EXHIBIT h(4)
FORM OF
AMENDED AND RESTATED
FUND ACCOUNTING AGREEMENT
BETWEEN
THE MAINSTAY FUNDS
AND
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
AMENDED AND RESTATED
FUND ACCOUNTING AGREEMENT
AMENDED AND RESTATED AGREEMENT, dated as of the 1st day of August, 2002, made by
and between THE MAINSTAY FUNDS (the "Trust"), a business trust operating as an
open end investment company, duly organized and existing under the laws of the
Commonwealth of Massachusetts, and New York Life Investment Management LLC
("NYLIM") a Delaware limited liability company.
WITNESSETH:
WHEREAS, the Trust entered into a Fund Accounting Agreement, dated October 27,
1997, by and between the Trust and MainStay Management Inc. ("MMI"), whereby MMI
agreed to maintain and keep current the accounting records, including all
journals, the general ledger and other records of original entry relating to the
business of the Trust; and
WHEREAS, on January 1, 2000, MMI converted from a corporation to a limited
liability company under Delaware law and organized as MainStay Management LLC
("MM LLC"); and
WHEREAS, pursuant to a Substitution Agreement, dated March 31, 2001, by and
between MM LLC and New York Life Investment Management LLC ("NYLIM"), NYLIM
assumed all the interests, rights and responsibilities of MM LLC under the
Management Agreement, dated October 21, 1997, as further amended effective
October 1, 1999, by and between the Trust and MM LLC, and agreed to perform all
of MM LLC's duties and responsibilities as Manager to the Trust under such
Agreement; and
WHEREAS, the Trust desires to appoint NYLIM, the Trust's Manager, as its
Accounting Services Agent to maintain and keep current the accounting records,
including all journals, the general ledger and other records of original entry
relating to the business of the Trust as set forth in Section 3 of this
Agreement (the "Accounts and Records") and to perform certain daily functions in
connection with such Accounts and Records; and
WHEREAS, NYLIM is willing to perform such functions upon the terms and
conditions set forth below; and
WHEREAS, the Trust will cause to be provided certain information to NYLIM as set
forth below; and
WHEREAS, this Amended and Restated Fund Accounting Agreement amends and
restates, in its entirety, the Fund Accounting Agreement, dated October 27,
1997, by and between the Trust and MM LLC in order to reflect the current
parties of the Fund Accounting Agreement and to make certain other ministerial
changes designed to facilitate the administration of this Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto, intending to be legally bound, do hereby agree as
follows:
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Section 1. APPOINTMENT. The Trust hereby appoints NYLIM as Accounting
Services Agent of the Trust and NYLIM hereby accepts such appointment, all in
accordance with the terms and conditions of this Agreement. This appointment
shall continue to be in effect since October 27, 1997.
Section 2. FURNISHING OF EXISTING ACCOUNTS AND RECORDS. The Trust shall
promptly turn over to NYLIM such of the Accounts and Records previously
maintained by or for it as are necessary for NYLIM to perform its functions
under this Agreement. The Trust authorizes NYLIM to rely on such Accounts and
Records turned over to it and hereby indemnifies and will hold NYLIM, its
successors and assigns, harmless of and from any and all expenses, damages,
claims, suits, liabilities, actions, demands and losses whatsoever arising out
of or in connection with any error, omission, inaccuracy or other deficiency of
such Accounts and Records or in the failure of the Trust to provide any portion
of such or to provide any information needed by NYLIM to knowledgeably perform
its functions.
Section 3. MAINTENANCE OF ACCOUNTS AND RECORDS. To the extent it
receives the necessary information from the Trust and its agents by Written or
Oral Instructions, NYLIM shall maintain in accordance with Rule 3la-1 under the
Investment Company Act of 1940, as amended (the "1940 Act"), the following
Accounts and Records relating to the business of the Trust, in such form as may
be mutually agreed to between the Trust and NYLIM:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid Record
(d) Purchase and Sales Journal - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers
(g) Broker-Dealer Ledger
(h) General Ledger
(i) Daily Expense Accruals
(j) Daily Interest Accruals
(k) Securities and Monies borrowed or loaned and collateral therefor
(l) Daily Trial Balances
(m) Investment Income Journal
The Trust will, prior to 4:00 p.m. (12:00 Noon with respect to the
Trust's Money Market funds), Eastern time, furnish NYLIM with Written or Oral
Instructions containing all necessary information (exclusive of portfolio
prices) to perform the above functions and to calculate the net asset value of
each Fund of the Trust, as provided below. The Trust shall indemnify and hold
harmless NYLIM from and against any liability arising from any discrepancy
between the information received by NYLIM and used in such calculations and any
subsequent information received from the Trust or any of its designated agents.
It shall be the responsibility of the Trust to furnish or cause to be
furnished to NYLIM, the declaration, record, payment dates and amounts of any
dividends or income and any other special actions required on or concerning each
of its portfolio securities.
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Section 4. CALCULATION OF NET ASSET VALUE. NYLIM shall perform the
calculations necessary to calculate the net asset value of each Fund of the
Trust daily, in accordance with that Fund's current prospectus except where the
Trust has given or caused to be given specific Written or Oral Instructions to
utilize a different method of calculation. NYLIM shall notify the Trust if
quotes are not available and portfolio securities shall be given such values as
the Trust or its agent provides by Written or Oral Instructions. NYLIM shall
have no responsibility or liability for the accuracy of prices provided by the
Trust or its agents as described in the preceding sentence; for the accuracy of
the information supplied by the Trust; or for any loss, liability, damage or
cost arising out of any inaccuracy of such data. NYLIM shall have no
responsibility or duty to include information or valuations to be provided by
the Trust or its designated agent in any computation unless and until it is
timely supplied to NYLIM in useable form. Unless the necessary information to
calculate the net asset value daily is furnished by Written or Oral Instructions
from the Trust or its designated agent, NYLIM shall incur no liability, and the
Trust shall indemnify and hold harmless NYLIM from and against any liability
arising from any failure to provide complete information or from any discrepancy
between the information received by NYLIM and used in such calculation and any
subsequent information received from the Trust or any of its designated agents.
Section 5. WRITTEN AND ORAL INSTRUCTIONS. Written Instructions as used
throughout this Agreement mean a writing signed or initialed by one or more
person or persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction or type
of transaction involved, including a specific statement of the purpose for which
such action is requested. Oral Instructions will be considered proper
instructions if NYLIM reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction involved.
The Trust shall cause all Oral Instructions to be confirmed in writing. Upon
receipt of a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Trust, Oral Instructions may
include communications effected directly between electromechanical or electronic
devices provided that the Board of Trustees and NYLIM are satisfied that such
procedures afford adequate safeguards for the Trust's assets.
Section 6. RELIANCE ON INSTRUCTIONS. For all purposes under this
Agreement, NYLIM is authorized to act upon receipt of the first of any Written
or Oral Instruction it receives from the Trust or its agents on behalf of the
Trust. In cases where the first Instruction is an Oral Instruction, a
confirmatory Written Instruction shall be delivered, and in cases where NYLIM
receives an Instruction, whether Written or Oral, to enter a portfolio
transaction on the records, the Trust shall cause the Broker-Dealer to send a
written confirmation to NYLIM.
NYLIM shall be entitled to rely reasonably on the first Instruction
received, and for any act or omission undertaken in compliance therewith shall
be free of liability and fully indemnified and held harmless by the Trust,
provided however, that in the event a Written or Oral Instruction received by
NYLIM is countermanded by a timely later Written or Oral Instruction received by
NYLIM prior to acting upon such countermanded Instruction, NYLIM shall act upon
such later Written or Oral Instruction. The sole obligation of NYLIM with
respect to any follow-up or confirmatory Written Instruction, Oral Instruction
in documentary or written form, or Broker-Dealer written confirmation shall be
to make reasonable efforts to detect any
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discrepancy between the original Instruction and such confirmation and to report
such discrepancy to the Trust. The Trust shall be responsible, at the Trust's
expense, for taking any action, including any reprocessing, necessary to correct
any discrepancy or error, and to the extent such action requires NYLIM to act,
the Trust shall give NYLIM specific Written Instructions as to the action
required.
Section 7. MONTHLY STATEMENTS. At the end of each month, the Trust shall
cause each custodian to forward to NYLIM a monthly statement of cash and
portfolio transactions, which will be reconciled with NYLIM's Accounts and
Records maintained for the Trust. NYLIM will report any discrepancies to each
custodian, and report any unreconciled items to the Trust.
Section 8. PERIODIC REPORTS.
(a) NYLIM shall promptly supply daily and periodic reports to the Trust
or its agents as requested by the Trust and agreed upon by NYLIM. NYLIM shall
prepare and maintain work papers to support the following accounts: cash
reconciliation, portfolio of investments, accrued interest, amounts due to/from
brokers, subscriptions and redemptions of Shares, Share reconciliation and
dividends payable.
(b) NYLIM will prepare the following financial reports:
(i) Daily Trial Balances
(ii) Statement of assets and liabilities (balance sheet)
(iii) Statement of operations (income and expense statement)
(iv) Statement of changes in net assets
(v) Schedules of purchases and sales of securities
Section 9. SHARE INFORMATION. The Trust shall, and shall require each of
its agents (including without limitation its Transfer Agent and its Custodian),
to provide NYLIM as of the close of each business day, or on such other schedule
as the Trust determines is necessary (to be delivered to NYLIM by 10:00 a.m. the
next following business day), all data and information necessary for NYLIM to
maintain the Trust's Accounts and Records and NYLIM may conclusively assume that
the information it receives is complete and accurate. Among the information to
be received by NYLIM are reports of Share purchases, redemptions, and total
shares outstanding on the next business day after each net asset valuation. If
supplied by the Trust, any such information shall be supplied by Written or Oral
Instructions.
Section 10. AVAILABILITY OF ACCOUNTS AND RECORDS. The Accounts and
Records, in the agreed upon format, maintained by NYLIM shall be the property of
the Trust, and shall be made available to the Trust promptly upon request and
shall be maintained for the periods prescribed in Rule 31a-2 under the 1940 Act.
NYLIM shall assist the Trust's independent auditors, or upon approval of the
Trust, or upon demand, any regulatory body, in any requested review of the
Trust's Accounts and Records but shall be reimbursed for all
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expenses and employee time invested in any such review outside of routine and
normal periodic reviews. Upon receipt from the Trust of the necessary
information, NYLIM shall supply the necessary data for the Trust or accountant's
completion of any necessary tax returns, questionnaires, periodic reports to
shareholders and such other reports and information requests as the Trust and
NYLIM shall agree upon from time to time.
Section 11. OTHER PROCEDURES. NYLIM and the Trust may from time to time
adopt such procedures as they agree upon in writing, and NYLIM may conclusively
rely on a determination by the Trust that any procedure approved by the Trust or
directed by the Trust, does not conflict with or violate any requirements of the
respective Prospectus, Declaration of Trust, By-Laws, or any rule or regulation
of any regulatory body or governmental agency. The Trust shall be responsible
for notifying NYLIM of any changes in regulations or rules which would
necessitate changes in NYLIM's procedures, and for working out with NYLIM such
changes.
Section 12. INDEMNIFICATION. NYLIM, in performing under the terms and
conditions of this Agreement, shall incur no liability for any reasonable
actions taken or omitted in good faith except as result from its negligence or
misconduct, or that of its officers, agents or employees, and the Trust hereby
agrees to indemnify and hold NYLIM harmless from any and all loss, liability and
expense, including any legal expenses, arising out of NYLIM's performance, or
any act or omission of NYLIM except such as shall result from its negligence,
misconduct or that of its officers, agents and employees in the performance of
this Agreement. Without limitation of the foregoing:
(a) NYLIM may rely upon the advice of the Trust or of counsel, who may
be counsel for the Trust or counsel for NYLIM and upon statements of
accountants, brokers and other persons believed by it in good faith to be expert
in the matters upon which they are consulted and NYLIM shall not be liable to
anyone for any actions taken in good faith upon such statements.
(b) NYLIM may act upon any Oral Instruction which it receives and which
it believes in good faith was transmitted by the person or persons authorized by
the Board of Trustees of the Trust to give such Oral Instructions. NYLIM shall
have no duty or obligation to make any inquiry or effort of certification of
such Oral Instruction.
(c) NYLIM shall not be liable for any reasonable action taken in good
faith reliance upon any Written Instruction or certified copy of any resolution
of the Board of Trustees of the Trust, and NYLIM may rely upon the genuineness
of any such document or copy thereof reasonably believed in good faith by NYLIM
to have been validly executed.
(d) NYLIM may rely and shall be protected in acting upon any signature,
instruction, request, letter of transmittal, certificate, opinion of counsel,
statement, instrument, report, notice, consent, order, or other paper document
reasonably believed by it to be genuine and to have been signed or presented by
the purchaser, Trust or other proper party or parties.
(e) If the Trust is required to indemnify NYLIM under the terms of this
Agreement for any reason, NYLIM shall be entitled to indemnification only from
the assets of the one or
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more series with respect to which such right of indemnification has arisen and
not from the assets or any other series or the Trust generally.
Section 13. COMPENSATION. NYLIM's compensation shall be as set forth in
Schedule A hereto attached, or as shall be set forth in amendments to such
Schedule approved in writing by the Trust and NYLIM.
Section 14. DAYS OF SERVICE. Nothing contained in this Agreement is
intended to or shall require NYLIM, in any capacity hereunder, to perform any
functions or duties on any holiday, day of special observance or any other day
on which the New York Stock Exchange is closed. Functions or duties normally
scheduled to be performed on such days shall be performed on, and as of, the
next scheduling business day on which both the New York Stock Exchange and NYLIM
are open. Notwithstanding the foregoing, NYLIM shall compute the net asset value
of the Fund on each day required pursuant to Rule 22c-1 promulgated under the
1940 Act.
Section 15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which, when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 16. TERMINATION. The Trust or NYLIM may give written notice to
the other of the termination of this Agreement, such termination to take effect
at the time specified in the notice not less than sixty (60) days after the
giving of notice. Upon the effective termination date, subject to payment to
NYLIM by the Trust of all amounts due to NYLIM as of said date, NYLIM shall
produce to the Trust or its designated recordkeeping successor, all of the
records of the Trust maintained and required to be maintained under this
Agreement then in NYLIM's possession.
Section 17. SUCCESSORS AND ASSIGNS. 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
Trust without the written consent of NYLIM, or by NYLIM, without the written
consent of the Trust authorized or approved by a resolution of the Board of
Trustees.
Section 18. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of New York.
Section 19. NO LIABILITY OF TRUSTEES OR SHAREHOLDERS. The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed by an authorized 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 them personally, and the obligations of this Agreement are not
binding upon any of the trustees or shareholders of the Trust, but bind only the
trust property of the Trust as provided in the Declaration of Trust.
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Section 20. MISCELLANEOUS.
(a) The headings of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(b) NYLIM shall not be liable for delays or errors occurring by reason
of circumstances beyond its control including, but not limited to, acts of civil
or military authority, national emergencies, work stoppages, fire, flood,
catastrophe, acts of God, insurrection, war, riot, or failure of communication
or power supply.
(c) NYLIM shall notify the Trust should any of NYLIM's insurance
coverage be changed for any reason. Such notification shall include the date of
change and reasons therefor. NYLIM shall notify the Trust of any material claims
against NYLIM 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 NYLIM under its insurance coverage.
(d) No provision of this Agreement shall prevent NYLIM 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 NYLIM in connection with the
performance of its duties and obligations under this Agreement, including those
developed in conjunction with the Trust, shall be and remain the property of
NYLIM, and NYLIM 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and attested, as of the day and year
first above written.
THE MAINSTAY FUNDS
By: By:
-------------------------------- ----------------------------------------
Name: Name:
Title: Title:
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
ATTEST
By: By:
-------------------------------- ----------------------------------------
Name: Name:
Title: Title:
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SCHEDULE A
(Fees)
Accounting services will be provided to the Trust by NYLIM at the lower
of its cost or the fee schedule below. These services include its salaries and
overhead expenses for personnel, facilities and equipment costs attributable to
the accounting functions. In the event this Agreement is in effect for only a
portion of any one year, the fee payable shall be reduced proportionately on the
basis of the number of business days (any day on which the New York Stock
Exchange is open for trading) during which the Agreement was in effect for that
year.
ANNUAL FEES PER PORTFOLIO
Fund Net Assets Accounting Fee Schedule
--------------- -----------------------
First $20 Million 1/20 of 1%
Next $80 Million 1/30 of 1%
Excess 1/100 of 1%
Minimum Monthly Charge $1,000
This accounting services fee shown above is an annual charge, billed and payable
monthly, based upon average monthly net assets.
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