EXHIBIT 23(D)
INVESTMENT ADVISORY AGREEMENT BETWEEN REGISTRANT AND LEVERAGED
INDEX MANAGEMENT COMPANY
INVESTMENT ADVISORY AGREEMENT
OPTIMAL FUNDS, INC.
This Agreement is made and entered into as of the 1st day of May, 1999, by
and between Optimal Funds, Inc., a Maryland corporation (the "Fund"), and
Leveraged Index Management Company, a Vermont corporation (hereinafter referred
to as "Adviser").
WHEREAS, the Fund is a diversified, open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "Act"), and
authorized to issue shares representing interests in the Optimal Fund (the
"Portfolio"); and
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of asset
management; and
WHEREAS, the Fund desires to retain Adviser to render certain investment
management services to the Fund and Adviser is willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Obligations of the Adviser
(a) Services. Adviser agrees to perform the following services (the
"Services") for the Fund:
(1) manage the investment and reinvestment of the Portfolio's assets;
(2) continuously review, supervise, and administer the investment
program of the Portfolio;
(3) determine, in its discretion, the securities to be purchased,
retained or sold (and implement those decisions);
(4) provide the Fund with records concerning Adviser's activities
which the Fund is required to maintain; and
(5) render regular reports to the Fund's officers and directors
concerning Adviser's discharge of the foregoing responsibilities.
Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the directors of the Fund and in compliance
with such policies as the directors may from time to time establish, and in
compliance with the objectives, policies, and limitations of the Portfolio
set forth in the Fund's prospectus and statement of additional information,
as amended from time to time, and with all applicable laws and regulations.
All Services to be furnished by Adviser under this Agreement may be
furnished through the medium of any directors, officers or employees of
Adviser or through such other parties as Adviser may determine from time to
time.
Adviser agrees, at its own expense or at the expense of one or more of its
affiliates, to render the Services and to provide the office space,
furnishings, equipment and personnel as may be reasonably required in the
judgment of the Board of Directors of the Fund to perform the Services on
the terms and for the compensation provided herein. Adviser shall authorize
and permit any of its officers, directors and employees, who may be elected
as directors or officers of the Fund, to serve in the capacities in which
they are elected.
Except to the extent expressly assumed by Adviser herein and except to the
extent required by law to be paid by Adviser, the Fund shall pay all costs
and expenses in connection with its operation and organization.
(b) Books and Records. All books and records prepared and maintained by
Adviser for the Fund under this Agreement shall be the property of the
Fund and, upon request therefor, Adviser shall surrender to the Fund
such of the books and records so requested.
2. Portfolio Transactions.
Adviser is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best net results as
described in the Fund's prospectus from time to time. Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Portfolio with research, analysis, advice and
similar services, and Adviser may pay to these brokers and dealers, in
return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, provided that Adviser determines in
good faith that such commission is reasonable in terms either of that
particular transaction or of the overall responsibility of Adviser to the
Fund and its other clients and that the total commission paid by the Fund
will be reasonable in relation to the benefits to the Portfolio over the
long-term. Adviser will promptly communicate to the officers and the
directors of the Fund such information relating to portfolio transactions
as they may reasonably request.
3. Compensation of Adviser.
The Fund will pay to Adviser on the last day of each month a fee at an
annual rate equal to 0.50% of the daily average net asset value of the
Portfolio, such fee to be computed daily based upon the net asset value of
the Portfolio as determined by a valuation made in accordance with the
Fund's procedure for calculating Portfolio net asset value as described in
the Fund's Prospectus and/or Statement of Additional Information. During
any period when the determination of a Portfolio's net asset value is
suspended by the directors of the Fund, the net asset value of a share of
that Portfolio as of the last business day prior to such suspension shall,
for the purpose of this Paragraph 3, be deemed to be net asset value at the
close of each succeeding business day until it is again determined.
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4. Status of Investment Adviser.
The services of Adviser to the Fund are not to be deemed exclusive, and
Adviser shall be free to render similar services to others so long as its
services to the Fund are not impaired thereby. Adviser shall be deemed to
be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Fund in any
way or otherwise be deemed an agent of the Fund. Nothing in this Agreement
shall limit or restrict the right of any director, officer or employee of
Adviser, who may also be a director, officer, or employee of the Fund, to
engage in any other business or to devote his or her time and attention in
part to the management or other aspects of any other business, whether of a
similar nature or a dissimilar nature.
5. Permissible Interests.
Directors, agents, and stockholders of the Fund are or may be interested in
Adviser (or any successor thereof) as directors, partners, officers, or
stockholders, or otherwise, and directors, partners, officers, agents, and
stockholders of Adviser are or may be interested in the Fund as directors,
stockholders or otherwise; and Adviser (or any successor) is or may be
interested in the Fund as a stockholder or otherwise.
6. Liability of Investment Adviser.
Adviser assumes no responsibility under this Agreement other than to render
the services called for hereunder in good faith. Adviser shall not be
liable for any error of judgment or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to receipt of
compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the
Investment Company Act of 1940 or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance
of, or from reckless disregard by it of its obligations and duties under,
this Agreement.
7. Term.
This Agreement shall remain in effect until no later than April 30, 2001,
and from year to year thereafter provided such continuance is approved at
least annually by (1) the vote of a majority of the Board of Directors of
the Fund or (2) a vote of a "majority" (as that term is defined in the
Investment Company Act of 1940) of the Fund's outstanding securities,
provided that in either event the continuance is also approved by the vote
of a majority of the directors of the Fund who are not parties to this
Agreement or "interested persons" (as defined in the Act) of any such
party, which vote must be cast in person at meeting called for the purpose
of voting on such approval; provided, however, that;
(a) the Fund may, at any time and without the payment of any penalty,
terminate this Agreement upon 60 days written notice to Adviser;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the Rules thereunder);
and
(c) Adviser may terminate this Agreement without payment of penalty on 60
days written notice to the Fund; and
(d) the terms of paragraph 6 of this Agreement shall survive the
termination of this Agreement.
8. Notices.
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by
first class mail, postage prepaid or by prepaid overnight delivery service
to the respective parties as follows:
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If to the Fund: If to the Adviser:
Optimal Funds, Inc Leveraged Index Management Company
213 G VT Route 15 213 G VT Xxxxx 00
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xx. Xxxxxxxx X. Xxxxxxx Xx. Xxxxxxxx X. Xxxxxxx
President President
9. Amendments.
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 amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the Fund's outstanding
voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and the year first written above.
Optimal Funds, Inc. Leveraged Investment Management Company
By: _____________________ By: __________________________
Xxxxxxxx X. Xxxxxxx Xxxxxxxx X. Xxxxxxx
President President
ATTEST: ATTEST:
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Secretary Secretary
[Corporate Seal] [Corporate Seal]
