SERVICE AND AGENCY AGREEMENT
This Service and Agency Agreement (The "Agreement") is among Investors Bank &
Trust Company (hereinafter referred to as "Investors Bank & Trust Company") and
Bull & Bear Funds II, Inc. (hereinafter referred to as "Bull & Bear"), and is
effective as of November 19, 1994. As of its effective date, this Agreement
supersedes any prior agreement relating to the subject matter hereof.
Article 1: Recitals
1.1 Bull & Bear has developed certain materials that may be used by an
individual to establish an individual retirement custodial account ("XXX").
These Bull & Bear materials use the provisions of IRS Form 5305-A, Individual
Retirement Custodial Account, provisions developed by Bull & Bear in Article
VIII of Form 5305-A, an XXX disclosure statement and related forms and materials
(and such materials are hereinafter collectively called the"XXX Materials"), and
the provisions of IRS Form 5305-SEP, Simplified Employee Pension - Individual
Retirement Accounts Contribution Agreement, and related informational or other
materials (and such materials are hereafter referred to collectively as the "SEP
Materials." In addition, Bull & Bear has developed or contracted for certain
materials that may be used by an individual to establish a 403(b)(7) custodial
account (the "403(b) Account Materials") and master or prototype qualified plan
materials that may be used by an Employer to establish a tax-qualified profit
sharing or money purchase pension plan (the "Prototype Plan Materials"). The XXX
Materials, the SEP Materials, the 403(b) Account Materials, and the Prototype
Plan Materials are hereinafter referred to collectively as the "Materials".
Contributions to an XXX, 403(b) Account or Employer Plan established using the
XXX Materials, the 403(b) Account Materials or the Prototype Plan Materials (as
the case may be) may be invested in shares of open-end regulated investment
companies in the Bull & Bear Funds Group ("Shares").
1.2 Bull & Bear desires to have Investors Bank & Trust Company serve as
Custodian of IRAs or 403(b) Accounts established using the XXX Materials or the
403(b) Account Materials, and to serve as Trustee of Employer Plans established
using the Prototype Plan Materials. Investors Bank & Trust Company is willing to
serve as such Custodian or Trustee in accordance with the terms and conditions
of this Agreement. For purposes of this
Agreement, in its capacity as Custodian or Trustee of a Customer Arrangement
hereunder, Investors Bank & Trust Company will be referred to as the "Custodian"
(even though with respect to Employer Plans, Investors Bank & Trust Company is
serving as
Trustee).
1.3 Investors Bank & Trust represents to Bull & Bear that it is and, as
long as any Customer Arrangements established hereunder are in effect, will be a
"bank" as defined in Section 408(n)(1) of the Internal Revenue Code of 1986, as
amended.
Article 2: Definitions
As used in this Agreement, the following terms have the following meanings:
2.1 "Customer" means an individual or business maintaining a Customer XXX,
Customer 403(b) Account, or Employer Plan.
2.2 "Customer Arrangement" means a Customer XXX, a Customer 403(b) Account,
or an Employer Plan.
2.3 "Customer XXX" means the individual retirement custodial account, as
hereafter adopted by an individual using the XXX Materials.
2.4 "Customer 403(b) Account" means the 403(b)(7) custodial account, as
hereafter adopted by an individual using the 403(b) Account Materials.
2.5 "Employer" means an entity (whether incorporated or not) that has
established an Employer SEP or an Employer Plan.
2.6 "Employer Plan" means a tax-qualified prototype profit sharing or money
purchase pension plan as hereafter established by an Employer using the
Prototype Plan Materials.
2.7 "Employer SEP" means a simplified employee pension plan, as hereafter
established by an Employer using the SEP Materials.
Article 3: XXX Materials
3.1 Bull & Bear will be responsible for preparing and maintaining all of
the Materials. Bull & Bear will be responsible for the legal and tax effect of
such Materials, and will take all steps necessary to ensure that all the
Materials contain such terms and conditions and meet such other requirements as
are necessary to comply with all provisions of the Internal Revenue Code and any
other laws applicable to individual retirement accounts, simplified employee
pension plans, 403(b)(7) custodial accounts or tax-qualified profit sharing or
money purchase pension plans, in order to achieve tax deferral for Customers who
establish or employees or owner-employees who participate in a Customer
Arrangement and to achieve tax deductibility for the Employer for any
contributions to any such Customer Arrangement (within applicable limitations).
This responsibility will include (without limitation) timely amending the
Materials and causing amended Materials to be distributed to and if necessary
signed by Customers and/or Employers. All costs and expense of the preparation
and maintenance of the Materials will be borne by Bull & Bear.
Bull & Bear may contract for or arrange with a vendor selected with
reasonable care by Bull & Bear for the provision of any or all the Materials,
provided that, as between Bull & Bear and Investors Bank & Trust Company, Bull &
Bear will be responsible for all the Materials as provided in the preceding
paragraph and for all other purposes of this Agreement.
The Materials (and all explanatory, advertising, marketing or other
Materials used in connection with any Customer Arrangement) will provide that
Investors Bank & Trust Company as Custodian of any Customer Arrangement will
have no investment responsibilities and no fiduciary or other responsibility or
liability for the selection of investments for any Customer Arrangement, and
will not serve as the "plan administrator" (as defined in the Employee
Retirement Income Security Act of 1974, as amended) of any Customer Arrangement.
Article 4: Employment of Investors Bank & Trust Company as Custodian
4.1 Investors Bank & Trust Company agrees to serve as Custodian of any
Customer Arrangement hereafter established by a Customer using the Materials. As
such Custodian, Investors Bank & Trust Company will be designated as the owner
of the Shares purchased for each Customer Arrangement on the records of Bull &
Bear. Bull & Bear represents and warrants to Investors Bank & Trust Company that
the Shares will meet all applicable legal
requirements, including registration in accordance with the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, in order
to be legal investments for Customer Arrangements.
4.2 Records of the Custodian's ownership of Shares will be maintained by
Bull & Bear in the name of Investors Bank & Trust Company as Custodian (or its
nominee) and no physical shares will be issued.
4.3 Investors Bank & Trust Company and Bull & Bear acknowledge and agree
that:
(a) Under the Materials, Investors Bank & Trust Company as Custodian
has no investment responsibility for the selection of Shares for any
Customer Arrangement and Investors Bank & Trust Company will have no
liability for any investments made for a Customer Arrangement.
(b) Investors Bank & Trust Company will not serve as "plan
administrator" (as defined in the Employee Retirement Income Security Act
of 1974, as amended) of any Customer Arrangement whatsoever, or in any
other administrative capacity or other capacity except as Custodian
thereof.
(c) Bull & Bear agrees that, in any written, oral, or electronic
communications from Bull & Bear to any prospective or actual Customer or
Employer, it will not state or represent that Investors Bank & Trust
Company has any investment discretion or other power concerning investments
of any Customer Arrangement, or that Investors Bank & Trust Company will
serve as plan administrator or have any administrative or other
responsibility for the administration or operation of any Customer
Arrangement.
4.4 (a) Investors Bank & Trust Company hereby delegates to Bull & Bear all
record keeping and other duties of the Custodian as are specified in any of the
Materials or as may be necessary or convenient to administer and maintain any
Customer Arrangement. With respect to any Customer Arrangement, such duties
include, without implied limitation, receiving and maintaining copies of the
signed Materials and other documentation necessary to reflect the establishment
of and activity in each Customer Arrangement, processing all contributions to a
Customer Arrangement (including rollover or
direct rollover contributions), properly investing all such contributions in
Shares in accordance with the Customer's instructions, processing investment
transfers among Shares in accordance with the Customer's instructions,
processing distributions and rollovers or transfers from the Customer
Arrangement, providing periodic Customer Arrangement account statements
(including a year-end statement), performing all required government reporting
in a timely manner in accordance with applicable requirements, including timely
filing Form 5498 and Form 1099R (where applicable) with the Customer and the
Internal Revenue Service, performing income tax withholding, where applicable,
timely providing a Schedule P to each Employer with an Employer Plan to be filed
with the Annual Report of the Employer Plan to the Internal Revenue Service, and
responding to all Customer and other inquiries concerning a Customer
Arrangement. With respect to Employer SEPs and Employer Plans, such duties may
include, without implied limitation, receiving Employer SEP or Employer Plan
contributions and properly allocating such contributions to participants'
accounts or (in the case of an Employer SEP) individual retirement accounts
operating in connection with such Employer SEP or Employer Plan, and responding
to all Employer and other inquiries concerning an Employer SEP or Employer Plan.
Bull & Bear will perform all such duties, and will do so with the same degree of
care that Investors Bank & Trust Company would be required to exercise if it
were performing such duties itself.
(b) Bull & Bear may delegate any of its duties under the preceding
subsection (a) to a third party service provider or service bureau (which may
include an affiliate of Bull & Bear or the transfer agent or distributor of the
Shares) selected by Bull & Bear with reasonable care. Notwithstanding any such
delegation, Bull & Bear will remain responsible to Investors Bank & Trust
Company for the complete and proper performance of Bull & Bear's duties under
the preceding subsection (a).
4.5 Bull & Bear will upon reasonable advance notice make available access
to its facilities and access to or copies of such records to Investors Bank &
Trust Company as Investors Bank & Trust Company may request in order that
Investors Bank & Trust Company may determine that Bull & Bear is properly
performing its duties and obligations hereunder or as may be necessary to comply
with bank regulatory or other legal requirements to which Investors Bank & Trust
Company is subject; Investors Bank & Trust Company's right of access under this
sentence will include access
to any service provider or service bureau performing any of Bull & Bear's duties
and obligations under this Agreement on behalf of Bull & Bear.
Article 5: Reviews of Materials
5.1 Bull & Bear will submit to Investors Bank & Trust Company and await its
advance approval of all Materials and of any other materials concerning
Investors Bank & Trust Company or the duties of the Custodian which will be used
by Bull & Bear in marketing the Materials to prospective or actual Customers or
Employers or in communicating with Customers or Employers. Investors Bank &
Trust Company will not unreasonably withhold its approval of any such materials.
5.2 Any approvals by Investors Bank & Trust Company under Section 5.1 will
constitute Investors Bank & Trust Company's acquiescence to the use of such
materials and not its approval of their contents or their effect. Bull & Bear
will assume full responsibility to Investors Bank & Trust Company and to all
other interested persons (including Customers and Employers) for such contents
and such effect.
Article 6: Applications and Correspondence
6.1 Investors Bank & Trust Company will sign all applications to establish
a Customer Arrangement or other documents related to Customer Arrangements which
Bull & Bear submits to Investors Bank & Trust Company for its signature.
However, Investors Bank & Trust Company may in writing authorize Bull & Bear or
Bull & Bear's designee to execute Investors Bank & Trust Company's name to one
or more specific documents or categories of documents (and such authorization
may be a blanket or standing authorization until revoked by Investors Bank &
Trust Company). In no event will Bull & Bear sign Investors Bank & Trust
Company's name on any application or other document without Investors Bank &
Trust Company's prior written approval.
6.2 Upon receipt, Investors Bank & Trust Company will promptly forward or
refer all written and oral inquiries from Customers, Employers and/or other
parties to Bull & Bear. Bull & Bear will appropriately handle all inquiries
directed to the Custodian.
Article 7: Returns and Reports
7.1 Bull & Bear will timely prepare and file all returns, reports and
statements relating to Customer Arrangements required by the Code and
regulations thereunder or any other applicable federal or state law, or as
agreed to in the relevant Materials relating to a Customer Arrangement.
Article 8: Fees and Expenses
8.1 In consideration for Investors Bank & Trust Company's service as
Custodian hereunder, Bull & Bear will pay Investors Bank & Trust Company such
compensation as is specified in attached Schedule A. In addition, Investors Bank
& Trust Company will be entitled to be reimbursed by Bull & Bear for Investors
Bank & Trust Company's reasonable expenses (including fees of legal counsel or
other advisors) incurred in performing any services under this Agreement other
than serving as Custodian of a Customer Arrangement (such as, by way of an
example of a reimbursable expense and not by way of limitation, fees of legal
counsel to review the Materials) or any services requested by Bull & Bear.
8.2 Investors Bank & Trust Company will receive reimbursement for any
expenses it incurs in connection with serving as Custodian of any Customer
Arrangement to the extent provided for under the relevant Materials and as
Custodian will have the right to charge such expenses directly to a Customer
Arrangement (or an account thereunder) as provided for under the relevant
Materials. To the extent that Investors Bank & Trust Company does not collect
the entire amount of any such expense from the Customer Arrangement involved,
Bull & Bear will pay such shortfall to Investors Bank & Trust Company.
Article 9: Indemnification of Investors Bank & Trust Company
9.1 Bull & Bear and its successors and assigns will at all times jointly
and severally indemnify and hold Investors Bank & Trust Company and its
successors and assigns harmless from any and all liability, claims, actions,
loss, costs or expense (including (a) reasonable fees for counsel, (b) taxes,
penalties, expenses or fees, and (c) any liability imposed directly or
indirectly as a consequence of limiting investment options available under any
Customer Arrangement to the Shares), hereinafter referred to as "Losses", which
Investors Bank & Trust
Company incurs in any manner arising directly or indirectly from or out of or in
connection with the performance or non-performance by Bull & Bear of Bull &
Bear's duties and obligations under this Agreement or applicable law, or arising
directly or indirectly from, out of or in connection with Investors Bank & Trust
Company's being named Custodian of any Customer Arrangement under this Agreement
or under any of the Materials.
The indemnification of Investors Bank & Trust Company (and its successors
and assigns) provided for in the preceding paragraph will include
indemnification for any Losses arising directly or indirectly from or out of or
in connection with the performance or non-performance by either any third-party
service provider or service bureau to whom Bull & Bear has delegated any of its
duties under Section 4.4(b) or any provider or vendor with whom Bull & Bear has
contracted for the provision of any of the Materials under Section 3.1.
9.2 No Losses which might be subject to the indemnification provision in
Section 9.1 will be confessed, settled or compromised by Investors Bank & Trust
Company until Investors Bank & Trust Company gives Bull & Bear at least ten
business days' written notice of the material facts as then known to Investors
Bank & Trust Company, and Bull & Bear will have the right, upon written demand
given to Investors Bank & Trust Company within ten business days after the date
of such notice from Investors Bank & Trust Company, to confess or defend against
such Losses at its expense.
Article 10: Resignation or Removal of Custodian
10.1 If at any time hereafter, Bull & Bear chooses to discontinue
performing any of its duties and obligations described in or contemplated by
this Agreement, either of a general nature or in respect to any or all Customer
Arrangements, it will give Investors Bank & Trust Company at least 90 days'
written notice prior to such discontinuance. Investors Bank & Trust Company may
thereupon resign as Custodian in respect to any or all Customer Arrangements in
accordance with the provisions of the relevant Materials. If within 30 days
after Investors Bank & Trust Company receives such a notice from Bull & Bear, or
if any other time prior to receipt of any such notice from Bull & Bear,
Investors Bank & Trust Company chooses to resign as Custodian of any or all
Customer Arrangements, Bull & Bear will promptly
distribute the notice of Investors Bank & Trust Company's resignation to such
persons and in such manner as are called for under the applicable provisions of
the relevant Materials and in form and content satisfactory to Investors Bank &
Trust Company. Bull & Bear will continue to perform such duties and obligations
in respect to such Customer Arrangements at least until Investors Bank & Trust
Company's resignation takes effect and the assets have been transferred to its
successor custodian or trustee or have been distributed.
Article 11: Miscellaneous
11.1 No party to this Agreement will be liable to any other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder
(provided that this Section 11.1 is not intended to and will not be construed to
reduce or terminate in any way Bull & Bear's indemnification obligation under
Section 9.1).
11.2 This Agreement will become effective as of the date stated above and
will continue in full force while Investors Bank & Trust Company serves as
Custodian of any Customer Arrangements, and will terminate when Investors Bank &
Trust Company no longer serves as Custodian of any such Customer Arrangement;
provided, however, that the indemnification provisions of Article 9 will
continue to apply after termination of this Agreement with respect to any act or
omission which is alleged to have occurred while this Agreement was in effect.
11.3 This Agreement may be amended from time to time by mutual written
agreement of the parties. Any such amendment must be in writing and signed by
both parties. Schedules appended hereto may be amended by written agreement
between the parties without re-execution of this Agreement.
11.4 Bull & Bear represents and warrants to Investors Bank & Trust Company
that it has power under its Articles of Incorporation and by-laws (or
equivalent) to enter into and perform its obligations under this Agreement, and
has duly executed this Agreement so as to constitute its valid and binding
obligation.
11.5 Notices and other writings will be delivered or mailed
postage prepaid to:
Bull & Bear at
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
Investors Bank & Trust Company at
X.X. Xxx 0000 - XXX00
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Managing Director
or to such other addresses Bull & Bear or Investors Bank & Trust
Company may hereafter specify to the other in writing.
11.6 This Agreement will be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts. Bull & Bear hereby submits to the jurisdiction of the courts
located in the Commonwealth of Massachusetts, including any appellate court
thereof or the federal district court located therein with respect to any
litigation involving this Agreement.
11.7 Unless otherwise required by law, each party agrees to maintain in
confidence any confidential or proprietary information of any other party and
not to disclose any such information without the consent of the party owning
such information. IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
and to be duly attested.
ATTEST:
BULL & BEAR FUNDS II, INC.
By: _______________________ ---------------------------------------
Authorized Signer
INVESTORS BANK & TRUST COMPANY
_______________________ By:
---------------------------------------
Authorized Signer
SCHEDULE A
In consideration for Investors Bank & Trust Company's service as Custodian, Bull
& Bear will pay Investors Bank & Trust Company the per account or per
participant amount shown below per calendar year or any portion thereof that
Investors Bank & Trust Company is serving as Custodian of one or more Customer
Arrangements:
Customer IRAs (including SEP - IRAs):
$1.00 Per Customer XXX
Customer 403(b) Accounts:
$1.00 per Customer 403(b) Account
Employer Plans
$10.00 Per Participant in the Employer Plan
December 1994
