MANAGEMENT CONTRACT
Exhibit
23D(1)
Management
Contract executed as of ______________________, 2006 between THE BLUE FUND
GROUP, a Massachusetts business trust (the “Trust”), on behalf of each of the
funds listed on Schedule A (each, a “Fund”), and BLUE INVESTMENT MANAGEMENT,
LLC, a Delaware limited liability company (the “Manager”).
W
I T N E
S S E T H :
That
in
consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES
TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject
always to the control of the Trustees of the Trust and to such policies as
the
Trustees may determine, the Manager will, at its expense, (i) manage each Fund
and will make investment decisions on behalf of each Fund in accordance with
such Fund’s investment objectives and restrictions and place all orders for the
purchase and sale of its portfolio securities and (ii) furnish office space
and
equipment, provide bookkeeping and clerical services (excluding determination
of
net asset value, shareholder accounting services and fund accounting services)
and pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Manager. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and each Fund’s stated investment objective,
policies and restrictions.
(b) In
placing orders for the portfolio transactions of a Fund, the Manager will seek
the best price and execution available, except to the extent it may be permitted
to pay higher brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the Fund the most
favorable price and execution available, the Manager shall consider all factors
it deems relevant, including, without limitation, the overall net economic
result to the Fund (involving price paid or received and any commissions and
other costs paid), the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block is involved,
availability of the broker to stand ready to execute possibly difficult
transactions in the future and the financial strength and stability of the
broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused
a
Fund to pay a broker or dealer that provides brokerage and research services
to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer
would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value
of
the brokerage and research services provided by such broker or dealer, viewed
in
terms of either that particular transaction or the Manager’s overall
responsibilities with respect to a Fund and to other clients of the Manager
as
to which the Manager exercises investment discretion.
(c)
The
Manager shall pay all organizational expenses of the Trust and shall not be
reimbursed for such expenses. The Manager may pay the operational expenses
of
the Trust, subject to reimbursement pursuant to paragraph 3 hereof. The Manager
shall be reimbursed for offering expenses of the Trust paid by the Manager
on
behalf of the Trust. The
Manager shall not be obligated under this Contract to pay any expenses of or
for
the Trust or of or for any Fund not expressly assumed by the Manager pursuant
to
this Section 1 other than as provided in Section 3.
2. OTHER
AGREEMENTS, ETC.
It
is
understood that any of the shareholders, Trustees, officers and employees of
the
Trust may be a partner, shareholder, director, officer or employee of, or be
otherwise interested in, the Manager, and in any person controlling, controlled
by or under common control with the Manager, and that the Manager and any person
controlling, controlled by or under common control with the Manager may have
an
interest in the Trust. It is also understood that the Manager and persons
controlling, controlled by or under common control with the Manager have and
may
have advisory, management service, distribution or other contracts with other
organizations and persons, and may have other interests and
businesses.
3. COMPENSATION
TO BE PAID BY THE FUND TO THE MANAGER.
Each
Fund
will pay a fee to the Manager as compensation for the Manager’s services
rendered, for the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1. The Blue Large Cap Fund shall pay a fee, computed and
paid monthly at the annual rate of 1.00% of such Fund’s average daily net asset
value. The Blue Small Cap Fund shall pay a fee, computed and paid monthly at
the
annual rate of 1.25% of such Fund’s average daily net asset value. Such average
daily net asset value of each Fund shall be determined by taking an average
of
all of the determinations of such net asset value during such month while this
Contract is in effect. Such fee shall be payable for each month within five
(5)
business days after the end of such month.
Subject
to the limitations contained herein and under applicable law, the Trust shall
reimburse the Manager for all operational expenses of the Trust paid by the
Manager but not expressly assumed by the Manager provided that such
reimbursement does not cause the Funds to exceed any expense limitations and
the
reimbursement is made within three years after the month in which expenses
were
paid by the Manager. The Funds must pay their current ordinary operating
expenses before the Manager is entitled to any reimbursement of expenses. In
the
event month in which that expenses of a Fund for any fiscal year should exceed
the expense limitation on investment company expenses imposed by any statute
or
regulatory authority of any jurisdiction in which shares of such Fund are
qualified for offer and sale, the compensation due the Manager for such fiscal
year shall be reduced by the amount of such excess by a reduction or refund
thereof. In the event that the expenses of a Fund exceed any expense limitation
which the Manager may, by written notice to the Trust, voluntarily declare
to be
effective with respect to such Fund, subject to such terms and conditions as
the
Manager may prescribe in such notice, the compensation due the Manager shall
be
reduced, and, if necessary, the Manager shall bear the Fund’s expenses to the
extent required by such expense limitation, subject to recoupment of such
expenses from the Trust as provided herein.
If
the
Manager shall serve for less than the whole of a month, the foregoing
compensation shall be prorated.
4. ASSIGNMENT
TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
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This
Contract shall automatically terminate, without the payment of any penalty,
in
the event of its assignment; and this Contract shall not be amended with respect
to any Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of such Fund, and by the vote,
cast
in person at a meeting called for the purpose of voting on such approval, of
a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager.
5. EFFECTIVE
PERIOD AND TERMINATION OF THIS CONTRACT.
This
Contract shall become effective upon effectiveness of the Trust’s registration
as a registered investment company, and shall remain in full force and effect
continuously thereafter (unless terminated automatically as set forth in Section
4) until terminated as follows:
(a) Either
party hereto may at any time terminate this Contract by not more than sixty
days’ written notice delivered or mailed by registered mail, postage prepaid, to
the other party, or
(b) if
(i)
the Trustees of the Trust or the shareholders by the affirmative vote of a
majority of the outstanding shares of each Fund, and (ii) a majority of the
Trustees of the Trust who are not interested persons of the Trust or of the
Manager, by vote cast in person at a meeting called for the purpose of voting
on
such approval, do not specifically approve at least annually the continuance
of
this Contract, then this Contract shall automatically terminate at the close
of
business on the second anniversary of its execution with respect to each Fund
as
to which a majority of the outstanding shares have not so approved, or upon
the
expiration of one year from the effective date of the last such continuance,
whichever is later; provided, however, that if the continuance of this Contract
is submitted to the shareholders of a Fund for their approval and such
shareholders fail to approve such continuance of this Contract as provided
herein, the Manager may continue to serve hereunder in a manner consistent
with
the Investment Company Act of 1940 and the rules and regulations
thereunder.
Action
by
the Trust under (a) above may be taken either (i) by vote of a majority of
its
Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of each Fund, with respect to such Fund.
Termination
of this Contract pursuant to this Section 5 shall be without the payment of
any
penalty.
6. CERTAIN
DEFINITIONS.
For
the
purposes of this Contract, the “affirmative vote of a majority of the
outstanding shares” of a Fund means the affirmative vote, at a duly called and
held meeting of shareholders, (a) of the holders of 67% or more of the shares
of
such Fund present (in person or by proxy) and entitled to vote at such meeting,
if the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting are present in person or by proxy, or (b) of the holders
of more than 50% of the outstanding shares of such Fund entitled to vote at
such
meeting, whichever is less.
For
the
purposes of this Contract, the terms “affiliated person,” “control,” “interested
person” and “assignment” shall have their respective meanings defined in the
Investment
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Company
Act of 1940 and the rules and regulations thereunder, subject, however, to
such
exemptions as may be granted by the Securities and Exchange Commission under
said Act; and the phrase “specifically approve at least annually” shall be
construed in a manner consistent with the Investment Company Act of 1940 and
the
rules and regulations thereunder.
7. NONLIABILITY
OF MANAGER.
In
the
absence of willful misfeasance, bad faith or gross negligence on the part of
the
Manager, or reckless disregard of its obligations and duties hereunder, the
Manager shall not be subject to any liability to the Trust, or to any
shareholder of the Trust, for any act or omission in the course of, or connected
with, rendering services hereunder.
8. NAMES
“BLUE INDEX,” “BLUE LARGE CAP INDEX” AND “BLUE SMALL CAP INDEX.”
The
Manager owns the names “Blue Index,” “Blue Large Cap Index” and “Blue Small Cap
Index” and such names may be used by the Trust only with the consent of the
Manager. The Manager consents to the use by the Trust of the names “Blue Index,”
“Blue Large Cap Index” and “Blue Small Cap Index”, in such forms as the Manager
shall in writing approve, but only on condition and so long as (i) this Contract
shall remain in full force and (ii) the Trust shall fully perform, fulfill
and
comply with all provisions of this Contract expressed herein to be performed,
fulfilled or complied with by it. None of the names shall be used by the Trust
at any time or in any place or for any purposes or under any conditions except
as in this section provided. The foregoing authorization by the Manager to
the
Trust to use said names is not exclusive of the right of the Manager itself
to
use, or to authorize others to use, the same; the Trust acknowledges and agrees
that as between the Manager and the Trust, the Manager has the exclusive right
so to use, or authorize others to use, said names and the Trust agrees to take
such action as may reasonably be requested by the Manager to give full effect
to
the provisions of this section (including, without limitation, consenting to
such use of said names). Such covenants on the part of the Trust shall be
binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
9. EXERCISE
OF VOTING RIGHTS.
Except
as
instructed otherwise by the Trustees of the Trust, the Manager shall at its
discretion exercise or procure the exercise of any voting right attaching to
investments of the Fund.
10. LIMITATION
OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A
copy of
the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust
as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of each Fund.
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IN
WITNESS WHEREOF, THE BLUE FUND GROUP and BLUE INVESTMENT MANAGEMENT, LLC have
each caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of the day and year first above
written.
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THE
BLUE FUND GROUP
By:______________________________________
Name:
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BLUE
INVESTMENT MANAGEMENT, LLC
By:______________________________________
Name:
Xxxxxx Xxxxxxx,
Title:
Chief Executive Officer
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Schedule
A
The
Blue
Large Cap Fund
The
Blue
Small Cap Fund
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