FORM OF
INVESTMENT MANAGEMENT AGREEMENT
[ ], 1998
Mutual Management Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This Investment Management Agreement (the "Agreement") is made on
this [ ] day of [ ], 1997, by and between [Name of Trust], a
trust/Trust organized under the laws of the State of
Maryland/Massachusetts (the "Trust"), in respect of its series, [Name of
Fund] (the "Fund"), and Mutual Management Corp. ("MMC") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting
in investments of the kind and in accordance with the limitations
specified in: (i) the Trust's Declaration of Trust as amended from
time to time (the "Declaration of Trust"); (ii) the Fund's
Prospectus (the "Prospectus"); and (iii) the Fund's Statement of
Additional Information (the "Statement") filed with the Securities
and Exchange Commission (the "SEC") as part of the Fund's
Registration Statement on Form N-1A, as amended from time to time,
and in such manner and to such extent as may from time to time be
approved by the Board of Trustees of the Trust (the "Board").
Copies of the Fund's Prospectus and the Statement and the
Declaration of Trust have been or will be submitted to MMC. The
Trust desires to employ and hereby appoints MMC to act as
investment manager for the Fund. MMC accepts the appointment and
agrees to furnish the services for the compensation set forth
below. MMC is hereby authorized to retain third parties and is
hereby authorized to delegate some or all of its duties and
obligations hereunder to such persons, provided such persons shall
remain under the general supervision of MMC.
2. Services as Investment Manager
Subject to the supervision and direction of the Board, MMC will:
(a) assist in supervising all aspects of the Fund's operations;
(b) supply the Fund with office facilities (which may be in MMC's
own offices), statistical and research data, data processing
services, clerical, accounting and bookkeeping services,
including, but not limited to, the calculation of (i) the net
asset value of shares of the Fund, (ii) applicable contingent
deferred sales charges and similar fees and charges and (iii)
distribution fees, internal auditing and legal services, internal
executive and administrative services, and stationery and office
supplies; and (c) prepare reports to shareholders of the Fund, tax
returns and reports to and filings with the SEC and state blue sky
authorities.
3. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Trust will pay MMC, on the first business day of
each month, a fee for the previous month at an annual rate of [
%] of the Fund's average daily net assets. The fee for the period
from the date the Fund commences its investment operations to the
end of the month during which the Fund commences its investment
operations shall be pro-rated according to the proportion that such
period bears to the full monthly period. Upon any termination of
this Agreement before the end of any month, the fee for such part
of that month shall be pro-rated according to the proportion that
such period bears to the full monthly period and shall be payable
upon the date of termination of this Agreement. For the purpose of
determining fees payable to MMC, the value of the Fund's net assets
shall be computed at the times and in the manner specified in the
Fund's Prospectus and/or the Statement, as from time to time in
effect.
4. Expenses
MMC will bear all expenses in connection with the performance of
its services under this Agreement. The Fund will bear certain
other expenses to be incurred in its operation, including:
investment advisory and administration fees; charges of custodians
and transfer and dividend disbursing agents; fees for necessary
professional services, such as the Fund's and Board members'
proportionate share of insurance premiums, professional
associations, dues and/or assessments; and brokerage services,
including taxes, interest and commissions; costs attributable to
investor services, including without limitation, telephone and
personnel expenses; costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes
and for distribution to existing shareholders; the costs of
regulatory compliance, such as SEC fees and state blue sky
qualifications fees; outside auditing and legal expenses and costs
associated with maintaining the Fund's legal existence; costs of
shareholders' reports and meetings of the officers or Board; fees
of the members of the Board who are not officers, directors or
employees of Xxxxx Xxxxxx, Inc. or its affiliates or any person who
is an affiliate of any person to whom duties may be delegated
hereunder and any extraordinary expenses. In addition, the Fund
will pay all service and distribution fees pursuant to a Services
and Distribution Plan adopted under Rule 12b-1 of the Investment
Company Act of 1940, as amended (the "1940 Act").
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement, but excluding distribution fees,
interest, taxes, brokerage and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitations
of any state having jurisdiction over the Fund, MMC will reimburse
the Fund for that excess expense to the extent required by state
law in the same proportion as its respective fees bear to the
combined fees for investment advice and administration. The expense
reimbursement obligation of MMC will be limited to the amount of
its fees hereunder. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
6. Brokerage
In selecting brokers or dealers to execute transactions on behalf
of the Fund, MMC will seek the best overall terms available. In
assessing the best overall terms available for any transaction, MMC
will consider factors it deems relevant, including, but not limited
to, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer and the reasonableness of the commission, if any,
for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction,
and in evaluating the best overall terms available, MMC is
authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934, as amended) provided to the Fund and/or other accounts
over which MMC or its affiliates exercise investment discretion.
7. Information Provided to the Fund
MMC will keep the Trust informed of developments materially
affecting the Fund's portfolio, and will, on its own initiative,
furnish the Trust from time to time with whatever information MMC
believes is appropriate for this purpose.
8. Standard of Care
MMC shall exercise its best judgment in rendering the services
listed in paragraph 2 above. MMC shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to protect
or purport to protect MMC against any liability to the Trust or to
the Fund's shareholders to which MMC would otherwise be subject by
reason of willful malfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of MMC 's
reckless disregard of its obligations and duties under this
Agreement.
9. Services to Other Companies or Accounts
The Trust understands that MMC now acts, will continue to act and
may act in the future as: investment adviser to fiduciary and other
managed accounts, as well as to other investment companies; and the
Trust has no objection to MMC's so acting, provided that whenever
the Fund and one or more other investment companies advised by MMC
have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula
believed to be equitable to each company. The Trust recognizes
that in some cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition, the Trust
understands that the persons employed by MMC to assist in the
performance of MMC's duties under this Agreement will not devote
their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict the right of MMC or
any affiliate of MMC to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
l0. Term of Agreement
This Agreement shall become effective as of the date the Fund
commences its investment operations and continue for an initial
two-year term and shall continue thereafter so long as such
continuance is specifically approved at least annually by (i) the
Board or (ii) a vote of a "majority" (as defined in the 0000 Xxx)
of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the
Board members who are not "interested persons" (as defined in the
0000 Xxx) of any party to this Agreement, by vote cast in person or
by proxy at a meeting called for the purpose of voting on such
approval. This Agreement is terminable, without penalty, on 60
days' written notice, by the Board or by vote of holders of a
majority of the Fund's shares, or upon 90 days' written notice, by
MMC. This Agreement will also terminate automatically in the event
of its assignment (as defined in the 1940 Act).
11. Representation by the Trust
The Trust represents that a copy of the Declaration of Trust is on
file with the Commonwealth of Massachusetts.
12. Indemnification
The Trust agrees to indemnify MMC and its officers, directors,
employees, affiliates, controlling persons, agents (including
persons to whom responsibilities are delegated hereunder) against
any loss, claim, expense or cost of any kind (including reasonable
attorney's fees) resulting or arising in connection with this
Agreement, or from the performance or failure to perform any act
hereunder, provided that no such indemnification shall be available
if the indemnitee violated the standard of care in paragraph 9
above. This indemnification shall be limited by the 1940 Act and
relevant state law. Each indemnitee shall be entitled to advance of
its expenses in accordance with the requirements of the 1940 Act
and the rules, regulations and interpretations thereof as in effect
from time to time.
13. Limitation of Liability
The Trust and MMC agree that the obligations of the Trust under
this Agreement shall not be binding upon any of the Board members,
shareholders, nominees, officers, employees or agents, whether
past, present or future, of the Trust individually, but are binding
only upon the assets and property of the Fund, as provided in the
Declaration of Trust. The execution and delivery of this Agreement
have been duly authorized by the Trust and MMC, and signed by an
authorized officer of each, acting as such. Neither the
authorization by the Board members of the Trust, nor the Trust's
execution and delivery by the officer of the Trust shall be deemed
to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets
and property of the Fund as provided in the Declaration of Trust.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning the enclosed
copy of this Agreement to us.
Very truly yours,
[Name of Trust]
on behalf of
[Name of Fund]
By:
Title:
Accepted:
Xxxxx Xxxxxx Mutual Funds Management Inc.
By:
Title:
