ADVISORY AGREEMENT
Broadway
Trust (the "Trust") is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"), and subject
to
the rules and regulations promulgated thereunder. The Trust currently offers
___
series of shares to investors, the “Funds.” Each share of the Funds represents
an undivided interest in the assets, subject to the liabilities, of the Funds.
1. Appointment
as Adviser.
The
Trust being duly authorized hereby appoints and employs __________________
(the
"Adviser") as discretionary portfolio manager on the terms and conditions
set
forth herein of the Funds.
2. Acceptance
of Appointment; Standard of Performance.
The
Adviser accepts the appointment as discretionary portfolio manager and agrees
to
use its best professional judgement to make timely investment decisions for
the
Funds in accordance with the provisions of this Agreement.
3. Portfolio
Management Services of the Adviser.
The
Adviser is hereby employed and authorized to select portfolio securities
for
investment by the Trust on behalf of the Funds, to purchase
and sell securities of the Funds, and, upon making any purchase or sale
decision, to place orders for the execution of such portfolio transactions
in
accordance with paragraphs 5 and 6 hereof. In providing portfolio management
services to the Funds, the Adviser shall be subject to such investment
restrictions as are set forth in the Act and the rules thereunder, the Internal
Revenue
Code of 1986, applicable state securities laws, the supervision and control
of
the Trustees of the Trust, such specific instructions as the Trustees may
adopt
and communicate to the Adviser and the investment objectives, policies and
restrictions of the Trust applicable to the Funds
furnished pursuant to paragraph 4. The Adviser is not authorized by the Trust
to
take any action, including the purchase or sale of securities for the Funds,
in
contravention of any restriction, limitation, objective, policy or instruction
described in the previous sentence. The Adviser shall maintain on behalf
of the
Trust the records listed in Schedule A hereto (as amended from time to time).
At
the Trust's reasonable request, the Adviser will consult with the Trust with
respect to any decision made by it with respect to the investments of the
Funds.
4. Investment
Objectives, Policies and Restrictions.
The
Trust will provide the Adviser with the statement of investment objectives,
policies and restrictions applicable to the Funds as contained in the Trust's
registration statement under the Act and the Securities Act of 1933, and
any
instructions adopted by the Trustees supplemental thereto. The Trust will
provide the Adviser with such further information concerning the investment
objectives, policies and restrictions applicable thereto as the Adviser may
from
time to time reasonably request. The Trust retains the right, on written
notice
to the Adviser from the Trust, to modify any such objectives, policies or
restrictions in any manner at any time.
5. Transaction
Procedures.
All
transactions will be consummated by payment to or delivery by the Trust’s
custodian or any successor custodian (the "Custodian"), or such depositories
or
agents as may be designated by the Custodian in writing, as custodian for
the
Trust, of all cash and/or securities due to or from the Funds, and the Adviser
shall not have possession or custody thereof. The Adviser shall advise the
Custodian and confirm in writing to the Trust and to _______________________
or
any other designated agent of the Trust, all investment orders for the Funds
placed by it with brokers and dealers. The Adviser shall issue to the Custodian
such instructions as may be appropriate in connection with the settlement
of any
transaction initiated by the Adviser.
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6. Allocation
of Brokerage.
The
Adviser shall have authority and discretion to select brokers and dealers
to
execute portfolio transactions initiated by the Adviser and to select the
markets on or in which the transactions will be executed.
In
doing
so, the Adviser will give primary consideration to securing the best price
and
execution. Consistent with this policy, the Adviser may consider the financial
responsibility, research and investment information and other services provided
by brokers or dealers who may effect or be a party to any such transaction
or
other transactions to which other clients of the Adviser may be a party.
It is
understood that neither the Trust nor the Adviser has adopted a formula for
allocation of the Funds' investment transaction business. It is also understood
that it is desirable for the Trust that the Adviser have access to supplemental
investment and market research and security and economic analyses provided
by
certain brokers who may execute brokerage transactions at a higher commission
to
the Funds than may result when allocating brokerage to other brokers on the
basis of seeking the lowest commission. Therefore, the Adviser is authorized
to
place orders for the purchase and sale of securities for the Funds with such
certain brokers, subject to review by the Trust's Trustees from time to time
with respect to the extent and continuation of this practice. It is understood
that the services provided by such brokers may be useful to the Adviser in
connection with its services to other clients.
On
occasions when the Adviser deems the purchase or sale of a security to be
in the
best interest of the Funds as well as other clients, the Adviser, to the
extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be sold or purchased in order
to
obtain the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or sold,
as
well as expenses incurred in the transaction, will be made by the Adviser
in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Trust and to such other clients.
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For
each
fiscal quarter of the Trust, the Adviser shall prepare and render reports
to the
Trust's Trustees of the total brokerage business placed and the manner in
which
the allocation has been accomplished. Such reports shall set forth at a minimum
the information required to be maintained by Rule 31a-1(b)(9) under the
Act.
7. Proxies.
The
Trust will vote all proxies solicited by or with respect to the issuers of
securities in which assets of the Funds may be invested from time to time.
At
the request of the Trust, the Adviser shall provide the Trust with its
recommendations as to the voting of such proxies.
8. Reports
to the Adviser.
The
Trust will provide the Adviser with such periodic reports concerning the
status
of the Funds as the Adviser may reasonably request.
9. Fees
for Services.
For all
of the services to be rendered and payments made as provided in this Agreement,
the Funds will pay the Adviser a fee, computed and accrued daily and paid
monthly, at the annual rate of ____% of its average daily net
assets.
10. Allocation
of Charges and Expenses.
The
Adviser shall employ or provide and compensate the executive, administrative,
secretarial and clerical personnel necessary to provide the services set
forth
herein, and shall bear the expense thereof. The Adviser shall compensate
all
Trustees, officers and employees of the Trust who are also employees of the
Adviser. The Adviser will pay all expenses incurred in connection with the
sale
or distribution of the Funds' shares to the extent such expenses are not
assumed
by the Funds under a plan of distribution pursuant to Rule 12b-1 under the
Act.
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The
Funds
will be responsible for the payment of all operating expenses of the Funds,
including fees and expenses incurred by the Funds in connection with membership
in investment company organizations, brokerage fees and commissions, legal,
auditing and accounting expenses, expenses of registering shares under federal
and state securities laws, insurance expenses, taxes or governmental fees,
fees
and expenses of the custodian, the transfer, shareholder service and dividend
disbursing agent and the accounting and pricing agent of the Funds, expenses
including clerical expenses of the issue, sale, redemption or repurchase
of
shares of the Funds, the fees and expenses of Trustees of the Trust who are
not
interested persons of the Trust, the cost of preparing, printing and
distributing prospectuses, statements, reports and other documents to
shareholders, expenses of shareholders' meetings and proxy solicitations,
and
such extraordinary or non-recurring expenses as may arise, including litigation
to which the Trust may be a party and indemnification of the Trust's officers
and Trustees with respect thereto, or any other expense not specifically
described above incurred in the performance of the Trust's obligations. All
other expenses not expressly assumed by the Adviser herein incurred in
connection with the organization, registration of shares and operations of
the
Funds will be borne by the Funds.
11. Other
Investment Activities of the Adviser.
The
Trust acknowledges that the Adviser or one or more of its affiliates may
have
investment responsibilities or render investment advice to or perform other
investment advisory services for other individuals or entities and that the
Adviser, its affiliates or any of its or their directors, officers, agents
or
employees may buy, sell or trade in any securities for its or their respective
accounts ("Affiliated Accounts"); provided, however, that performance by
the
Adviser of such other services shall not impair or interfere with the Adviser's
obligations under this Agreement. Subject to the provisions of paragraph
2
hereof, the Trust agrees that the Adviser or its affiliates may give advice
or
exercise investment responsibility and take such other action with respect
to
other Affiliated Accounts which may differ from the advice given or the timing
or nature of action taken with respect to the Funds, provided that the Adviser
acts in good faith, and provided further, that it is the Adviser's policy
to
allocate, within its reasonable discretion, investment opportunities to the
Funds over a period of time on a fair and equitable basis relative to the
Affiliated Accounts, taking into account the investment objectives and policies
of the Funds and any specific investment restrictions applicable thereto.
The
Trust acknowledges that one or more of the Affiliated Accounts may at any
time
hold, acquire, increase, decrease, dispose of or otherwise deal with positions
in investments in which the Funds may have an interest from time to time,
whether in transactions which involve the Funds or otherwise. The Adviser
shall
have no obligation to acquire for the Funds a position in any investment
which
any Affiliated Account may acquire, and the Trust shall have no first refusal,
co-investment or other rights in respect of any such investment, either for
the
Funds or otherwise.
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12. Certificate
of Authority.
The
Trust and the Adviser shall furnish to each other from time to time certified
copies of the resolutions of their Trustees or Board of Directors or executive
committees, as the case may be, evidencing the authority of officers and
employees who are authorized to act on behalf of the Trust, the Funds and/or
the
Adviser.
13. Limitation
of Liability.
The
Adviser shall not be liable for any action taken, omitted or suffered to
be
taken by it in its reasonable judgment, in good faith and believed by it
to be
authorized or within the discretion or rights or powers conferred upon it
by
this Agreement, or in accordance with (or in the absence of) specific directions
or instructions from the Trust, provided, however, that such acts or omissions
shall not have resulted from the Adviser's willful misfeasance, bad faith
or
negligence, a violation of the standard of care established by and applicable
to
the Adviser in its actions under this Agreement or breach of its duty or
of its
obligations hereunder. Nothing in this paragraph 13 shall be construed in
a
manner inconsistent with Sections 17(h) and (i) of the Act.
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14. Confidentiality.
Subject
to the duty of the Adviser and the Trust to comply with applicable law,
including any demand of any regulatory or taxing authority having jurisdiction,
the parties hereto shall treat as confidential all information pertaining
to the
Funds and the actions of the Adviser and the Trust in respect
thereof.
15. Assignment.
No
assignment of this Agreement shall be made by the Adviser, and this Agreement
shall terminate automatically in the event of such assignment. The Adviser
shall
notify the Trust in writing sufficiently in advance of any proposed change
of
control, as defined
in
Section 2(a)(9) of the Act, as will enable the Trust to consider whether
an
assignment will occur, and to take the steps necessary to enter into a new
contract with the Adviser.
16. Representation,
Warranties and Agreements of the Trust.
The
Trust represents, warrants and agrees that:
A. The
Adviser has been duly appointed by the Trustees of the Trust to provide
investment advisory services to the Funds as contemplated hereby.
B. The
Trust
will deliver to the Adviser true and complete copies of its then current
prospectus and statement of additional information as effective from time
to
time and such other documents or instruments governing the investments of
the
Funds and such other information as is necessary for the Adviser to carry
out
its obligations under this Agreement.
C. The
Trust
is currently in compliance and shall at all times comply with the requirements
imposed upon the Trust by applicable law and regulations.
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17. Representations,
Warranties and Agreements of the Adviser.
The
Adviser represents, warrants and agrees that:
A. The
Adviser is registered as an investment adviser under the Investment Advisers
Act
of 1940.
B. The
Adviser will maintain, keep current and preserve on behalf of the Trust,
in the
manner and for the time periods required or permitted by the Act, the records
identified in Schedule A. The Adviser agrees that such records (unless otherwise
indicated on Schedule A) are the property of the Trust, and will be surrendered
to the Trust promptly upon request.
C. The
Adviser will complete such reports concerning purchases or sales of securities
on behalf of the Funds as the Trust may from time to time require to ensure
compliance with the Act, the Internal Revenue Code of 1986 and applicable
state
securities laws.
D. The
Adviser has adopted a written code of ethics complying with the requirements
of
Rule 17j-1 under the Act and will provide the Trust with a copy of the code
of
ethics and evidence of its adoption. Within forty-five (45) days of the end
of
the last calendar quarter of each year while this Agreement is in effect,
an
executive officer of the Adviser shall certify to the Trust that the Adviser
has
complied with the requirements of Rule 17j-1 during the previous year and
that
there has been no violation of the Adviser's code of ethics or, if such a
violation has occurred, that appropriate action was taken in response to
such
violation. Upon the written request of the Trust, the Adviser shall permit
the
Trust, its employees or its agents to examine the reports required to be
made to
the Adviser by Rule 17j-1(c)(1).
E. The
Adviser will, promptly after filing with the Securities and Exchange Commission
an amendment to its Form ADV, furnish a copy of such amendment to the
Trust.
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F. Upon
request of the Trust, the Adviser will provide assistance to the Custodian
in
the collection of income due or payable to the Funds.
G. The
Adviser will immediately notify the Trust of the occurrence of any event
which
would disqualify the Adviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the Act or
otherwise.
18. Amendment.
This
Agreement may be amended at any time, but only by written agreement between
the
Adviser and the Trust, which amendment, other than amendments to Schedule
A, is
subject to the approval of the Trustees and the shareholders of the Funds
in the
manner required by the Act and the rules thereunder, subject to any applicable
exemptive order of the Securities and Exchange Commission modifying the
provisions of the Act with respect to approval of amendments to this
Agreement.
19. Effective
Date; Term.
This
Agreement shall become effective on the date of its execution and shall remain
in force for a period of two (2) years from such date, and from year to year
thereafter but only so long as such continuance is specifically approved
at
least annually by the vote of a majority of the Trustees who are not interested
persons of the Trust or the Adviser, cast in person at a meeting called for
the
purpose of voting on such approval, and by a vote of the Board of Trustees
or of
a majority of the outstanding voting securities of the Funds. The aforesaid
requirement that this Agreement may be continued "annually" shall be construed
in a manner consistent with the Act and the rules and regulations
thereunder.
20. Termination.
This
Agreement may be terminated by either party hereto, without the payment of
any
penalty, immediately upon written notice to the other in the event of a breach
of any provision thereof by the party so notified, or otherwise upon sixty
(60)
days' written notice to
the
other, but any such termination shall not affect the status, obligations
or
liabilities of any party hereto to the other.
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21. Obligations
of the Trust.
It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents
or
employees of the Trust, personally, but bind only the trust property of the
Trust. The execution and delivery of this Agreement have been authorized
by the
Trustees of the Trust and signed by an officer of the Trust, acting as such,
and
neither such authorization by such trustees nor such execution and delivery
by
such officer shall be deemed to have been made by any of them individually
or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust.
22. Definitions.
As used
in paragraphs 15 and 19 of this Agreement, the terms "assignment," "interested
person" and "vote of a majority of the outstanding voting securities" shall
have
the meanings set forth in the Act and the rules and regulations
hereunder.
23. Applicable
Law.
To the
extent that state law is not preempted by the provisions of any law of the
United States heretofore or hereafter enacted, as the same may be amended
from
time to time, this Agreement shall be administered, construed and enforced
according to the laws of the State of Ohio.
24. Severability.
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.
25. Notice.
Any
notice under this Agreement shall be in writing, addressed and delivered
or
mailed, postage prepaid, to the other party at such address as such other
party
may designate for the receipt of such notice.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the day and year written below.
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By:_____________________
Title:
___________________
Date:
__________________
________________________
By:_____________________
Title:
___________________
Date:
__________________
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SCHEDULE
A
RECORDS
TO BE MAINTAINED BY THE ADVISER
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1.
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(Rule
31a-1(b)(5) and (6)) A record of each brokerage order, and all
other
portfolio purchases or sales, given by the Adviser on behalf of
the Funds
for, or in connection with, the purchase or sale of securities,
whether
executed or unexecuted. Such records shall
include:
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A.
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The
name of the broker;
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B.
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The
terms and conditions of the order and of any modification or cancellation
thereof;
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C.
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The
time of entry or cancellation;
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D.
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The
price at which executed;
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E.
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The
time of receipt of a report of execution;
and
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F.
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The
name of the person who placed the order on behalf of the
Trust.
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2.
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(Rule
31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10)
days after the end of the quarter, showing specifically the basis
or bases
upon which the allocation of orders for the purchase and sale of
portfolio
securities to named brokers or dealers was effected, and the division
of
brokerage commissions or other compensation on such purchase and
sale
orders. Such record:
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A.
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Shall
include the consideration given to:
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(i)
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The
sale of shares of the Funds by brokers or
dealers.
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(ii)
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The
supplying of services or benefits by brokers or dealers
to:
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(a)
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The
Trust;
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(b)
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The
Adviser; and,
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(c)
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Any
person affiliated with the foregoing
persons.
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(iii)
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Any
other consideration other than the technical qualifications of
the brokers
and dealers as such.
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B.
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Shall
show the nature of the services or benefits made
available.
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C.
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Shall
describe in detail the application of any general or specific formula
or
other determinant used in arriving at such allocation of purchase
and sale
orders and such division of brokerage commissions or other
compensation.
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D.
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The
name of the person responsible for making the determination of
such
allocation and such division of brokerage commissions or other
compensation.
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3.
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(Rule
31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing
the
purchase or sale of portfolio securities. Where an authorization
is made
by a committee or group, a record shall be kept of the names of
its
members who participate in the authorization. There shall be retained
as
part of this record any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of portfolio securities
and
such other information as is appropriate to support the
authorization.*
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4.
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(Rule
31a-1(f)) Such accounts, books and other documents as are required
to be
maintained by registered investment advisers by rule adopted under
Section
204 of the Investment Advisers Act of 1940, to the extent such
records are
necessary or appropriate to record the Adviser's transactions with
respect
to the Funds.
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*
Such
information might include: the current Form 10-K, annual and quarterly reports,
press releases, reports by analysts and from brokerage firms (including their
recommendation; i.e., buy, sell, hold) or any internal reports or portfolio
adviser reviews.
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