MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of
December, 2005, by and between Xxxxx Xxxxxx Investment Funds Inc.,
a Maryland Corporation (the "Corporation") and Xxxxx Xxxxxx Fund
Management LLC, a Delaware limited liability company (the "Manager").
WHEREAS, the Corporation is registered as a management investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering
investment advisory, management and administrative services and
is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended;
WHEREAS, the Corporation wishes to retain the Manager to provide
investment advisory, management, and administrative services to
the Corporation with respect to the series of the Corporation
designated in Schedule A annexed hereto (the "Fund"); and
WHEREAS, the Manager is willing to furnish such services on the
terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
1. The Corporation hereby appoints the Manager to act as
investment adviser and administrator of the Fund for the period
and on the terms set forth in this Agreement. The Manager
accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. The Fund shall at all times keep the Manager fully
informed with regard to the securities owned by it, its funds
available, or to become available, for investment, and generally
as to the condition of its affairs. It shall furnish the Manager
with such other documents and information with regard to its
affairs as the Manager may from time to time reasonably request.
3. (a) Subject to the supervision of the
Corporation's Board of Directors (the "Board"), the Manager shall
regularly provide the Fund with investment research, advice,
management and supervision and shall furnish a continuous investment
program for the Fund's portfolio of securities and other investments
consistent with the Fund's investment objectives, policies and
restrictions, as stated in the Fund's current Prospectus and
Statement of Additional Information. The Manager shall determine
from time to time what securities and other investments will be
purchased, retained, sold or exchanged by the Fund and what portion
of the assets of the Fund's portfolio will be held in the various
securities and other investments in which the Fund invests, and
shall implement those decisions, all subject to the provisions of
the Corporation's Articles of Incorporation and By-Laws
(collectively, the "Governing Documents"), the 1940 Act, and the
applicable rules and regulations promulgated thereunder by the
Securities and Exchange Commission (the "SEC") and interpretive
guidance issued thereunder by the SEC staff and any other
applicable federal and state law, as well as the investment
objectives, policies and restrictions of the Fund referred to
above, and any other specific policies adopted by the Board
and disclosed to the Manager. The Manager is authorized as
the agent of the Corporation to give instructions to the
custodian of the Fund as to deliveries of securities and other
investments and payments of cash for the account of the Fund.
Subject to applicable provisions of the 1940 Act and direction
from the Board, the investment program to be provided hereunder
may entail the investment of all or substantially all of the
assets of a Fund in one or more investment companies. The
Manager will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or
dealer, foreign currency dealer, futures commission merchant or
others selected by it. In connection with the selection of such
brokers or dealers and the placing of such orders, subject to
applicable law, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the Funds
and/or the other accounts over which the Manager or its affiliates
exercise investment discretion. The Manager is authorized to pay
a broker or dealer who provides such brokerage and research services
a commission for executing a portfolio transaction for a Fund which
is 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 is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the Manager and its affiliates have with respect
to accounts over which they exercise investment discretion. The Board
may adopt policies and procedures that modify and restrict the Manager's
authority regarding the execution of the Fund's portfolio transactions
provided herein. The Manager shall also provide advice and
recommendations with respect to other aspects of the business and
affairs of the Fund, shall exercise voting rights, rights to consent to
corporate action and any other rights pertaining to a Fund's portfolio
securities subject to such direction as the Board may provide, and shall
perform such other functions of investment management and supervision as
may be directed by the Board.
(b) Subject to the direction and control of the Board, the
Manager shall perform such administrative and management services as
may from time to time be reasonably requested by the Fund as necessary
for the operation of the Fund, such as (i) supervising the overall
administration of the Fund, including negotiation of contracts and fees
with and the monitoring of performance and xxxxxxxx of the Fund's
transfer agent, shareholder servicing agents, custodian and other
independent contractors or agents, (ii) providing certain compliance,
fund accounting, regulatory reporting, and tax reporting services,
(iii) preparing or participating in the preparation of Board materials,
registration statements, proxy statements and reports and other
communications to shareholders, (iv) maintaining the Fund's existence,
and (v) during such times as shares are publicly offered, maintaining
the registration and qualification of the Fund's shares under federal
and state laws. Notwithstanding the foregoing, the Manager shall not
be deemed to have assumed any duties with respect to, and shall not be
responsible for, the distribution of the shares of any Fund, nor shall
the Manager be deemed to have assumed or have any responsibility with
respect to functions specifically assumed by any transfer agent, fund
accounting agent, custodian, shareholder servicing agent or other agent,
in each case employed by the Fund to perform such functions.
(c) The Fund hereby authorizes any entity or person associated
with the Manager which is a member of a national securities exchange to
effect any transaction on the exchange for the account of the Fund which
is permitted by Section 11(a) of the Securities Exchange Act of 1934, as
amended, and Rule 11a2-2(T) thereunder, and the Fund hereby consents to
the retention of compensation for such transactions in accordance with
Rule 11a2-2(T)(a)(2)(iv). Notwithstanding the foregoing, the Manager
agrees that it will not deal with itself, or with members of the Board
or any principal underwriter of the Fund, as principals or agents in
making purchases or sales of securities or other property for the
account of the Fund, nor will it purchase any securities from an
underwriting or selling group in which the Manager or its affiliates is
participating, or arrange for purchases and sales of securities between
a Fund and another account advised by the Manager or its affiliates,
except in each case as permitted by the 1940 Act and in accordance with
such policies and procedures as may be adopted by a Fund from time to
time, and will comply with all other provisions of the Governing Documents
and the Fund's then-current Prospectus and Statement of Additional
Information relative to the Manager and its directors and officers.
4. Subject to the Board's approval, the Manager or the Fund may enter
into contracts with one or more investment subadvisers or subadministrators,
including without limitation, affiliates of the Manager, in which the
Manager delegates to such investment subadvisers or subadministrators any
or all its duties specified hereunder, on such terms as the Manager will
determine to be necessary, desirable or appropriate, provided that in each
case the Manager shall supervise the activities of each such subadviser
or subadministrator and further provided that such contracts impose on
any investment subadviser or subadministrator bound thereby all the
conditions to which the Manager is subject hereunder and that such contracts
are entered into in accordance with and meet all applicable requirements
of the 1940 Act.
5. (a) The Manager, at its expense, shall supply the Board and
officers of the Corporation with all information and reports reasonably
required by them and reasonably available to the Manager and shall furnish
the Fund with office facilities, including space, furniture and equipment
and all personnel reasonably necessary for the operation of the Fund. The
Manager shall oversee the maintenance of all books and records with respect
to the Fund's securities transactions and the keeping of the Fund's books
of account in accordance with all applicable federal and state laws and
regulations. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Manager hereby agrees that any records that it maintains for
the Fund are the property of the Fund, and further agrees to surrender
promptly to the Fund any of such records upon the Fund's request. The
Manager further agrees to arrange for the preservation of the records
required to be maintained by Rule 31a-1 under the 1940 Act for the periods
prescribed by Rule 31a-2 under the 1940 Act. The Manager shall authorize
and permit any of its directors, officers and employees, who may be elected
as Board members or officers of the Fund, to serve in the capacities in
which they are elected.
(b) The Manager shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein specifically
indicated, the Manager shall not be responsible for the Fund's expenses,
including, without limitation, advisory fees; distribution fees; interest;
taxes; governmental fees; voluntary assessments and other expenses incurred
in connection with membership in investment company organizations;
organization costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the purchase or
sale of the Fund's securities and other investments and any losses in
connection therewith; fees and expenses of custodians, transfer agents,
registrars, independent pricing vendors or other agents; legal expenses; loan
commitment fees; expenses relating to share certificates; expenses relating
to the issuing and redemption or repurchase of the Fund's shares and servicing
shareholder accounts; expenses of registering and qualifying the Fund's shares
for sale under applicable federal and state law; expenses of preparing,
setting in print, printing and distributing prospectuses and statements of
additional information and any supplements thereto, reports, proxy statements,
notices and dividends to the Fund's shareholders; costs of stationery;
website costs; costs of meetings of the Board or any committee thereof,
meetings of shareholders and other meetings of the Fund; Board fees; audit
fees; travel expenses of officers, members of the Board and employees of the
Fund, if any; and the Fund's pro rata portion of premiums on any fidelity
bond and other insurance covering the Fund and its officers, Board members
and employees; litigation expenses and any non-recurring or extraordinary
expenses as may arise, including, without limitation, those relating to
actions,suits or proceedings to which the Fund is a party and the legal
obligation which the Fund may have to indemnify the Fund's Board members
and officers with respect thereto.
6. No member of the Board, officer or employee of the Corporation or
Fund shall receive from the Corporation or Fund any salary or other
compensation as such member of the Board, officer or employee while he is
at the same time a director, officer, or employee of the Manager or any
affiliated company of the Manager, except as the Board may decide. This
paragraph shall not apply to Board members, executive committee members,
consultants and other persons who are not regular members of the Manager's
or any affiliated company's staff.
7. As compensation for the services performed and the facilities
furnished and expenses assumed by the Manager, including the services of
any consultants retained by the Manager, the Fund shall pay the Manager, as
promptly as possible after the last day of each month, a fee, computed
daily at an annual rate set forth opposite the Fund's name on Schedule A
annexed hereto, provided however, that if the Fund invests all or
substantially all of its assets in another registered investment company
for which the Manager or an affiliate of the Manager serves as investment
adviser or investment manager, the annual fee computed as set forth on
such Schedule A shall be reduced by the aggregate management fees
allocated to that Fund for the Fund's then-current fiscal year from
such other registered investment company. The first payment of the fee
shall be made as promptly as possible at the end of the month succeeding
the effective date of this Agreement, and shall constitute a full payment
of the fee due the Manager for all services prior to that date. If
this Agreement is terminated as of any date not the last day of a month,
such fee shall be paid as promptly as possible after such date of
termination, shall be based on the average daily net assets of the
Fund in that period from the beginning of such month to such date of
termination, and shall be that proportion of such average daily net
assets as the number of business days in such period bears to the number
of business days in such month. The average daily net assets of the
Fund shall in all cases be based only on business days and be computed
as of the time of the regular close of business of the New York Stock
Exchange, or such other time as may be determined by the Board.
8. The Manager assumes no responsibility under this Agreement other
than to render the services called for hereunder, in good faith, and shall
not be liable for any error of judgment or mistake of law, or for any
loss arising out of any investment or for any act or omission in the
execution of securities transactions for a Fund, provided that nothing
in this Agreement shall protect the Manager against any liability to the
Fund to which the Manager would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder. As used in this Section 8, the term "Manager" shall
include any affiliates of the Manager performing services for the
Corporation or the Fund contemplated hereby and the partners, shareholders,
directors, officers and employees of the Manager and such affiliates.
9. Nothing in this Agreement shall limit or restrict the right of
any director, officer, or employee of the Manager who may also be a Board
member, officer, or employee of the Corporation or the Fund, to engage
in any other business or to devote his time and attention in part to the
management or other aspects of any other business, whether of a similar
nature or a dissimilar nature, nor to limit or restrict the right of
the Manager to engage in any other business or to render services of
any kind, including investment advisory and management services, to any
other fund, firm, individual or association. If the purchase or sale
of securities consistent with the investment policies of a Fund or one
or more other accounts of the Manager is considered at or about the
same time, transactions in such securities will be allocated among
the accounts in a manner deemed equitable by the Manager. Such
transactions may be combined, in accordance with applicable laws
and regulations, and consistent with the Manager's policies and
procedures as presented to the Board from time to time.
10. For the purposes of this Agreement, the Fund's "net assets"
shall be determined as provided in the Fund's then-current Prospectus
and Statement of Additional Information and the terms "assignment,
" "interested person," and "majority of the outstanding voting
securities" shall have the meanings given to them by Section 2(a) of
the 1940 Act, subject to such exemptions as may be granted by the SEC
by any rule, regulation or order.
11. This Agreement will become effective with respect to the Fund
on the date set forth opposite the Fund's name on Schedule A annexed
hereto, provided that it shall have been approved by the Corporation's
Board and by the shareholders of the Fund in accordance with the
requirements of the 1940 Act and, unless sooner terminated as provided
herein, will continue in effect for two years from the above written
date. Thereafter, if not terminated, this Agreement shall continue
in effect with respect to the Fund, so long as such continuance is
specifically approved at least annually (i) by the Board or (ii) by
a vote of a majority of the outstanding voting securities of the Fund,
provided that in either event the continuance is also approved by a
majority of the Board members who are not interested persons of any
party to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval.
12. This Agreement is terminable with respect to the Fund without
penalty by the Board or by vote of a majority of the outstanding
voting securities of the Fund, in each case on not more than 60 days'
nor less than 30 days' written notice to the Manager, or by the
Manager upon not less than 90 days' written notice to the Fund, and
will be terminated upon the mutual written consent of the Manager
and the Corporation. This Agreement shall terminate automatically
in the event of its assignment by the Manager and shall not be
assignable by the Corporation without the consent of the Manager.
13. The Manager agrees that for services rendered to the Fund,
or for any claim by it in connection with services rendered to the
Fund, it shall look only to assets of the Fund for satisfaction and
that it shall have no claim against the assets of any other
portfolios of the Corporation.
14. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought, and no material amendment
of the Agreement shall be effective until approved, if so required
by the 1940 Act, by vote of the holders of a majority of the Fund's
outstanding voting securities.
15. This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. Should any part
of this Agreement 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 on and shall inure
to the benefit of the parties hereto and their respective successors.
16. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized.
XXXXX XXXXXX INVESTMENT FUNDS INC.
By:________________________
Name: R. Xxx Xxxxxx
Title: Chairman
XXXXX XXXXXX FUND MANAGEMENT LLC
By:________________________
Name: Xxxxxx Xxxxxxx
Title: Director
Schedule A
Xxxxx Xxxxxx Real Return Strategy Fund
Fee:
The following percentage of the Fund's average daily net assets:
0.65
