ADMINISTRATIVE SERVICES AGREEMENT
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AGREEMENT made the 8th day of August 1994 by and between CROFT FUNDS CORPORATION
(the "Fund") and AMERICAN DATA SERVICES, INC. a New York corporation (the
"Administrator").
BACKGROUND
WHEREAS, 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
WHEREAS, the Administrator is a corporation experienced in providing
administrative services to mutual funds and possesses facilities sufficient to
provide such services; and
WHEREAS, the Fund desires to avail itself of the experience, assistance
and facilities of the Administrator and to have the Administrator perform for
the Fund certain services appropriate to the operations of the Fund and the
Administrator is willing to furnish such services in accordance with the terms
hereinafter set forth.
TERMS
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NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the Fund and the Administrator hereby agree to the
following:
1. DUTIES OF THE ADMINISTRATOR.
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The Administrator will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and annual
financial statements;
(c) Prepare selected management reports for performance and
compliance analyses as agreed upon by the Fund and
Administrator from time to time;
(d) Prepare selected financial data required for directors'
meetings as agreed upon by the Fund and the Administrator from
time to time and coordinate directors meeting agendas with
outside legal counsel to the Fund;
(e) Determine income and capital gains available for distribution
and calculate distributions required to meet regulatory,
income, and excise tax requirements, to be reviewed by the
Fund's independent public accountants;
(f) Prepare the Fund's federal, state, and local tax returns to be
reviewed by the Fund's independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget to
determine proper expense accruals to be charged to the Fund in
order to calculate it's daily net asset value.
(h) 1940 ACT filings--
In conjunction with the Fund's outside legal counsel the
Administrator will:
-- Prepare the Fund's Form N-SAR reports;
-- Update all financial sections of the Fund's Statement of
Additional Information and coordinate its completion;
-- Update all financial sections of the Fund's prospectus and
coordinate its completion;
-- Update all financial sections of the Fund's proxy statement
and coordinate its completion;
-- Prepare an annual update to Fund's 24f-2 filing (if
applicable);
(i) Monitor services provided by the Fund's custodian bank as well
as any other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by the
Fund's independent public accountants or SEC examiners),
coordinate the Fund's annual or SEC audit, and provide office
facilities as may be required;
(k) Attend management and board of directors meetings as
requested; and
(l) The preparation and filing (filing fee to be paid by the Fund)
of applications and reports as necessary to register or
maintain the Funds registration under the securities or "Blue
Sky" laws of the various states selected by the Fund's
Distributor.
The Administrator 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.
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2. COMPENSATION OF THE ADMINISTRATOR.
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In consideration of the services to be performed by ADS as set forth
herein, ADS shall be entitled to receive compensation and reimbursement for all
reasonable out-of-pocket expenses. The Fund agrees to pay ADS the fees and
reimbursement of out-of-pocket expenses as set forth in the fee schedule
attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
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(a) The Administrator shall be held to the exercise of reasonable care
in carrying out the provisions of the Agreement, but shall be without liability
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 be
without liability 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 the Administrator, 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) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties on
behalf of the Fund, reckless disregard of the Administrator's 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 the
Administrator 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 the Administrator by the
Fund or its authorized agents or in connection with any error in judgment or
mistake of law or any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, by reason of reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
4. REPORTS.
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(a) The Fund shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator shall
not be responsible for the accuracy of any information furnished to it by the
Fund, and the Fund shall hold the Administrator harmless in regard to any
liability incurred by reason of the inaccuracy of such information.
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(b) The Administrator shall provide to the Board of Directors of the
Fund, on a quarterly basis, a report, in such a form as the Administrator and
the Fund shall from time to time agree, representing that, to its knowledge, the
Fund was in compliance with all requirements of applicable federal and state
law, including without limitation, the rules and regulations of the Securities
and Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course of
performing its duties under this Agreement, the Administrator determines, on the
basis of information supplied to the Administrator by the Fund, 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, could occur,
the Administrator shall promptly notify the Fund and its counsel of such
violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
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The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
6. RECORDS.
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The records maintained by the Administrator shall be the property of
the Fund, and shall be made available to the Fund promptly upon request by the
Fund in the form in which such records have been maintained or preserved. The
Administrator shall upon approval of the Fund assist the Fund's independent
auditors, or, any regulatory body, in any requested review of the Fund's
accounts and records. The Administrator shall preserve the records in its
possession (at the expense of the Fund) as required by Rule 31a-1 of the 1940
Act.
7. CONFIDENTIALITY.
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The Administrator 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 such information
shall not be disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
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This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, without
penalty, upon ninety (90) days prior written notice.
Upon termination of this Agreement in accordance with the foregoing,
the Administrator shall deliver to the Fund (at the expense of the Fund) all
records and other documents made or accumulated in the performance of its duties
for the Fund hereunder.
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9. ASSIGNMENT.
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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 prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Fund.
10. GOVERNING LAW.
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The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York 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 New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
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This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
13. NOTICES.
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All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when delivered in person or by certified
mail, return receipt requested, and shall be given to the following addresses
(or such other addresses as to which notice is given):
To the Fund: To ADS:
Xx. Xxxx Xxxxx Xx. Xxxxxxx Xxxxx
President President
Croft-Leominster, Inc. American Data Services, Inc.
000 Xxxx Xxxxxxx Xxxxxx 00 Xxxx Xxxxxx Xxxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CROFT FUNDS CORPORATION AMERICAN DATA SERVICES, INC.
By: /S/ XXXX XXXXX By: /S/ XXXXXXX XXXXX
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Xxxx Xxxxx Xxxxxxx Xxxxx
President President
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SCHEDULE A
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(a) ADMINISTRATIVE SERVICE FEE:
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For the services rendered by ADS in its capacity as administrator, as specified
in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the Fund shall pay ADS, within ten
(10) days after receipt of an invoice from ADS at the beginning of each month, a
fee equal to the greater of:
NOTE: The following fees are per portfolio serviced.
MINIMUM FEE:
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Based upon previous month-end net assets:
Under $10 million .......................$1,300
From $11 million to $20 million ..........1,600
From $21 million on ......................2,000
OR,
NET ASSET CHARGE:
1/12th of 0.05% (5 basis points) of net assets.
On each annual anniversary date of this Agreement, the fees enumerated
above will be increased by the change in the Consumer Price Index for the
Northeast region (CPI) for the twelve month period ending with the month
preceding such annual anniversary date.
(b) EXPENSES. The Fund shall reimburse ADS for any out-of-pocket
expenses, exclusive of salaries, advanced by ADS in connection with but not
limited to the printing or filing of documents for the Fund, travel, telephone,
quotation services, facsimile transmissions, stationery and supplies, record
storage, postage, telex, and courier charges, incurred in connection with the
performance of its duties hereunder. ADS shall provide the Fund with a monthly
invoice of such expenses and the Fund shall reimburse ADS within fifteen (15)
days after receipt thereof.
(c) STATE REGISTRATION (BLUE SKY) SURCHARGE: The fees enumerated in
paragraph (a) above include the initial state registration, renewal and
maintenance of registration (as detailed in, Paragraph 1(1) DUTIES OF THE
ADMINISTRATOR) for five (5) states. Each additional state registration requested
will be subject to the following fees:
Initial registration ............... $175.00
Registration renewal ............... $100.00
Sales reports (if required) ........ $ 25.00
(d) SPECIAL REPORTS. All reports and /or analyses requested by the Fund
that are not in the normal course of fund administrative activities as specified
in Section 1 of this Agreement shall be subject to an additional charge, agreed
upon in advance, based upon the following rates:
Labor:
Senior staff--$100.00/hr.
Junior staff--$ 50.00/hr.
Computer time-- $ 45.00/hr.
(e) SECURITY DEPOSIT. The Fund will remit to ADS upon execution of this
Agreement a security deposit equal to one (1) month's minimum fee under this
Agreement, computed in accordance with the number of portfolios listed in
Schedule B of this Agreement. The Fund will have the option to have the security
deposit applied to the last month's service fee, or applied to any new contract
between the Fund and ADS.
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