EXHIBIT (h)(i)
FINAL 12-16-03
BRIDGEWAY FUNDS, INC.
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of the 1st day of December, 2003, by and between
Bridgeway Funds, Inc., a Maryland Corporation that acts as an open-end
investment company, with its principal office and place of business at 0000
Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Client"), and Forum
Shareholder Services, LLC, a Delaware limited liability company with its
principal office and place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 ("Forum").
WHEREAS, the Client is registered under the 1940 Act (as defined below) as
an open-end management investment company that issues or intends to issue shares
of beneficial interest (the "Shares"), in separate classes;
WHEREAS, the Client offers Shares in the funds as listed in Schedule 1
hereto (these funds, together with all other funds subsequently established by
the Client and made subject to this Agreement in accordance with Section 7.7 of
this Agreement being herein referred to individually as a "Fund," and
collectively as the "Funds") and the Client offers shares of various classes of
each Fund as listed in Schedule 1 hereto (each such class together with all
other classes subsequently established by the Client in a Fund in accordance
with Section 7.7 of this Agreement being herein referred to as a "Class," and
collectively as the "Classes"); and
WHEREAS, the Client desires that Forum perform certain services for each
Fund and Class, and Forum is willing to provide those services on the terms and
conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Client and Forum hereby agree as follows:
SECTION 1. DEFINITIONS; APPOINTMENT; DELIVERY OF DOCUMENTS
1.1 FREQUENTLY USED DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:
(a) "1940 Act" means the Investment Company Act of 1940, as amended.
(b) "Affiliate" means, with respect to any Person, any other Person that
is controlled by, controls, or is under common control with such Person;
for purposes hereof, "control" of a Person means (i) ownership of, or
possession of the right to vote, more than 25% of the outstanding voting
equity of that person or (ii) the right to control the appointment of the
board of directors, management or executive officers of that person.
(c) "Agreement" means this Agreement and any appendices and schedules
attached hereto, in each case as they may be amended from time to time.
(d) "Authorized Person(s)" means the persons described or listed on
Schedule 2 hereto.
(e) "Class" and "Classes" have the meaning set forth in the preamble to
this Agreement.
(f) "Client" has the meaning set forth in the preamble to this Agreement
and includes successors-in-interest; unless the context shall require
otherwise, references to the Client shall include any Funds or Classes
thereof.
(g) "Effective Date" means the date first set forth above.
(h) "Governing Body" means, for any entity, the Person or body of
Persons governing the operations of the entity under its Organic Documents
(for example, if the entity is a corporation, its board of directors).
(i) "Forum" has the meaning set forth in the preamble to this Agreement
and includes successors-in-interest.
(j) "Fund" and "Funds" have the meaning set forth in the preamble to
this Agreement.
(k) "Instruction" means any oral and written notice or statement
directing action or inaction, including any such notice or statement
transmitted to Forum (i) in electronic format by machine readable input,
electronic mail, CRT data entry or other similar means, or (ii) in person
or by telephone, telecopy, vocal telegram or similar means.
(l) "Laws" means any statutes, rules and regulations of any governmental
authority and applicable judicial or regulatory interpretations thereof
including without limitation the Conduct Rules of the NASD.
(m) "Organic Documents" means, for any entity, the documents pursuant to
which the entity was formed as a legal entity, as such documents may be
amended from time to time.
(n) "Parties" means the Client and Forum.
(o) "Person" means any natural person or incorporated or unincorporated
entity.
(p) "Policies and Procedures" means the written policies and procedures
of the Client in any way related to the Services, including any such
policies and procedures contained in the Organic Documents and the
Prospectus.
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(q) "Predecessor Records" has the meaning set forth in Section 2.9(b).
(r) "Prospectus" has the meaning set forth in Section 2.4(a).
(s) "SEC" means the United States Securities and Exchange Commission and
any successor governmental authority.
(t) "Securities Act" means the Securities Act of 1933, as amended.
(u) "Services" means the services set forth in Appendix A.
(v) "Services Commencement Date" means, with respect to any Fund or
Class thereof, (i) if the registration statement of the Fund or Class is
effective as of the Effective Date, then such Effective Date; (ii), if
such registration statement is not effective as of the Effective Date,
then the date such registration statement is declared effective; or (iii)
such other date as may be agreed in writing by the Parties.
(w) "Shareholder" means any Person that holds Shares of record.
(x) "Shares" has the meaning set forth in the preamble to this
Agreement.
Other capitalized terms used but not defined in this Section 1.1 shall have the
meanings set forth in this Agreement.
1.2 APPOINTMENT. The Client hereby appoints Forum to act as transfer agent and
dividend disbursing agent for the Funds for the period and on the terms set
forth in this Agreement, and Forum hereby accepts such appointment and in
connection with such appointment agrees to provide the Services on the terms and
conditions set forth in this Agreement.
SECTION 2. SERVICES; OTHER RELATED TERMS AND CONDITIONS
2.1. SERVICES. Subject to the terms and conditions of this Agreement and under
the direction and control of the Governing Body, Forum shall provide the
Services.
2.2 OTHER SERVICES. Forum shall provide such other services and assistance
relating to the affairs of the Client as the Client may, from time to time,
reasonably request pursuant to mutually acceptable compensation and
implementation arrangements.
2.3 FORUM'S COMPLIANCE WITH LAWS.
(a) Forum shall comply in all material respects with all Laws applicable
to Forum's delivery of the Services.
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(b) Nothing contained herein shall be construed to require Forum to
perform any service that could cause Forum to be deemed an investment
adviser for purposes of the 1940 Act or the Investment Advisers Act of
1940, as amended, or that could cause a Fund to act in contravention of
the Fund's Prospectus or any provision of the 1940 Act.
(c) Except as specifically set forth in this Agreement to the contrary,
Forum assumes no responsibility for compliance by the Client with any Laws
applicable to the Client; and, notwithstanding any other provision of this
Agreement to the contrary, Forum assumes no responsibility under this
Agreement to Client or any other Person for compliance by the Client or
Forum with the Laws of any jurisdiction other than those of the United
States.
2.4 CERTAIN DOCUMENTS; CHANGES IN POLICIES AND PROCEDURES OR APPLICABLE LAW.
(a) Contemporaneous with or promptly after the Effective Date, the
Client shall deliver to Forum copies of the following documents: (i) the
Client's Organic Documents; (ii) the offering documents, prospectuses,
private placement memoranda, subscription agreements and/or other offering
documents for the Funds and Classes thereof (collectively, the
"Prospectus"); (iii) a copy, certified by the secretary or other
individual or legal entity responsible for maintaining the official
records of the Client, of the resolution of its Governing Body appointing
Forum and authorizing the execution and delivery of this Agreement; and
(iv) the Client's Policies and Procedures.
(b) Client shall deliver to Forum as soon as is reasonably practical any
and all amendments to the documents required to be delivered under Section
2.4(a).
(c) Forum shall perform the Services in observance of the Policies and
Procedures delivered to Forum pursuant to Section 2.4(a), provided that
with respect to any provision(s) of the Policies and Procedures that are
delivered to Forum after the Effective Date, such provision(s) are
commercially reasonable. Notwithstanding the foregoing, in the event the
Client amends the Policies and Procedures or there is a change in Law
related to or affecting the Services, Forum need not begin performing any
new service(s), and need not perform any service(s) in a materially
different or more burdensome manner, except upon written agreement by
Forum and pursuant to mutually acceptable compensation agreements and
Forum's written approval of any amended Policies and Procedures, which
approval shall not be unreasonably withheld or delayed.
2.5. SERVICE DAYS. Nothing contained in this Agreement shall require Forum to
perform any functions or duties on any weekend day or on any other day on which
the Client does not accept subscriptions and redemptions of its Shares (a
"Business Day"). Functions or duties normally scheduled to be performed on any
day that is not a Business Day shall be performed on, and as of, the next
Business Day, unless otherwise required by applicable Law.
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2.6. RELIANCE ON INSTRUCTIONS, DOCUMENTS AND ADVICE.
(a) With respect to the subject matter of this Agreement, Forum may rely
on (i) with respect to any matter, advice or Instruction that it receives
and that it reasonably believes in good faith was transmitted by the
Client's Governing Body or an Authorized Person; or (ii) with respect to
any factual matter, any signature, Instruction, request, letter of
transmittal, certificate, opinion of counsel, statement, instrument,
report, notice, consent, order, or other document of or presented by any
Person (including any authorized representative(s) of any predecessor
service providers to the Client).
(b) Notwithstanding any other provisions of this Agreement to the
contrary, Forum shall have no duty or obligation to inquire into (i) the
authenticity of any statement, oral or written Instruction, resolution,
signature, request, letter of transmittal, certificate, opinion of
counsel, instrument, report, notice, consent, order, or any other document
or instrument that Forum reasonably believes in good faith to be genuine;
or (ii) the authority or lack thereof of any Person to represent or act as
an agent for any other Person, provided that Forum reasonably believes in
good faith that such authority exists, and, provided, further, that with
respect to Instructions of the Client, Forum may only rely on Instructions
of the Client's Governing Body or Authorized Persons.
(c) Forum may assume that any Instructions are not in any way
inconsistent with the Organizational Documents, the Prospectus, the
Policies and Procedures or any proceeding or resolution of the Client's
Governing Body or the Shareholders of the Client, unless and until Forum
receives written notice to the contrary from the Client's Governing Body
or an Authorized Person, and provided that Forum makes reasonable inquiry
into any instructions if Forum has doubts regarding the intention of any
instructions.
(d) Absent specific written notice to the contrary, Forum may assume
that Authorized Persons are authorized to deliver instructions relating to
all or any matter under this Agreement. The Client's Governing Body may at
any time (i) change the list of Authorized Persons or (ii) limit an
Authorized Person's authority. Forum shall not be deemed to have notice of
any change of Authorized Persons or limitation of authority until receipt
of written notice thereof from the Client's Governing Body or from at
least two then-current (as reflected in Forum's records immediately prior
to the receipt of such notice) Authorized Persons.
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(e) About any matter related to the Client or the Services, Forum may
apply to any Authorized Person for advice or Instructions; about any legal
matter related to the Client or the Services, Forum may request advice
from counsel of its own choosing (who may be counsel to the Client, to the
Administrator, or to Forum); and about any accounting or tax matter
related to the Client or the Services, Forum may request advice from the
independent accountants of the applicable Fund or Class of the Client or
from other independent accountants with recognized expertise about the
specific subject matter, provided Forum notifies Client in advance of its
intentions. Any costs related to such advice or Instructions shall be
borne by the Client, except that Forum shall be responsible for costs
related to advice from in-house counsel to Forum or any affiliate of
Forum. In the event of any conflict between advice or Instructions Forum
receives from (i) any Authorized Person or such independent accountant(s)
and (ii) advice from counsel, Forum may rely on advice from counsel.
(f) Nothing in this Section 2.6 shall be construed as imposing on Forum
any obligation to seek advice or Instructions, or, subject to Section
3.1(c), to act in accordance with such advice or Instructions if and when
received.
2.7. CERTAIN REPRESENTATIVE POWERS; OTHER ACTIVITIES.
(a) In the performance of the Services, Forum may use the name of the
Client and sign any necessary letters or other documents for and on behalf
of the Client provided such letters or other documents are necessary to
execute the Services in this Agreement and prior verbal approval has been
received from an Authorized Person of the Client.
(b) Forum may provide services similar to those provided under this
Agreement for any other Person on such terms as may be arranged with such
Person, and Forum shall not be required to disclose to the Client any fact
or thing that may come to the knowledge of Forum in the course of so
doing.
(c) Forum may acquire, hold or deal with, for its own account or for the
account of Person, any shares or securities from time to time issued by
the Client or in which the Client is authorized to invest; and Forum shall
not be required to account to the Client for any profit arising therefrom.
2.8 COOPERATION WITH INDEPENDENT AUDITORS AND COUNSEL. Forum shall cooperate
with the independent auditor(s) and attorneys of the Client and shall take
reasonable action to make all necessary information related to the Services
available to such auditors and attorneys for the performance of their duties.
2.9 CERTAIN RESPONSIBILITIES OF THE CLIENT. In order to permit Forum to
provide the Services, the Client agrees to:
(a) Comply in all material respects with all Laws applicable to the
Client;
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(b) Prior to the Services Commencement Date, deliver or cause to be
delivered to Forum all books, records and other documents relating to the
Client's prior operations and service providers, if any, that, in Forum's
reasonable opinion, are necessary for Forum properly to provide the
Services (collectively "Predecessor Records");
(c) Provide, and cause each other agent or service provider to the
Client to provide, to Forum all such information (and in such reasonable
medium) that Forum may reasonably request in connection with the Services
and this Agreement; and
(d) Deliver to Forum in advance of publication thereof any Prospectus or
amendment to a Prospectus in order to permit Forum and its agents to
review and comment upon, at Forum's discretion, those portions thereof
that describe Forum and Forum's duties and obligations under this
Agreement, including the indemnity provisions hereof, and the Client shall
not make any reference to Forum and such duties, obligations and
indemnities in any Prospectus without Forum's consent, which consent shall
not be unreasonably withheld or delayed.
SECTION 3. RECORDKEEPING; PROPRIETARY INFORMATION; CONFIDENTIALITY
3.1 CLIENT RECORDS; OWNERSHIP; INSPECTION; SUCCESSORS.
(a) Forum shall prepare and maintain on behalf of the Client the books
and records detailed in Appendix A and such other records as are agreed
from time to time in writing by Forum and the Client. The books and
records maintained by Forum shall be prepared, maintained and, subject to
Section 3.1(d) below, preserved by Forum in such form, for such periods
and in such locations as may be required by applicable Law, including,
without limitation, Section 31 of the 1940 Act and Section 17(A) of the
Securities Exchange Act of 1934, as amended.
(b) To the extent required by Section 31 of the 1940 Act and the rules
thereunder, the books and records maintained by Forum and any Predecessor
Records received by Forum pursuant to Section 2.9(b)(collectively, "Client
Records") in Forum's possession shall be the property of the Client. The
Client and the Client's authorized representatives shall have access to
such Client Records at all times during Forum's normal business hours.
Upon the reasonable advance request of the Client or such authorized
representatives, copies of any such Client Records shall be provided by
Forum, at the Client's expense, to the Client or its authorized
representatives.
(c) If Forum receives a request or demand from a third party to inspect
any Client Records, Forum will endeavor to notify the Client and to secure
Instructions from the Client or an Authorized Person about such
inspection. Forum shall abide by such Instructions for granting or denying
the inspection; provided, that Forum may grant the inspection without
Instructions or in contravention of specific Instructions if Forum is
advised by counsel to Forum or the Client that failure to do so is
substantially likely to result in liability to Forum; and provided,
further, that in such event, Forum shall
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endeavor promptly to advise the Client of such contrary advice, to the
extent practicable in advance of any actual inspection.
(d) Upon termination of this Agreement, Forum shall, subject to payment
of all undisputed amounts due to Forum hereunder and at the expense and
direction of the Client, transfer to Client or any successor service
provider all Client Records in the electronic or other medium in which
such material is then maintained by Forum.
3.2 PROPRIETARY INFORMATION OF FORUM. The Client acknowledges that the
databases, computer programs, screen formats, report formats, interactive design
techniques, and documentation manuals maintained by Forum on databases under the
control and ownership of Forum or a third party constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial importance to Forum or the third party. The Client
agrees to treat all Proprietary Information as proprietary to Forum and further
agrees that it shall maintain as confidential any Proprietary Information,
except as may be provided under this Agreement, and that breach by the Client of
this confidentiality obligation would cause irreparable injury to Forum.
3.3 CONFIDENTIALITY.
(a) Each Party (for purposes of this Section 3.3, a "Receiving Party")
agrees to keep confidential all information disclosed by the other Party
(for purposes of this Section 3.3, a "Disclosing Party"), including,
without limitation all forms and types of financial, business, marketing,
operations, technical, economic and engineering information of the
Disclosing Party, whether tangible or intangible.
(b) Notwithstanding any provision of this Agreement to the contrary, the
Parties agree that the following information shall not be deemed
confidential information: (i) information that was known to the receiving
Party before receipt thereof from or on behalf of the Disclosing Party;
(ii) information that is disclosed to the Receiving Party by a third
person who has a right to make such disclosure without any obligation of
confidentiality to the Party seeking to enforce its rights under this
Section 3; (iii) information that is or becomes generally known in the
trade without violation of this Agreement by the Receiving Party; or (iv)
information that is independently developed by the Receiving Party or its
employees or affiliates without reference to the Disclosing Party's
information.
(c) Notwithstanding any provision of this Agreement to the contrary,
Forum may: (i) provide information to Forum's counsel and to Persons
engaged by Forum or the Client to provide services with respect to the
Client; (ii) provide information consistent with the Procedures or with
operating procedures that are customary with respect to the Services in
the industry; (iii) identify the Client as a client of Forum for Forum's
sales and marketing purposes; and (iv) provide information as approved by
an Authorized Person, provided, that (A) such approval shall not be
unreasonably withheld or delayed, and (B) Forum may release information
without approval of the Client if Forum is advised by counsel to Forum or
the Client that failure to do so will result in liability to Forum; and
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provided, further, that, in such event Forum shall endeavor promptly to
advise the Client of such advice, to the extent practicable in advance of
any actual release of information.
(d) Forum acknowledges that certain Shareholder information made
available by the Client to Forum or otherwise maintained by Forum under
this Agreement may be deemed nonpublic personal information under the
Xxxxx-Xxxxx-Xxxxxx Act and other applicable privacy Laws (collectively,
"Privacy Laws"). Forum agrees (i) not to disclose or use such information
except as required to carry out its duties under the Agreement or as
otherwise permitted by law in the ordinary course of business; (ii) to
limit access to such information to authorized representatives of Forum
and the Client; (iii) to establish and maintain reasonable physical,
electronic and procedural safeguards to protect such information; and (iv)
to cooperate with the Client and provide reasonable assistance in ensuring
compliance with such Privacy Laws to the extent applicable to either or
both of the Parties.
SECTION 4. RESPONSIBILITY OF FORUM; INDEMNIFICATION; OTHER LIABILITY-RELATED
MATTERS
4.1. RESPONSIBILITY OF FORUM; LIMITATIONS.
(a) Forum shall be under no duty to take any action under this Agreement
except as specifically set forth in this Agreement or as may be
specifically agreed to by Forum and the Client in a written amendment to
this Agreement.
(b) In performing the Services, Forum (i) shall act in good faith and
shall be obligated to exercise care and diligence; and (ii) may, without
limiting the generality of any other provision of this Agreement, rely on
Instructions, advice and information pursuant to Section 2.6;
(c) Liability and Exceptions from Liability: Notwithstanding anything in
this Agreement to the contrary, Forum shall be liable to the Client only
for any damages arising out of Forum's failure to perform its duties under
this Agreement to the extent such damages were caused solely and directly
by Forum's willful misfeasance, bad faith, negligence or reckless
disregard of such duties; provided, however, that the negligence standard
referred to above shall be gross negligence with respect to any
"Exceptions" set forth in the Appendix A.
(d) Forum shall not be liable for the delays or errors of Persons that
provide services to the Client or Forum (other than employees of Forum) or
of other Persons, including the failure by any such Person to provide
information to Forum when they have a duty to do so (irrespective of
whether that duty is owed specifically to Forum or a third party).
(e) Notwithstanding anything in this Agreement to the contrary, the
cumulative liability of Forum to the Client for all losses, claims, suits,
controversies, breaches or damages for any cause whatsoever (including but
not limited to those arising out of or
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related to this Agreement), and regardless of the form of action or legal
theory, shall not exceed the higher of $1,000,000 or the fees received by
Forum under this Agreement during the twelve (12) months immediately
preceding the date of such loss or damages; provided, however, that the
foregoing limitation of liability shall not apply with respect to any
action (or omission to act) with respect to which Forum is adjudicated
liable due to Forum's gross negligence.
(e) The Client may not assert a cause of action against Forum that
allegedly occurred more than 12 months prior to the filing of the suit
(or, if applicable, commencement of arbitration proceedings) alleging such
cause of action.
4.2 INDEMNIFICATION; NOTIFICATION OF CLAIMS.
(a) Notwithstanding anything in this Agreement to the contrary, Forum
shall not be responsible for, and the Client shall on behalf of each
applicable Fund or Class thereof, indemnify and hold harmless Forum, its
employees, directors, officers and managers and any person who controls
Forum within the meaning of section 15 of the Securities Act or section 20
of the Securities Exchange Act of 1934, as amended, (for purposes of this
Section 4.2, "Indemnitees") from and against, any and all losses, damages,
costs, charges, reasonable counsel fees, payments, liability and other
expenses of every nature and character (including, but not limited to,
direct and indirect reasonable reprocessing costs) arising out of or
attributable to all and any of the following (for purposes of this Section
4.2, a "Forum Claim"):
(i) any action (or omission to act) of Forum or its agents taken in
connection with this Agreement; provided, that such action is taken
in good faith and without willful misfeasance, negligence (or gross
negligence with respect to Exception Services) or reckless disregard
by Forum of its duties and obligations under this Agreement;
(ii) any material breach of the Client's agreements, representations,
warranties, and covenants in Sections 2.9 and 5.2 of this Agreement
or in Appendix A;
(iii) the Client's lack of good faith or the Client's gross negligence or
willful misfeasance;
(iv) the reliance on or use by Forum or its agents or subcontractors of
information, records, documents or services which have been
prepared, maintained or performed by the Client or any other person
or firm on behalf of the Client, including but not limited to any
Predecessor Records provided pursuant to Section 2.9(b); and
(v) the reliance on advice, Instructions, and other information, as set
forth in Section 2.6.
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(b) Forum will indemnify, defend and hold the Client and its several
officers and members of its Governing Body and any person who controls the
Client within the meaning of section 15 of the Securities Act or section
20 of the Securities Exchange Act of 1934, as amended, (collectively, the
"Client Indemnitees" and, with the Forum Indemnitees, and "Indemnitee"),
free and harmless from and against any and all claims, demands, actions,
suits, judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees and other expenses of every nature and character (including
the cost of investigating or defending such claims, demands, actions,
suits or liabilities and any reasonable counsel fees incurred in
connection therewith), but only to the extent that such claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses result from, arise out of or
are based upon (for purposes of this Section 4.2(b), a "Client Claim" and,
with a Forum Claim:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a
material fact required to be stated or necessary to make the
statements therein not misleading, if such statement or omission was
made in reliance upon, and in conformity with, information furnished
to the Client in writing in connection with the preparation of the
Registration Statement or Prospectus by or on behalf of Forum; or
(ii) any act of, or omission by, Forum for which Forum is adjudicated
liable pursuant to Section 4.1(c) hereof.
(c) The Client or Forum (for purpose of this Section 4.2(c), an
"Indemnifying Party") may assume the defense of any suit brought to
enforce any Forum Claim or Client Claim, respectively, and may retain
counsel chosen by the indemnifying Party and approved by the other Party,
which approval shall not be unreasonably withheld or delayed. The
indemnifying Party shall advise the other Party that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of
the notice of the claim. If the indemnifying Party assumes the defense of
any such suit and retains counsel, the other Party shall bear the fees and
expenses of any additional counsel that they retain. If the indemnifying
Party does not assume the defense of any such suit, or if other Party does
not approve of counsel chosen by the indemnifying Party, or if the other
Party has been advised that it may have available defenses or claims that
are not available to or conflict with those available to the indemnifying
Party, the indemnifying Party will reimburse any Indemnitee named as
defendant in such suit for the reasonable fees and expenses of any counsel
that the Indemnitee retains. An Indemnitee shall not settle or confess any
claim without the prior written consent of the Client, which consent shall
not be unreasonably withheld or delayed.
(d) An indemnifying Party's obligation to provide indemnification under
this section is conditioned upon the indemnifying Party receiving notice
of any action brought against an Indemnitee within twenty (20) days after
the summons or other first legal process is served. Such notice shall
refer to the Person or Persons against whom the action is brought. The
failure to provide such notice shall not relieve the indemnifying Party
any liability that it may have to any Indemnitee except to the extent that
the ability of the
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party entitled to such notice to defend such action has been materially
adversely affected by the failure to provide notice.
(e) The provisions of this section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any
Indemnitee and shall survive the sale and redemption of any Shares made
pursuant to subscriptions obtained by Forum. The indemnification
provisions of this section will inure exclusively to the benefit of each
person that may be an Indemnitee at any time and their respective
successors and assigns (it being intended that such persons be deemed to
be third party beneficiaries under this Agreement).
4.3 OTHER LIABILITY-RELATED MATTERS. Notwithstanding anything in this
Agreement to the contrary excepting Section 4.2 or as specifically set forth
below:
(a) Neither Party shall be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by reason of
circumstances beyond its reasonable control, including, without
limitation, acts of God; action or inaction of civil or military
authority; public enemy; war; terrorism; riot; fire; flood; sabotage;
epidemics; labor disputes; civil commotion; interruption, loss or
malfunction of utilities, transportation, computer or communications
capabilities; insurrection; or elements of nature;
(b) Neither Party shall be liable for any punitive, consequential,
special or indirect losses or damages suffered by the other Party, whether
or not the likelihood of such losses or damages was known by the Party;
(c) No affiliate, director, officer, employee, manager, shareholder,
partner, agent, counsel or consultant of either Party shall be liable at
law or in equity for the obligations of such Party under this Agreement or
for any damages suffered by the other Party related to this Agreement;
(d) No Shareholder or member of the Client's Governing Body may bring
any action under or in the name of the Client in connection with this
Agreement except as is specifically required to be permitted under
applicable Law;
(e) There are no third party beneficiaries of this Agreement;
(f) Each Party shall have a duty to mitigate damages for which the other
Party may become responsible;
(g) Except as defined as the Services provided by this Agreement, Forum
hereby disclaims all representations and warranties, express or implied,
made to the Client or any other Person, including, without limitation, any
warranties regarding quality, suitability, merchantability, fitness for a
particular purpose or otherwise (irrespective of any course of dealing,
custom or usage of trade), of any services or any goods provided
incidental to
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Services provided under this Agreement. Forum disclaims any warranty of
title or non-infringement except as otherwise set forth in this Agreement;
and
(h) The assets and liabilities of each Fund are separate and distinct
from the assets and liabilities of each other Fund, and no Fund shall be
liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise; and in
asserting any rights or claims under this Agreement, Forum shall look only
to the assets and property of the Fund to which Forum's rights or claims
relate in settlement of such rights or claims.
SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF FORUM. Forum represents and warrants to
the Client that:
(a) It is a limited liability company duly organized and existing and in
good standing under the laws of the State of Delaware;
(b) It is empowered under applicable Laws and by its Organic Documents
to enter into this Agreement and perform its obligations under this
Agreement;
(c) All requisite limited liability company proceedings have been taken
to authorize it to enter into this Agreement and perform its obligations
under this Agreement;
(d) It has access to the necessary facilities, equipment, and personnel
to perform its duties and obligations under this Agreement;
(e) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Forum, enforceable against Forum 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
(f) It has in effect and will maintain all licenses, permits and other
authorizations necessary or appropriate for Forum to perform the Services.
(g) It has and will keep in effect professional liability insurance
naming Forum and its affiliates as insured and providing coverage with
respect to Forum activities on behalf of the Fund and other Forum clients
in the amount of at least $1,000,000, and will provide to the Fund at
least annually a certificate of insurance evidencing that such insurance
is in full force and effect.
5.2 REPRESENTATIONS AND WARRANTIES OF THE CLIENT. The Client represents and
warrants to Forum that:
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(a) It is duly organized and existing and in good standing under the
laws of the jurisdiction of its organization;
(b) It is empowered under applicable Laws and by its Organic Documents
to enter into this Agreement and perform its obligations under this
Agreement;
(c) All requisite corporate or similar proceedings have been taken to
authorize it to enter into this Agreement and perform its obligations
under this Agreement;
(d) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Client, enforceable against the
Client 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;
(e) With respect to all Shares from time to time being offered for sale
to the public, a registration statement under the Securities Act (the
"Registration Statement") is currently effective or will be effective at
the time of sale, and will remain effective, and all appropriate Federal
and State securities law filings have been made and will continue to be
made;
(f) The Prospectuses and, if Shares are offered for sale to the public,
Registration Statement, have been, and any amendment thereto will be, as
the case may be, carefully prepared in conformity with the requirements of
the Securities Act and the 1940 Act and the rules and regulations
thereunder, and all statements of fact contained or to be contained in the
Registration Statement or Prospectuses are or will be true and correct in
all material respects at the time indicated or on the effective date, as
the case may be; and neither the Registration Statement nor any
Prospectus, when they shall become effective or be authorized for use,
will include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares, except that no
representation is made with respect to information furnished to the Client
with the written approval of Forum expressly for use in the Registration
Statement or Prospectus; and
(g) It will from time to time amend its Registration Statement or
Prospectuses as, in the light of then-current and then-prospective
developments, shall, in the opinion of its counsel, be necessary in order
to have the Registration Statement and Prospectuses at all times contain
all material facts required to be stated therein or necessary to make any
statements therein not misleading to a purchaser of Shares;
SECTION 6. COMPENSATION AND EXPENSES
6.1 COMPENSATION. In consideration of the Services provided by Forum pursuant
to this Agreement, with respect to the Funds and each Class thereof the Client
shall pay Forum the fees as from time to time set forth in a separate written
agreement between Forum and the Client (the "Fee Schedule").
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6.2 EXPENSES.
(a) Forum shall be responsible for expenses incurred in providing office
space, equipment, and personnel as may be necessary or convenient to
provide the Services, including the compensation of any Forum employee who
serves as an officer of the Client.
(b) In connection with the Services, the Client, on behalf of each Fund
and Class thereof, agrees to reimburse Forum for its out-of-pocket
expenses as listed in the Fee Schedule.
6.3 ACCRUAL AND PAYMENT OF FEES AND EXPENSES; EXTRAORDINARY AUDITS.
(a) All fees and reimbursable expenses (or an estimate thereof) shall be
accrued daily by the Client. Fixed or determinable fees shall be paid
monthly in advance on the first day of each calendar month.
(b) If fees begin to accrue in the middle of a month or if this
Agreement terminates before the end of any month, all fees for the period
from that date to the end of that month or from the beginning of that
month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in
which the effectiveness or termination occurs.
(c) Upon the termination of this Agreement either in its entirety or
with respect to a Fund or Class, the Client shall pay to Forum such fees
as shall be payable prior to the effective date of termination and shall
also pay any applicable termination costs pursuant to Section 7.4 of the
Agreement.
(d) The Client, on behalf of the applicable Fund or Class thereof, shall
reimburse Forum for all reasonably incurred expenses and employee time
attributable to (i) any review of the Client's accounts and records by the
Client's independent accountants or any regulatory body outside of routine
and normal periodic reviews and (ii) any material, non-routine Services.
6.4 OTHER COMPENSATION. Notwithstanding anything in this Agreement to the
contrary, Forum and its affiliates may receive compensation or reimbursement
from the Client with respect to any services not included under this Agreement.
SECTION 7. EFFECTIVENESS, DURATION, TERMINATION; ASSIGNMENT; ADDITIONAL FUNDS
AND CLASSES
7.1 EFFECTIVENESS. This Agreement shall become effective on the Effective
Date, and shall become effective with respect to each Fund or Class thereof on
the Services Commencement Date with respect to such Fund or Class.
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7.2 DURATION. This Agreement shall have a minimum term of three (3) years from
the Effective Date (the "Base Term") and shall thereafter continue in effect
until terminated, either in its entirety or with respect to a Fund, as
applicable.
7.3 TERMINATION. This Agreement may be terminated at any time, either in its
entirety or with respect to a Fund, without the payment of any penalty:
(a) with or without cause, at any time after the expiration of the Base
Term, by either Party on at least ninety (90) days' written notice to the
other Party.
(b) with or without cause, by the Client after the first anniversary of
the Effective Date provided that the Client delivers written notice of
such election not later than one (1) year and ninety (90) days after the
Effective Date.
(c) for cause, and before or after the expiration of the Base Term, by
the non breaching Party on at least thirty (30) days' written notice
thereof to the other Party, if the other party has materially breached any
of its obligations hereunder including, with respect to Forum, the failure
by Forum to act consistently with the standard of care set forth in
Section 4.1(b); provided, however, that (i) the termination notice shall
describe the breach, and (ii) no such termination shall be effective if,
with respect to any breach that is capable of being cured prior to the
date set forth in the termination notice, the breaching Party has cured
such breach to the reasonable satisfaction of the non-breaching Party.
(d) by the Client with respect to a Fund or a Class, if the operations
of the Fund or Class are wound up and discontinued, and the assets of such
Fund or Class are distributed to the Shareholders after the Client's
Governing Body determines that its is no longer in the Shareholders' best
interest to continue the operations of the Fund or Class; provided,
however, that the Client shall be required to pay a Default Payment (as
defined below) if
(i) such distribution to Shareholders is incident to a merger,
consolidation or reorganization to which the Fund or Class is a
party that (A) is treated as a tax-free reorganization pursuant to
Section 368 of the Internal Revenue Code of 1986, as amended or (B)
as a result of which the Fund or Class is the accounting successor
under generally accepted accounting principles (a "Fund
Reorganization"); and
(ii) after the Fund Reorganization, Forum does not continue to provide
services with respect to the Fund or Class, or any successor fund or
class, pursuant to this Agreement or any substantially similar
agreement.
7.4 DEFAULT PAYMENT. The Client agrees that if the Client terminates this
Agreement, either in its entirety or with respect to a Fund or Class, prior to
the expiration of the Base Term then the Client shall be in default of this
Agreement, unless the Agreement is properly terminated by the Client (x) under
Section 7.3(b) after proper notice required by that Section is given, (y) for
"cause" pursuant to Section 7.3(c) after the notice and cure period provided
therein or (z)
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because the Fund or Class is being liquidated under the circumstances described
in Section 7.3(d). Inasmuch as a default by Client will cause substantial
damages to Forum and because of the difficulty of estimating the damages that
will result, the Client agrees to pay to Forum, as liquidated damages for such
default, an amount equal to (i) the average monthly fees payable to Forum
pursuant to Section 6.1 of this Agreement with respect to the affected Funds or
Classes for the last six (6) months preceding default, multiplied by (ii) the
number of full and partial months remaining until the expiration of the Base
Term (the "Default Payment"). The Parties agree that this sum is a reasonable
forecast of probable actual loss to Forum and that this sum is agreed to as
liquidated damages and not as a penalty. In the event Client terminates this
Agreement pursuant to Section 7.3(b) then, in addition to any other costs or
expenses properly payable by Client hereunder, Client shall pay or reimburse all
conversion costs incurred by Forum to convert the Client to any alternative
service provider, including employee time at 150% of salary.
7.5 SURVIVAL. The provisions of Sections 2.8, 3.1(d), 3.2, 3.3, 4, 6.1, 6.2, 7
and 8 shall survive any termination of this Agreement.
7.6 ASSIGNMENT. Except as otherwise provided in this Agreement, neither this
Agreement nor any rights or obligations under this Agreement may be assigned by
any party without the written consent of the other party. This Agreement shall
inure to the benefit of and be binding upon the Parties and their respective
permitted successors and assigns. Forum may, without further consent on the part
of the Client, (i) assign this agreement to any affiliate of Forum or (ii)
subcontract for the performance hereof with any entity, including an affiliate
of Forum; provided, that Forum shall be as fully responsible to the Client for
the acts and omissions of any subcontractor as Forum is for its own acts and
omissions.
7.7 ADDITIONAL FUNDS AND CLASSES.
(a) In the event that the Client requests Forum to provide services with
respect to one or more additional funds and/or classes of the Client after
the Effective Date, such funds and/or classes shall become Funds and/or
Classes under this Agreement for all purposes hereof upon the execution of
a joinder to this Agreement by the Client and Forum, which joinder shall
specify such Funds and/or Classes and the compensation due Forum for
providing Services with respect thereto.
(b) In the event that after the Effective Date the Client winds up one
or more Funds and/or Classes or otherwise terminates this Agreement with
respect to a Fund and its Classes, such Fund and/or Class shall from the
date of such winding up or termination no longer be deemed a Fund or Class
under this Agreement, provided, that the Client shall remain obligated
pursuant to (i) Section 6 to make any payments for obligations incurred
through the date of termination respecting such Fund and/or Class and (ii)
pursuant to Section 7.4, if applicable.
SECTION 8. MISCELLANEOUS
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8.1 AMENDMENTS. No provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized and executed by the
Parties; provided, that (i) the Client may amend Schedule 2 as permitted by
Section 2.6(d); and (ii) the Client and/or Forum may, as a result of the
addition or termination of a [Fund or] Class hereunder as contemplated by
Section 7.7, amend Schedule 1 as permitted by Section 7.7.
8.2 GOVERNING OF LAW. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the Laws of the State of
Delaware, without giving effect to the conflicts of laws, principles and rules
thereof.
8.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the Parties hereto and supersedes any prior agreement with respect to the
subject matter hereof, whether oral or written.
8.4 COUNTERPARTS. This Agreement may be executed by the Parties hereto in any
number of counterparts, and all of the counterparts taken together shall be
deemed to constitute one and the same instrument.
8.5 SEVERABILITY. If any part, term or provision of this Agreement is held to
be illegal, in conflict with any law or otherwise invalid, the remaining portion
or portions shall be considered severable and unaffected, and the rights and
obligations of the Parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
8.6 HEADINGS. Section and paragraph headings in this Agreement are included
for convenience only and are not to be used to construe or interpret this
Agreement.
8.7 NOTICES AND OTHER COMMUNICATIONS; ELECTRONIC RECORDS.
(a) Notices, requests, instructions and communications related to
matters described in Sections 7.1 to 7.6 of this Agreement shall be
delivered in writing as set forth below:
If to Forum:
Forum Shareholder Services, LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
XXX
Fax: (000) 000-0000
Attn: Legal Department
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If to Client:
Bridgeway Funds, Inc.
0000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax: 000-000-0000
Attn: Xxxxxx Xxxxxxxx
Notices received by the Parties at such addresses, or at such other
principle business addresses as they shall specify in writing, shall be
deemed to have been properly given.
(b) Other notices between the Parties and their agents and employees may
be sent in person, by telecopy, by mail or overnight courier, or through
electronic messages at such addresses as shall be specified by the Parties
or their agents.
(c) This Agreement and electronic signatures and records delivered and
maintained under the Agreement shall be effective to the fullest extent
permitted by Law, provided that references in this Agreement to written
approval or approval in writing of either Party shall be restricted to a
writing executed by a then-current executive officer of such Party. Each
Party agrees to maintain a copy of this Agreement and any amendments to
this Agreement for its records.
8.8 INTERPLEADER. In the event of a dispute about any funds of the Client held
by Forum from time to time under this Agreement, Forum or its agents may
commence an action in interpleader and pay the disputed funds into a court of
competent jurisdiction, and the Client shall reimburse Forum for its reasonable
costs and expenses related to any such action in interpleader.
8.9. DISPUTE RESOLUTION
(a) Client and Forum shall attempt, in good faith, to resolve by direct
discussions any disputes between them arising out of, relating to or in
connection with this Agreement.
(b) If direct discussions do not resolve the dispute, either party may
initiate mediation within 30 days of termination of direct discussions.
All disputes shall be submitted to mediation then to arbitration. Unless
otherwise agreed, mediation proceedings shall be administered by the
American Arbitration Association.
(c) If the parties fail to resolve the dispute through mediation within
60 days after commencement of mediation, then either party may submit the
dispute for arbitration. Unless otherwise agreed, arbitration proceedings
shall be administered by the American Arbitration Association. A demand
for arbitration shall be filed with the American Arbitration Association
within the applicable statute of limitations. All disputes submitted to
arbitration shall be resolved pursuant to the procedures set forth in the
Federal Arbitration Act.
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(d) The parties to this Agreement may agree on one arbitrator to hear
their dispute, in which case the decision of the sole arbitrator shall
decide the dispute. In the event that the parties cannot agree on one
arbitrator, either party may elect to have the dispute heard by a
three-arbitrator panel. If only one party elects a three arbitrator panel,
then that party shall pay all fees and expenses of all three arbitrators.
If both parties elect a three-arbitrator panel then each will pay one-half
of the resulting fees and expenses. In the case of a three-arbitrator
panel, the dispute shall be decided on the decision of a majority of the
panel.
(e) The decision of the arbitrator(s) shall be final and binding and may
be enforced in any court of competent jurisdiction. The arbitrator(s)
shall apply recognized privileges and exemptions from discovery, such as
the attorney-client, work-product and anticipation of litigation
privileges. The arbitrator(s) shall have the authority to award any relief
(including preliminary, temporary or permanent injunctive relief) which
could be awarded by a state or federal court sitting in Delaware. Upon
request from any party seeking preliminary or temporary injunctive relief,
the American Arbitration Association shall immediately appoint a single
interim arbitrator to hear and rule on such request as quickly as
possible. The arbitrator(s) shall be bound by the substantive law of the
United States and the State of Delaware.
(f) To the extent permitted by law, (the foregoing not withstanding) the
arbitrator(s) shall have the authority to award attorneys' fees and costs
to the prevailing party. In addition, the arbitrator(s) shall have the
discretion to allocate between the parties the fees and expenses of the
American Arbitration Association and the fees and expenses of the
arbitrator(s).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers or representatives, as of the day and year first above written.
BRIDGEWAY FUNDS, INC.
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------------
[Authorized Officer]
FORUM SHAREHOLDER SERVICES, LLC
By: /s/ Xxxx Xxxxxx
----------------------------------------
Director
LIST OF SCHEDULES AND APPENDICES THAT ARE PART OF THIS AGREEMENT:
Schedule 1 Funds and Classes of the Client
Schedule 2 Authorized Persons
Appendix A Services
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XXXXXXXXX XXXXX AGREEMENT
SCHEDULE 1
FUNDS AND CLASSES OF THE CLIENT
AS OF THE EFFECTIVE DATE:
FUNDS CLASSES
-----------------------------------------------------------------------------
Bridgeway Ultra-Small Company Fund Class N
Bridgeway Ultra-Small Company Market Fund Class N
Bridgeway Micro-Cap Limited Fund Class N
Bridgeway Aggressive Investors 1 Fund Class N
Bridgeway Aggressive Investors 2 Fund Class N
Bridgeway Small-Cap Growth Fund Class N, Class R
Bridgeway Small-Cap Value Fund Class N, Class R
Bridgeway Large-Cap Growth Fund Class N, Class R
Bridgeway Large-Cap Value Fund Class N, Class R
Bridgeway Blue Chip 35 Index Fund Class N
Bridgeway Balanced Fund Class N
-Schedule 2- Schedule 1 page 1 -
BRIDGEWAY FUNDS, INC.
TRANSFER AGENCY AGREEMENT
SCHEDULE 2
AUTHORIZED PERSONS
(AMENDED 1/2/2004)
1. AUTHORIZED PERSONS:
In addition to the officers (including assistant officers) of the Client, the
following persons are authorized to give Instructions to Forum with respect to
this Agreement:
NAME TITLE
--------------------------------------------------------------------------------------------
Xxxx Xxxxxxxxxx (officer) President and Director of Bridgeway Capital Mgmt
Xxxxxxx Xxxxxxx (officer) Director of Bridgeway Capital Management
Xxxx Xxxxxxx (officer) Treasurer of Bridgeway Capital Management
Xxxxxx Barhnill Administration of Bridgeway Capital Management
Xxxxxxx Xxxxxxxx Portfolio Manager, Head of Trading
Xxxxxxx "Xxxx" Xxxxxxxx Customer Services
Xxxxx Xxxxxx Customer Services
2. CHANGE IN AUTHORIZED PERSONS
Any change in Authorized Persons shall only be made in accordance with Section
2.6(d) of the Agreement.
- Schedule 2 page 1 -
BRIDGEWAY FUNDS, INC.
TRANSFER AGENCY AGREEMENT
APPENDIX A
SERVICES
[See document separately provided]
- Appendix B
- Page 1 -
