INVESTMENT ADVISORY AGREEMENT
This
Agreement is made and entered into effective as of November 2, 2007, by and
between the Xxxx Family of Funds, a Delaware Statutory Business Trust (the
“Trust”) on behalf of The USX China Fund, a series of shares of the Trust (the
“Fund”), and Xxxx Financial Group, LLC, a Tennessee limited liability company
(the “Adviser”).
WHEREAS,
the
Trust is an open-end management investment company, registered under the
Investment Company Act of 1940, as amended (the “1940 Act”);
WHEREAS,
the
Trust has designated the Fund as a series of interests in the Trust;
and
WHEREAS,
the
Adviser is registered as an investment adviser under the Investment Advisers
Act
of 1940 (the “Advisers Act”), and engages in the business of asset management;
and
WHEREAS,
the
Trust desires to retain the Adviser to render certain investment management
services to the Fund, and the Adviser is willing to render such
services;
NOW,
THEREFORE,
in
consideration of the mutual covenants herein contained, the parties hereto
agree
as follows:
1. Obligations
of the Investment Adviser
(a)
Services.
The
Adviser agrees to perform the following services (the “Services”) for the
Trust:
(1) manage
the investment and reinvestment of the assets of the Fund;
(2) continuously
review, supervise, and administer the investment program of the
Fund;
(3) determine,
in its discretion, the securities to be purchased, retained or sold (and
implement those decisions) with respect to the Fund;
(4) provide
the Trust and the Fund with records concerning the Adviser’s activities under
this Agreement which the Trust and the Fund are required to maintain;
and
(5) render
regular reports to the Trust’s trustees and officers concerning the Adviser’s
discharge of the foregoing responsibilities.
The
Adviser shall discharge the foregoing responsibilities subject to the control
of
the trustees and officers of the Trust and in compliance with (i) such policies
as the trustees may from time to time establish; (ii) the Fund’s objectives,
policies, and limitations as set forth in its prospectus and statement of
additional information, as the same may be amended from time to time; and (iii)
with all applicable laws and regulations. All Services to be furnished by the
Adviser under this Agreement may be furnished through the medium of any
directors, officers or employees of the Adviser or through such other parties
as
the Adviser may determine from time to time.
(b) Expenses
and Personnel.
The
Adviser agrees, at its own expense or at the expense of one or more of its
affiliates, to render the Services and to provide the office space, furnishings,
equipment and personnel as may be reasonably required in the judgment of the
trustees and officers of the Trust to perform the Services on the terms and
for
the compensation provided herein. The Adviser shall authorize and permit any
of
its officers, directors and employees, who may be elected as trustees or
officers of the Trust, to serve in the capacities in which they are elected.
Except to the extent expressly assumed by the Adviser herein and except to
the
extent required by law to be paid by the Adviser, the Trust shall pay all costs
and expenses in connection with its operation.
(c) Books
and Records.
All
books and records prepared and maintained by the Adviser for the Trust and
the
Fund under this Agreement shall be the property of the Trust and the Fund and,
upon request therefor, the Adviser shall surrender to the Trust and the Fund
such of the books and records so requested.
2. Fund
Transactions.
The
Adviser is authorized to select the brokers or dealers that will execute the
purchases and sales of portfolio securities for the Fund. With respect to
brokerage selection, the Adviser shall seek to obtain the best overall execution
for fund transactions, which is a combination of price, quality of execution
and
other factors. The Adviser may, in its discretion, purchase and sell portfolio
securities from and to brokers and dealers who provide the Adviser with
brokerage, research, analysis, advice and similar services, and the Adviser
may
pay to these brokers and dealers, in return for such services, a higher
commission or spread than may be charged by other brokers and dealers, provided
that the Adviser determines in good faith that such commission is reasonable
in
terms either of that particular transaction or of the overall responsibility
of
the Adviser to the Fund and its other clients and that the total commission
paid
by the Fund will be reasonable in relation to the benefits to the Fund and
its
other clients over the long-term. The Adviser will promptly communicate to
the
officers and the trustees of the Trust such information relating to portfolio
transactions as they may reasonably request.
3. Compensation
of the Adviser.
The
Fund will pay to the Adviser an investment advisory fee (the “Fee”) equal to an
annualized rate of 1.25% of the average daily net assets of the Fund. The Fee
shall be calculated as of the last business day of each month based upon the
average daily net assets of the Fund determined in the manner described in
the
Fund’s Prospectus and/or Statement of Additional Information, and shall be paid
to the Adviser by the Fund within five (5) days after such calculation.
4. Status
of Investment Adviser.
The
services of the Adviser to the Trust and the Fund are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others
so
long as its services to the Trust and the Fund are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust or the Fund in any way or otherwise be deemed an agent
of
the Trust or the Fund. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Adviser, who may also be
a
trustee, officer or employee of the Trust, to engage in any other business
or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar
nature.
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5. Permissible
Interests.
Trustees, agents, and stockholders of the Trust are or may be interested in
the
Adviser (or any successor thereof) as directors, partners, officers, or
stockholders, or otherwise; and directors, partners, officers, agents, and
stockholders of the Adviser are or may be interested in the Trust as trustees,
stockholders or otherwise; and the Adviser (or any successor) is or may be
interested in the Trust as a stockholder or otherwise.
6. Limits
of Liability; Indemnification.
The
Adviser assumes no responsibility under this Agreement other than to render
the
services called for hereunder. The Adviser shall not be liable for any error
of
judgment or for any loss suffered by the Trust or the Fund in connection with
the matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to receipt of compensation for services
(in which case any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the Investment Company Act of 1940)
or a
loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of, or from reckless disregard by it of its obligations
and duties under, this Agreement. It
is
agreed that the Adviser shall have no responsibility or liability for the
accuracy or completeness of the Trust's registration statement under the Act
or
the Securities Act of 1933, except for information supplied by the Adviser
for
inclusion therein. The Trust agrees to indemnify the Adviser to the full
extent permitted by the Trust's Declaration of Trust.
7. Term.
This
Agreement shall remain in effect for an initial term of two years from the
date
hereof, and from year to year thereafter provided such continuance is approved
at least annually by the vote of a majority of the trustees of the Trust who
are
not “interested persons” (as defined in the Act) of the Trust, which vote must
be cast in person at a meeting called for the purpose of voting on such
approval; provided,
however,
that:
(a) the
Trust
may, at any time and without the payment of any penalty, terminate this
Agreement upon 30 days written notice of a decision to terminate this Agreement
by (i) the Trust’s trustees; or (ii) the vote of a majority of the outstanding
voting securities of the Fund;
(b) this
Agreement shall immediately terminate in the event of its assignment (within
the
meaning of the Act and the Rules thereunder);
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(c) the
Adviser may, at any time and without the payment of any penalty, terminate
this
Agreement upon 60 days written notice to the Trust and the Fund; and
(d) the
terms
of paragraphs 6 and 7 of this Agreement shall survive the termination of this
Agreement.
8. Amendments.
No
provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, and
no
amendment of this Agreement shall be effective until approved by vote of the
holders of a majority of the Trust’s outstanding voting securities.
9. Applicable
Law.
This
Agreement shall be construed in accordance with, and governed by, the laws
of
the State of Delaware.
10. Representations
and Warranties.
(a) Representations
and Warranties of the Adviser.
The
Adviser hereby represents and warrants to the Trust as follows: (i) the Adviser
is a limited liability company duly organized and in good standing under the
laws of the State of Tennessee and is fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder; and (ii) the
Adviser is registered as an investment adviser with the SEC under the Advisers
Act, and shall maintain such registration in effect at all times during the
term
of this Agreement.
(b) Representations
and Warranties of the Trust.
The
Trust hereby represents and warrants to the Adviser as follows: (i) the Trust
has been duly organized as a business trust under the laws of the State of
Delaware and is authorized to enter into this Agreement and carry out its terms;
(ii) the Trust is (or will be) registered as an investment company with the
Securities and Exchange Commission under the 1940 Act; (iii) shares of each
Trust are (or will be) registered for offer and sale to the public under the
1933 Act; and (iv) such registrations will be kept in effect during the term
of
this Agreement.
11. Structure
of Agreement.
The
Trust is entering into this Agreement solely on behalf of the Fund. No breach
of
any term of this Agreement shall create a right or obligation with respect
to
any series of the Trust other than the Fund; (b) under no circumstances shall
the Adviser have the right to set off claims relating to the Fund by applying
property of any other series of the Trust; and (c) the business and contractual
relationships created by this Agreement, consideration for entering into this
Agreement, and the consequences of such relationship and consideration relate
solely to the Trust and the Fund.
12. Severability.
If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby and, to this extent, the provisions of this Agreement shall
be
deemed to be severable.
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IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be executed as of the day and
the
year first written above.
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XXXX
FAMILY OF FUNDS
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XXXX
FINANCIAL GROUP, LLC
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/s/
Xxxxxxx X. Xxxx
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/s/
Xxxxxxx X. Xxxx
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By:
Xxxxxxx X. Xxxx
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By:
Xxxxxxx X. Xxxx
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Title:
Trustee
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Title:
Managing Member
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