1
Exhibit 9(c)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 16th day of January, 1997, between FIVE ARROWS
SHORT-TERM INVESTMENT TRUST (the "Trust"), a Delaware business trust and BISYS
FUND SERVICES, INC. ("Fund Accountant"), a corporation organized under the laws
of the State of Delaware.
WHEREAS, Fund Accountant is an affiliate of Five Arrows Fund Distributors
Inc., BISYS Fund Services Limited Partnership and BISYS Fund Services (Ireland)
Limited (each such entity and any other entity hereafter providing services
under a BISYS Agreement (as defined below) is hereinafter referred to as a
"BISYS Entity"); and
WHEREAS, concurrently herewith, Fund Accountant and the other BISYS
Entities are entering into other agreements to provide services to the Trust,
The International Currency Fund, and Five Arrows Cash Management Fund PLC (such
agreements and any other comparable agreements in effect from time to time
being referred to collectively as the "BISYS Agreements"); and
WHEREAS, the Trust desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Trust, all as now or
hereafter may be established from time to time (individually referred to herein
as the "Fund" and collectively as the "Funds"); and
WHEREAS, Fund Accountant is willing to perform such services on the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Fund Accountant.
(a) Maintenance of Books and Records. Fund Accountant will keep and
maintain the following books and records of each Fund pursuant to
Rule 31a-1 under the Investment Company Act of 1940 (the "Rule"):
(i) Journals containing an itemized daily record in detail of
all purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts,
including interest accrued and interest received, as
required by subsection (b)(2)(I) of the Rule;
2
(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, Fund
Accountant shall perform the following accounting services daily
for each Fund:
(i) Calculate the net asset value per share utilizing prices
obtained from the sources described in subsection 1(b)(ii)
below;
(ii) Obtain security prices from independent pricing services, or
if such quotes are unavailable, then obtain such prices from
each Fund's designee, as approved by the Trust's Board of
Trustees;
(iii) Reconcile with the Funds' custodian all daily trade
activity;
(iv) Compute, as appropriate, each Fund's net income and capital
gains, dividend payables, dividend factors, 7-day yields,
7-day effective yields, 30-day yields, and weighted average
portfolio maturity;
(v) Review daily the net asset value calculation and dividend
factor (if any) for each Fund prior to release to
shareholders, check and confirm the net asset values and
dividend factors for reasonableness and deviations, and
distribute net asset values and yields to NASDAQ;
(vi) Post Fund transactions to appropriate categories;
(vii) Accrue expenses of each Fund according to instructions
received from the Trust's Administrator;
(viii) Determine the outstanding receivables and payables for all
(1) security trades, (2) Fund share transactions and (3)
income and expense accounts;
(ix) Provide accounting reports in connection with the Trust's
regular annual audit and other audits and examinations by
regulatory agencies; and
(x) Provide such periodic reports as the parties shall agree
upon, as set forth in a separate schedule.
3
(c) Special Reports and Services.
(i) Fund Accountant may provide additional special reports upon
the request of the Trust, which may result in an additional
charge, the amount of which shall be agreed upon between the
parties.
(ii) Fund Accountant 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 Services. Fund Accountant shall also perform
the following additional accounting services for each Fund:
(i) Provide monthly a download (and hard copy thereof) of the
financial statements described below, upon request of the
Trust. The download will include the following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information 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) the Administrator's monitoring of the Trust's status as
a regulated investment company 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.
4
2. Delegation.
The Trust consents to the appointment of the Fund Accountant's affiliate
BISYS Fund Services (Ireland) Limited ("BISYS Ireland") to provide certain
services under this Agreement and the Trust further agrees that the Fund
Accountant may delegate the responsibility to perform certain services to be
provided under this Agreement to non-affiliated third parties with the express
prior written consent of the Trust, provided that, to the extent that the
services delegated involve only such ministerial tasks as are routinely and
commonly delegated by similarly situated service providers, such consent shall
not be unreasonably withheld; provided, however, that Fund Accountant shall be
fully responsible for the acts and omissions of BISYS Ireland and its other
delegates and shall not be relieved of any of its responsibilities hereunder by
any such delegation.
3. Compensation.
For so long as the Trust invests all of its investable assets in the
International Currency Fund, the Trust shall not pay Fund Accountant a fee for
the services to be provided by Fund Accountant under this Agreement.
4. Reimbursement of Expenses.
In addition to paying Fund Accountant the fees described in Section 3
hereof, the Trust agrees to reimburse Fund Accountant for the following
out-of-pocket expenses incurred in providing services hereunder, including:
(a) All freight and other delivery and bonding charges incurred by Fund
Accountant in delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by Fund Accountant in
fulfillment of its obligations under this Agreement, other than
expenses incurred in communicating with other BISYS Entities and
any other affiliates;
(c) The cost of obtaining security market quotes pursuant to Section
l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other materials;
and
(e) Any expenses Fund Accountant shall incur at the written direction
of an officer of the Trust thereunto duly authorized.
5
5. Effective Date.
This Agreement shall become effective with respect to a Fund as of the
date first written above (or, if a particular Fund is not in existence on that
date, on the date such Fund commences operation) (the "Effective Date").
6. Term.
This Agreement shall continue in effect with respect to a Fund, unless
earlier terminated by either party hereto as provided hereunder, until
January 16, 1999 (the Initial Term"). Thereafter, if not earlier terminated as
herein provided, it shall continue from year to year so long as such
continuance with respect to any such Fund is approved at least annually by the
Trustees of the Trust. Notwithstanding the foregoing, this Agreement may be
terminated by either party, without payment of any penalty, except for the
liquidated damages described below, at any time with respect to any Fund upon
not less than sixty (60) days' prior written notice to the other party.
Notwithstanding the foregoing after such termination for so long as Fund
Accountant, 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 Fund Accountant and unpaid by the Trust
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. Fund Accountant shall be entitled to collect
from the Trust, in addition to the compensation described under Section 3
hereof, the amount of all of Fund Accountant's cash disbursements for services
in connection with Fund Accountant's 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, or any copies
thereof. Subsequent to such termination, for a reasonable fee, Fund Accountant
shall deliver to the Trust to any Trust documents or records remaining in its
possession.
7. Standard of Care; Reliance on Records and Instructions;
Indemnification.
Fund Accountant shall use its best efforts to insure the accuracy of all
services performed under this Agreement, but shall not be liable to the Trust
for any action taken or omitted by Fund Accountant in the absence of bad faith,
willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties. A Fund agrees to indemnify and hold harmless Fund
Accountant, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Fund Accountant's actions
taken or nonactions with respect to the performance of services under this
Agreement with respect to such Fund or based, if applicable, upon reasonable
reliance on information, records, instructions or requests with respect to such
Fund given or made to Fund Accountant by a duly authorized representative of
the Trust; provided that this indemnification shall not apply to actions or
omissions of Fund Accountant in cases of its own bad faith, willful
misfeasance, negligence or from reckless disregard by it of its
6
obligations and duties.
For purposes of this Agreement, actions or omissions by any BISYS Entity
or its employees, agents, directors, officers or nominees made in any capacity
shall be deemed to be actions or omissions by Fund Accountant. Any actions or
omissions by a person who is both an officer or employee of the Trust and an
officer or employee of any BISYS Entity shall be deemed to have been committed
solely in such person's capacity as an officer or employee of such BISYS
Entity.
The Trust's agreement to indemnify Fund Accountant, its partners and
employees and any such controlling person, as aforesaid, is expressly
conditioned upon the Trust being notified of any action brought against Fund
Accountant, its partners or employees, or any such controlling person, such
notification to be given in accordance with Section 19 hereof within 10 days
after the summons or other first legal process shall have been served. The
failure to so notify the Trust of any such action shall not relieve the Trust
from any liability which the Trust may have to the person against whom such
action is brought by reason of any such untrue, or allegedly untrue, statement
or omission, or alleged omission, otherwise than with respect to incremental
liabilities resulting from such failure. The Trust will be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but, in such case, such defense shall be conducted by counsel of good standing
chosen by the Trust and approved by Fund Accountant, which approval shall not
be unreasonably withheld. In the event the Trust elects to assume the defense
of any such suit and retain counsel of good standing approved by Fund
Accountant, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case the
Trust does not elect to assume the defense of any such suit, or in case Fund
Accountant reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse Fund Accountant, its partners and employees, or the
controlling person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by Fund Accountant or them.
8. Record Retention and Confidentiality.
Fund Accountant shall keep and maintain on behalf of the Trust all books
and records which the Trust and Fund Accountant is, or may be, required to keep
and maintain pursuant to any applicable statutes, rules and regulations,
including without limitation Rules 31a-1 and 31a-2 under the Investment Company
Act of 1940, as amended (the "1940 Act"), relating to the maintenance of books
and records in connection with the services to be provided hereunder. Fund
Accountant 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 Securities and Exchange Commission 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.
9. Reports.
7
Fund Accountant will furnish to the Trust and to its properly
authorized auditors, 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 Fund Accountant, or as
subsequently agreed upon by the parties pursuant to an amendment hereto.
10. Rights of Ownership.
All computer programs and procedures developed to perform services
required to be provided by Fund Accountant under this Agreement are the
property of Fund Accountant. 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 will be furnished to the Trust in appropriate form as
soon as practicable after termination of this Agreement for any reason.
11. Return of Records.
Fund Accountant may at its option at any time, and shall promptly
upon the Trust's demand, turn over to the Trust and cease to retain Fund
Accountant's files, records and documents created and maintained by Fund
Accountant pursuant to this Agreement which are no longer needed by Fund
Accountant 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
Fund Accountant 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.
12. Representations of the Trust.
The Trust certifies to Fund Accountant that: (1) as of the close of
business on the Effective Date, 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.
13. Representations of Fund Accountant.
Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant 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 Fund Accountant'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
8
hereunder, and (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant 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.
Fund Accountant 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. Fund Accountant 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 Fund Accountant under its insurance coverage.
15. Information to be Furnished by the Trust and Funds.
The Trust has furnished to Fund Accountant the following:
(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 document has been filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Board of 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 Fund Accountant thereunder.
(c) A list of all the officers of the Trust, together with specimen
signatures of those officers who are authorized to instruct Fund
Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
9
16. Information Furnished by Fund Accountant.
(a) Fund Accountant has furnished to the Trust the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments thereto.
(b) Fund Accountant shall, upon request, furnish certified copies of
corporate actions covering the following matters:
(i) Approval of this Agreement, and authorization of a specified
officer of Fund Accountant to execute and deliver this
Agreement; and
(ii) Authorization of Fund Accountant to act as fund accountant
for the Trust and to provide accounting services for the
Trust.
17. Amendments to Documents.
The Trust shall furnish Fund Accountant with 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 Fund Accountant in providing the services agreed to
hereunder or which amendment might affect the duties of Fund Accountant
hereunder unless the Trust first obtains Fund Accountant's approval of such
amendments or changes.
18. Compliance with Law.
Except for the obligations of Fund Accountant set forth in Section 7
hereof or as contemplated by another BISYS Agreement, 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. Fund Accountant shall have no obligation to take cognizance of
any laws relating to the sale of the Trust's shares. 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.
19. Notices.
Any notice, demand, request or other communication which may be
required or contemplated herein shall be sufficiently given if (i) given
either by facsimile transmission or
10
telex, by reputable overnight delivery service, postage prepaid, or by
registered or certified mail, postage prepaid and return receipt requested, to
the address indicated below or to such other address as any party hereto may
specify as provided herein, or (ii) delivered personally at such address.
If to the Trust: c/o Rothschild International Asset Management Limited
Five Arrows House
St. ▇▇▇▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ R.T. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Fund Accountant: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
11
20. Limitation of Liability of the Trustees and Shareholders.
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 Trustees, and this Agreement has been signed and delivered by
an authorized officer of the Trust, acting as such, and neither such
authorization by the Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in the Trust's Agreement and Declaration of Trust.
21. Several Obligations of the Funds.
The Trust is a series company with multiple series, the Funds, and has
entered into this Agreement on behalf of those series, as amended from time to
time on notice to the Fund Accountant. With respect to any obligation of the
Trust on behalf of any Fund arising hereunder, the Fund Accountant shall look
for payment or satisfaction of such obligations solely to the assets and
property of the Fund to which such obligation relates as though the Trust had
separately contracted with the Fund Accountant by separate written instrument
with respect to each Fund. In addition, this Agreement may be terminated with
respect to one or more Funds without affecting the rights, duties or
obligations of any of the other Funds.
22. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. Governing Law.
This Agreement shall be governed by and provisions shall be construed
in accordance with the laws of the State of Ohio. No provision of this Agreement
shall be deemed to limit the duties or obligations of Fund Accountant or any
other BISYS Entity under any other BISYS Agreement.
24. Force Majeure.
If the Fund Accountant is prevented, hindered or delayed from or in
performing any of its obligations under this Agreement by a Force Majeure Event
(as defined below), then:
(a) (i) the Fund Accountant's obligations under this Agreement shall
be suspended for so long as the Force Majeure Event
continues and
12
to the extent that it is so prevented, hindered or delayed;
(ii) as soon as possible after the commencement of the Force
Majeure Event the Fund Accountant shall notify the Company
in writing of the occurrence of the Force Majeure Event, the
date of commencement of the Force Majeure Event and the
effect of the Force Majeure Event on the Fund Accountant's
ability to perform its obligations under this Agreement; and
(iii) as soon as possible after the cessation of the Force Majeure
Event the Fund Accountant shall notify the Company in
writing of the cessation of the Force Majeure Event and
shall resume performance of its obligations under this
Agreement.
(b) If the Force Majeure continues for more than one month after the
commencement of the Force Majeure Event either party may terminate
this Agreement by giving not less than seven days notice in writing
to the other party.
(c) "Force Majeure Event" means any event beyond the reasonable control
of a party including, without limitation, acts of God, war, riot,
civil commotion, malicious damage, compliance with any law or
governmental order, rule, regulation or direction, accident,
breakdown of plant or machinery, fire, flood or storm.
25. Miscellaneous.
Paragraph headings in this agreement are included for convenience only
and are not to be used to construe or interpret this Agreement. For purposes of
this Agreement, no officer of the Trust who is an employee of any BISYS Entity
shall be deemed to be an authorized representative of the Trust for the
purposes of giving or receiving any notice, consent, or other communication
pursuant to Section 2, 4(e), 6, 7, 11, 14, 22 or 24 of this Agreement or not in
the ordinary course of business. No provision of this Agreement shall be deemed
to limit the duties or obligations of Fund Accountant or any other BISYS Entity
under any other BISYS Agreement.
[Remainder of the page intentionally left blank]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
FIVE ARROWS SHORT-TERM
INVESTMENT TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
BISYS FUND SERVICES, INC.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------