INVESTMENT ADVISORY AGREEMENT
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INVESTMENT ADVISORY AGREEMENT, dated this 17th day of August, 2006, by and
between EIP Investment Trust, a Delaware business trust (the "Trust"), on behalf
of EIP Growth and Income Fund (the "Fund"), and Energy Income Partners, LLC, a
Delaware limited liability company (the "Adviser").
WITNESSETH:
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WHEREAS, the Trust is engaged in business as an investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide services to the Fund on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
Article 1. Duties of the Adviser.
(a) The Adviser shall provide the Fund with such investment advice as the
latter may from time to time consider necessary for the proper supervision of
its assets. The Adviser shall act as investment adviser to the Fund and as such
shall furnish continuously an investment program and shall determine from time
to time what securities and other instruments shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held uninvested,
subject always to the restrictions of the Trust's Second Amended and Restated
Declaration of Trust, dated July 31, 2006, and Bylaws, each as amended from time
to time (respectively, the "Declaration" and the "Bylaws"), to the provisions of
the Investment Company Act of 1940 and the rules, regulations and orders
thereunder and to the Fund's then-current Private Placement Memorandum and
Statement of Additional Information. The Adviser also shall exercise voting
rights, rights to consent to corporate actions and any other rights pertaining
to the Fund's portfolio securities in accordance with the Adviser's policies and
procedures as presented to the Trustees of the Trust from time to time. Should
the Trustees at any time, however, make any definite determination to change the
Fund's investment policies and notify the Adviser thereof in writing, the
Adviser shall be bound by such determination for the period, if any, specified
in such notice or until similarly notified that such determination shall be
revoked.
(b) The Adviser shall take, on behalf of the Fund, all actions which it
deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
portfolio securities or other instruments for the Fund's account with brokers or
dealers selected by it, and to that end, the Adviser is authorized as the agent
of the Fund to give instructions to the Custodian of the Fund as to the
deliveries of securities and other instruments and payments of cash for the
account of the Fund. In connection with the selection of such brokers or dealers
and the placing of such orders, the Adviser is directed to seek for the Fund the
best execution available from responsible brokerage firms, taking account of all
factors it deems relevant, including, without limitation, price; the size of the
transaction; the nature of the market for the security; the amount of the
commission; the timing and impact 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 services rendered by the broker or
dealer in other transactions. In fulfilling this requirement, 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 Fund to
pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determined 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 Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion.
(c) The Adviser may from time to time enter into sub-investment advisory
agreements with respect to the Fund with one or more investment advisers with
such terms and conditions as the Adviser may determine, provided that such
sub-investment advisory agreements have been approved in accordance with
applicable provisions of the Investment Company Act of 1940 and any rules,
regulations or orders of the Securities and Exchange Commission thereunder.
Subject to the provisions of Article 6, the Adviser shall not be liable for any
error of judgment or mistake of law by any sub-adviser or for any loss arising
out of any investment made by any sub-adviser or for any act or omission in the
execution and management of the Fund by any sub-adviser.
Article 2. Allocation of Charges and Expenses.
(a) The Adviser shall furnish at its own expense investment advisory and
administrative services, office space, equipment and clerical personnel
necessary for servicing the investments of the Fund and maintaining its
organization, and investment advisory facilities and executive and supervisory
personnel for managing the investments and effecting the portfolio transactions
of the Fund. The Adviser shall arrange, if desired by the Trust, for directors,
officers and employees of the Adviser to serve as Trustees, officers or agents
of the Trust if duly elected or appointment to such positions and subject to
their individual consent and to any limitations imposed by law.
(b) It is understood that the Trust and the Fund will pay all of their own
expenses incurred in their operations and the offering of the Fund's shares,
unless specifically provided otherwise in this Agreement or except to the extent
that the Adviser agrees in a written instrument executed by the Adviser
(specifically referring to this Article 2(b)) to assume or otherwise pay for
specified expenses of the Trust or the Fund, including, without limitation:
compensation of Trustees "not affiliated" with the Adviser; governmental fees;
interest charges; taxes; membership dues in the Investment Company Institute
allocable to the Fund; fees and expenses of independent auditors, of legal
counsel, of administrators, and of any transfer agent, registrar or dividend
disbursing agent of the Fund; expenses of repurchasing and redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and mailing
stock certificates, shareholder reports, notices, proxy statements and reports
to governmental officers and commissions; brokerage and other expenses connected
with the execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of the Custodian for all services to the
Fund, including safekeeping of funds and securities and maintaining required
books and accounts; expenses of calculating the net asset value of shares of the
Fund; organizational and start up costs; such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or proceedings
to which the Fund is a party or otherwise may have an exposure, and the legal
obligation which the Fund may have to indemnify the Trust's Trustees and
officers or the Adviser and its employees with respect thereto; and expenses
relating to the issuance, registration and qualification of shares of the Fund
and the preparation, printing and mailing of private placement memoranda for
such purposes (except to the extent that any distribution agreement to which the
Trust is a party provides that another party is to pay some or all of such
expenses).
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(c) The payment or assumption by the Adviser of any expenses of the Trust
or the Fund that the Adviser is not obligated by this Agreement or otherwise to
pay or assume shall not obligate the Adviser to pay or assume the same or any
similar expenses of the Trust or the Fund on any subsequent occasions.
Article 3. Compensation of the Adviser. As full compensation for all
services rendered, facilities furnished, and expenses borne by the Adviser
hereunder (except to the extent the Adviser advances out-of-pocket expenses on
behalf of the Fund), the Fund shall pay to the Adviser an investment advisory
fee computed and paid monthly as set forth in Appendix A attached hereto. If the
Adviser shall serve for less than the whole of any period specified in this
Article 3, the compensation paid to the Adviser will be prorated.
Article 4. Additional Services. Should the Trust have occasion to request
the Adviser or its affiliates to perform administrative or other additional
services not herein contemplated or to request the Adviser or its affiliates to
arrange for the services of others, the Adviser or its affiliates will act for
the Trust on behalf of the Fund upon request to the best of its ability, with
compensation for the services to be agreed upon with respect to each such
occasion as it arises. No such agreement for additional services shall expand,
reduce or otherwise alter the obligations of the Adviser, or the compensation
that the Adviser is due, under this Agreement.
Article 5. Covenants of the Adviser. The Adviser agrees that it will not
deal with itself, or with the Trustees of the Trust or the Trust's distributor,
if any, as principals in making purchases or sales of securities or other
property for the account of the Fund, except as permitted by the Investment
Company Act of 1940 and any rules, regulations or orders of the Securities and
Exchange Commission thereunder, will not take a long or short position in the
shares of the Fund except as permitted by applicable law, and will comply with
all other provisions of the Declaration and the Bylaws and the then-current
Private Placement Memorandum and Statement of Additional Information of the Fund
relative to the Adviser and its directors and officers.
Article 6. Limitation of Liability and Indemnification of the Adviser.
(a) The Adviser 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
in the execution and management of the Fund, except for willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and obligations
hereunder. As used in this Article 6, the term "Adviser" shall include
directors, officers and employees of the Adviser as well as that corporation
itself.
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(b) The Trust shall indemnify to the fullest extent permitted by law out
of the assets of the Fund each of the Adviser and all of its shareholders,
officers, management committee members, employees and affiliates (and their
members) (each such entity or person hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any such Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding (including, without limitation, investigations), whether civil or
criminal, before any court or administrative or legislative body, in which such
Covered Person may be or may have been involved as a party or otherwise or with
which such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of any investment or other alleged act or omission in the
course of, connected with or arising out of any service to be rendered under
this Agreement, except with respect to any matter as to which such Covered
Person shall have been finally adjudicated in any such action, suit or other
proceeding not to have acted in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Fund, and except that
no Covered Person shall be indemnified against any liability to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, fraud or reckless disregard of the Covered Person's
obligations and duties. Expenses, including counsel fees so incurred by any such
Covered Person, may be paid from time to time by the Fund in advance of the
final disposition of any such action, suit or proceeding on the condition that
the amounts so paid shall be repaid to the Fund if it is ultimately determined
that indemnification of such expenses is not authorized under this Article 6.
Article 7. Activities of the Adviser.
(a) The Trust acknowledges that the services of the Adviser to the Fund
are not exclusive, the Adviser being free to render investment advisory and/or
other services to others. The Trust further acknowledges that it is possible
that, based on their investment objectives and policies, certain funds or
accounts managed by the Adviser or its affiliates may at times take investment
positions or engage in investment techniques which are contrary to positions
taken or techniques engaged in on behalf of the Fund. Notwithstanding the
foregoing, the Adviser will at all times endeavor to treat all of its clients in
a fair and equitable manner.
(b) The Trust acknowledges that whenever the Fund and one or more other
funds or accounts advised by the Adviser have available monies for investment,
investments suitable and appropriate for each shall be allocated in a manner
believed by the Adviser to be fair and equitable to each entity. Similarly,
opportunities to sell securities and other investments shall be allocated in a
manner believed by the Adviser to be fair and equitable to each entity. The
Trust acknowledges that in some instances this may adversely affect the size of
the position that may be acquired or disposed of for the Fund.
(c) It is understood that the Trustees, officers and shareholders of the
Trust are or may be or become interested in the Adviser, as directors, officers,
employees, or otherwise and that directors, officers and employees of the
Adviser are or may become similarly interested in the Trust, and that the
Adviser may be or become interested in the Fund as a shareholder or otherwise.
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Article 8. EIP Name. The Trust acknowledges that the names "Energy Income
Partners," "EIP" or any derivatives thereof or logos associated with those names
(collectively, the "EIP Marks") are the valuable property of the Adviser and its
affiliates. The Adviser grants the Trust and the Fund a non-exclusive and
non-transferable right and sub-license to use the EIP Marks only so long as the
Adviser serves as investment adviser to the Trust and the Fund. The Trust agrees
that if the Adviser for any reason no longer serves as investment adviser to the
Fund, and the Adviser so requests, the Fund promptly shall cease to use the EIP
Marks and promptly shall amend its registration statement to delete any
references to the EIP Marks. Likewise, the Trust agrees that if the Adviser for
any reason no longer serves as investment adviser to any fund of the Trust, and
the Adviser so requests, the Trust promptly shall cease to use the EIP Marks and
promptly shall amend its Declaration to delete any references to the EIP Marks.
The Trust acknowledges that the Adviser may permit other clients to use the EIP
Marks in their names or other material. For purposes of this Article, the Trust
shall be deemed to have taken the required action "promptly" if such action is
taken within 60 days of the Adviser's no longer serving as the investment
adviser to the Fund of the Trust, or from the date of the Adviser's request, as
the case may be.
Article 9. Duration, Termination and Amendment of this Agreement.
(a) This Agreement shall become effective with respect to the Trust on the
date first written above, and shall become effective with respect to the Fund,
if approved by the shareholders of the Fund, on the Effective Date for the Fund,
as set forth in Appendix B attached hereto. Thereafter, this Agreement will
remain in effect with respect to the Fund for a period of two years from the
Fund's Effective Date as set forth in Appendix B, on which date it will
terminate for the Fund unless its continuance is "specifically approved at least
annually" (i) by the vote of a majority of the Trustees of the Trust who are not
"interested persons" of the Trust or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (ii) by the Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Fund.
(b) This Agreement may be terminated as to the Trust or as to the Fund at
any time without the payment of any penalty by the Trustees or by "vote of a
majority of the outstanding voting securities" of the Fund, or by the Adviser,
in each case on not more than sixty days' nor less than thirty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its "assignment."
(c) This Agreement may be amended with respect to the Fund only if such an
amendment is in writing signed by or on behalf of the Trust and the Adviser and
is approved by a "vote of a majority of the outstanding voting securities" of
the Fund (if such shareholder approval is required by the Investment Company Act
of 1940).
(d) Any approval, renewal or amendment of this Agreement with respect to
the Fund by "vote of a majority of the outstanding voting securities" of the
Fund, by the Trustees of the Trust, or by a majority of the Trustees of the
Trust who are not "interested persons" of the Trust or the Adviser, shall be
effective to approve, renew or amend the Agreement with respect to the Fund
notwithstanding (i) that the approval, renewal or amendment has not been so
approved as to any other fund, or (ii) that the approval, renewal or amendment
has not been approved by the vote of a majority of the outstanding voting
securities of the Trust as a whole.
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Article 10. Scope of Trust's Obligations. A copy of the Declaration is on
file with the Secretary of State of the State of Delaware. The Adviser
acknowledges that the obligations of or arising out of this Agreement are not
binding upon any of the Trust's Trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and property
of the Trust. If this Agreement is executed by the Trust on behalf of one or
more funds, the Adviser further acknowledges that the assets and liabilities of
the Fund are separate and distinct and that the obligations of or arising out of
this Agreement concerning the Fund are binding solely upon the assets or
property of the Fund and not upon the assets or property of any other fund.
Article 11. Definitions and Interpretations. The terms "specifically
approved at least annually," "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person," and "interested person," when
used in this Agreement, shall have the respective meanings specified, and shall
be construed in a manner consistent with, the Investment Company Act of 1940 and
the rules and regulations promulgated thereunder. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Securities Act of 1933 or the Securities
Exchange Act of 1934 (collectively, the "Federal Securities Acts") shall be
resolved by reference to such term or provision of the Federal Securities Acts
and to interpretations thereof, if any, by United States federal courts or, in
the absence of any controlling decisions of any such court, by rules or
regulations of the Securities and Exchange Commission. Where the effect of a
requirement of the Federal Securities Acts reflected in any provision of this
Agreement is revised by rule or regulation of the Securities and Exchange
Commission, such provisions shall be deemed to incorporate the effect of such
rule or regulation.
Article 12. Record Keeping. The Adviser will maintain, or will cause an
agent to maintain, records in a form acceptable to the Trust and in compliance
with the rules and regulations of the Securities and Exchange Commission,
including but not limited to records required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and the rules thereunder, which at all
times will be the property of the Trust and will be available for inspection and
use by the Trust.
Article 13. Miscellaneous.
(a) This Agreement contains the entire understanding and agreement of the
parties with respect to the subject matter hereof.
(b) Headings in this Agreement are for ease of reference only and shall
not constitute a part of the Agreement.
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(c) Should any portion of this Agreement for any reason be held void in
law or equity, the remainder of the Agreement shall be construed to the extent
possible as if such voided portion had never been contained herein.
(d) This Agreement shall be governed by the laws of the State of Delaware,
without giving effect to the choice of laws provisions thereof, except that
questions of interpretation shall be resolved in accordance with the provisions
of Article 11 above.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned
officers thereunto duly authorized, all as of the day and year first above
written. The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Fund, individually, but bind only the trust estate.
EIP Investment Trust on behalf of
EIP Growth and Income Fund
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: COO
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Energy Income Partners, LLC
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: CEO
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Signature Page
Appendix A
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Compensation to the Adviser
The Fund will pay to the Adviser a fee, computed and paid monthly at the
annual rate of 1% of the average daily net assets of the Fund. The average daily
net assets of the Fund shall be determined by taking an average of all of the
determinations of such amount during such month at the close of business on each
business day during such month while this Agreement is in effect. Such fee shall
be payable for each month within five (5) business days after the end of such
month.
Appendix B
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Effective Date
Fund Effective Date
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EIP Growth and Income Fund August 17, 2006
