EXHIBIT 5.1
INVESTMENT ADVISORY AGREEMENT
XXXXXX OMNI INVESTMENT TRUST
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made
this ____ day of _________, 1997, between XXXXXX ASSOCIATES,
INC., a Delaware corporation ("Xxxxxx Associates"), and XXXXXX
OMNI INVESTMENT TRUST, a Massachusetts business trust (the
"Trust").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), currently consisting of one portfolio
series (the "Fund") having its own investment policies, and has
registered its shares for public offering under the Securities
Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate series
of shares, each with its own separate investment portfolio, one
of such series created by the Trust being the Fund; and
WHEREAS, the Trust and Xxxxxx Associates deem it mutually
advantageous that Xxxxxx Associates should assist the Trustees
and officers of the Trust in the management of the securities
portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints Xxxxxx
----------- Associates as investment adviser and
manager with respect to the Fund for the period and on the terms
set forth in this Agreement. Xxxxxx Associates hereby accepts
such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Investment Advisory Functions. Subject to the
----------------------------- approval of the
Trustees of the Trust and, if required, the shareholders of the
Fund, Xxxxxx Associates is authorized to engage one or more sub-
advisers in connection with Xxxxxx Associates' duties and
responsibilities under this Agreement, which sub-advisers may be
affiliates of Xxxxxx Associates. In its capacity as investment
adviser to the Fund, Xxxxxx Associates shall have the following
duties and responsibilities:
(a) To manage the investment operations of the
Fund and the composition of its investment
portfolio, and to determine without prior
consultation with the Trust, what securities
and other assets of the Fund will be
acquired, held, disposed of or loaned, in
conformity with the investment objective,
policies and restrictions and the other
statements concerning the Fund in the
Trust's declaration of trust, as amended
from time to time (the "Declaration of
Trust"), bylaws, and registration statements
under the
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1940 Act and the 1933 Act, the Investment
Advisers Act of 1940, as amended (the
"Advisers Act"), the rules thereunder, and
all other applicable federal and state laws
and regulations, and the provisions of the
Internal Revenue Code of 1986, as amended,
applicable to the Fund as a regulated
investment company;
(b) To cause its officers to attend meetings and
furnish oral or written reports, as the
Trust may reasonably require, in order to
keep the Trustees and appropriate officers
of the Trust fully informed as to the
condition of the investment portfolio of the
Fund, the investment recommendations of
Xxxxxx Associates, and the investment
considerations which have given rise to
those recommendations;
(c) To supervise the purchase and sale of
securities as directed by the appropriate
officers of the Trust or any sub-adviser
engaged by Xxxxxx Associates pursuant to the
authority granted in this Section 2;
(d) To maintain all books and records required
to be maintained by Xxxxxx Associates
pursuant to the 1940 Act and the rules and
regulations promulgated thereunder, as the
same may be amended from time to time, with
respect to transactions on behalf of the
Fund, and shall furnish the Trustees with
such periodic and special reports as the
Trustees reasonably may request. Xxxxxx
Associates agrees that all records which it
maintains for the Fund or the Trust are the
property of the Trust, agrees to permit the
reasonable inspection thereof by the Trust
or its designees and agrees to preserve for
the periods prescribed under the 1940 Act
any records which it maintains for the Trust
and which are required to be maintained
under the 1940 Act, and further agrees to
surrender promptly to the Trust or its
designees any records which it maintains for
the Trust upon request by the Trust; and
(e) At such times as shall be reasonably
requested by the Trustees, to provide the
Trustees with economic, operational and
investment data and reports, including
without limitation all information and
materials reasonably requested by or
requested to be delivered to the Trustees of
the Trust pursuant to Section 15(c) of the
1940 Act, and make available to the Trustees
any economic, statistical and investment
services normally available to similar
investment company clients of Xxxxxx
Associates.
3. Further Obligations. In all matters relating to the
------------------- performance of this Agreement,
Xxxxxx Associates shall act in conformity with the Trust's
Declaration of Trust, bylaws and currently effective registration
statements under the 1940 Act and the 1933 Act and any amendments
or supplements thereto (the "Registration Statements") and with
the written policies, procedures and guidelines of the Fund, and
written instructions and directions of the Trustees
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of the Trust and shall comply with the requirements of the 1940
Act, the Advisers Act, the rules thereunder, and all other
applicable federal and state laws and regulations. The Trust
agrees to provide Xxxxxx Associates with copies of the Trust's
Declaration of Trust, bylaws, Registration Statements, written
policies, procedures and guidelines, and written instructions and
directions of the Trustees, and any amendments or supplements to
any of them at, or, if practicable, before the time such
materials become effective.
4. Obligations of Trust. The Trust shall have the
-------------------- following obligations under
this Agreement:
(a) To keep Xxxxxx Associates continuously and
fully informed as to the composition of the investment portfolio
of the Fund and the nature of all of the Fund's assets and
liabilities from time to time;
(b) To furnish Xxxxxx Associates with a
certified copy of any financial statement or report prepared for
the Fund by certified or independent public accountants and with
copies of any financial statements or reports made to the Fund's
shareholders or to any governmental body or securities exchange;
(c) To furnish Xxxxxx Associates with any
further materials or information which Xxxxxx Associates may
reasonably request to enable it to perform its function under
this Agreement; and
(d) To compensate Xxxxxx Associates for its
services in accordance with the provisions of paragraph 5 hereof.
5. Compensation. The Trust shall pay to Xxxxxx
Associates
------------ for its services under this Agreement a
fee, payable in United States dollars, at an annual rate of 0.90%
of the average daily net asset value of the Fund. This fee shall
be computed and accrued daily and payable monthly on the last day
of each month during which or part of which this Agreement is in
effect. For the month during which this Agreement becomes
effective and the month during which it terminates, however,
there shall be an appropriate proration of the fee payable for
such month based on the number of calendar days of such month
during which this Agreement is effective.
6. Expenses.
--------
(a) Expenses Paid by the Trust. The Trust assumes and
-------------------------- shall pay all expenses
incidental to its operations and business not specifically
assumed or agreed to be paid by Xxxxxx Associateshereunder or
otherwise, including, but not limited to, any compensation, fees
or reimbursements which the Trust pays to its Trustees who are
not interested persons of Xxxxxx Associates; compensation of the
Fund's custodian, transfer agent, registrar and dividend
disbursing agent and other service providers; legal, accounting,
audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and
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all other expenses in connection with execution of portfolio
transactions (including any appropriate commissions paid to
Xxxxxx Associates or its affiliates for effecting exchange
listed, over-the-counter or other securities transactions);
interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates
and expenses of delivering such certificates to the purchasers
thereof; expenses of local representation in Massachusetts;
expenses of shareholders' meetings and of preparing, printing and
distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all
expenses incurred in complying with all federal and state laws
and the laws of any foreign country applicable to the issue,
offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing, printing and mailing
prospectuses and statements of additional information to
shareholders of the Fund; and all fees, dues and other expenses
incurred by the Trust in connection with the membership of the
Trust in any trade association or other investment company
organization. To the extent that Xxxxxx Associates shall perform
any of the above described administrative and clerical functions,
including transfer agency, registry, dividend disbursing,
recordkeeping, bookkeeping, accounting and blue sky monitoring
and registration functions, and the preparation of reports and
returns, the Trust shall pay to Xxxxxx Associates compensation
for, or reimburse Xxxxxx Associates for its expenses incurred in
connection with, such services as Xxxxxx Associates and the Trust
shall agree from time to time, any other provision of this
Agreement notwithstanding.
(b) Expenses Paid by Xxxxxx Associates. Xxxxxx
Associates
---------------------------------- shall pay all its
own costs and expenses incurred in rendering the services
required under this Agreement. In addition to such costs and
expenses, Xxxxxx Associates shall incur and pay the following
expenses relating to the Fund's operations:
(i) Reasonable compensation, fees and related
expenses of the Trust's officers and Trustees, except for such
Trustees who are not interested persons of Xxxxxx Associates;
(ii) Rental of offices of the Trust; and
(iii) Fees of any sub-adviser engaged by Xxxxxx
pursuant to the authority granted in Section 2 hereof.
7. Brokerage Commissions. For purposes of this
Agreement,
--------------------- brokerage commissions paid by
the Fund upon the purchase or sale of its portfolio securities
shall be considered a cost of securities of the Fund and shall be
paid by the Fund. Absent instructions from the Trust to the
contrary, Xxxxxx Associates is authorized and directed to place
Fund portfolio transactions only with brokers and dealers who
render satisfactory service in the execution of orders at the
most favorable prices and at reasonable commission rates,
provided, however, that Xxxxxx Associates may pay a broker an
amount of commission for effecting a securities transaction in
excess of the amount of commission another broker would have
charged for effecting that transaction if Xxxxxx Associates
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
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broker viewed in terms of either that particular transaction or
the overall responsibilities of Xxxxxx Associates. Xxxxxx
Associates is also authorized to consider sales of Fund shares as
a factor in selecting broker-dealers to execute Fund portfolio
transactions. In placing portfolio business with such broker-
dealers, Xxxxxx Associates shall seek the best execution of each
transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the
1940 Act and the Securities Exchange Act of 1934, as amended, and
in the event that Xxxxxx Associates or an affiliate is registered
as a broker-dealer, Xxxxxx Associates may select a broker with
which it or any of its affiliates or the Fund is affiliated.
Xxxxxx Associates or such affiliated broker may effect or execute
Fund portfolio transactions, whether on a securities exchange or
in the over-the-counter market, and receive separate compensation
from the Fund therefor. Notwithstanding the foregoing, the Trust
shall retain the right to direct the placement of all portfolio
transactions, and the Trustees of the Trust may establish
policies or guidelines to be followed by Xxxxxx Associates in
placing portfolio transactions for the Trust pursuant to the
foregoing provisions. Xxxxxx Associates shall report on the
placement of portfolio transactions in the prior fiscal quarter
at each quarterly meeting of such Trustees. To the extent
consistent with applicable law, purchase or sell orders for the
Fund may be aggregated with simultaneous purchase or sell orders
for other clients of Xxxxxx Associates. Whenever Xxxxxx
Associates simultaneously places orders to purchase or sell the
same security on behalf of the Fund and one or more other clients
of Xxxxxx Associates, such orders will be allocated as to price
and amount among all such clients in a manner reasonably believed
by Xxxxxx Associates to be fair and equitable to each client.
The Trust recognizes that in some cases, this procedure may
adversely affect the results obtained for the Fund.
8. Termination. This Agreement may be terminated at
any
----------- time, without penalty, by the Trustees
of the Trust, or by the shareholders of the Fund acting by vote
of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days' advance written
notice of termination be given to Xxxxxx Associates at its
principal place of business. This Agreement may be terminated by
Xxxxxx Associates at any time, without penalty, by giving sixty
(60) days' advance written notice of termination to the Trust,
addressed to its principal place of business. The Trust agrees
that, consistent with the terms of the Trust's Declaration of
Trust, the Trust shall cease to use the name "Xxxxxx" in
connection with the Fund as soon as reasonably practicable
following any termination of this Agreement if Xxxxxx Associates
does not continue to provide investment advice to the Fund after
such termination.
9. Assignment. This Agreement shall terminate
---------- automatically in the event of any
assignment of this Agreement.
10. Term. This Agreement shall continue in effect until
---- April 30, 1998, unless sooner terminated in
accordance with its terms, and shall continue in effect from year
to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority
of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on the approval of the terms of
such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting
securities of the Fund.
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11. Amendments. This Agreement may be amended by the
---------- parties only if such amendment is
specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested
persons of the Fund or Xxxxxx Associates and, (ii) if required by
applicable law, by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Allocation of Expenses. The Trustees shall
determine
---------------------- the basis for making an
appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and any other
series of the Trust and between the Fund and other investment
companies managed by Xxxxxx Associates.
13. Limitation on Personal Liability. NOTICE IS HEREBY
-------------------------------- GIVEN that the
Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts pursuant to a Declaration of Trust
filed in the office of the Secretary of State of the Commonwealth
of Massachusetts. All parties to this Agreement acknowledge and
agree that this Agreement was made by and on behalf of the Trust
by the person executing below as an officer of the Trust and not
individually, that the Trust is a series trust and all debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series shall be
enforceable against the assets held with respect to such series
only, and not against the assets of the Trust generally or
against the assets held with respect to any other series and
further that no trustee, officer or holder of shares of
beneficial interest of the Trust shall be personally liable for
any of the foregoing.
14. Limitation of Liability of Xxxxxx Associates.
Xxxxxx
--------------------------------------------
Associates shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or
for any act or omission taken with respect to the Fund, except
for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of
its obligations and duties hereunder and except to the extent
otherwise provided by law. As used in this Section 14, "Xxxxxx
Associates" shall include any affiliate of Xxxxxx Associates
performing services for the Trust contemplated hereunder and
directors, officers and employees of Xxxxxx Associates and such
affiliates.
15. Activities of Xxxxxx Associates. The services of
------------------------------- Xxxxxx Associates to
the Trust hereunder are not to be deemed to be exclusive, and
Xxxxxx Associates and its affiliates are free to render services
to other parties, so long as its services under this Agreement
are not materially adversely affected or otherwise impaired
thereby. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of Xxxxxx Associates
to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature. It
is understood that trustees, officers and shareholders of the
Trust are or may become interested in Xxxxxx Associates as
directors, officers and shareholders of Xxxxxx Associates, that
directors, officers, employees and shareholders of Xxxxxx
Associates are or may become similarly interested in the Trust,
and that Xxxxxx Associates may become interested in the Trust as
a shareholder or otherwise.
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16. Certain Definitions. The terms "vote of a majority
of
------------------- the outstanding voting
securities", "assignment", "approved at least annually" and
"interested persons" when used herein, shall have the respective
meanings specified in the 1940 Act, as now in effect or hereafter
amended, and the rules and regulations thereunder, subject to
such orders, exemptions and interpretations as may be issued by
the Securities and Exchange Commission under said Act and as may
be then in effect. Where the effect of a requirement of the
federal securities laws reflected in any provision of this
Agreement is made less restrictive by a rule, regulation, order,
interpretation or other authority of the Securities and Exchange
Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule,
regulation, order, interpretation or other authority.
17. Governing Law. This Agreement shall be construed in
------------- accordance with the laws of the State
of Colorado (without giving effect to the conflicts of laws
principles thereof) and the 1940 Act. To the extent that the
applicable laws of the State of Colorado conflict with the
applicable provisions of the 1940 Act, the latter shall control.
18. Miscellaneous. The headings in this Agreement are
------------- included for convenience of reference
only and in no way define or limit any of the provisions thereof
or otherwise affect their construction or effect. 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. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors.
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Investment Advisory Agreement
as of the date and year first above written.
XXXXXX
ASSOCIATES, INC.
By:_________________________
Xxxxxx X.
Xxxxx
President
XXXXXX OMNI
INVESTMENT TRUST
By:_________________________
Name:
Title:
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