and duties of the party to be terminated, or its ability to
perform those obligations and duties as contemplated herein.
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.
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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 be entitled to collect from the Trust, in addition to the
compensation described under Section 3 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, or any copies thereof. Subsequent
to such termination, for a reasonable fee, Fund Accountant will provide the
Trust with reasonable access to any Trust documents or records remaining in its
possession.
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 lesser of the amount due Fund
Accountant for: (i) a period of one year commencing on the date Fund Accountant
is replaced or a third party is added; or (ii) the remainder of the then-current
term of this Agreement, assuming for purposes of calculation of the payment that
the amount due Fund Accountant shall be based upon the total combined net asset
value of the Funds as shown in their most recently audited financial statements
and shall remain constant for the remainder of the then-current term.
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.
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 set forth herein, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby.
The Trust 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 any actions taken by Fund
Accountant or Fund Accountant's failure to take any actions with respect to the
performance of services under this Agreement on
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behalf of any Fund or based, if applicable, upon reasonable reliance on
information, records, instructions or 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 reckless disregard by it of its obligations and duties.
The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Trust may be asked to
indemnify or hold Fund Accountant harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that Fund Accountant will use all reasonable care
to identify and notify the Trust promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the Trust, but failure to do so in good faith shall not
affect Fund Accountant's rights hereunder.
The Trust shall be entitled to participate at its own expense
or, if it so elects, to assume the defense of any suit brought to enforce any
claims subject to this indemnity provision. If the Trust elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
the Trust and satisfactory to Fund Accountant, whose approval shall not be
unreasonably withheld. In the event that the Trust elects to assume the defense
of any suit and retain counsel, Fund Accountant shall bear the fees and expenses
of any additional counsel retained by it. If the Trust does not elect to assume
the defense of a suit, it will reimburse Fund Accountant for the reasonable fees
and expenses of any counsel retained by 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. 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
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pursuant to the terms and the conditions of this Agreement to be provided or
completed by Fund Accountant, 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 no later than ten business days from the receipt thereof.
In the event that errors or discrepancies, except such errors and discrepancies
as may not reasonably be expected to be discovered by the recipient within ten
days after conducting a diligent examination, are not so reported within the
aforesaid period of time, a report will for all purposes be accepted by and
binding upon the Trust and any other recipient, and, except as provided in
Section 7 hereof, Fund Accountant shall have no liability for errors or
discrepancies therein and shall have no further responsibility with respect to
such report except to perform reasonable corrections of such errors and
discrepancies within a reasonable time after requested to do so by the Trust.
10. Rights of Ownership.
All computer programs and procedures developed by or on behalf
of Fund Accountant to perform services required to be 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.
11. 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.
12. Representations of the Trust.
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, executed and delivered by the Trust, and constitutes 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.
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13. Representations of Fund Accountant.
Fund Accountant represents and warrants that: (1) Fund
Accountant will perform comprehensive tests on its systems to simulate the
actual turning of the century. These tests shall be intended to identify any
operational issues caused by the century change at midnight December 31, 1999.
Fund Accountant agrees to implement by December 31, 1998, all necessary updates
and changes to its systems, if any, to accommodate the turn of the century;, and
(2) this Agreement has been duly authorized, executed and delivered by Fund
Accountant, and constitutes 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.
14. Insurance.
Fund Accountant shall notify the Trust should any of Fund
Accountant's 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 Fund Accountant 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.
15. 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 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 Board
of Trustees 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 current Prospectuses and Statements
of Additional Information for each Fund.
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16. Information Furnished by Fund Accountant.
Fund Accountant has furnished to the Trust copies of corporate
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.
17. 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, which shall not be unreasonably withheld.
18. Maintenance of Systems and Equipment; Uncontrollable Events.
Fund Accountant shall maintain adequate and reliable computer
and other equipment necessary or appropriate to carry out its obligations under
this Agreement. In the event of computer or other equipment failures beyond its
reasonable control, Fund Accountant shall use its best efforts to minimize
service interruptions. Fund Accountant represents and warrants that the various
procedures and systems which it has implemented with regard to safekeeping from
loss or damage attributable to fire, theft or any other cause of the 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. Notwithstanding the foregoing, 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. In any such event, Fund Accountant shall, at no additional expense to
the Trust, take all steps reasonably necessary to minimize service
interruptions.
19. Compliance with Law.
Except for the obligations of Fund Accountant set forth in
Section 8 hereof, Fund Accountant shall have no responsibility for the
preparation, contents and distribution of any 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
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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. Nothing in this Section 19 shall modify the obligations of Fund
Accountant, or any affiliate of Fund Accountant under any other agreement with
the Trust.
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, c/o Xxxxxx X. Xxxxxx,
Chairman, Pacific Capital Funds, 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000;
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 this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
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 except 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 the laws of the State of Ohio and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the State
of Ohio, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
24. Entire Agreement.
Effective as of the date set forth above, the Fund Accounting
Agreement between the parties dated as of October 29, 1993 is terminated and
shall be of no further force or effect except as otherwise set forth therein.
This Agreement contains the entire understanding of the parties with respect to
the subject matter hereof, and may not be amended without the written consent of
both parties.
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25. Matters Relating to the Trust as a Massachusetts Business
Trust.
The names "Pacific Capital Funds" and "Trustees of Pacific
Capital Funds" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from
time to time under a Declaration of Trust dated as of October 30, 1992, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of the Commonwealth of Massachusetts and elsewhere as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of "Pacific Capital Funds" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders or representatives of the Trust personally, but bind only
the assets of the Trust, and all persons dealing with any series of shares of
the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first above written.
PACIFIC CAPITAL FUNDS
By: /s/ Irimga XxXxx
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Title: President
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BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: Executive Vice President
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Dated: October 1, 1998
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
PACIFIC CAPITAL FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
FEES
Fund Accountant shall be entitled to receive fees from each Fund in accordance
with the following schedule:
Annual Per Fund Fee:
Three one-hundredths of one percent (.03%) of each Fund's average daily
net assets up to three hundred million dollars.
Two and one-half one-hundredths of one percent (.025%) of each Fund's
average daily net assets in excess of three hundred million dollars up
to five hundred and fifty million dollars.
Two one-hundredths of one percent (.02%) of each Fund's average daily
net assets in excess of five hundred and fifty million dollars.
Multiple Classes of Shares:
Classes of shares which have different net asset values or pay
different daily dividends will be treated as separate classes, and in
addition to the fee schedule above, Fund Accountant will be entitled to
receive annual per class fees for any additional classes in excess of
three classes as agreed upon in writing between the parties.
A-1
