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EXHIBIT (h)(4)
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 1st day of August, 1999, by and
between ASSET MANAGEMENT FUND, INC. (the "Company"), a Maryland corporation
having its principal place of business at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, and BISYS FUND SERVICES OHIO, INC. ("BISYS"), an Ohio
corporation having its principal place of business at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000.
WHEREAS, the Company desires that BISYS perform certain fund accounting
services for the current investment portfolio of the Company and any additional
investment portfolio that may hereafter be created (individually referred to
herein as the "Fund" and collectively as the "Funds"); and
WHEREAS, BISYS 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. BISYS agrees to perform the services
described herein in accordance with all applicable laws, rule and regulations
(including, where applicable, Generally Acceptable Accounting Principles), and
in accordance with any reasonable instructions of the Company and the Company's
Articles of Incorporation, Bylaws, Prospectus and Statement of Additional
Information.
(a) Maintenance of Books and Records. BISYS 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.
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(b) Performance of Daily Accounting Services. In addition to
the maintenance of the books and records specified above, BISYS shall perform
the following accounting services daily for each Fund:
(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 Board of Directors (hereafter referred to as "Directors");
(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;
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(xii) Determine the outstanding receivables and
payables for all (1) security trades, (2) Fund share transactions and
(3) income and expense accounts;
(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) BISYS shall provide additional special reports and
other similar services upon the request of the Company or the Company's
investment adviser.
(ii) To the extent that the provision of any such reports
or services requires BISYS to incur material additional costs and BISYS
notifies the Company thereof promptly after such requests, such reports
or services shall be provided in exchange for such additional
compensation that is agreed upon by the parties.
(d) Additional Accounting Services. BISYS 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 (including financial
statements and schedules and pertinent statistical 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;
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(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 or sale of shares;
(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; and
(G) examinations performed by the SEC.
BISYS shall provide on a timely basis to the Company's investment adviser,
administrator, transfer agent, distributor and custodian and other persons
providing services to the Company such information as such persons may
reasonably request in connection with the performance of their respective duties
and obligations with respect to the Company. BISYS will report to the Board of
Directors of the Company at each meeting of the Board of Directors and will keep
the Board of Directors informed of material developments affecting the Company.
BISYS will comply with any performance standards that may be agreed to
by BISYS and the Company from time to time.
2. Subcontracting. BISYS may, at its expense, with the prior written
consent of the Company, subcontract with any entity or person concerning the
provision of the services contemplated hereunder; provided, however, that BISYS
shall not be relieved of any of its obligations under this Agreement by the
appointment of such subcontractor and provided further, that BISYS shall be
responsible, to the extent provided in Section 7 hereof, for all acts of such
subcontractor as if such acts were its own; and provided, further, that no such
services shall be subcontracted without the prior written consent of the
Company.
3. Compensation. The Company shall pay BISYS for the services to be
provided by BISYS under this Agreement in accordance with, and in the manner set
forth in the Omnibus Fee Agreement between the Company and BISYS dated as of
August 1, 1999 (the "Fee Agreement").
4. Reimbursement of Expenses. In addition to paying BISYS the fees
described in Section 3 hereof, the Company agrees to reimburse BISYS for its
out-of-pocket expenses in providing services hereunder, including without
limitation the following:
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(a) All freight and other delivery and bonding charges incurred
by BISYS in delivering materials to and from the Company;
(b) All direct telephone, telephone transmission and telecopy
or other electronic transmission expenses incurred by BISYS in communication
with the Company, the Company's investment adviser or custodian, dealers or
others as required for BISYS to perform the services to be provided hereunder;
(c) The cost of obtaining security market quotes pursuant to Section 1
(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;
(f) Any expenses BISYS shall incur at the written direction of an
officer of the Company thereunto duly authorized; and
(g) Any additional expenses reasonably incurred by BISYS in the
performance of its duties and obligations under this Agreement.
5. Effective Date. This Agreement shall become effective as of the date
first written above (the "Effective Date").
6. Term. This Agreement shall continue in effect unless earlier
terminated by either party hereto as provided hereunder, until July 31, 2004
(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 90 days advance written notice of nonrenewal prior to the
end of the Initial Term or any Rollover Period, as the case may be, (ii) by
mutual agreement of the parties or (iii) for "cause," as defined below, upon the
provision of 90 days advance written notice by the party alleging cause.
Notwithstanding the foregoing, after July 31, 2001, either party may terminate
this Agreement, at any time and without penalty, upon the provision of 90 days
advance written notice to the other party.
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
series of negligent acts or omissions or other breaches of this Agreement which,
in the aggregate, constitute, in the reasonable judgment of the Company's
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Directors, a serious failure to perform satisfactorily BISYS's obligations
hereunder; (c) a service standard deficiency (as defined by the parties in the
service standards that are agreed to by BISYS and the Company from time to
time); (d) a final, nonappealable 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 (e) 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 BISYS, 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 BISYS
and unpaid by the Company upon such termination shall be immediately due and
payable upon and notwithstanding such termination. BISYS shall be entitled to
collect from the Company, in addition to the compensation described under
Sections 3 and 4 hereof, the amount of all of BISYS's cash disbursements for
services in connection with BISYS'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, during the first two years of the Initial
Term of this Agreement, BISYS is replaced as fund accountant, 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 BISYS
equal to the balance due BISYS for the remainder of such two-year period
assuming for purposes of calculation of the payment that such balance shall be
based upon the average amount of the Company's assets for the twelve months
prior to the date BISYS is replaced.
In the event the Company is merged into another legal entity in part or
in whole pursuant to any form of business reorganization (including without
limitation a purchase of assets) or is liquidated in part or in whole prior to
the expiration of the first two years of the Initial Term of this Agreement, the
parties acknowledge and agree that the Company shall be entitled to terminate
this Agreement; provided, however, that the liquidated damages provision set
forth above shall be applicable in those instances in which BISYS is not
retained by the other party to such business reorganization or any successor
entity 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 BISYS is replaced or a third party is added.
The parties further acknowledge and agree that, in the event BISYS is
replaced as set forth above, (i) a determination of actual damages incurred by
BISYS would be extremely difficult, and (ii) the liquidated damages provision
contained herein is intended to adequately compensate
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BISYS for damages incurred and is not intended to constitute any form of
penalty.
In the event either party gives notice of the termination of this
Agreement as provided in this Section, BISYS will cooperate and use all
reasonable efforts to assist with the conversation of the data and records
maintained by it hereunder to, and the assumption of the services provided by it
hereunder by, a replacement provider of fund accounting services.
7. Standard of Care; Reliance on Records and Instructions;
Indemnification. BISYS 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 BISYS 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 BISYS, 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,
reasonable counsel fees and other expenses of every nature and character arising
out of or in any way relating to BISYS'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 BISYS by a
duly authorized representative of the Company; provided, however, that BISYS
shall not be protected in relying on any information, records, instructions or
requests given or made to or prepared by BISYS or any affiliate of BISYS or any
officer of the Company that is an officer or employee of BISYS or any affiliate
of BISYS; and provided, further, that this indemnification shall not apply to
actions or omissions of BISYS 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, BISYS shall give the Company written
notice of and reasonable opportunity to defend against said claim in its own
name or in the name of BISYS.
Notwithstanding the foregoing, BISYS agrees to indemnify and hold
harmless the Company, its employees, agents, directors, officers and nominees
from and against any and all actions, suits, demands and claims, whether
groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character arising out of or in any way relating to
BISYS's bad faith, willful malfeasance or misfeasance, negligence, or reckless
disregard by it of its obligations and duties with respect to the performance of
services under this Agreement.
The indemnifying party shall be entitled to participate at its own
expense or, if it acknowledges its responsibility to indemnify the other party,
it may elect to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the indemnifying party elects to assume
the defense of any such claim, the defense shall be conducted by counsel chosen
by the indemnifying party and satisfactory to the indemnified party, whose
approval shall not be unreasonably withheld. In the event that the indemnifying
party elects to assume the defense of any suit and retain counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by it. If the indemnifying party does not elect to assume the defense
of a suit, it will reimburse the indemnified party for the reasonable fees and
expenses of any counsel retained by the indemnified party.
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8. Record Retention and Confidentiality. BISYS shall keep and maintain
on behalf of the Company all books and records which the Company and BISYS 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. BISYS 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. BISYS will promptly notify the Company of any such request.
9. Uncontrollable Events. BISYS shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment and shall,
at no additional expense to the Company, take reasonable steps to minimize
service interruptions. BISYS 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; provided that such damage, delay
or other loss is not caused by BISYS' own willful misfeasance, bad faith,
negligence or reckless disregard of its obligations under, or other
noncompliance with this Agreement.
10. Reports. BISYS 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 BISYS,
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 of which the Company
is aware.
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11. Rights of Ownership. All computer programs and procedures developed
to perform services required to be provided by BISYS under this Agreement are
the property of BISYS. 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. BISYS may at its option at any time, and shall
promptly upon the Company's demand, turn over to the Company and cease to retain
BISYS's files, records and documents created and maintained by BISYS pursuant to
this Agreement which are no longer needed by BISYS 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 BISYS 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 BISYS that
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 BISYS. BISYS represents and warrants that: (1)
the various procedures and systems which BISYS 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 BISYS'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 BISYS and, when executed and
delivered by BISYS, will constitute a legal, valid and binding obligation of
BISYS, enforceable against BISYS 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.
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15. Insurance. BISYS 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. BISYS 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 BISYS under its insurance coverage.
16. Information to be Furnished by the Company and Funds. The Company
has furnished to BISYS the following:
(a) Copies of the Articles of Incorporation 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 Directors
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 BISYS
thereunder.
(c) A list of all the officers of the Company, together with
specimen signatures of those officers who are authorized to instruct BISYS in
all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
17. Information Furnished by BISYS.
(a) BISYS has furnished to the Company the following:
(i) BISYS's Articles of Incorporation; and
(ii) BISYS's Bylaws and any amendments thereto.
(b) BISYS shall, upon request, furnish certified copies of
corporate actions covering the following matters:
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(i) Approval of this Agreement, and authorization of a
specified officer of BISYS to execute and deliver this Agreement; and
(ii) Authorization of BISYS to act as fund accountant
for the Company and to provide accounting services for the Company.
18. Amendments to Documents. The Company shall furnish BISYS 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 BISYS in providing the
services agreed to hereunder or which amendment might affect the duties of BISYS
hereunder unless the Company first obtains BISYS's approval of such amendments
or changes.
19. Compliance with Law. Except for the obligations of BISYS set forth
in Sections 1, 2, 7, 8 and 10 hereof, BISYS bears no responsibility under this
Agreement 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. The
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: if to the Company at 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; if to BISYS at 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.
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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. Any assignment not in compliance
with this Agreement shall be void.
23. Governing Law. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of the State of Ohio.
24. Instructions, Approval or Consent by the Company; Imputation. Any
reference herein to any instructions, approval or consent of the Company shall
not include any instructions, approval or consent given by any officer of the
Company that is an officer, employee or agent of BISYS or any affiliate of
BISYS, unless specifically authorized by the Board of Directors of the Company.
No information known to any such officer of the Company shall be imputed to the
Company for purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
ASSET MANAGEMENT FUND, INC.
By:/s/ Xxxxxx X. Xxxxxxx, Xx.
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Title: President
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BISYS FUND SERVICES OHIO, INC.
By:/s/ Xxxxxxx X. Xxxxx
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Title: President
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