Exhibit
23(d)(1)
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
THIS MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT dated as of April 29th,
2003 by and between THE INTEGRITY FUNDS (the "Fund"), a Delaware Business Trust,
and XXXXXX CAPITAL CORPORATION (the "Manager"), a Kansas corporation.
1. (a) RETENTION OF MANAGER BY FUND. The Fund hereby employs the Manager
to act as the investment advisor for and to manage the investment and
reinvestment of the assets of The Integrity Income Fund in accordance with such
fund's investment objective and policies and restrictions, and to administer its
affairs to the extent requested by, and subject to the review and supervision
of, the trustees of the Fund (the "trustees") for the period and upon the terms
herein set forth. The investment of funds shall be subject to all applicable
restrictions of the Agreement and Declaration of Trust and By-Laws of the Fund
as may from time to time be in force. The term "Fund" as used herein shall refer
to either THE INTEGRITY FUNDS or THE INTEGRITY INCOME FUND as the context may
require.
(b) MANAGER'S ACCEPTANCE OF EMPLOYMENT. The Manager accepts such
employment and agrees during such period to render such services, to supply
investment research and portfolio management (including without limitation the
selection of securities for the Fund to purchase, hold or sell and the selection
of brokers through whom the Fund's portfolio transactions are executed, in
accordance with the policies adopted by the Fund and its Board of Trustees), to
administer the business affairs of the Fund, to furnish offices and necessary
facilities and equipment to the Fund, to provide administrative services for the
Fund, to render periodic reports to the Trustees of the Fund, and to permit any
of its officers or employees to serve without compensation as Trustees or
officers of the Fund if elected to such positions.
(c) The Manager may, at its option, appoint a subadvisor, which shall
assume all or such responsibilities and obligations of the Manager pursuant to
this Agreement as shall be delegated to the subadvisor, provided, however, that
any appointment of a subadvisor and assumption of responsibilities and
obligations of Manager by such subadvisor shall be subject to approval by the
Trustees of the Fund. The Manager agrees to give the Fund prompt written notice
of any termination of or notice to terminate any subadvisor agreement.
(d) INDEPENDENT CONTRACTOR. The Manager shall be deemed to be an
independent contractor under this Agreement and, unless otherwise expressly
provided or authorized, shall have no authority to act for or represent the Fund
in any way or otherwise be deemed an agent of the Fund.
(e) NON-EXCLUSIVE AGREEMENT. The services of the Manager to the Fund
under this Agreement are not to be deemed exclusive, and the Manager shall be
free to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
2. (a) FEE. For the services and facilities described in Section 1, each
Fund class will pay to the Manager at the end of each calendar month an
investment management fee equivalent on an annual basis of 1.00% of its average
daily net assets.
(b) EXPENSES PAID BY MANAGER. The Manager hereby agrees to pay all
expenses of the Fund, including the Fund's management and investment advisory
fee and the Fund's dividend disbursing, administrative and accounting services
fee (but excluding taxes and brokerage fees and commissions, if any) that exceed
1.50% of the Fund's average daily net asset value of the Class N shares (1.85%
with respect to the Class A shares) on an annual basis up to the amount of the
management and investment advisory fee payable by the Fund to the Manager. All
other expenses shall be paid by the Fund. From time to time and subject to
discontinuance at any time, the Manager may voluntarily assume certain expenses
of the Fund. Organizational costs will be borne by the Manager.
(c) DETERMINATION OF NET ASSET VALUE. The net asset value of the Fund
shall be calculated as of 3:14 p.m. central standard time or the close of the
New York Stock Exchange, whichever is earlier, on each day the Exchange is open
for trading or as of such other time or times as the Trustees may determine in
accordance with the provisions of the Agreement and Declaration of Trust and
By-Laws of the Fund as from time to time in force and in accordance with the
provisions of the Investment Company Act of 1940. For the purpose of the
foregoing computations, on each day when net asset value is not calculated, the
net asset value of a share of the Fund shall be deemed to be the net asset value
of such share as of the close of business on the last day on which such
calculation was made.
(d) PRORATION. For the month and year in which this Agreement becomes
effective or terminates, there shall be an appropriate proration of the
Manager's fee on the basis of the number of days that the Agreement is in effect
during such month and year, respectively.
3. EXPENSES. In addition to the fee of the Manager, the Fund shall assume
and pay any expenses for services rendered by a custodian for the safekeeping of
the Fund's securities or other property, for keeping its books of account, for
any other charges of the custodian and for calculating the net asset value of
the Fund as provided in the Agreement and Declaration of Trust of the Fund. The
Manager shall not be required to pay, and the Fund shall assume and pay, the
charges and expenses of its operations, including compensation of the Trustees
(other than those affiliated with the Manager and other than those affiliated
with the distributors of the Fund, if the distributors have agreed to pay such
compensation), charges and expenses of independent accountants, of legal counsel
and of any transfer or dividend disbursing agent, costs of acquiring and
disposing of portfolio securities, interest (if any) on obligations incurred by
the Fund, costs of share certificates, membership due in the Investment Company
Institute or any similar organization, costs of reports and notices to
shareholders, costs of registering shares of the Fund under the Federal
securities laws, miscellaneous expenses and all taxes and fees to federal, state
or other governmental agencies on account of the registration of securities
issued by the Fund, filing of corporate documents or otherwise. The Fund shall
not pay or incur any obligation for any management or administrative expenses
for which the Fund intends to seek reimbursement from the Manager without first
obtaining the written approval of the Manager. The Manager shall arrange, if
desired by the Fund, for officers or employees of the Manager to serve, without
compensation from the Fund, as Trustees, officers or agents of the Fund if duly
elected or appointed to such positions and subject to their individual consent
and to any limitations imposed by law.
4. INTERESTED PERSONS. Subject to applicable statutes and regulations, it
is understood that Trustees, officers, shareholders and agents of the Fund are
or may be interested in the Manager as directors, officers, shareholders and
agents or otherwise, and that the directors, officers, shareholders and agents
of the Manager may be interested in the Fund as Trustees, officers,
shareholders, agents or otherwise.
5. LIABILITY. The Manager shall not be liable for any error of judgment or
of law, or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Manager in the performance of
its obligations and duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. (a) TERM. This Agreement shall become effective on the date hereof and
shall remain in full force until the second anniversary of the date hereof
unless sooner terminated as hereinafter provided. This Agreement shall continue
in force from year to year thereafter, but only as long as such continuance is
specifically approved at least annually in the manner required by the Investment
Company Act of 1940.
(b) TERMINATION. This Agreement shall automatically terminate in the
event of its assignment. This Agreement may be terminated at any time without
the payment of any penalty by the Fund or by the Manager on sixty (60) days
written notice to the other party. The Fund may effect termination by action of
the Trustees or by vote of a majority of the outstanding shares of The Integrity
Income Fund, accompanied by appropriate notice. This Agreement may be terminated
at any time without the payment of any penalty and without advance notice by the
Trustees or by vote of a majority of the outstanding shares of The Integrity
Income Fund in the event that it shall have been established by a court or
competent jurisdiction that the Manager or any officer or director of the
Manager has taken any action which results in a breach of the covenants of the
Manager set forth herein.
(c) PAYMENT UPON TERMINATION. Termination of this Agreement shall not
affect the right of the Manager to receive payments on any unpaid balance of the
compensation described in Section 2 earned prior to such termination.
7. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or other vise, the remainder shall
not be thereby affected.
8. NOTICES. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
9. All parties hereto are expressly put on notice of the Fund's Agreement
and Declaration of Trust dated October 31, 1997, and all amendments thereto, all
of which are on file with the Delaware Secretary State, and the limitation of
shareholder and Trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund hereunder
are not binding upon any of the Trustees, officers or shareholders of the Fund
individually but are binding upon only the assets and property of the Fund. With
respect to any claim by Manager for recovery of that portion of the investment
management fee (or any other liability of the Fund arising hereunder) allocated
to a particular fund, if there is more than one, whether in accordance with the
express terms hereof or other vise, the Manager shall have recourse solely
against the assets of that fund to satisfy such claim and shall have no recourse
against the assets of any other fund for such purpose.
IN WITNESS WHEREOF, the Fund and the Manager have caused this Agreement to be
executed on the day and year first above written.
THE INTEGRITY INCOME FUND
By:
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Xxxxxx X. Xxxxxxx
President
XXXXXX CAPITAL CORPORATION
By:
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Xxxxxx X. Xxxxxxx
President
