EXHIBIT 4
FORM OF FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this ___ day of _______, 2004, by and between
XXXXX XXXXXXXX MLP INVESTMENT COMPANY (the "Fund"), a Maryland corporation
having its principal place of business at 1800 Avenue of the Stars, Xxxxxx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and ULTIMUS FUND SOLUTIONS, LLC
("Ultimus"), a limited liability company organized under the laws of the State
of Ohio and having its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxx 00000.
WHEREAS, the Fund is a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires that Ultimus perform certain fund accounting
services for the Fund; and
WHEREAS, Ultimus is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. RETENTION OF ULTIMUS.
The Fund hereby retains Ultimus to act as the fund accountant of the Fund
and to furnish the Fund with the services as set forth below. Ultimus hereby
accepts such employment to perform such duties.
(a) MAINTENANCE OF BOOKS AND RECORDS.
Ultimus shall maintain and keep current the accounts, books,
records and other documents relating to the Fund's financial
and portfolio transactions as may be required by the rules and
regulations of the Securities and Exchange Commission (the
"SEC") adopted under Section 31(a) of the 1940 Act. Ultimus
shall cause the subject records of the Fund to be maintained
and preserved pursuant to the requirements of the 1940 Act.
(b) PERFORMANCE OF ACCOUNTING SERVICES.
In addition to the maintenance of the books and records
specified above, Ultimus shall perform the following accounting
services for the 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 the Fund's investment
adviser or its designee, as approved by the
Fund's Board of Directors (hereafter referred to
as "Directors");
(iii) Verify and reconcile with the Fund's custodian
all trade activity;
(iv) Compute, as appropriate, the Fund's net income
and capital gains, dividend payables, dividend
factors, yields, and weighted average portfolio
maturity;
(v) Review the net asset value calculation and
dividend factor (if any) for the Fund prior to
release to shareholders, check and confirm the
net asset values and
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dividend factors for reasonableness and
deviations, and distribute net asset values and
yields to NASDAQ;
(vi) Determine unrealized appreciation and
depreciation on securities held by the Fund;
(vii) Amortize premiums and accrete discounts on
securities purchased at a price other than face
value, if requested by the Fund;
(viii) Update fund accounting system to reflect rate
changes, as received from the Fund's investment
adviser, on variable interest rate instruments;
(ix) Post Fund transactions to appropriate
categories;
(x) Accrue expenses of the Fund according to
instructions received from the Fund's
administrator;
(xi) Determine the outstanding receivables and
payables for all (1) security trades, (2) Fund
share transactions and (3) income and expense
accounts;
(xii) Provide accounting reports in connection with
the Fund's regular annual audit and other audits
and examinations by regulatory agencies; and
(xiii) Provide such periodic reports as the parties
shall agree upon.
(c) ADDITIONAL ACCOUNTING SERVICES.
Ultimus shall also perform the following additional accounting
services for the Fund:
(i) Provide monthly (or as frequently as may
reasonably be requested by the Fund or the
Fund's investment adviser) a set of financial
statements for the Fund as described below, upon
request of the Fund:
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Security Purchases and Sales Journals
Portfolio Holdings Reports
(ii) Provide accounting information for the
following:
(A) federal and state income tax returns and
federal excise tax returns;
(B) the Fund's semi-annual reports with the
SEC on Form N-SAR;
(C) the Fund's annual, semi-annual and quarterly
(if any) shareholder reports;
(D) registration statements and other filings
relating to the registration of shares;
(E) annual audit by the Fund's auditors; and
(F) examinations performed by the SEC.
(d) SPECIAL REPORTS AND SERVICES.
(i) Ultimus may provide additional special reports
upon the request of the Fund or the Fund's
investment adviser, which may result in an
additional charge, the amount of which shall be
agreed upon in advance in writing between the
parties.
(ii) Ultimus may provide such other similar services
with respect to the Fund as may be reasonably
requested by the Fund, which may result in an
additional charge, the amount of which shall be
agreed upon in advance in writing between the
parties.
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2. SUBCONTRACTING.
Ultimus may, at its expense and, upon written notice to the Fund and the
Fund's non-objection in writing thereto, subcontract with any entity or person
concerning the provision of the services contemplated hereunder; provided,
however, that Ultimus shall not be relieved of any of its obligations under this
Agreement by the appointment of such subcontractor and, provided further, that
Ultimus shall be responsible, to the extent provided in Section 7 hereof, for
all acts of such subcontractor as if such acts were its own.
3. COMPENSATION.
The Fund shall pay for the services to be provided by Ultimus under this
Agreement in accordance with, and in the manner set forth in, Schedule A
attached hereto, as such Schedule may be amended from time to time.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, Ultimus' compensation for that
part of the month in which the Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above. Payment
of Ultimus' compensation for the preceding month shall be made promptly.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Ultimus the fees described in Schedule A attached
hereto, the Fund agrees to reimburse Ultimus for its reasonable out-of-pocket
expenses in providing services hereunder, including without limitation the
following, all of which shall be passed through to the Fund at cost:
(a) All freight and other delivery and bonding charges incurred by
Ultimus in delivering materials to and from the Fund;
(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by Ultimus in
communication with the Fund, the Fund's investment adviser or
custodian, dealers or others as required for Ultimus to perform the
services to be provided hereunder;
(c) The costs of portfolio price quotation services and tax basis
reporting services utilized by the Fund;
(d) All expenses incurred in connection with any custom programming or
systems modifications required to provide any special reports or
services requested by the Fund, provided, however, that any such
expenses shall have been approved in advance in writing by the Fund;
(e) Any expenses Ultimus shall incur at the written direction of an
officer of the Fund thereunto duly authorized other than an employee
or other affiliated person of Ultimus who may otherwise be named as
an authorized representative of the Fund for certain purposes; and
(f) Any additional expenses reasonably incurred by Ultimus in the
performance of its duties and obligations under this Agreement
whenever such expenses are not otherwise properly borne by Ultimus
as part of its duties and obligations under this Agreement.
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5. EFFECTIVE DATE.
This Agreement shall become effective as of the date first written above
(the "Effective Date").
6. TERM OF THIS AGREEMENT.
The term of this Agreement shall continue in effect, unless earlier
terminated by either party hereto as provided hereunder, for a period of two
years. Thereafter, unless otherwise terminated as provided herein, this
Agreement shall be renewed automatically for successive one-year periods.
This Agreement may be terminated without penalty: (i) by provision of
sixty (60) days' written notice; (ii) by mutual agreement of the parties; or
(iii) for "cause" (as defined herein) upon the provision of thirty (30) days'
advance written notice by the party alleging cause.
For purposes of this Agreement, "cause" shall mean: (i) a material breach
of this Agreement that has not been remedied within thirty (30) days following
written notice of such breach from the non-breaching party, (ii) a series of
negligent acts or omissions or breaches of this Agreement which, in the
aggregate, constitute in the reasonable judgment of the Fund, a serious failure
to perform satisfactorily Ultimus' obligations hereunder; (iii) a final,
unappealable judicial, regulatory or administrative ruling or order in which the
party to be terminated has been found guilty of criminal or unethical behavior
in the conduct of its business; or (iv) financial difficulties on the part of
the party to be terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or the modification or alteration of the rights of
creditors.
Notwithstanding the foregoing, after such termination for so long as
Ultimus, with the written consent of the Fund, in fact continues to perform any
one or more of the services contemplated by this Agreement or any schedule or
exhibit hereto, the provisions of this Agreement, including without limitation
the provisions dealing with indemnification, shall continue in full force and
effect. Compensation due Ultimus and unpaid by the Fund upon such termination
shall be immediately due and payable upon and notwithstanding such termination.
Unless this Agreement has been terminated for "cause" (as defined herein),
Ultimus shall be entitled to collect from the Fund, in addition to the
compensation described in Schedule A, the amount of all of Ultimus' cash
disbursements for services in connection with Ultimus' activities in effecting
such termination, including without limitation, the delivery to the Fund and/or
its designees of the Fund's property, records, instruments and documents.
7. STANDARD OF CARE.
The duties of Ultimus shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against Ultimus
hereunder. Ultimus shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in performing the
services provided for under this Agreement. Ultimus shall be liable for any
damages arising directly or indirectly out of Ultimus' failure to perform its
duties under this Agreement to the extent such damages arise directly or
indirectly out of Ultimus' willful misfeasance, bad faith, negligence in the
performance of its duties, or reckless disregard of it obligations and duties
hereunder. (As used in this Article 7, the term "Ultimus" shall include
directors, officers, employees and other agents of Ultimus or of any
subcontractor of Ultimus as well as Ultimus itself and any such subcontractor.)
Without limiting the generality of the foregoing or any other provision of
this Agreement, (i) Ultimus shall not be liable for losses beyond its reasonable
control, provided that Ultimus has acted in
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accordance with the standard of care set forth above; and (ii) Ultimus shall not
be liable for the validity or invalidity or authority or lack thereof of any
instruction, notice or other instrument that Ultimus reasonably believes to be
genuine and to have been signed or presented by a duly authorized representative
of the Fund (other than an employee or other affiliated persons of Ultimus who
may otherwise be named as an authorized representative of the Fund for certain
purposes).
Ultimus may apply to the Fund at any time for instructions and may consult
with counsel for the Fund or its own counsel and with accountants and other
experts with respect to any matter arising in connection with Ultimus' duties
hereunder, and Ultimus shall not be liable or accountable for any action taken
or omitted by it in good faith in accordance with instruction or with the
reasonable opinion of counsel for the Fund, Fund accountants or other experts
retained by the Fund qualified to render such opinion.
8. INDEMNIFICATION.
The Fund agrees to indemnify and hold harmless Ultimus from and against
any and all actions, suits, claims, losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) (collectively, "Losses") arising directly or
indirectly out of any action or omission to act which Ultimus takes (i) at any
request or on the direction of or in reliance on the reasonable advice of the
Fund, (ii) upon any instruction, notice or other instrument that Ultimus
reasonably believes to be genuine and to have been signed or presented by a duly
authorized representative of the Fund (other than an employee or other
affiliated person of Ultimus who may otherwise be named as an authorized
representative of the Fund for certain purposes) or (iii) on its own initiative,
in good faith and in accordance with the standard of care set forth herein, in
connection with the performance of its duties or obligations hereunder;
provided, however that the Fund shall have no obligation to indemnify or
reimburse Ultimus under this Article 8 to the extent that Ultimus is entitled to
reimbursement or indemnification for such Losses under any liability insurance
policy described in this Agreement or otherwise.
Ultimus shall not be indemnified against or held harmless from any Losses
arising directly or indirectly out of Ultimus' own willful misfeasance, bad
faith, negligence in the performance of its duties, or reckless disregard of its
obligations and duties hereunder. (As used in this Article 8, the term "Ultimus"
shall include directors, officers, employees and other agents of Ultimus as well
as Ultimus itself.)
The Fund and its officers, employees, shareholders and agents shall not be
liable for, and Ultimus shall indemnify and hold the Fund harmless from and
against, any and all claims made by third parties, including costs, expenses
(including reasonable attorneys' fees), losses, damages, charges, payments and
liabilities of any sort or kind, which result from a negligent act, or omission
to act, or bad faith by Ultimus in the performance of its duties hereunder.
9. RECORD RETENTION AND CONFIDENTIALITY.
Ultimus shall keep and maintain on behalf of the Fund all books and
records which the Fund and Ultimus is, or may be, required to keep and maintain
pursuant to any applicable statutes, rules and regulations, including without
limitation Rules 31a-1 and 31a-2 under the 1940 Act, relating to the maintenance
of books and records in connection with the services to be provided hereunder.
Ultimus further agrees that all such books and records shall be the property of
the Fund and to make such books and records available for inspection by the Fund
or by the SEC at reasonable times and otherwise to keep confidential all books
and records and other information relative to the Fund and its shareholders;
except when requested to divulge such information by duly-constituted
authorities or court process.
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10. FORCE MAJEURE.
Ultimus assumes no responsibility hereunder, and shall not be liable, for
any damage, loss of data, delay or any other loss whatsoever caused by events
beyond its reasonable control, including acts of civil or military authority,
national emergencies, fire, flood, catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
11. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
All records and other data are the exclusive property of the Fund and all
such records and data will be furnished to the Fund in appropriate form as soon
as practicable after termination of this Agreement for any reason. Ultimus may
at its option at any time, and shall promptly upon the Fund's demand, turn over
to the Fund and cease to retain Ultimus' files, records and documents created
and maintained by Ultimus pursuant to this Agreement which are no longer needed
by Ultimus in the performance of its services or for its legal protection. If
not so turned over to the Fund, such documents and records will be retained by
Ultimus for six years from the year of creation. At the end of such six-year
period, such records and documents will be turned over to the Fund unless the
Fund authorizes in writing the destruction of such records and documents.
12. REPRESENTATIONS OF THE FUND.
The Fund certifies to Ultimus that: (1) as of the close of business on the
Effective Date, the Fund has authorized unlimited shares, and (2) this Agreement
has been duly authorized by the Fund and, when executed and delivered by the
Fund, will constitute a legal, valid and binding obligation of the Fund,
enforceable against the Fund in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
13. REPRESENTATIONS OF ULTIMUS.
Ultimus represents and warrants that: (1) the various procedures and
systems which Ultimus has implemented with regard to safeguarding from loss or
damage attributable to fire, theft, or any other cause the records, and other
data of the Fund and Ultimus' records, data, equipment facilities and other
property used in the performance of its obligations hereunder are adequate and
that it will make such changes therein from time to time as are required for the
secure performance of its obligations hereunder, (2) this Agreement has been
duly authorized by Ultimus and, when executed and delivered by Ultimus, will
constitute a legal, valid and binding obligation of Ultimus, enforceable against
Ultimus in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties, (3) it is duly registered
with the appropriate regulatory agency as a transfer agent and such registration
will remain in full force and effect for the duration of this Agreement, and (4)
it has and will continue to have access to the necessary facilities, equipment
and personnel to perform its duties and obligations under this Agreement.
14. INSURANCE.
Ultimus shall furnish the Fund with pertinent information concerning the
professional liability insurance coverage that it maintains. Such information
shall include the identity of the insurance carrier(s), coverage levels and
deductible amounts. Ultimus shall notify the Fund should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. Ultimus shall notify the Fund 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
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Fund from time to time as may be appropriate of the total outstanding claims
made by Ultimus under its insurance coverage.
15. INFORMATION TO BE FURNISHED BY THE FUND.
The Fund has furnished to Ultimus the following:
(a) Copies of the Articles of Incorporation and of any amendments
thereto, certified by the proper official of the state in
which such document has been filed.
(b) Copies of the following documents:
(1) The Fund's Bylaws and any amendments thereto; and
(2) Certified copies of resolutions of the Directors
covering the approval of this Agreement,
authorization of a specified officer of the Fund to
execute and deliver this Agreement and authorization
for specified officers of the Fund to instruct
Ultimus thereunder.
(c) A list of all the officers of the Fund, together with specimen
signatures of those officers who are authorized to instruct
Ultimus in all matters.
(d) Copies of the Prospectus and Statement of Additional
Information for the Fund.
16. AMENDMENTS TO AGREEMENT.
This Agreement, or any term thereof, may be changed or waived only by
written amendment signed by the party against whom enforcement of such change or
waiver is sought.
For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and Ultimus
may conclusively assume that any special procedure which has been approved by
the Fund does not conflict with or violate any requirements of its Articles of
Incorporation or then current prospectus, or any rule, regulation or requirement
of any regulatory body.
17. COMPLIANCE WITH LAW.
Except for the obligations of Ultimus otherwise set forth herein, the Fund
assumes full responsibility for the preparation, contents and distribution of
the prospectus of the Fund as to compliance with all applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act"), the 1940 Act and
any other laws, rules and regulations of governmental authorities having
jurisdiction. The Fund represents and warrants that no shares of the Fund will
be offered to the public until the Fund's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
18. NOTICES.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such
notice, at the following address: if to the Fund, at 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and if to Ultimus, at 000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxx 00000, Attn: Xxxxxx X. Xxxxxx; or at such other
address as such party may from time to time specify in writing to the other
party pursuant to this Section.
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19. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.
20. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
21. MULTIPLE ORIGINALS.
This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
XXXXX XXXXXXXX MLP INVESTMENT COMPANY
By:_________________________________
Name:
Title:
ULTIMUS FUND SOLUTIONS, LLC
By:__________________________________
Name: Xxxxxx X. Xxxxxx
Title:President
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
XXXXX XXXXXXXX MLP INVESTMENT COMPANY
AND
ULTIMUS FUND SOLUTIONS, LLC
FEES AND EXPENSES
FEES:
Ultimus shall be entitled to receive a fee from the Fund on the first
business day following the end of each month, or at such time(s) as Ultimus
shall request and the parties hereto shall agree, a fee computed as follows:
Base fee of: $30,000 ($2,500 per month), plus
Asset based fee of:
AVERAGE DAILY NET ASSETS ASSET BASED FEE
------------------------ ---------------
First $500 million .015%
Next $500 million .010%
In excess of $1 billion .005%
The foregoing fees include 200 portfolio trades per month (exclusive of
daily cash investments). When the Fund has more than 200 trades in a month,
Ultimus will charge $5.00 for each trade in excess of 200.
OUT-OF-POCKET EXPENSES:
The fees set forth above shall be in addition to the payment of
out-of-pocket expenses, as provided for in Section 4 of this Agreement.
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