EX-99.23.d(i)
INTERIM INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of December 15, 2004, between Fairport Funds, an
Ohio business trust (the "Trust"), and Xxxxxxxx & Company, Inc., an Ohio
corporation (the "Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act");
WHEREAS, the Adviser is engaged in the business of rendering investment
advisory and management services;
WHEREAS, the Adviser is a wholly owned subsidiary of Fairport Asset
Management, LLC;
WHEREAS, on or about December 15, 2004, certain persons will acquire a
majority of the interests in Fairport Asset Management, LLC (the "Acquisition"),
resulting in a change in control of the Adviser;
WHEREAS, pursuant to the Investment Company Act of 1940, as amended, a
transaction that results in a change of control of an investment adviser may be
deemed an "assignment." The Investment Company Act further provides that an
investment advisory contract automatically terminates in the event of its
assignment;
WHEREAS, the Trust desires to continue to retain the Adviser to furnish
investment advisory services to the current investment portfolio of the Trust
identified in Schedule A hereto (the "Fund") and the Adviser represents that it
is willing and possesses legal authority to so furnish such services.
NOW, THEREFORE, pending approval of a final investment advisory contract,
the parties hereto agree as follows:
ss.1. Appointment. The Trust hereby appoints the Adviser to act as
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investment adviser to the Fund for the period and on the terms and subject to
the conditions set forth in this Agreement. The Adviser accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided. Additional investment portfolios may from time to time be added to
those covered by this Agreement by the parties executing a new Schedule A which
shall become effective upon its execution and shall supersede any Schedule A
having an earlier date.
ss.2. Investment Advisory Services. Subject to the supervision of the
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Trust's Board of Trustees, the Adviser shall provide a continuous investment
program for the Fund, including investment, research and management with respect
to all securities and investments and cash equivalents in the Fund. The Adviser
shall determine from time to time what securities and other investments will be
purchased, retained or sold by the Trust with respect to the Fund. The Adviser
shall provide the services under this Agreement in accordance with each of the
Fund's investment objectives, policies, and restrictions as stated in such
Fund's most current Prospectus and Statement of Additional Information, as then
in effect, and all amendments or supplements thereto, and resolutions of the
Trust's Board of Trustees as may be adopted from time to time. The Adviser
further agrees that it:
(a) will use the same skill and care in providing such services as it uses
in providing services to any fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission (the "Commission") and, in
addition, will conduct its activities under this Agreement in
accordance with any applicable regulations of any governmental
authority pertaining to the investment advisory activities of the
Adviser;
(c) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Adviser will attempt to
obtain and is hereby directed to obtain prompt execution of orders in
an effective manner at the most favorable price. Consistent with this
obligation, the Adviser may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide the
Adviser with brokerage and research services (within the meaning of
Section 28(e) of the Securities Exchange Act of 1934). Subject to the
review of the Trust's Board of Trustees from time to time with respect
to the extent and continuation of this policy, the Adviser is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for effecting a securities transaction
the Fund which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if, but
only if, the Adviser determines in good faith that such 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 overall responsibilities of the
Adviser with respect to the accounts as to which it exercises
investment discretion. In no instance will portfolio securities be
purchased from or sold to Xxxxxxxx Research Corp., the Adviser, or any
affiliated person of the Trust, Xxxxxxxx Research Corp. or the Adviser
unless otherwise permitted by the 1940 Act, an exemption therefrom, or
an order thereunder;
(d) will maintain all books and records with respect to the securities
transactions of the Fund and will furnish the Trust's Board of
Trustees such periodic and special reports as the Board may request;
and
(e) will advise and assist the officers of the Trust in taking such
actions as may be necessary or appropriate to carry out the decisions
of the Trust's Board of Trustees and of the appropriate committees of
such Board regarding the conduct of the business of the Fund.
ss.3. Expenses. During the term of this Agreement, the Adviser will pay all
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expenses incurred by it in connection with its activities, duties and
obligations under this Agreement, other than the costs of securities (including
brokerage fees, if any) purchased for the Fund.
ss.4. Compensation. For the services provided and the expenses assumed
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pursuant to this Agreement, each of the Fund will pay the Adviser and the
Adviser will accept as full compensation therefor a fee set forth on Schedule A
hereto. The obligations of the Fund to pay the above-described fee to the
Adviser will begin as of the effective date of this Agreement (or effective date
of Schedule A with respect to funds added thereto after the date hereof). The
compensation earned under this Agreement will be held in an interest bearing
escrow account with the Trust's custodian or a bank mutually agreed upon by the
Trust and Adviser. If a majority of a Fund's outstanding voting securities
approve a final investment advisory agreement with Adviser by the end of the
150-day period following the closing of the Acquisition, the amount in the
escrow account for the Fund (including interest earned) will be paid to Adviser.
If a majority of a Fund's outstanding voting securities do not approve an
investment advisory contract with Adviser, Adviser will be paid, out of the
escrow account for the Fund, the lesser of (i) any costs incurred by Adviser in
performing services under this Agreement (plus interest earned on that amount
while in escrow) for the Fund, or (ii) the total amount in the escrow account
(plus interest earned) attributable to the Fund.
ss.5. Limitation of Liability. The Adviser shall not be liable for any
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error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
ss.6. Duration and Termination. The term of this Agreement shall begin on
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the date of the closing of the Acquisition and shall continue in effect as to
the Fund until the earlier of (i) 150 days from the date of this Contract, or
(ii) until a new investment advisory agreement is approved by the shareholders
of the Fund. If the shareholders of the Fund fail to approve a final investment
advisory contract, upon request of the Board, Adviser will continue to serve or
act in such capacity for the Fund for the period of time pending required
approval of a new agreement with Adviser or a different adviser or other
definitive action; provided that the compensation to be paid by the Fund to
Adviser for services to and payments on behalf of the Fund will be equal to the
lesser of Adviser's actual costs incurred in furnishing such services and
payments or the amount Adviser received under this Agreement for furnishing such
services and payments. This Agreement may be terminated by the Trust with
respect to the Fund at any time, without the payment of any penalty, by the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund, in any such case on ten (10) calendar days' written
notice to the Adviser, or by the Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Trust.
ss.7. Name. The Trust hereby acknowledges that the name "Xxxxxxxx" is a
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property right of the Adviser. The Adviser agrees that the Trust and the Fund
may, so long as this Agreement remains in effect, use "Xxxxxxxx" as part of its
name. The Adviser may permit other persons, firms or corporations, including
other investment companies, to use such name and may, upon termination of this
Agreement, require the Trust and the Fund to refrain from using the name
"Xxxxxxxx" in any form or combination in its name or in its business or in the
name of any of its funds, and the Trust shall, as soon as practicable following
its receipt of any such request from the Adviser, so refrain from using such
name.
ss.8. Adviser's Representations. The Adviser hereby represents and warrants
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that it is willing and possesses all requisite legal authority to provide the
services contemplated by this Agreement without violation of applicable laws and
regulations.
ss.9. Amendment of this Agreement. No provision of this Agreement may be
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changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
ss.10. Miscellaneous. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof 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 and shall be
governed by the laws of the State of Ohio.
Fairport Funds is a business trust organized under Chapter 1746, Ohio
Revised Code and under a Declaration of Trust, to which reference is hereby made
and a copy of which is on file at the office of the Secretary of State of Ohio
as required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Fairport Funds" entered into in the name or on behalf
thereof by any of the Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, officers, employees, agents or shareholders of the Trust personally,
but bind only the assets of the Trust, as set forth in Section 1746.13(A), Ohio
Revised Code, and all persons dealing with any fund of the Trust must look
solely to the assets of the Trust belonging to such fund for the enforcement of
any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
FAIRPORT FUNDS
By /s/ Xxxxx X. Xxxxxxxx
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Name Xxxxx X. Xxxxxxxx
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Title President
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XXXXXXXX & COMPANY, INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Name Xxxxxxx X. Xxxxxxx
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Title Chief Operating Officer
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Dated December 15, 2004
Schedule A
to the
Interim Investment Advisory Agreement
between Fairport Funds and
Xxxxxxxx & Company, Inc.
Dated as of December 15, 2004
Name of Fund Compensation*
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Fairport Government Securities Fund Annual rate of twenty-five one-hundredths of one
percent (.25%) of the average daily net assets of such
Fund up to $100 Million and one hundred twenty-five one
thousandths of one percent (0.125%) of the average
daily net assets of such Fund of $100 Million or more.
XXXXXXXX & COMPANY, INC. FAIRPORT FUNDS
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxx
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Name Xxxxxxx X. Xxxxxxx Name Xxxxx X. Xxxxxxxx
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Title Chief Operating Officer Title President
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* All fees are computed and paid monthly.
