EXHIBIT 99.B5(A)(II)
INVESTMENT ADVISORY AGREEMENT
FOR THE XXXXXXX PLAN VARIABLE SERIES
AGREEMENT, made by and between THE XXXXXXX PLAN, a Delaware business trust
(the "Trust") on behalf of THE XXXXXXX PLAN VARIABLE SERIES (the "Fund") and
XXXXXXX PARTNERS, LTD., a Florida limited partnership (the "Investment
Advisor").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment company
registered under the Investment Company Act of 1940 (the "1940 Act") and engages
in the business of investing and reinvesting its assets in securities, and the
Investment Advisor is a registered Investment Advisor under the Investment
Advisers Act of 1940 (the "Advisers Act") and engages in the business of
providing investment management services; and
WHEREAS, the Trust wishes to retain the Investment Advisor to serve as
Investment Advisor to the Fund and the Investment Advisor is willing to furnish
such services to the Fund.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Trust hereby employs the Investment Advisor to manage the
investment and reinvestment of the Fund's assets and to administer its affairs,
subject to the direction of the Board of Trustees and officers of the Trust for
the period and on the terms hereinafter set forth. The Investment Advisor hereby
accepts such employment and agrees during such period to render the services and
assume the obligations herein set forth for the compensation herein provided.
The Investment Advisor shall for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to
act for or to represent the Fund in any way, or in any way be deemed an agent of
the Fund. The Investment Advisor shall regularly make decisions as to what
securities to purchase and sell on behalf of the Fund and shall record and
implement such decisions and shall furnish the Board of Trustees of the Trust
with such information and reports regarding the Fund's investments as the
Investment Advisor deems appropriate or as the Trustees of the Trust may
reasonably request. Subject to compliance with the requirements of the 1940 Act,
the Investment Advisor may retain as a sub-Advisor to the Fund, at the
Investment Advisor's own expense, any investment Advisor registered under the
Advisers Act. As the Investment Advisor is structured as a partnership,
shareholders of the Fund will be notified (as required by Section 205 of the
Advisers Act of any significant ownership changes in the Investment Advisor
within ten (10) days of any such change in ownership.
2. The Fund shall conduct its own business and affairs and shall bear the
expenses and salaries necessary and incidental thereto including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of stock,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; and taxes. Partners and employees of
the Investment Advisor may be trustees, officers and employees of the funds of
which Xxxxxxx Partners, Ltd. is Investment Advisor. Partners and employees of
the Investment Advisor who are trustees, officers and/or employees of the Trust
shall not receive any compensation from the Fund for acting in such dual
capacity.
In the conduct of the respective businesses of the parties hereto and
in the performance of this Agreement, the Fund and Investment Advisor may share
facilities common
to each, with appropriate proration of expenses between them.
3. (a) The Investment Advisor shall place and execute Fund orders for the
purchase and sale of portfolio securities with broker/dealers. Subject to the
primary objective of obtaining the best available prices and execution, the
Investment Advisor will place orders for the purchase and sale of portfolio
securities for the Fund with such broker/dealers as it may select from time to
time, including brokers who provide statistical, factual and financial
information and services to the Fund, to the Investment Advisor, or to any other
fund for which the Investment Advisor provides investment advisory services
and/or with broker/dealers who sell shares of the Fund or who sell shares of any
other fund for which the Investment Advisor provides investment advisory
services. Broker/dealers who sell shares of the funds of which Xxxxxxx Partners,
Ltd. is Investment Advisor, shall only receive orders for the purchase or sale
of portfolio securities to the extent that the placing of such orders is in
compliance with the Rules of the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Advisor may ask the Fund and
the Fund may agree to pay a member of an exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker or dealer would have charged
for effecting that transaction, in such instances where it and the Investment
Advisor have determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Investment Advisor's overall responsibilities with
respect to the Fund and to other funds for which the Investment Advisor
exercises investment discretion.
4. As compensation for the services to be rendered to the Fund by the
Investment Advisor under the provisions of this Agreement, the Fund shall pay to
the Investment Advisor from the Fund's assets an annual fee equal to 1.00% of
the daily average net assets of the Fund, payable on a monthly basis, subject to
reduction to the extent necessary to comply with the most stringent limits
prescribed by any state in which the Fund's shares are offered for sale.
If this Agreement is terminated prior to the end of any calendar month,
the management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of calendar
days, during which the Agreement is in effect, bears to the number of calendar
days in the month, and shall be payable within 10 days after the date of
termination.
5. The services to be rendered by the Investment Advisor to the Fund under
the provisions of this Agreement are not to be deemed to be exclusive, and the
Investment Advisor shall be free to render similar or different services to
others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
6. The Investment Advisor, its partners, employees, and agents may engage
in other businesses, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual, and may
render underwriting services to the Fund or to any other investment company,
corporation, association, firm or individual.
7. In the absence of willful misfeasance, bad faith, gross negligence, or
a reckless disregard of the performance of duties of the Investment Advisor to
the Fund, the Investment Advisor shall not be subject to liabilities to the Fund
or to any shareholder of the Fund for any action or omission in the course of,
or connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security, or otherwise.
8. The Fund agrees that, in the event that the Investment Advisor ceases
to be the
Fund's investment advisor for any reason, the Fund will (unless the Investment
Advisor otherwise agrees in writing) promptly take all necessary steps to
propose to the shareholders at the next regular meeting that the Fund change to
a name not including the word "Xxxxxxx." The Fund agrees that the word "Xxxxxxx"
in its name is derived from the name of the Investment Advisor and is the
property of the Investment Advisor for copyright and all other purposes and that
therefore such word may be freely used by the Investment Advisor as to other
investment activities or other investment products.
9. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding voting
securities of the Fund. It shall continue in effect for a period of two years
and may be renewed thereafter only so long as such renewal and continuance is
specifically approved at least annually by the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund and only if the terms
and the renewal hereof have been approved by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. No amendment to this Agreement shall be effective unless the terms
thereof have been approved by the vote of a majority of the outstanding voting
securities of the Fund and by the vote of a majority of Trustees of the Trust
who are not parties to the Agreement or interested persons of any such party,
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 Fund at
any time, without the payment of a penalty, on sixty days' written notice to the
Investment Advisor of the Fund's intention to do so, pursuant to action by the
Board of Trustees of the Fund or pursuant to a vote of a majority of the
outstanding voting securities of the Fund. The Investment Advisor may terminate
this Agreement at any time, without the payment of penalty on sixty days'
written notice to the Fund of its intention to do so. Upon
termination of this Agreement, the obligations of all the parties hereunder
shall cease and terminate as of the date of such termination, except for any
obligation to respond for a breach of this Agreement committed prior to such
termination, and except for the obligation of the Fund to pay to the Investment
Advisor the fee provided in Paragraph 4 hereof, prorated to the date of
termination. This Agreement shall automatically terminate in the event of its
assignment.
10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers the ____ day of _______________, 1998 .
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Attest: THE XXXXXXX PLAN
__________________________ By:_____________________
Attest: XXXXXXX PARTNERS, LTD.
By: COVENANT FUNDS, INC.
Managing General Partner
__________________________ By:_____________________
Xxxxxx X. Ally, President
