ACCOUNTING AGENCY AGREEMENT
THIS AGREEMENT is made as of August 23, 2006 by and between XXXXX BROTHERS XXXXXXXX & CO., a limited partnership organized under the laws of the State of New York (the “Fund Accountant”) , and THE WORLD FUNDS, INC. an open-end management investment company incorporated in Maryland (the “Fund” on behalf of each series listed on Appendix A to this Agreement each a “Portfolio” and collectively, the “Portfolios11)
WITNESSETH:
1. Appointment of Fund Accountant. The Fund hereby employs and appoints the Fund Accountant to act as its accounting agent on the terms set forth in this Agreement, and the Fund Accountant accepts such appointment.
| 2.1 properly certified or authenticated copies of resolutions of the Fund’s Board of Directors or Trustees authorizing the appointment of the Fund Accountant as accounting agent of the Fund and approving this Agreement; | |
| 2.2 a copy of the Fund’s most recent registration statement; | |
| 2.3 copies of all agreements between the Fund and its service providers, including without limitation, advisory, distribution and administration agreements and distribution and/or shareholder servicing plans; | |
| 2.4 a copy of the Fund’s valuation procedures; | |
| 2.5 a copy of the Fund’s Articles of Incorporation/Declaration of Trust and By-laws; | |
| 2.6 any other documents or resolutions (including but not limited to directions or resolutions of the Fund’s Board of Directors or Trustees) which relate to or affect the Fund Accountant’s |
| Performance of its duties hereunder or which the Fund Accountant may at any time reasonably request; and | |
| 2.7 copies of any and all amendments or supplements to the foregoing. |
3. Duties as Fund Accountant Subject to the supervision and direction of the Fund’s Board of Directors or Trustees, the Fund Accountant will perform the accounting services described in Appendix B hereto. Additional services may be provided by the Fund Accountant upon the request of the Fund as mutually agreed from time to time. In performing its duties and obligations hereunder, the Fund Accountant will act in accordance with the Fund’s instructions as defined in Section 5 (“Instructions”). It is agreed and understood that the Fund Accountant shall not be responsible for the Fund’s compliance with any applicable documents, laws or regulations, or for losses, costs or expenses arising out of the Fund’s failure to comply with said documents, laws or regulations or the Fund’s failure or inability to correct any non-compliance therewith. The Fund Accountant shall in no event be required to take any action, which is in contravention of any applicable law, rule or regulation or any order or judgment of any court of competent jurisdiction.
3.1 Records.
The Fund Accountant will maintain and retain such records as required by the
1940 Act and other applicable federal securities laws and created pursuant to the
performance of the Fund Accountant’s obligations under this Agreement. The
Fund Accountant will maintain such other records as requested by the Fund and received
by the Fund Accountant. The Fund Accountant shall not be responsible for the accuracy
and completeness of any records not created by the Fund Accountant. The Fund Accountant
acknowledges that the records maintained and preserved by the Fund Accountant pursuant
to this Agreement are the property of the Fund and will be, at the Fund’s expense,
surrendered promptly upon reasonable request. In performing its obligations under
this Section, the Fund Accountant may utilize micrographic and electronic storage
media as well as independent third party storage facilities. |
4. Duties of the Fund. The Fund shall notify the Fund Accountant promptly of any matter affecting the performance by the Fund Accountant of its services under this Agreement and where the Fund Accountant is providing fund accounting services pursuant to this Agreement shall promptly notify the Fund Accountant as to the accrual of liabilities of the Fund, liabilities of the Fund not appearing on the books of account kept by the Fund Accountant as to the existence, status and proper treatment of reserves, if any, authorized by the Fund. Where the Fund Accountant is providing portfolio compliance monitoring services
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pursuant to this Agreement, the Fund agrees to notify the Fund Accountant in the event the Fund or any officer, employee or agent of the Fund detects a possible non-compliance of the Fund with its investment restrictions, policies and limitations. The Fund agrees to provide such information to the Fund Accountant as may be requested under the banking and securities laws of the United States or other jurisdictions relating to “Know Your Customer” and money laundering prevention rules and regulations (collectively, the “KY C Requirements”). For purposes of this subsection, and in connection with all applicable KYC Requirements, the Fund and each Portfolio is the “client” or “customer” of the Fund Accountant. The Fund further represents that it will perform all obligations required under applicable KYC Requirements with respect to its “customers” (as defined in the KYC Requirements) and that, because these customers do not constitute “customers” or “clients” of the Fund Accountant under such applicable rules and regulations, the Fund Accountant is under no such similar obligations.
| 5. | Instructions. |
5.1 The Fund
Accountant shall not be liable for, and shall be indemnified by the Fund against
any and all losses, costs, damages or expenses arising from or as a result of, any
action taken or omitted in reliance upon Instructions or upon any other written
notice, request, direction, instruction, certificate or other instrument believed
by it to be genuine and signed or authorized by the proper party or parties. A list
of persons so authorized by the Fund (“Authorized Persons”) is attached hereto as
Appendix C and upon which the Fund Accountant may rely until its receipt of notification
to the contrary by the Fund. |
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5.2 Instructions
shall include a written request, direction, instruction or certification signed
or initialed on behalf of the Fund by one or more persons as the Board of Directors
or Trustees of the Fund shall have from time to time authorized in writing. Those
persons authorized to give Instructions may be identified by the Board of Directors
or Trustees by name, title or position and will include at least one officer empowered
by the Board to name other individuals who are authorized to give Instructions on
behalf of the Fund. |
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5.3 Telephonic
or other oral instructions or instructions given by telefax transmission may be
given by any one of the above persons and will also be considered Instructions if
the Fund Accountant believes them to have been given by a person authorized to give
such Instructions with respect to the transaction involved. |
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5.4 With respect to telefax transmissions, the Fund hereby acknowledges that (i) receipt
of legible |
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instructions
cannot be assured, (ii) the Fund Accountant cannot verify that authorized signatures
on telefax instructions are original, and (iii) the Fund Accountant shall not be
responsible for losses or expenses incurred through actions taken in reliance on
such telefax instructions. The Fund agrees that such telefax instructions shall
be conclusive evidence of the Fund’s Instruction to the Fund Accountant to
act or to omit to act. |
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5.5 Instructions
given orally will not be confirmed in writing and the lack of such confirmation
shall in no way affect any action taken by the Fund Accountant in reliance upon
such oral Instructions. The Fund authorizes the Fund Accountant to tape record any
and all telephonic or other oral Instructions given to the Fund Accountant by or
on behalf of the Fund (including any of its officers, directors, trustees, employees
or agents or any investment manager or adviser or person or entity with similar
responsibilities which is authorized to give Instructions on behalf of the Fund
to the Fund Accountant.) |
6. Expenses and Compensation. For the services to be rendered and the facilities to be furnished by the Fund Accountant as provided for in this Agreement, the Fund shall pay the Fund Accountant for its services rendered pursuant to this Agreement a fee based on such fee schedule as may from time to time be agreed upon in writing by the Fund and the Fund Accountant. Additional services performed by the Fund Accountant as requested by the Fund shall be subject to additional fees as mutually agreed from time to time. In addition to such fee, the Fund Accountant shall xxxx the Fund separately for any out-of-pocket disbursements of the Fund Accountant based on an out-of-pocket schedule as may from time to time be agreed upon in writing by the Fund and the Fund Accountant. The foregoing fees and disbursements shall be billed to the Fund by the Fund Accountant and shall be paid promptly by wire transfer or other appropriate means to the Fund Accountant.
7. Standard of Care. The Fund Accountant shall be held to the exercise of reasonable care and diligence in carrying out the provisions of this Agreement, provided that the Fund Accountant shall not thereby be required to take any action which is in contravention of any applicable law, rule or regulation or any order or judgment of any court of competent jurisdiction.
8. General Limitations on Liability. The Fund Accountant shall incur no liability with respect to any telecommunications, equipment or power failures, or any failures to perform or delays in performance by postal or courier services or third-party information providers (including without limitation those listed on Appendix D).
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8.1 The Fund Accountant shall also incur no liability under this Agreement if the Fund Accountant or any agent or entity utilized by the Fund Accountant shall be prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement
provides sha11 be performed or omitted to be performed , by reason of causes or
events beyond its control, including but not limited to: |
8.1.1 any
Sovereign Event. A “Sovereign Event” shall mean any nationalization; expropriation;
devaluation; revaluation; confiscation ; seizure; cancellation; destruction; strike;
act of war, terrorism, insurrection or revolution ; or any other act or event beyond
the Fund Accountant’s control; |
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8.1.2 any
provision of any present or future law, regulation or order of the United States
or any state thereof, or of any foreign country or political subdivision thereof
, or of any securities depository or clearing agency; and |
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8.1.3 any
provision of any order or judgment of any court of competent jurisdiction. |
8.2 The Fund
Accountant shall not be held accountable or liable for any losses, damages or expenses
the Fund or any shareholder or former shareholder of the Fund or any other person
may suffer or incur arising from acts, omissions , errors or delays of the Fund
Accountant in the performance of its obligations and duties as provided in Section
3 hereof, including without limitation any error of judgment or mistake of law,
except a damage, loss or expense directly resulting from the Fund Accountant’s
willful malfeasance , bad faith or negligence in the performance of such Fund Accountant’s obligations and duties. |
8.3 In no event and under no circumstances shall the Fund Accountant be held liable to the
other party for consequential or indirect damages, loss of profits, damage to reputation
or business or any other special or punitive damages arising under or by reason
of any provision of this Agreement or for any act or omissions hereunder, even if
the Fund Accountant has been advised of the possibility of such damages or losses. |
9. Specific Limitations on Liability. In addition to, and without limiting the application of the general limitations on liability contained in Section 8, above, the following specific limitations on the Fund Accountant’s liability shall apply to the particular accounting services set forth on Appendix B hereto.
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9.1 Liability
for Fund Accounting Services. Without limiting the provisions in Section 8 hereof,
the Fund Accountant’s liability for acts, omissions, errors or delays relating
to its fund accounting obligations and duties shall be limited to the amount of
any expenses associated with a required recalculation of net asset value per share
(“NAV”) or any direct damages suffered by shareholders in connection with such recalculation.
The Fund Accountant’s liability or accountability for such acts, omissions,
errors or delays shall be further subject to clauses 9.2.1through 9.2.4 below. |
9.1.1. The
parties hereto acknowledge that the Fund Accountant’s causing an error or delay
in the determination of NAV may, but does not in and of itself, constitute negligence
or reckless or willful misconduct. The parties further acknowledge that in accordance
with industry practice, the Fund Accountant shall be liable and the recalculation
of NAV shall be performed only with regard to errors in the calculation of the NAV
that are greater than or equal to $.01 per share of a Fund. If a recalculation of
NAV occurs, the Fund agrees to reprocess shareholder transactions or take such other
action(s) so as to eliminate or minimize to the extent possible the liability of
the Fund Accountant. |
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9.1.2. In
no event shall the Fund Accountant be liable or responsible to the Fund, any present
or former shareholder of the Fund, or any other person for any error or delay that
continued or was undetected after the date of an audit performed by the certified
public accountants employed by the Fund if, in the exercise of reasonable care in
accordance with generally accepted accounting standards, such accountants should
have become aware of such error or delay in the course of performing such audit. |
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9.1.3 The
Fund Accountant shall not be held accountable or liable to the Fund, any shareholder
or former shareholder thereof or any other person for any delays or losses, damages
or expenses any of them may suffer or incur resulting from (i) the Fund Accountant’s usage of a third party service provider for the purpose of storing records
delivered to the Fund Accountant by the Fund and which the Fund Accountant did not
create in the performance of its obligations hereunder; (ii) the Fund Accountant’s failure to receive timely and suitable notification concerning quotations
or corporate actions relating to or affecting portfolio securities of the Fund;
or (iii) any errors in the computation of NAV based upon or arising out of quotations
or information as to corporate actions if received by the Fund Accountant either
(a) from a source which the Fund Accountant was authorized to rely upon (including,
but not limited to, the fair value pricing procedures of any investment manager
of adviser of the Fund and those sources listed on Appendix D), (b) from a source
which in the Fund Accountant’s reasonable judgment was as reliable a source
for such quotations or information as such authorized sources, or (c) relevant information
known to |
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the Fund or
its service provider which would impact the calculation of NAV but which is not
communicated by the Fund or its service providers to the Fund Accountant. To the
extent that Fund assets are not in the custody of the Fund Accountant, the Fund
Accountant may conclusively rely on any reporting in connection with such assets
provided to the Fund Accountant by a third party on behalf of the Fund. |
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9.1.4. In
the event of any error or delay in the determination of such NAV for which the Fund
Accountant may be liable, the Fund and the Fund Accountant will consult and make
good faith efforts to reach agreement on what actions should be taken in order to
mitigate any loss suffered by the Fund or its present or former shareholders, in
order that the Fund Accountant’s exposure to liability shall be reduced to
the extent possible after taking into account all relevant factors and alternatives.
It is understood that in attempting to reach agreement on the actions to be taken
or the amount of the loss which should appropriately be borne by the Fund Accountant,
the Fund and the Fund Accountant will consider such relevant factors as the amount
of the loss involved, the Fund’s desire to avoid loss of shareholder good will,
the fact that other persons or entities could have been reasonably expected to have
detected the error sooner than the time it was actually discovered, the appropriateness
of limiting or eliminating the benefit which shareholders or former shareholders
might have obtained by reason of the error, and the possibility that other parties
providing services to the Fund might be induced to absorb a portion of the loss
incurred. |
10. Indemnification. The Fund hereby agrees to indemnify the Fund Accountant against and hold it harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any act, omission, error or delay or any claim, demand, action or suit, in connection with or arising out of performance of its obligations and duties under this Agreement, not resulting from the willful malfeasance, bad faith or negligence of the Fund Accountant in the performance of such obligations and duties. The provisions of this Section 10 shall survive the termination of this Agreement.
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advice of its counsel or of the Fund’s counsel.
12. Termination of Agreement. This Agreement may be terminated by either party in accordance with the provisions of this Section
12.1 This
Agreement shall have an initial term of three (3) years from the date hereof. Thereafter,
this Agreement shall automatically renew for successive one (1) year periods unless
either party terminates this Agreement by written notice effective no sooner than
seventy-five (75) days following the date that notice to such effect shall be delivered
to the other party at its address set forth herein. Notwithstanding the foregoing
provisions, either party may terminate this Agreement at any time (a) for cause,
which as a material breach of the Agreement not cured within sixty (60) days, in
which case termination shall be effective upon written receipt of notice by the
non-terminating party, or upon thirty (30) days written notice to the other party
in the event that the either party is adjudged bankrupt or insolvent, or there shall
be commenced against such party a case under any applicable bankruptcy, insolvency,
or other similar law now or hereafter in effect. In the event a termination notice
is given by a party hereto, all expenses associated with the movement of records
and materials and the conversion thereof shall be paid by the Fund for which services
shall cease to be performed hereunder. The Fund Accountant shall be responsible for
completing all actions in progress when such termination notice is given unless
otherwise agreed. |
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12.2 Upon
termination of the Agreement in accordance with this Section 12, the Fund may request
the Fund Accountant to promptly deliver to the Fund or to any designated third party
all records created and maintained by the Fund Accountant pursuant to Section 3.1
of this Agreement, as well as any Fund records maintained but not created by the
Fund Accountant. If such request is provided in writing by the Fund to the Fund
Accountant within seventy-five (75) days of the date of termination of the Agreement,
the Fund Accountant shall provide to the Fund a certification that all records created
by the Fund Accountant pursuant to its obligations under Section 3.1 of this Agreement
are accurate and complete. After seventy-five (75) days of the date of termination
of this Agreement, no such certification will be provided to the Fund by the Fund
Accountant and the Fund Accountant is under no further obligation to ensure that
records created by the Fund Accountant pursuant to Section 3.1 of this Agreement
are maintained in a form that is accurate or complete. |
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13. Confidentiality. The parties hereto agree that each shall treat confidentially the terms and conditions of this Agreement and all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto shall be used by any other party hereto solely for the purpose of rendering or obtaining services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party without the prior consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by or to any Regulatory Authority, any auditor of the parties hereto, or by judicial or administrative process or otherwise by Applicable Law.
14. Tape-recording. The Fund authorizes the Fund Accountant to tape record any and all telephonic or other oral instructions given to the Fund Accountant by or on behalf of the Fund, including from any Authorized Person. This authorization will remain in effect until and unless revoked by the Fund in writing. The Fund further agrees to solicit valid written or other consent from any of its employees with respect to telephone communications to the extent such consent is required by applicable law.
15. Entire Agreement; Amendment. This Agreement constitutes the entire understanding and agreement of the parties hereto and supersedes any other oral or written agreements heretofore in effect between the parties with respect to the subject matter hereof. No provision of this Agreement may be amended or terminated except by a statement in writing signed by the party against which enforcement of the amendment or termination is sought.
16. Severability. fu 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.
17. Headings. The section headings in this Agreement are for the convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions thereof.
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18. Governing Law. This Agreement shall be governed by and construed according to the laws of the Commonwealth of Massachusetts without giving effect to conflicts of laws principles and each of the parties hereto irrevocably consents to the exclusive jurisdiction of the courts of the Commonwealth of Massachusetts in the City of Boston and the federal courts located in the City of Boston. The fund irrevocably waives any objection it may now or hereafter have to the laying of venue of any action or proceeding in any of the aforesaid courts and any claim that any such action or proceeding has been brought in an inconvenient forum. Furthermore, each party hereto irrevocably waives any right that it may have to trial by jury in any action, proceeding or counterclaim arising out of or related to this Agreement or the services contemplated hereby.
19. Notices. Notices and other writings delivered or mailed postage prepaid to the Fund addressed to the Fund at [ ] or to such other address as the Fund may have designated to the Fund Accountant in writing, or to the Fund Accountant at 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Manager , Fund Administration Department, or to such other address as the Fund Accountant may have designated to the Fund in writing, shall be deemed to have been properly delivered or given hereunder to the respective addressee.
20. Binding Effect; Assignment This Agreement shall be binding upon and inure to the benefit of the Fund and the Fund Accountant and their respective successors and assigns, provided that no party hereto may assign this Agreement or any of its rights or obligations hereunder without the written consent of the other party. Each party agrees that only the parties to this Agreement and/or their successors in interest shall have a right to enforce the terms of this Agreement. Accordingly, no client of the Fund or other third party shall have any rights under this Agreement and such rights are explicitly disclaimed by the parties.
21. Counterparts. This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original. This Agreement shall become effective when one or more counterparts have been signed and delivered by each of the parties. A photocopy or telefax of the Agreement shall be acceptable evidence of the existence of the Agreement and the Fund Accountant shall be protected in relying on the photocopy or telefax until the Fund Accountant has received the original of the Agreement.
22. Exclusivity. The services furnished by the Fund Accountant hereunder are not to be deemed exclusive, and the Fund Accountant shall be free to furnish similar services to others.
23. Authorization. The Fund hereby represents and warrants that the Fund’s Board of Directors or Trustees has authorized the execution and delivery of this Agreement and that an authorized officer of the
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Fund has signed this Agreement, Appendices A, B, C, and D and the fee schedule hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first written above.
The undersigned acknowledges that (I/we) have received a copy of this document.
THE WORLD
FUNDS, INC.
on behalf of each of the Funds listed
on the attached Appendix A
By: /s/ Xxxx Xxxxx III
Name:
Title:
Date:
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APPENDIX A
TO
Dated as of August 30, 2010
The following is a list of Portfolios for which the Fund Accountant shall serve under an Accounting Agency Agreement dated as of August 23, 2006 ]:
Eastern European
Equity Fund
Third Millennium Russia Fund
THE WORLD
FUNDS, INC.
on behalf of each of the Funds listed
on the attached Appendix
A
By: /s/ Xxxx Xxxxx III
Name:
Title:
Date:
APPENDIXB
TO
Fund Accounting Services
The Fund Accountant will provide
the following fund accounting services to each Portfolio each day that such Portfolio
and the New York Stock Exchange (“NYSE”) is open (each a “Business Day”): transaction
processing and review, custodial reconciliation, securities pricing and investment
accounting.
| Transaction Processing and Review. The Fund Accountant shall input and reconcile each Portfolio’s investment activity including with respect to: | |||
| • | Investment taxlots | ||
| • | Income | ||
| • | Dividends | ||
| • | Principal paydowns | ||
| • | Capital activity | ||
| • | Expense accruals | ||
| • | Cash activity | ||
| • | Corporate Reorganizations | ||
| Custodial Reconciliation. The Fund Accountant shall reconcile the following positions of each Portfolio against the records of the Custodian: | |||
| • | Securities holdings | ||
| • | Cash including cash transfers, fees assessed and other investment related cash transactions | ||
| • | Trade settlements | ||
| Securities Pricing. The Fund Accountant shall update each security position of each Portfolio as to the following: | |||
| • | Market prices obtained from approved sources including those listed on Appendix D or Fair Valuations obtained from an Authorized Person of the Fund | ||
| • | Xxxx to market of non-base receivables/payables utilizing approved foreign exchange quotations as quoted in Appendix D | ||
| • | Xxxx to market of non-base currency positions utilizing the approved sources quoted in Appendix D or Fair Valuations obtained from an Authorized Person of the Fund | ||
| Investment Accounting. The Fund Accountant shall provide the following investment accounting services to each Portfolio: | |||
| • | Amortization/accretion at the individual tax lot level | ||
| • | General ledger entries | ||
| • | Book value calculations | ||
| • | Trade Date+ 1 accounting Calculation of Net Asset Value Per Share (“NAV”) as of the close of business of the NYSE | ||
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XXXXX BROTHERS XXXXXXXX & CO.
THE WORLD
FUNDS, INC.
on behalf of each of the Funds listed
on the attached Appendix
A
/s/ Xxxx Xxxxx,
III
Name:
Title:
Date:
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APPENDIXC
List of Authorized Persons
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxxx
Xxxx Xxxxx, III
THE WORLD
FUNDS, INC.
on behalf of each of the Funds listed
/s/ Xxxx Xxxxx,
III
Name
Date:
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APPENDIX D TO
AUTHORISED SOURCES
The Fund hereby acknowledges that the Fund Accountant is authorized to use the following authorized sources and their successors and assigns for financial reporting, compliance monitoring, performance measurement, pricing (including corporate actions, dividends and rights offering), and foreign exchange quotations, to assist it in fulfilling its obligations under the aforementioned Agreement.
XXXXXXXXX
XXXXXXX/XXXXXX
EXTEL (LONDON)
FUND MANAGERS
INTERACTNE DATA CORPORATION
REPUTABLE BROKERS
REUTERS
SUBCUSTODIAN BANKS
TELEKURS
VALORINFORM (GENEYA)
REPUTABLE FINANCIAL PUBLICATIONS
STOCK EXCHANGES
FINANCIAL INFORMATION
INC. CARD
JJKENNY
FRI CORPORATION
XXXXXX XXXXXXX CAPITAL INTERNATIONAL
Other data source:
THE WORLD
FUNDS, INC.
on behalf of each of the Funds listed
on the attached Append A
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