ADVISORS SERIES TRUST INVESTMENT ADVISORY AGREEMENT Huber Capital Equity Income Fund Huber Capital Small Cap Value Fund
Xxxxx
Capital Equity Income Fund
Xxxxx
Capital Small Cap Value Fund
THIS
INVESTMENT ADVISORY AGREEMENT is made as of the 21st day of June, 2007,
by and between Advisors Series Trust, a Delaware business trust (hereinafter
called the "Trust"), on behalf of the following series of the Trust, Xxxxx
Capital Equity Income Fund and the Xxxxx Capital Small Cap Value Fund (the
"Funds") and Xxxxx Capital Management, LLC, a California limited liability
company (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS,
the Trust is an open-end management investment company, registered as such
under
the Investment Company Act of 1940 (the "Investment Company Act");
and
WHEREAS,
the Funds are each a series of the Trust having separate assets and liabilities;
and
WHEREAS,
the Adviser is registered as an investment adviser under the Investment Advisers
Act of 1940 (the "Advisers Act") (or is exempt from registration) and is engaged
in the business of supplying investment advice as an independent contractor;
and
WHEREAS,
the Trust desires to retain the Adviser to render advice and services to the
Funds pursuant to the terms and provisions of this Agreement, and the Adviser
desires to furnish said advice and services;
NOW,
THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties to this Agreement, intending to be legally
bound hereby, mutually agree as follows:
1. APPOINTMENT
OF ADVISER. The Trust hereby employs the Adviser and the
Adviser hereby accepts such employment, to render investment advice and related
services with respect to the assets of the Funds for the period and on the
terms
set forth in this Agreement, subject to the supervision and direction of the
Trust's Board of Trustees.
2. DUTIES
OF ADVISER.
(a) General
Duties. The Adviser shall act as investment adviser to the Funds and
shall supervise investments of the Funds on behalf of the Funds in accordance
with the investment objectives, policies and restrictions of the Funds as set
forth in the Funds’ and Trust's governing documents, including, without
limitation, the Trust's Agreement and Declaration of Trust and By-Laws; the
Funds’ prospectus, statement of additional information and undertakings; and
such other limitations, policies and procedures as the Trustees may impose
from
time to time in writing to the Adviser. In providing such services,
the Adviser shall at all times adhere to the provisions and restrictions
contained in the federal securities laws, applicable state securities laws,
the
Internal Revenue Code, the Uniform Commercial Code and other applicable
law.
Without
limiting the generality of the foregoing, the Adviser shall: (i) furnish the
Funds with advice and recommendations with respect to the investment of the
Funds’ assets and the purchase and sale of portfolio securities for the Funds,
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e., placing the orders); (ii) manage and oversee the
investments of the Funds, subject to the ultimate supervision and direction
of
the Trust's Board of Trustees; (iii) vote proxies for the Funds, file ownership
reports under Section 13 of the Securities Exchange Act of 1934 for the Funds,
and take other actions on behalf of the Funds; (iv) maintain the books and
records required to be maintained by the Funds except to the extent arrangements
have been made for such books and records to be maintained by the administrator
or another agent of the Funds; (v) furnish reports, statements and other data
on
securities, economic conditions and other matters related to the investment
of
the Funds’ assets which the Funds’ administrator or distributor or the officers
of the Trust may reasonably request; and (vi) render to the Trust's Board of
Trustees such periodic and special reports with respect to each Funds’
investment activities as the Board may reasonably request, including at least
one in-person appearance annually before the Board of Trustees.
(b) Brokerage. The
Adviser shall be responsible for decisions to buy and sell securities for the
Funds, for broker-dealer selection, and for negotiation of brokerage commission
rates, provided that the Adviser shall not direct order to an affiliated person
of the Adviser without general prior authorization to use such affiliated broker
or dealer for the Trust's Board of Trustees. The Adviser's primary
consideration in effecting a securities transaction will be execution at the
most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Adviser may take the following into consideration:
the best net price available; the reliability, integrity and financial condition
of the broker-dealer; the size of and difficulty in executing the order; and
the
value of the expected contribution of the broker-dealer to the investment
performance of the Funds on a continuing basis. The price to the
Funds in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of
the
portfolio execution services offered.
Subject
to such policies as the Board of Trustees of the Trust may determine, the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Funds to pay a broker or dealer that provides (directly or
indirectly) brokerage or research services to the Adviser an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect
to
the Trust. The Adviser is further authorized to allocate the orders
placed by it on behalf of the Funds to such brokers or dealers who also provide
research or statistical material, or other services, to the Trust, the Adviser,
or any affiliate of either. Such allocation shall be in such amounts
and proportions as the Adviser shall determine, and the Adviser shall report
on
such allocations regularly to the Trust, indicating the broker-dealers to whom
such allocations have been made and the basis therefor. The Adviser
is also authorized to consider sales of shares as a factor in the selection
of
brokers or dealers to execute portfolio transactions, subject to the
requirements of best execution, I.E., that such brokers or dealers are able
to
execute the order promptly and at the best obtainable securities
price.
On
occasions when the Adviser deems the purchase or sale of a security to be in
the
best interest of the Funds as well as of other clients, the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient
execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made
by
the Adviser in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Funds and to such other
clients.
3. REPRESENTATIONS
OF THE ADVISER.
(a) The
Adviser shall use its best judgment and efforts in rendering the advice and
services to the Funds as contemplated by this Agreement.
(b) The
Adviser shall maintain all licenses and registrations necessary to perform
its
duties hereunder in good order.
(c) The
Adviser shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act, and any other applicable state and/or
self-regulatory organization regulations.
(d) The
Adviser shall maintain errors and omissions insurance in an amount at least
equal to that disclosed to the Board of Trustees in connection with their
approval of this Agreement.
4.
INDEPENDENT CONTRACTOR. The Adviser shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized to do so, have no authority to act for or
represent the Trust or the Funds in any way, or in any way be deemed an agent
for the Trust or for the Funds. It is expressly understood and agreed
that the services to be rendered by the Adviser to the Funds 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.
5.
ADVISER'S PERSONNEL. 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 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 information, 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 or the Trust's Board of Trustees may desire and reasonably
request.
6.
EXPENSES.
(a)
With
respect to the operation of the Funds, the Adviser shall be responsible for
(i)
providing the personnel, office space and equipment reasonably necessary for
the
operation of the Funds, (ii) the expenses of printing and distributing extra
copies of the Funds' prospectus, statement of additional information, and sales
and advertising materials (but not the legal, auditing or accounting fees
attendant thereto) to prospective investors (but not to existing shareholders),
and (iii) the costs of any special Board of Trustees meetings or shareholder
meetings convened for the primary benefit of the Adviser. If the
Adviser has agreed to limit the operating expenses of the Funds, the Adviser
shall also be responsible on a monthly basis for any operating expenses that
exceed the agreed upon expense limit.
(b) The
Funds are responsible for and have assumed the obligation for payment of all
of
their expenses, other than as stated in Subparagraph 6(a) above, including
but
not limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses;
all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Trust for the benefit of the Funds
including all fees and expenses of their custodian, shareholder services agent
and accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if any;
a
pro rata portion of expenditures in connection with meetings of the Funds'
shareholders and the Trust's Board of Trustees that are properly payable by
the
Funds; salaries and expenses of officers and fees and expenses of members of
the
Trust's Board of Trustees or members of any advisory board or committee who
are
not members of, affiliated with or interested persons of the Adviser; insurance
premiums on property or personnel of each Fund which inure to its benefit,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Funds or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues;
fees
and expenses (including legal fees) of registering and maintaining registration
of its shares for sale under federal and applicable state and foreign securities
laws; 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 Funds, if any; and all
other
charges and costs of their operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
(c) The
Adviser may voluntarily absorb certain Fund expenses or waive the Adviser's
own
advisory fee.
(d) To
the extent the Adviser incurs any costs by assuming expenses which are an
obligation of the Funds as set forth herein, the Funds shall promptly reimburse
the Adviser for such costs and expenses, except to the extent the Adviser has
otherwise agreed to bear such expenses. To the extent the services
for which a Fund is obligated to pay are performed by the Adviser, the Adviser
shall be entitled to recover from such Fund to the extent of the Adviser's
actual costs for providing such services. In determining the Adviser's actual
costs, the Adviser may take into account an allocated portion of the salaries
and overhead of personnel performing such services.
7.
INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) The
Funds shall pay to the Adviser, and the Adviser agrees to accept, as full
compensation for all investment management and advisory services furnished
or
provided to such Funds pursuant to this Agreement, an annual management fee
at
the rate set forth in Schedule A to this Agreement.
(b) The
management fee shall be accrued daily by the Funds and paid to the Adviser
on
the first business day of the succeeding month.
(c) The
initial fee under this Agreement shall be payable on the first business day
of
the first month following the effective date of this Agreement and shall be
prorated as set forth below. If this Agreement is terminated prior to
the end of any month, 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, and shall be payable within ten (10) days after the date of
termination.
(d) The
fee payable to the Adviser under this Agreement will be reduced to the extent
of
any receivable owed by the Adviser to the Funds and as required under any
expense limitation applicable to a Funds.
(e) The
Adviser voluntarily may reduce any portion of the compensation or reimbursement
of expenses due to it pursuant to this Agreement and may agree to make payments
to limit the expenses which are the responsibility of a Fund under this
Agreement. Any such reduction or payment shall be applicable only to
such specific reduction or payment and shall not constitute an agreement to
reduce any future compensation or reimbursement due to the Adviser hereunder
or
to continue future payments. 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.
(f) Any
such reductions made by the Adviser in its fees or payment of expenses which
are
the Funds' obligation are subject to reimbursement by the Funds to the Adviser,
if so requested by the Adviser, in subsequent fiscal years if the aggregate
amount actually paid by the Funds toward the operating expenses for such fiscal
year (taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. Under the expense limitation agreement,
the Adviser may recoup reimbursements made in any fiscal year of the Funds
over
the following three fiscal years. Any such reimbursement is also
contingent upon Board of Trustees review and approval at time the reimbursement
is made. Such reimbursement may not be paid prior to the Funds'
payment of current ordinary operating expenses.
(g) 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. 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.
8.
NO SHORTING; NO BORROWING. The Adviser agrees that neither
it nor any of its officers or employees shall take any short position in the
shares of the Funds. This prohibition shall not prevent the purchase
of such shares by any of the officers 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 Investment Company
Act. The Adviser agrees that neither it nor any of its officers or
employees shall borrow from the Funds or pledge or use the Funds’ assets in
connection with any borrowing not directly for the Funds'
benefit. For this purpose, failure to pay any amount due and payable
to the Funds for a period of more than thirty (30) days shall constitute a
borrowing.
9.
CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE
LAWS. Nothing herein contained shall be deemed to require
the Trust or the Funds to take any action contrary to the Trust's Agreement
and
Declaration of Trust, By-Laws, 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 Funds. In
this connection, the Adviser acknowledges that the Trustees retain ultimate
plenary authority over the Funds and may take any and all actions necessary
and
reasonable to protect the interests of shareholders.
10.
REPORTS AND ACCESS. The Adviser agrees to supply such
information to the Funds' administrator and to permit such compliance
inspections by the Funds' administrator as shall be reasonably necessary to
permit the administrator to satisfy its obligations and respond to the
reasonable requests of the Trustees.
11. ADVISER'S
LIABILITIES AND INDEMNIFICATION.
(a) The
Adviser shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Funds' offering
materials (including the prospectus, the statement of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Trust or another third party for inclusion
therein.
(b) The
Adviser shall be liable to the Funds for any loss (including brokerage charges)
incurred by the Funds as a result of any improper investment made by the
Adviser.
(c) In
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties hereunder on the part of the Adviser,
the
Adviser shall not be subject to liability to the Trust or the Funds or to any
shareholder of the Funds 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 Funds.
(d) Each
party to this Agreement shall indemnify and hold harmless the other party and
the shareholders, directors, officers and employees of the other party (any
such
person, an "Indemnified Party") against any loss, liability, claim, damage
or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party's
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance
of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e) No
provision of this Agreement shall be construed to protect any Trustee or officer
of the Trust, or officer of the Adviser, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
12.
NON-EXCLUSIVITY; TRADING FOR ADVISER'S OWN ACCOUNT. The
Trust's employment of the Adviser is not an exclusive arrangement. The Trust
may
from time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Adviser may act as
investment adviser for any other person, and shall not in any way be limited
or
restricted from buying, selling or trading any securities for its or their
own
accounts or the accounts of others for whom it or they may be acting, provided,
however, that the Adviser expressly represents that it will undertake no
activities which will adversely affect the performance of its obligations to
the
Funds under this Agreement; and provided further that the Adviser will adhere
to
a code of ethics governing employee trading and trading for proprietary accounts
that conforms to the requirements of the Investment Company Act and the Advisers
Act and has been approved by the Trust's Board of Trustees.
13.
TERM.
This
Agreement shall become effective at the time the Funds commence operations
pursuant to an effective amendment to the Trust's Registration Statement under
the Securities Act of 1933 and shall remain in effect for a period of two (2)
years, unless sooner terminated as hereinafter provided. This
Agreement shall continue in effect thereafter for additional periods not
exceeding one (l) year so long as such continuation is approved for the Funds
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 each Fund and (ii) the vote
of
a majority of the Trustees of the Trust who are not parties to this Agreement
nor interested persons thereof, cast in person at a meeting called for the
purpose of voting on such approval. The terms "majority of the
outstanding voting securities" and "interested persons" shall have the meanings
as set forth in the Investment Company Act.
14.
RIGHT TO USE NAME.
The
Adviser warrants that the Funds' names are not deceptive or misleading and
that
the Adviser has rights to any distinctive name used by the Funds. The
Funds acknowledge that their use of any distinctive name is derivative of their
relationship with the Adviser. The Funds may use the names “Xxxxx
Capital Equity Income Fund” and “Xxxxx Capital Small Cap Value Fund” or any name
derived from or using the name Xxxxx only for so long as this Agreement or
any
extension, renewal or amendment hereof remains in effect. Within
sixty (60) days from such time as this Agreement shall no longer be in effect,
the Funds shall cease to use such a name or any other name connected with the
Adviser.
15.
TERMINATION; NO ASSIGNMENT.
(a) This
Agreement may be terminated by the Trust on behalf of the Funds at any time
without payment of any penalty, by the Board of Trustees of the Trust or by
vote
of a majority of the outstanding voting securities of a Fund, upon sixty (60)
days' written notice to the Adviser, and by the Adviser upon sixty (60) days'
written notice to the Funds. In the event of a termination, the
Adviser shall cooperate in the orderly transfer of the Funds’ affairs and, at
the request of the Board of Trustees, transfer any and all books and records
of
the Funds maintained by the Adviser on behalf of the Funds.
(b) This
Agreement shall terminate automatically in the event of any transfer or
assignment thereof, as defined in the Investment Company Act.
16. SEVERABILITY. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute or rule, or shall be otherwise rendered invalid, the remainder
of this Agreement shall not be affected thereby.
17. CAPTIONS. 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.
18.
GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without giving
effect to the conflict of laws principles thereof; provided that nothing herein
shall be construed to preempt, or to be inconsistent with, any federal law,
regulation or rule, including the Investment Company Act and the Advisers Act
and any rules and regulations promulgated thereunder.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year first
above written.
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on
behalf of the Xxxxx
Capital Equity Income Fund
Xxxxx
Capital Small Cap Value Fund
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XXXXX CAPITAL MANAGEMENT, LLC | |||
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By:
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/s/Xxxxxxx X. Xxxx |
By:
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/s/Xxx Xxxxx | |
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Name:
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Xxxxxxx X. Xxxx |
Name:
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Xxx Xxxxx | |
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Title:
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Treasurer |
Title:
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Chief Executive Officer | |
SCHEDULE
A
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Series
or Fund of Advisors Series Trust
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Annual
Fee Rate
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Xxxxx
Capital Equity Income Fund
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1.00%
of the Fund’s average daily net assets between $0 and $10 billion; 0.75%
of the Fund’s average daily net assets between $10 billion and $20
billion, and 0.50% of the Fund’s average daily net assets for assets in
excess of $20 billion
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Xxxxx
Capital Small Cap Value Fund
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1.50%
of the Fund’s average daily net assets for assets between $0 and $5
billion and 1.00% of the Fund’s average daily net assets for assets in
excess of $5 billion
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