ADMINISTRATIVE SERVICES AGREEMENT
Administrative Services Agreement (the "Agreement") dated November 1,
1996, by and between VALLEY FORGE CAPITAL HOLDINGS TOTAL RETURN FUND, INC. (the
"Fund"), a diversified, open-end management investment company, duly organized
as a corporation in accordance with the laws of the State of Maryland, and
COMMONWEALTH SHAREHOLDER SERVICES, INC. ("CSS"), a corporation duly organized as
a corporation in accordance with the laws of the Commonwealth of Virginia.
WITNESSETH THAT:
WHEREAS, the Fund desires to appoint CSS as its Administrator to
perform certain recordkeeping and shareholder servicing functions required of a
duly registered investment company to comply with certain provisions of federal,
state and local law, rules and regulations, and to assist the Fund in preparing
and filing certain financial reports (including quarterly, semi-annual and
annual reports to shareholders, Form N-SAR reports, and post-effective
amendments to the Fund's registration statement).
WHEREAS, CSS may, if requested, perform certain daily functions in
connection with the on-going operations of the Fund, as mutually agreed upon,
and provide ministerial services to implement the investment decisions of the
Fund and its investment advisor; and
WHEREAS, CSS is willing to perform such functions upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
Section 1. CSS shall examine and review all records and documents of
the Fund pertaining to its duties under this Agreement in order to determine
and/or recommend how such records and documents shall be maintained.
Section 2. CSS shall, as necessary for such purposes, advise the Fund
and its agents of the information which is deemed to be "necessary" for the
performance of its duties under this Agreement, and upon receipt of necessary
information and Written or Oral Instructions from the Fund, shall maintain and
keep current such shareholder relations records.
Unless the information necessary to perform the above functions is
furnished in writing to CSS by the Fund or its agents (such as Custodians,
Transfer Agents, etc.), CSS shall incur no liability and the Fund shall
indemnify and hold harmless CSS from and against any liability arising from any
discrepancy in the information received by CSS and used in the performance by
CSS of its duties.
It shall be the responsibility of the Fund to furnish CSS with the net
asset value per share, declaration, record and payment dates and amounts of any
dividends or distributions of income or gains (including the status of same) and
any other special actions required concerning each of its securities.
CSS shall maintain such shareholder records above mentioned as required
by regulation and as agreed upon between the Fund and CSS.
Section 3. CSS shall provide assistance to the Fund in the servicing of
shareholder accounts, which may include telephone and written conversations,
assistance in redemptions, exchanges, transfers and opening accounts as may be
required from time to time. CSS shall, at the direction of the Fund, also
prepare and maintain the Fund's Blue Sky registrations. CSS shall, in addition,
provide such additional administrative non-advisory management services as it
and the Fund may from time to time agree.
Section 4. The accounts and records maintained by CSS shall be the
property of the Fund, and shall be made available to the Fund, within a
reasonable period of time, upon demand. CSS shall assist the Fund's independent
auditors, or any other person authorized by the Fund or, upon demand, any
regulatory body as authorized by law or regulation, in any requested review of
the Fund's accounts and records but shall be reimbursed for all reasonable and
documented expenses and employee time invested in any such review outside of
routine and normal periodic reviews. Upon receipt from the Fund of any necessary
information, CSS shall assist the Fund in organizing necessary data for the
Fund's completion of any necessary tax returns, questionnaires, periodic reports
to shareholders and such other reports and information requests as the Fund and
CSS shall agree upon from time to time.
Section 5. CSS and the Fund may from time to time adopt procedures they
agree upon, and, absent knowledge to the contrary, CSS may conclusively assume
that any procedure approved by the Fund or directed by the Fund, does not
conflict with or violate any requirements of Fund's Prospectus, Articles of
Incorporation, By-Laws, registration statement, orders, or any rule or
regulation of any regulatory body or governmental agency. The Fund (acting
through its officers or other agents) shall be responsible for notifying CSS of
any changes in regulations or rules which might necessitate changes in the
Fund's procedures.
Section 6. CSS may rely upon the advice of the Fund and upon statements
of the Fund's lawyers, accountants and other persons believed by it in good
faith to be expert in matters upon which they are consulted, and CSS shall not
be liable for any actions taken in good faith upon such statements.
Section 7. CSS shall not be liable for any actions taken in good faith
reliance upon any authorized Oral Instructions, any Written Instructions, and
certified copy of any resolution of the Board of Directors of the Fund or any
other document reasonably believed by CSS to be genuine and to have been
executed or signed by the proper person or persons.
CSS shall not be held to have notice of any change of authority of any
officer, employee or agent of the Fund until receipt of notification thereof
from the Fund.
The Fund shall indemnify and hold CSS harmless from any and all
expenses, damages, claims, suits, liabilities, actions, demands and losses
whatsoever arising out of or in connection with any error, omission, inaccuracy
or other deficiency of any information provided to CSS by the Fund or any agent
of the Fund acting within the scope of its duties (except information provided
by agents of the Fund who are acting in a capacity arising from his or her
position with CSS, or when such agent is acting through individuals who are
employed by and subject to the supervisory control of CSS), or the failure of
the Fund to provide any information needed by CSS knowledgeably to perform its
functions hereunder (excluding any such failure by an agent of the Fund acting
in a capacity arising from his or her position with CSS, or when such agent is
acting through individuals who are employed by and subject to the supervisory
control of CSS). Also, the Fund shall indemnify and hold harmless CSS from all
claims and liabilities (including reasonable documented expenses for legal
counsel) incurred by or assessed against CSS in connection with the performance
of this Agreement, except such as may arise from CSS's own grossly negligent
action, omission or willful misconduct; provided, however, that before
confessing any claim against it, CSS shall give the Fund reasonable opportunity
to defend against such claim in the name of the Fund or CSS or both.
Section 8. The Fund agrees to pay CSS compensation for its services and
to reimburse it for expenses, as set forth in the Schedule attached hereto, or
as shall be set forth in amendments to such schedule approved by the Fund's
Board of Directors and CSS.
Section 9. Except as required by laws and regulations governing
investment companies, nothing contained in this Agreement is intended to or
shall require CSS, in any capacity hereunder, to perform any functions or duties
on any holiday or other day of special observance on which CSS is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day on which both the Fund and CSS
are open. CSS will be open for business on days when the Fund is
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open for business and/or as otherwise set forth in the Fund's Prospectus and
Statement of Additional Information.
Section 10. Either the Fund or CSS may give written notice to the other
of the termination of this Agreement, such termination to take effect at the
time specified in the notice, which time shall be not less than 90 days from the
giving of such notice. Such termination shall be without penalty.
Section 11. Any notice or other communication required by or permitted
to be given in connection with this Agreement shall be in writing, and shall be
delivered in person or sent by first-class mail, postage prepaid, to the
respective parties at their last known address, except that Oral Instructions
may be given if authorized by the Board of the Fund and preceded by a
certificate from the Fund's secretary so attesting.
Notices to the Fund shall be directed to:
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Notices to CSS shall be directed to:
0000 Xxxxxx Xxx.
Xxxxx 000
Xxxxxxxx, XX 00000
Section 12. This Agreement may be executed in two or more counterparts,
each of which, when so executed, shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 13. This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund without the
written consent of CSS, or by CSS without the written consent of the Fund,
authorized or approved by a resolution of its Board of Directors.
Section 15. For purposes of this Agreement, the terms Oral Instructions
and Written Instructions shall mean:
Oral Instructions: The term Oral Instruction shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to CSS in person or by telephone, telegram, telecopy, or other
mechanical or documentary
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means lacking a signature, by a person or persons believed in good faith by CSS
to be a person or persons authorized by a resolution of the Board of Directors
of the Fund, to give Oral Instructions on behalf of the Fund.
Written Instructions: The term Written Instruction shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to CSS in original writing containing original signatures or a
copy of such document transmitted by telecopy including transmission of such
signature believed in good faith by CSS to be the signature of a person
authorized by a resolution of the Board of Directors of the Fund to give Written
Instructions on behalf of the Fund.
The Fund shall file with CSS a certified copy of each resolution of its
Board of Directors authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
Section 16. This Agreement shall be governed by the laws of the State
of Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
VALLEY FORGE CAPITAL HOLDINGS TOTAL RETURN FUND, INC.
By:
Xxxxxxxx X. Xxxx
President
COMMONWEALTH SHAREHOLDER SERVICES, INC.
By:
Xxxx Xxxxx, III
Chief Executive Officer
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SCHEDULE A TO
ADMINISTRATIVE SERVICES AGREEMENT
BY AND BETWEEN
VALLEY FORGE CAPITAL HOLDINGS TOTAL RETURN FUND, INC.
AND
COMMONWEALTH SHAREHOLDER SERVICES, INC.
Pursuant to Section 8 of the Administrative Services Agreement, dated
November 1, 1996, by and between Valley Forge Capital Holdings Total Return
Fund, Inc. (the "Fund"), and Commonwealth Shareholder Services, Inc. ("CSS"),
the Fund shall pay CSS a fee calculated and paid monthly as follows:
A. For the performance of Blue Sky matters, CSS shall be paid at the rate of
$30 per hour of actual time used.
B. For shareholder servicing, CSS shall be paid at the rate of $30 per hour of
actual time used.
C. For all other administration, CSS shall be paid a fee at the rate of 0.2%
per annum of the average daily net assets of the Fund, payable monthly,
with a minimum fee of $30,000.
D. In addition to the foregoing, the Fund shall reimburse CSS for all expenses
incurred by it on behalf of the Fund. Such out- of-pocket expenses shall
include, but not be limited to: documented fees and costs of obtaining
advice of counsel or accountants in connection with its services to the
Fund; postage; long distance telephone; special forms required by the Fund;
any travel which may be required in the performance of its duties to the
Fund; and any other extraordinary expenses it may incur in connection with
its services to the Fund.
