FORM OF INTERIM
INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of this [____] day of [__________], between
[STRONG ENTITY] (the "[Corporation/Trust]"), a [corporation/trust] organized
under the laws of the State of [Wisconsin/Delaware] with its principal place of
business at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxx Xxxxx, XX 00000, and Xxxxx Fargo
Funds Management, LLC (the "Adviser"), a limited liability company organized
under the laws of the State of Delaware with its principal place of business at
000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000.
WHEREAS, the [Corporation/Trust] is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end management investment
company and is authorized to issue shares (as defined in the
[Corporation/Trust]'s [Articles of Incorporation/Trust Instrument], as amended
and supplemented from time to time), in separate classes and series; and
WHEREAS, the [Corporation/Trust] desires that the Adviser provide
investment advisory services to each class and series of the [Corporation/Trust]
listed on Schedule A hereto as such Schedule may be amended or supplemented from
time to time by mutual agreement (each a "Fund" and collectively the "Funds"),
and the Adviser is willing to provide those services on the terms and conditions
set forth in this Agreement;
NOW THEREFORE, the [Corporation/Trust] and the Adviser agree as follows:
SECTION 1. APPOINTMENT OF THE ADVISER. The [Corporation/Trust] is engaged
in the business of investing and reinvesting its assets in securities of the
type and in accordance with the limitations specified in its[Articles of
Incorporation/Trust Instrument], as amended and supplemented from time to time,
By-Laws (if any) and Registration Statement filed with the Securities and
Exchange Commission (the "Commission") under the 1940 Act and the Securities Act
of 1933 (the "Securities Act"), including any representations made in the
prospectus and statement of additional information relating to the Funds
contained therein and as may be amended or supplemented from time to time, all
in such manner and to such extent as may from time to time be authorized by the
[Corporation/Trust]'s Board of [Directors] (the "Board"). The Board is
authorized to issue any unissued shares in any number of additional classes or
series.
The investment authority granted to the Adviser shall include the
authority to exercise whatever powers the [Corporation/Trust] may possess with
respect to any of its assets held by the Funds, including, but not limited to,
the power to exercise rights, options, warrants, conversion privileges,
redemption privileges, and to tender securities pursuant to a tender offer, and
participate in class actions and other legal proceedings on behalf of the Funds.
The [Corporation/Trust] hereby employs Adviser, subject to the direction
and control of the Board, to manage the investment and reinvestment of the
assets in the Funds and, without limiting the generality of the foregoing, to
provide the other services specified in Section 2 hereof.
SECTION 2. DUTIES OF THE ADVISER.
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets for the Funds. Among other
things, the Adviser shall make all decisions with respect to the allocation of
the Fund's investments in various securities or other assets, in investment
styles and, if applicable, in other investment companies or pooled vehicles in
which a Fund may invest. To carry out such decisions, the Adviser is hereby
authorized, as agent and attorney-in-fact for the [Corporation/Trust], for the
account of, at the risk of and in the name of the [Corporation/Trust], to place
orders and issue instructions with respect to those transactions of the Funds.
In all purchases, sales and other transactions in securities for the Funds, the
Adviser is authorized to exercise full discretion and act for the
[Corporation/Trust] in the same manner and with the same force and effect as the
[Corporation/Trust] might or could do with respect to such purchases, sales or
other transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
(b) The Adviser will report to the Board at each regular meeting thereof
regarding the investment performance of the Funds since the prior report, and
will also keep the Board informed of important developments affecting the
[Corporation/Trust], each Fund and the Adviser, and on its own initiative will
furnish the Board from time to time with such information as the Adviser may
believe appropriate, whether concerning the individual companies whose
securities are held by a Fund, the industries in which they engage, or the
economic, social or political conditions prevailing in each country in which a
Fund maintains investments. The Adviser will also furnish the Board with such
statistical and analytical information with respect to securities in the Funds
as the Adviser may believe appropriate or as the Board reasonably may request.
The Adviser shall promptly notify the [Corporation/Trust] of (i) any
changes regarding the Adviser that would impact disclosure in the
[Corporation/Trust]'s Registration Statement, or (ii) any material violation of
any requirement, provision, policy or restriction that the Adviser is required
to comply with under Section 6 of this Agreement. The Adviser shall immediately
notify the [Corporation/Trust] of any legal process served upon it in connection
with its activities hereunder, including any legal process served upon it on
behalf of the Funds or the [Corporation/Trust].
(c) The Adviser will from time to time employ or sub-contract the services
to certain persons as the Adviser believes to be appropriate or necessary to
assist in the execution of the Adviser's duties hereunder; provided, however,
that the employment or sub-contracting with any such person shall not relieve
the Adviser of its responsibilities or liabilities hereunder and provided
further that the Adviser shall not have the authority to sub-contract advisory
responsibilities without the consent of the [Corporation/Trust]. The cost of
performance of such duties will be borne and paid by the Adviser. No obligation
may be imposed on the [Corporation/Trust] in any such respect.
The Adviser shall supervise and monitor the activities of its
representatives, personnel, sub-contractors, and agents in connection with the
execution of its duties and obligations hereunder. The appropriate personnel of
the Adviser will be made available to consult with the Board at reasonable times
and upon reasonable notice concerning the business of the [Corporation/Trust].
(d) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the [Corporation/Trust] under the 1940 Act. The Adviser shall
prepare and maintain, or cause to be prepared and maintained, in such form, for
such periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser pursuant
to this Agreement required to be prepared and maintained by the
[Corporation/Trust] pursuant to the rules and regulations of any national,
state, or local government entity with jurisdiction over the
[Corporation/Trust], including the Commission and the Internal Revenue Service.
The books and records pertaining to the [Corporation/Trust] which are in
possession of the Adviser shall be the property of the [Corporation/Trust]. The
[Corporation/Trust], or the [Corporation/Trust]'s authorized representatives,
shall have access to such books and records at all times during the Adviser's
normal business hours. Upon the reasonable request of the [Corporation/Trust],
copies of any such books and records shall be provided promptly by the Adviser
to the [Corporation/Trust] or the [Corporation/Trust]'s authorized
representatives.
(e) The Adviser shall (i) provide for use by the [Corporation/Trust],
at the Adviser's expense, office space and all necessary office facilities,
equipment and personnel for servicing the investments of each Portfolio, (ii)
pay the salaries and fees of all officers and directors of the
[Corporation/Trust] who are "interested persons" of the Adviser as such term is
defined under the 1940 Act, and (iii) pay for all clerical services relating to
research, statistical, and investment work.
SECTION 3. DELIVERY OF DOCUMENTS TO THE ADVISER. The
[Corporation/Trust] has furnished the Adviser with true, correct and complete
copies of the following documents:
(a) The [Articles of Incorporation/Trust Instrument], as in effect on the date
hereof; (b) The Registration Statement filed with the Commission under the 1940
Act and the Securities Act; and (c) Written guidelines, policies and procedures
adopted by the [Corporation/Trust].
The [Corporation/Trust] will furnish the Adviser with all future amendments
and supplements to the foregoing as soon as practicable after such
documents become available. The [Corporation/Trust] shall furnish the
Adviser with any further documents, materials or information that the
Adviser may reasonably request in connection with the performance of its
duties hereunder.
SECTION 4. DELEGATION OF RESPONSIBILITIES. The Adviser may carry out any of
its obligations under this Agreement by employing, subject to supervision by the
Adviser, one or more Sub-Adviser(s) who are registered as investment advisers
pursuant to the Investment Advisers Act of 1940 ("Sub-Advisers"). Each
Sub-Adviser's employment will be evidenced by a separate written agreement
approved by the Board and, if required under the 1940 Act, by the shareholders
of the Fund (unless the Commission or its staff has given authorization or
issued an interpretation dispensing with the requirement of shareholder
approval). The Adviser shall not be liable hereunder for any act or omission of
any Sub-Adviser, except for failure to exercise good faith in the employment of
the Sub-Adviser and for failure to exercise appropriate supervision of such
Sub-Adviser, and as may otherwise be agreed in writing. The Adviser shall be
solely responsible for compensating any Sub-Adviser for services rendered under
any Sub-Advisory Agreement. The Adviser may, from time to time and at any time,
terminate any Sub-Adviser and reassume the responsibilities assigned to such
Sub-Adviser with respect to any Fund without obtaining the approval of the
shareholders of the Fund.
SECTION 5. CONTROL BY BOARD. Any investment activities undertaken by the
Adviser pursuant to this Agreement, as well as any other activities undertaken
by the Adviser on behalf of the Funds, shall at all times be subject to the
direction and control of the Board.
SECTION 6. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Adviser shall at all times comply with:
(a) all applicable provisions of the 1940 Act, and any rules and
regulations adopted thereunder;
(b) the Registration Statement of the [Corporation/Trust], as
it may be amended from time to time, filed with the Commission under the
Securities Act and the 1940 Act;
(c) the provisions of the [Articles of Incorporation/Trust
Instrument] of the [Corporation/Trust], as it may be amended from time to time;
(d) the provisions of the Internal Revenue Code of 1986, as
amended, applicable to the [Corporation/Trust] or the Funds, and any rules and
regulations adopted thereunder; and
(e)any other applicable provisions of state or federal law,
and any rules and regulations adopted thereunder.
SECTION 7. PROXIES. The Adviser shall have responsibility to
vote proxies solicited with respect to issuers of securities in which assets of
the Funds are invested in accordance with the [Corporation/Trust]'s policies on
proxy voting.
SECTION 8. BROKER-DEALER RELATIONSHIPS. In connection with the purchase and
sale of securities for the Funds, the Adviser is responsible for broker-dealer
selection and negotiation of brokerage commission rates. The Adviser's primary
consideration in effecting a security transaction will be to obtain the best
execution and price. In selecting a broker-dealer to execute each particular
transaction for a Fund, the Adviser will consider among other things: the best
net price available, the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the Fund on a continuing
basis. 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 may from time to time 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 having caused a
Fund to pay a broker or dealer that provides brokerage and research services to
the Adviser an amount of commission for effecting a portfolio investment
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 or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
the Adviser with respect to the Fund and to other clients of the Adviser. The
Adviser is further authorized to allocate the orders placed by it on behalf of
the Funds to brokers and dealers who also provide brokerage and research
services within the meaning of Section 28(e) of the Securities Exchange Act of
1934 and in compliance therewith. Such allocation shall be in such amounts and
proportions as the Adviser shall determine and the Adviser will report on said
allocations regularly to the Board, indicating the brokers to whom such
allocations have been made and the basis therefore.
SECTION 9. EXPENSES. All of the ordinary business expenses incurred in the
operations of the Funds and the offering of their shares shall be borne by the
Funds unless specifically provided otherwise in this Agreement. The expenses
borne by the Funds include, but are not limited to, banking, brokerage
commissions, taxes, legal, auditing or governmental fees, the cost of preparing
share certificates, custodian, transfer agent and shareholder service agent
costs, expense of issue, sale, redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses relating to directors and
shareholder meetings, the cost of preparing and distributing reports and notices
to shareholders, the fees and other expenses incurred by the Funds in connection
with membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed to
the Fund's shareholders.
The Adviser shall pay its own expenses in connection with the services to
be provided by it pursuant to this Agreement.
SECTION 10. COMPENSATION. As compensation for the advisory services
provided under this Agreement, the [Corporation/Trust] shall pay the Adviser
fees, payable daily or less frequently as agreed by the [Corporation/Trust] and
the Adviser, at the annual rates indicated on Schedule A hereto, as such
Schedule may be amended or supplemented from time to time.
SECTION 11. STANDARD OF CARE. The [Corporation/Trust] will expect of
the Adviser, and the Adviser will give the [Corporation/Trust] the benefit of,
the Adviser's best judgment and efforts in rendering its services to the
[Corporation/Trust], and the Adviser shall not be liable hereunder for any
mistake in judgment. In the absence of willful misfeasance, bad faith,
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser or any of its officers, directors, employees or agents, the
Adviser shall not be subject to liability to the [Corporation/Trust] or to any
shareholders of the [Corporation/Trust] for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security.
SECTION 12. NON-EXCLUSIVITY. The services of the Adviser to the Funds
are not to be deemed to be exclusive, and the Adviser shall be free to render
investment advisory or other services to others (including other investment
companies) and to engage in other activities. It is understood and agreed that
officers or directors of the Adviser may serve as officers and [Directors] of
the [Corporation/Trust], and that officers or [Directors] of the
[Corporation/Trust] may serve as officers or directors of the Adviser, to the
extent that such services may be permitted by law, and that the officers and
directors of the Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust, including
other investment advisory companies.
SECTION 13. RECORDS. The Adviser shall, with respect to orders the
Adviser places for the purchase and sale of portfolio securities of the Funds,
maintain or arrange for the maintenance of the documents and records required
pursuant to Rule 31a-1 under the 1940 Act as well as such records as the Fund's
administrator reasonably requests to be maintained, including, but not limited
to, trade tickets and confirmations for portfolio trades. All such records shall
be maintained in a form acceptable to the [Corporation/Trust] and in compliance
with the provisions of Rule 31a-1 or any successor rule. All such records will
be the property of the [Corporation/Trust] and will be made available for
inspection and use by the [Corporation/Trust] and its authorized
representatives.
SECTION 14. TERM AND APPROVAL. This Agreement shall become effective
with respect to a Fund after approved in accordance with the requirements of the
1940 Act, and executed by the Adviser and the [Corporation/Trust], and shall
continue for two years, and thereafter from year to year provided that the
continuation of the Agreement is specifically approved in accordance with the
requirements of the 1940 Act, which currently requires that the continuation be
approved at least annually:
(a) by the Board, or by the vote of "a majority of the outstanding voting
securities" of the Fund (as defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the [Corporation/Trust]'s
[Directors] who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of a party to this Agreement (other than as [Directors]
of the [Corporation/Trust]), by votes cast in person at a meeting specifically
called for such purpose.
SECTION 15. TERMINATION. As required under the 1940 Act, this Agreement
may be terminated with respect to a Fund at any time, without the payment of any
penalty, by vote of the Board or by vote of a majority of a Fund's outstanding
voting securities, or by the Adviser, on sixty (60) days' written notice to the
other party. The notice provided for herein may be waived by the party entitled
to receipt thereof. This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" for purposes of this paragraph having the
meaning defined in Section 2(a)(4) of the 1940 Act, as it may be interpreted by
the Commission or its staff in interpretive releases, or by the Commission staff
in no-action letters issued under the 1940 Act.
This Agreement may also be terminated immediately by the
[Corporation/Trust] or the Adviser in the event that either party (i) breaches a
material term of this Agreement; or (ii) commits a material violation of any
governing law or regulation; or (iii) engages in conduct that would have a
material adverse effect upon the reputation or business prospects of such other
party.
SECTION 16. INDEMNIFICATION BY THE ADVISER. The [Corporation/Trust]
shall not be responsible for, and the Adviser shall indemnify and hold the
[Corporation/Trust] or any Fund harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to the willful misfeasance, bad faith, negligent acts or
reckless disregard of obligations or duties on the part of the Adviser or any of
its officers, directors, employees or agents.
SECTION 17. INDEMNIFICATION BY THE [CORPORATION/TRUST]. In the absence
of willful misfeasance, bad faith, negligence or reckless disregard of duties
hereunder on the part of the Adviser or any of its officers, directors,
employees or agents, the [Corporation/Trust] on behalf of the Funds hereby
agrees to indemnify and hold harmless the Adviser against all claims, actions,
suits or proceedings at law or in equity whether brought by a private party or a
governmental department, commission, board, bureau, agency or instrumentality of
any kind, arising from the advertising, solicitation, sale, purchase or pledge
of securities, whether of the Funds or other securities, undertaken by the
Funds, their officers, directors, employees or affiliates, resulting from any
violations of the securities laws, rules, regulations, statutes and codes,
whether federal or of any state, by the Funds, their officers, directors,
employees or affiliates.
SECTION 18. NOTICES. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
[Corporation/Trust] shall be 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxx Xxxxx, XX 00000.
SECTION 19. QUESTIONS OF INTERPRETATION. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such terms or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the Commission,
interpretations of the Commission or its staff, or Commission staff no-action
letters, issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order. The duties
and obligations of the parties under this Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware to the extent
that state law is not preempted by the provisions of any law of the United
States heretofore or hereafter enacted.
SECTION 20. AMENDMENT OF THIS AGREEMENT. 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. If shareholder approval of
an amendment is required under the 1940 Act, no such amendment shall become
effective until approved by a vote of the majority of the outstanding shares of
the affected Funds. Otherwise, a written amendment of this Agreement is
effective upon the approval of the Board and the Adviser.
SECTION 21. RISK ACKNOWLEDGEMENT. The Adviser does not guarantee the
future performance of the Funds or any specific level of performance, the
success of any investment decision or strategy that the Adviser may use, or the
success of the Adviser's overall management of the Funds. The
[Corporation/Trust] understands that investment decisions made for the Funds by
the Adviser are subject to various market, currency, economic and business
risks, and that those investment decisions will not always be profitable. The
Adviser will manage only the securities, cash and other investments for which
management responsibility is delegated to it and which are held in the Fund's
account(s) and, in making investment decisions for the Funds, the Adviser will
not consider any other securities, cash or other investments owned by the
[Corporation/Trust].
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate by their respective officers on the day and year first
written above.
[STRONG ENTITY]
on behalf of the Funds
By: ________________________
XXXXX FARGO FUNDS MANAGEMENT, LLC
By: ________________________
INTERIM INVESTMENT ADVISORY AGREEMENT
SCHEDULE A
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FEE AS % OF
STRONG FUNDS AVG. DAILY
NET ASSET
VALUE
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The foregoing fee schedule is agreed to as of [___________] and shall
remain in effect until changed in writing by the parties.
[STRONG ENTITY]
By:
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XXXXX FARGO FUNDS MANAGEMENT, LLC
BY:
