EXHIBIT (d)
Investment Management Agreement
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INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is entered into as of the date the registration statement
of The Elite Group becomes effective with the Securities and Exchange Commission
by and between THE ELITE GROUP a Massachusetts Business Trust (the "Trust"), and
X. X. XxXxxxxxx & Co., Inc., a Washington corporation (the "Investment
Manager"), registered as an investment adviser under the Investment Advisers Act
of 1940, as amended.
WHEREAS, the Trust is registered as a no-load, diversified, open-end
management investment company of the series type 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 administrative services to all series 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, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Investment Manager to act as
investment adviser to any series (hereinafter called "Funds") of the Trust 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 the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, filed with the State of
Massachusetts on _______________________, 1986 (such Declaration, as
presently in effect and as it shall from time to time be amended, is
herein called the "Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and as they
shall from time to time be amended, are herein called the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Investment Manager and approving this Agreement;
(d) The Trust's Registration Statement on Form N-lA under the 1940 Act and
under the Securities Act of 1933 as amended, (the "1933 Act"),
relating to shares of beneficial interest of the Trust (herein called
the "Shares") as filed with the Securities and Exchange Commission and
all amendments thereto;
(e) The Trust's Prospectus dated ___________________ 1986 (such
Prospectus, as presently in effect and all amendments and supplements
thereto are herein called the "Prospectus").
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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 each of the Trust's Funds, including investment research and management with
respect to all securities and investments and cash and cash equivalents in each
of the Trust's Funds. The Investment Manager will determine from time to time
what securities and other investments will be purchased, retained or sold by the
Funds. The Investment Manager will provide the services under this Agreement in
accordance with each Fund's investment objectives, policies and restrictions as
stated in its Prospectus. The Investment Manager further agrees that it:
(a) will conform with all applicable Rules and Regulations of the Securities
and Exchange Commission 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 Funds
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 Investment Manager believes two
or more brokers or dealers are comparable in price and execution, the
Investment Manager may prefer brokers and dealers who provide the Funds
with research advice and other services, or who sell Fund shares. In no
instance will portfolio securities be purchased from or sold to the
Investment Manager or any affiliated person of the Investment Manager;
(c) will maintain the account books and records of the Funds as required by
Rule 31a-3 of the 1940 Act, including the performance of daily pricing of
the Funds' shares in accordance with the Funds' prospectus;
(d) will hire all necessary executive personnel for the Trust, the salaries and
expenses of such personnel to be borne by the Investment Manager;
(e) will hire, at the cost of the Trust, all non-executive personnel who will
provide clerical, accounting, and general office services as may be
required by and requested by the Trust, the salaries of such personnel to
be subject to the approval of the Trustees;
(f) will provide, at its own cost, all office space, facilities and equipment
necessary for the activities of the Trust; and
(g) will pay the entire organization expense of the Trust which may be incurred
prior to the Trust's effective date; and will also pay initial state
registration costs for certain states, including legal and other related
services, as may be agreed upon between the Trust and the Investment
Manager.
Notwithstanding the foregoing, the Investment Manager may obtain the services of
an investment counselor or sub-advisor of its choice subject to the Trust's
approval. The cost of employing such counselor or sub-advisor will be paid by
the Investment Manager and not by the Trust.
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 provided, however,
that without the written consent of the Trustees, the Investment Manager will
not serve as investment adviser to any other investment company having a similar
investment objective to that of any of the Funds of the Trust.
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5. Books and Records. In compliance with the requirements of Rule 31a-3
under 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
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the Act.
6. Expenses. During the term of this Agreement, the Investment Manager
will pay expenses incurred by it in connection with the administration and
investment management of the Trust, and, in accordance with any Distribution
Plan then in effect, certain expenses incurred by the Trust in the promotion and
sale of the Shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs of the
following:
(a) Taxes;
(b) Brokerage fees and commissions with regard to portfolio transactions
of the Funds;
(c) Interest charges, fees and expenses of the custodian of the Funds'
portfolio securities;
(d) Fees and expenses of the Funds' transfer agent and shareholder
servicing agent;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entry;
(g) Compensation of trustees who are not interested persons of the
Investment Manager as that term is defined by law;
(h) Costs of Trust meetings;
(i) Federal and State registration fees and expenses;
(j) Costs of printing and mailing Prospectuses, reports and notices to
existing shareholders;
(k) The Investment Management fee payable to the Investment Manager, as
provided in paragraph 7 herein;
(1) Distribution expenses in accordance with the Distribution Plan as and
if approved by the shareholders of the Funds.
It is understood that the Trust may desire to register its Funds' shares
for sale in certain states which impose expense limitations on mutual funds. The
Trust agrees that it will register shares in such states only with the prior
written consent of the Investment Manager and, if consent is granted, the
Investment Manager agrees to reimburse the Trust for any excess expenses
incurred over the most stringent of such states' limitations.
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7. Compensation. For the services provided and the expenses assumed by the
Investment Manager pursuant to this Agreement, the Trust will pay the Investment
Manager and the Investment Manager will accept as full compensation a management
fee, based upon the daily average net assets of each Fund of the Trust, computed
at the end of each month and payable within five (5) business days thereafter,
according to the following schedule:
ANNUAL RATE
Net Assets Income Fund Growth &
Income Fund
First $250 Million 7/10 of 1%
1%
Second $250 Million 5/8 of 1%
3/4 of 1%
All over $500 Million 1/2 of 1%
1/2 of 1%
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 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 upon
the date the registration statement of the Trust is declared effective by the
Securities and Exchange Commission and, unless sooner terminated as provided
herein, shall continue in effect for two years. 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 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 or a majority (as) that term is defined in
the 0000 Xxx) of the outstanding voting securities of each Fund of the
Trust provided, however, that if the holders of any one Fund fail to
approve the agreement, Investment Manager may continue to act as
investment manager of the Fund(s) which did approve the agreement, and may
continue to act as investment manager for the Fund which did not approve
the agreement until new arrangements are made by such Fund.
Notwithstanding the foregoing, this Agreement may be terminated by any
Fund or by the Investment Manager at any time on sixty (60) days' written
notice, without the payment of any penalty, provided that termination by any
Fund of the Trust must be authorized either by vote of the Board of Trustees or
by vote of a majority of the outstanding voting securities of the Fund. 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 a written
instrument signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective until approved by vote of the holders of a majority of the
Funds' outstanding voting securities (as defined in the 1940 Act).
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11.
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 the 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.
12. Applicable Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of
Washington.
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.
ATTEST: THE ELITE GROUP
____________________________________ By:
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Title: _______________________________ Title:
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ATTEST:
_____________________________________ By:
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Title: ________________________________ Title:
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