Exhibit h(7)
FUND ACCOUNTING AGREEMENT
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AGREEMENT made this 29th day of September, 2000 between Citizens Funds
(the "Company"), a Massachusetts business trust having its principal place of
business at 000 Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, and
BISYS FUND SERVICES OHIO, INC. ("Fund Accountant"), a corporation organized
under the laws of the State of Ohio and having its principal place of business
at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
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.
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(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;
(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.
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(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 and
public offering price 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 Trustees (hereafter referred to as
"Trustees");
(iii) Allocate income, expenses, and realized and
unrealized gains and losses on multi-class
funds in accordance with a methodology
prescribed by Rule 18f-3 under the
Investment Company Act of 1940;
(iv) Post summary shareholder activity received
from the Company's transfer agent and
reconcile share balances and outstanding
payables and receivables for capital share
transactions with the transfer agent;
(v) Complete and return surveys from industry
publications including but not limited to
Lipper, Morningstar, Xxxxxxxx, XXXXXX,
Standard and Poors, and the Investment
Company Institute;
(vi) Report daily cash availability to the
Company's investment adviser or appointed
sub-advisers;
(vii) Reconcile cash, foreign currency and
security holdings with the Company's
custodian;
(viii) Identify, research and post to the general
ledger of the Funds all corporate actions;
(ix) Provide the Company's investment adviser and
any sub-adviser with access to Fund Station;
(x) Provide necessary assistance to the
Company's investment adviser and, if
applicable, the Company's Valuation
Committee with regard to the fair
valuation of securities;
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(xi) Verify and reconcile with the Company's
custodian and investment adviser all daily
trade activity;
(xii) 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, 30-day SEC
advertised yield, and weighted average
portfolio maturity;
(xiii) 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, the Company's transfer agent and
other third parties, as directed by the
Company;
(xiv) Report to the Company the daily market
pricing of securities in any money market
Funds, and the deviation of the net asset
value using market pricing from the net
asset value using amortized cost;
(xv) Determine unrealized appreciation and
depreciation on securities held in variable
net asset value Funds;
(xvi) Amortize premiums and accrue discounts on
securities purchased at a price other than
face value, if requested by the Company;
(xvii) Update fund accounting system to reflect
rate changes, on variable interest rate
instruments;
(xviii) Post Fund transactions to appropriate
general ledger accounts in accordance with
GAAP;
(xix) Accrue expenses of each Fund according to
instructions received from the Company's
sub-administrator;
(xx) Determine and reconcile the outstanding
receivables and payables for all (1)
security trades, (2) Fund share
transactions, (3) income and expense
accounts and (4) other miscellaneous
payables and receivables;
(xxi) Provide accounting reports in connection
with the Company's regular annual audit and
other audits and examinations by regulatory
agencies; and
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(xxii) Provide such periodic reports as the parties
shall agree upon, as set forth in a separate
schedule.
(c) Special Reports and Services.
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(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;
(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 including graphical
presentations therein;
(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 compliance with
Internal Revenue Code mandatory
qualification requirements, the
requirements of the 1940 Act and
Company prospectus limitations;
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(F) annual audit by the Company's
auditors; and
(G) examinations performed by the SEC or
other regulatory agencies.
2. Subcontracting.
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Fund Accountant may, at its expense, with the prior written
consent of the Company, 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 7 hereof, for
all acts of such subcontractor as if such acts were its own.
3. Compensation.
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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.
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In addition to paying Fund Accountant the fees described in
Section 3 hereof, the Company agrees to reimburse Fund Accountant for its
reasonable out-of-pocket expenses in providing services hereunder, including
without limitation the following:
(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 adviser 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;
(e) All systems-related expenses associated with the
provision of special reports and services pursuant
to Section 1(c) herein;
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(f) Any expenses Fund Accountant shall incur at the
written direction of an officer of the Company
thereunto duly authorized; and
(g) Any additional expenses reasonably incurred by Fund
Accountant in the performance of its duties and
obligations under this Agreement.
5. Effective Date.
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This Agreement shall become effective with respect to a Fund
as of the date first written above (or, if a particular Fund is not in existence
on that date, on the date such Fund commences operation) (the "Effective Date").
6. Term.
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This Agreement shall continue for a period of three (3) years
from the date of this Agreement (the "Initial Term"). Thereafter, unless
otherwise terminated as provided herein, this Agreement shall be reviewed
annually for renewal and, if not terminated by provision of a notice of
nonrenewal as set forth below, shall be renewed for successive one-year periods
("Rollover Periods"). This Agreement may be terminated without penalty (i) by
provision of a notice of nonrenewal in the manner set forth below, (ii) by
mutual agreement of the parties or (iii) for "cause," as defined below, upon the
provision of sixty (60) days advance written notice by the party alleging cause.
Written notice of nonrenewal must be provided at least sixty (60) days prior to
the end of the Initial Term of any Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been remedied for thirty (30)
days following written notice of such breach from the non-breaching party; (b) a
series of acts or omissions which, in the aggregate, constitutes, in the sole
reasonable judgment of the President of the Company, a material failure to
perform satisfactorily Fund Accountant's obligations hereunder; (c) a final,
unappealable judicial, regulatory or administrative ruling or order in which the
party to be terminated has been found guilty of criminal or unethical behavior
in the conduct of its business; or (d) financial difficulties on the part of the
party to be terminated which are evidenced by the authorization or commencement
of, or involvement by way of pleading, answer, consent or acquiescence in, a
voluntary or involuntary case under Title 11 of the United States Code, as from
time to time is in effect, or any applicable law, other than said Title 11, of
any jurisdiction relating to the liquidation or reorganization of debtors or to
the modification or alteration of the rights of creditors.
Upon 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. Fees and
out-of-pocket expenses incurred by Fund Accountant but unpaid by the Company
upon such
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termination shall be due and payable sixty (60) days from notice of
termination. Fund Accountant shall be entitled to collect from the Company, in
addition to the fees and disbursements provided by Sections 2 and 3 hereof, the
amount of all of Fund Accountant's reasonable cash disbursements in connection
with Fund Accountant's activities in effecting such termination, including
without limitation, the delivery to the Company and/or its distributor or
investment adviser and/or other parties, of the Company's property, records,
instruments and documents.
7. Standard of Care; Reliance on Records and Instructions;
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Indemnification.
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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. The Company 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; 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 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.
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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. Fund Accountant shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, Fund Accountant shall, at no additional expense to the Company, take
reasonable steps to minimize service interruptions. Fund Accountant shall have
no liability with respect to the loss of data or service interruptions caused by
equipment failure, provided such loss or interruption is not caused by Fund
Accountant's own willful misfeasance, bad faith, negligence or reckless
disregard of its duties or obligations under this Agreement.
10. Reports.
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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.
11. Rights of Ownership.
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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 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.
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The Company certifies to Fund Accountant that: (1) as of the
close of business on the Effective Date, each Fund that is in existence as of
the Effective Date has authorized unlimited shares, and (2) 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.
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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.
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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 Declaration of Trust of the Company 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:
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(i) The Company's Bylaws and any amendments
thereto; and
(ii) Certified copies of resolutions of the
Trustees 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.
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(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 or pursuant to any other agreement between the parties to this
Agreement, 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.
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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: if to the Company, at 000 Xxxxxxxx Xxx,
Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000; and if to Fund Accountant, at 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.
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Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
22. Assignment.
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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.
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This Agreement shall be governed by and its 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 caused this Agreement to be
duly executed all as of the day and year first above written.
CITIZENS FUNDS
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By: Xxxx X. Xxxxxxx
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Title: President
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BISYS FUND SERVICES OHIO, INC.
By: Xxxxxxx Xxxxx
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Title: President
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