INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT made the 24th day of February, 2003, by and between
STATE STREET BANK AND TRUST COMPANY, a trust company chartered under the laws of
the state of Massachusetts, having its trust office located at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("State Street"), and FIRST EAGLE VARIABLE
FUNDS, INC., a Maryland corporation, having its principal office and place of
business at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Fund").
WITNESSETH:
WHEREAS, the Fund desires to appoint State Street as its agent to
perform certain investment accounting and recordkeeping functions; and
WHEREAS, State Street is willing to accept such appointment;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF STATE STREET. The Fund hereby constitutes and appoints
State Street as agent to perform certain accounting and recordkeeping
functions relating to portfolio transactions required of a duly
registered investment company under Rule 31a of the Investment Company
Act of 1940 (the "1940 Act") and to calculate the net asset value of
the Fund.
2. REPRESENTATIONS AND WARRANTIES
A. Fund hereby represents, warrants and acknowledges to State Street:
1. That it is a corporation or trust (as specified
above) duly organized and existing and in good
standing under the laws of its state of organization,
and that it is registered under the 1940 Act; and
2. That it has the requisite power and authority under
applicable law, its articles of incorporation and its
bylaws to enter into this Agreement; that it has
taken all requisite action necessary to appoint State
Street as investment accounting and recordkeeping
agent for the Fund; that this Agreement has been duly
executed and delivered by the Fund; and that this
Agreement constitutes a legal, valid and binding
obligation of the Fund, enforceable in accordance
with its terms.
B. State Street hereby represents, warrants and acknowledges to the
Fund:
1. That it is a trust company duly organized and
existing and in good standing under the laws of the
Commonwealth of Massachusetts; and
2. That it has the requisite power and authority under
applicable law, its charter and its bylaws to enter
into and perform this Agreement; that this Agreement
has been duly executed and delivered by State Street;
and that this Agreement
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constitutes a legal, valid and binding obligation of
State Street, enforceable in accordance with its
terms.
3. DUTIES AND RESPONSIBILITIES OF STATE STREET
A. Delivery of Accounts and Records. The Fund shall turn over or
cause to be turned over to State Street all of the Fund's
relevant accounts and records previously maintained. State
Street shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records
turned over to it, and the Fund shall indemnify and hold State
Street harmless of and from any and all expenses, damages 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 Fund to provide,
or to provide in a timely manner, any accounts, records or
information needed by the State Street to perform its
functions hereunder.
B. Accounts and Records. State Street will prepare and maintain,
with the direction and as interpreted by the Fund, the Fund's
accountants and/or other advisors, in complete, accurate and
current form all accounts and records (i) required to be
maintained by the Fund with respect to portfolio transactions
under Rule 31a of the 1940 Act, (ii) required to be maintained
as a basis for calculation of the Fund's net asset value, and
(iii) as otherwise agreed upon between the parties. State
Street will preserve said records in the manner and for the
periods prescribed in the 1940 Act or for such longer period
as is agreed upon by the parties. State Street relies upon the
Fund to furnish, in writing or its electronic or digital
equivalent, accurate and timely information needed by State
Street to complete the Fund's records and perform daily
calculation of the Fund's net asset value. State Street shall
incur no liability and the Fund shall indemnify and hold
harmless State Street from and against any liability arising
from any failure of the Fund to furnish such information in a
timely and accurate manner, even if the Fund subsequently
provides accurate but untimely information. It shall be the
responsibility of the Fund to furnish State Street with the
declaration, record and payment dates and amounts of any
dividends or income and any other special actions required
concerning each of its securities when such information is not
readily available from generally accepted securities industry
services or publications.
C. Accounts and Records Property of Fund. State Street
acknowledges that all of the accounts and records maintained
by State Street pursuant to this Agreement are the property of
Fund, and will be made available to the Fund for inspection or
reproduction within a reasonable period of time, upon demand.
State Street will assist the Fund's independent auditors, or
upon approval of the Fund, or upon demand, any regulatory
body, in any requested review of the Fund's accounts and
records but shall be reimbursed by the Fund for all expenses
and employee time invested in any such review outside of
routine and normal periodic reviews. Upon receipt from the
Fund of the necessary information or instructions, State
Street will supply information from the books and records it
maintains for the Fund that the Fund needs for tax returns,
questionnaires, periodic reports to shareholders and such
other reports and information requests as the Fund and State
Street shall agree upon from time to time.
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D. Adoption of Procedures. State Street and the Fund may from
time to time adopt procedures as they agree upon, and State
Street may conclusively assume that no procedure approved or
directed by the Fund or its accountants or other advisors
conflicts with or violates any requirements of its
prospectus, articles of incorporation, bylaws, any applicable
law, rule or regulation, or any order, decree or agreement by
which the Fund may be bound. The Fund will be responsible to
notify State Street of any changes in statutes, regulations,
rules, requirements or policies which might necessitate
changes in State Street's responsibilities or procedures.
E. Calculation of Net Asset Value. State Street will calculate
the Fund's net asset value, in accordance with the Fund's
prospectus. State Street will price the securities and foreign
currency holdings of the Fund for which market quotations are
available by the use of outside services designated by the
Fund which are normally used and contracted with for this
purpose; all other securities and foreign currency holdings
will be priced in accordance with the Fund's instructions.
State Street will have no responsibility for the accuracy of
the prices quoted by these outside services or for the
information supplied by the Fund or for acting upon such
instructions.
4. INSTRUCTIONS
A. The term "instructions", as used herein, means written
(including telecopied or telexed) or oral instructions which
State Street reasonably believes were given by a designated
representative of the Fund. Written instructions or written
confirmation of oral instructions shall be signed by two
designated representatives. The Fund shall deliver to State
Street, upon execution hereof and thereafter from time to time
as changes therein are necessary, written instructions naming
one or more designated representatives to give instructions in
the name and on behalf of the Fund, which instructions may be
received and accepted by State Street as conclusive evidence
of the authority of any designated representative to act for
the Fund and may be considered to be in full force and effect
(and State Street will be fully protected in acting in
reliance thereon) until receipt by State Street of notice to
the contrary. Unless such written instructions delegating
authority to any person to give instructions specifically
limit such authority to specific matters or require that the
approval of anyone else will first have been obtained, State
Street will be under no obligation to inquire into the right
of such person to give any instructions whatsoever which State
Street may receive from such person. If the Fund fails to
provide State Street any such instructions naming designated
representatives, any instructions received by State Street
from a person reasonably believed to be an appropriate
representative of the Fund shall constitute valid and proper
instructions hereunder. "Designated representatives" of the
Fund may include its employees and agents, including
investment managers and their employees.
B. No later than the next business day immediately following each
oral instruction, the Fund will send State Street written
confirmation of such oral instruction. At State Street's sole
discretion, State Street may record on tape, or otherwise, any
oral instruction whether given in person or via telephone,
each such recording identifying the date and the time of the
beginning and ending of such oral instruction.
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5. LIMITATION OF LIABILITY OF STATE STREET
C. State Street shall at all times use reasonable care and due
diligence and act in good faith in performing its duties under
this Agreement. State Street shall not be responsible for, and
the Fund shall indemnify and hold State Street harmless from
and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability which may be
asserted against State Street, incurred by State Street or for
which State Street may be held to be liable, arising out of or
attributable to:
1. All actions taken by State Street pursuant to this
Agreement or any instructions provided to it
hereunder, provided that State Street has acted in
good faith and with due diligence and reasonable
care; and
2. The Fund's refusal or failure to comply with the
terms of this Agreement (including without limitation
the Fund's failure to pay or reimburse State Street
under this indemnification provision), the Fund's
negligence or willful misconduct, or the failure of
any representation or warranty of the Fund hereunder
to be and remain true and correct in all respects at
all times.
D. State Street may request and obtain at the expense of the Fund
the advice and opinion of counsel for the Fund or of its own
counsel with respect to questions or matters of law, and it
shall be without liability to the Fund for any action taken or
omitted by it in good faith, in conformity with such advice or
opinion. If State Street reasonably believes that it could not
prudently act according to the instructions of the Fund or the
Fund's accountants or counsel, it may in its discretion, with
notice to the Fund, not act according to such instructions.
E. State Street may rely upon the advice and statements of the
Fund, the Fund's accountants and officers or other authorized
individuals, and other persons believed by it in good faith to
be expert in matters upon which they are consulted, and State
Street shall not be liable for any actions taken, in good
faith, upon such advice and statements.
F. If the Fund requests State Street in any capacity to take any
action which involves the payment of money by State Street, or
which might make it or its nominee liable for payment of
monies or in any other way, State Street shall be indemnified
and held harmless by the Fund against any liability on account
of such action; provided, however, that nothing herein shall
obligate State Street to take any such action except in its
sole discretion.
G. State Street shall be protected in acting hereunder upon any
instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to
have been properly executed. State Street shall be entitled to
receive upon request as conclusive proof of any fact or matter
required to be ascertained from the Fund hereunder a
certificate signed by an officer or designated representative
of the Fund. The Fund shall also provide State Street
instructions with respect to any matter concerning this
Agreement requested by Xxxxx Xxxxxx.
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X. Xxxxx Xxxxxx shall not be responsible or liable for the
failure or delay in performance of its obligations under this
Agreement, or those of any entity for which it is responsible
hereunder, arising out of or caused, directly or indirectly,
by circumstances beyond the affected entity's reasonable
control, including, without limitation: any interruption, loss
or malfunction of any utility, transportation, computer
(hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a
delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike,
riot, emergency, civil disturbance, terrorism, vandalism,
explosions, labor disputes, freezes, floods, fires, tornados,
acts of God or public enemy, revolutions, or insurrection.
G. EXCEPT FOR VIOLATIONS OF SECTION 9, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE
TO ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY,
FOR CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES FOR ANY ACT OR
FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF
ADVISED OF THIS POSSIBILITY THEREOF.
6. COMPENSATION. In consideration for its services hereunder as investment
accounting. recordkeeping, the Fund will pay to State Street such
compensation as shall be set forth in a separate fee schedule,
incorporated herein by reference, to be agreed to by the Fund and State
Street from time to time. State Street shall also be entitled to
receive, and the Fund agrees to pay to State Street, on demand,
reimbursement for State Street's cash disbursements and reasonable
out-of-pocket costs and expenses, including attorney's fees, incurred
by State Street in connection with the performance of services
hereunder.
7. TERM AND TERMINATION. The initial term of this Agreement shall be for a
period of one (1) year. Thereafter, either party to this Agreement may
terminate the same by notice in writing, delivered or mailed, postage
prepaid, to the other party hereto and received not less than ninety
(90) days prior to the date upon which such termination will take
effect. Upon termination of this Agreement, the Fund will pay State
Street its fees and compensation due hereunder and its reimbursable
disbursements, costs and expenses paid or incurred to such date and the
Fund shall designate a successor investment accounting and
recordkeeping agent (which may be the Fund) by notice in writing to
State Street by the termination date. In the event no written notice
designating a successor has been delivered to State Street on or before
the date when such termination becomes effective, then State Street
may, at its option, deliver the accounts and records to the Fund. Upon
delivery to a successor , State Street will have no further obligations
or liabilities under this Agreement.
8. NOTICES. Notices, requests, instructions and other writings addressed
to the Fund at 1345 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
or at such other address as the Fund may have designated to State
Street in writing, will be deemed to have been properly given to the
Fund hereunder; and notices, requests, instructions and other writings
addressed to State Street at its offices at 000 Xxxxxxxxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Investment Accounting
Department, or to such other address as it may have designated to the
Fund in writing, will be deemed to have been properly given to State
Street hereunder.
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9. CONFIDENTIALITY
A. The System. Fund acknowledges that State Street has developed
proprietary accounting and other systems, and has acquired
licenses for other such systems, which it utilizes in
conjunction with the services it provides to Fund (the
"Systems"). In this regard, State Street maintains certain
information in databases under its control and ownership that
it makes available on a remote basis to its customers (the
"Remote Access Services").
B. The Services. The provisions of this Section of this Agreement
shall govern use of all Systems that State Street may from
time to time agree to provide to Fund and its designated
investment advisors, consultants or other third parties
authorized by State Street who agree to abide by the terms of
this Agreement ("Authorized Designees") in order to provide
Remote Access Services for the purpose of obtaining and
analyzing reports and information.
C. Security Procedures. Fund agrees to comply, and to cause its
Authorized Designees to comply, with remote access operating
standards and procedures and with user identification or other
password control requirements and other security procedures as
may be issued from time to time by State Street for use of the
Systems and access to the Remote Access Services. Fund agrees
to advise State Street immediately in the event that it learns
or has reason to believe that any person to whom it has given
access to the Systems or the Remote Access Services has
violated or intends to violate the terms of this Agreement and
Fund will cooperate with State Street in seeking injunctive or
other equitable relief. Fund agrees to discontinue use of the
Systems and Remote Access Services, if requested, for any
security reasons cited by State Street.
D. Fees. Fees and charges (if any) for the use of the Systems and
the Remote Access Services and related payment terms shall be
as set forth in the fee schedule in effect from time to time
between the parties (the "Fee Schedule"). Fund shall be
responsible for any tariffs, duties or taxes imposed or levied
by any government or governmental agency by reason of the
transactions contemplated by this Agreement, including,
without limitation, federal, state and local taxes, use, value
added and personal property taxes (other than income,
franchise or similar taxes which may be imposed or assessed
against State Street). Any claimed exemption from such
tariffs, duties or taxes shall be supported by proper
documentary evidence delivered to State Street.
E. Proprietary Information/Injunctive Relief. The Systems and
Remote Access Services and the databases, computer programs,
screen formats, report formats, interactive design techniques,
formulae, processes, systems, software, know-how, algorithms,
programs, training aids, printed materials, methods, books,
records, files, documentation and other information made
available to Fund by State Street as part of the Remote Access
Services and through the use of the Systems and all
copyrights, patents, trade secrets and other proprietary
rights of State Street and its relevant licensors related
thereto are the exclusive, valuable and confidential property
of State Street and its relevant licensors, as applicable (the
"Proprietary
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Information"). Fund agrees on behalf of itself and its
Authorized Designees to keep the Proprietary Information
confidential and to limit access to Funds employees and
Authorized Designees (under a similar duty of confidentiality)
who require access to the Systems for the purposes intended.
The foregoing shall not apply to Proprietary Information in
the public domain or required by law to be made public.
Fund agrees to use the Remote Access Services only in
connection with the proper purposes of this Agreement. Fund
will not, and will cause its employees and Authorized
Designees not to, (i) permit any third party to use the
Systems or the Remote Access Services, (ii) sell, rent,
license or otherwise use the Systems or the Remote Access
Services in the operation of a service bureau or for any
purpose other than as expressly authorized under this
Agreement, (iii) use the Systems or the Remote Access Services
for any fund, trust or other investment vehicle without the
prior written consent of State Street, or (iv) allow or cause
any information transmitted from State Street's databases,
including data from third party sources, available through use
of the Systems or the Remote Access Services, to be
redistributed or retransmitted for other than use for or on
behalf of Fund, as State Street's Customer.
Fund agrees that neither Fund nor its Authorized Designees
will modify the Systems in any way, enhance or otherwise
create derivative works based upon the Systems, nor will Fund
or its Authorized Designees reverse engineer, decompile or
otherwise attempt to secure the source code for all or any
part of the Systems.
Fund acknowledges that the disclosure of any Proprietary
Information, or of any information which at law or equity
ought to remain confidential, will immediately give rise to
continuing irreparable injury inadequately compensable in
damages at law, and that State Street and its licensor, if
applicable, shall be entitled to obtain immediate injunctive
relief against the breach or threatened breach of any of the
foregoing undertakings, in addition to any other legal
remedies which may be available.
F. Limited Warranties. State Street represents and warrants that
it has the right to grant access to the Systems and to provide
the Remote Access Services contemplated herein. Because of the
nature of computer information technology and the necessity of
relying upon third-party sources, and data and pricing
information obtained from third parties, the Systems and
Remote Access Services are provided "AS IS", and Fund and its
Authorized Designees shall be solely responsible for the
investment decisions, regulatory reports and statements
produced using the Remote Access Services. State Street and
its relevant licensors will not be liable to Fund or its
Authorized Designees for any direct or indirect, special,
incidental, punitive or consequential damages arising out of
or in any way connected with the Systems or the Remote Access
Services, nor shall either party be responsible for delays or
nonperformance under this Agreement arising out of any cause
or event beyond such party's control.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, STATE STREET
FOR ITSELF AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY
AND ALL WARRANTIES CONCERNING THE SYSTEM
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AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.
G. Infringement. State Street will defend or, at its option,
settle any claim or action brought against Fund to the extent
that it is based upon an assertion that access to any
proprietary System developed and owned by State Street or use
of the Remote Access Services through any such proprietary
System by Fund under this Agreement constitutes direct
infringement of any United States patent or copyright or
misappropriation of a trade secret, provided that Fund
notifies State Street promptly in writing of any such claim or
proceeding and cooperates with State Street in the defense of
such claim or proceeding. Should any such proprietary System
or the Remote Access Services accessed thereby or any part
thereof become, or in State Street's opinion be likely to
become, the subject of a claim of infringement or the like
under the patent or copyright or trade secret laws of the
United States, State Street shall have the right, at State
Street's sole option, to (i) procure for Fund the right to
continue using such System or Remote Access Services, (ii)
replace or modify such System or Remote Access Services so
that the System or the Remote Access Services becomes
noninfringing, or (iii) terminate the Remote Access Services
without further obligation.
H. Termination. Either party may terminate the Remote Access
Services (i) for any reason by giving the other party at least
one-hundred and eighty (180) days' prior written notice in the
case of notice of termination by State Street to Fund or
thirty (30) days' notice in the case of notice from Fund to
State Street of termination, or (ii) immediately for failure
of the other party to comply with any material term and
condition of this section of this Agreement by giving the
other party written notice of termination. In the event of
termination, Fund will return to State Street all copies of
documentation and other confidential information in Funds
possession or in the possession of its Authorized Designees.
The foregoing provisions with respect to confidentiality and
infringement will survive termination for a period of three
(3) years.
10. MULTIPLE PORTFOLIOS. If the Fund is comprised of more than one
Portfolio:
H. Each Portfolio shall be regarded for all purposes hereunder as
a separate party apart from each other Portfolio. Unless the
context otherwise requires, with respect to every transaction
covered by this Agreement, every reference herein to the Fund
shall be deemed to relate solely to the particular Portfolio
to which such transaction relates. Under no circumstances
shall the rights, obligations or remedies with respect to a
particular Portfolio constitute a right, obligation or remedy
applicable to any other Portfolio. The use of this single
document to memorialize the separate agreement of each
Portfolio is understood to be for clerical convenience only
and shall not constitute any basis for joining the Portfolios
for any reason.
I. Additional Portfolios may be added to this Agreement, provided
that State Street consents to such addition. Rates or charges
for each additional Portfolio shall be as agreed upon by State
Street and the Fund in writing.
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11. MISCELLANEOUS
J. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by,
the laws of the Commonwealth of Massachusetts, without
reference to the choice of laws principles thereof.
K. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
L. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Section 9 hereof are
intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement.
M. No provisions of the Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed by each party hereto.
N. The failure of either party to insist upon the performance of
any terms or conditions of this Agreement or to enforce any
rights resulting from any breach of any of the terms or
conditions of this Agreement, including the payment of
damages, shall not be construed as a continuing or permanent
waiver of any such terms, conditions, rights or privileges,
but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred. No
waiver, release or discharge of any party's rights hereunder
shall be effective unless contained in a written instrument
signed by the party sought to be charged.
O. The captions in the Agreement are included for convenience of
reference only, and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
P. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Q. If any provision of this Agreement shall be determined to be
invalid or unenforceable, the remaining provisions of this
Agreement shall not be affected thereby, and every provision
of this Agreement shall remain in full force and effect and
shall remain enforceable to the fullest extent permitted by
applicable law.
R. This Agreement may not be assigned by either party hereto
without the prior written consent of the other party.
S. Neither the execution nor performance of this Agreement shall
be deemed to create a partnership or joint venture by and
between State Street and the Fund.
T. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by either
party hereunder shall not affect any rights or obligations of
the other party hereunder.
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L. This agreement supercedes the previous agreement between First
Eagle Sogen Variable Funds, Inc. and State Street Bank and
Trust Company dated November 17, 2000.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
STATE STREET BANK AND TRUST COMPANY
By:
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Title:
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FIRST EAGLE VARIABLE FUNDS, INC.
By: Xxxxxx Xxxxx
Title: Vice President and Secretary
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