FUND ACCOUNTING SERVICE AGREEMENT
between
EAGLE GROWTH SHARES, INC.
and
AMERICAN DATA SERVICES, INC.
1
FUND ACCOUNTING SERVICE AGREEMENT
AGREEMENT made the 1 day of February, 1995 by and between EAGLE GROWTH SHARES,
INC., (the "Fund") and AMERICAN DATA SERVICES, INC. a New York corporation
("ADS").
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, 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
-----
NOW, THEREFORE, in consideration of the promises 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 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 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:
2
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend record
(iv) Purchase and sales - 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.
3
(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 negligence or misconduct,
ADS shall not be liable to anyone.
(b) ADS shall be liable to the Fund for any losses arising out of any
act or omission in the course of its duties, the negligence, misfeasance, bad
faith of ADS of the breach of the agreement by ADS or 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 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 ADS by the Fund or its
authorized agents. ADS shall promptly notify the Fund of the assertion of a
claim for which the Fund may be required to indemnify ADS and shall keep the
Fund advised with respect to all developments regarding such claim. The Fund
shall have the option to participate in the defense of such claim. ADS in no
case shall confess any claim or make any compromise in any case in which the
Fund may be required to indemnify ADS except with the Fund's prior written
consent.
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.
4
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
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 31a-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 (4) 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
5
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.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
12. 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 the ADS:
Xx. Xxxxxx X. Xxxxxx Xxxxxxx Xxxxx
President President
Eagle Growth Shares, Inc. American Data Services, Inc.
0000 X. Xxxxxxx Xxxxxxx, Xxxxx 000 00 Xxxx Xxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000 Xxxxxxxxxx, Xxx Xxxx 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
EAGLE GROWTH SHARES, INC. AMERICAN DATA SERVICES, INC.
By:/s/Xxxxxx X. Xxxxxx By:/s/Xxxxxxx Xxxxx
------------------------ -----------------------
Xxxxxx X. Xxxxxx, Xxxxxxx Xxxxx
Title: President President
-----------------
6
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 (10) days after receipt of an invoice from ADS at the beginning of each
month, a fee equal to:
NET ASSET CHARGE
--- ----- ------
1/12th of 0.04% (4 basis points) of the Fund's monthly average net
assets on first $100 million of the total average net assets for
the month of all mutual funds managed by Xxxxxx Financial and
fund accounting processed by ADS ("Combined Average Net
Assets"), plus;
1/12th of 0.01% (1 basis points) of the Fund's monthly average net
assets on all Combined Average Net Assets for the month in
excess of $100 million.
(b) AUTOMATED PRICING
Total Basic monthly fee........................................$250.00
The Basic monthly fee will be allocated to all funds processed by ADS
based upon the Combined Average Net Assets.
Monthly quotation charge per security:
Municipal Bond.................................$14.00
Government/Corporate Bonds..................... 11.00
Options, Futures............................... 5.00
Equities....................................... 4.00
Total Corporate Actions - Basic monthly fee...................$360.00
The Basic monthly fee will be allocated to all funds processed by ADS
based upon the Combined Average Net Assets.
Paydown Factors (Monthly)....................................$ 4.00/pool
(c) 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
7
invoice of such expenses and the Fund shall reimburse ADS within (15) days
after receipt thereof.
(d) SPECIAL REPORTS:
All reports and/or analyses requested by the Fund that are not in the
normal course of fund accounting 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 of equal to one (1) month's minimum fee under this Agreement, computed
upon the total combined net assets of the portfolios to be processed by ADS on
the date above written. 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.
(f) CONVERSION CHARGE:
The Fund will remit to ADS upon successful completion of the conversion
of the fund accounting records onto the system utilized by ADS to perform fund
accounting services, the sum of $2,000.00. This total conversion fee will be
allocated to the funds to be processed by ADS based on the fund's percentage
of total combined net assets.
8
