FUND ACCOUNTING AND ADMINISTRATION AGREEMENT Dated: November 23, 2009
Dated:
November 23, 2009
This Fund
Accounting and Administration Agreement (“Agreement”), is entered into as of the
date noted above by and between the Starboard Investment Trust, a Delaware
statutory trust (“Trust”), and The Nottingham Company, a North Carolina
corporation (“Administrator” or “Nottingham”).
WHEREAS,
the Trust is an open-end management investment company that is registered under
the Investment Company Act of 1940, as amended (the “1940 Act”);
WHEREAS,
the Trust is authorized to create separate series, each with its own separate
investment portfolio (each a “Fund” and collectively the “Funds”);
WHEREAS,
Nottingham is, among other things, in the business of providing fund
administration services for the benefit of its customers;
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the Trust
and Nottingham agree as follows:
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1.
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Engagement. The
Trust, being duly authorized, engages Nottingham to perform the services
described in this Agreement. Nottingham shall perform such
services upon the terms and conditions hereinafter set
forth. Any services undertaken by Nottingham pursuant to this
Agreement, as well as any other activities undertaken by Nottingham on
behalf of the Trust pursuant hereto, shall at all times be subject to any
directives of the Board of Trustees of the
Trust.
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Nottingham
shall at all times conform to: (i) all applicable provisions of the 1940 Act and
any rules and regulations adopted thereunder; (ii) the provisions of the
Registration Statement of the Trust under the Securities Act of 1933, as amended
(“1933 Act”), and the 1940 Act as amended from time to time; (iii) the
provisions of the Declaration of Trust and By-Laws of the Trust; and (iv) any
other applicable provisions of state and federal law.
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2.
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Administration. Subject
to the direction and control of the Trust, Nottingham shall serve as
administrator of each Fund and supervise the Fund’s business
affairs. In addition, to the extent not otherwise provided by
other parties under agreements with the Trust, Nottingham shall
supply: (i) non-investment related statistical and research
data; and (ii) executive and administrative
services. Nottingham shall also prepare and supervise the
preparation by the Trust’s other service providers of: (i) tax
returns; (ii) reports to shareholders of the Fund; (iii) reports to, and
filings with, the Securities and Exchange Commission, state securities
commissions, and Blue Sky authorities, including preliminary and
definitive proxy materials and post-effective amendments to the Trust’s
registration statement; and (iv) necessary materials for meetings of the
Trust’s Board of Trustees. Nottingham shall provide personnel
to serve as officers of the Trust if so elected by the Board of
Trustees. Executive and administrative services include, but
are not limited to, the negotiation and retention of all third parties
furnishing services to the Fund, subject to the input, oversight, and
approval of the Board of Trustees; review of the books and records of the
Fund maintained by such third parties, and the review and payment of
invoices or other requests for payment of Fund expenses; and such other
action with respect to the Fund as may be necessary in the opinion of
Nottingham to perform its duties
hereunder.
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3.
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Fund
Accounting. Nottingham shall maintain and keep current
the general ledger for each Fund, recording all income and expenses,
capital share activity and security transactions of the
Fund. Nottingham shall calculate the net asset value of each
Fund and the per share net asset value of each Fund, in accordance with
the Fund’s current prospectus and statement of additional information,
once daily as of the time selected by the Trust’s Board of
Trustees. Nottingham shall prepare and maintain a daily
valuation of all securities and other assets of the Fund in accordance
with instructions from a designated officer of the Trust and in the manner
set forth in the Fund’s current prospectus and statement of additional
information. In valuing securities of the Trust, Nottingham may
contract with, and rely upon market quotations provided by, outside
services.
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Nottingham
shall also perform for each Fund all such fund accounting services and duties as
are customary and necessary in the industry. Without limiting the
preceding sentence, (i) Nottingham shall process each request received from the
Trust or its authorized agents for payment of the Fund’s expenses, and (ii) upon
receipt of written instructions signed by an officer or other authorized agent
of the Trust, Nottingham shall prepare checks in the appropriate amounts which
shall be signed by an authorized officer of Nottingham and mailed to the
appropriate party.
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4.
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Allocation of Charges
and Expenses. Except as noted in this section,
Nottingham shall assume all operating expenses of each Fund not
specifically assumed by the Fund, including without limitation the
compensation and expenses of any employees of the Trust and of any other
persons rendering any services to the Fund; clerical and shareholder
service staff salaries; office space and other office expenses; fees and
expenses incurred by the Fund in connection with membership in investment
company organizations; expenses for ordinary legal, auditing and
accounting services; expenses of registering shares under federal and
state securities laws; insurance expenses; fees and expenses of the
investment advisor; fees and expenses of the custodian, transfer agent,
dividend disbursing agent, shareholder service agent, plan agent,
administrator, distributor, and accounting and pricing services agent of
the Fund; expenses, including clerical expenses, of issue, sale,
redemption, or repurchase of shares of the Fund; the cost of preparing and
distributing reports and notices to shareholders, the cost of printing or
preparing prospectuses and statements of additional information for
delivery to the Fund’s current shareholders; the cost of printing or
preparing stock certificates or any other documents, statements or reports
to shareholders; and all other operating expenses not specifically assumed
by the Fund.
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Nottingham
shall not be responsible for (i) marketing, distribution, and servicing expenses
related to the sale or promotion of Fund shares (ii) expenses incurred in
connection with the organization and initial registration of shares of a Fund;
(iii) expenses related to shareholder meetings and proxy solicitations; (iv)
indirect expenses of the Fund, such as expenses incurred by other investment
companies in which the Fund invests; (v) expenses for non-ordinary legal
services incurred as a result of the Fund selecting a legal firm other than one
recommended by Nottingham; (vi) litigation to which the Fund may be a party and
indemnification of the Trust’s trustees and officers with respect thereto; (vii)
any additional auditing and accounting expenses incurred as a result of
selecting an audit firm other than one recommended by Nottingham; (viii) hiring
employees and retaining advisers and experts as contemplated by Rule
0-1(a)(7)(vii) of the 1940 Act; and (ix) expenses that the Funds are obligated
to pay, as described in the following paragraph.
The Fund
shall pay all brokerage fees and commissions, taxes, borrowing costs (such as
interest or dividend expenses on securities sold short). The Fund
shall also pay all expenses which it is authorized to pay pursuant to Rule 12b-1
under the 1940 Act. Nottingham may obtain reimbursement from the
Fund, at such time or times as Nottingham
2
may
determine in its sole discretion, for any of the expenses advanced by Nottingham
that the Fund is obligated to pay, and such reimbursement shall not be
considered to be part of Nottingham’s compensation pursuant to this
Agreement.
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5.
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Compensation. For
the performance of Nottingham’s obligations under this Agreement, each
Fund listed on Schedule A shall pay Nottingham a monthly fee as set forth
on Schedule A following the end of each
month.
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6.
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Record Keeping and
Other Information. Nottingham shall create and maintain
all necessary records in accordance with all applicable laws, rules and
regulations, including but not limited to records required by Section
31(a) of the 1940 Act and the rules thereunder, as the same may be amended
from time to time, pertaining to the various functions performed by it and
not otherwise created and maintained by another party pursuant to contract
with the Trust. Where applicable, such records shall be
maintained by Nottingham for the periods and in the places required by
Rule 31a-2 under the 1940 Act. Nottingham acknowledges that
such records are the property of the
Trust.
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Nottingham
shall make available to the Trust during regular business hours all records and
other data created and maintained pursuant to the foregoing provisions of this
Agreement for reasonable audit and inspection by the Trust or any regulatory
agency having authority over the Trust.
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7.
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Equipment
Failure. In the event of a mechanical breakdown or
failure of communication or power supplies beyond its control, Nottingham
shall take all reasonable steps to minimize service interruptions for any
period that such interruption continues beyond Nottingham’s
control. Nottingham shall make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from
such a breakdown at the expense of Nottingham. Nottingham
agrees that it shall, at all times, have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate equipment
is available. Representatives of the Trust shall be entitled to
inspect Nottingham’s premises and operating capabilities at any time
during regular business hours of Nottingham, upon reasonable notice to
Nottingham.
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8.
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Limitation of
Liability. Nottingham may rely on information reasonably
believed by it to be accurate and reliable. Except as may
otherwise be required by the 1940 Act or the rules thereunder, neither
Nottingham nor its shareholders, officers, directors, employees, agents,
control persons or affiliates of any thereof (collectively, the
“Nottingham Employees”) shall be subject to any liability for, or any
damages, expenses or losses incurred by the Trust in connection with, any
error or judgment, mistake of law, any act or omission in connection with
or arising out of any services rendered under or payments made pursuant to
this Agreement or any other matter to which this Agreement relates, except
by reason of willful misfeasance, bad faith or gross negligence on the
part of any such persons in the performance of the duties of Nottingham
under this Agreement or by reason of reckless disregard by any of such
persons of the obligations and duties of Nottingham under this
Agreement.
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Further,
in no event shall Nottingham be liable under any provision of, or in connection
with, this agreement (regardless of whether a claim is based on contract, tort,
or otherwise) for any damages other than actual and direct damages, and
Nottingham shall have no liability for any incidental, indirect, consequential,
special, or exemplary damages or losses which the Fund may incur or suffer,
whether or not the likelihood or possibility of such damages was known to
Nottingham in advance.
Any
person, even though also a director, officer, employee, shareholder or agent of
Nottingham, who may be or become an officer, trustee, employee or agent of the
Trust, shall be deemed, when rendering services to the Trust or acting on any
business of the Trust (other than services or business in connection with
Nottingham’s duties
3
hereunder),
to be rendering such services to or acting solely for the Trust (other than
services or business in connection with Nottingham’s duties hereunder) and not
as a director, officer, employee, shareholder or agent, or one under the control
or direction of Nottingham, even though paid by it.
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9.
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Indemnification. Subject
to and except as otherwise provided in the 1933 Act and the 1940 Act, the
Trust shall indemnify Nottingham and each Nottingham Employee (hereinafter
collectively referred to as a “Covered Person”) against all liabilities,
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 any Covered Person 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, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be or may
have been threatened, while serving as the administrator for a Fund
hereunder or as a Nottingham Employee, or, thereafter, by reason of being
or having been the administrator for the Fund or a Nottingham Employee,
including but not limited to liabilities arising due to any
misrepresentation or misstatement in the Fund’s prospectus or statement of
additional information, other regulatory filings, and amendments thereto,
or in other documents originating from the Trust. In no case
shall a Covered Person be indemnified against any liability to which such
Covered Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties of such Covered Person.
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Nottingham
shall indemnify the Trust against all liabilities, 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,
that the Trust may sustain or incur arising out of Nottingham’s refusal or
failure to comply with the terms of this Agreement, or its bad faith, gross
negligence, or willful misconduct.
In order
that the indemnification provisions contained in this section shall apply, it is
understood that if in any case the indemnitor may be asked to indemnify or hold
the indemnitee harmless, the indemnitor shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify the
indemnitor promptly concerning any situation which presents or appears likely to
present the probability of a claim for indemnification. The
indemnitor shall have the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall
in no case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor’s prior written consent.
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10.
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Services for
Others. Nothing in this Agreement shall prevent
Nottingham or any affiliated person of Nottingham from providing services
for any other person, firm, or corporation, including other investment
companies; provided, however, that Nottingham expressly represents that it
will undertake no activities that, in its judgment, will adversely affect
the performance of its obligations to the Trust under this
Agreement.
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11.
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Compliance with the
0000 Xxx. The parties hereto acknowledge and agree that
nothing contained herein shall be construed to require Nottingham to
perform any services for any Fund that could cause Nottingham to be deemed
an “investment advisor” of the Fund within the meaning of Section 2(a)(20)
of the 1940 Act or to supersede or contravene the prospectus or statement
of additional information of any Fund or any provisions of the 1940 Act
and the rules thereunder.
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4
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12.
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Term of
Agreement. This Agreement shall become effective for a
period of one year. Thereafter, this Agreement shall continue
in full force and effect unless terminated by either party by giving not
less than ninety (90) days’ prior written notice to the other
party. This Agreement may also be terminated at any time as
follows: (i) by mutual written agreement of the parties; or (ii) for
cause, by a party, in the event of willful misconduct, gross negligence,
or breach of this Agreement by the other party, by giving not less than
thirty (30) days’ prior written notice to the other
party.
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13.
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The
Trust. The term “Starboard Investment Trust” means and
refers to the Trustees from time to time serving under the Trust’s
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto may be, amended. It is expressly agreed
that the obligations of the Trust hereunder shall not be binding upon any
of the Trustees, shareholders, nominees, officers, agent or employees of
the Trust personally, but shall bind only the assets or property of the
Fund or Funds as to which the obligations relate. The execution
and delivery of this Agreement have been authorized by the Trustees of the
Trust and signed by an officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but shall bind only
the assets or property of the Fund or Funds or to which the obligations
relate.
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14.
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Governing
Law. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of
the state of North Carolina, without regard to the principles of conflict
of laws; provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated by
the Securities and Exchange Commission
thereunder.
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15.
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Consent to
Jurisdiction and Venue. The parties hereto submit to the
personal jurisdiction and venue in the Superior Court in Xxxx County,
North Carolina or the United States Court for the Eastern District of
North Carolina for any action brought by the parties hereto arising out of
a breach or threatened breach of this
Agreement.
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16.
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Duties in the Event of
Termination. In the event that, in connection with
termination, a successor to any of Nottingham’s duties or responsibilities
hereunder is designated by the Trust by written notice to Nottingham,
Nottingham shall promptly, upon such termination and at the expense of the
Trust, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by Nottingham under
this Agreement in a form reasonably acceptable to the Trust, and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from Nottingham’s personnel in the establishment
of books, records, and other data by such
successor.
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Upon
termination of this Agreement, Nottingham shall be paid the termination fee set
forth on Schedule A. The termination fee is not a penalty, but a
charge to compensate Nottingham for its service in assisting in transferring
records and reports and otherwise wrapping up its services under this
Agreement. Notwithstanding the foregoing, Nottingham shall not be
entitled to the termination fee if Nottingham elects to terminate this Agreement
or Nottingham is terminated due to its willful misconduct, gross negligence, or
breach of this Agreement.
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17.
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Confidentiality. Nottingham
agrees on behalf of itself and its employees to treat confidential all
records and other information relative to the Trust and its prior, present
or potential shareholders and not to use such records and information for
any purpose other than performance of its responsibilities and duties
under this Agreement, except after prior notification to and approval in
wiring by the Trust, which approval will not be unreasonably
withheld. Notwithstanding the forgoing, Nottingham may divulge
such confidential records and information where Nottingham may be exposed
to civil or criminal contempt proceedings for failure to comply, when
requested by duly constituted
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5
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authorities,
when so requested by the Trust’s investment advisor, principal
underwriter, custodian, transfer agent, outside legal counsel or
independent public accountants, or when so requested by the
Trust. For purposes of this section, the following records and
other information shall not be considered confidential: (i) any record or
other information which is or becomes publicly available through no fault
of Nottingham; (ii) any record and other information which is released by
the Trust in a public release; (iii) any record or other information which
is lawfully obtained from third parties who are not under an obligation to
keep such information confidential, and (iv) any record or other
information previously known by
Nottingham.
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18.
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Independent
Contractor. For purposes stated in this Agreement,
Nottingham shall be deemed an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act or
represent the Trust in any way and will not be deemed an agent of the
Trust.
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19.
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Assignment. This
Agreement shall not be assignable by either party without the written
consent of the other party, such consent not to be unreasonably withheld
or delayed. Notwithstanding the foregoing, Nottingham may, at
its expense unless provided otherwise in the Agreement, subcontract with
any entity or person concerning the provision of the services contemplated
hereunder. Nottingham shall not, however, be relieved of any of
its obligations under this Agreement by the appointment of such
subcontractor. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective
successors and assigns.
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20.
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Amendments. This
Agreement or any part hereof may be changed or waived only by an
instrument in writing signed by the party against which enforcement of
such change or waiver is sought.
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21.
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Notices. Any
notice required or permitted to be given by either party to the other
party shall be in writing and will be deemed sufficient if personally
delivered or sent by electronic delivery (followed up by registered or
certified mail, postage prepaid) addressed by the party giving notice to
the other party at the following addresses (or such other address for a
party as shall be specified by like
notice):
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a. If
to Trust, at:
000 Xxxxx
Xxxxxxxx Xxxxxx
Post
Xxxxxx Xxx 00
Xxxxx
Xxxxx, XX 00000-0000
Attn: Secretary
With a
copy to:
FolioMetrix,
LLC
0000 XX
Xxxxxxxxxx Xxx
Xxxxxxxx,
Xxxxxx 00000
Attn: X. X.
Xxxxxxx
6
b. If
to Nottingham, at:
The
Nottingham Company
000 Xxxxx
Xxxxxxxx Xxxxxx
Post
Xxxxxx Xxx 00
Xxxxx
Xxxxx, XX 00000-0000
Attn: Legal
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22.
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Construction. 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
which would render the provision, or portion thereof, valid, then the
provision, or portion thereof, shall have the meaning that renders it
valid. In addition, the language used herein shall be deemed to
be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against either
party.
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23.
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Multiple
Originals. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute one and the same
instrument.
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24.
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Entire
Agreement. This Agreement, including all exhibits,
schedules and attachments, comprises the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes
all other prior agreements, understandings and letters related to this
Agreement. The headings in this Agreement have been inserted
solely for ease of reference and shall not be considered in the
interpretation or construction of this
Agreement.
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IN
WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly signed
as of the day and year first above written.
By: /s/ Xxxx X.
Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title: Chairman
THE
NOTTINGHAM COMPANY
By: /s/ Xxxxxx X.
Lower
Name: Xxxxxx
X. Lower
Title: Vice
President
7
SCHEDULE
A
Covered
Funds and Compensation
The
following Fund(s) are covered by the Agreement:
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·
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FMX
Total Return Fund
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Each Fund
shall pay Nottingham a fee at the annual rate of the average daily net assets of
each Fund as set forth in the schedule below. Such fee shall be
calculated and accrued daily, and paid to Nottingham monthly.
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Average Daily Net Assets
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Annual Rate
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Less
than $50 million
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1.200%
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$50
million but less than $60 million
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1.190%
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$60
million but less than $70 million
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1.180%
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$70
million but less than $80 million
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1.170%
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$80
million but less than $90 million
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1.160%
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$90
million but less than $100 million
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1.150%
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$100
million but less than $110 million
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1.140%
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$110
million but less than $120 million
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1.130%
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$120
million but less than $130 million
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1.120%
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$130
million but less than $140 million
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1.110%
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$140
million but less than $150 million
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1.100%
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$150
million but less than $160 million
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1.090%
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$160
million but less than $170 million
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1.080%
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$170
million but less than $180 million
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1.070%
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$180
million but less than $190 million
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1.060%
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$190
million but less than $200 million
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1.050%
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$200
million but less than $210 million
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1.040%
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$210
million but less than $220 million
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1.030%
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$220
million but less than $230 million
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1.020%
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$230
million but less than $240 million
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1.010%
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$240
million but less than $250 million
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1.000%
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$250
million but less than $260 million
|
0.990%
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$260
million but less than $270 million
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0.980%
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$270
million but less than $280 million
|
0.970%
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|
$280
million but less than $290 million
|
0.960%
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$290
million but less than $300 million
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0.950%
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$300
million but less than $310 million
|
0.940%
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|
$310
million but less than $320 million
|
0.930%
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$320
million but less than $330 million
|
0.920%
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|
$330
million but less than $340 million
|
0.910%
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|
$340
million but less than $350 million
|
0.900%
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|
$350
million but less than $360 million
|
0.890%
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|
$360
million but less than $370 million
|
0.880%
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$370
million or more
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0.875%
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The
average value of the daily net assets of each Fund shall be determined pursuant
to the applicable provisions of the Trust’s Declaration of Trust or a resolution
of the Board, if required. If, pursuant to such provisions, the
determination of net asset value of a Fund is suspended for any particular
business day, then for the purposes of this paragraph, the value
A-1
of the
net assets of a Fund as last determined shall be deemed to be the value of the
net assets as of the close of the business day, or as of such other time as the
value of a Fund’s net assets may lawfully be determined, on that
day. If the determination of the net asset value of a Fund has been
suspended for a period including such month, Nottingham’s compensation payable
at the end of such month shall be computed on the basis of the value of the net
assets of that Fund as last determined (whether during or prior to such
month).
If the
compensation received by Nottingham from each Fund under this Agreement is less
than the minimum operating cost set forth in the schedule below, then the Fund
shall remit or cause to be remitted to Nottingham an amount that is sufficient
to reimburse Nottingham for the difference. Such amount shall be
calculated and paid on a monthly basis.
Year
1 $8,750.00
per month ($105,000 annually)
Year
2 $9,583.33
per month ($115,000 annually)
Year 3 and
thereafter $10,416.67
per month ($125,000 annually)
If this
Agreement becomes effective subsequent to the first day of the month or
terminates before the last day of the month, Nottingham’s compensation for that
part of the month in which this Agreement is in effect will be prorated in a
manner consistent with the calculation of the fees as set forth
above.
In
accordance with Section 16 of this Agreement, Nottingham shall be entitled to be
paid a fee upon termination of this Agreement with respect to any
Fund. The termination fee shall be equal to one-sixth (1/6) of the
minimum operating cost outlined above. As stated in Section 16 of
this Agreement, Nottingham shall not be entitled to the termination fee if
Nottingham elects to terminate this Agreement or Nottingham is terminated due to
its willful misconduct, gross negligence, or breach of this
Agreement.
A-2
