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INVESTMENT ADVISORY AGREEMENT
AGREEMENT executed as of February 3, 1998, and effective as of the
commencement of operations of the hereinafter defined funds, between FIRST
OMAHA FUNDS, INC., a Nebraska corporation (herein called the "Company"), and
FNC TRUST GROUP, N.A., (herein called the "Investment Adviser").
WHEREAS, the Company is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Company desires to retain the Investment Adviser to furnish
investment advisory and administrative services to a newly created investment
portfolio of the Company, and may retain the Investment Adviser to serve in
such capacity to certain additional investment portfolios of the Company, all
as now or hereafter may be identified in Schedule A hereto (such initial
investment portfolio and any such additional investment portfolios together
called the "Funds"), and the Investment Adviser represents that it is willing
and possesses legal authority to so furnish such services without violation of
applicable laws and regulations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Funds for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
Additional investment portfolios may from time to time be added to those
covered by this Agreement by the parties executing a new Schedule A which shall
become effective upon its execution and shall supersede any Schedule A having
an earlier date.
2. Delivery of Documents. The Company has furnished the Investment
Adviser with copies properly certified or authenticated of each of the
following:
a. the Company's Articles of Incorporation, executed as of October 12,
1994, and as filed with the Secretary of State of Nebraska on October 12,
1994, and any and all amendments thereto or restatements thereof (such
document as presently in effect and as it shall from time to time be
amended or restated, is herein called the "Articles");
b. the Company's By-Laws and any amendments thereto;
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c. resolutions of the Company's Board of Directors authorizing the
appointment of the Investment Adviser and approving this Agreement;
d. the Company's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC") on
November 1, 1994, and all amendments thereto;
e. the Company's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act"), (File No. 33-85982), and under the
1940 Act as filed with the SEC and all amendments thereto; and
f. the most recent Prospectus and Statement of Additional Information of
each of the Funds (such Prospectus and Statement of Additional
Information, as presently in effect, and all amendments and supplements
thereto, are herein collectively called the "Prospectus").
The Company will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Company's Board of
Directors, the Investment Adviser will provide a continuous investment program
for the Funds, including investment research and management with respect to all
securities and investments and cash equivalents in the Funds. The Investment
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Company, with respect to the Funds.
The Investment Adviser will provide the services under this Agreement in
accordance with each of the Fund's investment objectives, policies, and
restrictions as stated in the Prospectus and resolutions of the Company's Board
of Directors. With the approval of the Company's Board of Directors, and
subject to applicable provisions of the 1940 Act, the Investment Adviser may
appoint sub-advisers to assist it in the performance of its duties hereunder.
The Investment Adviser further agrees that it:
a. will use the same skill and care in providing such services as it uses
in providing services to fiduciary accounts for which it has investment
responsibilities;
b. will conform with all applicable Rules and Regulations of the SEC,
including but not limited to, Rules 17f-2 and 17f-4 of the 1940 Act and in
addition will conduct its activities under this Agreement in accordance
with any applicable regulations of any governmental authority pertaining
to the investment advisory activities of the Investment Adviser;
c. will not make loans to any person to purchase or carry shares of the
Company or make loans to the Company;
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d. will place orders pursuant to its investment determinations for the
Funds either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Investment Adviser will
attempt to obtain prompt execution of orders in an effective manner at the
most favorable price. Consistent with this obligation and to the extent
permitted by the 1940 Act, the Investment Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide the Investment Adviser with research advice and other services.
The Investment Adviser may authorize the Fund to pay a commission in
excess of the commission another broker-dealer would have charged if the
Investment Adviser determines in good faith that such commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer, viewed either in terms of that particular
transaction or the Investment Adviser's overall responsibilities to the
accounts it manages. In no instance will portfolio securities be
purchased from or sold to Sunstone Financial Group, Inc. ("Sunstone"), the
Investment Adviser, or any affiliated person of the Company, Sunstone or
the Investment Adviser acting as principal; in no instance will portfolio
securities be sold or purchased through Sunstone, the Investment Adviser
or any affiliated person of the Company except in strict compliance with
Rule 17e-1 under the 1940 Act; in no instance will the Company purchase
securities of which the Investment Adviser or any affiliated person of the
Company is an underwriter except in strict compliance with Rule 10f-3
under the 1940 Act; in no instance will any Fund purchase securities from,
or sell securities to another portfolio of the Company (a "First Omaha
Fund") in a principal transaction except in strict compliance with Rule
17a-7 under the 1940 Act; and in no instance will any Fund engage in any
joint or joint and several participation in any transaction with any other
First Omaha Fund in violation of Section 17(d) of the 1940 Act.
e. will maintain all books and records with respect to the securities
transactions of the Funds and will furnish the Company's Board of
Directors such periodic and special reports as the Board may request;
f. will treat confidentially and as proprietary information of the Company
all records and other information relative to the Company and the Funds
and prior, present, or potential shareholders, will not use such records
and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where the Investment Adviser
may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company; and
g. will maintain its policy and practice of conducting its fiduciary
functions independently. In making investment recommendations for the
Funds, the Investment Adviser's personnel will not inquire or take into
consideration whether the
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issuers of securities proposed for purchase or sale for the Company's
account are customers of the Investment Adviser or of its parent or its
subsidiaries or affiliates. In dealing with such customers, the
Investment Adviser and its parent, subsidiaries, and affiliates will not
inquire or take into consideration whether securities of those customers
are held by the Company.
4. Services Not Exclusive. The investment management services furnished by the
Investment Adviser hereunder are not to be deemed exclusive, and the Investment
Adviser shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Investment Adviser hereby agrees that all records which it
maintains for the Funds are the property of the Company and further agrees to
surrender promptly to the Company any of such records upon the Company's
request. The Investment Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement, including but not limited to, expenses related to all office space,
facilities, equipment and clerical personnel necessary for the Investment
Adviser to carry out its duties and obligations under this Agreement, but
excluding the cost of securities (including brokerage commission, issue and
transfer taxes, if any) purchased for the Funds. Each of the Funds shall bear
the following expenses relating to its operations: organizational expenses,
taxes, interest, any brokerage fees and commissions, fees of the Directors of
the Company, Securities and Exchange Commission fees, state securities
registration fees and expenses, costs of preparing and printing prospectuses
for regulatory purposes and for distribution to a Fund's current Shareholders,
outside auditing and legal expenses, advisory and administration fees, fees and
out-of-pocket expenses of the custodian and transfer agent, costs of Fund
accounting services, certain insurance premiums, costs of maintenance of the
Company's existence, costs of shareholders' and directors' reports and
meetings, distribution expenses incurred pursuant to the Company's Distribution
and Shareholder Service Plan, any extraordinary expenses incurred in the Fund's
operation and other operating expenses not assumed by a Company's service
providers.
7. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, each of the Funds will pay the Investment Adviser and the
Investment Adviser will accept as full compensation therefor a fee, computed
daily and paid monthly in arrears, equal to the lesser of (a) the fee set forth
on Schedule A hereto or (b) such other fee as may from time to time be agreed
upon in writing by the Company and the Investment Adviser. The obligations of
the Funds to pay the above-described fee to the
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Investment Adviser will begin as of the respective dates of the initial public
sale of shares in the Funds.
If in any fiscal year the aggregate expenses of any of the Funds (as
defined under the securities regulations of any state having jurisdiction over
the Company) exceed the expense limitations of any such state, the Investment
Adviser will reimburse the Fund for such excess expenses, provided that the
obligation of the Investment Adviser to reimburse the Funds hereunder is
limited in any fiscal year to the amount of its fee hereunder for such fiscal
year; provided further, however, that notwithstanding the foregoing, the
Investment Adviser shall reimburse the Funds for such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over
the Company so require. Such expense reimbursement, if any, will be estimated
daily and reconciled and paid on a monthly basis.
8. Notices of Meetings. The Company agrees that notice of each regular meeting
of the Board of Directors of the Company will be sent or otherwise given to the
Investment Adviser. To the extent that the directors of the Company invite any
person or persons employed by the Investment Adviser to attend any such
meeting, the Company agrees that it will make the appropriate arrangements, at
the expense of the Investment Adviser, for the attendance by such person or
persons or by such other person or persons as the Investment Adviser may
designate.
9. Limitation of Liability. The Investment Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under
this Agreement.
10. Duration and Termination. This Agreement will become effective as of the
date first written above (or, if a particular Fund is not in existence on that
date, on the date a registration statement relating to that Fund becomes
effective with the SEC), provided that it shall have been approved by a vote of
a majority of the outstanding voting securities of such Fund, in accordance
with the requirements under the 1940 Act, and, unless sooner terminated as
provided herein, shall continue in effect until June 30, 1999.
Thereafter, if not terminated, this Agreement shall continue in effect as
to a particular Fund for successive periods of twelve months each ending on
June 30 of each year, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Company's
Board of Directors who are not parties to this Agreement or interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the vote of a majority of the
Company's Board of Directors or by the vote of a majority of all votes
attributable to
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the outstanding Shares of such Fund. Notwithstanding the foregoing, this
Agreement may be terminated as to a particular Fund at any time on sixty days'
written notice, without the payment of any penalty, by the Company (by vote of
the Company's Board of Directors or by vote of a majority of the outstanding
voting securities of such Fund) or by the Investment Adviser. This Agreement
will immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as ascribed
to such terms in the 1940 Act.)
11. Investment Adviser's Representations. The Investment Adviser hereby
represents and warrants that it is willing and possesses all requisite legal
authority to provide the services contemplated by this Agreement without
violation of applicable laws and regulations, including but not limited to the
Xxxxx-Xxxxxxxx Act, and the regulations promulgated thereunder.
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated except by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
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 shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the law
of the State of Nebraska. The provisions of the 1940 Act and rules and
regulations promulgated thereunder shall supercede the terms and provisions
hereof and any ambiguity or matter of interpretation hereunder shall be
resolved in a manner which effectuates the 1940 Act and such rules and
regulations.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
FIRST OMAHA FUNDS, INC.
By:____________________
Name: Xxxxx X. Xxxxx
Title: President
FNC TRUST GROUP, N.A.
By:____________________
Name:
Title:
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Dated February 3, 1998
Schedule A
to the
Investment Advisory Agreement
Between First Omaha Funds, Inc. and
FNC Trust Group, N.A.
dated as of February 3, 1998
Name of Company Compensation* Date
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First Omaha Annual rate of seventy-five February 3, 1998
Growth Fund one-hundredths of one
percent (.75%) of the
average daily net assets
of such Company
FIRST OMAHA FUNDS, INC.
By:
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Name: Xxxxx X. Xxxxx
Title: President
FNC TRUST GROUP, N.A.
By:
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Name:
Title:
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