PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this __________day of September 1995, between Xxxxxx
Xxxxxxxx Capital Management, Incorporated, a corporation organized under the
laws of Delaware ("Portfolio Manager") and THE XXXXXX XXXXXXXXX TRUST, a
Delaware business trust ("Trust").
WHEREAS, the Trust is registered as an open-end, diversified, management
series investment company under the Investment Company Act of 1940, as
amended ("Investment Company Act") which currently offers five series of
beneficial interests ("shares") representing interests in separate investment
portfolios, and may offer additional portfolios in the future; and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management for The Limited Duration Municipal
Bond Portfolio of the Trust ("Portfolio") and Portfolio Manager is willing,
in accordance with the terms and conditions hereof, to provide such services
to the Trust;
NOW THEREFORE, in consideration of the promises and covenants set forth
herein and intending to be legally bound hereby, it is agreed between the
parties as follows:
1. Appointment of Portfolio Manager. The Trust hereby retains Portfolio
Manager to provide the investment services set forth herein and Portfolio
Manager agrees to accept such appointment. In carrying out its
responsibilities under this Agreement, the Portfolio Manager shall at all
times act in accordance with the investment objectives, policies and
restrictions applicable to the Portfolio as set forth in the then current
Registration Statement of the Trust, applicable provisions of the Investment
Company Act and the rules and regulations promulgated under that Act and
other applicable federal securities laws.
2. Duties of Portfolio Manager. (a) Portfolio Manager shall provide a
continuous program of investment management for that portion of the assets
of the Portfolio ("Account") that may, from time to time be allocated to it
by the Trust's Board of Trustees, in writing, by an authorized officer of the
Trust. It is understood that the Account may consist of all, a portion of or
none of the assets of the Portfolio, and that the Board of Trustees has the
right to allocate and reallocate such assets to the Account at any time, and
from time to time, upon such notice to the Portfolio Manager as may be
reasonably necessary, in the view of the Trust, to ensure orderly management
of the Account or the Portfolio. (b) Subject to the general supervision of
the Trust's Board of Trustees, Portfolio Manager shall have sole investment
discretion with respect to the Account, including investment research,
selection of the securities to be purchased and sold and the portion of the
Account, if any, that shall be held uninvested, and the selection of brokers
and dealers through which securities transactions in the Account shall be
executed. Specifically, and without limiting the generality of the
foregoing, Portfolio Manager agrees that it will: (i) promptly advise the
Portfolio's designated custodian bank and administrator or accounting agent
of each purchase and sale, as the case may be, made on behalf of the Account,
specifying the name and quantity of the security purchased or sold, the unit
and aggregate purchase or sale price, commission paid, the market on which
the transaction was effected, the trade date, the settlement date, the
identity of the effecting broker or dealer and/or such other information, and
in such manner, as may from time to time be reasonably requested by the
Trust; (ii) maintain all applicable books and records with respect to the
securities transactions of the Account. Specifically, Portfolio Manager
agrees to maintain with respect to the Account those records required to be
maintained under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the Investment
Company Act with respect to transactions in the Account including, without
limitation, records which reflect securities purchased or sold in the
Account, showing for each such transaction, the name and quantity of
securities, the unit and aggregate purchase or sale price, commission paid,
the market on which the transaction was effected, the trade date, the
settlement date, and the identity of the effecting broker or dealer.
Portfolio Manager will preserve such records in the manner and for the
periods prescribed by Rule 31a-2 under the Investment Company Act. Portfolio
Manager acknowledges and agrees that all records it maintains for the Trust
are the property of the Trust and Portfolio Manager will surrender promptly to
the Trust any such records upon the Trust's request; (iii) provide, in a
timely manner, such information as may be reasonably requested by the Trust
or its designated agents in connection with, among other things, the daily
computation of the Portfolio's net asset value and net income, preparation of
proxy statements or amendments to the Trust's registration statement and
monitoring investments made in the Account to ensure compliance with the
various limitations on investments applicable to the Portfolio and to ensure
that the Portfolio will continue to qualify for the special tax treatment
accorded to regulated investment companies under Subchapter M of the
Internal Revenue Code of 1986, as amended; and (iv) render regular
reports to the Trust concerning the performance ofPortfolio Manager of its
responsibilities under this Agreement. In particular, Portfolio Manager
agrees that it will, at the reasonable request of the Board of Trustees,
attend meetings of the Board or its validly constituted committees and will,
in addition, make its officers and employees available to meet with the
officers and employees of the Trust at least quarterly and at other times
upon reasonable notice, to review the investments and investment program of
the Account.
3. Portfolio Transaction and Brokerage. In placing orders for portfolio
securities with brokers and dealers, Portfolio Manager shall use its best
efforts to execute securities transactions on behalf of the Account in such a
manner that the total cost or proceeds in each transaction is the most
favorable under the circumstances. Portfolio Manager may, however, in its
discretion, direct orders to brokers that provide to Portfolio Manager
research, analysis, advice and similar services, and Portfolio Manager may
cause the Account to pay to those brokers a higher commission than may be
charged by other brokers for similar transactions, provided that Portfolio
Manager determines in good faith that such commission is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Portfolio Manager to the Account and any other accounts with respect to which
Portfolio Manager exercises investment discretion, and provided further that
the extent and continuation of any such practice is subject to review by the
Trust's Board of Trustees. Portfolio Manager shall not execute any portfolio
transactions for the Trust with a broker or dealer which is an "affiliated
person" of the Trust or Portfolio Manager, including any other investment
advisory organization that may, from time to time act as a portfolio manager
for the Portfolio or any of the Trust's other Portfolios, without prior
written approval of the Trust. The Trust shall provide a list of such
affiliated brokers and dealers to Portfolio Manager and will promptly advise
Portfolio Manager of any changes in such list.
4. Expenses and Compensation. Portfolio Manager shall pay all of its
expenses incurred in the performance of its duties under this Agreement and
shall not be required to pay any other expenses of the Trust. For its
services under this Agreement, Portfolio Manager shall be entitled to receive
a fee at the annual rate of .20% of the average daily net asset value of the
Account, which fee shall be payable monthly.
5. Limitation of Liability and Indemnification. (a) Portfolio Manager shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which this Agreement
relates including, without limitation, losses that may be sustained in
connection with the purchase, holding, redemption or sale of any security or
other investment by the Trust except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Portfolio Manager
in the performance of its duties or from reckless disregard by it of its
duties under this Agreement. (b) Notwithstanding the foregoing,
Portfolio Manager expressly agrees that the Trust may rely upon information
provided, in writing, by Portfolio Manager to the Trust (including, without
limitation, information contained in Portfolio Manager's then current Form
ADV) in accordance with Section 9 of the Agreement or otherwise, in preparing
the Trust's registration statement and amendments thereto and certain
periodic reports relating to the Trust and its Portfolios that are required
to be furnished to shareholders of the Trust and/or filed with the
Securities and Exchange Commission ("SEC Filings"), provided that a copy of
any such filing is provided to Portfolio Manager (i) at least 10 business
days prior to the date on which it will become effective, in the case of a
registration statement; (ii) at least 10 business days prior to the date
upon which it is filed with the SEC in the case of the Trust's semi-annual
report on Form N-SAR or any shareholder report or proxy statement. (c)
Portfolio Manager agrees to indemnify and hold harmless the Trust and each of
its Trustees, officers and employees from any claims, liabilities and
expenses, including reasonable attorneys' fees, (collectively, "Losses") to
the extent that Losses are incurred as a result of statements contained in an
SEC Filing ("Disputed Statements") that are misleading either because they
are (i) untrue statements of material fact; or (ii) omitted to state any
material fact necessary in order to make the statements made, in the light of
the circumstances under which they are made, not misleading. For purposes of
the indemnification obligation set forth in this Section 5(c), a Disputed
Statement will be deemed misleading if so declared by a decision of a court
or administrative law judge or in an order of settlement issued by any court
or administrative body. Portfolio Manager further agrees to indemnify and
hold harmless the Trust and each of its Trustees, from any Losses to the
extent that such Losses are incurred as a result of Disputed Statements that
are alleged (i) to be untrue statements of material fact; or (ii) to have
omitted to state any material fact necessary in order to make the statements
made, in the light of the circumstances under which they are made, provided
that the indemnification obligation set forth in this Section 5(d) is
expressly limited to Losses arising from Disputed Statements that accurately
reflect information provided to the Trust in writing by the Portfolio Manager
and that cannot be independently verified by the Trust. Further, the
indemnification set forth in this Section 5(d) will not require
reimbursement of fees or expenses other than those incurred by the Trust's
regular counsel in connection with such counsel's representation of the Trust
or its Trustees. (e) The indemnification obligations set forth in Sections
5(c) and (d) shall not apply unless (i) Disputed Statements accurately
reflect information provided to the Trust in writing by the Portfolio
Manager; (ii) Disputed Statements were included in an SEC Filing in reliance
upon written information provided to the Trust by the Portfolio Manager;
(iii) the Portfolio Manager was afforded the opportunity to review Disputed
Statements in connection with the 10 business day review requirement set
forth in Section 5(b) above; and (iv) upon receipt by the Trust of any notice
of the commencement of any action or the assertion of any claim to which the
indemnification obligations set forth in Section 5(c) and (d) may apply, the
Trust notifies the Portfolio Manager, within 30 days and in writing, of such
receipt and provides to Portfolio Manager the opportunity to participate in
the defense and/or settlement of any such action or claim. Further,
Portfolio Manager will not be required to indemnify any person under this
Section 5 to the extent that Portfolio Manager relied upon statements or
information furnished to the Portfolio Manager, in writing, by any officer,
employee or Trustee of the Trust, or by the Trust's Custodian, Administrator
or Accounting Agent or any other agent of the Trust, in preparing written
information provided to the Trust and upon which the Trust relied in
preparing any Disputed Statement.
6. Permissible Interest. Subject to and in accordance with the Trust's
Declaration of Trust and By-laws and corresponding governing documents of
Portfolio Manager, Trustees , officers, agents and shareholders of the Trust
may have an interest in the Portfolio Manager as officers, directors, agents
and/or shareholders or otherwise. Portfolio Manager may have similar
interests in the Trust. The effect of any such interrelationships shall be
governed by said governing documents and the provisions of the Investment
Company Act.
7. Duration, Termination and Amendments. This Agreement shall become
effective as of the date first written above and shall continue in effect for
two years. Thereafter, this Agreement shall continue in effect from year to
year for so long as its continuance is specifically approved, at least
annually, by (i) a majority of the Board of Trustees or the vote of the
holders of a majority of the Portfolio's outstanding voting securities; and
(ii) the affirmative vote, cast in person at a meeting called for the purpose
of voting on such continuance, of a majority of those members of the Board of
Trustees ("Independent Trustees ") who are not "interested persons" of the
Trust or any investment adviser to the Trust. This Agreement may be
terminated by the Trust or by Portfolio Manager at any time and without
penalty upon sixty days written notice to the other party, which notice may
be waived by the party entitled to it. This Agreement may not be amended
except by an instrument in writing and signed by the party to be bound
thereby provided that if the Investment Company Act requires that such
amendment be approved by the vote of the Board, the Independent Trustees
and/or the holders of the Trust's or the Portfolio's outstanding shareholders,
such approval must be obtained before any such amendment may become
effective. This Agreement shall terminate upon its assignment. For
purposes of this Agreement, the terms "majority of the outstanding voting
securities, "assignment" and "interested person" shall have the meanings
set forth in the Investment Company Act.
8. Confidentiality; Use of Name. Portfolio Manager and the Trust acknowledge
and agree that during the term of this Agreement the parties may have access
to certain information that is proprietary to the Trust or Portfolio Manager,
respectively (or to their affiliates and/or service providers). The parties
agree that their respective officers and employees shall treat all such
proprietary information as confidential and will not use or disclose
information contained in, or derived from such material for any purpose other
than in connection with the carrying out of their responsibilities under this
Agreement and the management of the Trust's assets, provided, however, that
this shall not apply in the case of (i) information that is publicly
available; and (ii) disclosures required by law or requested by any
regulatory authority that may have jurisdiction over Portfolio Manager or the
Trust, as the case may be, in which case such party shall request such
confidential treatment of such information as may be reasonably available.
In addition, each party shall use its best efforts to ensure that its agents
or affiliates who may gain access to such proprietary information shall be
made aware of the proprietary nature and shall likewise treat such materials
as confidential. It is acknowledged and agreed that the names "Xxxxxx
Xxxxxxxxx," "Xxxxxx Xxxxxxxxx Chief Investment Officers" (which is a
registered trademark of Xxxxxx Xxxxxxxxx & Co., Inc. ("HCCI")), and
derivative of either, as well as any logo that is now or shall later become
associated with either name ("Marks") are valuable property of HCCI and that
the use of the Marks, or any one of them, by the Trust or its agents is
subject to the license granted to the Trust by HCCI. Portfolio Manager agrees
that it will not use any Xxxx without the prior written consent of the
Trust. Portfolio Manager consents to use of its name, performance data,
biographical data and other pertinent data by the Trust for use in marketing
and sales literature, provided that any such marketing and sales literature
shall not be used by the Trust without the prior written consent of Portfolio
Manager, which consent shall not be unreasonably withheld. The provisions
of this Section 8 shall survive termination of this Agreement.
9. Representation, Warranties and Agreements of Portfolio Manager. Portfolio
Manager represents and warrants that: (a) It is registered as an investment
adviser under the Investment Advisers Act of 1940 ("Investment Advisers
Act"), it will maintain such registration in full force and effect and will
promptly report to the Trust the commencement of any formal proceeding that
could render the Portfolio Manager ineligible to serve as an investment
adviser to a registered investment company under Section 9 of the Investment
Company Act. (b) It understands that, as a result of its services hereunder,
certain of its employees and officers may be deemed "access persons" of the
Trust within the meaning of Rule 17j-1 under the Investment Company Act and
that each such access person is subject to the provisions of the code of
ethics ("Trust's Code") adopted by the Trust in compliance with such rule.
Portfolio Manager further represents that it is subject to a written code of
ethics ("Portfolio Manager's Code") complying with the requirements of Rule
204-2(a)(12) under the Investment Advisers Act and will provide the Trust
with a copy of such code of ethics. During the period that this Agreement is
in effect, an officer or director of Portfolio Manager shall certify to the
Trust, on a quarterly basis, that Portfolio Manager has complied with the
requirements of the Portfolio Manager's Code during the prior year; and that
either (i) that no violation of such code occurred or (ii) if such a
violation occurred, that appropriate action was taken in response to such
violation. In addition, Portfolio Manager acknowledges that the Trust may,
in response to regulations or recommendations issued by the Securities and
Exchange Commission or other regulatory agencies, from time to time, request
additional information regarding the personal securities trading of its
directors, partners, officers and employees and the policies of Portfolio
Manager with regard to such trading. Portfolio Manager agrees that it make
every effort to respond to the Trust's reasonable requests in this area. (c)
Upon request of the Trust, Portfolio Manager shall promptly supply the Trust
with any information concerning Portfolio Manager and its stockholders,
employees and affiliates that the Trust may reasonably require in connection
with the preparation of its registration statements, proxy materials, reports
and other documents required, under applicable state or Federal laws, to be
filed with state or Federal agencies or to be provided to shareholders of the
Trust.
10. Status of Portfolio Manager. The Trust and Portfolio Manager
acknowledge and agree that the relationship between Portfolio Manager and
the Trust is that of an independent contractor and under no circumstances
shall any
employee of Portfolio Manager be deemed an employee of the Trust or any
other organization that the Trust may, from time to time, engage to provide
services to the Trust, its Portfolios or its shareholders. The parties also
acknowledge and agree that nothing in this Agreement shall be construed to
restrict the right of Portfolio Manager or its affiliates to perform
investment management or other services to any person or entity, including
without limitation, other investment companies and persons who may retain
Portfolio Manager to provide investment management services and the
performance of such services shall not be deemed to violate or give rise to
any duty or obligations to the Trust.
11. Counterparts and Notice. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original. Any
notice required to be given under this Agreement shall be deemed given when
received, in writing addressed and delivered, by certified mail, by hand or
via overnight delivery service as follows:
If to the Trust:
Xx. Xxxxxx X. Xxxxxxxxx, President
The Xxxxxx Xxxxxxxxx Trust
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
If to Portfolio Manager:
Xxx Xxxxxxx
Xxxxxx Xxxxxxxx Capital Management Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxx Xxxxx
Xxxxxx Xxxxxxxx Capital Management Incorporated
0000 Xxxxxx -- 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and shall be governed by the law of the state of Delaware provided that
nothing herein shall be construed as inconsistent with the Investment Company
Act or the Investment Advisers Act.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trustee liability set forth in the Declaration of Trust of the
Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the assets of The Limited Duration
Municipal Bond Portfolio. Portfolio Manager further agrees that it will not
seek satisfaction of any such obligations from the shareholders or any
individual shareholder of the Trust, or from the Trustees of the Trust or
any individual Trustee of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
Xxxxxx Xxxxxxxx Capital Management, Incorporated
By: /s/
The Xxxxxx Xxxxxxxxx Trust
By: /s/
