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INVESTMENT ADVISORY AGREEMENT
by and among
EVEREST SERIES FUNDS TRUST
and
EVEREST FUNDS MANAGEMENT, LLC
Dated as of __________, 2000
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INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (this "Agreement"), made this ____
day of ____________ __, 2000, by and between EVEREST SERIES FUNDS TRUST, a
Delaware business trust (the "Trust"), and EVEREST FUNDS MANAGEMENT, LLC, a
Delaware limited liability company (the "Advisor").
WITNESSETH:
WHEREAS, the Trust is an open-end investment management company,
registered under the Investment Company Act of 1940 (the "1940 Act") and is
authorized to create separate series, each with its separate investment
portfolio;
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940 and was created to provide, among other things,
investment advisory services to the Trust; and
WHEREAS, the Trust desires to retain the Advisor to provide advisory
services to each of the series of the Trust listed on Exhibit A attached hereto,
as may be amended from time to time (collectively, the "Series");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES. The Trust hereby engages the
Advisor, and the Advisor hereby agrees to act, as investment advisor for, and to
manage the affairs, business, and the investment of the assets of, each Series
listed on Exhibit A. In the event that the Advisor designates one or more series
other than the Series with respect to which the Trust wishes to retain the
Advisor to render investment advisory services hereunder, it shall notify the
Advisor in writing. If the Advisor is willing to render such services, it shall
notify the Trust in writing, whereupon such series shall become a Series
hereunder and shall be subject to this agreement. Within a reasonable time after
the inclusion of an additional series under this Agreement, Exhibit A shall be
amended to include the additional series.
(a) The investment of the assets of each Series shall at all times be
subject to the applicable provisions of the Declaration of Trust of the
Trust, the Bylaws of the Trust (the "Bylaws"), the Prospectus and the
Statement of Additional Information of the applicable Series, as from
time to time in effect (collectively, the Statement of Additional
Information and the Prospectus are referred to as the "Prospectus"),
and shall conform to the investment objective and policies of the
Series as set forth in the Prospectus and as interpreted from time to
time by the Board of Trustees of the Trust (the "Board of Trustees").
(b) Subject to the supervision of the Board of Trustees of the Trust, the
Advisor shall be responsible for an investment program in respect of,
and make investment decisions for, all assets of the Series and place
all orders for the purchase and sale of securities, all on behalf of
the Series and shall have the sole and exclusive responsibility for
furnishing a continuous investment program for the Series and for
determining, from time to time, the investments or securities to be
purchased, retained or sold by the Trust, the portion of the assets to
be invested or held uninvested as cash and for the general management
of the Series portfolio.
(c) The Advisor shall place or shall cause to be placed orders pursuant
to its investment determinations for the Series either directly
with the issuer or with any broker or dealer as permitted in
accordance with guidelines established by the Board of Trustees of
the Trust. In placing orders with brokers and dealers, the Advisor
will attempt to obtain the best combination of prompt execution of
orders in an effective manner and at the most favorable price.
Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the Advisor
may, in its discretion, purchase and sell or cause to be purchased
and sold portfolio securities to and from brokers and dealers who
provide the Advisor with research advice and other services. In no
instance will portfolio securities be purchased from or sold to the
Advisor or any affiliated person of either the Trust or the Advisor,
except as may be permitted under the 1940 Act.
(d) The Advisor shall report to the Board of Trustees regularly at such
times and in such detail as the Board of Trustees may from time to time
determine to be appropriate, in order to permit the Board of Trustees
to determine the adherence of the Advisor to the investment policies of
the Series.
(e) The Advisor shall obtain and provide investment research and supervise
the investments of each Series and conduct a continuous program of
investment, evaluation, and if appropriate, sale and reinvestment of
the assets of such Series. The Advisor shall furnish to the Trust such
statistical information, with respect to the investments which the
Series may hold or contemplate purchasing, as the Trust may reasonably
request. The Trust wishes to be informed of important developments
materially affecting its portfolio and shall expect the Advisor, on its
own initiative, to furnish to the Trust from time to time such
information as it may believe appropriate for this purpose.
(f) In addition, the Advisor shall supply office facilities, clerical
staff, and stationery and office supplies; prepare reports to the
Trust's shareholders, tax returns, reports to and filings with the
Securities and Exchange Commission ("SEC") and state blue sky
authorities; and generally assist in all aspects of the Trust's
operations.
2. USE OF SUB-ADVISORS. In providing the services and assuming the obligations
set forth herein, in connection with any Series, the Advisor may at its expense
employ one or more sub-advisors, and may enter into such service agreements as
the Advisor deems appropriate in connection with the performance of its duties
and obligations hereunder. Reference herein to the duties and responsibilities
of the Advisor shall include any sub-advisor employed by the Advisor to the
extent that the Advisor shall delegate such duties and responsibilities to any
such sub-advisor. Any agreement between the Advisor and a sub-advisor shall be
subject to the approval of the Trust, its Board of Trustees, and the owners of
interests issued by any portfolio affected thereby, as required by the 1940 Act,
and any such sub-advisor shall at all times be subject to the direction of the
Board of Trustees of the Trust or any officer of the Trust acting pursuant to
the authority of the Board of Trustees. The Advisor shall perform ongoing due
diligence oversight of any such sub-advisor in order to assure continuing
quality of performance by said sub-advisor.
3. ALLOCATION OF EXPENSES. All costs and expenses (other than those specifically
referred to herein as being borne by the Advisor) incurred in the operation of
the Series shall be borne by the Trust. These expenses include, but are not
limited to, all expenses incurred in the operation of the Series and any public
offering of its shares, including, among others, interest, taxes, brokerage fees
and commissions, fees, if any, of the trustees who are not employees of the
Advisor, or any of their affiliates, expenses of trustees' and shareholders'
meetings, including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage, expenses of redemption of
Series shares, expenses of issue and sale of Series shares, expenses of printing
and mailing stock certificates representing shares of the Series, association
membership dues, advertising promotional expenses in connection with the
distribution of the Series shares, including paying for prospectuses for new
shareholders, charges of custodian, transfer agent, dividend disbursing agent,
accounting services agent, investor servicing agent, and bookkeeping, auditing,
and legal expenses. The Trust will also pay the fees and bear the expense of
registering and maintaining the registration of the Trust and its shares with
the SEC and registering or qualifying its shares under state or other securities
laws and the expense of preparing and mailing prospectuses and reports to
shareholders.
4. LIMIT ON EXPENSES. In the event that the operating expenses of any Series
(including the investment advisory and management fee but excluding taxes,
interest, brokerage and extraordinary expenses, if any) exceed 0.50% of the
average daily net assets of such Series on an annual basis, the Advisor shall
reduce the amount of the investment advisory and management fee or shall assume
the expenses of such Series in the amount of such excess. The Advisor shall
directly incur and pay all expenses relating to the Series, and the Series in
turn shall reimburse the Advisor to the extent of the lesser of (a) the actual
expenses or (b) the 0.50% expense limitation. This expense reimbursement shall
be paid monthly by the Series to the Advisor.
5. BOOKS AND RECORDS. The Advisor hereby acknowledges that all records necessary
in the operation of the Trust, including records pertaining to its shareholders
and investments, are the property of the Trust, and in the event that a transfer
of management or investment advisory services to someone other than the Advisor
should ever occur, the Advisor will promptly, and at its own cost, take all
steps necessary to segregate such records and deliver them to the Trust. The
Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
promulgated under the 1940 Act any such records required to be maintained by
Rule 31a-1 promulgated under the 1940 Act.
6. COMPENSATION FOR SERVICES. In payment for the investment advisory services to
be rendered by the Advisor hereunder, the Trust shall pay to the Advisor, from
the assets of the applicable Series, a monthly fee, which fee shall be paid to
the Advisor not later than the fifth business day following the end of each
month in which said services were rendered. Said monthly fee shall be based on
the average of the net asset values of all of the issued and outstanding shares
of the applicable Series as determined as of the close of each business day of
the month pursuant to the Declaration of Trust, Bylaws and Prospectus and shall
be equal to an annual rate of 0.50 of 1% of the average daily net assets of the
applicable Series. Net asset value shall be computed on such days, at such time
or times described in the then-current Prospectus of the Series in the manner
specified in the Trust's Declaration of Trust. The fee for the period from the
date of the commencement of the initial public sale of the shares of the
applicable Series to the end of the month during which such sale shall have been
commenced shall be pro-rated according to the proportion which such period bears
to the full monthly period, and upon any termination of this Agreement before
the end of any month, the fee for such part of a month shall be pro-rated
according to the proportion which such period bears to the full monthly period
and shall be payable upon the date of termination of this Agreement.
7. FREEDOM TO DEAL WITH THIRD PARTIES. The Board of Trustees of the Trust
understands that the Advisor shall be deemed to be an independent contractor and
shall have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent for the Trust. The Trust shall be free to retain,
at its own expense, other persons to provide it with any services whatsoever
including, but not limited to, statistical, factual or technical information or
advice. The Advisor shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
8. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Advisor shall exercise its
best judgment and shall act in good faith in rendering the services to be
provided to the Trust hereunder and the Trust agrees as an inducement to its
undertaking the same that the Advisor shall not be liable hereunder for any
error of judgment or mistake of law or for any loss suffered by the Trust or its
shareholders in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect it
against any liability to the Trust or to its shareholders to which the Advisor
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of its
reckless disregard of its obligations and duties hereunder. Nothing in this
paragraph shall be deemed a limitation or waiver of any obligation or duty that
may not by law be limited or waived.
9. EFFECTIVE DATE. The effective date of this Agreement shall be the date of
execution or, if later, the date the initial capital to the Trust is first
provided (the "Effective Date.")
10. DURATION AND TERMINATION. Wherever referred to in this Agreement, the vote
or approval of the holders of a majority of the outstanding voting securities of
the Trust shall mean (a) the vote of 67% or more of such securities if the
holders of more than 50% of such securities are present in person or by proxy or
(b) the vote of more than 50% of all outstanding securities, whichever is the
lesser.
(a) Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect for two years from the Effective 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 of the
Trust or by the vote of the holders of a majority of the outstanding
voting securities of the Trust; provided that in either event the
continuance also is approved by a majority of the Board of Trustees who
are not "interested persons" of the Advisor or the Trust, as defined by
the provisions of the 1940 Act.
(b) Notwithstanding the foregoing, this Agreement may be terminated at
any time without the payment of any penalty by the vote of the Board of
Trustees of the Trust or by the vote of the holders of a majority of
the outstanding voting securities of the Trust, or by the Advisor, upon
60 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment as such term is
defined by the 1940 Act.
11. AMENDMENT OF THIS AGREEMENT. No material amendment to this Agreement
shall be effective until approved by vote of the holders of a majority of the
outstanding voting securities of the Trust.
12. NOTICE. Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.
13. 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 is held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement will be binding upon and shall inure
to the benefit of the parties hereto.
14. APPLICABLE LAW. This Agreement shall be construed in accordance with the
laws of the State of Nebraska.
IN WITNESS WHEREOF, the Trust and the Advisor have caused this
Agreement to be executed as of this _____ day of _______, 2000.
EVEREST SERIES FUNDS TRUST
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Xxxxx Xxxxx, President
EVEREST FUNDS MANAGEMENT, LLC
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Xxxxx Xxxxx, President, Treasurer and Secretary
