INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT is made effective the 1st day of July, 1999, by and between
STATE STREET BANK AND TRUST COMPANY, a trust company chartered under the laws of
the commonwealth of Massachusetts, having its principal office and place of
business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("State Street"),
and PUGET SOUND ALTERNATIVE INVESTMENT SERIES TRUST, a Massachusetts business
trust, having its principal office and place of business at Xxx Xxxxxx Xxxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint State Street as its agent to perform
certain investment accounting and recordkeeping functions for the assets of the
Fund's investment portfolio or portfolios (each a "Portfolio", and collectively
the "Portfolios"); and
WHEREAS, State Street is willing to accept such appointment on the terms
and conditions hereinafter set forth;
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 AGENT. Fund hereby constitutes and appoints State Street as
its 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, as amended
(the "1940 Act") and to calculate the net asset value of the Portfolios.
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to State Street:
1. That it is a trust 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 Declaration of Trust and its By-laws to enter into this
Agreement; it has taken all requisite action necessary to appoint
State Street as investment accounting and recordkeeping agent;
this Agreement has been duly executed and delivered by Fund; and
this Agreement constitutes a legal, valid and binding obligation
of Fund, enforceable in accordance with its terms.
B. State Street hereby represents, warrants and acknowledges to 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; this Agreement has been duly executed and delivered by
State Street; and this Agreement constitutes a legal, valid and
binding obligation of State Street, enforceable in accordance
with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. DELIVERY OF ACCOUNTS AND RECORDS. Fund will turn over or cause to be
turned over to State Street all accounts and records needed by State
Street to perform its duties and responsibilities hereunder fully and
properly. State Street may rely conclusively on the completeness and
correctness of such accounts and records.
B. ACCOUNTS AND RECORDS. State Street will prepare and maintain, under
the direction of and as interpreted by Fund, Fund's or Portfolio's
accountants and/or other advisors, in complete, accurate and current
form all accounts and records: (1) required to be maintained by Fund
under Section 31(a) of the 1940 Act and the rules and regulations from
time to time adopted thereunder including, without limitation, Rules
31a-1 and 31a-2 under the 1940 Act; (2) required as a basis for
calculation of each Portfolio's net asset value; and (3) as otherwise
agreed upon by the parties. Fund will advise State Street in writing
of all applicable record retention requirements, other than those set
forth in the 1940 Act or the rules thereunder. State Street will
preserve such accounts and 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. Prior to the expiration of such period, Fund may
Instruct State Street regarding disposal of such accounts and records
after the expiration of such period. Fund will furnish, in writing or
its electronic or digital equivalent, accurate and timely information
needed by State Street to complete such accounts and records 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
hereto are the property of Fund, and will be made available to Fund
for inspection or reproduction within a reasonable period of time,
upon demand. State Street will assist Fund's independent auditors, or
upon the prior written approval of Fund, or upon demand, any
regulatory body, in any requested review of Fund's accounts and
records but Fund will reimburse State Street for all expenses and
employee time invested in any such review outside of routine and
normal periodic reviews. Upon receipt from Fund of the necessary
information or instructions, State Street will supply information from
the books and records it maintains for Fund that Fund may reasonably
request for Fund's preparation of its annual tax returns,
questionnaires, periodic reports to shareholders, semi-annual
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financial statements, semi-annual form N-SAR, financial data necessary
to update form N-1A, proxy statements, and such other reports and
information requests as Fund and State Street may agree upon from time
to time. Except as in the situations explicitly stated in this section
3(C), State Street will keep confidential all books and records and
other information relative to Fund and its shareholders and will not
use any information made available to it hereunder for any purpose
other than to comply with its duties and responsibilities hereunder or
as specifically authorized by Fund in writing.
D. ADOPTION OF PROCEDURES. State Street and Fund may from time to time
adopt such procedures as they agree upon, and State Street may
conclusively assume that no procedure approved or directed by Fund,
Fund's or Portfolio's accountants or other advisors conflicts with or
violates any requirements of the prospectus, the Declaration of Trust
or By-laws of Fund, any applicable law, rule or regulation, or any
order, decree or agreement by which Fund may be bound. Fund will be
responsible for notifying State Street of any changes in statutes,
regulations, rules, requirements or policies which may impact State
Street's responsibilities or procedures under this Agreement or its
related operational policies and procedures as they relate to Fund if
such changes impact Fund in a manner different from or in addition to
requirements applicable to investment companies registered under the
1940 Act in general.
E. VALUATION OF ASSETS. State Street will value the assets of each
Portfolio utilizing the pricing sources designated by Fund ("Pricing
Sources"). In the event that Fund specifies Reuters America, Inc., it
will enter into the Agreement attached hereto as Exhibit A. State
Street will calculate each Portfolio's net asset value in accordance
with the Portfolio's prospectus and Instructions given by Fund. State
Street will provide Fund and its investment adviser with daily
portfolio valuations, net asset value calculations and other standard
operational reports as reasonably requested from time to time.
F. OTHER. Upon Instruction, State Street shall provide facilities to
accommodate audits or examinations of Fund conducted by the Securities
and Exchange Commission or any other governmental or
quasi-governmental entities with jurisdiction.
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written (including
telecopied, telexed, or electronically transmitted) or oral
instructions which State Street reasonably believes were given by a
designated representative of Fund. Fund will deliver to State Street,
on or prior to the date 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 Fund, which Instructions may be received and accepted by
State Street as conclusive evidence of the authority of any designated
representative to act for Fund and may be considered to be in full
force and effect until receipt by State Street of notice to the
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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, acting alone, to give any
Instructions whatsoever. If 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 Fund will constitute valid and proper
Instructions hereunder. The term "designated representative" may
include Fund's or a Portfolio's employees and agents, including
investment managers and their employees.
B. No later than the next business day immediately following each oral
Instruction, 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.
C. Fund will provide upon State Street's request a certificate signed by
an officer or designated representative of Fund, as conclusive proof
of any fact or matter required to be ascertained from Fund hereunder.
Fund will also provide State Street Instructions with respect to any
matter concerning this Agreement requested by State Street. If State
Street reasonably believes that it could not prudently act according
to the Instructions, or the instruction or advice of Fund's or a
Portfolio's accountants or counsel, it may in its discretion, with
notice to Fund, not act according to such Instructions.
5. LIMITATION OF LIABILITY.
A. State Street shall use its best efforts to accurately provide all
services performed hereunder, but it is not responsible or liable for,
and Fund will indemnify and hold State Street harmless from and
against, any and all losses, damages, payments, liabilities and all
reasonable costs, expenses, charges, and counsel fees (excluding
in-house counsel) which may be asserted against or incurred by State
Street or for which State Street may be held to be liable, arising out
of or attributable to:
1. State Street's action or failure to act pursuant hereto; provided that
State Street has acted in good faith and with reasonable care; and
provided further, that in no event is State Street liable for
consequential, special, or punitive damages;
2. State Street's payment of money as requested by Fund, or the taking of
any action required by this Agreement which might make it or its
nominee liable for payment of monies or in any other way, provided
State Street has acted in good faith and with reasonable care;
provided, however, that nothing herein obligates State Street to take
any such action or expend its own monies except in its sole
discretion;
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3. State Street's action or failure to act hereunder upon any
Instruction, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been
properly executed, including any Instructions, communications, data or
other information received by State Street by means of the Systems, as
hereinafter defined, or any electronic system of communication,
provided State Street has acted in good faith and with reasonable
care;
4. State Street's action or failure to act in good faith reliance on the
advice or opinion of counsel for Fund with respect to questions or
matters of law, which advice or opinion may be obtained by State
Street at the expense of Fund, or on the Instruction, advice or
statements of any officer or employee of Fund, or Fund's accountants
or other individuals authorized by Fund, provided State Street has
acted in good faith and with reasonable care.
5. Any error, omission, inaccuracy or other deficiency in any Portfolio's
accounts and records or other information provided to State Street by
or on behalf of a Portfolio, including the accuracy of the prices
quoted by the Pricing Sources or for the information supplied by Fund
to value the Assets, or the failure of Fund to provide, or provide in
a timely manner, any accounts, records, or information needed by State
Street to perform its duties hereunder, provided State Street has
acted in good faith and with reasonable care;
6. Fund's refusal or failure to comply with the terms hereof (including
without limitation Fund's failure to pay or reimburse State Street
under Section 5 hereof), Fund's negligence or willful misconduct, or
the failure of any representation or warranty of Fund hereunder to be
and remain true and correct in all respects at all times;
7. The use or misuse, whether authorized or unauthorized, of the Systems
or any electronic system of communication used hereunder by Fund or by
any person who acquires access to the Systems or such other systems
through the terminal device, passwords, access instructions or other
means of access to such Systems or such other system which are
utilized by, assigned to or otherwise made available to Fund, except
to the extent attributable to any negligence or willful misconduct by
State Street; and
8. Loss occasioned by the acts, omissions, defaults or insolvency of any
broker, bank, trust company, securities system or any other person
with whom State Street is Instructed to deal on Fund's behalf.
B. State Street is not responsible or liable for any and all losses,
damages, payments, liabilities, costs, expenses, charges, or counsel
fees which may be asserted against or incurred by Fund or for which
Fund may be held to be liable, arising out of or attributable to the
failure or delay in performance of State Street's obligations
hereunder, or those of any entity for which it is responsible
hereunder, arising out of or caused, directly or indirectly, by any or
all of the following, if out of the affected entities' reasonable
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control: interruption, loss or malfunction of any utility,
transportation, computer (hardware or software) or communication
service; inability to obtain 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, freezes, floods, fires,
tornadoes, acts of God or public enemy, revolutions, or insurrection.
6. COMPENSATION. In consideration for its services hereunder, Fund will pay to
State Street the compensation set forth in a separate fee schedule,
incorporated herein by reference, to be agreed to by Fund and State Street
from time to time, and, upon demand, reimbursement for State Street's cash
disbursements and reasonable out-of-pocket costs and expenses, incurred by
State Street in connection with the performance of services hereunder.
7. TERM AND TERMINATION. The initial term of this Agreement is for a period of
one (1) year commencing on the effective date hereof. Thereafter, either
Fund or State Street may terminate this Agreement by notice in writing,
delivered via overnight mail or mailed, postage prepaid, to the other party
and received not less than ninety (90) days prior to the date upon which
such termination will take effect. Upon termination hereof:
A. Fund will pay State Street its fees and compensation due hereunder and
its reimbursable disbursements, costs and expenses paid or incurred to
such date;
B. Fund will designate a successor (which may be Fund) by Instruction to
State Street; and
C. State Street will, upon payment of all sums due to State Street from
Fund hereunder or otherwise, deliver all accounts and records and
other properties of Fund to the successor, or, if none, to Fund, at
State Street's office.
In the event that accounts, records or other properties remain in the
possession of State Street after the date of termination hereof for any
reason other than State Street's failure to deliver the same, State Street
is entitled to compensation as provided in the then-current fee schedule
for its services during such period, and the provisions hereof relating to
the duties and obligations of State Street will remain in full force and
effect.
8. NOTICES. Notices, requests, instructions and other writings addressed to
Fund at the address set forth above, or at such other address as Fund may
have designated to State Street in writing, will be deemed to have been
properly given to Fund hereunder. Notices, requests, Instructions and other
writings addressed to State Street at the address set forth above,
Attention: Investment Accounting Department, or to such other address as it
may have designated to Fund in writing, will be deemed to have been
properly given to State Street hereunder.
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9. THE SYSTEMS; CONFIDENTIALITY.
A. If State Street provides Fund direct access to the computerized
investment portfolio recordkeeping and accounting systems used by
State Street ("Systems") or if State Street and Fund agree to utilize
any electronic system of communication, Fund agrees to implement and
enforce appropriate security policies and procedures to prevent
unauthorized or improper access to or use of the Systems or such other
system.
B. Fund will use reasonable care to preserve the confidentiality of the
Systems and the tapes, books, reference manuals, instructions,
records, programs, documentation and information of, and other
materials relevant to, the Systems and the business of State Street or
its affiliates ("Confidential Information"). Fund agrees that it will
use reasonable care not to voluntarily disclose any such Confidential
Information to any other person other than its own employees who
reasonably have a need to know such information pursuant hereto except
as may be required by law or court order. Fund will return all such
Confidential Information to State Street upon termination or
expiration hereof. For purposes of this Agreement, "Confidential
Information" shall not include (a) any information (i) that is or
becomes generally known or publicly available; (ii) that was
rightfully known by or available to Fund or any of its agents or
affiliates on a nonconfidential basis prior to or after disclosure by
State Street to Fund or such agents or affiliates; or (iii) that is
developed by Fund or its agents or affiliates independent of the
disclosure thereof by State Street and is not derived from other
Confidential Information or (b) the records, accounts information or
other data of Fund.
C. Fund has been informed that the Systems are licensed for use by State
Street and its affiliates from one or more third parties
("Licensors"), and Fund acknowledges that State Street and Licensors
have proprietary rights in and to the Systems and all other State
Street or Licensor programs, code, techniques, know-how, data bases,
supporting documentation, data formats, and procedures, including
without limitation any changes or modifications made at the request or
expense or both of Fund (collectively, the "Protected Information").
Fund acknowledges that the Protected Information constitutes
confidential material and trade secrets of State Street and Licensors.
Fund will preserve the confidentiality of the Protected Information,
and Fund hereby acknowledges that any unauthorized use, misuse,
disclosure or taking of Protected Information, residing or existing
internal or external to a computer, computer system, or computer
network, or the knowing and unauthorized accessing or causing to be
accessed of any computer, computer system, or computer network, may be
subject to civil liabilities and criminal penalties under applicable
law. Fund will so inform employees and agents who have access to the
Protected Information or to any computer equipment capable of
accessing the same. Licensors are intended to be and are third party
beneficiaries of Fund's obligations and undertakings contained in this
Section.
D. Fund hereby represents and warrants to State Street that it has
determined to its satisfaction that the Systems are appropriate and
suitable for its use. THE SYSTEMS ARE PROVIDED ON AN AS IS, AS
AVAILABLE BASIS. STATE STREET EXPRESSLY DISCLAIMS ALL WARRANTIES
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, EXCEPT THOSE
WARRANTIES EXPRESSLY STATED HEREIN.
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X. Xxxxx Xxxxxx will take reasonable steps to ensure that its products
(and those of its third-party suppliers) reflect the available state
of the art technology to offer products that are Year 2000 ready,
including, but not limited to, century recognition of dates,
calculations that correctly compute same century and multi century
formulas and date values, and interface values that reflect the date
issues arising between now and the next one-hundred years, and if any
changes are required, State Street will make the changes to its
products at no cost to the Fund and in a commercially reasonable time
frame and will require third-party suppliers to do likewise.
Similarly, Fund will take reasonable steps to ensure that its
electronic systems reflect the available state of the art technology
and are Year 2000 ready, including, but not limited to, century
recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that
reflect the date issues arising between now and the next one-hundred
years, and if any changes are required, Fund will make the changes to
its systems at no cost to State Street and in a commercially
reasonable time frame.
F. In the event of equipment failures, State Street shall, at no
additional expense to Fund, take reasonable steps to minimize service
interruptions. State Street shall make reasonable provisions for (i)
periodic back-up of the computer files and data with respect to Fund
and (ii) emergency use of electronic data processing equipment to
provide services under this Agreement.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio, the
following provisions apply:
A. Each Portfolio will 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 hereby,
every reference herein to Fund is deemed to relate solely to the
particular Portfolio to which such transaction relates. Under no
circumstances will 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 as to each Portfolio is understood
to be for clerical convenience only and will not constitute any basis
for joining the Portfolios for any reason.
B. Fund may appoint State Street as its investment accounting and
recordkeeping agent for additional Portfolios from time to time by
written notice, provided that State Street consents to such addition.
Such additional Portfolios shall be subject to the terms and
provisions hereof except to the extent that such provisions are
modified with respect to such series in writing signed by State Street
and Fund. Rates or charges for each additional Portfolio will be as
agreed upon by State Street and Fund in writing.
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11. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights and
liabilities of the parties hereto will be governed by, the laws of the
Commonwealth of Massachusetts, without reference to the choice of laws
principles thereof.
B. All terms and provisions hereof will be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
C. The indemnifications extended hereunder, and the provisions of Section
9 hereof are intended to and will continue after and survive the
expiration, termination or cancellation hereof.
D. No provisions hereof may be amended or modified in any manner except
by a written agreement properly authorized and executed by each party
hereto.
E. The failure of either party to insist upon the performance of any
terms or conditions hereof or to enforce any rights resulting from any
breach of any of the terms or conditions hereof, including the payment
of damages, will not be construed as a continuing or permanent waiver
of any such terms, conditions, rights or privileges, but the same will
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 will be effective unless contained in a written
instrument signed by the party sought to be charged.
F. The captions herein 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.
G. This Agreement may be executed in two or more counterparts, each of
which is deemed an original but all of which together constitute one
and the same instrument.
H. If any provision hereof is determined to be invalid, illegal, in
conflict with any law or otherwise unenforceable, the remaining
provisions hereof will be considered severable and will not be
affected thereby, and every remaining provision hereof will remain in
full force and effect and will remain enforceable to the fullest
extent permitted by applicable law.
I. The benefits of this Agreement may not be assigned by either party nor
may either party delegate all or a portion of its duties hereunder
without the prior written consent of the other party. Notwithstanding
the foregoing, Fund agrees that State Street may delegate all or a
portion of its duties to an affiliate of State Street, provided that
such delegation will not reduce the obligations of State Street under
this Agreement.
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J. Neither the execution nor performance hereof will be deemed to create
a partnership or joint venture by and between State Street and Fund or
any Portfolio.
K. 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 will not
affect any rights or obligations of the other party hereunder.
L. Notice is hereby given that a copy of Fund's Trust Agreement and all
amendments thereto is on file with the Secretary of State of the state
of its organization; that this Agreement has been executed on behalf
of the trustees of Fund and not individually; and that the obligations
of this Agreement are binding only upon the assets and property of
Fund and not upon any trustee, officer of shareholder of Fund
individually.
M. State Street shall maintain commercially reasonable amounts of (a)
comprehensive general liability insurance coverage and (b) errors and
omissions insurance coverage and notify Fund in the event that such
insurance is canceled. State Street shall notify Fund of any material
claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
STATE STREET BANK AND TRUST PUGET SOUND ALTERNATIVE
COMPANY INVESTMENT SERIES TRUST
By: By:
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Title: Title:
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EXHIBIT A--REUTERS DATA SERVICE AGREEMENT
The undersigned acknowledges and agrees that some of the data being provided in
the service by State Street to Fund contains information supplied to State
Street by Reuters America Inc. ("Reuters") (the "Data"). Fund agrees that:
(i) although Reuters makes every effort to ensure the accuracy and
reliability of the Data, Fund acknowledges that Reuters, its
employees, agents, contractors, subcontractors, contributors and
third party providers will not be liable for any loss, cost or damage
suffered or incurred by Fund arising out of any fault, interruption
or delays in the Data or out of any inaccuracies, errors or omissions
in the Data however such faults, interruptions, delays, inaccuracies,
errors or omissions arise, unless due to the gross negligence or
willful misconduct of Reuters;
(ii) it will not transfer, transmit, recirculate by digital or analogue
means, republish or resell all or part of the Data; and
(iii) certain parts of the Data are proprietary and unique to Reuters.
The undersigned further agrees that the benefit of this clause will inure to the
benefit of Reuters.
PUGET SOUND ALTERNATIVE
INVESTMENT SERIES TRUST
By:
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Title:
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Date:
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