ACCOUNTING SERVICES AGREEMENT
This Agreement, dated as of the 24th day of March , 1997, made by and
between THIRD AVENUE TRUST (the "Trust"), a Delaware business trust operating as
a registered investment company under the Investment Company Act of 1940, as
amended (the "Act"), and duly organized and existing under the laws of the State
of Delaware, and FPS SERVICES, INC. ("FPS"), a corporation duly organized and
existing under the laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Declaration of Trust ("Trust
Instrument") to issue separate series of shares representing interests in
separate investment portfolios (the "Series"), certain of which Series are
identified on Schedule "C" attached hereto and made a part hereof, and which
Schedule "C" may be amended from time to time by mutual agreement of the Trust
and FPS; and
WHEREAS, the Trust desires to appoint FPS as the Accounting Services
Agent for the Series to maintain and keep current the books, accounts, records,
journals and other records of original entry relating to the businesses of the
Series as set forth in this Agreement and in Schedule "A" attached hereto and
incorporated herein, and FPS desires to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties hereto, intending to be
legally bound, agree as follows:
Section 1. APPOINTMENT OF FPS. The Trust hereby appoints FPS as
Accounting Services Agent to the Series and FPS hereby accepts such appointment
and agrees to perform the duties hereinafter set forth.
In order that FPS may perform its duties under the terms of this
Agreement, the Board of Trustees of the Trust shall direct the officers,
investment adviser, legal counsel, independent accountants and custodian of the
Series to cooperate fully with FPS and, upon request of FPS, to provide such
information, documents and advice relating to the Series which FPS requires to
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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execute its responsibilities hereunder. In connection with its duties, FPS will
be entitled to rely, and will be held harmless by each Series when acting in
reasonable reliance, upon the instruction, advice or any documents relating to
that Series as provided to FPS by any of the aforementioned persons on behalf of
that Series. All fees charged by any such persons acting on behalf of a Series
will be deemed an expense of that Series.
Nothing in this Agreement will prevent FPS or any officer
thereof from providing the same or comparable services for or with any other
person, firm or corporation. While the services supplied to the Series may be
different than those supplied to other persons, firms or corporations, FPS will
provide the Series equitable treatment in supplying services. The Series
recognize that they will not receive preferential treatment from FPS as compared
with the treatment provided to other FPS clients.
SECTION 2. DEFINITIONS. Whenever used in this Agreement, or in any
amendment or supplement hereto, the following words and phrases will have the
following meanings, unless the context otherwise requires.
(a) "Authorized Person" will be deemed to include any person, whether
or not such person is an officer or employee of the Trust, duly authorized to
give Oral Instructions or Written Instructions on behalf of the Series by a
resolution of the Board of Trustees of the Trust, as may be received by FPS from
time to time.
(b) "Oral Instruction" will mean an authorization, instruction,
approval, item or set of data, or information of any kind transmitted to FPS in
person or by telephone, telegram, telecopy or other mechanical or documentary
means LACKING ORIGINAL SIGNATURE, by a person or persons reasonably identified
to FPS to be an Authorized Person to give Oral Instructions to FPS on behalf of
a Series.
(c) "Written Instruction" will mean an authorization, instruction,
approval, item or set of data or information of any kind transmitted to FPS in
an original writing CONTAINING AN ORIGINAL SIGNATURE or a copy of such document
transmitted by telecopy including transmission of such signature reasonably
identified to FPS to be the signature of a person or persons so authorized by a
resolution of the Board of Trustees of the Trust, or so identified by the Trust
to give Written Instructions to FPS on behalf of a Series.
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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The Trust will file with FPS a certified copy of each resolution of its
Board of Trustees authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
SECTION 3. DUTIES OF FPS. FPS will be responsible for administering
and/or performing those functions typically performed by a fund accounting agent
in accordance with the terms of each Series' current Prospectus and Statement of
Additional Information, applicable law and this Agreement, including without
limitation, those duties specified in Schedule "A" attached hereto.
SECTION 4. RECORD KEEPING AND OTHER INFORMATION. FPS will create and
maintain all records required of it pursuant to its duties hereunder and as set
forth in Schedule "A" in accordance with all applicable laws, rules and
regulations. All such records will be the property of the applicable Series and
will be available during regular business hours for inspection, copying and use
by the Series. Where applicable, such records will be maintained by FPS for the
periods and in the places required by Rule 31a-2 under the Act. Upon termination
of this Agreement, FPS will deliver all such records to the Trust or such person
as the Trust may designate.
In case of any request or demand for the inspection of the Share
records of a Series, FPS shall notify the Series and secure instructions as to
permitting or refusing such inspection. FPS may, however, exhibit such records
to any person in any case where it is advised by its counsel that it may be held
liable for failure to do so.
SECTION 5. OTHER DUTIES. In addition to the duties set forth in
Schedule "A," FPS may perform such other duties and functions, and will be paid
such amounts therefor, as may from time to time be agreed upon in writing
between the Trust and FPS. The compensation for such other duties and functions
will be reflected in a written amendment to Schedule "B" and the duties and
functions will be reflected in an amendment to Schedule "A," dated and signed by
an officer of the respective Parties hereto.
SECTION 6. RELIANCE BY FPS; INSTRUCTIONS.
(a) Provided the standard of care in Section 9 has been met,
FPS will have no liability when acting upon Written or Oral Instructions
believed to have been executed or
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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orally communicated by an Authorized Person and will not be held to have any
notice of any change of authority of any person until receipt of a Written
Instruction thereof from the Trust pursuant to Section 1(c).
(b) At any time, FPS may apply to any Authorized Person of the
Trust for Written Instructions and may seek advice from legal counsel for the
Trust, or its own legal counsel, with respect to any matter arising in
connection with this Agreement, and provided the standard of care in Section 9
has been met, it will not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Trust or for FPS. Written
Instructions requested by FPS will be provided by the Trust within a reasonable
period of time. In addition, FPS, its officers, agents or employees, will accept
Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Trust only if said representative is an
Authorized Person. The Trust agrees that all Oral Instructions will be followed
within one business day by confirming Written Instructions, and that the Trust's
failure to so confirm will not impair in any respect FPS' right to rely on Oral
Instructions. FPS will have no duty or obligation to inquire into, nor will FPS
be responsible for, the legality of any act done by it upon the request or
direction of a person reasonably believed by FPS to be an Authorized Person.
SECTION 7. DAYS OF OPERATION. Nothing contained in this Agreement is
intended to or will require FPS, in any capacity hereunder, to perform any
functions or duties on any day on which the New York Stock Exchange ("NYSE") is
closed. Functions or duties normally scheduled to be performed on such days will
be performed on, and as of, the next succeeding business day on which the NYSE
is open. Notwithstanding the foregoing, FPS will compute the net asset value of
each Series on each day required pursuant to Rule 22c-1 promulgated under the
Act.
SECTION 8. ACTS OF GOD, ETC. FPS will not be liable or responsible for
delays or errors caused by acts of God or by reason of circumstances beyond its
control, including acts of civil or military authority, national emergencies,
mechanical breakdown, insurrection, war, riots, or failure or unavailability of
transportation, communication or power supply, fire, flood or other
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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catastrophe.
In the event of equipment failures beyond FPS' control, FPS will, at no
additional expense to the Series, take reasonable steps to minimize service
interruptions but will have no liability with respect thereto. The foregoing
obligation will not extend to computer terminals located outside of premises
maintained by FPS. FPS will enter into and will maintain in effect with
appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available.
SECTION 9. DUTY OF CARE AND INDEMNIFICATION. FPS will be obligated to
exercise care and diligence and to act in good faith and to use its best efforts
within commercially reasonable limits to insure the accuracy and completeness of
all services performed under this Agreement.
FPS shall indemnify and hold the Trust and any of its Series harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributed to any action or
failure or omission to act by FPS as a result of FPS' lack of good faith,
negligence or willful misconduct.
Any person, even though also a director, officer, employee, shareholder
or agent of FPS, who may be or become an officer, trustee, employee or agent of
the Trust, will be deemed, when rendering services to the Series, or acting on
any business of the Trust (other than services or business in connection with
FPS' duties hereunder), to be rendering such services to or acting solely for
the Trust and not as a director, officer, employee, shareholder or agent of, or
one under the control or direction of FPS even though such person may be
receiving compensation from FPS.
Each Series shall indemnify and hold FPS harmless, together with its
directors, officers, employees, shareholders and agents from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which FPS may sustain or incur or which may
be asserted against FPS by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by FPS except
claims, demands, expenses and liabilities arising from willful misfeasance, bad
faith, negligence or reckless
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disregard on the part of FPS in the performance of its obligations and duties
under this Agreement; or
(ii) any action taken or omitted to be taken by FPS in
reliance upon any Certificate, instrument, order or stock certificate or other
document reasonably believed by FPS to be genuine and signed, countersigned or
executed by any duly Authorized Person, upon the Oral Instructions or Written
Instructions of an Authorized Person of the Trust, or upon the written opinion
of legal counsel for the Trust or FPS.
If a claim is made against any Party as to which such Party
may seek indemnity under this Section, such Party will notify the other Party
promptly after any written assertion of such claim threatening to institute an
action or proceeding with respect thereto and will notify the other Party
promptly of any action commenced against such Party within ten (10) days after
such Party has been served with a summons or other legal process, giving
information as to the nature and basis of the claim. Failure to notify the other
Party will not, however, relieve the other Party from any liability which it may
have on account of the indemnity under this Section so long as the other Party
has not been prejudiced in any material respect by such failure.
The Parties will cooperate in the control of the defense of
any action, suit or proceeding in which one Party is involved and for which
indemnity is being provided to such Party by the other Party. The indemnifying
Party may negotiate the settlement of any action, suit or proceeding subject to
the other Party's approval, which will not be unreasonably withheld. The other
Party reserves the right, but not the obligation, to participate in the defense
or settlement of a claim, action or proceeding with its own counsel. Costs or
expenses incurred by the other Party in connection with, or as a result of, such
participation will be borne solely by the indemnifying Party if:
(i) the other Party has received an opinion of counsel from
counsel to the indemnifying Party stating that the use of the indemnifying
Party's counsel by the other Party would present an impermissible conflict of
interest;
(ii) the defendants in, or targets of, any such action or
proceeding include both Parties, and legal counsel to the other Party has
reasonably concluded that there are legal
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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defenses available to it which are different from or additional to those
available to the indemnifying Party or which may be adverse to or inconsistent
with defenses available to the indemnifying Party (in which case the
indemnifying Party will not have the right to direct the defense of such action
on behalf of the other Party); or
(iii) the indemnifying Party authorizes the other Party to
employ separate counsel at the expense of the indemnifying Party.
The terms of this Section will survive the termination of this
Agreement.
SECTION 10. LIMITATION OF LIABILITY. FPS is expressly put on notice of
the limitation of liability as set forth in the Trust Instrument and agrees that
the obligations assumed by the Trust pursuant to this Agreement shall be limited
in any case to the Trust and its assets and that FPS shall not seek satisfaction
of any such obligations from the shareholders of the Trust, the Trustees,
officers, employees or agents of the Trust, or any of them.
SECTION 11. COMPENSATION. Each Series agrees to pay FPS compensation
for its services, and to reimburse it for expenses, at the rates, times and
amounts as set forth in Schedule "B" attached hereto and incorporated herein by
reference, and as will be set forth in any amendments to such Schedule "B"
agreed upon in writing by the Trust and FPS.
For the purpose of determining fees payable to FPS, the value of each
Series' net assets will be computed at the times and in the manner specified in
that Series' Prospectus and Statement of Additional Information then in effect.
FPS will transmit an invoice to each Series as soon as practicable after the end
of each calendar month which will be detailed in accordance with Schedule "B,"
and that Series will pay to FPS the amount of such invoice within ten (10) days
after its receipt of the invoice.
In addition, each Series agrees to pay, and will be billed separately
for, out-of-pocket expenses incurred by FPS with respect to such Series in the
performance of its duties hereunder. Out-of-pocket expenses will include, but
will not be limited to, the items specified in Schedule "B." Unspecified
out-of-pocket expenses will be limited to those out-of-pocket expenses
reasonably incurred by FPS in the performance of its obligations hereunder.
Reimbursement by a Series for expenses incurred by FPS in any month will be made
as soon as practicable but no later than ten (10) days after the receipt of an
itemized invoice from FPS.
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During the term of this Agreement, should the Trust seek services or
functions in addition to those outlined below or in Schedule "A" attached
hereto, a written amendment to this Agreement specifying the additional services
and corresponding compensation will be executed by both FPS and the Trust.
SECTION 12. TERM AND TERMINATION.
(a) The initial term of this Agreement (the "Initial Term") will be for
the period of one (1) year commencing on the date first above written and will
continue thereafter subject to termination by either Party as set forth in
subsection (c) below.
(b) The fee schedules set forth in Schedule "B" attached hereto will be
fixed for one (1) year commencing on the Effective Date of this Agreement and
will continue thereafter subject to their review and any adjustment.
(c) After the Initial Term of this Agreement, the Trust on behalf of
one or more of the Series or FPS may give written notice to the other of the
termination of this Agreement with respect to the Series identified in the
written notice, such termination to take effect at the time specified in the
notice, which date will not be less than one hundred eighty (180) days after the
date of receipt of such notice ( the "Notice Period"). Prior to the effective
termination date, each Series will pay to FPS such compensation as may be due as
of the date of termination and will likewise reimburse FPS for any out-of-pocket
expenses and disbursements reasonably incurred by FPS on behalf of each
applicable Series to such date.
(d) In connection with the termination of this Agreement, if a
successor to any of FPS' duties or responsibilities under this Agreement is
designated by the Trust by written notice to FPS, FPS will promptly, upon such
termination and at the expense of the Trust, transfer all records which belong
to the Trust and will provide reasonable cooperation in transferring such
records to the named successor.
(e) Should the Trust desire to move any of the services outlined in
this Agreement to a successor service provider prior to the expiration of the
Notice Period, FPS shall make a reasonable effort to facilitate the conversion
on such prior date; however, there can be no guarantee that FPS will be able to
facilitate a conversion of services prior to the end of the Notice Period.
Should services be converted to a successor service provider prior to the end of
the
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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Notice Period, or the Trust is liquidated or its assets merged with or purchased
by another entity, payment of fees to FPS shall be accelerated to a date prior
to the conversion or termination of services and calculated as if the services
had remained at FPS until the expiration of the Notice Period and at the asset
levels on the date of conversion or termination.
(f) Notwithstanding the foregoing, this Agreement may be terminated at
any time by either Party in the event of a material breach by the other Party
involving gross negligence, willful misfeasance, bad faith or a reckless
disregard of its obligations and duties under this Agreement and such breach, if
capable of being remedied, shall have remained unremedied for thirty (30) days
or more after receipt of written specification thereof.
SECTION 13. RIGHTS OF OWNERSHIP. All computer programs and procedures
developed to perform services required to be provided by FPS under this
Agreement are the property of FPS. All records and other data except such
computer programs and procedures are the exclusive property of the Series and
all such other records and data will be furnished to the Series in appropriate
form as soon as practicable after termination of this Agreement for any reason.
SECTION 14. AMENDMENTS TO DOCUMENTS. The Trust will furnish FPS written
copies of any amendments to, or changes in, the Trust's Declaration of Trust or
By-Laws, and each Series' Prospectus or Statement of Additional Information
forthwith upon such amendments or changes becoming effective. In addition, the
Trust agrees that no amendments will be made to the Prospectuses or Statement of
Additional Information of the Trust which have the effect of changing the
procedures employed by FPS in providing the services agreed to hereunder or
which amendment affects the duties of FPS hereunder unless the Trust first
obtains FPS' approval of such amendments or changes, which approval shall not be
unreasonably withheld or delayed.
SECTION 15. CONFIDENTIALITY. Both Parties hereto agree that any
non-public information obtained hereunder concerning the other Party is
confidential and may not be disclosed to any other person without the consent of
the other Party, except as may be required by applicable law or at the request
of the U.S. Securities and Exchange Commission or other governmental agency. FPS
agrees that it will not use any non-public information for any
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purpose other than performance of its duties or obligations hereunder. The
obligations of the Parties under this Section will survive the termination of
this Agreement. The Parties further agree that a breach of this Section would
irreparably damage the other Party and accordingly agree that each of them is
entitled, without bond or other security, to an injunction or injunctions to
prevent breaches of this provision.
SECTION 16. AMENDMENT. This Agreement may only be amended or modified by
a written instrument executed by both Parties.
SECTION 17. MISCELLANEOUS.
(a) Notices. Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Trust or FPS, will be
sufficiently given if addressed to that Party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
Third Avenue Trust
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxx X. Xxxxxxxxx, General Counsel
To FPS Services, Inc.:
FPS Services, Inc.
0000 Xxxxxxx Xxxxx
X.X. Xxx 00000
Xxxx xx Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, President
(b) Assignment. This Agreement will extend to and be binding
upon the Parties hereto and their respective successors and assigns; provided,
however, that this Agreement will not be assignable by the Trust without the
written consent of FPS or by FPS without the written consent of the Trust
authorized or approved by a resolution by its respective Boards of Directors and
Trustees.
(c) Governing Law. This Agreement will be governed exclusively
by the laws of the Commonwealth of Pennsylvania without reference to the choice
of law provisions
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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thereof.
(d) Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed to be an original; but such
counterparts will, together, constitute only one instrument.
(e) Captions. The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(f) Entire Agreement; Severability. This Agreement and the
Schedules attached hereto constitute the entire agreement of the Parties hereto
relating to the matters covered hereby and supersede any previous agreements. If
any provision is held to be illegal, unenforceable or invalid for any reason,
the remaining provisions will not be affected or impaired thereby.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
consisting in its entirety, of eleven typewritten pages, together with Schedules
"X," "X" and "C," to be signed by their duly authorized officers as of the day
and year first above written.
Third Avenue Trust on behalf of the FPS Services, Inc.
Series identified on Schedule C
By:------------------------ By:------------------------
Xxxxxx X. Xxxxxxx, President Xxxxxxx X. Xxxxx, President
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SCHEDULE "A"
ACCOUNTING & PORTFOLIO VALUATION
FOR
THIRD AVENUE TRUST
Dated: ------ --, 1997
I. SERVICES RELATED TO PORTFOLIO VALUATION AND ACCOUNTING
All financial data provided to, processed, and reported by FPS under
this Agreement shall be stated in U. S. dollars. FPS' obligation to
convert, equate or deal in foreign currencies or values extends only to
the accurate transposition of information received from the various
pricing and information services.
A. DAILY ACCOUNTING SERVICES
1. CALCULATE NET ASSET VALUE ("NAV") AND OFFERING PRICE PER
SHARE:
o Update the daily market value of securities held by the
Series using FPS' standard agents for pricing domestic
equity and bond securities. The domestic equity pricing
services employed by FPS are Reuters, Inc., Xxxxxx Data
Corporation, X.X. Xxxxx Co., Inc. and Interactive Data
Cor poration (IDC). Xxxxxx Data, Telerate Systems, Inc.,
X.X. Xxxxx Co., Inc. and IDC are employed by FPS for
bond and money market prices/yields. Bloomberg is
available and used for price research.
o Enter limited number of manual prices supplied by the
Series.
o Prepare NAV proof sheets. Review components of change in
NAV for reasonableness.
o Review variance reporting on-line and in hard copy for
price changes in individual securities using variance
levels established by the Series. Verify U.S. dollar
security prices exceeding variance levels by notifying
the Series and pricing sources of noted variances.
o Review for ex-dividend items indicated by pricing
sources; trace to Series' general ledger for agreement.
o Communicate required pricing information (NAV/Offering
Price) to the Trust's Advisor, agent performing
shareholder servicing and electronically to NASDAQ.
2. DETERMINE AND REPORT CASH AVAILABILITY TO TRUST BY
APPROXIMATELY 9:30 A.M. EASTERN TIME:
o Receive daily cash and transaction statements from the
Custodians
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by 8:30 a.m. Eastern time.
o Receive previous day shareholder activity reports from
the Trust's agents providing services related to
shareholders and share transactions by 8:30 a.m. Eastern
time.
o Fax hard copy of Cash Availability calculations with all
details to the Series.
o Supply the Series with 3-day cash projection report.
o Prepare and complete daily bank cash reconciliations
including documentation of any reconciling items and
notify the Series and the Custodians.
3. RECONCILE AND RECORD ALL DAILY EXPENSE ACCRUALS:
o Accrue expenses based on budget supplied by the Advisor
either as percentage of net assets or specific dollar
amounts.
o If applicable, monitor expense limitations established
by the Advisor.
o If applicable, accrue daily amortization of
organizational expense.
o If applicable, completed daily accrual of 12b-1
expenses.
4. VERIFY AND RECORD ALL DAILY INCOME ACCRUALS FOR DEBT ISSUES:
o Review and verify all system generated interest and
amortization reports.
o Establish unique security codes for bond issues to
permit segregated trial balance income reporting.
5. MONITOR DOMESTIC SECURITIES HELD FOR CASH DIVIDENDS,
CORPORATE ACTIONS AND CAPITAL CHANGES SUCH AS SPLITS,
MERGERS, SPINOFFS, ETC. AND PROCESS APPROPRIATELY.
o Monitor electronically received information from Xxxxxx
Data Corporation for all domestic securities.
o Review current daily security trades for dividend
activity.
o Interface with the Custodians to monitor timely
collection and postings of corporate actions, dividends
and interest.
6. ENTER ALL SECURITY TRADES ON INVESTMENT ACCOUNTING SYSTEM
(IAS) based on written instructions from Trust's Advisor.
o Review system verification of trade and interest
calculations.
o Verify settlement through the statements supplied by the
Custodians.
o Maintain security ledger transaction reporting.
o Maintain tax lot holdings.
o Determine realized gains or losses on security trades.
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o Provide complete broker commission reporting.
7. ENTER ALL FUND SHARE TRANSACTIONS ON IAS:
o Process activity identified on reports supplied by the
Trust's agent providing services related to shareholders
and share transactions.
o Verify settlement through the statements supplied by the
Trust's Custodians.
o Reconcile report balances to the Trust's agent providing
services related to shareholders and share transactions.
8. PREPARE AND RECONCILE/PROVE ACCURACY OF THE DAILY TRIAL
BALANCE (listing all asset, liability, equity, income and
expense accounts)
o Post manual entries to the general ledger.
o Post custodian bank activity.
o Post shareholder and security transactions.
o Post and verify system generated activity, i.e., income
and expense accruals.
o Prepare Series' general ledger net cash proof used in
NAV calculation.
9. REVIEW AND RECONCILE WITH CUSTODIANS' STATEMENTS:
o Verify all posted interest, dividends, expenses, and
shareholder and security payments/receipts, etc.
(Discrepancies will be reported to and resolved by the
Custodians.)
o Post all cash settlement activity to the Trial Balance.
o Reconcile to ending cash balance accounts.
o Clear IAS subsidiary reports with settled amounts.
o Track status of past due items and failed trades
handled by the Custodians.
10. SUBMISSION OF DAILY ACCOUNTING REPORTS TO SERIES:
(Additional reports readily available.)
o Trial Balance
o Portfolio Valuation (listing inclusive of holdings,
costs, market values, unrealized appreciation/
depreciation and percentage of portfolio comprised of
each security).
o NAV Calculation Report.
o Cash availability and 3-day Cash Projection Report.
B. MONTHLY ACCOUNTING SERVICES
1. FULL FINANCIAL STATEMENT PREPARATION (automated Statement of
Assets and
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Liabilities, Statement of Operations and Statement of
Changes in Net Assets) and submission to Advisor by 10th
business day.
2. SUBMISSION OF MONTHLY AUTOMATED IAS REPORTS TO ADVISOR:
o Security Purchase/Sales Journal
o Interest and Maturity Report
o Brokers Ledger (Commission Report)
o Security Ledger Transaction Report with Realized
Gains/Losses
o Security Ledger Tax Lot Holdings Report
o Additional reports available upon request
3. RECONCILE ACCOUNTING ASSET LISTING TO CUSTODIAN ASSET
LISTING:
o Report any security balance discrepancies to the
applicable Custodians and the Advisor.
4. PROVIDE MONTHLY ANALYSIS AND RECONCILIATION OF ADDITIONAL
TRIAL BALANCE ACCOUNTS,
such as:
o Security cost and realized gains/losses
o Interest/dividend receivable and income
o Payable/receivable for securities purchased and sold
o Payable/receivable for Series' shares; issued and
redeemed
o Expense payments and accruals analysis
5. If Appropriate, Prepare and Submit to the Trust (additional
fees may apply):
o SEC yield reporting (non-money market funds with
domestic and ADR securities only).
o Income by state reporting.
o Standard Industry Code Valuation Report.
o Alternative Minimum Tax Income segregation schedule.
C. ANNUAL (AND SEMI-ANNUAL) ACCOUNTING SERVICES
1. Annually assist and supply auditors with schedules
supporting securities and shareholder transactions, income
and expense accruals, etc. during the year in accordance
with standard audit assistance requirements.
2. Provide semi-annual N-SAR Reporting (Accounting Questions):
If applicable for the Series, answer the following items: 2,
12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53,
55, 62, 63, 64B,
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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71, 72, 73, 74, 75 and 76.
D. ACCOUNTS AND RECORDS
On each day the NYSE is open for regular trading and subject to the
proper receipt (via Oral or Written Instructions) by FPS of all
information required to fulfill its duties under this Agreement, FPS
will maintain and keep current the following Accounts and Records and
any other records required to be kept pursuant to Rule 31a-1 of the Act
relating to the business of the Series in such form as may be mutually
agreed upon between the Trust and FPS:
(1) Net Asset Value Calculation Reports;
(2) Cash Receipts Report;
(3) Cash Disbursements Report;
(4) Dividends Paid and Payable Schedule;
(5) Purchase and Sales Journals - Portfolio Securities;
(6) Subscription and Redemption Reports;
(7) Security Ledgers - Transaction Report and Tax Lot
Holdings Report;
(8) Broker Ledger - Commission Report;
(9) Daily Expense Accruals;
(10) Daily Interest Accruals;
(11) Daily Trial Balance;
(12) Portfolio Interest Receivable and Income Reports;
(13) Portfolio Dividend Receivable and Income Reports;
(14) Listing of Portfolio Holdings - showing cost, market
value and percentage of portfolio comprised of each
security; and
(15) Average Daily Net assets provided on monthly basis.
E. PROTOCOL CONCERNING ACCURACY OF PRICING PORTFOLIO SECURITIES
FPS shall perform the ministerial calculations necessary to calculate
the net asset value each day that the New York Stock Exchange is open
for business, in accordance with; (i) the current Prospectus and
Statement of Additional Information for each Series, and (ii)
procedures with respect thereto approved by the Board of Trustees of
the Trust and supplied in writing to FPS. Portfolio items for which
market quotations are available by FPS' use of an automated financial
information service (the "Service") shall be based on the closing
prices of such Service except where a Series or the Advisor has given
or caused to be given specific Written or Oral Instructions to utilize
a different value subject to the appropriate provisions in each Series'
Prospectus and Statement of Additional Information then in effect. All
of the portfolio securities shall be given such values as the
applicable Series or the Advisor provides by Written or Oral
Instructions including all restricted securities and other securities
requiring valuation not readily ascertainable
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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solely by such Service subject to the appropriate provisions in the
Series' Prospectus and Statement of Additional Information then in
effect.
FPS will have no responsibility or liability for (i) the accuracy of
prices quoted by such Service; (ii) the accuracy of the information
supplied by the a Series; or (iii) any loss, liability, damage, or cost
arising out of any inaccuracy of such data. FPS will have no
responsibility or duty to include information or valuations to be
provided by a Series in any computation unless and until it is timely
supplied to FPS in usable form. FPS will record corporate action
information as received from the Custodians, the Service or a Series.
FPS will not have any duty to gather or record corporate action
information not supplied by these sources.
FPS will assume no liability for price changes caused by the Advisor or
any subadvisor, Custodian, suppliers of security prices, corporate
action and dividend information, or any party other than FPS itself.
F. PROTOCOL REGARDING RECEIPT OF INSTRUCTIONS
For all purposes under this Agreement, FPS is authorized to act upon
receipt of the first of any Written or Oral Instruction it receives
from the Trust on behalf of a Series or its agents on behalf of the
Trust. In cases where the first instruction is an Oral Instruction that
is not in the form of a document or written record, a confirmatory
Written Instruction or Oral Instruction in the form of a document or
written record will be delivered, and in cases where FPS receives an
Instruction, whether Written or Oral, to enter a portfolio transaction
on the records, the Trust will cause the broker/dealer to send a
written confirmation to the Custodian. FPS will be entitled to rely on
the first Oral or Written Instruction received and any act or omission
undertaken in compliance therewith will be free of liability and fully
indemnified and held harmless by the applicable Series, provided,
however, that in the event a Written or Oral Instruction received by
FPS is countermanded by a subsequent Written or Oral Instruction
received by FPS prior to acting upon such countermanded Instruction,
FPS will act upon such subsequent Written or Oral Instruction. The sole
obligation of FPS with respect to any follow-up or confirmatory Written
Instruction or Oral Instruction in documentary or written form will be
to make reasonable efforts to detect any such discrepancy between the
original Instruction and such confirmation and to report such
discrepancy to the applicable Series. The Series will be responsible,
at the Series' expense, for taking any action, including any
reprocessing, necessary to correct any discrepancy or error. To the
extent such action requires FPS to act, the Trust will give FPS
specific Written Instruction as to the action required.
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
J:\WDATA\ADMIN\THIRD AVENUE\CONTRACT\ASU.AGR; March 21, 1997 Schedule "A"
II. ASSUMPTIONS REGARDING PORTFOLIO VALUATION AND ACCOUNTING
--------------------------------------------------------
(The Fees as set forth in Schedule "B" are based on the following
assumptions. To the extent these assumptions are inaccurate or
requirements change, fee revisions may be necessary.)
BASIC ASSUMPTIONS:
------------------
1. The Series' portfolio asset composition will be primarily
domestic equities. Trading activity is expected to be moderate
with an annual turnover rate not to exceed 100%.
2. Each Series has a tax year-end which coincides with its fiscal
year-end. No additional accounting requirements are necessary
to identify or maintain book-tax differences. FPS does not
provide security tax accounting which differs from its book
accounting under this fee schedule.
3. Each Series agrees to the use of FPS' standard current pricing
services for domestic equity and debt securities.
It is assumed that FPS will work closely with each Series to
ensure the accuracy of the Series' NAV and to obtain the most
satisfactory pricing sources and specific methodologies prior
to the actual start-up date. Each Series will establish
security variance procedures to minimize NAV miscalculations.
4. To the extent a Series requires a limited number of daily
security prices from specific brokers for domestic securities
(as opposed to pricing information received electronically),
these manual prices will be obtained by the Series' Advisor
and faxed to FPS by 4:00 p.m. Eastern time for inclusion in
the NAV calculations. The Advisor will supply FPS with the
appropriate pricing contacts for these manual quotes.
5. Procedural discussions between FPS and a Series are required
to clarify the appropriate pricing and dividend rate sources
if the Series invests in open-end regulated investment
companies (RIC's). Depending on the methodologies selected by
the Series, additional fees may apply.
6. FPS will supply daily Portfolio Valuation Reports to each
Series' Advisor identifying current security positions,
original/amortized cost, security market values and changes in
unrealized appreciation/depreciation. It will be the
responsibility of the Advisor to review these reports and to
promptly notify FPS of any possible problems, trade
discrepancies, incorrect security prices or corporate
action/capital change information that could result in a
misstated NAV.
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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7. The Series do not currently expect to invest in swaps,
futures, xxxxxx or derivatives. To the extent these investment
strategies should change, additional fees will apply after the
appropriate procedural discussions have taken place between
FPS and Series management. (Two weeks advance notice is
required should the Series commence trading in these
investments.)
8. Each Series will supply FPS with critical income information
such as accrual methods, interest payment frequency details,
coupon payment dates, floating rate reset dates, and complete
security descriptions with issue types and CUSIP numbers for
all debt issues. If applicable, the Series' Advisor shall
supply the yield to maturity and related cash flow schedules
for any mortgage/asset-backed securities held in the Series.
9. The Advisor will supply/support FPS in timely receipt of
dividend information and return of capital characterization
for the REITs held in each Series. To the extent applicable,
FPS will maintain on a daily basis U.S. dollar-denominated
qualified covered call options and index options reporting on
the daily Trial Balance and value the respective options and
underlying positions. This Agreement does not provide for tax
classifications if they are required.
10. Each Series is responsible for the establishment and
monitoring of any segregated accounts pertaining to any Line
of Credit for temporary administrative purposes, and/or
leveraging the portfolio. FPS will reflect appropriate Trial
Balance account entries and interest expense accrual charges
on the daily Trial Balance adjusting as necessary at
month-end.
11. If a Series commences participation in security lending or
short sales within its portfolio securities, additional fees
may apply. Should a Series require these additional services,
procedural discussions must take place between FPS and the
Series' Advisor to clarify responsibilities. (Two weeks
advance notice to FPS is required should a Series desire to
participate in the above.)
12. Each Series will supply FPS with portfolio specific expense
accrual procedures and monitor the expense accrual balances
for adequacy based on outstanding liabilities monthly.
13. Specific deadlines will be met and complete information will
be supplied by each Series in order to minimize any settlement
problems, NAV miscalculations or income accrual adjustments.
Each Series will direct its Advisor to provide Trade
Authorization Forms to FPS
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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with the appropriate officer's signature on all security
trades placed by the Series no later than 12:30 p.m. Eastern
time on settlement/value date for short term money market
securities issues (assuming that trade date equals settlement
date); and by 11:00 a.m. Eastern time on trade date plus one
for non-money market securities. Receipt by FPS of trade
information within these identified deadlines may be via
telex, fax or on-line system access. The Advisor will supply
FPS with the trade details in accordance with the above stated
deadlines.
The Advisor will provide all information required by FPS,
including CUSIP numbers and/or ticker symbols for all U.S.
dollar-denominated trades on the Trade Authorization, telex or
on-line support. FPS will supply the Advisor with recommended
trade ticket documents to minimize receipt of incomplete
information. FPS will not be responsible for NAV changes or
distribution rate adjustments that result from incomplete
trade information.
14. To the extent a Series utilizes purchases in-kind (U.S. dollar
denominated securities only) as a method for shareholder
subscriptions, FPS will provide the Series with procedures to
properly handle and process such transactions. Should a Series
prefer procedures other than those provided by FPS, additional
fees may apply. Discussions shall take place at least two
weeks in advance between FPS and the Series to clarify the
appropriate in-kind operational procedures to be followed.
15. The Parties will establish mutually agreed upon amortization
procedures and accretion requirements for debt issues held by
the Series prior to commencement of operations. Adjustments
for financial statements regarding any issues with original
issue discount (OID) are not included under this Agreement.
Each Series will direct its independent auditors to complete
the necessary OID adjustments for financial statements and/or
tax reporting.
16. No Series is currently expected to issue separate classes of
shares. To the extent it does, additional fees will be
negotiated.
17. Each Series shall direct its Custodian to provide FPS with
daily custodian statements (or on-line access to the custody
system) reflecting all prior day cash activity on behalf of
each portfolio by 8:30 a.m. Eastern time. Complete
descriptions of any postings, inclusive of Sedol/CUSIP
numbers, interest/dividend payment dates, capital stock
details, expense authorizations, beginning/ending cash
balances, etc. will be provided by the Custodian's reports or
system.
18. Each Series shall direct its Custodian to supply the dividend,
capital change information and interest rate changes to FPS in
a timely manner. The Advisor
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will supplement and support as appropriate.
19. Each Series shall direct its Custodian to handle and report
upon all settlement problems, failed trades and resolve
unsettled dividends/interest/pay downs and capital changes.
The Custodians will process all applicable capital change
paperwork based upon the advice from the Advisor. FPS agrees
to supply segregated Trial Balance reporting and supplemental
reports to assist in this process.
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
J:\WDATA\ADMIN\THIRD AVENUE\CONTRACT\ASU.AGR; March 21, 1997 Schedule "A"
SCHEDULE "B"
ACCOUNTING SERVICES AGENT FEE SCHEDULE
FOR
THIRD AVENUE TRUST
Dated: ------ --, 1997
THIS FEE SCHEDULE IS FIXED FOR THE INITIAL TERM AS THAT TERM IS DEFINED IN
THE AGREEMENT.
I. FEES RELATED TO PORTFOLIO VALUATION AND ACCOUNTING
A. ANNUAL FEE SCHEDULE FOR THE THIRD AVENUE VALUE FUND(U.S.
DOLLAR-DENOMINATED SECURITIES ONLY)(1/12TH PAYABLE MONTHLY IN
ADVANCE BASED ON THE PRIOR MONTH'S AVERAGE DAILY NET ASSETS):
$24,000 Minimum to $ 10 Million of Average Net Assets
.0004 On the Next $ 40 Million of Average Net Assets
.0003 On the Next $ 50 Million of Average Net Assets
.0001 On the Next $100 Million of Average Net Assets
.00005 On the Next $800 Million of Average Net Assets
.000025 Over $ 1 Billion of Average Net Assets
If the Fund holds 10 or less non-U.S. Dollar denominated securities,
the fee schedule will remain unchanged.
If the Fund purchases more than 10 non-U.S. dollar denominated
securities, the annual minimum of the Series will increase from
$24,000 to $34,000.
If the Fund holds more than 50% of its securities in non-U.S. dollar
denominated assets, the annual minimum of the Series will increase
from $24,000 to $40,000.
B. Annual Fee Schedule for the Third Avenue Small-Cap Value Fund(U.S.
DOLLAR-DENOMINATED SECURITIES ONLY)(1/12TH PAYABLE MONTHLY IN ADVANCE
BASED ON THE PRIOR MONTH'S AVERAGE DAILY NET ASSETS):
$24,000 Minimum to $ 20 Million of Average Net Assets
.0003 On the Next $ 30 Million of Average Net Assets
.0002 On the Next $ 50 Million of Average Net Assets
.0001 On the Next $100 Million of Average Net Assets*
If the Fund holds 10 or less non-U.S. Dollar denominated securities,
the fee Schedule will remain unchanged.
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
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If the Fund purchases more than 10 non-U.S. dollar denominated
securities, the annual minimum of the Series will increase
from $24,000 to $34,000. If the Fund holds more than 50% of
its securities in non-U.S. dollar denominated assets, the
annual minimum of the Series will increase from $24,000 to
$40,000.
*When the assets reach $200 million, fees will be subject to
further negotiation.
C. Pricing Services Quotation Fee (based on individual CUSIP or
security identification number.) Specific costs will be identified
based upon options selected by each Series and will be billed
monthly.
=======================================================================================================
XXXXXX DATA INTERACTIVE X.X. XXXXX
SECURITY TYPES CORP.* DATA CORP.* CO., INC.
-------------------------------------------------------------------------------------------------------
Government Bonds $ .50 $ .50 $ .25 (a)
Mortgage-Backed (evaluated, seasoned, closing) .50 .50 .25 (a)
Corporate Bonds (short and long term) .50 .50 .25 (a)
U.S. Municipal Bonds (short and long term) .55 .80 .50 (b)
CMO's/ARM's/ABS 1.00 .80 1.00 (a)
Convertible Bonds .50 .50 1.00 (a)
High Yield Bonds .50 .50 1.00 (a)
Mortgage-Backed Factors (per Issue per Month) 1.00 n/a n/a
Domestic Equities (d) .15 n/a
Domestic Options n/a .15 n/a
Domestic Dividends & Capital Changes (d) 3.50 n/a
(per Issue per month)
Foreign Securities .50 .50 n/a
Foreign Securities Dividends & Capital Changes
(per Issue per Month) 2.00 4.00 n/a
Set-up Fees n/a n/a(e) .25 (c)
All Added Items n/a n/a .25 (c)
=======================================================================================================
* Based on current Vendor costs, subject to change. Costs are
quoted based on individual security CUSIP/identifiers and are
per issue per day.
(a) $35.00 per day minimum
(b) $25.00 per day minimum
(c) $ 1.00, if no CUSIP
(d) At no additional cost to FPS clients
(e) Interactive Data also charges monthly
transmission costs and disk storage charges.
1) Futures and Currency Forward Contracts - $2.00 per Issue per Day
2) Reuters, Inc.*
*Based on current vendor costs, subject to change. FPS
does not currently pass along the charges for the domestic
security prices supplied by Reuters, Inc.
3) Telerate Systems, Inc.* (IF APPLICABLE)
*Based on current vendor costs, subject to change.
Specific costs will be identified based upon options selected
and will be billed monthly.
D. SEC Yield Calculation: (IF APPLICABLE)
-- --------------------------------------
Provide up to 12 reports per year to reflect the yield calculations
for non-money market funds required by the SEC, $1,000 per year per
fund. For multiple class funds, $1,000 per year per class. Daily SEC
yield reporting is available at $3,000 per year per fund (U.S.
DOLLAR-DENOMINATED SECURITIES ONLY).
II. OUT-OF-POCKET EXPENSES
--- ----------------------
Each Series will reimburse FPS monthly for all applicable out-of-pocket
expenses which include, but are not limited to, the following: postage,
telecommunications (telephone, fax, on-line access), special reports,
transmissions, approved record retention, pre-approved travel expenses and
copying and sending materials to auditors and/or regulatory agencies for
off-site examinations.
III. ADDITIONAL SERVICES
---- -------------------
Activities of a non-recurring nature, including but not limited to,
shareholder in-kinds, fund consolidations, mergers, acquisitions,
reorganizations are not included herein, and will be quoted separately. To
the extent the Advisor should decide to issue additional separate classes of
shares, additional fees will apply. Any enhanced services, programming
requests or reports will be quoted upon request.
To the extent the a Series commences using investment techniques such as
security lending, short sales, swaps, futures, leveraging, reverse
repurchase agreements and foreign securities, additional fees will be
negotiated.
SCHEDULE "C"
Dated: ------ --, 1997
Identification of Series
------------------------
Below are listed the "Series" of Third Avenue Trust to which services under this
Agreement are to be performed as of the execution date of the Agreement:
1. Third Avenue Value Fund
2. Third Avenue Small-Cap Value Fund
This Schedule "C" may be amended from time to time by agreement of the Parties.
Third Avenue Trust FPS Services, Inc.
By: By:
--------------------------- ---------------------------
Xxxxxx X. Xxxxxxx, President Xxxxxxx X. Xxxxx, President
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Accounting Services Agreement between Third Avenue Trust and FPS Services, Inc.
Schedule "C"
