EXHIBIT 99(h)(3)(A)(ii)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of October, 1996, between CENTURA FUNDS,
INC. (the "Company"), a Maryland corporation, and BISYS FUND SERVICES, INC.
("Fund Accountant"), a corporation organized under the laws of the State of
Delaware.
WHEREAS, the Company desires that Fund Accountant perform certain
fund accounting services for each investment portfolio of the Company, 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; Conversion to Services.
The Company hereby engages Fund Accountant to perform fund accounting
services as set forth in this Section 1 (collectively, the "Services"), and,
in connection therewith, the Company agrees to convert to Fund Accountant's
data processing systems and software (the "BISYS System") as necessary in
order to receive the Services. The Company shall cooperate with Fund
Accountant to provide Fund Accountant with all necessary information and
assistance required to successfully convert to the BISYS System. Fund
Accountant shall provide the Company with a schedule relating to such
conversion and the parties agree that the conversion may progress in stages.
The date upon which all Services shall have been converted to the BISYS
System shall be referred to herein as the "Conversion Date." Fund Accountant
hereby accepts such engagement and agrees to perform the Services commencing,
with respect to each individual Service, on the date that the conversion of
such Service to the BISYS System has been completed. Fund Accountant shall
determine in accordance with its normal acceptance procedures when the
applicable Service has been successfully converted.
(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;
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(ii) General and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and expense accounts, including
interest accrued and interest received, as required by subsection (b)(2)(I)
of the Rule;
(iii) Separate ledger accounts required by subsection
(b)(2 (ii) and (iii) of the Rule; and
(iv) A monthly trial balance of all ledger accounts
(except shareholder accounts) as required by subsection (b)(8) of the Rule.
(b) Performance of Daily Accounting Services. In addition to
the maintenance of the books and records specified above, Fund Accountant
shall perform the following accounting services daily for each Fund:
(i) Calculate the net asset value per share utilizing
prices obtained from the sources described in subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services, or if such quotes are unavailable, then obtain such prices from
each Fund's investment adviser or its designee, as approved by the Company's
Board of Directors;
(iii) Verify and reconcile with the Fund's 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 Company 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
Company;
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(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
instruction received from the Company'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 Company's regular annual audit and other audits and examinations by
regulatory agencies; and
(xiv) Provide such periodic reports as the parties
shall agree upon, as set forth in a separate schedule.
(c) Special Reports and Services.
(i) Fund Accountant may provide additional special
reports upon the request of the Company 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
Company, 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 Company. 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;
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(ii) Provide accounting information for the following:
(A) federal and state income tax returns and
federal excise tax returns;
(B) the Company's semi-annual reports with the
Securities and Exchange Commission ("SEC") on Form N-SAR;
(C) the Company'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;
(E) the Administrator's monitoring of the
Company's status as a regulated investment company under Subchapter M of the
Internal Revenue Code, as amended;
(F) annual audit by the Company's auditors; and
(G) examinations performed by the SEC.
2. Subcontracting.
Fund Accountant may, at its expense, subcontract with any entity or
person concerning the provision of the services contemplated hereunder;
provided, however, that Fund Accountant shall not be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that Fund Accountant shall be responsible, to the extent
provided in Section 6 hereof, for all acts of such subcontractor as if such
acts were its own.
3. Compensation.
The Company 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 Company agrees to reimburse Fund Accountant for its out-of-pocket
expenses in providing services hereunder, including without limitation the
following:
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(a) All freight and other delivery and bonding charges
incurred by Fund Accountant in delivering materials to and from the Company;
(b) All direct telephone, telephone transmission and telecopy
or other electronic transmission expenses incurred by Fund Accountant in
communication with the Company, the Company'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;
an officer of the Company thereunto duly authorized; and
(f) Any additional expenses reasonably incurred by Fund
Accountant in the performance of its duties and obligations under this
Agreement.
5. Effective Date.
This Agreement shall become effective with respect to a Fund as of
the date first written above.
6. Term.
The initial term of this Agreement (the "Initial Term") shall be for
a period commencing on the date this Agreement is executed by both parties
and ending on the date that is twelve (12) months after the Conversion Date.
This Agreement shall be renewed automatically for successive one-year terms
unless written notice not to renew is given by the non-renewing party to the
other party at least 60 days prior to the expiration of the then-current
term; provided, however, that after such termination for so long as Fund
Accountant, with the written consent of the Company, in fact continues to
perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including
without limitation the provisions dealing with indemnification, shall
continue in full force and effect. Compensation due Fund Accountant and
unpaid by the Company upon such termination shall be immediately due and
payable upon and notwithstanding such termination. Fund Accountant shall be
entitled to collect from the Company, 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
Company and/or its designees of the Company's property, records, instruments
and documents, or any copies thereof. Subsequent to such termination, for a
reasonable fee, Fund Accountant will provide the Company with reasonable
access to any Company documents or records remaining in its possession.
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In the event of a material breach of this Agreement by either party,
the non-breaching party shall notify the breaching party in writing of such
breach and, upon receipt of such notice, the breaching party shall have 45
days to remedy the breach. In the event the breach is not remedied within
such time period, the nonbreaching party may immediately terminate this
Agreement.
If, for any reason, other than a material breach of this Agreement,
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 Company shall make a one-time cash
payment, as liquidated damages, to Fund Accountant equal to the balance due
Fund Accountant for the remainder of the term of this Agreement, assuming for
purposes of calculation of the payment that the asset level of the Company on
the date Fund Accountant is replaced, or a third party is added, will remain
constant for the balance of the contract term.
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
Company for any action taken or omitted by Fund Accountant in the absence of
bad faith, willful misfeasance, negligence or from reckless disregard by it
of its obligations and duties. A Fund agrees to indemnify and hold harmless
Fund Accountant, its employees, agents, directors, officers and nominees from
and against any and all claims, demands, actions and suits, whether
groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses
of every nature and character arising out of or in any way relating to Fund
Accountant's actions taken or nonactions with respect to the performance of
services under this Agreement with respect to such Fund or based, if
applicable, upon reasonable reliance on information, records, instructions or
requests with respect to such Fund given or made to Fund Accountant by a duly
authorized representative of the Company other than a representative who is
also an affiliated person of Fund Accountant or its affiliates; provided that
this indemnification shall not apply to actions or omissions of Fund
Accountant in cases of its own bad faith, willful misfeasance, negligence or
from reckless disregard by it of its obligations and duties, and further
provided that prior to confessing any claim against it which may be the
subject of this indemnification, Fund Accountant shall give the Company
written notice of and reasonable opportunity to defend against said claim in
its own name or in the name of Fund Accountant.
8. Record Retention and Confidentiality.
Fund Accountant shall keep and maintain on behalf of the Company all
books and records which the Company 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 Company and
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to make such books and records available for inspection by the Company 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
Company and its shareholders; except when requested to divulge such
information by duly-constituted authorities or court process.
9. Uncontrollable Events.
Fund Accountant assumes no responsibility hereunder, and shall not be
liable, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
10. Reports.
Fund Accountant will furnish to the Company and to its properly
authorized auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the
Company in writing, such reports and at such times as are prescribed pursuant
to the terms and the conditions of this Agreement to be provided or completed
by Fund Accountant, or as subsequently agreed upon by the parties pursuant to
an amendment hereto. The Company 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 three 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 Company and any other recipient, and, except as provided in
Section 6 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
Company.
11. Rights of Ownership.
All computer programs and procedures developed 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 Company and all
such other records and data will be furnished to the Company in appropriate
form as soon as practicable after termination of this Agreement for any
reason.
12. Return of Records.
Fund Accountant may at its option at any time, and shall promptly
upon the Company's demand, turn over to the Company 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 Company, such documents and records will be
retained by Fund
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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
Company unless the Company authorizes in writing the destruction of such
records and documents.
13. Representations of the Company.
The Company certifies to Fund Accountant that this Agreement has been
duly authorized by the Company and, when executed and delivered by the
Company, will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of creditors and
secured parties.
14. Representations of Fund Accountant.
Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other
cause the records, and other data of the Company and Fund Accountant's
records, data, equipment facilities and other property used in the
performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as are required for the secure
performance of its obligations hereunder, and (2) this Agreement has been
duly authorized by Fund Accountant and, when executed and delivered by Fund
Accountant, will constitute a legal, valid and binding obligation of Fund
Accountant, enforceable against Fund Accountant in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of creditors and
secured parties.
15. Insurance.
Fund Accountant shall notify the Company should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. Fund Accountant shall notify the Company of
any material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify
the Company from time to time as may be appropriate of the total outstanding
claims made by Fund Accountant under its insurance coverage.
16. Information to be Furnished by the Company and Funds.
The Company has furnished to Fund Accountant the following:
(a) Copies of the Articles of Incorporation of the Company
and of any amendments thereto, certified by the proper official of the state
in which such document has been filed.
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(b) Copies of the following documents:
(i) The Company's Bylaws and any amendments thereto;
and
(ii) Certified copies of resolutions of the Board of
Directors covering the approval of this Agreement, authorization of a
specified officer of the Company to execute and deliver this Agreement and
authorization for specified officers of the Company to instruct Fund
Accountant thereunder.
(c) A list of all the officers of the Company, together with
specimen signatures of those officers who are authorized to instruct Fund
Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of
Additional Information for each Fund.
17. Information Furnished by Fund Accountant.
(a) Fund Accountant has furnished to the Company the
following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments
thereto.
(b) Fund Accountant shall, upon request, furnish certified
copies of corporate 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 Company and to provide accounting services for the Company.
18. Amendments to Documents.
The Company 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 Company agrees that no amendments will be made to the
Prospectuses or Statements of Additional Information of the Company 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 Company first obtains Fund
Accountant's approval of such amendments or changes.
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19. Compliance with Law.
Except for the obligations of Fund Accountant set forth in Section 8
hereof, the Company assumes full responsibility for the preparation, contents
and distribution of each prospectus of the Company as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the
Company's Shares. The Company represents and warrants that no Shares of the
Company will be offered to the public until the Company's registration
statement under the Securities Act and the 1940 Act has been declared or
becomes effective.
20. Notices.
Any notice provided hereunder shall be sufficiently given when sent
by registered or certified mail to the party required to be served with such
notice, at the following address: 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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
CENTURA FUNDS, INC.
By:
Attest:
BISYS FUND SERVICES, INC.
By:
Attest:
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Dated: October 1, 1996
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
CENTURA FUNDS, INC.
AND
BISYS FUND SERVICES, INC..
FEES
CENTURA FUNDS, INC. BISYS FUND SERVICES, INC.
By: By:
A-1
