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ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this 6TH day of JULY, 2001 by
and between CROFT - LEOMINSTER VALUE FUND, a registered management investment
company (the "Fund"), and Mutual Shareholder Services LLC ("MSS"), an Ohio
corporation.
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. MSS is a corporation experienced in providing accounting services to
mutual funds and possesses facilities sufficient to provide such services; and
C. The Fund desires to avail itself of the experience, assistance and
facilities of MSS and to have MSS perform the Fund certain services appropriate
to the operations of the Fund, and MSS is willing to furnish such services in
accordance with the terms hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MSS.
MSS will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Timely calculate and transmit to NASDAQ the daily net
asset value of each class of shares of each portfolio of the Fund,
and communicate such value to the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the
Fund as required by Rule 31a-1 under the 1940 Act, as such rule or
any successor rule may be amended from time to time ("Rule 31a-1"),
that are applicable to the fulfillment of MSS's duties hereunder, as
well as any other documents necessary or advisable for compliance
with applicable regulations as may be mutually agreed to between the
Fund and MSS. Without limiting the generality of the foregoing, MSS
will prepare and maintain the following records upon receipt of
information in proper form from the Fund or its authorized agents:
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o Cash receipts journal
o Cash disbursements journal
o Dividend record
o Purchase and sales - portfolio securities journals
o Subscription and redemption journals
o Security ledgers
o Broker ledger
o General ledger
o Daily expense accruals
o Daily income accruals
o Securities and monies borrowed or loaned and collateral
therefore
o Foreign currency journals
o Trial balances
(c) Provide the Fund and its investment adviser with daily
portfolio valuation, net asset value calculation and other standard
operational reports as requested from time to time.
(d) Provide all raw data available from its fund
accounting system for the preparation by the Fund or its
investment advisor of the following:
1. Semi-annual financial statements;
2. Semi-annual form N-SAR;
3. Annual tax returns;
4. Financial data necessary to update form N-1A;
5. Annual proxy statement.
(e) Provide facilities to accommodate annual audit and any
audits or examinations conducted by the Securities and Exchange
Commission or any other governmental or quasi-governmental entities
with jurisdiction.
MSS shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. FEES AND EXPENSES.
(a) In consideration of the services to be performed by MSS
pursuant to this Agreement, the Fund agrees to pay MSS the fees set
forth in the fee schedule attached hereto as Exhibit A.
(b) In addition to the fees paid under paragraph (a) above,
the Fund agrees to reimburse MSS for out-of-pocket expenses or
advances incurred by MSS in connection with the performance of its
obligations under this Agreement. In addition, any other expenses
incurred by MSS at the request or with the consent of the Fund will
be reimbursed by the Fund.
(c) The Fund agrees to pay all fees and reimbursable
expenses within five days following the receipt of the respective
billing notice.
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3. LIMITATION OF LIABILITY OF MSS.
(a) MSS shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall not be liable
to the Fund for any action taken or omitted by it in good faith
without gross negligence, bad faith, willful misconduct or reckless
disregard of its duties hereunder. It shall be entitled to rely upon
and may act upon the accounting records and reports generated by the
Fund, advice of the Fund, or of counsel for the Fund and upon
statements of the Fund's independent accountants, and shall not be
liable for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to
the knowledge of MSS, in violation of applicable federal or state
laws or regulations, and provided further that such action is taken
without gross negligence, bad faith, willful misconduct or reckless
disregard of its duties.
(b) Nothing herein contained shall be construed to protect
MSS against any liability to the Fund to which MSS shall otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence
in the performance of its duties to the Fund, reckless disregard of
its obligations and duties under this Agreement or the willful
violation of any applicable law.
(c) Except as may otherwise be provided by applicable law,
neither MSS nor its stockholders, 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
information furnished to MSS by the Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to MSS on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to MSS during the preceding quarter was true,
complete and correct in all material respects. MSS shall not be
responsible for the accuracy of any information furnished to it by
the Fund or its authorized agents, and the Fund shall hold MSS
harmless in regard to any liability incurred by reason of the
inaccuracy of such information.
(b) Whenever, in the course of performing its duties under
this Agreement, MSS determines, on the basis of information supplied
to MSS 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, MSS shall promptly notify the Fund and its counsel
of such violation.
5. ACTIVITIES OF MSS.
The services of MSS under this Agreement are not to be deemed
exclusive, and MSS shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
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6. ACCOUNTS AND RECORDS.
The accounts and records maintained by MSS shall be the property of
the Fund, and shall be surrendered to the Fund promptly upon request by the Fund
in the form in which such accounts and records have been maintained or
preserved. MSS agrees to maintain a back-up set of accounts and records of the
Fund (which back-up set shall be updated on at least a weekly basis) at a
location other than that where the original accounts and records are stored. MSS
shall assist 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. MSS
shall preserve the accounts and records as they are required to be maintained
and preserved by Rule 31a-1.
7. CONFIDENTIALITY.
MSS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and not to be disclosed to any
person except as may be authorized by the Fund.
8. TERM OF AGREEMENT.
(a) This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that each
party to this Agreement have the option to terminate the Agreement, without
penalty, upon 90 days prior written notice.
(b) Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movements of records and material
will be borne by the Fund. Additionally, MSS reserves the right to charge for
any other reasonable expenses associated with such termination.
9. MISCELLANEOUS.
(a) Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the written consent of the other party.
This Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
(b) The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio as at the time in
effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
(c) This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
(d) This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
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(e) 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 the Fund: To MSS:
CROFT FUNDS CORP. Mutual Shareholder Services, LLC
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CANTON HOUSE 0000 Xxxxxxxxxxx Xx, Xxxxx X
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000 XXXXX XX. Xxxxxxxxxxx, XX 00000
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XXXXXXXXX, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Fund: Mutual Shareholder Services, LLC
CROFT LEOMINSTER VALUE FUND
By: /S/ XXXX X. XXXXX By: /S/ XXXXXXX X. XXXXX
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Its: PRESIDENT Its: PRESIDENT
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