SMALL COMPANY VALUE FUND
A SERIES OF SEFTON FUNDS TRUST
0000 XXXXXXX XXXX, XXXXX 0000
XXXXXXXX, XX 00000-8499
May 1, 1997
Sefton Capital Management, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between Sefton Funds Trust (the "Trust")
and Sefton Capital Management, Inc. (the "Adviser") as follows:
Small Company Value Fund (the "Fund") is a series portfolio of the Trust
which had been organized as a business trust under the laws of the State of
Delaware and is an open-end management investment company. The Trust and the
Adviser have entered into a Master Investment Advisory Contract, dated, February
13, 1997 (as from time to time amended and supplemented, the "Master Advisory
Contract"), pursuant to which the Adviser has undertaken to provide or make
provision for the Trust for certain investment advisory and management services
identified therein and to provide certain other services, as more fully set
forth therein. Certain capitalized terms used without definition in his
Investment Advisory Contract Supplement have the meaning specified in the Master
Advisory Contract.
The Trust agrees with the Adviser as follows:
1. ADOPTION OF MASTER ADVISORY CONTRACT. The Master Advisory Contract is
hereby adopted for the Fund. The Fund shall be one of the "Funds" referred to
in the Master Advisory Contract; and its shares shall be a "Series" of shares as
referred to therein.
2. PAYMENT OF FEES. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as provided in the Master
Advisory Contract and herein, the Fund shall pay a monthly fee on the first
business day of each month, based upon the average daily value (as determined on
each business day at the time set forth in the Prospectus for determining net
asset value per share) of the net assets of the Fund during the preceding month,
at the annual rate of 1.00%.
3. LIMITATION OF EXPENSES PAID BY THE FUND. (a) If the aggregate
expenses of every character incurred by, or allocated to, a Fund in any fiscal
year, other than interest, taxes, expenses under the Plan, brokerage commissions
and other portfolio transaction expenses, other expenditures which are
capitalizes in accordance with generally accepted accounting principles and any
extraordinary expenses (including, without limitation, litigation and
indemnification expenses) but including the fees payable under the Master
Administrative Services Contract and the fees provided for in paragraph 5 of the
Master Advisory Contract ("includable expenses"), shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Adviser, or the
Adviser will bear, to the extent required by state law, that portion of such
excess which bears the same relation to the total of such excess as the fee to
be paid to the Adviser bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Advisory Contract and the Master
Administrative Services Contract between the Trust and the Administrator
Services Contract between the Trust and the Administrator. The
Adviser's obligation pursuant hereto will be limited to the amount of the fees
payable for the fiscal year by the Fund pursuant to the Master Advisory
Contract.
(b) With respect to portions of a fiscal year in which this Contract shall
be in effect, the limitation specified in subparagraph (a) of paragraph 3 above
shall be prorated according to the fiscal year bears to the full fiscal year.
At the end of each month of the Trust's fiscal year, the Administrator will
review the include expenses accrued during that fiscal year to the end of the
period and shall estimate the contemplated includable expenses for the balance
of that fiscal year. If, as a result of that review and estimation, it appears
likely that the includable expense will exceed such limitation for a fiscal year
with respect to the Fund, the monthly fees relating to that Fund payable to the
Adviser under this Contract for such month shall be reduced subject to the later
adjustments at the end of each month through the end of the fiscal year to
reflect actual expenses, by an amount equal to the proportionate share
attributable to the Adviser as described in subparagraph (a) of paragraph 3
above of a pro rata portion (prorated on the basis of the remaining month of the
fiscal year, including the month just ended) are expected to exceed such
limitations. For purposes of the foregoing, the value of t he net assets of the
Fund shall be computed in the manner specified in the penultimate sentence of
paragraph 5 of the Master Advisory Contract, and any payments required to be
made by the Adviser shall be made once a year promptly after the end of the
Trust's fiscal year.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
SMALL COMPANY VALUE FUND
a Series of Sefton Funds Trust
By:
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Title:
The foregoing Contract is hereby agreed
to of the date hereof:
SEFTON CAPITAL MANAGEMENT, INC.
By:
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Title:
