ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT made as of the _____ day of
_____, 1999, by and between ALLEGIANCE INVESTMENT TRUST, a Delaware business
trust (hereinafter called the "Trust"), on behalf of each series of the Trust
listed in Appendix A hereto, as may be amended from time to time (hereinafter
referred to individually as a "Fund" and collectively as the "Funds") and VAN
DEVENTER & XXXX, a California general partnership (hereinafter called the
"Administrator").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company,
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Administrator is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and is engaged in the business
of supplying investment advice, investment management and administrative
services, as an independent contractor; and
WHEREAS, the Trust desires to retain the Administrator to provide
administrative services to the Funds pursuant to the terms and provisions of
this Agreement, and the Administrator is interested in furnishing these
services;
NOW, THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound hereby, mutually agree as follows:
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1. Appointment of Administrator. The Trust hereby employs the
Administrator and the Administrator hereby accepts this employment, to provide
services with respect to the assets of the Funds for the period and on the terms
set forth in this Agreement, subject to the supervision and direction of the
Trust's Board of Trustees.
2. Duties of Administrator. The Administrator shall act as the primary
administrator for the Funds and shall provide administrative services either
directly or through other service providers it may retain. These services shall
be performed in accordance with the requirements of the 1940 Act and other
applicable federal and state laws, the supervision of the Board of Trustees, the
Trust's governing documents, including, without limitation, the Trust's
Agreement and Declaration of Trust and By-Laws, or otherwise and such other
limitations as the Trustees may impose from time to time in writing to the
Administrator. Without limiting the generality of the foregoing, the
Administrator shall:
(a) Coordinate the organization of the Trust and the
preparation of all documents and compensate of all accountants, lawyers, and
other service providers to complete that organization, register the Trust, the
Funds and their shares as necessary with the Securities and Exchange Commission,
and perform everything else necessary or appropriate to permit the sale of
shares of the Funds in the U.S. and various states and jurisdictions thereof;
(b) Performance measurement and analysis, including furnishing
performance data, statistical data and research data;
(c) Tax and treasury services, including preparing and filing
various reports (including tax returns) or other documents required by federal,
state and other applicable laws and regulations other than those required to be
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filed by other service providers retained by the Administrator (such as the
custodian or transfer agent);
(d) Management of printing, including assisting in the
preparation and printing of all documents, prospectuses and reports sent to
shareholders;
(e) Financial reporting and assisting in the preparation of
financial statements;
(f) Assisting in the preparation of all agendas, notices and
minutes for meetings of the Trust's Board of Trustees or shareholders; assisting
in the preparation of supporting information for such meetings with regard to
the duties of the Administrator under this Agreement, and collection and
distribution of supporting information for such meetings with respect to the
duties performed by other persons who provide services to the Trusts;
(g) Developing and monitoring compliance procedures for each
Fund concerning, among other matters, adherence of each Fund to its investment
objectives, policies, restrictions, tax matters and applicable laws and
regulations;
(h) Blue sky filings and monitoring;
(i) Management of legal services;
(j) Trust and Fund accounting;
(k) Pricing each Fund's portfolio securities;
(l) Transfer agent and shareholder servicing agent;
(m) Custodian for each Fund's portfolio securities (only
through the retention of a qualified third-party eligible custodian);
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(n) The retention of all records required to be maintained by
the 1940 Act and the rules thereunder; and
(o) All other necessary and appropriate ordinary
administrative and operating functions.
In performing its duties under this Agreement, the Administrator will
consult with legal counsel to, and the independent public accountants for, the
Trust, as necessary and appropriate, on whose advice the Administrator shall be
entitled to rely. The Trust will furnish the Administrator from time to time
with copies of any documents that the Administrator may reasonably request and
that are necessary for it to perform its obligations and duties under this
Agreement and will notify the Administrator as soon as possible of any matter
materially affecting the performance by the Administrator of its services under
this Agreement.
3. Best Efforts and Judgment. The Administrator shall use its best
judgment and efforts in providing services to the Funds as contemplated by this
Agreement.
4. Independent Contractor. The Administrator shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized to do so, have no authority to act for or
represent the Trust or the Funds in any way, or in any way be deemed an agent
for the Trust or for the Funds. It is expressly understood and agreed that the
services to be rendered by the Administrator to the Funds under the provisions
of this Agreement are not to be deemed exclusive, and the Administrator shall be
free to render similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be impaired
thereby.
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5. Administrator's Personnel. The Administrator shall, at its own
expense, maintain such staff and employ or retain such personnel and consult
with such other persons as it shall from time to time determine to be necessary
to the performance of its obligations under this Agreement.
6. Reports by Funds to Administrator. Each Fund will from time to time
furnish to the Administrator detailed statements of its investments and assets,
and information as to its investment objective and needs, and will make
available to the Administrator such financial reports, proxy statements, legal
and other information relating to each Fund's investments as may be in its
possession or available to it, together with such other information as the
Administrator may reasonably request.
7. Expenses.
(a) With respect to the operation of each Fund, the
Administrator is responsible for (i) the compensation of any of the Trust's
trustees, officers, and employees who are affiliates of the Administrator, (ii)
fees and expenses incurred in connection with the issuance, registration and
transfer of its shares; (iii) all expenses of transfer, receipt, safekeeping,
servicing and accounting for the cash, securities and other property of the
Trust for the benefit of the Funds including all fees and expenses of its
custodian, shareholder services agent and accounting services agent; (iv) costs
and expenses of pricing and calculating its daily net asset value and of
maintaining its books of account required under the 1940 Act; (v) expenditures
in connection with meetings of each Fund's shareholders and Board of Trustees;
(vi) insurance premiums on property or personnel of each Fund which inure to its
benefit, including liability and fidelity bond insurance; (vii) the cost of
preparing and printing reports, proxy statements, prospectuses and statements of
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additional information of the Fund or other communications for distribution to
existing shareholders; (viii) legal, auditing and accounting fees; (ix) trade
association dues; (x) fees and expenses (including legal fees) of obtaining and
maintaining any required registration or notification for its shares for sale
under federal and applicable state and foreign securities laws; (xi) all
expenses of maintaining and servicing shareholder accounts, including all
charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Funds, if any; and (xii) all
other charges and costs of its operation.
(b) Each Fund is responsible for and has assumed the
obligation for payment of the following expenses: (i) brokerage and commission
expenses; (ii) interest charges on any borrowings by the Fund; (iii) taxes, if
any; (iv) compensation and expenses of members of the Trust's Board of Trustees
or members of any advisory board or committee who are not members of, affiliated
with or interested person of the Administrator; and (v) any extraordinary and
non-recurring expenses.
(c) To the extent the Administrator incurs any costs by
assuming expenses which are an obligation of a Fund as set forth herein, such
Fund shall promptly reimburse the Administrator for such costs and expenses,
except to the extent the Administrator has otherwise agreed to bear such
expenses. To the extent the services for which a Fund is obligated to pay are
performed by the Administrator, the Administrator shall be entitled to recover
from such Fund to the extent of the Administrator's actual costs for providing
such services.
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8. Administrative Fee.
(a) Each Fund shall pay to the Administrator, and the
Administrator agrees to accept, as full compensation for all administrative
services furnished or provided to such Fund pursuant to this Agreement, an
administrative fee as set forth in the Fee Schedule attached hereto as Appendix
A, as may be amended in writing from time to time by the Trust and the
Administrator.
(b) The management fee shall be accrued daily by each Fund and
paid to the Administrator upon its request.
(c) The initial fee under this Agreement shall be payable on
the first business day of the first month following the effective date of this
Agreement and shall be prorated as set forth below. If this Agreement is
terminated before the end of any month, the fee to the Administrator shall be
prorated for the portion of any month in which this Agreement is in effect which
is not a complete month according to the proportion which the number of calendar
days in the month during which the Agreement is in effect bears to the number of
calendar days in the month, and shall be payable within ten (10) days after the
date of termination.
(d) The Administrator may reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this Agreement
and may agree to make payments to limit the expenses which are the
responsibility of a Fund under this Agreement. Any such reduction or payment
shall be applicable only to such specific reduction or payment and shall not
constitute an agreement to reduce any future compensation or reimbursement due
to the Administrator hereunder or to continue future payments. Any such
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reduction will be agreed to before the accrual of the related expense or fee and
will be estimated daily and reconciled and paid on a monthly basis.
(e) The Administrator may agree not to require payment of any
portion of the compensation or reimbursement of expenses otherwise due to it
pursuant to this Agreement before the time that compensation or reimbursement
has accrued as a liability of the Fund. Any such agreement shall be applicable
only with respect to the specific items covered thereby and shall not constitute
an agreement not to require payment of any future compensation or reimbursement
due to the Administrator hereunder.
9. Conflicts with Trust's Governing Documents and Applicable Laws.
Nothing herein contained shall be deemed to require the Trust or the Funds to
take any action contrary to the Trust's Agreement and Declaration of Trust,
By-Laws, or any applicable statute or regulation, or to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
conduct of the affairs of the Trust and Funds.
10. Administrator's Liabilities.
(a) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties hereunder on the
part of the Administrator, the Administrator shall not be subject to liability
to the Trust or the Funds or to any shareholder of the Funds for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security by the Funds.
(b) The Funds shall indemnify and hold harmless the
Administrator, its general partners and the shareholders, directors, officers
and employees of each of them (any such person, an "Indemnified Party") against
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any loss, liability, claim, damage or expense (including the reasonable cost of
investigating and defending any alleged loss, liability, claim, damage or
expenses and reasonable counsel fees incurred in connection therewith) arising
out of the Indemnified Party's performance or non-performance of any duties
under this Agreement provided, however, that nothing herein shall be deemed to
protect any Indemnified Party against any liability to which such Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties under this Agreement.
(c) No provision of this Agreement shall be construed to
protect any Trustee or officer of the Trust, or partner or officer of the
Administrator, from liability in violation of Sections 17(h) and (i) of the 1940
Act.
11. Non-Exclusivity. The Trust's employment of the Administrator is not
an exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event this Agreement is terminated with respect to any Fund, this Agreement
shall remain in full force and effect with respect to all other Funds listed on
Appendix A hereto, as the same may be amended.
12. Term. This Agreement shall become effective on the date that is the
latest of (1) the execution of this Agreement and, (2) the approval of this
Agreement by a majority of the Trustees and who are not interested persons of
the Trust and by the full Board of Trustees of the Trust. This Agreement shall
remain in effect for a period of two (2) years, unless sooner terminated as
hereinafter provided. This Agreement shall continue in effect thereafter for
additional periods not exceeding one (l) year so long as such continuation is
approved for each Fund at least annually by (i) the full Board of Trustees of
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the Trust and (ii) the vote of a majority of the Trustees of the Trust who are
not parties to this Agreement nor interested persons thereof.
14. Termination. This Agreement may be terminated by the Trust on
behalf of any one or more of the Funds at any time without payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of a Fund, upon sixty (60) days' written notice to
the Administrator, and by the Administrator upon sixty (60) days' written notice
to a Fund.
15. Transfer, Assignment. This Agreement may not be transferred,
assigned, sold or in any manner hypothecated or pledged without the written
consent of the Trust.
16. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
17. Definitions. The term "interested persons" shall have the meaning
as set forth in the 1940 Act.
18. Notice of Declaration of Trust. The Administrator agrees that the
Trust's obligations under this Agreement shall be limited to the Funds and to
their assets, and that the Administrator shall not seek satisfaction of any such
obligation from the shareholders of the Funds nor from any trustee, officer,
employee or agent of the Trust or the Funds.
19. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
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20. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the 1940 Act and the Investment Advisers Act of 1940 and any
rules and regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
ALLEGIANCE INVESTMENT TRUST VAN DEVENTER & XXXX
By: ____________________________ By: __________________________________
Title: __________________________ Title: ________________________________
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APPENDIX A
FUND AND FEE SCHEDULE
Fund Effective Date Administrative Services
Allegiance American Value Fund ___________, 1999 0.35% of net assets per
annum
Allegiance Intermediate-Term
Bond Fund ___________, 1999 0.10% of net assets per
annum
Allegiance CaliforniaTax-Free
Intermediate Bond Fund ___________, 1999 0.10% of net asset per
annum
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