KEELEY SMALL CAP VALUE FUND, INC. FUND ADMINISTRATION SERVICING AGREEMENT
KEELEY
SMALL CAP VALUE FUND, INC.
THIS
AGREEMENT is made and entered into as of this 1st day of October, 2006, by
and between KEELEY
SMALL CAP VALUE FUND, INC.,
a
Maryland corporation (the “Fund”) and U.S.
BANCORP FUND SERVICES, LLC,
a
Wisconsin limited liability company (“USBFS”).
WHEREAS,
the Fund is registered under the Investment Company Act of 1940, as amended
(the
“1940 Act”), as an open-end management investment company, and is authorized to
issue shares of beneficial interest in separate series, with each such series
representing interests in a separate portfolio of securities and other assets;
WHEREAS,
USBFS is, among other things, in the business of providing fund administration
services for the benefit of its customers; and
WHEREAS,
the Fund desires to retain USBFS to provide fund administration services to
each
series of the Fund listed on Exhibit
A
hereto
(as amended from time to time) (each a “Fund” and collectively, the “Funds”).
NOW,
THEREFORE, in consideration of the promises and mutual covenants herein
contained, and other good and valuable consideration, the receipt of which
is
hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
| 1. |
Appointment
of USBFS as Administrator
|
The
Fund
hereby
appoints USBFS as administrator of the Fund
on the
terms and conditions set forth in this Agreement, and USBFS hereby accepts
such
appointment and agrees to perform the services and duties set forth in this
Agreement. The services and duties of USBFS shall be confined to those matters
expressly set forth herein, and no implied duties are assumed by or may be
asserted against USBFS hereunder.
| 2. |
Services
and Duties of USBFS
|
USBFS
shall provide the following administration services to the Fund:
| A. |
General
Fund Management:
|
| (1) |
Act
as liaison among Fund service providers.
|
| (2) |
Supply:
|
| a. |
Corporate
secretarial services.
|
| b. |
Office
facilities (which may be in USBFS’s, or an affiliate’s, own offices).
|
| c. |
Non-investment-related
statistical and research data as needed.
|
1
| (3) |
Coordinate
the Fund’s
board of directors’ (the “Board of Directors” or the “Directors”)
communications, such as:
|
| a. |
Prepare
meeting agendas and resolutions, with the assistance of Fund counsel.
|
| b. |
Prepare
reports for the Board of Directors based on financial and administrative
data.
|
| c. |
Evaluate
independent auditor.
|
| d. |
Secure
and monitor fidelity bond and director and officer liability coverage,
and
make the necessary Securities and Exchange Commission (the “SEC”) filings
relating thereto.
|
| e. |
Prepare
minutes of meetings of the Board of Directors and Fund shareholders.
|
| f. |
Recommend
dividend declarations to the Board of Directors and prepare and distribute
to appropriate parties notices announcing declaration of dividends
and
other distributions to shareholders.
|
| g. |
Provide
personnel to serve as officers of the Fund
if
so elected by the Board of Directors, attend Board of Directors meetings
and present materials for Directors’ review at such meetings.
|
| (4) |
Audits:
|
| a. |
Prepare
appropriate schedules and assist independent auditors.
|
| b. |
Provide
information to the SEC and facilitate audit process.
|
| c. |
Provide
office facilities.
|
| (5) |
Assist
in overall operations of the Fund.
|
| (6) |
Pay
Fund expenses upon written authorization from the Fund.
|
| (7) |
Keep
the Fund’s
governing documents, including its charter, bylaws and minute books,
but
only to the extent such documents are provided to USBFS by the
Fund
or
its representatives for safe keeping.
|
| B. |
Compliance:
|
| (1) |
Regulatory
Compliance:
|
| a. |
Monitor
compliance with the 1940 Act requirements, including:
|
(i)
Asset
diversification tests.
(ii)
Total
return and SEC yield calculations.
(iii)
Maintenance
of books and records under Rule 31a-3.
(iv)
Code
of
ethics requirements under Rule 17j-1 for the disinterested Directors.
| b. |
Monitor
Fund's compliance with the policies and investment limitations as set
forth in its prospectus (the “Prospectus”) and statement of additional
information (the “SAI”).
|
| c. |
Perform
its duties hereunder in compliance with all applicable laws and
regulations and provide any sub-certifications reasonably requested
by the
Fund
in
connection with any certification required of the Fund
pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “SOX Act”) or any rules or
regulations promulgated by the SEC thereunder, provided the same shall
not
be deemed to change USBFS’s standard of care as set forth
herein.
|
2
| d. |
Monitor
applicable regulatory and operational service issues, and update Board
of
Directors periodically.
|
| (2) |
Blue
Sky Compliance:
|
| a. |
Prepare
and file with the appropriate state securities authorities any and
all
required compliance filings relating to the qualification of the
securities of the Fund so as to enable the Fund to make a continuous
offering of its shares in all states.
|
| b. |
Monitor
status and maintain registrations in each state.
|
| c. |
Provide
updates regarding material developments in state securities regulation.
|
| (3) |
SEC
Registration and Reporting:
|
| a. |
Assist
Fund counsel in annual update of the Prospectus and SAI and in preparation
of proxy statements as needed.
|
| b. |
Prepare
and file annual and semiannual shareholder reports, Form N-SAR, Form
N-CSR, and Form N-Q filings and Rule 24f-2 notices. As requested by
the
Fund,
prepare and file Form N-PX filings.
|
| c. |
Coordinate
the printing, filing and mailing of Prospectuses and shareholder reports,
and amendments and supplements thereto.
|
| d. |
File
fidelity bond under Rule 17g-1.
|
| e. |
Monitor
sales of Fund shares and ensure that such shares are properly registered
or qualified, as applicable, with the SEC and the appropriate state
authorities.
|
| (4) |
IRS
Compliance:
|
| a. |
Monitor
the Fund’s
status as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”), including without
limitation, review of the following:
|
(i)
Asset
diversification requirements.
(ii)
Qualifying
income requirements.
(iii)
Distribution
requirements.
| b. |
Calculate
required distributions (including excise tax distributions).
|
3
| C. |
Financial
Reporting:
|
| (1) |
Provide
financial data required by the Prospectus and
SAI.
|
| (2) |
Prepare
financial reports for officers, shareholders, tax authorities, performance
reporting companies, the Board of Directors, the SEC, and independent
accountants.
|
| (3) |
Supervise
the Fund’s custodian and fund accountants in the maintenance of the Fund’s
general ledger and in the preparation of the Fund’s financial statements,
including oversight of expense accruals and payments, the determination
of
net asset value and the declaration and payment of dividends and other
distributions to shareholders.
|
| (4) |
Compute
the yield, total return, expense ratio and portfolio turnover rate
of each
class of the Fund.
|
| (5) |
Monitor
the expense accruals and notify the Fund’s
management of any proposed adjustments.
|
| (6) |
Prepare
monthly financial statements, which include, without limitation, the
following items:
|
| a. |
Schedule
of Investments.
|
| b. |
Statement
of Assets and Liabilities.
|
| c. |
Statement
of Operations.
|
| d. |
Statement
of Changes in Net Assets.
|
| e. |
Cash
Statement.
|
| f. |
Schedule
of Capital Gains and Losses.
|
| (7) |
Prepare
quarterly broker security transaction summaries.
|
| D. |
Tax
Reporting:
|
| (1) |
Prepare
and file on a timely basis appropriate federal and state tax returns
including, without limitation, Forms 1120/8610, with any necessary
schedules.
|
| (2) |
Prepare
state income breakdowns where relevant.
|
| (3) |
File
Form 1099 for payments to disinterested Directors and other service
providers.
|
| (4) |
Monitor
wash sale losses.
|
| (5) |
Calculate
eligible dividend income for corporate shareholders.
|
| 3. |
Compensation
|
USBFS
shall be compensated for providing the services set forth in this Agreement
in
accordance with the fee schedule set forth on Exhibit
B
hereto
(as amended from time to time). USBFS shall also be compensated for such
out-of-pocket expenses (e.g., telecommunication charges, postage and delivery
charges, and reproduction charges) as are reasonably incurred by USBFS in
performing its duties hereunder. The Fund
shall
pay all such fees and reimbursable expenses within 30 calendar days following
receipt of the billing notice, except for any fee or expense subject to a good
faith dispute. The Fund
shall
notify USBFS in writing within 30 calendar days following receipt of each
invoice if the Fund
is
disputing any amounts in good faith. The Fund
shall
pay such disputed amounts within 10 calendar days of the day on which the
parties agree to the amount to be paid. With the exception of any fee or expense
the Fund
is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of 1½% per month after the due date. Notwithstanding anything to
the contrary, amounts owed by the Fund
to USBFS
shall only be paid out of the assets and property of the particular Fund
involved.
4
| 4. |
Representations
and Warranties
|
| A. |
The
Fund
hereby represents and warrants to USBFS, which representations and
warranties shall be deemed to be continuing throughout the term of
this
Agreement, that:
|
|
(1)
|
It
is duly organized and existing under the laws of the jurisdiction
of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
|
|
(2)
|
This
Agreement has been duly authorized, executed and delivered by the
Fund
in
accordance with all requisite action and constitutes a valid and
legally
binding obligation of the Fund,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties; and
|
|
(3)
|
It
is conducting its business in compliance in all material respects
with all
applicable laws and regulations, both state and federal, and has
obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution
or
performance of this Agreement.
|
| B. |
USBFS
hereby represents and warrants to the Fund,
which representations and warranties shall be deemed to be continuing
throughout the term of this Agreement,
that:
|
|
(1)
|
It
is duly organized and existing under the laws of the jurisdiction
of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
|
|
(2)
|
This
Agreement has been duly authorized, executed and delivered by USBFS
in
accordance with all requisite action and constitutes a valid and
legally
binding obligation of USBFS, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
other
laws of general application affecting the rights and remedies of
creditors
and secured parties; and
|
5
|
(3)
|
It
is conducting its business in compliance in all material respects
with all
applicable laws and regulations, both state and federal, and has
obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution
or
performance of this Agreement.
|
| 5. |
Standard
of Care; Indemnification; Limitation of Liability
|
| A. |
USBFS
shall exercise reasonable care in the performance of its duties under
this
Agreement. USBFS shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund
in
connection with its duties under this Agreement, including losses
resulting from mechanical breakdowns or the failure of communication
or
power supplies beyond USBFS’s control, except a loss arising out of or
relating to USBFS’s refusal or failure to comply with the terms of this
Agreement or from its bad faith, negligence, or willful misconduct
in the
performance of its duties under this Agreement. Notwithstanding any
other
provision of this Agreement, if USBFS has exercised reasonable care
in the
performance of its duties under this Agreement, the Fund
shall indemnify and hold harmless USBFS from and against any and all
claims, demands, losses, expenses, and liabilities of any and every
nature
(including reasonable attorneys’ fees) that USBFS may sustain or incur or
that may be asserted against USBFS by any person arising out of any
action
taken or omitted to be taken by it in performing the services hereunder
(i) in accordance with the foregoing standards, or (ii) in reliance
upon
any written or oral instruction provided to USBFS by any duly authorized
officer of the Fund,
as approved by the Board of Directors of the Fund,
except for any and all claims, demands, losses, expenses, and liabilities
arising out of or relating to USBFS’s refusal or failure to comply with
the terms of this Agreement or from its bad faith, negligence or willful
misconduct in the performance of its duties under this Agreement. This
indemnity shall be a continuing obligation of the Fund,
its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term “USBFS” shall include
USBFS’s directors, officers and
employees.
|
USBFS
shall indemnify and hold the Fund
harmless
from and against any and all claims, demands, losses, expenses, and liabilities
of any and every nature (including reasonable attorneys’ fees) that the
Fund
may
sustain or incur or that may be asserted against the Fund
by any
person arising out of any action taken or omitted to be taken by USBFS as a
result of USBFS’s refusal or failure to comply with the terms of this Agreement,
or from its bad faith, negligence, or willful misconduct in the performance
of
its duties under this Agreement. This indemnity shall be a continuing obligation
of USBFS, its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term “Fund”
shall
include the Fund’s
directors, officers and employees.
6
Neither
party to this Agreement shall be liable to the other party for consequential,
special or punitive damages under any provision of this Agreement.
In
the
event of a mechanical breakdown or failure of communication or power supplies
beyond its control, USBFS shall take all reasonable steps to minimize service
interruptions for any period that such interruption continues. USBFS will make
every reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of USBFS. USBFS agrees
that it shall, at all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of electrical data
processing equipment to the extent appropriate equipment is available.
Representatives of the Fund
shall be
entitled to inspect USBFS’s premises and operating capabilities at any time
during regular business hours of USBFS, upon reasonable notice to USBFS.
Moreover, USBFS shall provide the Fund,
at such
times as the Fund
may
reasonably require, copies of reports rendered by independent accountants on
the
internal controls and procedures of USBFS relating to the services provided
by
USBFS under this Agreement.
Notwithstanding
the above, USBFS reserves the right to reprocess and correct administrative
errors at its own expense.
| B. |
In
order that the indemnification provisions contained in this section
shall
apply, it is understood that if in any case the indemnitor may be asked
to
indemnify or hold the indemnitee harmless, the indemnitor shall be
fully
and promptly advised of all pertinent facts concerning the situation
in
question, and it is further understood that the indemnitee will use
all
reasonable care to notify the indemnitor promptly concerning any situation
that presents or appears likely to present the probability of a claim
for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it will
so
notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor’s prior written consent.
|
| C. |
The
indemnity and defense provisions set forth in this Section 5 shall
indefinitely survive the termination and/or assignment of this
Agreement.
|
| D. |
If
USBFS is acting in another capacity for the Fund
pursuant to a separate agreement, nothing herein shall be deemed to
relieve USBFS of any of its obligations in such other
capacity.
|
7
| 6. |
Data
Necessary to Perform Services
|
The
Fund
or its
agent shall furnish to USBFS the data necessary to perform the services
described herein at such times and in such form as mutually agreed upon.
| 7. |
Proprietary
and Confidential Information
|
USBFS
agrees on behalf of itself and its directors, officers, and employees to treat
confidentially and as proprietary information of the Fund,
all
records and other information relative to the Fund
and
prior, present, or potential shareholders of the Fund
(and
clients of said shareholders), and not to use such records and information
for
any purpose other than the performance of its responsibilities and duties
hereunder, except (i) after prior notification to and approval in writing by
the
Fund,
which
approval shall not be unreasonably withheld and may not be withheld where USBFS
may be exposed to civil or criminal contempt proceedings for failure to comply,
(ii) when requested to divulge such information by duly constituted authorities,
or (iii) when so requested by the Fund.
Records
and other information which have become known to the public through no wrongful
act of USBFS or any of its employees, agents or representatives, and information
that was already in the possession of USBFS prior to receipt thereof from the
Fund
or its
agent, shall not be subject to this paragraph.
Further,
USBFS will adhere to the privacy policies adopted by the Fund
pursuant
to Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, as may be modified from time to time.
In this regard, USBFS shall have in place and maintain physical, electronic
and
procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or
use
of, records and information relating to the Fund
and its
shareholders.
| 8. |
Records
|
USBFS
shall keep records relating to the services to be performed hereunder in the
form and manner, and for such period, as it may deem advisable and is agreeable
to the Fund,
but not
inconsistent with the rules and regulations of appropriate government
authorities, in particular, Section 31 of the 1940 Act and the rules thereunder.
USBFS agrees that all such records prepared or maintained by USBFS relating
to
the services to be performed by USBFS hereunder are the property of the
Fund
and will
be preserved, maintained, and made available in accordance with such applicable
sections and rules of the 1940 Act and will be promptly surrendered to the
Fund
or its
designee on and in accordance with its request.
8
| 9. |
Compliance
with Laws
|
The
Fund
has and
retains primary responsibility for all compliance matters relating to the Fund,
including but not limited to compliance with the 1940 Act, the Code, the SOX
Act, the USA Patriot Act of 2002 and the policies and limitations of the Fund
relating to its portfolio investments as set forth in its Prospectus and SAI.
USBFS’s services hereunder shall not relieve the Fund
of its
responsibilities for assuring such compliance or the Board of Director’s
oversight responsibility with respect thereto.
| 10. |
Term
of Agreement; Amendment
|
This
Agreement shall become effective as of the date first written above and will
continue in effect for a period of three (3) years. Subsequent to the initial
three-year term, this Agreement may be terminated by either party upon giving
90
days prior written notice to the other party or such shorter period as is
mutually agreed upon by the parties. Notwithstanding the foregoing, this
Agreement may be terminated by any party upon the breach of the other party
of
any material term of this Agreement if such breach is not cured within 15 days
of notice of such breach to the breaching party. This Agreement may not be
amended or modified in any manner except by written agreement executed by USBFS
and the Fund,
and
authorized or approved by the Board of Directors.
| 11. |
Duties
in the Event of Termination
|
In
the
event that, in connection with termination, a successor to any of USBFS’s duties
or responsibilities hereunder is designated by the Fund
by
written notice to USBFS, USBFS will promptly, upon such termination and at
the
expense of the Fund,
transfer to such successor all relevant books, records, correspondence, and
other data established or maintained by USBFS under this Agreement in a form
reasonably acceptable to the Fund
(if such
form differs from the form in which USBFS has maintained the same, the
Fund
shall
pay any expenses associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from USBFS’s personnel in the establishment of books,
records, and other data by such successor. If no such successor is designated,
then such books, records and other data shall be returned to the Fund.
| 12. |
Early
Termination
|
In
the
absence of any material breach of this Agreement, should the Fund
elect to
terminate this Agreement prior to the end of the term, the Fund
agrees
to pay the following fees:
| a. |
all
monthly fees through the life of the contract, including the rebate
of any
negotiated discounts;
|
| b. |
all
fees associated with converting services to successor service
provider;
|
9
| c. |
all
fees associated with any record retention and/or tax reporting obligations
that may not be eliminated due to the conversion to a successor service
provider;
|
| d. |
all
out-of-pocket costs associated with a-c
above.
|
| 13. |
Assignment
|
This
Agreement shall extend to and be binding upon the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by the Fund
without
the written consent of USBFS, or by USBFS without the written consent of the
Fund
accompanied by the authorization or approval of the Fund’s
Board
of Directors.
| 14. |
Governing
Law
|
This
Agreement shall be construed in accordance with the laws of the State of
Wisconsin, without regard to conflicts of law principles. To the extent that
the
applicable laws of the State of Wisconsin, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control, and nothing herein shall be construed in a manner inconsistent with
the
1940 Act or any rule or order of the SEC thereunder.
| 15. |
No
Agency Relationship
|
Nothing
herein contained shall be deemed to authorize or empower either party to act
as
agent for the other party to this Agreement, or to conduct business in the
name,
or for the account, of the other party to this Agreement.
| 16. |
Services
Not Exclusive
|
Nothing
in this Agreement shall limit or restrict USBFS from providing services to
other
parties that are similar or identical to some or all of the services provided
hereunder.
| 17. |
Invalidity
|
Any
provision of this Agreement which may be determined by competent authority
to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case, the
parties shall in good faith modify or substitute such provision consistent
with
the original intent of the parties.
| 18. |
Legal-Related
Services
|
Nothing
in this Agreement shall be deemed to appoint USBFS and its officers, directors
and employees as the Fund attorneys, form attorney-client relationships or
require the provision of legal advice. The Fund acknowledges that in-house
USBFS
attorneys exclusively represent USBFS and rely on outside counsel retained
by
the Fund to review all services provided by in-house USBFS attorneys and to
provide independent judgment on the Fund’s behalf. Because no attorney-client
relationship exists between in-house USBFS attorneys and the Fund, any
information provided to USBFS attorneys may not be privileged and may be subject
to compulsory disclosure under certain circumstances. USBFS represents that
it
will maintain the confidentiality of information disclosed to its in-house
attorneys on a best efforts basis.
10
| 19. |
Notices
|
Any
notice required or permitted to be given by either party to the other shall
be
in writing and shall be deemed to have been given on the date delivered
personally or by courier service, or three days after sent by registered or
certified mail, postage prepaid, return receipt requested, or on the date sent
and confirmed received by facsimile transmission to the other party’s address
set forth below:
Notice
to
USBFS shall be sent to:
U.S.
Bancorp Fund Services, LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
and
notice to the Fund
shall be
sent to:
Keeley
Small Cap Value Fund, Inc.
▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
| 20. |
Multiple
Originals
|
This
Agreement may be executed on two or more counterparts, each of which when so
executed shall be deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
11
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
a duly authorized officer on one or more counterparts as of the date first
above
written.
| KEELEY SMALL CAP VALUE FUND, INC. | U.S. BANCORP FUND SERVICES, LLC | |
| By:________________________________ | By:______________________________ | |
| Name:_____________________________ | Name:____________________________ | |
| Title:______________________________ | Title:_____________________________ |
Exhibit
A
to
the Keeley Small Cap Value Fund, Inc.
Fund
Names
| Name of Series | Date Added | |
| Keeley Small Cap Value Fund, Inc. | 9-8-1993 |