FORM OF
MANAGEMENT AGREEMENT
AGREEMENT dated as of ____________, between COLONIAL TRUST III, a Massachusetts
business trust (Trust), with respect to CRABBE HUSON CONTRARIAN FUND (Fund), and
CRABBE HUSON GROUP, INC., a ____________ corporation (Advisor).
In consideration of the promises and covenants herein, the parties agree as
follows:
1. The Advisor will manage the investment of the assets of the Fund in
accordance with its prospectus and statement of additional information
and will perform the other services herein set forth, subject to the
supervision of the Board of Trustees of the Trust. The Advisor may
delegate its investment responsibilities to a sub-adviser.
2. In carrying out its investment management obligations, the Advisor shall:
(a) evaluate such economic, statistical and financial information and
undertake such investment research as it shall believe advisable; (b)
purchase and sell securities and other investments for the Fund in
accordance with the procedures described in its prospectus and statement
of additional information; and (c) report results to the Board of
Trustees of the Trust.
3. The Advisor shall furnish at its expense the following:
(a) office space, supplies, facilities and equipment; (b) executive and
other personnel for managing the affairs of the Fund (including
preparing financial information of the Fund and reports and tax returns
required to be filed with public authorities, but exclusive of those
related to custodial, transfer, dividend and plan agency services,
determination of net asset value and maintenance of records required by
Section 31(a) of the Investment Company Act of 1940, as amended, and the
rules thereunder (1940 Act)); and (c) compensation of Trustees who are
directors, officers, partners or employees of the Advisor or its
affiliated persons (other than a registered investment company).
4. The Advisor shall be free to render similar services to others so long
as its services hereunder are not impaired thereby.
5. The Fund shall pay the Advisor bi-monthly a fee at the following annual
rates of the average daily net assets of the Fund:
Net Asset Value Annual Rate
First $100 million 0.xx%
Next $400 million 0.xx%
Amounts over $500 million 0.xx%
6. If the operating expenses of the Fund for any fiscal year exceed the
most restrictive applicable expense limitation for any state in which
shares are sold, the Advisor's fee shall be reduced by the excess but
not to less than zero. Operating expenses shall not include brokerage,
interest, taxes, deferred organization expenses, Rule 12b-1 distribution
fees, service fees and extraordinary expenses, if any. The Advisor may
waive its compensation (and bear expenses of the Fund) to the extent
that expenses of the Fund exceed any expense limitation the Advisor
declares to be effective.
7. This Agreement shall become effective as of the date of its execution,
and (a) unless otherwise terminated, shall continue until two years from
its date of execution and from year to year thereafter so long as
approved annually in accordance with the 1940 Act; (b) may be terminated
without penalty on sixty days' written notice to the Advisor either by
vote of the Board of Trustees of the Trust or by vote of a majority of
the outstanding shares of the Fund; (c) shall automatically terminate in
the event of its assignment; and (d) may be terminated without penalty
by the Advisor on sixty days' written notice to the Trust.
8. This Agreement may be amended in accordance with the 1940 Act.
9. For the purpose of the Agreement, the terms "vote of a majority of the
outstanding shares", "affiliated person" and "assignment" shall have
their respective meanings defined in the 1940 Act and exemptions and
interpretations issued by the Securities and Exchange Commission under
the 1940 Act.
10. In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Advisor, or reckless disregard of its obligations and
duties hereunder, the Advisor shall not be subject to any liability to
the Trust or the Fund, to any shareholder of the Trust or the Fund or to
any other person, firm or organization, for any act or omission in the
course of, or connected with, rendering services hereunder.
COLONIAL TRUST III on behalf of
CRABBE HUSON CONTRARIAN FUND
By: __________________________
Title: Controller
CRABBE HUSON GROUP, INC.
By: __________________________
Title:
A copy of the document establishing the Trust is filed with the Secretary of The
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of the Fund.
