FUND ACCOUNTING SERVICE AGREEMENT
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 (AADS@).
BACKGROUND
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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, ADS is a corporation experienced in providing accounting
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 ADS and to have ADS perform for the Fund certain services
appropriate to the operations of the Fund, and ADS 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 premises and mutual covenants
hereinafter contained, the Fund and ADS hereby agree as follows:
1. DUTIES OF ADS.
ADS 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 Fund's daily net
asset value 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 3la-1 under the 1940 Act, as such rule or any
successor rule may be amended from time to time ("Rule
31a-l"), that are applicable to the fulfillment of ADS'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 ADS. Without limiting
the generality of the foregoing, ADS will prepare and maintain
the following records upon receipt of information in proper
form from the Fund or its authorized agents:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend record
(iv) Purchase and sales C 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) Securities and monies borrowed or loaned and
collateral therefore
(xii) Foreign currency journals
(xiii) 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 our fund accounting system
(PAIRS) for managements preparation 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.
ADS 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. COMPENSATION OF ADS.
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. LIMITATION OF LIABILITY OF ADS.
(a) ADS may rely upon the advice of the Fund, or of counsel for the
Fund and upon statements of the Fund's independent accountants, brokers and
other persons reasonably believed by it in good faith to be expert in the
matters upon which they are consulted and for any actions reasonably taken in
good faith reliance upon such statements and without gross negligence or willful
misconduct, ADS shall not be liable to anyone.
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(b) ADS 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 of omission by ADS in
the performance of its duties hereunder except as hereinafter set forth. Nothing
herein contained shall be construed to protect ADS against any liability to the
Fund or its security holders to which ADS 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 ADS'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
ADS 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 information furnished to ADS 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 ADS's duties, by reason of
reckless disregard of ADS's obligations and duties under this Agreement or the
willful violation of any applicable law.
4. REPORTS.
(a) The Fund shall provide to ADS on a quarterly basis a report of
a duly authorized officer of the Fund representing that all information
furnished to ADS during the preceding quarter was true, complete and correct in
all material respects. ADS 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 ADS 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, ADS determines, on the basis of information supplied to ADS 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, ADS shall promptly notify
the Fund and its counsel of such violation.
5. ACTIVITIES OF ADS.
The services of ADS under this Agreement are not to be deemed
exclusive, and ADS shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by ADS 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. ADS 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
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location other than that where the original accounts and records are stored. ADS
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. ADS
shall preserve the accounts and records as they are required to be maintained
and preserved by Rule 3la-1.
7. CONFIDENTIALITY.
ADS 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. DURATION AND TERMINATION OF THIS AGREEMENT.
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, ADS 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.
9. ASSIGNMENT.
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 ADS, or by ADS without the prior written consent of the Fund.
10. GOVERNING LAW.
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. AGREEMENT BINDING ONLY ON FUND PROPERTY.
ADS understands that the obligations of this Agreement are not
binding upon any shareholder to the trust personally, but bind only upon the
trust's property. ADS represents that it has notice of the provisions of the
trust's declaration of trust disclaiming shareholder liability for acts or
obligations of the trust.
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12. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
13. 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 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 Xx.
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
(a) FUND ACCOUNTING SERVICE FEE:
For the services rendered by ADS in its capacity as fund accounting agent, as
specified in Paragraph 1. DUTIES OF ADS, the Fund shall pay ADS, within ten (10)
days after receipt of an invoice from ADS at the beginning of each month, a fee
which is included in Schedule A of the ADMINISTRATIVE SERVICES AGREEMENT.
SCHEDULE B
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
(1) Croft-Leominster Value Fund
(2) Croft-Leominster Income Fund
