Xxxxxxxx Investment Trust
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Xxxxxxxx Investment Counsel, Inc.
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Re: Amended and Restated Advisory Agreement
Ladies and Gentlemen:
Xxxxxxxx Investment Trust (the "Trust") is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"), and subject to the rules and regulations
promulgated thereunder. The Trust has established the Xxxxxxxx Value Fund (the
"Fund") as a series of shares of the Trust.
1. APPOINTMENT AS ADVISER. The Trust being duly authorized hereby appoints
and employs Xxxxxxxx Investment Counsel, Inc. ("Adviser") as discretionary
portfolio manager, on the terms and conditions set forth herein, of the Fund.
2. ACCEPTANCE OF APPOINTMENT; STANDARD OF PERFORMANCE. Adviser accepts the
appointment as discretionary portfolio manager and agrees to use its best
professional judgment to make timely investment decisions for the Fund in
accordance with the provisions of this Agreement.
3. PORTFOLIO MANAGEMENT SERVICES OF ADVISER. Adviser is hereby employed and
authorized to select portfolio securities for investment by the Trust on behalf
of the Fund, to purchase and sell securities of the Fund, and upon making any
purchase or sale decision, to place orders for the execution of such portfolio
transactions in accordance with paragraphs 5 and 6 hereof. In providing
portfolio management services to the Fund, Adviser shall be subject to such
investment restrictions as are set forth in the Act and the rules thereunder,
the Internal Revenue Code of 1986, applicable state securities laws, the
supervision and control of the Trustees of the Trust, such specific instructions
as the Trustees may adopt and communicate to Adviser and the investment
objectives, policies and restrictions of the Trust applicable to the Fund
furnished pursuant to paragraph 4. Adviser is not authorized by the Trust to
take any action, including the purchase or sale of securities for the Fund, in
contravention of any restriction, limitation, objective, policy or instruction
described in the previous sentence. Adviser shall maintain on behalf of the
Trust the records listed in Schedule A hereto (as amended from time to time). At
the Trust's reasonable request, Adviser will consult with the Trust with respect
to any decision made by it with respect to the investments of the Fund.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Trust will provide
Adviser with the statement of investment objectives, policies and restrictions
applicable to the Fund as
-2-
contained in the Trust's registration statements under the Act and the
Securities Act of 1933, and any instructions adopted by the Trustees
supplemental thereto. The Trust will provide Adviser with such further
information concerning the investment objectives, policies and restrictions
applicable thereto as Adviser may from time to time reasonably request. The
Trust retains the right, on written notice to Adviser from the Trust, to modify
any such objectives, policies or restrictions in any manner at any time.
5. TRANSACTION PROCEDURES. All transactions will be consummated by payment
to or delivery by US Bank, N.A., or any successor custodian (the "Custodian"),
or such depositories or agents as may be designated by the Custodian in writing,
as custodian for the Trust, of all cash and/or securities due to or from the
Fund, and Adviser shall not have possession or custody thereof. Adviser shall
advise Custodian and confirm in writing to the Trust and to Ultimus Fund
Solutions, LLC, or any other designated agent of the Trust, all investment
orders for the Fund placed by it with brokers and dealers. Adviser shall issue
to the Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Adviser.
6. ALLOCATION OF BROKERAGE. Adviser shall have authority and discretion to
select brokers and dealers to execute portfolio transactions initiated by
Adviser and to select the markets on or in which the transactions will be
executed.
-3-
In doing so, the Adviser will give primary consideration to securing the
most favorable price and efficient execution. Consistent with this policy, the
Adviser may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Adviser may be a party. It is understood that neither the Trust nor the
Adviser has adopted a formula for allocation of the Trust's investment
transaction business. It is also understood that it is desirable for the Trust
that the Adviser have access to supplemental investment and market research and
security and economic analyses provided by certain brokers who may execute
brokerage transactions at a higher commission to the Trust than may result when
allocating brokerage to other brokers on the basis of seeking the lowest
commission. Therefore, the Adviser is authorized to place orders for the
purchase and sale of securities for the Fund with such certain brokers, subject
to review by the Trust's Trustees from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Adviser in connection with its services to
other clients.
On occasions when the Adviser deems the purchase or sale of a security to
be in the best interest of the Fund as well as other clients, the Adviser, to
the extent permitted by applicable laws and regulations, may, but shall be under
no obligation to,
-4-
aggregate the securities to be sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as expenses
incurred in the transaction, will be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Trust and to such other clients.
For each fiscal quarter of the Trust, Adviser shall prepare and render
reports to the Trust's Trustees of the total brokerage business placed and the
manner in which the allocation has been accomplished. Such reports shall set
forth at a minimum the information required to be maintained by Rule 31a-1(b)(9)
under the Act.
7. ADMINISTRATIVE SERVICES OF ADVISER. The Adviser shall furnish to the
Trust on behalf of the Fund, but only to the extent that the Trust does not have
in effect a contract or contracts requiring a party of parties other than the
Trust to furnish one or more of the following described services to the Trust,
adequate (i) office space, which may be space within the offices of the Adviser
or in such other place as may be agreed upon from time to time, and (ii) office
furnishings, facilities and equipment as may be reasonably required for managing
and administering the operations and conducting the business of the Trust,
including complying with the securities, tax and other reporting requirements of
the United States and the various states in which the Trust does
-5-
business, conducting correspondence and other communications with the
shareholders of the Fund, and maintaining records in connection with the
investment and business activities of the Fund.
8. PROXIES. The Trust will vote all proxies solicited by or with respect to
the issuers of securities in which assets of the Fund may be invested from time
to time. At the request of the Trust, Adviser shall provide the Trust with its
recommendations as to the voting of such proxies.
9. REPORTS TO ADVISER. The Trust will provide Adviser with such periodic
reports concerning the status of the Fund as Adviser may reasonably request.
10. FEES FOR SERVICES. For all of the services to be rendered and payments
made as provided in this Agreement, the Fund will pay the Adviser a fee,
computed and accrued daily and paid quarterly, at the annual rate of 1.25% of
the first $100 million of the Fund's average daily net assets and 1% of such
assets in excess of $100 million.
11. ALLOCATION OF CHARGES AND EXPENSES. Adviser shall employ or provide and
compensate the executive, administrative, secretarial and clerical personnel
necessary to provide the services set forth herein, and shall bear the expense
thereof. Adviser shall compensate all Trustees, officers and employees of the
Trust who are also officers, partners or employees of Adviser.
Adviser will compensate the Trust's principal underwriter for the
performance of its obligations under the Underwriting
-6-
Agreement with the Trust.
The Fund will be responsible for the payment of all operating expenses of
the Fund, including fees and expenses incurred by the Fund in connection with
membership in investment company organizations, brokerage fees and commissions,
legal, auditing and accounting expenses, expenses of registering shares under
Federal and State securities laws, insurance expenses, taxes or governmental
fees, fees and expenses of the custodian, the transfer and dividend disbursing
agent and the accounting and pricing agent of the Fund, expenses including
clerical expenses of issue, sale, redemption or repurchase of shares of the
Fund, the fees and expenses of Trustees of the Trust who are not affiliated with
Adviser, the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses for delivery to the
Fund's shareholders, the cost of printing or preparing stock certificates or any
other documents, statements or reports to shareholders, expenses of
shareholders' meetings and proxy solicitations, 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 officers and Trustees with respect
thereto, or any other expense not specifically described above incurred in the
performance of the Trust's obligations. All other expenses not expressly assumed
by Adviser herein incurred in connection with the registration of shares and
operations of the Fund will be borne by the Fund.
-7-
12. OTHER INVESTMENT ACTIVITIES OF ADVISER. The Trust acknowledges that
Adviser or one or more of its affiliates may have investment responsibilities or
render investment advice to or perform other investment advisory services for
other individuals or entities and that Adviser, its affiliates or any of its or
their directors, officers, agents or employees may buy, sell or trade in any
securities for its or their respective accounts ("Affiliated Accounts"). Subject
to the provisions of paragraph 2 hereof, the Trust agrees that Adviser or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Affiliated Accounts which may differ from the
advice given or the timing or nature of action taken with respect to the Fund,
provided that Adviser acts in good faith, and provided further, that it is
Adviser's policy to allocate, within its reasonable discretion, investment
opportunities to the Fund over a period of time on a fair and equitable basis
relative to the Affiliated Accounts, taking into account the investment
objectives and policies of the Fund and any specific investment restrictions
applicable thereto. The Trust acknowledges that one or more of the Affiliated
Accounts may at any time hold, acquire, increase, decrease, dispose of or
otherwise deal with positions in investments in which the Fund may have an
interest from time to time, whether in transactions which involve the Fund or
otherwise. Adviser shall have no obligation to acquire for the Fund a position
in any investment which any Affiliated Account may acquire, and the
-8-
Trust shall have no first refusal, co-investment or other rights in respect of
any such investment, either for the Fund or otherwise.
13. CERTIFICATE OF AUTHORITY. The Trust and the Adviser shall furnish to
each other from time to time certified copies of the resolutions of their
Trustees or Board of Directors or executive committees, as the case may be,
evidencing the authority of officers and employees who are authorized to act on
behalf of the Trust, the Fund and/or the Adviser.
14. LIABILITIES OF ADVISER. Adviser shall not be liable for any action
taken, omitted or suffered to be taken by it in its reasonable judgment, in good
faith and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement, or in accordance with (or in the
absence of) specific directions or instructions from the Trust, provided,
however, that such acts or omissions shall not have resulted from Adviser's
willful misfeasance, bad faith or gross negligence, a violation of the standard
of care established by and applicable to Adviser in its actions under this
Agreement or breach of its duty or of its obligations hereunder. Nothing in this
paragraph 14 shall be construed in a manner inconsistent with Sections 17(h) and
(i) of the Act.
15. CONFIDENTIALITY. Subject to the duty of Adviser and the Trust to comply
with applicable law, including any demand of any regulatory or taxing authority
having jurisdiction, the parties hereto shall treat as confidential all
information
-9-
pertaining to the Fund and the actions of Adviser and the Trust in respect
thereof.
16. ASSIGNMENT. No assignment of this Agreement shall be made by Adviser,
and this Agreement shall terminate automatically in the event of such
assignment. Adviser shall notify the Trust in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Trust to consider whether an assignment will occur, and to take
the steps necessary to enter into a new contract with Adviser.
17. REPRESENTATION, WARRANTIES AND AGREEMENTS OF THE TRUST. The Trust
represents, warrants and agrees that: A. Adviser has been duly appointed by the
Trustees of the Trust to provide investment services to the Fund as contemplated
hereby.
B. The Trust will deliver to Adviser a true and complete copy of its then
current prospectus and statement of additional information as effective from
time to time and such other documents or instruments governing the investments
of the Fund and such other information as is necessary for Adviser to carry out
its obligations under this Agreement.
C. The Trust is currently in compliance and shall at all times comply with
the requirements imposed upon the Trust by applicable law and regulations.
18. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ADVISER. Adviser
represents, warrants and agrees that:
-10-
A. Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940.
B. Adviser will maintain, keep current and preserve on behalf of the Trust,
in the manner and for the time periods required or permitted by the Act, the
records identified in Schedule A. Adviser agrees that such records (unless
otherwise indicated on Schedule A) are the property of the Trust, and will be
surrendered to the Trust promptly upon request.
C. Adviser will complete such reports concerning purchases or sales of
securities on behalf of the Fund as the Trust may from time to time require to
ensure compliance with the Act, the Internal Revenue Code of 1986 and applicable
state securities laws.
D. Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Act and will provide the Trust with a copy
of the code of ethics and evidence of its adoption. Within forty-five (45) days
of the end of the last calendar quarter of each year while this Agreement is in
effect, an officer of Adviser shall certify to the Trust that Adviser has
complied with the requirements of Rule 17j-1 during the previous year and that
there has been no violation of the Adviser's code of ethics or, if such a
violation has occurred, that appropriate action was taken in response to such
violation. Upon the written request of the Trust, Adviser shall permit the
Trust, its employees or its agents to examine the reports required
to be made to Adviser by Rule 17j-1(c)(1).
E. Adviser will promptly after filing with the Securities and Exchange
Commission an amendment to its Form ADV furnish a copy of such amendment to the
Trust.
F. Upon request of the Trust, Adviser will provide assistance to the
Custodian in the collection of income due or payable to the Fund.
G. Adviser will immediately notify the Trust of the occurrence of any event
which would disqualify Adviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the Act or otherwise.
19. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between Adviser and the Trust, which amendment, other than
amendments to Schedule A, is subject to the approval of the Trustees and the
shareholders of the Fund in the manner required by the Act and the rules
thereunder, subject to any applicable exemptive order of the Securities and
Exchange Commission modifying the provisions of the Act with respect to approval
of amendments to this Agreement.
20. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
of its execution and shall remain in force for a period of one (1) year from
such date, and from year to year thereafter but only so long as such continuance
is specifically approved at least annually by the vote of a majority of the
Trustees who are not interested persons of the Trust or the
Adviser, cast in person at a meeting called for the purpose of voting on such
approval, and by a vote of the Board of Trustees or of a majority of the
outstanding voting securities of the Fund. The aforesaid requirement that this
Agreement may be continued "annually" shall be construed in a manner consistent
with the Act and the rules and regulations thereunder.
21. TERMINATION. This Agreement may be terminated by either party hereto,
without the payment of any penalty, immediately upon written notice to the other
in the event of a breach of any provision thereof by the party so notified, or
otherwise upon sixty (60) days' written notice to the other, but any such
termination shall not affect the status, obligations or liabilities of any party
hereto to the other.
22. LIMITATION OF LIABILITY. The term "Xxxxxxxx Investment Trust" means and
refers to the Trustees from time to time serving under the Trust's Agreement and
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto may 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. The execution and delivery of
this Agreement have been authorized by the Trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer 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.
23. DEFINITIONS. As used in paragraphs 16 and 20 of this Agreement, the
terms "assignment," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the Act and
the rules and regulations thereunder.
24. APPLICABLE LAW. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the State of Michigan.
XXXXXXXX INVESTMENT TRUST
Attest: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------- -------------------------------
Secretary Title: President
Date: January 28, 2005
ACCEPTANCE
The foregoing Agreement is hereby accepted.
XXXXXXXX INVESTMENT COUNSEL, INC.
Attest: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------- -------------------------------
Secretary Title: President
Date: January 28, 2005
-14-
SCHEDULE A
RECORDS TO BE MAINTAINED BY THE ADVISER
---------------------------------------
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases or sales, given by the Adviser on behalf of the Fund
for, or in connection with, the purchase or sale of securities, whether
executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modification or
cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Trust.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
(10) days after the end of the quarter, showing specifically the basis or
bases upon which the allocation of orders for the purchase and sale of
portfolio securities to named brokers or dealers was effected, and the
division of brokerage commissions or other compensation on such purchase
and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Trust;
(b) The Adviser;
(c) The Trust's principal underwriter; and
(d) Any person affiliated with the foregoing persons.
(iii)Any other consideration other than the technical qualifications
of the brokers and dealers as such.
-15-
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made by
a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record: any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
be maintained by registered investment advisers by rule adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Adviser's transactions
with respect to the Fund.
-----------------------------
* Such information might include: the current Form 10-K, annual and
quarterly reports, press releases, reports by analysts and from brokerage
firms (including their recommendation; i.e., buy, sell, hold) or any
internal reports or portfolio adviser reviews.
-16-
