INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made as of the 10th day of September, 2002 by and between Hussman
Econometrics Advisors, Inc. (the "Investment Adviser"), a Maryland corporation,
and Hussman Investment Trust (the "Trust"), an Ohio business trust.
WHEREAS, the Trust is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"), and
is currently authorized to issue separate series of shares, each having its own
investment objective, policies and restrictions, all as more fully described in
the prospectus and the statement of additional information constituting parts of
the Trust's Registration Statement on Form N-1A filed the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, and the Act (the "Registration Statement"); and
WHEREAS, the Trust is engaged in the business of investing and reinvesting the
assets of each of its series in securities ("the portfolio assets") of the type
and in accordance with the limitations specified in the Trust's Agreement and
Declaration of Trust (the "Declaration") and Registration Statement, and any
representations made in its prospectus and statement of additional information,
all in such manner and to such extent as may from time to time be authorized by
the Trustees; and
WHEREAS, the Trust established Hussman Strategic Total Return Fund (the "Fund")
as a series of the Trust, and wishes to employ the Investment Adviser to manage
the investment and reinvestment of the Fund's portfolio assets as above
specified and, without limiting the generality of the foregoing, to provide
management and other services specified below and acknowledges that it has
received prior to entering into this Agreement a copy of Form ADV-Part II as
filed by the Investment Adviser with the Commission.
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Investment Adviser to supervise and direct
the investments of and for the Fund and as the Fund's agent and
attorney-in-fact with full discretionary and exclusive power and authority
to establish, maintain and trade in brokerage accounts for and in the name
of the Fund and to buy, sell and trade in all stocks, bonds and other
assets of the Fund. The Investment Adviser hereby accepts such appointment
and agrees to manage the portfolio assets in a manner consistent with the
investment objective, policies and restrictions of the Fund and with
applicable law.
2. Unless advised by the Trustees of the Trust of an objection, the Investment
Adviser may direct that a portion of the brokerage commissions that may be
generated by the Fund be applied to payment for brokerage and research
services. Brokerage and research services furnished by brokers may include,
but are not limited to, written information and analyses concerning
specific
securities, companies or sectors; market, financial and economic studies
and forecasts as well as discussions with research personnel; financial
publications; and statistic and pricing services utilized in the investment
management process. Brokerage and research services obtained by the use of
commissions arising from the Fund's portfolio transactions may be used by
the Investment Adviser in its other investment activities. In selecting
brokers and negotiating commission rates, the Investment Adviser will take
into account the financial stability and reputation of brokerage firms and
the brokerage, execution and research services provided by such brokers.
The benefits which the Fund may receive from such services may not be in
direct proportion to the commissions generated by the Fund. The Trust
acknowledges that since commission rates are generally negotiable,
selecting brokers on the basis of considerations which are not limited to
applicable commission rates may result in higher transaction costs that
would otherwise by obtainable.
3. The Investment Adviser may bunch orders for the Fund with orders for the
same security for other accounts managed by the Investment Adviser or its
affiliates. In such instances, the Fund will be charged the average price
per unit for the security in such transactions. Complete records of such
transactions will be maintained by the Investment Adviser and will be made
available to the Trust upon request.
4. The Investment Adviser shall report to the Board of Trustees at each
meeting thereof all changes in the portfolio assets since the prior report,
and will also keep the Trustees in touch with important developments
affecting the portfolio assets and on the Investment Adviser's own
initiative will furnish the Trustees from time to time with such
information as the Investment Adviser may believe appropriate for this
purpose, whether concerning the individual issuers whose securities are
included in the portfolio assets, the industries in which they engage, or
the conditions prevailing in the economy generally. The Investment Adviser
will also furnish the Trustees with such statistical and analytical
information with respect to the portfolio assets as the Investment Adviser
may believe appropriate or as the Trustees reasonably may request. In
making purchases and sales of the portfolio assets, the Investment Adviser
will bear in mind the policies set from time to time by the Board of
Trustees as well as the limitations imposed by the Trust's Agreement and
Declaration of Trust, and in the Trust's Registration Statement, in each
case as amended from time to time, the limitations in the Act and of the
Internal Revenue Code of 1986, as amended, in respect of regulated
investment companies and the investment objective, policies and practices,
including restrictions applicable to the Fund's portfolio.
5. The Investment Adviser shall not be liable for any mistake of judgment or
in any event whatsoever, except for lack of good faith, provided that
nothing herein shall be deemed to protect, or purport to protect, the
Investment
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Adviser against any liability to the Fund or to its security holders to
which the Investment Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of
its duties hereunder, or by reason of the Investment Adviser's reckless
disregard of its obligations and duties hereunder. It is understood that
the Investment Adviser performs various investment advisory and managerial
services for others, and the Trust agrees that the Investment Adviser may
give advice and take action in the performance of its duties with respect
to others which may differ from advice given or action taken with respect
to the Fund. Nothing contained herein shall in any way constitute a waiver
or limitation of any rights which the Fund or its shareholders may have
under common law, or any federal or state securities laws.
6. This Agreement shall become effective on the date hereof and shall remain
in effect until July 20, 2004, and shall continue in effect from year to
year thereafter so long as its continuance is specifically approved at
least annually by the Board of Trustees or by a vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund, and, in
either case, by a vote, cast in person at a meeting called for the purpose
of voting on such approval, of a majority of the Trust's Trustees who are
not parties to this Agreement or interested persons, as defined in the Act,
of any party to this Agreement, and provided further, however, that if the
continuation of this Agreement is not approved, the Investment Adviser may
continue to render to the Fund the services described herein in the manner
and to the extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this Agreement, it shall supersede
all previous agreements between the parties covering the subject matter
hereof. This Agreement may be terminated at any time, without the payment
of any penalty, by vote of a majority of the outstanding voting securities
(as defined in the Act) of the Fund, or by a vote of the Board of Trustees
on 60 days' written notice to the Investment Adviser, or by the Investment
Adviser on 60 days' written notice to the Trust.
7. This Agreement shall not be amended unless such amendment is approved by
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trust's Trustees who are not parties to this
Agreement or interested persons, as defined in the Act, of any party to
this Agreement (other than as Trustees of the Trust), and, if required by
law, by vote of a majority of the outstanding voting securities (as defined
in the Act) of the Fund.
8. This Agreement may not be assigned by the Investment Adviser and shall
terminate automatically in the event of any assignment by the Investment
Adviser. The term "assignment" as used in this paragraph shall have the
meaning ascribed thereto by the Act and any regulations or interpretations
of the Commission thereunder.
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9. If the Investment Adviser ceases to act as investment adviser to the Fund,
or, in any event, if the Investment Adviser so requests in writing, the
Trust agrees to take all necessary action to change the names of the Trust
and the Fund to a name not including the term "Hussman." The Investment
Adviser may from time to time make available without charge to the Trust
for its use of such marks or symbols owned by the Investment Adviser,
including marks or symbols containing the term "Hussman" or any variation
thereof, as the Investment Adviser may consider appropriate. Any such marks
or symbols so made available will remain the Investment Adviser's property
and it shall have the right, upon notice in writing, to require the Trust
to cease the use of such xxxx or symbol at any time.
10. The Fund shall pay the Investment Adviser an investment advisory fee equal
to 0.6% per annum of the average daily net assets of the Fund. The
investment advisory fee will be paid monthly. The Investment Adviser's
compensation for the period from the date hereof through the last day of
the month of the effective date hereof will be prorated based on the
proportion that such period bears to the full month. In the event of any
termination of this Agreement, the Investment Adviser's compensation will
be calculated on the basis of a period ending on the last day on which this
Agreement is in effect, subject to proration based on the number of days
elapsed in the current period as a percentage of the total number of days
in such period.
11. Unless otherwise agreed to in writing by the parties, the Fund shall be
responsible and hereby assumes the obligation for payment of all of its
expenses, including: (a) payment to the Investment Adviser of the fee
provided for in the foregoing paragraph; (b) custody, transfer and dividend
disbursing expenses; (c) fees of trustees who are not affiliated persons of
the Investment Adviser or any administrator of the Trust; (d) legal and
auditing expenses; (e) clerical, accounting and other office costs; (f) the
cost of personnel providing services to the Fund; (g) costs of printing the
Fund's prospectuses and shareholder reports for existing shareholders; (h)
cost of maintenance of the Fund's corporate existence; (i) interest
charges, taxes, brokerage fees and commissions; (j) costs of stationery and
supplies; (k) expenses and fees related to registration and filing with the
Commission and with state regulatory authorities; and (l) such promotional,
shareholder servicing and other expenses as may be contemplated by one or
more effective plans pursuant to Rule 12b-1 under the Act or one or more
effective non-Rule 12b-1 shareholder servicing plans, in each case
provided, however, that the Fund's payment of such promotional, shareholder
servicing and other expenses shall be in the amounts, and in accordance
with the procedures, set forth in such plan or plans.
12. Except to the extent necessary to perform the Investment Adviser's
obligations hereunder, nothing herein shall be deemed to limit or restrict
the right of the Investment Adviser or its members, officers or employees
to
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engage in any other business or to devote time and attention to the
management of other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other
individual or entity.
13. The validity of the Agreement and the rights and liabilities of the parties
hereunder shall be determined in accordance with the laws of the State of
Maryland without regard to its conflict of laws provisions, provided,
however, that nothing herein shall be construed as being inconsistent with
the Act.
14. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees of the Trust
and not individually and that the obligations 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, and the
Investment Adviser shall look only to the assets of the Fund for the
satisfaction of such obligations.
15. The Investment Adviser shall promptly notify the Trust of any change in the
ownership or control of the Investment Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
HUSSMAN INVESTMENT TRUST
By: /s/ Xxxx X. Xxxxxxx
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HUSSMAN ECONOMETICS ADVISORS, INC.
By: /s/ Xxxx X. Xxxxxxx
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