AMENDED AND RESTATED
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN XXXXX FARGO MASTER TRUST, XXXXX FARGO FUNDS
MANAGEMENT, LLC AND XXXXX CAPITAL MANAGEMENT
INCORPORATED
This AMENDED AND RESTATED AGREEMENT is made as of this 1st day of March,
2001, as amended as of March 31, 2006, between Xxxxx Fargo Master Trust (the
"Trust"), a statutory trust organized under the laws of the State of Delaware
with its principal place of business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxx Fargo Funds Management, LLC (the "Adviser"),
a limited liability company organized under the laws of the State of Delaware
with its principal place of business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, and Xxxxx Capital Management Incorporated, a
corporation organized under the laws of the State of California, with its
principal place of business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 (the "Sub-Adviser").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "1940 Act") as an open-end, series management investment
company; and
WHEREAS, the Adviser and Sub-Adviser are registered investment advisers
under the Investment Advisers Act of 1940; and
WHEREAS, the Trust and the Adviser desire that the Sub-Adviser perform
investment advisory services for each of the series of the Trust listed in
Appendix A hereto (each a "Fund" and collectively the "Funds"), and the
Sub-Adviser is willing to perform those services on the terms and conditions set
forth in this Agreement;
NOW THEREFORE, the Trust, the Adviser and Sub-Adviser agrees as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS. The Trust is engaged in the
business of investing and reinvesting its assets in securities of the type and
in accordance with the limitations specified in its Declaration of Trust, as
amended or supplemented from time to time, By-Laws (if any) and Registration
Statement filed with the Securities and Exchange Commission (the "Commission")
under the 1940 Act and the Securities Act of 1933 (the "Securities Act"),
including any representations made in the prospectus and statement of additional
information relating to the Funds contained therein and as may be supplemented
from time to time, all in such manner and to such extent as may from time to
time be authorized by the Trust's Board of Trustees (the "Board"). The Board is
authorized to issue any unissued shares in any number of additional classes or
series. The Trust has delivered copies of the documents listed in this Section
to the Sub-Adviser and will from time to time furnish the Sub-Adviser with any
amendments thereof.
SECTION 2. APPOINTMENT OF SUB-ADVISER. Subject to the direction and
control of the Board, the Adviser manages the investment and reinvestment of the
assets of the Funds and
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provides for certain management and services as specified in the Investment
Advisory Agreement between the Trust and the Adviser with respect to the Funds.
Subject to the direction and control of the Board, the Sub-Adviser shall
manage the investment and reinvestment of the assets of the Funds, and without
limiting the generality of the foregoing, shall provide the management and other
services specified below, all in such manner and to such extent as may be
directed from time to time by the Adviser.
SECTION 3. DUTIES OF THE SUB-ADVISER.
(a) The Sub-Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets for the Funds. To carry out such
decisions, the Sub-Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Funds. In all purchases, sales and other transactions in securities for the
Funds, the Sub-Adviser is authorized to exercise full discretion and act for the
Trust in the same manner and with the same force and effect as the Trust might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions.
(b) The Sub-Adviser will report to the Board at each regular meeting
thereof all material changes in the Funds since the prior report, and will also
keep the Board informed of important developments affecting the Trust, the Funds
and the Sub-Adviser, and on its own initiative will furnish the Board from time
to time with such information as the Sub-Adviser may believe appropriate,
whether concerning the individual companies whose securities are held by a Fund,
the industries in which they engage, or the economic, social or political
conditions prevailing in each country in which the Fund maintains investments.
The Sub-Adviser will also furnish the Board with such statistical and analytical
information with respect to securities in the Funds as the Sub-Adviser may
believe appropriate or as the Board reasonably may request. In making purchases
and sales of securities for the Funds, the Sub-Adviser will comply with the
policies set from time to time by the Board as well as the limitations imposed
by the Trust's Declaration of Trust, as amended or supplemented from time to
time, By-Laws (if any), Registration Statement under the Act and the Securities
Act, the limitations in the Act and in the Internal Revenue Code of 1986, as
amended applicable to the Trust and the investment objectives, policies and
restrictions of the Funds.
(c) The Sub-Adviser may from time to time employ or associate with such
persons as the Sub-Adviser believes to be appropriate or necessary to assist in
the execution of the Sub-Adviser's duties hereunder, the cost of performance of
such duties to be borne and paid by the Sub-Adviser. No obligation may be
imposed on the Trust in any such respect.
(d) The Sub-Adviser shall maintain records relating to portfolio
transactions and the placing and allocation of brokerage orders as are required
to be maintained by the Trust under the Act. The Sub-Adviser shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such periods
and in such locations as may be required by applicable law, all documents and
records relating to the services provided by the Sub-Adviser pursuant to this
Agreement required to be prepared and maintained by the Trust pursuant to the
rules and regulations of any
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national, state, or local government entity with jurisdiction over the Trust,
including the Securities and Exchange Commission and the Internal Revenue
Service. The books and records pertaining to the Trust which are in possession
of the Sub-Adviser shall be the property of the Trust. The Trust, or the Trust's
authorized representatives (including the Adviser), shall have access to such
books and records at all times during the Sub-Adviser's normal business hours.
Upon the reasonable request of the Trust, copies of any such books and records
shall be provided promptly by the Sub-Adviser to the Trust or the Trust's
authorized representatives.
SECTION 4. CONTROL BY BOARD. As is the case with respect to the Adviser
under the Investment Advisory Agreement, any investment activities undertaken by
the Sub-Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser on behalf of the Funds, shall at all times be
subject to the direction and control the Trust's Board.
SECTION 5. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times comply
with:
(a) all applicable provisions of the 1940 Act, and any rules and
regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as it may
be amended from time to time, under the Securities Act and the 1940 Act;
(c) the provisions of the Declaration of Trust of the Trust, as it may be
amended or supplemented from time to time;
(d) the provisions of any By-laws of the Trust, if adopted and as it may
be amended from time to time, or resolutions of the Board as may be adopted from
time to time;
(e) the provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Trust or the Funds;
(f) any other applicable provisions of state or federal law; and
In addition, any code of ethics adopted by the Sub-Adviser must comply
with Rule 17j-1 under the 1940 Act, as it may be amended from time to time, and
any broadly accepted industry practices, if requested by the Trust or the
Adviser.
SECTION 6. BROKER-DEALER RELATIONSHIPS. The Sub-Adviser is responsible for
the purchase and sale of securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Sub-Adviser's primary
consideration in effecting a security transaction will be to obtain the best
price and execution. In selecting a broker-dealer to execute each particular
transaction for a Fund, the Sub-Adviser will take the following into
consideration: 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 Fund on a continuing basis. Accordingly, the price to the
Fund in any transaction may be less favorable than that available from another
broker-dealer if
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the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies as the Trust's Board of
Trustees may from time to time determine, the Sub-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 having caused a Fund to pay a broker or dealer
that provides brokerage and research services to the Sub-Adviser an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Sub-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 broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities of the Sub-Adviser
with respect to the Fund and to other clients of the Sub-Adviser. The
Sub-Adviser is further authorized to allocate the orders placed by it on behalf
of the Funds to brokers and dealers who also provide research or statistical
material, or other services to the Funds or to the Sub-Adviser. Such allocation
shall be in such amounts and proportions as the Sub-Adviser shall determine and
the Sub-Adviser will report on said allocations regularly to the Board of
Trustees of the Trust indicating the brokers to whom such allocations have been
made and the basis therefor.
SECTION 7. EXPENSES OF THE FUND. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares shall
be borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Trust include, but are not limited to, brokerage
commissions, taxes, legal, auditing or governmental fees, the cost of preparing
share certificates, custodian, transfer agent and shareholder service agent
costs, expense of issue, sale, redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses relating to trustees and
shareholder meetings, the cost of preparing and distributing reports and notices
to shareholders, the fees and other expenses incurred by the Funds in connection
with membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed to
the Funds' shareholders.
SECTION 8. COMPENSATION. As compensation for the sub-advisory services
provided under this Agreement, the Adviser shall pay the Sub-Adviser fees,
payable monthly, the annual rates indicated on Schedule A hereto, as such
Schedule may be amended or supplemented from time to time. It is understood that
the Adviser shall be responsible for the Sub-Adviser's fee for its services
hereunder, and the Sub-Adviser agrees that it shall have no claim against the
Trust or the Funds with respect to compensation under this Agreement.
SECTION 9. STANDARD OF CARE. The Trust and Adviser shall expect of the
Sub-Adviser, and the Sub-Adviser will give the Trust and the Adviser the benefit
of, the Sub-Adviser's best judgment and efforts in rendering its services to the
Trust, and as an inducement to the Sub-Adviser's undertaking these services at
the compensation level specified, the Sub-Adviser shall not be liable hereunder
for any mistake in judgment. In the absence of willful misfeasance, bad faith,
negligence or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser or any of its officers, directors, employees or agents, the
Sub-Adviser shall not be subject to liability to the Trust or to any
shareholders in the Trust 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.
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SECTION 10. NON-EXCLUSIVITY. The services of the Sub-Adviser to the
Adviser and the Trust are not to be deemed to be exclusive, and the Sub-Adviser
shall be free to render investment advisory and administrative or other services
to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or directors of the
Sub-Adviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies.
SECTION 11. RECORDS. The Sub-Adviser shall, with respect to orders the
Sub-Adviser places for the purchase and sale of portfolio securities of the
Funds, maintain or arrange for the maintenance of the documents and records
required pursuant to Rule 31a-1 under the 1940 Act as well as trade tickets and
confirmations of portfolio trades and such other records as the Adviser or the
Funds' Administrator reasonably requests to be maintained. All such records
shall be maintained in a form acceptable to the Funds and in compliance with the
provisions of Rule 31a-1 or any successor rule. All such records will be the
property of the Funds, and will be available for inspection and use by the Funds
and their authorized representatives (including the Adviser). The Sub-Adviser
shall promptly, upon the Trust's request, surrender to the Funds those records
which are the property of the Trust or any Fund. The Sub-Adviser will promptly
notify the Funds' Administrator if it experiences any difficulty in maintaining
the records in an accurate and complete manner.
SECTION 12. TERM AND APPROVAL. This Agreement shall become effective with
respect to a Fund after it is approved in accordance with the express
requirements of the 1940 Act, and executed by the Trust, Adviser and Sub-Adviser
and shall thereafter continue from year to year, provided that the continuation
of the Agreement is approved in accordance with the requirements of the 1940
Act, which currently requires that the continuation be approved at least
annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as defined in
Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trust's Trustees who are
not parties to this Agreement or "interested persons" (as defined in the 0000
Xxx) of a party to this Agreement (other than as Trustees of the Trust), by
votes cast in person at a meeting specifically called for such purpose.
SECTION 13. TERMINATION. As required under the 1940 Act, this Agreement
may be terminated with respect to a Fund at any time, without the payment of any
penalty, by vote of the Trust's Board of Trustees or by vote of a majority of a
Fund's outstanding voting securities, or by the Adviser or Sub-Adviser, on sixty
(60) days written notice to the other party. The notice provided for herein may
be waived by the party entitled to receipt thereof. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for purposes of this paragraph having the meaning defined in Section 2(a)(4) of
the 1940 Act, as it may be interpreted by the Commission or its staff in
interpretive releases, or applied by the Commission staff in no-action letters,
issued under the 1940 Act.
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SECTION 14. INDEMNIFICATION BY THE SUB-ADVISER. The Trust shall not be
responsible for, and the Sub-Adviser shall indemnify and hold the Trust or any
Fund of the Trust harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to the willful misfeasance, bad faith, negligent acts or reckless
disregard of obligations or duties of the Sub-Adviser or any of its officers,
directors, employees or agents.
SECTION 15. INDEMNIFICATION BY THE TRUST. In the absence of willful
misfeasance, bad faith, negligence or reckless disregard of duties hereunder on
the part of the Sub-Adviser or any of its officers, directors, employees or
agents, the Trust hereby agrees to indemnify and hold harmless the Sub-Adviser
against all claims, actions, suits or proceedings at law or in equity whether
brought by a private party or a governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising from the advertising,
solicitation, sale, purchase or pledge of securities, whether of the Funds or
other securities, undertaken by the Funds, their officers, directors, employees
or affiliates, resulting from any violations of the securities laws, rules,
regulations, statutes and codes, whether federal or of any state, by the Funds,
their officers, directors, employees or affiliates. Federal and state securities
laws impose liabilities under certain circumstances on persons who act in good
faith, and nothing herein shall constitute a waiver or limitation of any rights
which a Fund may have and which may not be waived under any applicable federal
and state securities laws.
SECTION 16. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000,
Attention: C. Xxxxx Xxxxxxx, and that of the Adviser shall be 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxx, and that of
the Sub-Adviser shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: J. Xxxx Xxxxx.
17. QUESTIONS OF INTERPRETATION. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to such
terms or provision of the 1940 Act and to interpretations thereof, if any, by
the United States Courts or in the absence of any controlling decision of any
such court, by rules, regulations or orders of the Commission, or
interpretations of the Commission or its staff, or Commission staff no-action
letters, issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision of
this Agreement is revised by rule, regulation or order of the Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. The duties and obligations of the parties under this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.
SECTION 18. AMENDMENT. This Agreement shall be effective on the 31st day
of March, 2006 and relates to the agreement dated as of March 1, 2001 by and
among Xxxxx Fargo Core Trust, Xxxxx Fargo Bank, N.A. and Xxxxx Capital
Management Incorporated dated November 8, 1999, as approved by the Board of
Trustees on March 26, 1999 and October 28, 1999. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only
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by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. If shareholder approval of
an amendment is required under the 1940 Act, no such amendment shall become
effective until approved by a vote of the majority of the outstanding shares of
the affected Funds. Otherwise, a written amendment of this Agreement is
effective upon the approval of the Board of Trustees, the Adviser and the
Sub-Adviser.
SECTION 19. XXXXX FARGO NAME. The Sub-Adviser and the Trust each agree
that the name "Xxxxx Fargo," which comprises a component of the Trust's name, is
a property right of the parent of the Adviser. The Trust agrees and consents
that: (i) it will use the words "Xxxxx Fargo" as a component of its corporate
name, the name of any series or class, or all of the above, and for no other
purpose; (ii) it will not grant to any third party the right to use the name
"Xxxxx Fargo" for any purpose; (iii) the Adviser or any corporate affiliate of
the Adviser may use or grant to others the right to use the words "Xxxxx Fargo,"
or any combination or abbreviation thereof, as all or a portion of a corporate
or business name or for any commercial purpose, other than a grant of such right
to another registered investment company not advised by the Adviser or one of
its affiliates; and (iv) in the event that the Adviser or an affiliate thereof
is no longer acting as investment adviser to any Fund or class of a Fund, the
Trust shall, upon request by the Adviser, promptly take such action as may be
necessary to change its corporate name to one not containing the words "Xxxxx
Fargo" and following such change, shall not use the words "Xxxxx Fargo," or any
combination thereof, as a part of its corporate name or for any other commercial
purpose, and shall use its best efforts to cause its trustees, officers and
shareholders to take any and all actions that the Adviser may request to effect
the foregoing and to reconvey to the Adviser any and all rights to such words.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
XXXXX FARGO MASTER TRUST
on behalf of the Funds
By:
-----------------------------------
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
-----------------------------------
Xxxxxx Xxxx
Senior Vice President
XXXXX CAPITAL MANAGEMENT INCORPORATED
By:
-----------------------------------
Xxxxx X'Xxxxx
Chief Financial Officer
APPENDIX A
XXXXX CAPITAL MANAGEMENT INCORPORATED
INVESTMENT SUB-ADVISORY AGREEMENT
XXXXX FARGO MASTER TRUST
Master Trust Funds
Emerging Growth Portfolio
Disciplined Value Portfolio(1)
Diversified Large Cap Growth Portfolio
Index Portfolio(1)
Inflation-Protected Bond Portfolio
International Equity Portfolio
Short-Term Investment Portfolio
Small Cap Value Portfolio
Total Return Bond Portfolio
Most recent annual approval by the Board of Trustees: March 25, 2011
Appendix A amended: May 18, 2011
(1) On May 18, 2011, the Board of Trustees of Xxxxx Fargo Funds Trust
approved the sub-adviser change to the Disciplined Value Portfolio and
Index Portfolio. Pending shareholder approval, the sub-adviser change
will become effective in the third quarter of 2011.
SCHEDULE A
XXXXX CAPITAL MANAGEMENT INCORPORATED
INVESTMENT SUB-ADVISORY AGREEMENT
AMENDED AND RESTATED FEE AGREEMENT
XXXXX FARGO MASTER TRUST
This amended and restated fee agreement is made as of the
31st day of March, 2001, and is amended as of the 18th day of May,
2011, by and between Xxxxx Fargo Funds Management, LLC (the
"Adviser") and Xxxxx Capital Management Incorporated (the
"Sub-Adviser") and
WHEREAS, the parties and Xxxxx Fargo Master Trust (the
"Trust") have entered into an Investment Sub-Advisory Agreement
("Sub-Advisory Agreement") whereby the Sub-Adviser provides
investment management advice to each series of the Trust as listed
in Schedule A to the Sub-Advisory Agreement (each a "Fund" and
collectively the "Funds").
WHEREAS, the Sub-Advisory Agreement provides that
the fees to be paid to the Sub-Adviser are to be as agreed upon in
writing by the parties.
NOW THEREFORE, the parties agree that the fees to be
paid to the Sub-Adviser under the Sub-Advisory Agreement shall
be calculated as follows on a monthly basis by applying the
following annual rates listed for each Fund listed in Appendix A.
NAME OF FUND SUB-ADVISORY RATE
------------------------------------------- -----------------
Disciplined Value Portfolio(1) First 100M 0.35%
Next 100M 0.30%
Next 300M 0.20%
Over 500M 0.15%
Diversified Large Cap Growth Portfolio First 100M 0.35%
Next 100M 0.30%
Next 300M 0.20%
Over 500M 0.15%
Emerging Growth Portfolio First 100M 0.55%
Next 100M 0.50%
Over 200M 0.40%
Index Portfolio(1) First 100M 0.05%
Next 100M 0.03%
Over 200M 0.02%
Inflation-Protected Bond Portfolio First 100M 0.20%
Next 200M 0.175%
Next 200M 0.15%
Over 500M 0.10%
International Equity Portfolio First 200M 0.45%
Over 200M 0.40%
Short-Term Investment Portfolio First 1B 0.05%
Next 2B 0.03%
Next 3B 0.02%
Over 6B 0.01%
Small Cap Value Portfolio(2) First 200M 0.45%
Over 200M 0.40%
Total Return Bond Portfolio First 100M 0.20%
Next 200M 0.175%
Next 200M 0.15%
Over 500M 0.10%
Most recent annual approval by the Board of Trustees: March 25, 2011
Schedule A amended: May 18, 2011
(1) On May 18, 2011, the Board of Trustees of Xxxxx Fargo Funds Trust
approved the sub-adviser change to the Disciplined Value Portfolio and
Index Portfolio. Pending shareholder approval, the sub-adviser change
will become effective in the third quarter of 2011.
(2) On March 25, 2011, the Board of Trustees of Xxxxx Fargo Master Trust
approved an amendment to the sub-advisory fee schedule for the Small Cap
Value Portfolio. Effective July 1, 2011, the sub-advisory fees will be:
First 100M 0.55%; Next 100M 0.50%; Over 200M 0.40%.
The foregoing fee schedule is agreed to as of May 18, 2011
and shall remain in effect until changed in writing by the parties.
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
---------------------------
Xxxxxx Xxxx
Executive Vice President
XXXXX CAPITAL MANAGEMENT INCORPORATED
By:
---------------------------
Xxxxx Xxxxxx
Chief Operating Officer
