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INVESTMENT ADVISORY AGREEMENT
XXXXXX INTERNATIONAL PORTFOLIO
(A SERIES OF XXXXXX WORLDWIDE PORTFOLIOS TRUST)
This INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 12th
day of May, 2000, between XXXXXX LLC, a Nevada limited liability company
("Xxxxxx"), and XXXXXX WORLDWIDE PORTFOLIOS TRUST, a Delaware business trust
(the "Trust"), with respect to the XXXXXX INTERNATIONAL PORTFOLIO, a series of
the Trust (the "Portfolio").
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").
B. The Trust is authorized to create separate series of interests, each
with its own separate investment portfolio, one of such series created by the
Trust being the Portfolio.
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 Portfolio and of the securities in the Portfolio 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 Portfolio 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 Portfolio, Xxxxxx shall have the following duties and responsibilities:
(a) To manage the investment operations of the Portfolio and the
composition of its investment portfolio, and to determine
without prior consultation with the Trust, what securities and
other assets of the Portfolio will be acquired, held, disposed
of or loaned, in conformity with the investment objective,
policies and restrictions and the
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other statements concerning the Portfolio in the Trust's trust
instrument, as amended from time to time (the "Trust
Instrument"), bylaws and registration statements under the
1940 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 Portfolio, or to any of the investors investing in the
Portfolio, 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 Portfolio, 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 Portfolio 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 Portfolio and for other related transactions as
directed by any such sub-adviser; to give instructions to the
custodian (including any subcustodian) of the Portfolio as to
deliveries of securities to and from such custodian and
receipt and payments of cash for the account of the Portfolio,
and advise the Trust on the same day such instructions are
given; and to submit such reports relating to the valuation of
the Portfolio's assets and to otherwise assist in the
calculation of the net asset value of interests in the
Portfolio as may reasonably be requested; on behalf of the
Portfolio, to exercise such voting rights, subscription
rights, rights to consent to corporate action and any other
rights pertaining to the Portfolio'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
Portfolio, and shall 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
Portfolio 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
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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.
3. Managerial and Administrative Services. Xxxxxx shall perform, or
arrange for the performance of, all managerial and administrative services
necessary for the operation of the Portfolio, subject to the monitoring of the
Trustees of the Trust, including but not limited to:
(a) providing the Portfolio with office space, personnel,
equipment and facilities for maintaining its organization;
(b) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of custodians, subcustodians,
depositories, transfer and pricing agents, accountants,
attorneys, placement agents, insurers and other persons in any
capacity deemed to be necessary or desirable;
(c) preparing all general investor communications, including
investor reports;
(d) providing personnel and assistance necessary to maintain the
registration, qualification or exemption to sell interests
under the federal securities laws and in each state where
Xxxxxx has determined such registration, qualification or
exemption to be advisable;
(e) monitoring the Portfolio's compliance with, insofar as they
relate to the Portfolio, (i) the Trust's Trust Instrument,
Bylaws and currently effective registration statement under
the 1940 Act and any amendments or supplements thereto
("Registration Statement"); (ii) the written policies,
procedures and guidelines of the Portfolio, and written
instructions and directions of the Trustees of the Trust;
(iii) the requirements of the Securities Act of 1933, the 1940
Act, the Advisers Act, the rules thereunder, and all other
applicable federal and state laws and regulations; and (iv)
the provisions of Subchapter M of the Internal Revenue Code,
if applicable to any of the investors investing in the
Portfolio;
(f) arranging for and supervising the preparation of any or all
registration statements, tax returns, proxy materials,
financial statements, notices and reports for filings with
regulatory authorities and distribution to holders of
interests in the Portfolio;
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(g) conducting investor relations;
(h) maintaining the Portfolio's existence and its records; and
(i) investigating the development of and developing and
implementing, if appropriate, management and investor services
designed to enhance the value or convenience of the Portfolio
as an investment vehicle.
4. 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 any amendments or supplements thereto (the "Registration
Statements") and with the written policies, procedures and guidelines of the
Portfolio, 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.
5. 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 investors of the Portfolio, 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.
6. 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 Portfolio and
the nature of all of the Portfolio'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 Portfolio by certified or
independent public accountants and with copies of
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any financial statements or reports made to the Portfolio's
investors or to any governmental body or securities exchange;
(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 7 hereof.
7. 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
0.85% of the first $500 million of average daily net assets of the Portfolio,
0.80% of the next $500 million of average daily net assets of the Portfolio, and
0.75% of any part of the average daily net assets of the Portfolio 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.
8. Expenses and Excluded Expenses. Xxxxxx shall pay all its own costs
and expenses incurred in rendering the services required under this Agreement.
Notwithstanding any other provision hereof, it is expressly agreed that Xxxxxx
shall not be responsible to pay, directly or on behalf of the Portfolio, any of
the Portfolio's expenses, which shall remain the Trust's own obligation and
responsibility to pay, including without limitation: (a) expenses of registering
the Trust with securities authorities, or registration or filing fees incurred
in the registration, qualification or exemption of interests in the Portfolio
with securities authorities; (b) compensation (including reimbursement of
expenses) of the Trustees of the Trust who are not "interested persons" as
defined in the 1940 Act; (c) expenses of preparing, printing and mailing
reports, notices, proxy materials and other required communications to investors
in the Portfolio; (d) all expenses incidental to holding meetings of the
Trustees of the Trust and of investors in the Portfolio, including proxy
solicitations therefor; (e) legal and audit expenses; (f) insurance premiums for
fidelity and other coverage; (g) brokerage commissions and other costs in
connection with the purchase and sale of securities and other assets of the
Portfolio; (h) custodian, transfer agent, recordkeeping and pricing agent fees
and expenses; (i) interest and taxes; and (j) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Trust is a party and the legal obligation which the
Trust may have to indemnify its Trustees and officers with respect thereto.
9. Brokerage Commissions. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. Absent instructions from the Trust to the contrary,
Xxxxxx is authorized and directed to place portfolio transactions for the
Portfolio only with brokers and dealers who render satisfactory service in the
execution of orders at the most
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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 shares in any fund investing in
the Portfolio as a factor in selecting broker-dealers to execute portfolio
transactions for the Portfolio. 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 Portfolio is affiliated. Xxxxxx or such affiliated broker may
effect or execute Portfolio securities transactions, whether on a securities
exchange or in the over-the-counter market, and receive separate compensation
from the Portfolio 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 Portfolio
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 Portfolio 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 Portfolio.
10. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the holders of interests in the
Portfolio 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 Portfolio as soon as reasonably practicable
following any termination of this Agreement if Xxxxxx does not continue to
provide investment advice to the Portfolio after such termination.
11. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
12. Term. This Agreement shall continue in effect until April 30, 2002,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only
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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 Portfolio.
13. 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
Portfolio or Xxxxxx and, (ii) if required by applicable law, by the affirmative
vote of a majority of the outstanding voting securities of the Portfolio.
14. 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 Portfolio) between the Portfolio and any other
series of the Trust and between the Portfolio and other investment companies
managed by Xxxxxx or its affiliates.
15. 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.
16. 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 respect to the Portfolio,
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 16, "Xxxxxx" shall include any affiliate of Xxxxxx performing services
for the Trust contemplated hereunder and managers, directors, officers and
employees of Xxxxxx and such affiliates.
17. 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, 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, officers and shareholders of Xxxxxx, that managers,
officers,
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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.
18. 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.
19. 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.
20. 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 LLC
By:
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Xxxx X. Xxxxxxxx
President
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XXXXXX WORLDWIDE PORTFOLIOS TRUST,
with respect to the series known as
the Xxxxxx International Portfolio
By:
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Xxxx X. Xxxxxxxx
President
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