FORM OF
FUND ACCOUNTING AND
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT effective as of the 1st day of May, 2002, between The Bear
Xxxxxxx Funds (the "Trust"), a Massachusetts business trust having its
principal place of business at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 and
BISYS FUND SERVICES OHIO, INC. ("BISYS"), a Delaware corporation having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, pursuant to an Administration Agreement dated February 22,
1995, as revised April 11, 1995 (the "Administration Agreement"), Bear
Xxxxxxx Funds Management Inc. serves as the administrator to the Trust (the
"Administrator");
WHEREAS, the Trust desires that BISYS perform fund accounting &
sub-administrative services for the Trust and each investment portfolio of
the Trust (individually and not jointly), as now in existence and listed on
Schedule A, or as hereafter may be established from time to time (each
individually referred to herein as a "Fund" and collectively as the "Funds");
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement; and
WHEREAS, BISYS and Trust wish to set forth the terms under which BISYS
will perform the fund accounting and sub-administrative services set forth
herein for the Trust.
NOW, THEREFORE, in consideration of the covenants hereinafter
contained, the Trust and BISYS hereby agree as follows:
1. Services as Fund Accountant.
(a) Maintenance of Books and Records. BISYS will keep and
maintain the following books and records of each Fund
pursuant to Rule 31a-1 (the "Rule") under the Investment
Company Act of 1940, as amended (the 1940 Act"):
(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;
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(iii) Separate ledger accounts required by subsections
(b)(2)(ii) and (iii) of the Rule; and
(iv) A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8)
of the Rule.
(b) Performance of Daily Accounting Services. In addition to
the maintenance of the books and records specified above,
Fund Accountant shall perform the following accounting
services daily for each Fund:
(i) Calculate the net asset value and public offering
price per share utilizing prices obtained from the
sources described in subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services approved by the Trust's Board of Trustees,
or if such quotes are unavailable, then obtain such
prices from each Fund's investment adviser or its
designee, as approved by the Trust's Board of
Trustees (hereafter referred to as the "Board");
(iii) Verify and reconcile with each Fund's custodian and
investment adviser all daily trade activity; and
holdings; and resulting balances for each fund and
its respective class;
(iv) Compute, as appropriate, each Fund's net income and
capital gains, dividend payables, dividend factors,
standard yields (7-day yields, 7-day effective yields,
30-day yields) and other yields as requested, total
return data, and weighted average 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, the Fund's transfer agent and
client locations requested by the Trust;
(vi) Calculate and report to the Trust the daily market
pricing of securities in any money market Funds, and
provide a comparison of the marked- to market
valuation to the valuation determined by the amortized
cost basis;
(vii) Determine unrealized appreciation and depreciation on
securities held in variable net asset value Funds;
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(viii)Amortize premiums and accrete discounts on securities
purchased at a price other than face value;
(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 general ledger
categories;
(xi) Accrue expenses (including fees payable to service
providers) of each Fund according to instructions
received from the Administrator;
(xii) Monitor and report to the Trust and its custodian the
outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3)
income and expense accounts; and
(xiii)Post summary shareholder activity received from the
Funds' transfer agent and reconcile share balances,
including receivables and payables, with the Funds'
transfer agent.
(c) Special Reports and Services.
(i) BISYS may provide additional special reports upon the
request of the Trust or a Fund's investment adviser,
which may result in an additional charge, the amount
of which shall be agreed upon between the parties.
(ii) BISYS may provide such other similar services with
respect to a Fund 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.
(d) Additional Accounting & Financial Administration Services.
BISYS shall also perform the following additional
accounting and administrative services for each Fund,
without additional compensation:
(i) Provide monthly a hard copy of the unaudited
financial statements described below, upon request of
the Trust. The unaudited financial statements will
include the following items:
Unaudited Statement of Investments
Unaudited Statement of Assets and Liabilities,
Unaudited Statement of Operations,
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Unaudited Statement of Changes in Net Assets
(ii) Provide and prepare accounting information for the
following:
(A) Federal and state income tax returns and
federal excise tax returns;
(B) registration statements on Form N-1A and other
filings relating to registration of shares;
(C) the Administrator's monitoring of the Trust's
status as a regulated investment company under
Subchapter M of the Internal Revenue Code, as
amended;
(D) the annual audit by the Trust's auditors;
(E) examinations performed by the SEC; and
(F) Supplemental tax letters and IRS Form 1099 or
equivalent to trustees and fund vendors.
(iii) Provide accounting reports in connection with the
Trust's regular annual audit and other audits and
examinations by regulatory agencies;
(iv) Prepare and monitor fund expense budgets and
coordinate cash disbursements for fund expenses;
(v) Provide such periodic reports as the parties shall
agree upon, at such times that the parties agree upon,
as set forth in a separate writing, including without
limitation reports used in preparation of financial
reports, regulatory fillings, compliance reporting,
total return and tax reporting;
(vi) Respond to surveys from industry publications and
rating agencies including, but not limited to, Lipper,
Morningstar, IMoneyNet, Xxxxxxxxxxxx, XXXXXX, Standard
& Poors's, Xxxxx'x and the Investment Company
Institute;
(vii) Prepare and file semi-annual and annual financial
statements; and any related filings such as N-30D, and
prepare versions of the relevant financial statements
using FundSmith or equivalent systems;
(viii)Prepare and file Form N-SAR and required notices
pursuant to Rule 24f-2;
(ix) Calculate and distribute all standard performance
information including after-tax return calculations;
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(x) Register Fund portfolios with NASDAQ;
(xi) Prepare financial materials for Board books;
(xii) Calculate income and capital gain distributions in
compliance with income tax and excise tax distribution
requirements;
(xiii)Review all dividend declarations to ensure that such
distributions are not "preferential" under the
Internal Revenue Code; and
(xiv) Prepare and sign Form 1120-RIC, Form 8613 and any
required state tax filings, and make such filings
within the statutory deadlines. Trust officers are
also responsible for signing above-mentioned forms.
(e) Additional Services as Sub-Administrator
(i) Compliance Services. Assist in developing compliance
procedures and compliance checklists for each Fund,
and provide compliance monitoring services
incorporating certain of those procedures, which will
include, among other matters, compliance with each
Fund's investment objective, defined investment
policies, restrictions, tax diversification,
distribution and income requirements as are
determinable based upon the fund's accounting
records, and prepare and maintain a fund-specific
compliance manual.
(ii) Blue Sky Services. Utilizing a data feed from the
Funds' transfer agent containing gross sales
information, prepare such reports, applications and
documents as may be necessary or desirable to register
the shares of the Funds with state securities
authorities; monitor the sale of shares for compliance
with state securities laws, and file with the
appropriate state securities authorities the
registration statements and reports for the Funds and
the shares and all amendments thereto, as may be
necessary or convenient to register and keep effective
the registration of the Funds and the shares with
state securities authorities;
(iii) Additional Legal & Sub-Administration Services.
BISYS shall also perform upon request by the
Administrator, the following additional legal and
administration services without additional
compensation. In
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each case, the Administrator shall notify BISYS in
writing of the scope of the specific services to be
provided; the commencement date (and, if applicable,
termination date) for rendering such services; and the
location (i.e. whether at the offices of the
Administrator or BISYS) where the books and records
related thereto shall be maintained:
(A) Coordinate, prepare and file with the Securities and
Exchange Commission (the "SEC") the annual update to
the Trust's registration statement on Form N-1A;
receive and coordinate comments from the SEC and
other parties on N-1A filings and prepare and
coordinate responses to all such comments;
(B) Coordinate, prepare and file with the SEC supplements
to the Funds' Prospectus or Prospectus, and statement
of Additional Information or, as agreed upon by the
parties hereto, review such supplements that are
prepared by counsel to the Trust;
(C) Coordinate, prepare and file as necessary, notices of
annual or special meetings of shareholders and proxy
materials relating thereto;
(D) Coordinate the solicitation and tabulation of proxies
in connection with meetings of shareholders;
(E) Coordinate the printing and distribution of
prospectuses, supplements and proxy materials;
(F) Prepare, produce and distribute board meeting
materials, including but not limited to agendas,
proposed resolutions, and relevant sections of the
board materials pertaining to the responsibilities of
BISYS;
(G) Provide appropriate personnel to attend board
meetings and record the minutes of such meetings;
(H) Administer contracts on behalf of the Trust with,
among others, the Trust's investment adviser,
distributor, custodian, transfer agent and fund
accountant;
(I) Maintain corporate records on behalf of the Trust,
including, but not limited to, minute books,
Declaration of Trust and By-Laws;
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(J) Assist with the design, development, and operation
ofFunds, including new classes, investment
objectives, policies and expense structure;
(K) Advise the Trust and the Board on matters concerning
the Trust and its affairs; and notify the Board or
the Administrator of issues requiring consideration
by the Board;
(L) Provide individuals reasonably acceptable to the
Board to serve as officers of the Trust in such
capacity as may be agreed to by BISYS, who will be
responsible for the management of certain of the
Trust's affairs as determined by the Board; and
(M) Obtain and keep in effect fidelity bonds and
directors and officers/errors and omissions insurance
policies for the Trust in accordance with the
requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by
the Board, and file such notices and copies of such
bonds as required under the 1940 Act.
2. Subcontracting.
BISYS may, at its expense, subcontract with any entity or person
concerning the provision of certain services (a "Subcontractor"); provided,
however, that BISYS shall obtain the express consent of the Trust for any
Subcontractor to act as a sub-fund accountant or sub-fund administrator
hereunder (a "Sub-Fund Accountant"); and provided, further, that BISYS shall
not be relieved of any of its duties and obligations under this Agreement by
the appointment of a Subcontractor (whether or not acting as a Sub-Fund
Accountant) and, that BISYS shall be responsible, to the extent provided in
Section 5 hereof, for all acts of such Subcontractor as if such acts were its
own.
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3. Compensation.
The Trust shall pay BISYS compensation for the services to be
provided by BISYS under this Agreement in accordance with, and in the manner
set forth in Schedule B attached hereto.
4. Reimbursement of Expenses and Miscellaneous Service Fees.
(A) In addition to paying BISYS the fees provided in Section 3 and Schedule
B, the Trust agrees to reimburse BISYS for its reasonable out-of-pocket
expenses in providing services hereunder, including without limitation
the following:
(a) All freight and other delivery and bonding charges incurred
by BISYS in delivering materials to and from the Trust;
(b) The cost of microfilm or microfiche of records or other
materials;
(c) All systems-related expenses associated with the provision
of special reports and services pursuant to Section 1(c) herein;
(d) Any expenses BISYS shall incur at the written direction of
an officer of the Trust (other than an employee of BISYS)
thereunto duly authorized; and
(e) Any additional expenses reasonably incurred by BISYS in the
performance of its duties and obligations under this Agreement,
except as otherwise provided in this Agreement. Pricing of
portfolio securities shall not be charged to the Funds as an
out-of-pocket expense, so long as the asset classes and costs of
pricing are substantially similar to the asset classes and the
costs of pricing applicable as of the date hereof.
(B) In addition, BISYS shall be entitled to receive the following fees:
(a) Systems development fees billed at an hourly rate of $150 per
hour, as approved by the Trust; and
(b) Ad hoc reporting fees billed at an agreed upon rate (forty (40)
hours per year of BISYS time preparing ad hoc reports shall be
without charge).
5. Standard of Care; Uncontrollable Events; Limitation of Liability.
BISYS shall use reasonable professional diligence to ensure the
accuracy of all services performed under this Agreement, but shall not be
liable to the Trust for any action taken or omitted by BISYS in the absence
of bad faith, willful misfeasance, negligence or reckless disregard
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by it of its obligations and duties. The duties of BISYS shall be confined to
those expressly set forth herein, and no implied duties are assumed by or may
be asserted against BISYS hereunder.
BISYS shall maintain adequate and reliable computer and other
equipment necessary or appropriate to carry out its obligations under this
Agreement. Upon the Trust's reasonable request, BISYS shall provide
supplemental information concerning the aspects of its disaster recovery and
business continuity plan that are relevant to the services provided
hereunder. Notwithstanding the foregoing or any other provision of this
Agreement, 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. Events beyond BISYS' reasonable
control include, without limitation, force majeure events. Force majeure
events include natural disasters, actions or decrees of governmental bodies,
and communication lines failures that are not the fault of either party. In
the event of force majeure, computer or other equipment failures or similar
events beyond its reasonable control, BISYS shall follow applicable
procedures in its disaster recovery and business continuity plan and use all
commercially reasonable efforts to minimize any service interruption.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL BISYS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR CONSEQUENTIAL DAMAGES,
REGARDLESS OF WHETHER BISYS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
6. Term.
This Agreement shall become effective as of the date first
written above and shall continue in effect for two (2) years, until April 30,
2004 (the "Initial Term"). Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically for successive
one (1) year periods ("Rollover Periods"). This Agreement may be terminated
only (i) by provision of a notice of non-renewal in the manner set forth
below, (ii) by mutual agreement of the parties or (iii) for "cause," as
defined below, upon the provision of sixty (60) days advance written notice
by the party alleging cause. Written notice of non-renewal must be provided
at least ninety (90) days prior to the end of the Initial Term or any
Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been remedied for thirty (30) days
following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or
unethical behavior in the conduct of its business; or (c) financial
difficulties on the part of the party to be terminated which are evidenced by
the authorization or commencement of, or involvement by way of pleading,
answer, consent or acquiescence in, a voluntary or involuntary case under
Title 11 of the United States Code, as from time to time is in effect, or any
applicable law, other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or alteration
of the
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rights of creditors. BISYS shall not terminate this Agreement pursuant to
clause (a) above based solely upon the Trust's failure to pay an amount to
BISYS which is the subject of a good faith dispute, if (i) the Trust is
attempting in good faith to resolve such dispute with as much expediency as
may be possible under the circumstances, and (ii) the Trust continues to
perform its obligations hereunder in all other material respects (including
paying all fees and expenses not subject to reasonable dispute hereunder).
Notwithstanding the foregoing, following any such termination, in
the event that BISYS in fact continues to perform any one or more of the
services contemplated by this Agreement (or any Schedule or exhibit hereto)
with the consent of the Trust, the provisions of this Agreement, including
without limitation the provisions dealing with indemnification, shall
continue in full force and effect. Fees and out-of-pocket expenses incurred
by BISYS but unpaid by the Trust upon such termination shall be immediately
due and payable upon and notwithstanding such termination. BISYS shall be
entitled to collect from the Trust, in addition to the fees and disbursements
provided by Sections 3 and 4 hereof, the amount of all of BISYS' cash
disbursements in connection with BISYS' activities in effecting such
termination, including without limitation, the delivery to the Trust and/or
its distributor or investment adviser and/or other parties of the Trust's
property, records, instruments and documents.
If, for any reason other than (i) nonrenewal, (ii) mutual
agreement of the parties or (iii) termination of BISYS for "cause" hereunder,
BISYS's services are terminated hereunder, BISYS is replaced as fund
accountant, or if a third party is added to perform all or a part of the
services provided by BISYS under this Agreement (excluding any Sub-Fund
Accountant appointed as provided in Section 1 hereof), then the Trust 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 that would be due BISYS for its services hereunder
during (x) the next twelve (12) months or (y) if less than twelve (12), the
number of months remaining in the then-current term of this Agreement,
assuming for purposes of the calculation of the one-time payment that the
fees that would be earned by BISYS for each month shall be based upon the
average assets, number of Funds and share classes, and corresponding fees
payable to BISYS, during the twelve (12) months prior to the date that
services terminate, BISYS is replaced or a third party is added.
In the event the Trust or any Fund is merged into another legal
entity in part or in whole pursuant to any form of business reorganization or
is liquidated in part or in whole prior to the expiration of the then-current
term of this Agreement, the parties acknowledge and agree that the liquidated
damages provision set forth above shall be applicable in those instances in
which BISYS is not retained to provide fund accounting services consistent
with this Agreement, including the number of Funds subject to such services.
The one-time cash payment referenced above shall be due and payable on the
day prior to the first day in which services are terminated, BISYS is
replaced or a third party is added.
The parties further acknowledge and agree that, in the event
services are terminated, BISYS is replaced, or a third party is added, as set
forth above, (i) a determination of actual damages
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incurred by BISYS would be extremely difficult, and (ii) the liquidated
damages provision contained herein is intended to adequately compensate BISYS
for damages incurred and is not intended to constitute any form of penalty.
7. Indemnification.
The Trust 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, and from and against any and all
judgments, liabilities, losses, damages, costs, charges, counsel fees and
other expenses of every nature and character arising out of or in any way
relating to BISYS' actions taken or omissions with respect to the performance
of services under this Agreement or based, if applicable, upon reasonable
reliance on information, records, instructions or requests given or made to
BISYS by the Trust, the investment adviser, administrator or custodian
thereof; provided that this indemnification shall not apply to actions or
omissions of BISYS in cases of its own bad faith, willful misfeasance,
negligence or reckless disregard by it of its obligations and duties; and
further provided that prior to confessing or settling any claim against it
which may be the subject of this indemnification, BISYS shall give the Trust
written notice of and reasonable opportunity to defend against said claim in
its own name or in the name of BISYS.
BISYS shall indemnify, defend, and hold the Trust , its
affiliates, and their officers, directors, trustees, employees and agents
harmless from and against any and all claims, actions and suits and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation
expenses) resulting directly and proximately from (a) the breach of an
express representation or warranty made by BISYS under Section 13 (b) of this
Agreement, or (b) BISYS' willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder.
The indemnification rights hereunder shall include the right to
reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provisions
contained herein shall apply, however, it is understood that if in any case a
party may be asked to indemnify or hold the other party harmless, the
indemnifying party shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
indemnified party will use all reasonable care to identify and notify the
indemnifying party promptly concerning any situation which presents or
appears likely to present the probability of such a claim for indemnification
against the indemnifying party, but failure to do so in good faith shall not
affect the rights hereunder except to the extent the indemnifying party is
materially prejudiced thereby.
The indemnifying party shall be entitled to participate at its
own expense or, if it so elects, 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 it and reasonably satisfactory to the
indemnified party, whose approval shall not be unreasonably withheld. In the
event that the indemnifying party elects to
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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 suit, it will
reimburse the indemnified party for the reasonable fees and expenses of any
counsel retained by the indemnified party. The indemnity and defense
provisions set forth herein shall indefinitely survive the termination of this
Agreement.
8. Record Retention and Confidentiality.
BISYS shall keep and maintain on behalf of the Trust all books
and records which the Trust 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 1940 Act,
relating to the maintenance of books and records in connection with the
services to be provided hereunder. Any records required to be maintained and
preserved pursuant to Rules 31a-1 and 31a-2 under the 1940 Act which are
prepared or maintained by BISYS on behalf of the Trust shall be prepared and
maintained at the expense of BISYS, but shall be the property of the Trust
and will be surrendered promptly to the Trust on request, and made available
for inspection by the Trust or by the Commission at reasonable times.
In case of any request or demand for the inspection of such
records by another party, BISYS shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that
BISYS may exhibit such records in any case where (i) disclosure is required
by law, (ii) BISYS is advised by counsel that it may incur liability for
failure to make a disclosure, (iii) BISYS is requested to divulge such
information by duly-constituted authorities or court process, or (iv) BISYS
is requested to make a disclosure by the Trust. BISYS shall provide the
Trust with reasonable advance notice of disclosure pursuant to items (i) -
(iii) of the previous sentence, to the extent reasonably practicable.
9. Activities of BISYS.
The services of BISYS rendered to the Trust hereunder are not to be
deemed to be exclusive. BISYS is free to render such services to others and
to have other businesses and interests. It is understood that Trustees,
officers, employees and Shareholders of the Trust are or may be or become
interested in BISYS, as officers, employees or otherwise and that partners,
officers and employees of BISYS and its counsel are or may be or become
similarly interested in the Trust as a shareholder or otherwise.
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10. Reports.
BISYS shall furnish to the Trust and to its properly authorized
auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the
Trust 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 Trust agrees to examine each such report or copy
promptly and will report or cause to be reported any errors or discrepancies
therein. In the event that errors or discrepancies, except such errors and
discrepancies as may not reasonably be expected to be discovered by the
recipient after conducting a diligent examination, are not so reported
promptly, a report will for all purposes be accepted by and binding upon the
Trust and any other recipient, and, BISYS shall have no liability for errors
or discrepancies therein and shall have no further responsibility with
respect to such report.
11. Rights of Ownership.
All computer programs and procedures employed or developed by or
on behalf of BISYS 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 Trust
and all such other records and data shall be furnished to the Trust 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
Trust's demand, turn over to the Trust 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 Trust,
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 Trust unless the Trust authorizes in
writing the destruction of such records and documents.
13. Representations and Warranties.
(a) The Trust represents and warrants that: (1) as of the
close of business on the effective date of this Agreement, each Fund that is
in existence as of the effective date has authorized unlimited shares, and
(2) this Agreement has been duly authorized by the Trust and, when executed
and delivered by the Trust, will constitute a legal, valid and binding
obligation of the Trust, enforceable against the Trust 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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(b) 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 Trust 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 reasonably 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.
14. Insurance.
BISYS shall maintain a fidelity bond covering larceny and
embezzlement and an insurance policy with respect to directors and officers
errors and omissions coverage in amounts that are appropriate in light of its
duties and responsibilities hereunder. Upon the request of the Trust, BISYS
shall provide evidence that coverage is in place. BISYS shall notify the
Trust should its insurance coverage with respect to professional liability or
errors and omissions coverage be canceled. Such notification shall include
the date of cancellation and the reasons therefore. BISYS shall notify the
Trust 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 Trust should the total outstanding claims made by BISYS
under its insurance coverage materially impair, or threaten to materially
impair, the adequacy of its coverage.
15. Information Furnished by the Trust.
The Trust has furnished to BISYS the following, as amended and
current as of the effective date of this Agreement:
(a) Copies of the Declaration of Trust of the Trust and of any
amendments thereto, certified by the proper official of the
state in which such Declaration has been filed.
(b) Copies of the following documents:
1. The Trust's Bylaws and any amendments thereto;
2. Certified copies of resolutions of the Trustees
covering the following matters:
A. Approval of this Agreement and authorization of
a specified officer of the Trust to execute and
deliver this Agreement and authorization for
specified officers of the Trust to instruct
14
BISYS hereunder; and
B. Authorization of BISYS to act as fund
accountant for the Trust.
(c) A list of all officers of the Trust and any other persons
(who may be associated with the Trust or its investment
advisor), together with specimen signatures of those
officers and other persons, who are authorized to instruct
BISYS in all matters.
(d) Two copies of the Prospectuses and Statement of Additional
Information of each Fund.
(e) The Administration Agreement.
16. Information Furnished by BISYS.
BISYS has furnished to the Trust evidence of the following:
(a) Approval of this Agreement by BISYS, and authorization of a
specified officer of BISYS to execute and deliver this
Agreement;
(b) Authorization of BISYS to act as fund accountant for the
Trust.
17. Amendments to Documents.
The Trust shall furnish BISYS written copies of any amendments
to, or changes in, any of the items referred to in Section 15 hereof
forthwith upon such amendments or changes becoming effective. In addition,
the Trust agrees that no amendments will be made to the Prospectuses or
Statements of Additional Information of the Trust 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 Trust first obtains BISYS's approval of such amendments or
changes, which approval shall not be withheld unreasonably.
18. Legal Advice; Reliance on Prospectus and Instructions.
BISYS shall notify the Trust at any time BISYS believes that it is
in need of the advice of counsel to the Trust with regard to BISYS'
responsibilities and duties pursuant to this Agreement. The Trust shall
authorize counsel to the Trust to give such advice to BISYS, however, this
Agreement shall not obligate counsel to the Trust to give such advice. BISYS
may rely upon the advice of counsel to the Trust or any other counsel
authorized by the Trust, and shall in no event be liable to the Trust or any
Fund or any shareholder or beneficial owner of the Trust for any action
reasonably taken pursuant to such advice.
15
As to the services to be provided hereunder, BISYS may rely
conclusively upon the terms of the Prospectuses and Statement of Additional
Information of the Trust relating to the relevant Funds to the extent that
such services are described therein, as well as the minutes of Board meetings
(if applicable) and other records of the Trust unless BISYS receives written
instructions to the contrary in a timely manner from the Trust or the
Administrator.
As to any matter covered by the Administration Agreement, BISYS
shall be authorized to act upon any instructions provided to it by the
Administrator that are not clearly inconsistent with the terms of this
Agreement. Also, BISYS shall be protected in acting upon any document, which
it reasonably believes to be genuine and to have been signed or presented by
the proper person or persons. BISYS will not be held to have notice of any
change of the Administrator's authority under the Administration Agreement,
or any change of authority of any officers, employees or agents of the Trust
or the Administrator until receipt of written notice thereof from the Trust
or the Administrator.
19. Compliance with Law.
Except for the obligations of BISYS set forth in Section 8
hereof, the Trust assumes full responsibility for the preparation, contents
and distribution of each prospectus of the Trust 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. BISYS shall have no obligation
to take cognizance of any laws relating to the sale of the Trust's shares.
BISYS will comply with all laws applicable to BISYS in connection with the
rendering of services under this Agreement.
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 Trust, to Bear Xxxxxxx Funds
Management, Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attn:
Xx. Xxxxx Maresea, with a copy to Kramer, Levin, Naftalis & Xxxxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attn: Xxx X. Xxxxx, Esq.; and if to BISYS,
to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000; Attn: President, 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. 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.
16
22. Governing Law and Matters Relating to the Trust as a
Massachusetts Business Trust.
This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the State of New York, subject to
any applicable provisions of the 1940 Act. 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 shall bind only the trust property of the Trust. The
execution and delivery of this Agreement have been authorized by the Board,
and this Agreement has been signed and delivered by an authorized officer of
the Trust, acting as such, and neither such authorization by the Board 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 as provided
in the Trust's Declaration of Trust.
23. Privacy.
Nonpublic personal financial information relating to consumers or
customers of the Trust provided by, or at the direction of the Trust to
BISYS, or collected or retained by BISYS to perform its duties shall be
considered confidential information. BISYS shall not give, sell or in any
way transfer such confidential information to any person or entity, other
than affiliates of BISYS except at the direction of the Trust or as required
or permitted by law. BISYS shall have in place and maintain physical,
electronic and procedural safeguards reasonably designed to protect the
security, confidentiality and integrity of, and to prevent unauthorized
access to or use of records and information relating to consumers or
customers of the Trust. The Trust represents to BISYS that it has adopted a
Statement of its privacy policies and practices as required by the
Commission's Regulation S-P and agrees to provide BISYS with a copy of that
statement annually.
24. Miscellaneous.
(a) Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or
interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the
parties hereto as to the subject matter covered by this
Agreement, and supercedes all prior negotiations,
understandings and agreements bearing upon the subject
matter covered herein.
(c) This Agreement may be executed in counterparts, each of
which shall be an original but all of which, taken
together, shall constitute one and the same agreement.
(d) No amendment to this Agreement shall be valid unless made
in writing and executed by both parties hereto. The
parties hereto may amend such procedures as may be set
forth herein by written agreement as may be
17
appropriate or practical under the circumstances, and BISYS
may conclusively assume that any special procedure which has
been approved by an executive officer of the Trust (other
than an officer or employee of BISYS) does not conflict with
or violate any requirements of the Trust's Declaration of
Trust, By-Laws or then-current prospectuses, or any rule,
regulation or requirement of any regulatory body.
(e) Every reference to a Fund will be deemed a reference solely
to the particular Fund (as set forth in Schedule A as may by
amended from time to time). Under no circumstances shall the
rights, obligations or remedies with respect to a particular
Fund constitute a right, obligation or remedy applicable to
any other Fund. In particular, and without otherwise
limiting the scope of this paragraph, BISYS shall not have
any right to set off claims of a Fund by applying the
property of any other Fund.
* * * * *
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE BEAR XXXXXXX FUNDS
By: _________________________________
Title: ________________________________
BISYS FUND SERVICES OHIO, INC.
By: ________________________________
Title: ________________________________
The Administrator hereby agrees to the
provisions set forth in Section 1 (e) of
this Agreement pertaining to
Sub-Administration services to be
rendered by BISYS:
BEAR XXXXXXX FUNDS MANAGEMENT INC.
BY: ____________________________________
Name: __________________________________
Title:
___________________________________
19
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
THE BEAR XXXXXXX FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
FUNDS
Prime Money Market Portfolio
Income Portfolio
High Yield Total Return Portfolio
Emerging Markets Debt Portfolio
Balanced Portfolio
International Equity Portfolio
Small Cap Value Portfolio
Large Cap Value Portfolio
Focus List Portfolio
The Insider Select Fund
S&P STARS Portfolio
S&P STARS Opportunity Portfolio
20
SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
THE BEAR XXXXXXX FUND
AND
BISYS FUND SERVICES OHIO, INC.
Administration/Fund Accounting
Fees
a. Asset-Based Fees
Asset Levels Fees*
------------ ------
Funds other than Money Market
Funds (as a complex)
Assets $0 - $3 Billion 3.50
Assets > $3 - $6 2.50
-
Billion
Assets > $6 Billion 1.50
Money Market Funds
(individually)
Assets $0 - $150 6.00
Million
Assets > $150 - $300 4.00
-
Million
Assets > $300 - $600 2.00
-
Million
Assets > $600 Million 1.00
- $1 Billion .85
Assets > $1 Billion
______________
*Fees are stated in basis points, and are applied as an annual rate based on
average net assets to the respective asset levels indicated above.
b. Minimum Fees
The asset-based fees set forth above are subject to an annual minimum fee of
$1,120,000 for the entire U.S. fund complex, which is subject to adjustment
as follows.
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In the event the total number of Funds and share classes subject to this
Agreement increases, the annual complex minimum shall increase by $88,500 for
each additional Fund and by $5,000 for each additional class of shares added
to a Fund, in each case which causes the total number of Funds or share
classes to exceed the existing totals of 12 Funds and 41 share classes. By
way of example, if a new Fund with two additional share classes is added (so
that the Fund has a total of three classes of shares), the minimum complex
fee would increase by $98,500, to $1,218,500.
In the event the total number of Funds and share classes subject to this
Agreement decreases, the complex minimum shall decrease by $88,500 for each
Fund removed from the complex and by $5,000 for any additional class of
shares that is removed from a Fund, in each case which causes the total
number of Funds or share classes to be reduced below the existing totals of
12 Funds and 43 share classes; provided, however, that under no circumstances
(regardless of the total number of Funds and share classes) shall the
complex-wide annual minimum fee be reduced to less than $810,000.
Out-of-Pocket Expenses
In addition to the above fees, BISYS shall be entitled to the reimbursement
of certain out-of-pocket expenses incurred in connection with its services,
as provided in Section 4 of this Agreement.
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