XXXXXXXXXXX.XXX TRUST
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT ("Agreement) is made of the ___ day of
October, 2000, by and between TRUST FOR INVESTMENT MANAGERS, a Delaware business
trust (the "Trust"), on behalf of its series, XxxxxXxxxxx.xxx Market Leaders
Growth Fund, XxxxxXxxxxx.xxx Pure Play Internet Fund and XxxxxXxxxxx.xxx
Community Intelligence Fund (the "Funds") and XXXXXXXXXXX.XXX INVESTMENT
ADVISORS, INC., A Delaware corporation (the "Advisor").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company, registered
as such under the Investment Company Act of 1940 (the "Investment Company Act");
and
WHEREAS, each Fund is a series of the Trust having separate assets and
liabilities; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 and is engaged in the business of providing
investment advice to individual clients and investment companies; and
WHEREAS, the Trust desires to retain the Adviser to render advice and
services to the Funds pursuant to the terms and provisions of this Agreement,
and the Adviser desires to furnish said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties to this Agreement, intending to be legally
bound hereby, mutually agree as follows:
1. APPOINTMENT OF ADVISOR. The Trust hereby employs the Adviser and the
Adviser hereby accepts such employment, to render investment advice and related
services with respect to the assets of each Fund for the period and on the terms
set forth in this Agreement, subject to the supervision and direction of the
Board of Trustees.
2. DUTIES OF ADVISER.
(a) GENERAL DUTIES. The Adviser shall act as investment adviser to
each Fund and shall supervise investment of each Fund's assets on behalf of that
Fund in accordance with the investment objective, policies and restrictions of
the Funds as set forth in the Funds' and Trust's governing documents, including,
without limitation, the Trust's Agreement and Declaration of Trust and By-Laws;
the Funds' prospectus, statement of additional information and undertakings in
effect from time to time; and such other limitations, policies and procedures as
the Trustees may impose from time to time in writing to the Adviser. In
providing such services, the Adviser shall at all times adhere to the provisions
and restrictions contained in the federal securities laws, applicable state
securities laws, the Internal Revenue Code, the Uniform Commercial Code and
other applicable law.
Without limiting the generality of the foregoing, the Adviser shall: (i)
furnish the Fund with advice and recommendations with respect to the investment
of the Funds' assets and the purchase and sale of portfolio securities for the
Funds, including the taking of such steps as may be necessary to implement such
advice and recommendations (e.g., placing the orders); (ii) manage and oversee
the investments of the Funds, subject to the ultimate supervision and direction
of the Board of Trustees; (iii) vote proxies for the Funds, file ownership
reports under Section 13 of the Securities Exchange Act of 1934 for the Funds,
and take other similar actions on behalf of the Funds; (iv) maintain the books
and records required to be maintained by the Funds except to the extent
arrangements have been made for such books and records to be maintained by the
administrator or another agent of the Funds; (v) furnish reports, statements and
other data on securities, economic conditions and other matters related to the
investment of the Fund's assets which the Funds' administrator or distributor of
the officers of the Trust may reasonably request; and (vi) render to the Board
of Trustees such periodic and special reports with respect to the Funds'
investment activities as the Board may reasonably request, including at least
one in-person appearance annually before the Board of Trustees. Notwithstanding
the provisions of this Section 2(a), the Adviser may delegate some or all of
these duties under Section 2(c) below.
(b) BROKERAGE. The Adviser shall be responsible for decisions to buy
and sell securities for the Funds, for broker-dealer selection, and for
negotiation of brokerage commission rates, provided that the Adviser shall not
direct orders to an affiliated person of the Adviser without general prior
authorization to use such affiliated broker or dealer from the Board of
Trustees. The Adviser's primary consideration in effecting a securities
transaction will be to obtain on behalf of a Fund the best available price and
execution. In selecting a broker-dealer to execute each particular transaction,
the Adviser may take into consideration all factors it deems relevant, including
without limitation: the best net price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Fund on a continuing basis.
The price to a Fund in any transaction may be less favorable that that available
from another broker-dealer if the difference is reasonably justified by other
aspects of the portfolio execution services offered.
Subject to such policies as the Board of Trustees may determine, the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused a Fund to pay a broker or dealer that provides (directly or indirectly)
brokerage or research services to the Adviser an amount of commission for
effecting a portfolio transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Adviser determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
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broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Trust. The Adviser is
further authorized to allocate the orders placed by it on behalf of a Fund to
such brokers or dealers who also provide research or statistical material, or
other services, to the Trust, the Adviser, or any affiliate of either. Such
allocation shall be in such amounts and proportions as the Adviser shall
determine, and the Adviser shall report on such allocations regularly to the
Trust, indicating the broker-dealers to whom such allocations have been made and
the basis therefore. The Adviser is also authorized to consider sales of shares
as a factor in the selection of brokers or dealers to execute portfolio
transactions, subject to the requirements of best price and execution.
On occasions when the Adviser deems the purchase or sale of a security to
be in the best interest of a Fund as well as of other clients, the Adviser, to
the extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to a Fund and to such other clients.
(c) DELEGATION OF RESPONSIBILITIES. Notwithstanding the provisions of
Sections 2(a) and 2(b), respectively, the Adviser may delegate the performance
of investment advisory services for a Fund to one or more sub-advisers approved
by the Board of Trustees, but such delegation will not relieve the Adviser of
the duty to supervise the performance of advisory services hereunder. If the
advisory functions are delegated to one or more sub-advisers, then the
obligations of each such sub-adviser shall be governed by a sub-advisory
agreement to be entered into between the Adviser and each such sub-adviser.
3. REPRESENTATIONS OF THE ADVISER.
(a) The Adviser shall use its best judgment and efforts in rendering
the advice and services to the Funds as contemplated by this Agreement.
(b) The Adviser shall maintain all licenses and registrations
necessary to perform its duties hereunder in good order.
(c) The Adviser shall conduct its operations at all times in
conformance with the Investment Advisers Act of 1940, the Investment Company
Act, and any other applicable state and/or self-regulatory organization laws and
regulations.
(d) The Adviser shall maintain errors and omissions insurance in an
amount at least equal to that disclosed to the Board of Trustees in connection
with their approval of this Agreement.
(e) The Adviser is a corporation duly organized and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to enter into this Agreement and to perform services hereunder, the
execution and delivery of this Agreement by the Adviser has been duly authorized
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by all necessary corporate action, and this Agreement is a valid binding
obligation of the Adviser, enforceable against the Adviser in accordance with
its terms.
4. INDEPENDENT CONTRACTOR. The Adviser 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
a Fund. It is expressly understood and agreed that the services to be rendered
by the Adviser to the Funds under the provisions of this Agreement are not to be
deemed exclusive, and the Adviser 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.
5. ADVISER'S PERSONNEL. The Adviser 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 obligation under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Adviser shall be
deemed to include persons employed or retained by the Adviser to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Adviser or the Board of Trustees may desire and reasonably request.
6. EXPENSES. With respect to the operation of the Funds, the Adviser shall
be responsible for (i) providing the personnel, office space and equipment
reasonably necessary for the investment management of the Funds, (ii) the
expenses of printing and distributing extra copies of the Funds' prospectus,
statement of additional information, and sales and advertising materials (but
not the legal, auditing or accounting fees attendant thereto) to prospective
investors (but not to existing shareholders), and (iii) the costs of any special
Board of Trustees meetings or shareholder meetings convened for the primary
benefit of the Adviser. The Adviser shall be responsible for payment of the
Funds' operating expenses, including but not limited to: administrative fees
payable to any administrator under the appropriate agreements entered into with
the Adviser or the Trust, as the case may be; fees and expenses incurred in
connection with the issuance, registration and transfer of Trust shares; 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
counting services agent; interest charges on any borrowings; costs and expenses
of pricing and calculating the Funds' daily net asset value and of maintaining
the Funds' books of account required under the Investment Company Act; taxes, if
any; expenditures in connection with meetings of the Funds' shareholders and the
Trust's Board of Trustees; salaries and expenses of officers and fees and
expenses of members of, affiliated with or interested persons of the Adviser or
the Administrator; insurance premiums on property or personnel of the Funds,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Funds or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues; fees
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and expenses (including legal fees) of registering and maintaining registration
of its shares for sale under federal and applicable state and foreign securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for benefit of the Funds, if any; and all other charges and costs of
the Funds' operation. Notwithstanding any other provision of this Agreement to
the contrary, however, the Adviser will not be responsible for any brokerage
commissions or extraordinary and non-recurring expense, except as specifically
agreed to herein or as otherwise prescribed.
7. Investment Advisory Fee.
(a) Each Fund shall pay to the Adviser, and the Adviser agrees to
accept as full compensation for all investment and advisory services furnished
or provided to the Funds pursuant to this Agreement, an annual investment
advisory fee at the rate equal to 1.00% of a Fund's average daily net assets.
(b) The investment advisory fee shall be accrued daily by the Funds
and paid to the Adviser on the first business day of the succeeding month.
(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 prior
to the end of any month, the fee to the Adviser 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 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 fee payable to the Adviser by a Fund under this Agreement will
be reduced to the extent of any receivable owed by the Adviser to the Fund and
as required under any expense limitation applicable to the Fund.
(e) The Adviser agrees to reduce any portion of the compensation or
reimbursement of expenses due to it pursuant to this Agreement and agrees to
make payments to limit the expenses which are the responsibility of each Fund
under this Agreement to a maximum of 1.45% of each Fund's average daily net
assets. Such reduction will be estimated daily and reconciled and paid on a
monthly basis.
(f) The Adviser may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to this
Agreement. 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 Adviser
hereunder.
8. NO SHORTING; NO BORROWING. The Adviser agrees that neither it nor any of
its officers or employees shall take any short position in the shares of a Fund.
This prohibition shall not prevent the purchase of such shares by any of the
officers or employees of the Adviser or any trust, pension, profit-sharing or
other benefit plan for such persons or affiliates thereof, at a price not less
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than the net asset value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the Investment Company Act. The Adviser agrees that
neither it nor any of its officer or employees shall borrow from a Fund or
pledge or secure a Fund's assets in connection with any borrowing not directly
for the Fund's benefit. For this purpose, failure to pay any amount due and
payable to a Fund for the a period of more than thirty (30) days shall
constitute borrowing.
9. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS. Nothing
herein contained shall be deemed to require the Trust or a Fund to take any
action contrary to the Trust's Agreement and Declaration of Trust, By-Laws, or
any applicable state 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 the Funds. In this connection, the Adviser
acknowledges that the Trustees retain ultimate plenary authority over the Funds
and may take any and all actions necessary and reasonable to protect the
interests of shareholders.
10. REPORTS AND ACCESS. The Adviser agrees to supply such information to
the Funds' administrator and to permit such compliance inspections by the
administrator as shall be reasonably necessary to permit the administrator to
satisfy its obligations and respond to the reasonable requests of the Trustees.
11. ADVISER'S LIABILITIES AND INDEMNIFICATION.
(a) The Adviser shall have responsibility for the accuracy and
completeness of the statements in the Funds' offering materials (including the
prospectus, the statement of additional information, advertising and sales
materials), except for information supplied by any sub-adviser, the
administrator or the Trust or another third party for inclusion therein.
(b) The Adviser shall be liable each Fund for any loss (including
brokerage charges) incurred by that Fund as a result of any improper investment
made by the Adviser.
(c) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties hereunder on the
part of the Adviser, the Adviser 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 a
Fund.
(d) Each party to this Agreement shall indemnify and hold harmless the
other party and the shareholders, trustees, officers and employees of the other
party (any such person, an "Indemnified Party") against any loss, liability,
claim, damage or expense (including the reasonable cost of investigation 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 nonperformance of any duties under this Agreement;
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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 gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties under this Agreement.
(e) No provision of this Agreement shall be construed to protect any
Director or Officer of the Trust, or officer of the Adviser, from liability in
violation of Sections 17(h) and (i) of the Investment Company Act.
12. NON-EXCLUSIVITY: TRADING FOR ADVISER'S OWN ACCOUNT. The Trust's
employment of the Adviser is not an exclusive arrangement. The Trust may from
time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Adviser may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from having, selling or trading any securities for its or their own accounts or
the accounts of other for whom it or they may be acting; provided, however, that
the Adviser expressly represents that it will undertake no activities which will
adversely affect the performance of its obligations to each Fund under this
Agreement; and provided further the at the Adviser shall adhere to a code of
ethics governing employee trading and trading for proprietary accounts that
conforms to the requirements of the Investment Company Act and the Investment
Advisers Act of 1940 and has been approved by the Trust's Board of Trustees.
13. TERM. This Agreement shall become effective at the time the Funds
commence operations pursuant to an effective amendment to the Trust's
Registration Statement under the Securities Act of 1933 and shall remain in
effect for a period of two (2) years, unless sooner terminated as hereinafter
provided. This Agreement shall continue in effect thereafter with respect to a
Fund for additional periods not exceeding one (1) year so long as such
continuation is approved for that Fund at least annually by (i) the Board of
Trustees of the Trust or by the vote of a majority of the outstanding voting
securities of that Fund and (ii) the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement nor interested persons thereof, cast
in person at a meeting called for the purpose of voting on such approval. The
terms "majority of the outstanding voting securities" and "interested persons"
shall have the meanings as set forth in the Investment Company Act.
14. Ownership of the Name of the Fund. The parties to this Agreement hereby
acknowledge that the prefix to the name of the Trust and the Funds,
XxxxxXxxxxx.xxx, is the exclusive property of the parent of the Adviser and
XxxxxXxxxxx.xxx, Inc. and is not the property of the Trust or the Funds. In the
event that the Adviser ceases to provide investment advisory services to a Fund
pursuant to this Agreement, a Fund shall change its name within thirty (30) days
of the termination of this Agreement.
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15. BOOKS AD RECORDS; CONFIDENTIALITY.
(a) In compliance with the requirements of Rule 31a-3 under the
Investment Company Act, the Adviser agrees that all record which it maintains
for the Trust are the property of the Trust and further agrees to surrender
promptly to the Trust any such records upon the Trust's request. The Adviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
Investment Company Act the records required to be maintained by Rule 31a-1 under
such Act.
(b) The Adviser shall treat as confidential and proprietary
information of the Trust all records and other information relative to the Trust
and shareholders of the Trust, or persons who respond to inquiries concerning
investment in the Trust, and shall not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder or
under any other agreement with the Trust, except as otherwise provided in
writing by the Trust (which approval shall not be unreasonably withheld if the
Adviser may be exposed to civil or criminal proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Trust). However, nothing herein shall be deemed to
prohibit the Adviser or its affiliates from using in any manner information
provided by the Adviser or its affiliates to the Trust, or from advertising to
or soliciting the public generally with respect to other products and services,
regardless of whether such advertisements or solicitation may coincidentally
include prior or present shareholders or persons who have responded to inquiries
regarding the Trust.
16. TERMINATION; NO ASSIGNMENT.
(a) This Agreement may be terminated by the Trust on behalf of a Fund
at any time without payment of any penalty, by the Board of Trustees or by vote
of a majority of the outstanding voting securities of the Fund, upon sixty (60)
days written notice to the Adviser, and by the Adviser upon sixty (60) days
written notice to the Fund. In the event of a termination, the Adviser shall
cooperate in the orderly transfer of the Fund's affairs and, at the request of
the Board of Trustees, transfer any and all books and records of the Fund
maintained by the Adviser on behalf of the Fund.
(b) This Agreement shall terminate automatically in the event of any
transfer or assignment thereof, as defined in the Investment Company Act.
17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement and understanding between the parties hereto. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement thereof
is sought. To the extent required by the Investment Company Act, no amendment of
this Agreement shall be effective until approved by a majority of the
outstanding voting securities of each Fund (as defined in such Act).
18. DECLARATION OF TRUST. The Agreement and Declaration of Trust of the
Trust is on file with the Secretary of the State of Delaware. In accordance
therewith, the Adviser acknowledges and agrees that this Agreement was signed on
behalf of the Trust by the undersigned as officers of the Trust and not
individually, and that the obligations of the Trust under this Agreement are not
binding upon any officers, trustees or shareholders of the Trust individually
but are binding only upon the assets of each Fund.
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19. 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.
20. 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.
21. 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 Investment Company 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 by their duly authorized officers, all on the day and year first
above written.
TRUST FOR INVESTMENT MANAGERS XXXXXXXXXXX.XXX INVESTMENT
On behalf of its series, the ADVISORS, INC.
XxxxxXxxxxx.xxx Community Intelligence Fund
XxxxxXxxxxx.xxx Pure Play Internet Fund
XxxxxXxxxxx.xxx Community Intelligence Fund
By: By:
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Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer Title: Chief Executive Officer
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