Exhibit 5(a)
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
________________, 1999
Maxus Asset Management Inc.
The Tower at Erieview - 36th Floor
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Sirs:
OTI Trust, an Ohio business trust (the "Trust"), herewith confirms its
agreement with you ("MAM") as follows:
The Trust desires to employ its capital by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
in its Prospectus as from time to time in effect, copies of which have been or
will be submitted to MAM, and in such manner and to such extent as may from time
to time be approved by the Board of Trustees of the Trust. The Trust desires to
employ MAM to act as the investment adviser and administrator for its investment
portfolio OTI Special Opportunities Fund and such other investment portfolios as
the Trust may from time to time create (individually, a "Fund" or collectively,
the "Funds").
Subject to the supervision and approval of the Board of Trustees, MAM will
provide investment management of each Fund's portfolio in accordance with each
Fund's investment objective and policies as stated in its most recent Prospectus
delivered to MAM, upon which MAM shall be entitled to rely. In connection
therewith, MAM will provide investment research and supervision of each Fund's
investments and conduct a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets. MAM will furnish to the
Trust such statistical information with respect to the investments which each
Fund may hold or contemplate purchasing as the Trust may reasonably request. The
Board wishes to be kept in touch with important developments materially
affecting its portfolio and shall expect MAM, on its own initiative, to furnish
to the Board from time to time such information as MAM may believe appropriate
for this purpose.
In providing investment management services to the Trust, MAM shall give
primary consideration to securing the most favorable price and efficient
execution. In so doing, MAM 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 MAM may be a party. The Trust recognizes that it is desirable
that MAM have access to supplemental investment and market research and security
and economic analyses provided by brokers and that such brokers may execute
brokerage transactions at a higher cost to the Trust than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and efficient execution. Therefore, MAM is authorized to pay higher
brokerage commissions for the purchase and sale of securities for each Fund to
brokers who provide such research and analyses, subject to review by the Board
of 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 MAM in connection with its services to other clients.
On occasions when MAM deems the purchase or sale of a security to be in the
best interest of each Fund as well as other clients, MAM, to the extent
permitted by applicable laws and regulations, may 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 the expenses incurred in the transaction, will
be made by MAM in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
MAM shall provide the Trust with such office facilities and clerical and
administrative services necessary to manage the business affairs of the Trust.
In addition, MAM will prepare and file various returns, reports and
registrations required by Federal and state law and respond to shareholder
communications. Subject to the direction of the Board of Trustees, MAM shall be
responsible for the overall management of the business affairs of the Trust.
MAM shall exercise its best judgment in rendering to the Trust the services
described above and the Trust agrees as an inducement to MAM's undertaking the
same that MAM shall not be liable hereunder for any mistake of judgment or in
any other event whatsoever, provided that nothing herein shall be deemed to
protect or purport to protect MAM against any liability to the Trust or to its
security holders to which MAM would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder, or by reason of MAM's reckless disregard of its obligations and
duties hereunder.
MAM shall, at its own expense, maintain such staff and employ or retain
such personnel and consult with such other persons as it shall from time to time
determine to be necessary or useful to the performance of its obligations under
this Agreement. Without limiting the generality of the foregoing, the staff and
personnel of MAM shall be deemed to include persons employed or otherwise
retained by MAM to furnish statistical and other factual data, advice regarding
economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
MAM may desire. MAM shall, as agent for the Trust, maintain the Trust's records
and books of account (other than those maintained by the Fund's transfer agent,
registrar, custodian and other agencies), including records of portfolio
transactions. All such books and records so maintained shall be the property of
each Fund and, upon request therefore, MAM shall surrender to such Fund such of
the books and records so requested.
MAM shall bear the cost of rendering the investment management, supervisory
and administrative services to be performed by it under this Agreement, and
shall, at its own expense, pay the compensation of the officers and employees,
if any, of the Trust who are employees of MAM, and provide such office space,
facilities and equipment, such clerical help and accounting, data processing,
bookkeeping and internal auditing services as the Trust shall reasonably require
in the conduct of its business and the cost of telephone service, heat, light,
power and other utilities provided to the Trust. The Trust shall bear all other
expenses to be incurred in the operation of the Trust, including charges and
expenses of any registrar, custodian, stock transfer and dividend disbursing
agent; brokerage commissions; taxes; engraving and printing stock certificates,
if any; registration costs of the Trust and its shares under Federal and state
securities laws; the cost and expense of printing, including typesetting, and
distributing prospectuses of the Trust and supplements thereto to the Trust's
shareholders; all expenses of shareholders' and trustees' meetings and of
preparing, printing and mailing proxy statements and reports to shareholders;
fees and travel expenses of trustees' or members of any advisory board or
committee who are not employees of MAM or any corporate affiliate of MAM; all
expenses incident to any dividend, withdrawal or redemption options; charges and
expenses of any outside service used for pricing of each Fund's portfolio
securities; fees and expenses of legal counsel, including counsel to the
trustees who are not interested persons of the Trust or of MAM and independent
accountants; membership dues of industry associations; interest on Fund
borrowings; postage; liability insurance premiums on property or personnel
(including officers and trustees) of the Trust which inure to their benefit; and
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification relating thereto).
In consideration of services rendered pursuant to this Agreement, the Trust
will pay MAM on the first business day of each month a fee at the annual rate of
one percent (1%) of the average value of each Fund's daily net assets. Net asset
value shall be computed at least once each business day. The fee for the period
from the date the initial registration statement of the Fund is declared
effective by the Securities and Exchange Commission to the end of the month
during which such initial registration shall have been declared effective by the
Securities and Exchange Commission shall be prorated according to the proportion
which such period bears to the full monthly period, and upon any termination of
this Agreement before the end of any month, such fee for such part of a month
shall be prorated according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to MAM, the value of each
Fund's net assets shall be computed in the manner specified in such Fund's
Prospectus for the computation of the value of such net assets.
The Trust understands that MAM now acts and will continue to act as
investment adviser to various fiduciary or other managed accounts, and the Trust
has no objection to MAM's so acting. In addition, it is understood that the
persons employed by MAM to assist in the performance of its duties hereunder
will not devote their full time to such service and nothing contained herein
shall be deemed to limit or restrict the right of MAM or any affiliate of MAM to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
The Trust understands that MAM now acts and may in the future act as
investment adviser to one or more other investment companies, and the Trust has
no objection to MAM's so acting, provided that when two or more companies
managed by MAM have available funds for investment in money market instruments,
available money market investments will be allocated in accordance with a
formula believed to be equitable to each company. It is recognized that in some
cases this procedure may adversely affect the size of the position obtainable
for the Funds.
MAM shall not be liable for any error of judgment or mistake of law or for
any loss suffered by any Fund in connection with the matters to which this
Agreement relates, except for 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 obligations and duties under this Agreement. Any
person, even though also an officer, partner, employee, or agent of MAM who may
be or become an officer, trustee, employee or agent of the Trust, shall be
deemed, when rendering services to the Trust or acting on any business of the
Trust, to be rendering such services to, or acting solely for, the Fund and not
as an officer, partner, employee, or agent or one under the control or direction
of MAM even though paid by it.
This Agreement shall become effective on the date hereof and shall continue
in force for a period of two (2) years and from year to year thereafter,
provided such continuance is specifically approved at least annually by (i) the
Board of Trustees or (ii) as to any Fund, by a vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of such Fund's outstanding
voting securities; provided that in either event the continuance is also
approved by a majority of the Trustees who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable without penalty, at any time by (i) the Board of Trustees on 60 days
written notice to MAM or (ii) as to any Fund, by vote of holders of a majority
of such Fund's shares on 60 days written notice to MAM or by (iii) MAM. This
Agreement will also terminate automatically in the event of its assignment (as
defined in said Act).
Neither the Trustees, shareholders, officers, employees or agents of the
Trust shall be personally liable upon, nor shall resort be had to their private
property for the satisfaction of, any obligations of the Trust hereunder, and
MAM shall look solely to the property of the Trust for the satisfaction of any
claim hereunder.
If the foregoing is in accordance with your understanding, kindly so
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
OTI TRUST
By:__________________________________
Accepted: Xxxxxxx X. Xxxxxx, Chairman
MAXUS ASSET MANAGEMENT INC.
By:______________________________
