FORM OF
COLUMBUS FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the ____ day of December, 2003,
between Columbus Funds, Inc., a Maryland corporation (the "Corporation"), and
Xxxxx Asset Management Company, LLC, an Indiana corporation (the "Adviser").
WITNESSETH
WHEREAS, the Corporation is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the" 1940 Act"). The
Corporation is authorized to create separate series, each with its own separate
investment portfolio (the "Funds"), and the beneficial interest in each such
series will be represented by a separate series of shares (the "Shares").
WHEREAS, the Adviser is a registered investment adviser, engaged in the
business of . rendering investment advisory services.
WHEREAS, in managing the Corporation's assets, as well as in the
conduct of certain of its affairs, the Corporation seeks the benefit of the
Adviser's services and its assistance in performing certain managerial
functions. The Adviser desires to furnish such services and to perform the
functions assigned to it under this Agreement for the consideration provided for
herein.
WHEREAS, the Company desires to retain the Adviser to act as investment
adviser for the Company or each series of the Company, if any, listed the
Exhibit(s) attached hereto, and to manage each of their assets;
NOW THEREFORE, the parties mutually agree as follows:
1. Appointment of the Adviser. The Corporation hereby appoints the
Adviser as investment adviser for each of the Funds of the Corporation on whose
behalf the Corporation executes an Exhibit to this Agreement, and the Adviser,
by execution of each such Exhibit, accepts the appointments. Subject to the
direction of the Board of Directors (the "Directors") of the Corporation, the
Adviser shall manage the investment and reinvestment of the assets of each Fund
in accordance with the Fund's investment objective and policies and limitations,
for the period and upon the terms herein set forth. The investment of funds
shall also be subject to all applicable restrictions of the Articles of
Incorporation and By-Laws of the Corporation as may from time to time be in
force.
2. Expenses Paid by the Adviser. In addition to the expenses which the
Adviser may incur in the performance of its responsibilities under this
Agreement, and the expenses which it may expressly undertake to incur and pay,
the Adviser shall incur and pay all reasonable compensation, fees and related
expenses of the Corporation's officers and its Directors, except for such
Directors who are not interested persons (as that term is defined in Section
2(a)(19) of the 0000 Xxx) of the Adviser, and all expenses related to the rental
and maintenance of the principal offices of the Corporation.
3. Investment Advisory Functions. In its capacity as investment
adviser, the Adviser shall have the following responsibilities:
(a) To furnish continuous advice and recommendations to the Funds,
as to the acquisition, holding or disposition of any or all of the securities or
other assets which the Funds may own or contemplate acquiring from time to time;
(b) To cause its officers to attend meetings and furnish oral or
written reports, as the Corporation may reasonably require, in order to keep the
Directors and appropriate officers of the Corporation fully informed as to the
condition of the investments of the Funds, the investment recommendations of the
Adviser, and the investment considerations which have given rise to those
recommendations; and
(c) To supervise the purchase and sale of securities or other assets
as directed by the appropriate officers of the Corporation.
The services of the Adviser are not to be deemed exclusive and the Adviser shall
be free to render similar services to others as long as its services for others
does not in any way hinder, preclude or prevent the Adviser from performing its
duties and obligations under this Agreement. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Corporation, the Funds, or to any shareholder for any act or
omission in the course of, or in connection with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of any
security.
4. Obligations of the Corporation. The Corporation shall have the
following obligations under this Agreement:
(a) To keep the Adviser continuously and fully informed as to the
composition of the Funds' investments and the nature of all of their respective
assets and liabilities;
(b) To furnish the Adviser with a copy of any financial statement or
report prepared for it by certified or independent public accountants, and with
copies of any financial statements or reports made to the Funds' shareholders or
to any governmental body or securities exchange;
(c) To furnish the Adviser with any further materials or information
which the Adviser may reasonably request to enable it to perform its functions
under this Agreement; and
(d) To compensate the Adviser for its services in accordance with
the provisions of paragraph 5 hereof.
5. Compensation. The Corporation will pay the Adviser a fee for its
services with respect to each Fund (the "Advisory Fee") at the annual rate set
forth on the Exhibit(s) hereto. The Advisory Fee shall be accrued each calendar
day during the term of this Agreement and the sum of the daily fee accruals
shall be paid monthly as soon as practicable following the last day of each
month. The daily fee accruals will be computed by multiplying 1/365 by the
annual rate
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and multiplying the product by the net asset value of each Fund as defined in
accordance with the Corporation's registration statement as of the close of
business on the previous day on which the Fund was open for business, or in such
other manner as the parties agree.
6. Expenses Paid by Corporation.
(a) Except as provided in this paragraph, nothing in this Agreement
shall be construed to impose upon the Adviser the obligation to incur, pay, or
reimburse the Corporation for any expenses not specifically assumed by the
Adviser under paragraph 2 above. Each Fund shall pay or cause to be paid all of
its expenses and the Fund's allocable share of the Corporation's expenses,
including, but not limited to, investment adviser fees; any compensation, fees,
or reimbursements which the Corporation pays to its Directors who are not
interested persons (as that phrase is defined in Section 2(a)(19) of the 0000
Xxx) of the Adviser; fees and expenses of the custodian, transfer agent,
registrar or dividend disbursing agent; current legal, accounting and printing
expenses; administrative, clerical recordkeeping and bookkeeping expenses;
brokerage commissions and all other expenses in connection with the execution of
Fund transactions; interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; and all expenses incurred
in complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of Shares of the Funds, including but
not limited to, all costs involved in the registration or qualification of
Shares of the Funds for sale in any jurisdiction and all costs involved in
preparing, printing and distributing prospectuses and statements of additional
information to existing shareholders of the Funds.
(b) If expenses borne by a Fund in any fiscal year (including the
Adviser's fee, but excluding taxes, interest, brokerage commissions, and similar
fees) exceed those set forth in any statutory or regulatory formula applicable
to a Fund, the Adviser will reimburse the Fund for any excess.
7. Brokerage Commissions. For purposes of this Agreement, brokerage
commissions paid by a Fund upon the purchase or sale of securities shall be
considered a cost of the securities of the Fund and shall be paid by the
respective Fund. The Adviser is authorized and directed to place Fund
transactions only with brokers and dealers who render satisfactory service in
the execution of orders at the most favorable prices and at reasonable
commission rates; provided, however, that the Adviser may pay a broker or dealer
an amount of commission for effecting a securities 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 overall responsibilities of the Adviser. In
placing Fund business with such broker or dealers, the Adviser shall seek the
best execution of each transaction, and all such brokerage placement shall be
made in compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and other applicable state and federal laws. Notwithstanding the
foregoing, the Corporation shall retain the right to direct the placement of all
Fund transactions, and the
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Directors may establish policies or guidelines to be followed by the Adviser in
placing Fund transactions for the Funds pursuant to the foregoing provisions.
8. Proprietary Rights. The Adviser has proprietary rights in each
Fund's name and the Corporation's name. The Corporation acknowledges and agrees
that the Adviser may withdraw the use of such names from the Funds or the
Corporation should it cease to act as the investment adviser to any Fund.
9. Termination. This Agreement may be terminated at any time, without
penalty, by the Directors of the Corporation or by the shareholders of a Fund
acting by the vote of at least a majority of its outstanding voting securities
(as that phrase is defined in Section 2(a)(42) of the 1940 Act), provided in
either case that 60 days' written notice of termination be given to the Adviser
at its principal place of business. This Agreement may also be terminated by the
Adviser at any time by giving 60 days' written notice of termination to the
Corporation, addressed to its principal place of business.
10. Assignment. This Agreement shall terminate automatically in the
event of any assignment (within the meaning of Section 2(a)(4) of the 0000 Xxx)
of this Agreement.
11. Term. This Agreement shall begin for each Fund as of the date of
execution of the applicable Exhibit and shall continue in effect with respect to
each Fund (and any subsequent Funds added pursuant to an Exhibit during the
initial term of this Agreement) for two years from the date of this Agreement
and thereafter for successive periods of one year, subject to the provisions for
termination and all of the other terms and conditions hereof if such
continuation shall be specifically approved at least annually (i) by the vote of
a majority of the Directors of the Corporation, including a majority of the
Directors who are not parties to this Agreement or "interested persons" of any
such party (as defined in the 1940 Act), cast in person at a meeting called for
that purpose or (ii) by the vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of
each Fund. If a Fund is added after the first approval by the Directors as
described above, this Agreement will be effective as to that Fund upon execution
of the applicable Exhibit and will continue in effect until the next annual
approval of this Agreement by the Directors and thereafter for successive
periods of one year, subject to approval as described above.
12. Amendments. This Agreement may be amended by the mutual consent of
the parties, provided that the terms of each such amendment shall be approved by
the Directors or by the affirmative vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of
each Fund.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Indiana, provided, however
that nothing herein shall be construed in a manner that is inconsistent with the
1940 Act, the Investment Advisers Act of 1940, as amended, or the rules and
regulations promulgated with respect to such respective Acts.
This Agreement will become binding on the parties hereto upon their
execution of the Exhibit(s) to this Agreement.
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Executed as of this ____ day of December, 2003.
Adviser:
XXXXX ASSET MANAGEMENT COMPANY, LLC
By: _________________________________
Corporation:
COLUMBUS FUNDS, INC.
By: _________________________________
Its: ________________________________
Exhibit A
The following schedule lists the portfolio(s) of Columbus Funds, Inc.
currently subject to this Agreement. For all services rendered by the Adviser,
on behalf of each respective portfolio, the Adviser shall be paid an annual
advisory fee pursuant to Paragraph 5 of this Agreement as set forth below:
Date of Addition to this Annual
Portfolio(s) Agreement Advisory Fee
-------------------------- ------------------------ ------------------------------
Columbus Low Duration Fund December ____, 2003 0.35% of its average daily net
assets
Columbus Intermediate Fund December ____, 2003 0.35% of its average daily net
assets
Columbus Core Fund December ____, 2003 0.35% of its average daily net
assets
Columbus Core Plus Fund December ____, 2003 0.35% of its average daily net
assets
Columbus High Yield Fund December ____, 2003 0.45% of its average daily net
assets
Executed as of this ____ day of December, 2003.
Adviser:
XXXXX ASSET MANAGEMENT COMPANY, LLC
By: __________________________________
Corporation:
COLUMBUS FUNDS, INC.
By: __________________________________
Its: _________________________________
