MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of
December, 2005, by and between Xxxxx Xxxxxx Investment Funds Inc.,
a Maryland Corporation (the "Corporation") and Xxxxx Xxxxxx Fund
Management LLC, a Delaware limited liability company (the "Manager").
WHEREAS, the Corporation is registered as a management investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering
investment advisory, management and administrative services and is
registered as an investment adviser under the Investment Advisers
Act of 1940, as amended;
WHEREAS, the Corporation wishes to retain the Manager to provide
investment advisory, management, and administrative services to
the Corporation with respect to the series of the Corporation
designated in Schedule A annexed hereto (the "Fund"); and
WHEREAS, the Manager is willing to furnish such services on the
terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Corporation hereby appoints the Manager to act as investment
adviser and administrator of the Fund for the period and on the terms
set forth in this Agreement. The Manager accepts such appointment
and agrees to render the services herein set forth, for the
compensation herein provided.
2. The Fund shall at all times keep the Manager fully informed
with regard to the securities owned by it, its funds available, or
to become available, for investment, and generally as to the
condition of its affairs. It shall furnish the Manager with such
other documents and information with regard to its affairs as the
Manager may from time to time reasonably request.
3. (a) Subject to the supervision of the
Corporation's Board of Directors (the "Board"), the Manager shall
regularly provide the Fund with investment research, advice,
management and supervision and shall furnish a continuous investment
program for the Fund's portfolio of securities and other investments
consistent with the Fund's investment objectives, policies and
restrictions, as stated in the Fund's current Prospectus and Statement
of Additional Information. The Manager shall determine from time to
time what securities and other investments will be purchased, retained,
sold or exchanged by the Fund and what portion of the assets of the
Fund's portfolio will be held in the various securities and other
investments in which the Fund invests, and shall implement those
decisions, all subject to the provisions of the Corporation's
Articles of Incorporation and By-Laws (collectively, the "Governing
Documents"), the 1940 Act, and the applicable rules and regulations
promulgated thereunder by the Securities and Exchange Commission
(the "SEC") and interpretive guidance issued thereunder by the SEC
staff and any other applicable federal and state law, as well as
the investment objectives, policies and restrictions of the Fund
referred to above, and any other specific policies adopted by the
Board and disclosed to the Manager. The Manager is authorized as
the agent of the Corporation to give instructions to the custodian
of the Fund as to deliveries of securities and other investments
and payments of cash for the account of the Fund. Subject to
applicable provisions of the 1940 Act and direction from the Board,
the investment program to be provided hereunder may entail the
investment of all or substantially all of the assets of a Fund in
one or more investment companies. The Manager will place orders
pursuant to its investment determinations for the Fund either directly
with the issuer or with any broker or dealer, foreign currency
dealer, futures commission merchant or others selected by it. In
connection with the selection of such brokers or dealers and the
placing of such orders, subject to applicable law, brokers or
dealers may be selected 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 Funds and/or the other
accounts over which the Manager or its affiliates exercise investment
discretion. The Manager is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for a Fund which is in excess of
the amount of commission another broker or dealer would have charged
for effecting that transaction if the Manager determines in good
faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of
either that particular transaction or the overall responsibilities
which the Manager and its affiliates have with respect to accounts
over which they exercise investment discretion. The Board may adopt
policies and procedures that modify and restrict the Manager's
authority regarding the execution of the Fund's portfolio
transactions provided herein. The Manager shall also provide
advice and recommendations with respect to other aspects of the
business and affairs of the Fund, shall exercise voting rights,
rights to consent to corporate action and any other rights
pertaining to a Fund's portfolio securities subject to such
direction as the Board may provide, and shall perform such other
functions of investment management and supervision as may be
directed by the Board.
(b) Subject to the direction and control of the Board,
the Manager shall perform such administrative and management services
as may from time to time be reasonably requested by the Fund as
necessary for the operation of the Fund, such as (i) supervising the
overall administration of the Fund, including negotiation of contracts
and fees with and the monitoring of performance and xxxxxxxx of the
Fund's transfer agent, shareholder servicing agents, custodian and
other independent contractors or agents, (ii) providing certain
compliance, fund accounting, regulatory reporting, and tax reporting
services, (iii) preparing or participating in the preparation of
Board materials, registration statements, proxy statements and
reports and other communications to shareholders, (iv) maintaining
the Fund's existence, and (v) during such times as shares are
publicly offered, maintaining the registration and qualification
of the Fund's shares under federal and state laws. Notwithstanding
the foregoing, the Manager shall not be deemed to have assumed any
duties with respect to, and shall not be responsible for, the
distribution of the shares of any Fund, nor shall the Manager be
deemed to have assumed or have any responsibility with respect to
functions specifically assumed by any transfer agent, fund
accounting agent, custodian, shareholder servicing agent or other
agent, in each case employed by the Fund to perform such functions.
(c) The Fund hereby authorizes any entity or person
associated with the Manager which is a member of a national
securities exchange to effect any transaction on the exchange for
the account of the Fund which is permitted by Section 11(a) of the
Securities Exchange Act of 1934, as amended, and Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-
2(T)(a)(2)(iv). Notwithstanding the foregoing, the Manager agrees
that it will not deal with itself, or with members of the Board or
any principal underwriter of the Fund, as principals or agents in
making purchases or sales of securities or other property for the
account of the Fund, nor will it purchase any securities from an
underwriting or selling group in which the Manager or its
affiliates is participating, or arrange for purchases and sales
of securities between a Fund and another account advised by the
Manager or its affiliates, except in each case as permitted by
the 1940 Act and in accordance with such policies and procedures
as may be adopted by a Fund from time to time, and will comply
with all other provisions of the Governing Documents and the Fund's
then-current Prospectus and Statement of Additional Information
relative to the Manager and its directors and officers.
4. Subject to the Board's approval, the Manager or the Fund
may enter into contracts with one or more investment subadvisers
or subadministrators, including without limitation, affiliates of
the Manager, in which the Manager delegates to such investment
subadvisers or subadministrators any or all its duties specified
hereunder, on such terms as the Manager will determine to be
necessary, desirable or appropriate, provided that in each case
the Manager shall supervise the activities of each such subadviser
or subadministrator and further provided that such contracts
impose on any investment subadviser or subadministrator bound
thereby all the conditions to which the Manager is subject
hereunder and that such contracts are entered into in accordance
with and meet all applicable requirements of the 1940 Act.
5. (a) The Manager, at its expense, shall supply the
Board and officers of the Corporation with all information and
reports reasonably required by them and reasonably available to
the Manager and shall furnish the Fund with office facilities,
including space, furniture and equipment and all personnel
reasonably necessary for the operation of the Fund. The Manager
shall oversee the maintenance of all books and records with
respect to the Fund's securities transactions and the keeping of
the Fund's books of account in accordance with all applicable
federal and state laws and regulations. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Manager hereby
agrees that any records that it maintains for the Fund are the
property of the Fund, and further agrees to surrender promptly to
the Fund any of such records upon the Fund's request. The Manager
further agrees to arrange for the preservation of the records
required to be maintained by Rule 31a-1 under the 1940 Act for
the periods prescribed by Rule 31a-2 under the 1940 Act. The
Manager shall authorize and permit any of its directors, officers
and employees, who may be elected as Board members or officers of
the Fund, to serve in the capacities in which they are elected.
(b) The Manager shall bear all expenses, and shall
furnish all necessary services, facilities and personnel, in
connection with its responsibilities under this Agreement. Other
than as herein specifically indicated, the Manager shall not be
responsible for the Fund's expenses, including, without limitation,
advisory fees; distribution fees; interest; taxes; governmental
fees; voluntary assessments and other expenses incurred in
connection with membership in investment company organizations;
organization costs of the Fund; the cost (including brokerage
commissions, transaction fees or charges, if any) in connection
with the purchase or sale of the Fund's securities and other
investments and any losses in connection therewith; fees and
expenses of custodians, transfer agents, registrars, independent
pricing vendors or other agents; legal expenses; loan commitment
fees; expenses relating to share certificates; expenses relating
to the issuing and redemption or repurchase of the Fund's shares
and servicing shareholder accounts; expenses of registering and
qualifying the Fund's shares for sale under applicable federal
and state law; expenses of preparing, setting in print, printing
and distributing prospectuses and statements of additional
information and any supplements thereto, reports, proxy statements,
notices and dividends to the Fund's shareholders; costs of
stationery; website costs; costs of meetings of the Board or any
committee thereof, meetings of shareholders and other meetings of
the Fund; Board fees; audit fees; travel expenses of officers,
members of the Board and employees of the Fund, if any; and the
Fund's pro rata portion of premiums on any fidelity bond and other
insurance covering the Fund and its officers, Board members and
employees; litigation expenses and any non-recurring or
extraordinary expenses as may arise, including, without limitation,
those relating to actions, suits or proceedings to which the Fund
is a party and the legal obligation which the Fund may have to
indemnify the Fund's Board members and officers with respect thereto.
6. No member of the Board, officer or employee of the
Corporation or Fund shall receive from the Corporation or Fund any
salary or other compensation as such member of the Board, officer
or employee while he is at the same time a director, officer, or
employee of the Manager or any affiliated company of the Manager,
except as the Board may decide. This paragraph shall not apply to
Board members, executive committee members, consultants and other
persons who are not regular members of the Manager's or any affiliated
company's staff.
7. As compensation for the services performed and the facilities
furnished and expenses assumed by the Manager, including the services
of any consultants retained by the Manager, the Fund shall pay the
Manager, as promptly as possible after the last day of each month, a
fee, computed daily at an annual rate set forth opposite the Fund's
name on Schedule A annexed hereto, provided however, that if the Fund
invests all or substantially all of its assets in another registered
investment company for which the Manager or an affiliate of the M
anager serves as investment adviser or investment manager, the annual
fee computed as set forth on such Schedule A shall be reduced by the
aggregate management fees allocated to that Fund for the Fund's
then-current fiscal year from such other registered investment company.
The first payment of the fee shall be made as promptly as possible at
the end of the month succeeding the effective date of this Agreement,
and shall constitute a full payment of the fee due the Manager for all
services prior to that date. If this Agreement is terminated as of
any date not the last day of a month, such fee shall be paid as
promptly as possible after such date of termination, shall be based
on the average daily net assets of the Fund in that period from the
beginning of such month to such date of termination, and shall be
that proportion of such average daily net assets as the number of
business days in such period bears to the number of business days in
such month. The average daily net assets of the Fund shall in all
cases be based only on business days and be computed as of the time
of the regular close of business of the New York Stock Exchange, or
such other time as may be determined by the Board.
8. The Manager assumes no responsibility under this Agreement
other than to render the services called for hereunder, in good faith,
and shall not be liable for any error of judgment or mistake of law,
or for any loss arising out of any investment or for any act or
omission in the execution of securities transactions for a Fund,
provided that nothing in this Agreement shall protect the Manager
against any liability to the Fund to which the Manager would otherwise
be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder. As used
in this Section 8, the term "Manager" shall include any affiliates
of the Manager performing services for the Corporation or the Fund
contemplated hereby and the partners, shareholders, directors,
officers and employees of the Manager and such affiliates.
9. Nothing in this Agreement shall limit or restrict the right
of any director, officer, or employee of the Manager who may also
be a Board member, officer, or employee of the Corporation or the
Fund, to engage in any other business or to devote his time and
attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature, nor
to limit or restrict the right of the Manager to engage in any other
business or to render services of any kind, including investment
advisory and management services, to any other fund, firm, individual
or association. If the purchase or sale of securities consistent
with the investment policies of a Fund or one or more other accounts
of the Manager is considered at or about the same time, transactions
in such securities will be allocated among the accounts in a manner
deemed equitable by the Manager. Such transactions may be combined,
in accordance with applicable laws and regulations, and consistent
with the Manager's policies and procedures as presented to the Board
from time to time.
10. For the purposes of this Agreement, the Fund's "net assets"
shall be determined as provided in the Fund's then-current Prospectus
and Statement of Additional Information and the terms "assignment," "
interested person," and "majority of the outstanding voting
securities" shall have the meanings given to them by Section 2(a) of
the 1940 Act, subject to such exemptions as may be granted by the SEC
by any rule, regulation or order.
11. This Agreement will become effective with respect to the Fund
on the date set forth opposite the Fund's name on Schedule A annexed
hereto, provided that it shall have been approved by the
Corporation's Board and by the shareholders of the Fund in accordance
with the requirements of the 1940 Act and, unless sooner terminated
as provided herein, will continue in effect for two years from the
above written date. Thereafter, if not terminated, this Agreement
shall continue in effect with respect to the Fund, so long as such
continuance is specifically approved at least annually (i) by the
Board or (ii) by a vote of a majority of the outstanding voting
securities of the Fund, provided that in either event the continuance
is also approved by a majority of the Board members who are not
interested persons of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval.
12. This Agreement is terminable with respect to the Fund without
penalty by the Board or by vote of a majority of the outstanding v
oting securities of the Fund, in each case on not more than 60 days'
nor less than 30 days' written notice to the Manager, or by the
Manager upon not less than 90 days' written notice to the Fund,
and will be terminated upon the mutual written consent of the Manager
and the Corporation. This Agreement shall terminate automatically
in the event of its assignment by the Manager and shall not be
assignable by the Corporation without the consent of the Manager.
13. The Manager agrees that for services rendered to the Fund,
or for any claim by it in connection with services rendered to the
Fund, it shall look only to assets of the Fund for satisfaction and
that it shall have no claim against the assets of any other
portfolios of the Corporation.
14. 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, and no material amendment
of the Agreement shall be effective until approved, if so required by
the 1940 Act, by vote of the holders of a majority of the Fund's
outstanding voting securities.
15. This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. Should any part
of this Agreement be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective
successors.
16. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of N
ew York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized.
XXXXX XXXXXX INVESTMENT FUNDS INC.
By:_________________________
Name: R. Xxx Xxxxxx
Title: Chairman
XXXXX XXXXXX FUND MANAGEMENT LLC
By:_________________________
Name: Xxxxxx Xxxxxxx
Title: Director
Schedule A
Xxxxx Xxxxxx Investment Grade Bond Fund
Fee:
The following percentage of the Fund's average daily net assets:
First $500 million 0.65; Over $500 million 0.60
