EXHIBIT 5.(n)
XXXXXXXXX XXXXXXXX INVESTMENT TRUST
INVESTMENT ADVISORY AGREEMENT
This INVESTMENT ADVISORY AGREEMENT ("Agreement") is made as of the 1st day
of October, 1997, by and between XXXXXXXXX XXXXXXXX INVESTMENT TRUST, a business
trust organized and existing under the laws of the Commonwealth of Massachusetts
(the "Trust"), with respect to its series of shares known as XXXXXXXXX, XXXXXXXX
VALUE + GROWTH FUND (the "Fund"), and XXXXXXXXX XXXXXXXX & COMPANY INVESTMENT
MANAGEMENT, L.P., a limited partnership formed and existing under the laws of
the State of Delaware (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is an open-end diversified, management investment
company, registered as such under the Investment Company Act of 1940, as amended
(the "Act"); and
WHEREAS, the Adviser seeks to be and has filed such documents as are
necessary to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and is engaged in the
business of supplying investment advice, investment management and
administrative services, as an independent contractor; and
WHEREAS, the Trust desires to retain the Adviser to render advice and
services to the Trust and Fund pursuant to the terms and provisions of this
Agreement, and the Adviser is interested in furnishing said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto mutually agree as follows:
1. EMPLOYMENT OF ADVISER. (a) The Trust hereby employs the Adviser, and
the Adviser hereby accepts such employment, to render investment advice and
investment management services with respect to the assets of the Fund,
consistent with the investment objectives and policies of the Fund and subject
to the supervision and direction of the Trust's Board of Trustees. The Adviser
shall, except as otherwise provided for herein, render or
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make available all administrative services needed for the management and
operation of the Fund, and shall, as part of its duties hereunder, (i)
furnish the Trust with investment advice, research and recommendations with
respect to the investment of the Fund's assets and the purchase and sale of its
portfolio securities, including the taking of such other steps as may be
necessary to implement such advice and recommendations, (ii) furnish the Trust
and Fund with reports, statements and other data on securities, economic
conditions and other pertinent subjects which the Trust's Board of Trustees may
request, (iii) furnish such office space and personnel as are needed by the
Fund, and (iv) in general superintend and manage the investments of the Fund,
subject to the ultimate super-vision and direction of the Trust's Board of
Trustees.
(b) The Adviser shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers (including Xxxxxxxxx, Xxxxxxxx &
Company LLC) in conformity with the policy with respect to brokerage as set
forth in the Trust's Registration Statement and the Fund's Prospectus and
Statement of Additional Information or as the Trustees may direct from time to
time. The Adviser shall not execute portfolio transactions for the account of
the Fund with a broker or dealer which is an "affiliated person" (as defined in
the Act) of the Adviser or the Trust, except pursuant to procedures adopted by
the Trustees in accordance with Rule 17e-1 under the Act. The Adviser shall
render regular reports to the Trustees of the total brokerage business placed
and the manner in which the allocation has been accomplished.
2. SUB-ADVISERS AND CONSULTANTS. The Adviser may from time to time,
in its discretion, delegate certain of its responsibilities under this Agreement
to one or more qualified companies, each of which is registered under the
Advisers Act, provided that the separate costs of employing such companies and
of the companies themselves are borne by the Adviser and not by the Fund.
3. ADVISER IS INDEPENDENT CONTRACTOR. The Adviser shall, for all
purposes herein, be deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized, have no authority to act for or
represent the Trust or Fund in any way, or in any way be deemed an agent for the
Trust or Fund. It is expressly understood and agreed that the services to be
rendered by the Adviser to the Trust and Fund under the provisions of this
Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be impaired thereby.
4. RESPONSIBILITIES AND PERSONNEL OF ADVISER. The Adviser agrees to
use its best efforts in the furnishing of investment advice, research and
recommendations to the Fund, in the preparation of reports and information, and
in the management of the Fund's assets, all pursuant to this Agreement, and for
this purpose the Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it shall
from time to time determine to be necessary to the performance of its
obligations under
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this Agreement. Without limiting the generality of the foregoing, the staff and
personnel of the Adviser shall be deemed to include persons employed or retained
by the Adviser to furnish statistical, research, and other factual information,
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 desire and request.
5. FURNISHING OF STATEMENTS AND REPORTS. The Trust shall from time
to time furnish to the Adviser detailed statements of the portfolio investments
and assets of the Fund and information as to its investment objectives and
needs, and shall make available to the Adviser such financial reports, business
descriptions and plans, proxy statements, legal and other information relating
to its investments as may be in the possession of the Trust or available to it
and such other information as the Adviser may reasonably request.
6. EXPENSES OF EACH PARTY. (a) The Adviser shall bear all expenses
in connection with the performance of its services under this Agreement. The
Adviser shall also pay (i) all compensation, if any, to the executive officers
of the Fund and their related expenses and (ii) all compensation, if any, and
out-of-pocket expenses of the Trust's trustees, who are "interested persons" of
the Trust (as defined in the Act).
(b) The Trust shall bear all expenses of the Fund's
organization, operations, and business not specifically assumed or agreed to be
paid by the Adviser as provided in this Agreement. In particular, but without
limiting the generality of the foregoing, the Trust on behalf of the Fund and
out of its assets shall pay:
(A) CUSTODY AND ACCOUNTING SERVICES. All expenses of the
transfer, receipt, safekeeping, servicing and accounting for the cash,
securities, and other property of the Fund, including all charges of
depositories, custodians, and other agents, if any;
(B) SHAREHOLDER SERVICING. All expenses of maintaining and
servicing shareholder accounts, including all charges for transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other
agents for the benefit of the Fund;
(C) BOOKS AND RECORDS. All costs and expenses associated with
the maintenance of the Fund's books of account and records as required
by the Act;
(D) SHAREHOLDER COMMUNICATIONS. All expenses of preparing,
printing, and distributing reports and other communications to
shareholders;
(E) SHAREHOLDER MEETINGS. All fees and expenses incidental to
holding meetings of shareholders, including the printing of notices
and proxy material, and proxy solicitation therefor, provided that the
Adviser shall be
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responsible for and assume all expenses and fees with respect to
meetings of the Fund's shareholders held solely for the benefit of the
Adviser;
(F) PROSPECTUSES AND STATEMENTS OF ADDITIONAL INFORMATION. All
expenses of preparing and printing of annual or more frequent
revisions of the Private Placement Memorandum, Prospectus and
Statement of Additional Information relating to the offering of Fund's
shares and of mailing them to shareholders;
(G) PRICING. All expenses of computing the Fund's net asset
value per share, including the cost of any equipment or services used
for obtaining price quotations;
(H) COMMUNICATION EQUIPMENT. All charges for equipment or
services for communication between the Adviser or the Trust and the
custodian, transfer agent or any other agent selected by the Trust;
(I) LEGAL AND ACCOUNTING FEES AND EXPENSES. All charges for
services and expenses of the Trust's legal counsel and independent
auditors for the benefit of the Trust;
(J) TRUSTEES' FEES AND EXPENSES. All compensation of trustees,
other than those who are interested persons of or affiliated with the
Adviser, and all expenses incurred in connection with their service
and meetings;
(K) FEDERAL REGISTRATION FEES. All fees and expenses of
registering and maintaining the registration of the Trust under the
Act and the registration of Fund shares under the Securities Act of
1933, an amended (the "1933 Act"), including all fees and expenses
incurred in connection with the preparation, printing, and filing of
any registration statement, Prospectus and Statement of Additional
Information under the 1933 Act or the Act, and any amendments or
supplements thereto that may be made from time to time;
(L) STATE REGISTRATION FEES. All fees and expenses (including
the compensation of personnel who may be employed by the Adviser or an
affiliate) of qualifying and maintaining qualification of the Trust
and of the Fund shares for sale under securities laws of various
states or jurisdictions, and of registration and qualification of the
Trust under all other laws applicable to the Trust or its business
activities (including registering the Trust as a broker-dealer, or any
officer of the Trust or any person as agent or salesman of the Trust
in any state);
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(M) ISSUE AND REDEMPTION OF TRUST SHARES. All expenses incurred
in connection with the issue, redemption, and transfer of Fund shares,
including the expense of confirming all Fund share transactions, and
of preparing and transmitting the Fund's share certificates;
(N) BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or deemed advisable by the
Board of Trustees;
(0) BROKERAGE COMMISSIONS. All brokerage commissions and other
charges incident to the purchase, sale, or lending of the Fund's
portfolio securities;
(P) TAXES. All taxes or governmental fees payable by or with
respect of the Trust or Fund to federal, state, or other governmental
agencies, domestic or foreign, including stamp or other transfer
taxes;
(Q) TRADE ASSOCIATION FEES. All fees, dues, and other expenses
incurred in connection with the Trust's membership in any trade
association or other investment organization;
(R) INTEREST. All interest which may accrue and be payable as a
result of the Fund's activities;
(S) STATIONERY AND POSTAGE. The cost of all stationery and
postage required by the Fund, unless otherwise payable by another
party with respect to an activity or expense referred to above; and
(T) NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring
expenses as may arise, including the costs of actions, suits, or
proceedings to which the Trust on behalf of the Fund is a party and
the expenses the Trust on behalf of the Fund may incur as a result of
its legal obligation to provide indemnification to its officers,
trustees, and agents.
(c) In the event that the Trust offers other series of its
shares in the future, then the Fund shall only be responsible for expenses
directly attributable to it and its operations and for such other costs and
expenses of the Trust as the Board of Trustees may by resolution or otherwise
direct.
7. REIMBURSEMENT FOR ADVANCED COSTS AND EXPENSES. To the extent the
Adviser incurs any costs or performs any services which are an obligation of the
Trust or Fund, as set forth herein, the Trust on behalf of the Fund and out of
the Fund's assets shall promptly reimburse the Adviser for such costs and
expenses. To the extent the services for
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which the Fund is obligated to pay are performed by the Adviser, the Adviser
shall be entitled to recover from the Fund only to the extent of its actual
costs for such services.
8. FEES. (a) The Trust on behalf of the Fund and out of the Fund's
assets agrees to pay to the Adviser, and the Adviser agrees to accept, as full
compensation for all services furnished or provided to the Trust and Fund
hereunder, and as full reimbursement for all expenses assumed by the Adviser, a
management fee computed at the rate of 1.00% per annum of the average daily net
assets of the Fund.
(b) The management fee shall be accrued daily during each month
by the Trust on behalf of the Fund and paid to the Adviser on the first business
day of the succeeding month. The initial monthly fee under this Agreement shall
be payable on the first business day of the first month following the effective
date of this Agreement. The fee to the Adviser shall be prorated for the
portion of any month in which this Agreement is in effect which is not a
complete month according to the proportion which the number of calendar days in
the month during which the Agreement is in effect bears to the number of
calendar days in the month. If this Agreement is terminated prior to the end of
any month, the fee to the Adviser shall be payable within ten (10) days after
the date of termination.
(c) To the extent that the gross operating costs and expenses of
the Fund (excluding any interest, taxes, brokerage commissions, and, with the
prior written approval of any state securities commission requiring same, any
extraordinary expenses, such as litigation), exceed the most stringent expense
limitation requirement of the states in which shares of the Fund are qualified
for sale, the Adviser shall reimburse the Fund or waive its compensation
hereunder for the amount of such excess.
(d) The Adviser may reduce or waive any portion of the
compensation due to it hereunder, or for reimbursement of expenses by the Trust
pursuant to Paragraph 7 of this Agreement, and any such reduction or waiver
shall be applicable only with respect to the specific items waived and shall not
constitute a waiver of any future compensation or reimbursement due to the
Adviser hereunder. The compensation payable to the Adviser under this Agreement
will be reduced to the extent required under the most stringent expense
limitation applicable to the Fund imposed by any state in which shares of the
Fund are qualified for sale. Any such reduction will be agreed to prior to
accrual of the related expense or fee and will be estimated daily and reconciled
and paid on a monthly basis. Any fee withheld pursuant to this paragraph from
the Adviser shall be reimbursed by the Trust to the Adviser in the first fiscal
year or the second fiscal year next succeeding the fiscal year of the
withholding to the extent permitted by the applicable state law if the aggregate
expenses for the next succeeding fiscal year or second succeeding fiscal year do
not exceed the applicable state limitation or any more restrictive limitation to
which the Adviser has agreed.
(e) The Adviser may agree not to require payment of any portion
of the compensation or reimbursement of expenses otherwise due to it pursuant to
this Agreement
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prior to the time such compensation or reimbursement has accrued as a liability
of the Trust. Any such agreement shall be applicable only with respect to the
specific items covered thereby and shall not constitute an agreement not to
require payment of any future compensation or reimbursement due to the Adviser
hereunder.
9. SHORT POSITIONS IN FUND'S SHARES. The Adviser agrees that
neither it nor any of its officers or employees shall take any short position in
the shares of the Fund. This prohibition shall not prevent the purchase of such
shares by any of the officers and Trustees or employees of the Adviser or any
trust, pension, profit-sharing or other benefit plan for such persons or
affiliates thereof, at a price not less than the net asset value thereof at the
time of purchase, as allowed pursuant to rules promulgated under the Act.
10. RELATIONSHIP TO PROVISIONS OF AGREEMENT AND DECLARATION OF Trust.
Nothing herein contained shall be deemed to require the Trust to take any
action, contrary to its Agreement and Declaration of Trust or any applicable
statute or regulation, or to relieve or deprive the Board of Trustees of the
Trust of its responsibility for and control of the conduct of the affairs of the
Trust and Fund.
11. DUTIES AND STANDARDS OF CARE. (a) In the absence of 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 Fund or to any shareholder of the 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 by the Fund.
(b) No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust or director or officer of the Adviser from
liability in violation of Sections 17(h) and (i) of the Act.
(c) A copy of the Agreement and Declaration of Trust of the
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees, and not individually, and that
the obligations arising out of this Agreement are not binding upon the Trustees
or holders of the Trust's shares individually but are binding only upon the
assets and property of the Fund. The Adviser acknowledges that it has received
notice of and accepts the limitations of liability as set forth in the Agreement
and Declaration of Trust of the Trust. The Adviser agrees that the Trust's
obligations hereunder shall be limited to the Fund and to its assets, and that
the Adviser or any affiliated or related party shall not seek satisfaction of
any such obligation from any shareholder of the Fund nor from any trustee,
officer, employee or agent of the Trust.
12. TERM AND RENEWAL. This Agreement shall remain in effect for a
period of two (2) years, unless sooner terminated in accordance with Paragraph
13 hereof, and shall
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continue in effect from year to year thereafter so long as such continuation is
approved at least annually by (i) the Board of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the Fund, and (ii)
the vote of a majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
for the purpose of voting on such approval.
13. TERMINATION. This Agreement may be terminated at any time,
without payment of any penalty, by the Board of Trustees of the Trust or by a
vote of a majority of its outstanding voting securities, upon sixty (60) days'
written notice to the Adviser, and by the Adviser upon sixty (60) days' written
notice to the Trust. This Agreement shall also terminate in the event of any
transfer or assignment thereof, as defined in the Act.
14. CERTAIN DEFINITIONS. The terms "majority of the outstanding
voting securities." of the Trust or Fund and "interested persons" shall have the
meanings as set forth in the Act. The term "net assets" shall have the meaning
and shall be calculated as set forth in the Trust's Registration Statement from
time to time.
15. 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.
16. HEADINGS. The headings used herein are for convenience and ease
of reference only. No legal effect is intended, nor is to be derived from such
headings.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all as of the day
and year first above written.
XXXXXXXXX XXXXXXXX INVESTMENT
TRUST
/S/ Xxxxx X. Xxxxx
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Treasurer
XXXXXXXXX, XXXXXXXX &
COMPANY INVESTMENT
MANAGEMENT, L.P.
By: Bayview Holdings, Inc.,
General Partner
/S/ Xxxxxx X. Xxxxx
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President
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