ADVISORS SERIES TRUST INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT
made
this 29th day of June 2006 by and between ADVISORS SERIES TRUST (the
“Trust”),
a
Delaware statutory trust and SINCERE INVESTMENT MANAGEMENT, LLC (the
“Manager”),
a
[Delaware] limited liability company.
WITNESSETH:
WHEREAS,
the
Manager and its affiliates are engaged in the business of creating and marketing
mutual funds; and
WHEREAS,
the
Manager is registered as an investment adviser under the Investment Advisers
Act
of 1940, as amended; and
WHEREAS,
Sincere
Advisor Small Cap Fund (the “Fund”)
is a
separate series of the Trust having separate assets and liabilities;
and
WHEREAS,
the
Fund has retained the Manager to render certain investment management services
to the Fund pursuant to this Investment Management Agreement (the “Agreement”);
and
WHEREAS,
the
Trust, on behalf of the Fund, and the Manager have retained Xxxxx Investment
Research, Inc. (the “Sub-Adviser”) to render portfolio management services to
the Fund pursuant to an Investment Sub-Advisory Agreement dated as of June
28,
2006 (the “Sub-Advisory
Agreement”).
NOW,
THEREFORE,
in
consideration of the mutual promises and agreements herein contained and
other
good and valuable consideration, the receipt of which is hereby acknowledged,
it
is hereby agreed by and among the parties hereto as follows:
| 1. |
IN
GENERAL
|
The
Manager agrees, all as more fully set forth herein, to act as the investment
manager to the Fund with respect to the creation and management of the Fund
and
to oversee the portfolio management services to be rendered by the Sub-Adviser
including, the purchase and sale of securities held in the portfolio of the
Fund.
| 2. |
DUTIES
AND OBLIGATIONS OF
THE MANAGER
|
(a) Subject
to the succeeding provisions of this section and subject to the direction
and
control of the Board of Trustees of the Trust, the Manager shall act as
investment manager to the Fund and shall:
(i) Manage
and oversee sub-advisory services to be rendered by the Sub-Adviser to the
Fund;
(ii) Maintain
the books and records required to be maintained by the Fund under the Investment
Company Act of 1940, as amended (the “1940
Act”)
and
other applicable law, except to the extent arrangements have been made for
such
books and records to be maintained by the Sub-Adviser, administrator or another
agent of the Fund;
(iii) Provide
the Trust with timely assistance in determining the value of any security
in the
Fund that requires fair value pricing, and may rely on advice and information
regarding pricing received from the Sub-Adviser.
(iv) Cause
the
Sub-Adviser to furnish reports, statements and other data on securities,
economic conditions and other matters related to the investment of the Fund’s
assets which the Fund’s administrator or distributor or the officers of the
Trust may reasonably request;
(v) Render
to
the Trust’s Board of Trustees such periodic and special reports with respect to
the Fund’s marketing activities as the Board may reasonably request and cause
the Sub-Adviser to render to the Trust’s Board of Trustees such periodic and
special reports with respect to the Fund’s investment activities as the Board
reasonably requests;
(vi) To
the
extent reasonably requested by the Trust, use its best efforts to assist
the
Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the
1940
Act, including, without limitation, providing the Chief Compliance Officer
of
the Trust with (a) current copies of the compliance policies and procedures
of
the Manager in effect from time to time (including prompt notice of any material
changes thereto), (b) a summary of such policies and procedures in connection
with the annual review thereof by the Trust required under Rule 38a-1, and
(c)
upon request, a certificate of the chief compliance officer of the Manager
to
the effect that the policies and procedures of the Manager are reasonably
designed to prevent violation of the Federal Securities Laws (as such term
is
defined in Rule 38a-1); and
(vii) Except
as
permitted by the Trust’s policies and procedures, not disclose but shall treat
confidentially all information in respect of the portfolio investments of
the
Fund, including, without limitation, the identification and market value
or
other pricing information of any and all portfolio securities or other financial
instruments held by the Fund, and any and all trades of portfolio securities
or
other transactions effected for the Fund (including past, pending and proposed
trades).
(b) Nothing
in this Agreement shall prevent the Manager or any affiliated person (as
defined
in the 0000 Xxx) of the Manager from serving as manager for any other person,
firm or corporation and shall not in any way limit or restrict the Manager
or
any such affiliated person from buying, selling or trading any securities
for
its or their own accounts or the accounts of others for whom it or they may
be
acting, provided, however, that the Manager expressly represents that it
will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(c) The
Manager shall give the Trust the benefit of its best judgment and effort
in
rendering services hereunder, but the Manager shall not be liable for any
loss
sustained by reason of its actions taken in good faith. Nothing herein contained
shall, however, be construed to protect the Manager against any liability
to the
Trust or its security holders by reason of willful misfeasance, bad faith,
or
negligence in the performance of its duties, or by reason of its reckless
disregard of obligations and duties under this Agreement.
(i) It
is
agreed that the Manager shall have no responsibility or liability for the
accuracy or completeness of the Trust’s Registration Statement under the 1940
Act or the Securities Act of 1933, as amended, except for information supplied
by the Manager or Sub-Advisor for inclusion therein, provided however, the
Manager may rely on information provided by the Sub-Advisor.
(d) The
Trust
may indemnify the Manager to the full extent permitted by the Trust’s
Declaration of Trust and by law; provided, however, that nothing herein shall
be
construed to protect the Manager against any liability to which the Manager
would otherwise be subject by reason of willful misfeasance, bad faith, or
negligence in the performance of its duties, or by reason of its reckless
disregard of obligations and duties under this Agreement.
(e) The
Fund
may use the name the “Sincere Advisor Small Cap Fund” or any name derived from
or using the name “Sincere” only for so long as this Agreement or any extension,
renewal or amendment hereof remains in effect. At such time as such an agreement
shall no longer be in effect, the Fund shall cease to use such a name or
any
other name connected with the Manager.
(f) The
Manager shall have full authority to retain the Sub-Adviser or a replacement
investment sub-adviser to provide certain investment advisory services to
the
Fund, and the Manager may delegate certain of its duties hereunder to the
Sub-Adviser and pay the Sub-Adviser a portion of the compensation received
by
the Manager hereunder; provided, however, that the Manager shall remain fully
liable for all of its obligations under this Agreement.
| 3. |
ALLOCATION
OF EXPENSES
|
The
Manager agrees that it will furnish the Trust, at the Manager’s expense, with
office space and facilities, equipment and clerical personnel necessary for
carrying out its duties under this Agreement. The Manager will also pay (a)
all
compensation of any Trustees, officers and employees of the Trust who are
affiliated persons of the Manager, (b) the costs of any special Board of
Trustees meetings or shareholders meetings convened for the primary benefit
of
the Manager, including the costs of any proxy solicitation in connection
therewith, and (c) the costs of liquidating or reorganizing the Fund (unless
such costs are otherwise allocated by the Board of Trustees). All operating
costs and expenses relating to the Fund not expressly assumed by the Manager
under this Agreement shall be paid by the Trust from the assets of the Fund,
including, but not limited to (i) interest and taxes; (ii) brokerage
commissions, (iii) insurance premiums; (iv) compensation and expenses
of the Trust’s Trustees other than those affiliated with the Manager or the
Sub-Adviser; (v) legal and audit expenses; (vi) fees and expenses of
the Trust’s custodian, shareholder servicing or transfer agent and accounting
services agent; (vii) expenses incident to the issuance of the Fund’s
shares, including issuance on the payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or
state securities laws of the Trust or the shares of the Fund; (ix) expenses
of preparing, printing and mailing reports and notices and proxy material
to
shareholders of the Trust; (x) all other expenses incidental to holding
meetings of the Trust’s shareholders; (xi) dues or assessments of or
contributions to the Investment Company Institute or any successor;
(xii) such non-recurring expenses as may arise, including litigation
affecting the trust and the legal obligations which the Trust may have to
indemnify its office and Trustees with respect thereto; and (xiii) all
expenses which the Trust or the Fund agrees to bear in any distribution
agreement or in any plan adopted by the Trust and/or a Fund pursuant to
Rule 12b-1 under the 1940 Act.
| 4. |
COMPENSATION
OF THE MANAGER
|
(a) The
Trust
agrees to pay the Manager and the Manager agrees to accept as full compensation
for all services rendered by the Manager hereunder, an annual management
fee,
payable monthly and computed on the value of the net assets of the Fund
as of
the close of business each business day at the annual rate of 0.75% of
such net
asset value for the $1 billion in assets and at the annual rate of 0.65%
of such
net asset value in excess of $1 billion. This fee is for the Manager’s services
exclusive of any distribution and marketing services which, to the extent
any
such distribution and marketing services are paid for by Fund assets, shall
by
paid pursuant to a separate distribution plan complying with Rule 12b-1
under
the 1940 Act.
(b) The
Manager may voluntarily or contractually reduce any portion of the compensation
or reimbursement of expenses due to it under this Agreement, or may voluntarily
or contractually agree to make payments to limit or absorb the expenses that
are
the responsibility of the Fund. Any such 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
Manager hereunder or to continue future payments.
Any
such
reductions made by the Manager in its fees or payment of expenses that are
the
Fund’s obligation are subject to reimbursement by the Fund to the Manager, if
so
requested by the Manager, in subsequent fiscal years if the aggregate amount
actually paid by the Fund toward the operating expenses for such fiscal year
(taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses, if any. Under the expense limitation agreement,
the
Manager may recoup such reductions or payments made in any fiscal year of
the
Fund over the following three fiscal years, subject to the Board of Trustees’
review and approval at time of reimbursement, provided that such reimbursement
may not be paid prior to the Fund’s payment of current ordinary operating
expenses.
| 5. |
DURATION
AND TERMINATION
|
(a) This
Agreement shall go into effect on the date hereof and shall, unless terminated
as hereinafter provided, continue in effect for a period of two years from
the
date hereof and thereafter from year to year, but only so long as such
continuance is specifically approved at least annually by the Board of Trustees,
including the vote of a majority of the Trustees who are not parties to this
Agreement or “interested persons” (as defined in the 0000 Xxx) of any such
party cast in person at a meeting called for the purpose of voting on such
approval, or by the vote of the holders of a “majority” (as so defined) of the
outstanding voting securities of the Fund and by such a vote of the
Trustees.
(b) This
Agreement may be terminated by the Manager at any time without penalty upon
giving the Trust sixty (60) days’ written notice (which notice may be waived by
the Trust) and may be terminated by the Trust at any time without penalty
by
giving the Manager sixty (60) days’ written notice (which notice may be waived
by the Manager), provided that such termination by the Trust shall be directed
or approved by the vote of a majority of all of its Trustees in office at
the
time or by the vote of the holders of a majority (as defined in the 0000
Xxx) of
the voting securities of the Trust at the time outstanding and entitled to
vote.
This Agreement shall automatically terminate in the event of its assignment
(as
so defined).
| 6. |
AGREEMENT
BINDING ONLY ON FUND PROPERTY
|
The
Manager 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
Manager represents that it has notice of the provisions of the Trust’s
Declaration of Trust disclaiming shareholder liability for acts or obligations
of the Trust.
| 7. |
CONFLICTS
WITH TRUST’S GOVERNING DOCUMENTS AND APPLICABLE
LAWS
|
Nothing
herein contained shall be deemed to require the Trust or the Fund to take
any
action contrary to the Trust’s Agreement and Declaration of Trust, By-Laws, or
any applicable statute or regulation, or to relieve or deprive the Board
of
Trustees of its responsibility for and control of the conduct of the affairs
of
the Trust and Fund. In this connection, the Manager acknowledges that the
Trustees retain ultimate plenary authority over the Fund and may take any
and
all actions necessary and reasonable to protect the interests of shareholders.
| 8. |
REPORTS
AND ACCESS
|
The
Manager agrees to supply such information to the Fund’s administrator and to
permit such compliance inspections by the Fund’s administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations
and
respond to the reasonable requests of the Board of Trustees.
| 9. |
NONPUBLIC
PERSONAL INFORMATION
|
Notwithstanding
any provision herein to the contrary, the Manager agrees on behalf of itself
and
their managers, members, officers, and employees (1) to treat confidentially
and
as proprietary information of the Trust (a) all records and other information
relative to the Fund’s prior, present, or potential shareholders (and clients of
said shareholders) and (b) any Nonpublic Personal Information, as defined
under
Section 248.3(t) of Regulation S-P (“Regulation
S-P”),
promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the “G-L-B
Act”),
and
(2) except after prior notification to and approval in writing by the Trust,
not
to use such records and information for any purpose other than the performance
of its responsibilities and duties hereunder, or as otherwise permitted by
Regulation S-P or the G-L-B Act, and if in compliance therewith, the privacy
policies adopted by the Trust and communicated in writing to the Manager.
Such
written approval shall not be unreasonably withheld by the Trust and may
not be
withheld where the Manager may be exposed to civil or criminal contempt or
other
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities.
| 10. |
ANTI-MONEY
LAUNDERING COMPLIANCE
|
The
Manager acknowledges that, in compliance with the Bank Secrecy Act, as amended,
the USA PATRIOT Act, and any implementing regulations thereunder (together,
“AML
Laws”),
the
Trust has adopted an Anti-Money Laundering Policy. The Manager agrees to
comply
with the Trust’s Anti-Money Laundering Policy and the AML Laws, as the same may
apply to the Manager, now and in the future. The Manager further agrees to
provide to the Trust and/or the administrator such reports, certifications
and
contractual assurances as may be reasonably requested by the Trust. The Trust
may disclose information regarding the Manager to governmental and/or regulatory
or self-regulatory authorities to the extent required by applicable law or
regulation and may file reports with such authorities as may be required
by
applicable law or regulation.
| 11. |
CERTIFICATIONS;
DISCLOSURE CONTROLS AND
PROCEDURES
|
The
Manager acknowledges that, in compliance with the Xxxxxxxx-Xxxxx Act of 2002
(the “Xxxxxxxx-Xxxxx
Act”),
and
the implementing regulations promulgated thereunder, the Trust and the Fund
are
required to make certain certifications and have adopted disclosure controls
and
procedures. To the extent reasonably requested by the Trust, the Manager
agrees
to use its best efforts to assist the Trust and the Fund in complying with
the
Xxxxxxxx-Xxxxx Act and implementing the Trust’s disclosure controls and
procedures. The Manager agrees to inform the Trust of any material development
related to the Fund that the Manager reasonably believes is relevant to the
Fund’s certification obligations under the Xxxxxxxx-Xxxxx Act.
| 12. |
NOTICES
|
Notices
and other communications required or permitted under this Agreement shall
be in
writing, shall be deemed to be effectively delivered when actually received,
and
may be delivered by US mail (first class, postage prepaid), by facsimile
transmission, by hand or by commercial overnight delivery service, addressed
as
follows:
|
MANAGER:
|
Sincere
Investment Management, LLC
X.X.
Xxx 0000
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxxx Sincere
|
|
FUND:
|
On
behalf of Sincere Advisor Small Cap Fund
000
Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attn:
Secretary
|
| 13. |
SEVERABILITY.
|
If
any
provision of this Agreement shall be held or made invalid by a court decision,
statute or rule, or shall be otherwise rendered invalid, the remainder of
this
Agreement shall not be affected thereby.
| 14. |
CAPTIONS.
|
The
captions in this Agreement are included for convenience of reference only
and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
| 15. |
GOVERNING
LAW.
|
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware without giving effect to the conflict of laws principles
of Delaware or any other jurisdiction; provided that nothing herein shall
be
construed to preempt, or to be inconsistent with, any federal law, regulation
or
rule, including the 1940 Act and the Investment Advisers Act of 1940, as
amended, and any rules and regulations promulgated thereunder.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF,
the
parties hereto have caused the foregoing instrument to be executed by duly
authorized persons and their seals to be hereunto affixed, all as of the
day and
year first above written.
|
On
behalf of Sincere Advisor Small Cap Fund
By:
/s/ Xxxxxxx
X. Xxxx
Title:
Treasurer
|
|
|
SINCERE
INVESTMENT MANAGEMENT, LLC
By:
/s/ Xxxxxxx
Sincere
Title:
President
|
|
