ACCOUNTING SERVICES AGREEMENT
AGREEMENT dated as of December 31, 2002 between Touchstone Investment
Trust (the "Trust"), a Massachusetts business trust, and Integrated Fund
Services, Inc. ("Integrated"), an Ohio corporation.
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, shares of beneficial interest in the Trust are divided into
separate series (along with any series which may in the future be established,
the "Funds" or, each, a "Fund"); and
WHEREAS, the Trust wishes to employ Integrated to serve as its
accounting services agent on behalf of the Funds; and
WHEREAS, Integrated wishes to provide such services to the Trust under
the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and Integrated agree as follows:
1. APPOINTMENT.
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The Trust hereby employs Integrated as agent to perform those
services described in this Agreement for the Trust. Integrated shall act under
such appointment and perform the obligations thereof upon the terms and
conditions hereinafter set forth.
2. DOCUMENTATION.
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The Trust will furnish from time to time certified copies of
each resolution of the Board of Trustees authorizing officers to give
instructions to Integrated and such other certifications, documents or opinions
that Integrated may, in its discretion, deem necessary or appropriate in the
proper performance of its duties.
3. CALCULATION OF NET ASSET VALUE.
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Integrated will maintain and keep current the general ledger
for the Funds, recording all income and expenses, capital share activity and
security transactions of the Funds. Integrated will calculate the net asset
value of each of the Funds and the per share net asset value of each of the
Funds, in accordance with the Trust's current prospectus and statement of
additional information, once daily as of the time selected by the Trust's Board
of Trustees. Integrated will prepare and maintain a daily valuation of all
securities and other assets of the Funds in accordance with instructions from a
designated officer of the Trust and in the manner
set forth in the Trust's current prospectus and statement of additional
information. In valuing securities of the Funds, Integrated may contract with,
and rely upon market quotations provided by, outside services.
4. PAYMENT OF TRUST EXPENSES.
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Integrated shall process each request received from the Trust
or its authorized agents for payment of the Funds' expenses. Upon receipt of
written instructions signed by an officer or other authorized agent of the
Trust, Integrated shall prepare checks in the appropriate amounts which shall be
signed by an authorized officer of Integrated and mailed to the appropriate
party.
5. OTHER SERVICES.
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Subject to the direction and control of the Trustees of the
Trust, Integrated shall perform the services to the Trust detailed in Schedule
A.
6. DATA ACCESS AND PROPRIETARY INFORMATION.
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The Trust acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by Integrated as part of the Trust's ability to
access certain Trust-related data ("Customer Data") maintained by Integrated on
data bases under the control and ownership of Integrated or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to Integrated or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Trust agrees to treat all Proprietary
Information as proprietary to Integrated and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder.
7. COOPERATION WITH ACCOUNTANTS.
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Integrated shall cooperate with the Trust's independent public
accountants and shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their unqualified
opinion where required for any document for the Trust.
8. SPECIAL SERVICES AND EXCEPTION PROCESSING.
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A. Integrated may provide additional special reports upon the
request of the Trust or the Trust's investment adviser, which may result in an
additional charge, the amount of which shall be agreed upon between the parties.
B. Integrated may provide such other services with respect to
the Trust 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.
C. Integrated may provide exception processing upon the request of the Trust or
the Trust's investment adviser, which may result in an additional charge, the
amount of which shall be agreed upon between the parties. Exception processing
includes, but is not limited to, processing which:
(a) requires Integrated to use methods and procedures other than those
usually employed by Integrated to perform its obligations under this
Agreement;
(b) involves the provision of information to Integrated after the
commencement of the nightly processing cycle of Integrated's transfer
agency, administration and/or fund accounting processing system; or
(c) requires more manual intervention by Integrated, either in the entry of
data or in the modification or amendment of reports generated by
Integrated's transfer agency, administration and/or fund accounting
processing system than is usually required.
9. FURTHER ACTIONS.
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Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
10. SUBCONTRACTING.
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Integrated may, at its expense, and, upon prior written
approval from the Trust, subcontract with any entity or person concerning the
provision of the services contemplated hereunder; provided, however, that
Integrated shall not be relieved of any of its obligations under this Agreement
by the appointment of such subcontractor and provided further, that Integrated
shall be responsible for all acts of such subcontractor as if such acts were its
own.
11. COMPENSATION.
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For performing its services under this Agreement, the Trust
shall pay Integrated a monthly fee with respect to each Fund in accordance with
the schedule attached hereto as Schedule B.
12. EXPENSES.
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Integrated shall furnish, at its expense and without cost to
the Trust the services of its personnel to the extent that such services are
required to carry out its obligations under this Agreement. All costs and
expenses not expressly assumed by Integrated under this Paragraph shall be paid
by the Trust, including, but not limited to, costs and expenses of officers and
employees of Integrated in attending meetings of the Board of Trustees and
shareholders of the Trust, as well as costs and expenses for all regulatory
filings, postage, envelopes, checks, drafts, continuous forms, bank charges,
reports, communications and other materials, file interface expenses, telephone,
telegraph and remote transmission lines, EDGARization, printing, use of outside
pricing services, use of outside firms, necessary outside record storage, media
for storage of records (e.g., microfilm, microfiche, computer tapes), pro rata
expenses for preparation of Integrated's Fund Accounting SAS 70 reports, costs
and fees, including employee time and system expenses, associated with exception
processing and resolution of errors not caused by Integrated, and any and all
assessments, taxes or levies assessed on Integrated for services provided under
this Agreement.
13. REFERENCES TO INTEGRATED OR THE TRUST.
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A. Neither the Trust nor its agents shall circulate any
printed matter which contains any reference to Integrated without the prior
written approval of Integrated, excepting solely such printed matter as merely
identifies Integrated as Administrative Services Agent, Transfer, Shareholder
Servicing and Dividend Disbursing Agent and Accounting Services Agent. The Trust
will submit printed matter requiring approval to Integrated in draft form,
allowing sufficient time for review by Integrated and its counsel prior to any
deadline for printing.
B. Integrated shall not circulate any printed matter that
contains any reference to the Trust without the prior written approval of the
Trust, excepting solely such printed matter as merely identifies the Trust as a
client of Integrated. Integrated will submit printed matter requiring approval
to the Trust in draft form, allowing sufficient time for review by the Trust and
its counsel prior to any deadline for printing.
14. EQUIPMENT FAILURES.
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In the event of equipment failures beyond Integrated's
control, Integrated shall take all steps necessary to minimize service
interruptions but shall have no liability with respect thereto. Integrated shall
endeavor to enter into one or more agreements making provision for emergency use
of electronic data processing equipment to the extent appropriate equipment is
available.
15. INDEMNIFICATION OF INTEGRATED.
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A. Integrated may rely on information reasonably believed by
it to be accurate and reliable. Except as may otherwise be required by the 1940
Act and the rules thereunder, neither Integrated nor its directors, officers,
employees, shareholders, agents, control persons or affiliates of any thereof
shall be subject to any liability for, or any damages, including consequential
damages, expenses or losses incurred by the Trust in connection with, any error
of judgment, mistake of law, any act or omission connected with or arising out
of any services rendered under or payments made pursuant to this Agreement or
any other matter to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of the duties of Integrated under this Agreement or by reason of
reckless disregard by any of such persons of the obligations and duties of
Integrated under this Agreement. Integrated may apply to the Trust at any time
for instructions and may consult counsel for the Trust, or its own counsel, and
with accountants and other experts with respect to any matter arising in
connection with its duties hereunder, and Integrated 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 opinion of such counsel, accountants, or
other experts. Integrated shall not be held to have notice of any change of
authority of any officers, employees, or agents of the Trust until receipt of
written notice thereof have been received by Integrated from the Trust.
B. Any person, even though also a director, officer, employee,
shareholder or agent of Integrated, or any of its affiliates, who may be or
become an officer, trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust, to
be rendering such services to or acting solely as an officer, trustee, employee
or agent of the Trust and not as a director, officer, employee, shareholder or
agent of or one under the control or direction of Integrated or any of its
affiliates, even though paid by one of these entities.
C. Notwithstanding any other provision of this Agreement, the
Trust shall indemnify and hold harmless Integrated, its directors, officers,
employees, shareholders, agents, control persons and affiliates of any thereof
from and against any and all losses, damages, claims, suits, actions, demands,
expenses and liabilities (whether with or without basis in fact or law),
including legal fees and expenses and investigation expenses, of any and every
nature which Integrated may sustain or incur or which may be asserted against
Integrated by any person by reason of, or as a result of: (i) any action taken
or omitted to be taken by Integrated in good faith in reliance upon any
certificate, instrument, order or share certificate believed by it to be genuine
and to be 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 opinion of legal counsel for the Trust or its own counsel; or
(ii) any action taken or omitted to be taken by Integrated in connection with
its appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. However, indemnification under this
subparagraph shall not apply to actions or omissions of Integrated or its
directors, officers, employees, shareholders or agents in cases of its or their
own gross negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder.
D. Notwithstanding anything to the contrary in this Agreement,
in no event shall Integrated be liable to the Trust or any third party for any
special, consequential, punitive or incidental damages, even if advised of the
possibility of such damages.
16. TERMINATION
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A. The provisions of this Agreement shall be effective on the
date first above written, shall continue in effect for two years ("Initial
Term") from that date and shall continue in force for one year thereafter
("Renewal Term"), but only so long as such continuance is approved (1) by
Integrated, (2) the Trust, (3) by a vote of a majority of the Trust's Trustees
who are not parties to this Agreement or interested persons (as defined in the
▇▇▇▇ ▇▇▇) of any such party, and (4) by vote of a majority of the Trust's Board
of Trustees or a majority of the Trust's outstanding voting securities.
B. Any party may terminate this Agreement at the end of the
Initial Term or at the end of any subsequent Renewal Term by giving the other
parties at least one hundred twenty (120) days' prior written notice of such
termination specifying the date fixed therefor. In the event this Agreement is
terminated by the Trust prior to the end of the Initial Term or any subsequent
Renewal Term the Trust shall make a one-time cash payment to Integrated in
consideration of services provided under this Agreement, and not as a penalty,
equal to the remaining balance of the fees payable to Integrated under this
Agreement through the end of the Initial Term or Renewal Term, as applicable.
The Trust shall likewise reimburse Integrated for any out-of-pocket expenses and
disbursements ("out-of-pocket expenses") reasonably incurred by Integrated in
connection with the services provided under this Agreement within 30 days of
notification to the Trust of such out-of-pocket expenses regardless of whether
such out-of-pocket expenses were incurred before or after the termination of
this Agreement.
C. If a party materially fails to perform its duties and
obligations hereunder (a "Defaulting Party") resulting in a material loss to
another party or parties, such other party or parties (the "Non-Defaulting
Party") may give written notice thereof to the Defaulting Party, which such
notice shall set forth with sufficient detail the nature of the breach. The
Defaulting Party shall have ninety (90) days from its receipt of notice to cure
the breach. If such material breach shall not have been remedied to commercially
reasonable operating standards, the Non-Defaulting Party may terminate this
Agreement by giving sixty (60) days written notice of such termination to the
Defaulting Party. If Integrated is the Non-Defaulting Party, its termination of
this Agreement shall not constitute a waiver of any rights or remedies with
respect to services it performed prior to such termination, or the right of
Integrated to receive such compensation as may be due as of the date of
termination or to be reimbursed for all reasonable out-of-pocket expenses. In
all cases, termination by the Non-Defaulting Party shall not constitute a waiver
by the Non-Defaulting Party of any other rights it might have under this
Agreement or otherwise against a Defaulting Party.
D. In the case of the following transactions, not in the
ordinary course of business, namely, the merger of the Trust, or a Fund, into or
the consolidation of the Trust, or a Fund, with another investment company, the
sale by the Trust, or a Fund, of all, or substantially all, of its assets to
another investment company, or the liquidation or dissolution of the Trust, or a
Fund, and distribution of its assets, this Agreement will terminate with respect
to the applicable Fund or Funds and Integrated shall be released from any and
all obligations hereunder upon the payment of the fees, disbursements and
expenses due to Integrated through the end of the then current term of this
Agreement. The parties acknowledge and agree that the damages provision set
forth above in paragraph B shall be applicable in those instances in which
Integrated is not retained to provide fund accounting services subsequent to the
transactions listed above.
E. Integrated will be entitled to collect from the Trust all
reasonable expenses incurred in conjunction with termination of this Agreement,
including but not limited to out-of-pocket expenses, employee time, system fees
and fees charged by third parties with whom Integrated has contracted.
17. SERVICES FOR OTHERS.
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Nothing in this Agreement shall prevent Integrated or any
affiliated person (as defined in the ▇▇▇▇ ▇▇▇) of Integrated from providing
services for any other person, firm or corporation (including other investment
companies); provided, however, that Integrated expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
18. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
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The parties hereto acknowledge and agree that nothing
contained herein shall be construed to require Integrated to perform any
services for the Trust which services could cause Integrated to be deemed an
"investment adviser" of the Trust within the meaning of Section 2(a)(20) of the
1940 Act or to supersede or contravene the Trust's prospectus or statement of
additional information or any provisions of the 1940 Act and the rules
thereunder. Except as otherwise provided in this Agreement and except for the
accuracy of information furnished to it by Integrated, the Trust assumes full
responsibility for complying with all applicable requirements of the 1940 Act,
the Securities Act of 1933, as amended, and any other laws, rules and
regulations of governmental authorities having jurisdiction, it being
acknowledged that the Trust is relying on the best efforts of Integrated.
19. LIMITATION OF LIABILITY.
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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 bind only the trust
property of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an officer of the Trust,
acting as such, and neither such authorization by such 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.
20. SEVERABILITY.
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In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
21. QUESTIONS OF INTERPRETATION.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the Securities and
Exchange Commission ("SEC") issued pursuant to said 1940 Act. In addition, where
the effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
22. CONFIDENTIALITY
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Both parties hereto agree that any non-public information
obtained hereunder concerning the other party is confidential and may not be
disclosed without the consent of the other party, except as may be required by
applicable law or at the request of a governmental agency. The parties further
agree that a breach of this provision would irreparably damage the other party
and accordingly agree that each of them is entitled, in addition to all other
remedies at law or in equity to an injunction or injunctions without bond or
other security to prevent breaches of this provision.
23. NOTICES.
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All notices required or permitted under this Agreement shall
be in writing (including telex and telegraphic communication) and shall be (as
elected by the person giving such notice) hand delivered by messenger or courier
service, telecommunicated, or mailed (airmail if international) by registered or
certified mail (postage prepaid), return receipt requested, addressed to:
To the Trust: Touchstone Family of Funds
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
To Integrated: Integrated Fund Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
or to such other address as any party may designate by notice complying with the
terms of this Paragraph. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method or e-mail; and (d) on the date upon
which the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be, if
mailed.
24. AMENDMENT.
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This Agreement may not be amended or modified except by a
written agreement executed by all parties.
25. BINDING EFFECT.
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Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
26. COUNTERPARTS.
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This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
27. FORCE MAJEURE.
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Integrated 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 control, including and without limitation, acts of
God, interruption of power or other utility, transportation, mail, or
communication services, acts of civil or military authority, sabotages, war,
insurrection, riots, national emergencies, explosion, flood, accident,
earthquake or other catastrophe, fire, strike or other labor problems, legal
action, present or future law, governmental order, rule or regulation, or
shortages of suitable parts, materials, labor or transportation.
28. MISCELLANEOUS.
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The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TOUCHSTONE INVESTMENT TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: President
INTEGRATED FUND SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Its: President
Schedule A
In consideration of the compensation detailed in this Agreement,
Integrated shall perform the following Accounting services:
1. Calculate net asset value and per share net asset value in accordance
with the 1940 Act and the Trust's prospectus.
2. Record all security transactions including appropriate gains and losses
from the sale of portfolio securities.
3. Record interest income and dividend income.
4. Record each Fund's capital share activities based upon purchase and
redemption transactions received by the transfer agent.
5. Calculate a daily cash figure for investment purposes.
6. Monitor and seek authorization for payment of expenses of each Fund.
7. Periodically report to the Trust or its authorized agents share
purchases and redemptions and trial balances of each Fund.
8. Prepare the necessary supporting computations on a book and tax basis
to ensure each Fund complies with the requirements of Section 851 of
the Internal Revenue Code.
9. Facilitate and perform tax planning and administration.
10. Monitor all tax compliance calculations to ensure that each Fund
qualifies as a regulated investment company pursuant to Subbchapter M
of the Internal Revenue Code.
11. Assist independent accountants with the annual audit by preparing
necessary annual audit work papers.
12. Generate fund performance calculations (including after-tax returns)
and automated report dissemination.
13. Maintain complete, accurate and current all records with respect to the
Trust required to be maintained by the Trust under the Internal Revenue
Code of 1986, as amended (the "Code"), and under the rules and
regulations of the 1940 Act, and preserve said records in the manner
and for the periods prescribed in the Code and the 1940 Act.