INVESTMENT ADVISORY AGREEMENT
GRAVER, BOKHOF, XXXXXXX & XXXXXXXX, a registered investment adviser (the
"Adviser"), a limited partnership organized under the laws of the State of
Illinois and having its principal office and place of business in Chicago,
Illinois (the "Adviser"), and UNIVERSAL CAPITAL INVESTMENT TRUST, a
Massachusetts business trust registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and having its
principal office and place of business in Chicago, Illinois (the "Trust"),
hereby agree as follows:
1. APPOINTMENT OF ADVISER.
(a) INITIAL FUND. The Trust appoints the Adviser to act as manager
and investment adviser to Universal Capital Growth Fund (the "Fund"),
a series of the Trust, for the period and on the terms herein set
forth. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
(b) ADDITIONAL FUNDS. If the Trust establishes one or more series of
shares other than the Fund with respect to which it wishes to retain
the Adviser to render management and investment advisory services
hereunder, it shall notify the Adviser in writing, indicating the
advisory fee which will be payable with respect to the additional
series of shares. If the Adviser is willing to render such services,
it shall notify the Trust in writing, whereupon such series of shares
shall become a Fund hereunder.
2. DUTIES OF ADVISER.
The Adviser, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) INVESTMENT PROGRAM. The Adviser will (i) furnish continuously an
investment program of the Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust (the
"Trustees")) what investments shall be purchased, held, sold or
exchanged by the Fund and what portion, if any, of the assets of the
Fund shall be held uninvested, and (iii) make changes on behalf of the
Trust in the investments of the Fund. The Adviser will also manage,
supervise and conduct the other affairs and business of the Trust and
the Fund and matters incidental thereto, subject always to the control
of the Trustees and to the provisions of the Declaration of Trust and
Bylaws and the 1940 Act.
(b) OFFICE SPACE AND FACILITIES. The Adviser shall furnish the Trust
office space in the offices of the Adviser, or in such other place or
places as may be agreed upon from time to time, and all necessary
office facilities, simple business equipment,
supplies, utilities, and telephone service for managing the affairs
and investments of the Trust. These services are exclusive of the
necessary services and records of any dividend disbursing agent,
transfer agent, registrar, custodian or fund accounting agent.
(c) PERSONNEL. The Adviser shall provide all necessary executive and
clerical personnel for administering the affairs of the Trust and
shall compensate the Trustees and all personnel and officers of the
Trust if such persons are also employees of the Adviser or its
affiliates, except as provided in Paragraph 3(g) hereof.
(d) PORTFOLIO TRANSACTIONS. The Adviser shall place all orders for
the purchase and sale of portfolio securities for the account of the
Fund with brokers or dealers selected by the Adviser, although the
Fund will pay the actual brokerage commissions on portfolio
transactions in accordance with Paragraph 3(d). In executing
portfolio transactions and selecting brokers or dealers, the Adviser
will use its best efforts to seek on behalf of the Trust or the Fund
the best overall terms available for any transaction. The Adviser
shall consider all factors it deems relevant, including the breadth of
the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any (for the specific transaction
and on a continuing basis).
To the extent contemplated by the Trust's registration statement
under the 1933 Act, in evaluating the best overall terms available,
and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Fund and/or other
accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. Consistent with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. and
subject to seeking the most favorable combination of net price and
execution available, the Adviser may consider sales of shares of a
Fund as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund. The Adviser is authorized to pay
to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that
particular transaction or in terms of all of the accounts over which
investment discretion is so exercised.
The Adviser (or an affiliate of the Adviser) may act as broker
for Trust in connection with the purchase or sale of securities by or
to Trust if and to the extent permitted by procedures adopted from
time to time by the Trustees. Such brokerage
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services are not within the scope of the duties of the Adviser under
this agreement, and, within the limits permitted by law and the
Trustees, the Adviser (or an affiliate of the Adviser) may receive
brokerage commissions, fees or other remuneration from Trust for such
services in addition to its fee for services as Adviser.
(e) OTHER SERVICES. Within the limits permitted by law, the Adviser
may receive compensation from the Trust for other services performed
by it for the Trust which are not within the scope of the duties of
the Adviser under this agreement.
3. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by the Adviser as set
forth in Paragraph 2 above, the Trust assumes and shall pay all expenses for all
other Trust operations and activities and shall reimburse the Adviser for any
such expenses incurred by the Adviser. The expenses to be borne by the Trust
shall include, without limitation:
(a) the charges and expenses of any registrar, stock transfer or
dividend disbursing agent, custodian or depository appointed by the
Trust for the safekeeping of its cash, portfolio securities and other
property or agent performing fund accounting services;
(b) payments under the Trust's distribution plan or plans adopted
pursuant to rule 12b-1 under the 1940 Act;
(c) the charges and expenses of independent auditors;
(d) brokerage commissions and any other costs incurred for
transactions in the portfolio securities of the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other governmental
agencies;
(f) the cost of stock certificates (if any) representing shares of
the Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions, including
reimbursements of actual expenses incurred by the Adviser in
performing such functions for the Trust and including compensation of
employees of the Adviser in proportion to the time spent on such
matters;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees and of preparing, printing and mailing proxy
statements, quarterly reports, semi-annual reports, annual reports and
other communications to
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shareholders (but not expenses of printing and mailing any such
documents used for promotional purposes);
(i) all expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of prospectuses and literature used
for promotional purposes);
(j) compensation and travel expenses of Trustees who are not
"interested persons" within the meaning of the 1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder a statement of the shareholder's account, including the
expense of mailing;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure and relations with its shareholders, issuance of Trust
shares and registration and qualification of securities under Federal,
state and other laws;
(m) the expenses of attendance at professional meetings of
organizations such as the Investment Company Institute by the Trustees
and officers of the Trust, and the membership or association dues of
such organizations;
(n) the cost and expense of maintaining the books and records of the
Trust, including general ledger accounting;
(o) the expense of obtaining and maintaining insurance including a
fidelity bond as required by Section 17(g) of the 1940 Act;
(p) interest payable on Trust borrowings; and
(q) postage.
4. ADVISORY FEE.
(a) For the services and facilities to be provided to the Fund by the
Adviser as provided in Paragraph 2 hereof, the Trust shall pay the
Adviser a monthly fee with respect to the Fund as soon as practical
after the last day of each calendar month, which fee shall be paid at
the rate set forth below based upon the Monthly Average Net Assets (as
defined in subparagraph (c) below) of the Fund for such calendar
month:
ADVISORY FEE SCHEDULE
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Monthly Average Monthly
Net Assets Fee Rate
Up to and including $250 million 1/12 of 1.00%
Over $250 million 1/12 of .75%
(b) In the case of termination of this Agreement during any calendar
month, the fee for that month shall be reduced proportionately based
upon the number of calendar days during which it is in effect and the
fee shall be computed upon the average net assets of the Fund for the
business days during which it is so in effect.
(c) The "Monthly Average Net Assets" of the Fund for any calendar
month shall be equal to the quotient produced by dividing (i) the sum
of the net assets of the Fund, determined in accordance with
procedures established from time to time by or under the direction of
the Trustees in accordance with the Agreement and Declaration of Trust
of the Trust, as of the close of business on each day during such
month that the Fund was open for business, by (ii) the number of such
days.
5. EXPENSE LIMITATION.
The Adviser agrees that for any fiscal year of the Trust during which the
total of all expenses of the Fund (including investment advisory fees under this
agreement, but excluding interest, portfolio brokerage commissions and expenses,
taxes and extraordinary items) exceeds the lowest expense limitation imposed in
any state in which the Fund is then making sales of its shares or in which its
shares are then qualified for sale, the Adviser will reimburse the Fund for such
expenses not otherwise excluded from reimbursement by this Paragraph 5 to the
extent that they exceed such expense limitation.
6. TRUST TRANSACTIONS.
The Adviser agrees that neither it nor any of its officers or directors
will take any long or short position in the shares of the Trust; provided,
however, that such prohibition:
(a) shall not prevent the Adviser from purchasing shares of the Trust
if orders to purchase such shares are placed upon the receipt by the
Adviser of purchase orders for such shares and are not in excess of
such purchase orders received by the Adviser; and
(b) shall not prevent the purchase of shares of the Trust by any of
the persons above described for their account and for investment.
7. RELATIONS WITH TRUST.
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Subject to and in accordance with the Agreement and Declaration of Trust
and Bylaws of the Trust and the Articles of Incorporation and Bylaws of the
Adviser, respectively, it is understood that the Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers, or otherwise, that directors,
officers, agents and shareholders of the Adviser are or may be interested in the
Trust as Trustees, officers, shareholders or otherwise, and that the effect of
any such adverse interests shall be governed by the Agreement and Declaration of
Trust, Articles of Incorporation and Bylaws.
8. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST
No provision of this Agreement shall be deemed to protect the Adviser
against any liability to the Trust or its shareholders to which it might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement. Nor shall any provision hereof be
deemed to protect any Trustee or officer of the Trust against any such liability
to which he might otherwise be subject by reason of any willful misfeasance, bad
faith, gross negligence or reckless disregard of his obligations and duties. 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.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) DURATION. This Agreement shall become effective on the date
hereof. Unless terminated as herein provided, this Agreement shall
remain in full force and effect until March 31, 1999 and shall
continue in full force and effect for successive periods of one year
thereafter so long as such continuance is approved at least annually
(i) by either the Trustees or by vote of a majority of the outstanding
voting shares (as defined in the 0000 Xxx) of the Fund, and (ii) in
either event by the vote of a majority of the Trustees who are not
parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
Any approval of this Agreement by the holders of a majority of
the outstanding shares (as defined in the 0000 Xxx) of the Fund shall
be effective to continue this Agreement notwithstanding that this
Agreement has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be
required by any other applicable law or otherwise.
(b) TERMINATION. This Agreement may be terminated at any time,
without payment of any penalty, by vote of the Trustees or by vote of
a majority of the outstanding shares (as defined in the 0000 Xxx) of
the Fund, or by the Adviser on sixty (60) days' written notice to the
other party.
(c) AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its assignment.
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10. SERVICES NOT EXCLUSIVE.
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
11. LIMITATION OF LIABILITY.
The obligations of the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Trust,
personally, but shall bind only the assets and property of the Trust as provided
in the Agreement and Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the Trustees and shareholders
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by the Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in its
Declaration of Trust.
IN WITNESS WHEREOF, this Investment Advisory Agreement has been executed
for the Adviser and the Trust by their duly authorized officers, as of the 15th
day of August, 1997.
GRAVER, BOKHOF, XXXXXXX & XXXXXXXX
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Partner
UNIVERSAL CAPITAL INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
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