EXHIBIT EX-99.H3A
ACCOUNTING SERVICES AGREEMENT
This ACCOUNTING SERVICES AGREEMENT is made as of this 23rd day of August,
2006 (the "Agreement") between The World Funds, Inc. (the "Company"), a
corporation duly organized and existing under the laws of the State of Maryland,
and Commonwealth Fund Accounting, Inc. ("CFA"), a corporation duly organized as
a corporation in accordance with the laws of the Commonwealth of Virginia.
WITNESSETH THAT:
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series portfolios (the "Funds"), each of which may
consist of one or more classes of shares of common stock;
WHEREAS, the Company desires to appoint CFA as its Accounting Services
Agent to maintain and keep current the books, accounts, records, journals or
other records of original entry relating to the business of the Company as set
forth in Schedule B of this Agreement (the "Accounts and Records") and to
perform certain other functions in connection with such Accounts and Records;
and
WHEREAS, CFA is willing to perform such functions upon the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
Section 1. Appointment. The Company hereby appoints CFA as its Accounting
Services Agent on behalf of the Company, and CFA hereby accepts such
appointment, to furnish the Funds listed on Schedule A, as such schedule may be
amended from time to time, with accounting services as set forth in this
Agreement.
Section 2. Duties. CFA shall perform or supervise the performance of
others of the services set forth in Schedule B hereto. CFA shall provide the
Company with all necessary office space, equipment, personnel, facilities and
compensation for providing such services. CFA may sub-contract with third
parties to perform certain of the services to be performed by CFA hereunder;
PROVIDED, however, that CFA shall remain principally responsible to the Company
for the acts and omissions of such other entities.
Except with respect to CFA's duties as set forth in this Agreement, and
except as otherwise specifically provided herein, the Company assumes all
responsibility for ensuring that each Fund complies with all applicable
requirements of the Securities Act of 1933, the 1940 Act and any other laws,
rules and regulations, or interpretations thereof, of governmental authorities
with jurisdiction over each Fund.
Section 3. Compensation and Expenses. The Company agrees to pay CFA
compensation for its services as set forth in Schedule A attached hereto, or as
shall be set forth in amendments to such schedule approved by the Board of
Directors of the Company (the "Board") and CFA. Fees will begin to accrue for
each Fund on the latter of the date of this Agreement or the date of
commencement of operations of the Fund. If fees begin to accrue in the middle of
a month or if this Agreement terminates before the end of any month, all fees
for the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in which the
effectiveness or termination occurs. Upon the termination of this Agreement with
respect to a Fund, the Fund shall pay to CFA such compensation as shall be
payable prior to the effective date of termination.
In addition, the Company shall reimburse CFA from the assets of each Fund
certain reasonable expenses incurred by CFA on behalf of each Fund individually
in connection with the performance of this Agreement. Such out-of-pocket
expenses shall include, but not be limited to: documented fees and costs of
obtaining advice of Fund counsel or accountants in connection with its services
to each Fund; postage; long distance telephone; special forms required by each
Fund; any economy class travel which may be required in the performance of its
duties to each Fund; and any other extraordinary expenses it may incur in
connection with its services to each Fund.
All fees and reimbursements are payable in arrears on a monthly basis and
the Company, on behalf of the applicable Fund, agrees to pay all fees and
reimbursable expenses within five (5) business days following receipt of the
respective billing notice.
Section 4. Company Reports to CFA. The Company shall furnish or otherwise
make available to CFA such copies of each Fund's prospectus, statement of
additional information, financial statements, proxy statements, shareholder
reports, each Fund's net asset value per share, declaration, record and payment
dates, amounts of any dividends or income, special actions relating to each
Fund's securities and other information relating to the Company's business and
affairs as CFA may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement. CFA shall maintain such
information as required by regulation and as agreed upon between the Company and
CFA. The Company will complete all necessary prospectus and compliance reports,
as well as monitoring the various limitations and restrictions.
Section 5. Maintenance of Records. CFA shall create and maintain all
records required by applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the 1940 Act and the rules
thereunder, as they may be amended from time to time, pertaining to the various
functions CFA performs under this Agreement and which are not otherwise created
or maintained by another party pursuant to contract with the Company. All such
records shall be the property of the Company and will be preserved, maintained
and made available in accordance with Section 31 of the 1940 Act and the rules
thereunder, and will be surrendered promptly to the Fund on and in accordance
with the Company's request. The Company and the Company's authorized
representatives shall have access to CFA's records relating to the services to
be performed under this Agreement at all times during CFA's normal business
hours. Upon the reasonable request of the Company, copies of any such records
shall be provided promptly by CFA to the Company or the Company's authorized
representatives.
Section 6. Reliance on Company Instructions and Experts. CFA may rely upon
the written advice of the Company and upon statements of the Company's legal
counsel, accountants and other persons believed by it in good faith to be expert
in matters upon which they are consulted, and CFA shall not be liable for any
actions taken in good faith upon such statements.
Section 7. Standard of Care. CFA shall be under no duty to take any action
on behalf of a Fund except as necessary to fulfill its duties and obligations as
specifically set forth herein or as may be specifically agreed to by CFA in
writing. CFA shall at all times act in good faith and agrees to use its best
effect within reasonable limits to ensure the accuracy of all services performed
under this Agreement, but assumes no responsibility for any loss arising out of
any act or omission in carrying out its duties hereunder, except a loss
resulting from CFA's, its employees' or its agents' willful misfeasance, bad
faith or gross negligence in the performance of CFA's duties under this
Agreement, or by reason of reckless disregard of CFA's, its employees' or its
agents' obligations and duties hereunder. Notwithstanding the foregoing, the
limitation on CFA's liability shall not apply to the extent any loss or damage
results from any fraud committed by CFA or any intentionally bad or malicious
acts (that is, acts or breaches undertaken purposefully under circumstances in
which the person acting knows or has reason to believe that such act or breach
violates such person's obligations under this Agreement or can cause danger or
harm) of CFA.
Without limiting the generality of the foregoing or of any other provision
of this Agreement, (i) CFA shall not be liable for losses beyond its control,
provided that CFA has acted in accordance with the standard of care set forth
above; and (ii) CFA shall not be liable for (A) the validity or invalidity or
authority or lack thereof of any oral or written instructions provided by the
Fund, notice or other instrument which conforms to the applicable requirements
of this Agreement, and which CFA reasonably believes to be genuine; or (B)
subject to Section 25, delays or errors or loss of data occurring by reason of
circumstances beyond CFA's control, including fire, flood, catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
Section 8. Limitation of Liability Regarding CFA. CFA shall not be liable
for any actions taken in good faith reliance upon any authorized written
instructions or any other document reasonably believed by CFA to be genuine and
to have been executed or signed by the proper person or persons. CFA shall not
be held to have notice of any change of authority of any officer, employee or
agent of the Company until receipt of notification thereof by the Company.
CFA shall not be liable for the errors of other service providers of the
Company, including the errors of pricing services (other than to pursue all
reasonable claims against the pricing service based on the pricing services'
standard contracts entered into by CFA) and errors in information provided by an
investment adviser (including prices and pricing formulas and the untimely
transmission of trade information), custodian or transfer agent to the Company.
With respect to a Fund that does not value its assets in accordance with
Rule 2a-7 under the 1940 Act (a money market fund), notwithstanding anything to
the contrary in this Agreement, CFA shall not be liable to the Company or any
shareholder of the Company for (i) any loss to the Company if a NAV Difference
for which CFA would otherwise be liable under this Agreement is less than $0.01
per Fund share or (ii) any loss to a shareholder of the Company if the NAV
Difference for which CFA would otherwise be liable under this Agreement is less
than or equal to 0.005 (1/2 of 1%) or if the loss in the shareholder's account
with the Company is less than or equal to $10. Any loss for which CFA is
determined to be liable hereunder shall be reduced by the amount of gain which
inures to shareholders, whether to be collected by the Company or not.
For purposes of this Agreement: (i) the NAV Difference shall mean the
difference between the NAV at which a shareholder purchase or redemption should
have been effected ("Recalculated NAV") and the NAV at which the purchase or
redemption is effected; (ii) NAV Differences and any CFA or other responsible
party liability therefrom are to be calculated each time a Fund's (or class's)
NAV is calculated; (iii) in calculating any NAV Difference for which CFA would
otherwise be liable under this Agreement for a particular NAV error, Fund losses
and gains shall be netted; and (iv) in calculating any NAV Difference for which
CFA would otherwise be liable under this Agreement for a particular NAV error
that continues for a period covering more than one NAV determination, Fund
losses and gains for the fund's fiscal year shall be netted.
Section 9. Limited Recourse. CFA hereby acknowledges that the Funds'
obligations hereunder with respect to the Shares are binding only on the assets
and property belonging to the Funds. The obligations of the parties hereunder
shall not be binding upon any of the Directors, shareholders, nominees,
officers, agents or employees of the Funds personally, but shall bind only the
property of the Funds. The execution and delivery of this agreement by such
officers shall not 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 Funds'
property.
Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Fund of the Company are separate and
distinct from the assets and liabilities of each other Series and that no Series
shall be liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise.
Section 10. Indemnification by the Funds. Each Fund shall indemnify CFA
and hold it harmless from and against any and all losses, damages and expenses,
including reasonable attorneys' fees and expenses, incurred by CFA that result
from: (i) any claim, action, suit or proceeding in connection with CFA's entry
into or performance of this Agreement with respect to such Fund; or (ii) any
action taken or omission to act committed by CFA in the performance of its
obligations hereunder with respect to such Fund; or (iii) any action of CFA upon
instructions believed in good faith by it to have been executed by a duly
authorized officer or representative of the Company with respect to such Fund;
or (iv) any error, omission, inaccuracy or other deficiency of any information
provided to CFA by the Company, or the failure of the Company to provide or make
available any information requested by CFA knowledgeably to perform its
functions hereunder; PROVIDED, that CFA shall not be entitled to such
indemnification in respect of actions or omissions constituting gross
negligence, bad faith or willful misfeasance in the performance of its duties,
or by reckless disregard of such duties, on the part of CFA or its employees,
agents or contractors.
Section 11. Indemnification by CFA. CFA shall indemnify each Fund and hold
it harmless from and against any and all losses, damages and expenses, including
reasonable attorneys' fees and expenses, incurred by such Fund which result
from: (i) CFA's failure to comply with the terms of this Agreement with respect
to such Fund; or (ii) CFA's lack of good faith in performing its obligations
hereunder with respect to such Fund; or (iii) CFA's gross negligence or
misconduct or that of its employees, agents or contractors in connection
herewith with respect to such Fund.
In order that the indemnification provisions contained in Sections 10 and
11 shall apply, upon the assertion of an indemnification claim, the party
seeking the indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The Company shall have the option to
participate with CFA in the defense of such claim or to defend against said
claim in its own name or that of CFA. The party seeking indemnification shall in
no case confess any claim or make any compromise in any case in which the other
party may be required to indemnify it except with the indemnifying party's
written consent, which consent shall not be unreasonably withheld.
Section 12. Confidentiality. CFA agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Company and its Shareholders received by CFA in connection with this
Agreement, including any non-public personal information as defined in
Regulation S-P, and that it shall not use or disclose any such information
except for the purpose of carrying out the terms of this Agreement; PROVIDED,
however, that CFA may disclose such information as required by law or in
connection with any requested disclosure to a regulatory authority with
appropriate jurisdiction after prior notification to the Company.
Upon termination of this Agreement, CFA shall return to the Company all
copies of confidential or non-public personal information received from the
Company hereunder, other than materials or information required to be retained
by CFA under applicable laws or regulations. CFA hereby agrees to dispose of any
"consumer report information," as such term is defined in Regulation S-P.
Section 13. Holidays. Except as required by laws and regulations governing
investment companies, nothing contained in this Agreement is intended to or
shall require CFA, in any capacity hereunder, to perform any functions or duties
on any holiday or other day of special observance on which CFA is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day on which both the Company and CFA
are open. CFA will be open for business on days when the Company is open for
business and/or as otherwise set forth in each Fund's prospectus(es) and
Statement(s) of Additional Information.
Section 14. Termination. This Agreement shall remain in effect with
respect to each Fund until terminated.
This Agreement may be terminated by either party at any time, without the
payment of a penalty upon ninety (90) days' written notice to other party. Any
termination shall be effective as of the date specified in the notice or upon
such later date as may be mutually agreed upon by the parties. Upon notice of
termination of this Agreement by either party, CFA shall promptly transfer to
the successor administrator the original or copies of all books and records
maintained by CFA under this Agreement including, in the case of records
maintained on computer systems, copies of such records in machine-readable form,
and shall cooperate with, and provide reasonable assistance to, the successor
administrator in the establishment of the books and records necessary to carry
out the successor administrator's responsibilities. If this Agreement is
terminated by the Company, the Company shall be responsible for all reasonable
out-of-pocket expenses or costs associated with the movement of records and
materials to the successor administrator. Additionally, CFA reserves the right
to charge for any other reasonable expenses associated with such termination.
Section 15. Notice. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in writing, and
shall be delivered in person or sent by first-class mail, postage prepaid, to
the respective parties at their last known address, except that oral
instructions may be given if authorized by the Board and preceded by a
certificate from the Company's Secretary so attesting. Notices to the Company
shall be directed to 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx
00000, Attention: Mr. Xxxx Xxxxx, III; and notices to CFA shall be directed to:
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Mr.
Xxxx Xxxxx, III.
Section 16. Execution in Counterparts. 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.
Section 17. Assignment; Third Party Beneficiaries. This Agreement shall
extend to and shall be binding upon the parties hereto and their respective
successors and assigns; PROVIDED, however, that this Agreement shall not be
assignable by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
Section 18. Services Not Exclusive. The services of CFA to the Company are
not deemed exclusive, and CFA shall be free to render similar services to
others, to the extent that such service does not affect CFA's ability to perform
its duties and obligations hereunder.
Section 19. Headings. All Section headings contained in this Agreement are
for convenience of reference only, do not form a part of this Agreement and will
not affect in any way the meaning or interpretation of this Agreement. Words
used herein, regardless of the number and gender specifically used, will be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the contract requires.
Section 20. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes all prior agreements, understandings
and arrangements to the subject matter thereof.
Section 21. Consequential Damages. Neither party to this Agreement shall
be liable to the other party for consequential damages under any provision of
this Agreement.
Section 22. Amendments. This Agreement may be amended from time to time by
a writing executed by the Company and CFA. The compensation stated in Schedule A
attached hereto may be adjusted from time to time by the execution of a new
schedule signed by both of the parties.
Section 23. Waiver. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by written instrument
executed by such party. No failure of either party hereto to exercise any power
or right granted hereunder, or to insist upon strict compliance with any
obligation hereunder, and no custom or practice of the parties with regard to
the terms of performance hereof, will constitute a waiver of the rights of such
party to demand full and exact compliance with the terms of this Agreement.
Section 24. Severability. If any part, term or provision of this Agreement
is held to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
Section 25. Force Majeure. In the event either party is unable to perform
its obligations under the terms of this Agreement because of acts of God, acts
of war or terrorism, strikes, equipment or transmission failure or damage
reasonably beyond its control, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes; provided,
however, that this provision shall not imply that CFA is excused from
maintaining reasonable business continuity plans to address potential service
outages.
Section 26. Survival. The obligations of Sections 3, 5, 6, 7, 8, 9, 10,
11, 12, 17, 20, 21, 23, 24, 25 and 27 shall survive any termination of this
Agreement.
Section 27. Governing Law. This Agreement shall be governed by and
construed to be in accordance with the laws of the State of Maryland, without
reference to choice of law principles thereof, and in accordance with the
applicable provisions of the 1940 Act. To the extent that the applicable laws of
the State of Maryland, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
THE WORLD FUNDS, INC.
By: __________________________
Xxxx Xxxxx, III
Chairman
COMMONWEALTH FUND ACCOUNTING, INC.
By: __________________________
Xxxx Xxxxx, III
Chief Executive Officer
A-6
1-WA/2589614.12
Amended and Restated
Schedule A
to the
Accounting Services Agreement
between
The World Funds, Inc. (the "Company")
and
Commonwealth Fund Accounting, Inc. ("CFA")
Dated as of November 1, 2008
Compensation to be Paid to CFA:
------------------------------
A. For accounting services, CFA shall be paid monthly at the following annual
rates:
Name of Fund Accounting Services Fee
CSI Equity Fund 0.05% of the Fund's average
daily net assets, computed daily and paid
monthly, with a minimum annual fee of
$15,000.
B. It is anticipated that the Company's security trading activity will remain
on average less than 100 trades per month, per portfolio. Should the
Company's security trading activity exceed an average of 100 trades per
month per portfolio, an additional fee of $2.50 per trade (for trades in
excess of 100 per month) may apply.
C. The Company will pay CFA on a current and ongoing basis for
CFA's reasonable time and costs required for the correction
of any errors or omissions in the Accounts and Records
delivered, or the information provided, to CFA by the
Company. Any such payment shall be in addition to the fees
and charges described above, provided that approval of the
amount of such payments shall be obtained in advance by CFA
from the Company if and when such additional charges would
exceed five percent of the usual charges payable for a
period under this Agreement.
D. Fund management will monitor the expense accrual procedures for accuracy
and adequacy based on outstanding liabilities monthly, and promptly
communicate to CFA any adjustment needed.
Compensation to be Paid to CFA:
------------------------------
A. For accounting services, CFA shall be paid monthly at the following annual
rates:
Name of Fund Accounting Services Fee
Dividend Capital Realty Income Fund 0.05% of the
Fund's average daily net assets, computed
daily and paid monthly, with a minimum
annual fee of $15,000.
B. It is anticipated that the Company's security trading activity will remain
on average less than 100 trades per month, per portfolio. Should the
Company's security trading activity exceed an average of 100 trades per
month per portfolio, an additional fee of $2.50 per trade (for trades in
excess of 100 per month) may apply.
C. The Company will pay CFA on a current and ongoing basis for
CFA's reasonable time and costs required for the correction
of any errors or omissions in the Accounts and Records
delivered, or the information provided, to CFA by the
Company. Any such payment shall be in addition to the fees
and charges described above, provided that approval of the
amount of such payments shall be obtained in advance by CFA
from the Company if and when such additional charges would
exceed five percent of the usual charges payable for a
period under this Agreement.
D. Fund management will monitor the expense accrual procedures for accuracy
and adequacy based on outstanding liabilities monthly, and promptly
communicate to CFA any adjustment needed.
Compensation to be Paid to CFA:
------------------------------
A. For accounting services, CFA shall be paid monthly at the following annual
rates:
Name of Fund Accounting Services Fee
Epoch U.S. All Cap Equity Fund 0.05% of the Fund's
average daily net assets, computed daily and
paid monthly, with a minimum annual fee of
$15,000.
B. It is anticipated that the Company's security trading activity will remain
on average less than 100 trades per month, per portfolio. Should the
Company's security trading activity exceed an average of 100 trades per
month per portfolio, an additional fee of $2.50 per trade (for trades in
excess of 100 per month) may apply.
C. The Company will pay CFA on a current and ongoing basis for
CFA's reasonable time and costs required for the correction
of any errors or omissions in the Accounts and Records
delivered, or the information provided, to CFA by the
Company. Any such payment shall be in addition to the fees
and charges described above, provided that approval of the
amount of such payments shall be obtained in advance by CFA
from the Company if and when such additional charges would
exceed five percent of the usual charges payable for a
period under this Agreement.
D. Fund management will monitor the expense accrual procedures for accuracy
and adequacy based on outstanding liabilities monthly, and promptly
communicate to CFA any adjustment needed.
Compensation to be Paid to CFA:
-------------------------------
A. For accounting services, CFA shall be paid monthly at the following annual
rates:
Name of Fund Accounting Services Fee
REMS Real Estate Value-Opportunity 0.10% of the Fund's average
Fund daily net assets, computed daily
and paid monthly*, with a
minimum annual fee of $15,000.
* Rate reflects additional work required for short trading and REIT
related accounting services.
B. It is anticipated that the Company's security trading activity will remain
on average less than 100 trades per month, per portfolio. Should the
Company's security trading activity exceed an average of 100 trades per
month per portfolio, an additional fee of $2.50 per trade (for trades in
excess of 100 per month) may apply.
C. The Company will pay CFA on a current and ongoing basis for
CFA's reasonable time and costs required for the correction
of any errors or omissions in the Accounts and Records
delivered, or the information provided, to CFA by the
Company. Any such payment shall be in addition to the fees
and charges described above, provided that approval of the
amount of such payments shall be obtained in advance by CFA
from the Company if and when such additional charges would
exceed five percent of the usual charges payable for a
period under this Agreement.
D. Fund management will monitor the expense accrual procedures for accuracy
and adequacy based on outstanding liabilities monthly, and promptly
communicate to CFA any adjustment needed.
Compensation to be Paid to CFA:
------------------------------
A. For accounting services, CFA shall be paid monthly at the following annual
rates:
Name of Fund Accounting Services Fee
The Exceptionator Fund .05% of the Fund's average daily
net assets, computed daily and
paid monthly, with a minimum
annual fee of $25,000 for the
first three years, and $30,000
thereafter.
B. It is anticipated that the Company's security trading activity will remain
on average less than 100 trades per month, per portfolio. Should the
Company's security trading activity exceed an average of 100 trades per
month per portfolio, an additional fee of $2.50 per trade (for trades in
excess of 100 per month) may apply.
C. The Company will pay CFA on a current and ongoing basis for
CFA's reasonable time and costs required for the correction
of any errors or omissions in the Accounts and Records
delivered, or the information provided, to CFA by the
Company. Any such payment shall be in addition to the fees
and charges described above, provided that approval of the
amount of such payments shall be obtained in advance by CFA
from the Company if and when such additional charges would
exceed five percent of the usual charges payable for a
period under this Agreement.
D. Fund management will monitor the expense accrual procedures for accuracy
and adequacy based on outstanding liabilities monthly, and promptly
communicate to CFA any adjustment needed.
Compensation to be Paid to CFA:
------------------------------
A. For accounting services, CFA shall be paid monthly at the following annual
rates:
Name of Fund Accounting Services Fee
Epoch U.S. Large Cap Equity Fund 0.05% of the
Fund's average daily net assets, computed
daily and paid monthly, with a minimum
annual fee of $15,000.
B. It is anticipated that the Company's security trading activity will remain
on average less than 100 trades per month, per portfolio. Should the
Company's security trading activity exceed an average of 100 trades per
month per portfolio, an additional fee of $2.50 per trade (for trades in
excess of 100 per month) may apply.
C. The Company will pay CFA on a current and ongoing basis for
CFA's reasonable time and costs required for the correction
of any errors or omissions in the Accounts and Records
delivered, or the information provided, to CFA by the
Company. Any such payment shall be in addition to the fees
and charges described above, provided that approval of the
amount of such payments shall be obtained in advance by CFA
from the Company if and when such additional charges would
exceed five percent of the usual charges payable for a
period under this Agreement.
D. Fund management will monitor the expense accrual procedures for accuracy
and adequacy based on outstanding liabilities monthly, and promptly
communicate to CFA any adjustment needed.
B-2
1-WA/2589614.12
Amended and Restated Schedule B
to the
Accounting Services Agreement
between
The World Funds, Inc. (the "Company")
and
Commonwealth Fund Accounting, Inc. ("CFA")
Dated as of February 15, 2007
Services to be Provided by CFA:
------------------------------
1. Subject to the direction and control of the Board of Directors of the
Company (the "Board"), CFA shall perform all accounting services with
respect to each Fund except those that are the specific responsibility of
any other service provider hired by the Company, all in such manner and to
such extent as may be authorized by the Board.
2. CFA shall maintain and keep current the following Accounts and Records
relating to the business of the Company, in such form as may be mutually
agreed to between the Company and CFA, and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act"):
(a) Cash Receipts Journal (b) Cash Disbursements Journal (c) Dividends Paid
and Payable Schedule
(d) Purchase and Sales Journals - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers - Transaction Report and Tax Lot Report
(g) Broker Ledger - Commission Report
(h) Daily Expense Accruals
(i) Daily Interest Accruals
(j) Daily Trial Balance
(k) Portfolio Interest Receivable and Income Journal
(l) Listing of Portfolio Holdings showing cost, market value and
percentage of portfolio comprised of each
security.
3. CFA shall perform ministerial calculations necessary to calculate the
Company's net asset value daily, in accordance with the Company's
registration statement and as follows:
(a) Portfolio investments for which market quotations are
available to CFA by use of an automated financial
service (a "Pricing Service") shall be valued
based on the closing prices of the portfolio
investment reported by such Pricing Service,
except where the Company has given or caused to
be given specific instructions to utilize a
different value.
(b) Notwithstanding any information obtained from a Pricing
Service, all portfolio securities shall be given
such values as the Company shall direct by
instructions from the Company's Pricing
Committee, including all restricted securities
and other securities requiring valuation not
readily ascertainable solely by the use of such a
Pricing Service.
(c) All financial data reported by CFA under this Agreement shall be stated in
United States dollars or currency. To the extent necessary, CFA (or its
designee) shall convert financial data received in foreign currencies or
values to United States dollars or currency.
4. CFA will supply the Transfer Agent with daily NAV's for each portfolio by
6:00 p.m. EST.
5. It is the responsibility of CFA to be reconciled to the Custodian. CFA
will report any discrepancies to the Custodian, and shall report any
unreconciled items to the Company.
