FUND ADMINISTRATION AND ACCOUNTING AGREEMENT
AGREEMENT made as of _________________ 2003, by and between PowerShare
Exchange Traded Fund Trust (the "Fund"), and The Bank of New York, a New York
banking organization ("BNY").
W I T N E S S E T H :
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WHEREAS, the Fund is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain BNY to provide for the portfolios
identified on Exhibit A hereto (each, a "Series") the services described herein,
and BNY is willing to provide such services, all as more fully set forth below;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties hereby agree as follows:
1. Appointment.
The Fund hereby appoints BNY as its agent for the term of this Agreement to
perform the services described herein. BNY hereby accepts such appointment and
agrees to perform the duties hereinafter set forth.
2. Representations and Warranties.
The Fund hereby represents and warrants to BNY, which representations and
warranties shall be deemed to be continuing, that:
(a) It is duly organized and existing under the laws of the jurisdiction of
its organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and delivered by the
Fund in accordance with all requisite action and constitutes a valid and legally
binding obligation of the Fund, enforceable in accordance with its terms;
(c) It is conducting its business in compliance with all applicable laws
and regulations, both state and federal, and has obtained all regulatory
licenses, approvals and consents necessary to carry on its business as now
conducted; there is no statute, regulation, rule, order or judgment binding on
it and no provision of its Fund Agreement or by-laws, nor of any mortgage,
indenture, credit agreement or other contract binding on it or affecting its
property which would prohibit its execution or performance of this Agreement;
and
(d) To the extent the performance of any services described in Schedule II
attached hereto by BNY in accordance with the then effective Prospectus (as
hereinafter defined) for the Fund would violate any applicable laws or
regulations, the Fund shall immediately so notify BNY in writing and thereafter
shall either furnish BNY with the appropriate values of securities, net asset
value or other computation, as the case may be, or, subject to the prior
approval of BNY, instruct BNY in writing to value securities and/or compute net
asset value or other computations in a manner the Fund specifies in writing, and
either the furnishing of such values or the giving of such instructions shall
constitute a representation by the Fund that the same is consistent with all
applicable laws and regulations and with its Prospectus.
3. Delivery of Documents.
(a) The Fund will promptly deliver to BNY true and correct copies of each
of the following documents as currently in effect and will promptly deliver to
it all future amendments and supplements thereto, if any:
(i) The Fund's Fund Agreement or other organizational document and all
amendments thereto (the "Fund Agreement");
(ii) The Fund's bylaws (the "Bylaws");
(iii) Resolutions of the Fund's Trustees authorizing the execution,
delivery and performance of this Agreement by the Fund;
(iv) The Fund's registration statement most recently filed with the
Securities and Exchange Commission (the "SEC") relating to the shares of
the Fund (the "Registration Statement");
(v) The Fund's Notification of Registration under the 1940 Act on Form
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N-8A filed with the SEC; and
(vi) The Fund's Prospectus and Statement of Additional Information
pertaining to the Series (collectively, the "Prospectus").
(b) The copy of the Fund Agreement shall be certified by the Secretary of
State (or other appropriate official) of the state of organization, and if the
Fund Agreement is required by law also to be filed with a county or other
officer or official body, a certificate of such filing shall be filed with a
certified copy submitted to BNY. Each copy of the Bylaws, Registration Statement
and Prospectus, and all amendments thereto, and copies of Fund resolutions,
shall be certified by the Secretary or an Assistant Secretary of the Fund.
(c) It shall be the sole responsibility of the Fund to deliver to BNY its
currently effective Prospectus and BNY shall not be deemed to have notice of any
information contained in such Prospectus until it is actually received by BNY.
4. Duties and Obligations of BNY.
(a) Subject to the direction and control of the Fund's Trustees and the
provisions of this Agreement, BNY shall provide to the Fund (i) the
administrative services set forth on Schedule I attached hereto and (ii) the
valuation and computation services listed on Schedule II attached hereto.
(b) In performing hereunder, BNY shall provide, at its expense, office
space, facilities, equipment and personnel.
(c) BNY shall not provide any services relating to the management,
investment advisory or sub-advisory functions of the Fund, distribution of
shares of the Fund, maintenance of the Fund's financial records, except to the
extent specifically set forth herein or other services normally performed by the
Funds' respective counsel or independent auditors.
(d) Upon receipt of the Fund's prior written consent (which shall not be
unreasonably withheld), BNY may delegate any of its duties and obligations
hereunder to any delegee or agent whenever and on such terms and conditions as
it deems necessary or appropriate. Notwithstanding the foregoing, no Fund
consent shall be required for any such delegation to any other subsidiary of The
Bank of New York Company, Inc., and BNY shall be
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deemed to have taken or omitted any action taken or omitted by any such
subsidiary.
(e) The Fund shall cause its officers, advisors, sponsor, distributor,
legal counsel, independent accountants, current administrator (if any) and
transfer agent to cooperate with BNY and to provide BNY, upon request, with such
information or documents relating to the Fund as is within the possession or
knowledge of such persons, in order to enable BNY to perform its duties
hereunder. In connection with its duties hereunder, BNY shall be entitled to
rely, and shall be held harmless by the Fund when acting in reliance, upon the
any such information or documents provided to BNY, or upon any advice received
from (i) a person reasonably believed by BNY to have been identified by the Fund
as authorized to give advice on behalf of the Fund or its advisors (each an
"Authorized Person") (ii) Fund Counsel, or (iii) the Fund's Independent
Accountants. BNY shall not be liable for any loss, damage or expense resulting
from or arising out of the failure of the Fund to cause any information,
documents or advice from legal counsel or independent accountants to be provided
to BNY as provided herein. All fees or costs charged by such persons shall be
borne by the Fund.
(f) Nothing in this Agreement shall limit or restrict BNY, any affiliate of
BNY or any officer or employee thereof from acting for or with any third
parties, and providing services similar or identical to same or all of the
services provided hereunder.
(g) The Fund shall furnish BNY with any and all instructions, explanations,
information, specifications and documentation deemed necessary by BNY in the
performance of its duties hereunder, including, without limitation, the amounts
or written formula for calculating the amounts and times of accrual of Fund
liabilities and expenses. BNY shall not be required to include as the Fund
liabilities and expenses, nor as a reduction of net asset value, any accrual for
any federal, state, or foreign income taxes unless the Fund shall have specified
to BNY the precise amount of the same to be included in liabilities and expenses
or used to reduce net asset value. The Fund shall also furnish BNY with bid,
offer, or market values of Securities if BNY notifies the Fund that same are not
available to BNY from a security pricing or similar service utilized, or
subscribed to, by BNY which BNY in its judgment deems reliable at the time such
information is required for calculations hereunder. At any time and from time to
time, the Fund also may furnish BNY with bid, offer, or market values of
Securities and instruct BNY to use
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such information in its calculations hereunder. BNY shall at no time be required
or obligated to commence or maintain any utilization of, or subscriptions to,
any securities pricing or similar service.
(h) BNY may apply to an officer of the Fund for written instructions with
respect to any matter arising in connection with BNY's performance hereunder for
the Fund, and BNY shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with such instructions. Such application
for instructions may, at the option of BNY, set forth in writing any action
proposed to be taken or omitted to be taken by BNY with respect to its duties or
obligations under this Agreement and the date on and/or after which such action
shall be taken, and BNY shall not be liable for any action taken or omitted to
be taken in accordance with a proposal included in any such application on or
after the date specified therein unless, prior to taking or omitting to take any
such action, BNY has received written instructions in response to such
application specifying the action to be taken or omitted.
(i) BNY may consult with counsel to the Fund or its own outside counsel, at
the Fund's expense, and shall be fully protected with respect to anything done
or omitted by it in good faith in accordance with the advice or opinion of such
counsel.
(j) Notwithstanding any other provision contained in this Agreement or
Schedule I or II attached hereto, BNY shall have no duty or obligation to with
respect to, including, without limitation, any duty or obligation to determine,
or advise or notify the Fund of: (i) the taxable nature of any distribution or
amount received or deemed received by, or payable to the Fund, (ii) the taxable
nature or effect on the Fund or its shareholders of any corporate actions, class
actions, tax reclaims, tax refunds or similar events, (iii) the taxable nature
or taxable amount of any distribution or dividend paid, payable or deemed paid,
by the Fund to its shareholders; or (iv) the effect under any federal, state, or
foreign income tax laws of the Fund making or not making any distribution or
dividend payment, or any election with respect thereto.
(k) BNY shall have no duties or responsibilities whatsoever except such
duties and responsibilities as are specifically set forth in this Agreement and
Schedules I and II attached hereto, and no covenant or obligation shall be
implied against BNY in connection with this Agreement.
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(l) BNY, in performing the services required of it under the terms of this
Agreement, shall be entitled to rely fully on the accuracy and validity of any
and all instructions, explanations, information, specifications and
documentation furnished to it by any authorized person on behalf of the Fund and
shall have no duty or obligation to review the accuracy, validity or propriety
of such instructions, explanations, information, specifications or
documentation, including, without limitation, evaluations of securities; the
amounts or formula for calculating the amounts and times of accrual of Series'
liabilities and expenses; the amounts receivable and the amounts payable on the
sale or purchase of Securities; and amounts receivable or amounts payable for
the sale or redemption of Fund shares effected by or on behalf of the Fund. In
the event BNY's computations hereunder rely, in whole or in part, upon
information, including, without limitation, bid, offer or market values of
securities or other assets, or accruals of interest or earnings thereon, from a
pricing or similar service utilized, or subscribed to, by BNY which BNY in its
judgment deems reliable, BNY shall not be responsible for, under any duty to
inquire into, or deemed to make any assurances with respect to, the accuracy or
completeness of such information. Without limiting the generality of the
foregoing, BNY shall not be required to inquire into any valuation of securities
or other assets by the Fund or any third party described in this (l) even though
BNY in performing services similar to the services provided pursuant to this
Agreement for others may receive different valuations of the same or different
securities of the same issuers.
(m) BNY, in performing the services required of it under the terms of this
Agreement, shall not be responsible for determining whether any interest
accruable to the Fund is or will be actually paid, but will accrue such interest
until otherwise instructed by the Fund.
(n) BNY shall not be responsible for delays or errors which occur by reason
of circumstances beyond its control in the performance of its duties under this
Agreement, including, without limitation, labor difficulties within or without
BNY, mechanical breakdowns, flood or catastrophe, acts of God, failures of
transportation, interruptions, loss, or malfunctions of utilities,
communications or computer (hardware or software) services. Nor shall BNY be
responsible for delays or failures to supply the information or services
specified in this Agreement where such delays or failures are caused by the
failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation
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deemed necessary by BNY in the performance of its duties under this Agreement.
5. Allocation of Expenses.
Except as otherwise provided herein, all costs and expenses arising or
incurred in connection with the performance of this Agreement shall be paid by
the Fund, including but not limited to, organizational costs and costs of
maintaining corporate existence, taxes, interest, brokerage fees and
commissions, insurance premiums, compensation and expenses of the Fund's
Trustees, directors, officers or employees, legal, accounting and audit
expenses, management, advisory, sub-advisory, administration and shareholder
servicing fees, charges of custodians, transfer and dividend disbursing agents,
expenses (including clerical expenses) incident to the issuance, redemption or
repurchase of the Fund shares, fees and expenses incident to the registration or
qualification under federal or state securities laws of the Fund or its shares,
costs (including printing and mailing costs) of preparing and distributing
Prospectuses, reports, notices and proxy material to the Fund's shareholders,
all expenses incidental to holding meetings of the Fund's Trustees, directors
and shareholders, and extraordinary expenses as may arise, including litigation
affecting the Fund and legal obligations relating thereto for which the Fund may
have to indemnify its Trustees, directors and officers.
6. Standard of Care; Indemnification.
(a) Except as otherwise provided herein, BNY shall not be liable for any
costs, expenses, damages, liabilities or claims (including attorneys' and
accountants' fees) incurred by the Fund, except those costs, expenses, damages,
liabilities or claims arising out of BNY's own negligence or wilful misconduct.
In no event shall BNY be liable to the Fund or any third party for special,
indirect or consequential damages, or lost profits or loss of business, arising
under or in connection with this Agreement, even if previously informed of the
possibility of such damages and regardless of the form of action, but BNY shall
indemnify the Fund against direct money damages arising out of BNY's own
negligence or willful misconduct. BNY shall not be liable for any loss, damage
or expense, including counsel fees and other costs and expenses of a defense
against any claim or liability, resulting from, arising out of, or in connection
with its performance hereunder, including its actions or omissions, the
incompleteness or inaccuracy of any specifications or other information
furnished by the Fund, or for delays caused by
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circumstances beyond BNY's control, unless such loss, damage or expense arises
out of the negligence or willful misconduct of BNY.
(b) The Fund shall indemnify and hold harmless BNY from and against any and
all costs, expenses, damages, liabilities and claims (including claims asserted
by the Fund), and reasonable attorneys' and accountants' fees relating thereto,
which are sustained or incurred or which may be asserted against BNY, by reason
of or as a result of any action taken or omitted to be taken by BNY in good
faith hereunder or in reliance upon (i) any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed, (ii) the Fund's Registration Statement or
Prospectus, (iii) any instructions of an Authorized Person, or (iv) any opinion
of legal counsel for the Fund or BNY, or arising out of transactions or other
activities of the Fund which occurred prior to the commencement of this
Agreement; provided, that the Fund shall not indemnify BNY for costs, expenses,
damages, liabilities or claims for which BNY is liable under preceding 6(a).
This indemnity shall be a continuing obligation of the Fund, its successors and
assigns, notwithstanding the termination of this Agreement. Without limiting the
generality of the foregoing, the Fund shall indemnify BNY against and save BNY
harmless from any loss, damage or expense, including counsel fees and other
costs and expenses of a defense against any claim or liability, arising from any
one or more of the following:
(i) Errors in records or instructions, explanations, information,
specifications or documentation of any kind, as the case may be, supplied
to BNY by any third party described above in 4(e) or 4(g) above;
(ii) Action or inaction taken or omitted to be taken by BNY pursuant
to written or oral instructions of the Fund or otherwise without negligence
or willful misconduct;
(iii) Any action taken or omitted to be taken by BNY in good faith in
accordance with the advice or opinion of counsel for the Fund or its own
outside counsel;
(iv) Any improper use by the Fund or its agents, distributor or
investment advisor of any valuations or computations supplied by BNY
pursuant to this Agreement;
(v) The method of valuation of the securities and the method of
computing each Series' net asset value; or
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(vi) Any valuations of securities or net asset value provided by the
Fund.
(c) Actions taken or omitted in reliance on oral or written instructions,
or upon any information, order, indenture, stock certificate, power of attorney,
assignment, affidavit or other instrument reasonably believed by BNY to be
genuine or bearing the signature of a person or persons believed to be
authorized to sign, countersign or execute the same, or upon the opinion of
legal counsel for the Fund or its own outside counsel, shall be conclusively
presumed to have been taken or omitted in good faith.
(d) Notwithstanding any other provision contained in this Agreement, BNY
shall have no duty or obligation with respect to, including, without limitation,
any duty or obligation to determine, or advise or notify the Fund of: (a) the
taxable nature of any distribution or amount received or deemed received by, or
payable to the Fund; (b) the taxable nature or effect on the Fund or its
shareholders of any corporate actions, class actions, tax reclaims, tax refunds,
or similar events; (c) the taxable nature or taxable amount of any distribution
or dividend paid, payable or deemed paid, by the Fund to its shareholders; or
(d) the effect under any federal, state, or foreign income tax laws of the Fund
making or not making any distribution or dividend payment, or any election with
respect thereto.
7. Record Retention and Confidentiality.
BNY shall keep and maintain on behalf of the Fund all books and
records which the Fund and BNY are, or may be, required to keep and
maintain in connection with the services to be provided hereunder pursuant
to any applicable statutes, rules and regulations, including, without
limitation, Rules 31a-1 and 31a-2 under the 1940 Act. BNY 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 Fund, by the
investment adviser to the Fund, or by the SEC at reasonable times.
8. Regulation S-P.
BNY agrees to make reasonable efforts to adhere to the Fund's policy
regarding the use of Fund Shareholder and potential shareholder information
as required by Regulation S-P. BNY shall be free to share information
regarding Fund shareholders and potential Fund shareholders, on an as
needed basis in order to fulfill its role as
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administrator, with other authorized agents of the Fund including service
providers and brokers. BNY shall also be free to provided such information
to its internal and external auditors, counsel and accountants, its
regulators and examiners, and to any other person when advised by its
counsel that it could be liable for a failure to provide such information.
9. Compensation.
For the services provided hereunder, the Fund agrees to pay BNY such
compensation as is mutually agreed from time to time and such out-of-pocket
expenses (e.g., telecommunication charges, postage and delivery charges,
record retention costs, reproduction charges and transportation and lodging
costs) as are incurred by BNY in performing its duties hereunder. Except as
hereinafter set forth, compensation shall be calculated and accrued daily
and paid monthly. The Fund authorizes BNY to debit the Fund's custody
account for all amounts due and payable hereunder. BNY shall deliver to the
Fund invoices for services rendered after debiting the Fund's custody
account with an indication that payment has been made. Upon termination of
this Agreement before the end of any month, the compensation for such part
of a month shall be prorated according to the proportion which such period
bears to the full monthly period and shall be payable upon the effective
date of termination of this Agreement. For the purpose of determining
compensation payable to BNY, the Fund's net asset value shall be computed
at the times and in the manner specified in the Fund's Prospectus.
10. Term of Agreement.
(a) This Agreement shall continue until terminated by either BNY giving to
the Fund, or the Fund giving to BNY, a notice in writing specifying the date of
such termination, which date shall be not less than 90 days after the date of
the giving of such notice. Upon termination hereof, the Fund shall pay to BNY
such compensation as may be due as of the date of such termination, and shall
reimburse BNY for any disbursements and expenses made or incurred by BNY and
payable or reimbursable hereunder.
(b) Notwithstanding the foregoing, BNY may terminate this Agreement upon 30
days prior written notice to the Fund if the Fund shall terminate its custody
agreement with
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The Bank of New York, or fail to perform its obligations hereunder in a material
respect.
11. Authorized Persons.
Attached hereto as Exhibit B is a list of persons duly authorized by the
Trustees of the Fund to execute this Agreement and give any written or oral
instructions, or written or oral specifications, by or on behalf of the Fund.
From time to time the Fund may deliver a new Exhibit B to add or delete any
person and BNY shall be entitled to rely on the last Exhibit B actually received
by BNY.
12. Amendment.
This Agreement may not be amended or modified in any manner except by a
written agreement executed by BNY and the Fund, and authorized or approved by
the Fund's Trustees.
13. Assignment.
This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of BNY, or by BNY without the written consent of the Fund accompanied by the
authorization or approval of the Fund's Trustees.
14. Governing Law; Consent to Jurisdiction.
This Agreement shall be construed in accordance with the laws of the State
of New York, without regard to conflict of laws principles thereof. The Fund
hereby consents to the jurisdiction of a state or federal court situated in New
York City, New York in connection with any dispute arising hereunder, and waives
to the fullest extent permitted by law its right to a trial by jury. To the
extent that in any jurisdiction the Fund may now or hereafter be entitled to
claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, the Fund irrevocably agrees
not to claim, and it hereby waives, such immunity.
15. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any
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provision is inapplicable to any person or circumstances, it shall nevertheless
remain applicable to all other persons and circumstances.
16. No Waiver.
Each and every right granted to BNY hereunder or under any other document
delivered hereunder or in connection herewith, or allowed it by law or equity,
shall be cumulative and may be exercised from time to time. No failure on the
part of BNY to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by BNY of any right
preclude any other or future exercise thereof or the exercise of any other
right.
17. Limitations of Liability of the Trustees and Shareholders.
It is expressly acknowledged and agreed that the obligations of the Fund
hereunder shall not be binding upon any of the shareholders, Trustees, officers,
employees or agents of the Trust, personally, but shall bind only the trust
property of the Trust, as provided in its Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees of the Trust
and signed by an officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in its Declaration of Trust.
18. Notices.
All notices, requests, consents and other communications pursuant to this
Agreement in writing shall be sent as follows:
if to the Fund, at
PowerShare Exchange Traded Fund Trust
Wheaton Oaks Professional Building
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
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if to BNY, at
The Bank of Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:__________________________
Title:
or at such other place as may from time to time be designated in writing.
Notices hereunder shall be effective upon receipt.
19. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original; but such counterparts together shall
constitute only one instrument.
20. Several Obligations.
The parties acknowledge that the obligations of the Funds hereunder are
several and not joint, that no Fund shall be liable for any amount owing by
another Fund and that the Funds have executed one instrument for convenience
only.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by their duly authorized officers and their seals to be hereunto
affixed, all as of the day and year first above written.
PowerShare Exchange Traded Fund Trust
By: ____________________________
Title: ____________________________
THE BANK OF NEW YORK
By: ____________________________
Title: ____________________________
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EXHIBIT A
SERIES
EXHIBIT B
I, ____________________, PowerShare Exchange Traded Fund Trust, a
Massachusetts Fund (the "Fund"), do hereby certify that:
The following individuals serve in the following positions with the
Fund, and each has been duly elected or appointed by the Fund to each such
position and qualified therefor in conformity with the Fund's Fund Agreement and
By-Laws, and the signatures set forth opposite their respective names are their
true and correct signatures. Each such person is authorized to give written or
oral instructions or written or oral specifications by or on behalf of the Fund
to BNY.
Name Position Signature
------------------------- ------------------- ---------------------
SCHEDULE 1
ADMINISTRAVITE SERVICES
1. Oversee the maintenance by the Fund's custodian of certain books and
records of the fund as required under Rule 31a-1(b) of the 1940 Act.
2. Review calculation, submit for approval by officers of the Fund and arrange
for payment of the Fund's expenses.
3. Prepare for review and approval by an officer and Treasurer for the Fund,
its counsel and its independent accountants financial information for the
Fund's semi-annual and annual reports, proxy statements and other
communications required or otherwise to be sent to Fund shareholders and
arrange for the printing and discrimination of such reports and
communications to record and beneficial shareholders through The Depository
Fund Company.
4. Prepare for review and approval by an officer and Treasurer of the Fund,
its counsel and its independent accountants the Fund's periodic financial
reports required to be filed with the Securities and Exchange commission
("SEC") on Form N-SAR and financial information required by Form N-!A and
such other reports, forms or filing as may be mutually agreed upon;
5. Prepare recommendations as to each Fund's income and capital gains
available for distribution; calculate such distributions for each Fund in
accordance with applicable regulations and the distribution for each Fund
in accordance with applicable regulations and the distribution policies set
forth in the Fund's registration statement, and assist Fund management in
making final determination of distribution amounts;
6. Oversee and review calculation of fees paid to the Fund's investment
adviser, custodian and Transfer Agent;
7. Respond to, or refer to the Fund's officers or the Distributor or the
Transfer Agent shareholder inquiries relating to the Fund;
8. Provide periodic testing of portfolios to assist the Trust's investment
adviser in complying with Internal Revenue Code mandatory qualification
requirements, the requirements of the 1940 Act and Fund prospectus
limitations as my be mutually agreed upon;
9. Review and provide assistance on shareholder communications;
10. Prepare for review and approval by an officer and Treasurer of the fund,
its counsel and its independent accountants and file annual and semi-annual
shareholder reports with the appropriate regulatory agencies; review text
of "President's letters" to shareholders and "Management's Discussion of
Fund Performance" (which shall also be subject to review by the Fund's
legal counsel);
11. Organize, attend and prepare minutes of shareholder meetings.
12. Counsel and assist the fund in the handling of routing regulatory
examinations and work closely with the Fund's legal counsel in response to
any non-routine regulatory matters.
13. Prepare for review and approval by an officer and Treasurer for the Fund,
its counsel and its independent accountants and file with the SEC
amendments to the Fund's registration statement, including updating the
Prospectus and Statement of Additional Information, where applicable;
14. Prepare for review and approval by an officer and Treasurer for the Fund,
its counsel and its independent accountants and file with the SEC proxy
statements; provide consultation on proxy solicitation matters.
15. Prepared agenda and background materials for Board meetings, make
presentation where appropriate, prepare minutes and follow-up on matters
raised at Boars meetings;
16. Prepare and file with the SEC Rule 24f-2 notices
SCHEDULE II
VALUATION AND COMPUTATION SERVICES
I. BNY shall maintain the following records on a daily basis for each
Series.
1. Report of priced portfolio securities
2. Statement of net asset value per share
II. BNY shall prepare and on behalf of the Fund all books and records
of the Fund as required by Rule 31a-1 under the 1940 Act, and as such rule
or any successor rule, may be amended from time to time, that are
applicable to the fulfillment of BNY's duties hereunder, as well as any
other documents necessary or advisable for compliance with applicable
regulation as may be mutually agreed to between the Fund and BNY. Without
limiting the generality of the foregoing, BNY will prepare and maintain the
following records upon receipt of information in proper form from the Fund
or its authorized agents:
1. General Ledger
2. General Journal
3. Cash Receipts Journal
4. Cash Disbursements Journal
5. Subscriptions Journal
6. Redemptions Journal
7. Accounts Receivable Reports
8. Accounts Payable Reports
9. Open Subscriptions/Redemption Reports
10. Transaction (Securities) Journal
11. Broker Net Trades Reports
III. BNY shall prepare a Holdings Ledger on a quarterly basis, and a
Buy-Sell Ledger (Broker's Ledger) on a semiannual basis for each Series.
Schedule D shall be produced on an annual basis for each Series.
The above reports may be printed according to any other required
frequency to meet the requirements of the Internal Revenue Service, The
Securities and Exchange Commission and the Fund's Auditors.
IV. For internal control purposes, BNY uses the Account Journals
produced by The Bank of New York Custody System to record daily settlements
of the following for each Series:
1. Securities bought
2. Securities sold
3. Interest received
4. Dividends received
5. Capital stock sold
6. Capital stock redeemed
7. Other income and expenses
All portfolio purchases for the Fund are recorded to reflect expected
maturity value and total cost including any prepaid interest.
