SERVICES AGREEMENT
This
Services Agreement (“Agreement”) is made as of the ___ day of ___________ 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:
| (i) |
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;
|
| (ii) |
assist
in the preparation of (but not pay for) financial statements for the
Fund;
|
| (iii) |
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;
|
| (iv) |
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;
|
| (v) |
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
|
| (vi) |
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).
|
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).
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.
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.
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.
GREENSPRING
FUND, INC.
By:
Name:
Title:
CORBYN
INVESTMENT
MANAGEMENT, INC.
By:
Name:
Title:
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.
