Exhibit (d)(13)
INVESTMENT
ADVISORY and Management AGREEMENT
AGREEMENT made as
of the 19th day of May, 2017 by and between THE OBERWEIS FUNDS, a Massachusetts business trust (the
“Trust”), on behalf of the Oberweis Small-Cap Value Fund (the “Fund”), and OBERWEIS ASSET MANAGEMENT,
INC., an Illinois corporation (the “Adviser”).
WHEREAS, the Trust
is an open-end, diversified management investment company registered under the Investment Company Act of 1940 (the “1940
Act”), the units of beneficial interest (“Shares”) of which are registered under the Securities Act of 1933 (the
“ 1933 Act”); and
WHEREAS, the Trust
is authorized to issue Shares in separate series with each such series representing the interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Trust
currently offers Shares in seven portfolios, including the Fund, together with any other portfolios which may be established later
and served by the Adviser hereunder, being herein referred to collectively as the “Funds” and individually referred
to as a “Fund”; and
WHEREAS, the Trust
desires at this time to retain the Adviser to render investment advisory services to the Fund and to provide the Fund with certain
non-investment advisory management and administrative services, and the Adviser is willing to render such services;
NOW, THEREFORE, in
consideration of the premises and mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Initial
Appointment of Adviser. The Trust hereby appoints the Adviser to act as investment adviser to the Fund and to provide the Fund
with management and administrative services 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. Subsequent
Appointments of Adviser. In the event that the Trust establishes additional funds with respect to which it desires to retain
the Adviser to render investment advisory, management and administrative services hereunder, it shall notify the Adviser in writing.
If the Adviser is willing to render such services, it shall notify the Trust in writing, whereupon such fund or funds shall become
a Fund or Funds hereunder.
3. Delivery
of Documents. The Trust has delivered (or will deliver as soon as is possible) to the Adviser copies of each of the following
documents and will deliver to the Adviser all future amendments and supplements:
(a) Amended
and Restated Agreement and Declaration of Trust of the Trust dated February 23, 2017, as amended (such Agreement and Declaration
of Trust, as presently in effect and as amended from time to time, is herein called the “Trust Agreement”), a copy
of which also is on file with the Secretary of the Commonwealth of Massachusetts.
(b) By-Laws
of the Trust (such By-Laws, as presently in effect and as amended from time to time, are herein called the “By-Laws”).
(c) Certified
resolutions of the Trustees and initial shareholder of the Fund authorizing the appointment of the Adviser and approving this Agreement.
(d) Registration
Statement under the 1933 Act and under the 1940 Act on Form N-1A (the “Registration Statement”) as filed with the Securities
and Exchange Commission and all amendments thereto.
(e) Current
prospectus and statement of additional information of the Fund (such prospectus and statement of additional information as then
in effect and as amended, supplemented and/or superseded from time to time, are herein collectively called the “Prospectus”).
4. Duties
of the Adviser. Subject to the general supervision of the Trustees of the Trust, the Adviser shall manage the investment operations
of the Fund and the composition of such Fund’s assets, including the purchase, retention and disposition thereof, in accordance
with the policies of the Fund as stated in the Prospectus and with the investment objective(s) of such Portfolio and subject to
the following understandings:
(a) The
Adviser shall use the same skill and care in the management of the Fund as is required to be used in the discharge of fiduciary
duties under the 1940 Act, the Investment Advisers Act of 1940 (the “Advisers Act”), the 1933 Act and the Internal
Revenue Code of 1986 (the “Code”).
(b) The
Adviser shall provide supervision of the Fund’s assets; furnish a continuous investment program for such Fund; determine
from time to time what investments or securities will be purchased, retained or sold by the Fund, and what portion of the assets
will be invested or held uninvested as cash.
(c) The
Adviser, in the performance of its duties and obligations under this Agreement, shall act in conformity with the Trust Agreement,
By-Laws, Registration Statement and Prospectus and with the instructions and directions of the Trustees of the Trust, and will
comply with and conform to the requirements of the 1940 Act, the Advisers Act, the 1933 Act and the Code (applicable to the Fund
as a regulated investment company or otherwise) as each may from time to time be amended, and all other applicable federal and
state laws, regulations and rulings.
(d) The
Adviser shall determine the securities to be purchased or sold by the Fund and will place orders pursuant to its determinations
either directly with the issuer or underwriter or with any broker-dealer (including, as set forth below, a broker-dealer which
is an affiliated person of the Adviser) who deals in the securities in which the Fund is active. In placing orders with broker-dealers,
the Adviser will attempt to obtain the best combination of price and execution. In seeking to achieve the best combination of price
and execution, an effort shall be made to evaluate the overall quality and reliability of broker-dealers and the service they provide,
including their general execution capability, reliability and integrity, willingness to take positions in securities, general operational
capabilities and financial condition. However, the responsibility of the Adviser to attempt to obtain the best combination of price
and execution does not obligate it to solicit a competitive bid for each transaction, and the Adviser shall have no obligation
to seek the lowest available commission cost to the Fund, so long as the Adviser determines in good faith that the commission paid
to a broker-dealer is reasonable in relation to the value of the brokerage, research, statistical or other services provided by
such broker-dealer to the Fund or the Adviser. The Adviser will not place orders with broker-dealers which are affiliated persons
of the Adviser or the Trust without the prior written authorization of the Trust, and then will do so subject to (i) the provisions
of Section 17(e)(2) and Rule 17e-1 and Section 10(f) and Rule 10f-3 under the 1940 Act, Rule 206(3)-2 under the Advisers
Act, Section 11(a) under the Securities Exchange Act of 1934 (the “1934 Act”) and any other applicable laws or
regulations, and (ii) procedures properly adopted by the Trust with respect thereto.
(e) On
occasions when the Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other clients,
if any (including any other Fund), the Adviser, to the extent permitted by applicable laws and regulations, may aggregate the securities
to be purchased or sold. In such event, allocation of the securities so purchased or sold will be made by the Adviser in a manner
it considers to be equitable and consistent with its fiduciary obligations to each, and transaction costs will be allocated so
that each receives, to the extent possible, the same price.
(f) Subject
to the supervision and control of the Trust’s Board of Trustees, the Adviser will provide the Fund with office space and
facilities; accounting and bookkeeping, recordkeeping and data processing facilities and services; internal compliance services
relating to accounting and legal matters; and personnel to carry out certain administrative services required for operation of
the business and affairs of the Fund other than the services of the underwriter/distributor, those services to be performed by
the Trust’s custodian and transfer agent, those fund accounting services to be performed by one or more service providers
under a fund accounting or similar agreement, and those services normally performed by the Trust’s counsel and independent
auditors. Such responsibilities include without limitation the following services:
(i)
Preparing and updating the Fund’s SEC and state registration statements and filings, reports to shareholders, and other
documents;
(ii)
Overseeing the performance of the Trust’s custodian, transfer agent and accounting agent;
(iii) Providing
information and certain administrative services to shareholders of the Fund, including but not limited to, transmitting redemption
requests to the Trust’s Transfer Agent and transmitting the proceeds of redemption of shares of the Fund pursuant to a shareholder’s
instructions when such redemption is effected through the Adviser, providing telephone and written communications with respect
to its shareholders account inquiries, assisting its shareholders in altering privileges and ownership of their accounts and serving
as a source of information for its existing shareholders in answering questions concerning the Fund and their transactions with
the Fund.
(iv) Overseeing
the maintenance by the Trust’s custodian and transfer agent of the books and records of the Trust required under the 1940
Act, in connection with the performance of the Trust’s agreement with such entities.
(g) The
Adviser shall render to the Trustees of the Trust such periodic and special reports as the Trustees may reasonably request.
(h) The
Adviser, and not the Trust, shall pay the salaries and fees of any officers or Trustees of the Trust who are “interested
persons” (as defined in the 0000 Xxx) and who are employed by the Adviser to perform services relating to the Trust.
(i) The
services of the Adviser to the Fund under this Agreement are not to be deemed exclusive and the Adviser shall be free to render
similar or other services in the future to the Trust or to others so long as its services under this Agreement are not impaired
thereby.
5. Transaction
Procedures. All transactions will be consummated by payment to or delivery by the Custodian, or such depositories or agents
as may be designated by the Custodian in writing, as custodian for the Trust, of all cash and/or securities due to or from the
Fund, and the Adviser shall not have possession or custody thereof or any responsibility or liability with respect thereto. The
Adviser shall advise the Custodian of all investment orders at the time and in the manner as prescribed by the Trust. The Trust
shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated
by the Adviser. The Trust shall be responsible for all custodial arrangements and the payment of custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Adviser shall have no responsibility or liability with respect to custodial
arrangements or the acts, omissions or other conduct of the Custodian.
6. Adoption
of Ethics Code. The Adviser has or will adopt a written code of ethics complying with the requirements of Rule 17j-1 under
the 1940 Act and has or will provide the Trust with a copy of such ethics code and evidence of its adoption. Upon written request
of the Trust, the Adviser shall permit the Trust, its employees or its agents to examine the reports required to be made by the
Adviser under Rule 17j-l(c)( 1).
7. Books
and Records. The Adviser agrees that all records which it maintains for the Trust are the property of the Trust and it will
surrender promptly to the Trust any of such records upon the Trust’s request. The Adviser further agrees to maintain, keep
current and preserve, on behalf of the Trust, in the manner required or permitted under the 1940 Act, the records relating to the
activities performed by the Adviser under this Agreement as are required to be maintained under the 1940 Act.
8. Subcontractors.
It is understood that the Adviser may from time to time employ or associate with itself such person or persons as the Adviser may
believe to be particularly fitted to assist in the performance of this Agreement; provided, however, that such employment or association
is consistent with the 1940 Act and the compensation of such person or persons shall be paid by the Adviser and that the Adviser
shall be as fully responsible to the Fund for the acts and omissions of any subcontractor as it is for its own acts and omissions.
9. Compensation.
For the services provided pursuant to this Agreement, the Fund will pay to the Adviser at the end of each calendar month, an investment
advisory and management fee computed at an annual rate of 1.00% of the average daily net assets of the Fund, plus out-of-pocket
expenses in connection with its shareholder servicing activities, such as postage, data entry, stationery, tax forms and other
printed material. For the month and year in which this Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in effect during the month and year, respectively.
In addition to the
compensation provided above, the Fund shall reimburse to the Adviser on a monthly basis those expenses which are to be borne by
the Fund but, from time to time may be incurred by the Adviser for the benefit of the Fund in connection with the performance of
the Adviser’s duties.
10. Expenses.
Except as otherwise stated in paragraph 9 and this paragraph 10, the Adviser shall pay all expenses incurred by it in providing
the services hereunder. All other expenses incurred in the operation of the Fund will be borne by the Fund, except to the extent
specifically assumed by others. In addition to the investment advisory and management fee of the Adviser, the Fund shall assume
and pay any distribution fees incurred under a distribution agreement, any expenses for services rendered by a custodian for the
safekeeping of the Fund’s securities or other property, for keeping its books of account and for any other charges of the
Custodian, as provided in the Prospectus of the Fund. The Adviser shall not be required to pay and the Fund shall assume and pay
the charges and expenses of its operations, including compensation of the Trustees (except as provided in paragraph 4(g)), charges
and expenses of independent auditors, of legal counsel, of any transfer or dividend disbursing agent, and of any registrar of the
Fund, costs of Fund account services, costs of acquiring and disposing of portfolio securities, interest, if any, on obligations
incurred by the Fund, costs of share certificates and of reports, membership dues in the Investment Company Institute or any similar
organization, costs of reports and notices to shareholders, stationery, printing, postage, other like miscellaneous expenses and
all taxes and fees payable to federal, state or other governmental agencies on account of the registration of securities issued
by the Fund, filing of Trust documents or otherwise.
11. Limitation
of Liability. Subject to Section 36 of the 1940 Act, neither the Adviser nor any of its agents or employees shall be liable
for any error of judgment, act or omission, or mistake of law or for any loss suffered by the Fund or its Shareholders in connection
with the matters to which this Agreement relates, except liability to the Fund or the Shareholders to which the Adviser would otherwise
be subject by reason of the Adviser’s willful misfeasance, bad faith, or gross negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties under this Agreement.
12. Indemnification.
a) Subject to the conditions set forth below, the Fund agrees to indemnify and hold harmless the Adviser, its officers and employees,
and each person, if any, who controls the Adviser within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense whatsoever jointly and severally (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever)
arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Fund’s
Registration Statement or the Prospectus or any amendment or supplement thereto, or any advertisement or sales literature authorized
by the Fund, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or omission was made in reliance upon and in conformity with written
information furnished to the Fund by or on behalf of the Adviser expressly for use in the Fund’s Registration Statement or
the Prospectus or any amendment or supplement thereof or any advertisement, or sales literature. If any action is brought against
the Adviser or any controlling person thereof in respect of which indemnity may be sought against the Fund pursuant to the foregoing,
the Adviser shall promptly notify the Fund in writing of the institution of such action and the Fund shall assume the defense of
such action, including the employment of counsel selected by the Fund and payment of expenses. The Adviser, or any such controlling
person thereof, shall have the right to employ separate counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of the Adviser or such controlling person unless the employment of such counsel shall have been authorized in
writing by the Fund in connection with the defense of such action or the Fund shall not have employed counsel to have charge of
the defense of such action, in which event such fees and expenses shall be borne by the Fund. Anything in this subparagraph to
the contrary notwithstanding, the Fund shall not be liable for any settlement of any such claim or action effected without its
written consent. The Fund agrees promptly to notify the Adviser of the commencement of any litigation or proceedings against the
Fund or any of its officers or directors or controlling persons in connection with the issue and sale of shares or in connection
with the Fund’s Registration Statement or the Prospectus or any advertisement or sales literature.
(b) The
Adviser agrees to indemnify and hold harmless the Fund, each of its Trustees, each of its officers and each other person, if any,
who controls the Fund within the meaning of Section 15 of the 1933 Act, with respect to statements or omissions, if any, made
in the Fund’s Registration Statement or the Prospectus or any amendment or supplement thereof or any advertisement or sales
literature in reliance upon and in conformity with information in writing furnished to the Fund with respect to the Adviser by
or on behalf of the Adviser expressly for use in the Fund’s Registration Statement or the Prospectus or any amendment or
supplement thereof or any advertisement or sales literature. In case any action shall be brought against the Fund or any other
person so indemnified based on the Fund’s Registration Statement or the Prospectus or any amendment or supplement thereof
and in respect of which indemnity may be sought against the Adviser, the Adviser shall have the rights and duties given to the
Fund and the Fund and each other person so indemnified shall have the rights and duties given to the Adviser by the provisions
of subparagraph (a) above.
(c) Nothing
herein contained shall be deemed to protect any person against liability to the Fund or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of the duties of such
person or by reason of the reckless disregard by such person of the obligations and duties of such person under this Agreement.
13. Duration
and Termination. This Agreement, unless sooner terminated as provided herein, shall remain in force until September 30,
2018, and thereafter, in the case of the Fund and each other Fund to which this Agreement shall have become applicable, this Agreement
shall continue in force from year to year, but only so long as such continuance is approved at least annually in the manner required
by the 1940 Act and the rules and regulations thereunder; provided, however, that if the continuation of this Agreement is not
approved for a Fund, the Adviser may continue to serve in such capacity for such Fund in the manner and to the extent permitted
by the 1940 Act and the rules and regulations thereunder. This Agreement may be terminated with respect to all or any of the Funds
at any time, without the payment of any penalty, by vote of a majority of the Trustees of the Trust or by vote of a majority of
the outstanding Shares (as so defined), representing the interests in each Fund with respect to which this Agreement is to be terminated
on sixty (60) days written notice to the Adviser, or by the Adviser at any time without the payment of the penalty on sixty (60)
days written notice to the Trust.
14. Assignment.
This Agreement will automatically and immediately terminate in the event of its “assignment” (as defined in Section 2(a)(4)
of the 1940 Act). The Adviser shall notify the Fund in writing sufficiently in advance of any proposed change of control, as defined
in Section 2(a)(9) of the 1940 Act, as will enable the Trust to consider whether an “assignment” will occur, and
to take the steps necessary to enter into a new contract with the Adviser.
15. Status
of Adviser as Independent Contractor. The Adviser shall for all purposes herein be deemed to be an independent contractor,
and shall, unless otherwise expressly provided herein or authorized by the Trustees of the Trust from time to time, have no authority
to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust.
16. Affiliations.
Subject to applicable statutes and regulations, it is understood that trustees, officers or agents of the Trust are or may be interested
in the Adviser as officers, directors, agents, shareholders or otherwise, and that the officers, directors, shareholders and agents
of the Adviser may be interested in the Trust otherwise than as a trustee, officer or agent.
17. Amendment
of Agreement. This Agreement may be amended by mutual consent, but the consent of the Trust must be (a) by vote of a majority
of those Trustees of the Trust who are not parties to this Agreement or interested persons (as defined in the 0000 Xxx) of any
such party at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding
Shares (as defined with respect to voting securities in the 1940 Act) representing the interests in each Fund affected by such
amendment.
18. Limitation
of Liability of Shareholders and Trustees. This Agreement is executed by or on behalf of the Fund and the Adviser is hereby
expressly put on notice of the limitation of Shareholder and Trustee liability as set forth in the Trust Agreement, and agrees
that the obligations assumed by the Fund pursuant to this Agreement shall be limited in all cases to the Fund and its assets, and
the Adviser shall not seek satisfaction of any such obligations from the Shareholders or any Shareholder of the Fund. In addition,
the Adviser shall not seek satisfaction of any such obligations from the trustees or officers of the Fund or any individual trustee
or officer.
19. Arbitration.
Any disputes or controversies between the parties to this Agreement involving the construction or application of any of the terms,
provisions, or conditions of this Agreement shall be submitted to arbitration. The arbitration shall be conducted in Chicago, Illinois
in accordance with the Rules of the American Arbitration Association. The parties shall each appoint one person to hear and determine
the dispute and, if they are unable to agree, then the two persons so chosen shall select a third impartial arbitrator whose decision
shall be final and conclusive upon both parties. The decision rendered in arbitration shall be borne by the losing party or in
such proportions as the arbitrator shall decide.
20. 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 provisions 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 construed in accordance with applicable federal law and (except as to paragraph 18 hereof which shall be construed in accordance
with the laws of the Commonwealth of Massachusetts) the laws of the State of Illinois, and shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors, subject to paragraph 14 hereof.
IN WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed as of the day and year first above written.
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THE OBERWEIS FUNDS |
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By: |
/s/ Xxxxxxx X. Xxxxx |
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Its: |
Executive Vice President |
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/s/ Xxxx X. Xxxxxxxxx |
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| Its: |
Secretary |
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OBERWEIS ASSET MANAGEMENT, INC. |
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By: |
/s/ Xxxxx X. Xxxxxxxx |
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Its: |
President |
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/s/ Xxxx X. Xxxxxxxxx |
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| Its: |
Vice President of Accounting |
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