ACCOUNTING SERVICES AGREEMENT
AGREEMENT dated as of October 15, 1996 between Waterhouse Asset Management,
Inc. ("WAM"), a Delaware corporation, and MGF Service Corp. ("MGF"), an Ohio
corporation.
WHEREAS, Waterhouse Investors Cash Management Fund, Inc. (the "Fund") is an
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), currently comprised of three separate investment
portfolios (the "Portfolios"); and
WHEREAS, the WAM wishes to employ the services of MGF to provide the Fund
with certain accounting and pricing services; and
WHEREAS, MGF wishes to provide such services under the conditions set forth
below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, WAM and MGF agree as follows:
1. APPOINTMENT.
WAM hereby appoints and employs MGF as agent to perform those services
described in this Agreement for the Fund. MGF shall act under such appointment
and perform the obligations thereof upon the terms and conditions hereinafter
set forth.
2. CALCULATION OF NET ASSET VALUE.
MGF will calculate the net asset value of each Portfolio of the Fund and
the per share net asset value of each Portfolio of the Fund, in accordance with
the Fund's current prospectus and statement of additional information, twice
daily as of the times selected by the Fund's Board of Directors. MGF will
prepare and maintain a valuation of all securities and other assets of the Fund
in accordance with instructions from a designated officer of the Fund or WAM and
in the manner set forth in the Fund's prospectus and statement of additional
information as in effect from time to time. In valuing securities of the Fund,
MGF may contract with, and rely upon market quotations provided by, outside
services.
3. BOOKS AND RECORDS.
MGF will maintain and keep current the general ledger for each Portfolio of
the Fund, recording all income and expenses, capital share activity and security
transactions of the Fund. MGF will maintain such further books and records as
are necessary to enable it to perform its duties under this Agreement, and will
periodically provide reports to the Fund and its authorized agents regarding
share purchases and redemptions and trial balances of each Portfolio of the
Fund. MGF will prepare and maintain complete, accurate and current records with
respect to the Fund required to be maintained by the Fund pursuant to applicable
statues, rules and
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regulations, including without limitation, under the Internal Revenue Code of
1986, as amended, and under the rules and regulations of the 1940 Act, and will
preserve said records in the manner and for the periods prescribed therein. The
retention of such records shall be at the expense of the Fund.
All of the records prepared and maintained by MGF pursuant to this Section
3 which are required to be maintained by the Fund under the Code and the 1940
Act will be the property of WAM, on behalf of the Fund, and MGF agrees to make
such records available for inspection by the Fund, by any designated affiliate
or agent of the Fund, and by the Securities and Exchange Commission, at
reasonable times, and otherwise to keep confidential all records and other
information relative to the Fund, except when requested to divulge such
information by duly constituted authorities and court process. In the event this
Agreement is terminated, all such records shall be delivered to WAM at WAM's
expense, and MGF shall be relieved of responsibility for the preparation and
maintenance of any such records delivered to the Fund. In the event this
Agreement is terminated by reason of MGF's failure to comply with any provision
hereof, WAM shall not pay expenses of MGF in connection with its duties in this
paragraph.
4. PAYMENT OF FUND EXPENSES.
MGF shall process each request received from the Fund or WAM for payment of
the Fund's expenses. Upon receipt of written instructions signed by an officer
or other authorized agent of the Fund or WAM, MGF shall prepare checks in the
appropriate amounts which shall be signed by an authorized officer of MGF and
mailed to the appropriate party.
5. FORM N-SAR.
MGF shall maintain such records within its control and shall be requested
to assist the Fund in fulfilling the requirements of Form N-SAR.
6. COOPERATION WITH ACCOUNTANTS.
MGF shall cooperate with the Fund's independent auditors 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 auditors for the
expression of their unqualified opinion where required for any document for the
Fund.
7. FURTHER ACTIONS.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
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8. FEES.
For the performance of the services under this Agreement, WAM shall pay MGF
a monthly fee in accordance with the schedule attached hereto as Schedule A. The
fees with respect to any month shall be paid to MGF on the last business day of
such month. WAM shall also promptly reimburse MGF for the cost of external
pricing services utilized by MGF. If this Agreement becomes effective subsequent
to the first day of a month, or is terminated before the last day of a month,
fees for the part of the month this Agreement is in effect shall be pro rated
accordingly.
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
The parties hereto acknowledge and agree that nothing contained herein
shall be construed to require MGF to perform any services for the Fund which
services could cause MGF to be deemed an "investment adviser" of the Fund within
the meaning of Section 2(a)(20) of the 1940 Act or to supersede or contravene
the Fund'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 and completeness of information furnished
to it by MGF, the Fund 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 over the Fund.
10. INDEMNIFICATION OF MGF.
A. MGF 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 MGF nor its officers, directors, employees, agents, control
persons or affiliates of any thereof shall be subject to any liability for, or
any damages, expenses or losses incurred by the Fund or WAM 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 negligence on the part of any such persons
in the performance of the duties of MGF under this Agreement or by reason of
reckless disregard by any of such persons of the obligations and duties of MGF
under this Agreement.
B. Any person, even though also a director, officer, employee, or agent of
MGF, or any of its affiliates, who may be or become an officer, director,
employee or agent of the Fund, shall be deemed, when rendering services to the
Fund or acting on any business of the Fund, to be rendering such services to or
acting solely as an officer, director, employee or agent of the Fund and not as
a director, officer, employee, shareholder or agent of or one under the control
or direction of MGF or any of its affiliates, even though paid by one of those
entities.
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C. WAM shall indemnify and hold harmless MGF, its directors, officers,
employees, agents, control persons and affiliates from and against any and all
claims, demands, expenses and liabilities of any and every nature which MGF may
sustain or incur or which may be asserted against MGF by any person by reason
of, or as a result of: (i) any action taken or omitted to be taken by MGF in
good faith in reliance upon any certificate, instrument, order or share
certificate reasonably 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 Fund or WAM
or upon the opinion of legal counsel for the Fund or WAM or its own counsel; or
(ii) any action taken or omitted to be taken by MGF 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 MGF or its directors,
officers, employees, shareholders or agents in cases of its or their own
negligence, willful misconduct, bad faith, or reckless disregard of its or their
own duties hereunder.
11. INDEMNIFICATION OF FUND AND WAM.
MGF shall indemnify and hold harmless the Fund and WAM, and their
respective directors, officers, employees, agents, control persons and
affiliates from and against any and all claims, demands, expenses and
liabilities of any and every nature which the Fund or WAM or such persons may
sustain or incur by reason of, or as a result of MGF's negligence, willful
misconduct, bad faith, or reckless disregard of its duties hereunder.
12. TERMINATION.
A. The provisions of this Agreement shall be effective on the date first
above written, shall continue until December 12, 1997 and shall continue in
force from year to year thereafter, but only so long as such continuance is
approved (1) by MGF, (2) by vote, cast in person at a meeting called for the
purpose, of a majority of the Fund's directors who are not parties to this
Agreement or interested persons (as defined in the 0000 Xxx) of any such party,
and (3) by vote of a majority of the Fund's Board of Directors or a majority of
the Fund's outstanding voting securities.
B. Either party may terminate this Agreement on any date by giving the
other party at least sixty (60) days' prior written notice of such termination
specifying the date fixed therefore. Upon termination of this Agreement, WAM
shall pay to MGF such compensation as may be due as of the date of such
termination, and shall likewise reimburse MGF for any out-of-pocket expenses and
disbursements reasonably incurred by MGF to such date.
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C. In the event that in connection with the termination of this Agreement a
successor to any of MGF's duties or responsibilities under this Agreement is
designated by WAM by written notice to MGF, MGF shall, promptly upon such
termination and at the expense of WAM, transfer to the Fund or its successor, as
indicated by such notice, all records maintained by MGF under this Agreement and
shall cooperate in the transfer of such duties and responsibilities, including
provision for assistance from MGF's cognizant personnel in the establishment of
books, records and other data by such successor. In the event this Agreement is
terminated by reason of MGF's failure to comply with any provision hereof, WAM
shall not pay any expenses of MGF in connection with its duties in this
paragraph.
13. SERVICES FOR OTHERS.
Nothing in this Agreement shall prevent MGF or any affiliated person (as
defined in the 0000 Xxx) of MGF from providing services for any other person,
firm or corporation (including other investment companies); provided, however,
that MGF expressly represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations to WAM under
this Agreement.
14. SEVERABILITY.
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.
15. QUESTIONS OF INTERPRETATION.
This Agreement shall be governed by the laws of the State of New York. 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 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
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
16. NOTICES.
All notices, requests, consents and other communications 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:
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To WAM and the Fund: Waterhouse Asset Management, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
To MGF: MGF Service Corp.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
or to such other address as any party may designate by notice complying with the
terms of this Section 16. 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; 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.
17. AMENDMENT.
This Agreement may not be amended or modified except by a written agreement
executed by both parties and approved by the Fund's Board of Directors.
18. BINDING EFFECT.
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.
19. COUNTERPARTS.
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.
20. FORCE MAJEURE.
If MGF shall be delayed in its performance of services or prevented
entirely or in part from performing services due to causes or events beyond its
control, including and without limitation, acts of God, interruption of power or
other utility, transportation or communication services, acts of civil or
military authority, sabotages, 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, such delay or
non-performance shall be excused and a
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reasonable time for performance in connection with this Agreement shall be
extended to include the period of such delay or non-performance.
21. MISCELLANEOUS.
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.
WATERHOUSE ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Its: President
MGF SERVICE CORP.
By: /s/ Xxxxxx Xxxxxx
Its: President
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Schedule A
COMPENSATION
MGF will receive a monthly fee from each Portfolio, based upon the average net
assets of such Portfolio during such month, in accordance with the following
schedule:
Portfolio's Average Net Assets Monthly Fee
------------------------------ -----------
Less than $250,000,000 $3,000
$250,000,000 - $400,000,000 4,000
$400,000,000 - $500,000,000 4,500
$500,000,000 - $600,000,000 5,000
Over $600,000,000 6,000
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