INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT
(this Agreement) is made this 1st
day of September, 2009 between
Lotsoff Capital Management
Investment Trust, a Delaware
statutory trust (the Trust), and
Lotsoff Capital Management, LLC
(the Adviser).
RECITALS
WHEREAS, the Trust is registered
with the Securities and Exchange
Commission under the Investment
Company Act of 1940 (the Act) as an
open-end management investment
company consisting of one series,
Lotsoff Capital Management Micro
Cap Fund (the Fund) and
WHEREAS, the Trust desires to
retain the Adviser, which is an
investment adviser registered under
the Investment Advisers Act of
1940, as the investment adviser for
the Fund.
AGREEMENT
NOW, THEREFORE, the Trust and the
Adviser do mutually promise and
agree as follows
1. Employment. The Trust hereby employs the Adviser to manage
the investment and reinvestment of the assets of the Fund for the
period and on the terms set forth in this Agreement. The Adviser
hereby accepts such employment for the compensation herein
provided and agrees during such period to render the services and
to assume the obligations herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and
manage the investment portfolio of the Fund, and, subject to such
policies as the Board of Trustees of the Trust may determine,
direct the purchase and sale of investment securities in the day
to day management of the Fund. The Adviser 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 Trust in any way or
otherwise be deemed an agent of the Trust. However, one or more
members, officers or employees of the Adviser may serve as
trustees and/or officers of the Trust, but without compensation
or reimbursement of expenses for such services from the Trust.
Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its charter documents, as amended or
supplemented, 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 affairs of the Trust.
3. Expenses. The Adviser, at its own expense and without
reimbursement from the Trust, shall furnish office space, and all
necessary office facilities, equipment and executive personnel
for managing the investments of the Fund. The Adviser shall not
be required to pay any expenses of the Fund except as provided
herein if the total expenses borne by the Fund, including the
Advisers fee and the fees paid to the Funds administrator, but
excluding all federal, state and local taxes, interest,
reimbursement payments to securities lenders for dividend and
interest payments on securities sold short, brokerage commissions
and extraordinary items, in any year exceed that percentage of
the average net asset value of the Fund for such year, as
determined by valuations made as of the close of each business
day, which is the most restrictive percentage provided by the
state laws of the various states in which the Funds shares are
qualified for sale or, if the states in which the Funds shares
are qualified for sale impose no such restrictions, 3.00%. The
expenses of the Funds operations borne by the Fund include by way
of illustration and not limitation, trustees fees paid to those
trustees who are not interested trustees under the Act, the
professional costs of preparing and printing registration
statements required under the Securities Act of 1933, as amended,
and the Act (and amendments thereto), the expense of registering
its shares with the Securities and Exchange Commission and in the
various states, the printing and distribution cost of
prospectuses mailed to existing shareholders, trustee and officer
liability insurance, reports to shareholders, reports to
government authorities and proxy statements, interest charges on
any borrowings, dividend and interest payments on securities sold
short, taxes, legal expenses, salaries of administrative and
clerical personnel, association membership dues, auditing and
accounting services, insurance premiums, brokerage commissions
and other expenses connected with the execution of portfolio
securities transactions, fees and expenses of the custodian of
the Funds assets, expenses of calculating the net asset value and
repurchasing and redeeming shares, printing and mailing expenses,
charges and expenses of dividend disbursing agents, registrars
and share transfer agents and the cost of keeping all necessary
shareholder records and accounts.
The Trust shall monitor the Funds
expense ratio on a monthly basis.
If the accrued amount of the
expenses of the Fund exceeds the
expense limitation established
herein, the Fund shall create an
account receivable from the Adviser
in the amount of such excess. In
such a situation the monthly
payment of the Advisers fee will be
reduced by the amount of such
excess, subject to adjustment month
by month during the balance of the
Trusts fiscal year if accrued
expenses thereafter fall below the
expense limitation.
4. Compensation of the Adviser. For the services to be
rendered by the Adviser hereunder, the Trust through the Fund
shall pay to the Adviser an advisory fee, paid monthly, based on
the average net assets of the Fund, as determined by valuations
made as of the close of each business day of the month. The
advisory fee shall be 0.95% per annum of such average net assets.
For any month in which this Agreement is not in effect for the
entire month, such fee shall be reduced proportionately on the
basis of the number of calendar days during which it is in effect
and the fee computed upon the average net assets of the business
days during which it is so in effect.
5. Ownership of Shares of the Fund. The Adviser shall not take
an ownership position in the Fund, and shall not permit any of
its members, officers or employees to take a long or short
position in the shares of the Fund, except for the purchase of
shares of the Fund for investment purposes at the same price as
that available to the public at the time of purchase.
6. Exclusivity. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive and the Adviser shall be
free to furnish similar services to others as long as the
services hereunder are not impaired thereby. Although the
Adviser has agreed to permit the Fund and the Trust to use the
names Lotsoff and Lotsoff Capital Management, if they so desire,
it is understood and agreed that the Adviser reserves the right
to use and to permit other persons, firms or corporations,
including investment companies, to use such name, and that the
Fund and the Trust will not use such names if the Adviser ceases
to be the Funds sole investment adviser. During the period that
this Agreement is in effect, the Adviser shall be the Funds sole
investment adviser.
7. Liability. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser 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 be
sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions. The Adviser may cause the Fund to
pay a broker-dealer which provides brokerage and research
services, as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
to the Adviser a commission for effecting a securities
transaction in excess of the amount another broker-dealer would
have charged for effecting such transaction, if the Adviser
determines in good faith that such amount of commission is
reasonable in relation to the value of brokerage and research
services provided by the executing broker-dealer viewed in terms
of either that particular transaction or his overall
responsibilities with respect to the accounts as to which he
exercises investment discretion (as defined in Section 3(a)(35)
of the Exchange Act).
9. Code of Ethics. The Adviser has adopted a written code of
ethics complying with the requirements of Rule 17j-1 under the
Act and has provided the Trust with a copy of the code of ethics
and evidence of its adoption. Upon written request of the Trust,
the Adviser shall permit the Trust to examine any reports
required to be made by the Adviser pursuant to Rule 17j-1(1)
under the Act.
10. Amendments. This Agreement may be amended by the mutual
consent of the parties provided, however, that in no event may it
be amended without the approval of the Board of Trustees of the
Trust in the manner required by the Act, and, if required by the
Act, by the vote of the majority of the outstanding voting
securities of the Fund, as defined in the Act.
11. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the Board of Trustees of
the Trust or by a vote of the majority of the outstanding voting
securities of the Fund, as defined in the Act, upon giving
written notice sixty (60) calendar days in advance to the
Adviser. This Agreement may be terminated by the Adviser at any
time upon giving written notice sixty (60) calendar days in
advance to the Trust. This Agreement shall terminate
automatically in the event of its assignment (as defined in
Section 2(a)(4) of the Act). Subject to prior termination as
hereinbefore provided, this Agreement shall continue in effect
for two (2) years from the date hereof and indefinitely
thereafter, but only so long as the continuance after such two
(2) year period is specifically approved annually by (i) the
Board of Trustees of the Trust or by the vote of the majority of
the outstanding voting securities of the Fund (as defined in the
Act) and (ii) the Board of Trustees of the Trust in the manner
required by the Act, provided that any such approval may be made
effective not more than sixty (60) calendar days thereafter.
* * *
IN WITNESS WHEREOF, the parties
hereto have caused this Investment
Advisory Agreement to be executed
on the day first above written.
LOTSOFF CAPITAL MANAGEMENT, LLC.
(the Adviser)
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title Senior Managing Director
LOTSOFF CAPITAL MANAGEMENT
INVESTMENT TRUST
(the Trust)
By /s/ Xxxxxxx X. Xxxxxxx
Name Xxxxxxx X. Xxxxxxx
Title President
