EXHIBIT 9(c)
COPY OF THE
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of the 1 day of
May, 1998, by and between Greenspring Fund, Incorporated, a
Maryland corporation (the "Fund"), and Corbyn Investment Management, Inc., a
Maryland corporation (the "Administrator").
WHEREAS, the Fund is engaged in business as an open-end
management investment company and registered as such under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Administrator to provide
administrative services to the Fund in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, do hereby agree as follows:
(C) DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR.
The Administrator shall oversee the administration of the
Fund's business and affairs set forth herein and shall provide certain services
required for effective administration of the Fund. In connection therewith, the
Administrator shall:
(a) PERSONNEL. Provide, without additional
remuneration from or other cost to the Fund, the services of individuals
competent to perform all of the Administrator's obligations under this
Agreement.
(b) AGENTS. Assist the Fund in selecting, coordinating
the activities of, supervising and acting as liaison with any other person or
agent engaged by the Fund, including the Fund's depository agent or custodian,
consultants, transfer agents, intermediaries with respect to mutual fund
alliance programs, dividend disbursing agent, sub-administrator, independent
accountants, and independent legal counsel. The Administrator shall also
monitor the functions of such persons and agents, including without limitation
the compliance of the Fund and the Fund's custodians with Rule 17f-5 under the
1940 Act, if appropriate.
(c) DIRECTORS AND OFFICERS. Authorize and permit
the Administrator's directors, officers and employees that may be elected or
appointed as directors or officers of the Fund to serve in such capacities,
without remuneration from or additional cost to the Fund.
(d) BOOKS AND RECORDS. Maintain customary records,
on behalf of the Fund, in connection with the performance of the Administrator's
duties under this Agreement. The Administrator also will monitor and oversee
the performance of the agents specified in Section 1(b) above, to ensure that
all financial, accounting, corporate, and other records required to be
maintained and preserved by the Fund or on its behalf will be maintained in
accordance with applicable laws and regulations.
(e) COST OVERSIGHT. Monitor and review activities and
procedures of the Fund and its agents identified in Section 1(b) above, in order
to identify and seek to obtain possible service improvements and cost
reductions. In connection therewith, the Administrator shall, on a quarterly
basis, prepare and submit to the Fund a pro forma budget or similar document
concerning the estimated costs of providing the services to the Fund and shall
monitor and periodically report to the Fund's Board of Directors information and
analysis about the actual expenses incurred in providing such services.
(f) FUND ACCOUNTING AND COMPLIANCE
POLICIES AND PROCEDURES. Developing, reviewing, maintaining, and
monitoring the effectiveness of Fund accounting, pricing, bonding and
compliance, including portfolio valuation procedures, expense allocation
procedures, and personal trading procedures and the Fund's Code of Ethics. The
Administrator also will assist and coordinate participation by the Fund and its
agents in any audit by its outside auditors or any examination by federal or
state regulatory authorities or any self-regulatory organization. The
Administrator also will oversee and coordinate the activities of Fund
accountants, outside counsel, and other experts in these audits or
examinations.
(g) FUND SYSTEMS. The Administrator will assist in
developing, implementing, and monitoring the Fund's use of automated
communications systems with brokers, dealers, custodians, and other service
providers, including without limitation trade clearance systems.
(h) REPORTS TO THE FUND. Furnish to or place at the
disposal of the Fund such information, reports, evaluations, analysis, and
opinions relating to its administrative functions, as the Fund may, at any time
or from time to time, reasonably request or as the Administrator may deem
helpful to the Fund. The Administrator also will assist in the preparation of
agendas and other materials for meetings of the Fund's Board of Directors and
will attend such meetings.
(i) REPORTS AND FILINGS. Provide appropriate assistance
in the development and/or preparation of all reports and communications by the
Fund to Fund shareholders and all reports and filings necessary to maintain the
registrations and qualifications of the Fund's shares under applicable
securities law.
(j) SHAREHOLDER INQUIRIES. Respond to all inquiries
from Fund shareholders or otherwise answer communications from Fund shareholders
if such inquiries or communications are directed to the Administrator. If any
such inquiry or communication would be more properly answered by one of the
agents listed in Sections 1(b) above, the Administrator will coordinate, as
needed, the provision of their response.
(D) ALLOCATION OF EXPENSES.
(a) EXPENSES PAID BY THE ADMINISTRATOR.
(i) In General. The Administrator shall bear all of
its own expenses in connection with the performance of its duties under this
Agreement.
(ii) Salaries and Fees of Directors and Officers.
The Administrator shall pay all salaries, expenses and fees, if any, of the
directors, officers and employees of the Administrator who are directors,
officers or employees of the Fund.
(iii) Waiver or Assumption and Reimbursement of
Fund Expenses by the Administrator. The waiver or assumption and reimbursement
by the Administrator of any expense of the Fund that the Administrator is not
required by this Agreement to waive, assume or reimburse, shall not obligate the
Administrator to waive, assume, or reimburse the same or any similar expense of
the Fund on any subsequent occasion, unless so required pursuant to a separate
agreement between the Fund and the Administrator.
(b) EXPENSES PAID BY THE FUND. The Fund shall
bear all expenses of its organization, operation and business not specifically
waived, assumed or agreed to be paid by the Administrator as provided in this
Agreement or any other agreement between the Fund and the Administrator, and as
described in the Fund's then-current Prospectus and Statement of Additional
Information.
(E) FEES.
(a) COMPENSATION RATE. As compensation for all
services rendered, facilities provided, and expenses paid and any expense waived
or assumed and reimbursed by the Administrator, the Fund shall pay the
Administrator a fee, payable each month, as follows: Two Thousand Five Hundred
Dollars ($2,500) plus a fraction of the Average Daily Net Assets ("ADNA")
computed as follows: four (4) basis points of that portion of ADNA up to $250
million, three (3) basis points of that portion of ADNA between $250 million to
$500 million, and two and one-half (2.5) basis points of that portion of ADNA in
excess of $500 million.
(b) METHOD OF COMPUTATION. The Administrator's
fee shall accrue on each calendar day and the sum of the daily fee accruals
shall be paid monthly to the Administrator by the fifth (5th) business day of
the next calendar month. The daily fee accruals shall be computed by
multiplying the fraction of one (1) over the number of calendar days in the
year by the applicable rates described in Section 3(a) above, and multiplying
this product by the net assets of the fund, as determined in accordance with
the current Prospectus of the Fund and applicable law, as of the close of
business on the last preceding business day on which the Fund was open for
business.
(c) PRORATION OF FEE. If this Agreement becomes
effective or terminates before the end of any month, the fee for the period from
the effective date to the end of such month or from the beginning of such month
to the date of termination, as the case may be, shall be prorated according to
the proportion which such period bears to the full month in which such
effectiveness or termination occurs.
4. ADMINISTRATOR'S USE OF THE SERVICES OF
OTHERS. The Administrator may, at its own cost, employ, retain or otherwise
avail itself of the services or facilities of other persons or organizations for
the purpose of providing the Administrator or the Fund with such information,
advice or assistance as the Administrator may deem necessary, appropriate or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Administrator including consulting, monitoring and evaluating services
concerning the Fund.
5. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Fund, pursuant to
rules or regulations of the Securities and Exchange Commission under Section 31
(a) of the 1940 Act, and maintained and preserved by the Administrator on behalf
of the Fund, are the property of the Fund and shall be surrendered by the
Administrator promptly on request by the Fund. The Administrator shall not
disclose or use any record or information obtained pursuant to this Agreement in
any manner whatsoever except as expressly authorized by this Agreement and
applicable law. The Administrator shall keep confidential any information
obtained in connection with its duties hereunder and shall disclose such
information only if the Fund has authorized such disclosure or if such
disclosure is expressly required by applicable law or federal or state
regulatory authorities.
6. REPORTS TO THE ADMINISTRATOR. The Fund shall
furnish or otherwise make available to the Administrator such Prospectuses,
Statements of Additional Information, financial statements, proxy statements,
reports and other information relating to the business and affairs of the Fund,
as the Administrator may, at any time or from time to time, reasonably require
in order to discharge its obligations under this Agreement.
7. SERVICES TO OTHER CLIENTS. Nothing herein contained
shall limit the freedom of the Administrator or any affiliated person of the
Administrator to render corporate administrative services to other investment
companies or to engage in other business activities; however, so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
or until the Administrator shall otherwise consent, the Administrator shall be
the only administrator to the Fund.
8. LIMITATION OF LIABILITY OF THE ADMINISTRATOR AND INDEMNIFICATION BY THE
FUND.
(a) LIMITATION OF LIABILITY OF THE ADMINISTRATOR.
(i) Neither the Administrator nor any of its
directors, officer, employees or agents performing services for the Fund, at the
direction or request of the Administrator in connection with the Administrator's
discharge of its obligations undertaken or reasonably assumed with respect to
this Agreement, shall be liable for any act or omission in the course of or in
connection with the Administrator's services hereunder, including any error of
judgment or mistake of law or for any loss suffered by the Fund, in connection
with the matters to which this Agreement relates; provided that nothing herein
contained shall be construed to protect the Administrator or any such
person against any liability to the Fund or its shareholders to which the .
Administrator or such person would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its or their duties
on behalf of the Fund.
(iii) The Administrator may apply to the Board of
Directors of the Fund at any time for instructions and may consult counsel for
the Fund or its own counsel and with accountants and other experts with respect
to any matter arising in connection with the Administrator's duties, and the
Administrator shall not be liable or accountable for any action taken or omitted
by it in good faith in accordance with such instruction or with the opinion of
such counsel, accountants or other experts.
(iv) The Administrator shall at all times have the
right to mitigate or cure any and all losses, damages, costs, charges, fees,
disbursements, payments and liabilities to the Fund and its shareholders.
2. INDEMNIFICATION BY THE FUND.
(i) As long as the Administrator acts in good faith
and with due diligence and without negligence, the Fund shall indemnify the
Administrator and hold it harmless from and against any and all actions, suits
and claims, whether groundless or otherwise, and from and against any and all
losses, damages (excluding consequential, punitive or other indirect damages),
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the administrative services or any other services rendered
to the Fund hereunder. The indemnity and defense provisions set forth herein
shall indefinitely survive the termination of this Agreement.
(ii) The rights hereunder shall include the right
to reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provision contained
herein shall apply, however, it is understood that if in any case the Fund may
be asked to indemnify or hold the Administrator harmless, the Board of Directors
of the Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question; and it is further understood that the
Administrator will use all reasonable care to identify and notify the
Board of Directors of the Fund promptly concerning any situation which presents
or appears likely to present the probability of such a claim for indemnification
against the Fund, but failure to do so in good faith shall not affect the rights
hereunder.
(iii) The Administrator shall secure and maintain a
fidelity bond, or be covered by an affiliate's blanket fidelity bond, in at
least the amount required by Rule 17g-1 under the 1940 Act for joint insurance
bonds of investment companies.
9. INDEMNIFICATION BY THE ADMINISTRATOR.
(a) The Administrator shall indemnify the Fund, its officers
and directors and hold them harmless from and against any and all actions, suits
and claims, whether groundless or otherwise, and from and against any and all
losses, damages (excluding consequential, punitive or other indirect damages),
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the administrative services or any other services rendered
to the Fund hereunder and arising or based upon the willful misfeasance, bad
faith or negligence of the Administrator, its directors, officers, employees and
agents in the performance of its or their duties on behalf of the Fund. The
indemnity and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
(b) The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Administrator may be
asked to indemnify or hold the Fund, its officers and directors harmless, the
Administrator shall be fully and promptly advised of all pertinent facts
concerning the situation in question; and it is further understood that the
Fund will use all reasonable care to identify and notify the Administrator
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Administrator,
but failure to do so in good faith shall not affect the rights hereunder.
10. FORCE MAJEURE. In the event the Administrator is unable
to perform its obligations or duties under the terms of this Agreement because
of any act of God, strike, riot, act of war, equipment failure, power failure or
damage or other causes reasonably beyond its control, the Administrator shall
not be liable for any and all losses, damages, costs, charges, counsel fees,
payments, expenses or liability to any other party (whether or not a party to
this Agreement) resulting from such failure to perform its obligations or duties
under this Agreement or otherwise from such causes.
This provision, however, shall in no way excuse the Administrator from being
liable to the Fund for any and all losses, damages, costs, charges, counsel
fees, payments and expenses incurred by the Fund due to the non-performance or
delay in performance by the Administrator of its duties and obligation under
this Agreement if such non-performance or delay in performance could reasonably
have been prevented by the Administrator through back-up systems and other
procedures commonly employed by other administrators in the mutual fund
industry, provided that the Administrator shall have the right, at all times, to
mitigate or cure any losses, including by making adjustments or corrections to
any current or former shareholder accounts.
11. RETENTION OF SUB-ADMINISTRATOR. The
Administrator may retain a sub-administrator to perform corporate administrative
services to the Fund upon sixty (60) days prior written notice to the Fund. The
retention of a sub-administrator shall be at the cost and expense of the
Administrator. The Administrator shall pay and shall be solely responsible for
the payment of the fees of the sub-administrator for the performance of its
services for the Fund.
12. TERM OF AGREEMENT. The term of this Agreement shall
begin on the day and year first written above and, unless sooner terminated as
hereinafter provided, shall continue in effect for an initial period that will
expire on May 1, 2000. Thereafter, this Agreement shall continue in effect from
year to year, subject to the termination provisions and all other terms and
conditions hereof. The Administrator shall furnish to the Fund, promptly upon
its request, such information as may be reasonably necessary to evaluate the
terms of this Agreement or any extension, renewal or amendment thereof.
The assignment (as that term is defined in Section 2(a)(4) of the 1940
Act and rules thereunder) of this Agreement or any rights or obligations
thereunder by either party shall be prohibited and, of no force or effect,
without the written consent of the other party. This Agreement shall inure to
the benefit of and be binding upon the parties and their respected permitted
successors and assigns.
13. TERMINATION OF AGREEMENT. This Agreement may be
terminated by any of the parties hereto, without the payment of any penalty:
(a) for a material breach of this Agreement, upon thirty (30)
days prior written notice to the other parties; provided, that this Agreement
shall not terminate if such material breach is cured within such thirty (30) day
period.
(b) following the initial term of this Agreement, for any
reason, upon ninety (90) days prior written notice to the other parties;
provided, that in the case of termination by the Fund such action shall have
been authorized by resolution of the Board of Directors of the Fund or by a vote
of a majority of the outstanding voting securities of the Fund. In the case of
termination by the Administrator, such termination shall not be effective
until the Fund and the Administrator shall have contracted with one or more
persons to serve as successor administrator(s) for the Fund and such
person(s) shall have assumed such position.
14. AMENDMENT OF AGREEMENT. Any amendment to this
Agreement shall be in writing and signed by the parties hereto; provided, that
no material amendment shall be effective unless authorized by resolution of the
Board of Directors of the Fund or by a majority of the outstanding voting
securities of the Fund.
15. MISCELLANEOUS.
(a) NOTICES. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed postpaid (i) if to the
Administrator, to Corbyn Investment Management, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: President; and (ii)
if to the Fund, to Greenspring Fund, Incorporated, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: President, with a copy
delivered by like means to De ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇.
(b) CAPTIONS. The captions contained in this Agreement
are included for convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their construction or effect.
(c) INTERPRETATION. Nothing herein contained shall
be deemed to require the Fund to take any action contrary to its Articles of
Incorporation or By-Laws, or any applicable statutory or regulatory requirement
to which it is subject or by which it is bound, or to relieve or deprive the
Board of Directors of its responsibility for and control of the conduct of the
affairs of the Fund.
(d) DEFINITIONS. 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
validly issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
relaxed by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
(e) SEVERABILITY. 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.
(f) GOVERNING LAW. Except insofar as the 1940 Act or
other federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Maryland.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year first
above written.
ATTEST: GREENSPRING FUND, INCORPORATED
______________________________ By: _____________________________
Title: ______________________ Title:____________________________
ATTEST: CORBYN INVESTMENT MANAGEMENT, INC.
______________________________ By: _____________________________
Title: _______________________ Title:____________________________