EXHIBIT 7(b)
FUND ACCOUNTING AND SERVICES AGREEMENT
THIS AGREEMENT is made as of June 30, 1997, by and among THE FIFTH THIRD BANK, a
banking company organized under the laws of the State of Ohio ("Fifth Third"),
and STONEBRIDGE GROWTH FUNDS, INC. (the "Fund").
W I T N E S S E T H
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act") with portfolios as listed in Exhibit A (the "Portfolios");
WHEREAS, Fifth Third provides certain fund accounting, administrative
and other services to investment companies; and
WHEREAS, the Fund, desires to retain Fifth Third to provide fund
accounting and other services for the Fund's portfolios listed on Exhibit A, as
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may be amended from time to time (each a Portfolio), and Fifth Third is willing
to provide such services, all as more fully set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
(1) Definitions, As Used in This Agreement.
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(a) Authorized Person means any officer of the Fund and any other
person duly authorized by the Fund's Board of Directors to give Oral
and Written Instructions on behalf of the Fund and listed on the
Authorized Persons Appendix attached hereto and made a part hereof or
any amendment thereto as may be received by Fifth Third. An Authorized
Person's scope of authority may be limited by the Fund by setting
forth such limitation in the Authorized Persons Appendix.
(b) Oral Instructions mean instructions orally transmitted to and
accepted by Fifth Third because such instructions are: (i) given by an
Authorized Person or from a person reasonably believed by Fifth Third
to have been an Authorized Person, (ii) recorded and kept among the
records of Fifth Third made in the ordinary course of business and
(iii) orally confirmed by Fifth Third. The Fund shall cause all Oral
Instructions to be confirmed by Written Instructions. If such Written
Instructions confirming Oral Instructions are not received by Fifth
Third prior to a transaction, it shall in no way affect the validity
of the transaction or the authorization thereof by the Fund. If Oral
Instructions vary from the Written Instructions which purport to
confirm them, Fifth Third shall notify the Fund of such variance but
such Oral Instructions will govern unless Fifth Third has not yet
acted.
(c) Written Instructions mean (i) written communications actually
received by Fifth Third and signed by one or more persons as the Board
of Directors shall have from time to time authorized, or (ii)
communications by fax or any other such system from a person or
persons reasonably believed by Fifth Third to be Authorized or (iii)
communications transmitted electronically through the Institutional
Delivery System (IDS), or any other similar electronic instruction
system acceptable to Fifth Third and approved by resolutions of the
Board of Directors, a copy of which, certified by the Secretary, shall
have been delivered to Fifth Third.
(d) Shares mean the shares of beneficial interest of any series
or class of the Fund.
2. Appointment. The Fund hereby appoints Fifth Third to provide fund
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accounting and other specified services to each of the Portfolios set forth in
Exhibit A, as may be amended from time to time, in accordance with the terms set
forth in this Agreement. Fifth Third accepts such appointment and agrees to
furnish such specified services.
3. Delivery of Documents. The Fund has provided or, where
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applicable, will provide Fifth Third with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's Board of Directors, approving the appointment of Fifth Third or
its affiliates to provide services to each Portfolio and approving
this Agreement;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of any distribution agreement or similar agreement
made with respect to each class of Shares;
(e) a copy of any management agreement and any administration
agreements or similar agreements with respect to the Fund;
(f) a copy of any shareholder servicing agreement made in respect
of the Fund or the Fund; and
(g) copies (certified or authenticated, where applicable) of any
and all amendments or supplements to the foregoing.
4. Compliance with Rules and Regulations. Fifth Third undertakes to
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comply with all applicable requirements of the Investment Company Act, and any
laws, rules and regulations of governmental authorities having jurisdiction with
respect to the duties to be performed by Fifth Third hereunder. Except as
specifically set forth herein, Fifth Third assumes no responsibility for such
compliance by the Fund or any Portfolio.
5. Instructions. Fifth Third will provide fund accounting and such
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other services as is agreed hereunder.
(a) With respect to other services Fifth Third shall act only
upon Oral or Written Instructions.
(b) Fifth Third shall be entitled to rely upon any Oral and
Written Instructions it receives from an Authorized Person (or from a
person reasonably believed by Fifth Third to be an Authorized Person)
pursuant to this Agreement. Fifth Third may assume that any Oral or
Written Instruction received hereunder is not in any way inconsistent
with the provisions of organizational documents or this Agreement or
of any vote, resolution or proceeding of the Fund's Board of Directors
or of the Fund's shareholders, unless and until Fifth Third receives
Written Instructions to the contrary.
(c) The Fund agrees to forward to Fifth Third, Written
Instructions confirming Oral Instructions so that Fifth Third receives
the Written Instructions by the close of business on the same day that
such Oral Instructions are received. The fact that such confirming
Written Instructions are not received by Fifth Third shall in no way
invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions. Where Oral or Written
Instructions reasonably appear to have been received from an
Authorized Person, Fifth Third shall incur no liability to the Fund in
acting upon such Oral or Written Instructions.
6. Right to Receive Advice.
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(a) Advice of the Fund. If Fifth Third is in doubt as to any
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action it should or should not take, Fifth Third shall request
directions or advice, including Oral or Written Instructions, from the
Fund.
(b) Advice of Counsel. If Fifth Third shall be in doubt as to
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any question of law pertaining to any action it should or should not
take, Fifth Third shall request advice from such counsel of its own
choosing and the Fund shall reimburse such reasonable cost.
(c) Conflicting Advice. In the event of a conflict between
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directions, advice or Oral or Written Instructions Fifth Third
receives from the Fund and the advice Fifth Third receives from
counsel, Fifth Third shall inform the Fund of the conflict and seek
resolution.
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(d) Protection of Fifth Third. Fifth Third shall be protected in
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any action it takes or does not take in reliance upon directions,
advice or Oral or Written Instructions it receives from the Fund or
counsel and which Fifth Third believes, in good faith, to be
consistent with those directions, advice or Oral or Written
Instructions. Nothing in this section shall be construed so as to
impose an obligation upon Fifth Third (i) to seek such directions,
advice or Oral or Written Instructions, or (ii) to act in accordance
with such directions, advice or Oral or Written Instructions unless,
under the terms of other provisions of this Agreement. Nothing in this
subsection shall excuse Fifth Third when an action or omission on the
part of Fifth Third constitutes willful misfeasance, lack of good
faith, or reckless disregard by Fifth Third of its duties, obligation
or responsibilities set forth in this Agreement.
7. Records; Visits.
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(a) The books and records pertaining to the Fund and the
Portfolios which are in the possession or under the control of Fifth
Third shall be the property of the Fund. Such books and records shall
be prepared, maintained and preserved as required by the Investment
Company Act and other applicable Securities Laws, rules and
regulations. The Fund and Authorized Persons shall have access to such
books and records at all times during Fifth Third's normal business
hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by Fifth Third to the Fund or to
an Authorized Person, at the Fund's expense.
(b) Fifth Third shall keep the following records:
(i) all books and records relating to the services it
performs hereunder with respect to a Portfolio's books of
account;
(ii) records relating to the services it performs hereunder
with respect to a Portfolio's securities transactions; and
(iii) all other books and records as Fifth Third is required
to maintain pursuant to Rule 31a-1 of the Investment Company Act
in connection with the services provided hereunder.
8. Confidentiality. Fifth Third agrees to keep confidential all
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records of the Fund and information relating to the Fund and its shareholders
(past, present and future), unless the release of such records of information is
otherwise consented to, in writing, by the Fund. The Fund agrees that such
consent shall not be unreasonably withheld and may not be withheld where Fifth
Third may be exposed to civil or criminal contempt proceedings or when required
to divulge such information or records to duly constituted authorities.
9. Liaison with Accountants. Fifth Third shall act as liaison with
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the Fund's independent public accountants and shall provide account analysis,
fiscal year summaries, and other audit-related schedules with respect to the
services provided to each Portfolio. Fifth Third shall take all reasonable
action in the performance of its duties under this Agreement to assure that the
necessary information in Fifth Third's control is made available to such
accountants for the expression of their opinion, as required by the Fund.
10. Disaster Recovery. Fifth Third shall maintain in effect a
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disaster recovery plan, and enter into any agreement necessary with appropriate
parties making reasonable provisions for emergency use of electronic data
processing equipment customary in the industry. In the event of equipment
failures, Fifth Third shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. Fifth Third shall have no
liability with respect to the loss of data or service interruptions caused by
equipment failure provided such loss or interruption is not caused by Fifth
Third's own willful misfeasance or gross negligence.
11. Compensation. As compensation for services rendered by Fifth
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Third during the term of this Agreement, the Fund will pay to Fifth Third a fee
or fees set forth in Exhibit B, as may be amended from time to time. It is
agreed that fees set forth in Exhibit B may be increased with not less than
ninety (90) days written notice. In the event that Exhibit C is amended such
that additional services as requested by the Fund are required from Fifth Third
on an ongoing basis, with the approval of the Fund, additional fees may be
charged as applicable. The fee for the period from the day of the year this
Agreement is entered into until the end of that year shall be prorated according
to the proportion that such period bears to the full annual period.
12. Indemnification.
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(a) The Fund agrees to indemnify and hold harmless Fifth Third
and its agents or subcontractor from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation,
liabilities arising under the Securities Laws and any state or foreign
securities and blue sky laws, and amendments thereto), and expenses,
including (without limitation) attorneys' fees and disbursements
arising directly or indirectly from any action or omission to act
which Fifth Third takes in reasonable reliance on Oral or Written
Instructions from the Fund. Fifth Third, shall not be indemnified
against any liability (or any expenses incident to such liability)
arising out of Fifth Third's own willful misfeasance, lack of good
faith or reckless disregard of its duties and obligations under this
Agreement. For any legal proceedings giving rise to this
indemnification, the Fund shall be entitled to defend or prosecute any
claim in the name of Fifth Third at the Fund's own expense through
counsel of its own choosing if it gives written notice to Fifth Third
within ten (10) business days of receiving notice of such claim.
(b) Fifth Third agrees to indemnify and hold harmless the Fund
from all taxes, charges, expenses, assessments, claims and liabilities
(excluding, liabilities arising under the Securities Laws and any
state or foreign securities and blue sky laws, and amendments
thereto), and expenses, including (without limitation) attorneys' fees
and disbursements arising directly from any action or omission of
Fifth Third's own willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties and obligations under this Agreement.
For any legal proceedings giving rise to this indemnification, Fifth
Third shall be entitled to defend or prosecute any claim in the name
of the Fund at Fifth Third's own expense through counsel of its own
choosing if it gives written notice to the Fund within ten (10)
business days of receiving notice of such claim.
13. Responsibilities of Fifth Third.
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(a) Fifth Third shall be under no duty to take any action on
behalf of the Fund or any Portfolio except as specifically set forth
herein or as may be specifically agreed to by Fifth Third in writing.
Fifth Third shall be obligated to exercise commercially reasonable
care and diligence in the performance of its duties hereunder, to act
in good faith and act within reasonable limits, in performing services
provided for under this Agreement. Fifth Third shall only be liable
for actual damages arising out of Fifth Third's failure to perform its
duties under this Agreement to the extent such damages arise out of
Fifth Third's willful misfeasance, bad faith, gross negligence or
reckless disregard of such duties.
(b) In no event shall Bank be liable for any special,
consequential, extraordinary or punitive damages, arising from the
performance or non-performance of Bank under this Agreement, or Bank's
failure to comply with any of the terms of this Agreement. Bank's
cumulative liability within a calendar year shall be limited to the
Fund or any party claiming by, through or on behalf of the Fund for
the initial and all subsequent renewal terms of this Agreement, to the
lessor of (a) the actual damages sustained by the Fund; or (b) one-
half of the net fees paid to the Bank, but not to exceed one half of
the net fees paid to the bank within the prior twelve calendar months
as in accordance with Agreement.
(c) Without limiting the generality of the foregoing or of any
other provision of this Agreement,
(i) Fifth Third shall not be liable for losses beyond its
reasonable control, provided that Fifth Third has acted in accordance
with the standard of care set forth above; and
(ii) Fifth Third shall not be liable for:
(A) the validity or invalidity or authority or lack
thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and
which Fifth Third reasonably believes to be genuine; or
(B) subject to Section 10, delays or errors or loss of
data occurring by reason of circumstances beyond Fifth Third's
control, including acts of civil or military authority, national
emergencies, non Fifth Third labor difficulties, fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
14. Description of Accounting Services on a Continuous Basis. Fifth Third
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will perform accounting services as deemed industry standard and/or agreed upon
with Customer at the time of conversion.
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15. Description of Other Services on a Continuous Basis. Fifth Third
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will perform other services at the request of the Customer, documented previous
to conversion.
16. Duration and Termination. This Agreement shall continue until
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terminated by either the Fund or Fifth Third on ninety (90) days' prior written
notice to the other party.
17. Notices. All notices and other communications, including Written
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Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. If notice is sent by confirming telegram, cable,
telex or facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is sent by messenger,
it shall be deemed to have been given on the day it is delivered. Notices shall
be addressed
(a) if to Fifth Third:
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Fund Accounting Manager
(b) if to the Fund:
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attn:
(c) if to none of the foregoing, at such other address as shall
have been provided by like notice to the sender of any such notice or
other communication by the receiving party.
18. Amendments. This Agreement, or any term thereof, may be changed
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or waived only by written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
19. Delegation; Assignment. Fifth Third may assign its rights and
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delegate its duties hereunder upon prior written consent of the Fund to any
wholly-owned direct or indirect subsidiary of Fifth Third, provided that:
(a) Fifth Third gives the Fund sixty (60) days' prior written
notice;
(b) the delegate (or assignee) agrees with Fifth Third and the
Fund to comply with all relevant provisions of the Securities Laws;
and
(c) Fifth Third and such delegate (or assignee) promptly provide
such information as the Fund may request, and respond to such
questions as the Fund may ask, relative to the delegation (or
assignment), including (without limitation) the capabilities of the
delegate (or assignee).
20. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. Further Actions. Each party agrees to perform such further acts
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and execute such further documents as are necessary to effectuate the purposes
hereof.
22. Miscellaneous.
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(a) Entire Agreement. This Agreement embodies the entire
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agreement and understanding among the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof,
provided that the Fund and Fifth Third may embody in one or more
separate documents their agreement, if any, with respect to delegated
duties and Oral Instructions.
(b) Captions. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect.
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(c) Governing Law. This Agreement will be governed and construed
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in accordance with the laws of the State of Ohio without regard to
principles or conflicts of law. The parties agree that venue for any
action or proceeding brought pursuant to this Agreement shall be in
the state or federal courts located in the State of Ohio.
(d) Partial Invalidity. If any provision of this Agreement shall
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be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
(e) Successors and Assigns. This Agreement shall be binding upon
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and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to
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this Agreement shall constitute the valid and biding execution hereof
by such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
THE FIFTH THIRD BANK STONEBRIDGE GROWTH FUNDS, INC.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
Its: Assistant Vice President Its: President
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EXHIBIT A
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PORTFOLIOS OF FUNDS
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THIS EXHIBIT A, dated as of June 30, 1997, is Exhibit A to the Fund
Accounting and Services Agreement dated as of June 30, 1997 by and among the
Fifth Third Bank and the Fund. This Exhibit A shall supersede all previous
forms of Exhibit A.
Stonebridge Growth Fund, Inc.
THE FIFTH THIRD BANK STONEBRIDGE GROWTH FUNDS, INC.
By: /s/ Xxxxxx Xxxxxx By: Xxxxx X. Xxxxxx
Its: Assistant Vice President Its: President
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EXHIBIT B
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FEE SCHEDULE
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THIS EXHIBIT B, dated as of June 30, 1997, is Exhibit B to the Fund
Accounting and Services Agreement dated as of June 30, 1997 by and among the
Fifth Third Bank and the Fund. This Exhibit B shall supersede all previous
forms of Exhibit B.
The Fund will pay Fifth Third an annual fund accounting and service fee (the
"Fee"), to be calculated daily and paid monthly. The annual Fee for each
Portfolio shall be an asset based fee, exclusive of out-of-pocket expenses, with
a minimum monthly payment as set forth below:
Asset Monthly Additional Other Services
Based Fees Minimum Class Monthly Monthly
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Funds
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(fees per attached Schedule A)
The Fund will also reimburse Fifth Third for its out-of-pocket expenses incurred
in performing its services under this Agreement, including, but not limited to:
postage and mailing, telephone, telex, overnight courier services and outside
independent pricing service charges, and record retention/storage.
THE FIFTH THIRD BANK STONEBRIDGE GROWTH FUNDS, INC.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
Its: Assistant Vice President Its: President
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EXHIBIT C
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Fifth Third will perform the accounting services with respect to each Portfolio:
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(a) Journalize investment, capital share and income and expense
activities;
(b) Verify investment buy/sell trade tickets when received from the
investment adviser for a Portfolio (the "Money Manager") and transmit trades to
the Fund's custodian (the "Custodian") for proper settlement;
(c) Maintain individual ledgers for investment securities;
(d) Maintain historical tax lots for each security;
(e) Reconcile cash and investment balances with the Custodian, and
provide the Money Manager with the beginning cash balance available for
investment purposes;
(f) Update the cash availability daily;
(g) Post to and prepare the Statement of Assets and Liabilities and
the Statement of Operations;
(h) Calculate the various contractual expenses (e.g., advisory and
custody fees);
(i) Monitor the expense accruals and notify an officer of the Fund of
any proposed adjustments;
(j) Control all disbursements and authorize such disbursements upon
Written Instructions;
(k) Calculate capital gains and losses and only upon Written
Instructions from the Fund transmit such information to the Fund's transfer
agent (or other agreed upon procedures);
(l) Determine net income;
(m) Obtain security market quotes from independent pricing services,
if available, approved by the Money Manager, or if such quotes are unavailable,
then obtain such prices from the Money manager, and in either case calculate the
market value of each Portfolio's investments;
(n) Transmit or mail a copy of the daily portfolio valuation to the
Money Manager;
(o) Compute net asset value;
(p) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average dollar-weighted
maturity; and
(q) Prepare a monthly financial statement, which will include the
following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
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Fifth Third Bank
Fund Accounting & Custody Service ProForma
Stonebridge Aggressive Growth Fund
Schedule A
I. Fund Accounting Services
Annual Units Per Unit Fee Total Annual
Asset Based Fees
(Monthly Minimum of $1,500
$5,000,000 0.0003 bp $18,000.00
II. Custody Services
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Book Entry (DTC, Fed, Fed amort, B) 195 9 1,755
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Physical 0 25 0
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PTC Eligible 0 25 0
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Amortized P&I 0 5 0
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Options (all types Equity & Index) 0 45 0
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Mutual Funds 0 15 0
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Foreign-Euroclear & Cedel 0 50 0
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Turnaround Trade 0 50 0
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Pair-off Trade 0 25 0
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III. MISCELLANEOUS FEES
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Voluntary Corporate Actions 0 25 0
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Wire Transfer (In/Out) 22 7 154
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Special Services-per hr. fee 0 75 0
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Estimate Annual Fee $19,909
Estimate Monthly Fee $1,659.08
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Fifth Third Bank
Fund Accounting & Custody Service ProForma
Stonebridge Growth Fund
Schedule A
I. Fund Accounting Services
Annual Units Per Unit Fee Total Annual
Asset Based Fees $38,000,000 0.00003 bp $30,000
(Monthly Minimum of $1,500
II. Custody Services
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Book Entry (DTC, Fed, Fed amort, B) 195 9 1,116
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Physical 0 25 0
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PTC Eligible 0 25 0
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Amortized P&I 0 5 0
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Options (all types Equity & Index) 0 45 0
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Mutual Funds 0 15 0
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Foreign-Euroclear & Cedel 0 50 0
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Turnaround Trade 0 50 0
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Pair-off Trade 0 25 0
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III. MISCELLANEOUS FEES
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Voluntary Corporate Actions 0 25 0
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Wire Transfer (In/Out) 22 7 154
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Special Services-per hr. fee 0 75 0
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Estimate Annual Fee $31,270
Estimate Monthly Fee $2,605.83
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