INTEGRITY MANAGED PORTFOLIOS
ADMINISTRATION SERVICES AGREEMENT
AGREEMENT made this 24th day of September 2003, by and between Integrity
Managed Portfolios, a Massachusetts Business Trust, having its principal office
and place of business at 0 Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000 (the
"Trust"), and Integrity Fund Services, Inc. ("IFS"), a North Dakota
corporation.
WHEREAS, the Trust is an open-end non-diversified management series
investment company registered with the United States Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust is authorized to issue shares ("Shares") in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust offers shares in the series as listed in Schedule B
hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Section 7, being herein referred to as a "Fund," and collectively as the
"Funds"); and
WHEREAS, the Trust desires that IFS perform certain administrative services
for each Fund and IFS is willing to provide those services on the terms and
conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and IFS hereby agree as follows:
1. APPOINTMENT AND DELIVERY OF DOCUMENTS
(a)The Trust hereby appoints IFS, and IFS hereby agrees, to act as
administrator of the Trust for the period and on the terms set forth in this
Agreement.
(b)In connection therewith, the Trust has delivered to IFS copies of
(i)the Trust's Declaration of Trust and Bylaws (collectively, as
amended from time to time),
(ii)the Trust's Registration Statement on Form N-1A and all amendments
thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), or the 1940 Act (the "Registration Statement"),
(iii)the Trust's notification of registration under the 1940 Act on Form
N-8A as filed with the SEC;
(iv)the Trust's current Prospectus and Statement of Additional
Information for each Fund (collectively, as currently in effect and
as amended or supplemented, the "Prospectus"),
(v)each current plan of distribution or similar document adopted by the
Trust under Rule 12b-1 under the 1940 Act ("Plan") and each current
shareholder service plan or similar document adopted by the Trust
("Shareholder Services Plan"), and
(vi)the Trust shall deliver to IFS a certified copy of the resolution of
the Board of Directors of the Trust (the "Board") appointing IFS and
authorizing the execution and delivery of this Agreement.
2. DUTIES OF IFS.
(a)Subject to the direction and control of the Board, IFS shall manage all
aspects of the Trust's operations with respect to the Funds except
those that are the responsibility of any other service provider hired
by the Trust, all in such manner and to such extent as may be
authorized by the Board.
(b)IFS will provide the Fund with the adequate general office space,
communication facilities and personnel to perform the services for the
Fund described in this Section 2.
(c)oversee the performance of administrative and professional services
rendered to the Trust by others, including its custodian, transfer
agent, fund accountant and dividend disbursing agent as well as legal,
auditing, shareholder servicing and other services performed for the
Funds, including:
(i)the preparation and maintenance by the Trust's custodian, transfer
agent, dividend disbursing agent and fund accountant in such form,
for such periods and in such locations as may be required by
applicable United States law, of all documents and records relating
to the operation of the Trust required to be prepared or maintained
by the Trust or its agents pursuant to applicable law;
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(ii)the reconciliation of account information and balances among the
Trust's custodian, transfer agent, dividend disbursing agent and
fund accountant;
(iii)the transmission of purchase and redemption orders for Shares; and
(iv)the performance of fund accounting, including the calculation of
the net asset value of the Shares;
(d)assist each Fund's investment adviser in monitoring Fund holdings for
compliance with Prospectus investment restrictions and assist in
preparation of periodic compliance reports, as applicable;
(e)Prepare and coordinate the printing of semi-annual and annual financial
statements;
(f)Prepare selected management reports for performance and compliance
analyses agreed upon by the Fund and Administrator from time to time;
(g)advise the Trust and the Board on matters concerning the Trust and its
affairs;
(h)with the cooperation of the counsel to the Trust, the investment
advisers, officers of the Trust and other relevant parties, prepare
and disseminate materials for meetings of the Board, including agendas
and selected financial information as agreed upon by the Fund and IFS
from time to time; attend and participate in Board meetings to the
extent requested by the Board; and prepare or cause to be prepared
minutes of the meetings of the Board;
(i)Determine income and capital gains available for distribution and
calculate distributions required to meet regulatory, income, and excise
tax requirements, to be reviewed by the Fund's independent public
accountants;
(j)Prepare the Fund's federal, state, and local tax returns to be
reviewed by the Fund's independent public accountants;
(k)Prepare and maintain the Fund's operating expense budget to determine
proper expense accruals to be charged to the Fund in order to calculate
it's daily net asset value;
(l)in consultation with counsel for the Trust, assist in and oversee the
preparation, filing, printing and where applicable, dissemination to
shareholders of the following:
(i)amendments to the Trust's Registration Statement on Form N-1A;
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(ii)periodic reports to the Funds' shareholders and the Commission,
including but not limited to annual reports and semi-annual reports;
(iii)notices pursuant to Rule 24f-2;
(iv)proxy materials; and
(v)reports to the SEC on Form N-SAR.
(m)coordinate the Fund's annual or SEC audit by:
(i)assisting the Fund's independent auditors, or, upon approval of the
Fund, any regulatory body, in any requested review of the Fund's
accounts and records;
(ii)providing appropriate financial schedules (as requested by the Fund's
independent public accountants or SEC examiners); and,
(iii)providing office facilities as may be required.
(n)after consultation with counsel for the Trust and the investment adviser,
determine the jurisdictions in which Shares of the Fund shall be
registered or qualified for sale; register, or prepare applicable filings
with respect to, the Shares with the various state and other securities
commissions, provided that all fees for the registration of Shares or for
qualifying or continuing the qualification of the Funds shall be paid by
the Fund
(o)monitor sales of Shares, ensure that the Shares are properly and duly
registered with the SEC;
(p)oversee the calculation of performance data for dissemination to
information services covering the investment company industry, for sales
literature of the Trust and other appropriate purposes;
(q)prepare, or cause to be prepared, expense and financial reports,
including Fund budgets, expense reports, pro-forma financial statements,
expense and profit/loss projections and fee waiver/expense reimbursement
projections on a periodic basis;
(r)authorize the payment of Trust expenses and pay, from Trust assets, all
bills of the Trust;
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(s)provide information typically supplied in the investment company industry
to companies that track or report price, performance or other information
with respect to investment companies;
(u)assist the Trust in the selection of other service providers, such as
independent accountants, legal counsel and proxy solicitors; and perform
such other recordkeeping, reporting and other tasks as may be specified
from time to time in the procedures adopted by the Board.
(v)IFS shall provide such other services and assistance relating to the
affairs of the Trust as the Trust may, from time to time, reasonably
request.
(w)Except with respect to IFS's duties as set forth in this Section 2 and
except as otherwise specifically provided herein, the Trust assumes all
responsibility for ensuring that the Trust complies with all applicable
requirements of the Securities Act, the 1940 Act and any laws, rules and
regulations of governmental authorities with jurisdiction over the Trust.
All references to any law in this Agreement shall be deemed to include
reference to the applicable rules and regulations promulgated under
authority of the law and all official interpretations of such law or
rules or regulations.
(x)In order for IFS to perform the services required by this Section 2, the
Trust (i) shall cause all service providers to the Trust to furnish any
and all information to IFS, and assist IFS as may be required and (ii)
shall ensure that IFS has access to all records and documents maintained
by the Trust or any service provider to the Trust.
IFS shall, for all purposes herein, be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Fund in any way or otherwise be deemed an agent of
the Fund.
3. COMPENSATION OF IFS.
(a)For the services provided by IFS pursuant to this Agreement, the Trust,
on behalf of each Fund, agrees to pay IFS the fees set forth in
Schedule A. Fees will begin to accrue for each Fund on the latter of the
date of this Agreement or the date of commencement of operations of the
Fund.
(b)In addition to the fees paid under subsection (a), the Trust agrees to
reimburse IFS for out-of-pocket expenses or advances incurred by IFS for
the items set out in the Schedule A attached hereto. In addition, the
Trust will reimburse any other expenses incurred by IFS at the request or
with the consent of the Trust.
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(c)The fees, out-of pocket expenses and advances identified in the foregoing
subsections (a) and (b) above may be changed from time to time subject to
written agreement between the Trust and IFS, as set forth in the
Schedule A attached.
(d)The Trust agrees to pay all fees and reimbursable expenses within ten
days following the receipt of the respective billing notice.
4. EXPENSES ASSUMED AS ADMINISTRATOR.
Except as specifically stated in this Agreement, IFS shall pay all expenses
incurred by it in performing its services and duties as Administrator. The
Trust will bear all other expenses to be incurred in the operation of the Funds
(other than those borne by the Adviser) including taxes, interest, brokerage
fees and commissions, if any, fees of Directors who are not officers,
directors, partners, employees or holders of five percent or more of the
outstanding voting securities of the Adviser or IFS or any of their affiliates,
Securities and Exchange Commission fees and state blue sky registration or
qualification fees, advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, payments under the Plans, certain insurance premiums,
outside auditing and legal expenses, costs of maintaining corporate existence,
costs attributable to shareholder services, including without limitation
telephone and personnel expenses, costs of preparing and printing Prospectuses
for regulatory purposes, costs of shareholders' reports and Trust meetings and
any extraordinary expenses
5. RESPONSIBILITY AND INDEMNIFICATION.
(a)IFS shall be held to the exercise of reasonable care in carrying out the
provisions of the Agreement, but shall be without liability to the Fund
for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its
duties hereunder. It shall be entitled to rely upon and may act upon the
accounting records and reports generated by the Fund, advice of the Fund,
or of counsel for the Fund and upon statements of the Fund's independent
accountants, and shall be without liability for any action reasonably
taken or omitted pursuant to such records and reports or advice, provided
that such action is not, to the knowledge of IFS, in violation of
applicable federal or state laws or regulations, and provided further
that such action is taken without gross negligence, bad faith, willful
misconduct or reckless disregard of its duties.
(b)IFS shall not be liable to the Fund for any error of judgment or mistake
of law or for any loss arising out of any act or omission by IFS in the
performance of its duties hereunder except as hereinafter set forth.
Nothing herein contained shall be construed to protect the Administrator
against any liability to the Fund
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or its shareholders to which IFS shall otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence in the performance of
its duties on behalf of the Fund, reckless disregard of IFS's obligations
and duties under this Agreement or the willful violation of anyapplicable
law.
(c)Except as may otherwise be provided by applicable law, neither IFS nor
its officers, directors, employees or agents shall be subject to, and the
Fund shall indemnify and hold such persons harmless from and against, any
liability for and any damages, expenses or losses incurred by reason of
the inaccuracy of information furnished to IFS by the Fund or its
authorized agents or in connection with any error in judgment or mistake
of law or any act or omission in the course of, connected with or arising
out of any services to be rendered hereunder, except by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, by reason of reckless disregard of IFS's obligations and duties
under this Agreement or the willful violation of any applicable law.
6. REPORTS.
(a)The Fund shall provide to IFS on a quarterly basis a report of a duly
authorized officer of the Fund representing that all information
furnished to IFS during the preceding quarter was true, complete and
correct to the best of its knowledge. IFS shall not be responsible for
the accuracy of any information furnished to it by the Fund, and the Fund
shall hold IFS harmless in regard to any liability incurred by reason of
the inaccuracy of such information.
(b)IFS shall provide to the Board of Trustees of the Fund, on a quarterly
basis, a report, in such a form as IFS and the Fund shall from time to
time agree, representing that, to its knowledge, the Fund was in
compliance with all requirements of applicable federal and state law,
including without limitation, the rules and regulations of the Securities
and Exchange Commission and the Internal Revenue Service, or specifying
any instances in which the Fund was not so in compliance. Whenever, in
the course of performing its duties under this Agreement, IFS determines,
on the basis of information supplied to IFS by the Fund, that a violation
of applicable law has occurred, or that, to its knowledge, a possible
violation of applicable law may have occurred or, with the passage of
time, could occur, IFS shall promptly notify the Fund and its counsel of
such violation.
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7. ADDITIONAL FUNDS
In the event that the Trust establishes one or more series of Shares after
the effectiveness of this Agreement, such series of Shares shall become Funds
under this Agreement. IFS or the Trust may elect not to make any such series
subject to this Agreement.
8. ACTIVITIES OF IFS.
(a)IFS shall be free to render similar services to others so long as its
services hereinunder are not impaired thereby.
(b)IFS may subcontract any or all of its responsibilities pursuant to this
Agreement to one or more Trusts, trusts, firms, individuals or
associations, who agree to comply with the terms of this Agreement;
provided, that any such subcontracting shall not relieve IFS of its
responsibilities hereunder. IFS may pay those persons for their services,
but no such payment will increase IFS's compensation from the Trust.
9. RECORDS.
IFS shall maintain records relating to its services, such as journals,
ledger accounts and other records, as are required to be maintained under the
1940 Act and Rule 31a-1 thereunder. The books and records pertaining to the
Trust that are in possession of IFS shall be the property of the Trust. The
Trust, or the Trust's authorized representatives, shall have access to such
books and records at all times during IFS's normal business hours. Upon the
reasonable request of the Trust, copies of any such books and records shall be
provided promptly by IFS to the Trust or the Trust's authorized
representatives. In the event the Trust designates a successor that assumes
any of IFS's obligations hereunder, IFS shall, at the expense and direction of
the Trust, transfer to such successor all relevant books, records and other
data established or maintained by IFS under this Agreement.
10. CONFIDENTIALITY.
IFS agrees to treat all records and other information related to the Trust
as proprietary information of the Trust and, on behalf of itself and its
employees, to keep confidential all such information, except that IFS may
(a)prepare or assist in the preparation of periodic reports to shareholders
and regulatory bodies such as the SEC;
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(b)provide information typically supplied in the investment company industry
to companies that track or report price, performance or other information
regarding investment companies; and
(c)release such other information as approved in writing by the Trust,
which approval shall not be unreasonably withheld and may not be withheld
where IFS may be exposed to civil or criminal contempt proceedings for
failure to release the information, when requested to divulge such
information by duly constituted authorities or when so requested by the
Trust.
11. EFFECTIVENESS, DURATION, AND TERMINATION
(a)This Agreement shall become effective on the date first above written.
(b)This Agreement shall remain in effect for a period of three (3) years
from the date of its effectiveness and shall continue in effect for
successive twelve-month periods; provided that such continuance is
specifically approved at least annually by the Board and by a majority of
the Trustees who are not parties to this Agreement or interested persons
of any such party.
(c)In the event of a material breach of this Agreement by either party, the
non-breaching part shall notify the breaching party in writing of such
breach and upon receipt of such notice, the breaching party shall by 45
days to remedy the breach. If said breach is not remedied to the
reasonable satisfaction of the non-breaching party, the non-breaching
party may thereafter terminate this Agreement immediately.
If after such termination for so long as IFS, 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 IFS and unpaid by the Trust upon such termination shall
be immediately due and payable upon, and notwithstanding, such
termination.
(d)If at any time during the initial or any subsequent term of this
Agreement, IFS is replaced as Administrator for any reason other than for
a material breach of this Agreement which IFS does not cure within a
reasonable time, or the Fund is merged into or sells all (or
substantially all) of its assets to another fund or family of funds for
which IFS does not serve as Administrator, then the Fund shall,
immediately upon demand by IFS, make a one time cash payment equal
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to the net present value of the revenues IFS would have earned during the
remainder of the initial or subsequent term of the Agreement, as the case
may be, at the fee rate in effect at the time of such event (including
any applicable minimum).
For purposes of this paragraph, the asset figured used to calculate the
fee due IFS hereunder shall be the highest monthly average assets of the
Fund at any time during the 12 months immediately preceding the
termination of IFS (or the merger or sale of assets) of the Fund.
If the Trust terminates this Agreement IFS shall be entitled to collect
from the Trust, in addition to the compensation described under Section
11 hereof, the amount of all of IFS's reasonable cash disbursements for
services in connection with IFS'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, IFS will provide the Trust with reasonable access to all
Trust documents or records, if any, remaining in its possession. Should
the Fund exercise its right to terminate, all out-of-pocket expenses
associated with the movement of records and material will be borne by the
Fund. Additionally, IFS reserves the right to charge for any other
reasonable costs and expenses associated with such termination.
(e)The obligations of Sections 3, 5 and 10 shall survive any termination
of this Agreement
12. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties hereto
and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of IFS.
13. FORCE MAJEURE
IFS shall not be responsible or liable for any failure or delay in performance
of its obligations under this Agreement arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control including, without
limitation, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
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14. SERVICE DAYS
Nothing contained in this Agreement is intended to or shall require IFS,
in any capacity under this Agreement, to perform any functions or duties on any
day other than a business day of the Trust or of a Fund. Functions or duties
normally scheduled to be performed on any day which is not a business day of
the Trust or of a Fund shall be performed on, and as of, the next business day,
unless otherwise required by law.
15. NOTICES.
All notices and other communications hereunder shall be in writing, shall be
deemed to have been given when delivered in person or by certified mail, return
receipt requested, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Trust: To IFS:
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
President President
Integrity Managed Portfolios Integrity Fund Services, Inc.
0 Xxxx Xxxxxx Xxxxx 0 Xxxx Xxxxxx Xxxxx
Xxxxx, XX 00000 Xxxxx, XX 00000
16. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The trustees of the Trust and the shareholders of each Fund shall not be
liable for any obligations of the Trust or of the Funds under this Agreement,
and IFS agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
IFS's rights or claims relate in settlement of such rights or claims, and not
to the trustees of the Trust or the shareholders of the Funds
17. MISCELLANEOUS
(a)Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(b)Except for the addition of new Funds in accordance with Section 7, no
provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both
parties hereto.
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(c)The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of North Dakota as at the time in
effect and the applicable provisions of the 1940 Act. To the extent that
the applicable law of the State of North Dakota or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
(d)This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof, whether oral or written.
(e)The parties may execute this Agreement on any number of counterparts, and
all of the counterparts taken together shall be deemed to constitute one
and the same instrument.
(f)If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the
rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision
held to be illegal or invalid.
(g)Section headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
(h)Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Fund of the Trust are separate
and distinct from the assets and liabilities of each other Fund and that
no Fund shall be liable or shall be charged for any debt, obligation or
liability of any other Fund, whether arising under this Agreement or
otherwise.
(i)No affiliated person, employee, agent, director, officer or manager of
IFS shall be liable at law or in equity for IFS's obligations under this
Agreement.
(j)Each of the undersigned warrants and represents that they have full power
and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof
and each party hereto warrants and represents that this Agreement, when
executed and delivered, will constitute a legal, valid and binding
obligation of the party, enforceable against the party 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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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized persons, as of the day and year first above written.
INTEGRITY MANAGED PORTFOLIOS INTEGRITY FUND SERVICES, INC.
By: --------------------------------- By: ----------------------------
Xxxxxx X. Xxxxxxx, President Xxxxxx X. Xxxxxxx, President
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INTEGRITY MANAGED PORTFOLIOS
ADMINISTRATION SERVICES AGREEMENT
Schedule A
Fees and Charges
(a)ADMINISTRATIVE SERVICE FEE:
For the services rendered by IFS in its capacity as administrator, as
specified in Paragraph 1. DUTIES OF IFS, each series of the Fund shall pay IFS
at the end of each calendar month a fee calculated at a rate of 0.010%
(10 basis points) of average daily net assets with a minimum of $1,500 per
month plus out-of-pocket expenses. Each series of the Fund will pay an
additional minimum administrative fee of $500 per month for each additional
share class.
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INTEGRITY MANAGED PORTFOLIOS
ADMINISTRATION SERVICES AGREEMENT
Schedule B
Funds to be Serviced Under This Agreement
Kansas Municipal Fund
Kansas Insured Intermediate Fund
Maine Municipal Fund
Nebraska Municipal Fund
New Hampshire Municipal Fund
Oklahoma Municipal Fund
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