TH XXX, XXXXXX INVESTMENT TRUST
INVESTMENT MANAGEMENT CONTRACT
Investment Management Contract dated as of July 27, 2001 between TH XXX,
XXXXXX INVESTMENT TRUST, a Massachusetts business trust (the "Fund"),
and TH XXX, XXXXXX CAPITAL MANAGEMENT, LLC, a Delaware limited liability
company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an investment
program for each series of the Fund, will determine what investments
shall be purchased, held, sold or exchanged by each series of the Fund
and what portion, if any, of the assets of each series of the Fund shall
be held uninvested and shall, on behalf of such series, make changes in
the Fund's investments. Subject always to the control of the Trustees
of the Fund, the Manager will also manage, supervise and conduct the
other affairs and business of the Fund and matters incidental thereto.
In the performance of its duties, the Manager will comply with the
provisions of the Agreement and Declaration of Trust and By-Laws of the
Fund and its stated investment objectives, policies and restrictions,
and will use its best efforts to safeguard and promote the welfare of
the Fund and to comply with other policies which the Trustees may from
time to time determine and shall exercise the same care and diligence
expected of the Trustees.
(b) The Manager, at its expense, will furnish all necessary investment
and management facilities, including salaries of personnel, required for
it to execute its duties faithfully. The Manager will pay the
compensation, if any, of the officers of the Fund carrying out the
investment management and related duties provided for by this Contract.
(c) The Manager shall place all orders for the purchase and sale of
portfolio investments for the Fund's account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall use its best efforts
to obtain for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In
using its best efforts to obtain for the Fund the most favorable price
and execution available, the Manager, bearing in mind the Fund's best
interests at all times, shall consider all factors it deems relevant,
including by way of illustration, price, the size of the transaction,
the nature of the market for the security, the amount of the commission,
the timing of the transaction taking into account market prices and
trends, the reputation, experience and financial stability of the broker
or dealer involved and the quality of service rendered by the broker or
dealer in other transactions. Subject to such policies as the Trustees
of the Fund may determine, the Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused the Fund to pay a broker
or dealer that provides brokerage and research services to the Manager
an amount of commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager 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 Manager's overall responsibilities with respect to the Fund and
to other clients of the Manager as to which the Manager exercises
investment discretion. The Manager agrees that in connection with
purchases or sales of portfolio investments for the Fund's account,
neither the Manager nor any officer, director, employee or agent of the
Manager shall act as a principal or receive any commission other than as
provided in Section 3. The Fund will pay the fees of the Trustees of the
Fund.
(d) The Manager shall pay all expenses incurred in connection with the
organization of the Fund and the initial public offering and sale of its
shares of beneficial interest, provided that upon the issuance and sale
of such shares to the public pursuant to the offering, and only in such
event, the Fund shall become liable for, and to the extent requested
reimburse the Manager for such expenses.
(e) The Manager shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Manager pursuant to this Section 1
other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any
person controlled by or under common control with the Manager, and that
the Manager and any person controlled by or under common control with
the Manager may have an interest in the Fund. It is also understood
that the Manager and any person controlled by or under common control
with the Manager have and may have advisory, management, service or
other contracts with other organizations and persons, and may have other
interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
(a) Investment Management Fee. The Fund will pay to the Manager as
compensation for the Manager's services rendered, for the facilities
furnished and for the expenses borne by the Manager pursuant to Section
1 for each series of the Fund, a fee, computed daily and paid monthly at
the following annual rates:
TH Xxx, Xxxxxx Emerging Opportunities Portfolio: 1.20% of the average
daily net assets.
Such average net asset value shall be determined by taking an average of
all of the determinations of such net asset value during such month at
the close of business on each business day during such month while this
Contract is in effect. Such fee shall be payable for each month within
15 days after the close of such month and shall commence accruing as of
the date of the initial issuance of shares of the Fund to the public.
The fees payable by the Fund to the Manager pursuant to this Section 3
shall be reduced by any commissions, fees, brokerage or similar payments
received by the Manager or any affiliated person of the Manager in
connection with the purchase and sale of portfolio investments of the
Fund, less any direct expenses approved by the Trustees incurred by the
Manager or any affiliated person of the Manager in connection with
obtaining such payments.
In the event that the expenses of the Fund exceed any expense limitation
which the Manager may, by written notice to the Fund, voluntarily
declare to be effective subject to such terms and conditions as the
Manager may prescribe in such notice, the compensation due the Manager
shall be reduced, and, if necessary, the Manager shall assume expenses
of the Fund to the extent required by the terms and conditions of such
expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
(b) Incentive Fee. In addition to the management fee, the Fund will pay
for each series of the Fund an annual incentive fee to the Manager as
follows:
TH Xxx, Xxxxxx Emerging Opportunities Portfolio: 20% of the Aggregate
Incentive Fee Base (as defined below), calculated from the commencement
of operations of such series, less the cumulative amount of incentive
fees paid to the Manager in previous years. The incentive fee payable
(if any) will be determined as of the last day of each fiscal year of
such series. The initial incentive fee payable (if any) will be for the
period from commencement of operations of the initial series of the Fund
through December 31, 2002, and subsequent incentive fees (if any) will
be payable for each subsequent fiscal year (and, if any series of the
Fund is liquidated during a calendar year, for the period from the
beginning of that year to the date of liquidation). The Manager will be
under no obligation to repay any incentive fees previously paid by the
Fund.
The incentive fee will be earned on the performance of securities that
(a) were acquired by such series of the Fund in a private placement and
(b) were not, at the time of acquisition, of the same class as a
publicly traded security unless, with respect to this subsection 3(b) ,
such securities were subject to a contractual restriction on transfer of
90 days or more from acquisition ("Private Equities"). For each Private
Equity holding, the Manager will calculate an "Incentive Fee Base" each
day. The Incentive Fee Base for a security will be calculated on a
cumulative basis from the date of acquisition of the security and will
equal realized gains less realized losses and unrealized depreciation
until the issuer of the security has completed an initial public
offering and any applicable lock-up period on the securities held by
such series has expired and, thereafter, will equal realized gains and
unrealized appreciation less realized losses and unrealized
depreciation. The "Aggregate Incentive Fee Base" is the sum of the
Incentive Fee Bases for all the Private Equity holdings of such series.
Such series will accrue daily a liability for incentive fees payable
equal to 20% of the realized gains and unrealized appreciation less
realized losses and unrealized depreciation on the Private Equity
holdings of such series. At the end of each calendar year, if an
incentive fee is paid to the Manager, the amount of the incentive fee
accrual will be reduced by the amount paid to the Manager. The amount of
incentive fees paid to the Manager may not exceed the incentive fees
accrued by such series.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended unless such amendment be approved at a meeting by the
affirmative vote of a majority of the outstanding shares of the Fund,
and by the vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Trustees of the Fund who
are not interested persons of the Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as
follows:
(a) Either party hereto may at any time terminate this Contract by not
more than sixty days' nor less than thirty days' written notice
delivered or mailed by registered mail, postage prepaid, to the other
party, or
(b) If (i) the Trustees of the Fund or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Fund,
and (ii) a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this Contract,
then this Contract shall automatically terminate at the close of
business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority
of the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares of the Fund" means the affirmative vote, at a
duly called and held meeting of shareholders of the Fund, (a) of the
holders of 67% or more of the shares of the Fund present (in person or
by proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund entitled to vote at such
meeting are present in person or by proxy, or (b) of the holders of more
than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder (the "1940 Act"), subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act; the term "specifically approve at least annually" shall be
construed in a manner consistent with the 1940 Act, and the Rules and
Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934 and the
Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and
duties hereunder, the Manager shall not be subject to any liability to
the Fund or to any shareholder of the Fund, for any act or omission in
the course of, or connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Fund as Trustees and not individually and that the
obligations of or arising out of this instrument are not binding upon
any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, TH XXX, XXXXXX INVESTMENT TRUST and TH XXX, XXXXXX
CAPITAL MANAGEMENT, LLC have each caused this instrument to be signed in
duplicate in its behalf by its President or a Vice President thereunto
duly authorized, all as of the day and year first above written.
TH XXX, XXXXXX INVESTMENT TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Title: Vice President and Clerk
TH XXX, XXXXXX CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx,
Title:
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