EXHIBIT 5.6
THE NAVELLIER PERFORMANCE FUNDS
INVESTMENT ADVISORY AGREEMENT
FOR
THE NAVELLIER INTERNATIONAL EQUITY PORTFOLIO
AGREEMENT made as of the 12th day of October, 1997, by and between The
Navellier International Equity 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
International Equity 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
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Portfolio as to the manner in which voting rights, rights to consent to trust
action, and any 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 percent (1.00%) (the "Management Fee") of the
Portfolio's average daily net
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assets. Payment of the Adviser's compensation for the preceding month shall
be made as 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 Adviser has entered into a Sub-Advisory Agreement with Global Value
Investors, Inc. ("GVI") whereby GVI will make the day-to-day investment
decisions regarding investments by the Portfolio. As part of that
Sub-Advisory Agreement, Adviser has agreed to pay GVI a sub-advisory fee of
0.625% of the average daily net assets of the Portfolio. The Adviser will
pay such fees to GVI. The Fund and the Portfolio shall have no obligation to
pay such fees. Said Sub-Advisory Agreement is adopted, approved and made a
part hereof as Exhibit A.
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 B 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,
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(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, 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 International Equity
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
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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 "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 INTERNATIONAL EQUITY
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/
--------------------
6
EXHIBIT A
7
DATED AUGUST 14, 1997
GLOBAL VALUE INVESTORS, INC.
and
THE NAVELLIER PERFORMANCE FUNDS
_________________________________
INVESTMENT ADVISORY AGREEMENT
_________________________________
8
THIS AGREEMENT is made the 14th day of August, 1997
AMONG
1. NAVELLIER MANAGEMENT, INC., a corporation incorporated in and under the
laws of the state of Delaware, whose principal office is at Xxx Xxxx
Xxxxxxx, Xxxxx Xxxxx, Xxxx, Xxxxxx 00000 (hereinafter called the
"Manager"); and
2. THE NAVELLIER PERFORMANCE FUNDS, a Delaware business trust, whose
principal office is at Xxx Xxxx Xxxxxxx, Xxxxx Xxxxx, Xxxx, Xxxxxx 00000
(hereinafter called the "Funds"); and
3. GLOBAL VALUE INVESTORS, INC., a corporation incorporated in and under the
laws of the state of New Jersey, whose principal office is at 000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
called the "Investment Advisor").
WHEREAS
A. The Navellier International Portfolio (the "Portfolio") is to be a new
portfolio of the Funds. The Portfolio is being organized with the
principal object to carry on business as a mutual fund portfolio
investing in international securities. None of the other portfolios
of the Funds invests primarily in securities of companies located outside
of the United States.
B. Manager has previously entered into an agreement with the Funds to
provide certain administrative and management services.
C. The Investment Advisor has experience in investing in international
securities that the Manager desires to utilize in managing the Portfolio.
D. The Manager is desirous of appointing the Investment Advisor to act as a
sub-advisor to the Portfolio and to the Manager in the stock selection and
investment advice relating to the Portfolio, and the Investment Advisor
(having been approved by the trustees of the Funds) has agreed so to act
with a view to attempting to achieve the investment objectives of the
Portfolio.
NOW IT IS HEREBY AGREED as follows:
1. APPOINTMENT OF INVESTMENT ADVISOR.
a. The Manager hereby appoints the Investment Advisor and the
Investment Advisor hereby agrees to act as the sole investment
advisor to the Portfolio from the date hereof upon the terms and
subject to the conditions hereinafter contained.
9
b. The Investment Advisor shall use its best endeavors to increase the
value of the cash and investment securities of the Portfolio
(hereinafter, "Investments") by investing and reinvesting the same in
such manner as the Investment Advisor shall think fit.
c. In carrying out its duties hereunder the Investment Advisor shall
observe and comply with the Trust Agreement and Bylaws of the
Portfolio, all applicable provisions of the Prospectus (all of which
documents shall first be provided to the Investment Advisor for its
review and approval), the Investment Company Act of 1940 (the
"Act"), and all resolutions and directions of the Board of Trustees
of the Funds (the "Trustees") of which it shall have notice,
PROVIDED THAT such resolutions, Bylaws and provisions of the
Prospectus do not violate any laws or restrictions placed upon the
Investment Advisor under applicable law.
2. DUTIES OF INVESTMENT ADVISOR.
The Manager hereby delegates to the Investment Advisor the management of
the investment and reinvestment of the Investments comprising the assets
of the Portfolio with power on behalf of and in the name of the Portfolio
at its discretion:
a. To direct the purchase, subscription or other acquisition of
Investments and to direct the sale, redemption, exchange thereof,
subject to the duty to render to the Trustees, the Manager and the
institution having custody of the Portfolio's Investments (the
"Custodian") written reports of the composition of the portfolio of
the Portfolio as often as the Trustees shall reasonably require;
b. To make all decisions (except for decisions relating to leverage)
relating to the manner, method and timing of investment
transactions, to select brokers, dealers and other intermediaries by
or through whom such transactions will be effected, and to engage
such consultants, analysts and experts in connection therewith as
may be considered necessary or appropriate;
c. To direct banks, brokers or custodians to disburse funds or assets
solely in order to execute investment transactions for the
Portfolio, PROVIDED THAT The Investment Advisor shall have no
authority to direct the transfer of Portfolio funds or assets to
itself or other persons and shall have no authority over the
disbursement (as opposed to investment decisions) of funds or assets
nor any custody of any Portfolio funds or assets; and
d. To take all such other actions as may be considered necessary or
appropriate to discharge its duties hereunder;
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PROVIDED THAT any specific or general directions which the Trustees
may give to the Investment Advisor with regard to any of the
foregoing powers shall, unless the contrary is expressly stated
therein, override the general authority given by this clause to the
extent that the Trustees may, at any time and from time to time,
take over, either generally or to a limited extent, the exercise of
all or any of the same as they shall think fit and, in particular,
the Manager shall have the right to direct the Investment Advisor to
place trades through brokers and other agents of the Manager's
choice, subject to such broker or agents executing such trades on a
"best execution basis," i.e. at the best price and/or with
research or other services which render that broker's services the
most appropriate for the Investment Advisor's needs, and further
that the Investment Advisor is satisfied that the dealing and
execution quality of such brokers are satisfactory to the Investment
Advisor; PROVIDED FURTHER THAT nothing herein shall be construed as
giving the Investment Advisor power to manage the aforesaid cash and
Investments in such a manner and would cause the Portfolio to be
considered a "dealer" in stocks, securities or commodities for U.S.
federal income tax purposes; PROVIDED FURTHER THAT such directions
by the Trustees do not violate any fiduciary duties, U.S. statutes or
the laws of any other countries with regard to the Investment
Advisor's duties and responsibilities; and PROVIDED FURTHER THAT if
the Trustees elect to take over, either generally or to a limited
extent, the exercise of all or any of the Investment Advisor's
responsibilities hereunder, then the provisions of clause 3(b) shall
be applicable to those circumstances.
3. REMUNERATION OF THE INVESTMENT ADVISOR AND EXPENSES OF THE PORTFOLIO.
a. The Manager shall pay to the Investment Advisor by way of
remuneration for its services hereunder 50% of the investment
advisory fees received by the Manager, i.e., 50% of 1.00% (0.50%) of
average daily net assets of the Portfolio. The fee payable to the
Investment Advisor under this clause shall accrue and be due on the
last business day of each month and shall be paid on that day or as
soon thereafter as is practicable, PROVIDED THAT nothing contained
in this clause shall preclude the Manager from charging the
Portfolio a Section 12b-1 fee of no greater than one-fourth of one
percent (0.25%).
b. If Investment Advisor should cease to be Investment Advisor to the
Portfolio for any reason then either:
(i) Investment Advisor and Manager shall agree upon a fair and
equitable severance payment to the Investment Advisor; or
(ii) The Manager shall resign as a manager of the Portfolio, and
neither the Manager nor an affiliated person or affiliated
company of the Manager (as those terms are defined in the Act)
shall accept any compensation, directly or indirectly,
attributable to investment advisory services to the Portfolio
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for a period of ten (10) years from the date on which the
Investment Advisor ceases to perform the duties required of him
hereunder.
c. If any of the Manager's rights and responsibilities under the
investment advisory agreement between the Manager and the Funds are
transferred or assigned to a third party, then the Investment
Advisor shall be entitled to one-half (1/2) of the consideration
attributable to the Portfolio in the same form and at the same time
as the Manager receives such compensation. If receipt of such
consideration is subject to the recipients' obligation to refrain
from competing with the assignee or transferee of such rights, then
the Investment Advisor's right to receive any consideration under
this paragraph shall be contingent upon the agreement of the
Investment Advisor to agree to the same restrictions upon its future
activities as those to which the Manager agrees.
4. DEALINGS OF INVESTMENT ADVISOR.
a. Subject to sub-clause (b) below, the duties of the Investment
Advisor hereunder shall not preclude the Investment Advisor from
providing investment advisory services of a like nature to any other
person or entity, including, without limitation, the management of
managed accounts and clients' accounts as part of its existing or
future business and the Investment Advisor shall not be liable to
account for any profit arising therefrom to the Manager, the
Portfolio or the shareholders of the Portfolio (the "Shareholders").
b. The Investment Advisor undertakes, while acting as investment
advisor to the Portfolio hereunder, and for a period of one year
thereafter, that neither it nor any of its affiliates (as that term
is defined in the Act) shall establish any mutual fund which may
reasonably be deemed to compete with the Portfolio, nor enter into
any arrangements to manage or advise any such fund without obtaining
the prior written consent of the Manager, which consent shall not
be unreasonably withheld. Specifically, the Investment Advisor
agrees that it shall not deal directly with any investor of the
Portfolio in connection with subscription(s) or with the investment
of funds in the Portfolio and will direct all inquiries from
prospective investors to the Manager. The Investment Advisor further
agrees that it will not accept any fee directly from any prospective
investor or take any other action to aid any prospective investor in
circumventing the Manager in connection with its management fee. The
Investment Advisor further agrees that information concerning
investors in the Portfolio, including but not limited to investors'
names, addresses, telephone numbers, net worth, investment
objectives, brokers, consultants, and financial advisors, constitute
confidential customer lists and trade secret information which
belong to Manager and Funds only and not to Investment Advisor.
Nothing contained in this paragraph shall limit or restrict
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the Investment Adviser from receiving compensation for rendering
investment advice to its clients nor from assisting the Manager in
marketing the Portfolio.
5. EXPENSES.
a. The Investment Advisor shall be entitled to reimbursement from the
Portfolio or Manager of its non-overhead, out-of-pocket, reasonable
expenses properly associated with and incurred by the Investment
Advisor in exercising or carrying out its powers and duties hereunder.
b. The Investment Advisor shall bear its own overhead research and
other internal operating costs.
c. For the avoidance of doubt, the Portfolio shall bear its own
overhead and other internal operating costs (whether incurred
directly or by the Manager) including, without limitation:
(i) The costs incurred by the Portfolio in registration under the
Act and the Securities Act of 1933, including, but not limited
to the preparation and printing of the prospectus or any
offering literature (including any form of advertisement or
other solicitation materials calculated to lead to investors
subscribing for Shares) and compliance with Blue Sky laws;
(ii) All fees and expenses on behalf of the Portfolio to its
transfer agent and custodian;
(iii) The reasonable fees and expenses of accountants,
auditors, lawyers and other professional advisors to the
Portfolio;
(iv) Any interest, fee or charge payable on or on account of
any borrowing by the Portfolio;
(v) Fiscal and governmental charge and duties relating to
the purchase, sale, issue or redemption of Shares and
increases in authorized share capital of the Portfolio;
(vi) The fees of any stock exchange or over-the-counter
market on which the Shares may from time to time be listed,
quoted or dealt in and the expenses of obtaining any such
listing, quotation or permission to deal;
(vii) The fees and expenses (if any) payable to the Trustees;
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(viii) Brokerage, fiscal or governmental charges or duties
in respect of or in connection with the acquisition, holding
or disposal of any of the assets of the Portfolio or otherwise
in connection with its business;
(ix) The annual registration fees for the Funds;
(x) The expenses of publishing details and prices of
Shares in newspapers and other publications;
(xi) All expenses incurred in the convening of meetings
of Shareholders or in the preparation of agreements or other
documents relating to the Portfolio or in relation to the safe
custody of the documents of title of any Investments;
(xii) All Trustees' fees and communication costs.
d. The Manager shall be responsible for all expenses of
marketing of the Portfolio, including fees payable for inclusion
in mutual fund supermarkets.
6. CONCERNING THE INVESTMENT ADVISOR.
The Investment Advisor agrees to use its best efforts and
judgment and to take due care in exercising or carrying out its
power and duties hereunder, provided that it shall not, in the
absence of wilful default or gross negligence, as opposed to
errors in investment judgment on its part, be liable to the
Manager, the Portfolio or the Shareholders for any act or omission
in connection with the performance of its services hereunder. The
Investment Advisor shall not be liable to the Portfolio or any of
its Shareholders or any other party for any error of judgment or
any other action or omission by the Manager and/or the Portfolio
or any of their employees, associates, brokers, distributors,
agents or persons or entities working on their behalf or for any
loss sustained by the Portfolio or its Shareholders or any third
party or entity which is a result of any actions or omission taken
by the Manager or the Portfolio or any of their employees,
associates, brokers, distributors, agents or persons or entities
working on their behalf.
7. INDEMNITY.
Each of the Manager and the Investment Advisor Investment Advisor (the
"Indemnifying Party") agrees to indemnify the other (the "Covered
Person") from and against all liabilities, losses, expenses, reasonable
attorneys' fees and costs (other than attorneys' fees and costs in
relation to the preparation of this Agreement, for which each party shall
bear its own costs and attorneys' fees) or damages (other than
liabilities, losses, expenses, attorneys' fees and costs or damages
arising from any wilful default or gross
14
negligence on the Covered Person's part) claimed by any third party as a
result of the acts or commissions of the Indemnifying Party in connection
with the performance of services hereunder, including but not limited to
any claims asserted or threatened by the Portfolio, any Shareholder,
governmental or regulatory agency, or any other person PROVIDED THAT any
claim for indemnity made by a Covered Person under the terms of this
indemnity shall first be made by that party to the Indemnifying Party.
The Indemnifying Party shall advance to the Covered Party its reasonable
expenses and costs (including any reasonable attorneys' fees and costs)
of investigating and/or defending any claim asserted or threatened by the
Portfolio or any such Shareholder or Shareholders, governmental or
regulatory agency or any other third person in connection with the
indemnity provisions of this Agreement, subject always to the
Indemnifying Party first receiving a written undertaking from the Covered
Party to repay any amounts advanced to him in the event and to the extent
of any subsequent determination that the Covered Party was not entitled
to indemnification hereunder in respect thereof. Notwithstanding any of
the foregoing provisions of this paragraph to the contrary, the
Investment Advisor shall not be liable to the Manager hereunder for any
error of judgment or any other action or omission for which the
Investment Advisor would not be liable pursuant to the provisions of
Clause 5 of this Agreement.
8. INDEPENDENT CONTRACTOR.
The Investment Advisor shall for all purposes of this Agreement be deemed
to be an independent contractor and, except as otherwise expressly
provided herein, shall have no authority to act for, bind or represent
the Portfolio in any way or otherwise be deemed to be an agent of the
Portfolio. Without limiting the generality of the foregoing, the
Investment Advisor shall have no authority (nor shall it have any duty)
on behalf of the Portfolio
a. To maintain the principal corporate records or books of account of
the Portfolio;
b. To disburse funds or assets of the Portfolio payments of dividends,
legal and accounting fees, and trustees' and officers' salaries;
c. To publish or furnish the subscription price or redemption price of
shares of the Portfolio;
d. To make redemptions of the Portfolio's shares;
e. To calculate or determine the Net Asset Value of the Portfolio's
shares; or
15
f. To market, sell, advertise, produce prospectuses and file financial
reports with any governmental agency or to be involved in any such
activity associated with the Fund.
9. ACCOUNT AND OTHER INFORMATION. The Investment Advisor shall:
a. Arrange that there be sent to the Portfolio confirmations of all
transactions in the Portfolio's Investments and periodic statements
(not less frequently than monthly) thereof at a fair market
valuation, together with such further information concerning its
services performed for the Portfolio as the Portfolio may reasonably
request;
b. Provide to the Portfolio and the Manager on execution of this
Agreement a copy of Part II of the Investment Advisor's current Form
ADV filed with the Securities and Exchange Commission (and shall
provide promptly to the Portfolio any supplement or amendment
thereto);
c. Provide to the Manager such information at such times as the Manager
may reasonably require for the purposes of preparing or procuring
the preparation of monthly trading and quarterly reports for
dispatch to the Shareholders; and
d. Provide to the Manager, or such other person as the Manager may
direct, timely valuations of Investments for the purpose of
calculating the Net Asset Value of the Portfolio's shares (however,
the Investment Advisor shall have no responsibility in preparing or
calculating the Net Asset Value, which responsibility shall be
solely that of the Manager).
11. USE OF NAMES AND PERFORMANCE RECORD.
a. The name and right to the name Navellier Management, Inc. or any
derivation of the name Navellier shall at all times be owned and be
the sole and exclusive property of Xxxxx Xxxxxxxxx. At the
conclusion of the term of this Agreement or in the event of any
termination of this Agreement or if the Investment Advisor's
services are terminated for any reason, the Portfolio and its
employees, representatives, affiliates, associates agree that they
shall immediately cease using the name Navellier and/or any
derivatives of said name for the Portfolio.
b. The Portfolio and Manager shall not publish or distribute to its
Shareholders, prospective investors, sales agents or members of the
public any disclosure document, offering literature (including any
form of advertisement or other solicitation materials calculated to
lead to investors subscribing for shares in the Portfolio) or other
document referring by name to the Investment Advisor unless
16
the Investment Advisor shall have consented in writing to such
references in the form and context in which they appear.
c. The performance record of the Portfolio shall belong to the
Investment Advisor.
11. TERMINATION.
The appointment of the Investment Advisor hereunder shall continue in
force until a date which is twenty-four (24) calendar months after the
later of the date of its initial execution or its approval by the Board
of Trustees of the Navellier Performance Funds, and, subject to approval
at lease annually by The Board of Trustees, shall continue thereafter
until terminated either by the Portfolio giving to the Investment
Advisor notice in writing at any time or by the Investment Advisor
giving to the Manager and/or the Portfolio not less than sixty (60) days
notice in writing. Notwithstanding the foregoing provisions of this
clause to the contrary, the provisions of clauses 3, 4b and 10 shall
survive the termination of the Investment Advisor's appointment
hereunder.
12. NOTICES.
Any notice, instruction or other instrument required or permitted to be
given hereunder may be delivered in person to the offices of the parties
as set forth herein during normal business hours, or delivered or sent by
prepaid registered mail or by telex, cable or telecopy to the parties at
such offices or such other address as may be notified by either party
from time to time. Such notice, instruction or other instrument shall be
deemed to have been served, in the case of a registered letter at the
expiration of seventy-two (72) hours after posting; in the case of cable
twenty-four (24) hours after dispatch; and, in the case of telex or
telecopy, immediately on dispatch, and if delivered outside normal
business hours it shall be deemed to have been received at the next time
after delivery when normal business hours commence, and in the case of
cable, telex or telecopy on the business day after the receipt thereof.
Evidence that the notice, instruction or other instrument was properly
addressed, stamped and put into the post shall be conclusive evidence of
posting.
13. ASSIGNMENT AND DELEGATION.
The benefit of this Agreement shall not be assigned by any party hereto
save with the written consent of the other parties. This Agreement shall
be personal to the Investment Advisor, who shall not sub-contract or
delegate the performance of its services hereunder to any person
whatsoever.
17
14. PROPER LAW AND FORUM.
This Agreement shall be governed by and construed and accordance with the
laws of the State of Nevada, and the parties agree that the federal or
state court located in San Francisco, California shall hear and determine
any suit, action or proceeding, and/or settle any disputes between the
parties which may arise out of or in connection with this Agreement
unless otherwise agreed in writing signed by all parties.
15. MODIFICATIONS.
Except as otherwise provided herein, this Agreement shall not be
considered amended, modified or waived unless evidenced by an instrument
in writing signed by the party or parties to be charged with such
amendment, modification or waiver.
16. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement shall not be effective until
the execution and delivery between the parties of at least one set of
counterparts. The parties authorize each other to detach and combine
original signature pages and consolidate them into a single identical
original. Any one of such completely executed counterparts shall be
sufficient proof of this Agreement.
17. ATTORNEYS' FEES.
In the event of a material breach of this Agreement by any party hereto,
the prevailing party, as determined by the trier of fact, shall be
entitled to its reasonable attorneys' fees and costs as determined by the
court in such action, in addition to any other damages awarded.
18. INTEGRATION.
Unless otherwise agreed in writing between the parties hereto, the
parties intend that the terms of this Agreement shall be the final
expression of their agreement with respect to the subject matter hereof
and may not be contradicted by evidence of any prior or contemporaneous
negotiations or agreement. The parties further intend that this Agreement
shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement, to
alter its terms. Any dispute as to which persons or entities are liable
for a breach of this Agreement shall be determined by the court or other
trier of fact.
18
19. MUTUAL CONTRIBUTION.
This Agreement has been negotiated at arm's length among persons
sophisticated and knowledgeable in the matters dealt with in this
Agreement. In addition, each party has been represented by experienced
and knowledgeable legal counsel. Accordingly, any rule of law or legal
decision that would require interpretation of any ambiguities in this
Agreement against the party that has drafted it is not applicable and is
waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the purposes of the parties and this
Agreement.
20. HEADINGS.
The paragraph headings of this Agreement are intended solely for
convenience of reference and shall not be used to define, limit, extend,
or describe the scope of this Agreement or the intent of any provision
hereof. References to clauses or paragraphs shall be deemed to refer to
clauses or paragraphs of this Agreement unless specific reference is made
to another document.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first set forth above.
GLOBAL VALUE INVESTORS, INC. NAVELLIER MANAGEMENT, INC.
By /s/ Ram Xxxxxxx By /s/ Xxxxx X. Xxxxxxxxx
-------------------------------- --------------------------------
Ram Xxxxxxx, President Xxxxx X. Xxxxxxxxx, President
August 14, 1997
THE NAVELLIER PERFORMANCE FUNDS
By
--------------------------------
19
EXHIBIT B
20
INDEMNIFICATION AGREEMENT
The Navellier International Equity 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
21
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
22
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.
23
ATTEST: THE NAVELLIER INTERNATIONAL EQUITY
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
24
