Exhibit 18
ACCOUNTING AND ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of May, 2002 by and between
VAN ECK FUNDS II INC. a Maryland Corporation having its principal place of
business in New York, New York (the "Fund") and XXX XXX ASSOCIATES CORPORATION
(the "Administrator"), a Delaware corporation having its principal place of
business in New York, New York.
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain the Administrator to provide certain
accounting and administrative services to certain series thereof, namely Mid Cap
Value Fund and any other Series as may, from time to time, be included in
Exhibit A hereto (the "Series"), and the Administrator is willing to furnish
such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT
The Fund hereby appoints the Administrator to provide certain accounting and
administrative services to the Series with respect to their investment
portfolios for the period and on the terms set forth in this Agreement. The
Administrator accepts such appointment and agrees to furnish the services herein
set forth. The Administrator agrees to comply with all relevant provisions of
the 1940 Act and applicable rules and regulations thereunder. The Fund currently
offers seven series and one class of shares for each series, and may, from time
to time, issue one or more separate Series or classes or classify and reclassify
shares of such Series or class. The Administrator shall identify to each such
Series or class of shares property belonging to such Series or class and shall
prepare such reports, confirmations and notices to the Series called for under
this Agreement and shall identify the Series or class of shares to which such
report, confirmation or notice pertains in the event it is engaged by the Series
to perform the services herein contained respecting such Series or class of
shares.
2. DELIVERY OF DOCUMENTS
The Fund, with respect to each Series, will furnish the Administrator with
properly certified or authenticated copies of such documents, resolutions and
agreements and any amendments or supplements thereto, as the Administrator may,
from time to time, request.
3. SERVICES ON A CONTINUING BASIS
(a) The Administrator will be responsible for the following accounting
functions on an ongoing basis:
(i) Journalize the Series' investment, capital share and income
and expense activities;
(ii) Maintain individual ledgers for investment securities; record
all Series security transaction and corporate actions;
(iii) Reconcile cash and investment balances of the Series with the
Fund's custodian, and provide the Series with the beginning
cash balance available for investment purposes;
(iv) Post to and prepare the Series' Statement of Assets and
Liabilities and the Statement of Operations;
(v) Calculate various contractual expenses (E.G., transfer agency
fees of the Series);
(vi) Control all disbursements from the Series and authorize such
disbursements upon written instructions from authorized Series
officers and agents;
(vii) Calculate the Series' capital gains and losses; recommend
capital gain distributions;
(viii) Determine the Series' net income; recommend dividend
distributions;
(ix) Compute the net asset value on each business day of the Series
utilizing security market quotes, obtained at the Series'
expense and risk from commercially available pricing services
or, if such quotes are unavailable, obtain such prices from
the Series' investment adviser, if any, or from brokers or
market-makers in such securities; proof net asset value
calculations and security pricing daily;
(x) Deliver a copy of the daily portfolio valuation to the Series;
(xi) Compute the Series' yields, total return, expense ratios and
portfolio turnover rate;
(xii) Monitor the expense accruals and notify the Series of any
proposed adjustments; and
(xiii) Prepare periodic unaudited financial statements.
(b) In addition to the accounting services described in the foregoing
Paragraph 3(a), the Administrator will provide, assist third-parties in
providing or arrange for the following services:
(i) Preparation of periodic audited financial statements;
(ii) Supplying various statistical data as requested by the Board
of Directors of the Fund on an ongoing basis;
(iii) Preparation for execution and filing of the Series' Federal
and state tax returns; preparation of Form 1099-MISC to
independent contractors and Directors, as required;
(iv) Preparation and filing the Series' Semi-Annual Reports with
the Securities and Exchange Commission ("SEC") on Form N-SAR;
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(v) Preparation and filing with the SEC the Series' annual,
semi-annual, and quarterly shareholder reports;
(vi) Filing registration statements on Form N-1A and other filings
relating to the registration of shares and maintenance of
Federal and state registrations;
(vii) Monitoring the Series' status as a regulated investment
company under Sub-Chapter M of the Internal Revenue Code of
1986, as amended;
(viii) Reviewing periodically the Series' fidelity bond and errors
and omission insurance coverage as required by the 1940 Act;
(ix) Preparation of materials for and recording the proceedings of,
in conjunction with the officers of the Fund, the meetings of
the Fund's Board of Directors and the Series' shareholders;
(x) Maintaining the Fund's existence and good standing under state
law;
(xi) Review and negotiate on behalf of the Fund normal course of
business contracts and agreements;
(xii) Assist the Fund in developing and maintaining a compliance
program; provide periodic review of compliance program,
potential regulatory issues, and brokerage allocation;
(xiii) Coordinate purchase and redemption orders with the Series'
transfer agent.
(xiv) Furnishing the office space in the offices of the
Administrator and office facilities, simple business
equipment, supplies, utilities, and telephone service for
administering the affairs and investments of the Series. These
services are exclusive of the necessary services and records
of any dividend disbursing agent, transfer agent, registrar or
custodian, and accounting and bookkeeping services which may
be provided by the custodian;
(xv) Providing executive and clerical personnel for administering
the affairs of the Fund, and compensating officers and
Directors of the Fund if such persons are also employees of
the Administrator or its affiliates, except as provided in
Paragraph 3(a);
(xvi) Preparation of any other regulatory reports to and for any
Federal, local, state or foreign governmental agency or
regulatory body as may be required; and
(xvii) Monitor Series holdings for compliance with prospectus and SAI
investment restrictions and assist in preparation of periodic
compliance reports (i.e. Rule 12d-3 procedures).
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(c) The Administrator shall provide such other services and assistance
relating to the affairs of the Series as the Fund or the Series'
investment adviser may, from time to time, reasonably request.
(d) In carrying out its duties hereunder, as well as any other activities
undertaken on behalf of the Series pursuant to this Agreement, the
Administrator shall at all times be subject to the control and
direction of the Board of Directors of the Fund.
4. EXPENSES OF THE ADMINISTRATOR AND THE FUND
(a) EXPENSES OF THE ADMINISTRATOR
The Administrator shall bear the ordinary and usual expenses of
providing the services set forth in Paragraph 3(a) and in Paragraph
3(b) (iv) - (xii), (xiv) - (xv), (xvii), which shall include the salary
costs and related expenses of the Administrator's employees, but shall
exclude all reasonable out-of-pocket expenses incurred by or on behalf
of the Administrator for the benefit of the Series. All costs and
expenses not expressly assumed by the Administrator and all
extraordinary expenses associated with the services hereunder shall be
borne by the Fund or the Series thereof.
(b) EXPENSES OF THE SERIES
The Administrator shall be responsible for providing or arranging for a
third party to provide the services set forth herein. Unless expressly
set forth in this Agreement, the Administrator shall not bear the
responsibility for, or expenses associated with, operational,
accounting or administrative services on behalf of the Series, which
expenses are to be borne by the Series. Such expenses include, without
limitation:
(i) The charges and expenses of any registrar, stock, transfer or
dividend disbursing agent, custodian, depository or other
agent appointed by the Fund or Series for the safekeeping of
its cash, portfolio securities and other property;
(ii) Except as provided in Section 4(a) hereof, general
operational, administrative and accounting costs, such as the
costs incident in calculating the Series' net asset value, the
preparation of the Series' tax filings with relevant
authorities and of compliance with any and all regulatory
authorities;
(iii) The charges and expenses of auditors and outside accountants;
(iv) Brokerage commissions for transactions in the portfolio
securities of the Series;
(v) All taxes, including issuance and transfer taxes, and
corporate fees payable by the Series to Federal, state or
other U.S. or foreign governmental agencies;
(vi) The cost of the Series' stock certificates representing
shares;
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(vii) Expenses involved in registering and maintaining registrations
of the Fund or Series and of its shares with the SEC and
various states and other jurisdictions, if applicable;
(viii) All expenses of shareholders' and Directors' meetings,
including meetings of committees, and of preparing, setting in
type, printing and mailing proxy statements, quarterly
reports, semi-annual reports, annual reports and other
communications to shareholders;
(ix) All expenses of preparing and setting in type offering
documents, and expenses of printing and mailing the same to
shareholders;
(x) Compensation and travel expenses of Directors who are not
"interested persons" of the Administrator within the meaning
of the 1940 Act and travel expenses of Directors who are
"interested persons" of the Administrator and officers and
employees of the Administrator when traveling on Fund
business, such as attending shareholders' or Directors'
meetings, beyond one hundred miles from such persons'
principal place of business;
(xi) The expense of furnishing, or causing to be furnished, to each
shareholder, statements of account;
(xii) Charges and expenses of legal counsel in connection with
matters relating to the Fund or Series, including, without
limitation, legal services rendered in connection with the
Fund's corporate and financial structure, day-to-day legal
affairs of the Fund and relations with its shareholders,
issuance of Series shares, and registration and qualification
of securities under Federal, state and other laws;
(xiii) The expenses of attendance at meetings of professional and
trade organizations, such as the Investment Company Institute
and regulatory agencies by officers and Directors of the Fund,
and the membership or association dues of such organizations;
(xiv) The cost and expense of maintaining the books and records of
the Fund, except those costs and expenses expressly assumed by
the Administrator under this Agreement,
(xv) The expense of the Fund obtaining and maintaining a fidelity
bond as required by Section 17(g) of the 1940 Act, the expense
of the Fund obtaining and maintaining an errors and omissions
policy and other insurance as may be appropriate;
(xvi) Interest payable on Series borrowing;
(xvii) Postage; and
(xviii) Any other reasonable costs and expenses incurred by the
Administrator for Fund or Series operations and activities.
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5. Records
The books and records pertaining to the Series which are in the possession of
the Administrator shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund, or the Fund's
authorized representatives, shall have access to such books and records at all
times during the Administrator's normal business hours. Upon the reasonable
request of the Fund or Series, copies of any such books and records shall be
provided by the Administrator to the Series or its authorized representative at
the Series' expense.
6. LIAISON WITH ACCOUNTANTS
The Administrator shall, at its own expense, act as liaison with the Series'
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit related schedules. The Administrator 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 opinion, as such may be required by the Fund from time
to time.
7. RIGHT TO RECEIVE ADVICE
(a) ADVICE OF FUND If the Administrator shall be in doubt as to any action
to be taken or omitted by it, it may request, and shall receive, from
the Fund directions or advice.
(b) ADVICE OF COUNSEL If the Administrator or the Fund shall be in doubt as
to any question of law involved in any action to be taken or omitted by
the Administrator, it may request advice at the Series' cost from
counsel of its own choosing (who may be counsel for the Fund or, after
consultation with the Fund's officers, counsel to the Administrator).
(c) PROTECTION OF THE ADMINISTRATOR The Administrator shall be protected in
any action or inaction which it takes in reliance on any directions or
advice received pursuant to subsections (a) or (b) of this paragraph,
provided that, in the case of subsection (b), it has chosen counsel
prudently, which the Administrator, after receipt of any such
directions or advice, in good faith believes to be consistent with such
directions or advice as the case may be. However, nothing in this
paragraph shall be construed as imposing upon the Administrator any
obligation (i) to seek such directions, or advice or (ii) to act in
accordance with such directions or advice when received. Nothing in
this subsection shall excuse the Administrator when an action or
omission on the part of the Administrator constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by the
Administrator of its duties under this Agreement.
8. Compliance with Governmental Rules and Regulations
The Fund and Series assume full responsibility for insuring that each complies
with all applicable requirements of the Securities Act of 1933 ( the "1933
Act"), the Securities Exchange Act of 1934 (the "1934 Act"), the 1940 Act, and
any other applicable laws, rules and regulations of governmental authorities
having jurisdiction.
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9. Compensation
As compensation for the services rendered by the Administrator during the term
of this Agreement, the Series will pay to the Administrator a fee, calculated
and payable monthly, at an annual rate expressed as a percentage of an average
daily net assets as set forth in Exhibit B hereto.
10. Indemnification
The Fund and Series agree to indemnify and hold harmless the Administrator and
its employees, agents and nominees from all taxes, charges, assessments, claims
and liabilities (including, without limitation, liabilities arising under the
1933 Act, the 1934 Act, the 1940 Act, and any state and foreign securities and
blue sky laws, all as or to be amended from time to time) and expenses,
including (without limitation) attorneys' fees and disbursements, arising
directly or indirectly from any action or thing which the Administrator takes or
does or omits to take or do (i) at the request or on the direction of or in
reliance on the advice of the Fund or the Series, (ii) upon oral or written
instruction from an authorized agent, or (iii) otherwise in connection with this
Agreement, provided, that neither the Administrator nor any of its employees,
agents or nominees shall be indemnified against any liability arising out of the
Administrator's own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties and obligations under this Agreement.
11. Liability of the Administrator
The Administrator shall be under no duty to take any action on behalf of the
Fund or Series except as specifically set forth herein or as may be specifically
agreed to by the Administrator in writing. In the performance of its duties
hereunder, the Administrator shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within reasonable limits in
performing services provided for under this Agreement, but the Administrator
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Administrator or
reckless disregard by the Administrator of its duties under this Agreement.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the Administrator in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or authority
or lack thereof of any oral or written instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which the
Administrator reasonably believes to be genuine; (b) delays or errors or loss of
data occurring by reason of circumstances beyond the Administrator's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply. In the event of equipment failures beyond the Administrator's
control, the Administrator shall, at no additional expense to the Series, take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto.
12. Duration and Termination
This Agreement shall continue until termination by either party on 120 days
written notice to the other; provided that this Agreement may be terminated by
either party on 7 days written notice in
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the event of a material breach by the other party which remains uncured for 30
days following written notice thereof, which notice shall specify in reasonable
detail the factual and/or legal basis for the breach.
13. Further Action
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
14. Amendments
This Agreement or any part hereof may be changed or waived only by an instrument
in writing signed by the party against which enforcement of such change or
waiver is sought.
15. Miscellaneous
This Agreement embodies the entire agreement and understanding between the
parties thereto, and supersedes all prior agreements and understandings,
relating to the subject matter hereof, provided that the parties hereto may
embody in one or more separate documents their agreement, if any, with respect
to delegation and/or oral instructions. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement shall be deemed to be a contract made in New York and governed by New
York law. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding and shall inure
to the benefit of the parties hereto and their respective successors.
16. Use of Name
It is understood that the name "Xxx Xxx" or any derivative thereof or logo
associated with that name is the valuable property of the Administrator and its
affiliates, and that the Fund and Series have the right to use such name (or
derivative or logo) only with the approval of the Administrator only so long as
the Administrator is Administrator of the Fund. Upon termination of this
Agreement, the Fund and Series shall forthwith cease to use such name (or
derivative or logo).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
[SEAL] XXX XXX FUNDS II, INC., .
Attest: By:
------------------------------ ------------------------------------
President
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[SEAL] XXX XXX ASSOCIATES CORPORATION
Attest: By:
------------------------------ ------------------------------------
President
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EXHIBIT A
10/1/97
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EXHIBIT B
0.15%
10/1/97
G:/ALISON/AGREEMENT/CHUBBPAS.AGR.
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