EXHIBIT (h)(ii)
FINAL VERSION
ADMINISTRATION, BOOKEEPING AND
PRICING SERVICES AGREEMENT
AGREEMENT made this 3rd day of November 2003, between Bridgeway Fund, Inc.
a Maryland corporation (the "Fund"), and ALPS Mutual Funds Services, Inc., a
Colorado corporation ("ALPS").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940 (the "1940 Act"), as amended, presently
consisting of eleven Portfolios, four of which are listed in Appendix A attached
hereto and made subject to this Agreement; the investment portfolios and any
additional investment portfolios that may be established by the Fund and made
subject to this Agreement are referred to herein individually as a "Portfolio"
and collectively as the "Portfolios"; and
WHEREAS, ALPS provides certain administrative, bookkeeping and pricing
services to investment companies; and
WHEREAS, the Fund desires to appoint ALPS to perform certain
administrative, bookkeeping and pricing services for the Fund and its
Portfolios, and ALPS has indicated its willingness to so act, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. ALPS Appointment and Duties.
(a) The Fund hereby appoints ALPS to provide to each of the Portfolios
the administrative, bookkeeping and pricing services as are set
forth in Appendix B, as amended from time to time, upon the terms
and conditions hereinafter set forth. ALPS hereby accepts such
appointment and agrees to furnish such specified services. ALPS
shall for all purposes be deemed to be an independent contractor and
shall, except as otherwise expressly authorized in this Agreement,
have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
(b) ALPS may employ or associate itself with a person or persons or
organizations as ALPS believes to be desirable in the performance of
its duties hereunder; provided that, in such event, the compensation
of such person or persons or organizations shall be paid by and be
the sole responsibility of ALPS and the Fund shall bear no cost or
obligation with respect thereto; and provided further that ALPS
shall not be relieved of any of its obligations under this Agreement
in such event and shall be responsible for all acts of any such
person or persons or organizations taken in furtherance of this
Agreement to the same extent it would be for its own acts.
2. ALPS Compensation; Expenses.
(a) In consideration for the services to be performed hereunder by ALPS,
the Fund shall pay ALPS the fees listed in Appendix C hereto.
(b) ALPS will bear all expenses in connection with the performance of
its services under this Agreement and all related agreements, except
as otherwise provided herein. ALPS will not bear any of the costs of
Fund personnel. Other Fund expenses incurred shall be borne by the
Fund or the Fund's adviser, including, but not limited to, transfer
agency and custodial expenses; taxes; interest; Fund directors'
fees; brokerage fees and commissions; state and federal registration
fees; advisory fees; insurance premiums; fidelity bond premiums;
Fund and advisory related legal expenses; costs of maintenance of
Fund existence; printing and delivery of materials in connection
with meetings of the Fund directors; printing and mailing
shareholder reports, prospectuses, statements of additional
information, supplements, and proxy materials; acquisition of daily
securities prices and expenses in connection with electronic filings
with the Securities and Exchange Commission (the "SEC").
3. Right to Receive Advice.
(a) Advice of the Fund. If ALPS is in doubt as to any action it should
or should not take, ALPS shall request directions or advice from the
Fund.
(b) Advice of Counsel. If ALPS is in doubt as to any question of law
pertaining to any action it should or should not take, ALPS shall
request advice from counsel of its own choosing and at its own
expense.
(c) Conflicting Advice. In the event of a conflict between directions,
advice or instructions ALPS receives from the Fund and the advice
ALPS receives from counsel, ALPS shall inform the Fund and its
counsel of the conflict and seek resolution.
(d) Nothing in this subsection shall excuse ALPS when an action or
omission on the part of ALPS constitutes willful misfeasance, bad
faith, negligence or reckless disregard by ALPS of any duties,
obligations or responsibilities set forth in this Agreement.
4. Liability of ALPS.
(a) ALPS may rely upon the written advice of counsel for the Fund and
the Fund's independent accountants, and upon oral or written
statements of the Fund's investment adviser, brokers and other
service providers to the Fund, reasonably believed by ALPS in good
faith to be an expert in the matters upon which they are consulted
and, for any actions reasonably taken in good faith reliance upon
such advice or statements and without negligence, ALPS shall not be
liable to anyone.
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(b) Nothing herein contained shall be construed to protect ALPS against
any liability to the Fund or its shareholders to which ALPS would
otherwise be subject by reason of willful misfeasance, bad faith,
negligence, or reckless disregard in the performance of its duties.
(c) Except as may otherwise be provided by applicable law, neither ALPS
nor its shareholders, officers, Directors, employees or agents shall
be subject to, and the Fund shall indemnify and hold such persons
harmless from and against, any liability for and any damages,
expenses or losses incurred by reason of the inaccuracy of factual
information furnished to ALPS by the Fund or its adviser.
(d) ALPS shall be obligated to exercise commercially reasonable care and
diligence in the performance of its duties hereunder, to act in good
faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. ALPS shall be
liable for actual damages arising out of ALPS' failure to perform
its duties under this Agreement to the extent such damages arise out
of ALPS' willful misfeasance, bad faith, negligence or reckless
disregard of such duties.
(e) ALPS shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the matters
to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith, negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
5. Reports. Whenever, in the course of performing its duties under this
Agreement, ALPS determines, on the basis of information supplied to ALPS by the
Fund or its authorized agents, that a violation of applicable law has occurred
or that, to its knowledge, a possible violation of applicable law may have
occurred or, with the passage of time, would occur, ALPS shall promptly notify
the Fund and its counsel.
6. Activities of ALPS. The services of ALPS under this Agreement are
not to be deemed exclusive, and ALPS shall be free to render similar services to
others. The Fund recognizes that from time to time directors, officers and
employees of ALPS may serve as directors, officers and employees of other
corporations or businesses (including other investment companies) and that such
other corporations and funds may include ALPS as part of their name and that
ALPS or its affiliates may enter into administrative, bookkeeping, pricing
agreements or other agreements with such other corporations and funds.
7. Accounts and Records. The accounts and records maintained by ALPS
shall be the property of the Fund. Such accounts and records shall be prepared,
maintained and preserved as required by the 1940 Act and other applicable
securities laws, rules and regulations. Such accounts and records shall be
surrendered to the Fund promptly upon receipt of instructions from the Fund in
the form in which such accounts and records have been maintained or preserved.
The Fund shall have access to such accounts and records at all times during
ALPS' normal business
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hours. Upon the reasonable request of the Fund, copies of any such books and
records shall be provided by ALPS to the Fund at the Fund's expense. ALPS shall
assist the Fund, the Fund's independent auditors, or, upon approval of the Fund,
any regulatory body, in any requested review of the Fund's accounts and records,
and reports by ALPS or its independent accountants concerning its accounting
system and internal auditing controls will be open to such entities for audit or
inspection upon reasonable request.
8. Confidential and Proprietary Information. ALPS agrees that it will,
on behalf of itself and its officers and employees, treat all transactions
contemplated by this Agreement, and all records and information relative to the
Fund and its shareholders (past, present and future) and other information
germane thereto, as confidential and as proprietary information of the Fund and
not to use, sell, transfer or divulge such information or records to any person
for any purpose other than performance of its duties hereunder, except after
prior notification to and approval in writing from the Fund, which approval
shall not be unreasonably withheld. It may not be withheld where ALPS may be
exposed to civil, regulatory or criminal proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Fund. ALPS shall have in place and maintain physical,
electronic and procedural safeguards reasonably designed to protect the
security, confidentiality and integrity of, and to prevent unauthorized access
to or use of records and information relating to the Fund and its past, present
and future shareholders, consumers and customers.
9. Compliance with Rules and Regulations. ALPS shall comply -- and to
the extent ALPS takes or is required to take action on behalf of the Fund or its
Portfolios hereunder shall cause the Fund and its Portfolios to comply -- with
all applicable requirements of the 1940 Act and other applicable laws, rules,
regulations, orders and code of ethics, as well as all investment restrictions,
policies and procedures adopted by the Fund or any of its Portfolios of which
ALPS has knowledge. Except as specifically set forth herein, ALPS assumes no
responsibility for such compliance by the Fund or any Portfolio.
10. Representations and Warranties of ALPS. ALPS represents and warrants
to the Fund that:
(a) It is duly organized and existing as a corporation and in good
standing under the laws of the State of Colorado.
(b) It is empowered under applicable laws and by its Articles of
Incorporation and By-laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
(d) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement in accordance with industry standards.
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(e) It has and will keep in effect professional liability insurance
naming ALPS as insured and providing coverage with respect to ALPS'
activities on behalf of the Fund and its Portfolios in the amount of
at least $1,000,000, and will provide to the Fund at least annually
a certificate of insurance evidencing that such insurance is in full
force and effect.
Representations and Warranties of the Fund. The Fund represents and
warrants to ALPS that:
(a) It is a corporation duly organized and existing and in good standing
under the laws of the state of Maryland and is registered with the
SEC as an open-end investment company.
(b) It is empowered under applicable laws and by its Articles of
Incorporation and By-laws to enter into and perform this Agreement.
(c) The Board of Directors has duly authorized it to enter into and
perform this Agreement.
(d) It has provided ALPS with copies of its Prospectus(es) and
Statement(s) of Additional Information and will provide ALPS with
any amendments or supplements thereto.
11. Liaison with Accountants. ALPS shall act as liaison with the Fund's
independent public accountants and shall provide account analysis, fiscal year
summaries, and other audit-related schedules with respect to the services
provided to each Portfolio. ALPS shall take all reasonable action in the
performance of its duties under this Agreement to assure that the necessary
information in ALPS' control is made available to such accountants for the
expression of their opinion, as required by the Fund.
12. Business Interruption Plan. ALPS shall maintain in effect a business
interruption plan, and enter into any agreements necessary with appropriate
parties making reasonable provisions for emergency use of electronic data
processing equipment customary in the industry. In the event of equipment
failures, ALPS shall, at no additional expense to the Fund, take commercially
reasonable steps to minimize service interruptions. ALPS shall have no liability
with respect to the loss of data or service interruptions caused by equipment
failure, provided such loss or interruption is not caused by ALPS' own willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations under this Agreement.
13. Duration and Termination of this Agreement.
(a) Initial Term. This Agreement shall become effective as of the date
first written above (the "Start Date") and shall continue thereafter
throughout the period which ends 3 years after the Start Date (the
"Initial Term"). Until the end of the Initial Term, this Agreement may be
terminated without penalty only by agreement of the parties upon not less
than 60 days' written notice or for cause pursuant to Section 13(c)
hereof. If the Fund
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terminates this Agreement unilaterally without cause prior to the end of
the Initial Term, it will be in default hereunder, causing substantial
damages to ALPS. Because of the difficulty of estimating the damages that
will result, the Fund agrees to pay to ALPS, as liquidated damages for
such default, an amount equal to twenty-five percent (25%) of the annual
fee in effect at the time of termination (the "Default Payment"):
The parties agree that the Default Payment is a reasonable forecast
of probable actual loss to ALPS and that this sum is agreed to as
liquidated damages and not as a penalty.
(b) Renewal Term. If not sooner terminated, this Agreement shall renew
at the end of the Initial Term and shall thereafter continue for
successive annual periods until terminated by the Fund or by ALPS, without
penalty, upon not less than 90 days' written notice to the other party.
(c) Cause. Notwithstanding anything to the contrary elsewhere in this
Agreement, the Fund may terminate this Agreement for cause immediately at
any time, without penalty, without default and without the payment of any
Default Payment or other liquidated damages. Termination for "cause"
hereunder shall mean:
(i) willful misfeasance, bad faith, negligence or reckless
disregard on the part of ALPS in the performance of or with respect
to its obligations and duties hereunder;
(ii) regulatory, administrative, or judicial proceedings against
ALPS which result in a determination that, in rendering its services
hereunder, ALPS has violated - or has caused the Fund or any of its
Portfolios to violate - any applicable law, rule, regulation, order
or code of ethics, or any investment restriction, policy or
procedure adopted by the Fund or any of its Portfolios of which ALPS
had knowledge;
(iii) financial difficulties on the part of ALPS which are evidenced
by the authorization or commencement of, or involvement by way of
pleading, answer, consent, or acquiescence in, a voluntary or
involuntary case under Title 11 of the United States Code, as from
time to time in effect, or any applicable law other than said Title
11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of
the rights of creditors;
(iv) failure by ALPS to keep in effect professional liability
insurance satisfactory to the Fund directors naming ALPS as insured
and providing coverage with respect to ALPS' activities on behalf of
the Fund and its Portfolios in the amount of at least $1,000,000,
and to provide to the Fund at least annually a certificate of
insurance evidencing that such insurance is in full force and
effect; or
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(v) any other circumstance which, in the reasonable judgment of
the Fund directors, including a majority of the directors who are
not interested persons (as defined in the 0000 Xxx) of any party to
this Agreement, materially impairs ALPS' ability to perform its
obligations and duties hereunder.
(d) Deliveries Upon Termination. Upon termination of this Agreement,
ALPS shall deliver to the Fund or as otherwise directed by the Fund (at the
expense of the Fund, unless such termination is for "cause") all records and
other documents made or accumulated in the performance of its duties for the
Fund hereunder.
14. Assignment. This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and permitted assigns;
provided, however, that this Agreement shall not be assignable by the Fund
without the prior written consent of ALPS, or by ALPS without the prior written
consent of the Fund.
15. Governing Law. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of Colorado, and the
1940 Act and the rules thereunder. To the extent that the laws of the State of
Colorado conflict with the 1940 Act or such rules, the latter shall control.
16. Names; Series Fund. The obligations of the "Fund" entered into in
the name or on behalf thereof by any director, representative or agent thereof
are made not individually, but in such capacities, and are not binding upon any
of the directors, shareholders, representatives or agents of the Fund
personally, but bind only the property of the Fund, and all persons dealing with
the Fund must look solely to the property of the Fund for the enforcement of any
claims against the Fund. ALPS further acknowledges and agrees that the
liabilities, obligations and expenses incurred hereunder with respect to a
particular Portfolio shall be enforceable against the assets and property of
such Portfolio only, and not against the assets or property of any other
Portfolio of the Fund.
17. Amendments to this Agreement. This Agreement may only be amended by
the parties in writing.
18. Notices. All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by telex
or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To ALPS:
ALPS Mutual Funds Services, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
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To the Fund:
Bridgeway Fund, Inc.
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: President
Fax: (000) 000-0000
19. Counterparts. This Agreement may be executed by the parties hereto
on any number of counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
20. Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof; provided, however, that
ALPS may embody in one or more separate documents its agreement, if any, with
respect to delegated duties and oral instructions.
21. Additional Portfolios. If the Fund establishes one or more
additional portfolios with respect to which it wishes to retain ALPS to provide
administrative, bookkeeping and pricing services hereunder, it will notify ALPS
in writing. If ALPS is willing to render such services under this Agreement, it
will so notify the Fund in writing, whereupon such series will become a
"Portfolio" as defined hereunder and will be subject to the provisions of this
Agreement to the same extent as the Fund is named above, except to the extent
that such provisions are modified with respect to such new Portfolio in writing
by the Fund and ALPS.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BRIDGEWAY FUND, INC.
By: /s/ Xxxx Xxxxxxxxx
---------------------------------------
Name:
Title:
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/ Xxxxxx Xxx
---------------------------------------
Name:
Title:
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XXXXXXXX X
Xxxxxxxxx Xxxxx Xxx Value Fund
Bridgeway Large Cap Growth Fund
Bridgeway Small Cap Value Fund
Bridgeway Small Cap Growth Fund
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APPENDIX B
SERVICES
ADMINISTRATIVE
- On a monthly basis, assist the Fund in monitoring each Portfolio's
compliance with:
(i) the investment restrictions described in the Fund's registration
statement
(ii) SEC diversification requirements, as applicable
(iii) its status as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended
- Coordinate the preparation and filing with the SEC on behalf of the Fund:
(i) Form N-SAR
(ii) Form N-CSR
(iii) Form 24f-2
ALPS shall not be responsible for the accuracy or adequacy of any
information contained in the documents listed in subsections (i) through
(iii) above, to the extent such information is provided to ALPS by the
Fund, other service providers to the Fund, or any other third party.
- Provide assistance to the Fund related to quarterly Board of Directors
meetings by preparing board reports regarding services provided by ALPS,
as requested by the Fund
- Assist the Fund with placement of fidelity bond and errors and omissions
insurance policies
- Prepare the Fund's annual and semi-annual financial statements including
schedules of investments and the related statements of operations, assets
and liabilities and, changes in net assets, as well as the financial
highlights and footnotes to the financial statements.
- Provide facilities, information and personnel, as necessary, to
accommodate annual audits with the Fund's independent accountants, or
examinations conducted by the Securities and Exchange Commission or other
regulatory authorities.
- Monitor the Fund's expense accruals by establishing expense budgets and
comparing expense accruals on a periodic basis to actual expenses paid.
- Report performance and other portfolio information to outside reporting
agencies as directed by the Fund.
- Calculate monthly performance including total return and SEC yield
calculations.
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- Maintain and coordinate the Fund's blue sky registration.
BOOKKEEPING AND PRICING
- Maintain separate accounts for each Portfolio, all as directed from time
to time by written instructions from the Fund.
- Compute net asset value for each Class of each Portfolio and, as
appropriate, compute yields, expense ratios, portfolio turnover rate and,
if required, portfolio average dollar-weighted maturity.
- Obtain security market quotes from independent pricing services, if
available, approved by the Fund, or if such quotes are unavailable, then
obtain such prices pursuant to the Fund's valuation policies and
procedures, and in either case calculate the market value of each
Portfolio's investments.
- Timely calculate and transmit to NASDAQ each Portfolio's (and each Class
of each Portfolio's) daily net asset value and public offering price (such
determinations to be made in accordance with the provisions of the Fund's
then-current Prospectuses and Statements of Additional Information
relating to the Portfolios, and any applicable resolutions and policies
and procedures of the Board of Directors of the Fund) and promptly
communicate such values and prices to the Fund and the Fund's transfer
agent.
- Maintain and keep current all books and records of the Portfolios as
required by Section 31 of the 1940 Act, and the rules thereunder, in
connection with ALPS' duties hereunder. Without limiting the generality of
the foregoing, ALPS will prepare and maintain the following records upon
receipt of information in proper form from the Fund:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend records
(iv) Security purchases, sales and loans - portfolio
securities journals
(v) Subscription and redemption journals
(vi) Security ledgers
(vii) Broker ledger
(viii) General ledger
(ix) Daily expense accruals
(x) Daily income accruals
(xi) Foreign currency journals
(xii) Trial balances
(xiii) Historical tax lots for each security
- Reconcile cash and investment balances with the Custodian.
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- Provide the Fund with daily Portfolio values, net asset values and other
statistical data for each Class of each Portfolio as requested from time
to time.
- Compute the net income and capital gains and losses of each Portfolio and
calculate income dividend rates in accordance with relevant prospectus
policies and resolutions of the Board of Directors of the Fund.
- Assist in the preparation of certain reports (including annual and
semi-annual reports, Prospectuses and Statement of Additional
Information), audits of accounts, and other matters of like nature, as
reasonably requested from time to time by the Fund.
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APPENDIX C
FEES
Fees paid to ALPS shall be calculated and accrued daily and payable monthly by
the Fund at the annual rate of:
- $47,500 per Portfolio for the first share class in such Portfolio;
- $5,000 per Portfolio for each additional class of shares in such
Portfolio; plus
- Out-of-pocket expenses incurred by ALPS on the Fund's behalf, including,
but not limited to, securities pricing, Blue Sky state registration fees, and
other miscellaneous expenses that may arise.
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