EXHIBIT 5(b)
Management Agreement between Integrity Management & Research, Inc.
and The Valiant Fund
MANAGEMENT AGREEMENT
Integrity Management & Research, Inc. (the "Manager") and The Valiant Fund
("Trust") hereby confirm their Agreement covering services as hereinafter set
forth. The terms and provisions of this Agreement shall take effect on July
29, 1993.
1. The Trust hereby retains the Manager as investment adviser for the
following series of shares of the Trust: U.S. Treasury Money Market
Portfolio, U.S. Government Money Market Portfolio, General Money Market
Portfolio and Tax-Exempt Money Market Portfolio, and such other series of
shares as the Trust and the Manager may from time to time agree on (as set
forth in a notice attached hereto stating the name of any other series
with the applicable compensation schedule), each such series of shares
being hereinafter referred to as a "Fund". The Manager shall also manage,
supervise and conduct the other affairs and business of the Trust and
matters incidental thereto, subject always to the provisions of the
Trust's Agreement and Declaration of Trust, Bylaws and of the provisions
of the Investment Company Act of 1940 as amended ("1940 Act") and any
other applicable laws and regulations. In providing and performing such
services, the Manager will function in cooperation with and subject always
to the direction and control of the Trustees of the Trust and in
cooperation with the Trust's authorized officers and representatives.
2. INVESTMENT ADVISORY SERVICES. The Manager agrees to act as the investment
adviser for , and to manage the investment assets of each Fund and to make
purchases and sales of securities for the Fund's account. The Manager
shall assume responsibility for the management of the portfolio securities
of each Fund and the making and execution of all investment decisions for
each Fund.
A. Investment of each Fund's assets shall be in accordance with the
objectives and policies of each Fund as set forth in the current
Registration Statement of the Trust filed with the Securities and
Exchange Commission (the "SEC"), and any applicable federal and
state law.
B. The Manager shall report to the Trustees of the Trust (the
"Trustees") at such times and in such detail as the Trustees may
from time to time determine to be appropriate in order to permit
the Trustees to determine the adherence by the Manager to the
investment policies and legal requirements of each Fund.
C. The Manager shall place all orders for the purchase and sale of
portfolio investments for the account of the Funds with issuers,
brokers or dealers selected by the Manager which may include brokers
or dealers affiliated with the Manager. In the selection of such
brokers or dealers and the placing of such orders, the Manager shall
always seek best execution (except to the extent permitted by the
next sentence hereof), which is to place portfolio transactions
where the Trust can obtain the most favorable combination of price
and execution services in particular transactions or provided on a
continuous basis by a broker or dealer,
and to deal directly with a principal market maker in connection with
over-the-counter transactions, except when it is believed that best
execution is obtainable elsewhere. Subject to such policies as the
Trustees may determine, the Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Trust to pay a
broker or dealer that provides brokerage and research services an
amount of commission for effecting a portfolio investment transaction
which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such excess amount of
commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall
responsibilities of the Manager and its affiliates with respect to
the Trust and to other clients as to which the Manager or any
affiliate of the Manager exercises investment discretion.
D. Subject to the provisions of the Trust's Agreement and Declaration of
Trust and the 1940 Act, the Manager, at its expense, may select and
contract with one or more investment advisers (the "Sub-Advisers") to
provide to the Manager such investments advice relating to the assets
of a Fund and related services as the Manager may from time to time
deem appropriate, or delegate any or all of its functions hereunder
to one or more Sub-Advisers, provided that the Trustees shall approve
any such contract with a Sub-Adviser. So long as any Sub-Adviser
serves as investment adviser to any Fund pursuant to a Sub-Adviser
Agreement in substantially the form attached attached hereto as
Exhibit A (the "Sub-Adviser Agreement"), the obligation of the
Manager under this Agreement with respect to managing the investment
portfolio of such Fund shall be, subject in any event to the control
of the Trustees, to determine and review with such Sub-Adviser the
investment objectives, policies and restrictions and placing of all
orders for the purchase and sale of portfolio securities for such
Fund, all as further described in the Sub-Adviser Agreement. The
Manager will compensate any Sub-Adviser of any Fund for its service
to such Fund. The Manager may terminate the services of any
Sub-Adviser at any time, subject to the approval of the Trustees,
and shall at all time assume the responsibilities of such Sub-Adviser
unless and until a successor Sub-Adviser is selected.
3. MANAGEMENT SERVICES. The Manager will perform (or arrange for the
performance) the management and administrative services set forth below.
A. Subject to the supervision of the Trustees, and unless otherwise
provided herein, the Manager shall be responsible for the following
day to day business activities of the Trust and shall perform all
services appropriate thereto: (i) providing for members of its
organization to serve without salaries as Trustees, officers or
agents of the Trust; (ii) on behalf of the Funds of the Trust,
supervising relations with, and monitoring the performance of,
custodians, depositories, transfer and pricing agents, accountants,
attorneys, underwriters, brokers and dealers, insurers
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and other persons in any capacity deemed to be necessary or
desirable; (iii) conducting shareholder relations; and
(iv) investigating the development of management and shareholder
services (and, if appropriate, assisting in the development and
implementation of such services) designed to enhance the value or
convenience of the Funds of the Trust as investment vehicles.
B. The Manager shall also furnish such reports, evaluations, information
or analyses to the Trust as the Trustees may request from time to
time or as the Manager may deem to be desirable. The Manager shall
make recommendations to the Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees.
The Manager shall, subject to review by the Trustees, furnish such
other services as the Manager shall from time to time determine to be
necessary or useful under this Agreement. Should the Trust have
occasion to call upon the Manager for services not herein
contemplated or through the Manager to arrange for services of
others, the Manager will act for the Trust upon request to the best
of its ability, the compensation for its services to be agreed upon
with respect to each such occasion as it arises.
C. The Manager will not furnish the Trust the following services under
this Agreement:
(i) determinations of the Trust's net assets and the net asset
value per share of its shares ("pricing");
(ii) maintenance of accounts, books and records as required by
Section 31(a) of the 1940 Act and the rules thereunder
("bookkeeping"); and
(iii) provision of custodian services, transfer agent services,
dividend disbursement and reinvestment services, shareholder
services, shareholder recordkeeping services or administrative
services not set forth in this Section 3.
4. EXPENSES OF THE TRUST. It is understood that the Manager will pay all of
the Trust's expenses other than those expressly stated to be payable by
the Trust hereunder. The expenses payable by the Trust shall include:
(i) interest and taxes; (ii) fees and expenses of its Trustees other than
those who are "interested persons" of the Trust or the Manager or any Sub-
Adviser; (iii) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the
Trust is a party and the legal obligation which the Trust may have to
indemnify the Trust's Trustees and officers with respect thereto; and (iv)
fees and expenses of the Trust pursuant to a plan adopted by the Trust
under Rule 12b-1 of the 1940 Act.
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5. COMPENSATION. As full compensation for the services furnished and
expenses borne by the Manager herein, the Trust will pay a monthly fee to
the Manager computed and paid monthly at an annual rate of the average
daily net assets of each Fund, as indicated below:
ANNUAL FEES
U.S. Treasury Money Market Portfolio .20%
U.S. Government Money Market Portfolio .20%
General Money Market Portfolio .20%
Tax-Exempt Money Market Portfolio .20%
The fee computed with respect to the net assets of each Fund shall be paid
from the assets of such Fund. The average daily net assets of each Fund
shall be determined by taking an average of all of the determinations of
net asset value during each month at the close of business on each
business day during such month while this Agreement is in effect. The
fee for each month shall be payable within five (5) business days after
the end of the month.
In the event that expenses of any Fund for any fiscal year should exceed
the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the
Fund are then qualified for offer and sale, the compensation due the
Manager for such period shall be reduced by the amount of such excess by a
reduction or refund thereof, subject to readjustment during the Fund's
fiscal year. In the event that the expenses with respect to any Fund
should exceed any expense limitation which the Manager may, by written
notice to the Trust, voluntarily declare to be effective, subject to such
terms and conditions as the Manager may prescribe in the notice, the
compensation due the Manager shall be reduced, and, if necessary, the
Manager shall bear expenses with respect to the Fund, to the extent
required by the expense limitation.
If the Manager shall for any period less than a full month, the foregoing
compensation shall be prorated according to the proportion which such
period bears to a full month.
6. LIMITATION OF LIABILITY. The Manager shall be under no liability to the
Trust or its Shareholders or creditors for any matter or thing in
connection with the performance of any of the Manager's services hereunder
or for any losses sustained or that may be sustained in the purchase, sale
or retention of any investment for the Funds of the Trust made by it in
good faith; provided, however, that nothing herein contained shall be
construed to protect the Manager against any liability to the Trust by
reason of the Manager's own willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
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7. AMENDMENT. This Agreement may be amended at any time by mutual consent of
the parties, provided that such amendment shall have been approved (i) by
vote of a majority of the outstanding voting securities of the Fund
affected by such amendment, and (ii) by vote of a majority of the Trustees
of the Trust who are not interested persons of the Manager or any Sub-
Adviser or of the Trust, cast in person at a meeting called for the
purpose of voting on such approval.
8. TERMINATION. This Agreement shall be effective as of the date executed,
and shall remain in full force and effect as to the Fund continuously
thereafter, until terminated as provided below.
A. Unless terminated as herein provided, this Agreement shall remain in
full force and effect for two years from the date hereof, and shall
continue in full force and effect for successive periods of one year
thereafter, but only so long as such continuance is specifically
approved at least annually (i) by the Trustees or by the affirmative
vote of a majority of the outstanding voting securities of a Fund, and
(ii) by a vote of a majority of the Trustees who are not interested
persons of the Trust or of the Manager or of any Sub-Adviser, by vote
cast in person at a meeting called for the purpose of voting on such
approval; provided, however, that if the continuance of this Agreement
is submitted to the shareholders of a Fund for their approval and such
shareholders fail to approve such continuance of this Agreement as
provided herein, the Manager may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and regulations
thereunder.
B. This Agreement may be terminated as to any Fund without the payment
of any penalty by vote of the Trustees or by vote of a majority of
the outstanding voting securities of such Fund at any annual or
special meeting or by the Manager on sixty days' written notice.
C. This Agreement shall automatically terminate in the event of its
assignment.
9. AGREEMENT AND DECLARATION OF TRUST. A copy of the Trust's Agreement and
Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed by the Trustees as Trustees and not individually,
and that the obligations of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Trust.
10. OTHER AGREEMENTS. It is understood that any of the shareholders,
Trustees, officers and employees of the Trust may be a shareholder,
partner, director, officer or employee of, or be otherwise interested in,
the Manager, and in any person controlled by or under common control with
the Manager, and that the Manger and any person controlled by or under
common control with the Manager may have any interest in the Trust. It
is also understood that the Manager and persons controlled by or under
common control with the
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Manager have and may have advisory, management service or other contracts
with other organizations and persons and may have other interests and
businesses.
11. MISCELLANEOUS. The Manager, its director, officers and its employees
retain the right to engage in other business, and to render portfolio
management, investment advisory or other services of any kind to any other
corporation, firm, individual or association. Neither the Manager nor any
officer, director, or shareholder of the Manager shall act as principal or
receive any compensation in connection with the purchase or sale of
securities by or on behalf of the Trust other than the compensation
provided in this Agreement.
The Manager is an independent contractor and not an agent of the Trust.
The Trust recognizes the Manager's control of the name "The Valiant Fund"
and agrees that its right to use this name is non-exclusive and can be
terminated by the Manager at any time. The use of such name will be
terminated automatically if at any time the Manager or affiliate of the
Manager ceases to be investment adviser for the Trust.
12. For the purposes of this Agreement, the terms "vote of a majority of the
outstanding voting securities", "interested person" and "assignment" shall
have their respective meanings defined in the 1940 Act, subject, however,
to such exemptions as may be grated by the SEC under said Act; the term
"specifically approved at least annually" shall be construed in the same
manner consistent with the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall have the
meaning given in the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
This Agreement shall be effective on the date executed. Executed this 29th day
of July, 1993.
INTEGRITY MANAGEMENT & RESEARCH, INC.
/s/ Xxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
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witness
THE VALIANT FUND
/s/ Xxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
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witness
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