Exhibit 99.b.5
INVESTMENT ADVISORY AGREEMENT
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AGREEMENT made this 3rd day of June, 1997 by and between FOCUS TRUST, INC.
(the "Corporation"), a Maryland corporation and FOCUS CAPITAL ADVISORY, L.P.
(the "Adviser"), a Pennsylvania limited partnership.
1. DUTIES OF ADVISER. The Corporation hereby appoints the Adviser to act
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as investment adviser to FOCUS TRUST, INC. for the period and on such terms set
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forth in this Agreement. The Corporation employs the Adviser to manage the
investment and reinvestment of the assets of the Corporation, to determine in it
discretion the assets to be held uninvested, to provide the Corporation with
records concerning the Adviser's activities which the Corporation is required to
maintain, and to render regular reports to the Corporation's officers and Board
of Directors concerning the Adviser's discharge of the foregoing
responsibilities. The Adviser shall discharge the foregoing responsibilities
subject to the control of the officers and the Board of Directors of the
Corporation, and in compliance with the objectives, policies and limitations set
forth in the Corporation's Prospectus and Statement of Additional Information
then in effect. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings,
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser shall provide the Corporation
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with a trading department. The Adviser shall select the brokers or dealers that
will execute the purchases and sales of securities for the Corporation and is
directed to use its best efforts to ensure that the best available price and
most favorable execution of securities transactions for the Corporation are
obtained. The Corporation will bear all expenses associated with its investment
activities, including, without limitation, brokerage commissions and custody
expenses. Subject to policies established by the Board of Directors of the
Corporation and communicated to the Adviser, it is understood that the Adviser
will not be deemed to have acted unlawfully, or to have breached a fiduciary
duty to the Corporation or in respect of the Corporation, or be in breach of any
obligation owing to the Corporation or in respect of the Corporation under this
Agreement, or otherwise, solely by reason of its having caused the
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Corporation to pay a member of a securities exchange, a broker or a dealer a
commission for effecting a securities transaction for the Corporation in excess
of the amount of commission another member of an exchange, broker or dealer
would have charged if the Adviser determines in good faith that the commission
paid was reasonable in relation to the brokerage or research services provided
by such member, broker or dealer, viewed in terms of that particular transaction
or the Adviser's overall responsibilities with respect to the accounts,
including the Corporation, as to which it exercises investment discretion. The
Adviser will communicate on a quarterly to the officers and directors of the
Corporation such information relating to Corporation transactions as they may
reasonably request.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
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Adviser as provided in Section 1 and 2 of this Agreement, the Corporation shall
pay to the Adviser within five business days after the end of each calendar
month, a monthly fee of one twelfth of 0.70% of the Corporation's average daily
net assets for the month. The net asset value shall be calculated in the manner
as provided in the Corporation's Prospectus and Statement of Additional
Information then in effect.
In the event of termination of this Agreement, the fee provided in this
Section 3 shall be paid on a pro rate basis, based on the number of days when
this Agreement was in effect.
4. REPORTS. The Corporation and the Adviser agree to furnish to each
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other such information regarding their operations with regard to their affairs
as each may reasonably request.
5. STATUS OF ADVISER. The services of the Adviser to the Corporation are
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not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Corporation are not impaired
thereby.
6. LIABILITY OF ADVISER. In the absence of willful misfeasance, bad
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faith, gross negligence or reckless disregard by the Adviser of its obligations
and duties hereunder, the Adviser shall not be subject to any liability
whatsoever to the Corporation, or to any shareholder of the Corporation, for any
error of judgment, mistake of law or any other act or omission in the course of,
or connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Corporation.
7. DURATION AND TERMINATION. This Agreement shall become effective on
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the
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date which the U.S. Securities and Exchange Commission declares effective,
the Corporation's registration statement provided that first it is approved by
the Board of Directors of the Corporation, including a majority of those
directors who are not parties to this Agreement or interested persons of any
party hereto, in the manner provided in section 15(c) of the Investment Company
Act of 1940, and by the holders of a majority of the outstanding voting
securities of the Corporation; and shall continue in effect for two years.
Thereafter, this Agreement may continue in effect only if such continuance is
approved at least annually by: (i) the Corporation's Board of Directors or, (ii)
by the vote of a majority of the outstanding voting securities of the
Corporation; and in either event by a vote of a majority of those directors of
the Corporation who are not parties to this Agreement or interested persons of
any such party in the manner provided in section 15(c) of the Investment Company
Act of 1940. This Agreement may be terminated by the Corporation at any time,
without the payment of any penalty, by the Board of Directors of the Corporation
or by vote of the holders of a majority of the outstanding voting securities of
the Corporation on 60 days' written notice to the Adviser. This Agreement may
be terminated by the Adviser at any time, without the payment of any penalty,
upon 60 days' written notice to the Corporation. This Agreement will
automatically terminate in the event of its assignment. Any notice under this
Agreement shall be given in writing, addressed and delivered or mailed postpaid,
to the other party at the principal office of such party.
As used in this Section 8, the terms "assignment" "interested person", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act and Rule 18f-2 thereunder.
8. NAME OF ADVISER. The parties agree that the Adviser has a proprietary
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interest in the name "Focus Trust, Inc." and the Corporation agrees to promptly
take such action as may be necessary to delete from its corporate name and/or
the name of the Corporation any reference to the name of the Adviser on the name
"Focus Trust, Inc." promptly after receipt from the Adviser of a written request
therefore.
9. SEVERABILITY. If any provisions of this Agreement shall be held or
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made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
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10. GOVERNING LAW. This agreement shall be governed by and construed and
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interpreted in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date hereinabove set forth.
ATTEST: FOCUS TRUST, INC.
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, Secretary Xxxxxx X. Xxxxxxxx, Xx., President
ATTEST: FOCUS CAPITAL ADVISORY, L.P.
________________________________ _________________________________________
, Secretary Xxxxxx X. Xxxxxxxx, Xx., General Partner
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