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EXHIBIT 5(a)
AMENDED MANAGEMENT AGREEMENT
TO: Boberski & Company
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000-0000
Dear Sirs:
The Lake Forest Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers two series of shares to investors: the Lake
Forest Core Equity Fund series and the Lake Forest Money Market Fund series
(the "Funds"). The Trust's Board of Trustees (the "Board") is authorized from
time to time, as it deems necessary or desirable, to establish and designate
additional series of shares.
You have been selected to act as the sole investment adviser of the
Trust and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Trust with such investment advice as you
in your discretion deem advisable and will furnish a continuous investment
program for each of the Trust's series consistent with the respective series'
investment objectives and policies. You will determine the securities to be
purchased for each series of the Trust, the portfolio securities to be held or
sold by each series of the Trust and the portion of each series' assets to be
held uninvested, subject always to the Fund's investment objectives,
policies and restrictions, as each of the same shall be from time to time in
effect, and subject further to such policies and instructions as the Board may
from time to time establish. You will advise and assist the officers of the
Trust in taking such steps as are necessary or appropriate to carry out
decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES
Except as provided herein, you will pay all operating expenses of the
Trust, including the compensation and expenses of any trustees, officers and
employees of the Trust and of any other persons rendering any services to the
Trust; clerical and shareholder service staff salaries; office space and other
office expenses; fees and expenses incurred by the Trust in connection with
membership in investment company organizations; legal, auditing and accounting
expenses; non-organizational expenses of registering shares under federal and
state securities laws; insurance expenses; fees and expenses of the custodian,
transfer agent, dividend disbursing agent, shareholder service agent, plan
agent, administrator, accounting and pricing services agent and underwriter of
the Trust; expenses, including clerical expenses of issue, sale, redemption or
repurchase of shares of the Trust; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the
Trust's current and prospective shareholders; the cost of printing or preparing
stock certificates or any other documents, statements or reports to
shareholders; expenses of shareholder's meetings and proxy solicitations;
advertising, promotion and other expenses incurred directly or indirectly in
connection with the sale or distribution of the Trust's shares; and all other
operating expenses not specifically assumed by the Trust.
Notwithstanding the above, you may instruct the custodian and/or the
transfer agent to charge individual shareholder accounts for certain services
such as wire transfers, exchanges, bad checks, location of shareholders without
a current address and fees for closing accounts so long as the fees charged to
shareholders are no more than the custodian's or transfer agent's current fee
schedule for such services. In addition, you may charge individual shareholders
a fee for maintaining an account balance below the minimum balance set for the
Funds from time to time by the Board of Directors and disclosed in the current
prospectus. However, the amount of such minimum balance fees must be
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approved by the Board of Trustees. You may charge or waive all such individual
account fees as set forth in the current prospectus for the Funds.
The Trust will pay all brokerage fees and commissions, taxes,
interest, expenses incurred by the Trust in connection with the organization and
initial registration of shares of any series of the Trust, and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Trust may be a party and indemnification of the Trust's trustees and
officers with respect thereto. You may obtain reimbursement from the Trust, at
such time or times as you may determine in your sole discretion, for any of the
expenses advanced by you, which the Trust is obligated to pay, and such
reimbursement shall not be considered to be part of your compensation pursuant
to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made as
provided in this Agreement, as of the last business day of each month, the Lake
Forest Money Market Fund will pay you a fee at the annual rate of 0.50% of the
average value of its daily net assets and the Lake Forest Core Equity Fund will
pay you a fee at the annual rate of 1.25% of the average value of its daily net
assets.
Your compensation with respect to each additional series of the Trust
established after the date of this Agreement shall be one of the fees described
above unless the Board of Trustees, including a majority of Trustees who are not
interested persons as defined in the Investment Company Act of 1940 of you or
the Trust, determines otherwise. If the Board of Trustees adopts a different fee
arrangement for an additional series, the fee arrangement shall be approved
pursuant to the provisions of Section 15 of the Investment Company Act of 1940.
The average value of the daily net assets of a series shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of a series is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the series as last determined shall be deemed to be the
value of the net assets as of the close of the business day, or as of such other
time as the value of the series' net assets may lawfully be determined, on that
day. If the determination of the net asset value of a series has been suspended
for a period including such month, your compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
series as last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities for the
account of each series of the Trust, it is understood that you will arrange for
the placing of all orders for the purchase and sale of portfolio securities for
the account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the series the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Trust and/or other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Trust portfolio transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if you determine in good faith that the amount of
the commission is reasonable in relation to
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the value of the brokerage and research services provided by the executing
broker or dealer. The determination may be viewed in terms of either a
particular transaction or your overall responsibilities with respect to the
Trust and to accounts over which you exercise investment discretion. The Trust
and you understand and acknowledge that, although the information may be useful
to the Trust and you, it is not possible to place a dollar value on such
information. The Board shall periodically review the commissions paid by the
Trust to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits of the Trust.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to seeking best qualitative execution
as described above, you may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.
Subject to the provisions of the Investment Company Act of 1940, as
amended, and other applicable law, you or any of your affiliates may retain
compensation in connection with effecting the Trust's portfolio transactions,
including transactions effected through others. If any occasion should arise in
which you give advice to clients of yours concerning the shares of the Trust,
you will act solely as investment counsel for such client and not in any way on
behalf of the Trust. Your services to the Trust pursuant to this Agreement are
not to be deemed to be exclusive and it is understood that you may render
investment advice, management and other services to others, including other
registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be accurate
and reliable. Except as may otherwise be required by the Investment Company Act
of 1940 or the rules thereunder, neither you nor your shareholders, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error judgment, mistake of law, any
act or omission connected with or arising out of any services rendered under,
or payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such
persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on July 1, 1997 and shall remain in
force for a period of two (2) years from such with respect to each of the
Trust's series established on the date of such execution, and, with respect to
any additional series registered after the date of execution, until the next
anniversary date of the Agreement following the date on which such series
becomes effectively registered for sale in a public offering, and from year to
year thereafter as to each series of the Trust's shares, subject to annual
approval by (i) the Board or (ii) a vote of a majority (as defined in the
Investment Company Act of 1940) of the outstanding voting securities of such
series, provided that in either event continuance is also approved by a
majority of the trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, of you or the Trust, by a vote cast in person
at a meeting called for the purpose of voting such approval.
If the shareholders of any series of the Trust's shares fail to
approve the Agreement in the manner set forth above, upon request of the Board,
you will continue to serve or act in such capacity for the series for the period
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of time pending required approval of the Agreement, of a new agreement with you
or a different adviser or other definitive action; provided that the
compensation to be paid by the Trust to you for services to and payments on
behalf of the series will be equal to the lesser of your actual costs incurred
in furnishing such services and payments or the amount you would have received
under this Agreement for furnishing such services and payments.
This Agreement may, on sixty days written notice, be terminated with
respect to a series at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of the
series or by you. This Agreement shall automatically terminate in the event of
its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name "Lake Forest"
belong to you, and that the Trust is being granted a limited license to use such
words in its Trust name or in any series name. In the event you cease to be the
adviser to the Trust, the Trust's rights to the use of the name "Lake Forest"
shall automatically cease on the thirtieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon thirty (30) days' written notice by you to the Trust.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Lake Forest" in the name of, or in connection with, any other
business enterprises with which you are or may become associated. There is no
charge to the Trust for the right to use these names.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, and no amendment of this Agreement shall be effective until
approved by the Board, including a majority of the trustees who are not
interested persons of your or the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (if required under current
interpretations of the Act by the Securities and Exchange Commission) by vote of
the holders of a majority of the outstanding voting securities of the series to
which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "The Lake Forest Funds" means and refers to the Trustees from
time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents, or
employees of the Trust, personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and
shareholders of the Trust and signed by officers of the Trust, acting as such,
and neither such authorization by such trustees and shareholders nor such
execution and delivery by such officers 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 trust property of the Trust as provided in its
Declaration of Trust. A copy of the Agreement and Declaration of Trust of the
Trust is on file with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of Ohio.
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(b) 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 Investment Company Act of 1940, as amended (the "Act") shall be resolved
by reference to such term or provision of the Act and to interpretation
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
Securities and Exchange Commission issued pursuant to such Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of
this Agreement is revised by rule, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
12. 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 Trust and your address
for this purpose shall be Xxx Xxxxxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000-0000.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that he has
the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date hereof.
Yours very truly,
THE LAKE FOREST FUNDS
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President
ACCEPTANCE
The foregoing Agreement is hereby accepted.
BOBERSKI & COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President
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