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EXHIBIT 9(c)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of September, 1998, among THE VALIANT FUND
(the "Trust"), a Massachusetts business trust having its principal place of
business at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000, BISYS FUND
SERVICES OHIO, INC. ("Fund Accountant"), a corporation organized under the laws
of the State of Ohio and having its principal place of business at 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000, and INTEGRITY MANAGEMENT & RESEARCH, INC.
("Integrity Management"), a corporation organized under the laws of the State of
Florida and having its principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxx 00000.
WHEREAS, Integrity Management is responsible for management of the
business affairs and the investments of the Trust under a certain Management
Agreement dated July 19, 1993 between the Trust and Integrity Management under
which Integrity Management is obligated to perform, or arrange for the
performance of, administrative services, including fund accounting services, for
the Trust;
WHEREAS, the Trust and Integrity Management desire that Fund Accountant
perform certain fund accounting services for each investment portfolio of the
Trust, all as now or hereafter may be established from time to time
(individually referred to herein as the "Fund" and collectively as the "Funds");
and
WHEREAS, Fund Accountant is willing to perform such services on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Fund Accountant.
(a) MAINTENANCE OF BOOKS AND RECORDS. Fund Accountant
will keep and maintain the following books and
records of each Fund pursuant to Rule 31a-1 under the
Investment Trust Act of 1940 (the "Rule"):
(i) Journals containing an itemized daily record
in detail of all purchases and sales of
securities, all receipts and disbursements
of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income
and expense accounts, including interest
accrued and interest received, as required
by subsection (b)(2)(I) of the Rule;
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(iii) Separate ledger accounts required by
subsection (b)(2)(ii) and (iii) of the Rule;
and
(iv) A monthly trial balance of all ledger
accounts (except shareholder accounts) as
required by subsection (b)(8) of the Rule.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES. In addition
to the maintenance of the books and records specified
above, Fund Accountant shall perform the following
accounting services daily for each Fund:
(i) Calculate the net asset value per share
utilizing prices obtained from the sources
described in subsection 1(b)(ii) below;
(ii) Obtain security prices from independent
pricing services, or if such quotes are
unavailable, then obtain such prices from
each Fund's investment adviser or its
designee, as approved by the Trust's Board
of Trustees;
(iii) Verify and reconcile with the Funds'
custodian all daily trade activity;
(iv) Compute, as appropriate, each Fund's net
income and capital gains, dividend payables,
dividend factors, 7-day yields, 7-day
effective yields, 30-day yields, and
weighted average portfolio maturity;
(v) Review daily the net asset value calculation
and dividend factor (if any) for each Fund
prior to release to shareholders, check and
confirm the net asset values and dividend
factors for reasonableness and deviations,
and distribute net asset values and yields
to NASDAQ;
(vi) Report to the Trust the daily market pricing
of securities in any money market Funds,
with the comparison to the amortized cost
basis;
(vii) Determine unrealized appreciation and
depreciation on securities held in variable
net asset value Funds;
(viii) Amortize premiums and accrete discounts on
securities purchased at a price other than
face value, if requested by the Trust;
(ix) Update fund accounting system to reflect
rate changes, as received from a Fund's
investment adviser, on variable interest
rate instruments;
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(x) Post Fund transactions to appropriate
categories;
(xi) Accrue expenses of each Fund according to
instructions received from the Trust's
Administrator;
(xii) Determine the outstanding receivables and
payables for all (1) security trades, (2)
Fund share transactions and (3) income and
expense accounts;
(xiii) Provide accounting reports in connection
with the Trust's regular annual audit and
other audits and examinations by regulatory
agencies; and
(xiv) Provide such periodic reports as the parties
shall agree upon, as set forth in a separate
schedule.
(c) Special Reports and Services.
(i) Fund Accountant may provide additional
special reports upon the request of the
Trust or a Fund's investment adviser, which
may result in an additional charge, the
amount of which shall be agreed upon between
the parties.
(ii) Fund Accountant may provide such other
similar services with respect to a Fund as
may be reasonably requested by the Trust,
which may result in an additional charge,
the amount of which shall be agreed upon
between the parties.
(d) ADDITIONAL ACCOUNTING SERVICES. Fund Accountant shall
also perform the following additional accounting
services for each Fund:
(i) Provide monthly a download (and hard copy
thereof) of the financial statements
described below, upon request of the Trust.
The download will include the following
items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the
following:
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(A) federal and state income tax
returns and federal excise tax
returns; (B) the Trust's
semi-annual reports with the
Securities and Exchange Commission
("SEC") on Form N-SAR;
(C) the Trust's annual, semi-annual and
quarterly (if any) shareholder
reports;
(D) registration statements on Form
N-1A and other filings relating to
the registration of shares;
(E) the Administrator's monitoring of
each Trust's status as a regulated
investment Trust under Subchapter M
of the Internal Revenue Code, as
amended;
(F) annual audit by the Trust's
auditors; and (G) examinations
performed by the SEC.
2. Subcontracting.
Fund Accountant may, at its expense, subject to the prior
approval of the Trust, which shall not be unreasonably withheld, subcontract
with any entity or person concerning the provision of the services contemplated
hereunder; provided, however, that Fund Accountant shall not be relieved of any
of its obligations under this Agreement by the appointment of such subcontractor
and provided further, that Fund Accountant shall be responsible, to the extent
provided in Section 7 hereof, for all acts of such subcontractor as if such acts
were its own.
3. Compensation.
Integrity Management shall pay Fund Accountant for the
services to be provided by Fund Accountant under this Agreement in accordance
with, and in the manner set forth in, Schedule A hereto, as such Schedule may be
amended from time to time.
4. Reimbursement of Expenses.
In addition to paying Fund Accountant the fees described in
Section 3 hereof, Integrity Management agrees to reimburse Fund Accountant for
its out-of-pocket expenses in providing services hereunder, including the
following:
(a) All freight and other delivery and bonding charges incurred by
Fund Accountant in delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by Fund
Accountant in communication with the
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Trust, the Trust's investment adviser or custodian, dealers or
others as required for Fund Accountant to perform the services
to be provided hereunder;
(c) The cost of obtaining security market quotes pursuant to
Section l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other
materials;
(e) All systems-related expenses associated with the provision of
special reports and services pursuant to Section 1 (c) herein;
and
(f) Any expenses Fund Accountant shall incur at the written
direction of the President of the Trust.
5. Effective Date.
This Agreement shall become effective with respect to a Fund
as of September 1, 1998 (or, if a particular Fund is not in existence on that
date, on the date such Fund commences operation) (the "Effective Date").
6. Term.
This Agreement shall continue in effect with respect to a
Fund, unless earlier terminated by either party hereto as provided hereunder,
until August 31, 2000 (the "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 if the 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.
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After such termination for so long as Fund Accountant, with
the written consent of the Trust, 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 Fund Accountant and unpaid by the Trust upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. Fund Accountant shall be entitled to collect from the Trust, in
addition to the compensation described under Section 3 hereof, the amount of all
of Fund Accountant's cash disbursements for services in connection with Fund
Accountant's activities in effecting such termination, including without
limitation, the delivery to the Trust and/or its designees of the Trust's
property, records, instruments and documents, or any copies thereof. Subsequent
to such termination, for a reasonable fee, Fund Accountant will provide the
Trust with reasonable access to any Trust 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, Fund
Accountant is replaced as fund accountant, or if a third party is added to
perform all or a part of the services provided by Fund Accountant under this
Agreement (excluding any sub-fund accountant appointed by Fund Accountant as
provided in Section 2 hereof), then the Trust 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 Fund Accountant equal to the balance
due Fund Accountant 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 Trust's assets for the twelve months prior to the date Fund
Accountant 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, Fund
Accountant is replaced as fund accountant, or if a third party is added to
perform all or a part of the services provided by Fund Accountant under this
Agreement (excluding any sub-fund accountant appointed by Fund Accountant as
provided in Section 2 hereof), then the Trust 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 Fund Accountant equal to one-half of
the balance due Fund Accountant 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 Trust's assets for the twelve months prior
to the date Fund Accountant is replaced or a third party is added.
In the event the Trust 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 Fund Accountant
is not retained to provide fund accounting services consistent with this
Agreement. The one-time cash
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payment referenced above shall be due and payable on the day prior to the first
day in which Fund Accountant is replaced or a third party is added.
7. Standard of Care; Reliance on Records and Instructions;
Indemnification.
Fund Accountant shall use its best efforts to insure the
accuracy of all services performed under this Agreement, but shall not be liable
to the Trust for any action taken or omitted by Fund Accountant in the absence
of bad faith, willful misfeasance, negligence or from reckless disregard by it
of its obligations and duties. A Fund agrees to indemnify and hold harmless Fund
Accountant, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Fund Accountant's actions
taken or nonactions with respect to the performance of services under this
Agreement with respect to such Fund or based, if applicable, upon reasonable
reliance on information, records, instructions or requests with respect to such
Fund given or made to Fund Accountant by a duly authorized representative of the
Trust; provided that this indemnification shall not apply to actions or
omissions of Fund Accountant in cases of its own bad faith, willful misfeasance,
negligence or from reckless disregard by it of its obligations and duties, and
further provided that prior to confessing any claim against it which may be the
subject of this indemnification, Fund Accountant shall give the Trust written
notice of and reasonable opportunity to defend against said claim in its own
name or in the name of Fund Accountant.
8. Record Retention and Confidentiality.
Fund Accountant shall keep and maintain on behalf of the Trust
all books and records which the Trust or Fund Accountant is, or may be, required
to keep and maintain pursuant to any applicable statutes, rules and regulations,
including without limitation Rules 31a-1 and 31a-2 under the Investment Trust
Act of 1940, as amended (the "1940 Act"), relating to the maintenance of books
and records in connection with the services to be provided hereunder. Fund
Accountant further agrees that all such books and records shall be the property
of the Trust and to make such books and records available for inspection by the
Trust or by the Securities and Exchange Commission at reasonable times and
otherwise to keep confidential all books and records and other information
relative to the Trust and its shareholders; except when requested to divulge
such information by duly-constituted authorities or court process.
9. Uncontrollable Events.
Fund Accountant assumes no responsibility hereunder, and shall
not be liable, except in the case of Fund Accountant's bad faith, willful
misfeasance, negligence or reckless disregard of its duties and obligations, for
any damage, loss of data, delay or any other loss whatsoever caused by events
beyond its reasonable control.
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10. Reports.
Fund Accountant will furnish to the Trust and to its properly
authorized auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the Trust
in writing, such reports and at such times as are prescribed pursuant to the
terms and the conditions of this Agreement to be provided or completed by Fund
Accountant, or as subsequently agreed upon by the parties pursuant to an
amendment hereto. The Trust agrees to examine each such report or copy promptly
and will report or cause to be reported any errors or discrepancies therein.
11. Rights of Ownership.
All computer programs and procedures developed to perform
services required to be provided by Fund Accountant under this Agreement are the
property of Fund Accountant. All records and other data except such computer
programs and procedures are the exclusive property of the Trust and all such
other records and data will be furnished to the Trust in appropriate form as
soon as practicable after termination of this Agreement for any reason.
12. Return of Records.
Fund Accountant shall maintain customary records in connection
with its duties as specified in this Agreement. Fund Accountant acknowledges and
agrees that any records required to be maintained and preserved pursuant to
applicable laws and regulations which are prepared or maintained by Fund
Accountant on behalf of the Trust shall be prepared and maintained at the
expense of Fund Accountant, but shall be the property of the Trust and will be
made available to or surrendered promptly to the Trust on request; provided
that, in connection with the termination of this Agreement, such records shall
be surrendered to the Trust or its designee promptly following the date of such
termination or at such other time that is reasonably requested by the Trust.
13. Representations of the Trust.
The Trust certifies to Fund Accountant that: (1) as of the
close of business on the Effective Date, each Fund that is in existence as of
the Effective Date has authorized unlimited shares, and (2) this Agreement has
been duly authorized by the Trust and, when executed and delivered by the Trust,
will constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
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14. Representations of Fund Accountant.
Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other cause
the records, and other data of the Trust and Fund Accountant's records, data,
equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its obligations
hereunder, and (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
15. Insurance.
Fund Accountant shall notify the Trust immediately should any
of its insurance coverage be canceled or reduced. Such notification shall
include the date of change and the reasons therefor. Fund Accountant shall
notify the Trust of any material claims against it with respect to services
performed under this Agreement, whether or not they may be covered by insurance,
and shall notify the Trust as they may be made of the total outstanding claims
made by Fund Accountant under its insurance coverage.
16. Information to be Furnished by the Trust and Funds.
The Trust has furnished to Fund Accountant the following:
(a) Copies of the Declaration of Trust of the Trust and
of any amendments thereto, certified by the proper
official of the state in which such document has been
filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments
thereto; and
(ii) Certified copies of resolutions of the Board
of Trustees covering the approval of this
Agreement, authorization of a specified
officer of the Trust to execute and deliver
this Agreement and authorization for
specified officers of the Trust to instruct
Fund Accountant thereunder.
(c) A list of all the officers of the Trust, together
with specimen signatures of those officers who are
authorized to instruct Fund Accountant in all
matters.
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(d) Two copies of the Prospectuses and Statements of
Additional Information for each Fund.
17. Information Furnished by Fund Accountant.
(a) Fund Accountant has furnished to the Trust the
following:
(i) Fund Accountant's Articles of Incorporation;
and
(ii) Fund Accountant's Bylaws and any amendments
thereto.
(b) Fund Accountant shall, upon request, furnish
certified copies of corporate actions covering the
following matters:
(i) Approval of this Agreement, and
authorization of a specified officer of Fund
Accountant to execute and deliver this
Agreement; and
(ii) Authorization of Fund Accountant to act as
fund accountant for the Trust and to provide
accounting services for the Trust.
18. Amendments to Documents.
The Trust shall furnish Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16 hereof
forthwith upon such amendments or changes becoming effective.
19. Compliance with Law.
Except for the obligations of Fund Accountant set forth in
Section 8 hereof, the Trust assumes full responsibility for the preparation,
contents and distribution of each prospectus of the Trust as to compliance with
all applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Trust's
shares. The Trust represents and warrants that no shares of the Trust will be
offered to the public until the Trust's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
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20. Notices.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice, at the following addresses: if to the Trust, at 0000 Xxxxxxxx Xxxx,
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 Fund Accountant, at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000; or at such other address as such party may from time to time specify
in writing to the other party pursuant to this Section. Notices will be
effective upon receipt.
21. Headings.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
22. Assignment.
This Agreement and the rights and duties hereunder shall not
be assignable with respect to a Fund by either of the parties hereto except by
the specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. Governing Law.
This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the State of Ohio.
24. Limitation of Liability of the Funds, Trustees and
Shareholders.
The parties agree that no Fund shall be liable for the
obligations of any other Fund arising hereunder. A copy of the Agreement and
Declaration of Trust of the Trust 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 Trust 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 Trust individually but are
binding only upon the assets and property of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all 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
BISYS FUND SERVICES OHIO, INC.
By: /S/ XXXXXXX X. XXXXX
--------------------------
Title: EXECUTIVE VICE PRESIDENT
INTEGRITY MANAGEMENT &
RESEARCH, INC.
By: /S/ XXXXXXX X. XXXXXX
--------------------------
Title: PRESIDENT
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
AMONG
THE VALIANT FUND,
BISYS FUND SERVICES OHIO, INC.
AND
INTEGRITY MANAGEMENT & RESEARCH, INC.
FEES
Except for the U.S. Treasury Income Portfolio, for which a separate fee schedule
is set forth below, Fund Accountant shall be entitled to receive a fee in
accordance with the following schedule, subject to a monthly minimum fee of
$3000 for up to four (4) classes for each Fund:
Two and one-quarter one-hundredths of one percent (.0225%) of each
Fund's average daily net assets up to $100 million.
One and one-quarter one-hundredths of one percent (.0125%) of each
Fund's average daily net assets in excess of $100 million up to $200
million.
One-half of one-hundredth of one percent (.005%) of each Fund's average
daily net assets in excess of $200 million.
U.S. Treasury Income Portfolio
For those months during which the U.S. Treasury Income Portfolio is operational,
Fund Accountant shall be entitled to receive a fee for such Portfolio in
accordance with the following schedule, subject to a monthly minimum fee of
$200:
Two and one-quarter one-hundredths of one percent (.0225%) of the
Fund's average daily net assets up to $100 million.
One and one-quarter one-hundredths of one percent (.0125%) of the
Fund's average daily net assets in excess of $100 million up to $200
million.
One-half of one-hundredth of one percent (.005%) of the Fund's average
daily net assets in excess of $200 million.
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For those months during which the U.S. Treasury Income Portfolio is not
operational, Fund Accountant shall be entitled to receive a monthly minimum fee
of $200.
For purposes of the foregoing, the parties shall identify in a separate writing
those months during which the U.S. Treasury Income Portfolio is not operational.
Out-of-Pocket Expenses
In addition to the fees described herein, Fund Accountant shall be reimbursed
for out-of-pocket expenses in accordance with Section 4 of this Agreement.
THE VALIANT FUND
By /S/ XXXXXXX X. XXXXXX
---------------------------
Title: CHAIRMAN OF THE BOARD
BISYS FUND SERVICES OHIO, INC.
By: /S/ XXXXXXX X. XXXXX
--------------------------
Title: EXECUTIVE VICE PRESIDENT
INTEGRITY MANAGEMENT &
RESEARCH, INC.
By: /S/ XXXXXXX X. XXXXXX
--------------------------
Title: PRESIDENT
A-2
