ACCOUNTING SERVICES AGREEMENT
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AGREEMENT dated as of September 22, 1998 between The Winter Harbor Fund, a
Delaware business trust (the "Trust"), and Countrywide Fund Services, Inc.
("Countrywide"), an Ohio corporation.
WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust wishes to employ the services of Countrywide to provide
the Trust with certain accounting and pricing services; 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 Trust and Countrywide agree as follows:
1. APPOINTMENT.
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The Trust hereby appoints and employs Countrywide as agent to perform
those services described in this Agreement for the Trust. 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 series of the
Trust and the per share net asset value of each series of the Trust, in
accordance with the Trust's current prospectus and statement of additional
information, once daily as of the time selected by the Trust's Board of
Trustees. Countrywide will prepare and maintain a daily valuation of all
securities and other assets of the Trust in accordance with instructions from a
designated officer of the Trust or its investment adviser and in the manner set
forth in the Trust's current prospectus and statement of additional information.
In valuing securities of the Trust, Countrywide may contract with, and rely upon
market quotations provided by, outside services.
Without limiting the generality of the foregoing, with respect to the Trust
or each series, as applicable, Countrywide shall:
A. calculate the net asset value per share with the frequency prescribed
in each series' then-current prospectus;
B. calculate each item of income, expense, deduction, credit, gain and
loss, if any, as required by the Trust and in conformance with
generally accepted accounting practice ("GAAP"), the SEC's Regulation
S-X (or any successor regulation) and the Internal Revenue Code of
1986, as amended (or any successor laws) (the "Code");
C. maintain each series' general ledger and record all income, expenses,
capital share activity and security transactions of each series;
D. calculate the yield, effective yield, tax equivalent yield and total
return for each series, and each class thereof, as applicable, and
such other measure of performance as may be agreed upon between the
parties hereto;
E. provide the Trust and such other persons as the Trust's administrator
may direct with the following reports: (i) a current security position
report, (ii) a summary report of transactions and pending maturities
(including the principal, cost, and accrued interest on each portfolio
security in maturity date order), and (iii) a current cash position
and projection report;
F. prepare and record, as of each time when the net asset value of a
series is calculated or as otherwise directed by the Trust, either (i)
a valuation of the assets of each series (unless otherwise specified
in or in accordance with this Agreement, based upon the use of outside
services normally used and contracted for this purpose by Countrywide
in the case of securities for which information and market price or
yield quotations are readily available and based upon evaluations
conducted in accordance with the Trust's instructions in the case of
all other assets), or (ii) a calculation confirming that the market
value of each series' assets does not deviate from the amortized cost
value of those assets by more than a specified percentage;
G. make such adjustments over such periods as Countrywide deems necessary
to reflect over-accruals or under-accruals of estimated expenses or
income;
H. request any necessary information from the Trust's administrator and
the Trust's transfer agent and distributor in order to prepare, and
prepare, the Trust's Form N-SAR;
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I. provide appropriate records to assist the Trust's independent
accountants and, upon approval of the Trust or the Trust's
administrator, any regulatory body in any requested review of the
Trust's books and records maintained by Countrywide;
J. prepare semi-annual financial statements and oversee the production of
the semi-annual financial statements and any related report to the
Trust's shareholders prepared by the Trust or its investment advisers;
K. file the series' semi-annual financial statements with the SEC or
ensure that the series' semi-annual financial statements are filed
with the SEC;
L. provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information with respect to investment companies;
M. provide the Trust or the Trust's administrator with the data requested
by the administrator that is required to update the Trust's
registration statement;
N. provide the Trust or independent accountants with all information
requested with respect to the preparation of the Trust's income,
excise and other tax returns;
O. prepare, execute and file all Federal income and excise tax returns
and state income and other tax returns, including any extensions or
amendments, each as agreed between the Trust and Countrywide;
P. produce quarterly compliance reports for investment advisers to the
Trust and the Board or Trustees and provide information to the Trust's
administrator, investment advisers to the Trust and other appropriate
persons with respect to questions of series compliance;
Q. determine the amount of distributions to shareholders as necessary to,
among other things, maintain the qualification of each series as a
regulated investment company under the Code, and prepare and
distribute to appropriate parties notices announcing the declaration
of dividends and other distributions to shareholders;
R. transmit to and receive from each series' transfer agent appropriate
data on a daily basis and daily reconcile shares of any and each
series outstanding and other data with the transfer agent;
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S. periodically reconcile all appropriate data with each series'
custodian;
T. verify investment trade tickets when received from an investment
adviser and maintain individual ledgers and historical tax logs for
each security; and
U. perform such other recordkeeping, reporting and other tasks as may be
specified from time to time in the procedures adopted by the Board or
Trustees or required by the 1940 Act.
3. BOOKS AND RECORDS.
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Countrywide will maintain and keep current the general ledger for each
series of the Trust, recording all income and expenses, capital share activity
and security transactions of the Trust. 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 Trust and its authorized
agents regarding share purchases and redemptions and trial balances of each
series of the Trust. Countrywide will prepare and maintain complete, accurate
and current all records with respect to the Trust required to be maintained by
the Trust 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.
Without limiting the generality of the foregoing, with respect to the Trust
or each series, as applicable, Countrywide shall prepare and maintain, pursuant
to Rule 3la-1 under the 1940 Act (the "Rule"), the following:
A. accounts, books and other documents constituting the basis for
financial statements required to be filed pursuant to Section 30 of
the 1940 Act, as required by subsection (a) of the Rule;
B. journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of
cash and all other debits and credits, as required by subsection
(b)(1) of the Rule;
C. journals and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by
subsection (b)(2) of the Rule;
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D. a record of each brokerage order given by or on behalf of the Trust
for, or in connection with, the purchase or sale of securities, and
all other portfolio purchases or sales, as required by subsections
(b)(5) and (b)(6) of the Rule;
E. a record of all options, if any, in which the Trust has any direct or
indirect interest or which the Trust has granted or guaranteed and a
record of any contractual commitments to purchase, sell, receive or
deliver any property as required by subsection (b)(7) of the Rule;
F. a monthly trial balance of all ledger accounts as required by
subsection (b)(8) of the Rule; and
G. other records required by the Rule or any successor rule or pursuant
to interpretations thereof to be kept by open-end management
investment companies.
All of the records prepared and maintained by Countrywide pursuant to this
Section 3 which are required to be maintained by the Trust under the Code and
the 1940 Act will be the property of the Trust. In the event this Agreement is
terminated, all such records shall be delivered to the Trust at the Trust's
expense, and Countrywide shall be relieved of responsibility for the preparation
and maintenance of any such records delivered to the Trust.
4. PAYMENT OF TRUST EXPENSES.
--------------------------
Countrywide shall process each request received from the Trust or its
authorized agents for payment of the Trust's expenses. Upon receipt of written
instructions signed by an officer or other authorized agent of the Trust,
Countrywide shall prepare checks in the appropriate amounts which shall be
signed by an authorized officer of Countrywide and mailed to the appropriate
party.
5. FORM N-SAR.
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Countrywide shall maintain such records within its control and shall
be requested by the Trust to assist the Trust in fulfilling the requirements of
Form N-SAR.
6. COOPERATION WITH ACCOUNTANTS.
-----------------------------
Countrywide shall cooperate with the Trust'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 Trust.
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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 series
of the Trust 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 Trust shall also
promptly reimburse Countrywide for the cost of external pricing services
utilized by Countrywide.
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 Trust
which services could cause Countrywide to be deemed an "investment adviser" of
the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to supersede
or contravene the Trust'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 or any other agreement between the parties hereto,
and except for the accuracy of information furnished to it by Countrywide, the
Trust 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.
--------------------------
The Trust 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
Administrative Services Agent, Transfer, Shareholder Servicing and Dividend
Disbursing Agent and Accounting Services Agent. The Trust 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.
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12. INDEMNIFICATION OF COUNTRYWIDE.
-------------------------------
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 Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or
negligence on the part of any such persons in the performance of the duties of
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, trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust, to
be rendering such services to or acting solely as an officer, trustee, employee
or agent of the Trust 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 Trust
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 Trust or
upon the opinion of legal counsel for the Trust 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 negligence, willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
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D. Countrywide agrees to indemnify and hold harmless the Trust, its
employees, agents, officers, control persons, affiliates and Trustees, against
and from any and all claims, demands, expenses, judgments, losses, charges
(including attorneys' fees), liabilities (whether with or without basis in fact
or law) and other reasonable expenses arising out of Countrywide's actions or
omissions in the performance of Countrywide's duties or obligations under this
Agreement by reason of Countrywide's, or its directors, officers, employees,
shareholders, agents, control persons, or affiliates, willful misfeasance, bad
faith, or negligence, or by reason of reckless disregard by any of such persons
of the obligations and duties of Countrywide under this Agreement.
13. TERMINATION.
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A. The provisions of this Agreement shall be effective on the date
first above written, shall continue in effect for two years from that date and
shall continue in force from year to year thereafter, but only so long as such
continuance is approved (1) by Countrywide, (2) by vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's trustees who are
not parties to this Agreement or interested persons (as defined in the 0000 Xxx)
of any such party, and (3) by vote of a majority of the Trust's Board of
Trustees or a majority of the Trust's outstanding voting securities.
B. Either party may terminate this Agreement on any date by giving the
other party at least ninety (90) days' prior written notice of such termination
specifying the date fixed therefor. Upon termination of this Agreement, the
Trust 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 Trust by written notice to Countrywide,
Countrywide shall, promptly upon such termination and at the expense of the
Trust, transfer all records maintained by Countrywide under this Agreement and
shall cooperate in the transfer of such duties and responsibilities, including
provision for assistance from Countrywide's cognizant personnel in the
establishment of books, records and other data by such successor.
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14. 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 Trust under this Agreement.
15. LIMITATION OF LIABILITY.
------------------------
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees 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 trust property of the Trust.
16. 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.
17. QUESTIONS OF INTERPRETATION.
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This Agreement shall be governed by the laws of the State of Delaware.
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.
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18. 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: The Winter Harbor Fund
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxxx Xxxx
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 18. 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.
19. AMENDMENT.
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This Agreement may not be amended or modified except by a written
agreement executed by both parties.
20. 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.
21. 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.
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22. SEPARATE LIABILITIES.
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Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each series of the Trust are separate
and distinct from the assets and liabilities of each other series and that no
series shall be liable or shall be charged for any debt, obligation or liability
of any other series, whether arising under this Agreement or otherwise.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE WINTER HARBOR FUND
By: /s/ Xxxxxxxx X. Xxxx
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Its: President
COUNTRYWIDE FUND SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Its: President
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Schedule A
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COMPENSATION
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Each series of the Trust will pay Countrywide a monthly fee, according to
the average monthly net assets of such series during such month, as follows:
Monthly Fee Average Net Assets During Month
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$2,000 $0 - $ 50,000,000
$2,500 $50,000,000 - $100,000,000
$3,000 $100,000,000 - $200,000,000
$4,000 + .001% of Over $200,000,000
average net assets
over $200,000,000
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