Exhibit (d)(1)
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 1st day of May, 2006, between the Ironwood Funds
(formerly known as ICM Series Trust), an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
called the "Trust"), and Ironwood Investment Management, LLC (formerly known as
Ironwood Capital Management, LLC, a Massachusetts limited liability company and
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 Ironwood Isabelle Small Company Stock 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;
WHEREAS, the Adviser is willing to perform such services on said terms and
conditions; and
WHEREAS, the purpose of this Amended and Restated Investment Advisory
Agreement is to reflect a change, effective as of the date hereof, in the names
of the Trust and the Adviser;
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.
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
Funds by the 1940 Act. The Adviser further agrees that all records which it
maintains for the Funds are the property of the Funds 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 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; (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 Advisers
services hereunder are not impaired thereby.
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, Xxxxx 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 Investment Management" or any
derivative thereof or logo associated with that name, including without
limitation "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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Boston, Massachusetts.
IRONWOOD FUNDS
By: /s/ Xxxx Xxxx
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Xxxx Xxxx
Attest:
:/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
IRONWOOD INVESTMENT MANAGEMENTLLC
By: /s/ Xxxx Xxxx
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Xxxx Xxxx
Attest:
:/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
