EXHIBIT 23(d)-9
INVESTMENT ADVISORY AGREEMENT
(XXXXXX LLC/XXXXXX INSTITUTIONAL PRODUCTS TRUST)
WITH RESPECT TO
XXXXXX IPT - MID CAP VALUE FUND
This INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 31st
day of December, 2001, between XXXXXX LLC, a Nevada limited liability company
("Xxxxxx"), and XXXXXX INSTITUTIONAL PRODUCTS TRUST, a Delaware business trust
(the "Trust"), with respect to XXXXXX IPT - MID CAP VALUE FUND (the "Fund"), a
series of the Trust.
RECITALS
A. The Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
registered its shares for public offering under the Securities Act of 1933, as
amended (the "1933 Act").
B. The Trust is authorized to create separate series of shares in the
Trust, each with its own separate investment portfolio, and has created the Fund
as one such series.
X. Xxxxxx is engaged in the business of rendering investment advisory
services and is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act").
D. The Trust and Xxxxxx deem it mutually advantageous that Xxxxxx
should be appointed to assume responsibility for the day-to-day management of
the Fund and of the securities in the Fund in accordance with the terms and
conditions of this Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Appointment. The Trust hereby appoints Xxxxxx as investment adviser
and manager with respect to the Fund for the period and on the terms set forth
in this Agreement. Xxxxxx hereby accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. Investment Advisory Functions. In its capacity as investment adviser
to the Fund, Xxxxxx 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
-1-
statements concerning the Fund in the Trust's trust
instrument, as amended from time to time (the "Trust
Instrument"), bylaws and registration statements under the
1940 Act and the 1933 Act, the 1940 Act and the Advisers Act,
the rules and regulations thereunder, and all other applicable
federal and state laws and regulations, and the provisions of
the Internal Revenue Code of 1986, as amended from time to
time, applicable to the Fund as a regulated investment company
or as required to maintain compliance with any diversification
provisions applicable to insurance company separate accounts
or qualified plans investing in the Fund;
(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 decisions of Xxxxxx, and the
investment considerations which have given rise to those
decisions;
(c) To place orders for the purchase and sale of securities for
investments of the Fund and for other related transactions,
or, in the event a sub-adviser is engaged pursuant to the
authority granted in this Agreement, to supervise the purchase
and sale of securities for investments of the Fund and for
other related transactions as directed by any such
sub-adviser; to give instructions to the custodian (including
any subcustodian) of the Fund as to deliveries of securities
to and from such custodian and receipt and payments of cash
for the account of the Fund, and advise the Trust on the same
day such instructions are given; and to submit such reports
relating to the valuation of the Fund's assets and to
otherwise assist in the calculation of the net asset value of
shares of the Fund as may reasonably be requested; on behalf
of the Fund, to exercise such voting rights, subscription
rights, rights to consent to corporate action and any other
rights pertaining to the Fund's assets that may be exercised,
in accordance with any policy pertaining to the same that may
be adopted or agreed to by the Trustees of the Trust, or, in
the event that the Trust retains the right to exercise such
voting and other rights, to furnish the Trust with advice as
to the manner in which such rights should be exercised;
(d) To maintain all books and records required to be maintained by
Xxxxxx 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 to furnish the Trustees with such periodic and special
reports as the Trustees reasonably may request. Xxxxxx 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
-2-
(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.
3. Further Obligations. In all matters relating to the performance of
this Agreement, Xxxxxx shall act in conformity with the Trust's Trust
Instrument, 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
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 with copies of the
Trust's Trust Instrument, 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. Xxxxxx shall
maintain errors and omissions insurance in an amount at least equal to that
disclosed to the Trustees in connection with their approval of this Agreement.
4. Sub-Advisers. Xxxxxx may engage one or more sub-advisers in
furtherance of Xxxxxx'x duties and responsibilities under this Agreement,
subject to the approval of the Trustees of the Trust and, if required by law,
the shareholders of the Fund, pursuant in each case to a written agreement with
a party that, if applicable, meets the requirements of Section 15 of the 1940
Act and the rules thereunder applicable to contracts for service as an
investment adviser of a registered investment company, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission. The
engagement of one or more sub-advisers pursuant to this provision shall not
diminish or relieve in any way the liability of Xxxxxx for any of its duties and
responsibilities under this Agreement. Xxxxxx shall appropriately oversee,
monitor and evaluate the activities of any sub-adviser engaged hereunder.
5. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) To keep Xxxxxx 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 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;
-3-
(c) To furnish Xxxxxx with any further materials or information
which Xxxxxx may reasonably request to enable it to perform
its function under this Agreement; and
(d) To compensate Xxxxxx for its services in accordance with the
provisions of Section 6 hereof.
6. Compensation. The Trust shall pay to Xxxxxx for its services under
this Agreement a fee, payable in United States dollars, at an annual rate of
0.75% of the first $500 million of average daily net assets of the Fund, 0.70%
of the next $500 million of average daily net assets of the Fund, and 0.65% of
any part of the average daily net assets of the Fund in excess of $1 billion.
This fee shall be computed and accrued daily and payable monthly as of 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.
7. 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 hereunder or otherwise, including, but not limited
to, any compensation, fees or reimbursements which the Trust pays to its
Trustees; 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 all other expenses in connection with
execution of portfolio transactions (including any appropriate commissions paid
to Xxxxxx 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 Delaware; 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 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 compensation for, or reimburse Xxxxxx for
its expenses incurred in connection with, such services as Xxxxxx and the Trust
shall agree from time to time, any other provision of this Agreement
notwithstanding.
-4-
(b) Expenses Paid by Xxxxxx. Xxxxxx shall pay all its own costs and
expenses incurred in fulfilling its obligations under this Agreement. In
addition to such costs and expenses, Xxxxxx 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;
(ii) Rental of offices of the Trust; and
(iii) Fees of any sub-adviser engaged by Xxxxxx pursuant to
the authority granted in Section 4 hereof.
8. 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 is
authorized and directed to place portfolio transactions for the Fund 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 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 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 viewed in terms of
either that particular transaction or the overall responsibilities of Xxxxxx.
Xxxxxx is also authorized to consider sales of variable insurance contracts that
permit allocation of contract values to the Fund as a factor in selecting
broker-dealers to execute portfolio transactions for the Fund. In placing
portfolio business with such broker-dealers, Xxxxxx 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 or
an affiliate is registered as a broker-dealer, Xxxxxx may select a broker with
which it or any of its affiliates or the Fund is affiliated. Xxxxxx or such
affiliated broker may effect or execute Fund securities 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 in placing portfolio transactions for the Trust pursuant to
the foregoing provisions. Xxxxxx 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. Whenever Xxxxxx simultaneously places orders to
purchase or sell the same security on behalf of the Fund and one or more other
clients of Xxxxxx, such orders will be allocated as to price and amount among
all such clients in a manner reasonably believed by Xxxxxx 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.
-5-
9. 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 at its principal place of business. This Agreement may be terminated
by Xxxxxx 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 Trust
Instrument, 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 does not continue to provide investment advice to the Fund
after such termination.
10. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
11. Term. This Agreement shall continue in effect until April 30, 2003,
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.
12. 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 and, (ii) if required by applicable law, by the affirmative vote of a
majority of the outstanding voting securities of the Fund.
13. 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 or
its affiliates.
14. Limitation on Personal Liability. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of State
of the State of Delaware. All parties to this Agreement acknowledge and agree
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.
15. Limitation of Liability of Xxxxxx. Xxxxxx 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
-6-
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, "Xxxxxx" shall include any affiliate
of Xxxxxx performing services for the Trust contemplated hereunder and managers,
members, owners, officers and employees of Xxxxxx and such affiliates.
16. Activities of Xxxxxx. The services of Xxxxxx to the Trust hereunder
are not to be deemed to be exclusive, and Xxxxxx 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 manager, member, owner,
officer or employee of Xxxxxx 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 as managers, members, owners, officers and
shareholders of Xxxxxx, that managers, members, owners, officers, employees and
shareholders of Xxxxxx are or may become similarly interested in the Trust, and
that Xxxxxx may become interested in the Trust as a shareholder or otherwise.
17. 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.
18. 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.
19. 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.
-7-
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 LLC
By:
-------------------------------
Xxxx X. Xxxxxxxx
President
XXXXXX INSTITUTIONAL PRODUCTS TRUST,
with respect to the series known as
the Xxxxxx IPT-Mid Cap Value Fund
By:
-------------------------------
Xxxx X. Xxxxxxxx
President
-8-
