INVESTMENT ADVISORY AGREEMENT
This INVESTMENT ADVISORY AGREEMENT ("Agreement") is made this ___ day
of February, 2000, by and between iMillenium Capital Trust (the "Trust"), a
business trust organized and existing under the laws of the state of Delaware,
and iMillenium Capital Management, Inc. (the "Adviser"), a corporation organized
and existing under the laws of the state of [TEXAS].
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust is authorized to issue separate series of shares of
beneficial interest (hereinafter referred to individually as a "Fund" and
collectively as the "Funds"), the existing series being listed on SCHEDULE A
hereto, as such may be amended from time to time;
WHEREAS, the Adviser is principally engaged in rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory and other services to the Trust pursuant to the terms and provisions of
this Agreement, and the Adviser is willing to provide said services;
NOW, THEREFORE, in consideration of the premises and the covenants
contained in this Agreement, the parties hereto agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as
investment adviser to the Fund for the period and on the terms and subject to
the conditions set forth in this Agreement. The Adviser accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided. Additional series of the Trust may from time to time be added to those
covered by this Agreement by the parties executing a new SCHEDULE A that shall
become effective upon its execution and shall supersede any SCHEDULE A having an
earlier date.
2. INVESTMENT ADVISORY SERVICES. Subject to the supervision of the
Board of Trustees of the Trust (the "Board"), the Adviser shall provide a
continuous investment program for each Fund, shall determine from time to time
which securities or other investments shall be purchased, sold or exchanged and
what portions of each Fund shall be held in the various securities or other
investments or cash, and shall take such steps as are necessary to implement an
overall investment plan for each Fund. The Adviser may delegate any or all of
its responsibilities to one or more sub-advisers, subject to the approval of the
Board. Such delegation shall not relieve the Adviser of its duties and
responsibilities hereunder. The Adviser shall provide the services under this
Agreement in accordance with each Fund's investment objectives, policies, and
restrictions as stated in such Fund's most current Prospectus and Statement of
Additional Information, including all amendments or supplements thereto, and in
such resolutions of the Board as may be adopted from time to time. The Adviser
further agrees that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to any fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable rules and regulations of the U.S.
Securities and Exchange Commission (the "Commission") as they pertain
to the registration of the Trust and, in addition, will conduct its
activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to the investment
advisory activities of the Adviser;
(c) will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer.
In placing orders with brokers and dealers, the Adviser will attempt to
obtain and is hereby directed to obtain prompt execution of orders in
an effective manner at the most favorable price. Under such conditions
as may be specified by the Board in the interest of its shareholders
and to ensure compliance with applicable law and regulations, the
Adviser may (i) place orders for the purchase or sale of each Fund's
portfolio securities with an affiliated broker-dealer ("Affiliated
Brokers"); (ii) pay commissions to brokers other than Affiliated
Brokers which are higher than might be charged by another qualified
broker to obtain brokerage and/or research services considered by the
Adviser to be useful or desirable in the performance of its duties
hereunder; and (iii) consider sales by brokers (other than Affiliated
Brokers) of shares of each Fund and any other mutual fund for which it
acts as investment adviser, as a factor in its selection of brokers and
dealers for each Fund's portfolio transactions.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of one or more of the Funds as well as of
other clients, the Adviser may, to the extent permitted by applicable
laws and regulations, 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 Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and to such other clients. In placing orders
with the Adviser for the Trust, the Adviser will comply with the
procedures adopted by the Trust pursuant to Rule 17e-1 under the 1940
Act;
(d) will maintain, or cause the Trust's custodian to maintain, all
books and records with respect to the securities transactions executed
for each Funds;
(e) will advise and assist the officers of the Trust in taking such
actions as may be necessary or appropriate to carry out the decisions
of the Board and of the appropriate committees of such Board regarding
the conduct of the business of the Trust;
(f) will furnish the Board such periodic and special reports with
respect to each Fund's investment activities as the Board may
reasonably request;
(g) will seek to provide qualified personnel to fulfill its duties
hereunder and will bear all costs and expenses;
(h) will seek to manage the Trust in accordance with any restrictions
set forth in the Trust Instrument or By-Laws, if any, and the Trust's
then-current registration statement on Form N-1A and the prospectus and
Statement of Additional Information included therein, as updated from
time to time; and
(i) will make every effort to ensure that (1) each Fund continuously
qualifies as a regulated investment company under Subchapter M of the
Code or any successor provision, and (2) any and all applicable state
law restrictions on investments that operate to limit or restrict the
investments that a Fund may otherwise make are complied with as well as
any changes thereto.
3.EXPENSES. During the term of this Agreement, the Adviser shall assume
the expense of and shall pay for maintaining the staff and personnel necessary
to perform its obligations under this Agreement, and shall at its own expense
provide the office space, equipment and facilities that it is obligated to
provide under this Agreement.
The Adviser shall not be liable for any expenses of the Trust
including, without limitation, (a) taxes, (b) brokerage fees and commissions and
other costs in connection with the purchase or sale of securities or other
investment instruments with respect to the Trust, (c) legal, auditing and
accounting fees and expenses, (d) the cost of liability insurance or fidelity
bond coverage, (e) charges of the Trust's administrator, custodian, transfer
agent and other service providers, and (f) the fees and expenses involved in
registering and maintaining registration of the Trust's shares with the
Commission.
4. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Adviser and the
Adviser will accept as full compensation therefor the annual fee set forth on
SCHEDULE I hereto. The obligations of the Funds to pay the fee to the Adviser
will begin as of the respective dates of the initial public sale of shares in
the Funds, including any shares sold or exchanged in connection with a merger,
consolidation or reorganization involving one or more of the Funds. Such fee
shall be paid monthly based upon each respective Fund's average daily net assets
calculated in the manner provided in the Prospectus and Statement of Additional
Information then in effect.
The fee shall be accrued daily by each Fund and paid to the
Adviser within five (5) business days after the end of each calendar month. If
this Agreement is terminated before the end of any month, the fee to the Adviser
shall be prorated for the portion of any month in which this Agreement is in
effect and shall be payable within ten (10) days after the date of termination.
The Adviser may voluntarily waive fees or reimburse expenses
at any time. Any amounts waived or reimbursed by the Adviser are subject to
reimbursement by the relevant Fund within the following three years, to the
extent such reimbursement by the Fund would not cause the Fund to exceed any
current expense limitation.
5. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the management of the Trust,
except for (a) willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder, and (b) to the extent specified in section 36(b) of the
1940 Act concerning loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation.
6. DURATION AND TERMINATION. This Agreement shall not become effective
unless and until it is approved by the Board, including a majority of trustees
who are not parties to this Agreement or interested persons of any such party,
and by the vote of a majority of the outstanding voting shares of each Fund of
the Trust. As to each Fund of the Trust, the Agreement shall continue in effect
for two years and shall thereafter continue in effect from year to year so long
as such continuance is specifically approved for each Fund at least annually by
(a) the Board, or by the vote of a majority of the outstanding votes
attributable to the shares of the applicable Fund; and (b) a majority of those
trustees who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time as to any Fund,
without the payment of any penalty, by the Board, or by vote of a majority of
the outstanding votes attributable to the shares of the applicable Fund, or by
the Adviser, on sixty days' written notice to the other party. If this Agreement
is terminated only with respect to one or more, but less than all, of the Funds,
the Agreement shall remain in effect with respect to the remaining Funds. This
Agreement will automatically terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered
or mailed to the other party at the principal office of such party.
7. BOOKS AND RECORDS. The Adviser hereby undertakes and agrees to
maintain, in the form and for the period required by the rules adopted under the
1940 Act, all records relating to the Trust's investments that are required to
be maintained by the Trust pursuant to the requirements of Rule 31a-1 and Rule
2a-7 of the 1940 Act. The foregoing notwithstanding, the Adviser may appoint a
qualified third party, such as the custodian of the Trust, to maintain the books
and records of the Trust on its behalf; provided, however, that such appointment
shall not relieve the Adviser of its obligations with respect to the books and
records of the Trust hereunder.
The Adviser agrees that all books and records which it may
maintain for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such books, records or information upon the
Trust's request. All such books and records shall be made available, within five
business days of a written request, to the Trust's accountants or auditors
during regular business hours at the Adviser's offices. The Trust or its
authorized representative shall have the right to copy any records in the
possession of the Adviser that pertain to the Trust. Such books, records,
information or reports shall be made available to properly authorized government
representatives consistent with state and federal law and/or regulations. In the
event of the termination of this Agreement, all such books, records or other
information shall be returned to the Trust free from any claim or assertion of
rights by the Adviser.
The Adviser further agrees that it will not disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if the Trust has authorized such disclosure, or if such disclosure is
required by federal or state regulatory authorities.
8. NAME. The parties agree that the Adviser has a proprietary
interest in the name "iMillenium" and the Trust hereby agrees to promptly take
such action as may be necessary to delete from its name and/or the name of any
Fund any reference to such name promptly after receipt from the Adviser of a
written request therefor.
9. ADVISER'S REPRESENTATIONS. The Adviser hereby represents
and warrants that it is willing, and possesses all requisite legal authority, to
provide the services contemplated by this Agreement without violation of
applicable laws and regulations.
10. AMENDMENTS OF THIS AGREEMENT. This Agreement may be
amended as to a Fund by the parties only if such amendment specifically is
approved by (a) the vote of a majority of the outstanding shares of the Fund, if
and to the extent required by applicable law, and (b) a majority of those
trustees who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
11. DEFINITIONS OF CERTAIN TERMS. The terms "assignment,"
"affiliated person," and "interested person," when used in this Agreement, shall
have the respective meanings specified in the 1940 Act. The term "majority of
the outstanding votes" attributable to the shares of a Fund means the lesser of
(a) 67% or more of the votes attributable to the shares of a Fund present at a
meeting if the holders of more than 50% of such votes are present or represented
by proxy, or (b) more than 50% of the votes attributable to shares of the Fund.
12. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Texas, without giving effect to
conflicts of law provisions thereof, and applicable provisions of the 1940 Act,
the Advisers Act, and the Securities Exchange Act of 1934.
13. SEVERABILITY. 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.
14 LIMITATION OF LIABILITY. It is expressly acknowledged and
agreed that the obligations of the Trust shall not be binding upon any of the
shareholders, trustees, officers, employees or agents of the Trust, personally,
but shall bind only the trust property of the Trust, as provided in its Trust
Instrument. The execution and delivery of this Agreement has been authorized by
the Board and such authorization shall not be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust as provided in its Trust
Instrument.
15. 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.
IN WITNESS WHEREOF, the parties hereto executed and delivered
this Agreement as of the date first above written.
iMILLENIUM CAPITAL TRUST iMILLENIUM CAPITAL MANAGEMENT, INC.
By: By:
-------------------- -------------------------
Name: Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: President Title: Chairman and Chief Executive
Officer
SCHEDULE A
NAME OF FUNDS
1. iMillenium Fund
SCHEDULE I
FEES
NAME OF FUND ANNUAL FEE
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iMillenium Fund 1.50%
