ACCOUNTING SERVICES AGREEMENT
AGREEMENT dated as of March 17, 2002 between Touchstone Strategic
Trust (the "Trust"), a Massachusetts business trust, and Integrated Fund
Services, Inc. ("Integrated"), an Ohio corporation.
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Emerging Growth Fund, the International Equity Fund and
the Value Plus Fund (the "Funds") are each a series of the Trust; and
WHEREAS, the Trust wishes to employ Integrated to serve as its
accounting services agent on behalf of the Funds; and
WHEREAS, Integrated wishes to provide such services to the Funds under
the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and Integrated agree as follows:
1. APPOINTMENT.
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The Trust hereby employs Integrated as agent to perform those services
described in this Agreement for the Funds. Integrated shall act under such
appointment and perform the obligations thereof upon the terms and conditions
hereinafter set forth.
2. DOCUMENTATION.
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The Trust will furnish from time to time certified copies of each
resolution of the Board of Trustees authorizing officers to give instructions to
Integrated and such other certifications, documents or opinions that Integrated
may, in its discretion, deem necessary or appropriate in the proper performance
of its duties.
3. CALCULATION OF NET ASSET VALUE.
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Integrated will maintain and keep current the general ledger for the
Funds, recording all income and expenses, capital share activity and security
transactions of the Funds. Integrated will calculate the net asset value of each
of the Funds and the per share net asset value of each of the Funds, in
accordance with the Trust's current prospectus and statement of additional
information, once daily as of the time selected by the Trust's Board of
Trustees. Integrated will prepare and maintain a daily valuation of all
securities and other assets of the Funds in accordance with instructions from a
designated officer of the Trust and in the manner set forth in the Trust's
current prospectus and statement of additional information. In valuing
securities of the Funds, Integrated may contract with, and rely upon market
quotations provided by, outside services.
4. PAYMENT OF TRUST EXPENSES.
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Integrated shall process each request received from the Trust or its
authorized agents for payment of the Funds' expenses. Upon receipt of written
instructions signed by an officer or other authorized agent of the Trust,
Integrated shall prepare checks in the appropriate amounts which shall be signed
by an authorized officer of Integrated and mailed to the appropriate party.
5. OTHER SERVICES.
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Subject to the direction and control of the Trustees of the Trust,
Integrated shall perform the services to the Funds detailed in Schedule A.
6. DATA ACCESS AND PROPRIETARY INFORMATION.
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The Trust acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by Integrated as part of the Trust's ability to
access certain Trust-related data ("Customer Data") maintained by Integrated on
data bases under the control and ownership of Integrated or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to Integrated or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Trust agrees to treat all Proprietary
Information as proprietary to Integrated and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder.
7. COOPERATION WITH ACCOUNTANTS.
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Integrated shall cooperate with the Trust's independent public
accountants and 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 unqualified
opinion where required for any document for the Trust.
8. SPECIAL SERVICES AND EXCEPTION PROCESSING.
-----------------------------------------
A. Integrated may provide additional special reports upon the
request of the Trust or the Trust's investment adviser, which may result in an
additional charge, the amount of which shall be agreed upon between the parties.
B. Integrated may provide such other services with respect to the
Trust as may be reasonably requested by the Trust, which may result in an
additional charge, the amount of which shall be agreed upon between the parties.
C. Integrated may provide exception processing upon the request of
the Trust or the Trust's investment adviser, which may result in an additional
charge, the amount of which shall be agreed upon between the parties. Exception
processing includes, but is not limited to, processing which:
(a) requires Integrated to use methods and procedures other than
those usually employed by Integrated to perform its obligations under this
Agreement;
(b) involves the provision of information to Integrated after
the commencement of the nightly processing cycle of Integrated's transfer
agency, administration and/or fund accounting processing system; or
(c) requires more manual intervention by Integrated, either in
the entry of data or in the modification or amendment of reports generated by
Integrated's transfer agency, administration and/or fund accounting processing
system than is usually required.
9. FURTHER ACTIONS.
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Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof.
10. SUBCONTRACTING.
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Integrated may, at its expense, and, upon prior written approval from
the Trust, subcontract with any entity or person concerning the provision of the
services contemplated hereunder; provided, however, that Integrated shall not be
relieved of any of its obligations under this Agreement by the appointment of
such subcontractor and provided further, that Integrated shall be responsible
for all acts of such subcontractor as if such acts were its own.
11. COMPENSATION.
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For performing its services under this Agreement, the Trust shall pay
Integrated a monthly fee with respect to each Fund in accordance with the
schedule attached hereto as Schedule B.
12. EXPENSES.
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Integrated shall furnish, at its expense and without cost to the Trust
the services of its personnel to the extent that such services are required to
carry out its obligations under this Agreement. All costs and expenses not
expressly assumed by Integrated under this Paragraph shall be paid by the Trust,
including, but not limited to, costs and expenses of officers and employees of
Integrated in attending meetings of the Board of Trustees and shareholders of
the Funds, as well as costs and expenses for postage, envelopes, checks, drafts,
continuous forms, reports, communications, statements and other materials,
telephone, telegraph and remote transmission lines, EDGARization, printing,
confirmations and any other shareholder correspondence, use of outside pricing
services, use of outside mailing firms, necessary outside record storage, media
for storage of records (e.g., microfilm, microfiche, computer tapes), costs and
fees, including employee time and system expenses, associated with exception
processing and resolution of errors not caused by Integrated, and any and all
assessments, taxes or levies assessed on Integrated for services provided under
this Agreement. Postage for mailings of dividends, proxies, reports and other
mailings to all shareholders shall be advanced to Integrated three business days
prior to the mailing date of such materials.
13. REFERENCES TO INTEGRATED OR THE TRUST.
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A. Neither the Trust nor its agents shall circulate any printed
matter which contains any reference to Integrated without the prior written
approval of Integrated, excepting solely such printed matter as merely
identifies Integrated as Administrative Services Agent, Transfer, Shareholder
Servicing and Dividend Disbursing Agent and Accounting Services Agent. The Trust
will submit printed matter requiring approval to Integrated in draft form,
allowing sufficient time for review by Integrated and its counsel prior to any
deadline for printing.
B. Integrated shall not circulate any printed matter that contains
any reference to the Trust without the prior written approval of the Trust,
excepting solely such printed matter as merely identifies the Trust as a client
of Integrated. Integrated will submit printed matter requiring approval to the
Trust in draft form, allowing sufficient time for review by the Trust and its
counsel prior to any deadline for printing.
14. EQUIPMENT FAILURES.
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In the event of equipment failures beyond Integrated's control,
Integrated shall take all steps necessary to minimize service interruptions but
shall have no liability with respect thereto. Integrated shall endeavor to enter
into one or more agreements making provision for emergency use of electronic
data processing equipment to the extent appropriate equipment is available.
15. INDEMNIFICATION OF INTEGRATED.
-----------------------------
A. Integrated may rely on information reasonably believed by it to
be accurate and reliable. Except as may otherwise be required by the 1940 Act
and the rules thereunder, neither Integrated nor its directors, officers,
employees, shareholders, agents, control persons or affiliates of any thereof
shall be subject to any liability for, or any damages, including consequential
damages, expenses or losses incurred by the Trust in connection with, any error
of judgment, mistake of law, any act or omission connected with or arising out
of any services rendered under or payments made pursuant to this Agreement or
any other matter to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of the duties of Integrated under this Agreement or by reason of
reckless disregard by any of such persons of the obligations and duties of
Integrated under this Agreement. Integrated may apply to the Trust at any time
for instructions and may consult counsel for the Trust, or its own counsel, and
with accountants and other experts with respect to any matter arising in
connection with its duties hereunder, and Integrated shall not be liable or
accountable for any action taken or omitted by it in good faith in accordance
with such instruction, or with the opinion of such counsel, accountants, or
other experts. Integrated shall not be held to have notice of any change of
authority of any officers, employees, or agents of the Trust until receipt of
written notice thereof have been received by Integrated from the Trust.
B. Any person, even though also a director, officer, employee,
shareholder or agent of Integrated, or any of its affiliates, who may be or
become an officer, trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust, to
be rendering such services to or acting solely as an officer, trustee, employee
or agent of the Trust and not as a director, officer, employee, shareholder or
agent of or one under the control or direction of Integrated or any of its
affiliates, even though paid by one of these entities.
C. Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless Integrated, its directors, officers,
employees, shareholders, agents, control persons and affiliates of any thereof
from and against any and all losses, damages, claims, suits, actions, demands,
expenses and liabilities (whether with or without basis in fact or law),
including legal fees and expenses and investigation expenses, of any and every
nature which Integrated may sustain or incur or which may be asserted against
Integrated by any person by reason of, or as a result of: (i) any action taken
or omitted to be taken by Integrated in good faith in reliance upon any
certificate, instrument, order or share certificate believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized person, upon
the oral instructions or written instructions of an authorized person of the
Trust or upon the opinion of legal counsel for the Trust or its own counsel; or
(ii) any action taken or omitted to be taken by Integrated in connection with
its appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. However, indemnification under this
subparagraph shall not apply to actions or omissions of Integrated or its
directors, officers, employees, shareholders or agents in cases of its or their
own gross negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder.
D. Notwithstanding anything to the contrary in this Agreement, in no
event shall Integrated be liable to the Trust or any third party for any
special, consequential, punitive or incidental damages, even if advised of the
possibility of such damages.
16. TERMINATION
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A. The provisions of this Agreement shall be effective on the date
first above written, shall continue in effect for one year ("Initial Term") from
that date and shall continue in force for one year thereafter ("Renewal Term"),
but only so long as such continuance is approved (1) by Integrated, (2) the
Trust, (3) by a vote of a majority of the Trust's Trustees who are not parties
to this Agreement or interested persons (as defined in the 0000 Xxx) of any such
party, and (4) by vote of a majority of the Trust's Board of Trustees or a
majority of the Trust's outstanding voting securities.
B. Any party may terminate this Agreement at the end of the Initial
Term or at the end of any subsequent Renewal Term by giving the other parties at
least one hundred twenty (120) days' prior written notice of such termination
specifying the date fixed therefor. In the event this Agreement is terminated by
the Trust prior to the end of the Initial Term or any subsequent Renewal Term
the Trust shall make a one-time cash payment to Integrated in consideration of
services provided under this Agreement, and not as a penalty, equal to the
remaining balance of the fees payable to Integrated under this Agreement through
the end of the Initial Term or Renewal Term, as applicable. The Trust shall
likewise reimburse Integrated for any out-of-pocket expenses and disbursements
("out-of-pocket expenses") reasonably incurred by Integrated in connection with
the services provided under this Agreement within 30 days of notification to the
Trust of such out-of-pocket expenses regardless of whether such out-of-pocket
expenses were incurred before or after the termination of this Agreement.
C. If a party materially fails to perform its duties and obligations
hereunder (a "Defaulting Party") resulting in a material loss to another party
or parties, such other party or parties (the "Non-Defaulting Party") may give
written notice thereof to the Defaulting Party, which such notice shall set
forth with sufficient detail the nature of the breach. The Defaulting Party
shall have ninety (90) days from its receipt of notice to cure the breach. If
such material breach shall not have been remedied to commercially reasonable
operating standards, the Non-Defaulting Party may terminate this Agreement by
giving sixty (60) days written notice of such termination to the Defaulting
Party. If Integrated is the Non-Defaulting Party, its termination of this
Agreement shall not constitute a waiver of any rights or remedies with respect
to services it performed prior to such termination, or the right of Integrated
to receive such compensation as may be due as of the date of termination or to
be reimbursed for all reasonable out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against a Defaulting Party.
D. In the case of the following transactions, not in the ordinary
course of business, namely, the merger of the Trust, or a Fund, into or the
consolidation of the Trust, or a Fund, with another investment company, the sale
by the Trust, or a Fund, of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Trust, or a series
of the Trust, and distribution of its assets, this Agreement will terminate and
Integrated shall be released from any and all obligations hereunder upon the
payment of the fees, disbursements and expenses due to Integrated through the
end of the then current term of this Agreement. The parties acknowledge and
agree that the damages provision set forth above in paragraph B shall be
applicable in those instances in which Integrated is not retained to provide
fund accounting services subsequent to the transactions listed above.
E. Integrated will be entitled to collect from the Trust all
reasonable expenses incurred in conjunction with termination of this Agreement,
including but not limited to out-of-pocket expenses, employee time, system fees
and fees charged by third parties with whom Integrated has contracted.
17. SERVICES FOR OTHERS.
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Nothing in this Agreement shall prevent Integrated or any affiliated
person (as defined in the 0000 Xxx) of Integrated from providing services for
any other person, firm or corporation (including other investment companies);
provided, however, that Integrated expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
18. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
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The parties hereto acknowledge and agree that nothing contained herein
shall be construed to require Integrated to perform any services for the Trust
which services could cause Integrated to be deemed an "investment adviser" of
the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to supersede
or contravene the Trust's prospectus or statement of additional information or
any provisions of the 1940 Act and the rules thereunder. Except as
otherwise provided in this Agreement and except for the accuracy of information
furnished to it by Integrated, the Trust assumes full responsibility for
complying with all applicable requirements of the 1940 Act, the Securities Act
of 1933, as amended, and any other laws, rules and regulations of governmental
authorities having jurisdiction, it being acknowledged that the Trust is relying
on the best efforts of Integrated.
19. LIMITATION OF LIABILITY.
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It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an 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 any of them personally, but shall
bind only the trust property of the Trust.
20. SEVERABILITY.
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In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
21. QUESTIONS OF INTERPRETATION.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission
("SEC") issued pursuant to said 1940 Act. In addition, where the effect of a
requirement of the 1940 Act, reflected in any provision of this Agreement, is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
22. CONFIDENTIALITY
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Both parties hereto agree that any non-public information obtained
hereunder concerning the other party is confidential and may not be disclosed
without the consent of the other party, except as may be required by applicable
law or at the request of a governmental agency. The parties further agree that a
breach of this provision would irreparably damage the other party and
accordingly agree that each of them is entitled, in addition to all other
remedies at law or in equity to an injunction or injunctions without bond or
other security to prevent breaches of this provision.
23. NOTICES.
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All notices required or permitted under this Agreement shall be in
writing (including telex and telegraphic communication) and shall be (as elected
by the person giving such notice) hand delivered by messenger or courier
service, telecommunicated, or mailed (airmail if international) by registered or
certified mail (postage prepaid), return receipt requested, addressed to:
To the Trust: Touchstone Family of Funds
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. XxXxxxxx
To Integrated: Integrated Fund Services, Inc.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
or to such other address as any party may designate by notice complying with the
terms of this Paragraph. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method or e-mail; and (d) on the date upon
which the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be, if
mailed.
24. AMENDMENT.
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This Agreement may not be amended or modified except by a written
agreement executed by all parties.
25. BINDING EFFECT.
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Each of the undersigned expressly warrants and represents that he has
the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
26. COUNTERPARTS.
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
27. FORCE MAJEURE.
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Integrated 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 control, including and without limitation, acts of God,
interruption of power or other utility, transportation, mail, or communication
services, acts of civil or military authority, sabotages, war, insurrection,
riots, national emergencies, explosion, flood, accident, earthquake or other
catastrophe, fire, strike or other labor problems, legal action, present or
future law, governmental order, rule or regulation, or shortages of suitable
parts, materials, labor or transportation.
28. MISCELLANEOUS.
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The captions in this Agreement 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
TOUCHSTONE STRATEGIC TRUST
By: /s/ Xxxx X. XxXxxxxx
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Its: President
INTEGRATED FUND SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Its: President
Schedule A
In consideration of the compensation detailed in this Agreement, Integrated
shall perform the following Accounting services:
1. Calculate net asset value and per share net asset value in accordance with
the 1940 Act and the Trust's prospectus.
2. Record all security transactions including appropriate gains and losses
from the sale of portfolio securities.
3. Record interest income and dividend income.
4. Record each Fund's capital share activities based upon purchase and
redemption transactions received by the transfer agent.
5. Calculate a daily cash figure for investment purposes.
6. Monitor and seek authorization for payment of expenses of each Fund.
7. Periodically report to the Trust or its authorized agents share purchases
and redemptions and trial balances of each Fund.
8. Prepare the necessary supporting computations on a book and tax basis to
ensure each Fund complies with the requirements of Section 851 of the
Internal Revenue Code.
9. Facilitate and perform tax planning and administration.
10. Monitor all tax compliance calculations to ensure that each Fund qualifies
as a regulated investment company pursuant to Subchapter M of the Internal
Revenue Code.
11. Assist independent accountants with the annual audit by preparing necessary
annual audit work papers.
12. Generate fund performance calculations (including after-tax returns) and
automated report dissemination.
13. Maintain complete, accurate and current all records with respect to the
Trust required to be maintained by the Trust under the Internal Revenue
Code of 1986, as amended (the "Code"), and under the rules and regulations
of the 1940 Act, and preserve said records in the manner and for the
periods prescribed in the Code and the 1940 Act.
Schedule B
March 17, 2002
COMPENSATION FOR ACCOUNTING SERVICES
The International Equity Fund will pay Integrated a monthly fee, according
to its average net assets during such month, as follows:
Monthly Fee Average Monthly Net Assets
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$2,500 $ 0 - $ 50,000,000
3,000 50 - 100,000,000
3,500 100 - 200,000,000
4,500 200 - 300,000,000
5,000 +.001% Over - 300,000,000
of assets over $300,000,000
The Emerging Growth Fund and the Value Plus Fund will each pay Integrated a
monthly fee according to its average net assets during such month, as follows:
Monthly Fee Average Monthly Net Assets
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$2,000 $ 0 - $ 50,000,000
2,500 50 - 100,000,000
3,000 100 - 200,000,000
3,500 200 - 300,000,000
4,500 +.001% Over - 300,000,000
of assets over $300,000,000
Each Fund will reimburse Integrated for out-of-pocket expenses including,
but not limited to, the cost of external pricing services used by that Fund.
The .001% on assets over $300,000,000 represents the asset-based fee
Integrated is charged by SunGard.
There is an additional monthly fee of $1,000 per Fund for each additional
class of shares.
