FORM OF MANAGEMENT CONTRACT
Exhibit
23D (1)
FORM
OF
Management
Contract executed as of ______________________, 2006 between THE BLUE FUND
GROUP, a Massachusetts business trust (the “Trust”), on behalf of The Blue
Fund (the “Fund”), and BLUE INVESTMENT MANAGEMENT, LLC, a Delaware limited
liability company (the “Manager”).
W
I T N E
S S E T H :
That
in
consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES
TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject
always to the control of the Trustees of the Trust and to such policies as
the
Trustees may determine, the Manager will, at its expense, (i) manage the Fund
and will make investment decisions on behalf of the Fund in accordance with
the
Fund’s investment objectives and restrictions and place all orders for the
purchase and sale of its portfolio securities and (ii) furnish office space
and
equipment, provide bookkeeping and clerical services (excluding determination
of
net asset value, shareholder accounting services and fund accounting services)
and pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Manager. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and the Fund’s stated investment objective,
policies and restrictions.
(b) In
placing orders for the portfolio transactions of the Fund, the Manager will
seek
the best price and execution available, except to the extent it may be permitted
to pay higher brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the Fund the most
favorable price and execution available, the Manager shall consider all factors
it deems relevant, including, without limitation, the overall net economic
result to the Fund (involving price paid or received and any commissions and
other costs paid), the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block is involved,
availability of the broker to stand ready to execute possibly difficult
transactions in the future and the financial strength and stability of the
broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused
the
Fund to pay a broker or dealer that provides brokerage and research services
to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer
would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value
of
the brokerage and research services provided by such broker or dealer, viewed
in
terms of either that particular transaction or the Manager’s overall
responsibilities with respect to the Fund and to other clients of the Manager
as
to which the Manager exercises investment discretion.
(c) The
Manager shall not be obligated under this Contract to pay any expenses of or
for
the Trust or of or for the Fund not expressly assumed by the Manager pursuant
to
this Section 1 other than as provided in Section 3.
-1-
2. OTHER
AGREEMENTS, ETC.
It
is
understood that any of the shareholders, Trustees, officers and employees of
the
Trust may be a partner, shareholder, director, officer or employee of, or be
otherwise interested in, the Manager, and in any person controlling, controlled
by or under common control with the Manager, and that the Manager and any person
controlling, controlled by or under common control with the Manager may have
an
interest in the Trust. It is also understood that the Manager and persons
controlling, controlled by or under common control with the Manager have and
may
have advisory, management service, distribution or other contracts with other
organizations and persons, and may have other interests and
businesses.
3. COMPENSATION
TO BE PAID BY THE FUND TO THE MANAGER.
The
Fund
will pay to the Manager as compensation for the Manager’s services rendered, for
the facilities furnished and for the expenses borne by the Manager pursuant
to
Section 1, a fee, computed and paid monthly at the annual rate of 1.25% of
the
Fund’s average daily net asset value. Such average daily net asset value of the
Fund shall be determined by taking an average of all of the determinations
of
such net asset value during such month while this Contract is in effect. Such
fee shall be payable for each month within five (5) business days after the
end
of such month.
In
the
event that expenses of the Fund for any fiscal year should exceed the expense
limitation on investment company expenses imposed by any statute or regulatory
authority of any jurisdiction in which shares of the Fund are qualified for
offer and sale, the compensation due the Manager for such fiscal year shall
be
reduced by the amount of such excess by a reduction or refund thereof. In the
event that the expenses of the Fund exceed any expense limitation which the
Manager may, by written notice to the Trust, voluntarily declare to be effective
with respect to the Fund, subject to such terms and conditions as the Manager
may prescribe in such notice, the compensation due the Manager shall be reduced,
and, if necessary, the Manager shall bear the Fund’s expenses to the extent
required by such expense limitation.
If
the
Manager shall serve for less than the whole of a month, the foregoing
compensation shall be prorated.
4.
ASSIGNMENT
TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This
Contract shall automatically terminate, without the payment of any penalty,
in
the event of its assignment; and this Contract shall not be amended unless
such
amendment is approved at a meeting by the affirmative vote of a majority of
the
outstanding shares of the Fund, and by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the Trustees
of the Trust who are not interested persons of the Trust or of the
Manager.
-2-
5. EFFECTIVE
PERIOD AND TERMINATION OF THIS CONTRACT.
This
Contract shall become effective upon effectiveness of the Fund’s registration as
a registered investment company, and shall remain in full force and effect
continuously thereafter (unless terminated automatically as set forth in Section
4) until terminated as follows:
(a) Either
party hereto may at any time terminate this Contract by not more than sixty
days’ written notice delivered or mailed by registered mail, postage prepaid, to
the other party, or
(b) if
(i)
the Trustees of the Trust or the shareholders by the affirmative vote of a
majority of the outstanding shares of the Fund, and (ii) a majority of the
Trustees of the Trust who are not interested persons of the Trust or of the
Manager, by vote cast in person at a meeting called for the purpose of voting
on
such approval, do not specifically approve at least annually the continuance
of
this Contract, then this Contract shall automatically terminate at the close
of
business on the second anniversary of its execution, or upon the expiration
of
one year from the effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this Contract is submitted
to the shareholders of the Fund for their approval and such shareholders fail
to
approve such continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment Company
Act of 1940 and the rules and regulations thereunder.
Action
by
the Trust under (a) above may be taken either (i) by vote of a majority of
its
Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of the Fund.
Termination
of this Contract pursuant to this Section 5 shall be without the payment of
any
penalty.
6. CERTAIN
DEFINITIONS.
For
the
purposes of this Contract, the “affirmative vote of a majority of the
outstanding shares” of the Fund means the affirmative vote, at a duly called and
held meeting of shareholders, (a) of the holders of 67% or more of the shares
of
the Fund present (in person or by proxy) and entitled to vote at such meeting,
if the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting are present in person or by proxy, or (b) of the holders
of more than 50% of the outstanding shares of the Fund entitled to vote at
such
meeting, whichever is less.
For
the
purposes of this Contract, the terms “affiliated person,” “control,” “interested
person” and “assignment” shall have their respective meanings defined in the
Investment Company Act of 1940 and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; and the phrase “specifically approve at
least annually” shall be construed in a manner consistent with the Investment
Company Act of 1940 and the rules and regulations thereunder.
7. NONLIABILITY
OF MANAGER.
In
the
absence of willful misfeasance, bad faith or gross negligence on the part of
the
Manager, or reckless disregard of its obligations and duties hereunder, the
Manager shall not be
-3-
subject
to any liability to the Trust, or to any shareholder of the Trust, for any
act
or omission in the course of, or connected with, rendering services
hereunder.
8. NAME
“BLUE INDEX.”
The
Manager owns the name “Blue Index” and such name may be used by the Trust only
with the consent of the Manager. The Manager consents to the use by the Trust
of
the name “Blue Index”, in such forms as the Manager shall in writing approve,
but only on condition and so long as (i) this Contract shall remain in full
force and (ii) the Trust shall fully perform, fulfill and comply with all
provisions of this Contract expressed herein to be performed, fulfilled or
complied with by it. No such name shall be used by the Trust at any time or
in
any place or for any purposes or under any conditions except as in this section
provided. The foregoing authorization by the Manager to the Trust to use said
name is not exclusive of the right of the Manager itself to use, or to authorize
others to use, the same; the Trust acknowledges and agrees that as between
the
Manager and the Trust, the Manager has the exclusive right so to use, or
authorize others to use, said name and the Trust agrees to take such action
as
may reasonably be requested by the Manager to give full effect to the provisions
of this section (including, without limitation, consenting to such use of said
name). Such covenants on the part of the Trust shall be binding upon it, its
trustees, officers, stockholders, creditors and all other persons claiming
under
or through it.
9. EXERCISE
OF VOTING RIGHTS.
Except
as
instructed otherwise by the Trustees of the Trust, the Manager shall at its
discretion exercise or procure the exercise of any voting right attaching to
investments of the Fund.
10. LIMITATION
OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A
copy of
the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust
as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.
-4-
IN
WITNESS WHEREOF, THE BLUE FUND GROUP and BLUE INVESTMENT MANAGEMENT, LLC have
each caused this instrument to be signed in duplicate on its behalf by its
duly
authorized representative, all as of the day and year first above
written.
|
THE
BLUE FUND GROUP
By:_______________________________________
Name:
|
|
|
BLUE
INVESTMENT MANAGEMENT, LLC
By:_______________________________________
Name:
Xxxxxx Xxxxxxx,
Title:
Chief Executive Officer
|
-5-
