ACCOUNTING SERVICES AGREEMENT
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THIS ACCOUNTING SERVICES AGREEMENT is made as of this 5 day of October,
1998 (the "Agreement"), by and between Investors Research Fund, Inc., a
Delaware corporation (the "Company"), and ND Resources, Inc., a North Dakota
corporation ("Resources").
WHEREAS, the Company is registered as a diversified open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Company wishes to retain Resources to provide certain fund
accounting services with respect to each investment portfolio listed in
Schedule A hereto, as the same may be amended from time to time by the parties
hereto (collectively, the "Funds"), and Resources is willing to furnish such
services;
WITNESSETH:
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
The Company hereby appoints Resources to provide certain fund accounting
services required by the Company for each Fund for the period, and on the
terms, set forth in this Agreement. Resources accepts such appointment and
agrees to furnish the services herein set forth in return for the compensation
as provided in Section 4 of this Agreement. In the event that the Company
decides to retain Resources to act as fund accountant hereunder with respect
to one or more portfolios other than the Funds, the Company shall notify
Resources in writing. If Resources is willing to render such services, it
shall notify the Company in writing, whereupon such portfolio shall become a
Fund hereunder.
2. Delivery of Documents.
The Company has furnished Resources with copies, properly certified or
authenticated, of each of the following:
(a) Resolutions of the Company's Board of Directors authorizing Resources
to provide certain fund accounting services to the Company and approving this
Agreement;
(b) The Company's Articles of Incorporation (the "Articles") filed with
the State of Delaware and all amendments thereto;
(c) The Company's By-Laws and all amendments thereto (the "By-Laws");
(d) The Investment Advisory Agreement between Fox Asset Management, Inc.
(the "Adviser") and all amendments thereto (the "Advisory Agreement");
(e) The Custody Agreement between United Missouri Bank (the "Custodian")
and the Company, and all amendments thereto (the "Custody Agreement");
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(f) The Transfer Agency and Registrar Agreement between ND Resources,
Inc. (the "Transfer Agent") and the Company and all amendments thereto;
(g) The Company's Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933 and under the Investment Company
Act of 1940 (the "1940 Act") (File Nos. 002-14675 and 811-00861), as declared
effective by the Securities and Exchange Commission (the "SEC") on January 30,
1998, relating to shares of beneficial interest of the Company (the "Shares"),
and all amendments thereto; and
(h) Each Fund's most recent prospectus and statement of additional
information, and all amendments and supplements thereto (collectively, the
"Prospectuses").
The Company will furnish Resources, from time to time, with copies,
properly certified or authenticated, of all amendments of, or supplements to,
the foregoing, if any. Furthermore, the Company will provide Resources with any
other documents that Resources may reasonably request, and will notify
Resources, as soon as possible, of any matter materially affecting the
performance by Resources of its services under this Agreement.
3. Services and Duties.
Subject to the supervision and control of the Company, Resources under-
takes to provide the following specific services:
(a) Accounting and bookkeeping services (including the maintenance of
such accounts, books, and records of the Company as may be required by Section
31(a) of the 1940 Act and the rules thereunder);
(b) Internal auditing;
(c) Valuing the assets of each Fund and calculating the net asset value
of the shares of the Fund at the close of trading on the New York Stock
Exchange ("NYSE") on each day on which the NYSE is open for trading, and at
such other times as the Board of Directors may reasonably request;
(d) Accumulating information for and, subject to approval by the
Company's Treasurer, preparing reports to the Company's shareholders of record
and the SEC, including, but not necessarily limited to, Annual Reports and Semi-
Annual Reports on Form N-SAR;
(e) Assisting the Adviser, at the Adviser's request, in monitoring and
developing compliance procedures for the Company, which will include, among
other matters, procedures to assist the Adviser in monitoring compliance with
each Fund's investment objective, policies, restrictions, tax matters and
applicable laws and regulations; and
(f) Preparing and furnishing the Company (at the Company's request) with
performance information (including yield and total return information),
calculated in accordance with applicable U.S. securities laws, and reporting to
external databases such information as may reasonably be requested.
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(g) Form 1099 generation and reporting.
In performing its duties under this Agreement, Resources: (a) will act in
accordance with the Articles, By-Laws, Prospectuses, and with the instructions
and directions of the Company, and will conform to, and comply with, the
requirements of the 1940 Act and all other applicable Federal or state laws and
regulations; and (b) will consult with legal counsel to the Company, as
necessary and appropriate. Furthermore, Resources shall not have, or be
required to have, any authority to supervise the investment or reinvestment of
the securities or other properties which comprise the assets of the Company or
any of its Funds, and shall not provide any investment advisory services to the
Company or any of its Funds.
4. Compensation and Allocation of Expenses.
(a) For the services to be rendered, the facilities to be furnished, and
the payments to be made by Resources, as provided for in this Agreement, the
Company, on behalf of each Fund, will pay Resources an accounting service fee
(as detailed in Schedule B to this Agreement) equal to the sum of (i) $2,500
per month on net assets from zero to $100 million, or (ii) when net assets
exceed $100 million, the Fund will be billed monthly at an annual rate equal to
3 basis points (where one basis point is equal to 1/100 of 1 percent, or
0.0001) on net assets from zero to $100 million, 2 basis points on the next
$100 million, and 1 basis point on only those net assets over $200 million; for
example, if net assets are equal to $250 million, the monthly base-fee billing
would be equal to $4,584 [($100 million x 0.0003) / 12, plus ($100 million x
0.0002) / 12, plus ($50 million x 0.0001) / 12], or [$2,500 + $1,667 + $417 =
$4,584]. For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during such month and year,
respectively. The services of Resources to the Company under this Agreement are
not to be deemed exclusive, and Resources shall be free to render similar
services or other services to others.
(b) The Company shall compensate Resources for its services rendered,
pursuant to this Agreement, in accordance with the fees set forth above. Such
fees do not include out-of-pocket disbursements of Resources for which
Resources shall be entitled to xxxx separately. Out-of-pocket disbursements
shall include, but shall not be limited to, the items specified in Schedule C,
annexed hereto and incorporated herein.
(c) Resources shall not be required to pay any of the following expenses
incurred by the Company: membership dues in the Investment Company Institute or
any similar organization; transfer agency expenses; investment advisory
expenses; costs of printing and mailing stock certificates, prospectuses,
reports and notices; interest on borrowed money; brokerage commissions; taxes
and fees payable to Federal, state and other governmental agencies; fees of
Directors of the Company who are not affiliated with Resources; outside
auditing expenses; outside legal expenses; or other expenses not specified in
this Section 4 which may be properly payable by the Company.
(d) Resources will xxxx the Company, as soon as practicable after the end
of each calendar month, for out-of-pocket disbursements, and said xxxxxxxx will
be detailed in accordance with this Section and Schedule C. The Company will
pay to Resources the amount of such billing within 30 days of such billing.
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(e) Upon any termination of this Agreement before the end of any month,
the fee for such period shall be prorated according to the proportion which
such period bears to the full month period. For purposes of determining fees
payable to Resources, the value of each Fund's net assets shall be computed at
the time and in the manner specified in the most recent Prospectuses.
(f) Resources will, from time to time, employ or associate itself with
such person or persons as Resources may believe to be particularly suited to
assist it in performing services under this Agreement. The compensation of such
person or persons shall be paid by Resources and no obligation shall be
incurred on behalf of the Company in such respect.
(g) Any compensation agreed to hereunder may be adjusted, from time to
time, upon mutual agreement by both parties hereto, by attaching to Schedule B
of this Agreement a revised Fee Schedule, dated and signed by an Officer of
each party hereto.
5. Limitation of Liability
(a) Resources, its directors, officers, employees, shareholders, and
agents shall not be liable for any error of judgment or mistake of law, or for
any loss suffered by the Company or a Fund, in connection with the performance
of this Agreement, except a loss resulting from willful misfeasance, bad faith,
or negligence on the part of Resources in the performance of its obligations
and duties under this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
Resources' cumulative liability (to the Company) for all losses, claims, suits,
controversies, breaches, or damages, for any cause whatsoever (including but
not limited to those arising out of or related to this Agreement), and regard-
less of the form of action or legal theory, shall not exceed the lesser of
(i) $1,000,000 or (ii) three (3) times the fees received by Resources for
services provided under this Agreement during the twelve (12) months
immediately prior to the date of such loss or damage.
(c) Neither party may assert any cause of action against the other party
under this Agreement that accrued more than two (2) years prior to the filing
of the suit (or commencement of arbitration proceedings) alleging such cause
of action.
(d) Each party shall have the duty to mitigate damages for which the
other party may become responsible.
6. Indemnification.
(a) The Company shall indemnify, and hold Resources harmless from and
against, any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against Resources or for which Resources may be held to
be liable in connection with this Agreement or Resources' performance hereunder
(a "Claim"), unless such Claim resulted from a negligent act, or omission to
act, or bad faith by Resources in the performance of its duties hereunder.
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(b) The Company, or a Fund, its officers, employees, shareholders, and
agents shall not be liable for, and Resources shall indemnify and hold the
Company and each Fund harmless from and against any and all claims made by
third parties, including costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments, and liabilities of any sort or kind,
which result from a negligent act, or omission to act, or bad faith by
Resources in the performance of its duties hereunder.
(c) Resources shall indemnify, and hold the Company harmless from and
against, any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against the Company or for which the Company may be held
to be liable in connection with this Agreement or the Company's performance
hereunder (a "Claim"), unless such Claim resulted from a negligent act, or
omission to act, or bad faith by the Company in the performance of its duties
hereunder.
(d) Resources, its officers, employees, shareholders, and agents shall
not be liable for, and the Company shall indemnify and hold Resources harmless
from and against any and all claims made by third parties, including costs,
expenses (including reasonable attorneys' fees), losses, damages, charges,
payments, and liabilities of any sort or kind, which result from a negligent
act, or omission to act, or bad faith by the Company in the performance of its
duties hereunder.
(e) In any case in which either party (the "Indemnifying Party") may be
asked to indemnify or hold the other party (the "Indemnified Party") harmless,
the Indemnified Party will notify the Indemnifying Party promptly, after
identifying any situation which it believes presents, or appears likely to
present, a claim for indemnification against the Indemnifying Party, although
the failure to do so shall not prevent recovery by the Indemnified Party, and
shall keep the Indemnifying Party advised with respect to all developments
concerning such situation. The Indemnifying Party shall have the option to
defend the Indemnified Party against any claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party, and thereupon the Indemnifying Party
shall take over complete defense of the claim, and the Indemnified Party shall
sustain no further legal or other expenses in respect of such claim. The
Indemnified Party will not confess any claim, or make any compromise, in any
case in which the Indemnifying Party will be asked to provide indemnification,
except with the Indemnifying Party's prior written consent. The obligations of
the parties hereto under this Section 6 shall survive the termination of this
Agreement.
7. Termination of Agreement.
(a) This Agreement shall be effective on the date first written above and
shall continue for a period of three (3) years (the "Initial Term"), unless
earlier terminated, pursuant to the terms of this Agreement. Thereafter, this
Agreement shall automatically be renewed for successive annual periods
("Renewal Terms").
(b) Either party may terminate this Agreement by giving to the other
party a notice in writing specifying the date of such termination, which shall
be not less than 90 days after the date of receipt of such notice.
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(c) In the event a termination notice is given by the Company, all
expenses associated with movement of records and materials, and conversion
thereof, will be borne by the Company; provided termination notice is not given
as a result of willful misfeasance, bad faith, or negligence on the part of
Resources in the performance of its obligations and duties under this
Agreement.
(d) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") resulting in a material
loss to the other party, such other party (the "Non-Defaulting Party") may give
written notice thereof to the Defaulting Party, and if such material breach
shall not have been remedied within thirty- (30) days after such written notice
is given, then the Non-Defaulting Party may terminate this Agreement by giving
thirty- (30) days written notice of such termination to the Defaulting Party.
If Resources is the Non-Defaulting Party, its termination of this Agreement
shall not constitute a waiver of any other rights or remedies of Resources,
with respect to services performed prior to such termination, or rights of
Resources to be reimbursed for out-of-pocket expenses. In all cases, termina-
tion by the Non-Defaulting Party shall not constitute a waiver by the Non-
Defaulting Party of any other rights it might have under this Agreement, or
otherwise, against the Defaulting Party.
8. Modifications and Waivers.
No change, termination, modification, or waiver of any term or condition
of the Agreement shall be valid unless it is in writing, signed by each party.
No such writing shall be effective as against Resources unless said writing is
executed by the President of Resources. A party's waiver of a breach of any
term or condition in the Agreement shall not be deemed a waiver of any
subsequent breach of the same or another term or condition.
9. No Presumption Against Drafter.
Resources and the Company have jointly participated in the negotiation and
drafting of this Agreement. The Agreement shall be construed as if drafted
jointly by the Company and Resources, and no presumptions arise favoring any
party by virtue of the authorship of any provision of this Agreement.
10. Publicity.
Neither Resources nor the Company shall release or publish news releases,
public announcements, advertising, or other publicity relating to this Agree-
ment, or to the transactions contemplated by it, without prior review and
written approval of the other party, which approval shall not be unreasonably
withheld; provided, however, that either party may make such disclosures as are
required by legal, accounting, or regulatory requirements, after making
reasonable efforts, in the circumstances, to consult in advance with the other
party.
11. Severability.
The parties intend every provision of this Agreement to be severable. If a
court of competent jurisdiction determines that any term or provision is
illegal or invalid for any reason, the illegality or invalidity shall not
affect the validity of the remainder of this Agreement. In such case, the
parties shall, in good faith, modify or substitute such provision, consistent
with the original intent of the parties. Without limiting the generality of
this paragraph, if a court determines that any remedy stated in this Agreement
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has failed of its essential purpose, then all other provisions of this
Agreement, including the limitations on liability and exclusion of damages,
shall remain fully effective.
12. Miscellaneous.
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Company or Resources shall be sufficiently given
if addressed to that party and received by it at its office set forth below or
at such other place as it may from time to time designate in writing.
To the Company:
Investors Research Fund, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, President
To Resources:
ND Resources, Inc.
0 Xxxxx Xxxx
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns, and is
not intended to confer upon any other person any rights or remedies hereunder.
This Agreement may not be assigned or otherwise transferred by either party
hereto, without the prior written consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that Resources may, in
its sole discretion, assign all its right, title and interest in this Agreement
to an affiliate, parent or subsidiary, or to the purchaser of substantially all
of its business. Resources may, in its sole discretion, engage subcontractors
to perform any of the obligations contained in this Agreement to be performed
by Resources.
13. Confidentiality.
(a) The parties agree that the Proprietary Information (defined below)
and the contents of this Agreement (collectively "Confidential Information")
are confidential information of the parties and their respective licensers.
The Company and Resources shall exercise reasonable care to safeguard the
confidentiality of the Confidential Information of the other. The Company and
Resources may each use the Confidential Information only to exercise its rights
or perform its duties under this Agreement. The Company and Resources shall not
duplicate, sell or disclose to others the Confidential Information of the
other, in whole or in part, without the prior written permission of the other
party. The Company and Resources may, however, disclose Confidential
Information to its employees who have a need to know the Confidential
Information to perform work for the other, provided that each shall use
reasonable efforts to ensure that the Confidential Information is not
duplicated or disclosed by its employees in breach of this Agreement. The
Company and Resources may also disclose the Confidential Information to
independent contractors, auditors and professional advisors, provided they
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first agree in writing to be bound by the confidentiality obligations
substantially similar to this Section 14. Notwithstanding the previous
sentence, in no event shall either the Company or Resources disclose the
Confidential Information to any competitor of the other without specific, prior
written consent.
(b) Proprietary Information means:
i any data or information that is completely sensitive material,
and is private information, not disclosed to the public, including, but not
limited to, information about product plans, marketing strategies, finance,
operations, customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to the past, present
or future business activities of the Company or Resources, their respective
subsidiaries and affiliated companies and the customers, clients and suppliers
of any of them;
ii any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Company or Resources a
competitive advantage over its competitors; and
iii all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code, object code,
flow charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
(c) Confidential Information is private information which has not been
disclosed to the public, and includes, without limitation, all documents,
equipment, Proprietary Information, and any other tangible manifestation of the
foregoing of either party which now exist or come into the control or
possession of the other.
(d) The parties acknowledge that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information would result in
immediate and irreparable harm, and money damages would be inadequate to
compensate the other party for that harm. The non-breaching party shall be
entitled to equitable relief, in addition to all other available remedies, to
redress any such breach.
14. Force Majeure.
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if, and to the extent, such default or
delay is caused, directly or indirectly, by (i) fire, flood, elements of
nature, or other acts of God; (ii) any outbreak or escalation of hostilities,
war, riots, or civil disorders in any country, (iii) any act or omission of the
other party or any governmental authority; (iv) any labor disputes (whether or
not the employees' demands are reasonable or within the party's power to
satisfy); or (v) nonperformance by a third party, or any similar cause beyond
the reasonable control of such party, including, without limitation, failures
or fluctuations in telecommunications or other equipment. In any such event,
the non-performing party shall be excused from any further performance and
observance of the obligations so affected only for so long as such circum-
stances prevail and such party continues to use commercially reasonable efforts
to recommence performance or observance as soon as practicable.
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15. Entire Agreement.
This Agreement, and the Schedules attached hereto, constitute the entire
agreement of the parties hereto, relating to the matters covered hereby, and
supersede any previous agreements. If any provision is held to be illegal,
unenforceable or invalid for any reason, the remaining provisions shall not be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed and delivered by their duly authorized officers as of the date first
written above.
ND RESOURCES, INC.
By: /Xxxxxx X. Xxxxxxx/
-------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
INVESTORS RESEARCH FUND, INC.
By: /Xxxx X. Xxxxxxxxx/
-------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
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SCHEDULE A
Dated as of 5 October, 1998
Fund(s):
INVESTORS RESEARCH FUND, INC. (Class A)
ND RESOURCES, INC.
By: /Xxxxxx X. Xxxxxxx/
Name: Xxxxxx X. Xxxxxxx
Title: President
INVESTORS RESEARCH FUND, INC.
By: /Xxxx X. Xxxxxxxxx/
Name: Xxxx X. Xxxxxxxxx
Title: President
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SCHEDULE B
ACCOUNTING SERVICES FEE SCHEDULE
Accounting Services Fee Schedule
(Per Portfolio)
Per Month Minimum1 $ 2,500.00 per month
Annual Asset-Based Fees2
First $ 0 to $100,000,000 3 basis points3
Next $ 100,000,001 to $200,000,000 2 basis points
Next $ 200,000,001 and over 1 basis point
Additional Fund Classes (per each) $ 7,000.00 per year
Special Services $ 75.00 per hour
Out-of-pocket Expenses Passed through to the Fund at cost
-------------------
1. The Fund will pay a monthly minimum charge of $2,500 until such time as the
asset-based charges exceed the monthly minimum. At that point, the account-
based charges will supersede the $2,500 monthly minimum.
2. Asset-based fees are calculated on average daily net assets during the
month.
0.Xxx basis point is equal to 1/100 of 1 percent, or 0.0001.
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SCHEDULE C
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the following:
* Overnight delivery and courier service;
* Postage;
* Outside Pricing services;
* Outside Production costs associated with Quarterly, Semi-Annual, and Annual
Reports, if desired;
* Telephone and telecommunications charges;
* Terminals, transmitting lines and any expenses incurred in connection with
such lines; and
* Any other unscheduled expenses incurred by Resources, whenever such expenses
are not otherwise properly borne by Resources as part of its duties and
obligations under the Agreement.
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