AVE XXXXX XXXX FUND
INVESTMENT MANAGEMENT AGREEMENT, dated as of ______________, 200_ by and
between Xxxxxxxx Investment Counsel, Inc., a Michigan Corporation (the
"Adviser"), and Xxxxxxxx Investment Trust (the "Trust"), which was organized as
an Ohio business trust on August 31, 1992.
WHEREAS, the Trust is an open-end diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, shares of beneficial interest in the Trust are divided into
separate series or funds; and
WHEREAS, the Trust desires to avail itself of the services, information,
advice, assistance and facilities of an investment advisor and to have an
investment advisor perform for it various investment advisory and research
services and other management services; and
WHEREAS, the Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended, and desires to provide investment
advisory services to the Trust;
NOW THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADVISER. The Trust, on behalf of the Ave Xxxxx Xxxx
Fund (the "Fund"), hereby employs the Adviser to manage the investment and
reinvestment of the assets of the Fund subject to the control and direction of
the Trust's Board of Trustees, for the period of the term hereinafter set forth.
The Adviser hereby accepts such employment and agrees during such period to
render the services and to assume the obligations herein set forth for the
compensation herein provided. The Adviser shall for all purposes herein be
deemed to be independent contractor and shall, except as expressly provided or
authorized (whether herein or otherwise), have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of the Trust.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE ADVISER. In providing
the services and assuming the obligations set forth herein, the Adviser
undertakes to provide the following services and to assume the following
obligations:
a) The Adviser will manage the investment and reinvestment of the assets of
the Fund, subject to and in accordance with the respective investment objective
and policies of the Fund and any directions which the Trust's Board of Trustees
may issue from time to time. In pursuance of the foregoing, the Adviser will
make all determinations with respect to the investment of the assets of the
Fund, to effect the purchase and sale of portfolio securities and to take such
steps as may be necessary to implement the same. The services by the Adviser
shall also include determining the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the portfolio
securities shall be exercised. The Adviser shall render regular reports to the
Trust's Board of Trustees concerning the Trust's and the Fund's investment
activities.
b) The Adviser shall place orders for the execution of all portfolio
transactions, in the name of the Fund and in accordance with the policies with
respect thereto set forth in the Trust's registration statements under the 1940
Act and the Securities Act of 1933, as such registration statements may be
amended from time to time. In connection with the placement of orders for the
execution of portfolio transactions, the Adviser shall create and maintain all
necessary brokerage records for the Fund, which records shall comply with all
applicable laws, rules and regulations, including but not limited to records
required by Section 31(a) of the 1940 Act. All records shall be the property of
the Trust and shall be available for inspection and use by the Securities and
Exchange Commission (the "SEC"), the Trust or any person retained by the Trust.
Where applicable, such records shall be maintained by the Adviser for the
periods and in the places required by Rule 31a -2 under the 1940 Act.
c) In the event of any reorganization or other change in the Adviser, its
investment principals, supervisors or members of its investment (or comparable)
committee, the Adviser shall give the Trust's Board of Trustees written notice
of such reorganization or change within a reasonable time (but not later than 30
days) after such reorganization or change.
d) The Adviser shall bear its expenses of providing services to the Trust
pursuant to this Agreement except such expenses as are undertaken by the Trust.
In addition, the Adviser shall pay the salaries and fees, if any, of all
Trustees, officers and employees of the Trust who are affiliated persons, as
defined in Section 2(a)(3) of the 1940 Act, of the Adviser.
e) The Adviser will manage the Fund's assets and the investment and
reinvestment of such assets so as to comply with the provisions of the 1940 Act
and with Subchapter M of the Internal Revenue Code of 1986, as amended.
3. EXPENSES. The Trust shall pay the expenses of its operation, including
but not limited to (i) charges and expenses for Trust accounting, pricing and
appraisal services and related overhead, (ii) the charges and expenses of the
Trust's auditors; (iii) the charges and expenses of any custodian, transfer
agent, plan agent, dividend disbursing agent and registrar appointed by the
Trust with respect to the Fund; (iv) brokers'
commissions, and issue and transfer taxes, chargeable to the Trust in connection
with securities transactions to which the Trust is a party; (v) insurance
premiums, interest charges, dues and fees for Trust membership in trade
associations and all taxes and fees payable by the Trust to federal, state or
other governmental agencies; (vi) fees and expenses involved in registering and
maintaining registrations of the Trust and/or shares of the Trust with the SEC,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the SEC; (vii) all expenses of meetings of Trustees and of shareholders of
the Trust and of preparing, printing and distributing prospectuses, notices,
proxy statements and all reports to shareholders and to governmental agencies;
(viii) charges and expenses of legal counsel to the Trust; (ix) compensation of
Trustees of the Trust; and (x) interest on borrowed money, if any.
4. COMPENSATION OF THE ADVISER.
a) As compensation for the services rendered and obligations assumed
hereunder by the Adviser, the Trust shall pay to the Adviser monthly a fee that
is equal on an annual basis to that percentage of the average daily net assets
of the Fund set forth on Schedule 1 attached hereto (and with respect to any
future Fund, such percentage as the Trust and the Adviser may agree to from time
to time). Such fee shall be computed and accrued daily. If the Adviser serves as
investment adviser for less than the whole of any period specified in this
Section 4a, the compensation to the Adviser shall be prorated. For purposes of
calculating the Adviser's fee, the daily value of the Fund's net assets shall be
computed by the same method as the Trust uses to compute the net asset value of
that Fund.
b) The Adviser reserves the right to waive all or a part of its fee.
5. ACTIVITIES OF THE ADVISER. The services of the Adviser to the Trust
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others. It is understood that the Trustees and
officers of the Trust are or may become interested in the Adviser as
stockholders, officers or otherwise, and that stockholders and officers of the
Adviser are or may become similarly interested in the Trust, and that the
Adviser may become interested in the Trust as a shareholder or otherwise.
The Adviser has supplied to the Trust copies of its Form ADV with all
exhibits and attachments thereto and will hereafter supply to the Trust,
promptly upon the preparation thereof, copies of all amendments or restatements
of such document.
The Adviser has also delivered to the Trust copies of its code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act. If in the
opinion of counsel to the Trust, the code of ethics does not satisfy the
requirements of Rule 17j-1, the Adviser will adopt a code of ethics that does.
The Adviser shall promptly furnish the Trust with all amendments of or
supplements to its Code of Ethics at least annually. On a quarterly basis, the
Adviser shall report on compliance by the access persons of the Fund with its
Code of Ethics to the Board of Trustees and upon the written request of the
Trust, the Adviser shall permit the Trust, or their respective representatives
to examine the reports required to be made to the Adviser by the access persons
of the Fund under such code.
6. USE OF NAMES. The Trust will not use the name of the Adviser in any
prospectus, sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Adviser; except that the Trust may use
such name in any document which merely refers in accurate terms to its
appointment hereunder or in any situation which is required by the SEC or a
state securities commission; and provided further, that in no event shall such
approval be unreasonably withheld. The Adviser will not use the name of the
Trust in any material relating to the Adviser in any manner not approved prior
thereto by the Trust; except that the Adviser may use such name in any document
which merely refers in accurate terms to the appointment of the Adviser
hereunder or in any situation which is required by the SEC or a state securities
commission. In all other cases, the parties may use such names to the extent
that the use is approved by the party named, it being agreed that in no event
shall such approval be unreasonably withheld.
7. LIMITATION OF LIABILITY OF THE ADVISER.
a) Absent willful misfeasance, bad faith, gross negligence, or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder in
any Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security. As used in this Section 7, the term "Adviser"
shall include Xxxxxxxx Investment Counsel, Inc. ("Xxxxxxxx") and/or any of its
affiliates and the directors, officers and employees of Xxxxxxxx and/or any of
its affiliates.
b) The Trust will indemnify the Adviser against, and hold it harmless from,
any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from acts or omissions of the
Trust. Indemnification shall be made only after: (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
Trust was liable for the damages claimed or (ii) in the absence of such a
decision, a reasonable determination based upon a review of the facts, that the
Trust was liable for the damages claimed, which determination shall be made by
either (a) the vote of a majority of a quorum of Trustees of the Trust who are
neither "interested persons" of the Trust nor parties to the proceeding
"disinterested non-party Trustees") or (b) an independent legal counsel
satisfactory to the parties hereto, whose determination shall be set forth in a
written opinion. The Adviser shall be entitled to advances from the Trust for
payment of the reasonable expenses incurred by it in connection with the matter
as to which it is seeking indemnification in the manner and to the fullest
extent that would be permissible under the applicable provisions of Michigan
Law. The Adviser shall provide to the Trust a written affirmation of its good
faith belief that the standard of conduct necessary for indemnification under
such law has been met and a
written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at least
one of the following additional conditions shall be met: (i) the Adviser shall
provide security in form and amount acceptable to the Trust for its undertaking;
(ii) the Trust is insured against losses arising by reason of the advance; or
(iii) a majority of a quorum of the Trustees of the Trust, the members of which
a majority are disinterested non-party Trustees, or independent legal counsel in
a written opinion, shall have determined, based on a review of facts readily
available to the Trust at the time the advance is proposed to be made, that
there is reason to believe that the Adviser will ultimately be found to be
entitled to indemnification.
8. LIMITATION OF TRUST'S LIABILITY. The Adviser acknowledges that it has
received notice of and accepts the limitations upon the Trust's liability set
forth in its Declaration of Trust. The Adviser agrees that the Trust's
obligations hereunder in any case shall be limited to the Trust and to its
assets and that the Adviser shall not seek satisfaction of any such obligation
from the holders of the shares of any Fund nor from any Trustee, officer,
employee or agent of the Trust.
9. FORCE MAJEURE. The Adviser shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Adviser shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
10. RENEWAL, TERMINATION AND AMENDMENT.
a) This Agreement shall continue in effect, unless sooner terminated as
hereinafter provided, for a period of two years from the date hereof and it
shall continue indefinitely thereafter as to the Fund, provided that such
continuance is specifically approved by the parties hereto and, in addition, at
least annually by (i) the vote of holders of a majority of the outstanding
voting securities of the affected Fund or by vote of a majority of the Trust's
Board of Trustees and (ii) by the vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of the Adviser, cast in person
at a meeting called for the purpose of voting on such approval.
b) This Agreement may be terminated at any time, with respect to any Fund,
without payment of any penalty, by the Trust's Board of Trustees or by a vote of
the majority of the outstanding voting securities of the affected Fund upon 60
days' prior written notice to the Adviser and by the Adviser upon 60 days' prior
written notice to the Trust.
c) This Agreement may be amended at any time by the parties hereto, subject
to approval by the Trust's Board of Trustees and, if required by applicable SEC
rules and regulations, a vote of the majority of the outstanding voting
securities of any Fund affected by such change. This Agreement shall terminate
automatically in the event of its assignment.
d) The terms "assignment," "interested persons" and "majority of the
outstanding voting securities" shall have the meaning set forth for such terms
in the 1940 Act.
11. 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.
12. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Michigan. The captions in this Agreement
are included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Pursuant to the Trust's Declaration of Trust, the obligations of this Agreement
are not binding upon any of the Trustees or shareholders of the Trust
individually, but bind only the Trust estate.
XXXXXXXX INVESTMENT TRUST
By:_______________________________
XXXXXXXX INVESTMENT COUNSEL, INC.
By:_______________________________
SCHEDULE 1
BOND FUND - 0.30% of average daily net assets
