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EXHIBIT h(8)
FUND ACCOUNTING AGREEMENT
between
THE MAINSTAY FUNDS
and
MAINSTAY MANAGEMENT, INC.
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FUND ACCOUNTING AGREEMENT
THIS AGREEMENT, dated as of the 27th day of October, 1997 made by and
between THE MAINSTAY FUNDS (the "Trust") a business trust operating as an open
end investment company, duly organized and existing under the laws of the
Commonwealth of Massachusetts, and MainStay Management, Inc. ("MMI") a Delaware
corporation.
WITNESSETH:
WHEREAS, the Trust desires to appoint MMI as its Accounting Services Agent
to maintain and keep current the accounting records, including all journals, the
general ledger and other records of original entry relating to the business of
the Trust as set forth in Section 3 of this Agreement (the "Accounts and
Records") and to perform certain daily functions in connection with such
Accounts and Records; and
WHEREAS, MMI is willing to perform such functions upon the terms and
conditions set forth below; and
WHEREAS, the Trust will cause to be provided certain information to MMI as
set forth below; and
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
Section 1. APPOINTMENT. The Trust hereby appoints MMI as Accounting
Services Agent of the Trust and MMI hereby accepts such appointment, all in
accordance with the terms and conditions of this Agreement. This appointment
shall take effect commencing October 27, 1997.
Section 2. FURNISHING OF EXISTING ACCOUNTS AND RECORDS. The Trust shall
promptly turn over to MMI such of the Accounts and Records previously maintained
by or for it as are necessary for MMI to perform its functions under this
Agreement. The Trust authorizes MMI to rely on such Accounts and Records turned
over to it and hereby indemnifies and will hold MMI, its successors and assigns,
harmless of and from any and all expenses, damages, claims, suits, liabilities,
actions, demands and losses whatsoever arising out of or in connection with any
error, omission, inaccuracy or other deficiency of such Accounts and Records or
in the failure of the Trust to provide any portion of such or to provide any
information needed by MMI to knowledgeably perform its functions.
Section 3. MAINTENANCE OF ACCOUNTS AND RECORDS. To the extent it receives
the necessary information from the Trust and its agents by Written or Oral
Instructions,
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MMI shall maintain in accordance with Rule 3la-1 under the Investment Company
Act of 1940, as amended (the "1940 Act"), the following Accounts and Records
relating to the business of the Trust, in such form as may be mutually agreed to
between the Trust and MMI:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid Record
(d) Purchase and Sales Journal - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers
(g) Broker-Dealer Ledger
(h) General Ledger
(i) Daily Expense Accruals
(j) Daily Interest Accruals
(k) Securities and Monies borrowed or loaned and collateral therefor
(l) Daily Trial Balances
(m) Investment Income Journal
The Trust will, prior to 4:00 p.m. (12:00 Noon with respect to the Trust's
Money Market funds), Eastern time, furnish MMI with Written or Oral Instructions
containing all necessary information (exclusive of portfolio prices) to perform
the above functions and to calculate the net asset value of each Fund of the
Trust, as provided below. The Trust shall indemnify and hold harmless MMI from
and against any liability arising from any discrepancy between the information
received by MMI and used in such calculations and any subsequent information
received from the Trust or any of its designated agents.
It shall be the responsibility of the Trust to furnish or cause to be
furnished to MMI, the declaration, record, payment dates and amounts of any
dividends or income and any other special actions required on or concerning each
of its portfolio securities.
Section 4. CALCULATION OF NET ASSET VALUE. MMI shall perform the
calculations necessary to calculate the net asset value of each Fund of the
Trust daily, in accordance with that Fund's current prospectus except where the
Trust has given or caused to be given specific Written or Oral Instructions to
utilize a different method of calculation. MMI shall notify the Trust if quotes
are not available and portfolio securities shall be given such values as the
Trust or its agent provides by Written or Oral Instructions. MMI shall have no
responsibility or liability for the accuracy of prices provided by the Trust or
its agents as described in the preceding sentence; for the accuracy of the
information supplied by the Trust; or for any loss, liability, damage or cost
arising out of any inaccuracy of such data. MMI shall have no responsibility or
duty to include information or valuations to be provided by the Trust or its
designated agent in any computation unless and until it is timely supplied to
MMI in useable form. Unless the necessary information to calculate the net asset
value daily is furnished by Written or Oral Instructions from the Trust or its
designated agent, MMI shall incur no liability,
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and the Trust shall indemnify and hold harmless MMI from and against any
liability arising from any failure to provide complete information or from any
discrepancy between the information received by MMI and used in such calculation
and any subsequent information received from the Trust or any of its designated
agents.
Section 5. WRITTEN AND ORAL INSTRUCTIONS. Written Instructions as used
throughout this Agreement mean a writing signed or initialled by one or more
person or persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction or type
of transaction involved, including a specific statement of the purpose for which
such action is requested. Oral Instructions will be considered proper
instructions if MMI reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction involved.
The Trust shall cause all Oral Instructions to be confirmed in writing. Upon
receipt of a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Trust, Oral Instructions may
include communications effected directly between electromechanical or electronic
devices provided that the Board of Trustees and MMI are satisfied that such
procedures afford adequate safeguards for the Trust's assets.
Section 6. RELIANCE ON INSTRUCTIONS. For all purposes under this
Agreement, MMI is authorized to act upon receipt of the first of any Written or
Oral Instruction it receives from the Trust or its agents on behalf of the
Trust. In cases where the first Instruction is an Oral Instruction, a
confirmatory Written Instruction shall be delivered, and in cases where MMI
receives an Instruction, whether Written or Oral, to enter a portfolio
transaction on the records, the Trust shall cause the Broker-Dealer to send a
written confirmation to MMI.
MMI shall be entitled to rely reasonably on the first Instruction received, and
for any act or omission undertaken in compliance therewith shall be free of
liability and fully indemnified and held harmless by the Trust, provided
however, that in the event a Written or Oral Instruction received by MMI is
countermanded by a timely later Written or Oral Instruction received by MMI
prior to acting upon such countermanded Instruction, MMI shall act upon such
later Written or Oral Instruction. The sole obligation of MMI with respect to
any follow-up or confirmatory Written Instruction, Oral Instruction in
documentary or written form, or Broker-Dealer written confirmation shall be to
make reasonable efforts to detect any discrepancy between the original
Instruction and such confirmation and to report such discrepancy to the Trust.
The Trust shall be responsible, at the Trust's expense, for taking any action,
including any reprocessing, necessary to correct any discrepancy or error, and
to the extent such action requires MMI to act, the Trust shall give MMI specific
Written Instructions as to the action required.
Section 7. MONTHLY STATEMENTS. At the end of each month, the Trust shall
cause each custodian to forward to MMI a monthly statement of cash and portfolio
transactions, which will be reconciled with MMI's Accounts and Records
maintained for the Trust. MMI will report any discrepancies to each custodian,
and report any unreconciled items to the Trust.
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Section 8. PERIODIC REPORTS.
(a) MMI shall promptly supply daily and periodic reports to the Trust or
its agents as requested by the Trust and agreed upon by MMI. MMI shall prepare
and maintain work papers to support the following accounts: cash reconciliation,
portfolio of investments, accrued interest, amounts due to/from brokers,
subscriptions and redemptions of Shares, Share reconciliation and dividends
payable.
(b) MMI will prepare the following financial reports:
(i) Daily Trial Balances
(ii) Statement of assets and liabilities (balance sheet)
(iii) Statement of operations (income and expense statement)
(iv) Statement of changes in net assets
(v) Schedules of purchases and sales of securities
Section 9. SHARE INFORMATION. The Trust shall, and shall require each of
its agents (including without limitation its Transfer Agent and its Custodian),
to provide MMI as of the close of each business day, or on such other schedule
as the Trust determines is necessary, (to be delivered to MMI by 10:00 a.m. the
next following business day) all data and information necessary for MMI to
maintain the Trust's Accounts and Records and MMI may conclusively assume that
the information it receives is complete and accurate. Among the information to
be received by MMI are reports of Share purchases, redemptions, and total shares
outstanding on the next business day after each net asset valuation. If supplied
by the Trust, any such information shall be supplied by Written or Oral
Instructions.
Section 10. AVAILABILITY OF ACCOUNTS AND RECORDS. The Accounts and
Records, in the agreed upon format, maintained by MMI shall be the property of
the Trust, and shall be made available to the Trust promptly upon request and
shall be maintained for the periods prescribed in Rule 31a-2 under the 1940 Act.
MMI shall assist the Trust's independent auditors, or upon approval of the
Trust, or upon demand, any regulatory body, in any requested review of the
Trust's Accounts and Records but shall be reimbursed for all expenses and
employee time invested in any such review outside of routine and normal periodic
reviews. Upon receipt from the Trust of the necessary information, MMI shall
supply the necessary data for the Trust or accountant's completion of any
necessary tax returns, questionnaires, periodic reports to shareholders and such
other reports and information requests as the Trust and MMI shall agree upon
from time to time.
Section 11. OTHER PROCEDURES. MMI and the Trust may from time to time
adopt such procedures as they agree upon in writing, and MMI may conclusively
rely on a determination by the Trust that any procedure approved by the Trust or
directed by the Trust, does not conflict with or violate any requirements of the
respective Prospectus, Declaration of Trust, By-Laws, or any rule or regulation
of any regulatory body or governmental agency. The
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Trust shall be responsible for notifying MMI of any changes in regulations or
rules which would necessitate changes in MMI's procedures, and for working out
with MMI such changes.
Section 12. INDEMNIFICATION. MMI, in performing under the terms and
conditions of this Agreement, shall incur no liability for any reasonable
actions taken or omitted in good faith except as result from its negligence or
misconduct, or that of its officers, agents or employees, and the Trust hereby
agrees to indemnify and hold MMI harmless from any and all loss, liability and
expense, including any legal expenses, arising out of MMI's performance, or any
act or omission of MMI except such as shall result from its negligence,
misconduct or that of its officers, agents and employees in the performance of
this Agreement. Without limitation of the foregoing:
(a) MMI may rely upon the advice of the Trust or of counsel, who may be
counsel for the Trust or counsel for MMI and upon statements of accountants,
brokers and other persons believed by it in good faith to be expert in the
matters upon which they are consulted and MMI shall not be liable to anyone for
any actions taken in good faith upon such statements.
(b) MMI may act upon any Oral Instruction which it receives and which it
believes in good faith was transmitted by the person or persons authorized by
the Board of Trustees of the Trust to give such Oral Instructions. MMI shall
have no duty or obligation to make any inquiry or effort of certification of
such Oral Instruction.
(c) MMI shall not be liable for any reasonable action taken in good faith
reliance upon any Written Instruction or certified copy of any resolution of the
Board of Trustees of the Trust, and MMI may rely upon the genuineness of any
such document or copy thereof reasonably believed in good faith by MMI to have
been validly executed.
(d) MMI may rely and shall be protected in acting upon any signature,
instruction, request, letter of transmittal, certificate, opinion of counsel,
statement, instrument, report, notice, consent, order, or other paper document
reasonably believed by it to be genuine and to have been signed or presented by
the purchaser, Trust or other proper party or parties.
(e) If the Trust is required to indemnify MMI under the terms of this
Agreement for any reason, MMI shall be entitled to indemnification only from the
assets of the one or more series with respect to which such right of
indemnification has arisen and not from the assets or any other series or the
Trust generally.
Section 13. COMPENSATION. MMI's compensation shall be as set forth in
Schedule A hereto attached, or as shall be set forth in amendments to such
Schedule approved in writing by the Trust and MMI.
Section 14. DAYS OF SERVICE. Nothing contained in this Agreement is
intended to or shall require MMI, in any capacity hereunder, to perform any
functions or duties on any
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holiday, day of special observance or any other day on which the New York Stock
Exchange is closed. Functions or duties normally scheduled to be performed on
such days shall be performed on, and as of, the next scheduling business day on
which both the New York Stock Exchange and MMI are open. Notwithstanding the
foregoing, MMI shall compute the net asset value of the Fund on each day
required pursuant to Rule 22c-1 promulgated under the 1940 Act.
Section 15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which, when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 16. TERMINATION. The Trust or MMI may give written notice to the
other of the termination of this Agreement, such termination to take effect at
the time specified in the notice not less than sixty (60) days after the giving
of notice. Upon the effective termination date, subject to payment to MMI by the
Trust of all amounts due to MMI as of said date, MMI shall produce to the Trust
or its designated recordkeeping successor, all of the records of the Trust
maintained and required to be maintained under this Agreement then in MMI's
possession.
Section 17. SUCCESSORS AND ASSIGNS. This Agreement shall extend to and
shall be binding upon the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by the
Trust without the written consent of MMI, or by MMI, without the written consent
of the Trust authorized or approved by a resolution of the Board of Trustees.
Section 18. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York.
Section 19. NO LIABILITY OF TRUSTEES OR SHAREHOLDERS. The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed by an authorized officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on them personally, and the obligations of this Agreement are not
binding upon any of the trustees or shareholders of the Trust, but bind only the
trust property of the Trust as provided in the Declaration of Trust.
Section 20. MISCELLANEOUS.
(a) The headings of 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.
(b) MMI shall not be liable for delays or errors occurring by reason of
circumstances beyond its control including, but not limited to, acts of civil or
military authority, national emergencies, work stoppages, fire, flood,
catastrophe, acts of God, insurrection, war, riot, or
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failure of communication or power supply.
(c) MMI shall notify the Trust should any of MMI's insurance coverage be
changed for any reason. Such notification shall include the date of change and
reasons therefor. MMI shall notify the Trust of any material claims against MMI
whether or not they may be covered by insurance and shall notify the Trust from
time to time as may be appropriate of the total outstanding claims made by MMI
under its insurance coverage.
(d) No provision of this Agreement shall prevent MMI from offering
services similar or identical to those covered by this Agreement to any other
corporations, associations or entities of any kind. Any and all operational
procedures, techniques and devices developed by MMI in connection with the
performance of its duties and obligations under this Agreement, including those
developed in conjunction with the Trust, shall be and remain the property of
MMI, and MMI shall be free to employ such procedures, techniques and devices in
connection with the performance of any other contract with any other person
whether or not such contract is similar or identical to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and attested, as of the day and year
first above written.
THE MAINSTAY FUNDS
ATTEST /s/ A. Xxxxxx Xxxxx III /s/ Xxxxxxx X. Xxxxxxx
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Secretary President
MAINSTAY MANAGEMENT, INC.
ATTEST /s/ Xxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxx
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Secretary Vice President and Chief Financial Officer
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SCHEDULE A
(Fees)
Accounting services will be provided to the Trust by MMI at the lower of
its cost or the fee schedule below. These services include its salaries and
overhead expenses for personnel, facilities and equipment costs attributable to
the accounting functions. In the event this Agreement is in effect for only a
portion of any one year, the fee payable shall be reduced proportionately on the
basis of the number of business days (any day on which the New York Stock
Exchange is open for trading) during which the Agreement was in effect for that
year.
ANNUAL FEES PER PORTFOLIO
Fund Net Assets Accounting Fee Schedule
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First $20 Million 1/20 of 1%
Next $80 Million 1/30 of 1%
Excess 1/100 of 1%
Minimum Monthly Charge $1,000
This accounting services fee shown above is an annual charge, billed and payable
monthly, based upon average monthly net assets.
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