LIBERTY NEWPORT TIGER FUND
INVESTMENT MANAGEMENT AGREEMENT
Investment Management Agreement dated November 1, 2001, by and between LIBERTY
FUNDS TRUST VII, a Massachusetts business trust (the "Trust"), and NEWPORT FUND
MANAGEMENT, INC., a Virginia corporation (the "Investment Manager"), a
registered investment corporation (the "Investment Manager"), a registered
investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain the Investment Manager to furnish
investment advisory and management services to a certain portfolio of the Trust,
and the Investment Manager is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be bound, it is agreed between the parties hereto as
follows:
1. Appointment. The Trust hereby appoints the Investment Manager to act as
investment manager to the Liberty Newport Tiger Fund series of the Trust (the
"Portfolio") for the period and on the terms set forth in this Agreement. The
Investment Manager accepts such appointment and agrees to furnish the services
herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Trust has furnished (or will furnish when
available) the Investment Manager with copies properly certified or
authenticated of each of the following:
(a) The Trust's Declaration of Trust dated July 3, 1991, as amended to
date;
(b) The Trust's By-laws, as amended to date;
(c) Resolutions of the Trust's Board of Trustees approving this Agreement;
(d) The Trust's Registration Statement on Form N-IA (or any successor form
adopted by the Securities and Exchange Commission (the "SEC") under the 1940 Act
and under the Securities Act of 1933 as amended (the "1933 Act"), relating to
shares of beneficial interest in the Portfolio (herein called the "Shares") as
filed with the SEC, and all amendments thereto;
(e) The Trust's Prospectus and Statement of Additional Information for the
Portfolio, as currently in effect (such Prospectus and Statement of Additional
Information as presently in effect and all amendments and supplements thereto
are herein called the "Prospectus" and "Statement of Additional Information",
respectively").
The Trust will furnish the Investment Manager from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing.
3. Management. Subject to the supervision of the Trust's Board of Trustees,
the Investment Manager will provide a continuous investment program for the
Portfolio, including investment research and management with respect to all
securities and investments and cash and cash equivalents in the Portfolio. The
Investment Manager will determine from time to time what securities and other
investments will be purchased, retained or sold by the Portfolio. The Investment
Manager will provide the services under this Agreement in accordance with the
Portfolio's investment objective, policies and restrictions as stated in the
Prospectus and Statement of Additional Information. The Investment Manager
further agrees that it:
(a) will conform with all applicable Rules and Regulations of the SEC and
will, in addition, conduct its activities under this Agreement in accordance
with regulations of any other Federal and State agencies which may now or in the
future have jurisdiction over its activities;
(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 or dealers, the Investment Manager will attempt to
obtain the best net price and the most favorable execution of its orders.
Consistent with this obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Investment Manager, may, in its
description, purchase and sell portfolio securities to and from brokers and
dealers who provide the Investment Manager or the Portfolio with research advice
and other services, or who sell Portfolio shares, as permitted by law, including
but not limited to Section 28(e) of the Securities Exchange Act of 1934, as
amended. In no instance will portfolio securities be purchased from or sold to
the Investment Manager or any affiliated person of the Investment Manager as
principal;
(c) will provide, or cause its affiliates to provide, all necessary
executive personnel for the Fund, the salaries and expenses of such personnel to
be borne by the Investment Managers or its affiliates;
(d) will provide, or cause its affiliates to provide, at its or their own
cost, all office space and facilities necessary for the activities of the Trust.
Notwithstanding the foregoing, the Investment Manager may obtain the services of
one or more investment counsel to act as a sub-advisor to the Portfolio. The
cost of employing such counselor or sub-advisor will be paid by the Investment
Manager and not by the Portfolio.
4. Services Not Exclusive. The investment management services furnished by
the Investment Manager hereunder are not to be deemed exclusive, and the
Investment Manager 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 the requirements of the 1940 Act,
the Investment Manager hereby agrees that all records which it maintains for 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. The Investment Manager
further agrees to preserve for the periods prescribed by the 1940 Act the
records required to be maintained by the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Manager will
pay all expenses incurred by it in connection with its investment management of
the Portfolio.
The Trust or the Portfolio as appropriate, shall bear all expenses of its
operations and business not specifically assumed or agreed to be paid by the
Investment Manager, its affiliates, or other third parties. In particular, but
without limiting the generality of the foregoing, the Trust or the Portfolio, as
appropriate, shall pay:
(1) Taxes;
(2) Brokerage fees and commissions with regard to portfolio transactions of the
Portfolio;
(3) Interest charges, fees and expenses of the custodian of the Portfolio's
securities;
(4) Fees and expenses of the Trust's transfer agent and administrator relating
to the Portfolio;
(5) Auditing and legal expenses;
(6) Cost of maintenance of the Trust's existence;
(7) The proportionate share of compensation of directors of the Trust who are
not interested persons of the Investment Manager as that term is defined by law;
(8) Costs of shareholder and trustee meetings of the Trust;
(9) Federal and State registration fees expenses;
(10) Costs of printing and mailing Prospectuses and Statements of Additional
Information for the Portfolio's shares, reports and notices to existing
shareholders;
(11) The Investment Management fee payable to the Investment Manager, as
provided in paragraph 7 herein;
(12) Costs of record keeping and daily pricing, and;
(13) Distribution expenses in accordance with any Distribution Plan as and if
approved by the shareholders of the Portfolio.
At the request of the Trust, the Investment Manager may arrange for any such
services on behalf of the Trust. If the Investment Manager makes any payment
therefor, or incurs any cost in connection therewith, the Trust shall promptly
reimburse such amounts to the Investment Manager.
If the expenses projected to be borne by the Portfolio (exclusive of interest,
brokerage commissions, taxes and extraordinary items, but inclusive of
investment management fee) in any fiscal year are expected to exceed any
applicable state expense limitation provision to which the Portfolio is subject,
the Investment Management fee payable by the Portfolio to the Investment Manager
shall be reduced on each day such fee is accrued to the extent of that day's
portion of such excess expenses. The amount of such reduction shall not exceed
the actual amount of the Investment Management fee otherwise payable in such
year. Any excess reduction accrued shall be payable to the Investment Manager by
the Trust on behalf of the Portfolio within five (5) business days after the
amount of such excess is determined.
7. Compensation. For the services provided and the expenses assumed by the
Investment Manager pursuant to this Agreement, the Portfolio will pay the
Investment Manager and the Investment Manager will accept as full compensation a
management fee, accrued daily and payable within five (5) business days after
the last business day of each month, at the annual rate of 1.00% on the first
$100 million of the aggregate net assets of the Portfolio, 0.75% in excess of
$100 million, 0.70% in excess of $1.5 billion and 0.65% in excess of $2.5
billion.
8. Limitation of Liability. The Investment Manager shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust or the
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 misfeasance, bad
faith or gross negligence on the part of the Investment Manager in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. Duration and Termination. This Agreement shall become effective on the date
first above written and, unless sooner terminated as provided herein, shall
continue in effect until July 31, 2003. Thereafter, this Agreement shall be
renewable for successive periods of one year each, provided such continuance is
specifically approved annually (a) by the vote of a majority of those members of
the Trust's Board of Trustees who are not parties to this 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 vote of either the Board of Trustees of the Trust or of a majority of
the outstanding voting securities (as that term is defined in the 0000 Xxx) of
the Portfolio. Notwithstanding the foregoing, this Agreement may be terminated
by the Trust on behalf of the Portfolio or by the Investment Manager at any time
on sixty (60) days written notice, without the payment of any penalty, provided
that termination by the Portfolio must be authorized either by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio. 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 an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. Except as permitted by the 1940 Act or any rule
thereunder or any exemptive order or no-action letter issued by the SEC
thereunder, no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the Portfolio's outstanding
voting securities (as defined in the 1940 Act)
11. Limitation of Liability of Trust. The term "Liberty Funds Trust VII" means
and refers to the trustees from time to time serving under the Declaration of
Trust dated July 3, 1991 as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust personally, but shall bind
only the trust property of the Trust, as provided in the Declaration of Trust of
the Trust. The execution and delivery of this Agreement have been authorized by
the trustees of the Trust and this Agreement has been signed by an authorized
officer of the Trust acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them but shall bind only the trust property of the Trust as
provided in its Declaration of Trust.
12. 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 this Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
13. Use of Name. The Trust and the Portfolio may use the names "Liberty",
"Liberty Financial", "Colonial" or "Newport" only for so long as this Agreement
or any extension, renewal or amendment hereof remains in effect, including any
similar agreement with any organization which shall have succeeded to the
business of the Investment Manager as investment adviser.
14. Notice. Any notice to be given as required herein may be given by personal
notification or by first class mail, postage prepaid, to the party specified at
the address stated below:
(a) To the Trust or the Portfolio at:
Liberty Funds Trust VII
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
(b) To the Investment Manager at:
Newport Pacific Management, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
15. Applicable Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NEWPORT FUND MANAGEMENT, INC.
By:__________________________________
Name:
Title:
LIBERTY NEWPORT TIGER FUND
By: LIBERTY FUNDS TRUST VII
By:__________________________________
Xxxxxxx X. Xxxxxx
Secretary
