INVESTMENT ADVISORY AGREEMENT
XXXXXX NEW GENERATION FUND
(A SERIES OF XXXXXX INVESTMENT PORTFOLIO TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made
this _____ day of _____________, 1996, between XXXXXX ASSOCIATES,
INC., a Delaware corporation ("Xxxxxx Associates"), and XXXXXX
INVESTMENT PORTFOLIO TRUST, a Delaware business trust (the "Trust")
with respect to XXXXXX NEW GENERATION FUND, a series of the Trust (the
"Fund").
W I T N E S S E T H:
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WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has registered it shares for public
offering under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust is authorized to create separate series
of shares, each with its own separate investment portfolio, one of
such series created by the Trust being the Fund; and
WHEREAS, the Trust and Xxxxxx Associates deem it mutually
advantageous that Xxxxxx Associates should assist the Trustees and
officers of the Trust in the management of the securities portfolio of
the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Management Functions. In addition to the expenses
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which Xxxxxx Associates may incur in the performance of its investment
advisory functions under this Agreement, and the expenses which it may
expressly undertake to incur and pay under other agreements with the
Trust or otherwise, Xxxxxx Associates shall incur and pay the
following expenses relating to the Fund's operations without
reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of
the Trust's officers and its Trustees (the "Trustees"),
except for such Trustees who are not interested persons
of Xxxxxx Associates;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the
Fund, other than expenses incurred in complying with
federal and state laws and the law of any foreign
country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund
including without limitation
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registration fees and costs, the costs of preparing the
registration statement relating to the Fund and
amendments thereto, and the costs and expenses of
preparing, printing, and mailing prospectuses (and
statements of additional information) to persons other
than shareholders of the Fund.
2. Investment Advisory Functions. In its capacity as
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investment adviser to the Fund, Xxxxxx Associates shall have the
following responsibilities:
(a) To furnish continuous advice and recommendations to the
Fund as to the acquisition, holding or disposition of
any or all of the securities or other assets which the
Fund may own or contemplate acquiring from time to
time, giving due consideration to the investment
policies and restrictions and the other statements
concerning the Fund in the Trust's Trust Instrument,
Bylaws, and registration statements under the 1940 Act
and the 1933 Act, and to the provisions of the Internal
Revenue Code, as amended from time to time, applicable
to the Fund as a regulated investment company;
(b) To cause its officers to attend meetings and furnish
oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate
officers of the Trust fully informed as to the
condition of the investment portfolio of the Fund, the
investment recommendations of Xxxxxx Associates, and
the investment considerations which have given rise to
those recommendations; and
(c) To supervise the purchase and sale of securities as
directed by the appropriate officers of the Trust.
3. Obligations of Trust. The Trust shall have the
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following obligations under this Agreement:
(a) To keep Xxxxxx Associates continuously and fully
informed as to the composition of the investment
portfolio of the Fund and the nature of all of the
Fund's assets and liabilities from time to time;
(b) To furnish Xxxxxx Associates with a certified copy of
any financial statement or report prepared for the Fund
by certified or independent public accountants and with
copies of any financial statements or reports made to
the Fund's shareholders or to any governmental body or
securities exchange;
(c) To furnish Xxxxxx Associates with any further materials
or information which Xxxxxx Associates may reasonably
request to enable it to perform its function under this
Agreement; and
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(d) To compensate Xxxxxx Associates for its services and
reimburse Xxxxxx Associates for its expenses incurred
hereunder in accordance with the provisions of
paragraph 4 hereof.
4. Compensation. The Trust shall pay to Xxxxxx Associates
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for its services under this Agreement a monthly fee, payable on the
last day of each month during which or part of which this Agreement is
in effect, of 1/12 of 0.90% of the average daily closing net asset
value of the Fund for such month. For the month during which this
Agreement becomes effective and the month during which it terminates,
however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month
during which this Agreement is effective.
5. Expenses Paid by the Trust. The Trust assumes and
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shall pay all expenses incidental to its operations and business not
specifically assumed or agreed to be paid by Xxxxxx Associates
pursuant to Section 1 hereof, including, but not limited to,
investment adviser fees; any compensation, fees or reimbursements
which the Trust pays to its Trustees who are not interested persons of
Xxxxxx Associates; compensation of the Fund's custodian, transfer
agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping
and bookkeeping expenses; brokerage commissions and all other expenses
in connection with execution of portfolio transactions (including any
appropriate commissions paid to Xxxxxx Associates or its affiliates
for effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the
purchasers thereof; expenses of local representation in Delaware;
expenses of shareholders' meetings and of preparing, printing and
distributing proxy statements, notices, and reports to shareholders;
expenses of preparing and filing reports and tax returns with federal
and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country
applicable to the issue, offer or sale of shares of the Fund,
including, but not limited to, all costs involved in the registration
or qualification of shares of the Fund for sale in any jurisdiction,
the costs of portfolio pricing services and systems for compliance
with blue sky laws, and all costs involved in preparing, printing and
mailing prospectuses and statements of additional information of the
Fund; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association
or other investment company organization. To the extent that Xxxxxx
Associates shall perform any of the above described administrative and
clerical functions, including transfer agency, registry, dividend
disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and registration functions, and the preparation of reports
and returns, the Trust shall pay to Xxxxxx Associates compensation
for, or reimburse Xxxxxx Associates for its expenses incurred in
connection with, such services as Xxxxxx Associates and the Trust
shall agree from time to time, any other provision of this Agreement
notwithstanding.
6. Treatment of Investment Advice. The Trust shall treat
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the investment advice and recommendations of Xxxxxx Associates as
being advisory only, and shall retain full control over its own
investment policies. However,the Trustees may delegate to the
appropriate
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officers of the Trust, or to a committee of the Trustees, the power to
authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
7. Brokerage Commissions. For purposes of this Agreement,
---------------------
brokerage commissions paid by the Fund upon the purchase or sale of
its portfolio securities shall be considered a cost of securities of
the Fund and shall be paid by the Fund. Xxxxxx Associates is
authorized and directed to place Fund portfolio transactions only with
brokers and dealers who render satisfactory service in the execution
of orders at the most favorable prices and at reasonable commission
rates, provided, however, that Xxxxxx Associates may pay a broker an
amount of commission for effecting a securities transaction in excess
of the amount of commission another broker would have charged for
effecting that transaction if Xxxxxx Associates 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
viewed in terms of either that particular transaction or the overall
responsibilities of Xxxxxx Associates. Xxxxxx Associates is also
authorized to consider sales of Fund shares as a factor in selecting
broker-dealers to execute Fund portfolio transactions. In placing
portfolio business with such broker-dealers, Xxxxxx Associates shall
seek the best execution of each transaction. Subject to the terms of
this Agreement and the applicable requirements and provisions of the
law, including the Investment Company Act of 1940 and the Securities
Exchange Act of 1934, as amended, and in the event that Xxxxxx
Associates or an affiliate is registered as a broker-dealer, Xxxxxx
Associates may select a broker with which it or the Fund is
affiliated. Xxxxxx Associates or such affiliated broker may effect or
execute Fund portfolio transactions, whether on a securities exchange
or in the over-the-counter market, and receive separate compensation
from the Fund therefor. Notwithstanding the foregoing, the Trust
shall retain the right to direct the placement of all portfolio
transactions, and the Trustees of the Trust may establish policies or
guidelines to be followed by Xxxxxx Associates in placing portfolio
transactions for the Trust pursuant to the foregoing provisions.
Xxxxxx Associates shall report on the placement of portfolio
transactions in the prior fiscal quarter at each quarterly meeting of
such Trustees.
8. Termination. This Agreement may be terminated at any
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time, without penalty, by the Trustees of the Trust, or by the
shareholders of the Fund acting by vote of at least a majority of its
outstanding voting securities, provided in either case that sixty (60)
days' advance written notice of termination be given to Xxxxxx
Associates at its principal place of business. This Agreement may be
terminated by Xxxxxx Associates at any time, without penalty, by
giving sixty (60) days' advance written notice of termination to the
Trust, addressed to its principal place of business. The Trust agrees
that, consistent with the terms of the Trust's Trust Instrument, the
Trust shall cease to use the name "Xxxxxx" in connection with the Fund
as soon as reasonably practicable following any termination of this
Agreement if Xxxxxx Associates does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate
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automatically in the event of any assignment of this Agreement.
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10. Term. This Agreement shall continue in effect until
----
the last day of April, 1997, unless sooner terminated in accordance
with its terms, and shall continue in effect from year to year
thereafter only so long as such continuance is specifically approved
at least annually 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
the approval of the terms of such renewal, and by either the Trustees
of the Trust or the affirmative vote of a majority of the outstanding
voting securities of the Fund. The annual approvals provided for
herein shall be effective to continue this Agreement from year to year
if given within a period beginning not more than sixty (60) days prior
to the last day of April of each applicable year, notwithstanding the
fact that more than three hundred sixty-five (365) days may have
elapsed since the date on which such approval was last given.
11. Amendments. This Agreement may be amended by the
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parties only if such amendment is specifically approved (i) by a
majority of the Trustees, including a majority of the Trustees who are
not interested persons of Xxxxxx Associates and, if required by
applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Allocation of Expenses. The Trustees shall determine
----------------------
the basis for making an appropriate allocation of the Trust's expenses
(other than those directly attributable to the Fund) between the Fund
and any other series of the Trust and between the Fund and other
investment companies managed by Xxxxxx Associates.
13. Limitation on Personal Liability. NOTICE IS HEREBY
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GIVEN that the Trust is a business trust organized under the Delaware
Business Trust Act pursuant to a Certificate of Trust filed in the
office of the Secretary of State of the State of Delaware. All
parties to this Agreement acknowledge and agree that the Trust is a
series trust and all debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with
respect to such series only, and not against the assets of the Trust
generally or against the assets held with respect to any other series
and further that no trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the
foregoing.
14. Limitation of Liability of Xxxxxx Associates. Xxxxxx
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Associates shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and
duties hereunder and except to the extent otherwise provided by law.
As used in this Section 14, "Xxxxxx Associates" shall include any
affiliate of Xxxxxx Associates performing services for the Trust
contemplated hereunder and directors, officers and employees of Xxxxxx
Associates and such affiliates.
15. Activities of Xxxxxx Associates. The services of
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Xxxxxx Associates to the Trust hereunder are not to be deemed to be
exclusive, and Xxxxxx Associates and its affiliates are free to render
services to other parties. It is understood that trustees, officers
and
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shareholders of the Trust are or may become interested in Xxxxxx
Associates as directors, officers and shareholders of Xxxxxx
Associates, that directors, officers, employees and shareholders of
Xxxxxx Associates are or may become similarly interested in the Trust,
and that Xxxxxx Associates may become interested in the Trust as a
shareholder or otherwise.
16. Certain Definitions. The terms "vote of a majority of
-------------------
the outstanding voting securities", "assignment" and "interested
persons" when used herein, shall have the respective meanings
specified in the 1940 Act, as now in effect or hereafter amended, and
the rules and regulations thereunder, subject to such orders,
exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Investment Advisory Agreement as
of the date and year first above written.
XXXXXX ASSOCIATES, INC.
By______________________________________
Title:
XXXXXX INVESTMENT PORTFOLIO TRUST
By______________________________________
Title:
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[XXXXXX ASSOCIATES, INC. LETTERHEAD APPEARS HERE]
____________, 1996
Xxxxxx Investment Portfolio Trust
000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Gentlemen:
As you know, Section 4 of our Investment Advisory Agreement,
dated _______________, 1996, provides for compensation to Xxxxxx
Associates, Inc. ("Xxxxxx Associates") with respect to Xxxxxx New
Generation Fund (the "Fund"). This letter is to inform you that
Xxxxxx Associates will voluntarily waive a portion of its investment
advisory fee under the conditions set forth in this letter agreement
and hereby agrees to amend our Investment Advisory Agreement by the
addition of the following provision:
Xxxxxx Associates shall reduce the fee due from
the Fund under Section 4 of this Agreement in the
event and to the extent that the normal operating
expenses of the Fund (as defined below) exceed
either of the following expense limitations:
(1) in the event that the normal operating
expenses of the Fund, including amounts payable to
Xxxxxx Associates pursuant to Section 4 hereof,
for any fiscal year ending on a date on which this
Agreement is in effect exceed 1.90% of the Fund's
average daily net assets; provided, however, to
the extent permitted by law, there shall be
excluded from such expenses the amount of any
interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited
to legal claims and liabilities and litigation
costs and any indemnification related thereto)
paid or payable by the Fund; and
(2) in the event that the normal operating
expenses of the Fund, including amounts payable to
Xxxxxx Associates pursuant to Section 4 hereof,
for any fiscal year ending on a date on which this
Agreement is in effect exceed the expense
limitations applicable to the Fund imposed by
applicable state securities laws or regulations
thereunder, as such limitations may be raised or
lowered from time to time; provided, however, to
the extent
Xxxxxx Investment Portfolio Trust
______________, 1996
Page 2
permitted by law, there shall be excluded from
such expenses the amount of any asset-based sales
charge or distribution fees, interest, taxes,
brokerage commissions and extraordinary expenses
(including but not limited to legal claims and
liabilities and litigation costs and any
indemnification related thereto) paid or payable
by the Fund.
In either case, Xxxxxx Associates shall reduce its
advisory fee due from the Fund by the extent of
such excess and, if required pursuant to any laws
or regulations, will reimburse the Fund in the
amount of such excess. Whenever the expenses of
the Fund exceed a pro rata portion of the
applicable annual expense limitations, the
estimated amount of reimbursement under such
limitations shall be applicable as an offset
against the monthly payment of the fee due to
Xxxxxx Associates under this Agreement. In any
given month, whichever of the foregoing expense
limitations results in the largest reduction in
Xxxxxx Associates' fee shall be applicable.
This waiver shall terminate automatically upon the
termination of the Investment Advisory Agreement. In addition, this
waiver may be terminated by Xxxxxx Associates at any time provided
that Xxxxxx Associates provides at least 90 days' prior written notice
of the date of termination. Any such notice of termination shall
state the date this waiver shall terminate and copies of any such
notice shall be mailed to each Trustee of the Trust concurrently with
its delivery to the Trust. Xxxxxx Associates will also provide to the
Trust's independent Trustees at least 90 days' prior written notice of
any change in state law that increases the expense limitation set
forth in clause (2) above before such change shall become effective
for this letter agreement.
This waiver is applicable only to that series of the Trust
known as Xxxxxx New Generation Fund and shall not be applicable to any
other series of the Trust, whether now existing or hereafter created.
Very truly yours,
XXXXXX ASSOCIATES, INC.
By:_____________________________________
Title:_______________________________
