INVESTMENT ADVISORY AGREEMENT BETWEEN INVESTMENT MANAGERS SERIES TRUST AND PEAK6 ADVISORS LLC
BETWEEN
AND
PEAK6
ADVISORS LLC
THIS
INVESTMENT ADVISORY AGREEMENT (the “Agreement”), dated as of March 31, 2010,
between the Investment Managers
Series Trust, a Delaware statutory trust (the “Trust”), on behalf of its
series listed in Appendix A, as amended from time to time (the “Fund”), and
PEAK6 ADVISORS LLC, a Delaware limited liability company (the
“Advisor”).
WHEREAS,
the Advisor has agreed to furnish investment advisory services to the Fund, a
series of the Trust which is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the “1940
Act”);
WHEREAS,
this Agreement has been approved in accordance with the provisions of the 1940
Act, and the Advisor is willing to furnish such services upon the terms and
conditions herein set forth;
NOW,
THEREFORE, in consideration of the mutual premises and covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In General. The
Advisor agrees, all as more fully set forth herein, to act as investment advisor
to the Fund with respect to the investment of the Fund’s assets and to supervise
and arrange for the day-to-day operations of the Fund and the purchase of
securities for and the sale of securities held in the investment portfolio of
the Fund.
2. Duties and Obligations of the Advisor
with Respect to Investment of Assets of the Fund. Subject to
the succeeding provisions of this section and subject to the direction and
control (but not as to investment decisions, portfolio management or related
determinations) of the Trust’s Board of Trustees, the Advisor shall (i) act as
investment advisor for and supervise and manage the investment and reinvestment
of the Fund’s assets and, in connection therewith, have complete discretion in
purchasing and selling securities and other assets for the Fund and in voting,
exercising consents and exercising all other rights appertaining to such
securities and other assets on behalf of the Fund; (ii) supervise the investment
program of the Fund and the composition of its investment portfolio; and (iii)
arrange, subject to the provisions of paragraph 3 hereof, for the purchase and
sale of securities and other assets held in the investment portfolio of the
Fund. In performing its duties under this Section 2, the Advisor may
delegate some or all of its duties and obligations under this Agreement to one
or more investment sub-advisors, including but not limited to delegating the
voting of proxies relating to the Fund’s portfolio securities in accordance with
the proxy voting policies and procedures of such investment sub-advisor;
provided, however, that any such delegation shall be pursuant to an agreement
with terms agreed upon by the Trust and approved in a manner consistent with the
1940 Act and provided, further, that no such delegation shall relieve the
Advisor from its duties and obligations of management and supervision of the
management of the Fund’s assets pursuant to this Agreement and to applicable
law.
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3. Covenants. In the
performance of its duties under this Agreement, the Advisor:
(a) shall
at all times conform to, and act in accordance with, any requirements imposed
by: (i) the applicable provisions of the 1940 Act and the Investment
Advisers Act of 1940, as amended (the “Advisers Act”), and all applicable Rules
and Regulations of the Securities and Exchange Commission (the “SEC”); (ii) any
other applicable provision of law; (iii) in all material respects, the
provisions of the Agreement and Declaration of Trust and By-Laws of the Trust,
as such documents are amended from time to time, it being understood that the
Trust shall provide the Advisor with reasonable advance notice of any such
amendments; (iv) the investment objectives and policies of the Fund as set forth
in its Registration Statement on Form N-1A, as such may be amended from time to
time; and (v) in all material respects, compliance policies and procedures of
the Trust adopted by the Board of Trustees of the Trust;
(b) will
place orders either directly with the issuer or with any broker or
dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Advisor will attempt to obtain the
combination of best net price and favorable execution of its orders under the
circumstances. In placing orders, the Advisor will consider, among
other things, the experience and skill of the firm’s securities traders as well
as the firm’s financial responsibility and administrative
efficiency. Consistent with this obligation, the Advisor may select
brokers on the basis of the research, statistical and pricing services they
provide to the Advisor, which it may use for its other
clients. Information and research received from such brokers will be
in addition to, and not in lieu of, the services required to be performed by the
Advisor hereunder. A commission paid to such brokers may be higher
than that which another qualified broker would have charged for effecting the
same transaction, provided that the Advisor determines in good faith that such
commission is reasonable in relation to the research services and other benefits
received. In no instance, however, will the Fund’s securities be
purchased from or sold to the Advisor, or any affiliated person thereof, except
to the extent permitted by the SEC or by applicable law;
(c) will
treat confidentially and as proprietary information of the Fund all records and
other information relative to the Fund, and the Fund’s prior, current or
potential shareholders (except if such prior, current or potential shareholders
are also a client of or investor in PEAK6 Investments, L.P. or any affiliate
thereof (other than the Fund)), and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Fund, which approval shall not be unreasonably withheld and may not be withheld
where the Advisor or its affiliates has been requested or is required to divulge
such information by duly constituted authorities, or when so requested by the
Fund;
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(d) will
maintain errors and omissions insurance in an amount at least equal to that
disclosed to the Board of Trustees in connection with its approval of this
Agreement;
(e) will
supply such information to the Fund’s co-administrators and permit such
compliance inspections by the Fund’s co-administrators as shall be reasonably
necessary to permit the co-administrators to satisfy their obligations and
respond to the reasonable requests of the Board of Trustees (any such
inspections shall be conducted after reasonable advance notice by the Fund,
during normal business hours and in a manner that does not unreasonably
interfere with the Advisor’s businesses);
(f) will
not pay fees in addition to any Fund distribution or servicing fees to financial
intermediaries for sub-administration, sub-transfer agency or any other
shareholder servicing or distribution services associated with shareholders
whose shares are held in omnibus or other group accounts, except with the prior
authorization of the Board of Trustees and, if the Board of Trustees authorizes
such payments, the Advisor shall report regularly to the Trust on the amounts
paid and the relevant financial intermediary; and
(g) will
use its reasonable efforts to assist the Trust and the Fund in implementing the
Trust’s disclosure controls and procedures in respect of the Fund, and will from
time to time provide the Trust a written assessment of the Advisor’s compliance
policies and procedures that is reasonably acceptable to the Trust to enable the
Trust to fulfill its obligations under Rule 38a-1 under the 1940
Act.
4. Services Not
Exclusive. Nothing in this Agreement shall prevent the Advisor
or any officer, employee or affiliate thereof from acting as investment advisor
for any other person, firm or corporation, or from engaging in any other lawful
activity, and shall not in any way limit or restrict the Advisor or any of its
officers, employees or agents from buying, selling or trading any securities for
its or their own accounts or for the accounts of others for whom it or they may
be acting, including trading the same securities for clients’ accounts or its
own account in a fashion dissimilar to how it is trading those securities for
the Fund; provided, however, that the Advisor will not knowingly undertake any
activities which, in its judgment, will adversely affect the performance of its
obligations under this Agreement.
5. Books and
Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the Fund are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust’s
request. The Advisor 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 1940 Act. Notwithstanding anything
in this Agreement to the contrary, and to the extent permitted by applicable
law, the Trust will not object to the Advisor maintaining copies of any such
records, including the performance records of the Fund, and will not object to
the Advisor using such performance records to promote its services to other
accounts, including other fund accounts.
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6. Agency Cross
Transactions. From time to time, the Advisor or brokers or
dealers affiliated with it may find themselves in a position to buy for certain
of their brokerage clients (each an “Account”) securities which the Advisor’s
investment advisory clients wish to sell, and to sell for certain of their
brokerage clients securities which advisory clients wish to
buy. Where one of the parties is an advisory client, the Advisor or
the affiliated broker or dealer cannot participate in this type of transaction
(known as a cross transaction) on behalf of an advisory client and retain
commissions from one or both parties to the transaction without the advisory
client’s consent. This is because in a situation where the Advisor is
making the investment decision (as opposed to a brokerage client who makes his
own investment decisions), and the Advisor or an affiliate is receiving
commissions from both sides of the transaction, there is a potential conflicting
division of loyalties and responsibilities on the Advisor’s part regarding the
advisory client. The SEC has adopted a rule under the Advisers Act
which permits the Advisor or its affiliates to participate on behalf of an
Account in agency cross transactions if the advisory client has given written
consent in advance. Notwithstanding the first three sentences of this
Section 6, by execution of this Agreement, the Trust authorizes the Advisor or
its affiliates to participate in agency cross transactions involving an
Account. The Advisor agrees that it will not arrange purchases or
sales of securities between the Fund and an Account advised by the Advisor
unless (a) the purchase or sale is in accordance with applicable law (including
Rule17a-7 under the 0000 Xxx) and the Trust’s policies and procedures, (b) the
Advisor determines that the purchase or sale is in the best interests of the
Fund, and (c) the Trust’s Board of Trustees has approved these types of
transactions, which approval the Trust represents and warrants to the Advisor
has been obtained as of the date hereof. The Trust may revoke its
consent at any time by written notice to the Advisor.
7. Expenses. During
the term of this Agreement, the Advisor will bear all costs and expenses of its
employees and any overhead incurred in connection with its duties
hereunder.
8. Compensation of the
Advisor. The Fund agrees to pay to the Advisor and the Advisor
agrees to accept as full compensation for all services rendered by the Advisor
as such, a fee accrued daily and paid monthly in arrears at an annual rate
listed in Appendix
A with respect to the Fund’s average daily net assets. For any
period less than a month during which this Agreement is in effect, the fee shall
be prorated according to the proportion which such period bears to a full month
of 28, 29, 30 or 31 days, as the case may be. The fee payable to the
Advisor under this Agreement will be reduced to the extent required by any
expense limitation agreement between the Advisor and the Fund. The
Advisor may voluntarily absorb certain Fund expenses or waive all or a portion
of its fee, any such agreement or waiver must, however, be in a writing signed
by an authorized officer of the Advisor.
9. Advisor’s
Liability. The Advisor shall have responsibility for the
accuracy and completeness (and liability for the lack thereof) of the statements
in the Fund’s offering materials relating to the Advisor and its investment
program for the Fund (including the prospectus, the statement of additional
information, and advertising and sales materials), except
for information supplied by the co-administrators or the Trust or another third
party for inclusion therein. The Trust shall have responsibility for
the accuracy and completeness (and liability for the lack thereof) of the
statements in the Fund’s offering materials supplied by the co-administrators or
the Trust for inclusion therein. The Advisor will not be liable for
any error of judgment or mistake of law or for any loss suffered by Advisor or
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 its part in the performance of its duties or from
reckless disregard by it of its duties under this Agreement.
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10. Duration and
Termination. This Agreement shall become effective as of the
date hereof and, unless sooner terminated with respect to the Fund as provided
herein, shall continue in effect for a period of two years as to such
Fund. If neither party gives the other party written notice of
termination of this Agreement 60 days prior to the end of the then current term,
this Agreement shall continue in effect with respect to the Fund for successive
periods of 12 months, provided such continuance is specifically approved at
least annually by both (a) the vote of a majority of the Trust’s Board of
Trustees or the vote of a majority of the outstanding voting securities of the
Fund at the time outstanding and entitled to vote, and (b) the vote of a
majority of the Trustees 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. Notwithstanding the
foregoing, this Agreement may be terminated by the Trust at any time as to the
Fund, without the payment of any penalty but after payment of amounts then due
to the Advisor, upon giving the Advisor 60 days’ prior written notice (which
notice may be waived by the Advisor), provided that such termination by the
Trust shall be directed or approved by the vote of a majority of the Trustees of
the Trust in office at the time or by the vote of the holders of a majority of
the voting securities of the Fund at the time outstanding and entitled to
vote. This Agreement will also immediately terminate in the event of
its assignment. Notwithstanding the foregoing, this Agreement may be
terminated by the Advisor at any time as to the Fund, without the payment of any
penalty but after payments then due to the Fund, upon giving the Trust and the
Fund 60 days’ prior written notice (which notice may be waived by the Trust). As
used in this Agreement, the terms “majority of the outstanding voting
securities,” “interested person” and “assignment” shall have the same meanings
of such terms in the 1940 Act.
11. Notices. Any notice
under this Agreement shall be in writing to the other party at such address as
the other party may designate from time to time for the receipt of such notice
and shall be deemed to be received on the earlier of the date actually received
or on the fourth day after the postmark if such notice is mailed first class
postage prepaid.
12. Amendment of this
Agreement. This Agreement may only be amended by an instrument
in writing signed by the parties hereto. Any amendment of this
Agreement shall be subject to the 1940 Act.
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13. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware for contracts to be performed entirely therein without
reference to choice of law principles thereof and in accordance with the
applicable provisions of the 1940 Act.
14. Use of the Names of the
Fund. The Advisor has consented to the revocable,
non-exclusive, limited, nontransferable, nonassignable, nonsublicensable use by
the Fund of the name or identifying word “PEAK6” in the name of the
Fund. Such consent is conditioned upon the employment of the Advisor
as the investment advisor to the Fund and shall terminate immediately in the
event that any of the following occurs: (i) the Advisor (or any successor
thereto or affiliate thereof) is terminated or ceases to be, in each case for
any reason, the investment adviser of the Fund, (ii) the Fund or its affiliates,
directors, officers or agents use such xxxx for any other purpose other than as
expressly permitted hereunder, (iii) the Fund takes any action which dilutes
(determined on a reasonable basis) or could reasonably be expected to dilute,
invalidate or adversely affect, the “PEAK6” xxxx. The Fund accepts
such grant and acknowledges, admits and agrees that it has no right, title or
interest in or other right to use the xxxx “PEAK6” or any derivation thereof,
and agrees to knowingly do nothing inconsistent with PEAK6 Investments, L.P.’s
ownership rights therein. All uses of the “PEAK6” xxxx by the Fund
and all goodwill associated therewith shall inure to the sole benefit of PEAK6
Investments, L.P. The name or identifying word “PEAK6” is used in other
connections and for other purposes by the Advisor and its
affiliates.
15. Additional Limitation of
Liability. The parties hereto are expressly put on notice that
a Certificate of Trust, referring to the Trust’s Agreement and Declaration of
Trust (the “Certificate”), is on file with the Secretary of the State of
Delaware. The Certificate was executed by a trustee of the Trust on
behalf of the Trust as trustee, and not individually, and, as provided in the
Trust’s Agreement and Declaration of Trust, the obligations of the Trust are not
binding on the Trust’s trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust, or the particular series
in question, as the case may be.
16. Miscellaneous. 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 any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding on, and shall inure to the benefit of the parties
hereto and their respective successors.
17. Counterparts. This
Agreement may be executed in counterparts by the parties hereto, each of which
shall constitute an original counterpart, and all of which, together, shall
constitute one Agreement.
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IN
WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be
executed by their duly authorized officers, all as of the day and the year first
above written.
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THE
TRUST:
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INVESTMENT
MANAGERS SERIES
TRUST
on behalf of the PEAK6 Plus Fund
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By:
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Name:
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Title:
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THE
ADVISOR:
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PEAK6
ADVISORS LLC
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By:
PEAK6 Investments, L.P., its Managing
Member
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By:
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Name:
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Title:
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Appendix
A
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Fund/Class
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Advisor Fee
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Effective Date
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PEAK6
Plus Fund
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1.25%
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March
31, 2010
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