INVESTMENT ADVISORY AND
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of May 31, 1997, between American Pension Investors
Trust ("Trust"), a Massachusetts business trust registered with the Securities
and Exchange Commission as an open-end, management investment company under the
Investment Company Act of 1940, as amended ("1940 Act"), and Yorktown Management
& Research Company, Inc. ("Yorktown"), a Maryland corporation registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust proposes to offer for public sale two new distinct
series of shares of beneficial interest each corresponding to a distinct
portfolio in two separate series: Multiple Index Trust and Treasuries Trust
(such series and their successor series being herein referred to as the
"Funds"); and
WHEREAS, the Trust desires to retain Yorktown as investment adviser and
administrator to furnish certain investment advisory, administrative and
portfolio management services to the Trust and each Fund, and Yorktown desires
to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, Yorktown and the Trust agree as follows:
1. APPOINTMENT. The Trust hereby appoints Yorktown as investment adviser
and administrator to manage the investment and reinvestment of the assets of the
Funds, to administer the affairs of the Trust, and to perform the other services
herein set forth, subject to the supervision of the Board of Trustees, for the
period and on the terms herein set forth. Yorktown hereby accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DUTIES AS INVESTMENT ADVISER AND ADMINISTRATOR.
a. Yorktown shall act as investment adviser for, and shall manage
the investment and reinvestment of the assets of the Funds at all times in
accordance with the investment objective and policies of each Fund as is set
forth in the Trust's currently effective Registration Statement. Within such
policies, Yorktown shall assume responsibility for the management of the assets
of the Funds and the making and execution of all investment decisions for the
Funds subject to the overall supervision of the Board of Trustees;
b. Yorktown will obtain and evaluate pertinent economic information
relevant to the investment policies of the Funds, and place orders for the
purchase and sale of securities on behalf of the Funds. In placing such orders,
Yorktown is authorized to use the facilities and services of brokers and
dealers, including Yorktown Distributors, Inc., who render satisfactory services
at competitive rates, and to allocate orders to such brokers and dealers who
also provide research, statistical and other services to the Trust, such
determinations to be made by Yorktown in its own reasonable judgment, consistent
with applicable laws and regulations;
c. Yorktown will report to the Board of Trustees of the Trust, or to
any committee or officers of the Trust acting pursuant to the authority of the
Board, at such times and in such detail as the Board may deem appropriate in
order to enable the Trust to determine that its investment policies are being
observed and implemented and that the obligations of Yorktown under this
Agreement are being fulfilled. Any investment program undertaken by Yorktown
pursuant to this Agreement and any other activities undertaken by Yorktown on
behalf of the Trust shall at all times be subject to any directives of the Board
of Trustees or any duly constituted committee or officer of the Trust acting
pursuant to authority of the Board of Trustees;
d. Yorktown will provide the Trust and each Fund with such
corporate, administrative and clerical personnel (including officers of the
Trust) and services as are reasonably deemed necessary or advisable by the Board
of Trustees, including the maintenance of certain books and records of the Trust
and each Fund and the provision of adequate office space, and all necessary
office equipment and services, including telephone service, heat, utilities and
similar items;
e. Yorktown will permit its employees and its affiliates to serve
without compensation from the Trust as officers, Trustees or agents of the
Trust, if desired by the Board of Trustees; and
f. Yorktown will furnish general purpose administrative forms,
supplies, stationery and postage relating to the obligations of Yorktown under
the terms of this Agreement.
3. EXPENSES. During the term of this Agreement, each Fund will bear all
expenses, not specifically assumed by Yorktown, incurred in its operations and
the offering of its shares, including but not limited to:
a. Costs of preparation, printing and mailing of reports, notices,
proxy solicitation materials and prospectuses and statements of additional
information to existing Trust shareholders or to regulatory authorities;
b. Charges and expenses of any custodian or depository appointed by
the Trust for the safekeeping of its assets, or for other custodial services;
c. Advisory, administrative and distribution fees;
d. Charges and expenses of any transfer agents and registrars
appointed by the Trust;
e. Charges and expenses of any agents appointed by the Trust to
provide accounting and daily pricing services;
f. Costs of share certificates representing shares of the Trust;
g. Fees and expenses, including legal, incurred in maintaining
the registration of the Trust and of its shares with the Securities and
Exchange Commission;
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h. Brokers' commissions and issue and transfer taxes chargeable to
the Trust in connection with securities transactions to which the Trust is a
party;
i. Taxes and all registration, filing and other similar fees payable
by the Trust to federal, state or other governmental agencies;
j. Expenses of shareholders' and trustees' meetings and of preparing
and printing reports to shareholders;
k. Premiums for the fidelity maintained by the Trust pursuant to the
requirements of the 1940 Act and for other insurance;
l. Trustee fees and expenses;
m. Interest expenses; and
n. Legal, accounting and auditing expenses.
4. SERVICES NOT EXCLUSIVE. The services of Yorktown to the Trust hereunder
are not to be deemed exclusive, and Yorktown shall be free to render similar
services to others so long as its services and responsibilities hereunder are
not impaired thereby.
5. COMPENSATION.
a. As full compensation for all services rendered hereunder,
Yorktown shall receive from the Multiple Index Trust a monthly fee at an annual
rate of 0.70% of the average daily net assets of the Multiple Index Trust, and
shall receive from the Treasuries Trust a monthly fee at an annual rate of 0.40%
of the average daily net assets of the Treasuries Trust. Such compensation shall
be accrued daily and payable monthly. The compensation for each month shall be
payable to Yorktown not later than the tenth day of the following month.
b. If the aggregate expenses of any Fund in any fiscal year exceed
the highest expense limitation established pursuant to the statutes or
regulations of any jurisdiction in which the shares of that Fund are qualified
or registered for offer and sale, Yorktown agrees to waive such portion of its
advisory fee as may be necessary to provide for any such expenses, but such
waiver shall not exceed the full amount of the advisory fee for such year except
as may be elected by Yorktown in its discretion. For this purpose, aggregate
expenses of a Fund shall include the compensation of Investors, but shall
exclude interest, taxes, brokerage fees on portfolio transactions, fees and
expenses incurred in connection with the distribution of Trust shares, and
extraordinary expenses including litigation expenses.
6. INTERESTED PERSONS OF THE TRUST OR YORKTOWN. It is understood that the
Trustees, officers, agents and shareholders of the Trust are or may be
interested persons of Yorktown as directors, officers, shareholders, or
otherwise, and that the directors, officers, agents and shareholders of Yorktown
are, or may be, interested persons of the Trust as Trustees, officers,
shareholders or otherwise, that Yorktown may be an interested person of the
Trust and that the existence of any such dual interest shall not affect the
validity of any transactions except as otherwise provided in the Declaration of
Trust creating the Trust and the Articles of Incorporation of Yorktown,
respectively, or by specific provision of applicable law.
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7. DURATION AND TERMINATION.
a. The term of this Agreement shall begin on the date first above
written, and unless sooner terminated as hereinafter provided, shall remain in
effect for two years from the above written date. Thereafter, if not terminated,
this Agreement shall continue in effect from year to year, as to a Fund, if such
continuation shall be specifically approved at least annually (i) by vote of a
majority of those Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or with respect to a
Fund by vote of a majority of the outstanding voting securities of such Fund.
Any approval of this Agreement or the renewal thereof with respect to a Fund by
the vote of a majority of the outstanding voting securities of that Fund, or by
the Trustees of the Trust which shall include a majority of the non-interested
Trustees, shall be effective to continue this Agreement with respect to that
Fund notwithstanding (a) that this Agreement or the renewal thereof has not been
so approved as to any other Fund or (b) that this Agreement or the renewal
thereof has not been approved by the vote of a majority of the outstanding
voting securities of the Trust as a whole.
b. This Agreement may be terminated as to a Fund at any time,
without payment of any penalty, by vote of the Board or by the vote of a
majority of the outstanding voting securities (as defined in the ▇▇▇▇ ▇▇▇) of
such Fund, on sixty (60) days' written notice to Yorktown or by Yorktown at any
time without payment of any penalty on sixty (60) days' written notice to the
Trust; provided, however, that this Agreement may not be terminated by Yorktown
unless another investment advisory agreement has been approved by the Fund in
accordance with the 1940 Act. This Agreement terminates automatically in the
event of its assignment (as defined in the 1940 Act).
8. AMENDMENT OF THIS AGREEMENT. This Agreement may be modified by mutual
consent of the parties; however, such consent on the part of a Fund requires a
vote of a majority of the outstanding voting securities of that Fund and a vote
of a majority of the Trustees including a majority of the members of the Board
of Trustees who are not interested persons of the Trust (other than as Trustees)
or Yorktown and who have no direct or indirect interest in the operations of the
Trust, this Agreement or Yorktown, cast in person at a meeting called for that
purpose.
9. LIMITATION OF LIABILITY OF YORKTOWN. Yorktown assumes no responsibility
under this Agreement other than to render the services called for hereunder.
Yorktown shall not be liable for any error of judgment or mistake of law, for
any loss arising out of any investment, or in any event whatsoever, provided
that nothing herein shall be deemed to protect, or purport to protect, Yorktown
against any liability to the trust or to the security holders of the Trust to
which it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties hereunder, or by reason of
reckless disregard of its obligations and duties hereunder. No provision of this
Agreement shall be construed to protect any Trustee or officer of the Trust, or
any director or officer of Yorktown, from liability in violation of Sections
17(h), 17(i) or 36(b) of the 1940 Act.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The Trustees of the Trust and the shareholders of a Fund shall not be liable for
any obligations of the Fund or the Trust under this Agreement, and Yorktown
agrees that, in asserting any rights of claims under this Agreement, it shall
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look only to the assets and property of the Trust or the Fund in settlement of
such right or claim, and not to such Trustees or shareholders.
11. BOOKS AND RECORDS RETENTION. Yorktown and the Trust agree to maintain
and preserve for such period or periods as the Securities and Exchange
Commission may prescribe by rules and regulations, such account, books and other
documents as constitute the records forming the basis for all reports, including
financial statements required to be filed pursuant to the 1940 Act and for the
Trust's auditor certification relating thereto. Yorktown and the Trust agree
that all accounts, books and other records maintained and preserved by each as
required hereby shall be subject at any time, and from time to time, to such
reasonable periodic, special and other examinations by the Securities and
Exchange Commission, the Trust's auditors, the Trust or any representative of
the Trust, or any governmental agency or other instrumentality having regulatory
authority over the Trust. It is expressly understood and agreed that the books
and records maintained by Yorktown on behalf of the Trust shall, at all times,
remain the property of the Trust. Moreover, the Trust agrees to supply Yorktown
with copies of all documents filed with the Securities and Exchange Commission,
and with such other information relating to the Trust's affairs as Yorktown may
reasonably request.
12. GOVERNING LAW. This Agreement is executed and delivered in the
Commonwealth of Virginia and shall be governed by the laws of Virginia and the
1940 Act. To the extent that the applicable laws of the Commonwealth of Virginia
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
13. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, Yorktown and the Trust have executed this Agreement on
the day first above written.
AMERICAN PENSION INVESTORS TRUST
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
YORKTOWN MANAGEMENT & RESEARCH COMPANY, INC.
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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