Exhibit No. EX-99.x
XXXXXXX GROWTH FUND
a series of
THE XXXXXXX FUNDS
000 Xxxxx Xxxxxx
XXX XXXX, XX 00000
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, dated March 7, 2001, is made by and between THE XXXXXXX
FUNDS, a Delaware business trust (the "Trust"), on behalf of the XXXXXXX GROWTH
FUND (the "Fund"), and XXXXXXX ASSOCIATES, INC., a New York corporation (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, as amended (the "Investment
Company Act"), and engages in the business of investing and reinvesting its
assets in securities; and
WHEREAS, the Investment Advisor is a registered investment advisor under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
engages in the business of providing investment management services; and
WHEREAS, the Board of Trustees and shareholders of the Trust have selected
the Investment Advisor to serve as the investment advisor for the Fund effective
as of the date of this Agreement, after taking into account the fact that Xxxx
Xxxxx, Inc. has acquired a controlling interest in the Investment Advisor.
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 on behalf of the Fund hereby employs the Investment
Advisor to manage the investment and reinvestment of the Fund's assets and
to provide administration of the Fund not otherwise provided by third party
service providers, 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 Trust or the Fund in any way, or
in any way be deemed an agent of the Trust or the Fund. The Investment
Advisor shall regularly make decisions as to what securities and other
investments to purchase and sell on behalf of the Fund and shall effect the
purchase and sale of such investments in furtherance of the Fund's
objectives and policies. The Investment Advisor 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
Investment Company 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.
2. (a)The Trust 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; taxes, and state and federal registration fees. Directors,
officers, and employees of the Investment Advisor may be
trustees/directors, officers and employees of the funds of which the
Investment Advisor serves as Investment Advisor. Directors, officers and
employees of the Investment Advisor who are trustees, officers and/or
employees of the Trust shall not receive any compensation from the Trust
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 Trust and the Investment Advisor
may share facilities common to each, with appropriate proration of expenses
between them.
(b)To the extent the Investment Advisor incurs any costs by assuming
expenses which are an obligation of the Fund as set forth herein, the Fund
shall promptly reimburse the Investment Advisor for such costs and
expenses, except to the extent the Investment Advisor has otherwise agreed
to bear such expenses. To the extent the services for which the Fund is
obligated to pay are performed by the Investment Advisor, the Investment
Advisor shall be entitled to recover from the Fund to the extent of the
Investment Advisor's actual costs for providing such services.
3. (a)The Investment Advisor shall place and execute Fund orders for
the purchase and sale of portfolio securities with broker-dealers. Subject
to obtaining the best available execution, the Investment Advisor is
authorized to 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. Subject to subparagraph (b) below, the Investment Advisor is also
authorized to place transactions with broker-dealers who provide research
or statistical information or analyses to the Fund, to the Investment
Advisor, or to any other client for whom the Investment Advisor provides
investment management services. Subject to obtaining the best available
execution, the Investment Advisor may also place brokerage transactions
with broker-dealers who sell shares of the Fund. Broker-dealers who sell
shares of the Fund 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 U.S. Securities and Exchange Commission
and the National Association of Securities Dealers, Inc. The Investment
Advisor also agrees that it will cooperate with the Trust to execute
instructions from the Trust that brokerage transactions be allocated to
broker-dealers who provide benefits directly to the Fund.
(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 is authorized 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 the Investment Advisor
has 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 clients for which the Investment Advisor
exercises investment discretion.
(c)The Investment Advisor is authorized to direct portfolio
transactions to a broker-dealer which is an affiliated person of the
Investment Advisor or the Fund in accordance with such standards and
procedures as may be approved by the Board in accordance with Investment
Company Act Rule 17e-1, or other rules promulgated by the Securities and
Exchange Commission. Any transaction placed with an affiliated
broker-dealer must (i) be placed at the best available execution, and (ii)
may not be a principal transaction.
4. (a)As compensation for the services to be rendered to the Fund by
the Investment Advisor under the provisions of this Agreement, the Trust on
behalf of the Fund shall pay to the Investment Advisor from the Fund's
assets an annual fee equal to 1.00% of the average daily net assets of the
Fund, payable on a monthly basis.
(b)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.
(c)The Investment Advisor may voluntarily reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this
Agreement and may agree to make payments to limit expenses which are the
responsibility of the Fund under this Agreement. Any such reduction or
payment shall be applicable only to such specific reduction or payment and
shall not constitute an agreement to reduce any future compensation or
reimbursement due to the Investment Advisor hereunder or to continue future
payments. Any such reduction will be agreed upon prior to accrual of the
related expense or fee and will be estimated daily. Any fee withheld shall
be voluntarily reduced and any Fund expense paid by the Investment Advisor
voluntarily or pursuant to an agreed expense limitation shall be reimbursed
by the Fund to the Investment Advisor in the first, second, or third (or
any combination thereof) fiscal year next succeeding the fiscal year of the
withholding, reduction, or payment to the extent permitted by applicable
law if the aggregate expenses for the next succeeding fiscal year, second
fiscal year or third succeeding fiscal year do not exceed any limitation to
which the Investment Advisor has agreed. Such reimbursement may be paid
prior to the Fund's payment of current expenses if so requested by the
Investment Advisor even if such payment may require the Investment Advisor
to waive or reduce its fees hereunder or to pay current Fund expenses.
5. The services to be rendered by the Investment Advisor to the Trust
on behalf of 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 directors, officers, employees, and
agents may engage in other businesses, may render investment management
services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to
the Trust on behalf of 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. In accordance with the Agreement and Declaration of Trust of the
Trust, in the event that the Investment Advisor ceases to be the Fund's
investment manager for any reason, the Trust will (unless the Investment
Advisor otherwise agrees in writing) take all necessary steps to cause the
Fund to change to a name not including the word "Xxxxxxx," within a
reasonable period of time.
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. Notwithstanding the
foregoing, this Agreement may be terminated by the Trust at any time,
without the payment of a penalty, on sixty days written notice to the
Investment Advisor of the Trust's intention to do so, pursuant to action by
the Board of Trustees of the Trust 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 Trust 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 to a breach of this Agreement committed prior to
such termination, and except for the obligation of the Trust 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 Investment Company 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 as of the 7th day of March, 2001.
Attest: THE XXXXXXX FUNDS
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx, President
Attest: XXXXXXX ASSOCIATES, INC.
By: /s/ Xxxx X. Xxxxxxx, XX
----------------------------------
Xxxx X. Xxxxxxx, XX, Chairman
