INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this ____ day of _____ 2002, by and between XXXXXXX
MULTIFUND TRUST, an unincorporated business trust organized under the laws of
The Commonwealth of Massachusetts (the "Trust"), and XXXXXXX CAPITAL MANAGEMENT,
INC., a corporation organized under the laws of the State of Minnesota, (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, shares of beneficial interest in the Trust currently consist
of one separate series portfolio - the Total Return Portfolio, and the Trustees
have the power to create additional series (each a "Fund" and together, the
"Funds"); and
WHEREAS, the Adviser is engaged in the business of rendering investment
advisory and management services and is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
management services to the Trust and the Adviser is willing to furnish such to
the Trust;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. Appointment of Adviser. The Trust hereby appoints the Adviser to act as
investment manager of ----------------------- the Trust for the period and on
the terms herein set forth. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Investment Management Services. The Adviser shall supervise the
investments of the Funds contemplated as of the date hereof, and such subsequent
series of shares of the Trust as the Trustees of the Trust shall select the
Adviser to manage. In such capacity, the Adviser shall maintain a continuous
investment program for each such Fund, determine what securities shall be
purchased or sold by each Fund, secure and evaluate such information as it deems
proper and take whatever action is necessary or convenient to perform its
functions, including the placing of purchase and sale orders.
In executing portfolio transactions and selecting brokers or dealers,
the Adviser will use its best efforts to seek on behalf of the Funds the best
overall terms available. In assessing the best overall terms available for any
transaction, the Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, (as those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934, as amended) provided by such broker or dealer to the Funds or other
accounts over which the Adviser or any affiliate of the Adviser exercises
investment discretion. The Adviser is authorized to pay to a broker or dealer
who provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if, but only if, the Adviser determines in good faith that such
commission is 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 in terms of all of the accounts over which the Adviser
or any affiliate of the Adviser exercises investment discretion.
3. Compliance with Laws. All functions undertaken by the Adviser
hereunder shall at all times conform to, and be in accordance with, any
requirements imposed by: (1) the 1940 Act, and any rules and regulations
promulgated thereunder; (2) any other applicable provisions of law; (3) the
Declaration of Trust of the Trust as amended from time to time; (4) the By-laws
of the Trust as amended from time to time; and (5) the registration statements
of the Trust as amended from time to time, filed under the Securities Act of
1933, as amended and the 1940 Act.
4. Board Supervision. All of the functions undertaken by the Adviser
hereunder shall at all ----------------- times be subject to the direction of
the Board of Trustees of the Trust, or any committee or officers of the Trust
acting under the authority of the Board of Trustees.
5. Payment of Expenses. (a) The Adviser shall employ or provide and
compensate the ------------------- executive, administrative, secretarial and
clerical personnel necessary to provide the services set forth herein, and shall
bear the expense thereof. Adviser shall compensate all Trustees, officers and
employees of the Trust who are also partners or employees of the Adviser.
(b) The Funds will be responsible for the payment of all
operating expenses of the Trust, including fees and expenses incurred by the
Trust in connection with membership in investment company organizations,
brokerage fees and commissions, legal, auditing and accounting expenses,
expenses of registering shares under federal and state securities laws,
insurance expenses, taxes or governmental fees, fees and expenses of the
custodian, the transfer, shareholder service and dividend disbursing agent and
the accounting and pricing agent of the Funds, expenses including clerical
expenses of issue, sale, redemption or repurchase of shares of the Funds, the
fees and expenses of Trustees of the Trust who are not interested persons of the
Trust, the cost of preparing, printing and distributing prospectuses,
statements, reports and other documents to shareholders, expenses of
shareholders' meetings and proxy solicitations, and such extraordinary or
non-recurring expenses as may arise, including litigation to which the Trust may
be a party and indemnification of the Trust's officers and Trustees with respect
thereto, or any other expense not specifically described above incurred in the
performance of the Trust's obligations. All other expenses not expressly assumed
by Adviser herein incurred in connection with the organization, registration of
shares and operations of the Funds will be borne by the Funds
6. Account Fees. The Trust, by resolution of the Board of Trustees,
including a majority of the Independent Trustees, may from time to time
authorize the imposition of a fee as a direct charge against shareholder
accounts of the Funds, such fee to be retained by the Trust or to be paid to the
Adviser to defray expenses which would otherwise be paid by the Adviser in
accordance with the provisions of paragraph 5 of this Agreement. At least sixty
(60) days' prior written notice of the intent to impose such fee must be given
to the shareholders of the affected Fund.
7. Compensation of Adviser. (a) As full compensation for the services
and such facilities as may from time to time be furnished by the Adviser under
this Agreement, the Funds agree to pay to the Adviser a fee at the annual rate
listed in Appendix A of the Fund's average daily net asset value. Such fee shall
be accrued daily and payable monthly. For purposes of calculating such fee, such
net asset value shall be determined by taking the average of all determinations
of net asset value made in the manner provided in the Funds' current Prospectus
and Statement of Additional Information.
(b) For any period less than a full month during which this
Agreement is in effect the compensation payable to the Adviser hereunder shall
be prorated according to the proportion which such period bears to a full month.
(c) Each Fund is responsible for its own operating expenses.
Any fees withheld or voluntarily reduced and any Fund expenses absorbed by the
Adviser voluntarily or pursuant to an agreed upon expense cap which are a Fund's
obligation are subject to reimbursement by the Fund to the Adviser, if so
requested by the Adviser, in subsequent fiscal years if the aggregate amount
actually paid by a Fund toward the operating expenses for such fiscal year
(taking into account the reimbursement) does not exceed the applicable
limitation on the Fund's expenses. The Adviser is permitted to be reimbursed
only for fee reductions and expense payments made in the previous three fiscal
years. Any such reimbursement is also contingent upon the Board of Trustees'
review and approval all reimbursements. Such reimbursement may not be paid prior
to a Fund's payment of current ordinary operating expenses.
8. Limitation of Liability of Adviser.The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by a Fund
in connection with any investment policy or the purchase, sale, or retention of
any investment on the recommendation of the Adviser; provided, however, that
nothing herein contained shall be construed to protect the Adviser against any
liability to the Fund by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties under this Agreement.
9. Term and Termination. (a) This Agreement shall become effective on the
date hereof. -------------------- Unless terminated as herein provided, this
Agreement shall remain in full force and effect for an initial period of two
years from the date hereof and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as each such
continuance is approved (i) by either the Trustees of the Trust or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Funds, and, in either event, (ii) by vote of a majority of the Trustees of
the Trust who are not parties to this Agreement or interested persons (as
defined in the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time as to the
Trust or a particular series of the Trust without the payment of any penalty by
vote of the Trustees of the Trust or by vote of the holders of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of a Fund or by the
Adviser, on sixty days' written notice to the other party.
(c) This Agreement shall automatically and immediately terminate in the
event of its assignment (as defined in the 1940 Act).
10. Separate Agreement. The parties hereto acknowledge that certain
provisions of the 1940 Act, in effect, treat each series of shares of an
investment company as a separate investment company. Accordingly, the parties
hereto hereby acknowledge and agree that, to the extent deemed appropriate and
consistent with the 1940 Act, this Agreement shall be deemed to constitute a
separate agreement between the Adviser and each Fund.
11. Limitation of Liability of Trustees and Shareholders. A copy of the
Declaration of Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that this Agreement is
executed on behalf of the Trustees of the Trust as trustees are not binding upon
the Trustees or holders of shares of the Trust individually but are binding only
upon the assets and property of the Trust.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
XXXXXXX MULTIFUND TRUST
By:________________________
Xxxxxx X. Xxxxxxx
Chairman of the Board of
Trustees and President
ATTEST:
-------------------------
XXXXXXX CAPITAL MANAGEMENT, INC.
By:________________________
Xxxxxx X. Xxxxxxx
President
ATTEST:
-------------------------
APPENDIX A
Schedule of Investment Management Fees to
be charged to each Series Portfolio of
Xxxxxxx MultiFund Trust
Total Return Portfolio
Annual rate of 0.75% of
average daily net asset
value, payable monthly.
