EXHIBIT 5.A
CMC FUND TRUST
CMC SMALL CAP FUND
INVESTMENT ADVISORY CONTRACT
This Agreement is made the 8th day of August, 1989 between CMC
FUND TRUST, an Oregon business trust (the "Fund"), and COLUMBIA MANAGEMENT
CO., an Oregon corporation having its principal place of business in
Portland, Oregon (the "Adviser"). The Fund has established its first Series
of shares, referred to as "CMC Small Cap Fund," (the "Series") and this
Agreement relates to services to be performed by the Adviser with respect
to that Series.
The parties agree as follows:
1. Duties of Adviser. With respect to the Series, the Adviser shall
regularly provide the Fund with research, advice, and supervision with
respect to investment matters and shall furnish continuously an investment
program, recommend what securities shall be purchased or sold and what
portion of the Fund's assets shall be held invested or uninvested, subject
always to the provisions of the Investment Company Act of 1940 (the "Act")
and the Fund's Declaration of Trust and Bylaws, and amendments thereto,
which amendments shall be furnished to the Adviser by the Fund. The Adviser
shall take any steps necessary or appropriate to carry out its decisions in
regard to the foregoing matters and the general conduct of the business of
the Fund. The Adviser may take into consideration receipt of research and
statistical information and other services rendered to the Fund in the
allocation of commissions from portfolio brokerage business.
2. Allocation of Charges and Expenses.
(a) With respectto the Series, the Adviser shall pay or reimburse
the Fund for payments made by the Fund for all executive salaries and
executive expenses, office rent of the Fund, ordinary office expenses
(other than the expense of clerical services relating to the administration
of the Fund), and for any other expenses that, if otherwise borne by the
Fund, would cause the Fund to "be deemed to be acting as a distributor of
securities of which it is the issuer, other than through an underwriter,"
pursuant to Rule 12b-1 under the Act. The Adviser shall provide investment
advisory, statistical and research facilities and all clerical services
relating to research, statistical, and investment work with respect to the
Series.
(b) The Adviser shall not be required to pay any expenses of the
Fund other than those enumerated in this Agreement. The Fund will assume
all other costs, including the cost of its custodian, legal, auditing, and
accounting expenses, disinterested directors' fees, taxes, and governmental
fees, interest, brokers' commissions, transaction expenses, cost of stock
certificates, and any other expenses (including clerical expenses) of
issue, sale, repurchase, or redemption of shares, expenses of registering
or qualifying shares for sale, transfer taxes, and all expenses of
preparing the Fund's registration statement and prospectus, and the cost of
printing and delivering to shareholders prospectuses and reports.
3. Compensation of the Adviser. For the services to be rendered, the
facilities to be furnished, and the payments to be made by the Adviser, as
provided in Sections 1 and 2 hereof, for each calendar month the Fund shall
pay to the Adviser a fee computed at the annual rate of .75 percent of the
daily net assets. If the asset value is not required to be determined on
any particular business day, then for the purposes of this Section 3, the
asset value of a share as last determined shall be deemed to be the asset
value of a share as of the close of business on that day. If there is no
business day in any calendar month, the fee shall be computed on the basis
of the asset value of a share as last determined, multiplied by the average
number of shares outstanding on the last day of the month (exclusive of
shares held by the Fund, if any).
4. Covenants of the Adviser. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor
any officer, director, or employee of the Adviser shall act as a principal.
The Adviser covenants that it and its employees will comply with investment
restrictions of the Fund's Bylaws applicable to them. If the Adviser or any
of its affiliates give any advice to clients concerning the shares of the
Fund, it will act solely as investment counsel for the clients and not on
behalf of the Fund.
5. Limitation on Liability of Adviser. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters to which this agreement relates, except
a loss resulting from willful malfeasance, bad faith, or gross negligence
on the part of the Adviser in the performance of its duties or from
reckless disregard by the Adviser of its obligations and duties under this
Agreement.
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6. Duration and Termination of this Agreement.
(a) This Agreement shall remain in force for two years from the
date hereof, and it may be continued from year to year thereafter if
approved annually by a vote of a majority of the Fund's shareholders or by
its trustees and in either case a vote of a majority of the trustees who
are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such
approval.
(b) This Agreement may be terminated at any time without the
payment of any penalty by vote of the trustees of the Fund, by vote of a
majority of the outstanding shares of the Fund, by the Adviser, on 60 days
written notice to the other party.
(c) This Agreement shall automatically terminate if it is
assigned. The Adviser shall notify the Fund of any change in the officers
or directors of the Adviser within a reasonable time after the change. The
terms "assignment," "vote of a majority of the outstanding voting
securities", and "interested persons" shall have the meanings specified in
the Act.
7. Applicable to Specific Series. The Adviser agrees that, with
respect to any obligation of the Fund under this Agreement, the Adviser
shall look only to the assets of the Series to which this Agreement
relates.
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the day and year first written above.
CMC FUND TRUST
By J. XXXXX INNSKEEP, JR.
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Title: President
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COLUMBIA MANAGEMENT CO.
By XXXXX X. XXXXXX
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Title: President
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