Exhibit (k)(b)
ADMINISTRATION AGREEMENT
AGREEMENT made as of this 7th day of October, 1996, by and between The
Principled Equity Market Fund, a Massachusetts business trust (the "Fund"), and
Anchor Investment Management Corporation, a Massachusetts corporation (the
"Administrator").
W I T N E S S E T H :
WHEREAS, the Fund is engaged in business as a closed-end management
investment company and is so registered under the Investment Company Act of
1940, as amended; and
WHEREAS, the Administrator is engaged in the business of rendering
administrative services; and
WHEREAS, the Fund desires to retain the Administrator to furnish
administrative services and the Administrator is willing to furnish such
services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
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(a) Services Rendered and Expenses Paid by the Administrator.
The Administrator, subject to the control, direction and
supervision of the Board of Trustees of the Fund and in conformity with
applicable laws, this Agreement, the Fund's Declaration of Trust By-Laws,
registration statements and amendments thereto, prospectuses and statements of
additional information, as in effect from time to time, and stated investment
objectives, policies and restrictions, shall, as directed by the Fund from time
to time, at its own expense perform as administrative services for the Fund such
of the following as the Fund shall designate:
(1) compute the net asset value per share of the Fund once
each week or at such longer intervals as the Fund may designate;
(2) prepare and file all registration or other material
required by federal and state laws for the registration or other
qualification of the Fund and its shares for sale to the public as
required by such laws;
(3) prepare and file or mail all reports and statements
required of the Fund by federal and state laws, to be filed or sent by
the Fund to all authorities and security holders of the Fund;
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(4) maintain contact with and coordinate the Fund's public
accountants, legal counsel, custodian, transfer and service agent and
other providers of services to the Fund, all of whose fees shall be
paid independently by the Fund, and perform customary checks and
confirmations of such services and the records thereof;
(5) coordinate the Fund's portfolio transactions and cash
management with the Fund's custodian;
(6) receive, confirm and pay over to the Fund's custodian the
proceeds of sales by the Fund of its shares and administer and confirm
to the Fund's transfer agent and shareholders the sales of its shares
by the Fund; and
(7) prepare and maintain on behalf of the Fund such records of
the Fund's business transactions as are not maintained by other service
providers to the Fund and generally take all such other action as may
be required to administer the Fund's business.
The Fund shall pay the Administrator's out-of-pocket expenses for
supplies, printing and postage incurred by the Administrator in the performance
of its duties hereunder. To the extent that any of the foregoing expenses are
allocated between the Fund and any other party, such allocations shall be
pursuant to methods approved by the Board of Trustees of the Fund.
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(b) Role of the Administrator.
(i) The Administrator, and any person controlling, controlled
by or under common control with the Administrator shall be free to
render similar services to others and to engage in other activities, so
long as the services rendered to the Fund are not impaired.
(ii) Except as otherwise required by the Investment Company
Act of 1940, as amended, any of the shareholders, Trustees, officers
and employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Administrator, and in
any person controlling, controlled by or under common control with the
Administrator, and the Administrator, and any person controlling,
controlled by or under common control with the Administrator, may have
an interest in the Fund.
(iii) Except as otherwise agreed, in the absence of willful
misfeasance, bad faith, or negligence, neither the Administrator nor
any of its officers, directors, employees or agents shall be subject to
liability to the Fund for any act or omission in the course of, or
connected with, rendering services hereunder, and each shall be
indemnified and held harmless by the Fund from and against any losses,
claims, damages and legal fees and other expenses arising out of their
due performance of this Agreement in the absence of willful
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misfeasance, bad faith, or negligence on the part of the Administrator
and any of its officers, directors, employees and agents.
(c) Compensation of the Administrator.
(i) As full compensation for the services rendered, facilities
furnished and costs not specifically paid by the Fund under this
Agreement, the Fund agrees to pay to the Administrator a monthly fee at
the annual rate of $6,000.
(ii) If the Administrator shall serve for less than the whole
of any period, the foregoing compensation shall be prorated.
(c) Term and Termination.
(i) This Agreement shall become effective on the date hereof,
shall remain in full force and effect for one year from the date hereof
and shall continue in full force and effect for successive periods of
one year thereafter, but only so long as each such continuance is
approved at least annually by the Board of Trustees of the Fund.
(ii) This Agreement may be terminated at any time without the
payment of any penalty by vote of the Board of Trustees of the Fund or
by the Administrator, on not more than sixty (60) days, nor less than
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thirty (30) days, written notice to the other party, or upon such
shorter notice as may be mutually agreed upon.
(iii) This Agreement may not be assigned by either party
without the written consent of the other party.
(d) Miscellaneous. For the purposes of this Agreement, the
terms "affiliated person," "assignment" and "interested person," shall
have their respective meanings defined in the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted to either the
Administrator or the Fund by the Securities and Exchange Commission.
(e) Limitation of Liability of the Trustees and Shareholders.
A copy of the Declaration of Trust of the Fund is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees
of the Fund 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 Fund but are binding only upon the assets and
property of the Fund.
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IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
THE PRINCIPLED EQUITY MARKET FUND
By: S/Xxxxx X.X. Xxxxxx
Xxxxx X.X. Xxxxxx, President
ANCHOR INVESTMENT MANAGEMENT
CORPORATION
By:S/Xxxxx X Xxxxxxxx, Authorized Officer
Xxxxx X. Xxxxxxxx, Authorized Officer
