ADVISORS SERIES TRUST INVESTMENT ADVISORY AGREEMENT Capital Advisors Growth Fund
Capital
Advisors Growth Fund
THIS INVESTMENT ADVISORY
AGREEMENT is made as of the 30th day of November, 2006, by and between
Advisors Series Trust, a Delaware statutory trust (hereinafter called the
"Trust"), on behalf of the following series of the Trust, Capital Advisors
Growth Fund (the "Fund") and Capital Advisors, Inc. a Delaware corporation
(hereinafter called the "Advisor").
WITNESSETH:
WHEREAS, the Trust is an
open-end management investment company, registered as such under the Investment
Company Act of 1940 (the "Investment Company Act"); and
WHEREAS, the Fund is a series
of the Trust having separate assets and liabilities; and
WHEREAS, the Advisor is
registered as an investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act") (or is exempt from registration) and is engaged in the
business of supplying investment advice as an independent contractor;
and
WHEREAS, the Trust desires to
retain the Advisor to render advice and services to the Fund 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 covenants and the mutual promises hereinafter set forth,
the parties to this Agreement, intending to be legally bound hereby, mutually
agree as follows:
1. APPOINTMENT OF
ADVISOR. The Trust hereby employs the Advisor and the Advisor
hereby accepts such employment, to render investment advice and related services
with respect to the assets of the Fund for the period and on the terms set forth
in this Agreement, subject to the supervision and direction of the Trust's Board
of Trustees.
2. DUTIES
OF ADVISOR.
(a) General
Duties. The Advisor shall act as investment adviser to the Fund and
shall supervise investments of the Fund on behalf of the Fund in accordance with
the investment objectives, policies and restrictions of the Fund as set forth in
the Fund's and Trust's governing documents, including, without limitation, the
Trust's Agreement and Declaration of Trust and By-Laws; the Fund's prospectus,
statement of additional information and undertakings; and such other
limitations, policies and procedures as the Trustees may impose from time to
time in writing to the Advisor. In providing such services, the
Advisor shall at all times adhere to the provisions and restrictions contained
in the federal securities laws, applicable state securities laws, the Internal
Revenue Code, the Uniform Commercial Code and other applicable law.
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish the
Fund with advice and recommendations with respect to the investment of the
Fund's assets and the purchase and sale of portfolio securities for the Fund,
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e., placing the orders); (ii) manage and oversee the
investments of the Fund, subject to the ultimate supervision and direction of
the Trust's Board of Trustees; (iii) vote proxies for the Fund, file ownership
reports under Section 13 of the Securities Exchange Act of 1934 for the Fund,
and take other actions on behalf of the Fund; (iv) maintain the books and
records required to be maintained by the Fund except to the extent arrangements
have been made for such books and records to be maintained by the administrator
or another agent of the Fund; (v) furnish reports, statements and other data on
securities, economic conditions and other matters related to the investment of
the Fund's assets which the Fund's administrator or distributor or the officers
of the Trust may reasonably request; and (vi) render to the Trust's Board of
Trustees such periodic and special reports with respect to each Fund's
investment activities as the Board may reasonably request, including at least
one in-person appearance annually before the Board of Trustees.
(b) Brokerage. The
Advisor shall be responsible for decisions to buy and sell securities for the
Fund, for broker-dealer selection, and for negotiation of brokerage commission
rates, provided that the Advisor shall not direct order to an affiliated person
of the Advisor without general prior authorization to use such affiliated broker
or dealer for the Trust's Board of Trustees. The Advisor's primary
consideration in effecting a securities transaction will be execution at the
most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Advisor may take the following into consideration:
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 investment
performance of the Fund on a continuing basis. 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 of Trustees of the Trust may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides (directly or indirectly)
brokerage or research services to the Advisor an amount of commission for
effecting a portfolio transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Advisor 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
Advisor's overall responsibilities with respect to the Trust. The
Advisor is further authorized to allocate the orders placed by it on behalf of
the Fund to such brokers or dealers who also provide research or statistical
material, or other services, to the Trust, the Advisor, or any affiliate of
either. Such allocation shall be in such amounts and proportions as
the Advisor shall determine, and the Advisor shall report on such allocations
regularly to the Trust, indicating the broker-dealers to whom such allocations
have been made and the basis therefor. The Advisor is also authorized
to consider sales of shares as a factor in the selection of brokers or dealers
to execute portfolio transactions, subject to the requirements of best
execution, I.E., that such brokers or dealers are able to execute the order
promptly and at the best obtainable securities price.
On
occasions when the Advisor deems the purchase or sale of a security to be in the
best interest of the Fund as well as of other clients, the Advisor, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient
execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by
the Advisor in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Fund and to such other
clients.
3. REPRESENTATIONS
OF THE ADVISOR.
(a) The
Advisor shall use its best judgment and efforts in rendering the advice and
services to the Fund as contemplated by this Agreement.
(b) The
Advisor shall maintain all licenses and registrations necessary to perform its
duties hereunder in good order.
(c) The
Advisor shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act, and any other applicable state and/or
self-regulatory organization regulations.
(d) The
Advisor shall maintain errors and omissions insurance in an amount at least
equal to that disclosed to the Board of Trustees in connection with their
approval of this Agreement.
4. INDEPENDENT
CONTRACTOR. The Advisor shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Trust or the Fund in any way, or in any way be deemed an agent for the Trust or
for the Fund. It is expressly understood and agreed that the services
to be rendered by the Advisor to the Fund under the provisions of this Agreement
are not to be deemed exclusive, and the Advisor shall be free to render similar
or different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
5. ADVISOR'S
PERSONNEL. The Advisor shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting
the generality of the foregoing, the staff and personnel of the Advisor shall be
deemed to include persons employed or retained by the Advisor to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Advisor or the Trust's Board of Trustees may desire and reasonably
request.
6.
EXPENSES.
(a) With
respect to the operation of the Fund, the Advisor shall be responsible for (i)
providing the personnel, office space and equipment reasonably necessary for the
operation of the Fund, (ii) the expenses of printing and distributing extra
copies of the Fund's prospectus, statement of additional information, and sales
and advertising materials (but not the legal, auditing or accounting fees
attendant thereto) to prospective investors (but not to existing shareholders),
and (iii) the costs of any special Board of Trustees meetings or shareholder
meetings convened for the primary benefit of the Advisor. If the
Advisor has agreed to limit the operating expenses of the Fund, the Advisor
shall also be responsible on a monthly basis for any operating expenses that
exceed the agreed upon expense limit.
(b) The
Fund is responsible for and has assumed the obligation for payment of all of its
expenses, other than as stated in Subparagraph 6(a) above, including but not
limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses; all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Trust for the benefit of the Fund
including all fees and expenses of its custodian, shareholder services agent and
accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if any; a
pro rata portion of expenditures in connection with meetings of the Fund's
shareholders and the Trust's Board of Trustees that are properly payable by the
Fund; salaries and expenses of officers and fees and expenses of members of the
Trust's Board of Trustees or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Advisor; insurance
premiums on property or personnel of each Fund which inure to its benefit,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Fund or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues; fees
and expenses (including legal fees) of registering and maintaining registration
of its shares for sale under federal and applicable state and foreign securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Fund, if any; and all other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
(c) The
Advisor may voluntarily absorb certain Fund expenses or waive the Advisor's own
advisory fee.
(d) To
the extent the Advisor incurs any costs by assuming expenses which are an
obligation 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. To the extent the services
for which a Fund is obligated to pay are performed by the Advisor, the Advisor
shall be entitled to recover from such 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.
7.
INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) The
Fund shall pay to the Advisor, and the Advisor agrees to accept, as full
compensation for all investment management and advisory services furnished or
provided to such Fund pursuant to this Agreement, an annual management fee at
the rate set forth in Schedule A to this Agreement.
(b) The
management fee shall be accrued daily by the Fund and paid to the Advisor on the
first business day of the succeeding month.
(c) 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 (10) days after the date of
termination.
(d) 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 a Fund.
(e) 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 which are the responsibility of a 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.
(f) Any
such reductions made by the Advisor in its fees or payment of expenses which are
the Fund's obligation are subject to reimbursement by the Fund to the Advisor,
if so requested by the Advisor, in subsequent fiscal years if the aggregate
amount actually paid by the Fund toward the operating expenses for such fiscal
year (taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. Under the expense limitation agreement,
the Advisor may recoup reimbursements made in any fiscal year of the Fund over
the following three fiscal years. Any such reimbursement is also
contingent upon Board of Trustees review and approval at time the reimbursement
is made. Such reimbursement may not be paid prior to the Fund's
payment of current ordinary operating expenses.
(g) 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.
8. NO SHORTING; NO
BORROWING. The Advisor agrees that neither it nor any of its
officers or employees shall take any short position in the shares of the
Fund. This prohibition shall not prevent the purchase of such shares
by any of the officers or employees of the Advisor or any trust, pension,
profit-sharing or other benefit plan for such persons or affiliates thereof, at
a price not less than the net asset value thereof at the time of purchase, as
allowed pursuant to rules promulgated under the Investment Company
Act. The Advisor agrees that neither it nor any of its officers or
employees shall borrow from the Fund or pledge or use the Fund's assets in
connection with any borrowing not directly for the Fund's
benefit. For this purpose, failure to pay any amount due and payable
to the Fund for a period of more than thirty (30) days shall constitute a
borrowing.
9. CONFLICTS WITH TRUST'S
GOVERNING DOCUMENTS AND APPLICABLE LAWS. Nothing herein
contained shall be deemed to require the Trust or the Fund to take any action
contrary to the Trust's Agreement and Declaration of Trust, By-Laws, or any
applicable statute or regulation, or to relieve or deprive the Board of Trustees
of the Trust of its responsibility for and control of the conduct of the affairs
of the Trust and Fund. In this connection, the Advisor acknowledges
that the Trustees retain ultimate plenary authority over the Fund and may take
any and all actions necessary and reasonable to protect the interests of
shareholders.
10. REPORTS AND
ACCESS. The Advisor agrees to supply such information to the
Fund's administrator and to permit such compliance inspections by the Fund's
administrator as shall be reasonably necessary to permit the administrator to
satisfy its obligations and respond to the reasonable requests of the
Trustees.
11. ADVISOR'S
LIABILITIES AND INDEMNIFICATION.
(a) 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 (including the prospectus, the statement of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Trust or another third party for inclusion
therein.
(b) The
Advisor shall be liable to the Fund for any loss (including brokerage charges)
incurred by the Fund as a result of any improper investment made by the
Advisor.
(c) In
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties hereunder on the part of the Advisor, the
Advisor shall not be subject to liability to the Trust or 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 be sustained in
the purchase, holding or sale of any security by the Fund.
(d) Each
party to this Agreement shall indemnify and hold harmless the other party and
the shareholders, directors, officers and employees of the other party (any such
person, an "Indemnified Party") against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party's
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e) No
provision of this Agreement shall be construed to protect any Trustee or officer
of the Trust, or officer of the Advisor, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
12. NON-EXCLUSIVITY;
TRADING FOR ADVISOR'S OWN ACCOUNT. The Trust's employment of
the Advisor is not an exclusive arrangement. The Trust may from time to time
employ other individuals or entities to furnish it with the services provided
for herein. Likewise, the Advisor may act as investment adviser for
any other person, and shall not in any way be limited or restricted from buying,
selling or trading any securities for its or their own accounts or the accounts
of others for whom it or they may be acting, provided, however, that the Advisor
expressly represents that it will undertake no activities which will adversely
affect the performance of its obligations to the Fund under this Agreement; and
provided further that the Advisor will adhere to a code of ethics governing
employee trading and trading for proprietary accounts that conforms to the
requirements of the Investment Company Act and the Advisers Act and has been
approved by the Trust's Board of Trustees.
13. TERM.
This
Agreement shall become effective at the time the Fund commences operations
pursuant to an effective amendment to the Trust's Registration Statement under
the Securities Act of 1933 and shall remain in effect for a period of two (2)
years, unless sooner terminated as hereinafter provided. This
Agreement shall continue in effect thereafter for additional periods not
exceeding one (l) year so long as such continuation is approved for the Fund at
least annually by (i) the Board of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of each Fund and (ii) the vote of
a majority of the Trustees of the Trust who are not parties to this Agreement
nor interested persons thereof, cast in person at a meeting called for the
purpose of voting on such approval. The terms "majority of the
outstanding voting securities" and "interested persons" shall have the meanings
as set forth in the Investment Company Act.
14. RIGHT
TO USE NAME
The
Advisor warrants that the Fund's name is not deceptive or misleading and that
the Advisor has rights to any distinctive name used by the Fund. The
Fund acknowledges that its use of any distinctive name is derivative of its
relationship with the Advisor. The Fund may use the name Capital Advisors Growth Fund
or any name derived from or using the name Capital Advisors only for so long as
this Agreement or any extension, renewal or amendment hereof remains in
effect. Within sixty (60) days from such time as this Agreement shall
no longer be in effect, the Fund shall cease to use such a name or any other
name connected with the Advisor.
15. TERMINATION;
NO ASSIGNMENT.
(a) This
Agreement may be terminated by the Trust on behalf of the Fund at any time
without payment of any penalty, by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of a Fund, upon sixty (60)
days' written notice to the Advisor, and by the Advisor upon sixty (60) days'
written notice to the Fund. In the event of a termination, the
Advisor shall cooperate in the orderly transfer of the Fund's affairs and, at
the request of the Board of Trustees, transfer any and all books and records of
the Fund maintained by the Advisor on behalf of the Fund.
(b) This
Agreement shall terminate automatically in the event of any transfer or
assignment thereof, as defined in the Investment Company Act.
16. SEVERABILITY. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute or rule, or shall be otherwise rendered invalid, the remainder
of this Agreement shall not be affected thereby.
17. CAPTIONS. The
captions in this Agreement are included for convenience of reference only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
18. GOVERNING
LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act and the Advisers Act and any rules
and regulations promulgated thereunder.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their duly
authorized officers, all on the day and year first above written.
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CAPITAL
ADVISORS, INC.
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on
behalf of the
Capital
Advisors Growth Fund
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By: /s/ Xxxxxxx X.
Xxxx
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By: /s/ Xxxxx X.
Xxxxxxx
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Name: Xxxxxxx X.
Xxxx
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Name: Xxxxx X.
Xxxxxxx
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Title: Treasurer
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Title: President/CEO
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SCHEDULE
A
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Series or Fund of
Advisors Series Trust
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Annual Fee
rate
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Capital
Advisors Growth Fund
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0.75%
of average net assets
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