INVESTMENT MANAGEMENT AGREEMENT
This AGREEMENT is made as of this 1st day of March,
2012, between Xxxxx Fargo Fund Trust (the "Trust"), a statutory
trust organized under the laws of the State of Delaware with its
principal place of business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx, 00000 and Xxxxx Fargo Fund Management,
LLC (the "Manager"), a limited liability company organized under
the laws of the State of Delaware with its principal place of
business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx, 00000.
WHEREAS, the Trust is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as an openend
management investment company and is authorized to issue
interests (as defined in the Trust's Declaration of Trust, as
amended and supplemented from time to time), in separate series;
and
WHEREAS, the Trust desires that the Manager provide
investment advisory and certain fund level administrative services
to the series of the Trust identified on Schedule A hereto, as such
Schedule may be amended or supplemented from time to time by
mutual agreement (the "Fund"), and the Manager is willing to
provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust and the Manager agree as
follows:
Section 1. Appointment of the Manager. The Trust is
engaged in the business of investing and reinvesting its assets in
securities of the type and in accordance with the limitations
specified in its Declaration of Trust, as amended and supplemented
from time to time, By-Laws (if any) and Registration Statement
filed with the Securities and Exchange Commission (the
"Commission") under the 1940 Act and the Securities Act of 1933
(the "Securities Act"), including any representations made in the
prospectus and statement of additional information relating to the
Fund contained therein and as may be amended or supplemented
from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees
(the "Board"). The Board is authorized to issue any unissued
shares in any number of additional classes or series.
The investment advisory authority granted to the Manager
shall include the authority to exercise whatever powers the Trust
may possess with respect to any of its assets held by the Fund,
including, but not limited to, the power to exercise rights, options,
warrants, conversion privileges, redemption privileges, and to
tender securities pursuant to a tender offer, and participate in class
actions and other legal proceedings on behalf of the Fund.
The Trust hereby employs Manager, subject to the direction
and control of the Board, to manage the investment and
reinvestment of the assets in the Fund and, without limiting the
generality of the foregoing, to provide the other administrative
services specified in Section 2 hereof.
Section 2. Duties of the Manager.
(a) Advisory Services. The Manager shall make
decisions with respect to all purchases and sales of securities and
other investment assets for the Fund. Among other things, the
Manager shall make all decisions with respect to the allocation of
the Fund's investments in various securities or other assets, in
investment styles and, if applicable, in other investment companies
or pooled vehicles in which the Fund may invest.
To the extent the securities of an underlying
registered investment company constitute the Fund's only
investment security, in accordance with Section 12(d)(1)(E) of the
1940 Act, the Manager's responsibilities shall include, but not be
limited to, reviewing (at least quarterly) the investment strategy
and performance of the underlying fund, including any changes
affecting the underlying fund, its objective, investment strategies
and risks, and conducting risk management reviews and
assessments with respect to the underlying fund and its adviser.
To carry out such duties, the Manager is hereby
authorized, as agent and attorney-in-fact for the Trust, for the
account of, at the risk of and in the name of the Trust, to place
orders and issue instructions with respect to transactions of the
Fund. In all purchases, sales and other transactions in securities
for the Fund, the Manager is authorized to exercise full discretion
and act for the Trust in the same manner and with the same force
and effect as the Trust might or could do with respect to such
purchases, sales or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance or conduct
of such purchases, sales or other transactions.
(b) The Manager will report to the Board at each
regular meeting thereof regarding the investment performance of
the Fund since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Fund
and the Manager, and on its own initiative will furnish the Board
from time to time with such information as the Manager may
believe appropriate, whether concerning the individual companies,
including registered investment companies held by the Fund,
whose securities are held by the Fund, the industries in which they
engage, or the economic, social or political conditions prevailing in
each country in which the Fund maintains investments. The
Manager will also furnish the Board with such statistical and
analytical information with respect to securities in the Fund as the
Manager may believe appropriate or as the Board reasonably may
request.
The Manager shall promptly notify the Trust of (i)
any changes regarding the Manager that would impact disclosure
in the Trust's Registration Statement, or (ii) any material violation
of any requirement, provision, policy or restriction that the
Manager is required to comply with under Section 6 of this
Agreement. The Manager shall immediately notify the Trust of
any legal process served upon it in connection with its activities
hereunder, including any legal process served upon it on behalf of
the Fund or the Trust.
(c) Administrative Services. The Manager shall
provide the following administrative services in connection with
the operation of the Trust and the Fund:
(1) coordinate, supervise and make all payments to the Fund's
transfer agent and various subtransfer agents and omnibus account
servicers and record-keepers;
(2) receive and tabulate shareholder votes;
(3) furnish statistical and research data;
(4) coordinate (or assist in) the preparation and filing with
the U.S. Securities and Exchange Commission ("SEC") of registration
statements, notices, shareholder reports, and other material
required to be filed under applicable laws;
(5) prepare and file with the states registration statements,
notices, reports, and other material required to be filed under
applicable laws;
(6) prepare and file Form 24F-2s and N-SARs;
(7) review bills submitted to the Fund and, upon determining that
a xxxx is appropriate, allocate amounts to the Fund and instruct the
Fund's custodian to pay such bills;
(8) coordinate (or assist in) the preparation of reports and other
information materials regarding the Fund, including prospectuses,
proxies and other shareholder communications;
(9) prepare expense table and performance information for annual
updates;
(10) provide legal and regulatory advice to the Fund in connection
with its other administrative functions, including assignment of
matters to outside legal counsel on behalf of the Trust and
supervising the work of such counsel;
(11) provide office facilities and clerical support for the Fund;
(12) develop and implement procedures for monitoring compliance
with regulatory requirements and compliance with the Fund's
investment objectives, policies and restrictions;
(13) serve as liaison between the Fund and its independent
auditors;
(14) prepare and file tax returns;
(15) review payments of Fund expenses;
(16) prepare expense budgeting and accruals;
(17) provide communication, coordination, and supervision services
with regard to the Fund's transfer agent, custodian, fund
accountant, any co-administrators, and other service organizations
that render recordkeeping or shareholder communication services;
(18) provide information to the Fund's distributor concerning fund
performance and administration;
(19) provide reports to the Fund's board of directors regarding its
activities;
(20) assist in the preparation and assembly of meeting materials,
including comparable fee information, as required, for the Fund's
board of directors; and
(21) provide any other administrative services reasonably
necessary for the operation of the Fund other than those services
that are to be provided by the Trust's transfer and dividend
disbursing agent, custodian, and fund accountant, provided that
nothing in this Agreement shall be deemed to require Funds
Management to provide any services that may not be provided by it
under applicable banking laws and regulations.
Section 3. Delivery of Documents to the Manager. The
Trust has furnished the Manager with true, correct and complete
copies of the following documents:
(a) The Declaration of Trust, as in effect on the date hereof;
(b) The Registration Statement filed with the Commission under
the 1940 Act and the Securities Act; and
(c) Written guidelines, policies and procedures adopted
by the Trust.
The Trust will furnish the Manager with all future
amendments and supplements to the foregoing as soon as
practicable after such documents become available. The Trust
shall furnish the Manager with any further documents, materials or
information that the Manager may reasonably request in
connection with the performance of its duties hereunder.
Section 4. Delegation of Responsibilities.
(a) The Manager may carry out any of its obligations
under this Agreement by employing, subject to supervision by the
Manager, one or more Sub-Adviser(s) who are registered as
investment advisers pursuant to the Investment Advisers Act of
1940 ("Sub-Advisers"). Each Sub-Adviser's employment will be
evidenced by a separate written agreement approved by the Board
and, if required under the 1940 Act, by the shareholders of the
Fund (unless the Commission or its staff has given authorization or
issued an interpretation dispensing with the requirement of
shareholder approval). The Manager shall not be liable hereunder
for any act or omission of any Sub-Adviser, except for failure to
exercise good faith in the employment of the Sub-Adviser and for
failure to exercise appropriate supervision of such Sub-Adviser,
and as may otherwise be agreed in writing. The Manager shall be
solely responsible for compensating any Sub-Adviser for services
rendered under any Sub-Advisory Agreement. The Manager may,
from time to time and at any time, terminate any Sub-Adviser and
reassume the responsibilities assigned to such Sub-Adviser with
respect to any Fund without obtaining the approval of the
shareholders of the Fund.
(b) The Manager will from time to time employ or subcontract
the services to certain persons as the Manager believes to
be appropriate or necessary to assist in the execution of the
Manager's duties hereunder; provided, however, that the
employment or sub-contracting with any such person shall not
relieve the Manager of its responsibilities or liabilities hereunder
and provided further that the Manager shall not have the authority
to sub-contract advisory responsibilities without the consent of the
Trust. The cost of performance of such duties will be borne and
paid by the Manager. No obligation may be imposed on the Trust
in any such respect.
The Manager shall supervise and monitor the
activities of its representatives, personnel, sub-contractors, and
agents in connection with the execution of its duties and obligations
hereunder. The appropriate personnel of the Manager will be made
available to consult with the Board at reasonable times and upon
reasonable notice concerning the business of the Trust.
(c) The Manager shall maintain records relating to
portfolio transactions and the placing and allocation of brokerage
orders as are required to be maintained by the Trust under the 1940
Act. The Manager shall prepare and maintain, or cause to be
prepared and maintained, in such form, for such periods and in
such locations as may be required by applicable law, all documents
and records relating to the services provided by the Manager
pursuant to this Agreement required to be prepared and maintained
by the Trust pursuant to the rules and regulations of any national,
state, or local government entity with jurisdiction over the Trust,
including the Commission and the Internal Revenue Service. The
books and records pertaining to the Trust which are in possession
of the Manager shall be the property of the Trust. The Trust, or the
Trust's authorized representatives, shall have access to such books
and records at all times during the Manager's normal business
hours. Upon the reasonable request of the Trust, copies of any
such books and records shall be provided promptly by the Manager
to the Trust or the Trust's authorized representatives.
Section 5. Control by Board. Any investment activities
undertaken by the Manager pursuant to this Agreement, as well as
any other activities undertaken by the Manager on behalf of the
Fund, shall at all times be subject to the direction and control of the
Board.
Section 6. Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Manager
shall at all times comply with:
(a) all applicable provisions of the 1940 Act, and any rules and
regulations adopted thereunder;
(b) the Registration Statement of the Trust, as it may be amended
from time to time, filed with the Commission under the Securities
Act and the 1940 Act;
(c) the provisions of the Declaration of Trust of the Trust, as it
may be amended from time to time;
(d) the provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Trust or the Fund, and any rules and regulations
adopted thereunder; and
(e) any other applicable provisions of state or federal law, and
any rules and regulations adopted thereunder.
Section 7. Proxies. The Manager shall have responsibility
to vote proxies solicited with respect to issuers of securities in
which assets of the Fund are invested in accordance with the
Trust's policies on proxy voting.
Section 8. Broker-Dealer Relationships. In connection
with the purchase and sale of securities for the Fund, the Manager
is responsible for broker-dealer selection and negotiation of
brokerage commission rates. The Manager's primary
consideration in effecting a security transaction will be to obtain
the best price and execution. In selecting a broker-dealer to
execute each particular transaction for the Fund, the Manager will
consider among other things: the best net price available, the
reliability, integrity and financial condition of the broker-dealer;
the size of and difficulty in executing the order; and the value of
the expected contribution of the broker-dealer to the Fund on a
continuing basis. Accordingly, the price to the Fund in any
transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other
aspects of the portfolio execution services offered. Subject to such
policies as the Board may from time to time determine, the
Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely
by reason of 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 overall
responsibilities of the Manager with respect to the Fund and to
other clients of the Manager. The Manager is further authorized to
allocate the orders placed by it on behalf of the Fund to brokers
and dealers who also provide brokerage and research services
within the meaning of Section 28(e) of the Securities Exchange
Act of 1934 and in compliance therewith. Such allocation shall be
in such amounts and proportions as the Manager shall determine
and the Manager will report on said allocations regularly to the
Board, indicating the brokers to whom such allocations have been
made and the basis therefore.
Section 9. Expenses. All of the ordinary business
expenses incurred in the operations of the Fund and the offering of
their shares shall be borne by the Fund unless specifically provided
otherwise in this Agreement. The expenses borne by the Trust
include, but are not limited to, brokerage commissions, taxes,
legal, auditing or governmental fees, the cost of preparing share
certificates, custodian, transfer agent and shareholder service agent
costs, expense of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses
relating to trustees 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 the Fund's shareholders.
The Manager shall pay its own expenses in connection with
the services to be provided by it pursuant to this Agreement. In
addition, the Manager shall be responsible for reasonable out-ofpocket
costs and expenses incurred by the Trust: (a) to amend the
Trust's registration statement or supplement the Fund's prospectus,
and circulate the same, to reflect a change in the personnel of the
Manager responsible for making investment decisions in relation to
the Fund; (b) to obtain shareholder approval of a new sub-advisory
agreement as a result of a "change in control" (as such term in
defined in Section 2(a)(9) of the 0000 Xxx) of the Manager, or to
otherwise comply with the 1940 Act, the Securities Act, or any
other applicable statute, law, rule or regulation, as a result of such
change; or (c) to meet other legal or regulatory obligations caused
by actions of the Manager.
Section 10. Compensation.
(a) As compensation for the advisory services provided
under this Agreement, the Trust shall pay the Manager fees,
payable monthly, at the annual rates indicated on Schedule A
hereto, as such Schedule may be amended or supplemented from
time to time;
Section 11. Standard of Care. The Trust will expect of
the Manager, and the Manager will give the Trust the benefit of,
the Manager's best judgment and efforts in rendering its services to
the Trust, and the Manager shall not be liable hereunder for any
mistake in judgment. In the absence of willful misfeasance, bad
faith, negligence or reckless disregard of obligations or duties
hereunder on the part of the Manager or any of its officers,
directors, employees or agents, the Manager shall not be subject to
liability to the Trust or to any shareholders of the Trust for any act
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.
Section 12. Non-Exclusivity. The services of the
Manager to the Fund are not to be deemed to be exclusive, and the
Manager shall be free to render investment advisory or other
services to others (including other investment companies) and to
engage in other activities. It is understood and agreed that officers
or directors of the Manager may serve as officers and directors of
the Trust, and that officers or directors of the Trust may serve as
officers or directors of the Manager, to the extent that such services
may be permitted by law, and that the officers and directors of the
Manager are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from
serving as partners, officers, directors or trustees of any other firm
or trust, including other investment advisory companies.
Section 13. Records. The Manager shall, with respect to
orders the Manager places for the purchase and sale of portfolio
securities of the Fund, maintain or arrange for the maintenance of
the documents and records required pursuant to Rule 31a-1 under
the 1940 Act as well as such records as the Fund's administrator
reasonably requests to be maintained, including, but not limited to,
trade tickets and confirmations for portfolio trades. All such
records shall be maintained in a form acceptable to the Trust and in
compliance with the provisions of Rule 31a-1 or any successor
rule. All such records will be the property of the Trust and will be
made available for inspection and use by the Trust and its
authorized representatives.
Section 14. Term and Approval. This Agreement shall
become effective with respect to the Fund for an initial two-year
term after being approved in accordance with the requirements of
the 1940 Act and executed by the Manager and the Trust, and shall
thereafter continue from year to year, provided that the
continuation of the Agreement is specifically approved in
accordance with the requirements of the 1940 Act, which currently
requires that the continuation be approved at least annually:
(a) by the Board, or 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
(b) by the affirmative vote of a majority of the Trust's
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at a
meeting specifically called for such purpose.
Section 15. Termination. As required under the 1940
Act, this Agreement may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of the Board
or by vote of a majority of the Fund's outstanding voting
securities, or by the Manager, on sixty (60) days' written notice to
the other party. The notice provided for herein may be waived by
the party entitled to receipt thereof. This Agreement shall
automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning
defined in Section 2(a)(4) of the 1940 Act, as it may be interpreted
by the Commission or its staff in interpretive releases, or by the
Commission staff in no-action letters issued under the 1940 Act.
This Agreement may also be terminated immediately by the
Trust or the Manager in the event that either party (i) breaches a
material term of this Agreement; or (ii) commits a material
violation of any governing law or regulation; or (iii) engages in
conduct that would have a material adverse effect upon the
reputation or business prospects of such other party.
Section 16. Indemnification by the Manager. The Trust
shall not be responsible for, and the Manager shall indemnify and
hold the Trust or any Fund harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to the willful
misfeasance, bad faith, negligent acts or reckless disregard of
obligations or duties on the part of the Manager or any of its
officers, directors, employees or agents.
Section 17. Indemnification by the Trust. In the absence
of willful misfeasance, bad faith, negligence or reckless disregard
of duties hereunder on the part of the Manager or any of its
officers, directors, employees or agents, the Trust hereby agrees to
indemnify and hold harmless the Manager against all claims,
actions, suits or proceedings at law or in equity whether brought by
a private party or a governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising from the
advertising, solicitation, sale, purchase or pledge of securities,
whether of the Fund or other securities, undertaken by the Fund,
their officers, directors, employees or affiliates, resulting from any
violations of the securities laws, rules, regulations, statutes and
codes, whether federal or of any state, by the Fund, their officers,
directors, employees or affiliates.
Section 18. 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 shall be 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: C.
Xxxxx Xxxxxxx, and that of the Manager shall be 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxx Xxxx.
Section 19. 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 terms or provision
of the 1940 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 Commission,
interpretations of the Commission or its staff, or Commission staff
no-action letters, issued pursuant to the 1940 Act. In addition,
where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is revised by rule, regulation or order
of the Commission, such provision shall be deemed to incorporate
the effect of such rule, regulation or order. The duties and
obligations of the parties under this Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware to the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted.
Section 20. 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. If shareholder approval of an
amendment is required under the 1940 Act, no such amendment
shall become effective until approved by a vote of the majority of
the outstanding shares of the affected Fund. Otherwise, a written
amendment of this Agreement is effective upon the approval of the
Board and the Manager.
Section 21. Xxxxx Fargo Name. The Manager and the
Trust each agree that the name "Xxxxx Fargo," which comprises a
component of the Trust's name, is a property right of the parent of
the Manager. The Trust agrees and consents that: (i) it will use the
words "Xxxxx Fargo" as a component of its corporate name, the
name of any series or class, or all of the above, and for no other
purpose; (ii) it will not grant to any third party the right to use the
name "Xxxxx Fargo" for any purpose; (iii) the Manager or any
corporate affiliate of the Manager may use or grant to others the
right to use the words "Xxxxx Fargo," or any combination or
abbreviation thereof, as all or a portion of a corporate or business
name or for any commercial purpose, other than a grant of such
right to another registered investment company not advised by the
Manager or one of its affiliates; and (iv) in the event that the
Manager or an affiliate thereof is no longer acting as investment
adviser to any Fund, the Trust shall, upon request by the Manager,
promptly take such action as may be necessary to change its
corporate name to one not containing the words "Xxxxx Fargo" and
following such change, shall not use the words "Xxxxx Fargo," or
any combination thereof, as a part of its corporate name or for any
other commercial purpose, and shall use its best efforts to cause its
trustees, officers and shareholders to take any and all actions that
the Manager may request to effect the foregoing and to reconvey to
the Manager any and all rights to such words.
Section 22. Risk Acknowledgement. The Manager does
not guarantee the future performance of the Fund or any specific
level of performance, the success of any investment decision or
strategy that the Manager may use, or the success of the Manager's
overall management of the Fund. The Trust understands that
investment decisions made for the Fund by the Manager are
subject to various market, currency, economic and business risks,
and that those investment decisions will not always be profitable.
The Manager will manage only the securities, cash and other
investments for which management responsibility is delegated to it
and which are held in the Fund's account(s) and, in making
investment decisions for the Fund, the Manager will not consider
any other securities, cash or other investments owned by the Trust.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in duplicate by their respective
officers on the day and year first written above.
XXXXX FARGO FUNDS TRUST
on behalf of the Fund
By:
------------------------------------
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
------------------------------------
Xxxxxx Xxxx
Executive Vice President
SCHEDULE A
INVESTMENT MANAGEMENT AGREEMENT
FEE SCHEDULE
XXXXX FARGO FUND TRUST
FEE AS % OF AVG. DAILY
NET ASSET VALUE
-------------------------------
FUND CURRENT
---------------------------------------------- -------------------------------
Absolute Return Fund First 1B 0.225
Next 4B 0.200
Over 5B 0.175
Schedule A approved by the Board of Trustees: November 16, 2011
The foregoing fee schedule is agreed to as of November 16, 2011 and
shall remain in effect until changed in writing by the parties.
XXXXX FARGO FUNDS TRUST
By:
------------------------------------
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
------------------------------------
Xxxxxx Xxxx
Executive Vice President
