AMENDED INVESTMENT ADVISORY AGREEMENT BETWEEN INVESTMENT MANAGERS SERIES TRUST AND ZACKS INVESTMENT MANAGEMENT, INC.
AMENDED
INVESTMENT ADVISORY AGREEMENT
BETWEEN
AND
ZACKS
INVESTMENT MANAGEMENT, INC.
THIS
INVESTMENT ADVISORY AGREEMENT (the “Agreement”), dated as of December 1, 2007
and amended June 26, 2008, between the Investment Managers Series Trust, a
Delaware statutory trust (the “Trust”), on behalf of its series listed in
Appendix A, as amended from time to time (each a “Fund” and collectively the
“Funds”), and Zacks Investment Management, Inc., an Illinois corporation (the
“Adviser”).
WHEREAS,
the Adviser has agreed to furnish investment advisory services to the Funds,
each a series of the Trust which is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the “1940
Act”);
WHEREAS,
this Agreement has been approved in accordance with the provisions of the 1940
Act, and the Adviser is willing to furnish such services upon the terms and
conditions herein set forth;
NOW,
THEREFORE, in consideration of the mutual premises and covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In
General. The
Adviser agrees, all as more fully set forth herein, to act as investment adviser
to the Funds with respect to the investment of each Fund’s assets and to
supervise and arrange for the day-to-day operations of the Funds and the
purchase of securities for and the sale of securities held in the investment
portfolio of the Funds.
2. Duties
and Obligations of the Adviser with Respect to Investment of Assets of the
Funds. Subject
to the succeeding provisions of this section and subject to the direction and
control of the Trust’s Board of Trustees, the Adviser shall (i) act as
investment adviser for and supervise and manage the investment and reinvestment
of each Fund’s assets and, in connection therewith, have complete discretion in
purchasing and selling securities and other assets for the Funds and in voting,
exercising consents and exercising all other rights appertaining to such
securities and other assets on behalf of the Funds; (ii) supervise the
investment program of each Fund and the composition of its investment portfolio;
and (iii) arrange, subject to the provisions of paragraph 3 hereof, for the
purchase and sale of securities and other assets held in the investment
portfolio of each Fund. In performing its duties under this Section
2, the Adviser may delegate some or all of its duties and obligations under
this
Agreement to one or more investment sub-advisers, including but not limited
to
delegating the voting of proxies relating to each Fund’s portfolio securities in
accordance with the proxy voting policies and procedures of such investment
sub-adviser; provided, however, that any such delegation shall be pursuant
to an
agreement with terms agreed upon by the Trust and approved in a manner
consistent with the 1940 Act and provided, further, that no such delegation
shall relieve the Adviser from its duties and obligations of management and
supervision of the management of each Fund’s assets pursuant to this Agreement
and to applicable law.
3. Covenants. In
the performance of its duties under this Agreement, the Adviser:
(a) shall
at
all times conform to, and act in accordance with, any requirements imposed
by: (i) the provisions of the 1940 Act and the Investment Advisers
Act of 1940, as amended, and all applicable Rules and Regulations of the
Securities and Exchange Commission (the “SEC”); (ii) any other applicable
provision of law; (iii) the provisions of the Agreement and Declaration of
Trust
and By-Laws of the Trust, as such documents are amended from time to time;
(iv)
the investment objectives and policies of each Fund as set forth in its
Registration Statement on Form N-1A; and (v) any policies and determinations
of
the Board of Trustees of the Trust;
(b) will
place orders either directly with the issuer or with any broker or
dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Adviser will attempt to obtain the best
price and the most favorable execution of its orders. In placing
orders, the Adviser will consider the experience and skill of the firm’s
securities traders as well as the firm’s financial responsibility and
administrative efficiency. Consistent with this obligation, the
Adviser may select brokers on the basis of the research, statistical and pricing
services they provide to the Funds and other clients of the
Adviser. Information and research received from such brokers will be
in addition to, and not in lieu of, the services required to be performed by
the
Adviser hereunder. A commission paid to such brokers may be higher
than that which another qualified broker would have charged for effecting the
same transaction, provided that the Adviser determines in good faith that such
commission is reasonable in terms either of the transaction or the overall
responsibility of the Adviser to the Funds and its other clients and that the
total commissions paid by the Funds will be reasonable in relation to the
benefits to the Funds over the long-term. In no instance, however,
will the Funds’ securities be purchased from or sold to the Adviser, or any
affiliated person thereof, except to the extent permitted by the SEC or by
applicable law; and
(c) will
treat confidentially and as proprietary information of the Funds all records
and
other information relative to the Funds, and each Fund’s prior, current or
potential shareholders, and will not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Funds, which
approval shall not be unreasonably withheld and may not be withheld where the
Adviser may be exposed to civil or criminal contempt proceedings for failure
to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Funds.
4. Services
Not Exclusive. Nothing
in this Agreement shall prevent the Adviser or any officer, employee or other
affiliate thereof from acting as investment adviser for any other person, firm
or corporation, or from engaging in any other lawful activity, and shall not
in
any way limit or restrict the Adviser or any of its officers, employees or
agents from buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may be acting;
provided, however, that the Adviser will undertake no activities which, in
its
judgment, will adversely affect the performance of its obligations under this
Agreement.
5. Books
and Records. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Adviser
hereby agrees that all records which it maintains for the Funds are the property
of the Trust and further agrees to surrender promptly to the Trust any such
records upon the Trust’s request. The Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
6. Agency
Cross Transactions. From
time to time, the Adviser or brokers or dealers affiliated with it may find
themselves in a position to buy for certain of their brokerage clients (each
an
“Account”) securities which the Adviser’s investment advisory clients wish to
sell, and to sell for certain of their brokerage clients securities which
advisory clients wish to buy. Where one of the parties is an advisory
client, the Adviser or the affiliated broker or dealer cannot participate in
this type of transaction (known as a cross transaction) on behalf of an advisory
client and retain commissions from one or both parties to the transaction
without the advisory client’s consent. This is because in a situation
where the Adviser is making the investment decision (as opposed to a brokerage
client who makes his own investment decisions), and the Adviser or an affiliate
is receiving commissions from both sides of the transaction, there is a
potential conflicting division of loyalties and responsibilities on the
Adviser’s part regarding the advisory client. The Securities and
Exchange Commission has adopted a rule under the Investment Advisers Act of
1940, as amended, which permits the Adviser or its affiliates to participate
on
behalf of an Account in agency cross transactions if the advisory client has
given written consent in advance. By execution of this Agreement, the
Trust authorizes the Adviser or its affiliates to participate in agency cross
transactions involving an Account. The Trust may revoke its consent
at any time by written notice to the Adviser.
7. Expenses. During
the term of this Agreement, the Adviser will bear all costs and expenses of
its
employees and any overhead incurred in connection with its duties hereunder
and
shall bear the costs of any salaries or trustees fees of any officers or
trustees of the Trust who are affiliated persons (as defined in the ▇▇▇▇ ▇▇▇)
of
the Adviser.
8. Compensation
of the Adviser. The
Funds agrees to pay to the Adviser and the Adviser agrees to accept as full
compensation for all services rendered by the Adviser as such, a fee accrued
daily and paid monthly in arrears at an annual rate listed in Appendix
A
of each
Fund’s average daily net assets. For any period less than a month
during which this Agreement is in effect, the fee shall be prorated according
to
the proportion which such period bears to a full month of 28, 29, 30 or 31
days,
as the case may be.
9. Limitation
on Liability.
(a) The
Adviser will not be liable for any error of judgment or mistake of law or for
any loss suffered by Adviser or by the Trust in connection with the performance
of this Agreement, except a loss resulting from a breach of fiduciary duty
with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties under
this Agreement.
(b) The
Funds
may, but shall not be required to, make advance payments to the Adviser in
connection with the expenses of the Adviser in defending any action with respect
to which damages or equitable relief might be sought against the Adviser under
this Section (which payments shall be reimbursed to the Funds by the Adviser
as
provided below) if the Funds receive (i) a written affirmation of the Adviser’s
good faith belief that the standard of conduct necessary for the limitation
of
liability in this Section has been met and (ii) a written undertaking to
reimburse the Funds whether or not the Adviser shall be deemed to have liability
under this Section, such reimbursement to be due upon (1) a final decision
on
the merits by a court or other body before whom the proceeding was brought
as to
whether or not the Adviser is liable under this Section or (2) in the absence
of
such a decision, upon the request of the Adviser for reimbursement by a majority
vote of a quorum consisting of trustees of the Trust who are neither “interested
persons” of the Trust (as defined in Section 2(a)(19) of the ▇▇▇▇ ▇▇▇) nor
parties to the proceeding (“Disinterested Non-Party Trustees”). In
addition, at least one of the following conditions must be met: (A)
the Adviser shall provide a security for such Adviser undertaking, (B) the
Funds
shall be insured against losses arising by reason of any lawful advance, or
(C)
a majority of a quorum of the Disinterested Non-Party Trustees of the Trust
or
an independent legal counsel in a written opinion, shall determine, based on
a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Adviser ultimately will be found not
to
be liable under this Section.
10. Duration
and Termination. This
Agreement shall become effective for a Fund as of the date listed in Appendix
A
hereof and, unless sooner terminated with respect to the Fund as provided
herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue
in effect with respect to each Fund for successive periods of 12 months,
provided such continuance is specifically approved at least annually by both
(a)
the vote of a majority of the Trust’s Board of Trustees or the vote of a
majority of the outstanding voting securities of the Fund at the time
outstanding and entitled to vote, and (b) the vote of a majority of the Trustees
who are not parties to this Agreement or interested persons of any party to
this
Agreement, cast in person at a meeting called for the purpose of voting on
such
approval. Notwithstanding the foregoing, this Agreement may be
terminated by the Trust for a Fund at any time, without the payment of any
penalty, upon giving the Adviser 60 days’ notice (which notice may be waived by
the Adviser), provided that such termination by the Trust shall be directed
or
approved by the vote of a majority of the Trustees of the Trust in office at
the
time or by the vote of the holders of a majority of the voting securities of
the
Fund at the time outstanding and entitled to vote, or by the Adviser on 60
days’
written notice (which notice may be waived by the Trust). This
Agreement will also immediately terminate in the event of its
assignment. (As used in this Agreement, the terms “majority of the
outstanding voting securities,” “interested person” and “assignment” shall have
the same meanings of such terms in the 1940 Act.)
11. Notices. Any
notice under this Agreement shall be in writing to the other party at such
address as the other party may designate from time to time for the receipt
of
such notice and shall be deemed to be received on the earlier of the date
actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
12. Amendment
of this Agreement. This
Agreement may only be amended by an instrument in writing signed by the parties
hereto. Any amendment of this Agreement shall be subject to the 1940
Act.
13. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware for contracts to be performed entirely therein without
reference to choice of law principles thereof and in accordance with the
applicable provisions of the 1940 Act.
14. Use
of the Name Zacks. The
Adviser has consented to the use by the Funds of the name or identifying word
“Zacks” in the name of the Funds. Such consent is conditioned upon
the employment of the Adviser as the investment adviser to the
Funds. The name or identifying word “Zacks” may be used from time to
time in other connections and for other purposes by the Adviser and any of
its
affiliates. The Adviser may require the Funds to cease using “Zacks”
in the name of the Funds and in connection with the Funds’ operations if the
Funds ceases to employ, for any reason, the Adviser, any successor thereto
or
any affiliate thereof as investment adviser of the Funds.
15. Additional
Limitation of Liability. The
parties hereto are expressly put on notice that a Certificate of Trust,
referring to the Trust’s Agreement and Declaration of Trust (the “Certificate”),
is on file with the Secretary of the state of Delaware. The
Certificate was executed by a trustee of the Trust on behalf of the Trust as
trustee, and not individually, and, as provided in the Trust’s Agreement and
Declaration of Trust, the obligations of the Trust are not binding on the
Trust’s trustees, officers or shareholders individually but are binding only
upon the assets and property of the Trust, or the particular series in question,
as the case may be.
16. Miscellaneous. 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 any provision of this Agreement shall 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.
17. Counterparts. This
Agreement may be executed in counterparts by the parties hereto, each of which
shall constitute an original counterpart, and all of which, together, shall
constitute one Agreement.
[Signature
page immediately follows]
IN
WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to
be
executed by their duly authorized officers, all as of the day and the year
first
above written.
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THE
TRUST:
on
behalf of its series listed on Appendix A
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By:
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/s/
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Name
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Title
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THE
ADVISER:
ZACKS
INVESTMENT MANAGEMENT, INC.
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By:
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/s/
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Name
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Title
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Appendix
A
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Fund/Class
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Advisory Fee
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Effective Date
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Zacks
Multi-Cap Opportunities Fund
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Class
A Shares
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0.90
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%
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12/1/07
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Class
C Shares
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0.90
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%
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12/1/07
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Zacks
Market Neutral Fund
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Class
A Shares
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1.10
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%
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6/26/08
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Class
C Shares
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1.10
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%
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6/26/08
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