IGAM GROUP FUNDS
THE INTERNET INDEX FUND
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made effective as of the 13th day of September, 1999, by and
between IGAM GROUP FUNDS, a Delaware business trust (the "Trust"), on behalf of
the INTERNET INDEX FUND SERIES (the "Fund"), and INTEGRITY GLOBAL ASSET
MANAGEMENT, INC., a Delaware corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") and engages in the business of investing and
reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages
in the business of providing investment management services; and
WHEREAS, the Trust has selected the Investment Manager to serve as the
investment manager for the Fund effective as of the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Trust on behalf of the Fund hereby employs the Investment Manager
to manage the investment and reinvestment of the Fund's assets and to provide
business management and administrative services for the Fund not otherwise
provided by third party service providers, subject to the direction of the Board
of Trustees and officers of the Trust, for the period and on the terms
hereinafter set forth. The Investment Manager hereby accepts such employment and
agrees during such period to render the services and assume the obligations
herein set forth for the compensation herein provided. The Investment Manager
shall for all purposes herein, be deemed to be an independent contractor, and
shall, unless otherwise expressly provided and authorized, have no authority to
act for or to represent the Trust or the Fund in any way, or in any way be
deemed an agent of the Trust or the Fund. The Investment Manager shall regularly
make decisions as to what securities and other investments to purchase and sell
on behalf of the Fund and shall effect the purchase and sale of such investments
in furtherance of the Fund's objectives and policies. The Investment Manager
shall record and implement such decisions and shall furnish the Board of
Trustees of the Trust with such information and reports regarding the Fund's
investments as the Investment Manager deems appropriate or as the Trustees of
the Trust may reasonably request. Subject to compliance with the requirements of
the 1940 Act, the Investment Manager may retain as a sub-adviser to the Fund, at
the Investment Manager's own expense, any investment adviser registered under
the Advisers Act. The Investment Manager shall also coordinate and manage the
Fund's business activities and its relationship with service providers and
professionals. The Investment Manager will provide office space personnel and
materials reasonably necessary to perform the investment and business management
services outlined herein.
2. (a) The Trust shall conduct its own business and affairs and shall bear
the expenses and salaries necessary and incidental thereto including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of stock,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; taxes, and state and federal
registration fees. Directors, officers, and employees of the Investment Manager
may be trustees/directors, officers and employees of the funds for which the
Investment Manager serves as investment manager. Directors, officers and
employees of the Investment Manager who are trustees, officers and/or employees
of the Trust shall not receive any compensation from the Trust for acting in
such dual capacity.
In the conduct of the respective businesses of the parties hereto and
in the performance of this Agreement, the Trust and the Investment Manager may
share facilities common to each, with appropriate proration of expenses between
them.
(b) To the extent the Investment Manager incurs any costs by assuming
expenses which are an obligation of the Fund as set forth herein, the Fund shall
promptly reimburse the Investment Manager for such costs and expenses, except to
the extent the Investment Manager has otherwise agreed to bear such expenses. To
the extent the services for which the Fund is obligated to pay are performed by
the Investment Manager, the Investment Manager shall be entitled to recover from
the Fund to the extent of the Investment Manager's actual costs for providing
such services.
3. (a) The Investment Manager shall place and execute Fund orders for the
purchase and sale of portfolio securities with broker-dealers. Subject to
obtaining the best available execution, the Investment Manager is authorized to
place orders for the purchase and sale of portfolio securities for the Fund with
such broker-dealers as it may select from time to time. Subject to subparagraph
(b) below, the Investment Manager is also authorized to place transactions with
broker-dealers who provide research or statistical information or analyses to
the Fund, to the Investment Manager, or to any other client for which the
Investment Manager provides investment management services. Subject to obtaining
the best available execution, the Investment Manager may also place brokerage
transactions with broker-dealers who sell shares of the Fund. Broker-dealers who
sell shares of the Fund shall only receive orders for the purchase or sale of
portfolio securities to the extent that the placing of such orders is in
compliance with the rules of the U.S. Securities and Exchange Commission and the
National Association of Securities Dealers, Inc. The Investment Manager also
agrees that it will cooperate with the Trust to execute instructions from the
Trust that brokerage transactions be allocated to broker-dealers who provide
benefits directly to the Fund.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Manager is authorized to pay
a member of an exchange, broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another member of
an exchange, broker or dealer would have charged for effecting that transaction,
in such instances where the Investment Manager has determined in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker or dealer,
viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Fund and to other clients
for which the Investment Manager exercises investment discretion.
(c) The Investment Manager is authorized to direct portfolio
transactions to a broker-dealer which is an affiliated person of the Investment
Manager or the Fund in accordance with such standards and procedures as may be
approved by the Board in accordance with 1940 Act Rule 17e-1, or other rules
promulgated by the Securities and Exchange Commission. Any transaction placed
with an affiliated broker-dealer must (i) be placed at the best available
execution, and (ii) may not be a principal transaction.
4. (a) As compensation for the investment management, business management
and administrative services to be rendered to the Fund by the Investment Manager
under the provisions of this Agreement, the Trust on behalf of the Fund shall
pay to the Investment Manager from the Fund's assets an annual fee equal to
0.65% of the average daily net assets of the Fund, payable on a monthly basis.
(b) If this Agreement is terminated prior to the end of any calendar
month, the management fee shall be prorated for the portion of any month in
which this Agreement is in effect according to the proportion which the number
of calendar days, during which the Agreement is in effect, bears to the number
of calendar days in the month, and shall be payable within 10 days after the
date of termination.
(c) The Investment Manager may voluntarily or contractually agree to
reduce any portion of the compensation or reimbursement of expenses due to it
pursuant to this Agreement and may similarly agree to make payments to limit
expenses which are the responsibility of the Fund under this Agreement. Any
voluntary reduction or payment shall be applicable only to such specific
reduction or payment and shall not constitute an agreement to reduce any future
compensation or reimbursement due to the Investment Manager hereunder or to
continue future payments. Any such reduction will be agreed upon prior to
accrual of the related expense or fee and will be estimated daily. Any fee
withheld shall be voluntarily reduced and any Fund expense paid by the
Investment Manager voluntarily or pursuant to an agreed expense limitation shall
be reimbursed by the Fund to the Investment Manager in the first, second, or
third (or any combination thereof) fiscal year next succeeding the fiscal year
of the withholding, reduction, or payment to the extent permitted by applicable
law if the aggregate expenses for the next succeeding fiscal year, second fiscal
year or third succeeding fiscal year do not exceed any limitation to which the
Investment Manager has agreed. Such reimbursement may be paid prior to the
Fund's payment of current expenses if so requested by the Investment Manager
even if such payment may require the Investment Manager to waive or reduce its
fees hereunder or to pay current Fund expenses.
5. The services to be rendered by the Investment Manager to the Trust on
behalf of the Fund under the provisions of this Agreement are not to be deemed
to be exclusive, and the Investment Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees, and agents
may engage in other businesses, may render investment management services to
other investment companies, or to any other corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross negligence, or
a reckless disregard of the performance of duties of the Investment Manager to
the Fund, the Investment Manager shall not be subject to liabilities to the Fund
or to any shareholder of the Fund for any action or omission in the course of,
or connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security, or otherwise.
8. In accordance with the Agreement and Declaration of Trust of the Trust,
in the event that the Investment Manager ceases to be the Fund's investment
manager for any reason, the Trust will (unless the Investment Manager otherwise
agrees in writing) take all necessary steps to cause itself and the Fund to
cease using the terms, words or phrases "IGAM," or "Integrity Global Asset
Management" in its (or the Fund's) names within a reasonable period of time.
9. This Agreement shall be executed and become effective as of the date
written above if approved by the vote of a majority of the outstanding voting
securities of the Fund. It shall continue in effect for an initial period of two
years and may be renewed thereafter for one year periods only so long as such
renewal and continuance is specifically approved at least annually by the Board
of Trustees or by vote of a majority of the outstanding voting securities of the
Fund and only if the terms and the renewal hereof have been approved by the vote
of a majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated by the Trust at any time, without the payment of a
penalty, on sixty days written notice to the Investment Manager of the Trust's
intention to do so, pursuant to action by the Board of Trustees of the Trust or
pursuant to a vote of a majority of the outstanding voting securities of the
Fund. The Investment Manager may terminate this Agreement at any time, without
the payment of penalty on sixty days written notice to the Trust of its
intention to do so. Upon termination of this Agreement, the obligations of all
the parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond to a breach of this Agreement
committed prior to such termination, and except for the obligation of the Trust
to pay to the Investment Manager the fee provided in Paragraph 4 hereof,
prorated to the date of termination. This Agreement shall automatically
terminate in the event of its assignment.
10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals
to be affixed and duly attested and their presents to be signed by their duly
authorized officers.
IGAM GROUP FUNDS
By:
Name and Title:
Attest:
Name:
INTEGRITY GLOBAL ASSET MANAGEMENT
By:
Name and Title:
Attest:
Name:
