Exhibit 9(b)
ACCOUNTING SERVICES AGREEMENT
BETWEEN
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
AND
XXXXXX SQUARE MANAGEMENT CORPORATION
AGREEMENT made this 1st day of November, 1993, by and between The Xxxxxx
Square Strategic Fixed-Income Fund, a Massachusetts business trust
(hereinafter called the "Fund"), having its principal place of business in
Wilmington, Delaware, and Xxxxxx Square Management Corporation, a corporation
organized under the laws of the State of Delaware (hereinafter called "RSMC"),
having its principal place of business in Wilmington, Delaware.
WHEREAS the Fund is registered under the Investment Company Act of 1940,
as amended ("Investment Company Act") as an open-end management investment
company and offers for public sale distinct series of shares of beneficial
interest ("Series"), par value $.01 per share, each corresponding to a
distinct portfolio;
WHEREAS each share of a Series represents an undivided interest in the
assets, subject to the liabilities, allocated to that Series and each Series
has a separate investment objective and policies;
WHEREAS the Fund desires to retain RSMC to provide certain accounting
services;
WHEREAS RSMC is willing to furnish such services to the Fund with
respect to the Series listed on Schedule A to this Agreement (the "Portfolio"
or "Portfolios") on the terms and conditions hereinafter set forth;
1. APPOINTMENT. The Fund hereby appoints RSMC to provide certain
accounting services to the Fund for the period and on the terms set forth in
this Agreement. RSMC accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Section 11 of this Agreement. RSMC agrees to comply with all relevant
provisions of the Investment Company Act and applicable rules and regulations
thereunder, and to remain open for business on any day on which the New York
Stock Exchange, the Philadelphia branch office of the Federal Reserve and
Wilmington Trust Company are open for business. The Fund may from time to time
issue separate series or classes or classify and reclassify shares of such
series or class. RSMC shall identify to each such series or class property
belonging to such series or class and in such reports, confirmations and
notices to the Fund called for under this Agreement shall identify the series
or class to which such report, confirmation or notice pertains.
2. DOCUMENTS. The Fund has furnished RSMC with copies properly
certified or authenticated of each of the following:
A. Resolutions of the Fund's Board of Trustees authorizing the
appointment of RSMC to provide certain accounting services to the Fund and
approving this Agreement;
SFIACCTG.DOC
B. Schedule B identifying and containing the signatures of the
Fund's officers and other persons authorized ("Authorized Persons") to sign
"Written Instructions" (as used in this Agreement to mean written instructions
delivered by hand, mail, tested telegram, cable, telex or facsimile sending
device and received by RSMC, signed by two Authorized Persons) on behalf of
the Fund;
C. The Fund's Declaration of Trust filed with the Secretary of
the Commonwealth of Massachusetts on May 7, 1986 and all amendments thereto
and restatements thereof (such Declaration of Trust, as presently in effect
and as it shall from time to time be amended or restated, is herein called the
"Declaration");
D. The Fund's Bylaws and all amendments thereto and restatements
thereof (such Bylaws, as presently in effect and as they shall from time to
time be amended or restated, are herein called "Bylaws");
E. The Investment Advisory Contract between Wilmington Trust
Company (the "Adviser") and the Fund with respect to The Xxxxxx Square
Diversified Income Portfolio dated as of April 1, 1991;
F. The Advisory Agreement between the Adviser and the Fund with
respect to The Xxxxxx Square Municipal Income Portfolio dated as of November
1, 1993;
G. The Distribution Agreement between the Fund and Xxxxxx Square
Distributors, Inc. dated as of December 31, 1992;
H. The Administration Agreement between the Fund and RSMC dated
as of December 31, 1992;
I. The Custodian Contract between Wilmington Trust Company (the
"Custodian") and the Fund dated as of November 12, 1986;
J. The Transfer Agency Agreement between the Fund and RSMC dated
as of December 31, 1992;
K. The Fund's Notification of Registration filed pursuant to
Section 8(a) of the Investment Company Act as filed with the Securities and
Exchange Commission ("SEC") on May 7, 1986;
L. The Fund's most recent Registration Statement on Form N-1A
under the Securities Act of 1933 (the "1933 Act") (File No. 33-5501) and under
the Investment Company Act, as filed with the SEC relating to shares of
beneficial interest in the Fund, and all amendments thereto;
M. The Fund's most recent prospectuses and statements of
additional information relating to the Portfolios; and
N. If required, a copy of either (i) a filed notice of
eligibility to claim the exclusion from the definition of "commodity pool
operator" contained in Section 2(a)(1)(A) of the Commodity Exchange Act
("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the Commodity Futures Trading Commission
("CFTC"), or (ii) a letter which has been granted the Fund by the CFTC which
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states that the Fund will not be treated as a "pool" as defined in Section
4.10(d) of the CFTC's General Regulations, or (iii) a letter which has been
granted the Fund by the CFTC which states that CFTC will not take any
enforcement action if the Fund does not register as a "commodity pool
operator."
The Fund will furnish RSMC from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to
the foregoing, if any.
3. INSTRUCTIONS CONSISTENT WITH DECLARATION, ETC.
A. Unless otherwise provided in this Agreement, RSMC shall act
only upon Oral and Written Instructions ("Oral Instructions" used in this
Agreement shall mean oral instructions actually received by RSMC from an
Authorized Person or from a person reasonably believed by RSMC to be an
Authorized Person). Although RSMC may know of the provisions of the
Declaration and Bylaws of the Fund, RSMC in its capacity under this Agreement
may assume that any Oral or Written Instructions received hereunder are not in
any way inconsistent with any provisions of such Declaration or Bylaws or any
vote, resolution or proceeding of the shareholders, or of the Board of
Trustees, or of any committee thereof.
B. RSMC shall be entitled to rely upon any Oral Instructions and
any Written Instructions actually received by RSMC pursuant to this Agreement.
The Fund agrees to forward to RSMC Written Instructions confirming Oral
Instructions in such manner that the Written Instructions are received by
RSMC, whether by hand delivery, telex, facsimile sending device or otherwise,
by the close of business of the same day that such Oral Instructions are given
to RSMC. The Fund agrees that the fact that such confirming Written
Instructions are not received by RSMC shall in no way affect the validity of
the transactions or enforceability of the transactions authorized by the Fund
by giving Oral Instructions. The Fund agrees that RSMC shall incur no
liability to the Fund in acting upon Oral Instructions given to RSMC hereunder
concerning such transactions provided such instructions reasonably appear to
have been received from an Authorized Person.
4. FUND ACCOUNTING.
A. RSMC shall provide the following accounting functions on a
daily basis:
(1) Journalize each Portfolio's investment, capital share and
income and expense activities;
(2) Verify investment buy/sell trade tickets when received
from the Adviser(s) and transmit trades to the Fund's Custodian for proper
settlement;
(3) Maintain individual ledgers for investment securities;
(4) Maintain historical tax lots for each security;
(5) Reconcile cash and investment balances of each Portfolio
with the Custodian, and provide the Adviser(s) with the beginning cash balance
available for investment purposes;
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(6) Update the cash availability throughout the day as
required by the Adviser(s);
(7) Post to and prepare each Portfolio's Statement of Assets
and Liabilities and the Statement of Operations;
(8) Calculate expenses payable pursuant to the Fund's various
contractual obligations;
(9) Control all disbursements from the Fund on behalf of each
Portfolio and authorize such disbursements upon Written Instructions;
(10) Calculate capital gains and losses;
(11) Determine each Portfolio's net income;
(12) Obtain security market prices or if such market prices
are not readily available, then obtain such prices from services approved by
the Adviser(s), and in either case calculate the market or fair value of each
Portfolio's investments;
(13) In the case of debt instruments with remaining maturities
of sixty (60) days or less, calculate the amortized cost value of those
instruments;
(14) Transmit or mail a copy of the portfolio valuations to
the Adviser(s);
(15) Compute the net asset value of each Portfolio;
(16) Compute each Portfolio's yields, total returns, expense
ratios and portfolio turnover rate; and
(17) Prepare and monitor the expense accruals and notify Fund
management of any proposed adjustments.
B. In addition, RSMC will:
(1) Prepare monthly financial statements, which will include
without limitation the Schedule of Investments, the Statement of Assets and
Liabilities, the Statement of Operations, the Statement of Changes in Net
Assets, the Cash Statement, and the Schedule of Capital Gains and Losses; (2)
Prepare monthly security transactions listings;
(3) Prepare quarterly broker security transactions summaries;
(4) Supply various Fund and Portfolio statistical data as
requested on an ongoing basis;
(5) Assist in the preparation of support schedules necessary
for completion of Federal and state tax returns;
(6) Assist in the preparation and filing of the Fund's annual
and semiannual reports with the SEC on Form N-SAR;
(7) Assist in the preparation and filing of the Fund's annual
and semiannual reports to shareholders and proxy statements;
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(8) Assist with the preparation of amendments to the Fund's
registration statements on Form N-1A and other filings relating to the
registration of shares; and
(9) Monitor the Portfolios' status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended
from time to time.
5. RECORDKEEPING AND OTHER INFORMATION. RSMC shall create and maintain
all necessary records in accordance with all applicable laws, rules and
regulations, including, but not limited to, records required by Section 31(a)
of the Investment Company Act and the rules thereunder, as the same may be
amended from time to time, pertaining to the various functions (described
above) performed by it and not otherwise created and maintained by another
party pursuant to contract with the Fund. All records shall be the property of
the Fund at all times and shall be available for inspection and use by the
Fund or the Fund's authorized representatives. Upon reasonable request of the
Fund, copies of such records shall be provided by RSMC to the Fund or the
Fund's authorized representatives at the Fund's expense. Where applicable,
such records shall be maintained by RSMC for the periods and in the places
required by Rule 31a-2 under the Investment Company Act.
6. LIAISON WITH ACCOUNTANTS. RSMC shall act as liaison with the Fund's
independent public accountants and shall provide account analysis, fiscal year
summaries and other audit related schedules. RSMC shall take all reasonable
action in the performance of its obligations under this Agreement to assure
that the necessary information is made available to such accountants for the
expression of their opinion, as such may be required by the Fund from time to
time.
7. CONFIDENTIALITY. RSMC agrees on behalf of itself and its employees
to treat confidentially and as proprietary information of the Fund all records
and other information relative to the Fund and its prior, present or potential
shareholders, and not to use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except,
after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld and may not be withheld where RSMC
may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund.
8. EQUIPMENT FAILURE. In the event of equipment failures beyond RSMC's
control, RSMC shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions but shall have no liability with
respect thereto. RSMC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provision of
emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
9. RIGHT TO RECEIVE ADVICE.
A. ADVICE OF FUND. If RSMC shall be in doubt as to any action to
be taken or omitted by it, it may request, and shall receive, from the Fund
directions or advice, including Oral or Written Instructions where
appropriate.
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B. ADVICE OF COUNSEL. If RSMC shall be in doubt as to any question
of law involved in any action to be taken or omitted by RSMC, it may request
advice at its own cost from counsel of its own choosing (who may be the
regularly retained counsel for the Fund or RSMC, at the option of RSMC).
C. CONFLICTING ADVICE. In case of conflict between directions,
advice or Oral or Written Instructions received by RSMC pursuant to subsection
A of this Section and advice received by RSMC pursuant to subsection B of this
Section, RSMC shall be entitled to rely on and follow the advice received
pursuant to the latter provision alone.
D. PROTECTION OF RSMC. RSMC shall be protected in any action or
inaction which it takes in reliance on any directions, advice or Oral or
Written Instructions received pursuant to subsections A or B of this Section
which RSMC, after receipt of any such directions, advice or Oral or Written
Instructions, in good faith believes to be consistent with such directions,
advice or Oral or Written Instructions, as the case may be. However, nothing
in this Section shall be construed as imposing upon RSMC any obligation (i) to
seek such direction, advice or Oral or Written Instructions, or (ii) to act in
accordance with such directions, advice or Oral or Written Instructions when
received, unless, under the terms of another provision of this Agreement, the
same is a condition to RSMC's properly taking or omitting to take such action.
Nothing in this subsection shall excuse RSMC when an action or omission on the
part of RSMC constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard by RSMC of its duties under this Agreement.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Fund assumes
full responsibility for ensuring that the Fund complies with all applicable
requirements of the Securities Act of 1933 (the "1933 Act"), the Securities
Exchange Act of 1934 (the "1934 Act"), the Investment Company Act, the CEA and
any laws, rules and regulations of governmental authorities having
jurisdiction.
11. COMPENSATION. For the performance of its obligations under this
Agreement, the Fund on behalf of each Portfolio shall pay RSMC in accordance
with the fee arrangements described in Schedule A attached hereto, as such
schedule may be amended from time to time.
12. INDEMNIFICATION. The Fund agrees to indemnify and hold harmless RSMC
and its directors, officers, employees and agents from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the Investment Company
Act, the CEA and any applicable state and foreign laws, all as or to be
amended from time to time) and expenses, including (without limitation)
attorneys' fees and disbursements arising directly or indirectly from any
action or thing which RSMC takes or does or omits to take or do (i) at the
request or on the direction of or in reliance on the written advice of the
Fund or (ii) upon Oral or Written Instructions, provided, that neither RSMC
nor any of its directors, officers, employees and agents shall be indemnified
against any liability to the Fund or to its shareholders (or any expenses
incident to such liability) arising out of RSMC's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and obligations
specifically described in this Agreement.
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13. RESPONSIBILITY OF RSMC. RSMC shall be under no duty to take any
action on behalf of the Fund except as specifically set herein or as may be
specifically agreed to by RSMC in writing. In the performance of its
duties hereunder, RSMC shall be obligated to exercise care and diligence and
to act in good faith and to use its best efforts within reasonable limits in
performing services provided for under this Agreement. RSMC shall be
responsible for its own negligent failure to perform its duties under this
Agreement, but to the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, RSMC shall not be liable for any
act or omission which does not constitute willful misfeasance, bad faith or
gross negligence on the part of RSMC or reckless disregard by RSMC of such
duties, obligations and responsibilities. Without limiting the generality of
the foregoing or of any other provision of this Agreement, RSMC in connection
with its duties under this Agreement shall not be under any duty or obligation
to inquire into and shall not be liable for or in respect of (i) the validity
or invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of
this Agreement, and which RSMC reasonably believes to be genuine; or (ii)
delays or errors or loss of data occurring by reason of circumstances beyond
RSMC's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown (except as
provided in Section 8), flood or catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
14. DURATION, TERMINATION, ETC. The provisions of this Agreement may
not be changed, waived, discharged or terminated orally, but only by written
instrument that shall make specific reference to this Agreement and that shall
be signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.
Upon the termination of this Agreement, the Fund shall pay to RSMC
such compensation as may be payable for the period prior to the effective date
of such termination, including reimbursement for any out-of-pocket expenses
reasonably incurred by RSMC to such date. In the event that the Fund
designates a successor to any of RSMC's obligations hereunder, RSMC shall, at
the expense and direction of the Fund, transfer to such successor all relevant
books, records and other data established or maintained by RSMC under the
foregoing provisions.
15. NOTICES. Any notice under this Agreement shall be given in writing
addressed and delivered or mailed, postage prepaid, to the other party to this
Agreement at its principal place of business.
16. FURTHER ACTIONS. Each Party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
17. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
18. DELEGATION. On thirty (30) days' prior written notice to the Fund,
RSMC may assign any part or all its rights and delegate its duties hereunder
to any wholly owned direct or indirect subsidiary of Wilmington Trust Company
provided that (i) the delegate agrees with RSMC to comply with all relevant
provisions of the Investment Company Act and applicable rules and regulations;
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(ii) RSMC shall remain responsible for the performance of all of its duties
under this Agreement; (iii) RSMC and such delegate shall promptly provide
such information as the Fund may request; and (iv) RSMC shall respond to such
questions as the Fund may ask, relative to the delegation, including (without
limitation) the capabilities for the delegate.
19. MISCELLANEOUS.
A. RSMC acknowledges that the Fund is a Massachusetts business
trust, and that it is required by the Declaration to limit its liability in
all agreements to the assets of the Fund. Consequently, RSMC agrees that any
claims by it against the Fund may be satisfied only from the assets of the
Fund, and no shareholders, trustees or officers of the Fund may be held
personally liable or responsible for any obligations arising out of this
Agreement.
B. This Agreement embodies the entire agreement and understanding
between the parties thereto, and supersedes all matter hereof, provided that
the parties hereto may embody in one or more separate documents their
agreement, if any, with respect to Written and/or Oral Instructions. The
captions in this Agreement are included for convenience of reference only and
in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefits of the parties
hereto and their respective successors.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
on their behalf by their respective officers thereunto duly authorized all as
of the date first written above.
THE XXXXXX SQUARE STRATEGIC FIXED- INCOME FUND
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx, President
XXXXXX SQUARE MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx, President
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SCHEDULE A
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
FEE SCHEDULE
For the services RSMC provides under the Accounting Services Agreement
attached hereto, the Fund on behalf of the Portfolios listed below agrees to
pay RSMC an accounting fee payable monthly expressed as follows:
The Xxxxxx Square Diversified Income Portfolio: An annual fee of $50,000
plus an amount equal to 0.02% of that portion of the Portfolio's average daily
net assets for the year which are in excess of $100 million.
The Xxxxxx Square Municipal Income Portfolio: An annual fee of $50,000
plus an amount equal to 0.02% of that portion of the Portfolio's average daily
assets for the year which are in excess of $100 million.
A-1
SCHEDULE B
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
AUTHORIZED PERSONS
The following persons have been duly authorized by the Board of Trustees
to give Oral and Written Instructions on behalf of the Portfolios:
Xxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Marky
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxx
B-1
