FORM OF
NEW
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this day of , between the ICM Series
Trust, an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts (hereinafter called the "Trust"), and Ironwood
Capital Management, LLC, a Massachusetts limited liability company,
(hereinafter called the "Adviser");
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and is authorized to issue shares ("Shares") in separate series and classes; and
WHEREAS, a series of the Trust having Institutional Class Shares and
Investment Class Shares, as well as separate assets and liabilities, has been
created under the name ICM/Isabelle Small-Cap Value Fund (the "Fund"); and
WHEREAS, the Adviser is registered as an Adviser under the Advisers Act of
1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust desires to retain the Adviser to render advisory services
to the Fund in the manner and on the terms and conditions hereinafter set
forth; and
WHEREAS, the Adviser is willing to perform such services on said terms and
conditions;
NOW THEREFORE, in consideration of the mutual promises and agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is thereby acknowledged, it is hereby agreed between the
Trust and the Adviser, as follows:
1. The Trust hereby retains the Adviser, and the Adviser hereby agrees,
to act as investment adviser to the Trust and, subject to such limitations
as the Board of Trustees of the Trust may impose, to assume all investment
duties and have full discretionary power and authority with respect to
investment of the assets of the Fund. Without limiting the generality of the
foregoing, the Adviser shall (i) obtain and evaluate such information and
advice relating to the economy and securities markets and securities as it
deems necessary or useful to discharge its duties hereunder;
(ii) continuously invest the assets of the Fund in a manner consistent with
the investment objective and policies thereof as stated in the Fund's
Prospectuses and Statements of Additional Information on file with the
Securities and Exchange Commission, as the same may be amended from time to
time; (iii) determine the securities to be purchased, sold or otherwise
disposed of by the Fund and the timing of such purchases, sales and
dispositions; (iv) vote all proxies for securities held by the Fund and
exercise all other voting rights with respect to such securities in the
manner it deems appropriate; (v) issue settlement instructions to custodians
designated by the Trust; (vi) evaluate the credit worthiness of securities
dealers, banks and other entities with which the Fund may engage in
repurchase agreements and monitor the status of such agreements; and
(vi) take such further action, including the placing of purchase and sale
orders and the selection of broker-dealers to execute such orders on behalf
of the Fund, as the Adviser shall deem necessary or appropriate, in its sole
discretion, to carry out its duties under this Agreement. The Adviser shall
also furnish to or place at the disposal of the Trust such information,
evaluations, analyses and opinions formulated or obtained by the Adviser in
the discharge of its duties, as the Trust may, from time to time, reasonably
request.
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The Adviser agrees, that in performing its duties hereunder, it will
comply with (i) the 1940 Act and the Advisers Act, and all rules and
regulations promulgated thereunder; (ii) all other applicable federal and
state laws and regulations, (iii) the provisions of the Declaration of Trust
and By-Laws of the Trust, as amended from time to time; and (iv) any
applicable procedures adopted by the Trust or the Adviser.
2. Adviser is responsible for broker-dealer selection in its sole
discretion, and is not obligated to deal with any broker or group of brokers
in executing portfolio transactions for the Fund. In selecting
broker-dealers, Adviser will generally seek the best combination of net
price and execution and may consider other factors, including: the broker's
trading expertise, stature in the industry, execution ability, facilities,
clearing capabilities and financial services offered, long-term relations
with Adviser, reliability and financial responsibility, timing and size of
order and execution, difficulty of execution, current market conditions and
depth of the market. Transaction charges, being a component of price, may
also be considered as a factor in making such determination. Accordingly,
the price to the Fund 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, 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 Fund to pay a broker or dealer that provides
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 and dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with
respect to the Trust. The Adviser is further authorized to allocate the
orders placed by it on behalf of the Fund 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.
3. The Adviser agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be
maintained by the Adviser with respect to the Fund by the 1940 Act. The
Adviser further agrees that all records which it maintains for the Fund are
the property of the Fund and it will promptly surrender any of such records
upon request.
4. The Adviser shall bear the cost of rendering the advisory services to
be performed by it under this Agreement, and shall, at its own expense, pay
the compensation of any Trustees, officers and employees, if any, of the
Trust who are affiliated persons of the Adviser. All other operating costs
and expenses relating to the Fund shall be paid by the Trust from the assets
of the Fund, including without limitation: (i) the charges and expenses of
any registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property, and any
stock transfer or dividend agent or agents appointed by the Fund;
(ii) brokers' commissions chargeable to the Fund in connection with
portfolio transactions to which the Fund is a party; (iii) all taxes,
including securities issuance and transfer taxes, and fees payable by the
Fund to federal, state or other governmental agencies; (iv) the cost and
expense of engraving or printing of certificates representing shares of the
Fund; (v) all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the Securities
and Exchange Commission and various states and other jurisdictions
(including filing fees and legal fees and disbursements of counsel and the
costs and expenses of preparation, printing (including typesetting) and
distributing prospectuses for such purposes); (vi) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any Advisory board or committee who are not employees
of the Adviser; (vii) all expenses which the Trust or the Fund agrees to
bear pursuant to any plan adopted by the Trust and/or the Fund pursuant to
Rule 12b-1 of the 1940 Act or any other dividend or distribution program or
agreement; (viii) charges and expenses of any outside service used for
pricing of the Fund's shares; (ix) charges and expenses of legal counsel,
including counsel to the Trustees of the Trust who are not interested
persons (as defined in the 0000 Xxx) of the Fund or the Adviser, and of
independent accountants, in connection with any matter relating to the Fund;
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(x) membership dues of industry associations; (xi) fees and expenses
incident to the listing of the Fund's shares on any stock exchange;
(xii) interest payable on Fund borrowings; (xiii) postage; insurance
premiums on property or personnel (including officers and Trustees) of the
Fund which inure to its benefit; (xiv) extraordinary expenses (including,
but not limited to, legal claims and liabilities and litigation costs and
any indemnification related thereto); and (xv) all other charges and costs
of the Fund's operation unless otherwise explicitly provided herein.
Notwithstanding anything in the immediately preceding paragraph to the
contrary the Adviser hereby undertakes to limit total Fund expenses,
including the investment advisory fee set forth in Paragraph 6 below, to
1.95% of the average daily net assets annually for Investment Class Shares
and 1.70% of the average daily net assets annually for Institutional Class
Shares.
5. For the services to be rendered by the Adviser to the Fund, the Trust
shall pay to the Adviser monthly compensation, calculated from the day of
commencement of operations of the Fund, determined by applying the annual
rate of one percent (1%) of the Fund's average daily net assets. Except as
hereinafter set forth, compensation under this Agreement shall be calculated
and accrued daily and paid monthly. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last
day of a month, compensation for that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the
fees as set forth above.
In the event the expenses of the Fund (including the fees of the Adviser
and amortization of organization expenses, but excluding interest, taxes,
brokerage commissions, extraordinary expenses and sales charges, and
expenses attributable to investing outside the United States) for any fiscal
year exceed the limits set by applicable regulations of state securities
commissions where the Fund is registered or qualified for sale, the Adviser
will reduce its fees by the amount of such excess. Any such reductions are
subject to readjustment during the year. The payment of the advisory fee at
the end of any month will be reduced or postponed or, if necessary, a refund
will be made to the Fund so that at no time will there be any accrued but
unpaid liability under this expense limitation. The adviser may reduce any
portion of the compensation or reimbursement of expenses due to it under
this agreement, or may agree to make payments to limit the expenses which
are the responsibility of the Fund. Any such reduction or payment shall be
applicable only to such specific 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 fee withheld from the
Adviser under this paragraph shall be reimbursed by the Fund to the Adviser
to the extent permitted by the applicable state law if the aggregate
expenses for the next succeeding fiscal year do not exceed the applicable
state limitation or any more restrictive limitation to which the Adviser has
agreed.
6. The Adviser will use its best judgment and effort in its investment of
the Fund's assets, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and duties
hereunder, the Adviser shall not be liable to the Trust, the Fund or any of
its shareholders for any error of judgment or mistake of law or for any act
or omission by the Adviser or for any losses sustained by any of them. The
Adviser shall be indemnified by the Trust as an agent of the Trust in
accordance with the terms of Section 4.8 of the Trust's By-Laws. As used in
this Section 7, the term "Adviser" shall include any officers, managers,
employees, or other affiliates of the Adviser performing services with
respect to the Fund.
7. Nothing contained in this Agreement shall prevent the Adviser or any
affiliated person of the Adviser (as defined in the 0000 Xxx) from acting as
investment adviser or manager for any other investment companies and other
clients, whether or not the investment objectives or policies of any such
other clients are similar to those of the Fund, and shall not in any way
bind or restrict the Adviser or any such affiliated person from buying,
selling or trading any securities for their own accounts or for the account
of others for whom the Adviser or any such affiliated person may be acting.
Nothing in this Agreement shall limit or restrict the right of the Adviser
or any manager, officer or employee of the Adviser to engage in any other
business or to devote time and attention in part to the management or other
aspects of any other business whether of a similar or dissimilar nature, so
long as Adviser's services hereunder are not impaired thereby.
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8. This Agreement shall become effective on the date hereof and shall
continue in effect, unless sooner terminated as herein provided, for two
(2) years from such date, and from year to year thereafter provided such
continuance is approved at least annually by the vote of a majority of the
Board of Trustees of the Trust, including a majority of the Trustees of the
Trust who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such party, which vote must be cast in
person at a 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 sixty (60) days'
written notice to the Adviser, either by majority vote of the Trustees of
the Trustee or by the vote of a majority of the outstanding voting
securities of the Fund; (b) this Agreement shall immediately terminate in
the event of its assignment (to the extent required by the 1940 Act and the
rules thereunder) unless such automatic terminations shall be prevented by
an exemptive order of the Securities and Exchange Commission; and (c) the
Adviser may terminate this Agreement without payment of penalty on sixty
(60) days written notice to the Trust.
9. Any notice to be given by the Adviser to the Trust under this
Agreement shall be given in writing, addressed and hand delivered or mailed
certified mail, to Two Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, or such other
address as shall be specified in writing to the Adviser. Any notice to be
given by the Trust or the Fund to the Adviser under this Agreement shall be
given in writing, addressed and delivered or mailed certified mail, to 21
Xxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000, or such other
address as shall be specified in writing to the Trust.
10. No provision of this Agreement may be changed, waived, discharge or
terminated orally, but only by any instrument in writing signed by both
parties hereto, and no amendment of this Agreement shall be effective with
respect to the Fund until approved by an affirmative vote of (i) a majority
of the outstanding voting securities of the Fund, and (ii) a majority of the
Trustees of the Trust, including a majority of Trustees who are not
interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, if such approval
is required by applicable law. Notwithstanding anything herein to the
contrary, this Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Adviser shall be liable for failing to do so.
11. It is understood that the name "Ironwood Capital Management" or any
derivative thereof or logo associated with that name, including without
limitation "ICM" or "Ironwood", is the valuable property of the Adviser and
its affiliates, and that the Fund has the right to use such name (or
derivative thereof or associated logo) only so long as this Agreement shall
continue with respect to the Fund. Upon termination of this Agreement, the
Fund shall forthwith cease to use such name (or derivative thereof or
associated logo) and the Trust shall promptly amend its Declaration of Trust
to change its name and the name of the Fund to comply herewith.
12. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts. To the extent the applicable law of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the Advisers Act or any
rules, regulations or orders of the Securities and Exchange Commission, the
latter shall control.
13. The Adviser understands that the obligations of this Agreement are
not binding upon any shareholder of the Trust personally, but bind only the
Trust's property; the Adviser acknowledges that it has notice of the
provisions of the Trust's Declaration of Trust disclaiming shareholder
liability for acts or obligations of the Trust or any series of the Trust,
including, without limitation, the Fund. This Agreement has been executed by
or with reference to any Trustee in such person's capacity as a Trustee, and
the Trustees shall not be personally liable hereon.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Boston, Massachusetts.
THE ICM SERIES TRUST
Attest: By:
IRONWOOD CAPITAL MANAGEMENT, LLC
Attest: By:
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