INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this _____ day of
_________, 2001, between FORT PITT CAPITAL FUNDS (the "Trust"), a
Delaware business trust, and FORT PITT CAPITAL GROUP, INC. (the
"Adviser"), a Pennsylvania corporation registered under the Investment
Advisers Act of 1940 (the "Advisers Act").
WITNESSETH:
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Trust desires to retain the Adviser to furnish
certain investment advisory services, as described herein, with
respect to certain of the series of the Trust, all as now are or may
be hereafter listed on Exhibit A to this Agreement (each, a "Fund"),
which may be amended from time to time; and
WHEREAS, the Adviser represents that it is willing and possesses
legal authority to render such services subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the Trust and the Adviser do mutually agree and
promise as follows:
1. Appointment as Adviser. The Trust hereby appoints the Adviser
to act as investment adviser to each Fund subject to the terms and
conditions set forth in the Agreement. The Adviser hereby accepts such
appointment and agrees to furnish the services hereinafter described
for the compensation provided for in this Agreement.
2. Duties of Adviser.
(a) Investment Management Services. (1) Subject to the
supervision of the Trust's Board of Trustees (and except as
otherwise permitted under the terms of any exemptive relief
obtained by the Adviser from the Securities and Exchange
Commission or by rule or regulation), the Adviser will provide,
or arrange for the provision of a continuous investment program
and overall investment strategies for each Fund, including
investment research and management with respect to all securities
and investments and cash equivalents in each Fund. The Adviser
will determine, or arrange for others to determine, from time to
time what securities and other investments will be purchased,
retained or sold by each Fund and will implement, or arrange for
others to implement, such determinations through the placement,
in the name of a Fund, of orders for the execution of portfolio
transactions with or through such brokers or dealers as may be so
selected. The Adviser will provide, or arrange for the provision
of, the services under this Agreement in accordance with the
stated investment policies and restrictions of each Fund as set
forth in that Fund's current prospectus and statement of
additional information as currently in effect and as supplemented
or amended from time to time (collectively referred to
hereinafter as the "Prospectus") and subject to the directions of
the Trust's Board of Trustees.
(2) Subject to the provisions of this Agreement and the 1940
Act and any exemptions thereto, the Adviser is authorized to
appoint one or more qualified subadvisers (each a "Subadviser')
to provide each Fund with certain services required by this
Agreement. Each Subadviser shall have such investment discretion
and shall make all determinations with respect to the investment
of a Fund's assets as shall be assigned to that Subadviser by the
Adviser and the purchase and sale of portfolio securities with
respect to those assets and shall take such steps as may be
necessary to implement its decisions. The Adviser shall not be
responsible or liable for the investment merits of any decision
by a Subadviser to purchase, hold, or sell a security for a Fund.
(3) Subject to the supervision and direction of the
Trustees, the Adviser shall (i) have overall supervisory
responsibility for the general management and investment of a
Fund's assets; (ii) determine the allocation of assets among the
Subadvisers, if any; and (iii) have full investment discretion to
make all determinations with respect to the investment of Fund
assets not otherwise assigned to a Subadviser.
(4) The Adviser shall research and evaluate each Subadviser,
if any, including (i) performing initial due diligence on
prospective Subadvisers and monitoring each Subadviser's ongoing
performance; (ii) communicating performance expectations and
evaluations to the Subadvisers; and (iii) recommending to the
Trust's Board of Trustees whether a Subadviser's contract should
be renewed, modified or terminated. The Adviser shall also
recommend changes or additions to the Subadvisers and shall
compensate the Subadvisers.
(5) The Adviser shall provide to the Trust's Board of
Trustees such periodic reports concerning a Fund's business and
investments as the Board of Trustees shall reasonably request.
(b) Compliance with Applicable Laws and Governing Documents.
In the performance of its duties and obligations under this
Agreement, the Adviser shall act in conformity with the Trust's
Declaration of Trust and By-Laws and the Prospectus and with the
instructions and directions received from the Trustees of the
Trust and will conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986, as amended (the
"Code") (including the requirements for qualification as a
regulated investment company) and all other applicable federal
and state laws and regulations.
The Adviser acknowledges and agrees that subject to the
supervision and directions of the Trust's Board of Trustees, it
shall be solely responsible for compliance with all disclosure
requirements under all applicable federal and state laws and
regulations relating to the Trust or a Fund, including, without
limitation, the 1940 Act, and the rules and regulations
thereunder, except that each Subadviser shall have liability in
connection with information furnished by the Subadviser to a Fund
or to the Adviser.
(c) Consistent Standards. It is recognized that the Adviser
will perform various investment management and administrative
services for entities other than the Trust and the Funds; in
connection with providing such services, the Adviser agrees to
exercise the same skill and care in performing its services under
this Agreement as the Adviser exercises in performing similar
services with respect to the other fiduciary accounts for which
the Adviser has investment responsibilities.
(d) Brokerage. The Adviser is authorized, subject to the
supervision of the Trust's Board of Trustees, to establish and
maintain accounts on behalf of each Fund with, and place orders
for the purchase and sale of assets not allocated to a
Subadviser, with or through, such persons, brokers or dealers
("brokers") as Adviser may select and negotiate commissions to be
paid on such transactions. In the selection of such brokers and
the placing of such orders, the Adviser shall seek to obtain for
a Fund the most favorable price and execution available, except
to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services, as provided
below. In using its reasonable efforts to obtain for a Fund the
most favorable price and execution available, the Adviser,
bearing in mind the Fund's best interests at all times, shall
consider all factors it deems relevant, including price, the size
of the transaction, the nature of the market for the security,
the amount of the commission, if any, the timing of the
transaction, market prices and trends, the reputation, experience
and financial stability of the broker involved, and the quality
of service rendered by the broker in other transactions. Subject
to such policies as the 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 a Fund to pay a broker that provides brokerage
and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to the Adviser an amount of
commission for effecting a Fund investment transaction that is in
excess of the amount of commission that another broker would have
charged for effecting that transaction if, but only if, the
Adviser determines in good faith that such 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 overall
responsibilities of the Adviser with respect to the accounts as
to which it exercises investment discretion.
It is recognized that the services provided by such brokers
may be useful to the Adviser in connection with the Adviser's
services to other clients. On occasions when the Adviser deems
the purchase or sale of a security to be in the best interests of
a Fund as well as other clients of the Adviser, the Adviser, to
the extent permitted by applicable laws and regulations, may, but
shall be under no obligation to, 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, allocations of securities so sold or purchased, as well as
the expenses incurred in the transaction, will be made by the
Adviser in the manner the Adviser considers to be the most
equitable and consistent with its fiduciary obligations to each
Fund and to such other clients.
(e) Securities Transactions. The Adviser will not purchase
securities or other instruments from or sell securities or other
instruments to a Fund; provided, however, the Adviser may
purchase securities or other instruments from or sell securities
or other instruments to a Fund if such transaction is permissible
under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder or any exemption therefrom.
The Adviser agrees to observe and comply with Rule 17j-1 under
the 1940 Act and the Trust's and its Code of Ethics, as the same
may be amended from time.
(f) Books and Records. In accordance with the 1940 Act and
the rules and regulations promulgated thereunder, the Adviser
shall maintain separate books and detailed records of all matters
pertaining to the Funds and the Trust (the "Fund's Books and
Records"), including, without limitation, a daily ledger of such
assets and liabilities relating thereto and brokerage and other
records of all securities transactions. The Adviser acknowledges
that the Fund's Books and Records are property of the Trust. In
addition, the Fund's Books and Records shall be available to the
Trust at any time upon request and shall be available for
telecopying without delay to the Trust during any day that the
Funds are open for business.
3. Expenses. During the term of this Agreement, the Adviser will
pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities, commodities
and other investments (including brokerage commissions and other
transaction charges, if any) purchased for a Fund. The Adviser shall,
at its sole expense, employ or associate itself with such persons as
it believes to be particularly fitted to assist in the execution of
its duties under this Agreement.
It is understood that the Trust will pay all of it own expenses
including, without limitation, (1) all charges and expenses of any
custodian or depository appointed by the Trust for the safekeeping of
its cash, securities and other assets, (2) all charges and expenses
paid to an administrator appointed by the Trust to provide
administrative or compliance services, (3) the charges and expenses of
any transfer agents and registrars appointed by the Trust, (4) the
charges and expenses of independent certified public accountants and
of general ledger accounting and internal reporting services for the
Trust, (5) the charges and expenses of dividend and capital gain
distributions, (6) the compensation and expenses of the officers and
Trustees of the Trust who are not "interested persons" of the Adviser,
(7) brokerage commissions and issue and transfer taxes chargeable to
the Trust in connection with securities transactions to which the
Trust is a party, (8) all taxes and fees payable by the Trust to
Federal, State or other governmental agencies; (9) the cost of stock
certificates, if any, representing shares of the Trust, (10) all
expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses and reports to shareholders,
(11) charges and expenses of legal counsel for the Trust in connection
with legal matters relating to the Trust, including without
limitation, legal services rendered in connection with the Trust's
existence, financial structure and relations with its shareholders,
(12) insurance and bonding premiums, (13) association membership dues,
(14) bookkeeping and the costs of calculating the net asset value of
shares of the Trust's Funds, and (15) expenses relating to the
issuance, registration and qualification of the Trust's shares.
4. Compensation. For the services provided and the expenses
assumed with respect to a Fund pursuant to this Agreement, the Adviser
will be entitled to the fee listed for each Fund on Exhibit A. Such
fees will be computed daily and payable monthly at an annual rate
based on a Fund's average daily net assets.
The method of determining net assets of a Fund for purposes
hereof shall be the same as the method of determining net assets for
purposes of establishing the offering and redemption price of the
Shares as described in each Fund's Prospectus. If this Agreement shall
be effective for only a portion of a month, the aforesaid fee shall be
prorated for the portion of such month during which the Agreement is
in effect.
5. Representations and Warranties of Adviser. The Adviser
represents and warrants to the Trust as follows:
(a) The Adviser is registered as an investment adviser under
the Advisers Act;
(b) The Adviser is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth
of Pennsylvania with the power to own and possess its assets and
carry on its business as it is now being conducted;
(c) The execution, delivery and performance by the Adviser
of this Agreement are within the Adviser's powers and have been
duly authorized by all necessary action on the part of its
shareholders and/or directors, and no action by or in respect of,
or filing with, any governmental body, agency or official is
required on the part of the Adviser for the execution, delivery
and performance by the Adviser of this Agreement, and the
execution, delivery and performance by the Adviser of this
Agreement do not contravene or constitute a default under (i) any
provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement,
judgment, injunction, order, decree or other instruments biding
upon the Adviser; and
(d) The Form ADV of the Adviser previously provided to the
Trust is a true and complete copy of the form filed with the SEC
and the information contained therein is accurate and complete in
all material respects and does not omit to state any material
fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading.
6. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Adviser
pursuant to Section 5 shall survive for the duration of this Agreement
and the parties hereto shall promptly notify each other in writing
upon becoming aware that any of the foregoing representations and
warranties are no longer true.
7. Liability and Indemnifications.
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(a) Liability. In the absence of wilful misfeasance, bad
faith or gross negligence on the part of the Adviser or a
reckless disregard of its duties hereunder, the Adviser shall not
be subject to any liability to a Fund or the Trust, for any act
or omission in the case of, or connected with, rendering services
hereunder or for any losses that may be sustained in the
purchase, holding or sale of Fund assets; provided, however, that
nothing herein shall relieve the Adviser from any of its
obligations under applicable law, including, without limitation,
the federal and state securities laws.
(b) Indemnification. The Adviser shall indemnify the Trust
and its officers and trustees, for any liability and expenses,
including attorneys fees, which may be sustained as a result of
the Adviser's wilful misfeasance, bad faith, gross negligence,
reckless disregard of its duties hereunder or violation of
applicable law, including, without limitation, the federal and
state securities laws.
8. Duration and Termination.
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(a) Duration. Unless sooner terminated, this Agreement shall
continue until December 31, 2003, and thereafter shall continue
automatically for successive annual periods, provided such
continuance is specifically approved at least annually by the
Trust's Board of Trustees or the vote of the lesser of (a) 67% of
the shares of a Fund represented at a meeting if holders of more
than 50% of the outstanding shares of the Fund are present in
person or by proxy or (b) more than 50% of the outstanding shares
of the Fund; provided that in either event its continuance also
is approved by a majority of the Trust's Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval.
(b) Termination. Notwithstanding whatever may be provided
herein to the contrary, the Agreement may be terminated any time,
without payment of any penalty by vote of a majority of the
Trust's Board of Trustees, or by vote of a majority of the
outstanding voting securities of a Fund, or by the Adviser, in
each case, on not less than sixty (60) days' written notice to
the other party.
This Agreement shall not be assigned (as such term is defined in
the 0000 Xxx) and shall terminate automatically in the event of its
assignment.
9. Services Not Exclusive. The services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. It is understood that
the action taken by the Adviser under this Agreement may differ from
the advice given or the timing or nature of action taken with respect
to other clients of the Adviser, and that a transaction in a specific
security may not be accomplished for all clients of the Adviser at the
same time or at the same price.
10. Amendment. This Agreement may be amended by mutual consent of
the parties, provided that the terms of each such amendment shall be
approved by the Trust's Board of Trustees or by a vote of a majority
of the outstanding voting securities of a Fund (as required by the
1940 Act).
11. Confidentiality. Subject to the duties of the 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 pertaining to a Fund and
the Trust and the actions of the Adviser and the Funds in respect
thereof. In accordance with Section 248.11 of Regulation S-P (17 CFR
248.1-248.30) ("Reg. S-P") Adviser will not directly, or indirectly
through an affiliate, disclose any non-public personal information, as
defined in Reg. S-P, received from the Trust to any person that is not
an affiliate of the Trust or the Adviser and provided that any such
information disclosed to an affiliate of the Trust shall be under the
same limitations of non-disclosure.
12. Notice. Any notice that is required to be given by the
parties to each other under the terms of this Agreement shall be in
writing, delivered, or mailed postpaid to the other party, or
transmitted by facsimile with acknowledgment of receipt, to the
parties at the following addresses or facsimile numbers, which may
from time to time be changed by the parties by notice to the other
party.
(a) If to the Adviser:
Fort Pitt Capital Group, Inc.
000 Xxxxxxx Xxxxx
Xxxxxx Plaza Eleven
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(b) If to the Trust:
Fort Pitt Capital Funds
920 Holiday Drive
Xxxxxx Plaza Eleven
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
13. Jurisdiction. This Agreement shall be governed by and
construed to be in accordance with substantive laws of the
Commonwealth of Pennsylvania without reference to choice of law
principles thereof and in accordance with the 1940 Act. In the case of
any conflict, the 1940 Act shall control.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which
shall together constitute one and the same instrument.
15. Certain Definitions. For the purposes of this Agreement,
"interested person," "affiliated person," "assignment" shall have
their respective meanings as set forth in the 1940 Act, subject,
however, to such exemptions as may be granted by the SEC.
16. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or
interpretation hereof.
17. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision or applicable law, the
remainder of the Agreement shall not be affected adversely and shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
ADVISER:
FORT PITT CAPITAL GROUP, INC.
By:/s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
TRUST:
FORT PITT CAPITAL FUNDS
By:/s/ Xxxxxx X.Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board of Trustees
EXHIBIT A
FORT PITT CAPITAL FUNDS
Investment Advisory Agreement
Effective ___________, 2001
Funds of the Trust Advisory Fees
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For Each of the Fort Pitt Capital Funds
Fort Pitt Capital Total Return Fund 1.00% on all assets
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FORT PITT CAPITAL FUNDS
By:/s/ Xxxxxx X. Xxxxxx
_______________________________
Xxxxxx X. Xxxxxx
Chairman of the Board of Trustees
FORT PITT CAPITAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
_______________________________
Xxxxxx X. Xxxxxx
President
