INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of this
26th
day of August, 2008 by and between ALLIED ASSET ADVISORS FUNDS, a Delaware
Business Trust (the “Trust”) and ALLIED ASSET ADVISORS, INC., a Delaware
Corporation (the “Advisor”), with respect to the following recital of
fact:
RECITAL
WHEREAS, the Trust is registered as an
open-end, diversified management investment company under the Investment Company
Act of 1940, as amended (the “1940 Act”) and is authorized to issue shares in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Advisor is registered as
an investment advisor under the Investment Advisers Act of 1940, as amended, and
is engaged in the business of acting as an investment advisor; and
WHEREAS, the Trust desires to retain
the Advisor to render advice and services to the Fund (as defined below)
pursuant to the terms and provisions of this Agreement, and the Advisor desires
to furnish said advice and services.
NOW, THEREFORE, in consideration of the
mutual covenants herein contained and other good and valuable consideration, the
receipt whereof is hereby acknowledged, the parties hereto agree as
follows:
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1.
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Appointment of
Advisor. The Trust hereby appoints the Advisor to act as
investment advisor for the Iman Fund, a series of the Trust (the
“Fund”). Subject to the direction and control of the Trust’s
Board of Trustees, the Advisor shall act as investment advisor for the
Fund and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the
Fund’s assets. The Advisor shall give the Fund the benefit of
its best judgment, efforts and facilities in rendering its services as
investment advisor.
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2.
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Duties of Investment
Advisor. In carrying out its obligation under paragraph
1 hereof, the Advisor shall:
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(a) act
as investment adviser 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; (b) supervise
continuously the investment program of the Fund and the composition of its
investment portfolio; (c) 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; and (d) maintain books and records with
respect to the Fund’s securities transactions and will render to the Trust’s
Board of Trustees such periodic and special reports as they may
request.
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3.
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Brokerage. The
Advisor shall place all orders for the purchase and sale of portfolio
securities for the account of the Fund with brokers or dealers selected by
the Advisor, although the Fund will pay the actual brokerage commissions
on portfolio transactions in accordance with paragraph 5
hereof. The Advisor shall consider all factors it deems
relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any (for
the specific transaction and on a continuing
basis).
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To the
extent contemplated by the Trust’s registration statement under the 1933 Act, in
evaluating the overall terms available, and in selecting the broker or dealer to
execute a particular transaction, the Advisor may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Fund and/or other accounts over
which the Advisor (or an affiliate of the Advisor) exercises investment
discretion. The Advisor is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Advisor determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised. Consistent with the Rules
of Fair Practice of the National Association of Securities Dealers, Inc. and
subject to seeking the most favorable combination of net price and execution
available, the Advisor may consider sales of shares of the Fund as a factor in
the selection of broker-dealers to execute portfolio transactions for the
Fund.
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4.
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Compliance with
Applicable Requirements. In carrying out its obligations
under this Agreement, the Advisor shall at all times conform
to:
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(a)
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all
applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder;
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(b)
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the
provisions of the Registration Statements of the Trust under the
Securities Act of 1933 and the 1940
Act;
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(c)
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the
provisions of the Declaration of Trust of the Trust, as
amended;
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(d)
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the
provisions of the By-Laws of the Trust, as amended;
and
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(e)
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any
other applicable provisions of state and Federal
law.
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5.
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Expenses. The
expenses connected with the Fund shall be allocable between the Fund and
the Advisor as follows:
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2
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(a)
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The
Advisor shall furnish, at its expense and without cost to the Fund, the
services of a President, Secretary and one or more Vice Presidents of the
Trust, to the extent that such additional officers may be required by the
Trust for the proper conduct of its
affairs.
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(b)
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The
Advisor shall further maintain, at its expense and without cost to the
Fund, a trading function in order to carry out its obligations under
subparagraph (d) of paragraph 2 hereof to place orders for the purchase
and sale of portfolio securities for the
Fund.
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(c)
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Nothing
in subparagraph (a) hereof shall be construed to require the Advisor to
bear:
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(i)
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any of the costs
(including applicable office space, facilities and equipment) of the
services of a principal financial officer of the Trust whose normal duties
consist of maintaining the financial accounts and books and records of the
Fund; including the reviewing of calculations of daily net asset value and
preparing tax returns; or
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(ii)
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any of the costs
(including applicable office space, facilities and equipment) of the
services of any of the personnel operating under the direction of such
principal financial officer.
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| Notwithstanding the obligation of the Fund to bear the expense of the functions referred to in clauses (i) and (ii) of this subparagraph (c), the Advisor may pay the salaries, including any applicable employment or payroll taxes and other salary costs, of the principal financial officer and other personnel carrying out such functions and the Fund shall reimburse the Advisor therefor upon proper accounting. | ||
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(d)
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All
of the ordinary business expenses incurred in the operations of the Fund
and the offering of its shares shall be borne by the Fund unless
specifically provided otherwise in this paragraph 6. These
expenses include but are not limited to brokerage commissions, legal,
auditing, taxes or governmental fees, the cost of preparing share
certificates, custodian, transfer and shareholder service agent costs,
expenses of issue, sale, redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses relating to trustee
and shareholder meetings, the cost of preparing and distributing reports
and notices to shareholders, the fees and other expenses incurred by the
Fund in connection with membership in investment company organizations and
the cost of printing copies of prospectuses and statements of additional
information distributed to shareholders.
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3
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(e)
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The
Advisor may voluntarily absorb certain Fund expenses or waive the
Adviser’s own advisory fee. To the extent the Advisor incurs
any costs by assuming expenses, which are obligations of the Fund as set
forth herein, the Fund shall promptly reimburse the Advisor for such costs
and expenses, except to the extent the Advisor has otherwise agreed to
bear such expenses. Subject to approval by the Trust’s Board of
Trustees, to the extent the services for which the Fund is obligated to
pay are performed by the Advisor, the Advisor shall be entitled to recover
from the Fund to the extent of the Advisor's actual costs for providing
such services. In determining the Advisor's actual costs, the
Advisor may take into account an allocated portion of the salaries and
overhead of personnel performing such
services.
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6.
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Compensation.
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(a)
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For
all services rendered by Advisor hereunder, the Fund shall pay to Advisor
and Advisor agrees to accept as full compensation for all services
rendered hereunder, an annual investment advisory fee equal to 1.00% of
the average daily net assets of the Fund.
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| The portion of the fee based upon the average daily net assets of the Fund shall be accrued daily at the rate of 1/365th of 1.00% applied to the daily net assets of the Fund. |
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(b)
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The
investment advisory fee shall be accrued daily by the Fund and paid to the
Advisor on the first business day of the succeeding
month.
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(c)
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The
initial fee under this Agreement shall be payable on the first business
day of the first month following the effective date of this Agreement and
shall be prorated as set forth below. If this Agreement is
terminated prior to the end of any month, the fee to the Advisor shall be
prorated for the portion of any month in which this Agreement is in effect
which is not a complete month according to the proportion which the number
of calendar days in the month during which the Agreement is in effect
bears to the number of calendar days in the month, and shall be payable
within ten days after the date of
termination.
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(d)
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The
fee payable to the Advisor under this Agreement will be reduced to the
extent of any receivable owed by the Advisor to the Fund and as required
under any expense limitation applicable to the
Fund.
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(e)
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The
Advisor voluntarily may reduce any portion of the compensation or
reimbursement of expenses due to it pursuant to this Agreement and may
agree to make payments to limit the expenses that are the responsibility
of the Fund under this Agreement. Any such 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 Advisor hereunder or to continue future
payments. Any such reduction will be agreed to prior to accrual
of the related expense or fee and will be estimated daily and reconciled
and paid on a monthly basis.
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4
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(f)
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The
Advisor may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to
this Agreement. Any such agreement shall be applicable only
with respect to the specific items covered thereby and shall not
constitute an agreement not to require payment of any future compensation
or reimbursement due to the Advisor
hereunder.
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7.
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Independent
Contractor/Non-Exclusivity. The Advisor shall for all
purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund or the Trust in any way or otherwise be
deemed an agent of the Fund or the Trust. However, it is
understood and agreed that officers or directors of the Advisor may serve
as officers or trustees of the Trust, and that officers and trustees of
the Trust may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are
not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners,
officers or directors of any other firm or corporation, including other
investment companies.
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| The services of the Advisor to the Fund are not to be deemed to be exclusive, and the Advisor shall be free to render investment advisory and corporate administrative or other services to others (including other investment companies) and to engage in other activities. |
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8.
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Term and
Approval. This Agreement shall become effective at the
close of business on the date set forth above (the “Effective Date”) and
shall, unless terminated as hereinafter provided, continue in
force and effect for two years from the Effective Date and from year to
year thereafter, provided that such continuance is specifically approved
at least annually:
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(a)
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(i)
by the Trustees or (ii) by the vote of a majority of the outstanding
voting securities of the Fund (as defined in Section 2 (a)(42) of the 1940
Act), and
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(b)
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by
the affirmative vote of a majority of the Trustees who are not parties to
this Agreement or interested persons of a party to this Agreement (other
than as Trustees), by votes cast in person at a meeting specifically
called for such purpose.
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9.
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Termination. This
Agreement may be terminated at any time, without the payment of any
penalty, by vote of the Trustees or by vote of a majority of the Fund’s
outstanding voting securities, or by the Advisor on sixty days’ written
notice to the other party. The notice provided for herein may
be waived by either party. This Agreement shall automatically
terminate in the event of its assignment, the term “assignment” for this
purpose having the meaning defined in Section 2(a)(4) of the 1940
Act.
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5
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10.
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Liability of Advisor
and Indemnification. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Advisor or any of its
officers, directors or employees, it shall not be subject to liability to
the Fund or to any shareholder of the Fund for any act or omission in the
course of, or connected with, rendering services hereunder or for any
losses that may, from time to time, be sustained in the purchase, holding
or sale of any security.
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11.
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Liability of
Trust. 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 shall bind only the
assets and property of the Trust as provided in the Declaration of Trust
of the Trust.
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12.
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Notices. Any
notices under this Agreement shall be in writing, addressed and delivered
or mailed postage paid to the other party at such address as such other
party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the
Trust and that of the Advisor shall be 000 XxXxxxxxxx Xxxxx,
Xxxxx 000, Xxxx Xxxxx, Xxxxxxxx,
00000.
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13.
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Questions of
Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by
reference to such term or provision of the Act and to interpretations
thereof, if any, by the United States Courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of
the Securities and Exchange Commission issued pursuant to said
Act. In addition, where the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is released by rules,
regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule,
regulation and order.
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14.
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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 Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any such records upon the
Trust’s request. The Adviser 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.
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15.
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Amendment of this
Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. Any
amendment of this Agreement shall by subject to the 1940
Act.
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16.
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Governing
Law. This Agreement shall be construed in accordance
with the laws of the State of Illinois 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.
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17.
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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 parities hereto and their respective
successors.
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18.
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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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IT WITNESS WEHREOF, the parties have
caused this Agreement to be executed by their respective officers on the day and
the year first above written.
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By: /s/ Xxxxxx
Xxxxx
Name:
Xxxxxx
Xxxxx
Title:
President
Attest:__________________________
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ALLIED
ASSET ADVISORS, INC.
By:
/s/ Xxxxxx
Xxxxx
Name: Xxxxxx
Xxxxx
Title:
President
Attest:___________________________
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