FUND ACCOUNTING AGREEMENT
AGREEMENT made as of this _____ day of __________, 200_ by and between
______________________, a statutory trust organized and existing under the laws
of the State of Delaware having its principal place of business at
_________________________ (hereinafter called the "Fund") and The Bank of New
York, a New York corporation authorized to do a banking business, having its
principal place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter called the "Bank").
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the Fund and
the Bank hereby agree as follows:
1. The Fund hereby appoints the Bank to perform the duties hereinafter set
forth.
2. The Bank hereby accepts appointment and agrees to perform the duties
hereinafter set forth.
3. Subject to the provisions of paragraphs 4 and 5 below, the Bank shall
compute the net asset value per share of each Series of shares listed on
Schedule I hereto (the "Series") of the Fund and shall value the securities held
by the Fund (the "Securities") at such times and dates and in the manner
specified in the then currently effective Prospectus and Statement of Additional
Information (the "Prospectus") of the Fund, except that notwithstanding any
language in the Prospectus, in no event shall the Bank be required to determine,
or have any obligations with respect to, whether a market price represents any
fair or true value, nor to adjust any price to reflect any events or
announcements, including, without limitation, those with respect to the issuer
thereof, it being agreed that all such determinations and considerations shall
be solely for the Fund.
4. To the extent valuation of Securities or computation of a Series' net
asset value as specified in the Fund's then currently effective Prospectus is at
any time inconsistent with any applicable laws or regulations, the Fund shall
immediately so notify the Bank in writing and thereafter shall either furnish
the Bank at all appropriate times with the values of such Securities and each
Series' net asset value, or subject to the prior approval of the Bank, instruct
the Bank in writing to value Securities and compute each Series' net asset value
in a manner which the Fund then represents in writing to be consistent with all
applicable laws and regulations. The Fund may also from time to time, subject to
the prior approval of the Bank, instruct the Bank in writing to compute the
value of the Securities or a Series' net asset value in a manner other than as
specified in paragraph 3 of this Agreement. By giving such instruction, the Fund
shall be deemed to have represented that such instruction is consistent with all
applicable laws and regulations and the then currently effective Prospectus of
the Fund. The Fund shall have sole responsibility for determining the method of
valuation of Securities and the method of computing each Series' net asset
value.
5. The Fund shall furnish the Bank with any and all instructions,
explanations, information, specifications and documentation deemed necessary by
the Bank 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. The Bank shall not be required to
include as 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 the Bank 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 the Bank with bid, offer, or market values of Securities if the
Bank notifies the Fund that same are not available to the Bank from a security
pricing or similar service utilized, or subscribed to, by the Bank which the
Bank 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 the Bank with bid, offer, or market values of Securities and instruct
the Bank to use such information in its calculations
2
hereunder. The Bank shall at no time be required or obligated to commence or
maintain any utilization of, or subscriptions to, any securities pricing or
similar service.
6. The Bank shall advise the Fund, the Fund's custodian and the Fund's
transfer agent of the net asset value and SEC Yield, as applicable, of each
Series upon completion of the computations required to be made by the Bank
pursuant to this Agreement.
7. The Bank shall, as agent for the Fund, maintain and keep current the
books, accounts and other documents, if any, listed in Appendix A hereto and
made a part hereof, as such Appendix A may be amended from time to time, and
preserve any such books, accounts and other documents in accordance with the
applicable provisions of Rule 31a-2 of the General Rules and Regulations under
the Investment Company Act of 1940, as amended (the "Rules"). Such books,
accounts and other documents shall be made available upon reasonable request for
inspection by officers, employees and auditors of the Fund during the Bank's
normal business hours.
8. All records maintained and preserved by the Bank pursuant to this
Agreement which the Fund is required to maintain and preserve in accordance with
the above-mentioned Rules shall be and remain the property of the Fund and shall
be surrendered to the Fund promptly upon request in the form in which such
records have been maintained and preserved. Upon reasonable request of the Fund,
the Bank shall provide in hard copy or on micro-film, whichever the Bank shall
elect, any records included in any such delivery which are maintained by the
Bank on a computer disc, or are similarly maintained, and the Fund shall
reimburse the Bank for its expenses of providing such hard copy or micro-film.
9. The Bank, 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 the Fund and shall have no duty or obligation
to review the accuracy, validity or propriety of such instructions,
explanations, information, specifications or
3
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 the Bank'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 the Bank which the
Bank in its judgment deems reliable, the Bank 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, nor shall the Bank be
required to determine, or have any obligations with respect to, whether a market
price represents any fair or true value, nor to adjust any price to reflect any
events or announcements, including, without limitation, those with respect to
the issuer thereof.
10. The Bank shall not be required to inquire into any valuation of
Securities or other assets by the Fund or any third party described in preceding
paragraph 9 hereof, even though the Bank 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.
11. The Bank, 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.
12. The Bank shall not be responsible or liable for any failure or delay in
the performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; epidemics; riots; interruptions, loss,
or malfunctions of utilities, computer (hardware or
4
software) or communications service; accidents; labor disputes; acts of civil or
military authority or governmental actions. Nor shall the Bank 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 the Bank to supply any instructions, explanations,
information, specifications or documentation deemed necessary by the Bank in the
performance of its duties under this Agreement.
13. No provision of this Agreement shall prevent the Bank from offering
services similar or identical to those covered by this Agreement to any other
corporations, associations or entities of any kind. Any and all operational
procedures, techniques and devices developed by the Bank in connection with the
performance of its duties and obligations under this Agreement, including those
developed in conjunction with the Fund, shall be and remain the property of the
Bank, and the Bank shall be free to employ such procedures, techniques and
devices in connection with the performance of any other contract with any other
person whether or not such contract is similar or identical to this Agreement.
14. The Bank may, with respect to questions of law, apply to and obtain the
advice and opinion of counsel to the Fund or its own counsel and shall be
entitled to rely on the advice or opinion of such counsel. The costs of any such
advice or opinion shall be borne by the Fund.
15. The Bank shall be entitled to rely upon any oral instructions received
by the Bank and reasonably believed by the Bank to be given by or on behalf of
the Fund, even if the Bank subsequently receives written instructions
contradicting such oral instructions. The books and records of the Bank with
respect to the content of any oral instruction shall be binding and conclusive.
16. Notwithstanding any other provision contained in this Agreement, the
Bank 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)
5
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.
17. The Bank 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, or errors, unless such loss,
damage or expense arises out of the gross negligence or willful misconduct of
the Bank. In no event shall the Bank be liable to the Company or any third party
for special, indirect, or consequential damages, or for 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.
18. Without limiting the generality of the foregoing, the Fund shall
indemnify the Bank against and save the Bank 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:
(a) Errors in records or instructions, explanations, information,
specifications or documentation of any kind, as the case may be, supplied to the
Bank by any third party described in preceding paragraph 9 hereof or by or on
behalf of the Fund;
(b) Action or inaction taken or omitted to be taken by the Bank
pursuant to written or oral instructions of the Fund or otherwise without gross
negligence or willful misconduct;
(c) Any action taken or omitted to be taken by the Bank in good faith
in accordance with the advice or opinion of counsel for the Fund or its own
counsel;
6
(d) Any improper use by the Fund or its agents, distributor or
investment advisor of any valuations or computations supplied by the Bank
pursuant to this Agreement;
(e) The method of valuation of the Securities and the method of
computing each Series' net asset value; or
(f) Any valuations of Securities or net asset value provided by the
Fund.
19. In consideration for all of the services to be performed by the Bank as
set forth herein the Bank shall be entitled to receive reimbursement for all
out-of-pocket expenses and such compensation as may be agreed upon in writing
from time to time between the Bank and the Fund.
20. Attached hereto as Appendix B is a list of persons duly authorized by
the Board of 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 Appendix B to add or delete
any person and the Bank shall be entitled to rely on the last Appendix B
actually received by the Bank.
21. The Fund represents and warrants to the Bank that it has all requisite
power to execute and deliver this Agreement, to give any written or oral
instructions contemplated hereby, and to perform the actions or obligations
contemplated to be performed by it hereunder, and has taken all necessary action
to authorize such execution, delivery, and performance.
22. This Agreement shall not be assignable by the Fund without the prior
written consent of the Bank, or by the Bank without the prior written consent of
the Fund.
23. Either of the parties hereto may terminate this Agreement by giving the
other party a notice in writing specifying the date of such termination, which
shall not be less than ninety (90) days after the date of giving of such notice.
Upon the date set forth
7
in such notice, the Bank shall deliver to the Fund all records then the property
of the Fund and, upon such delivery, the Bank shall be relieved of all duties
and responsibilities under this Agreement.
24. This Agreement may not be amended or modified in any manner except by
written agreement executed on behalf of both parties hereto.
25. This Agreement is executed in the State of New York and all laws and
rules of construction of the State of New York (other than those relating to
choice of laws) shall govern the rights, duties and obligations of the parties
hereto. The Fund and the Bank hereby consent to the exclusive jurisdiction of a
federal court situated in New York City, New York in connection with any dispute
arising hereunder. The Fund hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such preceding brought in such court and any claim
that such proceeding brought in such court has been brought in an inconvenient
form. The Fund and the Bank each hereby irrevocably waives any and all rights to
trial by jury in any legal proceeding arising out of or relating to this
Agreement.
26. The performance and provisions of this Agreement are intended to
benefit only the Bank and the Fund, and no rights shall be granted to any other
person by virtue of this Agreement.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
-----------------------------
By:
--------------------------
Attest:
------------------------------------
THE BANK OF NEW YORK
By:
--------------------------
Attest:
------------------------------------
9
APPENDIX A TO FUND ACCOUNTING AGREEMENT
BETWEEN
THE BANK OF NEW YORK
AND
----------------------
I._______The Bank of New York (the "Bank"), as agent for __________________
(the "Fund"), 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. The Bank shall maintain the following records on a monthly basis for
each Series:
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
10. Transaction (Securities) Journal
11. Broker Net Trades Reports
III. The Bank 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, the Bank 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.
2
APPENDIX B
I, , of _________________, a statutory trust organized and existing under
the laws of the State of Delaware (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 Board of Trustees of the Fund
to each such position and qualified therefor in conformity with the Fund's
Declaration of Trust 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 the Bank.
Name Position Signature
---------------------- --------------------------- -------------------------
SCHEDULE I
SERIES
