ADVISORY AGREEMENT
AGREEMENT made as of this 27th day of June, 1997, by and between
Millennium Income Trust, a Massachusetts business trust (the "Trust"),and
Trias Capital Management, Inc., an Illinois corporation (the "Advisor").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, the units of
beneficial interest ("Shares") of which are registered or are to be
registered under the Securities Act of 1933; and
WHEREAS, the Trust is authorized to issue Shares in separate series with
each such series representing the interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust currently offers Shares in one portfolio, designated the
Treasurers' Government Money Market Fund, herein referred to as the
"Initial Portfolio," together with any other Trust portfolios which may be
established later and served by the Advisor hereunder, being herein
referred to collectively as the "Portfolios" and individually referred to
as a "Portfolio"; and
WHEREAS, the Trust desires at this time to retain the Advisor to render
investment advisory services to the Initial Portfolio, and the Advisor is
willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as
follows:
1. Appointment. The Trust hereby employs the Advisor to act as
the investment advisor for the Initial Portfolio and any other Portfolios
which become subject to this Agreement pursuant to the provisions of
Section 10 hereunder and to manage the investment and reinvestment of the
assets of such Portfolios in accordance with applicable investment
objectives, policies and restrictions, and subject to the supervision of
the Trust's Board of Trustees ("Trustees") for the period and upon the
terms herein set forth. The Advisor accepts such employment and agrees to
render such services described in Section 2 of this Agreement for the
compensation set forth in Section 3 of, and Exhibit A to, this Agreement.
2. Services of Advisor. Subject always to the supervision of the
Trustees, Advisor will furnish an investment program in respect of, and
make investment decisions for all assets of the Portfolio and place all
orders for the purchase and sale of securities, all on behalf of the
Portfolio. In the performance of its duties, the Advisor will monitor the
Portfolio's investments and; (a) will conform with all restrictions of the
Trust's Declaration of Trust and By-Laws, the stated investment objectives,
polices, restrictions and procedures of the Portfolios adopted by the
Trustees and set forth in the Trust's Prospectus, Statement of Additional
Information and any resolutions of the Trustees, and all applicable Rules
and Regulations of the Securities and Exchange Commission and in addition
will conduct its activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining to its
investment advisory activities. The Advisor will report to the Trustees
with respect to the implementation of such program.
Advisor represents that it is an investment advisor registered under
the Investment Advisors Act of 1940 (the "Advisors Act") and other
applicable Laws and that the statements contained in the Advisor's
registration under the Advisors Act on Form ADV, as of the date hereof, are
true and correct and do not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. The Advisor agrees to maintain the completeness and accuracy
of its registration on Form ADV, in accordance with all legal requirements
relating to that Form. The Advisor acknowledges that it is an "investment
advisor" to the Portfolio within the meaning of the 1940 Act and the
Advisors Act.
Advisor further agrees that it:
a. will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
b. will place orders pursuant to its investment
determinations for the Portfolio either directly with the issuer or
with any broker or dealer. In placing orders with brokers and
dealers, Advisor will attempt to obtain the best combination of
prompt execution of orders in an effective manner and at the most
favorable price. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are comparable
Advisor is hereby authorized, in its discretion, to purchase and sell
portfolio securities to and from brokers and dealers who provide
Advisor with research advice and other services. In no instance will
portfolio securities be purchased from or sold to Advisor or any
affiliated person of the Trust except as may be permitted under the
1940 Act;
c. will make available appropriate persons for reviewing
with representatives of the Trustees on a regular basis at reasonable
times the management of the Portfolio, the performance of the
Portfolio in relation to standard industry indices, interest rate
considerations and general conditions affecting the marketplace and
will provide various other reports from time to time as reasonably
requested by the Trustees;
d. will treat confidentially and as proprietary information
provided by the Trust and all records and other information relative
to the Trust, and will not use such records and information for any
purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing
by the Trust which approval shall not be unreasonably withheld and
may not be withheld either where the Advisor may be exposed to civil
or criminal contempt proceedings for failure to comply, or when
requested to divulge such information by duly constituted
authorities, or when so requested by the Trust;
e. will immediately notify the Trustees in the event that
the Advisor or any of its affiliates: (i) becomes subject to a
statutory disqualification that prevents the Advisor from serving
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pursuant to this Agreement; or (ii) is or expects to become the
subject of an administrative proceeding or enforcement action by the
SEC or other regulatory authority. The Advisor has provided the
information about itself set forth in the Registration Statement and
acknowledges that, as of the date hereof, it is true and correct and
contains no material misstatement or omission, and the Advisor
further agrees to notify the Trustees or their representative
immediately of, (i) any material fact known to the Advisor respecting
or relating to the Advisor that is not contained in the Prospectus or
Statement of Additional Information of the Trust or any amendment or
supplement thereto, if the omission of such would make such document
misleading, or (ii) any statement therein that becomes untrue in any
material respect.
f. will surrender promptly to the Trust any records or
copies of records maintained for the Trust upon the Trust's request
and will preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under
the 1940 Act and to preserve the records required by Rule 204-2 under
the Advisors Act for the periods specified in the Rule.
g. furnish office facilities, equipment and general clerical
services for the Trust, and, if desired by the Trust, permit members
or employees of the Advisor to serve without compensation from the
Trust, as trustees, officers or agents of the Trust if duly elected
or appointed to such positions and subject to their individual
consent and to any limitations imposed by law.
h. furnish the Trustees such periodic and special reports as
the Board may request; and provide such other services reasonably
requested by the Trust.
The Advisor shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust. Although the
Advisor's activities are subject to oversight by the Board of Trustees
neither the Board or its officers evaluates the investment merits of the
Advisor's individual security selections.
3. Advisory Fee. For the services and facilities described in
Section 2, the Trust will accrue daily and pay monthly a fee to Advisor at
the annual rate applied to the value of that Portfolio's daily average net
assets as set forth in Exhibit A. The value of the Portfolio's net assets
will be computed in the manner described in the Trust's current Prospectus
and/or Statement of Additional Information. On each day the net asset
value is not calculated, the net asset value of a Portfolio shall be deemed
to be the net asset value as of the close of business on the last day on
which such calculation was made for the purpose of the foregoing
computations. The fee for a given month shall be paid on the first
business day of the following month. For the month and year in which this
Advisory Agreement (the "Agreement") becomes effective or terminates, there
shall be an appropriate proration on the basis of the number of days that
the Agreement is in effect during the month and year, respectively. The
services of the Advisor to the Trust under this Agreement are not to be
deemed exclusive, and the Advisor shall be free to render similar services
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or other services to others. From time to time the Advisor may agree to
waive a portion or all of its fee, in the Advisor's sole discretion.
4. Expenses. The Advisor will pay all expenses incurred by it in
connection with its activities under this Agreement. The Advisor shall not
be required to pay and the Trust shall assume and pay the charges and
expenses of its operations, including but not limited to expenses for
services rendered by a custodian for the safekeeping of the Fund's
securities or other property, compensation of the trustees (other than
those affiliated with the Advisor or the Administrator), charges and
expenses of independent auditors, of legal counsel, of any transfer or
dividend disbursing agent, any registrar of the Fund, costs of acquiring
and disposing of portfolio securities, interest, if any, on obligations
incurred by the Fund, costs of pricing services to obtain valuations of
portfolio securities, costs of share certificates and reports, insurance
premiums, membership dues in the Investment Company Institute or any
similar organization, reports and notices to shareholders, stationery,
printing, postage, other like miscellaneous expenses and all taxes and fees
payable to federal, state or other government agencies on account of the
registration of securities issued by the Trust, filing of corporate
documents or otherwise. The Trust shall not pay or incur any obligation
for any expenses for which the Trust intends to seek reimbursement from the
Advisor as herein provided without first obtaining the written approval of
the Advisor. From time to time the Advisor may agree to reimburse the
Trust additional expenses or waive a portion or all of its fee payable
pursuant to Section 4, in the sole discretion of the Advisor.
If expenses borne by the Trust for any Portfolio which the Advisor
manages in any fiscal year (including the Advisor's fee, but excluding
interest, taxes, fees incurred in acquiring and disposing of portfolio
securities and, to the extent permitted, extraordinary expenses) exceed the
expense limitation imposed by any state having jurisdiction over the Trust,
the Advisor will reimburse the Trust to the extent required by state law.
Notwithstanding anything in the foregoing to the contrary, the Advisor
shall not be obligated to reimburse a Portfolio in an amount exceeding its
Advisor Fee for the period received from such Portfolio unless required to
do so under applicable state law.
5. Services to Others. The Advisor may act as an investment
advisor to other managed accounts, including other investment companies.
The Trust has no objection to the Advisor's acting in such capacities,
provided that whenever the Portfolio and one or more investment companies
or accounts advised by the Advisor have available funds for investment,
investments suitable and appropriate for each will be allocated in a manner
which in the opinion of the Advisor is the most equitable for the Portfolio
and all other companies or accounts concerned. The Trustees have been
advised that in some cases this procedure may adversely affect the size of
the position that the Portfolio may obtain in a particular security. In
addition, the Trustees have been advised, that the persons employed by the
Advisor to assist in the Advisor's duties under this Agreement will not
devote their full time to such service and nothing contained in this
Agreement will be deemed to limit or restrict the right of Advisor or any
of its affiliates to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
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6. Custody of Portfolio Assets. Advisor hereby agrees that
(i) the Trust shall be responsible for making custodial arrangements for
the Portfolio; and (ii) all assets in respect of which the Advisor shall
provide services pursuant to this Agreement shall be the property of the
Trust and all investments capable of registration will be registered in the
name of the Trust or the Trust's Custodian; and (iii) all certificates and
documents of title relating to any such assets (whether or not in
registered form) will be held for safekeeping by the Trust's Custodian.
The Trust hereby authorizes the Advisor to give such instructions to
the Trust's Custodian for delivery of all documents relating to title,
rights and privileges attaching to investments as is necessary in
connection with any services provided by the Advisor under this Agreement.
7. Limitation of Liability of Advisor. The Trust will not take
any action against the Advisor to hold the Advisor liable for any error of
judgment or mistake of law or for any loss or failure to take profit or
advantage in connection with the performance of the Advisor's duties under
this Agreement, except a loss resulting from Advisor's willful misfeasance,
bad faith, or gross negligence in the performance of its duties under this
Agreement. In addition, the Advisor shall not be liable for any act or
failure to act by the Trust's Custodian. The Advisor agrees to indemnify
the Trust against any claim against, loss to or liability of the Trust
(including reasonable attorneys fees) arising out of any action on the part
of the Advisor which constitutes willful misfeasance, bad faith or gross
negligence.
8. Term; Termination; Amendment. This Agreement shall become
effective with respect to the Initial Portfolio on the date hereof and
shall remain in full force for two years from the effective date unless
sooner terminated as hereinafter provided. This Agreement shall continue
in force from year to year thereafter with respect to the Initial Portfolio
and each other Portfolio to which the Agreement shall have become
applicable, but only so long as such continuance is specifically approved
for each Portfolio at least annually in the manner required by the
Investment Company Act of 1940 and the rules and regulations thereunder;
provided, however, that if the continuation of this Agreement is not
approved for a Portfolio, the Advisor may continue to serve in such
capacity for such Portfolio in the manner and to the extent permitted by
the Investment Company Act of 1940 and the rules and regulations
thereunder.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any
penalty by the Trust or by the Advisor on sixty (60) days written notice to
the other party. The Trust may effect termination with respect to any
Portfolio by action of the Board of Trustees or by vote of a majority of
the outstanding voting securities of such Portfolio.
This Agreement may also be terminated with respect to any Portfolio
at any time, without the payment of any penalty by the Trust, in the event
that it shall have been established by a court of competent jurisdiction
that the Advisor or any officer or member of the Advisor has taken any
action which results in a breach of the covenants of the Advisor set forth
herein.
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The terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the Investment
Company Act of 1940 and the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of the Advisor to
receive payments on any unpaid balance of the compensation described in
Section 3 earned prior to such termination.
9. Amendment of this Agreement. As to each Portfolio of the Fund,
this Agreement may be amended only by an instrument in writing signed by
the party against which enforcement of the amendment is sought. An
amendment of this Agreement affecting a Portfolio hereunder shall not be
effective until approved in the manner required by the Investment Company
Act of 1940 and the rules and regulations thereunder.
10. Additional Portfolios. In the event that the Trust establishes
one or more portfolios other than the Initial Portfolio with respect to
which it desires to engage the Advisor to render investment advisory and
management service hereunder, it shall notify the Advisor of such desire.
If the Advisor is willing to render such services and the Trust and the
Advisor agree upon the management fee rates (including breakpoints) to be
payable by such portfolio or portfolios, the Advisor and the Trust shall
each execute an amendment to Exhibit A of this Agreement setting forth the
agreed upon fee rates, whereupon such portfolio or portfolios shall become
a Portfolio or Portfolios hereunder.
11. Affiliations. Subject to applicable statutes and regulation,
it is understood that trustees, officers or agents of the Trust are or may
be interested in the Advisor as members, officers, agents or otherwise, and
that the members, officers and agents of the Advisor may be interested in
the Trust otherwise than as a trustee, officer or agent.
12. Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
13. Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at
its principal place of business or such other address as either party may
designate for the receipt of such notice.
14. Applicable Law. This Agreement will be construed in accordance
with applicable federal law and the laws of the State of Illinois.
15. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provision hereof or otherwise affect their construction or effect.
16. Disclaimer of Liability. A copy of the Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts and notice
is hereby given to Advisor that this Agreement has been executed on behalf
of Fund by the undersigned officer of Fund in her capacity as an officer of
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Fund. The Advisor agrees that the obligations assumed by the Trust
pursuant to this Agreement shall be limited in any case to the Trust and
its assets and that the Advisor shall not seek satisfaction of any such
obligations from the Shareholders of the Trust, the Trustees, officers,
employees or agents of the Trust or any of them individually.
IN WITNESS WHEREOF, the Trust and the Advisor have caused this
Agreement to be executed as of the day and year first above written.
MILLENNIUM INCOME TRUST
By: /s/ XXXXX X. XXXXXXXXXXX, XX.
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Xxxxx X. Xxxxxxxxxxx, Xx., President
ATTEST:
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TRIAS CAPITAL MANAGEMENT, INC.
By: /s/ XXXXX X. XXXXXXXXXXX, XX.
-----------------------------
Xxxxx X. Xxxxxxxxxxx, Xx., Chairman
ATTEST:
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EXHIBIT A
ADVISOR'S RATE OF FEE IN
ACCORDANCE WITH SECTION 4
PORTFOLIO OF THIS AGREEMENT
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Treasurer's Government Portfolio .20%
n
