FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of October, 1996, between XXXX XXXXXXXXX SERIES
TRUST (the "Trust"), a Massachusetts business trust, and BISYS FUND SERVICES,
INC. (the "Fund Accountant"), a corporation organized under the laws of the
State of Delaware.
WHEREAS, the Trust desires that the Fund Accountant perform certain fund
accounting services for each investment portfolio of the Trust, all as now or
hereafter may be established from time to time (individually referred to herein
as a "Fund" and collectively as the "Funds"); and
WHEREAS, the 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 THE FUND ACCOUNTANT; CONVERSION TO SERVICES.
The Trust hereby engages the Fund Accountant to perform fund accounting
services as set forth in this Section 1 (collectively, the "Services"), and, in
connection therewith, the Trust agrees to convert to the Fund Accountant's data
processing systems and software (the "BISYS System") as necessary in order to
receive the Services. The Trust shall cooperate with the Fund Accountant to
provide the Fund Accountant with all necessary information and assistance
required to successfully convert to the BISYS System. The Fund Accountant shall
provide the Trust 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." The 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. The 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. The Fund Accountant will keep
and maintain the following books and records of each Fund
pursuant to Rule 31a-1 under the Investment Company Act of 1940
(the "Rule"):
(i) Journals containing an itemized daily record in detail of
all purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts,
including interest accrued and interest received, as
required by subsection (b)(2)(I) of the Rule;
(iii) Separate ledger accounts required by subsection (b)(2)(ii)
and (iii) of the Rule; and
(iv) A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of
the Rule.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES. In addition to the
maintenance of the books and records specified above, the 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 Trust's Board of Trustees;
(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 Trust the daily market pricing of securities
in any money market Funds, with the comparison to the
amortized cost basis;
(vii) Determine unrealized appreciation and depreciation on
securities held in variable net asset value Funds;
(viii) Amortize premiums and accrete discounts on securities
purchased at a price other than face value, if requested
by the Trust;
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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 instructions
received from the Trust's Administrator;
(xii) Determine the outstanding receivables and payables for all
(1) security trades, (2) Fund share transactions and (3)
income and expense accounts;
(xiii) Provide accounting reports in connection with the Trust's
regular annual audit and other audits and examinations by
regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall agree
upon, as set forth in a separate schedule.
(c) SPECIAL REPORTS AND SERVICES.
(i) The Fund Accountant may provide additional special reports
upon the request of the Trust or a Fund's investment
adviser, which may result in an additional charge, the
amount of which shall be agreed upon between the parties.
(ii) The Fund Accountant may provide such other similar
services with respect to a Fund as may be reasonably
requested by the Trust, which may result in an additional
charge, the amount of which shall be agreed upon between
the parties.
(d) ADDITIONAL ACCOUNTING SERVICES. The Fund Accountant shall also
perform the following additional accounting services for each
Fund:
(i) Provide monthly a download (and hard copy thereof) of the
financial statements described below, upon request of the
Trust. The download will include the following items:
Schedule of Investments,
Cash Statement,
Schedule of Capital Gains and Losses,
Statement of Assets and Liabilities,
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Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal
excise tax returns;
(B) the Trust's semi-annual reports with the Securities
and Exchange Commission ("SEC") on Form N-SAR;
(C) the Trust's annual, semi-annual and quarterly (if
any) shareholder reports;
(D) registration statements on Form N-1A and other
filings relating to the registration of Shares;
(E) the Administrator's monitoring of the Trust's status
as a regulated investment company under Subchapter M
of the Internal Revenue Code, as amended;
(F) annual audit by the Trust's auditors; and
(G) examinations performed by the SEC.
2. SUBCONTRACTING.
The Fund Accountant may, at its expense and with the written consent
of the Trust, subcontract with any entity or person concerning the provision of
the services contemplated hereunder; provided, however, that the Fund Accountant
shall not be relieved of any of its obligations under this Agreement by the
appointment of such subcontractor and provided further, that the Fund Accountant
shall be responsible, to the extent provided in Section 7 hereof, for all acts
of such subcontractor as if such acts were its own.
3. COMPENSATION.
Commencing on the Conversion Date, the Trust shall pay the Fund
Accountant for the services to be provided by the 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.
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4. REIMBURSEMENT OF EXPENSES.
In addition to paying the Fund Accountant the fees described in
Section 3 hereof, the Trust agrees to reimburse the Fund Accountant for the
following reasonable out-of-pocket expenses in providing services hereunder:
(a) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by the Fund Accountant in
communication with the Trust, the Trust's investment advisor or
custodian, dealers or others as required for the Fund Accountant to
perform the services to be provided hereunder;
(b) The cost of obtaining security market quotes pursuant to Section
l(b)(ii) above; and
(c) Any expenses the Fund Accountant shall incur at the written direction
of an officer of the Trust (other than an officer of the Trust who is
also an employee of BISYS or Xxxxxx Xxxx) thereunto duly authorized.
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 one year 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 the Initial Term, (i) the Trust may terminate this
Agreement at any time, without the payment of any penalty, by a vote of a
majority of the Trust's outstanding voting securities (as defined in the 0000
Xxx) or by vote of a majority of the Trustees of the Trust on 60 days' written
notice to the Fund Accountant and (ii) the Fund Accountant may terminate this
Agreement at any time, without penalty, on 60 days' written notice to the Trust;
and, provided, further, that after this Agreement is terminated, for so long as
the Fund Accountant, with the written consent of the Trust, in fact continues to
perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due the Fund Accountant and unpaid by the Trust
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. The Fund Accountant shall be entitled to
collect from the Trust, in addition to the compensation described under Section
3 hereof, the amount of all of the Fund Accountant's reasonable cash
disbursements for services in connection with the Fund Accountant's activities
in effecting such termination, including without limitation, the delivery
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to the Trust and/or its designees of the Trust's property, records, instruments
and documents, or any copies thereof. Subsequent to such termination, for a
reasonable fee, the Fund Accountant will provide the Trust with reasonable
access to any Trust documents or records remaining in its possession.
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 or
termination of this Agreement by the Trust after the Initial Term, the Fund
Accountant is replaced as the Fund Accountant, or if a third party is added to
perform all or a part of the services provided by the Fund Accountant under this
Agreement (excluding any sub-accountant appointed by the Fund Accountant as
provided in Section 2 hereof), then the Trust shall make a one-time cash
payment, as liquidated damages, to the Fund Accountant equal to the balance due
the 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 Trust on
the date the 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.
The Fund Accountant shall use its best efforts to ensure the accuracy
of all services performed under this Agreement, but shall not be liable to the
Trust for any action taken or omitted by the Fund Accountant in the absence of
bad faith, willful misfeasance, negligence or reckless disregard by it of its
obligations and duties. The Trust agrees to indemnify and hold harmless the
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, reasonable counsel fees and other reasonable expenses
of every nature and character arising out of or in any way relating to the Fund
Accountant's actions taken or nonactions with respect to the performance of
services under this Agreement or based, if applicable, upon reasonable reliance
on information, records, instructions or requests with respect to a Fund given
or made to the Fund Accountant by a duly authorized representative of the Trust;
provided that this indemnification shall not apply to actions or omissions of
the Fund Accountant or its employees, agents, directors, officers or nominees in
cases of their own bad faith, willful misfeasance, negligence or reckless
disregard by any or all of them of the Fund Accountant's obligations and duties,
and further provided that prior to confessing any claim against it which may be
the subject of this indemnification, the Fund Accountant shall give the Trust
written notice of and reasonable opportunity to defend against said claim in its
own name or in the name of the Fund Accountant.
The Fund Accountant agrees to indemnify and hold harmless the Trust,
its employees, agents, Trustees, officers and nominees from and against any and
all actions, suits, demands and
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claims, whether groundless or otherwise, and from and against any and all
judgments, liabilities, losses, damages, costs, charges, reasonable counsel fees
and other expenses of every nature and character arising out of or in any way
relating to the Fund Accountant's or its employees', agents', directors',
officers' or nominees' bad faith, willful misfeasance, negligence or reckless
disregard by any or all of them of the Fund Accountant's obligations and duties
with respect to the performance of services under this Agreement; provided,
that, prior to confessing any claim against it which may be the subject of this
indemnification, the Trust shall give the Fund Accountant written notice of and
a reasonable opportunity to defend against said claim in its own name or in the
name of the Trust.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provisions contained herein shall apply, however, it is
understood that if in any case the indemnifying party may be asked to indemnify
or hold the other party harmless, the indemnifying party shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnified party will use all reasonable
care to identify and notify the indemnifying party promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the indemnifying party, but failure to do so
in good faith shall not affect the rights hereunder.
The indemnifying party shall be entitled to participate at its own expense
or, if it so elects, to assume the defense of any suit brought to enforce any
claims subject to this indemnity provision. If the indemnifying party elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the indemnifying party and satisfactory to the other party, whose
approval shall not be unreasonably withheld. In the event that the indemnifying
party elects to assume the defense of any suit and retain counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by it. If the indemnifying party does not elect to assume the defense
of a suit, it will reimburse the indemnified party for the reasonable fees and
expenses of any counsel retained by the other party.
8. RECORD RETENTION AND CONFIDENTIALITY.
The Fund Accountant shall keep and maintain on behalf of the Trust all
books and records which the Trust and the 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. The Fund Accountant further agrees that all such books and records
shall be the property of the Trust and to make such books and records available
for inspection by the Trust or by the SEC at reasonable times and otherwise to
keep confidential all books and records and other information relative to the
Trust and its shareholders; except when requested to divulge such information by
duly-constituted authorities or court process.
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9. UNCONTROLLABLE EVENTS.
The 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.
The Fund Accountant will furnish to the Trust and to its properly
authorized auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the Trust
in writing, such reports and at such times as are prescribed pursuant to the
terms and the conditions of this Agreement to be provided or completed by the
Fund Accountant, or as subsequently agreed upon by the parties pursuant to an
amendment hereto.
11. RIGHTS OF OWNERSHIP.
All computer programs and procedures developed to perform services
required to be provided by the Fund Accountant under this Agreement are the
property of the Fund Accountant. All records and other data except such
computer programs and procedures are the exclusive property of the Trust and all
such other records and data will be furnished to the Trust in appropriate form
as soon as practicable after termination of this Agreement for any reason.
12. RETURN OF RECORDS.
The Fund Accountant may at its option at any time, and shall promptly
upon the Trust's demand, turn over to the Trust and cease to retain the Fund
Accountant's files, records and documents created and maintained by the Fund
Accountant pursuant to this Agreement which are no longer needed by the Fund
Accountant in the performance of its services or for its legal protection. If
not so turned over to the Trust, such documents and records will be retained by
the Fund Accountant for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Trust
unless the Trust authorizes in writing the destruction of such records and
documents.
13. REPRESENTATIONS OF THE TRUST.
The Trust certifies to the Fund Accountant that: (1) as of the close
of business on each Conversion Date, each Fund that is in existence as of the
Conversion Date has authorized unlimited shares, and (2) this Agreement has been
duly authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties and general
principles of equity.
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14. REPRESENTATIONS OF THE FUND ACCOUNTANT.
The Fund Accountant represents and warrants that: (1) the various
procedures and systems which the 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 Trust and the 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 the Fund
Accountant and, when executed and delivered by the Fund Accountant, will
constitute a legal, valid and binding obligation of the Fund Accountant,
enforceable against the 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.
The Fund Accountant shall notify the Trust should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. The Fund Accountant shall notify the Trust 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
Trust from time to time as may be appropriate of the total outstanding claims
made by the Fund Accountant under its insurance coverage.
16. INFORMATION TO BE FURNISHED BY THE TRUST AND FUNDS.
The Trust has furnished to the Fund Accountant, or will furnish to the
Fund Accountant within 90 days following the effective date of this Agreement,
the following:
(a) Copies of the Agreement and Declaration of Trust of the Trust and
of any amendments thereto, certified by the proper official of
the state in which such document has been filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Board of Trustees
covering the approval of this Agreement, authorization of
a specified officer of the Trust to execute and deliver
this Agreement and authorization for specified officers of
the Trust to instruct the Fund Accountant thereunder.
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(c) A list of all the officers of the Trust, together with specimen
signatures of those officers who are authorized to instruct the
Fund Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
17. INFORMATION FURNISHED BY THE FUND ACCOUNTANT.
(a) The Fund Accountant has furnished to the Trust the following:
(i) The Fund Accountant's Articles of Incorporation; and
(ii) The Fund Accountant's Bylaws and any amendments thereto.
(b) The 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 the Fund Accountant to execute and
deliver this Agreement; and
(ii) Authorization of the Fund Accountant to act as fund
accountant for the Trust and to provide accounting
services for the Trust.
18. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish the Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16 hereof
forthwith upon such amendments or changes becoming effective. In addition, the
Trust agrees that no amendments will be made to the Prospectuses or Statements
of Additional Information of the Trust which might have the effect of changing
the procedures employed by the Fund Accountant in providing the services agreed
to hereunder or which amendment might affect the duties of the Fund Accountant
hereunder unless the Trust first obtains the Fund Accountant's approval of such
amendments or changes.
19. COMPLIANCE WITH LAW.
Except for the obligations of the Fund Accountant set forth in Section
8 hereof, the Trust assumes full responsibility for the preparation, contents
and distribution of each prospectus of the Trust as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. The Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Trust's
Shares. The Trust represents and warrants
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that no Shares of the Trust will be offered to the public until the Trust's
registration statement under the Securities Act and the 1940 Act has been
declared or becomes effective.
20. NOTICES.
Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
following address: if to the Fund Accountant, to it at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000; if to the Trust, to it at Xxxxxxxxx Institutional Equity
Management, 0 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxx, 00000, Attn: Xxxxxx X. Xxxxx,
Esq., with a copy to X.X. Xxxxxxxxx, Esq., Ropes & Xxxx, Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, 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.
24. MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS BUSINESS TRUST.
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the property of
the Trust. The execution and delivery of this Agreement have been authorized by
the Trustees, and this Agreement has been signed and delivered by an authorized
officer of the Trust, acting as such, and neither such authorization by the
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 property of the Trust as provided in the
Trust's Amended and Restated Agreement and Declaration of Trust, which is on
file with the Secretary of The Commonwealth of Massachusetts.
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25. CONFIDENTIAL INFORMATION.
Each party acknowledges that it may acquire knowledge and information
relating to the other party and its affiliates which is not generally known by
others including, but not limited to, information pertaining to business plans,
prior, present or potential shareholders, employees, customers and/or suppliers,
and that all such knowledge and information acquired or developed is and shall
be confidential and proprietary information (all such confidential and
proprietary information is herein collectively referred to as the "Confidential
Information"). Each party agrees to hold the Confidential Information in strict
confidence, to refrain from directly or indirectly disclosing it to others or
using it in any way except for purposes of performing services hereunder, and to
prevent any unauthorized person access to it either before or after termination
of this Agreement, without the prior written consent of the other party. Both
parties further agree to take all action reasonable and necessary to protect the
confidentiality of the Confidential Information. The parties shall use their
best efforts to have their officers, employees and agents agree to the terms of
this Section. The obligations of the parties contained in this section shall
survive termination of this Agreement. Neither party's confidentiality
obligations under this provision shall apply to such information that (i) was in
the public domain or available to a third party without restrictions at or prior
to the time such information was made known to such party, (ii) had been
independently known to such party at the time of disclosure from persons who
were not subject to similar confidentiality obligations, or (iii) is required to
be disclosed by law (except that each party will use best efforts to give the
other party written notice prior to any such disclosure).
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
XXXX XXXXXXXXX SERIES TRUST
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Vice President
-------------------------------------
BISYS FUND SERVICES, INC.
By: /s/ J. Xxxxx Xxxxx
----------------------------------------
Title: Executive Vice President
-------------------------------------
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Dated: October 1,1996
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
XXXX XXXXXXXXX SERIES TRUST
AND
BISYS FUND SERVICES, INC..
FEES
Effective as of the Conversion Date, the Fund Accountant shall be entitled to
receive an annual fee of $30,000 per Fund.
XXXX XXXXXXXXX SERIES TRUST BISYS FUND SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ J. Xxxxx Xxxxx
----------------------------------- -----------------------------------
A-1
