INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated January 14, 2011, between del Rey Global Investors Funds (the “Trust”), a
Delaware statutory trust, on behalf of its series, del Rey Monarch Fund (the “Fund”) and del Rey
Global Investors, LLC, a Delaware limited liability company (the “Adviser”).
WHEREAS, the Board of Trustees of the Trust has established and designated the Fund as a
series of the Trust, an open-end management investment company registered under the Investment
Company Act of 1940, as amended (the “1940 Act”);
WHEREAS, the Adviser has agreed to furnish investment advisory services to the Fund; and
WHEREAS, this Agreement has been approved in accordance with the provisions of the 1940 Act,
and the Adviser is willing to furnish such services upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual premises and covenants herein contained and
other good and valuable consideration, the receipt of which is hereby acknowledged, it is agreed by
and between the parties hereto as follows:
1. In General. The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of the Fund’s assets and to supervise
and arrange for the day to day operations of the Fund and the purchase of securities for and the
sale of securities held in the investment portfolio of the Fund.
2. Duties and Obligations of the Adviser with Respect to Investment of Assets of the
Fund. Subject to the succeeding provisions of this section and subject to the direction and
control of the Trust’s Board of Trustees, the Adviser shall (i) 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; (ii) supervise continuously the investment
program of the Fund and the composition of its investment portfolio; (iii) arrange for the purchase
and sale of securities and other assets held in the investment portfolio of the Fund; and (iv)
provide investment research to the Fund.
3. Covenants. (a) In the performance of its duties under this Agreement, the Adviser
shall at all times conform to, and act in accordance with, any requirements imposed by: (i) the
provisions of the 1940 Act and the Investment Advisers Act of 1940, as amended, and all applicable
Rules and Regulations of the Securities and Exchange Commission; (ii) any other applicable
provision of law; (iii) the provisions of the Declaration of Trust and By Laws of the Trust, as
such documents are amended from time to time; (iv) the investment objectives and policies of the
Fund as set forth in its Registration Statement on Form N-1A and/or the resolutions of the Board of
Trustees; and (v) any policies and determinations of the Board of Trustees of the Trust and
(b) In addition, the Adviser will:
(i) place orders either directly with the issuer of the securities in which it invests
or with any broker or dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Adviser will attempt to obtain the best price and the
most favorable execution of its orders. In placing orders, the Adviser will consider the
experience and skill of the firm’s securities traders as well as the firm’s financial
responsibility and administrative efficiency. Consistent with this obligation, the Adviser
may select brokers on the basis of the research, statistical and pricing services they
provide to the Fund and other clients of the Adviser. Information and research received
from such brokers will be in addition to, and not in lieu of, the services required to be
performed by the Adviser hereunder. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same transaction,
provided that the Adviser determines in good faith that such commission is reasonable in
terms either of the transaction or the overall responsibility of the Adviser to the Fund and
its other clients and that the total commissions paid by the Fund will be reasonable in
relation to the benefits to the Fund over the long term. Subject to the foregoing and the
provisions of the 1940 Act, the Securities Exchange Act of 1934, as amended, and other
applicable provisions of law, the Adviser may select brokers and dealers with which it or
the Trust is affiliated; and
(ii) treat confidentially and as proprietary information of the Fund all records and
other information relative to the Fund, and the Fund’s prior, current or potential
shareholders, and will not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Fund, which approval shall not be unreasonably withheld and
may not be withheld where the Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
4. Services Not Exclusive. Nothing in this Agreement shall prevent the Adviser or any
officer, employee or other affiliate thereof from acting as investment adviser for any other
person, firm or corporation, or from engaging in any other lawful activity, and shall not in any
way limit or restrict the Adviser or any of its officers, employees or agents from buying, selling
or trading any securities for its or their own accounts or for the accounts of others for whom it
or they may be acting; provided, however, that the Adviser will undertake no activities which, in
its judgment, will adversely affect the performance of its obligations under this Agreement.
5. Sub-Advisers. The Adviser may from time to time, in its sole discretion to the
extent permitted by applicable law, appoint one or more sub-advisers, including, without
limitation, affiliates of the Adviser, to perform investment advisory services with respect to the
Fund. The Adviser may terminate any or all sub-advisers in its sole discretion at any time to the
extent permitted by applicable law.
6. Books and Records. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Adviser 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
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31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 and Rule 31a-2
under the 1940 Act.
7. Expenses. During the term of this Agreement, the Adviser will bear all costs and
expenses of its employees and any overhead incurred in connection with its duties hereunder and
shall bear the costs of any salaries or trustees’ fees of any officers or trustees of the Trust who
are affiliated persons (as defined in the 0000 Xxx) of the Adviser; provided that the Board of
Trustees of the Trust may approve reimbursement to the Adviser of the pro rata portion of the
salaries, bonuses, health insurance, retirement benefits and all similar employment costs for the
time spent on Fund operations, (including, without limitation, compliance matters) (other than the
provision of investment advice required to be provided hereunder) of all personnel employed by the
Adviser who devote substantial time to Fund operations or the operations of other investment
companies advised by the Adviser.
8. Compensation of the Adviser. (a) The Trust, on behalf of the Fund, agrees to pay
to the Adviser and the Adviser agrees to accept as full compensation for all services rendered by
the Adviser as such, a monthly fee (the “Investment Advisory Fee”) in arrears at an annual rate
equal to the amount set forth in Schedule A hereto of the average daily value of the Fund’s Net
Assets. “Net Assets” means the total assets of the Fund minus the sum of the accrued liabilities.
For any period less than a month during which this Agreement is in effect, the fee shall be
prorated according to the proportion which such period bears to a full month of 28, 29, 30 or 31
days, as the case may be.
(b) For purposes of this Agreement, the net assets of the Fund shall be calculated pursuant to
the procedures adopted by resolutions of the Trustees of the Trust for calculating the value of the
Fund’s assets or delegating such calculations to third parties.
9. Indemnity. (a) The Fund may, in the discretion of the Board of Trustees of the
Trust, indemnify the Adviser, and each of the Adviser’s directors, officers, employees, agents,
associates and controlling persons and the directors, partners, members, officers, employees and
agents thereof (including any individual who serves at the Adviser’s request as director, officer,
partner, member, trustee or the like of another entity) (each such person being an “Indemnitee”)
against any liabilities and expenses, including amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees (all as provided in accordance with
applicable state law) reasonably incurred by such Indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which such Indemnitee may be or may have been involved as a
party or otherwise or with which such Indemnitee may be or may have been threatened, while acting
in any capacity set forth herein or thereafter by reason of such Indemnitee having acted in any
such capacity, except with respect to any matter as to which such Indemnitee shall have been
adjudicated not to have acted in good faith in the reasonable belief that such Indemnitee’s action
was in the best interest of the Trust and furthermore, in the case of any criminal proceeding, so
long as such Indemnitee had no reasonable cause to believe that the conduct was unlawful; provided,
however, that (1) no Indemnitee shall be indemnified hereunder against any liability to the Trust
or the Fund or its shareholders or any expense of such Indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless disregard of the duties
involved in the conduct of such Indemnitee’s position (the
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conduct referred to in such clauses (i) through (iv) being sometimes referred to herein as
“disabling conduct”), (2) as to any matter disposed of by settlement or a compromise payment by
such Indemnitee, pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless there has been a determination that such
settlement or compromise is in the best interests of the Fund and that such Indemnitee appears to
have acted in good faith in the reasonable belief that such Indemnitee’s action was in the best
interest of the Fund and did not involve disabling conduct by such Indemnitee and (3) with respect
to any action, suit or other proceeding voluntarily prosecuted by any Indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit or other proceeding
by such Indemnitee was authorized by a majority of the full Board of Trustees of the Trust.
(b) The Fund may make advance payments in connection with the expenses of defending any action
with respect to which indemnification might be sought hereunder if the Trust receives a written
affirmation of the Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Fund unless it is
subsequently determined that such Indemnitee is entitled to such indemnification and if the
Trustees of the Trust determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must be met: (A) the
Indemnitee shall provide security for such Indemnitee undertaking, (B) the Trust shall be insured
against losses arising by reason of any unlawful advance, or (C) a majority of a quorum consisting
of Trustees of the Trust who are neither “interested persons” of the Trust (as defined in Section
2(a)(19) of the 0000 Xxx) nor parties to the proceeding (“Disinterested Non Party Trustees”) or an
independent legal counsel in a written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial type inquiry), that there is reason to believe that the
Indemnitee ultimately will be found to be entitled to indemnification.
(c) All determinations with respect to the standards for indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before whom the proceeding was
brought that such Indemnitee is not liable or is not liable by reason of disabling conduct, or (2)
in the absence of such a decision, by (i) a majority vote of a quorum of the Disinterested Non
Party Trustees of the Trust, or (ii) if such a quorum is not obtainable or, even if obtainable, if
a majority vote of such quorum so directs, independent legal counsel in a written opinion. In the
absence of a final determination on the merits by a court as set out in clause (1) above, any
determinations that advance payments made pursuant to Section 9(b) were properly borne by the Fund
shall be made in accordance with the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these provisions shall not exclude any other right
to which such Indemnitee may be lawfully entitled.
10. Limitation on Liability. The Adviser will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Adviser or by the Fund in connection with the
performance of this Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or from reckless disregard by it
of its duties under this Agreement. As used in this Section 10, the term “Adviser”
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shall include any affiliates of the Adviser performing services for the Fund contemplated
hereby and partners, directors, officers and employees of the Adviser and of such affiliates.
11. Duration and Termination. This Agreement shall become effective as of the date
hereof and, unless sooner terminated with respect to the Fund as provided herein, shall continue in
effect for a period of two years. Thereafter, if not terminated, this Agreement shall continue in
effect with respect to the Fund for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of the Trust’s Board of
Trustees or the vote of a majority of the outstanding voting securities of the Fund at the time
outstanding and entitled to vote, and (b) by the vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated by the Trust, on behalf of the Fund, at any time, without the payment
of any penalty, upon giving the Adviser 60 days’ notice (which notice may be waived by the
Adviser), provided that such termination by the Trust, on behalf of the Fund, shall be directed or
approved by the vote of a majority of the Trustees of the Trust in office at the time or by the
vote of the holders of a majority of the voting securities of the Fund at the time outstanding and
entitled to vote, or by the Adviser on 60 days’ written notice (which notice may be waived by the
Trust, on behalf of the Fund). This Agreement will also immediately terminate in the event of its
assignment. (As used in this Agreement, the terms “majority of the outstanding voting securities,”
“interested person” and “assignment” shall have the same meanings of such terms in the 1940 Act.)
12. Notices. Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the receipt of such notice
and shall be deemed to be received on the earlier of the date actually received or on the fourth
day after the postmark if such notice is mailed first class postage prepaid.
13. Amendment of this Agreement. This Agreement may be amended by the parties only if
such amendment is specifically approved by the vote of the Board of Trustees of the Trust,
including a majority of those Trustees who are not parties to this Agreement or interested persons
of any such party cast in person at a meeting called for the purpose of voting on such approval
and, where required by the 1940 Act, by a vote of a majority of the outstanding voting securities
of the Fund.
14. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York 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. To the extent that the applicable laws of the State of New York, or any of the
provisions, conflict with the applicable provisions of the 1940 Act, the latter shall control.
15. Use of the Name del Rey Global Investors. The Adviser has consented to the use of
the name or identifying words “del Rey Global Investors” in the name of the Trust and the Fund.
Such consent is conditioned upon the employment of the Adviser as the investment adviser to the
Fund and may be subject to a separate agreement between the parties. The name or identifying words
“del Rey Global Investors” may be used from time to time in other
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connections and for other purposes by the Adviser and any of its affiliates. The Adviser may
require the Trust and the Fund to cease using “del Rey Global Investors” in the name of the Trust
and the Fund if the Fund ceases to employ, for any reason, the Adviser, any successor thereto or
any affiliate thereof as investment adviser of the Fund.
16. Miscellaneous. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding on, and shall inure to the benefit of the parties hereto
and their respective successors.
17. Counterparts. This Agreement may be executed in counterparts by the parties
hereto, each of which shall constitute an original counterpart, and all of which, together, shall
constitute one Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be executed by
their duly authorized officers, all as of the day and the year first above written.
| DEL REY GLOBAL INVESTORS FUNDS, on behalf of its series, DEL REY MONARCH FUND | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxx |
|||||
| Name: Xxxxxx X. Xxxxxxx | ||||||
| Title: President | ||||||
| DEL REY GLOBAL INVESTORS, LLC | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxx |
|||||
| Name: Xxxxxx X. Xxxxxxx | ||||||
| Title: Chief Operating Officer | ||||||
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Schedule A
Investment Advisory Fee
| FUND | FEE | |||
del Rey Monarch Fund |
0.90 | % | ||
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