LEADER SHORT TERM BOND FUND
INTERIM INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of June 30, 2004 between LEADER Mutual Funds, a
Massachusetts business trust (herein called the "Trust"), and Xxxxxx Asset
Management, Inc. (herein called the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Trust desires to retain the Investment Adviser to furnish
investment advisory services to the LEADER Short Term Bond Fund (the "Fund"), an
investment portfolio of the Trust, and the Investment Adviser represents that it
is willing and possesses legal authority to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Adviser to act
as investment adviser to the Fund for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. MANAGEMENT. Subject to the supervision of the Trust's Board of
Trustees, the Investment Adviser will provide a continuous investment program
for the Trust, including investment research and management with respect to all
securities and investments and cash equivalents of the Fund. The Investment
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Trust with respect to the Fund. The
Investment Adviser will provide the services under this Agreement in accordance
with the Trust's investment objective, policies and restrictions as stated in
the Prospectus and resolutions of the Trust's Board of Trustees. The Investment
Adviser further agrees that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to any fiduciary accounts for which it has investment
responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its activities
under this Agreement in accordance with any applicable regulations of any
governmental authority pertaining to the investment advisory activities of the
Investment Adviser;
(c) will place orders pursuant to its investment determinations for
the Trust either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Investment Adviser will attempt to
obtain prompt execution of orders in an effective manner at the most favorable
price. Consistent with this obligation, when the execution and price offered by
two or more brokers or dealers are comparable, the Investment Adviser may, in
its discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Investment Adviser with research advice and other
services. Unless and until appropriate procedures are adopted by the Trustees of
the Trust under Rule 17e-1 of the 1940 Act and unless the provisions of such
Rule are complied with, portfolio securities will not be purchased from or sold
to BISYS Fund Services, the Investment Adviser, or any affiliated person of the
Trust, BISYS Fund Services, or the Investment Adviser;
(d) will maintain all books and records with respect to the Trust's
securities transactions and will furnish the Trust's Board of Trustees such
periodic and special reports as the Board may request; and
(e) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and prior, present
or potential interestholders, 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 Trust, which
approval shall not be unreasonably withheld and may not be withheld where the
Investment 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 Trust.
3. SERVICES NOT EXCLUSIVE. The investment management services furnished
by the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby.
4. BOOKS AND RECORDS. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Investment 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 of such records upon the Trust's request.
The Investment Adviser further agrees to preserve for the periods prescribed by
Rule 3la-3 under the 1940 Act the records required to be maintained by Rule
3la-1 under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Trust.
6. COMPENSATION. Subject to the terms of this paragraph 6, for the
services provided and the expenses assumed pursuant to this Agreement, the Trust
will pay the Investment Adviser and the Investment Adviser will accept as full
compensation therefor a fee computed daily and paid monthly at the applicable
annual rate of 0.55% of average daily net assets.
Amounts due and payable by the Trust to the Investment Adviser pursuant to
this paragraph 6 shall be held in an interest-bearing escrow account with the
Fund's custodian or a bank (the "Escrow Account").
If a majority of the Fund's outstanding voting securities (as defined in
the 1940 Act) approve a new Investment Advisory Agreement by and between the
Trust, on behalf of the Fund, and the Investment Adviser prior to 150 days after
the date of this Agreement, the amount in the Escrow Account (including interest
earned thereon) shall be paid to the Investment Adviser.
If a majority of the Fund's outstanding voting securities (as defined in
the 0000 Xxx) do not approve a new Investment Advisory Agreement by and between
the Trust, on behalf of the Fund, and the Investment Adviser, the Investment
Adviser shall be paid, from the Escrow Account, an amount equal to the lesser
of:
(a) any costs incurred in performing this Agreement (plus interest
earned on that amount while in the Escrow Account); or
(b) the total amount in the Escrow Account (plus interest earned
thereon).
7. LIMITATION OF LIABILITY. The Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered 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 the part of the Investment Adviser in the performance of its
duties or from reckless disregard by the Investment Adviser of its obligations
and duties under this Agreement.
8. DURATION AND TERMINATION. This Agreement will become effective as to
the Trust as of the date first written above, and, unless sooner terminated as
provided herein, shall continue in effect until the earlier of (i) 150 days from
the date hereof or (ii) the date on which a new Investment Advisory Agreement by
and between the Trust, on behalf of the Fund, and the Investment Adviser is
approved by a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated at any time
(i) on ten days' written notice, without the payment of any penalty, by the
Trust (by vote of the Fund's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund) or (ii) on ninety days' written
notice, without the payment of any penalty, by the Investment Adviser. This
Agreement will immediately terminate in the event of its assignment. If the
Investment Adviser requires the Trust or the Fund to change its name so as to
eliminate all references to the word "LEADER," then this Agreement shall
automatically terminate at the time of such change unless the continuance of
this Agreement after such change shall have been specifically approved by vote
of a majority of the outstanding voting securities of the Fund and by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or the Investment Adviser, cast in person at a meeting called for the
purpose of voting on such approval. (As used herein, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning of such terms in the 1940 Act.)
9. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
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10. 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 upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the laws of the Commonwealth of Massachusetts.
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A copy of the Agreement and Declaration of Trust establishing the Trust is
on file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed with respect to the Fund on behalf
of the Trust by officers of the Trust as officers and not individually and that
the obligations of or arising out of this Agreement are not binding upon any of
the Trustees, officers or shareholders individually but are binding only upon
the assets and property belonging to the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
LEADER MUTUAL FUNDS
Seal By: /s/ R. Xxxxxxx Xxxxx
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Title: President
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XXXXXX ASSET MANAGEMENT, INC.
Seal By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Secretary
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