TRUST FOR PROFESSIONAL MANAGERS INVESTMENT ADVISORY AGREEMENT NEWGATE FUNDS
NEWGATE
FUNDS
THIS INVESTMENT ADVISORY
AGREEMENT is made as of the 4th day of November, 2008, by and between
Trust for Professional Managers, (hereinafter called the “Trust”), on behalf of
each series of the Trust as listed in Schedule A attached hereto (each a “Fund”
and together the “Funds”), and Newgate Capital Management, LLC (hereinafter
called the “Adviser”).
WITNESSETH:
WHEREAS, the Trust is an
open-end management investment company, registered as such under the Investment
Company Act of 1940, as amended (the “Investment Company Act”); and
WHEREAS, the Funds are a
series of the Trust having separate assets and liabilities; and
WHEREAS, the Adviser is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the “Advisers Act”) and is engaged in the business of supplying
investment advice as an independent contractor; and
WHEREAS, the Trust desires to
retain the Adviser to render advice and services to the Funds pursuant to the
terms and provisions of this Agreement, and the Adviser desires to furnish said
advice and services;
NOW, THEREFORE, in
consideration of the covenants and the mutual promises hereinafter set forth,
the parties to this Agreement, intending to be legally bound hereby, mutually
agree as follows:
1. APPOINTMENT OF ADVISER. The
Trust hereby employs the Adviser, and the Adviser hereby accepts such
employment, to render investment advice and related services with respect to the
assets of the Funds for the period and on the terms set forth in this Agreement,
subject to the supervision and direction of the Trust’s Board of
Trustees.
2.
DUTIES OF ADVISER.
(a) GENERAL DUTIES. The Adviser
shall act as investment adviser to the Funds and shall supervise investments of
the Funds on behalf of the Funds in accordance with the investment objectives,
policies and restrictions of the Funds as set forth in the Funds’ and Trust’s
governing documents, including, without limitation: the Trust’s Agreement and
Declaration of Trust and By-Laws; the Funds’ prospectus, statement of additional
information and undertakings; and such other limitations, policies and
procedures as the Trustees may impose from time to time in writing to the
Adviser. In providing such services, the Adviser shall at all times
adhere to the provisions and restrictions contained in the federal securities
laws, applicable state securities laws, the Internal Revenue Code, the Uniform
Commercial Code and other applicable law.
Without
limiting the generality of the foregoing, the Adviser shall: (i) furnish the
Funds with advice and recommendations with respect to the investment of the
Funds’ assets and the purchase and sale of portfolio securities for the Funds,
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e., placing the orders);
(ii) manage and oversee the investments of the Funds, subject to the ultimate
supervision and direction of the Trust’s Board of Trustees; (iii) vote proxies
for the Fund, file ownership reports under Section 13 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) for the Fund, and take other
actions on behalf of the Fund; (iv) maintain the books and records required to
be maintained by the Funds except to the extent arrangements have been made for
such books and records to be maintained by the administrator or another agent of
the Funds; (v) furnish reports, statements and other data on securities,
economic conditions and other matters related to the investment of the Funds’
assets that the Funds’ administrator or distributor or the officers of the Trust
may reasonably request; and (vi) render to the Trust’s Board of Trustees such
periodic and special reports with respect to the Funds’ investment activities as
the Board may reasonably request, including at least one in-person appearance
annually before the Board of Trustees.
(b) BROKERAGE. The Adviser
shall be responsible for decisions to buy and sell securities for the Funds, for
broker-dealer selection, and for negotiation of brokerage commission rates,
provided that the Adviser shall not direct orders to an affiliated person of the
Adviser without general prior authorization to use such affiliated broker or
dealer by the Trust’s Board of Trustees. The Adviser’s primary consideration in
effecting a securities transaction will be execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction, the
Adviser may take the following into consideration: the best net price available;
the reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Funds on
a continuing basis. The price to the Funds in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified by other aspects of the portfolio execution services
offered.
Subject
to such policies as the Board of Trustees of the Trust may determine and
consistent with Section 28(e) of the Exchange Act the Adviser shall not be
deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused the Funds to pay a
broker or dealer that provides (directly or indirectly) brokerage or research
services to the Adviser an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser 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 Adviser’s overall
responsibilities with respect to the Trust. Subject to the same policies and
legal provisions, the Adviser is further authorized to allocate the orders
placed by it on behalf of the Funds to such brokers or dealers who also provide
research or statistical material, or other services, to the Trust, the Adviser,
or any affiliate of either. Such allocation shall be in such amounts and
proportions as the Adviser shall determine, and the Adviser shall report on such
allocations regularly to the Trust, indicating the broker-dealers to whom such
allocations have been made and the basis therefor.
On
occasions when the Adviser deems the purchase or sale of a security to be in the
best interest of the Funds as well as of other clients, the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
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 Funds and to such other clients.
3.
REPRESENTATIONS OF THE ADVISER.
(a) The
Adviser shall use its best judgment and efforts in rendering the advice and
services to the Funds as contemplated by this Agreement.
(b) The
Adviser shall maintain all licenses and registrations necessary to perform its
duties hereunder in good order.
(c) The
Adviser shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act, and any other applicable state and/or
self-regulatory organization regulations.
4. INDEPENDENT CONTRACTOR. The
Adviser shall, for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized to do
so, have no authority to act for or represent the Trust in any way, or in any
way be deemed an agent for the Trust. It is expressly understood and agreed that
the services to be rendered by the Adviser to the Funds under the provisions of
this Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be impaired
thereby.
5. ADVISER’S PERSONNEL. The
Adviser shall, at its own expense, maintain such staff and employ or retain such
personnel and consult with such other persons as it shall from time to time
determine to be necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing, the staff and
personnel of the Adviser shall be deemed to include persons employed or retained
by the Adviser to furnish statistical information, research, and other factual
information, advice regarding economic factors and trends, information with
respect to technical and scientific developments, and such other information,
advice and assistance as the Adviser or the Trust’s Board of Trustees may desire
and reasonably request and any compliance staff and personnel required by the
Adviser.
6.
EXPENSES.
(a) With
respect to the operation of the Funds, the Adviser shall be responsible for (i)
the Funds’ organizational expenses, (ii) providing the personnel, office space
and equipment reasonably necessary for the operation of the Funds, (iii) the
expenses of printing and distributing extra copies of the Funds’ prospectus,
statement of additional information, and sales and advertising materials (but
not the legal, auditing or accounting fees attendant thereto) to prospective
investors (but not to existing shareholders) to the extent such expenses are not
covered by any applicable plan adopted pursuant to Rule 12b-1 under the
Investment Company Act, (iv) the costs of any special Board of Trustees meetings
or shareholder meetings convened for the primary benefit of the Adviser, and (v)
any costs of liquidating or reorganizing the Funds (unless such cost is
otherwise allocated by the Board of Trustees). If the Adviser has agreed,
whether voluntarily or pursuant to an agreement, to limit the operating expenses
of the Funds, the Adviser shall also be responsible on a monthly basis for any
operating expenses that exceed the agreed upon expense limit.
(b) The
Funds are responsible for and has assumed the obligation for payment of all of
its expenses, other than as stated in Subparagraph 6(a) above, including but not
limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses; all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Trust for the benefit of the Funds
including all fees and expenses of its custodian, shareholder services agent and
accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if any; a
pro rata portion of expenditures in connection with meetings of the Funds’
shareholders and the Trust’s Board of Trustees that are properly payable by the
Funds; salaries and expenses of officers of the Trust, including
without limitation the Trust’s Chief Compliance Officer, and fees and expenses
of members of the Trust’s Board of Trustees or members of any advisory board or
committee who are not members of, affiliated with or interested persons of the
Adviser; insurance premiums on property or personnel of the Funds which inure to
its benefit, including liability and fidelity bond insurance; the cost of
preparing and printing reports, proxy statements, prospectuses and statements of
additional information of the Funds or other communications for distribution to
existing shareholders; legal, auditing and accounting fees; all or any portion
of trade association dues or educational program expenses determined appropriate
by the Board of Trustees; fees and expenses (including legal fees) of
registering and maintaining registration of its shares for sale under federal
and applicable state and foreign securities laws; all expenses of maintaining
and servicing shareholder accounts, including all charges for transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other agents for
the benefit of the Funds, if any; and all other charges and costs of its
operation plus any extraordinary and non-recurring expenses, except as herein
otherwise prescribed.
(c) The
Adviser may voluntarily absorb certain Fund expenses or waive the Adviser’s own
advisory fee.
(d) To
the extent the Adviser incurs any costs by assuming expenses which are an
obligation of the Funds as set forth herein, the Funds shall promptly reimburse
the Adviser for such costs and expenses, except to the extent the Adviser has
otherwise agreed to bear such expenses. To the extent the services for which the
Funds are obligated to pay are performed by the Adviser, the Adviser shall be
entitled to recover from the Funds to the extent of the Adviser’s actual costs
for providing such services. In determining the Adviser’s actual costs, the
Adviser may take into account an allocated portion of the salaries and overhead
of personnel performing the services.
(e) The
Adviser may not pay fees in addition to any Funds distribution or servicing fees
to financial intermediaries, including, without limitation, banks,
broker-dealers, financial advisors, or pension administrators, for
sub-administration, sub-transfer agency or any other shareholder servicing or
distribution services associated with shareholders whose shares are held in
omnibus or other group accounts, except with the prior authorization of the
Trust’s Board of Trustees. Where such arrangements are authorized by
the Trust’s Board of Trustees, the Adviser shall report regularly to the Trust
on the amounts paid and the relevant financial institutions.
7.
INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) The
Funds shall pay to the Adviser, and the Adviser agrees to accept, as full
compensation for all investment management and advisory services furnished or
provided to the Funds pursuant to this Agreement, an annual management fee at
the rate set forth in Schedule A to this Agreement.
(b) The
management fee shall be accrued daily by the Funds and paid to the Adviser on
the first business day of the succeeding month.
(c) The
initial fee under this Agreement shall be payable on the first business day of
the first month following the effective date of this Agreement and shall be
prorated as set forth below. If this Agreement is terminated prior to the end of
any month, the fee to the Adviser shall be prorated for the portion of any month
in which this Agreement is in effect which is not a complete month according to
the proportion which the number of calendar days in the month during which the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of
termination.
(d) The
fee payable to the Adviser under this Agreement will be reduced to the extent of
any receivable owed by the Adviser to the Funds and as required under any
expense limitation applicable to the Funds.
(e) The
Adviser voluntarily may reduce any portion of the compensation or reimbursement
of expenses due to it pursuant to this Agreement and may agree to make payments
to limit the expenses which are the responsibility of the Funds under this
Agreement. Any such reduction or payment shall be applicable only to such
specific reduction or payment and shall not constitute an agreement to reduce
any future compensation or reimbursement due to the Adviser hereunder or to
continue future payments. Any such reduction will be agreed to prior to accrual
of the related expense or fee and will be estimated daily and reconciled and
paid on a monthly basis.
(f) Any
such reductions made by the Adviser in its fees or payment of expenses which are
the Funds’ obligation are subject to reimbursement by the Funds to the Adviser,
if so requested by the Adviser, in subsequent fiscal years if the aggregate
amount actually paid by the Funds toward the operating expenses for such fiscal
year (taking into account the reimbursement) does not exceed the applicable
limitation on Funds expenses. Under the expense limitation agreement, the
Adviser may recoup reimbursements made in any fiscal year of the Funds over the
following three fiscal years. Any such reimbursement is also
contingent upon Board of Trustees review and approval at the time the
reimbursement is made. Such reimbursement may not be paid prior to the Funds’
payment of current ordinary operating expenses.
(g) The
Adviser may agree not to require payment of any portion of the compensation or
reimbursement of expenses otherwise due to it pursuant to this Agreement. Any
such agreement shall be applicable only with respect to the specific items
covered thereby and shall not constitute an agreement not to require payment of
any future compensation or reimbursement due to the Adviser
hereunder.
8. NO SHORTING; NO BORROWING.
The Adviser agrees that neither it nor any of its officers or employees shall
take any short position in the shares of the Funds. This prohibition shall not
prevent the purchase of such shares by any of the officers or employees of the
Adviser or any trust, pension, profit-sharing or other benefit plan for such
persons or affiliates thereof, at a price not less than the net asset value
thereof at the time of purchase, as allowed pursuant to rules promulgated under
the Investment Company Act. The Adviser agrees that neither it nor any of its
officers or employees shall borrow from the Funds or pledge or use the Funds’
assets in connection with any borrowing not directly for the Funds’ benefit. For
this purpose, failure to pay any amount due and payable to the Funds for a
period of more than thirty (30) days’ shall constitute a borrowing.
9. CONFLICTS WITH TRUST’S GOVERNING
DOCUMENTS AND APPLICABLE LAWS. Nothing herein contained shall be deemed
to require the Trust or the Funds to take any action contrary to the Trust’s
Agreement and Declaration of Trust, By-Laws, or any applicable statute or
regulation, or to relieve or deprive the Board of Trustees of the Trust of its
responsibility for and control of the conduct of the affairs of the Trust and
Funds. In this connection, the Adviser acknowledges that the Trustees retain
ultimate plenary authority over the Funds and may take any and all actions
necessary and reasonable to protect the interests of shareholders.
10. REPORTS AND ACCESS. The
Adviser agrees to supply such information to the Funds’ administrator and to
permit such compliance inspections by the Funds’ administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations and
respond to the reasonable requests of the Trustees.
11.
ADVISER’S LIABILITIES AND INDEMNIFICATION.
(a) The
Adviser shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Funds’ offering
materials (including the prospectus, the statement of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Trust or another third party for inclusion
therein.
(b) The
Adviser shall be liable to the Funds for any loss (including brokerage charges)
incurred by the Funds as a result of any improper investment made by the
Adviser.
(c) In
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the obligations or duties hereunder on the part of the Adviser, the Adviser
shall not be subject to liability to the Trust or the Funds or to any
shareholder of the Funds 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 by the
Funds. Notwithstanding the foregoing, federal securities laws and
certain state laws impose liabilities under certain circumstances on persons who
have acted in good faith, and therefore nothing herein shall in any way
constitute a waiver or limitation of any rights which the Trust, the Funds or
any shareholder of the Funds may have under any federal securities law or state
law.
(d) Each
party to this Agreement shall indemnify and hold harmless the other party and
the shareholders, directors, officers and employees of the other party (any such
person, an “Indemnified Party”) against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party’s
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e) No
provision of this Agreement shall be construed to protect any Trustee or officer
of the Trust, or officer of the Adviser, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
12. NON-EXCLUSIVITY; TRADING FOR
ADVISER’S OWN ACCOUNT. The Trust’s employment of the Adviser is not an
exclusive arrangement. The Trust may from time to time employ other individuals
or entities to furnish it with the services provided for herein. Likewise, the
Adviser may act as investment adviser for any other person, and shall not in any
way be limited or restricted from buying, selling or trading any securities for
its or their own accounts or the accounts of others for whom it or they may be
acting, provided, however, that the Adviser expressly represents that it will
undertake no activities which will adversely affect the performance of its
obligations to the Funds under this Agreement, and provided further that the
Adviser will adhere to a code of ethics governing employee trading and trading
for proprietary accounts that conforms to the requirements of the Investment
Company Act and the Advisers Act and has been approved by the Trust’s Board of
Trustees.
13.
TERM.
(a) This
Agreement shall become effective with respect to the Funds at the time the Funds
commences operations pursuant to an effective amendment to the Trust’s
Registration Statement under the Securities Act of 1933, as amended, and shall
continue for an initial term ending August 31, 2010, unless sooner terminated as
hereinafter provided. This Agreement shall continue in effect thereafter for
additional periods not exceeding one year so long as such continuation is
approved for the Funds at least annually by (i) the Board of Trustees of the
Trust or by the vote of a majority of the outstanding voting securities of such
Funds and (ii) the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement nor interested persons thereof, cast in person at a
meeting called for the purpose of voting on such approval. The terms “majority
of the outstanding voting securities” and “interested persons” shall have the
meanings as set forth in the Investment Company Act.
(b) The
Funds may use the names “Newgate” or any name derived from or using the name
“Newgate Emerging Markets Fund” and “Newgate Global Resources Fund” only for so
long as this Agreement or any extension, renewal or amendment hereof remains in
effect. Within sixty (60) days from such time as this Agreement shall no longer
be in effect, the Funds shall cease to use such a name or any other name
connected with the Adviser. The Adviser can still use the name “Newgate”,
“Newgate Emerging Markets Fund”, “Newgate Global Resources Fund” or any other
similar name arising from any existing or future copyright, service ▇▇▇▇,
trademark, patent or any other property right.
14.
TERMINATION; NO ASSIGNMENT.
(a) This
Agreement may be terminated by the Trust on behalf of the Funds at any time
without payment of any penalty, by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Funds, upon sixty (60)
days’ written notice to the Adviser, and by the Adviser upon sixty (60) days
written notice to such Funds. In the event of a termination, the Adviser shall
cooperate in the orderly transfer of the Funds’ affairs and, at the request of
the Board of Trustees, transfer any and all books and records of such Funds
maintained by the Adviser on behalf of the Funds.
(b) This
Agreement shall terminate automatically in the event of any transfer or
assignment thereof, as defined in the Investment Company Act.
15. NONPUBLIC PERSONAL
INFORMATION.
Notwithstanding any provision herein to the contrary, the Adviser agrees
on behalf of itself and its directors, trustees, shareholders, officers, and
employees (1) to treat confidentially and as proprietary information of the
Trust (a) all records and other information relative to the Funds’ prior,
present, or potential shareholders (and clients of said shareholders) and (b)
any Nonpublic Personal Information, as defined under Section 248.3(t) of
Regulation S-P (“Regulation S-P”), promulgated under the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
(the “G-L-B Act”), and (2) except after prior notification to and approval in
writing by the Trust, not to use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder, or as
otherwise permitted by Regulation S-P or the G-L-B Act, and if in compliance
therewith, the privacy policies adopted by the Trust and communicated in writing
to the Adviser. Such written approval shall not be unreasonably
withheld by the Trust and may not be withheld where the Adviser may be exposed
to civil or criminal contempt or other proceedings for failure to comply after
being requested to divulge such information by duly constituted
authorities.
16. ANTI-MONEY LAUNDERING COMPLIANCE.
The Adviser acknowledges that, in compliance with the Bank Secrecy Act,
as amended, the USA PATRIOT Act, and any implementing regulations thereunder
(together, “AML Laws”), the Trust has adopted an Anti-Money Laundering Policy.
The Adviser agrees to comply with the Trust’s Anti-Money Laundering Policy and
the AML Laws, as the same may apply to the Adviser, now and in the future. The
Adviser further agrees to provide to the Trust and/or the Administrator such
reports, certifications and contractual assurances as may be reasonably
requested by the Trust. The Trust may disclose information regarding the Adviser
to governmental and/or regulatory or self-regulatory authorities to the extent
required by applicable law or regulation and may file reports with such
authorities as may be required by applicable law or regulation.
17. CERTIFICATIONS; DISCLOSURE
CONTROLS AND PROCEDURES. The Adviser acknowledges that, in compliance
with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and the implementing regulations promulgated
thereunder, the Trust and the Funds are required to make certain certifications
and have adopted disclosure controls and procedures. To the extent reasonably
requested by the Trust, the Adviser agrees to use its best efforts to assist the
Trust and the Funds in complying with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and implementing
the Trust’s disclosure controls and procedures. The Adviser agrees to inform the
Trust of any material development related to the Funds that the Adviser
reasonably believes is relevant to the Funds’ certification obligations under
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
18. SEVERABILITY. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute or rule, or shall be otherwise rendered invalid, the remainder of this
Agreement shall not be affected thereby.
19. CAPTIONS. 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.
20. GOVERNING LAW. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Wisconsin without giving effect to the conflict of laws principles
thereof; provided that nothing herein shall be construed to preempt, or to be
inconsistent with, any federal law, regulation or rule, including the Investment
Company Act and the Advisers Act and any rules and regulations promulgated
thereunder.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their duly
authorized officers, all on the day and year first above written.
|
NEWGATE
CAPITAL MANAGEMENT LLC
|
|
| on behalf its series listed on Schedule A | |
| By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
| Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
| Title: President | Title: Managing Director |
SCHEDULE
A
| Series or Fund of Trust for Professional Managers | Annual Fee rate |
| -------------------------------------------------------------- | --------------------- |
| Newgate Emerging Markets Fund | 1.00% of average net assets |
| Newgate Global Resources Fund | 0.80% of average net assets |