Exhibit 99.B9(c)
ACCOUNTING SERVICES AGREEMENT
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AGREEMENT dated as of September 30, 1997 between Xxxxxxx Capital Mutual
Fund Group, Inc. (the "Corporation"), a Maryland corporation, and Countrywide
Fund Services, Inc. ("Countrywide"), an Ohio corporation.
WHEREAS, the Corporation is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Corporation wishes to employ the services of Countrywide
to provide the Corporation with certain accounting and pricing services with
respect to the Corporation and each series identified on Schedule A (each, a
"Fund" and collectively, the "Funds"), which may be amended by agreement of the
parties from time to time; and
WHEREAS, Countrywide 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, the Corporation and Countrywide agree as follows:
1. APPOINTMENT.
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The Corporation hereby appoints and employs Countrywide as
agent to perform those services described in this Agreement for the Corporation.
Countrywide shall act under such appointment and perform the obligations thereof
upon the terms and conditions hereinafter set forth.
2. CALCULATION OF NET ASSET VALUE.
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Countrywide will calculate the net asset value of each Fund
and the per share net asset value of each Fund, in accordance with the current
prospectus and statement of additional information of each Fund, once daily as
of the time selected by the Corporation's Board of Directors. Countrywide will
prepare and maintain a daily valuation of all securities and other assets of the
Corporation in accordance with instructions from a designated officer of the
Corporation or its investment adviser and in the manner set forth in the
Corporation's current prospectus and statement of additional information. In
valuing securities of the Corporation, Countrywide may contract with, and rely
upon market quotations provided by, outside services.
3. PAYMENT OF EXPENSES.
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Countrywide shall process each request received from the
Corporation or its authorized agents for payment of the Corporation's expenses.
Upon receipt of written instructions signed by an officer or other authorized
agent of the Corporation, Countrywide shall prepare checks in the appropriate
amounts which shall be signed by an authorized officer of Countrywide and mailed
to the appropriate party.
4. FORM N-SAR.
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Countrywide shall maintain such records within its control and
shall be requested by the Corporation to assist the Corporation in fulfilling
the requirements of Form N-SAR.
5. BOOKS AND RECORDS.
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Countrywide will maintain and keep current the general ledger
for each Fund, recording all income and expenses, capital share activity and
security transactions of the Funds. Countrywide 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 Corporation and its
authorized agents regarding share purchases and redemptions and trial balances
of each Fund. Countrywide will prepare and maintain complete, accurate and
current all records with respect to the Funds required to be maintained by the
Corporation under the Internal Revenue Code of 1986, as amended (the "Code"),
and under the rules and regulations of the 1940 Act, and will preserve said
records in the manner and for the periods prescribed in the Code and the 1940
Act.
All of the records prepared and maintained by Countrywide pursuant to
this Agreement which are required to be maintained by the Corporation under the
Code and the 1940 Act will be the property of the Corporation. In the event this
Agreement is terminated, all such records shall be delivered to the Corporation
at the Corporation's expense, and Countrywide shall be relieved of
responsibility for the preparation and maintenance of any such records delivered
to the Corporation.
The records that Countrywide will create and maintain and the daily,
monthly, and annual (or semiannual) services that will be provided by
Countrywide are set forth on Schedule B.
6. COOPERATION WITH ACCOUNTANTS.
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Countrywide shall cooperate with the Corporation's independent
public accountants 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 accountants for the expression of their unqualified
opinion where required for any document for the Corporation.
7. FURTHER ACTIONS.
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Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
8. FEES.
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For the performance of the services under this Agreement, each
Fund shall pay Countrywide a monthly fee in accordance with the schedule
attached hereto as Schedule A. The fees with respect to any month shall be paid
to Countrywide on the last business day of such month. The Corporation shall
also promptly reimburse Countrywide for the cost of external pricing services
utilized by Countrywide. Countrywide shall not be required to reimburse the
Funds or the Funds' investment adviser for (or have deducted from its fees) any
expenses in excess of expense limitations imposed by certain state securities
commissions having jurisdiction over the Funds.
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
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The parties hereto acknowledge and agree that nothing
contained herein shall be construed to require Countrywide to perform any
services for the Corporation which services could cause Countrywide to be deemed
an "investment adviser" of the Corporation within the meaning of Section
2(a)(20) of the 1940 Act or to supersede or contravene the Corporation'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 of information furnished to it by Countrywide, the
Corporation 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.
10. REFERENCES TO COUNTRYWIDE.
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The Corporation shall not circulate any printed matter which
contains any reference to Countrywide without the prior written approval of
Countrywide, excepting solely such printed matter as merely identifies
Countrywide as Transfer, Dividend Disbursing, Shareholder Service and Plan Agent
and Accounting Services Agent. The Corporation will submit printed matter
requiring approval to Countrywide in draft form, allowing sufficient time for
review by Countrywide and its counsel prior to any deadline for printing.
11. EQUIPMENT FAILURES.
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Countrywide shall take all steps necessary to minimize or
avoid service interruptions, and has entered into one or more agreements making
provision for emergency use of electronic data processing equipment. Countrywide
shall have no liability with respect to equipment failures beyond its control.
12. INDEMNIFICATION OF COUNTRYWIDE.
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A. Countrywide 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 Countrywide nor its shareholders, 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 Corporation 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 gross
negligence on the part of any such persons in the performance of the duties of
Countrywide under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Countrywide under this Agreement.
B. Any person, even though also a director, officer, employee,
shareholder, or agent of Countrywide, or any of its affiliates, who may be or
become an officer, director, employee or agent of the Corporation, shall be
deemed, when rendering services to the Corporation or acting on any business of
the Corporation, to be rendering such services to or acting solely as an
officer, director, employee or agent of the Corporation and not as a director,
officer, employee, shareholder or agent of or one under the control or direction
of Countrywide or any of its affiliates, even though paid by one of those
entities.
C. Notwithstanding any other provision of this Agreement, the
Corporation shall indemnify and hold harmless Countrywide, its directors,
officers, employees, shareholders, agents, control persons and affiliates from
and against any and all claims, demands, expenses and liabilities (whether with
or without basis in fact or law) of any and every nature which Countrywide may
sustain or incur or which may be asserted against Countrywide by any person by
reason of, or as a result of: (i) any action taken or omitted to be taken by
Countrywide 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 Corporation
or upon the opinion of legal counsel for the Corporation or its own counsel; or
(ii) any action taken or omitted to be taken by Countrywide 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 Countrywide or its
directors, officers, employees, shareholders or agents in cases of its or their
own gross negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder.
D. If a claim is made against Countrywide as to which Countrywide may
seek indemnity under this Section, Countrywide shall notify the Corporation
promptly after any written assertion of such claim threatening to institute an
action or proceeding with respect thereto and shall notify the Corporation
promptly of any action commenced against Countrywide within ten (10) days after
Countrywide shall have been served with a summons or other legal process, giving
information as to the nature and basis of the claim. Failure to so notify the
Corporation shall not, however, relieve the Corporation from any liability which
it may have on account of the indemnity under this Section if the Corporation
has not been prejudiced in any material respect by such failure. Countrywide
shall cooperate in the control of the defense of any action, suit or proceeding
in which Countrywide is involved and for which indemnity is being provided by
the Corporation to Countrywide. The Corporation may negotiate the settlement of
any action, suit or proceeding subject to Countrywide's approval, which shall
not be unreasonably withheld. Countrywide shall have the right, but not the
obligation, to participate in the defense or settlement of a claim or action,
with its own counsel, but any costs or expenses incurred by Countrywide in
connection with, or as a result of, such participation will be borne solely by
Countrywide.
13. INDEMNIFICATION OF THE CORPORATION
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A. Countrywide shall indemnify any hold harmless the Corporation, each
Fund, and the Corporation's officers, directors, employees, shareholders,
agents, control persons and affiliates from and against any and all claims,
demands, expenses and liabilities (whether with or without basis in fact or law)
of any and every nature which the Corporation may sustain or incur or which may
be asserted against the Corporation by any person by reason of, or as a result
of, the gross negligence, willful misconduct, or bad faith of Countrywide, or
its directors, officers, employees, shareholders, agents, control persons or
affiliates in taking any action or omitting to take any action under this
Agreement or the reckless disregard of their duties thereunder.
B. If a claim is made against the Corporation as to which the
Corporation may seek indemnity under this Section, the Corporation shall notify
Countrywide promptly after any written assertion of such claim threatening to
institute an action or proceeding with respect thereto and shall notify
Countrywide promptly of any action commenced against the Corporation within ten
(10) days after the Corporation shall have been served with a summons or other
legal process, giving information as to the nature and basis of the claim.
Failure to so notify Countrywide shall not, however, relieve Countrywide from
any liability which it may have on account of the indemnity under this Section
if Countrywide has not been prejudiced in any material respect by such failure.
The Corporation shall cooperate in the control of the defense of any action,
suit or proceeding in which Countrywide is involved and for which indemnity is
being provided by Countrywide to the Corporation. Countrywide may negotiate the
settlement of any action, suite or proceeding subject to the Corporation's
approval, which shall not be unreasonably withheld. The Corporation shall have
the right, but not the obligation, to participate in the defense or settlement
of a claim or action, with its own counsel, but any costs or expenses incurred
by the Corporation in connection with, or as a result of, such participation
will be borne solely by the Corporation.
14. TERMINATION.
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A. The provisions of this Agreement shall be effective on the date
first above written and shall continue in effect for an initial term of one year
from that date. Thereafter, this Agreement shall continue in effect until
terminated by either party.
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, the
Corporation shall pay to Countrywide such compensation as may be due as of the
date of such termination, and shall likewise reimburse Countrywide for any
out-of-pocket expenses and disbursements reasonably incurred by Countrywide to
such date.
C. In the event that in connection with the termination of this
Agreement a successor to any of Countrywide's duties or responsibilities under
this Agreement is designated by the Corporation by written notice to
Countrywide, Countrywide shall, promptly upon such termination and at the
expense of the Corporation, transfer all records maintained by Countrywide under
this Agreement and shall cooperate in the transfer of such duties and
responsibilities, including providing for assistance from Countrywide's
cognizant personnel in the establishment of books, records and other data by
such successor.
15. SERVICES FOR OTHERS.
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Nothing in this Agreement shall prevent Countrywide or any
affiliated person (as defined in the 0000 Xxx) of Countrywide from providing
services for any other person, firm or corporation (including other investment
companies); provided, however, that Countrywide expressly represents that it
will undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Corporation under this Agreement.
16. LIMITATION OF LIABILITY.
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It is expressly agreed that the obligations of the Corporation
hereunder shall not be binding upon any of the Directors, shareholders,
nominees, officers, agents or employees of the Corporation, personally, but bind
only the property of the Corporation. The execution and delivery of this
Agreement have been authorized by the Directors of the Corporation and signed by
an officer of the Corporation, acting as such, and neither such authorization by
such Directors nor such execution and delivery by such officer shall 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 property of the Corporation.
17. SEVERABILITY.
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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.
18. QUESTIONS OF INTERPRETATION.
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This Agreement shall be governed by the laws of the State of
Ohio. 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.
19. NOTICES.
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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:
To the Trust: Xxxxxxx Capital Mutual Fund Group, Inc.
c/x Xxxxxxxxx Group
0000 Xxxx Xxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
To Countrywide: Countrywide Fund Services, Inc.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
or to such other address as any party may designate by notice complying with the
terms of this Section 19. 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.
20. AMENDMENT.
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This Agreement may not be amended or modified except by a
written agreement executed by both parties.
21. BINDING EFFECT.
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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.
22. COUNTERPARTS.
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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.
23. FORCE MAJEURE.
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If Countrywide 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 reasonable
time for performance in connection with this Agreement shall be extended to
include the period of such delay or non-performance.
24. MISCELLANEOUS.
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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. This Agreement and the rights and
duties hereunder shall not be assignable with respect to a Fund by either party
except with the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
XXXXXXX CAPITAL MUTUAL FUND GROUP, INC.
By: /s/ Xxxxxxxx X.X. Xxxxx
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Its: President
COUNTRYWIDE FUND SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Its: President
Schedule A
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COMPENSATION
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Xxxxxxx Fund
Xxxxxxx Fledgling Fund
Each Fund will pay Countrywide a monthly fee, according to the average
net assets of such series during such month, as follows:
Average Monthly Net Assets Monthly Fee
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0 - $ 25,000,000 $1,500
25 - 50,000,000 2,000
50 - 100,000,000 2,500
100 - 200,000,000 3,000
Over 200,000,000 4,000 plus .001%
of such assets in
excess of $200,000,000
Schedule B
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FUND ACCOUNTING SERVICES
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Required Records; Ledgers and Journals
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Countrywide shall maintain and keep current the following accounts and
records relating to the business of the Fund, in such form as may be mutually
agreed to between the Fund and Countrywide:
1) Cash Receipts Journal
2) Cash Disbursements Journal
3) Dividends Paid and Payable Schedule
4) Purchase and Sales Journals - Portfolio Securities
5) Realized/Unrealized Gain (Loss) Reports
6) Subscription and Redemption Journals
7) Security Ledgers - Transaction Report and Tax Lot Holdings Report
8) Broker Ledger - Commission Report
9) Daily Expense Accruals
10) Daily Interest Accruals
11) Daily Trial Balance
12) Portfolio Interest Receivable and Income Journal
13) Portfolio Dividend Receivable and Income Register
14) Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security
Daily Accounting Services
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1) Calculate Net Asset Value (and Offering Price) Per Share:
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- Update the daily market value of securities held by each Fund
- Where necessary, enter manual prices supplied by broker
- Prepare NAV proof sheet. Review components of change in NAV
for reasonableness
- Review variance reporting for price changes in individual
securities using variance levels established by Funds
- Review for ex-dividend items indicated by pricing sources;
trace to general ledger for agreement
- Communicate required pricing information (NAV/POP) to the
Corporation, Transfer Agent and, electronically, to NASDAQ
2) Calculate Daily Dividend:
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- Calculate net investment income available for distribution
daily
- Calculate daily dividend rate, and 1,7,30-day yields
- Verify dollar-weighted average maturity
3) Determine and Report Cash Availability:
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- Receive daily cash and transaction statements from the
custodian
- Complete daily bank cash reconciliations (including
documentation of any reconciling items) and notify the Fund's
custodian
- Report investable cash to investment adviser (if any)
4) Reconcile All Daily Expense Accruals:
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- Accrue expenses based on percentage of Fund's net assets or
specific dollar amounts provided by the administrator
- If applicable, accrue daily amortization of organization
expense
- If applicable, complete daily accrual of Rule 12b-1 Plan
expenses
5) Verify and Record All Daily Income Accruals for Debt Issues:
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- Review and verify all interest and amortization reports
- Establish security codes to permit income reporting
6) Monitor Domestic Securities:
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- Monitor information electronically received for all domestic
securities
- Review current daily security trades for dividend activity
- Interface with the custodian for timely collection and
postings of corporate actions, dividends and
interest/pre-payments
7) Enter All Security Trades:
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- Review verification of trade and interest calculations -
Verify settlement through custodian statements
- Maintain security ledger transaction reporting
- Maintain tax lot holdings
- Determine realized gains or losses on security trades
- Provide broker commission reporting
8) Enter All Fund Shares Transactions:
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- Process activity identified on transfer agent reports
- Verify settlement through custodian statements
- Reconcile to transfer agency report balances
9) Prepare Daily Trial Balance:
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- Post manual entries to general ledger
- Post custodian bank activity
- Post shareholder and security transactions
- Post and verify income and expense accruals
- Prepare general ledger
10) Review and Reconcile Custodian Statements:
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- Verify all posted interest, dividends, expenses, and
shareholder and security payments/receipts, etc.
- Post all cash settlement activity to trial balance and
reconcile to ending cash balance accounts
- Track status of past due items and failed grades with the
custodian
11) Preparation of Accounting Reports:
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- Trial Balance
- Portfolio Valuation
- NAV Calculation Report
- Cash Availability
Monthly Services
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1) Submission of Monthly Accounting Reports
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2) Reconcile Asset Listing to Custodian Asset Listing
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3) Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
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4) Prepare Documentation Supporting the Preparation of:
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- SEC yield reporting
- Income by state reporting
- Standard Industry Code Valuation Report
- Alternative Minimum Tax income segregation schedule
Annual and (Semiannual) Accounting Services
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1) Supply auditors with schedules supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in
accordance with standard audit assistance requirements
2) Provide Relevant N-SAR Reporting Information
