Investment Advisory Agreement
This Investment Advisory Agreement is made this 11th day of April, 2003 by
and between GINTEL FUND, a Massachusetts business trust (the "Fund") and GINTEL
ASSET MANAGEMENT, INC., a Connecticut corporation (the "Adviser"), with respect
to the following recital of fact:
RECITAL
The Fund and the Adviser desire to enter into an agreement to provide for
the management of the Fund's assets on the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Management. The Adviser shall act as investment manager for the Fund and
shall, in such capacity, supervise the investment and reinvestment of the cash,
securities or other properties comprising the Fund's assets, subject at all
times to the policies and control of the Fund's Board of Trustees. The Adviser
shall give the Fund the benefit of its best judgment, efforts and facilities in
rendering its services as investment manager.
2. Investment Analysis and Implementation. In carrying out its obligation
under paragraph 1 hereof, the Adviser shall:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Fund,
and whether concerning the individual companies whose securities are
included in the Fund or the activities in which they engage, or with
respect to securities which the Adviser considers desirable for inclusion
in the Fund's portfolio;
(b) determine what industries and companies shall be represented in
the Fund's portfolio and regularly report them to the Fund's Board of
Trustees;
(c) formulate and implement continuing programs for the purchases and
sales of the securities of such companies and regularly report thereon to
the Fund's Board of Trustees; and
(d) take, on behalf of the Fund, all actions which appear to the Fund
necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Adviser is responsible for decisions to
buy and sell securities for the Fund, broker-dealer selection, and negotiation
of its brokerage commission rates. The Adviser may select Gintel & Co. as the
broker-dealer to effect all or substantially all of the security transactions
which are effected on the New York Stock Exchange, Inc. or the American Stock
Exchange or which are listed on NASDAQ. The Adviser's primary consideration in
effecting a security transaction will be execution at a price that is reasonable
and fair compared to the commission, fee or other remuneration received or to be
received by other brokers in connection with comparable transactions including
similar securities being purchased or sold on a securities exchange during a
comparable period of time.
In selecting a broker-dealer to execute each particular transaction, the
Adviser will take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer, the size of and difficulty in executing the order and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to the Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board
of Trustees may determine, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Fund to pay a broker or dealer that
provides brokerage and research services to the Adviser for the Fund's use an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction, if the Adviser determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the Adviser's overall responsibilities
with respect to the Fund. The Adviser is further authorized to allocate the
orders placed by it on behalf of the Fund to such brokers and dealers who also
provide research or statistical material, or other services to the Fund or the
Adviser for the Fund's use. Such allocation shall be in such amounts and
proportions as the Adviser shall determine and the Adviser will report on said
allocations regularly to the Board of Trustees of the Fund indicating the
brokers to whom such allocations have been made and the basis therefor.
4. Control by Board of Trustees. Any investment program undertaken by the
Adviser pursuant to this Agreement, as well as any other activities undertaken
by the Adviser on behalf of the Fund pursuant thereto, shall at all times be
subject to any directives of the Board of Trustees of the Fund.
5. Compliance with Applicable Requirements. In carrying out its obligations
under this Agreement, the Adviser shall at all times conform to:
(a) all applicable provisions of the Investment Company Act of 1940
and any rules and regulations adopted thereunder as amended;
(b) the provisions of the Registration Statements of the Fund under
the Securities Act of 1933 and the Investment Company Act of 1940, as
amended;
(c) the provisions of the Declaration of Trust of the Fund;
(d) the provisions of the By-laws of the Fund; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Fund shall be allocable
between the Fund and the Adviser as follows:
(a) The Adviser shall furnish, at its expense and without cost to the
Fund, the services of a President, Secretary and one or more Vice
Presidents of the Fund, to the extent that such additional officers may be
required by the Fund for the proper conduct of its affairs.
(b) The Adviser shall further maintain, at its expense and without
cost to the Fund, a trading function in order to carry out its obligations
under subparagraph (d) of paragraph 2 hereof to place orders for the
purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed to require
the Adviser to bear:
(i) any of the costs (including applicable office space,
facilities and equipment) of the services of a principal financial
officer of the Fund whose normal duties consist of maintaining the
financial accounts and books and records of the Fund, including the
reviewing of calculations of daily net asset value and preparing tax
returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the personnel
operating under the direction of such principal financial officer.
Notwithstanding the obligation of the Fund to bear the expense of
the functions referred to in clauses (i) and (ii) of this subparagraph
(c), the Adviser may pay the salaries, including any applicable
employment or payroll taxes and other salary costs, of the principal
financial officer and other personnel carrying out such functions and
the Fund shall reimburse the Adviser therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations
of the Fund and the offering of its shares shall be borne by the Fund
unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing,
taxes or governmental fees, the cost of preparing share certificates,
custodian, transfer and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to trustee and shareholder
meetings, the cost of preparing and distributing reports and notices to
shareholders, the fees and other expenses incurred by the Fund in
connection with membership in investment company organizations and the cost
of printing copies of prospectuses and statements of additional information
distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Fund's Board of
Trustees, the Adviser may perform services on behalf of the Fund which are not
required by this Agreement. Such services will be performed on behalf of the
Fund and the Adviser's cost in rendering such services may be billed monthly to
the Fund, subject to examination by the Fund's independent accountants. Payment
or assumption by the Adviser of any Fund expenses that the Adviser is not
required to pay or assume under this Agreement shall not relieve the Adviser of
any of its obligations to the Fund nor obligate the Adviser to pay or assume any
similar Fund expense on any subsequent occasion.
8. Compensation. The Fund shall pay the Adviser in full compensation for
services rendered hereunder an annual investment advisory fee, payable at the
beginning of each quarter, of 1% of the average daily net assets of the Fund
during the preceding quarter. The average daily net asset value of the Fund
shall be determined in the manner set forth in the Declaration of Trust and
prospectus of the Fund.
9. Expense Limitation. If, for any fiscal year, the total of all ordinary
business expenses of the Fund, including all investment advisory fees but
excluding brokerage commissions and fees, taxes, interest and extraordinary
expenses such as litigation, would exceed the most restrictive expense limits
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are offered for sale, the investment advisory fee shall be
reduced by the amount of such excess. The amount of any such reduction to be
borne by the Adviser shall be deducted from the quarterly investment advisory
fee otherwise payable to the Adviser during such fiscal year; and if such amount
should exceed such quarterly fee, the Adviser agrees to pay to the Fund such
excess expenses no later than the last day of the first month of the next
succeeding fiscal year. For the purposes of this paragraph, the term "fiscal
year" shall exclude the portion of the current fiscal year which shall have
elapsed prior to the date hereof and shall include the portion of the then
current fiscal year which shall have elapsed at the date of termination of this
Agreement.
10. Non-Exclusivity. The services of the Adviser to the Fund are not to be
deemed to be exclusive, and the Adviser shall be free to render investment
advisory and corporate administrative or other services to others (including
other investment companies) and to engage in other activities. It is understood
and agreed that officers or directors of the Adviser may serve as officers or
trustees of the Fund, and that officers or trustees of the Fund may serve as
officers or directors of the Adviser to the extent permitted by law; and that
the officers and directors of the Adviser are not prohibited from engaging in
any other business activity or from rendering services to any other person, or
from serving as partners, officers or directors of any other firm or
corporation, including other investment companies.
11. Term and Approval. This Agreement shall continue for a period of two
years from the date of its execution, and it shall continue thereafter for
successive one year periods provided that such continuance is specifically
approved at least annually:
(a) (i) by the Fund's Board of Trustees or (ii) by the vote of a
majority of the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the Investment Company Act of 1940, as amended), and
(b) by the affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons (as defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended) of any party to
this agreement (other than as Fund Trustees), by votes cast in person at a
meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Fund's Board of Trustees or by vote of a
majority of the Fund's outstanding voting securities, or by the Adviser, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by either party. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for the purpose
having the meaning defined in Section 2(a)(4) of the Investment Company Act of
1940, as amended.
13. Liability of Adviser and Indemnification. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Fund agrees to indemnify the
Adviser against any and all claims, demands, liabilities and expenses which the
Adviser may incur under the Securities Act of 1933, or common law or otherwise,
arising out of or based upon any alleged untrue statement of a material fact
contained in any registration statement, prospectus or statement of additional
information of the Fund, or any omission to state a material fact therein, the
omission of which makes any statement contained therein misleading, unless such
statement or omission was made in reliance upon, and in conformity with
information furnished to the Fund in connection therewith by or on behalf of the
Adviser. The Adviser agrees to indemnify the Fund against any and all claims,
demands, liabilities and expenses which the Fund may incur arising out of or
based upon any act or deed of its employees which is outside the scope of their
authority.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Fund and
that of the Adviser shall be 0 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000.
15. Questions of Interpretation. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the Investment Company Act of 1940, as amended, shall be
resolved by reference to such term or provision of the Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Investment Company Act of
1940, as amended, reflected in any provision of this Agreement is released by
rules, regulations or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by this respective officers on the day and year first
above written.
GINTEL FUND
Attest: By /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, President
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GINTEL ASSET MANAGEMENT, INC.
Attest: By /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, President
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