XXXX XXXXXXX FUNDAMENTAL VALUE FUND
(a series of Xxxx Xxxxxxx Investment Trust)
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
June 1, 2001
Xxxx Xxxxxxx Advisers, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Investment Management Contract
----------------------------------------
Ladies and Gentlemen:
Xxxx Xxxxxxx Investment Trust (the "Trust"), of which Xxxx Xxxxxxx Fundamental
Value Fund (the "Fund") is a series, has been organized as a business trust
under the laws of The Commonwealth of Massachusetts to engage in the business of
an investment company. The Trust's shares of beneficial interest, no par value,
may be divided into series, each series representing the entire undivided
interest in a separate portfolio of assets. This Agreement relates solely to the
Fund.
The Board of Trustees of the Trust (the "Trustees") has selected Xxxx Xxxxxxx
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund, and to provide certain other services, as more fully
set forth below, and the Adviser is willing to provide such advice, management
and services under the terms and conditions hereinafter set forth.
Accordingly, the Adviser and the Trust, on behalf of the Fund, agree as follows:
1. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a) Amended and Restated Declaration of Trust dated July 1, 1996, as amended
from time to time (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Adviser as investment adviser for
the Fund and approving the form of this Agreement;
(d) The Trust's Code of Ethics.
The Trust will furnish to the Adviser from time to time copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. INVESTMENT AND MANAGEMENT SERVICES. The Adviser will use its best efforts to
provide to the Fund continuing and suitable investment programs with respect to
investments, consistent with the investment objectives, policies and
restrictions of the Fund. In the performance of the Adviser's duties hereunder,
subject always (x) to the provisions contained in the documents delivered to the
Adviser pursuant to Section 1, as each of the same may from time to time be
amended or supplemented, and (y) to the limitations set forth in the Fund's
then- current Prospectus and Statement of Additional Information included in the
registration statement of the Trust as in effect from time to time under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), the Adviser will, at its own expense:
(a) furnish the Fund with advice and recommendations, consistent with the
investment objectives, policies and restrictions of the Fund, with respect to
the purchase, holding and disposition of portfolio securities, alone or in
consultation with any subadviser or subadvisers appointed pursuant to this
Agreement and subject to the provisions of any sub-investment management
contract respecting the responsibilities of such subadviser or subadvisers;
(b) advise the Fund in connection with policy decisions to be made by the
Trustees or any committee thereof with respect to the Fund's investments and, as
requested, furnish the Fund with research, economic and statistical data in
connection with the Fund's investments and investment policies;
(c) provide administration of the day-to-day investment operations of the Fund;
(d) submit such reports relating to the valuation of the Fund's securities as
the Trustees may reasonably request;
(e) assist the Fund in any negotiations relating to the Fund's investments with
issuers, investment banking firms, securities brokers or dealers and other
institutions or investors;
(f) consistent with the provisions of Section 7 of this Agreement, place orders
for the purchase, sale or exchange of portfolio securities with brokers or
dealers selected by the Adviser, PROVIDED that in connection with the placing of
such orders and the selection of such brokers or dealers the Adviser shall seek
to obtain execution and pricing within the policy guidelines determined by the
Trustees and set forth in the Prospectus and Statement of Additional Information
of the Fund as in effect from time to time;
(g) provide office space and office equipment and supplies, the use of
accounting equipment when required, and necessary executive, clerical and
secretarial personnel for the administration of the affairs of the Fund;
(h) from time to time or at any time requested by the Trustees, make reports to
the Fund of the Adviser's performance of the foregoing services and furnish
advice and recommendations with respect to other aspects of the business and
affairs of the Fund;
(i) maintain all books and records with respect to the Fund's securities
transactions required by the 1940 Act, including subparagraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 thereunder (other than those records
being maintained by the Fund's custodian or transfer agent) and preserve such
records for the periods prescribed therefor by Rule 31a-2 of the 1940 Act (the
Adviser agrees that such records are the property of the Fund and will be
surrendered to the Fund promptly upon request therefor);
(j) obtain and evaluate such information relating to economies, industries,
businesses, securities markets and securities as the Adviser may deem necessary
or useful in the discharge of the Adviser's duties hereunder;
(k) oversee, and use the Adviser's best efforts to assure the performance of the
activities and services of the custodian, transfer agent or other similar agents
retained by the Fund;
(l) give instructions to the Fund's custodian as to deliveries of securities to
and from such custodian and transfer of payment of cash for the account of the
Fund; and
(m) appoint and employ one or more sub-advisors satisfactory to the Fund under
sub- investment management agreements.
3. EXPENSES PAID BY THE ADVISER. The Adviser will pay:
(a) the compensation and expenses of all officers and employees of the Trust;
(b) the expenses of office rent, telephone and other utilities, office
furniture, equipment, supplies and other expenses of the Fund; and
(c) any other expenses incurred by the Adviser in connection with the
performance of its duties hereunder.
4. EXPENSES OF THE FUND NOT PAID BY THE ADVISER. The Adviser will not be
required to pay any expenses which this Agreement does not expressly make
payable by it. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 3, the Adviser will not be
required to pay under this Agreement:
(a) any and all expenses, taxes and governmental fees incurred by the Trust or
the Fund prior to the effective date of this Agreement;
(b) without limiting the generality of the foregoing clause (a), the expenses of
organizing the Trust and the Fund (including without limitation, legal,
accounting and auditing fees and expenses incurred in connection with the
matters referred to in this clause (b), of initially registering shares of the
Trust under the Securities Act of 1933, as amended, and of qualifying the shares
for sale under state securities laws for the initial offering and sale of
shares;
(c) the compensation and expenses of Trustees who are not interested persons (as
used in this Agreement, such term shall have the meaning specified in the 0000
Xxx) of the Adviser and of independent advisers, independent contractors,
consultants, managers and other unaffiliated agents employed by the Fund other
than through the Adviser;
(d) legal, accounting, financial management, tax and auditing fees and expenses
of the Fund (including an allocable portion of the cost of its employees
rendering such services to the Fund);
(e) the fees and disbursements of custodians and depositories of the Fund's
assets, transfer agents, disbursing agents, plan agents and registrars;
(f) taxes and governmental fees assessed against the Fund's assets and payable
by the Fund;
(g) the cost of preparing and mailing dividends, distributions, reports, notices
and proxy materials to shareholders of the Fund;
(h) brokers' commissions and underwriting fees;
(i) the expense of periodic calculations of the net asset value of the shares of
the Fund; and
(j) insurance premiums on fidelity, errors and omissions and other coverages.
5. COMPENSATION OF THE ADVISER. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided, the
Adviser shall be entitled to a fee, paid monthly in arrears, at an annual rate
equal to (i) 0.70% of the average daily net asset value of the Fund up to
$500,000,000 of average daily net assets, (ii) 0.65% of the next $500,000,000 of
the average daily net asset value of the Fund, (iii) 0.60% of the next
$1,000,000,000 of the average daily net asset value of the Fund, and (iv) 0.55%
of the average daily net asset value of the Fund in excess of $2,000,000,000.
The "average daily net assets" of the Fund shall be determined on the basis set
forth in the Fund's Prospectus or otherwise consistent with the 1940 Act and the
regulations promulgated thereunder. The Adviser will receive a pro rata portion
of such monthly fee for any periods in which the Adviser serves as investment
adviser to the Fund for less than a full month. On any day that the net asset
value calculation is suspended as specified in the Fund's Prospectus, the net
asset value for purposes of calculating the advisory fee shall be calculated as
of the date last determined.
In addition, the Adviser may agree not to impose all or a portion of its fee (in
advance of the time its fee would otherwise accrue) and/or undertake to make any
other payments or arrangements necessary to limit the Fund's expenses to any
level the Adviser may specify. Any fee reduction or undertaking shall constitute
a binding modification of this Agreement while it is in effect but may be
discontinued or modified prospectively by the Adviser at any time.
6. OTHER ACTIVITIES OF THE ADVISER AND ITS AFFILIATES. Nothing herein contained
shall prevent the Adviser or any affiliate or associate of the Adviser from
engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it is specifically
understood that officers, directors and employees of the Adviser and those of
its parent company, Xxxx Xxxxxxx Life Insurance Company, or other affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Adviser or of its affiliates and to said affiliates
themselves.
The Adviser shall have no obligation to acquire with respect to the Fund a
position in any investment which the Adviser, its officers, affiliates or
employees may acquire for its or their own accounts or for the account of
another client, if, in the sole discretion of the Adviser, it is not feasible or
desirable to acquire a position in such investment on behalf of the Fund.
Nothing herein contained shall prevent the Adviser from purchasing or
recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security.
7. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any of
its investment management subsidiaries, nor any of the Adviser's or such
investment management subsidiaries' directors, officers or employees will act as
principal or agent or receive any commission, except as may be permitted by the
1940 Act and rules and regulations promulgated thereunder. If any occasions
shall arise in which the Adviser advises persons concerning the shares of the
Fund, the Adviser will act solely on its own behalf and not in any way on behalf
of the Fund. Nothing herein contained shall limit or restrict the Adviser or any
of its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts.
8. NO PARTNERSHIP OR JOINT VENTURE. Neither the Trust, the Fund nor the Adviser
are partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on any of them.
9. NAME OF THE TRUST AND THE FUND. The Trust and the Fund may use the name "Xxxx
Xxxxxxx" or any name or names derived from or similar to the names "Xxxx Xxxxxxx
Advisers, Inc.", "Xxxx Xxxxxxx Life Insurance Company", or "Xxxx Xxxxxxx
Financial Services, Inc." only for so long as this Agreement remains in effect.
At such time as this Agreement shall no longer be in effect, the Trust and the
Fund will (to the extent that they lawfully can) cease to use such a name or any
other name indicating that the Fund is advised by or otherwise connected with
the Adviser. The Fund acknowledges that it has adopted the name Xxxx Xxxxxxx
Fundamental Value Fund through permission of Xxxx Xxxxxxx Life Insurance
Company, a Massachusetts insurance company, and agrees that Xxxx Xxxxxxx Life
Insurance Company reserves to itself and any successor to its business the right
to grant the nonexclusive right to use the name "Xxxx Xxxxxxx" or any similar
name or names to any other corporation or entity, including but not limited to
any investment company of which Xxxx Xxxxxxx Life Insurance Company or any
subsidiary or affiliate thereof shall be the investment adviser.
10. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser 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, except 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 it of
its obligations and duties under this Agreement. Any person, even though also
employed by the Adviser, who may be or become an employee of and paid by the
Trust shall be deemed, when acting within the scope of his employment by the
Fund, to be acting in such employment solely for the Trust and not as the
Adviser's employee or agent.
11. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain in
force until June 30, 2002, and from year to year thereafter, but only so long as
such continuance is specifically approved at least annually by (a) a majority of
the Trustees who are not interested persons of the Adviser or (other than as
Board members) of the Fund, cast in person at a meeting called for the purpose
of voting on such approval, and (b) either (i) the Trustees or (ii) a majority
of the outstanding voting securities of the Fund. This Agreement may, on 60
days' written notice, be terminated at any time without the payment of any
penalty by the vote of a majority of the outstanding voting securities of the
Fund, by the Trustees or by the Adviser. Termination of this Agreement shall not
be deemed to terminate or otherwise invalidate any provisions of any contract
between the Adviser and any other series of the Trust. This Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Section 11, the definitions contained in Section 2(a) of the
1940 Act (particularly the definitions of "assignment," "interested person" and
"voting security") shall be applied.
12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Agreement shall be effective until approved by
(a) the Trustees, including a majority of the Trustees who are not interested
persons of the Adviser or (other than as Trustees) of the Fund, cast in person
at a meeting called for the purpose of voting on such approval, and (b) a
majority of the outstanding voting securities of the Fund, as defined in the
1940 Act.
13. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of The Commonwealth of Massachusetts.
14. SEVERABILITY. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
15. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously 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. The name Xxxx Xxxxxxx Fundamental Value Fund is a series designation
of the Trustees under the Trust's Declaration of Trust. The Declaration of Trust
has been filed with the Secretary of State of The Commonwealth of Massachusetts.
The obligations of the Fund are not personally binding upon, nor shall resort be
had to the private property of, any of the Trustees, shareholders, officers,
employees or agents of the Trust, but only upon the Fund and its property. The
Fund shall not be liable for the obligations of any other series of the
Trust and no other series shall be liable for the Fund's obligations hereunder.
Yours very truly,
XXXX XXXXXXX INVESTMENT TRUST
on behalf of Xxxx Xxxxxxx Fundamental Value Fund
By: ___________________________
Xxxxxxx X. Xxxx
President
The foregoing contract
is hereby agreed to as
of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By: ___________________________
Xxxxx X. Xxxxxx
Vice President and Secretary
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