Exhibit 5(i)
INVESTMENT ADVISORY AGREEMENT
Between
CLS ADVISORONE FUNDS
THE XXXXXXX FUND
and
XXXXXX XXXXXX XXXXXX INVESTMENT FIRM, INC.
This Agreement is made the third day of March, 1997, by and between
THE XXXXXXX FUND (the "Fund") a separate investment series of CLS ADVISORONE
FUNDS, a business trust organized and existing under the laws of the State of
Massachusetts, operating as an open-end investment company (the "Trust") , and
XXXXXX XXXXXX XXXXXX INVESTMENT FIRM, INC., a corporation organized and
existing under the laws of the State of Nebraska (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended; and
WHEREAS, the Adviser is engaged principally in the business of
rendering investment supervisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Adviser to render investment
and supervisory services to the Fund in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth, the parties hereto agree as follows:
I
INVESTMENT RESPONSIBILITY
(1) In providing the services and assuming the obligations set forth
herein, the Adviser may, at its expense, employ one or more subadvisers.
References herein to the Adviser shall include any subadviser employed by the
Adviser. Any agreement between the Adviser and a subadviser shall be subject
to the renewal, termination and amendment provisions of section V hereof.
The Trust hereby retains the Adviser to supervise and assist in the
management of the assets for the Fund and to furnish the Fund with a
continuous program for the investment of the Fund's assets in accordance with
the Fund's currently effective registration statement, including:
a. Recommendations as to specific securities to be purchased
for or eliminated from the Fund, and
b. Recommendations as to the portion of the Fund's assets that
should be held uninvested.
(2) Notwithstanding the generality of the foregoing, the Adviser may
itself, and at its own expense, contract for such supplementary advisory and
research services as it deems necessary or desirable to fulfill its
obligations under paragraph (1) above, provided that any such contract shall
have been approved by the Fund and its shareholders to the extent, and in the
manner, required by the Investment Company Act of 1940, as amended.
(3) The Adviser shall furnish to the Trust the services of one or more
persons who shall be authorized by the Trust to place orders for the purchase
and sale of securities for the account of the Fund. Acting through a person so
authorized by the Trust, the Adviser shall place such orders for the Fund.
(4) Notwithstanding the generality of paragraph (3) above, and subject
to the provisions of paragraphs (5) and (6) below, the Adviser shall endeavor
to secure for the Fund the best possible price and execution of every purchase
and sale for the account of the Fund. In seeking such best price and execution
the Adviser shall use its own judgment as to the implementation of its own
investment recommendations, including the Adviser's judgment as to the time
when an order should be placed, the number of securities to be bought or sold
in any one trade that is a part of any particular recommendation, and the
market in which an order should be placed.
(5) The Adviser shall use its own judgment in determining the
broker-dealers who shall be employed to execute orders for the purchase or
sale of securities for the Fund, in order to:
a. Secure best price and execution on purchases and sales for
the Fund; and
b. Secure supplemental research and statistical data for use
in making its recommendations to the Fund.
(6) The Adviser shall use its discretion as to when, and in which
market, the Fund's transactions shall be executed, in order to secure for the
Fund the benefits of best price and execution, and supplemental research and
statistical data. The use of such discretion shall be subject to review by the
Trustees of the Trust at any time and form time to time. The Trust, acting by
its Trustees, may withdraw said discretion at any time, and may direct the
execution of portfolio transactions for the Fund in any lawful manner
different from that provided for herein. Until a decision is made to withdraw
or limit the discretion herein granted, the Adviser shall not be liable for
any loss suffered by the Fund through the exercise by the Adviser of that
discretion unless the Adviser shall be guilty of gross negligence or willful
misconduct.
II
ADMINISTRATIVE RESPONSIBILITY
During the continuance of this Agreement, Adviser shall provide the
Fund with a continuous program of general administration including:
a. Office space, equipment, supplies and utility services as
shall be required to conduct Fund business;
b. The provision and supervision of all persons performing the
executive, administrative, and clerical functions necessary for the conduct
of the Fund's business except as set forth in g., below;
c. The supervision of accounting, and of records and
record-keeping for the Fund;
d. The preparation and distribution of mandatory reports
to Fund shareholders and regulatory bodies;
e. The supervision of the daily net asset value of the Fund;
f. The preparation and distribution on behalf of the Fund of
notices of shareholder and Trustee meetings, agendas, proxies, and proxy
statements; and
g. Other facilities, services, and activities necessary for
the conduct of the Fund's business, except for services by the Fund's
Custodian, Registrar, Transfer Agent, Accounting Services Agent, Dividend
Disbursing Agent, Auditors, and Legal Counsel.
III
ALLOCATION OF EXPENSES
The Adviser shall pay the Fund's pro rata share of the cost and
expenses of the following services, facilities and activities: necessary
office space, equipment, supplies, utility services and all other ordinary
office expenses; the salaries and other compensation of the Trust's trustees,
officers and employees who are affiliated persons of the Adviser; and fees for
supplementary advisory and research services performed for the Adviser. The
Fund shall pay all other expenses incurred in the organization and operation
of the Fund and the continuous offering of interests in the Fund, including,
but not limited to, the following:
a. The Fund's pro rata share of the fees and expenses of
counsel in connection with the organization of the Fund.
b. The regular fees or special charges of any Custodian,
Transfer Agent, Registrar, Accounting Services Agent or Dividend Disbursing
Agent allocable to the Fund.
c. The Fund's pro rata share of the compensation or fees of
the Trust's auditors and legal counsel, and compensation and costs relating to
legal or administrative proceedings or to litigation.
d. Income, franchise, stock transfer and other taxes
attributable to the Fund.
e. Initial or renewal fees payable to governmental agencies in
connection with the filing of reports, notices, registration statements, and
other material required to be filed in connection with the Fund's business.
f. The Fund's pro rata share of any insurance or bond premiums.
g. The Fund's pro rata share of association dues or assessments.
h. Brokerage fees or commissions on all Fund transactions.
i. The Fund's pro rata share of interest on borrowed funds or
otherwise.
j. Any extraordinary expenses attributable directly to the Fund.
IV
COMPENSATION
The Fund shall pay the Adviser a fee, based on the value of the net
assets of the Fund determined in accordance with the Trust's Declaration of
Trust, and computed as follows:
(a) The annual advisory fee (the "Fee") shall be equal to the
sum of 1.00% of the Fund's average daily net assets.
(b) The amounts due the Adviser in payment of the Fee set
forth above. The Fee will be accrued daily and shall be paid to the Adviser in
pro rata monthly installments due and payable on the first business day of
each calendar month.
V
DURATION AND TERMINATION
(1) The term of this Agreement shall begin on the date first written
above and, unless sooner terminated as hereinafter provided, this Agreement
shall remain in effect for a period of two years. Thereafter this Agreement
shall continue in effect from year to year, subject to the termination
provisions and all other terms and conditions hereof; if: (a) such
continuation shall be specifically approved at least annually by vote of the
holders of a majority of the outstanding voting securities of the Fund or 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 parties to
this Agreement or interested persons of any such party; and (b) the Adviser
shall not have notified the Fund, in writing, at least 60 days prior to the
expiration of any term, that it does not desire such continuation. The Adviser
shall furnish to the Trust, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
(2) This Agreement may not be amended, transferred, sold or in any
manner hypothecated or pledged, without the affirmative vote of a majority of
the outstanding voting securities of the Fund, and this Agreement shall
automatically and immediately terminate in the event of its assignment.
(3) This Agreement may be terminated by either party hereto, without
the payment of any penalty, upon 60 days' notice in writing to the other
party, provided, that in the case of termination by the Fund such action shall
have been authorized by resolution of the Trustees of the Trust or by vote of
a majority of the outstanding voting securities of the Fund.
VI
MISCELLANEOUS
(1) The Adviser shall not deal with the Fund as broker or dealer but
the Adviser may enter orders for the purchase or sale of the Fund's securities
through a company or companies that are under common control with the Adviser,
provided such company acts as broker and charges a commission that does not
exceed the usual and customary broker's commission if the sale is effected
on a securities exchange, or, 1 per centum of the purchase or sale price of
such securities if the sale is otherwise effected. In connection with the
purchase or sale of portfolio securities for the account of the Fund,
neither the Adviser nor any officer or director of the Adviser shall act as
a principal.
(2) Except as expressly prohibited in this Agreement, nothing herein
shall in any way limit or restrict the Adviser, or any officers, shareholders
or employees of Adviser, from buying selling or trading in any security for
its or their own account. Neither the Adviser nor any Officer or Director
thereof shall take a short position in any interests of the Fund or otherwise
purchase such interests for any purpose other than that of investment.
However, the Adviser may act as underwriter or distributor provided it does so
pursuant to a written contract approved in the manner specified in the
Investment Company Act of 1940, as amended.
(3) The Adviser may act as investment adviser to, and provide
management services for, other investment companies, and may engage in
businesses that are unrelated to investment companies, without limitation,
provided the performance of such services and the transaction of such
businesses does not impair the Adviser's performance of this Agreement.
(4) The Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates (including, but not limited to, loss
sustained by reason of the adoption or implementation of any investment policy
or the purchase, sale or retention of any security), except for loss resulting
from willful misfeasance, bad faith or gross negligence of the Adviser in the
performance of its duties or from reckless disregard by the Adviser of its
obligations and duties under this Agreement.
(5) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended, shall be resolved
by reference to such term or provision of the Act and to interpretations
thereof, if any, by the United States courts or, in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission validly issued pursuant to said Act.
Specifically, the terms "vote by a majority of the outstanding voting
securities", "annually", "interested person", "assignment", and "affiliated
person", as used herein, shall have the meanings assigned to them by the
Investment Company Act of 1940, as amended. In addition, where the effect of a
requirement of the Investment Company Act of 1940, as amended, reflected in
any provision of this contract is relaxed by a rule, regulation or order of
the Securities and Exchange Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
(6) The Trust will provide the Adviser with all information concerning
the investment policies and restrictions of the Fund as the Adviser may from
time to time request or which the Trust deems necessary. In the event of any
change in the investment policies or restrictions of the Fund, the Trust will
promptly provide Adviser with all information concerning such change
including, but not limited to, copies of all documents filed by the Fund with
the Securities and Exchange Commission.
(7) The Trustees, officers, employees and agents of the Trust shall
not be personally bound by or liable hereunder, nor shall resort be had to
their private property for the satisfaction of any obligation or claim
hereunder.
(8) Except to the extent the provisions of this Agreement are governed
by federal law, they shall be governed by the law of Nebraska, without
reference to its choice of law rules.
(9) This Agreement represents the entire agreement between the parties
hereto.
(10) This Agreement may be executed in two or more counterparts, each of
which shall be considered an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the day
and year first above written.
CLS ADVISORONE FUNDS
THE XXXXXXX FUND
Attest:________________________ By:____________________________
XXXXXX XXXXXX XXXXXX INVESTMENT FIRM, INC. Secretary
Attest:________________________ By:____________________________
W. Xxxxxxx Xxxxxx, President Secretary
