EXHIBIT D3
INVESTMENT ADVISORY AGREEMENT
Between
and
X.X. XXXXX & CO., INC.
X.X. Xxxxx & Co., Inc.
0 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
The undersigned (the "Client") hereby requests that X.X. Xxxxx & Co.,
Inc. (the "Advisor") act as investment advisor to the Client's above-captioned
Investment Advisory Account (the "Account") and the Advisor desires to act in
such a capacity for the period from ________________ ("Commencement Date"),
which is to be governed by the following agreement (the "Agreement"):
1. The Advisor will, in accordance with the terms and conditions of
this Agreement, supervise on a continuing basis the investment and reinvestment
of all cash and securities and other property in the Account. The Advisor's
investment decisions for the Client will be made in accordance with the Client's
investment objectives and any restrictions the Client may impose in any
investment guidelines or instructions which the Client may from time to time
furnish to the Advisor in writing. The Client will receive prompt notification
of any purchase or sale made for the Account, and will receive monthly
statements of the Account. Upon the written request of the Client, copies of any
of the foregoing will be sent to any other person. Representatives of the
Advisor will also be available to meet with the Client periodically to review
the Account.
2. The Client may make additions to and withdrawals from the Account in
such amounts as the Client shall determine with approval from the Advisor.
3. The Advisor is authorized to invest and reinvest the cash and
securities and other property in the Account in its discretion and, without
being required to consult with the Client in advance, to exercise its judgment
with respect to proper investments in the best interest of the Client. In
accordance with the foregoing, the Client authorizes the Advisor to act as the
agent of the Client to order deposits and the investment of cash and purchases
and sales (including, but not limited to, the exercise of rights and the tender,
exchange or conversion) of securities and other property for the Client's
account and risk, and in the name of the Client. This authorization shall be a
continuing one and shall remain in full force and effect until the Advisor has
received written notice of revocation thereof.
4. As compensation for the advisory services provided under this
Agreement the Advisor shall receive a fee equal to 1.0% per annum of the first
$5,000,000 aggregate value of assets under management.
In computing the market value of any investment in the Client's
Account, each security listed on any national securities exchange shall be
valued at the last quoted sale price on the last business day of each calendar
quarterly period on the principal exchange on which such security is traded. Any
other security or asset shall be valued in a manner determined in good faith by
the Advisor to reflect its fair market value.
The initial fee will be payable not later than five calendar days
after the end of the first calendar quarter following the Commencement Date and
will be calculated on the last business day of such quarterly period, regardless
of the market value of such Account on the Commencement Date. Thereafter, the
fee will be calculated as of the last business day of each subsequent calendar
quarter for services to be performed for the following quarter. Such quarterly
fee is due and payable not later than five calendar days following the end of
such quarterly period. In the event that the account is closed at any time other
than the last day of a calendar quarter, all unearned fees will be refunded by
the Advisor to the Client.
Client expressly acknowledges and understands that an opening
Account of less than $1,000,000 shall be subject to an initial one-time set up
fee of $100. In addition, a portfolio maintenance fee of $250 shall be assessed
from your account if it is valued at less than $1,000,000, but in no event will
the Advisor assess such a maintenance fee for more than one time during a
calendar year. These fees are in addition to the per annum advisory fee set
forth hereinabove.
Client hereby expressly authorizes the Advisor to charge all of its
fees due under the terms of this Agreement directly against the Client's
account.
5. The Client hereby appoints the Advisor to act as broker or dealer in
effecting any transaction in respect to the Account. When so acting as a broker
or dealer, the Advisor shall be entitled to receive (in addition to its advisory
fee pursuant to paragraph 4 hereof) a brokerage commission, xxxx-up or xxxx-down
in accordance with its then existing standard rates. All confirmations of
transactions effected for the Client by the Advisor, as broker or dealer, shall
state the amount of commission, xxxx-up or xxxx-down received by the Advisor
with respect to such transactions. The Advisor may arrange to have transactions
for the Account effected by another broker or dealer to which the Account will
be introduced on a fully-disclosed basis and clearing arrangement, pursuant to
which the Advisor will normally be entitled to a portion of the commission or
other transaction charge paid or payable to such clearing broker or dealer.
Notwithstanding the foregoing, the Advisor shall be subject to a continuing
obligation of best execution.
6. The Client understands that the Advisor performs investment advisory
and brokerage services for various clients and the Client agrees that the
Advisor may give advice and take action with respect to any of its other clients
which may differ from the timing or nature of the Advisor's actions taken on
behalf of the Client with respect to the Account, so long as it is the Advisor's
policy, to the extent practical, to allocate investment opportunities to the
Account over a period of time on a fair and equitable basis relative to other
clients. The Client further understands that the Advisor shall not have any
obligation to purchase or sell, or to recommend for purchase or sale, for the
Account any security which the Advisor, its principals, affiliates or employees
may purchase or sell for the account of any other client or for the Advisor or
its own accounts, if in the Advisor's opinion such transaction or investment
appears unsuitable, impractical or undesirable for the Account. The Client also
understands that the Account may include from time to time securities of
companies for which the Advisor may be acting as investment banker or financial
advisor or for which one or more of its principals or employees may be serving
as directors or officers, or with which it has other confidential relationships.
The Client further understands that because of legal and business
considerations, the Advisor in managing the Account is precluded from acting on
material non-public information learned by it through these relationships or
otherwise. Accordingly, the Advisor may suspend effecting transactions for the
Account with respect to a security when it becomes aware of material non-public
information affecting such security. The Advisor will not be required to take
any action or render any advice with respect to the voting of proxies in respect
to securities in which the Account may be invested from time to time, but may,
at its option, exercise such sole discretion.
7. Consent to Agency Cross Transactions. The Client hereby authorizes
the Advisor to purchase or sell securities where the other party to the
transaction may be a customer of the Advisor in its capacity as a broker-dealer.
The Client recognizes that the Advisor may receive commissions
from both sides of the transaction and will have a potentially conflicting
division of loyalties and responsibilities between the parties. At all times the
Client has a right to full disclosure on all such transactions including details
on remuneration inuring to the Advisor. This authorization may be revoked at any
time by written notice to the Advisor, which shall only be effective upon the
Advisor's actual receipt of the same.
8. The Client hereby represents that there are no, and except as the
Client may advise the Advisor in writing, there will be no restrictions on the
ownership by the Client or the transferability of any securities in the Account,
and the Client shall hold the Advisor and any other corporation and/or
partnership with which it is affiliated, directly or indirectly, harmless and
shall indemnify the Advisor and any other such corporation or partnership, their
respective employees, officers, partners and agents thereof, against any and all
costs, expenses, liabilities or losses, including legal expenses, which they may
incur or suffer, if and to the extent such costs, expenses, liabilities or
losses are caused by the inaccuracy or breach by the Client of this
representation. Except for gross negligence or willful misfeasance, neither the
Advisor nor its affiliates, their respective principals, directors, officers,
employees or agents shall be liable hereunder or otherwise for any action
performed or omitted to be taken; provided, however, that this shall not relieve
the Advisor from any liability imposed by federal securities laws or other
applicable laws which cannot be waived.
9. Written notice and communications to the Client shall be addressed
as indicated at the end of this Agreement and written notices and communications
to the Advisor shall be addressed as indicated at the head of this Agreement,
unless either the Client or the Advisor has notified the other of a change.
Notification of a change of address, which must be in writing, shall be
effective upon receipt.
10. This Agreement may be terminated upon 30 days written notice from
the Client or at such time as otherwise mutually agreed upon in writing by the
Advisor and Client. Termination by either the Client or the Advisor shall not
have the effect of canceling orders to deposit or invest cash or to purchase or
sell securities or other property placed prior to the receipt of the notice of
termination in accordance with the provisions of this paragraph 10.
11. This Agreement shall not be assigned by either party without the
consent of the other party.
12. Client warrants and represents that:
(a) Client has a net worth (together with the Client's spouse, if
any) of at least $____________________ .
(b) Client is either:
(i) a natural person (individual); or
(ii) a company which is not primarily engaged in the
business of investing in securities and less than 40
percent of whose assets consist of investment
securities.
13. Client agrees to notify Advisor immediately should there be a
material change in any representation made by Client herein.
14. Client hereby acknowledges that he has received a copy of Part II
of the Advisor's Form ADV.
15. The Advisor shall notify the Client in writing of any material
change in the Advisor and/or its affiliation.
16. Advisor agrees that Client has up to five business days after
signing this Agreement to terminate the same without penalty.
17. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York applicable to contracts made and to be
performed entirely within such State without giving effect to any conflict of
law provision thereunder.
18. Any controversy between the Advisor and the Client arising out of
or relating to this Agreement shall be settled by arbitration before and in
accordance with the rules then in effect of the National Association of
Securities Dealers, Inc. unless it lacks jurisdiction over such matter, in which
case it shall be settled by arbitration to be determined by the American
Arbitration Association in the City and State of New York. Any arbitration
hereunder shall be before one arbitrator and the award of the arbitrator shall
be final, and judgment upon the award rendered may be entered in any court,
state or federal, having jurisdiction.
Very truly yours,
------------------------------------ -----------------------------------
Accepted: Address of Client
X.X. Xxxxx & Co., Inc. where all communications
should be directed:
By:
-------------------------------- -----------------------------------
Dated:
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Client gives consent to the
Advisor to take its management
and all other fees provided
for hereunder directly from
the Client's managed Account.
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Security positions which may not be changed or purchased without express
authorization of the Client:
Security Reason
Withdrawals from the Account may be made only on the last business day of each
quarterly calendar period, or with the prior consent of Advisor.
