CENTURION FUNDS, INC.
on behalf of
Centurion U.S. Contra Fund
INVESTMENT MANAGEMENT AGREEMENT
December 6, 2001
Centurion Trust Company
0000 Xxxx Xxxxxxxxx Xxxx - Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Dear Sirs:
Centurion Funds, Inc. (the Fund), a corporation
formed under the laws of the State of Maryland, confirms its
agreement with Centurion Trust Company (the Manager) with
respect to the Manager's serving as investment manager of
the Centurion U.S. Contra Fund (the Portfolio) as set forth
below.
Section 1. Investment Description; Appointment
The Fund desires to employ the Portfolio's capital
by investing and reinvesting in investments of the kind and
in accordance with the investment objectives, policies and
limitations specified in the Fund's Charter dated August 20,
1998, as amended from time to time (the Charter), in the
prospectus (the Prospectus) and in the statement of
additional information (the Statement of Additional
Information) filed with the Securities and Exchange
Commission (the SEC) as part of the Fund's Registration
Statement on Form N-1A, as amended from time to time and in
the manner and to the extent as may from time to time be
approved in the manner set forth in the Charter. Copies of
the Fund's Prospectus, the Statement of Additional
Information and the Charter have been or will be submitted
to the Manager. The Fund desires to employ and hereby
appoints the Manager to act as the Portfolio's investment
manager. The Manager accepts the appointment and agrees to
furnish the services described in Section 2 of this
Agreement for the compensation set forth in Section 6 of
this Agreement.
Section 2. Services as Manager; Appointment of Sub-
advisers
Subject to the supervision and direction of the
Board of Directors of the Fund, the Manager will:
(a) act in strict conformity with the Fund's
Articles of Incorporation, the Investment Company Act of
1940, as amended (the Act), and the Investment Advisers Act
of 1940, as amended (the Advisers Act);
(b) manage the Portfolio's assets in accordance
with the Portfolio's investment objective and policies as
stated in the Prospectus and Statement of Additional
Information;
(c) make investment decisions for the Portfolio;
(d) place purchase and sale orders for securities
on behalf of the Portfolio;
(e) exercise voting rights in respect of
portfolio securities and other investments for the
Portfolio; and
(f) monitor and evaluate the services provided by
the Portfolio's investment sub-adviser(s) (the Sub-
adviser(s)), if any, under the terms of the applicable
investment sub-advisory agreement(s).
In providing these services, the Manager will
provide investment research and supervision of the
Portfolio's investments and conduct a continual program of
investment, evaluation and, if appropriate, sale and
reinvestment of the Portfolio's assets. In addition, the
Manager will furnish the Portfolio with whatever statistical
information the Portfolio may reasonably request with
respect to the securities that the Portfolio may hold or
contemplate purchasing.
Subject to the approval of the Directors of the
Fund and, where required by law, the Portfolio's
shareholders, the Manager may engage an investment sub-
adviser or sub-advisers to provide advisory services in
respect of the Portfolio and may delegate to such investment
sub-adviser(s) the responsibilities described in
subparagraphs (b), (c), (d) and (e) above. In the event
that a Sub-adviser's engagement has been terminated, the
Manager shall be responsible for furnishing the Portfolio
with the services required to be performed by such
investment sub-adviser under the applicable investment sub-
advisory agreement or arranging for a successor investment
sub-adviser(s) to provide such services on terms and
conditions acceptable to the Portfolio and the Fund's Board
of Directors and subject to the requirements of the Act.
Section 3. Brokerage
In executing transactions for the Portfolio and
selecting brokers or dealers, the Sub-adviser(s) will use
its best efforts to seek the best overall terms available.
In assessing the best overall terms available for any
portfolio transaction, the Sub-adviser will consider all
factors it deems relevant including, but not limited to, the
breadth of the market in the security or commodity interest,
the price of the security or commodity interest, the
financial condition and execution capability of the broker
or dealer and the reasonableness of any commission for the
specific transaction and for transactions executed through
the broker or dealer in the aggregate. In selecting brokers
or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Sub-adviser
may 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 Portfolio and/or other
accounts over which the Sub-adviser or an affiliate
exercises investment discretion.
Section 4. Information Provided to the Fund
The Manager will keep the Fund informed of
developments materially affecting the Portfolio and the
Manager will, on its own initiative, furnish the Fund from
time to time with whatever information the Manager believes
is appropriate for this purpose.
Section 5. Standard of Care
The Manager shall exercise its best judgment in
rendering the services provided by it under this Agreement.
The Manager shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in
connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Manager against any
liability to the Portfolio or to holders of the Portfolio's
shares of beneficial interest to which the Manager would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of
its duties or by reason of the Manager's reckless disregard
of its obligations and duties under this Agreement.
Section 6. Compensation
(a) In consideration of services rendered
pursuant to this Agreement, the Portfolio will accrue daily
and pay monthly a fee to the Manager at the annual rate of
1.20% of the average daily net assets of the Portfolio.
(b) The fee for the period from the commencement
of investment operations to the end of the month during
which investment operations commence will be prorated
according to the proportion that such period bears to the
full monthly period, and will be payable that month. Upon
any termination of this Agreement before the end of a month,
the fee for such part of that month shall be prorated
according to the proportion that such period bears to the
full monthly period and will be payable upon the date of
termination of this Agreement.
(c) For the purpose of determining fees payable
to the Manager under this Agreement, the value of the
Portfolio's net assets will be computed in the manner
described in the Fund's current Prospectus and/or Statement
of Additional Information.
Section 7. Costs and Expenses
The Manager will bear all expenses in connection
with the performance of its services under this Agreement,
including the payment of salaries of all officers and
employees who are employed by it as well as the payment of
the fees of the Sub-adviser(s). The Portfolio will bear its
proportionate share of certain other expenses to be incurred
in its operation, including: investment advisory and
administration fees; taxes, interest, brokerage fees and
commissions, if any; fees of Directors of the Fund who are
not officers, directors, or employees of the Manager or any
of its affiliates; fees of any pricing service employed to
value shares of the Portfolio; SEC fees and state blue sky
qualification fees; charges of custodians and transfer and
dividend disbursing agents; the Portfolio's proportionate
share of insurance premiums; outside auditing and legal
expenses; costs of maintenance of the Portfolio's existence;
costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of
preparing and printing prospectuses and statements of
additional information for regulatory purposes and for
distribution to existing shareholders; costs of
shareholders' reports and meetings of the Portfolio's
shareholders and of the officers or Directors of the Fund;
and any extraordinary expenses.
The Portfolio will be responsible for nonrecurring
expenses which may arise, including costs of litigation to
which the Portfolio is a party and of indemnifying officers
and Directors of the Fund with respect to such litigation
and other expenses as determined by the Directors.
Section 8. Services to Other Companies or Accounts
The Fund understands that the Manager and the Sub-
adviser(s) may act as investment advisers to fiduciary and
other managed accounts, including other investment
companies, and the Fund has no objection to the Manager and
Sub-adviser(s) so acting, provided that whenever the
Portfolio and one or more other accounts advised by the
Manager or Sub-adviser(s) have available funds for
investment, investments suitable and appropriate for each
will be allocated in accordance with a formula believed to
be equitable to each account or company. The Fund recognizes
that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In
addition, the Fund understands and acknowledges that the
persons employed by the Manager to assist in the performance
of the Manager's duties under this Agreement will not devote
their full time to such service and nothing contained in
this Agreement shall be deemed to limit or restrict the
right of the Manager or any affiliate of the Manager to
engage in and devote time and attention to other businesses
or to render services of any kind or nature.
Section 9. Term of Agreement
(a) This Agreement will become effective as of
December ___, 2001 (Effective Date), and shall continue for
an initial term of two years from the Effective Date.
Thereafter, this Agreement shall continue automatically for
successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Fund's
Board of Directors or (ii) a vote of a majority of the
Portfolio's outstanding voting securities (as defined in the
Act), provided that in either event the continuance is also
approved by a majority of Directors who are not interested
persons (as defined in the Act) of any party to this
Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval.
(b) This Agreement is terminable, without
penalty, on 60 days' written notice, by the Fund's Directors
or by vote of holders of a majority of the Portfolio's
outstanding voting securities, or upon 90 days' written
notice, by the Manager.
(c) This Agreement will terminate automatically
in the event of its assignment (as defined in the Act or in
rules adopted under the Act).
Section 10. Miscellaneous
(a) The Fund recognizes that directors, officers
and employees of the Manager may from time to time serve as
directors, trustees, officers and employees of corporations
and business trusts (including other investment companies)
and that such other corporations and trusts may include the
name Centurion as part of their names, and that the Manager
or its affiliates may enter into advisory or other
agreements with such other corporations and trusts. If the
Manager ceases to act as the investment manager of the
Fund's shares, the Fund agrees that, at the Manager's
request, the Fund's license to use the word Centurion will
terminate and that the Fund will take all necessary action
to change the name of the Fund to a name that does not
include the word Centurion.
(b) This Agreement shall be governed by the laws
of the State of Arizona, provided that nothing herein shall
be construed in a manner inconsistent with the Act, the
Advisers Act or rules or orders of the SEC.
(c) The captions of this Agreement are included
for convenience only and in no way define or limit any of
the provisions hereof or otherwise affect their construction
or effect.
(d) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(e) Nothing herein shall be construed as
constituting the Manager as an agent of the Fund.
(f) This Agreement may be executed in
counterparts, with the same effect as if the signatures were
upon the same instrument.
If the foregoing is in accordance with your
understanding, kindly indicate your acceptance of this
Agreement by signing and returning the enclosed copy of this
Agreement.
Very truly yours,
CENTURION FUNDS, INC.
on behalf of the
Centurion U.S. Contra
Fund
By:
_________________________
__
Name: Xxxxxx X.
Xxxxxx, Xx.
Title: President
Accepted:
CENTURION TRUST COMPANY
By: ________________________________
Name:
Title:
