VERACITY FUNDS
AGREEMENT FOR INVESTMENT ADVISORY SERVICES
THIS AGREEMENT is made as of this 30th day of March, 2004, between
Veracity Funds (the "Trust") and Integrity Asset Management, LLC, a Delaware
limited liability company (the "Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of Delaware as
an unincorporated business trust operating and registered as an open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized by its Declaration of Trust and by-laws to
issue separate Portfolios of shares representing interests in separate
investment portfolios (the "Portfolios"), and
WHEREAS, the Trust has authorized the issuance of shares of beneficial
interest ("Shares") in the Portfolios which are identified on Schedule A
attached hereto and incorporated herein, which Schedule A may be amended from
time to time by mutual agreement of the Trust and Adviser (the "Portfolios");
and
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust desires to retain Adviser to furnish investment advisory
services to the Portfolios, and such other Portfolios as may be added from time
to time by mutual agreement of the parties, pursuant to the terms and conditions
of this Agreement, and Adviser is willing to so furnish such services;
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. APPOINTMENT
The Trust hereby appoints Adviser to act as investment adviser to the
Portfolios for the periods and pursuant to the terms and conditions as set
forth in this Agreement. Adviser accepts the appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS
The Trust has furnished Adviser with properly certified or authenticated
copies of each of the following:
a. The Trust's Declaration of Trust;
b. The Trust's By-Laws;
c. Resolutions of the Trust's Board of Trustees authorizing the
appointment of Adviser and approving this Agreement;
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d. The Trust's current Prospectus and Statement of Additional
Information (together called the "Prospectus"); and
e. All policies and procedures of the Trust which are relevant to this
Agreement.
The Trust will furnish Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements
to the foregoing at the same time as such documents are required to be
filed with the SEC and/or state authorities.
3. MANAGEMENT
Subject to the general supervision of the Trust's Board of Trustees (the
"Board"), Adviser will be responsible for providing a continuous investment
program for the Portfolios, including investment research and management
with respect to all securities, investments, cash and cash equivalents held
by the Portfolios.
Adviser may, with the prior written consent of the Board and the approval
of the appropriate Trust shareholders, as required, employ persons or
entities to serve as sub-advisers to one or more Portfolios. The Adviser
and/or such sub-advisers, if any, may, in their sole discretion, determine
from time to time what securities and other investments will be purchased,
retained or sold by the Portfolios. The investment activities of such
sub-advisers, if any, as such services relate to the Portfolios, will at
all times be subject to the general supervision and control of Adviser.
Adviser will provide, through its own efforts itself and/or through the
medium of its previously approved sub-adviser(s), the services under this
Agreement in accordance with each Portfolio's investment objectives,
policies and restrictions as such are set forth in the Prospectus from time
to time. Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of
the SEC and will, in addition, conduct its activities under this
agreement in accordance with the regulations of any other Federal and
State agencies which may now or in the future have jurisdiction over
its activities under this Agreement;
(b) Will monitor the investment activities of any sub-adviser which it
employs to insure that such sub-adviser conducts its activities with
respect to the applicable Portfolio(s) in accordance with the
Prospectus and any and all federal and/or state laws and regulations
relating to the applicable Portfolio(s);
(c) Will place orders, or monitor the placement of orders by sub-advisers,
pursuant to good faith investment determinations for the Portfolios
either directly with the respective issuers or with appropriate
brokers and dealers. In placing orders with brokers or dealers, the
Advisor, or sub-adviser(s) under the supervision of Adviser, will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Adviser, or
Adviser's duly authorized sub-adviser(s), believes two or more brokers
or dealers are comparable in price and execution, Adviser, or
Adviser's duly authorized sub-adviser(s), may prefer: (I) brokers and
dealers who provide the Portfolio(s) with research advice and other
services, or who recommend or sell Trust shares, and (II) brokers who
are affiliated with the Trust, Adviser or sub-adviser; provided,
however, that in no instance will portfolio securities be purchased
from or sold to Adviser or any sub-adviser in principal transactions;
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(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
4. SERVICES NOT EXCLUSIVE
The services to be furnished by Adviser hereunder are not to be considered
exclusive, and Adviser shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby.
5. BOOKS AND RECORDS
In compliance with applicable rules promulgated under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the benefit of the
Trust are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the Trust's request. Adviser
further agrees to preserve for the periods prescribed by applicable rules
promulgated under the 1940 Act the records required to be maintained by it
pursuant to such Rule that are not maintained by others on behalf of the
Trust.
6. EXPENSES
During the term of this Agreement, Adviser will pay all expenses incurred
by it in connection with its investment advisory services furnished to the
Trust other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for
the Portfolios.
7. COMPENSATION
The Trust will pay Adviser, and Adviser will accept as full compensation
for its services rendered hereunder, the investment advisory fees for each
Portfolio as set forth on Schedule A attached hereto and incorporated
herein, which Schedule A may be amended from time to time by mutual
agreement of the Trust, Adviser and shareholders as applicable. All fees
payable to Adviser pursuant to this Agreement shall be computed at the end
of each month and payable within five (5) business days thereafter, and
shall be computed as an annual rate as a percentage of the average daily
net assets of the applicable Portfolio. All parties to this Agreement do
hereby expressly authorize and instruct the Trust's Administrator, Unified
Fund Services, Inc. or its successor, to provide, in accordance with the
fees set forth on Schedule A, a calculation each month of the gross amounts
due Adviser for each Portfolio and to remit such fee payments hereunder
promptly to Adviser.
8. LIMITATION OF LIABILITY
Adviser shall not be liable for any error of judgment, mistake of law or
for any other loss suffered by the Trust or any Portfolio in connection
with the performance of this Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful malfeasance, bad faith or gross
negligence on Adviser's part in the performance of its duties or from
reckless disregard by it of its obligations or duties under this Agreement.
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9. DURATION AND TERMINATION
This Agreement shall become effective as of the date first written above
and, unless sooner terminated as provided herein, shall continue in effect
until March 30, 2006. Thereafter, this Agreement shall be renewable for
successive periods of one year each, provided such continuance is
specifically approved annually:
(a) By the affirmative vote of a majority of those members of the Board
who are not parties to the Agreement or interested persons of any such
party (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
(b) By affirmative vote of either a majority of the entire Board or a
majority (as that term is defined in the 0000 Xxx) of the outstanding
voting securities of the Trust.
Notwithstanding the foregoing, this Agreement may be terminated by the
Trust or by Adviser at any time upon sixty (60) days written notice,
without payment of any penalty; provided, however that termination by the
Trust must be authorized by a majority vote of the Board or by vote of a
majority of the outstanding voting securities of the Trust. This Agreement
will automatically terminate in the event of its assignment (as that term
is defined in the 1940 Act).
10. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by a written instrument signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought. No material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act).
11. MISCELLANEOUS
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. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of the Agreement shall not be affected thereby.
This Agreement shall be binding on, and shall inure to the benefit of, the
parties hereto and their respective successors.
12. COUNTERPARTS
This Agreement may be executed in counterparts by the parties hereto, each
of which shall constitute an original, and all of which, together, shall
constitute one Agreement.
13. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by, the
laws of the State of Kentucky, without regard to such jurisdiction's
conflict-of-law statutes.
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14. NOTICES
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by
first class mail, postage prepaid or by prepaid overnight delivery service
to the respective parties as follows:
If to the Trust: If to the Adviser:
---------------- ------------------
Veracity Funds Integrity Asset Management, LLC
0000 Xxxxxxxxx Xxxxxx Xx., Xxxxx 0000 0000 Xxxxxxxxx Xxxxxx Xx., Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
President Chief Executive Officer
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
Attest: VERACITY FUNDS
By: /s/ Xxxx Bridge By: /s/ Xxxxxxx X. Xxxxx
---------------------------- ----------------------------
Name: Xxxx Bridge Xxxxxxx X. Xxxxx
Title: Assistant Secretary Title: President
Attest: INTEGRITY ASSET MANAGEMENT, LLC.
By: /s/ Xxxxxxx X. XxXxxx, III By: /s/ Xxxxxxx X. Xxxxx
---------------------------- ----------------------------
Name: Xxxxxxx X. XxXxxx, III Xxxxxxx X. Xxxxx
Title: Principal Title: Chief Executive Officer
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SCHEDULE A
VERACITY FUNDS
PORTFOLIOS OF THE TRUST
AS OF MARCH 30, 2004
The Portfolios offered by the Trust, and the fees payable to Integrity Asset
Management, LLC for services rendered to each such Portfolio, are as follows:
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Annual Fee Rate, as percentage of average
Name of Portfolio daily net assets
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Veracity Small Cap Value Fund 1.00%
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