SERVICES AGREEMENT
This
Services Agreement (“Agreement”) is made as of the 1st day of July 2005 by and
between GREENSPRING FUND, INC. (the “Fund”), a Maryland corporation, having its
principal place of business at 0000 Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, XX
00000 and CORBYN INVESTMENT MANAGEMENT, INC. (“Corbyn”), a Maryland corporation,
having its principal place of business at 0000 Xxxx Xxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxx, XX 00000.
WHEREAS,
the Fund is an open-end, diversified management investment company registered
under the Investment Company Act of 1940, as amended (the “1940 Act”), and
offers for sale shares of common stock; and
WHEREAS,
the Fund wishes to retain Corbyn to provide certain services to the Fund;
and
WHEREAS,
Corbyn is willing to furnish such services on the terms and conditions
hereinafter set forth;
NOW,
THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed as follows:
1. Appointment. The
Fund hereby appoints Corbyn to provide certain services for the Fund for the
period, in the manner, and on the terms set forth in this
Agreement. Corbyn hereby accepts such appointment and agrees during
such period to render the services and to assume the obligations herein set
forth. Corbyn shall for all purposes herein be deemed to be an
independent contractor and shall, except as expressly provided or authorized
(whether herein or otherwise), have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
2. Services. Subject
to the supervision and control of the Board of Directors (“Board”) of the Fund,
Corbyn shall perform and will provide facilities, equipment and personnel to
carry out the following services for the Fund:
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(i)
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assist
in the preparation of (but not pay for) all periodic reports by the Fund
to shareholders of the Fund and all reports and filings required to
maintain the registration, qualification of the shares of the Fund, or to
meet other regulatory or tax requirements applicable to the Fund or the
shares of the Fund, under federal and state securities and tax
laws;
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(ii)
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assist
in the preparation of (but not pay for) financial statements for the
Fund;
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(iii)
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assist
the Fund in connection with its obligations under Sections 302 and 906 of
the Sarbanes Oxley Act of 2002 and Rule 30a-2 under the 1940
Act;
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(iv)
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assist
in developing compliance procedures for the Fund, and provide compliance
monitoring services incorporating certain of those procedures, which will
include, among other matters, compliance with the Fund’s investment
objective, investment policies, restrictions, all as are determinable
based upon the Fund’s accounting
records;
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(v)
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oversee
the performance by others of services in connection with the operations of
the Fund, and on behalf of the Fund, investigate, assist in the selection
of and conduct relations with custodians, transfer agents, depositories,
administrators, accountants, legal counsel, brokers and dealers, banks and
persons in any other capacity deemed to be necessary or desirable for the
Fund’s operations; and
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(vi)
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provide
such other services required by the Fund as the parties may from time to
time agree in writing are appropriate to be provided under this Agreement
(and that are not performed in some other capacity pursuant to a separate
agreement or arrangement with the
Fund).
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3. Books and
Records. Corbyn will maintain customary records in connection
with its duties as specified in this Agreement. Any records required
to be maintained and preserved pursuant to Rules 31a-1 and 31a-2 under the 1940
Act which are prepared or maintained by Corbyn on behalf of the Fund shall be
the property of the Fund and will be made available or surrendered to the Fund
promptly upon request. In the case of any request or demand for the
inspection of such records by another party, Corbyn shall notify the Fund and
follow the Fund’s instructions as to permitting or refusing such
inspection.
4. Reports. Corbyn
shall furnish to or place at the disposal of the Fund such information,
evaluations, analyses and opinions formulated or obtained by Corbyn in the
discharge of its duties as the Fund may, from time to time, reasonably
request. The Fund shall furnish Corbyn with such documents and
information with regard to its affairs as Corbyn may, at any time or from time
to time, reasonably request in order to discharge its obligations under this
Agreement.
5. Expenses. The
Fund shall bear the expense of its operation, except those specifically
allocated to Corbyn under this Agreement or under any separate agreement between
the Fund and Corbyn. Subject to any separate agreement or arrangement
between the Fund and Corbyn, the expenses hereby allocated to the Fund, and not
to Corbyn, include, but are not limited to: (i) legal and audit
expenses; (ii) expenses of preparing, setting in print, printing and
distributing reports, notices and dividends to shareholders; and (iii) the
Fund’s portion of premiums of any fidelity bond and other insurance covering the
Fund and its officers and directors.
6. Compensation. For
the services and facilities to be furnished and expenses assumed hereunder,
Corbyn shall receive from the Fund a fee at the annual rate set forth in
Schedule A attached hereto. This fee shall be payable monthly as soon
as practicable after the last day of each month based on the daily net asset
value of the Fund as determined at the close of business on each day throughout
the month. The assets of the Fund will be valued separately as of the close of
regular trading on the New York Stock Exchange (currently 4:00 p.m., Eastern
time) on each business day throughout the month or, if the Fund lawfully
determines the value of its net assets as of some other time on each business
day, as of such time. The first payment of such fee shall be made as
promptly as possible at the end of the month next succeeding the effective date
of this Agreement. In the event that the Corbyn’s right to such fee
commences on a date other than the last day of the month, the fee for such month
shall be based on the daily net assets of the Fund in that period from the date
of commencement to the last day of the month. The value of net assets
shall be determined pursuant to the applicable provisions of the Fund’s Articles
of Incorporation, its By-Laws and the 1940 Act. If, pursuant to such
provisions, the determination of the net asset value is suspended for an
particular business day, then for the purposes of this Section 6, the value of
the net assets of the Fund as last determined shall be deemed to be the value of
its net assets as of the close of regular trading on the New York Stock
Exchange, or as of such other time as the value of the net assets of the Fund’s
securities may lawfully be determined, on that day. If the
determination of the net asset value of the shares of the Fund has been so
suspended for a period including any month when Corbyn’s compensation is payable
at the end of such month, then such value shall be computed on the basis of the
value of the net assets of the Fund as last determined (whether during or prior
to such month).
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7. Non-Exclusive
Services. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of Corbyn who may also be a
director, officer or employee of the Fund, to engage in any other business or to
devote his time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature, nor to limit
or restrict the right of Corbyn to engage in any other business or to render
services of any kind, including investment advisory or administrative services,
to any other corporation, firm, individual or association, provided that any
such other services and activities do not, during the term of this Agreement,
interfere, in a material manner, with the Corbyn’s ability to meet all of its
obligations to the Fund hereunder.
8. Confidentiality. Corbyn
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 not to use such records and information for any purpose other
than the performance of its responsibilities and duties hereunder, except after
prior notification to an approval in writing by the Fund, which approval shall
not be unreasonably withheld and may not be withheld where Corbyn may be exposed
to civil or criminal contempt proceedings for failure to comply, when requested
to divulge such information by duly constituted authorities, or when so
requested by the Fund.
9. Limitation of
Liability.
9.1 Liability of
Corbyn. Neither Corbyn nor any director, officer or employee
of Corbyn performing services for the Fund at the direction or request of Corbyn
in connection with Corbyn’s discharge of its obligations hereunder shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with any matter to which this Agreement relates; provided
that nothing herein contained shall be construed (i) to protect Corbyn against
any liability to the Fund or its shareholders to which Corbyn would otherwise be
subject by reason of Corbyn’s willful misfeasance, bad faith, or gross
negligence in the performance of Corbyn’s duties, or by reason of Corbyn’s
reckless disregard of its obligations and duties under this Agreement (collectively, “disabling conduct”), or (ii) to
protect any director, officer or employee of Corbyn who is or was a director or
officer of the Fund against any liability to the Fund or its shareholders to
which such person would otherwise be subject by reason of disabling
conduct.
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9.2 Indemnification by the
Fund. The Fund will indemnify
Corbyn against, and hold it harmless from, any and all expenses (including
reasonable counsel fees and expenses) incurred investigating or defending
against claims for losses or liabilities described in Section 9.1 not resulting
from disabling conduct by Corbyn. Indemnification shall be made only
following: (i) a final decision on the merits by a court or other body before
whom the proceeding was brought that Corbyn was not liable by reason of
disabling conduct or (ii) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that Corbyn was not liable by
reason of disabling conduct by (a) the vote of a majority of a quorum
of directors of the Fund who are neither “interested persons” of the Fund nor
parties to the proceeding (“disinterested non-party directors”) or (b) an
independent legal counsel in a written opinion. Corbyn shall be
entitled to advances from the Fund for payment of the reasonable expenses
incurred by it in connection with the matter as to which it is seeking
indemnification hereunder in the manner and to the fullest extent permissible
under Maryland law.
9.3 Indemnification by
Corbyn. Corbyn shall indemnify the Fund and hold it harmless
from and against any and all losses, damages and expenses, including reasonable
attorneys’ fees and expenses, incurred by the Fund which result from: (i)
Corbyn’s failure to comply with the terms of this Agreement; or (ii) Corbyn’s
lack of good faith in performing its obligations hereunder; or (iii) Corbyn’s
disabling conduct or that of its employees, agents or contractors in connection
herewith. The Fund shall not be entitled to such indemnification in
respect of actions or omissions constituting gross negligence or misconduct on
the part of the Fund or its employees, agents or contractors other than Corbyn
unless such negligence or misconduct results from or is accompanied by disabling
conduct on the part of Corbyn, any affiliated person of Corbyn, or any
affiliated person of an affiliated person of Corbyn. Before
confessing any claim against it which may be subject to indemnification
hereunder, the Fund shall give Corbyn reasonable opportunity to defend against
such claim in its own name or in the name of the Fund.
10. Term of
Agreement. The term of this Agreement shall begin on the date
first written above and, unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect through May 31, 2007. Thereafter,
this Agreement shall continue in effect from year to year, subject to the
termination provisions and all other terms and conditions hereof; provided such
continuance is approved at least annually by vote or written consent of the
directors, including a majority of the directors who are not interested persons
of either party hereto (“Independent Directors”); and provided further, that
Corbyn shall not have notified the Fund in writing at least sixty (60) days
prior to the first expiration date hereof or at least sixty (60) days prior to
any expiration date in any year thereafter that it does not desire such
continuation. Corbyn shall furnish the Fund, promptly upon its
request, such information as may reasonably be necessary to evaluate the terms
of this Agreement or any extension, renewal or amendment thereof.
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11. Amendment or Assignment of
Agreement. This Agreement may be amended at any time, but only
by written agreement between Corbyn and the Fund, which agreement has been
authorized by the Board, including the vote or written consent of a majority of
the Independent Directors. This Agreement shall terminate
automatically and immediately in the event of its assignment.
12. Termination of
Agreement. This Agreement may be terminated at any time by
either party hereto, without the payment of any penalty, upon at least sixty
(60) days’ prior written notice to the other party; provided that, in the case
of termination by the Fund, such action shall have been authorized by the Board,
including the vote or written consent of a majority of the Independent
Directors. Fees due to Corbyn in the event of a termination of this
Agreement will be only those fees and expenses payable up to the date of
termination.
13. Interpretation and
Definition of Terms. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretation thereof, if any, by the
United States courts or, in the absence of any controlling decision of any
court, by rules, regulations or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms
“assignment” and “interested person” shall have the meanings given to them by
Section 2(a) of the 1940 Act, subject to such exemptions as may be granted by
the Securities and Exchange Commission by any rule, regulation or
order.
14. Governing
Law. Except insofar as the 1940 Act or other federal laws and
regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the state of
Maryland.
15. Notice. Any
notice under this Agreement shall be given in writing addressed and delivered or
mailed postage prepaid to the other party to this Agreement at its principal
place of business.
16. Captions. The
captions in this Agreement are included for convenience of reference only and in
no way define or delineate any of the provisions hereof or otherwise affect
their construction or effect.
17. Severability. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN
WITNESS WHEREOF the parties have caused this instrument to be signed on their
behalf by their respective officers thereunto duly authorized all as of the date
first written above.
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GREENSPRING
FUND, INC.
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By:
/s/Xxxxxxx X.
Xxxxxxx
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Name:
Xxxxxxx X. Xxxxxxx
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Title:
Sr. Vice President
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CORBYN
INVESTMENT MANAGEMENT, INC.
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By:
/s/Xxxxxxx xX.
Xxxxxxx
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Name:
Xxxxxxx xX. Xxxxxxx
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Title:
President
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GREENSPRING
FUND, INC.
SCHEDULE
A
The Fund will pay Corbyn (1) $2500 per
month plus an additional .01% (annualized) of its daily net assets for
the services provided under this agreement and (2) reasonable out of pocket
expenses, including, but not limited to, postage, stationery, electronic filing
(XXXXX) fees, record retention costs, legal and auditing fees and expenses, and
any travel-related expenses.
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