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EXHIBIT 9(a)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of September, 1998, by and
among THE VALIANT FUND (the "Company"), a Massachusetts business trust, BISYS
FUND SERVICES OHIO, INC. (the "Administrator"), an Ohio corporation, and
INTEGRITY MANAGEMENT & RESEARCH, INC. ("Integrity Management"), a Florida
corporation.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of beneficial interest ("Shares");
WHEREAS, Integrity Management is responsible for management of the
business affairs and the investments of the Company under a certain Management
Agreement dated July 19, 1993 between the Company and Integrity Management under
which Integrity Management is obligated to perform, or arrange for the
performance of, administrative services for the Company; and
WHEREAS, the Company and Integrity Management desire the Administrator
to provide, and the Administrator is willing to provide, management and
administrative services to each currently existing series of the Company and
such future series that may, from time to time, be established ("Portfolios") on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE 1. Retention of the Administrator. The Company hereby retains
the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Company in any way and shall
not be deemed an agent of the Company.
ARTICLE 2. Administrative Services. The Administrator shall perform or
supervise the performance by others of administrative services in connection
with the operations of the Portfolios, and, on behalf of the Company, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operations. The Administrator
shall provide the Trustees of the Company with such reports regarding investment
performance as they may reasonably request but shall have no responsibility for
supervising the performance by any investment adviser or sub-adviser of its
responsibilities.
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The Administrator shall, subject in each case to the general
supervision and control of the Company's Board of Trustees, provide the Company
with regulatory reporting, all necessary office space, equipment, personnel,
compensation and facilities (including facilities for Shareholders' and
Trustees' meetings) for handling the affairs of the Portfolios and such other
services as the Administrator shall, from time to time, determine to be
necessary to perform its obligations under this Agreement. In addition, at the
request of the Board of Trustees, the Administrator shall make reports to the
Company's Trustees concerning the performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Company expenses and control all
disbursements for the Company, and as appropriate compute the
Company's yields, total return, expense ratios, portfolio
turnover rate and, if required, Portfolio average
dollar-weighted maturity;
(b) (i) coordinate, prepare and file with the SEC the annual
update to form N-1A and other routine post-effective
amendments and supplements, (ii) prepare and file with the SEC
Notices of Annual or Special Meetings of Shareholders and
proxy materials relating thereto with respect to routine
matters, (iii) assist Company counsel in preparing non-routine
post-effective amendments and supplements and proxy materials,
(iv) coordinate the printing and distribution of prospectuses,
supplements and proxy materials, and (v) coordinate the
solicitation and tabulation of proxies in connection with
meetings of shareholders;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the
Company's Shares with state securities authorities, monitor
the sale of Company Shares for compliance with state
securities laws, and file with the appropriate state
securities authorities the registration statements and reports
for the Company and the Company's Shares and all amendments
thereto, as may be necessary or convenient to register and
keep effective the Company and the Company's Shares with state
securities authorities to enable the Company to make a
continuous offering of its Shares;
(d) develop and prepare, with the assistance of the Company's
investment adviser and independent auditors, communications to
Shareholders, including the semi-annual and annual reports to
Shareholders;
(e) supervise the Company's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
(f) calculate performance data of the Portfolios for dissemination
to information services covering the investment company
industry;
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(g) coordinate and supervise the preparation and filing of the
Company's tax returns;
(h) examine and review the operations and performance of the
various organizations providing services to the Company or any
Portfolio of the Company, including, without limitation, the
Company's investment adviser, distributor, custodian, fund
accountant, transfer agent, outside legal counsel and
independent public accountants, and at the request of the
Board of Trustees, report to the Board on the performance of
organizations;
(i) assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives,
policies and structure;
(j) provide individuals reasonably acceptable to the Company's
Board of Trustees to serve as officers of the Company, who
will be responsible for the management of certain of the
Company's affairs as determined by the Company's Board of
Trustees;
(k) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the
Company in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act as such bonds and policies are
approved by the Company's Board of Trustees;
(l) monitor and advise the Company and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
(m) perform all administrative services and functions of the
Company and each Portfolio to the extent administrative
services and functions are not provided to the Company or such
Portfolio pursuant to the Company's or such Portfolio's
investment advisory agreement, distribution agreement,
custodian agreement, transfer agent agreement and fund
accounting agreement;
(n) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Company and the Administrator shall determine desirable;
(o) prepare and file with the SEC the semi-annual report for the
Company on Form N-SAR and all required notices pursuant to
Rule 24f-2;
(p) assist in monitoring and developing compliance procedures for
each Portfolio which will include, among other matters,
procedures to monitor compliance with each Portfolio's
investment objective, policies, restrictions, tax matters and
applicable laws and regulations;
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(q) provide legal advice and counsel to the Company with respect
to regulatory matters including: monitoring regulatory and
legislative developments which may affect the Company and
assisting in the strategic response to such developments,
counseling and assisting the Company in routine regulatory
examinations or investigations of the Company, and working
closely with outside counsel to the Company in response to any
litigation or non-routine regulatory matters; and
(r) assist the Company in preparing for Board meetings by (i)
coordinating board book production and distribution, (ii)
preparing Board agendas, (iii) attending Board meetings and
recording and preparing the minutes of such meetings, (iv)
preparing the BISYS section of Board materials, (v) preparing
Board meeting materials, including but not limited to,
materials relating to annual contract approvals and 12b-1 plan
approvals, as agreed upon by the parties, and (vi) such other
Board meeting functions that are agreed upon by the parties.
The Administrator shall perform such other services for the Company
that are mutually agreed upon in writing by the parties from time to time.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Company as well as all Trustees of the
Company who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Company otherwise retained by the Trustees
of the Company to perform services on behalf of the Company.
(B) The Company. Except for those costs and expenses that are properly
borne by the Administrator in connection with the performance of services and
duties under this Agreement, the Company assumes and shall pay or cause to be
paid all expenses of the Company not otherwise allocated herein, including,
without limitation, organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of the Administrator or the Investment Adviser to
the Company or any affiliated corporation of the Administrator or the Investment
Adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Company.
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ARTICLE 4. Compensation of the Administrator.
(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, Integrity Management shall pay to the Administrator compensation at
an annual rate specified in Schedule A attached hereto. Such compensation shall
be calculated and accrued daily, and paid to the Administrator monthly.
Integrity Management shall also reimburse the Administrator for its reasonable
out-of-pocket expenses, including the travel and lodging expenses incurred by
officers and employees of the Administrator in connection with attendance at
Board meetings and such additional expenses that BISYS incurs at the written
direction of the President of the Company.
If this Agreement becomes effective subsequent to the first
day of a month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) Survival of Compensation Rights. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
directors, officers, employees and other agents of the Administrator as well as
the Administrator itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Company assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the
Administrator's actions taken or nonactions with respect to the performance of
services hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply,
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however, it is understood that if in any case the Company may be asked to
indemnify or hold the Administrator harmless, the Company shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Administrator will use all reasonable care
to identify and notify the Company promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the Company, but failure to do so in good faith shall
not affect the rights hereunder.
The Company shall be entitled to participate at its own expense or, if
it so elects, to assume the defense of any suit brought in respect of which the
Administrator may be entitled to indemnity hereunder. If the Company elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Company and satisfactory to the Administrator, whose approval
shall not be unreasonably withheld. In the event that the Company elects to
assume the defense of any suit and retain counsel, the Administrator shall bear
the fees and expenses of any additional counsel retained by it. If the Company
does not elect to assume the defense of a suit, it will reimburse the
Administrator for the reasonable fees and expenses of any counsel retained by
the Administrator.
The Administrator may apply to the Company at any time for instructions
and may consult counsel for the Company and with accountants and other experts
retained by the Company with respect to any matter arising in connection with
the Administrator's duties, and the Administrator shall not be liable or
accountable for any action taken or omitted by it in good faith in accordance
with such instruction or with the opinion of such counsel, accountants or other
experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Company until receipt of written notice thereof from the Company.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Company are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that directors, officers, employees
and Shareholders of the Company are or may be or become interested in the
Administrator, as officers, employees or otherwise and that partners, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Company, and that the Administrator may be or become
interested in the Company as a Shareholder or otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in Schedule A hereto.
ARTICLE 8. Assignment. This Agreement shall not be assignable by either
party without the written consent of the other party; provided, however, that
the Administrator may, at its expense, subject to the prior approval of the
Company, which approval shall not be unreasonably withheld, subcontract with any
entity or person concerning the provision of the services contemplated
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hereunder. The Administrator shall not, however, be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that the Administrator shall be responsible, to the extent
provided in Article 5 hereof, for all acts of such subcontractor as if such acts
were its own. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.
ARTICLE 9. Amendments. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Company, and (ii) by the vote of a majority of
the Trustees of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.
ARTICLE 10. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. The
Administrator acknowledges and agrees that any records required to be maintained
and preserved pursuant to applicable laws and regulations which are prepared or
maintained by the Administrator on behalf of the Company shall be prepared and
maintained at the expense of the Administrator, but shall be the property of the
Company and will be made available to or surrendered promptly to the Company on
request; provided that, in connection with the termination of this Agreement,
such records shall be surrendered to the Company or its designee promptly
following the date of such termination or at such other time that is reasonably
requested by the Company.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Administrator may, following a reasonable period of notice to the
Company, exhibit such records to any person in any case where it is advised by
its counsel that it may be held liable for failure to do so, unless (in cases
involving potential exposure only to civil liability) the Company has agreed to
indemnify the Administrator against such liability.
ARTICLE 11. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 12. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice; if to the Company, at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxxx
00000, with copies to: Integrity Management & Research, Inc., 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000, Attn: Xxxxxxx Xxxxxx; and if to the
Administrator, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000. Notices shall be
effective upon receipt.
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ARTICLE 13. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
ARTICLE 14. 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 but one and the same
instrument.
ARTICLE 15. Limitation of Liability of the Portfolios, Trustees and
Shareholders. The parties agree that no Portfolio shall be liable for the
obligations of any other Portfolio arising hereunder. A copy of the Agreement
and Declaration of Trust of the Company is on file with the Secretary of State
of The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Company as Trustees and
not individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders of the Company individually
but are binding only upon the assets and property of the Company.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE VALIANT FUND
By: /S/ XXXXXXX X. XXXXXX
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Title: CHAIRMAN OF THE BOARD
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BISYS FUND SERVICES OHIO, INC.
By: /S/ XXXXXXX X. XXXXX
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Title: EXECUTIVE VICE PRESIDENT
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INTEGRITY MANAGEMENT &
RESEARCH, INC.
By: XXXXXXX X. XXXXXX
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Title: PRESIDENT
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF ____________________
AMONG
THE VALIANT FUND,
BISYS FUND SERVICES OHIO, INC.
AND
INTEGRITY MANAGEMENT & RESEARCH, INC.
Portfolios: This Agreement shall apply to all Portfolios of The Valiant
Fund either now or hereafter created. The current portfolios
of the Company are set forth below:
U.S. Treasury Money Market Portfolio
U.S. Treasury Income Portfolio
General Money Market Portfolio
Tax-Exempt Money Market Portfolio
(collectively, the "Portfolios").
Fees: Pursuant to Article 4, in consideration of services rendered
and expenses assumed pursuant to this Agreement, the Company
will pay the Administrator on the first business day of each
month, or at such time(s) as the Administrator shall request
and the parties hereto shall agree, a fee computed daily at
the annual rate of:
Two and one-half one-hundredths of one percent
(.025%) of the Company's average daily net assets up
to $1,200,000,000.
One and one-quarter one-hundredths of one percent
(.0125%) of the Company's average daily net assets in
excess of $1,200,000,000.
For purposes of determining the fees payable to the
Administrator, the value of the net assets of a particular
Portfolio shall be computed in the manner described in the
Company's Declaration of Trust or in the Prospectus or
Statement of Additional Information respecting that Portfolio
as from time to time is in effect for the computation of the
value of such net assets in connection with the determination
of the net asset value of the shares of such Portfolio.
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The parties hereby confirm that the fees payable hereunder
shall be applied to each Portfolio as a whole, and not to
separate classes of shares within the Portfolios.
The fee payable by the Company hereunder shall be allocated to
each Portfolio based upon its pro rata share of the total fee
payable hereunder. Such fee as is attributable to each
Portfolio shall be a separate (and not joint or joint and
several) obligation of each such Portfolio. The Administrator
may agree, from time to time, to waive any fees payable under
this Agreement. Such waiver shall be at the Administrator's
sole discretion.
Term: Pursuant to Article 7, the term of this Agreement shall
commence on September 1, 1998, and shall remain in effect
through August 31, 2000 ("Initial Term"). Thereafter, unless
otherwise terminated as provided herein, this Agreement may be
renewed for successive one-year periods ("Rollover Periods")
by the execution of a letter of renewal on behalf of each of
the parties hereto at least 60 days prior to the end of the
Initial Term or any Rollover Period, as the case may be. This
Agreement may be terminated without penalty (i) by failure to
renew in the manner set forth above, (ii) by mutual agreement
of the parties or (iii) for "cause," as defined below, upon
the provision of 60 days advance written notice by the party
alleging cause. In addition, subject to the payment obligation
set forth below, this Agreement may be terminated during any
Rollover Period upon the provision of 90 days advance written
notice of termination.
For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been cured
within thirty (30) days following written notice of such
breach from the non-breaching party; (b) a final, unappealable
judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of
criminal or unethical behavior in the conduct of its business;
or (c) financial difficulties on the part of the party to be
terminated which are evidenced by the authorization or
commencement by such party or any third party of, or
involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title
11 of the United States Code, as from time to time is in
effect, or any applicable law, other than said Title 11, of
any jurisdiction relating to the liquidation or reorganization
of debtors or to the modification or alteration of the rights
of creditors.
Notwithstanding the foregoing, after such termination for so
long as the Administrator, with the written consent of the
Company, in fact continues to perform any one or more of the
services contemplated by this Agreement or any schedule or
exhibit hereto, the provisions of this Agreement, including
without limitation the provisions dealing with
indemnification, shall continue in full force and effect.
Compensation due the Administrator and unpaid by the Company
upon such
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termination shall be immediately due and payable upon and
notwithstanding such termination. The Administrator shall be
entitled to collect from the Company, in addition to the
compensation described in this Schedule A, the amount of all
of the Administrator's cash disbursements for services in
connection with the Administrator's activities in effecting
such termination, including without limitation, the delivery
to the Company and/or its designees of the Company's property,
records, instruments and documents, or any copies thereof.
Subsequent to such termination, for a reasonable fee, the
Administrator will provide the Company with reasonable access
to any Company documents or records remaining in its
possession.
If, during the Initial Term, for any reason other than
nonrenewal, mutual agreement of the parties or "cause," as
defined above, the Administrator is replaced as administrator,
or if a third party is added to perform all or a part of the
services provided by the Administrator under this Agreement
(excluding any sub-administrator appointed by the
Administrator as provided in Article 7 hereof), then the
Company shall make a one-time cash payment, in consideration
of the fee structure and services to be provided under this
Agreement, and not as a penalty, to the Administrator equal to
the balance due the Administrator for the remainder of the
Initial Term, assuming for purposes of calculation of the
payment that such balance shall be based upon the average
amount of the Company's assets for the twelve months prior to
the date the Administrator is replaced or a third party is
added.
If, during any Rollover Term, for any reason other than
nonrenewal, mutual agreement of the parties or "cause," as
defined above, the Administrator is replaced as administrator,
or if a third party is added to perform all or a part of the
services provided by the Administrator under this Agreement
(excluding any sub-administrator appointed by the
Administrator as provided in Article 7 hereof), then the
Company shall make a one-time cash payment, in consideration
of the fee structure and services to be provided under this
Agreement, and not as a penalty, to the Administrator equal to
one-half of the balance due the Administrator for the
remainder of such Rollover Term, assuming for purposes of
calculation of the payment that such balance shall be based
upon the average amount of the Company's assets for the twelve
months prior to the date the Administrator is replaced or a
third party is added.
In the event the Company is merged into another legal entity
in part or in whole pursuant to any form of business
reorganization or is liquidated in part or in whole prior to
the expiration of the then-current term of this Agreement, the
parties acknowledge and agree that the payment obligation set
forth above shall be applicable in those instances in which
the Administrator is not retained to provide administration
services consistent with this Agreement. The one-time cash
payment referenced above shall be due and payable on the day
prior to the first day in which the Administrator is replaced
or a third party is added.
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