INDUSTRY LEADERS(R) FUND
INVESTMENT MANAGEMENT AGREEMENT
May 20, 2004
Claremont Investment Partners(R) LLC
000 Xxxxxx Xxxxxx, Xxx 00
Xxxxxx, XX 00000
Ladies and Gentlemen:
Industry Leaders(R) Fund, a Delaware business trust (the "Trust"), is an
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). A list of the Trust's current series and classes is
attached hereto as Exhibit A.
Each series of the Trust invests and reinvests its assets in a portfolio of
securities and investments. The Trust hereby engages you to act as its
investment manager for each series of the Trust authorized now or in the future
subject to the terms and conditions of this Management Agreement (this
"Agreement").
SECTION 1. Investment Management Services.
You shall use your staff and other facilities to conduct and maintain a
continuous review of each series' portfolio of securities and investments, and
shall advise and assist each series of the Trust with respect to the selection,
acquisition, holding and disposal of securities and investments. In so doing,
you shall be guided by the investment objectives and policies of each series
delineated and limited in documents filed with the U.S. Securities and Exchange
Commission (the "Commission"), by policies adopted by the Board of Trustees of
the Trust (the "Board") and by the provisions of the 1940 Act and the rules
thereunder, so that at all times the Trust shall be in compliance with its
policies and the provisions of the 1940 Act. The Trust agrees to supply you with
copies of all such documents and to notify you of any changes in its investment
objectives, policies and restrictions.
In rendering services to the Trust pursuant to this Agreement, you may employ,
retain or otherwise avail yourself of the services or facilities of other
persons or organizations for the purpose of providing you and/or the Trust with
such statistical and other factual information, such advice regarding economic
factors and trends, such advice as to occasional transactions in specific
securities, or such other information, advice or assistance as you may deem
necessary, appropriate or convenient for the discharge of your obligations under
this Agreement or otherwise helpful to the Trust or in the discharge of your
overall responsibilities with respect to the other accounts for which you or
your affiliates serve as investment manager.
You and any person performing executive, administrative or trading functions for
the Trust, whose services were made available to the Trust by you, are
specifically authorized to allocate brokerage and principal business to firms
that provide such services or facilities or to cause the Trust to pay a member
of a securities exchange or any other securities broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange or broker or dealer would have charged
for effecting that transaction if you or such person determines in good faith
that such amount of commission is reasonable in relation to the value of the
brokerage and research services (as such services are defined in Section 28(e)
of the Securities Exchange Act of 1934, as amended (the "1934 Act")) provided by
such member, broker or dealer, viewed in terms of either that particular
transaction or your or such person's over-all responsibilities with respect to
the accounts as to which you or such person exercise investment discretion.
You shall maintain a record of all the investments and securities which comprise
the portfolios of each series of the Trust and shall furnish to the Board, at
its regularly scheduled meetings and at such other times as the Board may
reasonably request, a resume of the portfolios and report on all matters
pertaining to your services as investment manager. In addition, you shall
furnish the Trust with such statistical information reasonably available to you
as the Board shall reasonably request.
SECTION 2. Intellectual Property Rights
The Trust acknowledges that any and all intellectual property rights associated
with the names "Industry Leaders(R) Fund", "Industry Leaders(R) Portfolio
Strategy", "Industry Leaders(R) Index" and "Industry Leaders(R) Strategy Model"
and any and all copyrights, trademarks, and trade names associated therewith
(collectively, the "Marks") belong exclusively to you. You hereby grant to the
Trust a limited-use exclusive license with respect to the right of usage of the
Marks for purposes of activities related to operating and marketing an open-end
mutual fund registered with the Commission under the 1940 Act. Such right is
irrevocable during the term of this Agreement, but exclusive to the Trust only
to the extent of the foregoing grant. The Trust agrees to comply with
limitations on the use of the Marks in accordance with the 1940 Act and/or the
regulations of the National Association of Securities Dealers, and the Trust
shall further undertake to use reasonable efforts to ensure that Trust
personnel, its distributors, service providers and its other representatives do
the same. The Trust shall have the right to reproduce the Marks on documents
filed with the Commission and any other Trust communications, including, but not
limited to, prospectuses, business cards, letterhead stationery, and Trust
marketing materials. The Trust shall not use the Marks in a disparaging manner.
The Trust shall not take any action which is inconsistent with your ownership of
the Marks. The Trust agrees to include correct trademark, trade name, copyright,
trade secret and patent notices for the Marks on all materials and equipment
where appropriate. The Trust shall not remove, alter, cover, obfuscate or
otherwise deface any Xxxx on any promotional or advertising material used in
conjunction with operation of the Trust. In addition, The Trust acknowledges and
agrees that you have reserved the right to use the Marks in your own business
activities and/or grant the use of the Marks to, and to withdraw such right
from, any other business or other enterprise, except within the scope of the
limited-use exclusive right set forth above, and that you further reserve the
right to withdraw from the Trust the right to use said Marks and will withdraw
such right if the Trust ceases to employ, for any reason, you, an affiliate or
any successor as adviser of the Trust. In the event this Agreement is
terminated: (a) by you; or (b) by the Trust for Cause (as defined below), then
the Trust shall continue to have the right to use the Marks for a period of six
(6) months from the effective date of such termination. In the event this
Agreement is terminated by the Trust without Cause, then the Trust's right to
use the Marks shall cease sixty (60) days from the effective date of such
termination. For purposes of the foregoing, "Cause" shall mean a finding by the
Board, based upon reasonable evidence, that you have: (i) intentionally or
repeatedly failed to perform the duties set forth in this Agreement, (ii)
engaged in dishonest or willful misconduct in the performance of such duties or
(iii) willfully violated any law, rule or regulation promulgated by a government
entity or agency which either singly or in the aggregate would have a materially
adverse effect on the Trust.
SECTION 3. Additional Services to be Furnished.
You shall coordinate with the Trust's other service providers to assure the
maintenance of the books and financial records of the Trust and shall perform
such other services as are reasonably incidental to the foregoing duties,
including reviewing the Trust Custodian's record keeping. You shall coordinate
with the Trust's other service providers to assure the computation of the net
asset value of the shares of each class of each series of the Trust (in
accordance with the Trust's Prospectus and the instructions of the Board) and
shall coordinate with the Trust's distributor, if any, to assure the provision
of any statements with respect to the net assets of each series of the Trust and
the net asset value per share of each class of each series of the Trust at such
times, and in such forms, as the Trust may prescribe. You shall coordinate with
other service providers to the Trust to assure the maintenance of office space
reasonably suited to the Trust's ministerial operations and with its
bookkeeping, internal accounting and administrative requirements, and shall
permit such of your directors, officers and employees as may be elected as
Trustees or officers of the Trust to serve in the capacities to which they are
elected without additional compensation from the Trust. You shall also make
recommendations with respect to other aspects and affairs of the Trust as from
time-to-time requested by the Board. All services to be furnished by you under
this Agreement may be furnished through directors, officers or employees of you
or your affiliates.
In acting under this Agreement, you shall be an independent contractor and shall
not be an agent of the Trust except as explicitly mandated herein. The
investment policies, the administration of its business and affairs and all
other acts of the Trust are and shall at all times be subject to the approval
and direction of the Board.
SECTION 4. Multiple Capacities.
Nothing in this Agreement shall be deemed to prohibit you or your affiliates
from acting, and being separately compensated for acting, in one or more
capacities on behalf of the Trust. The Trust understands that you and your
affiliates may, in the future, act as investment manager or in other capacities
on behalf of other investment companies and customers. While information and
recommendations you supply to the Trust shall in your judgment be appropriate
under the circumstances and in light of the investment objectives and policies
of the Trust, they may be different from the information and recommendations you
supply to other investment companies and customers. You shall give the Trust
equitable treatment under the circumstances in supplying information,
recommendations and any other services requested of you, but you shall not be
required to give preferential treatment to the Trust as compared with the
treatment given to any other investment company or customer. Whenever you shall
act in multiple capacities on behalf of the Trust, you shall maintain the
appropriate separate accounts and records for each such capacity.
SECTION 5. Payment of Expenses.
You shall assume and pay all of your own costs and expenses under this
Agreement. In addition, You assume and shall pay, or reimburse the Trust for,
all expenses incurred in the operation of the Trust, except for the Management
fee, the Administration Fee and the Shareholder Service Fee, each as set forth
in the Trust's Registration Statement, as amended from time-to-time and as filed
and in effect with the Securities and Exchange Commission. In particular, but
without limitation, you hereby assume and agree to bear the cost of and pay any
and all of the following costs and expenses of the Trust:
(a) a distribution agreement, if any;
(b) services of independent public auditors;
(c) services pertaining to fund accounting and transfer agency services;
(d) an administrative services agreement;
(e) the Fidelity Bond, directors and officers insurance, and any and all other
insurance policies;
(f) a custody agreement and all charges of custodians (including fees as
custodian, escrow agent, for keeping books and performing portfolio valuations);
(g) services of legal counsel to the Trust;
(h) any and all other agreements entered into by the Trust, to the extent
permitted by the 1940 Act, related to expenses of issue, repurchase or
redemption of shares, expenses of registering or qualifying shares for sale,
association membership dues, dividend disbursing agents, and, to the extent not
paid by third parties under one or more of the foregoing agreements,
(i) interest expenses incident to the Trust's existence; and
(j) expenses of preparing, printing and distributing prospectuses and all proxy
materials, reports and notices to shareholders, out-of-pocket expenses of
trustees and fees of all trustees, including those who are not "interested
persons", and all costs related to the foregoing, including.
SECTION 6. Compensation for Services.
Each class of Shares of the Trust will pay to you a management fee at the
annualized rate set forth on Exhibit A attached hereto (the "Management Fee
Rate"). The amount payable to you shall be calculated each calendar day as the
product of 1/365th (except during leap years, which shall be calculated as
1/366th) of the Management Fee Rate multiplied by the respective class average
daily Net Asset Value from the immediately preceding business day (each, a
"Daily Calculated Fee"). The aggregate of the Daily Calculated Fees shall be
payable to you in arrears on the first business day of each month with respect
to the preceding month (collectively, the "Management Fee").
SECTION 7. Liability of the Investment Manager, etc.
You shall be liable for your own acts and omissions caused by your willful
misfeasance, bad faith or gross negligence in the performance of your duties or
by your reckless disregard of your obligations under this Agreement, and nothing
in this Agreement shall protect you against any such liability to the Trust or
its security holders. You shall not be liable for the acts and omissions of any
agent employed by you, nor for those of any bank, trust company, broker or other
person with whom, or into whose hands, any monies, shares of the Trust or
securities and investments may be deposited or come, pursuant to the provisions
of this Agreement. You shall not be liable for any defect in title of any
property acquired, nor for any loss unless it shall occur through your own
willful default. Subject to the first sentence of this section, you shall not be
liable for any action taken or omitted on advice, obtained in good faith, of
counsel, provided such counsel is satisfactory to the Trust.
SECTION 8. Termination of Agreement.
This Agreement may be terminated at any time, without the payment of any
penalty, upon 60 days' written notice by the terminating party to the other
party, by you or by the Trust, acting pursuant to a resolution adopted by its
Board or by a vote of shareholders in accordance with the requirements of the
1940 Act. This Agreement shall automatically terminate in the event of its
assignment. Termination shall not affect rights of the parties which have
accrued prior thereto.
SECTION 9. Duration of Agreement.
Unless sooner terminated, this Agreement shall continue in effect for two years.
The renewal and continuation of this Agreement shall be specifically subject to
approval in accordance with the requirements of the 1940 Act by a majority of
the Trustees, including a majority of the Trustees who are not "interested
persons" of you or of the Trust, cast in person at a meeting specifically called
for the purpose of voting on such approval.
SECTION 10. Definitions.
The terms "assignment" and "interested person" when used in this Agreement shall
have the meanings given such terms in the 1940 Act and the rules and regulations
thereunder.
SECTION 11. Obligation of the Trust.
The Trust's Declaration of Trust is on file with the Secretary of the State of
Delaware and notice is hereby given that this Agreement is made and executed on
behalf of the Trust, and not by the Trustees or officers of the Trust
individually, and the obligations of or arising out of this Agreement are not
binding upon the Trustees, officers or shareholders of the Trust individually
but are binding only upon the assets and property of one or more classes or
series of the Trust.
SECTION 12. Concerning Applicable Provisions of Law, etc.
This Agreement shall be subject to all applicable provisions of law, including,
without limitation, the applicable provisions of the 1940 Act, and to the extent
that any provisions in this Agreement conflict with any such applicable
provisions of law, the latter shall control.
SECTION 13. Counterparts.
This Agreement may be executed by any one or more of the parties in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
SECTION 14. Effective Date.
This Agreement is effective upon such date on or after its initial approval in
accordance with the 1940 Act as may be agreed upon by the parties.
[Signature Page Follows]
If the foregoing correctly sets forth your understanding of our agreement,
please sign where indicated below and return an executed copy of this Agreement
to the Trust.
Very truly yours,
INDUSTRY LEADERS(R) FUND
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
Attest: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Accepted and agreed to as of the date first set forth above
CLAREMONT INVESTMENT PARTNERS(R) LLC
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
Attest: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
EXHIBIT A
Share Class Fee
----------- ---
D 0.30% of average daily net assets
I 0.30% of average daily net assets
L 0.30% of average daily net assets
