Exhibit 9(a)
Fund Accounting, Dividend Disbursing &
Transfer Agent and Administration Agreement
FUND ACCOUNTING,
DIVIDEND DISBURSING & TRANSFER AGENT
AND ADMINISTRATION AGREEMENT
THIS AGREEMENT, made and entered into on this 17th day of November 1992 by and
between the ALBEMARLE INVESTMENT TRUST, a Massachusetts business trust (the
"Trust"), and THE NOTTINGHAM COMPANY, INC., a North Carolina corporation (the
"Administrator").
WHEREAS, the Trust is an open-end management investment company of the series
type which is registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Administrator is in the business of providing administrative
services to investment companies.
NOW THEREFORE, the Trust and the Administrator do mutually promise and agree as
follows:
1. Employment. The Trust hereby employs Administrator to act as fund
accountant, dividend disbursing and transfer agent and fund administrator
for each Fund of the Trust, unless the Administrator and an individual
Fund of the Trust determine it is in the best interests of that individual
Fund to negotiate a separate Agreement. Administrator, at its own
expense, shall render the services and assume the obligations herein set
forth subject to being compensated therefor as herein provided.
2. Delivery of Documents. The Trust has furnished the Administrator with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as it shall
from time to time be amended, is herein called the "Declaration"); (b) The
Trust's By-Laws (such By-Laws, as presently in effect and as they shall
from time to time be amended, are herein called the "By-Laws"); (c)
Resolutions of the Trust's Board of Trustees authorizing the appointment
of the Administrator and approving this Agreement; and (d) The Trust's
Registration Statement on Form N-1A under the 1940 Act and under the
Securities Act of 1933 as amended, (the "1933 Act"), including all
exhibits, relating to shares of beneficial interest of, and containing the
Prospectus of, each Fund of the Trust (herein called the "Shares") as
filed with the Securities and Exchange Commission and all amendments
thereto.
The Trust will furnish the Administrator with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing.
3. Duties of the Administrator. Subject to the policies and direction of the
Trust's Board of Trustees, the Administrator will provide a continuous
executive management program and day to day supervision for each of the
Trust's Funds. Services to be provided shall be in accordance with the
Trust's organizational and registration documents as listed in paragraph 2
hereof and with the Prospectus of each Fund of the Trust. The
Administrator further agrees that it:
(a) Will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and will, in addition, conduct its
activities under this Agreement in accordance with regulations of any
other Federal and State agencies which may now or in the future have
jurisdiction over its activities;
(b) Will maintain, except as may be required to be maintained by third
parties hired by the Trust under Rule 31a-3 of the 1940 Act, the account
books and records of the Trust and each Fund of the Trust as required by
Rule 31a-1 of the 1940 Act and will preserve such records in accordance
with Rule 31a-2 of the 1940 Act;
(c) Will provide, at its expense the necessary non-executive personnel
and data processing equipment and software to perform the Portfolio
Accounting Services, Expense Accrual and Payment Services, Fund Valuation
and Financial Reporting Services, Tax Accounting Services and Compliance
Control Services shown on Exhibit A hereof;
(d) Will provide, at its expense the non-executive personnel and data
processing equipment and software necessary to perform the Shareholder
Servicing functions shown on Exhibit B hereof;
(e) Will provide, at its expense, certain executive personnel for the
Trust as may be agreed upon from time to time with the Board of Trustees;
and
(f) Will provide all office space and general office equipment necessary
for the activities of the Trust except as may be provided by third parties
pursuant to separate agreements with the Trust.
Notwithstanding anything contained in this Agreement to the contrary, the
Administrator (including its directors, officers, employees and agents)
shall not be required to perform any of the duties of, assume any of the
obligations or expenses of, or be liable for any of the acts or omissions
of, any investment advisor of a Fund of the Trust or other third party
subject to separate agreements with the Trust. It is the express intent
of the parties hereto that the Administrator shall not have control over
or be responsible for the placement (except as specifically directed by a
Shareholder of the Trust), investment or reinvestment of the assets of any
Fund of the Trust. The Administrator may from time to time, subject to the
approval of the Trustees, obtain at its own expense the services of
consultants or other third parties to perform part or all of its duties
hereunder, and such parties may be affiliates of the Administrator.
4. Services Not Exclusive. The management and administrative services
furnished by the Administrator hereunder are not to be deemed exclusive,
and the Administrator shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Administrator hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request.
6. Expenses. During the term of this Agreement, the Administrator will pay
all expenses incurred by it in connection with the performance of its
obligations under this Agreement.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs
of the following:
(a) Taxes;
(b) Brokerage fees and commissions with regard to portfolio
transaction of the Funds;
(c) Interest charges, fees and expenses of the custodian of the
Funds' portfolio securities;
(d) Fees and expenses of the Trust's dividend disbursing and
transfer agent, fund accounting agent and administrator, in
accordance with paragraph 7 herein;
(e) Costs, as may be allocable to and agreed upon in advance by
the Trustees and the Administrator, of all non-executive and
clerical personnel and all data processing equipment and
software in connection with the provision of fund accounting
and recordkeeping services and shareholder servicing functions
as contemplated herein;
(f) Auditing and legal expenses of the Trust;
(g) Cost of maintenance of the Trust's existence as a legal
entity;
(h) Cost of special forms, stationery and telephone services (but
not telephone equipment) for the Trust;
(i) Compensation of Independent Trustees who are not interested
persons of the Trust as that term is defined by law;
(j) Costs of Trust meetings;
(k) Federal and State registration fees and expenses;
(l) Costs of setting in type, printing and mailing Prospectuses,
reports and notices to existing shareholders;
(m) The Advisory fees payable to each Funds' Investment Adviser;
and
(o) Actual out-of-pocket expenses of the Administrator as may be
agreed upon in writing from time to time by the Administrator
and the Trustees, but including, as a minimum, direct costs in
connection with Trust activities such as the costs of long
distance telephone and wire charges, postage and the printing
of special forms and stationery.
7. Compensation. For the services provided and the expenses assumed by the
Administrator pursuant to this Agreement, the Trust will pay the
Administrator and the Administrator will accept as full compensation the
administrative fees and expenses as set forth on Exhibit C attached
hereto. Special projects, not included herein and requested in writing by
the Trustees, shall be completed by the Administrator and invoiced to the
Trust as mutually agreed upon.
8.(a) Limitation of Liability. The Administrator shall not be liable for any
loss, damage or liability related to or resulting from the placement
(except as specifically directed by a Shareholder of the Trust),
investment or reinvestment of assets in any Fund of the Trust or the acts
or omissions of any Fund's investment advisor or any other third party
subject to separate agreements with the Trust. Further, the Administrator
shall not be liable for any error of judgment or mistake of law or for any
loss or damage suffered by the Trust in connection with the performance of
this Agreement or any agreement with a third party, except a loss
resulting directly from (i) a breach of fiduciary duty on the part of the
Administrator with respect to the receipt of compensation for services; or
(ii) willful misfeasance, bad faith or gross negligence on the part of the
Administrator in the performance of its duties or from reckless disregard
by it of its duties under this Agreement.
8.(b) Indemnification of Administrator. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold harmless
(from the assets of the Fund or Funds to which the conduct in question
relates) the Administrator against all loss, damage and liability,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by the Administrator in connection
with the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or
legislative body, related to or resulting from this Agreement or the
performance of services hereunder, except with respect to any matter as to
which it has been determined that the loss, damage or liability is a
direct result of (i) a breach of fiduciary duty on the part of the
Administrator with respect to the receipt of compensation for services; or
(ii) willful misfeasance, bad faith or gross negligence on the part of the
Administrator in the performance of its duties or from reckless disregard
by it of its duties under this Agreement (either and both of the conduct
described in clauses (i) and (ii) above being referred to hereinafter as
"Disabling Conduct"). A determination that the Administrator is entitled
to indemnification may be made by (i) a final decision on the merits by a
court or other body before whom the proceeding was brought that the
Administrator was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against the
Administrator for insufficiency of evidence of Disabling Conduct, or (iii)
a reasonable determination, based upon a review of the facts, that the
Administrator was not liable by reason of Disabling Conduct by, (a) vote
of a majority of a quorum of Trustees who are neither "interested persons"
of the Trust as the quoted phrase is defined in Section 2(a)(19) of the
1940 Act nor parties to the action, suit or other proceeding on the same
or similar grounds that is then or has been pending or threatened (such
quorum of such Trustees being referred to hereinafter as the "Independent
Trustees"), or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by the
Administrator (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), shall be paid from time to time by
the Fund or Funds to which the conduct in question related in advance of
the final disposition of any such action, suit or proceeding; provided,
that the Administrator shall have undertaken to repay the amounts so paid
unless it is ultimately determined that it is entitled to indemnification
of such expenses under this Subsection 8(b) and if (i) the Administrator
shall have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii)
a majority of the Independent Trustees, or an independent legal counsel in
a written opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the Administrator ultimately will be entitled to
indemnification hereunder.
As to any matter disposed of by a compromise payment by the Administrator
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such indemnification shall be
approved (i) by a majority of the Independent Trustees or (ii) by an
independent legal counsel in a written opinion. Approval by the
Independent Trustees pursuant to clause (i) shall not prevent the recovery
from the Administrator of any amount paid to the Administrator in
accordance with either of such clauses as indemnification of the
Administrator is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that
the Administrator's action was in or not opposed to the best interests of
the Trust or to have been liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Administrator may be
entitled. Nothing contained in this Subsection 8(b) shall affect any
rights to indemnification to which Trustees, officers or other personnel
of the Trust, and other persons may be entitled by contract or otherwise
under law, nor the power of the Trust to purchase and maintain liability
insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Administrator
is entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
8.(c) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Administrator and its directors, officers, employees and
agents and shall inure to the benefit of its/their respective successors,
assigns and personal representatives.
9. Duration and Termination. This Agreement shall become effective upon
effectiveness of the Fund's registration statement and shall continue in
force and effect for a period of one year thereafter and shall be
continued on its terms from year to year thereafter unless sooner
terminated as permitted herein. This Agreement may be terminated at any
time, without payment of any penalty, by the Trust or the Administrator
upon ninety days' written notice to the other party.
10. Amendment. This Agreement may be amended by mutual written consent of the
parties. If, at any time during the existence of this Agreement, the
Trust deems it necessary or advisable in the best interests of the Trust
that any amendment of this Agreement be made in order to comply with the
recommendations or requirements of the Securities and Exchange Commission
or state regulatory agencies or other governmental authority, or to obtain
any advantage under state or federal laws, and shall notify the
Administrator of the form of Amendment which it deems necessary or
advisable and the reasons therefor, and if the Administrator declines to
assent to such amendment, the Trust may terminate this Agreement
forthwith.
11. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, addressed or
delivered, or mailed postpaid to the other party at the principal place of
business of such party.
12. Construction. This Agreement shall be governed and enforced in accordance
with the laws of the State of North Carolina. If any provision of this
Agreement, or portion thereof, shall be determined to be void or
unenforceable by any court of competent jurisdiction, then such
determination shall not affect any other provision of this Agreement, or
portion thereof, all of which other provisions and portions thereof shall
remain in full force and effect. If any provision of this Agreement, or
portion thereof, is capable of two interpretations, one of which would
render the provision, or portion thereof, void and the other of which
would render the provision, or portion thereof, valid, then the provision,
or portion thereof, shall have the meaning which renders it valid.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized officers on the date first above written.
Attest: ALBEMARLE INVESTMENT TRUST
By:
(SEAL)
Attest: THE NOTTINGHAM COMPANY, INC.
By:
(SEAL)
Exhibit A
FUND ACCOUNTING AND RECORDKEEPING SERVICES
Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date basis using security trade
information communicated from the investment manager on a timely basis.
(2) For each valuation date, obtain prices from a pricing source approved by
the Board of Trustees and apply those prices to the portfolio positions.
For those securities where market quotations are not readily available, the
Board of Trustees shall approve, in good faith, the method for determining
the fair market value for such securities.
(3) Identify interest and dividend accrual balances as of each valuation date
and calculate gross earnings on investments for the accounting period.
(4) Determine gain/loss on security sales and identify them as to short-short,
short or long term status. Account for periodic distributions of gain to
shareholders and maintain undistributed gain or loss balances as of each
valuation date.
Expense Accrual and Payment Services:
(5) For each valuation date, calculate the expense accrual amounts as directed
by the Trust as to methodology, rate, or dollar amount.
(6) Issue payments for Fund expenses upon receipt of funds from the Trust's
Custodian.
(7) Account for Fund expenditures and maintain expense accrual balances at the
level of accounting detail specified by the Fund.
(8) Support periodic expense accrual review, i.e., comparison of actual expense
activity versus accrual amounts.
(9) Provide expense accrual and payment reporting.
Fund Valuation and Financial Reporting Services:
(10) Account for Fund share purchases, sales, exchanges, transfers, dividend
reinvestments, and other Fund share activity, for each of the Funds, as
reported by the Trust on a timely basis.
(11) Determine net investment income (earnings) for each of the Funds as of each
valuation date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances as
of each valuation date.
(12) Maintain a general ledger for each of the Funds in the form defined by the
Trust and produce a set of financial statements as may be agreed upon from
time to time as of each valuation date.
(13) For each day the Funds are opened as defined in the prospectuses, determine
the net asset value of each of the Funds according to the accounting
policies and procedures set forth in the prospectuses.
(14) Calculate per share net asset value, per share net earnings, and other per
share amounts reflective of fund operation at such time as required by the
nature and characteristics of the Funds. Perform the calculations using
the number of shares outstanding reported by the Trust to be applicable at
the time of calculation.
(15) Communicate, at an agreed upon time, the per share price for each valuation
date to parties as agreed upon from time to time.
(16) Prepare monthly reports which document the adequacy of accounting detail to
support month-end ledger balances.
Tax Accounting Services:
(17) Maintain tax accounting records for each of the Funds investment portfolio
so as to support tax reporting required for IRS defined regulated
investment companies.
(18) Maintain tax lot detail for the investment portfolio.
(19) Calculate taxable gain/loss on security sales using the tax cost basis
defined for each Fund.
(20) Report the taxable components of income and capital gains distributions to
the Trust to support tax reporting to the shareholders.
Compliance Control Services:
(21) Maintain accounting records to support compliance monitoring by the Trust.
(22) Support reporting to regulatory bodies and support financial statement
preparation by making the Fund accounting records available to the Trust,
the Securities and Exchange Commission, and the outside auditors.
(23) Maintain accounting records according to the Investment Company Act of 1940
and regulations provided thereunder.
Exhibit B
SHAREHOLDER SERVICING FUNCTIONS
(1) Process new accounts.
(2) Process purchases, both initial and subsequent in accordance with
conditions set forth in the Fund's prospectus.
(3) Transfer shares of capital stock to an existing account or to a new account
upon receipt of required documentation in good order.
(4) Issue and/or cancel certificates as instructed; replace lost, stolen or
destroyed certificates upon receipt of satisfactory indemnification or
bond.
(5) Distribute dividends and/or capital gain distributions. This includes
disbursement as cash or reinvestment and to change the disbursement option
at the request of shareholders.
(6) Process exchanges between funds, (process and direct purchase/redemption
and initiate new account or process to existing account).
(7) Make miscellaneous changes to records, including, but not necessarily
limited to, address changes and changes in plans (such as systematic
withdrawal, dividend reinvestment, etc.).
(8) Prepare and mail a year-to-date confirmation and statement as each
transaction is recorded in a shareholder account as follows: original to
shareholder. Duplicate confirmations to be available on request within
current year.
(9) Handle telephone calls and correspondence in reply to shareholder requests
except those items otherwise set forth herein.
(10) Daily control and reconciliation of Fund shares.
(11) Prepare address labels or confirmations for four reports to shareholders
per year.
(12) Mail and tabulate proxies for one Meeting of Shareholders annually,
including preparation of certified shareholder list and daily report to
Fund management, if required.
(13) Prepare and mail annual Form 1099, Form W-2P and 5498 to shareholders to
whom dividends or distributions are paid, with a copy for the IRS.
(14) Provide readily obtainable data which may from time to time be requested
for audit purposes.
(15) Replace lost or destroyed checks.
(16) Continuously maintain all records for active and closed accounts.
(17) Furnish shareholder data information for a current calendar year in
connection with XXX and Xxxxx Plans in a format suitable for mailing to
shareholders.
Exhibit C
ADMINISTRATOR'S COMPENSATION SCHEDULE
For the services delineated in the Fund Accounting and Administration Agreement,
the Administrator shall be compensated monthly, as of the last day of each
month, within five business days of the month end, a base fee plus a fee based
upon net assets according to the following schedule. The fee is calculated
based upon the Trust's average daily net assets of the Fund:
Base Fee: $1,750 per month
Annual
Net Assets Fee
Xxx Xxxxx Fund:
On the first $10 million 0.25%
On the next $15 million 0.20%
On all assets over $25 milllion 0.15%
The Trust Company of the South Equity Funds:
On the first $10 million 0.25%
On the next $15 million 0.20%
On all assets over $25 milllion 0.15%
The Trust Company of the South Bond Funds
On all assets 0.15%
The Alabama Tax Free Bond Fund
On all assets 0.25%
The North Carolina Tax Free Bond Fund
On all assets 0.25%
XXX Accounts
$15 per year
Securities Pricing
$0.40 per bond per pricing day priced using Xxxxxxx Xxxxx
$0.20 per bond per pricing day using matrix pricing
$0.15 per pricing day for equity and listed securities
$2.00 per equity per month for S&P On-Line Dividend Record
