MUTUAL FUND SERVICES AGREEMENT
Fund Accounting Services
Transfer Agency Services
Blue Sky Services
between
THE FORESTER FUNDS, INC.
and
UNIFIED FUND SERVICES, INC.
October 25, 2002
Exhibit A - Portfolio Listing
Exhibit B - Fund Accounting Services Description
Exhibit C - Transfer Agency Services Description
Exhibit D - Fees and Expense
MUTUAL FUND SERVICES AGREEMENT
AGREEMENT (this "Agreement"), dated as of October 25, 2002, between The
Forester Funds, Inc., a Maryland Corporation (the "Fund"), and Unified
Fund Services, Inc., a Texas corporation ("Unified").
WITNESSTH:
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund wishes to retain Unified to provide certain transfer
agent and fund accounting services with respect to the Fund, and Unified
is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
Section 1. Appointment. The Fund hereby appoints Unified to provide
transfer agent and fund accounting services for the Fund, subject to
the supervision of the Board of Directors of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. Unified
accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided in Section 6 and
Exhibit D to this Agreement. The Fund will initially consist of the
portfolios, funds and/or classes of shares (each a "Portfolio";
collectively the "Portfolios") listed on Exhibit A. The Fund shall
notify Unified in writing of each additional Portfolio established by
the Fund. Each new Portfolio shall be subject to the provisions of
this Agreement, except to the extent that the provisions (including
those relating to the compensation and expenses payable by the Fund
and its Portfolios) may be modified with respect to each new Portfolio
in writing by the Fund and Unified at the time of the addition of the
new Portfolio.
Section 2. Representations and Warranties of Unified. Unified
represents and warrants to the Fund that:
(a) Unified is a corporation duly organized and existing under the
laws of the State of Texas;
(b) Unified is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement,
and all requisite corporate proceedings have been taken by Unified to
authorize Unified to enter into and perform this Agreement;
(c) Unified has, and will continue to have, access to the facilities,
personnel and equipment required to fully perform its duties and
obligations hereunder;
(d) no legal or administrative proceedings have been instituted or
threatened against Unified that would impair its ability to perform
its duties and obligations under this Agreement; and
(e) Unified's entrance into this Agreement will not cause a
material breach or be in material conflict with any other agreement
or obligation of Unified or any law or regulation applicable to Unified.
Section 3. Representations and Warranties of the Fund. The Fund
represents and warrants to Unified that:
(a) the Fund is a corporation duly organized and existing under the
laws of the State of Maryland;
(b) the Fund is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement,
and the Fund has taken all requisite proceedings to authorize the Fund
to enter into and perform this Agreement;
(c) the Fund is an investment company properly registered under the
1940 Act; a registration statement under the Securities Act of 1933,
as amended ("1933 Act"), and the 1940 Act on Form N-lA has been filed
and will be effective and will remain effective during the term of
this Agreement, and all necessary filings under the laws of the states
will have been made and will be current during the term of this
Agreement;
(d) no legal or administrative proceedings have been instituted or
threatened against the Fund that would impair its ability to perform
its duties and obligations under this Agreement; and
(e) the Fund's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or
obligation of the Fund or any law or regulation applicable to it.
Section 4. Delivery of Documents. The Fund will promptly furnish
to Unified such copies, properly certified or authenticated, of contracts,
documents and other related information that Unified may request or
requires to properly discharge its duties. Such documents may include,
but are not limited to, the following:
(a) resolutions of the Board authorizing the appointment of Unified to
provide certain transfer agency and fund accounting services to the Fund
and approving this Agreement;
(b) the Fund's Articles of Incorporation;
(c) the Fund's By-Laws;
(d) the Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) the Fund's registration statement including exhibits, as amended,
on Form N-1A (the "Registration Statement") under the 1933 Act and the
1940 Act, as filed with the SEC;
(f) copies of the Management Agreement between the Fund and its
investment adviser (the "Advisory Agreement");
(g) opinions of counsel and auditors reports;
(h) the Fund's Prospectus and Statement of Additional Information
relating to all Portfolios and all amendments and supplements thereto
(such Prospectus and Statement of Additional Information and
supplements thereto, as presently in effect and as from time to time
hereafter amended and supplemented, herein called the "Prospectuses"); and
(i) such other agreements as the Fund may enter into from time to
time including securities lending agreements, futures and commodities
account agreements, brokerage agreements and options agreements.
Section 5. Services Provided by Unified.
(a) Unified will provide the following services subject to the
control, direction and supervision of the Board and in compliance with
the objectives, policies and limitations set forth in the Fund's
Registration Statement, Articles of Incorporation and By-Laws; applicable
laws and regulations; and all resolutions and policies implemented by the
Board:
(i) Fund Accounting, as described on Exhibit B to this Agreement.
(i) Transfer Agency, as described on Exhibit C to this Agreement.
(iii) Dividend Disbursing. Unified will serve as the Fund's
dividend disbursing agent. Unified will prepare and mail checks, place
wire transfers of credit income and capital gain payments to shareholders.
The Fund will advise Unified in advance of the declaration of any dividend
or distribution and the record and payable date thereof. Unified will, on
or before the payment date of any such dividend or distribution, notify
the Fund's Custodian of the estimated amount required to pay any portion
of such dividend or distribution payable in cash, and on or before the
payment date of such distribution, the Fund will instruct its Custodian
to make available to Unified sufficient funds for the cash amount to be
paid out. If a shareholder is entitled to receive additional shares by
virtue of any such distribution or dividend, appropriate credits will be
made to each shareholder's account and/or certificates delivered where
requested. A shareholder not receiving certificates will receive a
confirmation from Unified indicating the number of shares credited to
his/her account.
(b) Unified will also:
(i) provide office facilities with respect to the provision of
the services contemplated herein (which may be in the offices of Unified
or a corporate affiliate of Unified);
(ii) provide or otherwise obtain personnel sufficient, in
Unified's sole discretion, for provision of the services contemplated
herein;
(iii) furnish equipment and other materials, which Unified,
in its sole discretion, believes are necessary or desirable for
provision of the services contemplated herein; and
(iv) keep records relating to the services provided hereunder
in such form and manner as set forth on Exhibits B, C and D and as
Unified may otherwise deem appropriate or advisable, all in accordance
with the 1940 Act. To the extent required by Section 31 of the 1940 Act
and the rules thereunder, Unified agrees that all such records prepared
or maintained by Unified relating to the services provided hereunder are
the property of the Fund and will be preserved for the periods prescribed
under Rule 31a-2 under the 1940 Act, maintained at the Fund's expense, and
made available to the SEC for inspection in accordance with such Section
and rules. Subject to the provisions of Section 9 hereof, Unified further
agrees to surrender promptly to the Fund upon its request and cease to
retain in its records and files those records and documents created and
maintained by Unified pursuant to this Agreement.
Section 6. Fees: Expenses: Expense Reimbursement.
(a) As compensation for the services rendered to the Fund pursuant to
this Agreement the Fund shall pay Unified on a monthly basis those fees
determined as set forth on Exhibit D to this Agreement. Such fees are to
be billed monthly and shall be due and payable upon receipt of the invoice.
Upon any termination of this Agreement and before the end of any month,
the fee for the part of the month before such termination shall be equal to
the fee normally due for the full monthly period and shall be payable,
without setoff, upon the date of termination of this Agreement.
(b) For the purpose of determining fees calculated as a function of a
Portfolio's net assets, the value of the Portfolio's net assets shall be
computed as required by the Prospectus, generally accepted accounting
principles and resolutions of the Board.
(c) Unified will from time to time employ or associate with such
person or persons as may be appropriate to assist Unified in the
performance of this Agreement. Such person or persons may be officers
and employees who are employed or designated as officers by both Unified
and the Fund. Except as otherwise expressly provided in this Agreement,
the compensation of such person or persons for such employment shall be
paid by Unified and no obligation will be incurred by or on behalf of
the Fund in such respect.
(d) Unified will bear all of its own expenses in connection with the
performance of the services under this Agreement, except as otherwise
expressly provided in this Agreement. The Fund agrees to promptly
reimburse Unified for any equipment and supplies specially ordered by
or for the Fund through Unified and for any other expenses not
contemplated by this Agreement that Unified may incur on the Fund's
behalf, at the Fund's request or as consented to by the Fund. Such other
expenses to be incurred in the operation of the Fund and to be borne
by the Fund, include, but are not limited to: taxes; interest;
brokerage fees and commissions; salaries and fees of officers and
directors who are not officers, directors, shareholders or employees
of Unified or Unified's affiliates; SEC and state Blue Sky registration
and qualification fees, levies, fines and other charges; advisory fees;
charges and expenses of custodians; insurance premiums including
fidelity bond premiums; auditing and legal expenses; costs of maintenance
of corporate existence; expenses of typesetting and printing of
prospectuses and for distribution to current shareholders of the Fund;
expenses of printing and production cost of shareholders' reports and
proxy statements and materials; costs and expense of Fund stationery and
forms; costs and expenses of special telephone and data lines and devices;
costs associated with corporate, shareholder and Board meetings; and any
extraordinary expenses and other customary Fund expenses. In addition,
Unified may utilize one or more independent pricing services, approved
from time to time by the Board, to obtain securities prices and to act
as backup to the primary pricing services, in connection with determining
the net asset values of the Fund, and the Fund will reimburse Unified for
the Fund's share of the cost of such services based upon the actual usage,
or a pro-rata estimate of the use, of the services for the benefit of the
Fund.
(e) The Fund may request additional services, additional processing or
special reports. Such requests may be provided by Unified at additional
charges. In this event, the Fund shall submit such requests in writing
together with such specifications as may be reasonably required by Unified,
and Unified shall respond to such requests in the form of a price
quotation. The Fund's written acceptance of the quotation must be received
prior to implementation of such request. Additional services will be
charged at Unified's standard rates.
(f) All fees, out-of-pocket expenses or additional charges of Unified
shall be billed on a monthly basis and shall be due and payable upon
receipt of the invoice. No fees, out-of-pocket expenses or other charges
set forth in this Agreement shall be subject to setoff.
Unified will render, after the close of each month in which services have
been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days shall bear interest in
finance charges equivalent to, in the aggregate, the Prime Rate (as
publicly announced by Firstar Bank, N.A., from time to time) plus 2.00%
per year and all costs and expenses of effecting collection of any such
sums, including reasonable attorney's fees, shall be paid by the Fund to
Unified.
In the event that the Fund is more than sixty (60) days delinquent in
its payments of monthly xxxxxxxx in connection with this Agreement (with
the exception of specific amounts which may be contested in good faith
by the Fund), this Agreement may be terminated upon thirty (30) days'
written notice to the Fund by Unified. The Fund must notify Unified in
writing of any contested amounts within thirty (30) days of receipt of a
billing for such amounts. Disputed amounts are not due and payable
while they are being investigated.
Section 7. Proprietary and Confidential Information. Unified agrees
on behalf of itself and its employees to treat confidentially and as
proprietary information of the Fund, all records and other information
relative to the Fund's prior, present or potential shareholders, and to
not use such records and information for any purpose other than performance
of Unified's responsibilities and duties hereunder. Unified may seek a
waiver of such confidentiality provisions by furnishing reasonable prior
notice to the Fund and obtaining approval in writing from the Fund, which
approval shall not be unreasonably withheld and may not be withheld where
the service agent may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities. Waivers of confidentiality are automatically
effective without further action by Unified with respect to Internal
Revenue Service levies, subpoenas and similar actions, or with respect
to any request by the Fund.
Section 8. Duties, Responsibilities and Limitations of Liability.
(a) In the performance of its duties hereunder, Unified shall be obligated
to exercise due care and diligence, and to act in good faith in performing
the services provided for under this Agreement. In performing its services
hereunder, Unified shall be entitled to rely on any oral or written
instructions, advice, notices or other communications, information, records
and documents (collectively, "Fund Information") from the Fund, its custodian,
officers and trustees, investors, agents, legal counsel, auditor and other
service providers (excluding in each case, Unified and its affiliates) (the
Fund, collectively with such persons other than Unified and its affiliates,
"Fund Representatives") which Unified reasonably believes to be genuine,
valid and authorized. Unified also shall be entitled to consult with and
rely on the advice and opinions of the Fund's auditor and of outside legal
counsel retained by the Fund, as may be reasonably necessary or appropriate
in Unified's sole judgment, as well as all other Fund Representatives, in
each case at the expense of the Fund.
(b) Neither Unified nor its officers, directors, partners, employees,
shareholders or agents (the "Unified Parties") shall be liable for any
error of judgment or mistake of law or for any losses, damages, costs,
reasonable attorneys' fees and expenses, payments, expenses and liabilities
of any nature or kind (collectively, "Damages") suffered by the Fund or its
shareholders in connection with any matter to which this Agreement relates
or in connection with any action (or omission) by any of the Unified Parties
in connection with this Agreement. This complete release from all liability
shall not apply to any action (or omission) of any Unified Party to the
extent such action (or omission) is caused by or results from the negligence
or willful misfeasance of any Unified Party. Any person, even though also
an officer, director, partner, employee or agent of Unified, who may be or
become an officer, director, partner, employee or agent of the Fund, shall
be deemed when rendering services to the Fund or acting on any business of
the Fund (other than services or business in connection with Unified's duties
hereunder) to be rendering such services to or acting solely for the Fund
and not as an officer, director, partner, employee or agent or person under
the control or direction of Unified even though paid by Unified.
(c) The Unified Parties shall not be responsible for, and the Fund shall
indemnify and hold the Unified Parties harmless from and against, any and
all Damages arising out of or in connection with:
(i) any action (or omission) of any Unified Party taken pursuant
to this Agreement, except to the extent (and only to the extent) any such
action (or omission) is caused by or results from the negligence or willful
misfeasance of any Unified Party; provided, however, that every action (or
omission) taken in good faith by any of the Unified Parties in connection
with or in reliance upon matters described in clauses (ii) through (x) below
shall be deemed in its entirety to be an action taken pursuant to this
Agreement that was not caused by and did not result from the negligence
or willful misfeasance of any Unified Party;
(ii) the reliance on or use by the Unified Parties of Fund
Information which is furnished to any of the Unified Parties by or on
behalf of any of the Fund Representatives;
(iii) any delays, inaccuracies, errors or omissions in or arising
out of or attributable to Fund Information which is furnished to any of
the Unified Parties by or on behalf of any of the Fund Representatives
or to the untimely provision to Unified of such Fund Information;
(iv) the Fund's refusal or failure to comply with the terms of
this Agreement or the Fund's lack of good faith, or its actions (or
omissions) involving negligence or willful misfeasance;
(v) the breach of any representation or warranty of the Fund
hereunder;
(vi) the taping or other form of recording of telephone
conversations or other forms of electronic communications with investors
and shareholders, or reliance by Unified on telephone or other electronic
instructions of any person acting on behalf of a shareholder or shareholder
account for which telephone or other electronic services have been
authorized;
(vii) the reliance on or the carrying out by Unified or
its officers or agents of any proper instructions reasonably believed
to be duly authorized, or requests of the Fund or recognition by Unified
of any share certificates which are reasonably believed to bear the proper
signatures of the officers of the Fund and the proper countersignature
of any transfer agent or registrar of the Fund;
(viii) any delays, inaccuracy, errors or omissions in or arising
out of or attributable to data or information provided to Unified by data
and pricing services;
(ix) the offer or sale of shares by the Fund in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop
order or other determination or ruling by any federal agency or any state
agency with respect to the offer or sale of such shares in such state (1)
resulting from activities, actions or omissions by Fund Representatives,
or (2) existing or arising out of activities, actions or omissions by or
on behalf of the Fund Representatives prior to the earlier of (x) the
effective date of this Agreement and (y) the effective date of an agreement
between the parties hereto with respect to the subject matter hereof that
was in effect immediately prior to the effective date of this Agreement ; and
(x) the non-compliance by the Fund, its investment adviser and/or
its distributor with applicable securities, tax, commodities and other
laws, rules and regulations.
(d) In any case in which the Fund may be asked to indemnify or hold a
Unified Party harmless, the Unified Party will notify the Fund promptly
after identifying any situation which it believes presents or appears
likely to present a claim for indemnification against the Indemnifying
Party and shall keep the Fund advised with respect to all developments
concerning such situation; provided, however, that the failure to do so
shall not prevent recovery by the Unified Party unless such failure
causes actual material harm to the Fund. The Fund shall have the option
to defend the Unified Party against any claim which may be the subject
of this indemnification, and, in the event that the Fund so elects, such
defense shall be conducted by counsel chosen by the Fund and satisfactory
to the Unified Party, and thereupon the Fund shall take over complete
defense of the claim and the Unified Party shall sustain no further legal
or other expenses in respect of such claim. The Unified Party will not
confess any claim or make any compromise in any case in which the Fund
Party will be asked to provide indemnification, except with the Fund's
prior written consent.
(e) Each of the Unified Parties, on the one hand, and the Fund, on the
other hand, shall have the duty to mitigate Damages for which the other
party may become responsible. This duty shall include giving such other
party every reasonable opportunity to correct any error or other
circumstance that caused, resulted in or increased such Damages, and every
reasonable opportunity to assist in such mitigation. Notwithstanding any
other provision of this Agreement, as to any matter where any portion of
Damages may be, in whole or part, caused, increased or determined by the
manner in which an item or amount is treated or reported for accounting
purposes or the manner in which an item or amount is treated or reported
to any governmental agency or taxing authority, no recovery for any amount
of Damages in connection with such matter shall be had by any party to (or
beneficiary of) this Agreement if an alternative manner of treatment or
reporting is or was possible and such alternative manner of treatment or
reporting is or was, in the written opinion of any reputable practitioner
of appropriate expertise, more likely than not the correct treatment (such
opinion to be rendered in customary form, subject to customary assumptions
and representations); provided however, that the provisions of this sentence
shall not apply and shall be disregarded in respect of a matter if and only
if (i) the person seeking or who may have sought to recover Damages (the
"Damaged Party") provided the party against whom recovery is or may have been
sought (the "Potentially Responsible Party") written notice bearing the bold
heading "Notice of Potential Claim for Damages," identifying this Agreement,
and describing the nature of the potential claim and the subject matter of
the required opinion, (ii) such notice is sent by certified mail and
actually delivered to the Potentially Responsible Party at least sixty (60)
days prior to the first time such item or amount is to be accounted for or
reported, (iii) the Damaged Party fully and promptly cooperates in the
attempts of the Potentially Responsible Party to obtain such an opinion, and
(iv) no such opinion is obtained prior to such accounting or reporting. If
an opinion described in the preceding sentence is obtained by the Potentially
Responsible Party, the Damaged Party shall bear the cost of such opinion.
The parties acknowledge that the purpose of the preceding two sentences is
to preclude the recovery of any and all Damages in connection with any
matter where the proper accounting, tax or other treatment of such matter
is susceptible to differing opinions among reputable practitioners of
appropriate expertise, and that the effect of such sentences is intended to
ensure that such matters are treated and reported in a legitimate manner
that gives rise to the smallest amount of Damages.
(f) THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, UNIFIED DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, MADE TO THE FUND 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 SERVICES PROVIDED UNDER
THIS AGREEMENT. UNIFIED DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT
EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT. THE PARTIES ACKNOWLEDGE
THAT THE ALLOCATION OF RISKS (BOTH INSURABLE RISKS AND OTHER RISKS) UNDER
THIS AGREEMENT HAS BEEN TAKEN INTO ACCOUNT IN THE PRICING STRUCTURE OF THE
SERVICES AND GOODS PROVIDED AND IS FAIR TO ALL PARTIES, AND THE PARTIES
FURTHER ACKNOWLEDGE THAT DIFFERENT ALLOCATIONS OF RISK WERE AVAILABLE UNDER
DIFFERENT PRICE STRUCTURES. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
(AND INTENDED BENEFICIARIES) UNDER THIS SECTION 8 SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
Section 9. Term. This Agreement shall become effective on the date
first herein above written. This Agreement may be modified or amended
from time to time by mutual agreement between the parties hereto. This
Agreement shall continue in effect unless terminated by either party on
at least ninety (90) days' prior written notice. With the sole exception
of the 30-day termination described in Section 6(f), no other event
(including any purported or actual breach) shall result in termination of
this Agreement. Upon termination of this Agreement, the Fund shall pay to
Unified all fees,
compensation and other charges as shall be accrued or due under the terms
of this Agreement as of the date of termination or the date that the
provision of services ceases, whichever is sooner.
Should the Fund exercise its right to terminate this Agreement, the Fund
agrees to pay a termination/conversion fee, simultaneous with the transfer
of all Fund records to the successor mutual fund service provider(s), in
an amount equal to the total compensation under this agreement for the
90-day period immediately preceding the termination notice date. Such fee
shall not be subject to any setoffs of any nature. In addition, the Fund
agrees to pay for all conversion tape set-up fees, test conversion
preparation and processing fees and final conversion fees, none of which
shall be subject to any setoff.
Such compensation to Unified shall be for the expenses incurred in
connection with the retrieval, compilation and movement of books, records
and materials relative to the deconversion or conversion of Fund records
to the successor mutual fund service provider as directed by the Fund.
Notwithstanding the foregoing, any amount owed by the Fund to Unified prior
to the termination/conversion shall still be due and payable under the terms
of this Agreement. No such compensation shall be due to Unified if Unified
terminates this Agreement for reasons other than a default by the Fund.
Upon the termination of the Agreement for any reason and payment of the fees
set forth in this Agreement without setoff, Unified agrees to provide the
Fund with the complete transfer agency and fund accounting records in its
possession and to assist the Fund in the orderly transfer of accounts and
records. Without limiting the generality of the foregoing, subject to the
preceding sentence, Unified agrees upon termination of this Agreement:
(a) to deliver to the successor mutual fund service provider(s), computer
tapes containing the Fund's accounts and records together with such record
layouts and additional information as may be necessary to enable the
successor mutual fund service provider(s) to utilize the information therein;
(b) to cooperate with the successor mutual fund service provider(s) in
the interpretation of the Fund's account and records;
(c) to forward all shareholder calls, mail and correspondence to the
new mutual fund service provider(s) upon de-conversion; and
(d) to act in good faith, to make the conversion as smooth as possible
for the successor mutual fund service provider(s) and the Fund.
Section 10. Notices. Any notice required or permitted hereunder
shall be in writing and shall be deemed to have been given when delivered
in person or by certified mail, return receipt requested, to the parties
at the following address (or such other address as a party may specify
by notice to the other):
(a) If to the Fund, to:
The Forester Funds, Inc.
c/o Forester Capital Management, Ltd.
000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: President
(b) If to Unified, to:
Unified Fund Services, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President
Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.
Section 11. Assignability. 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 Unified may, in its sole discretion and
upon notice to the Fund, 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. Unified may, in its sole discretion,
engage subcontractors to perform any of the obligations contained in this
Agreement to be performed by Unified provided that Unified shall remain
responsible to the Fund for the actions and omissions of such subcontractors
as if Unified had provided such services to the Fund.
Section 12. Intended Beneficiaries. This Agreement shall be binding upon
the Fund, Unified and their respective successors and assigns, and shall
inure to the benefit of the Fund, Unified, the Unified Parties, their
respective heirs, successors and assigns. Nothing herein expressed or
implied is intended to confer upon any person not named or described in
the preceding sentence any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
Section 13. Arbitration. Notwithstanding any provision of this Agreement
to the contrary, any claim or controversy arising out of or in any manner
relating to this Agreement, or breach hereof, which cannot be resolved
between the parties themselves, shall be settled by arbitration administered
by the American Arbitration Association in Indianapolis, Indiana in
accordance with its applicable rules. The arbitration panel shall consist
of three arbitrators selected from list(s) of candidates provided by the
American Arbitration Association. One party to the dispute shall be
entitled to appoint one arbitrator and the other party to the dispute
shall be entitled to appoint one arbitrator. The third arbitrator, who
shall be an attorney in good standing who is licensed to practice law in
the State of Indiana and devotes more than one-half of his or her professional
time to the practice of securities law, shall be chosen by the two arbitrators
so appointed. If any party fails to appoint its arbitrator or to notify the
other party of such appointment within thirty (30) days after the institution
of arbitration proceedings, such other party may request the President of the
American Arbitration Association to appoint such arbitrator on behalf of the
party who so failed. If the two arbitrators appointed by (or on behalf of)
the parties fail to appoint such third arbitrator, or fail to notify the
parties to such proceedings of such appointment, within thirty (30) days after
the appointment of the later of such two arbitrators to be appointed by (or
on behalf of) the parties, any party may request such President to appoint
such third arbitrator. The President of the American Arbitration Association
shall appoint such arbitrator or such third arbitrator, as the case may be,
within thirty (30) days after the making of such request. No awards of
punitive damages shall be made. The parties hereby agree that judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction. The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Section 13.
Section 14. Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver nor shall it deprive such party of the right thereafter to insist upon
strict adherence to that term or any term of this Agreement. Any waiver must
be in writing signed by the waiving party.
Section 15. Force Majeure. Unified shall not be responsible or liable
for any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitation, acts of God, earthquake, fires, floods,
wars, acts of civil or military authorities, governmental actions,
nonperformance by a third party or any similar cause beyond the reasonable
control of Unified, failures or fluctuations in telecommunications or other
equipment, nor shall any such failure or delay give the Fund the right to
terminate this Agreement.
Section 16. Use of Name. The Fund and Unified agree not to use the
other's name nor the names of such other's affiliates, designees, or assignees
in any prospectus, sales literature, or other printed material written in a
manner not previously, expressly approved in writing by the other or such
other's affiliates, designees, or assignees except where required by the SEC
or any state agency responsible for securities regulation.
Section 17. Amendments. This Agreement may be modified or amended
from time to time by mutual written agreement between the parties. No
provision of this Agreement may be changed, discharged or terminated orally,
but only by an instrument in writing signed by the party against which
enforcement of the change, discharge or termination is sought.
Section 18. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law to any person or circumstance,
such provision shall be ineffective only to the extent of such prohibition
or invalidity. In the event that any one or more of the provisions contained
in this Agreement or any application thereof shall be invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application thereof shall
not in any way be affected or impaired thereby.
Section 19. Headings; Pronouns; Certain Phrases. The headings in the sections
and subsections of this Agreement are inserted for convenience only and in no
way alter, amend, modify, limit or restrict the contractual obligations of
the parties. Wherever used in this Agreement, masculine, feminine and neuter
pronouns shall be deemed to include the other genders. Singular pronouns and
nouns (including defined terms) shall be deemed to include the plural (and
vice versa) as the context may require, but shall have no effect upon the
nature of a party's liability as joint or several. Wherever used in this
Agreement, the phrase "in connection with" shall be given the broadest
possible interpretation, and shall include matters (without limitation) that
are in whole or part caused by, relate to, arise out of, are attributable to,
or result from, the referent or object of such phrase.
Section 20. No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against
any party.
Section 21. Entire Agreement; Survival; Governing Law. This Agreement
embodies the entire understanding between the parties with respect to the
subject matter hereof, and supersedes all prior negotiations and agreements
between the parties relating to the subject matter hereof; provided, however,
that if an agreement between the parties hereto with respect to the subject
matter hereof was in effect immediately prior to the effective date of this
Agreement (the "Predecessor Agreement"), then the provisions contained in
Section 8 of the Predecessor Agreement (relating to indemnification and other
risk allocation matters) shall, in respect of all periods prior to the
effective date of this Agreement ("Prior Periods"), survive and remain in
effect to the same extent and in the same manner as such provisions would
have applied in respect of Prior Periods had the Predecessor Agreement not
been superseded by this Agreement or otherwise terminated or amended or
modified in any manner at any time. The provisions of Section 6 through 9
and Sections 13 through 21, inclusive, shall survive any termination of this
Agreement. This Agreement shall be governed by and construed and interpreted
according to the internal laws of the State of Indiana, without reference to
conflict of law principles.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Mutual Fund Services
Agreement to be signed by their respective duly authorized officers as of the
day and year first above written.
THE FORESTER FUNDS, INC.
By: Date
Print Name:
Title:
Attest:
UNIFIED FUND SERVICES, INC.
By: Date
Print Name:
Title:
By: Date
Print Name:
Title:
Attest:
EXHIBIT A
to
Mutual Fund Services Agreement
List of Portfolios
The Forester Value Fund
EXHIBIT B
to
Mutual Fund Services Agreement
General Description of Fund Accounting Services
I. General Description
Unified shall provide the following accounting services to the fund:
A. Maintain the books and records and accounting controls for the fund's
assets, including records of all securities transactions and payments of
fund expenses.
B. Calculate each Portfolio's net asset value in accordance with the
Prospectus and (once the Portfolio meets eligibility requirements) transmit
to NASDAQ and to such other entities as directed by the fund.
C. Provide the Administrator with the requested reports and information
deemed necessary to calculate dividend and capital gain distributions in
accordance with distribution policies detailed in the fund's prospectus.
Assist, if requested, the fund management in making final determinations
of distribution amounts.
D. Assist the fund's public accountants or other professionals in the
preparation and filing of the fund's Federal tax return on Form 1120-RIC
along with all state and local tax returns where applicable. Assist in the
preparation and filing of the Federal Excise Tax Return (Form 8613).
E. Account for dividends, interest and corporate actions received by the
fund.
F. Assist the Administrator in the preparation of Fund expense projections
and establishing accruals.
G. Produce transaction data, financial reports and such other periodic
and special reports as the Board may reasonably request.
H. Liaison with the fund's independent auditors.
I. Monitor and administer arrangements with the fund's custodian and
depository banks.
EXHIBIT C
to
Mutual Fund Services Agreement
General Description of Transfer Agency Services
The following is a general description of the transfer agency services
Unified provides or makes available to the fund:
Systems: Utilizing PowerAgent by Envision Financial Systems, Windows NT
Servers and Microsoft SQL Databases, we offer a robust yet open
architecture for shareholder data.
Interactive Voice Response: Provides fund shareholders 24 hour, 7 day
a week access to their account information, accessing the system either
via telephone or computer.
Shareholder Services: Shareholder telephone calls will be answered by
Unified's shareholder services department through toll-free numbers that
are unique to each fund family, during Unified's normal business hours. Phone
volumes and response times are continually monitored for quality assurance.
Shareholder Recordkeeping: Maintains complete shareholder records for each
fund including the following: (i) name, address and tax identification
number; (ii) number of shares held; (iii) historical information including
dividends paid and individual purchases and redemptions; and (iv) any
systematic purchase or redemption instructions and correspondence
relating to the current maintenance of the account.
Purchase and Redemption Orders: Unified will process all purchase and
redemption orders of a fund's shareholders in accordance with the fund's
current prospectus. Confirmation statements are produced for each
transaction and promptly mailed to shareholders. Daily transaction
reports and share proofs are made available to all necessary
parties via electronic medium.
Telephone Orders: Process redemption, exchange and transfer requests
upon telephone instructions from qualified shareholders. Unified will
redeem and/or transfer fund shares from any account for which such
services have been properly authorized.
Shareholder Communications and Meetings: Mail all necessary
communications by a fund to its shareholders. For proxies, Unified will
handle mailing of proxy materials, tabulation of proxy cards, and provide
periodic reports to the fund on the progress of the tabulation.
Shareholder Correspondence: Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed upon.
Asset Allocation Program Support: Provide rebalancing, asset allocation
models and performance measurement as an optional and additional transfer
agency service, for certain types of asset allocation and/or wrap programs.
EXHIBIT D
to
Mutual Fund Services Agreement
TRANSFER AGENCY FEE SCHEDULE
The prices contained herein are effective for twelve months from the
execution date of the Mutual Fund Services Agreement.
I New Fund Start-Up/Existing Fund Conversion Fee
? New fund establishment; manual conversion
? Electronic conversion
- $1,500 or less per portfolio.
- $1.50 per shareholder account with $4,000
minimum fee per trust.
II Standard Base Fees for Standard Base Services
The Base Fee1 is $18.00 for money market funds and $15.00 for
equity/bond funds per active Shareholder Account per year with a
minimum fee2 per portfolio and/or share class per year. An Active
Shareholder Account is any Shareholder Account existing on Transfer
Agent's computerized files with a non-zero Share balance. There is a
$.50 per account charge for any account with a zero share balance for
the current month, as determined on the last day of each month. The
base fee will be billed on a monthly basis.
1The Base Fee does not include: forms design and printing,
statement production, envelope design and printing, postage and
handling, shipping, statement microfiche copies and 800 number access
to Unified's shareholder services group.
2 Minimum fee based on average net assets per portfolio
and/or share class per month:
$0 - 5 Million $10,800 per year
$5 - 10 Million $12,000 per year
$10 Plus Million $15,000 per year
Unified will provide lost account search services in connection
of SEC Rules 17Ad-17 and 17a-24 at a cost of $2.50 per account searched.
These "Electronic Data Search Services" will be performed on a semi-annual
basis. This service will apply to only Active Shareholder Accounts
maintained on the transfer agency system coded as RPO accounts.
In addition to the above fees, there will be a $200.00 per day
minimum fee/rerun charge when the nightly processing has to be repeated
due to incorrect NAV or dividend information received from the Portfolio
Pricing Agent due to incorrect or untimely information provided by an
Advisor or its Agent.
III Standard Services Provided
? Open new accounts
? Maintain Shareholder accounts, including:
? Maintain certificate records
? Change addresses
? Prepare daily reports on number of Shares, accounts
? Prepare Shareholder federal tax information
? Withhold taxes on U.S. resident and non-resident alien accounts
? Reply to Shareholder calls and correspondence other than
that for Fund information and related inquiries
? Process purchase of Shares
? Issue/Cancel certificates (Excessive use may be subject to
additional charges)
? Process partial and complete redemptions
III Standard Services Provided (continued)
? Process regular and legal transfer of accounts
? Mail semi-annual and annual reports
? Process dividends and distributions
? Prepare Shareholder meeting lists
? Confirm all transactions as provided by the terms of each
Shareholder's account
? Provide a system which will enable Fund to monitor the total
number of Shares sold in each state. System has capability to halt sales
and warn of potential oversell. (Blue Sky Reports)
? Determine/Identify lost Shareholder accounts
IV Standard Reports Available
? 12b-1 Disbursement Report
? Holdings by Account Type
? 12b-1 Disbursement Summary
? Posting Details
? Dealer Commission Report
? Posting Summary
? Dealer Commission Summary Report
? Settlement Summary
? Exchange Activity Report
? Tax Register
? Fees Paid Summary Report
? Transactions Journal
? Fund Accrual Details
V NSCC Interfaces
? Fund/Serv and/or Networking set-up
- $1,000 per occurrence
? Fund/Serv processing
- $100 per month per trust
? Networking processing
- $150 per month per trust
? Fund/Serv transactions
- $0.35 per trade
? Direct Networking expenses:
? Monthly dividend fund
- $0.025 per item
? Non-monthly dividend fund
- $0.015 per item
VI Additional Fees for Services Outside the Standard Base
? Interactive Voice Response System Set-up
- Pass through
? Archiving of old records/storage of aged
records
- Pass through
? Off-line Shareholder research
- $25 per hour (Billed to customer account)
? Check copies
- $3 each (Billed to customer account)
? Statement copies
- $5 each (Billed to customer account)
? Mutual Fund fulfillment/prospect file
maintenance
- $1.00 per item
? Shareholder communications charges
(Faxes)
- Pass through
? Leased line/equipment on TA's computer
system
- Pass through
? Dial-up access to TA's computer system
- Pass through
? Labels
- $.05 each ($100 minimum)
? AD-HOC REPORTWRITER Report
Generation
- $50.00 per report
? Bank Reconciliation Service
- $50.00 monthly maintenance fee per bank account
- $1.50 per bank item
? Systems Programming Labor Charges:
? Programmers or Consultants
- $125.00 per hour
? Officers
- $150.00 per hour
? Proxy Processing
- Negotiable
FUND ACCOUNTING FEE SCHEDULE
The prices contained herein are effective for twelve months from the
execution date of the Mutual Fund Services Agreement.
I Standard Fee*
0.05% for the first $50 million in average net assets per
portfolio and/or share class per year; 0.04% from $50 million to
$100 million in average net assets per portfolio and/or share class per year;
0.03% over $100 million in average net assets per portfolio and/or
share class per year.
*Subject to an Annual Minimum1 per portfolio plus $7,500 (1) per
additional share class. International/Global Funds will be charged an
additional $10,000 per year. Fees are billed on a monthly basis.
1 Annual Minimum based on average net assets per portfolio per month:
$0 - 5 Million $10,800 per year
$5 - 10 Million $14,440 per year
$10 - 15 Million $18,000 per year
$15 Million Plus $21,600 per year
Out of Pocket Fees: Fees charged for outside pricing services and
all accompanying administrative expenditures.
II Standard Reports Available
Daily Reports
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Tax Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
II Standard Reports Available (continued)
Daily Reports (continued)
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
Monthly Reports
A. Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. SEC Yield Calculation Work Sheet (fixed-income funds only)
III Optional Services Available - Initial (for desired services)
__________ Additional portfolio sub-adviser fee
- $10,000 per portfolio
__________ Multiple custodian fee
- $5,000 per fund group
__________ GNMA securities fee
- $2,500 per portfolio
__________ S.E.C. audit requirements
- Pass through
IV Special Report Generation Fees
? AD-HOC Report Generation
- $75.00 per report
? Reruns
- $75.00 per run
? Extract Tapes
- $110.00 plus
V Systems Programming Labor Charges
? System Support Representatives
- $100.00 per hour
? Programmers, Counsultants or
Department Heads
- $125.00 per hour
? Officers
- $150.00 per hour
VI Repricing Charges
For incorrect or untimely information provided by an Advisor or
its Agent, Unified will charge $200.00 per day for each day that a
portfolio is repriced.
VII De-Conversion Fees
De-Conversion fees will be subject to additional charges
commensurate with particular circumstances and dependent upon scope of
problems.
BLUE SKY SERVICES FEE SCHEDULE
Unified will prepare and file all state notifications of intent to sell
the fund's securities including annual renewals, adding new portfolios,
preparing and filing sales reports, filing copies of the registration
statement and final prospectus and statement of additional information
for limited states, and increasing registered amounts of securities
in individual states.
The cost of this service is: $25.00 per state filing.
Unified Fund Services, Inc. 10/25/2002 The Forester Funds, Inc. - 1
