Exhibit (b)5(a)
Management Agreement
Between
Islamia Group of Funds
and
Income Achievers, Inc.
Islamia Group of Funds, a Massachusetts business trust registered
under the Investment Company Act of 1940 (the "1940 Act") as an
open-end diversified management series investment company (the
"Trust"), hereby appoints Income Achievers, Inc., an Illinois
corporation registered under the Investment Advisers Act of 1940
as an investment adviser (the "Manager"), to furnish investment
advisory and management services and certain administrative
services with respect to the assets represented by the shares of
beneficial interest issued in each series listed in Schedule A
hereto, as such schedule may be amended from time to time (each
such series hereinafter referred to as the "Fund"). The Trust and
the Manager hereby agree that:
1. Investment Management Services. The Manager shall
manage the investment operations of the Trust and each Fund,
subject to the terms of this Agreement and to the supervision and
control of the Trust's Board of Trustees (the "Trustees"). The
Manager agrees to perform, or arrange for the performance of, the
following services with respect to each Fund:
(a) to obtain and evaluate such information relating to
economies, industries, businesses, securities and commodities
markets, and individual securities, commodities and indices as it
may deem necessary or useful in discharging its responsibilities
hereunder;
(b) to formulate and maintain a continuous investment
program in a manner consistent with and subject to (i) the
Trust's Declaration of Trust and By-laws; (ii) the Fund's
investment objectives, policies, and restrictions as set forth in
written documents furnished by the Trust to the Manager; (iii)
all securities, commodities, and tax laws and regulations
applicable to the Fund and Trust; and (iv) any other written
limits or directions furnished by the Trustees to the Manager;
(c) unless otherwise directed by the Trustees, to determine
from time to time securities, commodities, interests or other
investments to be purchased, sold, retained or lent by the Fund,
and to implement those decisions, including the selection of
entities with or through which such purchases, sales or loans are
to be effected;
(d) to use reasonable efforts to manage the Fund so that it
will qualify as a regulated investment company under subchapter M
of the Internal Revenue Code of 1986, as amended;
(e) to make the recommendations as to the manner in which
voting rights, rights to consent to the Trust or the Fund, and
any other rights pertaining to the Trust or the Fund shall be
exercised;
(f) to make available to the Trust promptly upon request
all of the Fund's records and ledgers and any reports or
information reasonably requested by the Trust; and
(g) to the extent required by law, to furnish to regulatory
authorities any information or reports relating to the services
provided pursuant to this Agreement.
Except as otherwise instructed from time to time by the Trustees,
with respect to execution of transactions for the Trust on behalf
of a Fund, the Manager shall place, or arrange for the placement
of, all orders for purchases, sales, or loans with issuers,
brokers, dealers or other counterparts or agents selected by the
Manager. In connection with the selection of all such parties
for the placement of all such orders, the Manager shall attempt
to obtain most favorable execution and price, but may
nevertheless in its sole discretion as a secondary factor,
purchase and sell portfolio securities from and to brokers and
dealers who provide the Manager with statistical, research and
other information, analysis, advice, and similar services. In
recognition of such services or brokerage services provided by a
broker or dealer, the Manager is hereby authorized to pay such
broker or dealer a commission or spread in excess of that which
might be charged by another broker or dealer for the same
transaction if the Manager determines in good faith that the
commission or spread is reasonable in relation to the value of
the services so provided. The Manager may also act as broker to
execute trades on behalf of a Fund subject to the above policies
and applicable federal and state securities laws.
The Trust hereby authorizes any entity or person associated with
the Manager that is a member of a national securities exchange to
effect any transaction on the exchange for the account of a Fund
to the extent permitted by and in accordance with Section 11(a)
of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder. The Trust hereby consents to the retention by such
entity or person of compensation for such transactions in
accordance with Rule 11a-2-2(T)(a)(iv).
Transactions for each Fund managed by the Manager generally will
be effected independently. The Manager, however, may, where it
deems to be advisable, aggregate orders for its other customers
together with any securities of the same type to be sold or
purchased for the Trust or one or more Funds in order to obtain
best execution or lower brokerage commissions. In such event,
the Manager shall allocate the shares so purchased or sold, as
well as the expenses incurred in the transaction, in a manner it
considers to be equitable and fair and consistent with its
fiduciary obligations to the Trust, the Funds, and the Manager's
other customers.
The Manager shall for all purposes be deemed to be an independent
contractor and not an agent of the Trust and shall, unless
otherwise expressly provided or authorized, have no authority to
act for or represent the Trust in any way.
2. Administrative Services. Subject to the terms of this
Agreement and to the supervision and control of the Trustees, the
Manager shall provide to the Trust facilities, equipment,
statistical and research data, clerical, accounting and
bookkeeping services, internal auditing and legal services, and
personnel to carry out all management services required for
operation of the business and affairs of the Funds other than
those services to be performed by the Trust's Distributor
pursuant to the Distribution Agreement, those services to be
performed by the Trust's Custodian pursuant to the Custody
Agreement, those services to be performed by the Trust's Transfer
Agent pursuant to the Transfer Agency Agreement, those services
to be provided by the Trust's accountant pursuant to the
Accounting Agreement and those services normally performed by the
Trust's counsel and auditors.
3. Use of Affiliated Companies and Subcontractors. In
connection with the services to be provided by the Manager under
this Agreement, the Manager may, to the extent it deems
appropriate, and subject to compliance with the requirements of
applicable laws and regulations, make use of (i) its affiliated
companies and their directors, trustees, officers, and employees
and (ii) subcontractors selected by the Manager, provided that
the Manager shall supervise and remain fully responsible for the
services of all such third parties in accordance with and to the
extent provided by this Agreement. All costs and expenses
associated with services provided by any such third parties shall
be borne by the Manager of such parties.
4. Expenses Borne by the Trust. Except to the extent
expressly assumed by the Manager herein or under a separate
agreement between the Trust and the Manager and except to the
extent required by law to be paid by the Manager, the Manager
shall not be obligated to pay any costs or expenses incidental to
the organization, operations or business of the Trust. Without
limitation, such costs and expenses shall include but not be
limited to:
(a) all charges of depositories, custodians and other
agencies for the safekeeping and servicing of its cash,
securities, and other property;
(b) all charges for equipment or services used for
obtaining price quotations or for communication between the
Manager or the Trust and the custodian, transfer agent or any
other agent selected by the Trust;
(c) all charges for and accounting services provided to the
Trust by the Manager, or any other provider of such services;
(d) all charges for services of the Trust's independent auditors
and for services to the Trust by legal counsel;
(e) all compensation of the Trustees, other than those
affiliated with the Manager, all expenses incurred in connection
with their services to the Trust, and all expenses of meetings of
the Trustees or committees thereof;
(f) all expenses incidental to holding meetings of holders
of shares of interest in the Trust ("Shareholders"), including
printing and of supplying each record-date Shareholder with
notice and proxy solicitation material, and all other proxy
solicitation expenses;
(g) all expenses of printing of annual or more frequent
revisions of the Trust prospectus(es) and of supplying each then-
existing Shareholder with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting
certificates (if any) representing the Trust shares;
(i) all expenses of bond and insurance coverage required by
law or deemed advisable by the Board of Trustees;
(j) all brokers' commissions and other normal charges
incident to the purchase, sale, or lending of portfolio
securities;
(k) all taxes and governmental fees payable to Federal,
state or other governmental agencies, domestic or foreign,
including all stamp or other transfer taxes;
(l) all expenses of registering and maintaining the
registration of the Trust under the 1940 Act and, to the extent
no exemption is available, expenses of registering the Trust's
shares under the 1933 Act, of qualifying and maintaining
qualification of the Trust and of the Trust's shares for sale
under securities laws of various states or other jurisdictions
and of registration and qualification of the Trust under all
other laws applicable to the Trust or its business activities;
(m) all interest on indebtedness, if any, incurred by the
Trust or a Fund; and
(n) all fees, dues and other expenses incurred by the Trust
in connection with membership of the Trust in any trade
association or other investment company organization.
5. Allocation of Expenses Borne by the Trust. Any
expenses borne by the Trust that are attributable solely to the
organization, operation or business of a Fund shall be paid
solely out of Fund assets. Any expense borne by the Trust which
is not solely attributable to a Fund, nor solely to any other
series of shares of the Trust, shall be apportioned in such
manner as the Manager determines is fair and appropriate, or as
otherwise specified by the Board of Trustees.
6. Expenses Borne by the Manager. The Manager at its own
expense shall furnish all executive and other personnel, office
space, and office facilities required to render the investment
management and administrative services set forth in this
Agreement.
In the event that the Manager pays or assumes any expenses of the
Trust or a Fund not required to be paid or assumed by the Manager
under this Agreement, the Manager shall not be obligated hereby
to pay or assume the same or similar expense in the future;
provided that nothing contained herein shall be deemed to relieve
the Manager of any obligation to the Trust or a Fund under any
separate agreement or arrangement between the parties.
7. Management Fee. For the services rendered, facilities
provided, and charges assumed and paid by the Manager hereunder,
the Trust shall pay to the Manager out of the assets of each Fund
fees at the annual rate for such Fund as set forth in Schedule B
to this Agreement. For each Fund, the management fee shall
accrue on each calendar day, and shall be payable monthly on the
first business day of the next succeeding calendar month. The
daily fee accrual shall be computed by multiplying the fraction
of one divided by the number of days in the calendar year by the
applicable annual rate of fee, and multiplying this product by
the net assets of the Fund, determined in the manner established
by the Board of Trustees, as of the close of business on the last
preceding business day on which the Fund's net asset value was
determined.
8. Retention of Sub-Adviser. Subject to obtaining the
initial and periodic approvals required under Section 15 of the
1940 Act, the Manager may retain one or more sub-advisers at the
Manager's own cost and expense for the purpose of furnishing one
or more of the services described in Section 1 hereof with
respect to the Trust or one or more Funds. Retention of a sub-
adviser shall in no way reduce the responsibilities or
obligations of the Manager under this Agreement, and the Manager
shall be responsible to the Trust and its Funds for all acts or
omissions of any sub-adviser in connection with the performance
of the Manager's duties hereunder.
9. Non-Exclusivity. The services of the Manager to the
Trust hereunder are not to be deemed exclusive and the Manager
shall be free to render similar services to others.
10. Standard of Care. The Manager shall not be liable for
any loss sustained by reason of the purchase, sale or retention
of any security, whether or not such purchase, sale or retention
shall have been based upon the investigation and research made by
any other individual, firm or corporation, if such recommendation
shall have been selected with due care and in good faith, except
loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of the Manager in the performance of its
obligations and duties, or by reason of its reckless disregard of
its obligations and duties under this Agreement.
11. Amendment. This Agreement may not be amended as to the
Trust or any Fund without the affirmative votes (a) of a majority
of the Board of Trustees, including a majority of those Trustees
who are not "interested persons" of the Trust or of the Manager,
voting in person at a meeting called for the purpose of voting on
such approval, and (b) of a "majority of the outstanding shares"
of the Trust or, with respect to any amendment affecting an
individual Fund, a "majority of the outstanding shares" of that
Fund. The terms "interested persons" and "vote of a majority of
the outstanding shares" shall be construed in accordance with
their respective definitions in the 1940 Act and, with respect to
the latter term, in accordance with Rule 18f-2 under the 1940
Act.
12. Effective Date and Termination. This Agreement shall
become effective as to any Fund as of the effective date for that
Fund specified in Schedule A hereto. This Agreement may be
terminated at any time, without payment of any penalty, as to any
Fund by the Board of Trustees of the Trust, or by a vote of a
majority of the outstanding shares of that fund, upon at least
sixty (60) days' written notice to the Manager. This Agreement
may be terminated by the Manager at any time upon at least sixty
(60) days' written notice to the Trust. This Agreement shall
terminate automatically in the event of its "assignment" (as
defined in the 1940 Act). Unless terminated as provided above,
this Agreement shall continue in effect with respect to any Fund
until the end of the initial term applicable to that Fund
specified in Schedule A and thereafter from year to year only so
long as such continuance is specifically approved with respect to
that Fund at least annually (a) by a majority of those Trustees
who are not interested persons of the Trust or of the Manager,
voting in person at a meeting called for the purpose of voting on
such approval, and (b) by either the Board of Trustees of the
Trust or by a "vote of a majority of the outstanding shares" of
the Fund.
13. Ownership of Records; Interparty Reporting. All
records required to be maintained and preserved by the Trust
pursuant to the provisions of rules or regulations of the
Securities and Exchange Commission under Section 31(a) of the
1940 Act or other applicable laws or regulations which are
maintained and preserved by the Manager on behalf of the Trust
and any other records the parties mutually agree shall be
maintained by the Manager on behalf of the Trust, are the
property of the Trust and shall be surrendered by the Manager
promptly on request by the Trust; provided that the Manager may
at its own expense make and retain copies of any such records.
The Trust shall furnish or otherwise make available to the
Manager such copies of the financial statements, proxy
statements, reports, and other information relating to the
business and affairs of each Fund as the Manager may, at any time
or from time to time, reasonably require in order to discharge
its obligations under this Agreement.
The Manager shall prepare and furnish to the Trust as to each
Fund statistical data and other information in such form and at
such intervals as the Trust may reasonably request.
14. Non-Liability of Trustees and Shareholders. Any
obligation of the Trust hereunder shall be binding only upon the
assets of the Trust (or the applicable Fund thereof) and shall
not be binding upon any Trustee, officer, employee, agent or
shareholder of the Trust. Neither the authorization of any
action by the Trustees or shareholders of the Trust nor the
execution of this Agreement on behalf of the Trust shall impose
any liability upon any Trustee or any shareholder.
15. References and Headings. In this Agreement and in any
such amendment, references to this Agreement and all expressions
such as "herein," "hereof," and "hereunder'" shall be deemed to
refer to this Agreement as amended or affected by any such
amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control
or affect the meaning, construction, or effect of this Agreement.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
Dated: ____________, 1997
Islamia Group of Funds
Attest By___________________________
Income Achievers, Inc.
Attest By___________________________
Islamia Group of Funds
Schedule A
The Funds of the Trust currently subject to this Agreement and
the effective date of each are as follows:
Fund Effective Date
Islamia Growth Fund ________________________
Islamia Income Fund ________________________
Islamia Group of Funds
Management Agreement
Schedule B
Compensation pursuant to Section 7 of this Agreement shall be
calculated with respect to each Fund in accordance with the
following rate: .80 of 1% of the average daily net assets of the
Fund annually.
