KD MUTUAL FUNDS
AGREEMENT FOR INVESTMENT ADVISORY SERVICES
THIS AGREEMENT is made as of this __________, 2006, between KD Mutual
Funds (the "Trust") and KD Fund Advisors, LLC, a Delaware limited liability
company (the "Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of Delaware as
an unincorporated business trust operating and registered as an open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized by its Declaration of Trust and by-laws
to issue separate Portfolios of shares representing interests in separate
investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest ("Shares") in the Portfolios which are identified on Schedule A
attached hereto and incorporated herein, which Schedule A may be amended from
time to time by mutual agreement of the Trust and Adviser (the "Portfolios"),
and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management;
WHEREAS, the Trust desires to retain Adviser to furnish investment
advisory services to the Portfolios, and such other Portfolios as may be added
from time to time by mutual agreement of the parties, pursuant to the terms and
conditions of this Agreement, and Adviser is willing to so furnish such
services; and
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. Appointment
The Trust hereby appoints Adviser to act as investment adviser to the
Portfolios for the periods and pursuant to the terms and conditions as set
forth in this Agreement. Adviser accepts the appointment and agrees to
furnish the services herein set forth for the compensation herein
provided.
2. Delivery of Documents
The Trust has furnished Adviser with properly certified or authenticated
copies of each of the following:
a. The Trust's Declaration of Trust;
b. The Trust's By-Laws;
c. Resolutions of the Trust's Board of Trustees authorizing the
appointment of Adviser and approving this Agreement;
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d. The Trust's current Prospectus and Statement of Additional
Information (together called the "Prospectus"); and
e. All policies and procedures of the Trust which are relevant to this
Agreement.
The Trust will furnish Adviser from time to time with properly certified
or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with
the SEC and/or state authorities.
3. Management
Subject to the general supervision of the Trust's Board of Trustees (the
"Board"), Adviser will be responsible for providing a continuous
investment program for the Portfolios, including investment research and
management with respect to all securities, investments, cash and cash
equivalents held by the Portfolios.
Adviser may, with the prior written consent of the Board and the approval
of the appropriate Trust shareholders, as required, employ persons or
entities to serve as sub-advisers to one or more Portfolios. The Adviser
and/or such sub-advisers, if any, may, in their sole discretion, determine
from time to time what securities and other investments will be purchased,
retained or sold by the Portfolios. The investment activities of such
sub-advisers, if any, as such services relate to the Portfolios, will at
all times be subject to the general supervision and control of Adviser.
Adviser will provide, through its own efforts itself and/or through the
medium of its previously approved sub-adviser(s), the services under this
Agreement in accordance with each Portfolio's investment objectives,
policies and restrictions as such are set forth in the Prospectus from
time to time. Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations
of the SEC and will, in addition, conduct its activities under this
agreement in accordance with the regulations of any other Federal
and State agencies which may now or in the future have jurisdiction
over its activities under this Agreement;
(b) Will monitor the investment activities of any sub-adviser which it
employs to insure that such sub-adviser conducts its activities with
respect to the applicable Portfolio(s) in accordance with the
Prospectus and any and all federal and/or state laws and regulations
relating to the applicable Portfolio(s);
(c) Will place orders, or monitor the placement of orders by
sub-advisers, pursuant to good faith investment determinations for
the Portfolios either directly with the respective issuers or with
appropriate brokers and dealers. In placing orders with brokers or
dealers, the Advisor, or sub-adviser(s) under the supervision of
Adviser, will attempt to obtain the best net price and the most
favorable execution of its orders. Consistent with this obligation,
when Adviser, or Adviser's duly authorized sub-adviser(s), believes
two or more brokers or dealers are comparable in price and
execution, Adviser, or Adviser's duly authorized sub-adviser(s), may
prefer: (I) brokers and dealers who provide the Portfolio(s) with
research advice and other services, or who recommend or sell Trust
shares, and (II) brokers who are affiliated with the Trust, Adviser
or sub-adviser; provided, however, that in no instance will
portfolio securities be purchased from or sold to Adviser or any
sub-adviser in principal transactions;
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(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
4. Services not Exclusive
The services to be furnished by Adviser hereunder are not to be considered
exclusive, and Adviser shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby;
provided, however, that without the prior written consent of the Board,
Adviser will not serve as an investment advisor to any other investment
company having a similar investment objective to that of the Trust.
5. Books and Records
In compliance with applicable rules promulgated under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the benefit
of the Trust are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the Trust's request.
Adviser further agrees to preserve for the periods prescribed by
applicable rules promulgated under the 1940 Act the records required to be
maintained by it pursuant to such Rule that are not maintained by others
on behalf of the Trust.
6. Expenses
During the term of this Agreement, Adviser will pay all expenses incurred
by it in connection with its investment advisory services furnished to the
Trust other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for
the Portfolios.
7. Compensation
The Trust will pay Adviser, and Adviser will accept as full compensation
for its services rendered hereunder, the investment advisory fees for each
Portfolio as set forth on Schedule A attached hereto and incorporated
herein, which Schedule A may be amended from time to time by mutual
agreement of the Trust, Adviser and shareholders as applicable. All fees
payable to Adviser pursuant to this Agreement shall be computed at the end
of each month and payable within five (5) business days thereafter, and
shall be computed as an annual rate as a percentage of the average daily
net assets of the applicable Portfolio. All parties to this Agreement do
hereby expressly authorize and instruct the Trust's Administrator, Unified
Fund Services, Inc. or its successor, to provide, in accordance with the
fees set forth on Schedule A, a calculation each month of the gross
amounts due Adviser for each Portfolio and to remit such fee payments
hereunder promptly to Adviser.
8. Limitation of Liability
Adviser shall not be liable for any error of judgment, mistake of law or
for any other loss suffered by the Trust or any Portfolio 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 malfeasance, bad faith or gross
negligence on Adviser's part in the performance of its duties or from
reckless disregard by it of its obligations or duties under this
Agreement.
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9. Duration and Termination
This Agreement shall become effective as of the date first written above
and, unless sooner terminated as provided herein, shall continue in effect
until September 30, 2005. Thereafter, this Agreement shall be renewable
for successive periods of one year each, provided such continuance is
specifically approved annually:
(a) By the affirmative vote of a majority of those members of the Board
who are not parties to the Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in person
at a meeting called for the purpose of voting on such approval; and
(b) By affirmative vote of either a majority of the entire Board or a
majority (as that term is defined in the 0000 Xxx) of the
outstanding voting securities of the Trust.
Notwithstanding the foregoing, this Agreement may be terminated by the
Trust or by Adviser at any time upon sixty (60) days written notice,
without payment of any penalty; provided, however that termination by the
Trust must be authorized by majority vote of the Board or by vote of a
majority of the outstanding voting securities of the Trust. This Agreement
will automatically terminate in the event of its assignment (as that term
is defined in the 1940 Act).
10. Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by a written instrument signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought. No material amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act).
11. Miscellaneous
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. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of the 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.
12. Counterparts
This Agreement may be executed in counterparts by the parties hereto, each
of which shall constitute an original, and all of which, together, shall
constitute one Agreement.
13. Governing Law
This Agreement shall be construed in accordance with, and governed by, the
laws of the State of Illinois, without regard to such jurisdiction's
conflict-of-law statutes.
14. Notices
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by
first class mail, postage prepaid or by prepaid overnight delivery service
to the respective parties as follows:
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If to the Trust: If to the Adviser:
---------------- ------------------
KD Mutual Funds KD Fund Advisors, LLC
President President
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
Attest: KD Mutual Funds
By: _______________________ By:
---------------------------------
Name:
Title: Secretary Title: President
Attest: KD Fund Advisors, LLC.
By: ________________________ By:
--------------------------------
Name: ______________________
Title: ______________________ Title: President
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Schedule A
KD Mutual Funds
Portfolios of the Trust
As of __________, 2006
The Portfolios offered by the Trust, and the fees payable to KD Fund Advisors,
LLC for services rendered to each such Portfolio, are as follows:
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Name of Portfolio Annual Fee Rate, as
percentage of average
daily net assets
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New Europe Fund 1.25%
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