Exhibit (d)
INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of the ___th day of _______, 2006, by and
between NAKOMA MUTUAL FUNDS (hereinafter referred to as the "Fund") and NAKOMA
CAPITAL MANAGEMENT, LLC (hereinafter referred to as "Adviser").
WHEREAS, the Fund is an open-end, nondiversified management investment
company registered as such with the U.S. Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), and Adviser is an investment adviser registered as such with the
Commission;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties as follows:
1. GENERAL PROVISION.
The Fund hereby employs Adviser and Adviser hereby undertakes to act as
the investment adviser of the Fund and to perform for the Fund such other duties
and functions as are hereinafter set forth. Adviser shall, in all matters, give
to the Fund and its Board of Trustees the benefit of its best judgment, effort,
advice and recommendations and must, at all times conform to, and use its best
efforts to enable the Fund to conform to (i) the provisions of the Investment
Company Act and any rules or regulations thereunder; (ii) any other applicable
provisions of state or federal law; (iii) the provisions of the Declaration of
Trust and By-Laws of the Fund as amended from time to time; (iv) policies and
determinations of the Board of Trustees of the Fund; (v) the fundamental
policies and investment restrictions of the Fund as reflected in its
registration statement under the Investment Company Act or as such policies may,
from time to time, be amended by the Fund's shareholders; and (vi) the
Prospectus and Statement of Additional Information of the Fund in effect from
time to time. The appropriate officers and employees of Adviser shall be
available upon reasonable notice for consultation with any of the Trustees and
officers of the Fund with respect to any matters dealing with the business and
affairs of the Fund, including the valuation of any of the Fund's portfolio
securities that are either not registered for public sale or not being traded on
any securities market.
2. INVESTMENT MANAGEMENT.
(a) Adviser shall, subject to the direction and control by the Fund's
Board of Trustees, (i) regularly provide investment advice and recommendations
to the Fund with respect to its investments, investment policies and the
purchase and sale of securities; (ii) supervise continuously the investment
program of the Fund and the composition of its portfolio and determine what
securities shall be purchased or sold by the Fund; and (iii) arrange, subject to
"6" hereof, for the purchase of securities and other investments for the Fund
and the sale of securities and other investments held in the portfolio of the
Fund.
(b) Provided that the Fund shall not be required to pay any compensation
other than as provided by the terms of this Agreement and subject to the
provisions of paragraph "6" hereof, Adviser may obtain investment information,
research or assistance from any other person, firm or corporation to supplement,
update or otherwise improve its investment management services.
(c) Subject to written instructions from the Fund, the Adviser is
hereby appointed the Fund's agent and attorney-in-fact in its discretion to
vote, convert or tender in an exchange or tender offer any securities in the
Fund's portfolio, to execute proxies, waivers, consents and other instruments
with respect to such securities, to endorse, transfer or deliver such securities
and to participate in or consent to any plan of reorganization, merger,
combination, consolidation, liquidation or similar plan with reference to such
securities.
(d) The Adviser will report to the Board at each meeting thereof as
requested by the Board all material changes in the Fund since the prior report,
and will also keep the Board informed of important developments affecting the
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 for
this purpose, whether concerning the individual companies whose securities are
included in the Fund's holdings, the industries in which they engage, the
economic, social or political conditions prevailing, or otherwise. The Adviser
will also furnish the Board with such statistical and analytical information
with respect to investments of the Fund as the Adviser may believe appropriate
or as the Board reasonably may request.
(e) 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 Adviser or the Fund pursuant to applicable law. To the extent
required by law, the books and records pertaining to the Fund that are in
possession of the Adviser shall be the property of the Fund. The Fund, or its
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 Fund,
copies of any such books and records shall be provided promptly by the Adviser
to the Fund or its representatives.
(f) The Adviser will cooperate with the Fund's independent public
accountants and shall take reasonable action to make all necessary information
available to those accountants for the performance of the accountants' duties.
(g) Nothing in this Agreement shall prevent Adviser or any officer
thereof from acting as investment adviser for any other person, firm or
corporation and shall not in any way limit or restrict Adviser or any of its
directors, officers, stockholders or employees from buying, selling or trading
any securities for its or their own account or for the account of others for
whom it or they may be acting, provided that such activities will not adversely
affect or otherwise impair the performance by Adviser of its duties and
obligations under this Agreement.
3. ALLOCATION OF EXPENSES.
All other costs and expenses not expressly assumed by Adviser under this
agreement, or to be paid by the Distributor of the shares of the Fund, shall be
paid by the Fund, including, but not limited to (i) interest and taxes; (ii)
brokerage commissions; (iii) premiums for fidelity and other insurance coverage
requisite to its operations; (iv) compensation and expenses of its trustees
other than those associated or affiliated with Adviser; (v) legal and audit
expenses; (vi) custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its shares; (viii) expenses incident to the
issuance of its shares against payment therefor by or on behalf of the
subscribers thereto; (ix) fees and expenses, other than as hereinabove provided,
incident to the registration under federal securities laws of shares of the Fund
for public sale; (x) expenses of printing and mailing reports, notices and proxy
materials to shareholders of the Fund; (xi) except as noted above, all other
expenses incidental to holding meetings of the Fund's shareholders; and (xii)
such extraordinary non-recurring expenses as may arise, including litigation,
affecting the Fund and the legal obligation which the Fund may have to indemnify
its officers and trustees with respect thereto. Any officers or employees of
Adviser or any entity controlling, controlled by or under common control with
Adviser, who may also serve as officers, trustees or employees of the Fund shall
not receive any compensation by the Fund for their services.
4. COMPENSATION OF ADVISER.
The Fund agrees to pay Adviser and Adviser agrees to accept as full
compensation for the performance of all functions and duties on its part to be
performed pursuant to the provisions hereof, a management fee computed on the
total net assets of the Fund as of the close of each business day and payable
monthly at the following annual rates:
1.5% of the average daily net assets of the Fund.
5. USE OF NAME "NAKOMA."
Adviser hereby grants to the Fund a royalty-free, non-exclusive license to
use the name "Nakoma" in the name of the Fund for the duration of this Agreement
and any extensions or renewals thereof. Such license may, upon termination of
this Agreement, be terminated by Adviser, in which event the Fund shall promptly
take whatever action may be necessary to change its name and discontinue any
further use of the name "Nakoma" in the name of the Fund or otherwise. The name
"Nakoma" may be used or licensed by Adviser in connection with any of its
activities or licensed by Adviser to any other party.
6. PORTFOLIO TRANSACTIONS AND BROKERAGE.
(a) Adviser is authorized, in arranging the purchase and sale of the
Fund's portfolio securities, to employ or deal with such members of securities
or commodities exchanges, brokers or dealers, (hereinafter "broker-dealers"), as
may, in its best judgment, implement the policy of the Fund to obtain, at
reasonable expense, the "best execution" (prompt and reliable execution at the
most favorable security price obtainable) of the Fund's portfolio transactions
as well as to obtain, consistent with the provisions of subparagraph "(c)" of
this paragraph "6," the benefit of such investment information or research as
will be of significant assistance to the performance by Adviser of its
investment management functions.
(b) Adviser shall select broker-dealers to effect the Fund's portfolio
transactions on the basis of its estimate of their ability to obtain best
execution of particular and related portfolio transactions. The abilities of a
broker-dealer to obtain best execution of particular portfolio transaction(s)
will be judged by Adviser on the basis of all relevant factors and
considerations including, insofar as feasible, the execution capabilities
required by the transaction or transactions; the ability and willingness of the
broker-dealer to facilitate the Fund's portfolio transactions by participating
therein for its own account; the importance to the Fund of speed, efficiency or
confidentiality; the broker-dealer's apparent familiarity with sources from or
to whom particular securities might be purchased or sold; as well as any other
matters relevant to the selection of a broker-dealer for particular and related
transactions of the Fund.
(c) Adviser shall have discretion, in the interests of the Fund, to
allocate brokerage on the Fund's portfolio transactions to broker-dealers
qualified to obtain best execution of such transactions who provide brokerage
and/or research services (as such services are defined in Section 28(e)(3) of
the Securities Exchange Act of 1934) for the Fund and/or other accounts for
which Adviser has "investment discretion" (as that term is defined in Section
3(a)(35) of the Securities Exchange Act of 1934) and to cause the Fund to pay
such broker-dealers a commission for effecting a portfolio transaction for the
Fund that is in excess of the amount of commission another broker-dealer
adequately qualified to effect such transaction would have charged for effecting
that transaction, if Adviser determines in good faith that such commission is
reasonable in relation to the value of the brokerage and/or research services
provided by such broker-dealer, viewed in terms of either that particular
transaction or the overall responsibilities of Adviser with respect to the
accounts as to which it exercises investment discretion. In reaching such
determination, Adviser will not be required to place or attempt to place a
specific dollar value on the brokerage and/or research services provided or
being provided by such broker-dealer. In demonstrating that such determinations
were made in good faith, Adviser shall be prepared to show that all commissions
were allocated for the purposes contemplated by this Agreement and that the
total commissions paid by the Fund over a representative period selected by the
Fund's trustees were reasonable in relation to the benefits to the Fund.
(d) The Adviser may aggregate sales and purchase orders of the assets
of the Fund with similar orders being made simultaneously for other accounts
advised by the Adviser. Whenever the Adviser simultaneously places orders to
purchase or sell the same asset on behalf of the Fund and one or more other
accounts advised by the Adviser, the orders will be allocated as to price and
amount among all such accounts in a manner believed to be equitable over time to
each account.
7. ADVISER REPRESENTATIONS AND WARRANTIES
The Adviser represents and warrants that it: (i) is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act") (and will continue to be so registered for so long as this
Agreement remains in effect); (ii) is not prohibited by the Investment Company
Act or the Advisers Act from performing the services contemplated by this
Agreement; (iii) has met, and will seek to continue to meet for so long as this
Agreement remains in effect, any other applicable federal or state requirements,
or the applicable requirements of any self-regulatory agency, necessary to be
met in order to perform the services contemplated by this Agreement; and (iv)
will promptly notify the Fund of the occurrence of any event that would
disqualify the Adviser from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the Investment Company Act or otherwise.
8. LIABILITY.
The Adviser shall be liable to the Trust and its shareholders or former
shareholders for any negligence or willful misconduct on the part of the Adviser
or any of its Trustees, officers, employees, representatives or agents in
connection with the responsibilities assumed by it hereunder, provided, however,
that the Adviser shall not be liable for any investments made by the Adviser in
accordance with the explicit or implicit direction of the Board of Trustees of
the Trust or the investment objectives and policies of the Trust, and provided
further that any liability of the Adviser resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services shall be limited
to the period and amount set forth in Section 36(b)(3) of the Act. Any person,
even though also an officer, director, partner, employee, or agent of the
Adviser, who may be or become an officer, 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 the
Adviser's duties hereunder), to be rendering such services to or acting solely
for the Trust and not as an officer, director, partner, employee, or agent or
one under the control or direction of the Adviser even though paid by it.
Notwithstanding the above, nothing in this Agreement shall operate to
limit the Adviser's liability otherwise arising under the federal securities
laws.
9. DURATION.
This Agreement will take effect on the date first set forth above. Unless
earlier terminated pursuant to paragraph 8 hereof, this Agreement shall remain
in effect until two years from the date of execution hereof, and thereafter will
continue in effect from year to year, so long as such continuance shall be
approved at least annually by the Fund's Board of Trustees, including the vote
of the majority of the Trustees of the Fund who are not parties to this
Agreement or "interested persons" (as defined in the Investment Company Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval, or by the holders of a "majority" (as defined in the Investment
Company Act) of the outstanding voting securities of the Fund and by such a vote
of the Fund's Board of Trustees.
10. TERMINATION.
This Agreement may be terminated (i) by Adviser at any time without
penalty upon giving the Fund sixty days' written notice (which notice may be
waived by the Fund); or (ii) by the Fund at any time without penalty upon sixty
days' written notice to Adviser (which notice may be waived by Adviser) provided
that such termination by the Fund shall be directed or approved by the vote of a
majority of all of the trustees of the Fund then in office or by the vote of the
holders of a "majority" (as defined in the Investment Company Act) of the
outstanding voting securities of the Fund.
11. ASSIGNMENT OR AMENDMENT.
This Agreement may not be amended or the rights of Adviser hereunder sold,
transferred, pledged or otherwise in any manner encumbered without the
affirmative vote or written consent of the holders of the majority of the
outstanding voting securities of the Fund; this Agreement shall automatically
and immediately terminate in the event of its assignment (as that term is
defined in the Investment Company Act).
12. DISCLAIMER OF SHAREHOLDER LIABILITY.
Adviser understands that the obligations of the Fund under this Agreement
are not binding upon any Trustee or shareholder of the Fund personally, but bind
only the Fund and the Fund's property. Adviser represents that it has notice of
the provisions of the Declaration of Trust of the Fund disclaiming shareholder
liability for acts or obligations of the Fund.
13. DEFINITIONS.
The terms and provisions of this Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions of the
Investment Company Act.
NAKOMA MUTUAL FUNDS
By: /s/
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NAKOMA CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
