TRUST FOR PROFESSIONAL MANAGERS INVESTMENT ADVISORY AGREEMENT Leader Short-Term Bond Fund
Leader
Short-Term Bond Fund
THIS
INVESTMENT ADVISORY AGREEMENT is made as of the 18th day of
January, 2007, by and between Trust for Professional Managers, (hereinafter
called the “Trust”), on behalf of Leader Short-Term Bond Fund (the “Fund”), a
series of the Trust, and Leader Capital Corp. (hereinafter called the
“Advisor;”).
WITNESSETH:
WHEREAS,
the Trust is an open-end management investment company, registered as such
under
the Investment Company Act of 1940 (the “Investment Company Act”); and
WHEREAS,
the Fund is a series of the Trust having separate assets and liabilities; and
WHEREAS,
the Advisor is registered as an investment adviser under the Investment Advisers
Act of 1940 (the “Advisers Act”) and is engaged in the business of supplying
investment advice as an independent contractor; and
WHEREAS,
the Trust desires to retain the Advisor to render advice and services to the
Fund pursuant to the terms and provisions of this Agreement, and the Advisor
desires to furnish said advice and services;
NOW,
THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties to this Agreement, intending to be legally
bound hereby, mutually agree as follows:
1.
APPOINTMENT OF ADVISOR. The Trust hereby employs the Advisor and the
Advisor hereby accepts such employment, to render investment advice and related
services with respect to the assets of the Fund for the period and on the terms
set forth in this Agreement, subject to the supervision and direction of the
Board of Trustees.
2. DUTIES OF
ADVISOR.
(a) GENERAL
DUTIES. The Advisor shall act as investment adviser to the Fund and
shall supervise investments of the Fund on behalf of the Fund in accordance
with
the investment objectives, policies and restrictions of the Fund as set forth
in
the Fund’s and Trust’s governing documents, including, without limitation, the
Trust’s Agreement and Declaration of Trust and By-Laws; the Fund’s prospectus,
statement of additional information and undertakings; and such other
limitations, policies and procedures as the Trustees may impose from time to
time in writing to the Advisor. In providing such services, the Advisor
shall at all times adhere to the provisions and restrictions contained in the
federal securities laws, applicable state securities laws, the Internal Revenue
Code, the Uniform Commercial Code and other applicable law.
Without limiting the
generality of the foregoing, the Advisor shall: (i) furnish the Fund with advice
and recommendations with respect to the investment of the Fund’s assets and the
purchase and sale of portfolio securities for the Fund, including the taking
of
such steps as may be necessary to implement such advice and recommendations
(i.e., placing the orders); (ii) manage and oversee the investments of
the Fund, subject to the ultimate supervision and direction of the Trust’s Board
of Trustees (the “Board of Trustees”); (iii) vote proxies for the Fund, file
ownership reports under Section 13 of the Securities Exchange Act of 1934 for
the Fund, and take other actions on behalf of the Fund; (iv) maintain the books
and records required to be maintained by the Fund except to the extent
arrangements have been made for such books and records to be maintained by
the
administrator or another agent of the Fund; (v) furnish reports, statements
and
other data on securities, economic conditions and other matters related to
the
investment of the Fund’s assets which the Fund’s administrator or distributor or
the officers of the Trust may reasonably request; and (vi) render to the Board
of Trustees such periodic and special reports with respect to the Fund’s
investment activities as the Board may reasonably request, including at least
one in-person appearance annually before the Board of Trustees.
(b)
BROKERAGE. The Advisor shall be responsible for decisions to buy and
sell securities for the Fund, for broker-dealer selection, and for negotiation
of brokerage commission rates, provided that the Advisor shall not direct orders
to an affiliated person of the Advisor without general prior authorization
to
use such affiliated broker or dealer by the Board of Trustees. The Advisor’s
primary consideration in effecting a securities transaction will be execution
at
the most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Advisor may take the following into consideration:
the best net price available; the reliability, integrity and financial condition
of the broker-dealer; the size of and difficulty in executing the order; and
the
value of the expected contribution of the broker-dealer to the investment
performance of the Fund on a continuing basis. The price to the Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered.
Subject to such policies
as
the Board of Trustees may determine and consistent with Section 28(e) of the
Securities Exchange Act of 1934, as amended, the Advisor 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 (directly or indirectly) brokerage or research services
to
the Advisor an amount of commission for effecting a portfolio transaction in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction, if the Advisor 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 Advisor’s overall
responsibilities with respect to the Trust. Subject to the same policies and
legal provisions, the Advisor is further authorized to allocate the orders
placed by it on behalf of the Fund to such brokers or dealers who also provide
research or statistical material, or other services, to the Trust, the Advisor,
or any affiliate of either. Such allocation shall be in such amounts and
proportions as the Advisor shall determine, and the Advisor shall report on
such
allocations regularly to the Trust, indicating the broker-dealers to whom such
allocations have been made and the basis therefor.
On occasions when the
Advisor deems the purchase or sale of a security to be in the best interest
of
the Fund as well as of other clients, the Advisor, to the extent permitted
by
applicable laws and regulations, may aggregate the securities to be so purchased
or sold in order to obtain the most favorable price or lower brokerage
commissions and the most efficient execution. In such event, allocation of
the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Advisor in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and
to
such other clients.
3. REPRESENTATIONS
OF THE ADVISOR.
(a) The Advisor shall use
its best judgment and efforts in rendering the advice and services to the Fund
as contemplated by this Agreement.
(b) The Advisor shall
maintain all licenses and registrations necessary to perform its duties
hereunder in good order.
(c) The Advisor shall
conduct its operations at all times in conformance with the Advisers Act, the
Investment Company Act, and any other applicable state and/or self-regulatory
organization regulations.
4. INDEPENDENT
CONTRACTOR. The Advisor shall, for all purposes herein, be deemed to be
an independent contractor, and shall, unless otherwise expressly provided and
authorized to do so, have no authority to act for or represent the Trust in
any
way, or in any way be deemed an agent for the Trust. It is expressly understood
and agreed that the services to be rendered by the Advisor to the Fund under
the
provisions of this Agreement are not to be deemed exclusive, and the Advisor
shall be free to render similar or different services to others so long as
its
ability to render the services provided for in this Agreement shall not be
impaired thereby.
5. ADVISOR’S
PERSONNEL. The Advisor shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as
it
shall from time to time determine to be necessary to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Advisor shall be deemed to include
persons employed or retained by the Advisor to furnish statistical information,
research, and other factual information, advice regarding economic factors
and
trends, information with respect to technical and scientific developments,
and
such other information, advice and assistance as the Advisor or the Board of
Trustees may desire and reasonably request and any compliance staff and
personnel required by the Advisor.
6. EXPENSES.
(a) With respect to the
operation of the Fund, the Advisor shall be responsible for (i) the Fund’s
organizational expenses, (ii) providing the personnel, office space and
equipment reasonably necessary for the operation of the Fund, (iii) the expenses
of printing and distributing extra copies of the Fund’s prospectus, statement of
additional information, and sales and advertising materials (but not the legal,
auditing or accounting fees attendant thereto) to prospective investors (but
not
to existing shareholders) to the extent such expenses are not covered by any
applicable plan adopted pursuant to Rule 12b-1 under the Investment Company
Act,
(iv) the costs of any special Board of Trustees meetings or shareholder meetings
convened for the primary benefit of the Advisor, and (v) any costs of
liquidating or reorganizing the Fund (unless such cost is otherwise allocated
by
the Board of Trustees). If the Advisor has agreed to limit the operating
expenses of the Fund, the Advisor shall also be responsible on a monthly basis
for any operating expenses that exceed the agreed upon expense limit.
(b) The Fund is responsible
for and have assumed the obligation for payment of all of its expenses, other
than as stated in Subparagraph 6(a) above, including but not limited to: fees
and expenses incurred in connection with the issuance, registration and transfer
of its shares; brokerage and commission expenses; all expenses of transfer,
receipt, safekeeping, servicing and accounting for the cash, securities and
other property of the Trust for the benefit of the Fund including all fees
and
expenses of its custodian, shareholder services agent and accounting services
agent; interest charges on any borrowings; costs and expenses of pricing and
calculating its daily net asset value and of maintaining its books of account
required under the Investment Company Act; taxes, if any; a pro rata portion
of
expenditures in connection with meetings of the Fund’s shareholders and the
Board of Trustees that are properly payable by the Fund; salaries and expenses
of officers of the Trust, including without limitation the Trust’s Chief
Compliance Officer, and fees and expenses of members of the Board of Trustees
or
members of any advisory board or committee who are not members of, affiliated
with or interested persons of the Advisor; insurance premiums on property or
personnel of the Fund which inure to its benefit, including liability and
fidelity bond insurance; the cost of preparing and printing reports, proxy
statements, prospectuses and statements of additional information of the Fund
or
other communications for distribution to existing shareholders; legal, auditing
and accounting fees; all or any portion of trade association dues or educational
program expenses determined appropriate by the Board of Trustees; fees and
expenses (including legal fees) of registering and maintaining registration
of
its shares for sale under federal and applicable state and foreign securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Fund, if any; and all other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
(c) The Advisor may
voluntarily absorb certain Fund expenses or waive the Advisor’s own advisory
fee.
(d) To the extent the
Advisor incurs any costs by assuming expenses which are an obligation of the
Fund as set forth herein, the Fund shall promptly reimburse the Advisor for
such
costs and expenses, except to the extent the Advisor has otherwise agreed to
bear such expenses. To the extent the services for which the Fund is obligated
to pay are performed by the Advisor, the Advisor shall be entitled to recover
from such Fund to the extent of the Advisor’s actual costs for providing such
services. In determining the Advisor’s actual costs, the Advisor may take into
account an allocated portion of the salaries and overhead of personnel
performing such services.
(e) The Advisor may not
pay
fees in addition to any Fund distribution or servicing fees to financial
intermediaries, including without limitation banks, broker-dealers, financial
advisors, or pension administrators, for sub-administration, sub-transfer agency
or any other shareholder servicing or distribution services associated with
shareholders whose shares are held in omnibus or other group accounts, except
with the prior authorization of the Board of Trustees. Where such
arrangements are authorized by the Board of Trustees, the Advisor shall report
regularly to the Trust on the amounts paid and the relevant financial
institutions.
7. INVESTMENT
ADVISORY AND MANAGEMENT FEE.
(a) The Fund shall pay
to
the Advisor, and the Advisor agrees to accept, as full compensation for all
investment management and advisory services furnished or provided to such Fund
pursuant to this Agreement, an annual management fee at the rate set forth
in
Schedule A to this Agreement.
(b) The management fee
shall be accrued daily by the Fund and paid to the Advisor on the first business
day of the succeeding month.
(c) The initial fee under
this Agreement shall be payable on the first business day of the first month
following the effective date of this Agreement and shall be prorated as set
forth below. If this Agreement is terminated prior to the end of any month,
the
fee to the Advisor shall be prorated for the portion of any month in which
this
Agreement is in effect which is not a complete month according to the proportion
which the number of calendar days in the month during which the Agreement is
in
effect bears to the number of calendar days in the month, and shall be payable
within ten (10) days after the date of termination.
(d) The fee payable to
the
Advisor under this Agreement will be reduced to the extent of any receivable
owed by the Advisor to the Fund and as required under any expense limitation
applicable to the Fund.
(e) The Advisor voluntarily
may reduce any portion of the compensation or reimbursement of expenses due
to
it pursuant to this Agreement and may agree to make payments to limit the
expenses which are the responsibility of the Fund under this Agreement. Any
such
reduction or payment shall be applicable only to such specific reduction or
payment and shall not constitute an agreement to reduce any future compensation
or reimbursement due to the Advisor hereunder or to continue future payments.
Any such reduction will be agreed to prior to accrual of the related expense
or
fee and will be estimated daily and reconciled and paid on a monthly basis.
(f) Any such reductions
made by the Advisor in its fees or payment of expenses which are the Fund’s
obligation are subject to reimbursement by the Fund to the Advisor, if so
requested by the Advisor, in subsequent fiscal years if the aggregate amount
actually paid by the Fund toward the operating expenses for such fiscal year
(taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. Under the expense limitation agreement, the Advisor
may recoup reimbursements made in any fiscal year of the Fund over the following
three fiscal years. Any such reimbursement is also contingent upon Board
of Trustees review and approval at the time the reimbursement is made. Such
reimbursement may not be paid prior to the Fund’s payment of current ordinary
operating expenses.
(g) The Advisor may agree
not to require payment of any portion of the compensation or reimbursement
of
expenses otherwise due to it pursuant to this Agreement. Any such agreement
shall be applicable only with respect to the specific items covered thereby
and
shall not constitute an agreement not to require payment of any future
compensation or reimbursement due to the Advisor hereunder.
8. NO SHORTING;
NO
BORROWING. The Advisor agrees that neither it nor any of its officers
or employees shall take any short position in the shares of the Fund. This
prohibition shall not prevent the purchase of such shares by any of the officers
or employees of the Advisor or any trust, pension, profit-sharing or other
benefit plan for such persons or affiliates thereof, at a price not less than
the net asset value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the Investment Company Act. The Advisor agrees that
neither it nor any of its officers or employees shall borrow from the Fund
or
pledge or use the Fund’s assets in connection with any borrowing not directly
for the Fund’s benefit. For this purpose, failure to pay any amount due and
payable to the Fund for a period of more than thirty (30) days’ shall constitute
a borrowing.
9. CONFLICTS WITH
TRUST’S GOVERNING DOCUMENTS AND APPLICABLE LAWS. Nothing herein
contained shall be deemed to require the Trust or the Fund to take any action
contrary to the Trust’s Agreement and Declaration of Trust, By-Laws, or any
applicable statute or regulation, or to relieve or deprive the Board of Trustees
of its responsibility for and control of the conduct of the affairs of the
Trust
and Fund. In this connection, the Advisor acknowledges that the Trustees retain
ultimate plenary authority over the Fund and may take any and all actions
necessary and reasonable to protect the interests of shareholders.
10. REPORTS AND
ACCESS. The Advisor agrees to supply such information to the Fund’s
administrator and to permit such compliance inspections by the Fund’s
administrator as shall be reasonably necessary to permit the administrator
to
satisfy its obligations and respond to the reasonable requests of the Trustees.
11. ADVISOR’S
LIABILITIES AND INDEMNIFICATION.
(a) The Advisor shall have
responsibility for the accuracy and completeness (and liability for the lack
thereof) of the statements in the Fund’s offering materials (including the
prospectus, the statement of additional information, advertising and sales
materials), except for information supplied by the administrator or the Trust
or
another third party for inclusion therein.
(b) The Advisor shall be
liable to the Fund for any loss (including brokerage charges) incurred by the
Fund as a result of any improper investment made by the Advisor.
(c) In the absence of
willful misfeasance, bad faith, negligence, or reckless disregard of the
obligations or duties hereunder on the part of the Advisor, the Advisor shall
not be subject to liability to the Trust or the Fund or to any shareholder
of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security by the Fund. Notwithstanding the
foregoing, federal securities laws and certain state laws impose liabilities
under certain circumstances on persons who have acted in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation
of
any rights which the Trust, the Fund or any shareholder of the Fund may have
under any federal securities law or state law.
(d) Each party to this
Agreement shall indemnify and hold harmless the other party and the
shareholders, directors, officers and employees of the other party (any such
person, an “Indemnified Party”) against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party’s
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance
of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e) No provision of this
Agreement shall be construed to protect any Trustee or officer of the Trust,
or
officer of the Advisor, from liability in violation of Sections 17(h) and (i)
of
the Investment Company Act.
12.
NON-EXCLUSIVITY; TRADING FOR ADVISOR’S OWN ACCOUNT. The Trust’s
employment of the Advisor is not an exclusive arrangement. The Trust may from
time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Advisor may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts
or
the accounts of others for whom it or they may be acting, provided, however,
that the Advisor expressly represents that it will undertake no activities
which
will adversely affect the performance of its obligations to the Fund under
this
Agreement; and provided further that the Advisor will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms
to
the requirements of the Investment Company Act and the Advisers Act and has
been
approved by the Board of Trustees.
13. TERM.
(a) This Agreement shall
be
effective for the period from January 18, 2007 to August 31, 2008,
unless sooner terminated as hereinafter provided. This Agreement shall continue
in effect thereafter for additional periods not exceeding one (l) year so long
as such continuation is approved for the Fund at least annually by (i) the
Board
of Trustees or by the vote of a majority of the outstanding voting securities
of
such Fund and (ii) the vote of a majority of the Trustees of the Trust who
are
not parties to this Agreement nor interested persons thereof, cast in person
at
a meeting called for the purpose of voting on such approval. The terms “majority
of the outstanding voting securities” and “interested persons” shall have the
meanings as set forth in the Investment Company Act.
(b) The Fund may use the
names “Leader Short-Term Bond Fund” or any name derived from or using the name
“Leader” only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect. Within sixty (60) days from such time as
this Agreement shall no longer be in effect, the Fund shall cease to use such
a
name or any other name connected with the Advisor.
14. TERMINATION;
NO
ASSIGNMENT.
(a) This Agreement may be
terminated by the Trust on behalf of the Fund at any time without payment of
any
penalty, by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund, upon sixty (60) days’ written notice to the
Advisor, and by the Advisor upon sixty (60) days written notice to such Fund.
In
the event of a termination, the Advisor shall cooperate in the orderly transfer
of the Fund’s affairs and, at the request of the Board of Trustees, transfer any
and all books and records of such Fund maintained by the Advisor on behalf
of
the Fund.
(b) This Agreement shall
terminate automatically in the event of any transfer or assignment thereof,
as
defined in the Investment Company Act.
15. Nonpublic
Personal Information. Notwithstanding any provision herein to the
contrary, the Advisor hereto agrees on behalf of itself and its directors,
trustees, shareholders, officers, and employees (1) to treat confidentially
and
as proprietary information of the Trust (a) all records and other information
relative to the Fund’s prior, present, or potential shareholders (and clients of
said shareholders) and (b) any Nonpublic Personal Information, as defined under
Section 248.3(t) of Regulation S-P (“Regulation S-P”), promulgated under the
Xxxxx-Xxxxx-Xxxxxx Act (the “G-L-B Act”), and (2) except after prior
notification to and approval in writing by the Trust, not to use such records
and information for any purpose other than the performance of its
responsibilities and duties hereunder, or as otherwise permitted by Regulation
S-P or the G-L-B Act, and if in compliance therewith, the privacy policies
adopted by the Trust and communicated in writing to the Advisor. Such
written approval shall not be unreasonably withheld by the Trust and may not
be
withheld where the Advisor may be exposed to civil or criminal contempt or
other
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities.
16. ANTI-MONEY
LAUNDERING COMPLIANCE. The Advisor acknowledges that, in compliance
with the Bank Secrecy Act, as amended, the USA PATRIOT Act, and any implementing
regulations thereunder (together, “AML Laws”), the Trust has adopted an
Anti-Money Laundering Policy. The Advisor agrees to comply with the Trust’s
Anti-Money Laundering Policy and the AML Laws, as the same may apply to the
Advisor, now and in the future. The Advisor further agrees to provide to the
Trust and/or the Administrator such reports, certifications and contractual
assurances as may be reasonably requested by the Trust. The Trust may disclose
information regarding the Advisor to governmental and/or regulatory or
self-regulatory authorities to the extent required by applicable law or
regulation and may file reports with such authorities as may be required by
applicable law or regulation.
17. CERTIFICATIONS;
DISCLOSURE CONTROLS AND PROCEDURES. The Advisor acknowledges that, in
compliance with the Xxxxxxxx-Xxxxx Act, and the implementing regulations
promulgated thereunder, the Trust and the Fund is required to make certain
certifications and have adopted disclosure controls and procedures. To the
extent reasonably requested by the Trust, the Advisor agrees to use its best
efforts to assist the Trust and the Fund in complying with the Xxxxxxxx-Xxxxx
Act and implementing the Trust’s disclosure controls and procedures. The Advisor
agrees to inform the Trust of any material development related to the Fund
that
the Advisor reasonably believes is relevant to the Fund’s certification
obligations under the Xxxxxxxx-Xxxxx Act.
18.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
19.
CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof
or
otherwise affect their construction or effect.
20. GOVERNING
LAW. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Wisconsin without giving effect to the conflict
of laws principles thereof; provided that nothing herein shall be construed
to
preempt, or to be inconsistent with, any federal law, regulation or rule,
including the Investment Company Act and the Advisers Act and any rules and
regulations promulgated thereunder.
IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized officers, all on the day and year first above
written.
|
TRUST FOR PROFESSSIONAL
MANAGERS
on behalf of the
Leader Short-Term Bond Fund
|
LEADER CAPITAL
CORP.
|
|
By: /s/ Xxxxxx X.
Xxxxxxxxx
|
By: /s/ Xxxx
Xxxxx
|
|
Name: Xxxxxx X. Xxxxxxxxx
|
Name: Xxxx Xxxxx
|
|
Title:
President
|
Title: President
|
SCHEDULE
A
Series or Fund of Trust for Professional
Managers
Annual Fee rate
Leader Short-Term Bond Fund
0.90% of average net assets
