MANAGEMENT AGREEMENT
TO: Access Fund Management, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
Access Variable Insurance Trust (the "Trust") herewith confirms our
agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors
You have been selected to act as the sole investment adviser of the
portfolios of the Trust set forth on the Exhibits to this Agreement (each, a
"Portfolio," collectively, the "Portfolios") and to provide certain other
services, as more fully set forth below, and you are willing to act as such
investment adviser and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust agrees with you as follows
effective upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will provide or arrange to be provided to each Portfolio such
investment advice as you in your discretion deem advisable and will furnish or
arrange to be furnished a continuous investment program for each Portfolio
consistent with the Portfolio's investment objective and policies. You will
determine or arrange for others to determine the securities to be purchased for
each Portfolio, the portfolio securities to be held or sold by each Portfolio
and the portion of each Portfolio's assets to be held uninvested, subject always
to the Portfolio's investment objective, policies and restrictions, as each of
the same shall be from time to time in effect, and subject further to such
policies and instructions as the Board may from time to time establish. You may
delegate any or all of the responsibilities, rights or duties described above to
one or more sub-advisers who shall enter into agreements with you, provided the
agreements are approved and ratified (i) by the Board including a majority of
the trustees who are not interested persons of you or of the Trust, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
if required under interpretations of the Investment Company Act of 1940, as
amended (the "Act") by the Securities and Exchange Commission or its staff, by
vote of the holders of a majority of the outstanding voting securities of the
applicable Portfolio (unless the Trust has obtained an exemption from the
provisions of Section 15(a) of the Act). Any such delegation shall not relieve
you from any liability hereunder.
You will also advise and assist the officers of the Trust in taking
such steps as are necessary or appropriate to carry out the decisions of the
Board and the appropriate committees of the Board regarding the conduct of the
business of the Trust. You may delegate any of the responsibilities, rights or
duties described above to one or more persons, provided you notify the Trust and
agree that such delegation does not relieve you from any liability hereunder.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay the compensation of any sub-adviser retained pursuant to
paragraph 1 above and the compensation and expenses of any persons rendering any
services to the Trust who are directors, officers, employees, members or
stockholders of your corporation or limited liability company and will make
available, without expense to the Portfolios, the services of such of your
employees as may duly be elected trustees or officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law. The
compensation and expenses of any trustees, officers and employees of the Trust
who are not directors, officers, employees, members or stockholders of your
corporation or limited liability company will be paid by the Portfolios. You
will pay all advertising, promotion and other distribution expenses incurred in
connection with each Portfolio's shares to the extent such expenses are not
permitted to be paid by the Portfolio under any distribution expense plan or any
other permissible arrangement that may be adopted in the future.
Each Portfolio will be responsible for the payment of all operating
expenses of the Portfolio, including the compensation and expenses of any
employees of the Trust and of any other persons rendering any services to the
Portfolio; clerical and shareholder service staff salaries; office space and
other office expenses; fees and expenses incurred by the Portfolio in connection
with membership in investment company organizations; legal, auditing and
accounting expenses; expenses of registering shares under federal and state
securities laws, including expenses incurred by the Portfolio in connection with
the organization and initial registration of shares of the Portfolio; insurance
expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Portfolio;
expenses, including clerical expenses, of issue, sale, redemption or repurchase
of shares of the Portfolio; the cost of preparing and distributing reports and
notices to shareholders, the cost of printing or preparing prospectuses and
statements of additional information for delivery to shareholders; the cost of
printing or preparing stock certificates or any other documents, statements or
reports to shareholders; expenses of shareholders' meetings and proxy
solicitations; advertising, promotion and other expenses incurred directly or
indirectly in connection with the sale or distribution of the Portfolio's shares
that the Portfolio is authorized to pay pursuant to Rule 12b-1 under the Act;
and all other operating expenses not specifically assumed by you. Each Portfolio
will also pay all brokerage fees and commissions, taxes, borrowing costs (such
as (a) interest and (b) dividend expenses on securities sold short), fees and
expenses of the non-interested person Trustees and such extraordinary or
non-recurring expenses as may arise, including litigation to which the Portfolio
may be a party and indemnification of the Trust's Trustees and officers with
respect thereto.
You may obtain reimbursement from each Portfolio, at such time or times
as you may determine in your sole discretion, for any of the expenses advanced
by you, which the Portfolio is obligated to pay, and such reimbursement shall
not be considered to be part of your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered as provided in this Agreement,
as of the last business day of each month, each Portfolio will pay you a fee at
an annual rate as set forth on the Exhibit executed with respect to such
Portfolio and attached hereto.
The average value of the daily net assets of a Portfolio shall be
determined pursuant to the applicable provisions of the Agreement and
Declaration of Trust or a resolution of the Board of Trustees, if required. If,
pursuant to such provisions, the determination of net asset value of a Portfolio
is suspended for any particular business day, then for the purposes of this
paragraph, the value of the net assets of the Portfolio as last determined shall
be deemed to be the value of the net assets as of the close of the business day,
or as of such other time as the value of the Portfolio's net assets may lawfully
be determined, on that day. If the determination of the net asset value of a
Portfolio has been suspended for a period including such month, your
compensation payable at the end of such month shall be computed on the basis of
the value of the net assets of the Portfolio as last determined (whether during
or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities for the
account of a Portfolio, it is understood that you (or the applicable sub-adviser
retained pursuant to paragraph 1 above) will arrange for the placing of all
orders for the purchase and sale of portfolio securities for the account with
brokers or dealers selected by you (or the sub-adviser), subject to review of
this selection by the Board of Trustees from time to time. You (or the
sub-adviser) will be responsible for the negotiation and the allocation of
principal business and portfolio brokerage. In the selection of such brokers or
dealers and the placing of such orders, you (or the sub-adviser) are directed at
all times to seek for the Portfolios the best qualitative execution, taking into
account such factors as price (including the applicable brokerage commission or
dealer spread), the execution capability, financial responsibility and
responsiveness of the broker or dealer and the brokerage and research services
provided by the broker or dealer.
You (or the sub-adviser) should generally seek favorable prices and
commission rates that are reasonable in relation to the benefits received. In
seeking best qualitative execution, you (or the sub-adviser) are authorized to
select brokers or dealers who also provide brokerage and research services to
the Portfolio and/or the other accounts over which you exercise investment
discretion. You (or the sub-adviser) are authorized to pay a broker or dealer
who provides such brokerage and research services a commission for executing a
Portfolio portfolio transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
you (or the sub-adviser) determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your (or the
sub-adviser's) overall responsibilities with respect to the Portfolio and to
accounts over which you (or the sub-adviser) exercise investment discretion. The
Portfolios and you (and the sub-adviser) understand and acknowledge that,
although the information may be useful to the Portfolios and you (and the
sub-adviser), it is not possible to place a dollar value on such information.
The Board of Trustees shall periodically review the commissions paid by each
Portfolio to determine if the commissions paid over representative periods of
time were reasonable in relation to the benefits to the Portfolio.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to seeking best qualitative execution
as described above, you (or the sub-adviser) may give consideration to sales of
shares of each Portfolio as a factor in the selection of brokers and dealers to
execute the Portfolio's portfolio transactions.
Subject to the provisions of the Act, and other applicable law, you (or
the sub-adviser), any of your (and the sub-adviser's) affiliates or any
affiliates of your (or the sub-adviser's) affiliates may retain compensation in
connection with effecting a Portfolio's portfolio transactions, including
transactions effected through others. If any occasion should arise in which you
(or the sub-adviser) give any advice to your clients (or clients of the
sub-adviser) concerning the shares of a Portfolio, you (or the sub-adviser) will
act solely as investment counsel for such client and not in any way on behalf of
the Portfolio. Your (and the sub-adviser's) services to a Portfolio pursuant to
this Agreement are not to be deemed to be exclusive, and it is understood that
you (or the sub-adviser) may render investment advice, management and other
services to others, including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be accurate
and reliable. Except as may otherwise be required by the Act or the rules
thereunder, neither you nor your directors, officers, employees, shareholders,
members, agents, control persons or affiliates of any thereof shall be subject
to any liability for, or any damages, expenses or losses incurred by the Trust
in connection with, any error of judgment, mistake of law, any act or omission
connected with or arising out of any services rendered under, or payments made
pursuant to, this Agreement or any other matter to which this Agreement relates,
except by reason of willful misfeasance, bad faith or gross negligence on the
part of any such persons in the performance of your duties under this Agreement,
or by reason of reckless disregard by any of such persons of your obligations
and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder, member or agent of you, who may be or become a trustee, officer,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder, member, or agent of you, or one under your control or direction,
even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
The term of this Agreement shall begin on the date of this Agreement
for each Portfolio that has executed an Exhibit hereto as of the date of this
Agreement and shall continue in effect with respect to each such Portfolio (and
any subsequent Portfolio added pursuant to an Exhibit executed during the
initial two-year term of this Agreement) for a period of two years from the date
of its execution. This Agreement shall continue in effect from year to year
thereafter, subject to termination as hereinafter provided, if such continuance
is approved at least annually by (a) a majority of the outstanding voting
securities of such Portfolio or by vote of the Trust's Board of Trustees, cast
in person at a meeting called for the purpose of voting on such approval, and
(b) by vote of a majority of the Trustees of the Trust who are not parties to
this Agreement or "interested persons" of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval. If a
Portfolio is added pursuant to an Exhibit executed after the date of this
Agreement as described above, this Agreement shall become effective with respect
to that Portfolio upon execution of the applicable Exhibit and shall continue in
effect for two years from the date thereof and from year to year thereafter,
subject to approval as described above.
This Agreement may, on sixty (60) days written notice, be terminated
with respect to the Portfolio, at any time without the payment of any penalty,
by the Board of Trustees, by a vote of a majority of the outstanding voting
securities of the Portfolio, or by you. This Agreement shall automatically
terminate in the event of its assignment
7. USE OF NAME
The Trust and you acknowledge that all rights to the name "Access" or
any variation thereof belong to you, and that the Trust is being granted a
limited license to use such words in its Portfolio names or in any class name.
In the event you cease to be the adviser to the Portfolios, the Trust's right to
the use of the name "Access" shall automatically cease on the ninetieth day
following the termination of this Agreement. The right to the name may also be
withdrawn by you during the term of this Agreement upon ninety (90) days'
written notice by you to the Trust. Nothing contained herein shall impair or
diminish in any respect, your right to use the name "Access" in the name of, or
in connection with, any other business enterprises with which you are or may
become associated. There is no charge to the Trust for the right to use this
name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, and no amendment of this Agreement shall be effective until
approved by the Board of Trustees, including a majority of the Trustees who are
not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the Portfolio to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "Access Variable Insurance Trust" means and refers to the
Trustees from time to time serving under the Trust's Agreement and Declaration
of Trust 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 Trustees, officers, employees, agents or
nominees of the Trust, or any shareholders of any series of the Trust,
personally, but bind only the trust property of the Trust (and only the property
of the applicable Portfolio), as provided in the Agreement and Declaration of
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees and shareholders of the applicable Portfolio and signed by officers of
the Trust, acting as such, and neither such authorization by such Trustees and
shareholders nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Trust (and only
the property of applicable Portfolio) as provided in its Agreement and
Declaration of Trust. A copy of the Agreement and Declaration of Trust is on
file with the Secretary of State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of Ohio.
(b) For the purpose of this Agreement, the terms "assignment," "majority of the
outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the Act; and the term "brokerage and
research services" shall have the meaning given in the Securities Exchange Act
of 1934.
(c) 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 Act
shall be resolved by reference to such term or provision of the Act and to
interpretation thereof, if any, by the United States courts or in the absence of
any controlling decision of any such court, by the Securities and Exchange
Commission or its staff. In addition, where the effect of a requirement of the
Act, reflected in any provision of this Agreement, is revised by rule,
regulation, order or interpretation of the Securities and Exchange Commission or
its staff, such provision shall be deemed to incorporate the effect of such
rule, regulation, order or interpretation.
12. 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 is 00000 XX Xxx.
00 X., Xxxxx 000, Xxxxxxxxxx, Xxxxxxx, 00000, and your address for this purpose
shall be 00000 XX Xxx. 00 X., Xxxxx 000, Xxxxxxxxxx, Xxxxxxx, 00000.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that he has
the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
Access Variable Insurance Trust
Dated: as of May 1, 2004 By: /s/ Xxxxxxx X. Xxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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ACCEPTANCE
The foregoing Agreement is hereby accepted.
Access Fund Management, LLC
Dated: as of May 1, 2004 By: /s/ Xxxxxxx X. Xxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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exhibit A
To
Management Agreement
Access Variable InsuranceTrust
For all services rendered by the Adviser hereunder with respect to the
Portfolios named below, the Portfolio shall pay to the Adviser, and the Adviser
agrees to accept as full compensation for all services rendered hereunder, an
annual fee with respect to each Portfolio equal to the percentage of the average
daily net assets of the Portfolio set forth opposite its named below:
Xxxxx S&P REIT IndexSM Portfolio 1.00%
Shepherd Opportunity Growth Portfolio 1.00%
Potomac OTC Plus Portfolio 1.00%
Potomac Dow 30SM Plus Portfolio 1.00%
Potomac Mid Cap Plus Portfolio 1.00%
Potomac Small Cap Plus Portfolio 1.00%
Potomac OTC/Short Portfolio 1.00%
Potomac Small Cap/Short Portfolio 1.00%
Potomac U.S./Short Portfolio 1.00%
Target Multi-Cap 100 Portfolio 1.00%
PMFM Managed Portfolio 1.00%
Access U.S. Government Money Market Portfolio 1.00%
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit to be
executed by their officers designated below as of the date set forth below.
Access Variable Insurance Trust Access Fund Management, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
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Title: President Title: President
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425036.2
