FORM OF
INVESTMENT MANAGEMENT AGREEMENT
October [ ], 1997
Xxxxx Xxxxxx Mutual Funds Management Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This Investment Management Agreement (the "Agreement") is made on this
[ ] day of October, 1997, by and between Xxxxx Xxxxxx Investment Funds Inc.
, a corporation organized under the laws of the State of Maryland (the
"Corporation"), in respect of its new series, Xxxxx Xxxxxx Xxxxxxxxxx
Global Value Fund (the "Fund"), and Xxxxx Xxxxxx Mutual Funds Management
Inc. ("SBMFM") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in:
(i)
the Corporation's Charter as amended from time to time (the "Charter of the
Corporation"); (ii) the Fund's Prospectus (the "Prospectus"); and (iii) the
Fund's Statement of Additional Information (the "Statement") filed with the
Securities and Exchange Commission (the "SEC") as part of the Fund's
Registration Statement on Form N-1A, as amended from time to time, and in
such manner and to such extent as may from time to time be approved by the
Board of Directors of the Corporation (the "Board"). Copies of the Fund's
Prospectus and the Statement and the Charter of the Corporation hav
en or will be submitted to SBMFM. The Corporation desires to employ and
hereby appoints SBMFM to act as investment manager for the Fund. SBMFM
accepts the appointment and agrees to furnish the services for the
compensation set forth below. SBMFM is hereby authorized to retain
third parties and is hereby
authorized to delegate some or all of its duties and obligations hereunder to
such persons, provided such persons shall remain under the general
supervision of SBMFM.
2. Services as Investment Manager
Subject to the supervision and direction of the Board, SBMFM will: (a) assist
in supervising all aspects of the Fund's operations; (b) supply the Fund
with office facilities (which may be in SBMFM's own offices), statistical
and research data, data processing services, clerical, accounting and
bookkeeping services, including, but not limited to, the calculation o
f (i) the net asset value of shares of the Fund, (ii) applicable contingent
deferred sales charges and similar fees and charges and (iii) distribu
fees, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; and (c)
prepare reports to shareholders of the Fund, tax returns and reports to and
filings with the SEC and state blue sky authorities.
3. Compensation
In consideration of the services rendered pursuant to this Agreement, the
Corporation will pay SBMFM, on the first business day of each month, a fee
for the previous month at an annual rate of 0.95% of the Fund's average
daily net assets. The fee for the period from the date the Fund commences
its investment operations to the end of the month during which the Fund
commences its investment operations shall be pro-rated according to the
proportion that such period bears to the full monthly period. Upon any
mination of this Agreement before the end of any month, the fee for such
part of that month shall be pro-rated according to the proportion that such
period bears to the full monthly period and shall be payable upon the date
of termination of this Agreement. For the purpose of determining fees
payable to SBMFM, the value of the Fund's net assets shall be computed
at the times and in the manner specified in the Fund's Prospectus and/or
the Statement, as from time to time in effect.
4. Expenses
SBMFM will bear all expenses in connection with the performance of its services
under this Agreement. The Fund will bear certain other expenses to be incurred
in its operation, including: investment advisory and administration fees;
charges of custodians and transfer and dividend disbursing agents; fees for
necessary professional services, such as the Fund's and Board members'
proportionate share of insurance premiums, professional associations,
dues and/or assessments; and brokerage services, including t
, interest and commissions; costs attributable to investor services, including
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders;
the costs of regulatory compliance, such as SEC fees and state blue sky
qualifications fees; outside auditing and legal expenses and costs
associated with maintaining the Fund's legal existence; costs of
shareholders' repo
and meetings of the officers or Board; fees of the members of the Board
who are not officers, directors or employees of Xxxxx Xxxxxx, Inc. or its
affiliates or any person who is an affiliate of any person to whom duties
may be delegated hereunder and any extraordinary expenses. In addition,
the Fund will pay all service and distribution fees pursuant to a Services
and Distribution Plan adopted under Rule 12b-1 of the Investment Company
Act of 1940, as amended (the "1940 Act").
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to this Agreement, but excluding distribution fees, interest,
taxes, brokerage and, if permitted by state securities commissions,
extraordinary expenses) exceed the expense limitations of any state having
jurisdiction over the Fund, SBMFM will reimburse the Fund for that excess
expense to the extent required by state law in the same proportion as its
respective fees bear to the combined fees for investment advice and administ
on. The expense reimbursement obligation of SBMFM will be limited to the
amount of its fees hereunder. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
6. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the Fund,
SBMFM will seek the best overall terms available. In assessing the best
overall terms available for any transaction, SBMFM will consider factors it
deems relevant, including, but not limited to, the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission, if
any, for the specific transaction and on a xxxxx
g basis. In selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available, SBMFM is
authorized to consider the brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934, a
s amended) provided to the Fund and/or other accounts over which SBMFM or
its affiliates exercise investment discretion.
7. Information Provided to the Fund
SBMFM will keep the Corporation informed of developments materially
affecting the Fund's portfolio, and will, on its own initiative, furnish
the Corporation from time to time with whatever information SBMFM believes
is appropriate for this purpose.
8. Standard of Care
SBMFM shall exercise its best judgment in rendering the services listed in
paragraph 2 above. SBMFM 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
matters to which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect SBMFM against
any liability to the Corporation or to the Fund's shareholders to which
SBMFM would otherwise be subject by reason of willful malfeasance, bad
faith or gross negligence on its part in the performance of its duties or
by reason of SBMFM 's reckless disregard of its obligations and duties under
this Agreement.
9. Services to Other Companies or Accounts
The Corporation understands that SBMFM now acts, will continue to act and may
act in the future as: investment adviser to fiduciary and other managed
accounts, as well as to other investment companies; and the Corporation
has no objection to SBMFM's so acting, provided that whenever the Fund
and one or more other investment companies advised by SBMFM have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed to be equitable to
BMFM to assist in the performance of SBMFM's duties under this Agreement
will not devote their full time to such service and nothing contained in
this Agreement shall be deemed to limit or restrict the right of SBMFM or
any affiliate of SBMFM to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
l0. Term of Agreement
This Agreement shall become effective as of the date the Fund commences its
investment operations and continue for an initial two-year term and shall
continue thereafter so long as such continuance is specifically approved at
least annually by (i) the Board or (ii) a vote of a "majority" (as defined in
the 0000 Xxx) of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the Board
members who are not "interested persons" (as defined in th
by the Board or by vote of holders of a majority of the Fund's shares, or
upon 90 days' written notice, by SBMFM. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
11. Representation by the Corporation
The Corporation represents that a copy of the Charter of the Corporation is
on file with the State of Maryland Department of Assessments and Taxation.
12. Limitation of Liability
The Corporation and SBMFM agree that the obligations of the Corporation under
this Agreement shall not be binding upon any of the Board members,
shareholders, nominees, officers, employees or agents, whether past, present
or
future, of the Corporation individually, but are binding only upon the assets
and property of the Fund, as provided in the Charter of the Corporation.
The execution and delivery of this Agreement have been duly authorized by the
Corporation and SBMFM, and signed by an authorized offic
hem individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Fund as provided in the Charter of
the Corporation.
If the foregoing is in accordance with your understanding, kindly indicate your
acceptance hereof by signing and returning the enclosed copy of this Agreement
to us.
Very truly yours,
Xxxxx Xxxxxx Investment Funds Inc.
on behalf of
Xxxxx Xxxxxx Xxxxxxxxxx Global Value Fund
By:
Title:
Accepted:
Xxxxx Xxxxxx Mutual Funds Management Inc.
By:
Title:
