INVESTMENT ADVISORY AGREEMENT FOR THE THINK FUNDS OF THE INVESTMENT MANAGERS SERIES TRUST
FOR
THE
THINK
FUNDS
OF
THE
THIS
INVESTMENT ADVISORY AGREEMENT (the “Agreement”), dated as of March 31, 2008,
between the Investment
Managers Series Trust,
a
Delaware statutory trust (the “Trust”), on behalf of its series the ThinkGrowth
Fund, ThinkGlobal Fund, and ThinkGreen Fund
(each a
“Fund”, collectively the “Think Funds”), and ThinkCapital
Management, LLC,
a
Delaware limited liability corporation (the “Advisor”).
WHEREAS,
the Advisor has agreed to furnish investment advisory services to the Think
Funds, each a series of the Trust which is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
“1940 Act”);
WHEREAS,
this Agreement has been approved in accordance with the provisions of the 1940
Act, and the Advisor is willing to furnish such services upon the terms and
conditions herein set forth;
NOW,
THEREFORE, in consideration of the mutual premises and covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In
General. The
Advisor agrees, all as more fully set forth herein, to act as investment advisor
to each Fund with respect to the investment of the Fund’s assets and to
supervise and arrange for the day-to-day operations of the Fund and the purchase
of securities for and the sale of securities held in the investment portfolio
of
the Fund.
2. Duties
and Obligations of the Advisor with Respect to Investment of Assets of the
Think
Funds. Subject
to the succeeding provisions of this section and subject to the direction and
control of the Trust’s Board of Trustees, the Advisor shall (i) act as
investment advisor for and supervise and manage the investment and reinvestment
of each Fund’s assets and, in connection therewith, have complete discretion in
purchasing and selling securities and other assets for the Fund and in voting,
exercising consents and exercising all other rights appertaining to such
securities and other assets on behalf of the Fund; (ii) supervise the investment
program of each Fund and the composition of its investment portfolio; and (iii)
arrange, subject to the provisions of paragraph 3 hereof, for the purchase
and
sale of securities and other assets held in the investment portfolio of each
Fund. In performing its duties under this Section 2, the Advisor may
delegate some or all of its duties and obligations under this Agreement to
one
or more investment sub-advisors, including but not limited to delegating the
voting of proxies relating to each Fund’s portfolio securities in accordance
with the proxy voting policies and procedures of such investment sub-advisor;
provided, however, that any such delegation shall be pursuant to an agreement
with terms agreed upon by the Trust and approved in a manner consistent with
the
1940 Act and provided, further, that no such delegation shall relieve the
Advisor from its duties and obligations of management and supervision of the
management of the Fund’s assets pursuant to this Agreement and to applicable
law.
3. Covenants. In
the performance of its duties under this Agreement, the Advisor:
(a) shall
at
all times conform to, and act in accordance with, any requirements imposed
by: (i) the provisions of the 1940 Act and the Investment Advisers
Act of 1940, as amended (the “Advisers Act”), and all applicable Rules and
Regulations of the Securities and Exchange Commission (the “SEC”); (ii) any
other applicable provision of law; (iii) the provisions of the Agreement and
Declaration of Trust and By-Laws of the Trust, as such documents are amended
from time to time; (iv) the investment objectives and policies of each Fund
as
set forth in its Registration Statement on Form N-1A; and (v) any policies
and
determinations of the Board of Trustees of the Trust;
(b) will
place orders either directly with the issuer or with any broker or
dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Advisor will attempt to obtain the best
price and the most favorable execution of its orders. In placing
orders, the Advisor will consider the experience and skill of the firm’s
securities traders as well as the firm’s financial responsibility and
administrative efficiency. Consistent with this obligation, the
Advisor may select brokers on the basis of the research, statistical and pricing
services they provide to each Fund and other clients of the
Advisor. Information and research received from such brokers will be
in addition to, and not in lieu of, the services required to be performed by
the
Advisor hereunder. A commission paid to such brokers may be higher
than that which another qualified broker would have charged for effecting the
same transaction, provided that the Advisor determines in good faith that such
commission is reasonable in terms either of the transaction or the overall
responsibility of the Advisor to the Think Funds and its other clients and
that
the total commissions paid by the Think Funds will be reasonable in relation
to
the benefits to the Think Funds over the long-term. In no instance,
however, will the Think Funds’ securities be purchased from or sold to the
Advisor, or any affiliated person thereof, except to the extent permitted by
the
SEC or by applicable law;
(c) will
treat confidentially and as proprietary information of each Fund all records
and
other information relative to the Fund, and each Fund’s prior, current or
potential shareholders, and will not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld and may not be withheld where the
Advisor may be exposed to civil or criminal contempt proceedings for failure
to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund;
(d) will
maintain errors and omissions insurance in an amount at least equal to that
disclosed to the Board of Trustees in connection with its approval of this
Agreement;
(e) will
supply such information to the Think Funds’ co-administrators and permit such
compliance inspections by the Fund’s co-administrators as shall be reasonably
necessary to permit the co-administrators to satisfy their obligations and
respond to the reasonable requests of the Board of Trustees;
(f) will
not
pay fees in addition to any Fund distribution or servicing fees to financial
intermediaries 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 and, if the Board of Trustees authorizes
such payments, the Advisor shall report regularly to the Trust on the amounts
paid and the relevant financial intermediary; and
(g) will
use
its best efforts to assist the Trust and the Think Funds in implementing the
Trust’s disclosure controls and procedures, and will from time to time provide
the Trust a written assessment of its compliance policies and procedures that
is
reasonably acceptable to the Trust to enable the Trust to fulfill its
obligations under Rule 38a-1 under the 1940 Act.
4. Services
Not Exclusive. Nothing
in this Agreement shall prevent the Advisor or any officer, employee or
affiliate thereof from acting as investment advisor for any other person, firm
or corporation, or from engaging in any other lawful activity, and shall not
in
any way limit or restrict the Advisor or any of its officers, employees or
agents from buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may be acting;
provided, however, that the Advisor will undertake no activities which, in
its
judgment, will adversely affect the performance of its obligations under this
Agreement.
5. Books
and Records. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Advisor
hereby agrees that all records which it maintains for the Think Funds are the
property of the Trust and further agrees to surrender promptly to the Trust
any
such records upon the Trust’s request. The Advisor further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
6. Agency
Cross Transactions. From
time to time, the Advisor or brokers or dealers affiliated with it may find
themselves in a position to buy for certain of their brokerage clients (each
an
“Account”) securities which the Advisor’s investment advisory clients wish to
sell, and to sell for certain of their brokerage clients securities which
advisory clients wish to buy. Where one of the parties is an advisory
client, the Advisor or the affiliated broker or dealer cannot participate in
this type of transaction (known as a cross transaction) on behalf of an advisory
client and retain commissions from one or both parties to the transaction
without the advisory client’s consent. This is because in a situation
where the Advisor is making the investment decision (as opposed to a brokerage
client who makes his own investment decisions), and the Advisor or an affiliate
is receiving commissions from both sides of the transaction, there is a
potential conflicting division of loyalties and responsibilities on the
Advisor’s part regarding the advisory client. The SEC has adopted a
rule under the Advisers Act which permits the Advisor or its affiliates to
participate on behalf of an Account in agency cross transactions if the advisory
client has given written consent in advance. By execution of this
Agreement, the Trust authorizes the Advisor or its affiliates to participate
in
agency cross transactions involving an Account. The Advisor agrees that it
will
not arrange purchases or sales of securities between the Think Funds and an
Account advised by the Advisor unless (a) the purchase or sale is in accordance
with applicable law (including Rule17a-7 under the 0000 Xxx) and the Trust’s
policies and procedures, (b) the Advisor determines that the purchase or sale
is
in the best interests of the applicable Fund, and (c) the Trust’s Board of
Trustees has approved these types of transactions. The Trust may
revoke its consent at any time by written notice to the Advisor.
7. Expenses. During
the term of this Agreement, the Advisor will bear all costs and expenses of
its
employees and any overhead incurred in connection with its duties
hereunder.
8. Compensation
of the Advisor. The
Funds agree to pay to the Advisor and the Advisor agrees to accept as full
compensation for all services rendered by the Advisor as such, a fee accrued
daily and paid monthly in arrears at an annual rate equal to 1.00% of each
Fund’s average daily net assets. For any period less than a month
during which this Agreement is in effect, the fee shall be prorated according
to
the proportion which such period bears to a full month of 28, 29, 30 or 31
days,
as the case may be. The fee payable to the Advisor under this Agreement will
be
reduced to the extent required by any expense limitation agreement. The Advisor
may voluntarily absorb certain Fund expenses or waive all or a portion of its
fee.
9. Advisor’s
Liability. The
Advisor shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Think Funds’ offering
materials (including the prospectus, the statement of additional information,
and advertising and sales materials), except for information supplied by the
co-administrators or the Trust or another third party for inclusion therein.
The
Advisor will not be liable for any error of judgment or mistake of law or for
any loss suffered by Advisor or by the Trust in connection with the performance
of this Agreement, except a loss resulting from a breach of fiduciary duty
with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties under
this Agreement.
10. Duration
and Termination. This
Agreement shall become effective as of the date hereof and, unless sooner
terminated with respect to a Fund as provided herein, shall continue in effect
for a period of two years as to such Fund. Thereafter, if not
terminated, this Agreement shall continue in effect with respect to each Fund
for successive periods of 12 months, provided such continuance is specifically
approved at least annually by both (a) the vote of a majority of the Trust’s
Board of Trustees or the vote of a majority of the outstanding voting securities
of the Fund at the time outstanding and entitled to vote, and (b) the vote
of a
majority of the Trustees who are not parties to this Agreement or interested
persons of any party to this Agreement, cast in person at a meeting called
for
the purpose of voting on such approval. Notwithstanding the
foregoing, this Agreement may be terminated by the Trust at any time as to
a
Fund, without the payment of any penalty, upon giving the Advisor 60 days’
notice (which notice may be waived by the Advisor), provided that such
termination by the Trust shall be directed or approved by the vote of a majority
of the Trustees of the Trust in office at the time or by the vote of the holders
of a majority of the voting securities of the Fund at the time outstanding
and
entitled to vote, or by the Advisor on 60 days’ written notice (which notice may
be waived by the Trust). This Agreement will also immediately
terminate in the event of its assignment. (As used in this Agreement,
the terms “majority of the outstanding voting securities,” “interested person”
and “assignment” shall have the same meanings of such terms in the 1940
Act.)
11. Notices. Any
notice under this Agreement shall be in writing to the other party at such
address as the other party may designate from time to time for the receipt
of
such notice and shall be deemed to be received on the earlier of the date
actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
12. Amendment
of this Agreement. This
Agreement may only be amended by an instrument in writing signed by the parties
hereto. Any amendment of this Agreement shall be subject to the 1940
Act.
13. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware for contracts to be performed entirely therein without
reference to choice of law principles thereof and in accordance with the
applicable provisions of the 1940 Act.
14. Use
of the Names of the Think Funds. The
Advisor has consented to the use by each Fund of the name(s) or identifying
word
“ThinkGrowth”, “ThinkGlobal”, and “ThinkGreen” in the name of each
Fund. Such consent is conditioned upon the employment of the Advisor
as the investment advisor to the Fund. The name or identifying word
“ThinkGrowth”, “ThinkGlobal”, and “ThinkGreen” may be used from time to time in
other connections and for other purposes by the Advisor and any of its
affiliates. The Advisor may require a Fund to cease using
“ThinkGrowth”, “ThinkGlobal”, or “ThinkGreen” in the name of the respective Fund
and in connection with the Fund’s operations if the Fund ceases to employ, for
any reason, the Advisor, any successor thereto or any affiliate thereof as
investment advisor.
15. Additional
Limitation of Liability. The
parties hereto are expressly put on notice that a Certificate of Trust,
referring to the Trust’s Agreement and Declaration of Trust (the “Certificate”),
is on file with the Secretary of the State of Delaware. The
Certificate was executed by a trustee of the Trust on behalf of the Trust as
trustee, and not individually, and, as provided in the Trust’s Agreement and
Declaration of Trust, the obligations of the Trust are not binding on the
Trust’s trustees, officers or shareholders individually but are binding only
upon the assets and property of the Trust, or the particular series in question,
as the case may be.
16. 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 provision 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 binding on, and shall inure to the benefit of the parties
hereto and their respective successors.
17. Counterparts. This
Agreement may be executed in counterparts by the parties hereto, each of which
shall constitute an original counterpart, and all of which, together, shall
constitute one Agreement.
IN
WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to
be
executed by their duly authorized officers, all as of the day and the year
first
above written.
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THE
TRUST:
INVESTMENT
MANAGERS SERIES TRUST on behalf of THINKGROWTH FUND, THINKGLOBAL
FUND, and
THINKGREEN FUND
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Name
Title
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THE
ADVISOR:
THINKCAPITAL
MANAGEMENT, LLC
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Name
Title
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