INVESTMENT ADVISORY AGREEMENT
This Agreement is made by and between Bankers Finance Advisors, LLC
(also known as MADISON MOSAIC), a Wisconsin limited liability company
which is a wholly owned subsidiary of Madison Investment Advisors, Inc.,
having its principal place of business in Arlington, Virginia (the
foregoing entities referred to collectively as the "Advisor"), and
MOSAIC FOCUS FUND TRUST, a Massachusetts business trust created pursuant
to a Declaration of Trust filed with the Commonwealth of Massachusetts
(the "Trust").
The parties hereto, intending so to be legally bound, agree with each
other as follows:
1. Appointment and Acceptance. The Trust hereby appoints the Advisor
to manage the investment of its assets and to administer its affairs;
and the Advisor hereby accepts such appointment. The Advisor shall
employ its best efforts to supervise the investment management of the
Trust.
2. Discretion of the Advisor. In the performance of its duties
hereunder the Advisor shall have full authority to act as it deems
advisable, except that it shall be bound by the terms of the Declaration
of Trust and By-Laws of the Trust, and by any written direction given by
the Trustees of the Trust not inconsistent with this Agreement; and it
shall be guided by the investment policies of the Trust from time to
time duly in effect. Subject only to the foregoing, the Advisor shall
have full authority to purchase and sell securities for the Trust; the
Advisor may determine the persons with whom such securities transactions
are to be made and the terms thereof.
3. Other Activities of the Advisor. The Advisor and any of its
affiliates shall be free to engage in any other lawful activity,
including the rendering to others of services similar to those rendered
to the Trust hereunder; and the Advisor or any interested person thereof
shall be free to invest in the Trust as a shareholder, to become an
officer or Trustee of the Trust if properly elected, or to enter into
any other relationship with the Trust approved by the Trustees and in
accordance with law.
The Advisor agrees that it will not deal with itself or with any
affiliated person or promoter or principal underwriter of the Trust (or
any affiliated person of the foregoing) acting as a principal, in
effecting securities transactions for the account of the Trust. It is
further agreed that in effecting any such transaction with such a person
acting as a broker or agent, compensation to such person shall be
permitted, provided that the transaction is in the ordinary course of
such person's business and the amount of such compensation does not
exceed one percent of the purchase or sale price of the securities
involved.
If the Advisor or any affiliate thereof provides any other goods or
services which otherwise would be paid for by the Trust pursuant to this
Agreement, then the Trust shall pay the Advisor or such affiliate the
cost reasonably allocated by the Advisor or affiliate to such goods or
services.
4. Investment by Advisor. The Advisor shall not take, and shall not
permit any of its shareholders, officers, directors or employees to take
long or short positions in the shares of the Trust, except for the
purchase of shares of the Trust for investment purposes at the same
price as that available to the public at the time of purchase, or in
connection with the original capitalization of the Trust. In connection
with purchases or sales of portfolio securities for the account of the
Trust neither the Advisor nor any officer, director or employee of the
Advisor shall act as a principal or receive any commission therefor.
5. Expenses of the Trust. The Trust shall pay all of its expenses not
expressly assumed by the Advisor herein. Without limitation, the
expenses of the Trust, assumed by the Trust hereby, shall include the
following:
a. Expenses related to the continued existence of the Trust.
b. Fees and expenses of the Trustees (except those affiliated
with the Advisor), the officers and the administrative employees of the
Trust.
c. Fees paid to the Advisor hereunder.
d. Fees and expenses of preparing, printing and distributing
official filings, reports, prospectuses and documents required pursuant
to applicable state and Federal securities law and expenses of reports
to shareholders.
e. Fees and expenses of custodians, transfer agents, dividend
disbursing agents, shareholder servicing agents, registrars, and similar
agents.
f. Expenses related to the issuance, registration, repurchase,
exchange and redemption of shares and certificates representing shares.
g. Auditing, accounting, legal, insurance, portfolio
administration, association membership, printing, postage, and other
administrative expenses.
h. Expenses relating to qualification or licensing of the Trust,
shares in the Trust, or officers, employees and agents of the Trust
under applicable state and Federal securities law.
i. Expenses related to shareholder meetings and proxy
solicitations and materials.
j. Interest expense, taxes and franchise fees, and all brokerage
commissions and other costs related to purchase and sales of portfolio
securities.
In addition, the Trust shall assume all losses and liabilities
incurred in the administration to the Trust and of its investment
portfolio; and it shall pay such non-recurring expenses as may arise
through litigation, administrative proceedings, claims against the
Trust, the indemnification of Trustees, officers, employees,
shareholders and agents, or otherwise.
6. Compensation to the Advisor. For its services hereunder, the
Trust shall pay to the Adviser a management fee equal to three-quarters
(3/4) percent per annum of the average daily net assets of each
investment portfolio. Such fee shall be payable quarterly as of the
last day of the month and shall be the sum of the daily fees calculated
as one-three hundred sixty-fifth (1/365), except in leap years one-three
hundred sixty-sixth (1/366), of the annual fee based upon each
portfolio's net assets calculated for the day.
With respect to any portfolio of the Trust subsequently authorized
by the Trustees, the management fee provided herein may be revised
upward or downward by mutual agreement between the parties at the time
the additional portfolio is authorized, provided such revision is
approved by the Trustees, including the vote of a majority of those
Trustees who are not interested persons of the Trust, cast in person at
a meeting called for that purpose. The Advisor shall have the right to
waive any portion of its management fee during any period, and it may
permanently reduce the amount of the fee under such terms as it may
determine by written notice thereof to the Trust. The Advisor shall
have the right to share its management fee with others or make payments
out of its management fee to others, as it solely determines.
7. Limitation of Expenses of the Trust. In addition to
investment management expenses related to the Trust, the Advisor shall
pay the fees and expenses of any Trustees and officers of the Trust
affiliated with the Advisor, all promotional expenses of the Trust to
the extent not paid for by the Trust pursuant to a Plan of Distribution,
the rent expense of the Trust's principal executive office premises, and
the expenses of formation of the Trust.
The Advisor shall further reimburse the Trust for all of its
expenses, excluding securities transaction commissions and expenses,
taxes, interest, share distribution expenses, and extra-ordinary and
non-recurring expenses, which exceed during any fiscal year the
applicable expense limitation in any State or other jurisdiction in
which the Trust, during the fiscal year, becomes subject to regulation
by qualification or sale of its shares. Any such required reimbursement
shall be made within a reasonable period following the close of the
fiscal year to which it relates; and the Advisor may elect to pay all or
a portion of any such reimbursement it anticipates will be required at
any time or from time to time during the fiscal year to which the
reimbursement relates.
8. Limitation of Advisor's Liability. The Advisor shall not be
liable for any loss incurred in connection with its duties hereunder,
nor for any action taken, suffered or omitted and believed by it to be
advisable or within the scope of its authority or discretion, except for
acts or omissions involving willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties assumed by it under this
Agreement.
9. Limitation of Trust's Liability. The Advisor acknowledges
that it has received notice of and accepts the limitations upon the
Trust's liability set forth in its Declaration of Trust. The Advisor
agrees that the Trust's obligations hereunder in any case shall be
limited to the Trust and to its assets and that the Advisor shall not
seek satisfaction of any such obligation from the shareholders of the
Trust nor from any Trustee, officer, employee or agent of the Trust.
10. Term of Agreement. This Agreement shall continue in effect
for two years from the date of its execution; and it shall continue in
force thereafter (but subject to the termination provisions below),
provided that it is specifically approved at least annually by the
Trustees of the Trust or by a majority vote of the outstanding
securities of each series and class of the Trust's shares with respect
to which it is to continue in effect, and in either case by the vote of
a majority of the Trustees who are not interested persons of the Trust,
cast in person at a meeting called for that purpose.
11. Termination by Notice. Notwithstanding any provision of this
Agreement, it may be terminated at any time, without penalty, by the
Trustees of the Trust or, with respect to any series or class of the
Trust's shares, by the vote of a majority of the outstanding voting
securities of such series or class, or by the Advisor, upon sixty days
written notice to the other party.
12. Termination Upon Assignment. This Agreement may not be
assigned by the Adviser and shall automatically terminate immediately
upon any assignment. Nothing herein shall prevent the Advisor from
employing any other persons or agents, including Madison Investment
Advisors, Inc., at its own expense, to assist it in the performance of
its duties hereunder.
13. Name of the Trust. In consideration of its formation of the
Trust and the related expenses, the Advisor has retained the rights to
the name "Mosaic Focus Fund" (and any similar name), which rights the
Trust hereby acknowledges. The Trust, however, shall have the exclusive
right to the use of the name "Mosaic Focus Fund" (although its rights to
the "Mosaic" portion of such name shall be non-exclusive) so long as
this contract shall remain in force, except that the Advisor may
withdraw such rights from the Trust at any time, effective immediately
or at a time specified, upon written notice to the Trust. In the event
of such notice, the Trust agrees that it will cause the question of
continuation of this Agreement to be put to a vote of the shareholders
of the Trust as soon as practicable after such notice has been given.
14. Use of Terms. The terms "affiliated person", "interested
person", "assignment", "broker", and "majority of the outstanding voting
securities" as used herein, shall have the same meanings as in the
Investment Company Act of 1940 and any applicable regulations
thereunder.
15. Control of Advisor. Madison Mosaic is controlled by Madison
Investment Advisors, Inc. a registered investment advisor located in
Madison, Wisconsin. As such, it is expected that Madison Mosaic and
Madison Investment Advisors, Inc. will work closely together in the
management of the portfolios including but not limited to portfolio
management, research, securities trading, and other investment
management responsibilities.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed on their behalf by their respective officers duly authorized and
their respective seals to be affixed hereto, this 21 day of April,
1998.
MADISON MOSAIC
By: (signature)
Xxxxx X. Xxxxxxx
Madison Investment Advisors, Inc., Member
MOSAIC FOCUS FUND TRUST
Xxxxx X. Xxxxxxx
By (signature)
Trustee
Xxxxxxx Xxxxxxx
By (signature)
Trustee
Xxxxxx Xxxxxx
By (signature)
Trustee
Xxxxx Xxxxxx
By (signature)
Trustee
