Investment Advisory Agreement
AGREEMENT made this ___ day of ______, 2006, by and between The Roxbury
Funds, a Delaware statutory trust (the "Fund"), and Roxbury Capital Management
LLC, a limited liability company organized under the laws of the State of
Delaware (the "Adviser").
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and offers for sale distinct series of shares of beneficial interest (each, a
"Portfolio" and collectively, the "Portfolios"), each corresponding to a
distinct portfolio; and
WHEREAS, the Fund desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser on behalf of one or
more Portfolios of the Fund, and to have that investment adviser provide or
perform for the Portfolios various research, statistical and investment
services; and
WHEREAS, the Adviser is willing to furnish such services to the Fund
with respect to each of the Portfolios listed on Schedule A to this Agreement on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties as follows:
1. Employment of the Adviser. The Fund hereby employs the Adviser to
invest and reinvest the assets of the Portfolios in the manner set forth in
Section 2 of this Agreement subject to the direction of the Trustees and the
officers of the Fund, for the period, in the manner, and on the terms set forth
hereinafter. The Adviser hereby accepts such employment and agrees during such
period to render the services and to assume the obligations herein set forth.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized (whether
herein or otherwise), have no authority to act for or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
2. Obligations of, and Services to be Provided by, the Adviser. The
Adviser undertakes to provide the services hereinafter set forth and to assume
the following obligations:
A. Investment Advisory Services.
(i) The Adviser shall direct the investments of each Portfolio,
subject to and in accordance with the Portfolio's investment objective, policies
and limitations as provided in its prospectus(es) and statement(s) of additional
information (collectively, the "Prospectus") and other governing instruments,
as amended from time to time, and any other directions and policies which the
Trustees may issue to the Adviser from time to time.
(ii) The Adviser is authorized, in its discretion and without
prior consultation with the Fund, to purchase and sell for each Portfolio,
securities and other investments consistent with the Portfolio's objectives and
policies.
B. Corporate Management Services.
(i) The Adviser shall furnish for the use of the Fund office
space and all office facilities, equipment and personnel necessary for servicing
the investments of the Fund.
(ii) The Adviser shall pay the salaries of all personnel of the
Fund and the Adviser performing services relating to research, statistical and
investment activities on behalf of the Fund.
C. Provision of Information Necessary for Preparation of
Registration Statement, Amendments and Other Materials. The Adviser will make
available and provide such information as the Fund and/or its administrator may
reasonably request for use in the preparation of its registration statement,
reports and other documents required by any applicable federal, foreign or state
statutes or regulations.
D. Code of Ethics. The Adviser has adopted and will maintain a
written code or codes of ethics complying with the requirements of Rule 17j-1
under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of 1940, as
amended, and will provide the Fund and its administrator, on the date of this
Agreement, a copy of the code or codes of ethics and evidence of its or their
adoption. Within forty-five (45) days of the end of the last calendar quarter of
each year while this Agreement is in effect, an executive officer of the Adviser
shall certify to the Trustees that the Adviser has complied with the
requirements of Rule 17j-1 and Rule 204A-1 during the previous year and that
there has been no violation of the Adviser's code or codes of ethics or, if
such a violation has occurred, that appropriate action was taken in response
to such violation. Upon the written request of the Fund or its administrator,
the Adviser shall permit the Fund or its administrator to examine the reports
required to be made to the Adviser by Rule 17j.
E. Disqualification. The Adviser shall immediately notify the
Trustees of the occurrence of any event which would disqualify the Adviser from
serving as an investment adviser of an investment company pursuant to Section 9
of the 1940 Act or any other applicable statute or regulation.
F. Other Obligations and Services. The Adviser shall make its
officers and employees available to the Trustees and officers of the Fund for
consultation and discussion regarding the management of each Portfolio and its
investment activities.
3. Execution and Allocation of Portfolio Brokerage.
A. The Adviser, subject to the control and direction of the
Trustees, shall have authority and discretion to select brokers and dealers to
execute portfolio transactions for each Portfolio, and for the selection of the
markets on or in which the transactions will be executed.
B. In acting pursuant to Section 3A, the Adviser will place
orders through such brokers or dealers in conformity with the portfolio
transaction policies set forth in the Fund's registration statement.
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C. It is understood that neither the Fund nor the Adviser will
adopt a formula for allocation of a Portfolio's brokerage.
D. It is understood that the Adviser may, to the extent
permitted by applicable laws and regulations, aggregate securities to be sold or
purchased for any Portfolio and for other clients of the Adviser in order to
obtain the most favorable price and efficient execution. In that event,
allocation of the securities purchased or sold, as well as 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 Fund and
to its other clients.
E. It is understood that the Adviser may, to the extent
authorized by Section 28(e) of the Securities Exchange Act of 1934, as amended,
use brokers who provide a Portfolio with research, analysis, advice and similar
services to execute portfolio transactions on behalf of the Portfolio, and the
Adviser may pay to those brokers in return for brokerage and research services
a higher commission than may be charged by other brokers, subject to the Adviser
determining in good faith that such commission is reasonable in terms either
of the particular transaction or of the overall responsibility of the Adviser
to the Portfolio and its other clients and that the total commissions paid by
such Portfolio will be reasonable in relation to the benefits to the Portfolio
over the long term.
F. It is understood that the Adviser may use brokers who (i) are
affiliated with the Adviser provided that no such broker will be utilized in any
transaction in which such broker acts as principal; and (ii) the commissions,
fees or other remuneration received by such brokers is reasonable and fair
compared to the commissions fees or other remuneration paid to other brokers in
connection with comparable transactions involving similar securities being
purchased or sold during a comparable period of time.
G. The Adviser shall provide such reports as the Trustees may
reasonably request with respect to each Portfolio's total brokerage and
portfolio transaction activities and the manner in which that business was
allocated.
4. Delegation of Adviser's Obligations and Services. With respect to
any or all Portfolios, the Adviser may enter into one or more contracts (each, a
"Sub-Advisory Agreement") with a sub-adviser in which the Adviser delegates to
such sub-adviser any or all of its obligations or services specified in
Section 2 of this Agreement, provided that each Sub-Advisory Agreement imposes
on the sub-adviser bound thereby all the duties and conditions the Adviser is
subject to under this Agreement, and further provided that each Sub-Advisory
Agreement meets all requirements of the 1940 Act and rules thereunder.
5. Expenses of the Fund. Except as may be agreed to otherwise by the
Fund and the Adviser from time to time, the Fund will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Fund shall include, without limitation:
A. fees payable for administrative services;
B. fees payable for accounting services;
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C. the cost of obtaining quotations for calculating the value of
the assets of each Portfolio;
D. interest and taxes;
E. brokerage commissions, dealer spreads and other costs in
connection with the purchase or sale of securities;
F. compensation and expenses of its Trustees other than those
who are "interested persons" of the Fund within the meaning of the 1940 Act;
G. legal and audit expenses;
H. fees and expenses related to the registration and
qualification of the Fund and its shares for distribution under state and
federal securities laws;
I. expenses of typesetting, printing and mailing reports,
notices and proxy material to shareholders of the Fund;
J. all other expenses incidental to holding meetings of the
Fund's shareholders, including proxy solicitations therefor;
K. premiums for fidelity bond and other insurance coverage;
L. the Fund's association membership dues;
M. expenses of typesetting for printing Prospectuses;
N. expenses of printing and distributing Prospectuses to
existing shareholders;
O. out-of-pocket expenses incurred in connection with the
provision of custodial and transfer agency services;
P. service fees payable by each Portfolio to the distributor for
providing personal services to the shareholders of each Portfolio and for
maintaining shareholder accounts for those shareholders;
Q. distribution fees; and
R. such non-recurring expenses as may arise, including costs
arising from threatened legal actions, suits and proceedings to which the Fund
is a party and the legal obligation which the Fund may have to indemnify its
Trustees and officers with respect thereto.
6. Compensation of the Adviser. For the services and facilities to be
furnished hereunder, the Adviser shall receive advisory fees calculated at the
annual rates listed along with each Portfolio's name in Schedule B attached
hereto. The aggregate of such advisory fees for all Portfolios shall be payable
monthly as soon as practicable after the last day of each month based on each
Portfolio's average daily net assets.
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7. Activities and Affiliates of the Adviser.
A. The services of the Adviser to the Fund are deemed not to be
exclusive, and the Adviser is free to render services to others and engage in
other activities; provided, however, that such other services and activities do
not, during the term of this Agreement, interfere, in a material manner, with
the Adviser's ability to meet all of its obligations with respect to rendering
services to the Fund hereunder.
B. The Fund acknowledges that the Adviser or one or more of its
"affiliated persons" may have investment responsibilities or render investment
advice to or perform other investment advisory services for other individuals or
entities and that the Adviser, its "affiliated persons" or any of its or their
directors, officers, agents or employees may buy, sell or trade in securities
for its or their respective accounts ("Affiliated Accounts"). Subject to any
other provisions of this Agreement to the contrary, the Fund agrees that the
Adviser or its "affiliated persons" may give advice or exercise investment
responsibility and take such other action with respect to Affiliated Accounts
which may differ from the advice given or the timing or nature of action with
respect to the Portfolios of the Fund, provided that the Adviser acts in good
faith. The Fund acknowledges that one or more of the Affiliated Accounts may
at any time hold, acquire, increase, decrease, dispose of or otherwise deal
with positions in investments in which one or more Portfolios may have an
interest. The Adviser shall have no obligation to recommend for any Portfolio
a position in any investment which an Affiliated Account may acquire, and the
Fund shall have no first refusal, co-investment or other rights in respect of
any such investment, either for its Portfolios or otherwise.
C. Subject to and in accordance with the Agreement and
Declaration of Trust and By-Laws of the Fund as currently in effect and the 1940
Act and the rules thereunder, it is understood that Trustees, officers and
agents of the Fund and shareholders of the Fund are or may be interested in the
Adviser or its "affiliated persons" as directors, officers, agents or
shareholders of the Adviser or its "affiliated persons"; that directors,
officers, agents and shareholders of the Adviser or its "affiliated persons" are
or may be interested in the Fund as trustees, officers, agents, shareholders or
otherwise; that the Adviser or its "affiliated persons" may be interested in
the Fund as shareholders or otherwise; and that the effect of any such
interests shall be governed by said Agreement and Declaration of Trust,
By-Laws and the 1940 Act and the rules thereunder.
8. Liabilities of the Adviser.
A. Except as provided below, 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 Fund or to any shareholder of the Fund or its
Portfolios 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 or the making of any investment for or
on behalf of the Fund.
B. No provision of this Agreement shall be construed to protect
any Trustee or officer of the Fund, or the Adviser, from liability in violation
of Sections 17(h), 17(i), 36(a) or 36(b) of the 1940 Act.
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9. Record Keeping and Reports.
A. The Adviser will maintain all books and records with respect
to the Fund's securities transactions required by the 1940 Act and rules
thereunder (other than those records being maintained by the Fund's
administrator, custodian or transfer agent) and preserve such records for the
periods prescribed therefore.
B. The Adviser shall regularly report to the Board of Trustees
on the investment program of the Fund and the issuers and securities generally
represented in the Fund's portfolio, and will furnish the Board of Trustees such
periodic and special reports as the Trustees may reasonably request. The Fund
shall furnish or otherwise make available to the Adviser such financial reports,
proxy statements, policies and procedures and other information relating to the
business and affairs of the Fund as the Adviser may reasonably require in
order to discharge its duties and obligations hereunder.
10. Effective Date; Term. This Agreement shall become effective on the
date first written above and shall remain in force for a period of two years
from such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of
Trustees, including the vote of a majority of the Trustees who are not
"interested persons" of the Fund, cast in person at a meeting called for the
purpose of voting on such approval, or by vote of a majority of the
outstanding voting securities. The aforesaid provision shall be construed in a
manner consistent with the 1940 Act and the rules and regulations thereunder.
11. Assignment. No "assignment" of this Agreement shall be made by the
Adviser, and this Agreement shall terminate automatically in event of such
assignment. The Adviser shall notify the Fund in writing in advance of any
proposed change of "control" to enable the Fund to take the steps necessary to
enter into a new advisory agreement.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Adviser and the Fund, which amendment is subject
to the approval of the Trustees of the Fund and, where required by the 1940 Act,
the shareholders of any affected Portfolio in the manner required by the 1940
Act and the rules thereunder.
13. Termination. This Agreement:
A. may at any time be terminated without payment of any penalty
by the Fund with respect to any Portfolio (by vote of the Board of Trustees of
the Fund or by "vote of a majority of the outstanding voting securities") on
sixty (60) days' written notice to the Adviser;
B. shall immediately terminate in the event of its "assignment";
and
C. may be terminated with respect to any Portfolio by the
Adviser on sixty (60) days' written notice to the Fund.
14. Definitions. As used in this Agreement, the terms "affiliated
person," "assignment," "control," "interested person" and "vote of a majority of
the outstanding voting
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securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to any applicable orders of exemption issued by
the Securities and Exchange Commission.
15. Notice. Any notice under this Agreement shall be given in writing
addressed and delivered or mailed postage prepaid to the other party to this
Agreement at its principal place of business.
16. 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.
17. Governing Law. To the extent that state law has not been preempted
by the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the state of
Delaware.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
on their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date first written
above.
THE ROXBURY FUNDS
By:
______________________________
Name:
Title:
ROXBURY CAPITAL MANAGEMENT LLC
By:
______________________________
Name: Xxxxx Xxx
Title: President
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Schedule A
to
Investment Advisory Agreement
Dated _________, 2006
Between The Roxbury Funds
and
Roxbury Capital Management LLC
Portfolios of The Roxbury Funds
Roxbury Micro-Cap Fund
Roxbury Mid-Cap Fund
Roxbury Small-Cap Growth Fund
Schedule B
to
Investment Advisory Agreement
Dated _______, 2006
Between
The Roxbury Funds
and
Roxbury Capital Management LLC
Investment Advisory Fee Schedule
Annual Fee as a Percentage
Portfolio Fund of Average Daily Net Assets ("Assets")
______________ ______________________________________
Roxbury Micro-Cap Fund 1.50% of Assets
Roxbury Mid-Cap Fund 0.75% of the Portfolio's first $1 billion of Assets;
0.70% of the Portfolio's next $1 billion of Assets;
and
0.65% of the Portfolio's Assets over $2 billion.
Roxbury Small-Cap Growth 1.00% of the Portfolio's first $1 billion of Assets;
Fund 0.95% of the Portfolio's next $1 billion of Assets;
and
0.90% of the Portfolio's Assets over $2 billion.
