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Exhibit-99(g)(5)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of June, 2000, between BB & T FUNDS (the
"Company"), a Massachusetts business trust having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 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.
(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.
(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:
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(i) Calculate the net asset value per share utilizing
prices obtained from the sources described in
subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services, or if such quotes are unavailable, then
obtain such prices from each Fund's investment
adviser or its designee, as approved by the
Company's Trustees;
(iii) Verify and reconcile with the Funds' custodian all
daily trade activity;
(iv) Compute, as appropriate, each Fund's net income and
capital gains, dividend payables, dividend factors,
7-day yields, 7-day effective yields, 30-day yields,
and weighted average portfolio maturity;
(v) Review daily the net asset value calculation and
dividend factor (if any) for each Fund prior to
release to shareholders, check and confirm the net
asset values and dividend factors for reasonableness
and deviations, and distribute net asset values and
yields to NASDAQ;
(vi) Report to the Company the daily market pricing of
securities in any money market Funds, with the
comparison to the amortized cost basis;
(vii) Determine unrealized appreciation and depreciation
on securities held in variable net asset value
Funds;
(viii) Amortize premiums and accrete discounts on
securities purchased at a price other than face
value, if requested by the Company;
(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 Company's
Administrator;
(xii) Determine the outstanding receivables and payables
for all (1) security trades, (2) Fund share
transactions and (3) income and expense accounts;
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(xiii) Provide accounting reports in connection with the
Company's regular annual audit and other audits and
examinations by regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall
agree upon, as set forth in a separate schedule.
(c) SPECIAL REPORTS AND SERVICES.
(i) Fund Accountant may provide additional special
reports upon the request of the Company or a Fund's
investment adviser, which may result in an
additional charge, the amount of which shall be
agreed upon between the parties.
(ii) Fund Accountant may provide such other similar
services with respect to a Fund as may be reasonably
requested by the Company, which may result in an
additional charge, the amount of which shall be
agreed upon between the parties.
(d) ADDITIONAL ACCOUNTING SERVICES. Fund Accountant shall also
perform the following additional accounting services for
each Fund:
(i) Provide monthly a download (and hard copy thereof)
of the financial statements described below, upon
request of the Company. The download will include
the following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and
federal excise tax returns;
(B) the Company's semi-annual reports with the
Securities and Exchange Commission ("SEC") on
Form N-SAR;
(C) the Company's annual, semi-annual and
quarterly (if any) shareholder reports;
(D) registration statements on Form N-1A and
other filings relating to the registration of
shares;
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(E) the Administrator's monitoring of the
Company's status as a regulated investment
company under Subchapter M of the Internal
Revenue Code, as amended;
(F) annual audit by the Company's auditors;
(G) examinations performed by the SEC; and
(H) quarterly reports to Trustees regarding
manually priced securities.
2. SUBCONTRACTING.
Fund Accountant may, at its expense, subcontract with any entity
or person concerning the provision of the services contemplated hereunder;
provided, however, that Fund Accountant shall not be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that Fund Accountant shall be responsible, to the extent
provided in Section 7 hereof, for all acts of such subcontractor as if such acts
were its own.
3. COMPENSATION.
The Company shall pay Fund Accountant for the services to be
provided by Fund Accountant under this Agreement in accordance with, and in the
manner set forth in the Omnibus Fee Agreement by and among the Company, BISYS
Fund Services Limited Partnership and Fund Accountant dated as of June 1, 2000
(the "Fee Agreement").
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Fund Accountant the fees described in the
Fee Agreement, the Company agrees to reimburse Fund Accountant for its
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.
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.
This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
May 31, 2005 (the "Initial Term"). Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically 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 within sixty (60)
days of the end of the Initial Term or 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 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 (c) 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.
After such termination for so long as Fund Accountant, with the written
consent of the Company, in fact continues to perform any one or more of
the services contemplated by this Agreement or any schedule or exhibit
hereto, the provisions of this Agreement, including without limitation
the provisions dealing with indemnification, shall continue in full force
and effect. Compensation due Fund Accountant and unpaid by the Company
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. Fund Accountant shall be entitled to
collect from the Company, in
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addition to the compensation described the Fee Agreement and Section 4
hereof, the amount of all of Fund Accountant's cash disbursements for
services in connection with Fund Accountant's activities in effecting
such termination, including without limitation, the delivery to the
Company and/or its designees of the Company's property, records,
instruments and documents.
If, for any reason other than nonrenewal, mutual agreement of the parties
or "cause," as defined above, Fund Accountant is replaced as fund
accountant, or if a third party is added to perform all or a part of the
services provided by Fund Accountant under this Agreement (excluding any
sub-accountant appointed by Fund Accountant as provided in Section 2
hereof), then the Company shall make a one-time cash payment, in
consideration of the fee structure and services to be provided under this
Agreement, and not as a penalty, to Fund Accountant in accordance with
the following schedule: (i) if the one-time cash payment becomes due and
payable at any time during years one through four of the Initial Term,
such payment shall be equal to the balance due for one-half of the period
remaining until the end of the Initial Term and (ii) if such payment
becomes due and payable at any time during year five of the Initial Term,
such payment shall be equal to the balance due for the entire period
remaining until the end of the Initial Term. For purposes of calculation
of the payment, it shall be assumed that (i) the balance due shall be
based upon the average amount of the Company's assets for the twelve
months prior to the date Fund Accountant is replaced or a third party is
added and (ii) the portion of the asset-based fees set forth in the Fee
Agreement that is attributable to fund accounting services shall be three
one-hundredths of one percent (.03%) of the Company's average daily net
assets.
In the event the Company is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which Fund
Accountant is not retained to provide fund accounting services consistent with
this Agreement. The one-time cash payment referenced above shall be due and
payable on the day prior to the first day in which Fund Accountant is replaced
or a third party is added.
The parties further acknowledge and agree that, in the event Fund
Accountant is replaced, or a third party is added, as set forth above,
(i) a determination of actual damages incurred by Fund Accountant would
be extremely difficult, and (ii) the liquidated damages provision
contained herein is intended to adequately compensate Fund Accountant for
damages incurred and is not intended to constitute any form of penalty.
7. STANDARD OF CARE; RELIANCE ON RECORDS AND INSTRUCTIONS;
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. A Fund agrees to indemnify and hold harmless Fund
Accountant, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Fund Accountant's actions
taken or nonactions with respect to the performance of services under this
Agreement with respect to such Fund or based, if applicable, upon reasonable
reliance on information, records, instructions or requests with respect to such
Fund given or made to Fund Accountant by a duly authorized representative of the
Company; 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.
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.
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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.
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.
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.
Fund Accountant shall maintain a fidelity bond covering larceny
and embezzlement and an insurance policy with respect to directors and officers
errors and omissions coverage in amounts that are appropriate in light of its
duties and responsibilities hereunder. 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:
(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.
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(c) A list of all the officers of the Company, together with
specimen signatures of those officers who are authorized to
instruct Fund Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
17. INFORMATION FURNISHED BY FUND ACCOUNTANT.
(a) Fund Accountant has furnished to the Company the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments thereto.
(b) Fund Accountant shall, upon request, furnish certified
copies of corporate actions covering the following matters:
(i) Approval of this Agreement, and authorization of a
specified officer of Fund Accountant to execute and
deliver this Agreement; and
(ii) Authorization of Fund Accountant to act as fund
accountant for the Company and to provide accounting
services for the Company.
18. AMENDMENTS TO DOCUMENTS.
The Company shall furnish Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16 hereof
forthwith upon such amendments or changes becoming effective. In addition, the
Company agrees that no amendments will be made to the Prospectuses or Statements
of Additional Information of the Company which might have the effect of changing
the procedures employed by Fund Accountant in providing the services agreed to
hereunder or which amendment might affect the duties of Fund Accountant
hereunder unless the Company first obtains Fund Accountant's approval of such
amendments or changes.
19. COMPLIANCE WITH LAW.
Except for the obligations of Fund Accountant set forth in
Section 8 hereof, the Company assumes full responsibility for the preparation,
contents and distribution of each prospectus of the Company as to compliance
with all applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Company's
shares. The
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Company represents and warrants that no shares of the Company will be offered to
the public until the Company's registration statement under the Securities Act
and the 1940 Act has been declared or becomes effective.
20. NOTICES.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice, at the following address: 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.
21. HEADINGS.
Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
22. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. GOVERNING LAW AND MATTERS RELATING TO THE COMPANY AS A
MASSACHUSETTS BUSINESS TRUST.
The names "BB & T Funds and "Trustees of BB & T Funds" refer respectively
to the Company created and the Trustees, as trustees but not individually
or personally, acting from time to time under an Agreement and
Declaration of Trust dated as of October 1, 1987 to which reference is
hereby made and a copy of which is on file at the office of the Secretary
of State of The Commonwealth of Massachusetts and elsewhere as required
by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "BB & T Funds" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made
not individually, but in such capacities, and are not binding upon any of
the Trustees, shareholders or representatives of the Company personally,
but bind only the assets of the Company, and all persons dealing with any
series of shares of the Company must look solely to the assets of the
Company belonging to such series for the enforcement of any claims
against the Company.
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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.
BB & T FUNDS
By: /S/WALTERB.XXXXX
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Title: PRESIDENT
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BISYS FUND SERVICES OHIO, INC.
By: /S/XXXX X. XXXXXX
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Title: EXECUTIVE VICE PRESIDENT
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