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Exhibit (9)(a)
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT, dated May 31, 1997, by and between the parties
set forth in Schedule A hereto (designated collectively hereafter as the
"Funds") and XXX XXXXXX AMERICAN CAPITAL INVESTMENT ADVISORY CORP., a Delaware
corporation ("Advisory Corp.").
W I T N E S S E T H:
WHEREAS, each of the Funds is registered as a management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, Advisory Corp. has the capability of providing certain
accounting services to the Funds; and
WHEREAS, each desires to utilize Advisory Corp. in the
provision of such accounting services; and
WHEREAS, Advisory Corp. intends to maintain its staff in order
to accommodate the provision of all such services.
NOW THEREFORE, in consideration of the premises and the mutual
covenants spelled out herein, it is agreed between the parties hereto as
follows:
1. Appointment of Advisory Corp. As agent, Advisory Corp. shall provide
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each of the Funds the accounting services ("Accounting Services") as set
forth in Paragraph 2 of this Agreement. Advisory Corp. accepts such
appointment and agrees to furnish the Accounting Services in return for the
compensation provided in Paragraph 3 of this Agreement.
2. Accounting Services to be Provided. Advisory Corp. will provide
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to each respective Fund accounting related services in connection with the
maintenance of the financial records of such Fund, including without
limitation: (i) maintenance of the general ledger and other financial books
and records; (ii) processing of portfolio transactions; (iii) coordination
of the valuation of portfolio securities; (iv) calculation of the Fund's
net asset value; (v) coordination of financial and regulatory reporting;
(vi) preparation of financial reports for each Fund's Board of Trustees;
(vii) coordination of tax and financial compliance issues; (viii) the
establishment and maintenance of accounting policies; (ix) recommendations
with respect to dividend policies; (x) preparation of each Fund's financial
reports and other accounting and tax related notice information to
shareholders; and (xi) the assimilation and interpretation of accounting
data for meaningful management review. Advisory Corp. shall provide
accurate maintenance of each Fund's financial books and records as required
by the applicable securities statutes and regulations, and shall hire
persons (collectively the "Accounting Service Group") as needed to provide
such Accounting Services.
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3. Expenses and Reimbursements. Advisory Corp. shall be reimbursed by the
Funds for all costs and services incurred in connection with the provision
of the aforementioned Accounting Services ("Accounting Service Expenses"),
including but not limited to all salary and related benefits paid to the
personnel of the Accounting Service Group, overhead and expenses related to
office space and related equipment and out-of-pocket expenses.
The Accounting Services Expenses will be paid by Advisory Corp.
and reimbursed by the Funds. Advisory Corp. will tender to each Fund a monthly
invoice as of the last business day of each month which shall certify the total
support service expenses expended. Except as provided herein, Advisory Corp.
will receive no other compensation in connection with Accounting Services
rendered in accordance with this Agreement.
4. Payment for Accounting Service Expenses Among the Funds. As to one
quarter (25%) of the Accounting Service Expenses incurred under the
Agreement, the expense shall be allocated between all Funds based on the
number of classes of shares of beneficial interest that each respective
Fund has issued. As to the remaining three quarters (75%) of the Accounting
Service Expenses incurred under the Agreement, the expense shall be
allocated between all Funds based on their relative net assets. For
purposes of determining the percentage of expenses to be allocated to any
Fund, the liquidation preference of any preferred shares issued by any such
Fund shall not be considered a liability of such Fund for the purposes of
calculating relative net assets of such Fund.
5. Maintenance of Records. All records maintained by Advisory Corp. in
connection with the performance of its duties under this Agreement will
remain the property of each respective Fund and will be preserved by
Advisory Corp. for the periods prescribed in Section 31 of the 1940 Act and
the rules thereunder or such other applicable rules that may be adopted
from time to time under the act. In the event of termination of the
Agreement, such records will be promptly delivered to the respective Funds.
Such records may be inspected by the respective Funds at reasonable times.
6. Liability of Advisory Corp. Advisory Corp. shall not be liable to any
Fund for any action taken or thing done by it or its agents or contractors
on behalf of the fund in carrying out the terms and provisions of the
Agreement if done in good faith and without gross negligence or misconduct
on the part of Advisory Corp., its agents or contractors.
7. Indemnification By Funds. Each Fund will indemnify and hold Advisory
Corp. harmless from all lost, cost, damage and expense, including reasonable
expenses for legal counsel, incurred by Advisory Corp. resulting from: (a) any
claim, demand, action or suit in connection with Advisory Corp.'s acceptance of
this Agreement; (b) any action or omission by Advisory Corp. in the performance
of its duties hereunder; (c) Advisory Corp.'s acting upon instructions believed
by it to have been executed by a duly authorized officer of the Fund; or (d)
Advisory Corp.'s acting upon information provided by the Fund in form and under
policies agreed to by Advisory Corp. and the Fund. Advisory Corp. shall not be
entitled to such indemnification in respect of actions or omissions
constituting gross negligence or willful misconduct of Advisory Corp. or its
agents or contractors. Prior to confessing any claim against it which may be
subject to this indemnification, Advisory Corp. shall give the Fund reasonable
opportunity to defend against said claim in its own name or in the name of
Advisory Corp.
8. Indemnification By Advisory Corp. Advisory Corp. will indemnify and
hold harmless each Fund from all loss, cost, damage and expense, including
reasonable expenses for legal counsel, incurred by the Fund resulting from any
claim, demand, action or suit arising out of Advisory Corp.'s failure to comply
with the terms of this Agreement or which arises out of the gross negligence or
willful misconduct of Advisory Corp. or its agents or contractors; provided
that such negligence or misconduct is not attributable to the Funds, their
agents or contractors. Prior to confessing any claim against it which may be
subject to this indemnification, the Fund shall give Advisory Corp. reasonable
opportunity to defend against said claim in its own name or in the name of such
Fund.
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9. Further Assurances. Each party agrees to perform such further acts and
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execute such further documents as are necessary to effectuate the purposes
hereof.
10. Dual Interests. It is understood that some person or persons may be
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directors, trustees, officers or shareholders of both the Funds and Advisory
Corp. (including Advisory Corp.'s affiliates), and that the existence of any
such dual interest shall not affect the validity hereof or of any transactions
hereunder except as otherwise provided by a specific provision of applicable
law.
11. Execution, Amendment and Termination. The term of this Agreement shall
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begin as of the date first above written, and unless sooner terminated as
herein provided, this Agreement shall remain in effect through May, 1998, and
thereafter from year to year, if such continuation is specifically approved at
least annually by the Board of Trustees of each Fund, including a majority of
the independent Trustees of each Fund. This Agreement may be modified or
amended from time to time by mutual agreement between the parties hereto and
may be terminated after May, 1998, by at least sixty (60) days' written notice
given by one party to the others. Upon termination hereof, each Fund shall pay
to Advisory Corp. such compensation as may be due as of the date of such
termination and shall likewise reimburse Advisory Corp. for its costs, expenses
and disbursements payable under this Agreement to such date. This Agreement
may be amended in the future to include as additional parties to the Agreement
other investment companies for with Advisory Corp., any subsidiary or affiliate
serves as investment advisor or distributor if such amendment is approved by
the President of each Fund.
12. Assignment. Any interest of Advisory Corp. under this Agreement shall
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not be assigned or transferred, either voluntarily or involuntarily, by
operation of law or otherwise, without the prior written consent of the Funds.
This Agreement shall automatically and immediately terminate in the event of
its assignment without the prior written consent of the Funds.
13. Notice. Any notice under this Agreement shall be in writing, addressed
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and delivered or sent by registered or certified mail, postage prepaid, to the
other party at such address as such other party may designate for the receipt
of such notices. Until further notice to the other parties, it is agreed that
for this purpose the address of each Fund is Xxx Xxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000, Attention: President and that of Advisory Corp. for
this purpose is Xxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
Attention: President.
14. Personal Liability. As provided for in the Agreement and Declaration of
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Trust of the various Funds, under which the Funds are organized as
unincorporated trusts, the shareholders, trustees, officers, employees and
other agents of the Fund shall not personally be found by or liable for the
matters set forth hereto, nor shall resort be had to their private property for
the satisfaction of any obligation or claim hereunder.
15. Interpretative Provisions. In connection with the operation of this
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Agreement, Advisory Corp. and the Funds may agree from time to time on such
provisions interpretative of or in addition to the provisions of this Agreement
as may in their joint opinion be consistent with the general tenor of this
Agreement.
16. State Law. This Agreement shall be construed and enforced in accordance
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with and governed by the laws of the State of Illinois.
17. Captions. The captions in this Agreement are included for convenience
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of reference only and in no way define or limit any of the provisions hereof
or otherwise affect their construction or effect.
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IN WITNESS WHEREOF, the parties have caused this amended and
restated Agreement to be executed as of the day and year first above written.
ALL OF THE PARTIES SET FORTH IN SCHEDULE A
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Vice President
XXX XXXXXX AMERICAN CAPITAL INVESTMENT ADVISORY CORP.
By: /s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx X. XxXxxxxxx, President
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SCHEDULE A
I. Funds advised by Xxx Xxxxxx American Capital Investment
Advisory Corp. ("Investment Advisory Corp.") (Collectively, the "Former
Xxx Xxxxxx Funds"):
CLOSED END FUNDS
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Xxx Xxxxxx American Capital Municipal Income Trust
Xxx Xxxxxx American Capital California Municipal Trust
Xxx Xxxxxx American Capital High Income Trust
Xxx Xxxxxx American Capital High Income Trust II
Xxx Xxxxxx American Capital Investment Grade Municipal Trust
Xxx Xxxxxx American Capital Municipal Trust
Xxx Xxxxxx American Capital California Quality Municipal Trust
Xxx Xxxxxx American Capital Florida Quality Municipal Trust
Xxx Xxxxxx American Capital New York Quality Municipal Trust
Xxx Xxxxxx American Capital Ohio Quality Municipal Trust
Xxx Xxxxxx American Capital Pennsylvania Quality Municipal Trust
Xxx Xxxxxx American Capital Trust For Insured Municipals
Xxx Xxxxxx American Capital Trust For Investment Grade Municipals
Xxx Xxxxxx American Capital Trust For Investment Grade California Municipals
Xxx Xxxxxx American Capital Trust For Investment Grade Florida Municipals
Xxx Xxxxxx American Capital Trust For Investment Grade New Jersey Municipals
Xxx Xxxxxx American Capital Trust For Investment Grade New York Municipals
Xxx Xxxxxx American Capital Trust For Investment Grade Pennsylvania Municipals
Xxx Xxxxxx American Capital Municipal Opportunity Trust
Xxx Xxxxxx American Capital Advantage Municipal Income Trust
Xxx Xxxxxx American Capital Advantage Pennsylvania Municipal Income Trust
Xxx Xxxxxx American Capital Strategic Sector Municipal Trust
Xxx Xxxxxx American Capital Value Municipal Income Trust
Xxx Xxxxxx American Capital California Value Municipal Income Trust
Xxx Xxxxxx American Capital Massachusetts Value Municipal Income Trust
Xxx Xxxxxx American Capital New Jersey Value Municipal Income Trust
Xxx Xxxxxx American Capital New York Value Municipal Income Trust
Xxx Xxxxxx American Capital Ohio Value Municipal Income Trust
Xxx Xxxxxx American Capital Pennsylvania Value Municipal Income Trust
Xxx Xxxxxx American Capital Municipal Opportunity Trust II
Xxx Xxxxxx American Capital Florida Municipal Opportunity Trust
Xxx Xxxxxx American Capital Advantage Municipal Income Trust II
Xxx Xxxxxx American Capital Select Sector Municipal Trust
INSTITUTIONAL FUNDS
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II. Funds Advised by Xxx Xxxxxx American Capital Management, Inc.
("Management, Inc.") (Collectively, the "Former Xxx Xxxxxx Funds"):
The Explorer Institutional Trust
on behalf of its series
Explorer Institutional Active Core Fund
Explorer Institutional Limited Duration Fund
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OPEN END FUNDS
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III. Funds Advised by Xxx Xxxxxx American Capital Asset Management, Inc.
("Asset Management, Inc.") (Collectively, the "Former American Capital Funds"):
Xxx Xxxxxx American Capital Xxxxxxxx Fund ("Xxxxxxxx Fund")
Xxx Xxxxxx American Capital Corporate Bond Fund ("Corporate Bond Fund")
Xxx Xxxxxx American Capital Emerging Growth Fund ("Emerging Growth Fund")
Xxx Xxxxxx American Capital Enterprise Fund ("Enterprise Fund")
Xxx Xxxxxx American Capital Equity Income Fund ("Equity Income Fund")
Xxx Xxxxxx American Capital Global Managed Assets Fund ("Global Managed Assets
Funds")
Xxx Xxxxxx American Capital Government Securities Fund ("Government Securities
Fund")
Xxx Xxxxxx American Capital Government Target Fund ("Government Target Fund")
Xxx Xxxxxx American Capital Growth and Income Fund ("Growth and Income Fund")
Xxx Xxxxxx American Capital Harbor Fund ("Harbor Fund")
Xxx Xxxxxx American Capital High Income Corporate Bond Fund ("High Income
Corporate Bond Fund")
Xxx Xxxxxx American Capital Life Investment Trust ("Life Investment Trust" or
"LIT") on behalf of its Series
Enterprise Portfolio ("LIT Enterprise Portfolio")
Domestic Income Portfolio ("LIT Domestic Income Portfolio")
Emerging Growth Portfolio ("LIT Emerging Growth Portfolio")
Government Portfolio ("LIT Government Portfolio")
Asset Allocation Portfolio ("LIT Asset Allocation Portfolio")
Money Market Portfolio ("LIT Money Market Portfolio")
Real Estate Securities Portfolio ("LIT Real Estate Securities Portfolio")
Growth and Income Portfolio ("LIT Growth and Income Portfolio")
Global Equity Portfolio ("LIT Global Equity Portfolio")
Xxx Xxxxxx American Capital Limited Maturity Government Fund ("Limited
Maturity Government Fund")
Xxx Xxxxxx American Capital Pace Fund ("Pace Fund")
Xxx Xxxxxx American Capital Real Estate Securities Fund ("Real Estate
Securities Fund")
Xxx Xxxxxx American Capital Reserve Fund ("Reserve Fund")
Xxx Xxxxxx American Capital Small Capitalization Fund ("Small Capitalization
Fund")
Xxx Xxxxxx American Capital Tax-Exempt Trust ("Tax-Exempt Trust") on behalf of
its Series
Xxx Xxxxxx American Capital High Yield Municipal Fund ("High Yield
Municipal Fund")
Xxx Xxxxxx American Capital U.S. Government Trust for Income ("U.S.
Government Trust for Income")
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IV. Funds advised by Xxx Xxxxxx American Capital Investment
Advisory Corp. ("Investment Advisory Corp.") (Collectively, the "Former
Xxx Xxxxxx Funds"):
Xxx Xxxxxx American Capital U.S. Government Trust ("U.S. Government Trust")
on behalf of its series
Xxx Xxxxxx American Capital U.S. Government Fund ("U.S. Government Fund")
Xxx Xxxxxx American Capital Tax Free Trust ("Tax Free Trust") on behalf of its
series
Xxx Xxxxxx American Capital Insured Tax Free Income Fund ("Insured Tax Free
Income Fund")
Xxx Xxxxxx American Capital Tax Free High Income Fund ("Tax Free High Income
Fund")
Xxx Xxxxxx American Capital California Insured Tax Free Fund ("California
Insured Tax Free Fund")
Xxx Xxxxxx American Capital Municipal Income Fund ("Municipal Income Fund")
Xxx Xxxxxx American Capital Intermediate Term Municipal Income Fund
(Intermediate Term Municipal Income Fund")
Xxx Xxxxxx American Capital Florida Insured Tax Free Income Fund ("Florida
Insured Tax Free Income Fund")
Xxx Xxxxxx American Capital New Jersey Tax Free Income Fund ("New Jersey
Tax Free Income Fund")
Xxx Xxxxxx American Capital New York Tax Free Income Fund ("New York
Tax Free Income Fund")
Xxx Xxxxxx American Capital California Tax Free Income Fund ("California Tax
Free Income Fund")
Xxx Xxxxxx American Capital Michigan Tax Free Income Fund ("Michigan Tax
Free Income Fund")
Xxx Xxxxxx American Capital Missouri Tax Free Income Fund ("Missouri Tax
Free Income Fund")
Xxx Xxxxxx American Capital Ohio Tax Free Income Fund ("Ohio Tax Free
Income Fund")
Xxx Xxxxxx American Capital Trust ("VKAC Trust")
Xxx Xxxxxx American Capital High Yield Fund ("High Yield Fund")
Xxx Xxxxxx American Capital Short-Term Global Income Fund ("Short-Term
Global Income Fund")
Xxx Xxxxxx American Capital Strategic Income Fund ("Strategic Income Fund")
Xxx Xxxxxx American Capital Equity Trust ("Equity Trust")
on behalf of its series
Xxx Xxxxxx American Capital Utility Fund ("Utility Fund")
Xxx Xxxxxx American Capital Growth Fund ("Growth Fund")
Xxx Xxxxxx American Capital Value Fund ("Value Fund")
Xxx Xxxxxx American Capital Great American Companies Fund ("Great American
Companies Fund")
Xxx Xxxxxx American Capital Prospector Fund ("Prospector Fund")
Xxx Xxxxxx American Capital Aggressive Growth Fund ("Aggressive Growth Fund")
Xxx Xxxxxx American Capital Foreign Securities Fund ("Foreign Securities Fund")
Xxx Xxxxxx American Capital Pennsylvania Tax Free Income Fund ("Pennsylvania
Tax Free Income Fund")
Xxx Xxxxxx American Capital Tax Free Money Fund ("Tax Free Money Fund")
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