EXHIBIT 5.5
THE NAVELLIER PERFORMANCE FUNDS
INVESTMENT ADVISORY AGREEMENT
FOR
THE NAVELLIER LARGE CAP VALUE PORTFOLIO
AGREEMENT made as of the 12th day of September, 1997, by and between The
Navellier Large Cap Value Portfolio ("Portfolio") of THE NAVELLIER
PERFORMANCE FUNDS, a business trust organized under the laws of the State of
Delaware (the "Fund"), and NAVELLIER MANAGEMENT, INC., a Delaware corporation
(the "Adviser").
WHEREAS, the Fund intends to engage in business as an open-end
management investment company and is being registered as such under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund has a portfolio designated as the "Navellier Large Cap
Value Portfolio" ("Portfolio"); and
WHEREAS, the Adviser is being registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser with an emphasis on over the counter stocks; and
WHEREAS, the Portfolio desires to retain the Adviser as investment
adviser to furnish advisory and portfolio management services to the
Portfolio;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the Portfolio and the Adviser agree as
follows:
1. DUTIES AS ADVISER. The Portfolio hereby appoints the Adviser to
act as the investment adviser to the Portfolio and, subject to the
supervision of the Board of Trustees of the Portfolio, to provide investment
advisory services to the Portfolio as hereinafter set forth: (i) to obtain
and evaluate such information and advice relating to the economy, securities
markets, and securities as it deems necessary or useful to discharge its
duties hereunder; (ii) to continuously manage the assets of the Portfolio in
a manner consistent with applicable law and the investment objectives and
policies set forth in the most current prospectus and statement of additional
information of the Fund under the Securities Act of 1933 (the "Prospectus");
(iii) to determine which issuers will be deemed "Qualified Issuers" (as
defined in the Prospectus); (iv) to determine the timing of purchases, sales,
and dispositions of securities; (v) to take such further action in its sole
discretion (but always in compliance with applicable law and the Prospectus)
without obligation to give prior notice to the Board of Trustees of the
Portfolio, or the Custodian, including the placing of purchase and sale
orders on behalf of the Portfolio as it shall deem necessary and appropriate;
(vi) to furnish to or place at the disposal of the Portfolio such of the
information, evaluations, analyses, and opinions formulated or obtained by
it in the discharge of its duties as the Portfolio may, from time to time,
reasonably request; (vii) to take such actions necessary or appropriate to
carry out the decisions of the Portfolio's Board of Trustees; (viii) to make
decisions for the Portfolio as to the manner in which voting rights, rights
to consent to trust action, and any
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other rights pertaining to how the Portfolio's securities shall be exercised
("Portfolio Voting Rights"). The Portfolio has directed the Custodian, and
Custodian as agreed, to act in accordance with the instructions of the
Adviser. The Adviser shall at no time have custody of or physical control
over the investment account assets or securities, and the Adviser shall not
be liable for any act or omission of the Custodian. The Adviser shall
maintain records required under the Investment Advisers Act of 1940
("Advisers Act") and shall make them available to the Portfolio or its
designees for review or inspection upon demand and at the Adviser's expense.
2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall bear the
cost of rendering the investment advisory services to be performed by it
under this Agreement and shall, at its expense, maintain such staff and
employ or retain personnel and consult with other persons as it shall
determine necessary. Without limiting the generality of the foregoing, the
staff and personnel of the Adviser shall be deemed to include persons
employed or otherwise retained by the Adviser to furnish statistical and
other factual data, advice regarding economic factors and trends, information
with respect to technical and scientific developments, and such other
information, advice, and assistance as the Adviser may deem appropriate. The
Adviser shall, without expense to the Portfolio, furnish the services of such
members of the Adviser's organization as may be duly elected to be officers
of the Portfolio, subject to their individual consent to serve and to any
limitations imposed by law.
The Portfolio will pay or cause to be paid all other expenses of the
Portfolio (except for the expenses to be paid by the Portfolio's
Distributor), including, without limitation, the following: (i) services
rendered by the Custodian and the Transfer Agent, (ii) fees, voluntary
assessments, and other expenses incurred in connection with membership in
investment company organizations, (iii) cost of stock certificates, reports,
proxy materials and notices to shareholders, and other like miscellaneous
expenses, (iv) brokerage commissions and other brokerage expenses, (v) taxes
(including any income or franchise taxes), and any fees payable to federal,
state, and other governmental agencies, (vi) fees and salaries payable to the
Trustees, officers, and advisory board members of the Portfolio, if any,
(vii) auditing the Fund's books and accounts, (viii) the cost of bookkeeping
and accounting services, (ix) any and all Portfolio legal expenses, (x) costs
of mailing and tabulating proxies and costs of shareholders' and Trustees'
meetings, (xi) the cost of investment company literature and other
publications provided by the Portfolio to its Trustees and officers, (xii)
costs of any liability, uncollectible items of deposit and other insurance or
fidelity bonds, (xiii) any extraordinary expenses (including fees and
disbursements of counsel) incurred by the Portfolio, (xiv) costs of printing
and mailing monthly statements and confirmations, (xv) expense of organizing
the Portfolio, (xvi) filing fees and expenses relating to the registration
and qualification of the Portfolio's shares under federal and/or state
securities laws and maintaining such registrations and qualifications and
(vii) other expenses properly payable by the Portfolio.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by
the Adviser hereunder, the Portfolio shall pay to the Adviser, on a monthly
basis, an annual fee of one and a quarter percent (0.75%) (the "Management
Fee") of the Portfolio's average daily net assets. Payment of the Adviser's
compensation for the preceding month shall be made as
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promptly as possible after the last day of each such month. The compensation
for the period from the effective date hereof to the next succeeding last day
of the month shall be prorated according to the proportion which such period
bears to the full month ending on such date, and provided further that, upon
any termination of this Agreement before the end of the month, such
compensation for the period from the end of the last month ending prior to
such termination shall be prorated according to the proportion which such
period bears to a full month, and shall be payable upon the date of
termination. If the annual operating expenses borne by the Fund relating to
any Portfolio, including amounts payable to the Adviser hereunder paid or
payable by such Portfolio for any fiscal year, exceed the applicable expense
limitations imposed by state securities laws or regulations thereunder (as
same may be adjusted from time to time), the Adviser will reduce its
Management Fee to the extent of such excess and if required, pursuant to any
such laws or regulations ((unless otherwise waived), will reimburse the
Portfolio for annual operating expenses in excess of any such expense
limitation up to the amount of the Management Fee payable to it during that
fiscal year with respect to the Portfolio. The Adviser has the right, but
not the obligation, to waive any portion or all of its Management Fee, from
time to time.
The "average daily net assets" of the Portfolio for a particular period
shall be determined by adding together all calculations of net assets, as
regularly computed for the Portfolio on each business day during such period,
and dividing the resulting total by the number of business days during such
period.
4. LIMITATIONS OF LIABILITY OF ADVISER. The Adviser shall not be
liable for any error of judgment or mistake of law or fact, or, for any loss
suffered by the Portfolio or its investors in connection with the matters to
which this Agreement relates, except (i) a loss resulting from willful
misfeasance, bad faith, or gross negligence on the part of the Adviser in the
performance of its duties, or from reckless disregard by the Adviser of its
obligations and duties under this Agreement, or (ii) a loss for which the
Adviser would not be permitted to be indemnified under the federal Securities
laws. The Portfolio also agrees to indemnify Adviser to the extent provided
for and agreed to by the parties in that agreement entitled Indemnification
Agreement executed by both parties on this date and incorporated herein as
Exhibit A and made a part hereof.
5. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date hereof and shall continue in effect unless
sooner terminated, as herein provided, for two years after the date hereof,
and thereafter only if approved at least annually: (a) by the Board of
Trustees of the Portfolio; or (b) by the vote of a majority (as defined in
the Act) of the outstanding voting securities of the Portfolio, and, in
addition, (c) by the vote of a majority of the Trustees of the Portfolio who
are not parties hereto nor interested persons of any party, as required by
the Act.
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Trustees of the Portfolio, or by a vote of a
majority (as defined in the Act) of the outstanding voting securities of the
Portfolio, in either case upon written notice to the Adviser, and it may be
terminated by the Adviser upon sixty (60) days' written notice to the
Portfolio. This Agreement shall automatically terminate in the event of its
assignment,
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within the meaning of the Act, unless such automatic termination shall be
prevented by an exemptive order of the Securities and Exchange Commission.
6. SEPARATE CONTRACT. This Agreement is separate and distinct form,
and neither affects nor is affected by (i) the Fund's Distribution Agreement,
and (ii) the Fund's Administrative Services Agreement. Nothing contained in
this Agreement shall prevent the Adviser or any affiliated person of the
Adviser from acting as investment adviser or manager for any other person,
firm, corporation, or other entity and shall not in any way bind or restrict
the Adviser or any such affiliated person from buying, selling, or trading
any securities, commodities, futures contracts, or options on such contracts
for their own accounts or for the account of others for whom they may be
acting. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser to engage in any other business
or to devote his time and attention in part to the management or other
aspects of any other business whether of a similar or dissimilar nature.
7. AMENDMENT. This Agreement may be amended from time to time by
agreement of the parties; provided, that such amendment shall be approved
both by the vote of a majority of Trustees of the Portfolio, including a
majority of Trustees who are not parties to this Agreement or interested
persons of any such party to this Agreement (other than as Trustees of the
Portfolio) cast in person at a meeting called for that purpose, and by the
holders of a majority (as defined in the Act) of the outstanding voting
securities of the Portfolio.
This Agreement may be amended by agreement of the parties without the
vote or consent of the shareholders of the Portfolio to supply any omission,
to cure, correct, or supplement any ambiguous, defective, or inconsistent
provision hereof, or if they deem it necessary to conform this Agreement to
the requirements of applicable federal and/or state laws or regulations, but
neither the Portfolio nor the Investment Adviser shall be liable for failing
to do so.
8. BINDING EFFECT. This Agreement shall be binding upon, and inure to
the benefit of the Portfolio and the Adviser and their respective successors.
9. NAME OF THE PORTFOLIO. The Portfolio acknowledge that the name
"Navellier" is and shall remain the sole property of the Adviser,
notwithstanding the use thereof by the Portfolio. The Portfolio may use the
name "The Navellier Performance Fund, The Navellier Large Cap Value
Portfolio" or any name derived from the name "Navellier" only for so long as
this Agreement or any extension, renewal, or amendment hereof remains in
effect, including any similar agreement with any organization which shall
have succeeded to the business of the Adviser and for only so long as
Navellier Management, Inc., remains as Adviser to the Portfolio. At such
time as such an agreement shall no longer be in effect, or Adviser's services
have terminated, the Portfolio will (to the extent that it is lawfully able)
cease to use such a name or any other name connected with the Adviser or any
organization which shall have succeeded to the business of the Adviser.
10. DEFINITIONS. Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Prospectus. For the purpose of
this Agreement, the terms
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"vote of a majority of the outstanding voting securities," "assignment,"
"affiliated person," and "interested person" shall have the respective
meanings specified in the Investment Company Act of 1940.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and each party may
become a party hereto by executing a counterpart hereof. This Agreement and
any counterpart so executed shall be deemed to be one and the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with the laws of the State of Delaware. Any dispute or
controversy arising out of this Agreement shall be either submitted to
arbitration (if both parties agree) in Reno, Nevada (near the Fund's
principal place of business) in accordance with the rules and regulations of
the National Association of Securities Dealers, Inc., or decided by a trier
of fact in a federal or state court in Reno, Nevada, and in no other
jurisdiction or court venued outside of Reno, Nevada.
13. ACKNOWLEDGEMENT OF RECEIPT OF FORM ADV PART II. The Portfolio
hereby acknowledges receipt of the Adviser's Form ADV Part II or its brochure
as required by Rule 204-3 promulgated under the Investments Advisers Act of
1940.
14. INTEGRATION OF ALL PRIOR DISCUSSIONS, NEGOTIATIONS AND AGREEMENTS.
This Agreement integrates all prior discussions, negotiations and agreements
between the parties relating to Adviser's and Portfolio's agreement relating
to the performance of investment advisory services for the Portfolio, and no
evidence or parol evidence may be introduced to vary or change the terms of
this written Agreement which is the full and final expression of the parties'
agreement. Any change in the terms of this Agreement must be in writing
signed by both parties.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Reno, Nevada.
THE NAVELLIER LARGE CAP VALUE
PORTFOLIO OF THE NAVELLIER
PERFORMANCE FUNDS
By:
----------------------------
Xxxxx Xxxxxx, Trustee
By:
----------------------------
Attest: Xxxx Xxxxxxx, Trustee
/s/ By:
---------------------- ----------------------------
Xxxxxx Xxxxxxx, Trustee
By:
----------------------------
Xxxxxxx Xxxxxxxxx, Trustee
NAVELLIER MANAGEMENT, INC.
By:
----------------------------
Xxxxx Xxxxxxxxx, President
Attest:
/s/
----------------------
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EXHIBIT A
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INDEMNIFICATION AGREEMENT
The Navellier Large Cap Value Portfolio of The Navellier Performance
Funds (the "Fund") and Navellier Management, Inc. (the "Advisor") agree as
follows:
1. The Fund agrees with the Advisor, for the benefit of the Advisor
and each person, if any, who controls the Advisor within the meaning of
Section 15 of the Securities Act and each and all and any of them, to
indemnify and hold harmless the Advisor and any such controlling person from
and against any and all losses, claims, damages or liabilities, joint or
several (including reasonable legal fees and expenses) to which they or any
of them may become subject under the Securities Act or under any other
statute, at common law or otherwise, and to reimburse the Advisor and such
controlling persons, if any, for any legal or other expenses (including the
cost of any investigation and preparation) reasonably incurred by them in
connection with any litigation, whether or not resulting in any liability,
insofar as such losses, claims, damages, liabilities or litigation arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any Prospectus,
filed with the SEC, or any amendment thereof or supplement thereto, or which
arise out of, or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that this indemnity
agreement shall not apply to amounts paid in settlement of any such
litigation if such settlement is effected without the consent of the Fund or
to any such losses, claims, damages, liabilities or litigation arising out
of, or based upon, any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or prospectus, or
any amendment thereof of or supplement thereof, or arising out of, or based
upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made in reliance upon information
furnished in writing to the Fund by the Advisor for inclusion in any such
Registration Statement or Prospectus or any amendment thereof or supplement
thereto. The Advisor and each such controlling person shall, within thirty
(30) days after the complaint shall have been served upon the Advisor or such
controlling person in respect of which indemnity may be sought from the Fund
on account of its agreement contained in this paragraph, notify the Fund in
writing of the commencement thereof. The omission of the Advisor of such
controlling person so to notify the Fund of any such litigation shall relieve
the Fund from any liability which it may have to the Advisor or such
controlling person on account of the indemnity agreement contained in this
paragraph if such failure to timely notify the Fund has resulted in
substantial prejudice to the Fund, but shall not relieve the Fund from any
liability which it may have to the Advisor or controlling person otherwise
than on account of the indemnity agreement contained in this paragraph. In
case any such litigation shall be brought against the Advisor or any such
controlling person and notice of the commencement thereof shall have been
timely given to the Fund, the Fund shall be entitled to participate in (and,
to the extent that it shall wish, to direct) the defense thereof at its own
expense, but such defense shall be conducted by counsel of good standing and
reasonably satisfactory to the Advisor or such controlling person(s) or
defendant(s) in the litigation. The indemnity agreement of the Fund
contained in this paragraph shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Advisor or
any such controlling person, and shall survive any delivery of shares of the
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Fund. The Fund agrees to notify the Advisor promptly of the commencement of
any litigation or proceeding against it or any of it officers or directors of
which it may be advised in connection with the issue and sale of shares of
the Fund.
2. Anything herein to the contrary notwithstanding, the agreement in
paragraph 1 of this Indemnification Agreement, insofar as it constitutes a
basis of reimbursement by the Fund for liabilities (other than payment by the
Fund of expenses incurred or paid in the successful defense of any action,
suit or proceeding) arising under the Securities Act, shall not extend to the
extent of any interest therein of any person who is an underwriter or a
partner or controlling person of an underwriter within the meaning of Section
15 of the Securities Act or who, at the date of this Agreement, is a Trustee
of the Fund, except to the extent that an interest of such character shall
have been determined by a court of appropriate jurisdiction as not against
public policy as expressed in the Securities Act. Unless in the opinion of
counsel for the Fund the matter has been adjudicated by controlling
precedent, the Fund, will, if a claim for such reimbursement is asserted,
submit to a court of appropriate jurisdiction the question of whether or not
such interest is against the public policy as expressed in the Securities Act.
3. The Advisor agrees to indemnify and hold harmless the Fund and
its Trustees and such officers as shall have signed any Registration
Statement filed with the Commission from and against any and all losses,
claims, damages, or liabilities, joint or several, to which the Fund or such
Trustees or officers may become subject under the Securities Act, under any
other statute, at common law or otherwise, and will reimburse the Fund or
such Trustees or officers for any legal or other expenses (including the cost
of any investigation and preparation) reasonably incurred by it or them or
any of them in connection with any litigation, whether or not resulting in
any liability, insofar as such losses, claims, damages, liabilities, or
litigation arise out of, or are based upon, any untrue statement or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made by the Fund in reliance upon information furnished in
writing to the Fund by the Advisor for inclusion in any Registration
Statement or any Prospectus, or any amendment thereof or supplement thereto
or otherwise for distribution or publication. The Advisor shall not be
liable for amounts paid in settlement of any such litigation if such
settlement was effected without its consent. The Fund and its Trustees and
such officers or defendant(s), in any such litigation, shall, within thirty
(30) days after the complaint shall have been served upon the Fund or any
such Trustee or officer in respect of which indemnity may be sought from the
Advisor or account of its agreement contained in this paragraph, notify the
Advisor in writing of the commencement thereof. The omission of the Fund or
such Trustee or officer so to notify the Advisor of any such litigation shall
relieve the Advisor from any liability which it may have to the Fund or such
Trustee or officer of liability which it may have to the Fund or such Trustee
or officer on account of the indemnity agreement contained in this paragraph,
but shall not relieve the Advisor from any liability which it may have to the
Fund or such Trustee or officer otherwise than on account of the indemnity
agreement contained in this paragraph. In case any such litigation shall be
brought against the Fund or any such Trustee or officer and timely notice of
the commencement thereof shall have been so given to the Advisor, the Advisor
shall be entitled to participate in (and, to the extent it shall wish, to
direct) the defense thereof at its own expense, but such defense shall be
conducted by counsel of good standing and satisfactory to the Fund. The
indemnity agreement of the Advisor
9
contained in this paragraph shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Fund and
shall survive any delivery of shares of the Fund. The Fund agrees to notify
the Advisor promptly of the commencement of any litigation or proceeding
against it or any of its officers or Trustees or against any such controlling
person of which it may be advised in connection with the issue and sale of
the Fund's shares.
4. Notwithstanding any provision contained in this Agreement, no
party hereto and no person or persons in control of any party hereto shall be
protected against any liability to the Fund or its security holders to which
they would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence, in the performance of their duties, or by reason of
their reckless disregard of their obligations and duties under this Agreement.
5. Except as expressly provided in paragraphs 1 and 3 hereof, the
agreements herein set forth have been made and are made solely for the
benefit of the Fund, the Advisor, and the persons expressly provided for in
paragraphs 1 and 3, their respective heirs, successor, personal
representatives and assigns, and except as so provided, nothing expressed or
mentioned herein is intended or shall be construed to give any person, firm
or corporation, other than the Fund, the Advisor, and the persons expressly
provided for in paragraphs 1 and 3, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any representation, warranty
or agreement herein contained. Except as so provided, the terms "heirs,
successors, personal representatives and assigns" shall not include any
purchaser of shares merely because of such purchase.
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ATTEST: THE NAVELLIER LARGE CAP VALUE
PORTFOLIO OF THE NAVELLIER
PERFORMANCE FUNDS
-------------------------
By:
----------------------------
Xxxxx Xxxxxx, Trustee
By:
----------------------------
Xxxx Xxxxxxx, Trustee
By:
----------------------------
Xxxxxxx Xxxxxxxxx, Trustee
By:
----------------------------
Xxxxxx Xxxxxxx, Trustee
ATTEST: NAVELLIER MANAGEMENT, INC.
By:
------------------------- ----------------------------
Xxxxx Xxxxxxxxx, President
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