Exhibit 23(d)(iv)
FORM OF
MANAGEMENT AGREEMENT
XXXX XXXXX LIGHT STREET TRUST, INC.:
XXXX XXXXX CLASSIC VALUATION FUND
This MANAGEMENT AGREEMENT ("Agreement") is made this ___ day of
________, 1999, by and between Xxxx Xxxxx Light Street Trust, Inc., a Maryland
corporation (the "Corporation"), on behalf of Xxxx Xxxxx Classic Valuation Fund
("Fund"), and Xxxx Xxxxx Fund Adviser, Inc., a Maryland corporation (the
"Manager").
WHEREAS, the Corporation is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") currently consisting of two portfolios; and
WHEREAS, the Corporation wishes to retain the Manager to provide
investment advisory, management, and administrative services to the Fund; and
WHEREAS, the Manager is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Corporation hereby appoints the Manager as manager of the Fund
for the period and on the terms set forth in this Agreement. The Manager accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. The Fund shall at all times keep the Manager fully informed with
regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs. It
shall furnish the Manager with such other documents and information with regard
to its affairs as the Manager may from time to time reasonably request.
3. (a) Subject to the supervision of the Corporation's Board of
Directors, the Manager shall regularly provide the Fund with investment
research, advice, management and supervision and shall furnish a continuous
investment program for the Fund's portfolio of securities consistent with the
Fund's investment goals and policies. The Manager shall determine from time to
time what securities will be purchased, retained or sold by the Fund, and shall
implement those decisions, all subject to the provisions of the Corporation's
Articles of Incorporation and By-Laws, the 1940 Act, the applicable rules and
regulations of the Securities and Exchange Commission, and other applicable
federal and state law, as well as the investment goals and policies of the Fund.
The Manager will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In placing
orders with brokers and dealers the Manager will attempt to obtain the best net
price and the most favorable execution of its orders; however, the Manager may,
in its discretion, purchase and sell portfolio securities from and to brokers
and dealers who provide the Fund with research, analysis, advice and similar
services, and the Manager may pay to these brokers, in return for research and
analysis, a higher commission or spread than may be charged by other brokers.
The Manager shall also provide advice and recommendations with respect to other
aspects of the business and affairs of the Fund, and shall perform such other
functions of management and supervision as may be directed by the Board of
Directors of the Corporation;
(b) The Fund hereby authorizes any entity or person associated with the
Manager which is a member of a national securities exchange to effect any
transaction on the exchange for the account of the Corporation which is
permitted by Section 11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T) thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
4. The Manager may enter into a contract ("Investment Advisory
Agreement") with an investment adviser in which the Manager delegates to such
investment adviser any or all its duties specified in Paragraph 3 hereunder,
provided that such Investment Advisory Agreement imposes on the investment
adviser bound thereby all duties and conditions to which the Manager is subject
hereunder, and further provided that such Investment Advisory Agreement meets
all requirements of the 1940 Act and rules thereunder.
5. (a) The Manager, at its expense, shall supply the Board of Directors
and officers of the Corporation with all statistical information and reports
reasonably required by them and reasonably available to the Manager and shall
furnish the Fund with office facilities, including space, furniture and
equipment and all personnel reasonably necessary for the operation of the Fund.
The Manager shall oversee the maintenance of all books and records with respect
to the Fund's securities transactions and the keeping of the Fund's books of
account in accordance with all applicable federal and state laws and
regulations. In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Manager hereby agrees that any records which it maintains for the Fund
are the property of the Fund, and further agrees to surrender promptly to the
Fund any of such records upon the Fund's request. The Manager further agrees to
arrange for the preservation of the records required to be maintained by Rule
31a-1 under the 1940 Act for the periods prescribed by Rule 31a-2 under the 1940
Act. The Manager shall authorize and permit any of its directors, officers and
employees, who may be elected as directors or officers of the Fund, to serve in
the capacities in which they are elected.
(b) Other than as herein specifically indicated, the Manager shall not
be responsible for the Fund's expenses. Specifically, the Manager will not be
responsible, except to the extent of the reasonable compensation of employees of
the Fund whose services may be used by the Manager hereunder, for any of the
following expenses of the Fund, which expenses shall be borne by the Fund:
advisory fees; distribution fees; interest, taxes, governmental fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; the cost (including brokerage commissions or
charges, if any) of securities purchased or sold by the Fund and any losses in
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connection therewith; fees of custodians, transfer agents, registrars or other
agents; legal expenses; expense of preparing share certificates; expenses
relating to the redemption or repurchase of the Fund's shares; expenses of
registering and qualifying the Fund's shares for sale under applicable federal
and state law; expenses of preparing, setting in print, printing and
distributing prospectuses, reports, notices and dividends to the Fund's
shareholders; costs of stationery; costs of stockholders and other meetings of
the Fund; directors' fees; audit fees; travel expenses of officers, directors
and employees of the Corporation, if any; and the Corporation's pro rata portion
of premiums on any fidelity bond and other insurance covering the Corporation
and its officers, directors and employees.
(c) For the period ending December 31, 2000, the Manager shall pay any
of the Fund's expenses, including organizational expenses (but excluding
interest, taxes, brokerage commissions and extraordinary expenses) of the Fund
which exceed, in the aggregate, an annual rate of 2.00% of the Fund's average
daily net assets attributable to the Primary Class of shares and an annual rate
of ____% of the Fund's average daily net assets attributable to the Navigator
Class of shares ("Expense Limit"); provided, however, that in order to determine
the Manager's liability for the Fund's expenses over the Expense Limit, the
amount of allowable year-to-date expenses shall be computed daily by pro-rating
the Expense Limit based on the number of days elapsed within the fiscal year of
the Fund ("Pro Rated Limitation"). The Pro Rated Limitation shall be compared to
the expenses of the Fund recorded through the prior day in order to produce the
allowable expenses to be recorded for the current day ("Allowable Expenses"). If
the Fund's management fee and other expenses for the current day exceed the
Allowable Expenses, the management fee for the current day shall be reduced by
such excess ("Unaccrued Fees"). In the event the excess exceeds the amount due
as the management fee, the Manager shall be responsible to the Fund for the
additional excess ("Other Expenses Exceeding Limit"). If at any time up through
and including December 31, 2000, the Fund's management fee and other expenses
for the current day are less than the Allowable Expenses, the differential shall
be due to the Manager as payment of cumulative Unaccrued Fees (if any) or as
payment for cumulative Other Expenses Exceeding Limit (if any). If cumulative
Unaccrued Fees or cumulative Other Expenses Exceeding Limit remain at December
31, 2000, these amounts shall be paid to the Manager in the future provided
that: (1) such payment shall be made to the Manager neither later than the end
of the third fiscal year after the Unaccrued Fees or Other Expenses Exceeding
Limit was incurred nor, in any event, after December 31, 2002; and (2) such
payment shall only be made to the extent that it does not result in the Fund's
aggregate expenses exceeding an expense limit of 2.00% of its average daily net
assets attributable to the Primary Class of shares or an expense limit of ____%
of its average daily net assets attributable to the Navigator Class of shares.
(d) The Manager may voluntarily agree to an additional expense
limitation (any such additional expense limitation hereinafter referred to as an
"Additional Expense Limitation"), at the same or a different level and for the
same or a different period of time beyond December 31, 2000 (any such additional
period being hereinafter referred to as an "Additional Period") provided,
however, that: (1) the calculations and methods of payment shall be as described
above; (2) no payment for cumulative Unaccrued Fees or cumulative Other Expenses
Exceeding Limit shall be made to the Manager more than three years after the end
of an Additional Period; and (3) payment for cumulative Unaccrued Fees or
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cumulative Other Expenses Exceeding Limit after the expiration of the Additional
Period shall only be made to the extent it does not result in the Fund's
aggregate expenses exceeding the Additional Expense Limitation to which the
unpaid amounts relate.
6. No director, officer or employee of the Corporation or Fund shall
receive from the Corporation any salary or other compensation as such director,
officer or employee while he is at the same time a director, officer, or
employee of the Manager or any affiliated company of the Manager. This paragraph
shall not apply to directors, executive committee members, consultants and other
persons who are not regular members of the Manager's or any affiliated company's
staff.
7. As compensation for the services performed and the facilities
furnished and expenses assumed by the Manager, including the services of any
consultants retained by the Manager, the Fund shall pay the Manager, as promptly
as possible after the last day of each month, a fee, computed daily at an annual
rate of 0.75% of the average daily net assets of the Fund. The first payment of
the fee shall be made as promptly as possible at the end of the month succeeding
the effective date of this Agreement, and shall constitute a full payment of the
fee due the Manager for all services prior to that date. If this Agreement is
terminated as of any date not the last day of a month, such fee shall be paid as
promptly as possible after such date of termination, shall be based on the
average daily net assets of the Fund in that period from the beginning of such
month to such date of termination, and shall be that proportion of such average
daily net assets as the number of business days in such period bears to the
number of business days in such month. The average daily net assets of the Fund
shall in all cases be based only on business days and be computed as of the time
of the regular close of business of the New York Stock Exchange, or such other
time as may be determined by the Board of Directors of the Corporation. Each
such payment shall be accompanied by a statement prepared either by the Fund or
by a reputable firm of independent accountants which shall show the amount
properly payable to the Manager under this Agreement and the detailed
computation thereof.
8. The Manager assumes no responsibility under this Agreement other
than to render the services called for hereunder, in good faith, and shall not
be responsible for any action of the Board of Directors of the Corporation in
following or declining to follow any advice or recommendations of the Manager;
provided, that nothing in this Agreement shall protect the Manager against any
liability to the Fund or its shareholders to which the Manager would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Manager who may also be a director,
officer, or employee of the Corporation or the Fund, to engage in any other
business or to devote his time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature, nor to limit or restrict the right of the Manager to engage in any other
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business or to render services of any kind, including investment advisory and
management services, to any other corporation, firm, individual or association.
10. As used in this Agreement, the term "net assets" shall have the
meaning ascribed to it in the Articles of Incorporation of the Corporation and
the terms "assignment," "interested person," and "majority of the outstanding
voting securities" shall have the meanings given to them by Section 2(a) of the
1940 Act, subject to such exemptions as may be granted by the Securities and
Exchange Commission by any rule, regulation or order.
11. This Agreement will become effective with respect to the Fund on
____________, 1999, provided that it shall have been approved by the
Corporation's Board of Directors and by the shareholders of the Fund in
accordance with the requirements of the 1940 Act and, unless sooner terminated
as provided herein, will continue in effect for two years from the above written
date. Thereafter, if not terminated, this Agreement shall continue in effect
with respect to the Fund for successive annual periods ending on the same date
of each year, provided that such continuance is specifically approved at least
annually (i) by the Corporation's Board of Directors or (ii) by a vote of a
majority of the outstanding voting securities of the Fund, provided that in
either event the continuance is also approved by a majority of the Corporation's
Directors who are not interested persons of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such approval.
12. This Agreement is terminable with respect to the Fund without
penalty by the Corporation's Board of Directors, by vote of a majority of the
outstanding voting securities of the Fund, or by the Manager, on not less than
sixty (60) days' notice to the other party and will be terminated upon the
mutual written consent of the Manager and the Corporation. This Agreement shall
terminate automatically in the event of its assignment by the Manager and shall
not be assignable by the Corporation without the consent of the Manager.
13. In the event this Agreement is terminated by either party or upon
written notice from the Manager at any time, the Corporation hereby agrees that
it will eliminate from its corporate name any reference to the name of "Xxxx
Xxxxx." The Corporation shall have the non-exclusive use of the name "Xxxx
Xxxxx" in whole or in part so long as this Agreement is effective or until such
notice is given.
14. The Manager agrees that for services rendered to the Fund, or
indemnity due in connection with service to the Fund, it shall look only to
assets of the Fund for satisfaction and that it shall have no claim against the
assets of any other portfolios of the Corporation.
15. 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, and no material amendment of the Agreement shall be effective until
approved by vote of the holders of a majority of the Fund's outstanding voting
securities.
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16. This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. Should any part of this
Agreement 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 on and shall inure to the benefit of the parties
hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX LIGHT STREET TRUST, INC.
By: _________________________ By: ________________________________
Attest: XXXX XXXXX FUND ADVISER, INC.
By: _________________________ By: ________________________________
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