FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 29th day of December, 1999, by and
between XXXXXXXXXX CAPITAL TRUST (the "Trust"), a Delaware business trust having
its principal place of business at 1270 Avenue of the Americas, Xxxxx 000, Xxx
Xxxx, Xxx Xxxx 00000, and ULTIMUS FUND SOLUTIONS, LLC ("Ultimus"), a limited
liability company organized under the laws of the State of Ohio and having its
principal place of business at 0000 Xxxx Xxxxxx Xxxxx, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires that Ultimus perform certain fund accounting
services for each series of the Trust, listed on Schedule A attached hereto and
made part of this Agreement, as such Schedule A may be amended from time to time
(individually referred to herein as the "Portfolio" and collectively as the
"Portfolios"); and
WHEREAS, Ultimus 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. RETENTION OF ULTIMUS.
The Trust hereby retains Ultimus to act as the fund accountant of the Trust
and to furnish the Trust with the services as set forth below. Ultimus hereby
accepts such employment to perform such duties.
(a) MAINTENANCE OF BOOKS AND RECORDS.
Ultimus will keep and maintain the following books and records of each
Portfolio pursuant to Rule 31a-1 under the 1940 Act (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.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES.
In addition to the maintenance of the books and records specified above,
Ultimus shall perform the following accounting services daily for each
Portfolio:
(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
Portfolio's investment adviser or its designee, as approved by
the Trust's Board of Trustees (hereafter referred to as
"Trustees");
(iii)Verify and reconcile with the Portfolios' custodian all daily
trade activity;
(iv) Compute, as appropriate, each Portfolio's net income and capital
gains, dividend payables, dividend factors, yields, and weighted
average portfolio maturity;
(v) Review daily the net asset value calculation and dividend factor
(if any) for each Portfolio 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) Determine unrealized appreciation and depreciation on securities
held by the Portfolios;
(vii)Amortize premiums and accrete discounts on securities purchased
at a price other than face value, if requested by the Trust;
(viii)Update fund accounting system to reflect rate changes, as
received from a Portfolio's investment adviser, on variable
interest rate instruments;
(ix) Post Portfolio transactions to appropriate categories;
(x) Accrue expenses of each Portfolio according to instruction
received from the Trust's administrator;
(xi) Determine the outstanding receivables and payables for all (1)
security trades, (2) Portfolio share transactions and (3) income
and expense accounts;
(xii)Provide accounting reports in connection with the Trust's
regular annual audit and other audits and examinations by
regulatory agencies; and
(xiii)Provide such periodic reports as the parties shall agree upon.
(c) SPECIAL REPORTS AND SERVICES.
(i) Ultimus may provide additional special reports upon the request
of the Trust or a Portfolio's investment adviser, which may
result in an additional charge, the amount of which shall be
agreed upon between the parties.
(ii) Ultimus may provide such other similar services with respect to a
Portfolio 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 SERVICES.
Ultimus shall also perform the following additional accounting services for
each Portfolio:
(i) Provide monthly a set of financial statements for each Portfolio
as described below, upon request of the Trust:
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Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Security Purchases and Sales Journals
Portfolio Holdings Reports
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal excise tax
returns;
(B) the Trust's semi-annual reports with the Securities and
Exchange Commission ("SEC") on Form N-SAR;
(C) the Trust's annual, semi-annual and quarterly (if any)
shareholder reports;
(D) registration statements on Form N-1A and other filings
relating to the registration of shares;
(E) Ultimus' monitoring of the Trust's status as a regulated
investment Trust under Subchapter M of the Internal Revenue
Code, as amended;
(F) annual audit by the Trust's auditors; and
(G) examinations performed by the SEC.
2. SUBCONTRACTING.
Ultimus may, at its expense and subject to prior approval of the Trust,
which approval shall not be unreasonably withheld, subcontract with any entity
or person concerning the provision of the services contemplated hereunder;
provided, however, that Ultimus shall not be relieved of any of its obligations
under this Agreement by the appointment of such subcontractor and provided
further, that Ultimus shall be responsible, to the extent provided in Section 7
hereof, for all acts of such subcontractor as if such acts were its own.
3. COMPENSATION.
The Trust shall pay for the services to be provided by Ultimus under this
Agreement in accordance with, and in the manner set forth in, Schedule B
attached hereto, as such Schedule may be amended from time to time.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, Ultimus' compensation for that
part of the month in which the Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above. Payment
of Ultimus' compensation for the preceding month shall be made promptly.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Ultimus the fees described in Schedule B attached
hereto, the Trust agrees to reimburse Ultimus 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 Ultimus
in delivering materials to and from the Trust;
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(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by Ultimus in communication
with the Trust, the Trust's investment adviser or custodian, dealers
or others as required for Ultimus to perform the services to be
provided hereunder;
(c) The cost of obtaining security market quotes;
(d) All expenses incurred in connection with any custom programming or
systems modifications required to provide any special reports or
services requested by the Trust;
(e) Any expenses Ultimus shall incur at the written direction of an
officer of the Trust thereunto duly authorized other than an employee
or other affiliated person of Ultimus who may otherwise be named as an
authorized representative of the Trust for certain purposes; and
(f) Any additional expenses reasonably incurred by Ultimus in the
performance of its duties and obligations under this Agreement,
provided that any such expenses incurred by Ultimus on behalf of the
Trust shall be pre-approved by the Trust for all amounts in excess of
$500 per transaction/cost item.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Portfolio as of the
date first written above (or, if a particular Portfolio is not in existence on
that date, on the date such Portfolio commences operation) (the "Effective
Date").
6. TERM OF THIS AGREEMENT.
The term of this Agreement shall continue in effect, unless earlier
terminated by either party hereto as provided hereunder, for a period of two
years (the "Initial Term"). Thereafter, unless otherwise terminated as provided
herein, this Agreement shall be renewed automatically for successive one-year
periods.
This Agreement may be terminated without penalty: (i) by provision of
written notice of nonrenewal at least sixty (60) days prior to the end of the
Initial Term; (ii) by mutual agreement of the parties; (iii) for "cause" (as
defined herein) upon the provision of sixty (60) days' advance written notice by
the party alleging cause; (iv) at any time during the second year of this
Agreement upon the provision of sixty (60) days' advance written notice that the
Trust, or one of the Portfolios as the case may be, is to be liquidated and
terminated; or (v) at any time after the Initial Term, upon the provision of at
least sixty (60) days' advance written notice by either party.
For purposes of this Agreement, "cause" shall mean: (i) a material breach
of this Agreement that has not been remedied within thirty (30) days following
written notice of such breach from the non-breaching party, (ii) a series of
negligent acts or omissions or breaches of this Agreement which, in the
aggregate, constitute in the reasonable judgment of the Trust, a serious failure
to perform satisfactorily Ultimus' obligations hereunder; (iii) 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 (iv) financial difficulties on the part of
the party to be terminated which are evidenced by the authorization or
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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 the modification or alteration of the rights of
creditors.
Notwithstanding the foregoing, after such termination for so long as
Ultimus, with the written consent of the Trust, 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 Ultimus and unpaid by the Trust upon such termination
shall be immediately due and payable upon and notwithstanding such termination.
Ultimus shall be entitled to collect from the Trust, in addition to the
compensation described in Schedule B, the amount of all of Ultimus' cash
disbursements for services in connection with Ultimus' activities in effecting
such termination, including without limitation, the delivery to the Trust and/or
its designees of the Trust's property, records, instruments and documents. Cash
disbursements incurred by Ultimus on behalf of the Trust shall be pre-approved
by the Trust for all amounts in excess of $500 per cost item.
7. STANDARD OF CARE.
The duties of Ultimus shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against Ultimus
hereunder. Ultimus shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in performing the
services provided for under this Agreement. Ultimus shall be liable for any
damages arising directly or indirectly out of Ultimus' failure to perform its
duties under this Agreement to the extent such damages arise directly or
indirectly out of Ultimus' willful misfeasance, bad faith, negligence in the
performance of its duties, or reckless disregard of it obligations and duties
hereunder. (As used in this Article 7, the term "Ultimus" shall include
directors, officers, employees and other agents of Ultimus as well as Ultimus
itself.)
Without limiting the generality of the foregoing or any other provision of
this Agreement, (i) Ultimus shall not be liable for losses beyond its reasonable
control, provided that Ultimus has acted in accordance with the standard of care
set forth above; and (ii) Ultimus shall not be liable for the validity or
invalidity or authority or lack thereof of any instruction, notice or other
instrument that Ultimus reasonably believes to be genuine and to have been
signed or presented by a duly authorized representative of the Trust (other than
an employee or other affiliated persons of Ultimus who may otherwise be named as
an authorized representative of the Trust for certain purposes).
Ultimus may apply to the Trust at any time for instructions and may consult
with counsel for the Trust or its own counsel and with accountants and other
experts with respect to any matter arising in connection with Ultimus' duties
hereunder, and Ultimus 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
reasonable opinion of such counsel, accountants or other experts qualified to
render such opinion.
8. INDEMNIFICATION.
The Trust agrees to indemnify and hold harmless Ultimus from and against
any and all actions, suits, claims, losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) (collectively,
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"Losses") arising directly or indirectly out of any action or omission to act
which Ultimus takes (i) at any request or on the direction of or in reliance on
the reasonable advice of the Trust, (ii) upon any instruction, notice or other
instrument that Ultimus reasonably believes to be genuine and to have been
signed or presented by a duly authorized representative of the Trust (other than
an employee or other affiliated person of Ultimus who may otherwise be named as
an authorized representative of the Trust for certain purposes) or (iii) on its
own initiative, in good faith and in accordance with the standard of care set
forth herein, in connection with the performance of its duties or obligations
hereunder; provided, however that the Trust shall have no obligation to
indemnify or reimburse Ultimus under this Article 8 to the extent that Ultimus
is entitled to reimbursement or indemnification for such Losses under any
liability insurance policy described in this Agreement or otherwise.
Ultimus shall not be indemnified against or held harmless from any Losses
arising directly or indirectly out of Ultimus' own willful misfeasance, bad
faith, negligence in the performance of its duties, or reckless disregard of its
obligations and duties hereunder. (As used in this Article 8, the term "Ultimus"
shall include directors, officers, employees and other agents of Ultimus as well
as Ultimus itself.)
9. RECORD RETENTION AND CONFIDENTIALITY.
Ultimus shall keep and maintain on behalf of the Trust all books and
records which the Trust and Ultimus 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.
Ultimus further agrees that all such books and records shall be the property of
the Trust and to make such books and records available for inspection by the
Trust or by the SEC at reasonable times and otherwise to keep confidential all
books and records and other information relative to the Trust and its
shareholders; except when requested to divulge such information by
duly-constituted authorities or court process.
10. FORCE MAJEURE.
Ultimus 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, including acts of civil or military authority,
national emergencies, fire, flood, catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
11. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
All records and other data except computer programs and procedures
developed to perform services required to be provided by Ultimus are the
exclusive property of the Trust and all such records and data will be furnished
to the Trust in appropriate form as soon as practicable after termination of
this Agreement for any reason. Ultimus may at its option at any time, and shall
promptly upon the Trust's demand, turn over to the Trust and cease to retain
Ultimus' files, records and documents created and maintained by Ultimus pursuant
to this Agreement which are no longer needed by Ultimus 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 Ultimus 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.
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12. REPRESENTATIONS OF THE TRUST.
The Trust certifies to Ultimus that: (1) as of the close of business on the
Effective Date, each Portfolio 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.
13. REPRESENTATIONS OF ULTIMUS.
Ultimus represents and warrants that: (1) the various procedures and
systems which Ultimus 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 Ultimus'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 Ultimus and, when executed and delivered by Ultimus, will
constitute a legal, valid and binding obligation of Ultimus, enforceable against
Ultimus 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.
Ultimus shall furnish the Trust with pertinent information concerning the
professional liability insurance coverage that it maintains. Such information
shall include the identity of the insurance carrier(s), coverage levels and
deductible amounts. Ultimus shall notify the Trust should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. Ultimus 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 from
time to time as may be appropriate of the total outstanding claims made by
Ultimus under its insurance coverage.
15. INFORMATION TO BE FURNISHED BY THE TRUST.
The Trust has furnished to Ultimus the following:
(a) Copies of the Declaration of Trust 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:
(1) The Trust's Bylaws and any amendments thereto; and
(2) Certified copies of resolutions of the Trustees covering the
approval of this Agreement, authorization of a specified officer
of the Trust to execute and deliver this Agreement and
authorization for specified officers of the Trust to instruct
Ultimus thereunder.
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(c) A list of all the officers of the Trust, together with specimen
signatures of those officers who are authorized to instruct Ultimus in
all matters.
(d) Copies of the Prospectus and Statement of Additional Information for
each Portfolio.
16. AMENDMENTS TO AGREEMENT.
This Agreement, or any term thereof, may be changed or waived only by
written amendment signed by the party against whom enforcement of such change or
waiver is sought.
For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and Ultimus
may conclusively assume that any special procedure which has been approved by
the Trust does not conflict with or violate any requirements of its Declaration
of Trust or then current prospectuses, or any rule, regulation or requirement of
any regulatory body.
17. COMPLIANCE WITH LAW.
Except for the obligations of Ultimus otherwise set forth herein, 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. The Trust represents and warrants that no shares of the Trust will
be offered to the public until the Trust's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
18. 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, at 1270 Avenue of the
Americas, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxxx X. Xxxxxxx; and if
to Ultimus, at 0000 Xxxx Xxxxxx Xxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
00000, Attn: Xxxxxx X. Xxxxxx; or at such other address as such party may from
time to time specify in writing to the other party pursuant to this Section.
19. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be assignable
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.
20. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
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21. LIMITATION OF LIABILITY.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Board of Trustees of the Trust and not
individually and that the obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Trust (or if the matter relates only to a
particular Portfolio, that Portfolio), and the Ultimus shall look only to the
assets of the Trust, or the particular Portfolio, for the satisfaction of such
obligations.
22. MULTIPLE ORIGINALS.
This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
XXXXXXXXXX CAPITAL TRUST
By: /S/ XXXXXX X. XXXXXXX
---------------------
Title: PRESIDENT
------------------
ULTIMUS FUND SOLUTIONS, LLC
By: /S/ XXXXXX X. XXXXXX
----------------------
Title: PRESIDENT
------------------
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
XXXXXXXXXX CAPITAL TRUST
AND
ULTIMUS FUND SOLUTIONS, LLC
FUND PORTFOLIOS
---------------
VAL CAP MID CAP FUND
VAL CAP SMALL CAP FUND
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SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
XXXXXXXXXX CAPITAL TRUST
AND
ULTIMUS FUND SOLUTIONS, LLC
FEES AND EXPENSES
-----------------
FEES:
Ultimus shall be entitled to receive a fee from the Trust on the first
business day following the end of each month, or at such time(s) as Ultimus
shall request and the parties hereto shall agree, a fee computed with respect to
each Portfolio as follows:
Base fee per year = $30,000, plus
Asset based fee of:
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AVERAGE DAILY NET ASSETS ASSET BASED FEE
---------------------------------------------------
Up to $500 million .010%
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In excess of $500 million .005%
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The above base fee assumes one class of shares. For a Portfolio that offers
more than one class of shares, the base fee is $36,000.
Until such time as a Portfolio is publicly offered for sale, but in no case
later than July 31, 2000, the fee shall be a fixed price of $2,000 per month per
Portfolio, with no additional asset-based fee.
OUT-OF-POCKET EXPENSES:
The fees set forth above shall be in addition to the payment of
out-of-pocket expenses, as provided for in Section 4 of this Agreement.
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