INVESTMENT MANAGEMENT AGREEMENT
Investment
Management Agreement (the “Agreement”) executed as of May 26, 2009 between the
XXXX & XXXXX FUNDS TRUST, a Delaware business trust (the “Trust”) on behalf
of its The Xxxx & Xxxxx Fund (the “Fund”), and XXXX & XXXXX CAPITAL
MANAGEMENT, LLC, a Delaware limited liability company (the
“Adviser”).
W I T N E
S S E T H:
That in
consideration of the mutual covenants herein contained, it is agreed as
follows:
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1.
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SERVICES
TO BE RENDERED BY ADVISER TO THE
TRUST.
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(a) Subject
always to the control of the Trustees of the Trust and to such policies as the
Trustees may determine, the Adviser will, at its expense, (i) furnish
continuously an investment program for the Fund and will make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of its portfolio securities and (ii) furnish office space and equipment, provide
bookkeeping and clerical services (excluding determination of net asset value,
shareholder accounting services and fund accounting services) and pay all
salaries, fees and expenses of officers and Trustees of the Trust who are
affiliated with the Adviser. In the performance of its duties, the
Adviser will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and the Fund’s stated investment objective,
policies and restrictions.
(b) In
placing orders for the portfolio transactions of the Fund, the Adviser will seek
the best price and execution available, except to the extent it may be permitted
to pay higher brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the Fund the
most favorable price and execution available, the Adviser shall consider all
factors it deems relevant, including, without limitation, the overall net
economic result to the Fund (involving price paid or received and any
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees may determine,
the Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and research
services to the Adviser an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Adviser
determines in good faith that such amount of commission was 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 the
Adviser’s overall responsibilities with respect to the Fund and to other clients
of the Adviser as to which the Adviser exercises investment
discretion.
(c) Subject
to the provisions of the Agreement and Declaration of Trust of the Trust and the
Investment Company Act of 1940, the Adviser, at its expense, may select and
contract with investment consultants or sub-advisers (the “Consultants” or
“Sub-Advisers,” as applicable) for the Fund. The Adviser will
compensate any Consultant or Sub-Adviser of the Fund for its services to the
Fund. The Adviser may terminate the services of the Consultant or
Sub-Adviser at any time in its sole discretion and shall at such time assume the
responsibilities of such Consultant or Sub-Adviser unless and until a successor
Consultant or Sub-Adviser is selected.
(d) The
Adviser shall not be obligated under this Agreement to pay any expenses of or
for the Trust or of or for the Fund not expressly assumed by the Adviser
pursuant to this Section 1 other than as provided in Section 3.
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2.
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OTHER
AGREEMENTS, ETC.
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It is
understood that any of the shareholders, Trustees, officers and employees of the
Trust may be a partner, shareholder, director, officer or employee of, or be
otherwise interested in, the Adviser, and in any person controlling, controlled
by or under common control with the Adviser, and that the Adviser and any person
controlling, controlled by or under common control with the Adviser may have an
interest in the Trust. It is also understood that the Adviser and
persons controlling, controlled by or under common control with the Adviser have
and may have advisory, management service, distribution or other contracts with
other organizations and persons, and may have other interests and
businesses.
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3.
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COMPENSATION
TO BE PAID BY THE FUND TO THE
ADVISER.
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The Fund
will pay to the Adviser as compensation for the Adviser’s services rendered, for
the facilities furnished and for the expenses borne by the Adviser pursuant to
Section 1, a fee, computed and paid monthly at the annual rate of 1.50% of the
Fund’s average daily net asset value. Such average daily net asset
value of the Fund shall be determined by taking an average of all of the
determinations of such net asset value during such month while this Agreement is
in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the
event that expenses of the Fund for any fiscal year should exceed the expense
limitation on investment company expenses imposed by any statute or regulatory
authority of any jurisdiction in which shares of the Fund are qualified for
offer and sale, the compensation due the Adviser for such fiscal year shall be
reduced by the amount of such excess by a reduction or refund
thereof. In the event that the expenses of the Fund exceed any
expense limitation which the Adviser may, by written notice to the Trust,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Adviser may prescribe in such notice, the
compensation due the Adviser shall be reduced, and, if necessary, the Adviser
shall bear the Fund’s expenses to the extent required by such expense
limitation.
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If the
Adviser shall serve for less than the whole of a month, the foregoing
compensation shall be prorated.
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4.
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ASSIGNMENT
TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS
AGREEMENT.
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This
Agreement shall automatically terminate, without the payment of any penalty, in
the event of its assignment; and this Agreement shall not be amended unless such
amendment is approved at a meeting by the affirmative vote of a majority of the
outstanding shares of the Fund, and by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the Trustees
of the Trust who are not interested persons of the Trust or of the
Adviser.
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5.
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EFFECTIVE
PERIOD AND TERMINATION OF THIS
AGREEMENT.
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This
Agreement shall become effective upon its execution, and shall remain in full
force and effect continuously thereafter (unless terminated automatically as set
forth in Section 4) until terminated as follows:
(a) Either
party hereto may at any time terminate this Agreement by not more than sixty
days’ written notice delivered or mailed by registered mail, postage prepaid, to
the other party, or
(b) If
(i) the Trustees of the Trust or the shareholders by the affirmative vote of a
majority of the outstanding shares of the Fund, and (ii) a majority of the
Trustees of the Trust who are not interested persons of the Trust or of the
Adviser, by vote cast in person at a meeting called for the purpose of voting on
such approval, do not specifically approve at least annually the continuance of
this Agreement, then this Agreement shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the expiration
of one year from the effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this Agreement is submitted
to the shareholders of the Fund for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Adviser may
continue to serve hereunder in a manner consistent with the Investment Company
Act of 1940 and the rules and regulations thereunder.
Action by
the Trust under (a) above may be taken either (i) by vote of a majority of its
Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of the Fund.
Termination
of this Agreement pursuant to this Section 5 shall be without the payment of any
penalty.
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6.
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CERTAIN
DEFINITIONS.
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For the
purposes of this Agreement, the “affirmative vote of a majority of the
outstanding shares” of the Fund means the affirmative vote, at a duly called and
held meeting of shareholders, (a) of the holders of 67% or more of the shares of
the Fund present (in person or by proxy) and entitled to vote at such meeting,
if the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting are present in person or by proxy, or (b) of the holders
of more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the
purposes of this Agreement, the terms “affiliated person,” “control,”
“interested person” and “assignment” shall have their respective meanings
defined in the Investment Company Act of 1940 and the rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act; and the phrase “specifically
approve at least annually” shall be construed in a manner consistent with the
Investment Company Act of 1940 and the rules and regulations
thereunder.
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7.
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NONLIABILITY
OF ADVISER.
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In the
absence of willful misfeasance, bad faith or gross negligence on the part of the
Adviser, or reckless disregard of its obligations and duties hereunder, the
Adviser shall not be subject to any liability to the Trust, or to any
shareholder of the Trust, for any act or omission in the course of, or connected
with, rendering services hereunder.
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8.
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EXERCISE
OF VOTING RIGHTS.
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Except as
instructed otherwise by the Trustees of the Trust, the Adviser shall at its
discretion exercise or procure the exercise of any voting right attaching to
investments of the Fund.
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IN
WITNESS WHEREOF, THE XXXX & BYMUM FUNDS TRUST and XXXX & XXXXX CAPITAL
MANAGEMENT, LLC have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
XXXX
& XXXXX FUNDS TRUST
By: /s/ X. Xxxx
Xxxxx
Title:
Trustee, Vice-President and Secretary
XXXX
& XXXXX CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxx X.
Xxxx
Title:
Principal
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