INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
Alabama Tax-Free Income Series, (hereinafter called "Income Series"), and XXXXXX
& COMPANY, INC., a corporation organized and existing under the laws of the
State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Income Series is engaged in business as part of an open-end
management investment company which is registered as such under the federal
Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Income Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Income Series and shall provide the Income Series
with office space and facilities and corporate administration, subject to and
upon the terms and conditions set forth in this Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Income Series in a manner consistent with its
investment objectives; shall determine the securities to be purchased and sold
by the Income Series, and the portion of its assets to be held in cash or cash
equivalents, in order to carry out such program; and generally shall take such
other steps, including the placing of orders for the purchase or sales of
securities on behalf of the Income Series, as the Adviser may deem necessary or
appropriate for the implementation of such program. The Adviser shall also
furnish to or place at the disposal of the Income Series such of the
information, reports evaluations, analyses and opinions formulated or obtained
by the Adviser in the discharge of its duties hereunder as the Income Series
may, at the time or from time to time, reasonably request or as the Adviser may
deem helpful to the Income Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Income Series such office
space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Income Series) as the Income Series may
reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Income Series, for such
periods and in such forms as are prescribed by rules and regulations of the
Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Income Series is required to maintain and preserve
pursuant to Section 31(a) of the Investment company Act of 1940 and the rules
and regulations of the Commission thereunder which are not maintained and
preserved on behalf of the Income Series by any custodian, transfer agent or
other institutional agent retained by the Income Series;
(iii) Furnish the services and pay or provide for the compensation and
expenses of individuals competent (A) to perform for the Income Series all
executive and administrative functions that are not assigned to any custodian,
transfer agent or other institutional agent retained by the Income Series, and
(B) to supervise and coordinate the activities of such institutional agents and
the other agents (e.g., independent accountants and legal counsel) retained by
the Income Series; and
(iv) Permit officers or employees of the Adviser who are duly elected
or appointed as officers, trustees, members of any committee of trustees or
members of any advisory board or committee of the Income Series to serve as such
without remuneration from or other cost to the Income Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Income Series. The expenses to be
assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Income Series will bear printing costs relating to
copies of its prospectus and reports which are distributed to its shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Income Series
shares.
(c) The Income Series shall bear all expenses of its operation not
specifically assumed by the Adviser as hereinabove set forth or as provided
elsewhere in this Agreement. The Adviser, in its sole discretion, may at any
time or from time to time pay or assume any expense that the Income Series would
or might otherwise be required to bear. However, the Adviser's payment or
assumption of any such expenses on one or more occasion shall neither relieve
the Adviser of any obligation to the Income Series pursuant to paragraph 6(b)
hereof nor obligate the Adviser to pay or assume the same or any similar expense
of the Income Series on any subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Income Series with such statistical and other
factual information, such advice regarding economic factors and trends, such
advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Income Series whose
services were made available to it by the Adviser are specifically authorized to
allocate brokerage and principal business to firms that provide such services or
facilities and to cause the Income Series to pay a member of a securities
exchange, or any other securities broker or dealer, an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange or another broker or dealer would have charged for
effecting that transaction, if the Adviser or the individual allocating such
brokerage determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services (as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such member, 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 the
Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Income Series pursuant to paragraph 3(a)(i) hereof are
the property of the Income Series and shall be surrendered by the Adviser
promptly on request by the Income Series. The Income Series shall furnish or
otherwise make available to the Adviser such financial reports, proxy statements
and other information relating to the business and affairs of the Income Series
as the Adviser may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished
and expenses paid or assumed hereunder by the Adviser, the Income Series shall
pay the Adviser a fee at the annual rate of one-half of one percent (1/2 of 1%)
of the first $100,000,000 average daily net asset value, .45 of 1% of the
average daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of
the average daily net assets between $150,000,001 and $500,000,000 and .35 of 1%
in excess of $500,000,001 of the Income Series, as determined in accordance with
the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due the Adviser in
payment of such fees shall be accrued daily by the Income Series on the basis of
the net asset value of the Income Series applicable to the close of each
business day, and in the case of any day which is not a business day, the net
asset value of the Income Series applicable to the close of the last preceding
business day; and the total amount thus accrued with respect to each calendar
month or portion thereof during which this Agreement remains in effect shall
become due and payable to the Adviser in the first business day of the next
succeeding calendar month. The term "business day" means a day for all or part
of which the New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Income Series; but
this prohibition shall not prevent the purchase by or for the Adviser or any of
its officers or directors of shares of the Income Series at the price at which
such shares are available to the public at the moment of purchase.
8. Nothing herein contained shall be deemed to require the Income Series
to take any action to the Declaration of Trust of Xxxxxx Mutual Funds or the
Trust By-Laws, or any applicable statutory or regulatory requirement to which it
is subject or by which it is bound, or to relieve or deprive the Board of
Trustees of Xxxxxx Mutual Funds of its responsibility for and control of the
conduct of the Income Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Income Series at the 2002 Annual Meeting,
and, unless sooner terminated as provided in paragraph 10 hereof, this Agreement
shall remain in effect through the close of business on October 31, 2004, and
thereafter subject to the termination provisions and other terms and conditions
hereof; if: (a) such continuation shall be specifically approved at least
annually by the Board of Trustees, or by vote of a majority of the outstanding
voting securities of the Income Series, and concurrently with such approval by
the Board of Trustees or prior to such approval by the holders of the
outstanding voting securities of the Income Series, as the case may be, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the trustees of the Xxxxxx Mutual Funds who are not
parties to this Agreement or interested persons of any such party; and (b) the
Adviser shall have not notified the Income Series, in writing, at least sixty
(60) days prior to October 31 of each year after 2004 that it does not desire
such continuation. The Adviser shall furnish to the Income Series, promptly upon
its request such information in the possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner
hypothecated or pledged, without the affirmative vote of a majority of the
outstanding voting securities of the Income Series, and this Agreement shall
automatically and immediately terminate in the event of its assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Income Series, such
action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Income Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the Income
Series whose services were made available to the Income Series by the Adviser
shall be liable to the Income Series for any error of judgment or mistake of law
or for any loss suffered by the Income Series by reason of any action taken or
omission to act committed in connection with the matters to which this Agreement
relates, except that nothing herein contained shall be construed (i) to protect
the Adviser or any affiliated person of the Adviser (whether or not such
affiliated person is or was an officer, director or member of any advisory board
of the Income Series and/or Xxxxxx Mutual Funds) against any liability to the
Income Series or its security holders for any breach of fiduciary duty with
respect to the Adviser's receipt of compensation for services to the Income
Series, (ii) to protect the Adviser or any affiliated person of the Adviser who
is or was an officer, trustee or member of any advisory board of the Income
Series and/or Xxxxxx Mutual Funds against any liability to the Income Series or
its security holders for any act or practice ( other than the Adviser's receipt
of compensation for services to the Income Series) constituting a breach of
fiduciary duty involving personal misconduct in respect of the Income Series,
(iii) to protect the Adviser against any liability to the Income Series or its
security holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations or duties, under
this Agreement, or (iv) to protect any affiliated person of the Adviser who is
or was a Trustee or officer of the Income Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Income Series and/or Xxxxxx Mutual Funds. In the
event that any affiliated person of the Adviser shall become a Trustee, officer
or employee of the Income Series and/or Xxxxxx Mutual Funds, then all actions
taken or omissions to act made by such person in connection with the discharge
of his duties to the Income Series shall be deemed to have been taken or made by
such person solely in his capacity as such Trustee, officer or employee of said
entity, notwithstanding the fact that the services of such person are being or
have been furnished by the Adviser to said entity as provided in this Agreement
or that the compensation and expenses of such person are being or have been paid
by the Adviser or any other affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Income Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have the meanings assigned
to them by Section 2(a) of the Investment Company Act of 1940, as
amended. In addition, where the effect of a requirement of the Investment
Company Act of 1940, as amended, reflected in any provision of this Agreement is
relaxed by a rule, regulation or order of the Commission, whether of special or
of general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
15. The Alabama Tax-Free Income Series hereby delegates to and the Adviser
accepts delegation of the responsibilities embodied in the Anti-Money Laundering
Policy of Xxxxxx Mutual Funds as adopted by the Board of Trustees at its meeting
on August 22, 2002 and as may be further amended to conform with requirements of
federal laws, rules and regulations. The Adviser agrees that any and all records
maintained by or created by the Adviser to effectuate the Anti-Money Laundering
Policy of Xxxxxx Mutual Funds shall be available for inspection by federal
examiners upon request. The Adviser acknowledges and agrees that all employees
of the Adviser will cooperate with the Anti-Money Laundering Policy of Xxxxxx
Mutual Funds and that failure to do so, or involvement in money laundering
activities, may result in suspension, termination and/or civil or criminal
liability. The Adviser further agrees that any and all records maintained by or
created by the Adviser to effectuate the Anti-Money Laundering Policy of Xxxxxx
Mutual Funds shall be available for independent third party audit as determined
by the Board of Trustees, and that all employees of the Adviser will cooperate
fully with the independent third party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Alabama Tax-Free Income Series
By:________________________________
Xxxxxx X. Xxxxxx, Xx.
President
Attest__________________________
Xxxxxxxx Xxxxxx
XXXXXX & COMPANY, INC.
By:________________________________
Xxxxxxx X. Xxxxxx XX
President
Attest__________________________
Xxxxxxxx Xxxxxx
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
Kentucky Tax-Free Income Series, (hereinafter called "Income Series"), and
XXXXXX & COMPANY, INC., a corporation organized and existing under the laws of
the State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Income Series is engaged in business as part of an open-end
management investment company which is registered as such under the federal
Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Income Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Income Series and shall provide the Income Series
with office space and facilities and corporate administration, subject to and
upon the terms and conditions set forth in this Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Income Series in a manner consistent with its
investment objectives; shall determine the securities to be purchased and sold
by the Income Series, and the portion of its assets to be held in cash or cash
equivalents, in order to carry out such program; and generally shall take such
other steps, including the placing of orders for the purchase or sales of
securities on behalf of the Income Series, as the Adviser may deem necessary or
appropriate for the implementation of such program. The Adviser shall also
furnish to or place at the disposal of the Income Series such of the
information, reports evaluations, analyses and opinions formulated or obtained
by the Adviser in the discharge of its duties hereunder as the Income Series
may, at the time or from time to time, reasonably request or as the Adviser may
deem helpful to the Income Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Income Series such
office space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Income Series) as the Income Series may
reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Income Series, for such
periods and in such forms as are prescribed by rules and regulations of the
Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Income Series is required to maintain and preserve
pursuant to Section 31(a) of the Investment company Act of 1940 and the rules
and regulations of the Commission thereunder which are not maintained and
preserved on behalf of the Income Series by any custodian, transfer agent or
other institutional agent retained by the Income Series;
(iii) Furnish the services and pay or provide for the compensation
and expenses of individuals competent (A) to perform for the Income Series all
executive and administrative functions that are not assigned to any custodian,
transfer agent or other institutional agent retained by the Income Series, and
(B) to supervise and coordinate the activities of such institutional agents and
the other agents (e.g., independent accountants and legal counsel) retained by
the Income Series; and
(iv) Permit officers or employees of the Adviser who are duly
elected or appointed as officers, trustees, members of any committee of trustees
or members of any advisory board or committee of the Income Series to serve as
such without remuneration from or other cost to the Income Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Income Series. The expenses to be
assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Income Series will bear printing costs relating to
copies of its prospectus and reports which are distributed to its shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Income Series
shares.
(c) The Income Series shall bear all expenses of its operation not
specifically assumed by the Adviser as hereinabove set forth or as provided
elsewhere in this Agreement. The Adviser, in its sole discretion, may at any
time or from time to time pay or assume any expense that the Income Series would
or might otherwise be required to bear. However, the Adviser's payment or
assumption of any such expenses on one or more occasion shall neither relieve
the Adviser of any obligation to the Income Series pursuant to paragraph 6(b)
hereof nor obligate the Adviser to pay or assume the same or any similar expense
of the Income Series on any subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Income Series with such statistical and other
factual information, such advice regarding economic factors and trends, such
advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Income Series whose
services were made available to it by the Adviser are specifically authorized to
allocate brokerage and principal business to firms that provide such services or
facilities and to cause the Income Series to pay a member of a securities
exchange, or any other securities broker or dealer, an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange or another broker or dealer would have charged for
effecting that transaction, if the Adviser or the individual allocating such
brokerage determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services (as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such member, 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 the
Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Income Series pursuant to paragraph 3(a)(i) hereof are
the property of the Income Series and shall be surrendered by the Adviser
promptly on request by the Income Series. The Income Series shall furnish or
otherwise make available to the Adviser such financial reports, proxy statements
and other information relating to the business and affairs of the Income Series
as the Adviser may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Income Series shall pay
the Adviser a fee at the annual rate of one-half of one percent (1/2 of 1%) of
the first $100,000,000 average daily net asset value, .45 of 1% of the average
daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of the
average daily net assets between $150,000,001 and $500,000,000, and .35 of 1% in
excess of $500,000,001 of the Income Series, as determined in accordance with
the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due the Adviser in
payment of such fees shall be accrued daily by the Income Series on the basis of
the net asset value of the Income Series applicable to the close of each
business day, and in the case of any day which is not a business day, the net
asset value of the Income Series applicable to the close of the last preceding
business day; and the total amount thus accrued with respect to each calendar
month or portion thereof during which this Agreement remains in effect shall
become due and payable to the Adviser in the first business day of the next
succeeding calendar month. The term "business day" means a day for all or part
of which the New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Income Series; but
this prohibition shall not prevent the purchase by or for the Adviser or any of
its officers or directors of shares of the Income Series at the price at which
such shares are available to the public at the moment of purchase.
8. Nothing herein contained shall be deemed to require the Income Series to
take any action to the Declaration of Trust of Xxxxxx Mutual Funds or the Trust
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of Xxxxxx Mutual Funds of its responsibility for and control of the conduct of
the Income Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Income Series at the 2002 Annual Meeting,
and, unless sooner terminated as provided in paragraph 10 hereof, this Agreement
shall remain in effect through the close of business on October 31, 2004, and
thereafter subject to the termination provisions and other terms and conditions
hereof; if: (a) such continuation shall be specifically approved at least
annually by the Board of Trustees, or by vote of a majority of the outstanding
voting securities of the Income Series, and concurrently with such approval by
the Board of Trustees or prior to such approval by the holders of the
outstanding voting securities of the Income Series, as the case may be, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the trustees of the Xxxxxx Mutual Funds who are not
parties to this Agreement or interested persons of any such party; and (b) the
Adviser shall have not notified the Income Series, in writing, at least sixty
(60) days prior to October 31 of each year after 2004 that it does not desire
such continuation. The Adviser shall furnish to the Income Series, promptly upon
its request such information in the possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Income Series, and this Agreement
shall automatically and immediately terminate in the event of its assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Income Series, such
action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Income Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the Income
Series whose services were made available to the Income Series by the Adviser
shall be liable to the Income Series for any error of judgment or mistake of law
or for any loss suffered by the Income Series by reason of any action taken or
omission to act committed in connection with the matters to which this Agreement
relates, except that nothing herein contained shall be construed (i) to protect
the Adviser or any affiliated person of the Adviser (whether or not such
affiliated person is or was an officer, director or member of any advisory board
of the Income Series and/or Xxxxxx Mutual Funds) against any liability to the
Income Series or its security holders for any breach of fiduciary duty with
respect to the Adviser's receipt of compensation for services to the Income
Series, (ii) to protect the Adviser or any affiliated person of the Adviser who
is or was an officer, trustee or member of any advisory board of the Income
Series and/or Xxxxxx Mutual Funds against any liability to the Income Series or
its security holders for any act or practice ( other than the Adviser's receipt
of compensation for services to the Income Series) constituting a breach of
fiduciary duty involving personal misconduct in respect of the Income Series,
(iii) to protect the Adviser against any liability to the Income Series or its
security holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations or duties, under
this Agreement, or (iv) to protect any affiliated person of the Adviser who is
or was a Trustee or officer of the Income Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Income Series and/or Xxxxxx Mutual Funds. In the
event that any affiliated person of the Adviser shall become a Trustee, officer
or employee of the Income Series and/or Xxxxxx Mutual Funds, then all actions
taken or omissions to act made by such person in connection with the discharge
of his duties to the Income Series shall be deemed to have been taken or made by
such person solely in his capacity as such Trustee, officer or employee of said
entity, notwithstanding the fact that the services of such person are being or
have been furnished by the Adviser to said entity as provided in this Agreement
or that the compensation and expenses of such person are being or have been paid
by the Adviser or any other affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Income Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have
the meanings assigned to them by Section 2(a) of the Investment Company Act of
1940, as amended. In addition, where the effect of a requirement of the
Investment Company Act of 1940, as amended, reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Commission, whether
of special or of general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
15. The Kentucky Tax-Free Income Series hereby delegates to and the Adviser
accepts delegation of the responsibilities embodied in the Anti-Money Laundering
Policy of Xxxxxx Mutual Funds as adopted by the Board of Trustees at its meeting
on August 22, 2002 and as may be further amended to conform with requirements of
federal laws, rules and regulations. The Adviser agrees that any and all records
maintained by or created by the Adviser to effectuate the Anti-Money Laundering
Policy of Xxxxxx Mutual Funds shall be available for inspection by federal
examiners upon request. The Adviser acknowledges and agrees that all employees
of the Adviser will cooperate with the Anti-Money Laundering Policy of Xxxxxx
Mutual Funds and that failure to do so, or involvement in money laundering
activities, may result in suspension, termination and/or civil or criminal
liability. The Adviser further agrees that any and all records maintained by or
created by the Adviser to effectuate the Anti-Money Laundering Policy of Xxxxxx
Mutual Funds shall be available for independent third party audit as determined
by the Board of Trustees, and that all employees of the Adviser will cooperate
fully with the independent third party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Kentucky Tax-Free Income Series
By:___________________________________
Vice President
Attest________________________________
XXXXXX & COMPANY, INC.
By:___________________________________
President
Attest________________________________
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
Kentucky Tax-Free Short-to-Medium Series, (hereinafter called "Short-to-Medium
Series"), and XXXXXX & COMPANY, INC., a corporation organized and existing under
the laws of the State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Short-to-Medium Series is engaged in business as part of an
open-end management investment company which is registered as such under the
federal Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Short-to-Medium Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Short-to-Medium Series and shall provide the
Short-to-Medium Series with office space and facilities and corporate
administration, subject to and upon the terms and conditions set forth in this
Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Short-to-Medium Series in a manner consistent
with its investment objectives; shall determine the securities to be purchased
and sold by the Short-to-Medium Series, and the portion of its assets to be held
in cash or cash equivalents, in order to carry out such program; and generally
shall take such other steps, including the placing of orders for the purchase or
sales of securities on behalf of the Short-to-Medium Series, as the Adviser may
deem necessary or appropriate for the implementation of such program. The
Adviser shall also furnish to or place at the disposal of the Short-to-Medium
Series such of he information, reports evaluations, analyses and opinions
formulated or obtained by the Adviser in the discharge of its duties hereunder
as the Short-to-Medium Series may, at the time or from time to time, reasonably
request or as the Adviser may deem helpful to the Short-to-Medium Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Short-to-Medium Series
such office space, equipment facilities, personnel and services (exclusive of
and in addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Short-to-Medium Series) as the
Short-to-Medium Series may reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Short-to-Medium Series,
for such periods and in such forms as are prescribed by rules and regulations of
the Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Short-to-Medium Series is required to maintain and
preserve pursuant to Section 31(a) of the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder which are not
maintained and preserved on behalf of the Short-to-Medium Series by any
custodian, transfer agent or other institutional agent retained by the
Short-to-Medium Series;
(iii) Furnish the services and pay or provide for the compensation and
expenses of individuals competent (A) to perform for the Short-to-Medium Series
all executive and administrative functions that are not assigned to any
custodian, transfer agent or other institutional agent retained by the
Short-to-Medium Series, and (B) to supervise and coordinate the activities of
such institutional agents and the other agents (e.g., independent accountants
and legal counsel) retained by the Short-to-Medium Series; and
(iv) Permit officers or employees of the Adviser who are duly elected
or appointed as officers, trustees, members of any committee of trustees or
members of any advisory board or committee of the Short-to-Medium Series to
serve as such without remuneration from or other cost to the Short-to-Medium
Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Short-to-Medium Series. The
expenses to be assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Short-to-Medium Series will bear printing costs
relating to copies of its prospectus and reports which are distributed to its
shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Short-to-Medium
Series shares.
(c) The Short-to-Medium Series shall bear all expenses of its
operation not specifically assumed by the Adviser as hereinabove set forth or as
provided elsewhere in this Agreement. The Adviser, in its sole discretion, may
at any time or from time to time pay or assume any expense that the
Short-to-Medium Series would or might otherwise be required to bear. However,
the Adviser's payment or assumption of any such expenses on one or more occasion
shall neither relieve the Adviser of any obligation to the Short-to-Medium
Series pursuant to paragraph 6(b) hereof nor obligate the Adviser to pay or
assume the same or any similar expense of the Short-to-Medium Series on any
subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Short-to-Medium Series with such statistical and
other factual information, such advice regarding economic factors and trends,
such advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Short-to-Medium Series
whose services were made available to it by the Adviser are specifically
authorized to allocate brokerage and principal business to firms that provide
such services or facilities and to cause the Short-to-Medium Series to pay a
member of a securities exchange, or any other securities broker or dealer, an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange or another broker or dealer
would have charged for effecting that transaction, if the Adviser or the
individual allocating such brokerage determines in good faith that such amount
of commission is reasonable in relation to the
value of the brokerage and research services (as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided by such member,
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
the Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Short-to-Medium Series pursuant to paragraph 3(a)(i)
hereof are the property of the Short-to-Medium Series and shall be surrendered
by the Adviser promptly on request by the Short-to-Medium Series. The
Short-to-Medium Series shall furnish or otherwise make available to the Adviser
such financial reports, proxy statements and other information relating to the
business and affairs of the Short-to-Medium Series as the Adviser may, at any
time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Short-to-Medium Series
shall pay the Adviser a fee at the annual rate of one-half of one percent (1/2
of 1%) of the first $100,000,000 average daily net asset value, .45 of 1% of the
average daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of
the average daily net assets between $150,000,001 and $500,000,000, and .35 of
1% in excess of $500,000,001 of the Short-to-Medium Series, as determined in
accordance with the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due
the Adviser in payment of such fees shall be accrued daily by the
Short-to-Medium Series on the basis of the net asset value of the
Short-to-Medium Series applicable to the close of each business day, and in the
case of any day which is not a business day, the net asset value of the
Short-to-Medium Series applicable to the close of the last preceding business
day; and the total amount thus accrued with respect to each calendar month or
portion thereof during which this Agreement remains in effect shall become due
and payable to the Adviser in the first business day of the next succeeding
calendar month. The term "business day" means a day for all or part of which the
New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Short-to-Medium
Series; but this prohibition shall not prevent the purchase by or for the
Adviser or any of its officers or directors of shares of the Short-to-Medium
Series at the price at which such shares are available to the public at the
moment of purchase.
8. Nothing herein contained shall be deemed to require the Short-to-Medium
Series to take any action to the Declaration of Trust of Xxxxxx Mutual Funds or
the Trust By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the Board
of Trustees of Xxxxxx Mutual Funds of its responsibility for and control of the
conduct of the Short-to-Medium Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Short-to-Medium Series at the 2002 Annual
Meeting, and, unless sooner terminated as provided in paragraph 10 hereof, this
Agreement shall remain in effect through the close of business on October 31,
2004, and thereafter subject to the termination provisions and other terms and
conditions hereof; if: (a) such continuation shall be specifically approved at
least annually by the Board of Trustees, or by vote of a majority of the
outstanding voting securities of the Short-to-Medium Series, and concurrently
with such approval by the Board of Trustees or prior to such approval by the
holders of the outstanding voting securities of the Short-to-Medium Series, as
the case may be, by the vote, cast in person at a meeting called for the purpose
of voting on such approval, of a majority of the trustees of the Xxxxxx Mutual
Funds who are not parties to this Agreement or interested persons of any such
party; and (b) the Adviser shall have not notified the Short-to-Medium Series,
in writing, at least sixty (60) days prior to October 31 of each year after 2004
that it does not desire such continuation. The Adviser shall furnish to the
Short-to-Medium Series, promptly upon its request such information in the
possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Short-to-Medium Series, and this
Agreement shall automatically and immediately terminate in the event of its
assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Short-to-Medium Series,
such action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Short-to-Medium Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the
Short-to-Medium Series whose services were made available to the Short-to-Medium
Series by the Adviser shall be liable to the Short-to-Medium Series for any
error of judgment or mistake of law or for any loss suffered by the
Short-to-Medium Series by reason of any action taken or omission to act
committed in connection with the matters to which this Agreement relates, except
that nothing herein contained shall be construed (i) to protect the Adviser or
any affiliated person of the Adviser (whether or not such affiliated person is
or was an officer, director or member of any advisory board of the
Short-to-Medium Series and/or Xxxxxx Mutual Funds) against any liability to the
Short-to-Medium Series or its security holders for any breach of fiduciary duty
with respect to the Adviser's receipt of compensation for services to the
Short-to-Medium Series, (ii) to protect the Adviser or any affiliated person of
the Adviser who is or was an officer, trustee or member of any advisory board of
the Short-to-Medium Series and/or Xxxxxx Mutual Funds against any liability to
the Short-to-Medium Series or its security holders for any act or practice (
other than the Adviser's receipt of compensation for services to the
Short-to-Medium Series) constituting a breach of fiduciary duty involving
personal misconduct in respect of the Short-to-Medium Series, (iii) to protect
the Adviser against any liability to the Short-to-Medium Series or its security
holders to which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations or duties, under this
Agreement, or (iv) to protect any affiliated person of the Adviser who is or was
a Trustee or officer of the Short-to-Medium Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Short-to-Medium Series and/or Xxxxxx Mutual
Funds. In the event that any affiliated person of the Adviser shall become a
Trustee, officer or employee of the Short-to-Medium Series and/or Xxxxxx Mutual
Funds, then all actions taken or omissions to act made by such person in
connection with the discharge of his duties to the Short-to-Medium Series shall
be deemed to have been taken or made by such person solely in his capacity as
such Trustee, officer or employee of said entity, notwithstanding the fact that
the services of such person are being or have been furnished by the Adviser to
said entity as provided in this Agreement or that the compensation and expenses
of such person are being or have been paid by the Adviser or any other
affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Short-to-Medium Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have the meanings assigned
to them by Section 2(a) of the Investment Company Act of 1940, as amended. In
addition, where the effect of a requirement of the Investment Company Act of
1940, as amended, reflected in any provision of this Agreement is relaxed by a
rule, regulation or order of the Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
15. The Kentucky Tax-Free Short-to-Medium Series hereby delegates to and
the Adviser accepts delegation of the responsibilities embodied in the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds as adopted by the Board of
Trustees at its meeting on August 22, 2002 and as may be further amended to
conform with requirements of federal laws, rules and regulations. The Adviser
agrees that any and all records maintained by or created by the Adviser to
effectuate the Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be
available for inspection by federal examiners upon request. The Adviser
acknowledges and agrees that all employees of the Adviser will cooperate with
the Anti-Money Laundering Policy of Xxxxxx Mutual Funds and that failure to do
so, or involvement in money laundering activities, may result in suspension,
termination and/or civil or criminal liability. The Adviser further agrees that
any and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
independent third party audit as determined by the Board of Trustees, and that
all employees of the Adviser will cooperate fully with the independent third
party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Kentucky Tax-Free Short-to-Medium Series
By:___________________________________
Vice President
Attest________________________________
XXXXXX & COMPANY, INC.
By: ___________________________________
President
Attest________________________________
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
Mississippi Tax-Free Income Series, (hereinafter called "Income Series"), and
XXXXXX & COMPANY, INC., a corporation organized and existing under the laws of
the State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Income Series is engaged in business as part of an open-end
management investment company which is registered as such under the federal
Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Income Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Income Series and shall provide the Income Series
with office space and facilities and corporate administration, subject to and
upon the terms and conditions set forth in this Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Income Series in a manner consistent with its
investment objectives; shall determine the securities to be purchased and sold
by the Income Series, and the portion of its assets to be held in cash or cash
equivalents, in order to carry out such program; and generally shall take such
other steps, including the placing of orders for the purchase or sales of
securities on behalf of the Income Series, as the Adviser may deem necessary or
appropriate for the implementation of such program. The Adviser shall also
furnish to or place at the disposal of the Income Series such of the
information, reports evaluations, analyses and opinions formulated or obtained
by the Adviser in the discharge of its duties hereunder as the Income Series
may, at the time or from time to time, reasonably request or as the Adviser may
deem helpful to the Income Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Income Series such office
space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Income Series) as the Income Series may
reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Income Series, for such
periods and in such forms as are prescribed by rules and regulations of the
Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Income Series is required to maintain and preserve
pursuant to Section 31(a) of the Investment company Act of 1940 and the rules
and regulations of the Commission thereunder which are not maintained and
preserved on behalf of the Income Series by any custodian, transfer agent or
other institutional agent retained by the Income Series;
(iii) Furnish the services and pay or provide for the compensation and
expenses of individuals competent (A) to perform for the Income Series all
executive and administrative functions that are not assigned to any custodian,
transfer agent or other institutional agent retained by the Income Series, and
(B) to supervise and coordinate the activities of such institutional agents and
the other agents (e.g., independent accountants and legal counsel) retained by
the Income Series; and
(iv) Permit officers or employees of the Adviser who are duly elected
or appointed as officers, trustees, members of any committee of trustees or
members of any advisory board or committee of the Income Series to serve as such
without remuneration from or other cost to the Income Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Income Series. The expenses to be
assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Income Series will bear printing costs relating to
copies of its prospectus and reports which are distributed to its shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Income Series
shares.
(c) The Income Series shall bear all expenses of its operation not
specifically assumed by the Adviser as hereinabove set forth or as provided
elsewhere in this Agreement. The Adviser, in its sole discretion, may at any
time or from time to time pay or assume any expense that the Income Series would
or might otherwise be required to bear. However, the Adviser's payment or
assumption of any such expenses on one or more occasion shall neither relieve
the Adviser of any obligation to the Income Series pursuant to paragraph 6(b)
hereof nor obligate the Adviser to pay or assume the same or any similar expense
of the Income Series on any subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Income Series with such statistical and other
factual information, such advice regarding economic factors and trends, such
advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Income Series whose
services were made available to it by the Adviser are specifically authorized to
allocate brokerage and principal business to firms that provide such services or
facilities and to cause the Income Series to pay a member of a securities
exchange, or any other securities broker or dealer, an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange or another broker or dealer would have charged for
effecting that transaction, if the Adviser or the individual allocating such
brokerage determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services (as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such member, 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 the
Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Income Series pursuant to paragraph 3(a)(i) hereof are
the property of the Income Series and shall be surrendered by the Adviser
promptly on request by the Income Series. The Income Series shall furnish or
otherwise make available to the Adviser such financial reports, proxy statements
and other information relating to the business and affairs of the Income Series
as the Adviser may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished
and expenses paid or assumed hereunder by the Adviser, the Income Series shall
pay the Adviser a fee at the annual rate of one-half of one percent (1/2 of 1%)
of the first $100,000,000 average daily net asset value, .45 of 1% of the
average daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of
the average daily net assets between $150,000,001 and $500,000,000, and .35 of
1% in excess of $500,000,001 of the Income Series, as determined in accordance
with the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due the
Adviser in payment of such fees shall be accrued daily by the Income Series on
the basis of the net asset value of the Income Series applicable to the close of
each business day, and in the case of any day which is not a business day, the
net asset value of the Income Series applicable to the close of the last
preceding business day; and the total amount thus accrued with respect to each
calendar month or portion thereof during which this Agreement remains in effect
shall become due and payable to the Adviser in the first business day of the
next succeeding calendar month. The term "business day" means a day for all or
part of which the New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Income Series; but
this prohibition shall not prevent the purchase by or for the Adviser or any of
its officers or directors of shares of the Income Series at the price at which
such shares are available to the public at the moment of purchase.
8. Nothing herein contained shall be deemed to require the Income Series
to take any action to the Declaration of Trust of Xxxxxx Mutual Funds or the
Trust By-Laws, or any applicable statutory or regulatory requirement to which it
is subject or by which it is bound, or to relieve or deprive the Board of
Trustees of Xxxxxx Mutual Funds of its responsibility for and control of the
conduct of the Income Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Income Series at the 2002 Annual Meeting,
and, unless sooner terminated as provided in paragraph 10 hereof, this Agreement
shall remain in effect through the close of business on October 31, 2004, and
thereafter subject to the termination provisions and other terms and conditions
hereof; if: (a) such continuation shall be specifically approved at least
annually by the Board of Trustees, or by vote of a majority of the outstanding
voting securities of the Income Series, and concurrently with such approval by
the Board of Trustees or prior to such approval by the holders of the
outstanding voting securities of the Income Series, as the case may be, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the trustees of the Xxxxxx Mutual Funds who are not
parties to this Agreement or interested persons of any such party; and (b) the
Adviser shall have not notified the Income Series, in writing, at least sixty
(60) days prior to October 31 of each year after 2004 that it does not desire
such continuation. The Adviser shall furnish to the Income Series, promptly upon
its request such information in the possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Income Series, and this Agreement
shall automatically and immediately terminate in the event of its assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Income Series, such
action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Income Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the Income
Series whose services were made available to the Income Series by the Adviser
shall be liable to the Income Series for any error of judgment or mistake of law
or for any loss suffered by the Income Series by reason of any action taken or
omission to act committed in connection with the matters to which this Agreement
relates, except that nothing herein contained shall be construed (i) to protect
the Adviser or any affiliated person of the Adviser (whether or not such
affiliated person is or was an officer, director or member of any advisory board
of the Income Series and/or Xxxxxx Mutual Funds) against any liability to the
Income Series or its security holders for any breach of fiduciary duty with
respect to the Adviser's receipt of compensation for services to the Income
Series, (ii) to protect the Adviser or any affiliated person of the Adviser who
is or was an officer, trustee or member of any advisory board of the Income
Series and/or Xxxxxx Mutual Funds against any liability to the Income Series or
its security holders for any act or practice ( other than the Adviser's receipt
of compensation for services to the Income Series) constituting a breach of
fiduciary duty involving personal misconduct in respect of the Income Series,
(iii) to protect the Adviser against any liability to the Income Series or its
security holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations or duties, under
this Agreement, or (iv) to protect any affiliated person of the Adviser who is
or was a Trustee or officer of the Income Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Income Series and/or Xxxxxx Mutual Funds. In the
event that any affiliated person of the Adviser shall become a Trustee, officer
or employee of the Income Series and/or Xxxxxx Mutual Funds, then all actions
taken or omissions to act made by such person in connection with the discharge
of his duties to the Income Series shall be deemed to have been taken or made by
such person solely in his capacity as such Trustee, officer or employee of said
entity, notwithstanding the fact that the services of such person are being or
have been furnished by the Adviser to said entity as provided in this Agreement
or that the compensation and expenses of such person are being or have been paid
by the Adviser or any other affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Income Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have
the meanings assigned to them by Section 2(a) of the Investment Company Act of
1940, as amended. In addition, where the effect of a requirement of the
Investment Company Act of 1940, as amended, reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Commission, whether
of special or of general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
15. The Mississippi Tax-Free Income Series hereby delegates to and the
Adviser accepts delegation of the responsibilities embodied in the Anti-Money
Laundering Policy of Xxxxxx Mutual Funds as adopted by the Board of Trustees at
its meeting on August 22, 2002 and as may be further amended to conform with
requirements of federal laws, rules and regulations. The Adviser agrees that any
and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
inspection by federal examiners upon request. The Adviser acknowledges and
agrees that all employees of the Adviser will cooperate with the Anti-Money
Laundering Policy of Xxxxxx Mutual Funds and that failure to do so, or
involvement in money laundering activities, may result in suspension,
termination and/or civil or criminal liability. The Adviser further agrees that
any and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
independent third party audit as determined by the Board of Trustees, and that
all employees of the Adviser will cooperate fully with the independent third
party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Mississippi Tax-Free Income Series
By:___________________________________
Xxxxxx X. Xxxxxx, Xx.
President
Attest_____________________________
Xxxxxxxx Xxxxxx
XXXXXX & COMPANY, INC.
By: __________________________________
Xxxxxxx X. Xxxxxx XX
President
Attest_____________________________
Xxxxxxxx Xxxxxx
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
North Carolina Tax-Free Income Series, (hereinafter called "Income Series"), and
XXXXXX & COMPANY, INC., a corporation organized and existing under the laws of
the State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Income Series is engaged in business as part of an open-end
management investment company which is registered as such under the federal
Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Income Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Income Series and shall provide the Income Series
with office space and facilities and corporate administration, subject to and
upon the terms and conditions set forth in this Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Income Series in a manner consistent with its
investment objectives; shall determine the securities to be purchased and sold
by the Income Series, and the portion of its assets to be held in cash or cash
equivalents, in order to carry out such program; and generally shall take such
other steps, including the placing of orders for the purchase or sales of
securities on behalf of the Income Series, as the Adviser may deem necessary or
appropriate for the implementation of such program. The Adviser shall also
furnish to or place at the disposal of the Income Series such of the
information, reports evaluations, analyses and opinions formulated or obtained
by the Adviser in the discharge of its duties hereunder as the Income Series
may, at the time or from time to time, reasonably request or as the Adviser may
deem helpful to the Income Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Income Series such office
space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Income Series) as the Income Series may
reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Income Series, for such
periods and in such forms as are prescribed by rules and regulations of the
Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Income Series is required to maintain and preserve
pursuant to Section 31(a) of the Investment company Act of 1940 and the rules
and regulations of the Commission thereunder which are not maintained and
preserved on behalf of the Income Series by any custodian, transfer agent or
other institutional agent retained by the Income Series;
(iii) Furnish the services and pay or provide for the compensation
and expenses of individuals competent (A) to perform for the Income Series all
executive and administrative functions that are not assigned to any custodian,
transfer agent or other institutional agent retained by the Income Series, and
(B) to supervise and coordinate the activities of such institutional agents and
the other agents (e.g., independent accountants and legal counsel) retained by
the Income Series; and
(iv) Permit officers or employees of the Adviser who are duly
elected or appointed as officers, trustees, members of any committee of trustees
or members of any advisory board or committee of the Income Series to serve as
such without remuneration from or other cost to the Income Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Income Series. The expenses to be
assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Income Series will bear printing costs relating to
copies of its prospectus and reports which are distributed to its shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Income Series
shares.
(c) The Income Series shall bear all expenses of its operation not
specifically assumed by the Adviser as hereinabove set forth or as provided
elsewhere in this Agreement. The Adviser, in its sole discretion, may at any
time or from time to time pay or assume any expense that the Income Series would
or might otherwise be required to bear. However, the Adviser's payment or
assumption of any such expenses on one or more occasion shall neither relieve
the Adviser of any obligation to the Income Series pursuant to paragraph 6(b)
hereof nor obligate the Adviser to pay or assume the same or any similar expense
of the Income Series on any subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Income Series with such statistical and other
factual information, such advice regarding economic factors and trends, such
advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Income Series whose
services were made available to it by the Adviser are specifically authorized to
allocate brokerage and principal business to firms that provide such services or
facilities and to cause the Income Series to pay a member of a securities
exchange, or any other securities broker or dealer, an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange or another broker or dealer would have charged for
effecting that transaction, if the Adviser or the individual allocating such
brokerage determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services (as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such member, 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 the
Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Income Series pursuant to paragraph 3(a)(i) hereof are
the property of the Income Series and shall be surrendered by the Adviser
promptly on request by the Income Series. The Income Series shall furnish or
otherwise make available to the Adviser such financial reports, proxy statements
and other information relating to the business and affairs of the Income Series
as the Adviser may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Income Series shall pay
the Adviser a fee at the annual rate of one-half of one percent (1/2 of 1%) of
the first $100,000,000 average daily net asset value, .45 of 1% of the average
daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of the
average daily net assets between $150,000,001 and $500,000,000, and .35 of 1% in
excess of $500,000,001 of the Income Series, as determined in accordance with
the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due the Adviser in
payment of such fees shall be accrued daily by the Income Series on the basis of
the net asset value of the Income Series applicable to the close of each
business day, and in the case of any day which is not a business day, the net
asset value of the Income Series applicable to the close of the last preceding
business day; and the total amount thus accrued with respect to each calendar
month or portion thereof during which this Agreement remains in effect shall
become due and payable to the Adviser in the first business day of the next
succeeding calendar month. The term "business day" means a day for all or part
of which the New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Income Series; but
this prohibition shall not prevent the purchase by or for the Adviser or any of
its officers or directors of shares of the Income Series at the price at which
such shares are available to the public at the moment of purchase.
8. Nothing herein contained shall be deemed to require the Income Series to
take any action to the Declaration of Trust of Xxxxxx Mutual Funds or the Trust
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of Xxxxxx Mutual Funds of its responsibility for and control of the conduct of
the Income Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Income Series at the 2002 Annual Meeting,
and, unless sooner terminated as provided in paragraph 10 hereof, this Agreement
shall remain in effect through the close of business on October 31, 2004, and
thereafter subject to the termination provisions and other terms and conditions
hereof; if: (a) such continuation shall be specifically approved at least
annually by the Board of Trustees, or by vote of a majority of the outstanding
voting securities of the Income Series, and concurrently with such approval by
the Board of Trustees or prior to such approval by the holders of the
outstanding voting securities of the Income Series, as the case may be, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the trustees of the Xxxxxx Mutual Funds who are not
parties to this Agreement or interested persons of any such party; and (b) the
Adviser shall have not notified the Income Series, in writing, at least sixty
(60) days prior to October 31 of each year after 2004 that it does not desire
such continuation. The Adviser shall furnish to the Income Series, promptly upon
its request such information in the possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Income Series, and this Agreement
shall automatically and immediately terminate in the event of its assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Income Series, such
action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Income Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the Income
Series whose services were made available to the Income Series by the Adviser
shall be liable to the Income Series for any error of judgment or mistake of law
or for any loss suffered by the Income Series by reason of any action taken or
omission to act committed in connection with the matters to which this Agreement
relates, except that nothing herein contained shall be construed (i) to protect
the Adviser or any affiliated person of the Adviser (whether or not such
affiliated person is or was an officer, director or member of any advisory board
of the Income Series and/or Xxxxxx Mutual Funds) against any liability to the
Income Series or its security holders for any breach of fiduciary duty with
respect to the Adviser's receipt of compensation for services to the Income
Series, (ii) to protect the Adviser or any affiliated person of the Adviser who
is or was an officer, trustee or member of any advisory board of the Income
Series and/or Xxxxxx Mutual Funds against any liability to the Income Series or
its security holders for any act or practice ( other than the Adviser's receipt
of compensation for services to the Income Series) constituting a breach of
fiduciary duty involving personal misconduct in respect of the Income Series,
(iii) to protect the Adviser against any liability to the Income Series or its
security holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations or duties, under
this Agreement, or (iv) to protect any affiliated person of the Adviser who is
or was a Trustee or officer of the Income Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Income Series and/or Xxxxxx Mutual Funds. In the
event that any affiliated person of the Adviser shall become a Trustee, officer
or employee of the Income Series and/or Xxxxxx Mutual Funds, then all actions
taken or omissions to act made by such person in connection with the discharge
of his duties to the Income Series shall be deemed to have been taken or made by
such person solely in his capacity as such Trustee, officer or employee of said
entity, notwithstanding the fact that the services of such person are being or
have been furnished by the Adviser to said entity as provided in this Agreement
or that the compensation and expenses of such person are being or have been paid
by the Adviser or any other affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Income Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have
the meanings assigned to them by Section 2(a) of the Investment Company Act of
1940, as amended. In addition, where the effect of a requirement of the
Investment Company Act of 1940, as amended, reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Commission, whether
of special or of general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
15. The North Carolina Tax-Free Income Series hereby delegates to and the
Adviser accepts delegation of the responsibilities embodied in the Anti-Money
Laundering Policy of Xxxxxx Mutual Funds as adopted by the Board of Trustees at
its meeting on August 22, 2002 and as may be further amended to conform with
requirements of federal laws, rules and regulations. The Adviser agrees that any
and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
inspection by federal examiners upon request. The Adviser acknowledges and
agrees that all employees of the Adviser will cooperate with the Anti-Money
Laundering Policy of Xxxxxx Mutual Funds and that failure to do so, or
involvement in money laundering activities, may result in suspension,
termination and/or civil or criminal liability. The Adviser further agrees that
any and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
independent third party audit as determined by the Board of Trustees, and that
all employees of the Adviser will cooperate fully with the independent third
party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
North Carolina Tax-Free Income Series
By:___________________________________
Vice President
Attest________________________________
XXXXXX & COMPANY, INC.
By: ___________________________________
President
Attest________________________________
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
North Carolina Tax-Free Short-to-Medium Series, (hereinafter called
"Short-to-Medium Series"), and XXXXXX & COMPANY, INC., a corporation organized
and existing under the laws of the State of Kentucky (hereinafter called the
"Adviser").
WITNESSETH:
WHEREAS, the Short-to-Medium Series is engaged in business as part of an
open-end management investment company which is registered as such under the
federal Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Short-to-Medium Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Short-to-Medium Series and shall provide the
Short-to-Medium Series with office space and facilities and corporate
administration, subject to and upon the terms and conditions set forth in this
Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Short-to-Medium Series in a manner consistent
with its investment objectives; shall determine the securities to be purchased
and sold by the Short-to-Medium Series, and the portion of its assets to be held
in cash or cash equivalents, in order to carry out such program; and generally
shall take such other steps, including the placing of orders for the purchase or
sales of securities on behalf of the Short-to-Medium Series, as the Adviser may
deem necessary or appropriate for the implementation of such program. The
Adviser shall also furnish to or place at the disposal of the Short-to-Medium
Series such of he information, reports evaluations, analyses and opinions
formulated or obtained by the Adviser in the discharge of its duties hereunder
as the Short-to-Medium Series may, at the time or from time to time, reasonably
request or as the Adviser may deem helpful to the Short-to-Medium Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Short-to-Medium Series
such office space, equipment facilities, personnel and services (exclusive of
and in addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Short-to-Medium Series) as the
Short-to-Medium Series may reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Short-to-Medium Series,
for such periods and in such forms as are prescribed by rules and regulations of
the Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Short-to-Medium Series is required to maintain and
preserve pursuant to Section 31(a) of the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder which are not
maintained and preserved on behalf of the Short-to-Medium Series by any
custodian, transfer agent or other institutional agent retained by the
Short-to-Medium Series;
(iii) Furnish the services and pay or provide for the compensation and
expenses of individuals competent (A) to perform for the Short-to-Medium Series
all executive and administrative functions that are not assigned to any
custodian, transfer agent or other institutional agent retained by the
Short-to-Medium Series, and (B) to supervise and coordinate the activities of
such institutional agents and the other agents (e.g., independent accountants
and legal counsel) retained by the Short-to-Medium Series; and
(iv) Permit officers or employees of the Adviser who are duly elected
or appointed as officers, trustees, members of any committee of trustees or
members of any advisory board or committee of the Short-to-Medium Series to
serve as such without remuneration from or other cost to the Short-to-Medium
Series.
(b) The adviser shall pay all sales and promotional expenses incurred
in the distribution of shares of the Short-to-Medium Series. The expenses to be
assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Short-to-Medium Series will bear printing costs
relating to copies of its prospectus and reports which are distributed to its
shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up to
and including receipt of their orders for the purchase of Short-to-Medium Series
shares.
(c) The Short-to-Medium Series shall bear all expenses of its
operation not specifically assumed by the Adviser as hereinabove set forth or as
provided elsewhere in this Agreement. The Adviser, in its sole discretion, may
at any time or from time to time pay or assume any expense that the
Short-to-Medium Series would or might otherwise be required to bear. However,
the Adviser's payment or assumption of any such expenses on one or more occasion
shall neither relieve the Adviser of any obligation to the Short-to-Medium
Series pursuant to paragraph 6(b) hereof nor obligate the Adviser to pay or
assume the same or any similar expense of the Short-to-Medium Series on any
subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Short-to-Medium Series with such statistical and
other factual information, such advice regarding economic factors and trends,
such advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Short-to-Medium Series
whose services were made available to it by the Adviser are specifically
authorized to allocate brokerage and principal business to firms that provide
such services or facilities and to cause the Short-to-Medium Series to pay a
member of a securities exchange, or any other securities broker or dealer, an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange or another broker or dealer
would have charged for effecting that transaction, if the Adviser or the
individual allocating such brokerage determines in good faith that such amount
of in relation to the commission is reasonable
value of the brokerage and research services (as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided by such member,
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
the Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Short-to-Medium Series pursuant to paragraph 3(a)(i)
hereof are the property of the Short-to-Medium Series and shall be surrendered
by the Adviser promptly on request by the Short-to-Medium Series. The
Short-to-Medium Series shall furnish or otherwise make available to the Adviser
such financial reports, proxy statements and other information relating to the
business and affairs of the Short-to-Medium Series as the Adviser may, at any
time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Short-to-Medium Series
shall pay the Adviser a fee at the annual rate of one-half of one percent (1/2
of 1%) of the first $100,000,000 average daily net asset value, .45 of 1% of the
average daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of
the average daily net assets between $150,000,001 and $500,000,000, and .35 of
1% in excess of $500,000,001 of the Short-to-Medium Series, as determined in
accordance with the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due
the Adviser in payment of such fees shall be accrued daily by the
Short-to-Medium Series on the basis of the net asset value of the
Short-to-Medium Series applicable to the close of each business day, and in the
case of any day which is not a business day, the net asset value of the
Short-to-Medium Series applicable to the close of the last preceding business
day; and the total amount thus accrued with respect to each calendar month or
portion thereof during which this Agreement remains in effect shall become due
and payable to the Adviser in the first business day of the next succeeding
calendar month. The term "business day" means a day for all or part of which the
New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Short-to-Medium
Series; but this prohibition shall not prevent the purchase by or for the
Adviser or any of its officers or directors of shares of the Short-to-Medium
Series at the price at which such shares are available to the public at the
moment of purchase.
8. Nothing herein contained shall be deemed to require the Short-to-Medium
Series to take any action to the Declaration of Trust of Xxxxxx Mutual Funds or
the Trust By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the Board
of Trustees of Xxxxxx Mutual Funds of its responsibility for and control of the
conduct of the Short-to-Medium Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Short-to-Medium Series at the 2002 Annual
Meeting, and, unless sooner terminated as provided in paragraph 10 hereof, this
Agreement shall remain in effect through the close of business on October 31,
2004, and thereafter subject to the termination provisions and other terms and
conditions hereof; if: (a) such continuation shall be specifically approved at
least annually by the Board of Trustees, or by vote of a majority of the
outstanding voting securities of the Short-to-Medium Series, and concurrently
with such approval by the Board of Trustees or prior to such approval by the
holders of the outstanding voting securities of the Short-to-Medium Series, as
the case may be, by the vote, cast in person at a meeting called for the purpose
of voting on such approval, of a majority of the trustees of the Xxxxxx Mutual
Funds who are not parties to this Agreement or interested persons of any such
party; and (b) the Adviser shall have not notified the Short-to-Medium Series,
in writing, at least sixty (60) days prior to October 31 of each year after 2004
that it does not desire such continuation. The Adviser shall furnish to the
Short-to-Medium Series, promptly upon its request such information in the
readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Short-to-Medium Series, and this
Agreement shall automatically and immediately terminate in the event of its
assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Short-to-Medium Series,
such action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Short-to-Medium Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the
Short-to-Medium Series whose services were made available to the Short-to-Medium
Series by the Adviser shall be liable to the Short-to-Medium Series for any
error of judgment or mistake of law or for any loss suffered by the
Short-to-Medium Series by reason of any action taken or omission to act
committed in connection with the matters to which this Agreement relates, except
that nothing herein contained shall be construed (i) to protect the Adviser or
any affiliated person of the Adviser (whether or not such affiliated person is
or was an officer, director or member of any advisory board of the
Short-to-Medium Series and/or Xxxxxx Mutual Funds) against any liability to the
Short-to-Medium Series or its security holders for any breach of fiduciary duty
with respect to the Adviser's receipt of compensation for services to the
Short-to-Medium Series, (ii) to protect the Adviser or any affiliated person of
the Adviser who is or was an officer, trustee or member of any advisory board of
the Short-to-Medium Series and/or Xxxxxx Mutual Funds against any liability to
the Short-to-Medium Series or its security holders for any act or practice (
other than the Adviser's receipt of compensation for services to the
Short-to-Medium Series) constituting a breach of fiduciary duty involving
personal misconduct in respect of the Short-to-Medium Series, (iii) to protect
the Adviser against any liability to the Short-to-Medium Series or its security
holders to which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations or duties, under this
Agreement, or (iv) to protect any affiliated person of the Adviser who is or was
a Trustee or officer of the Short-to-Medium Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Short-to-Medium Series and/or Xxxxxx Mutual
Funds. In the event that any affiliated person of the Adviser shall become a
Trustee, officer or employee of the Short-to-Medium Series and/or Xxxxxx Mutual
Funds, then all actions taken or omissions to act made by such person in
connection with the discharge of his duties to the Short-to-Medium Series shall
be deemed to have been taken or made by such person solely in his capacity as
such Trustee, officer or employee of said entity, notwithstanding the fact that
the services of such person are being or have been furnished by the Adviser to
said entity as provided in this Agreement or that the compensation and expenses
of such person are being or have been paid by the Adviser or any other
affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Short-to-Medium Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have the meanings assigned
to them by Section 2(a) of the Investment Company Act of 1940, as amended. In
addition, where the effect of a requirement of the Investment Company Act of
1940, as amended, reflected in any provision of this Agreement is relaxed by a
rule, regulation or order of the Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
15. The North Carolina Tax-Free Short-to-Medium Series hereby delegates to
and the Adviser accepts delegation of the responsibilities embodied in the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds as adopted by the Board of
Trustees at its meeting on August 22, 2002 and as may be further amended to
conform with requirements of federal laws, rules and regulations. The Adviser
agrees that any and all records maintained by or created by the Adviser to
effectuate the Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be
available for inspection by federal examiners upon request. The Adviser
acknowledges and agrees that all employees of the Adviser will cooperate with
the Anti-Money Laundering Policy of Xxxxxx Mutual Funds and that failure to do
so, or involvement in money laundering activities, may result in suspension,
termination and/or civil or criminal liability. The Adviser further agrees that
any and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
independent third party audit as determined by the Board of Trustees, and that
all employees of the Adviser will cooperate fully with the independent third
party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
North Carolina Tax-Free Short-to-Medium Series
By:___________________________________
Vice President
Attest_______________________
XXXXXX & COMPANY, INC.
By: ___________________________________
President
Attest_______________________
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
Tennessee Tax-Free Income Series, (hereinafter called "Income Series"), and
XXXXXX & COMPANY, INC., a corporation organized and existing under the laws of
the State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Income Series is engaged in business as part of an open-end
management investment company which is registered as such under the federal
Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Income Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Income Series and shall provide the Income Series
with office space and facilities and corporate administration, subject to and
upon the terms and conditions set forth in this Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Income Series in a manner consistent with its
investment objectives; shall determine the securities to be purchased and sold
by the Income Series, and the portion of its assets to be held in cash or cash
equivalents, in order to carry out such program; and generally shall take such
other steps, including the placing of orders for the purchase or sales of
securities on behalf of the Income Series, as the Adviser may deem necessary or
appropriate for the implementation of such program. The Adviser shall also
furnish to or place at the disposal of the Income Series such of the
information, reports evaluations, analyses and opinions formulated or obtained
by the Adviser in the discharge of its duties hereunder as the Income Series
may, at the time or from time to time, reasonably request or as the Adviser may
deem helpful to the Income Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Income Series such office
space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Income Series) as the Income Series may
reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Income Series, for such
periods and in such forms as are prescribed by rules and regulations of the
Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Income Series is required to maintain and preserve
pursuant to Section 31(a) of the Investment company Act of 1940 and the rules
and regulations of the Commission thereunder which are not maintained and
preserved on behalf of the Income Series by any custodian, transfer agent or
other institutional agent retained by the Income Series;
(iii) Furnish the services and pay or provide for the compensation
and expenses of individuals competent (A) to perform for the Income Series all
executive and administrative functions that are not assigned to any custodian,
transfer agent or other institutional agent retained by the Income Series, and
(B) to supervise and coordinate the activities of such institutional agents and
the other agents (e.g., independent accountants and legal counsel) retained by
the Income Series; and
(iv) Permit officers or employees of the Adviser who are duly
elected or appointed as officers, trustees, members of any committee of trustees
or members of any advisory board or committee of the Income Series to serve as
such without remuneration from or other cost to the Income Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Income Series. The expenses to be
assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Income Series will bear printing costs relating to
copies of its prospectus and reports which are distributed to its shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Income Series
shares.
(c) The Income Series shall bear all expenses of its operation not
specifically assumed by the Adviser as hereinabove set forth or as provided
elsewhere in this Agreement. The Adviser, in its sole discretion, may at any
time or from time to time pay or assume any expense that the Income Series would
or might otherwise be required to bear. However, the Adviser's payment or
assumption of any such expenses on one or more occasion shall neither relieve
the Adviser of any obligation to the Income Series pursuant to paragraph 6(b)
hereof nor obligate the Adviser to pay or assume the same or any similar expense
of the Income Series on any subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Income Series with such statistical and other
factual information, such advice regarding economic factors and trends, such
advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Income Series whose
services were made available to it by the Adviser are specifically authorized to
allocate brokerage and principal business to firms that provide such services or
facilities and to cause the Income Series to pay a member of a securities
exchange, or any other securities broker or dealer, an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange or another broker or dealer would have charged for
effecting that transaction, if the Adviser or the individual allocating such
brokerage determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services (as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such member, 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 the
Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Income Series pursuant to paragraph 3(a)(i) hereof are
the property of the Income Series and shall be surrendered by the Adviser
promptly on request by the Income Series. The Income Series shall furnish or
otherwise make available to the Adviser such financial reports, proxy statements
and other information relating to the business and affairs of the Income Series
as the Adviser may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Income Series shall pay
the Adviser a fee at the annual rate of one-half of one percent (1/2 of 1%) of
the first $100,000,000 average daily net asset value, .45 of 1% of the average
daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of the
average daily net assets between $150,000,001 and $500,000,000, and .35 of 1% in
excess of $500,000,001 of the Income Series, as determined in accordance with
the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due the Adviser in
payment of such fees shall be accrued daily by the Income Series on the basis of
the net asset value of the Income Series applicable to the close of each
business day, and in the case of any day which is not a business day, the net
asset value of the Income Series applicable to the close of the last preceding
business day; and the total amount thus accrued with respect to each calendar
month or portion thereof during which this Agreement remains in effect shall
become due and payable to the Adviser in the first business day of the next
succeeding calendar month. The term "business day" means a day for all or part
of which the New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Income Series; but
this prohibition shall not prevent the purchase by or for the Adviser or any of
its officers or directors of shares of the Income Series at the price at which
such shares are available to the public at the moment of purchase.
8. Nothing herein contained shall be deemed to require the Income Series to
take any action to the Declaration of Trust of Xxxxxx Mutual Funds or the Trust
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of Xxxxxx Mutual Funds of its responsibility for and control of the conduct of
the Income Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Income Series at the 2002 Annual Meeting,
and, unless sooner terminated as provided in paragraph 10 hereof, this Agreement
shall remain in effect through the close of business on October 31, 2004, and
thereafter subject to the termination provisions and other terms and conditions
hereof; if: (a) such continuation shall be specifically approved at least
annually by the Board of Trustees, or by vote of a majority of the outstanding
voting securities of the Income Series, and concurrently with such approval by
the Board of Trustees or prior to such approval by the holders of the
outstanding voting securities of the Income Series, as the case may be, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the trustees of the Xxxxxx Mutual Funds who are not
parties to this Agreement or interested persons of any such party; and (b) the
Adviser shall have not notified the Income Series, in writing, at least sixty
(60) days prior to October 31 of each year after 2004 that it does not desire
such continuation. The Adviser shall furnish to the Income Series, promptly upon
its request such information in the possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Income Series, and this Agreement
shall automatically and immediately terminate in the event of its assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Income Series, such
action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Income Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the Income
Series whose services were made available to the Income Series by the Adviser
shall be liable to the Income Series for any error of judgment or mistake of law
or for any loss suffered by the Income Series by reason of any action taken or
omission to act committed in connection with the matters to which this Agreement
relates, except that nothing herein contained shall be construed (i) to protect
the Adviser or any affiliated person of the Adviser (whether or not such
affiliated person is or was an officer, director or member of any advisory board
of the Income Series and/or Xxxxxx Mutual Funds) against any liability to the
Income Series or its security holders for any breach of fiduciary duty with
respect to the Adviser's receipt of compensation for services to the Income
Series, (ii) to protect the Adviser or any affiliated person of the Adviser who
is or was an officer, trustee or member of any advisory board of the Income
Series and/or Xxxxxx Mutual Funds against any liability to the Income Series or
its security holders for any act or practice ( other than the Adviser's receipt
of compensation for services to the Income Series) constituting a breach of
fiduciary duty involving personal misconduct in respect of the Income Series,
(iii) to protect the Adviser against any liability to the Income Series or its
security holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations or duties, under
this Agreement, or (iv) to protect any affiliated person of the Adviser who is
or was a Trustee or officer of the Income Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Income Series and/or Xxxxxx Mutual Funds. In the
event that any affiliated person of the Adviser shall become a Trustee, officer
or employee of the Income Series and/or Xxxxxx Mutual Funds, then all actions
taken or omissions to act made by such person in connection with the discharge
of his duties to the Income Series shall be deemed to have been taken or made by
such person solely in his capacity as such Trustee, officer or employee of said
entity, notwithstanding the fact that the services of such person are being or
have been furnished by the Adviser to said entity as provided in this Agreement
or that the compensation and expenses of such person are being or have been paid
by the Adviser or any other affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Income Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have
the meanings assigned to them by Section 2(a) of the Investment Company Act of
1940, as amended. In addition, where the effect of a requirement of the
Investment Company Act of 1940, as amended, reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Commission, whether
of special or of general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
15. The Tennessee Tax-Free Income Series hereby delegates to and the
Adviser accepts delegation of the responsibilities embodied in the Anti-Money
Laundering Policy of Xxxxxx Mutual Funds as adopted by the Board of Trustees at
its meeting on August 22, 2002 and as may be further amended to conform with
requirements of federal laws, rules and regulations. The Adviser agrees that any
and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
inspection by federal examiners upon request. The Adviser acknowledges and
agrees that all employees of the Adviser will cooperate with the Anti-Money
Laundering Policy of Xxxxxx Mutual Funds and that failure to do so, or
involvement in money laundering activities, may result in suspension,
termination and/or civil or criminal liability. The Adviser further agrees that
any and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
independent third party audit as determined by the Board of Trustees, and that
all employees of the Adviser will cooperate fully with the independent third
party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Tennessee Tax-Free Income Series
By:___________________________________
Vice President
Attest________________________________
XXXXXX & COMPANY, INC.
By:___________________________________
President
Attest________________________________
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 2002 by and
between XXXXXX MUTUAL FUNDS, a Kentucky Business Trust, for and on behalf of its
Tennessee Tax-Free Short-to-Medium Series, (hereinafter called "Short-to-Medium
Series"), and XXXXXX & COMPANY, INC., a corporation organized and existing under
the laws of the State of Kentucky (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Short-to-Medium Series is engaged in business as part of an
open-end management investment company which is registered as such under the
federal Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Short-to-Medium Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Income Series in the manner and on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Short-to-Medium Series and shall provide the
Short-to-Medium Series with office space and facilities and corporate
administration, subject to and upon the terms and conditions set forth in this
Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Short-to-Medium Series in a manner consistent
with its investment objectives; shall determine the securities to be purchased
and sold by the Short-to-Medium Series, and the portion of its assets to be held
in cash or cash equivalents, in order to carry out such program; and generally
shall take such other steps, including the placing of orders for the purchase or
sales of securities on behalf of the Short-to-Medium Series, as the Adviser may
deem necessary or appropriate for the implementation of such program. The
Adviser shall also furnish to or place at the disposal of the Short-to-Medium
Series such of he information, reports evaluations, analyses and opinions
formulated or obtained by the Adviser in the discharge of its duties hereunder
as the Short-to-Medium Series may, at the time or from time to time, reasonably
request or as the Adviser may deem helpful to the Short-to-Medium Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Short-to-Medium Series such
office space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Short-to-Medium Series) as the
Short-to-Medium Series may reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Short-to-Medium Series,
for such periods and in such forms as are prescribed by rules and regulations of
the Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Short-to-Medium Series is required to maintain and
preserve pursuant to Section 31(a) of the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder which are not
maintained and preserved on behalf of the Short-to-Medium Series by any
custodian, transfer agent or other institutional agent retained by the
Short-to-Medium Series;
(iii) Furnish the services and pay or provide for the compensation and
expenses of individuals competent (A) to perform for the Short-to-Medium Series
all executive and administrative functions that are not assigned to any
custodian, transfer agent or other institutional agent retained by the
Short-to-Medium Series, and (B) to supervise and coordinate the activities of
such institutional agents and the other agents (e.g., independent accountants
and legal counsel) retained by the Short-to-Medium Series; and
(iv) Permit officers or employees of the Adviser who are duly elected
or appointed as officers, trustees, members of any committee of trustees or
members of any advisory board or committee of the Short-to-Medium Series to
serve as such without remuneration from or other cost to the Short-to-Medium
Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Short-to-Medium Series. The
expenses to be assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Short-to-Medium Series will bear printing costs
relating to copies of its prospectus and reports which are distributed to its
shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Short-to-Medium
Series shares.
(c) The Short-to-Medium Series shall bear all expenses of its
operation not specifically assumed by the Adviser as hereinabove set forth or as
provided elsewhere in this Agreement. The Adviser, in its sole discretion, may
at any time or from time to time pay or assume any expense that the
Short-to-Medium Series would or might otherwise be required to bear. However,
the Adviser's payment or assumption of any such expenses on one or more occasion
shall neither relieve the Adviser of any obligation to the Short-to-Medium
Series pursuant to paragraph 6(b) hereof nor obligate the Adviser to pay or
assume the same or any similar expense of the Short-to-Medium Series on any
subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Short-to-Medium Series with such statistical and
other factual information, such advice regarding economic factors and trends,
such advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Short-to-Medium Series
whose services were made available to it by the Adviser are specifically
authorized to allocate brokerage and principal business to firms that provide
such services or facilities and to cause the Short-to-Medium Series to pay a
member of a securities exchange, or any other securities broker or dealer, an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange or another broker or dealer
would have charged for effecting that transaction, if the Adviser or the
individual allocating such brokerage determines in good faith that such amount
of commission is reasonable in relation to the
value of the brokerage and research services (as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided by such member,
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
the Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Short-to-Medium Series pursuant to paragraph 3(a)(i)
hereof are the property of the Short-to-Medium Series and shall be surrendered
by the Adviser promptly on request by the Short-to-Medium Series. The
Short-to-Medium Series shall furnish or otherwise make available to the Adviser
such financial reports, proxy statements and other information relating to the
business and affairs of the Short-to-Medium Series as the Adviser may, at any
time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Short-to-Medium Series
shall pay the Adviser a fee at the annual rate of one-half of one percent (1/2
of 1%) of the first $100,000,000 average daily net asset value, .45 of 1% of the
average daily net assets between $100,000,001 and $150,000,000, and .4 of 1% of
the average daily net assets between $150,000,001 and $500,000,000, and .35 of
1% in excess of $500,000,001 of the Short-to-Medium Series, as determined in
accordance with the Declaration of Trust of Xxxxxx Mutual Funds. The amounts due
the Adviser in payment of such fees shall be accrued daily by the
Short-to-Medium Series on the basis of the net asset value of the
Short-to-Medium Series applicable to the close of each business day, and in the
case of any day which is not a business day, the net asset value of the
Short-to-Medium Series applicable to the close of the last preceding business
day; and the total amount thus accrued with respect to each calendar month or
portion thereof during which this Agreement remains in effect shall become due
and payable to the Adviser in the first business day of the next succeeding
calendar month. The term "business day" means a day for all or part of which the
New York Stock Exchange is open for unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Short-to-Medium
Series; but this prohibition shall not prevent the purchase by or for the
Adviser or any of its officers or directors of shares of the Short-to-Medium
Series at the price at which such shares are available to the public at the
moment of purchase.
8. Nothing herein contained shall be deemed to require the Short-to-Medium
Series to take any action to the Declaration of Trust of Xxxxxx Mutual Funds or
the Trust By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the Board
of Trustees of Xxxxxx Mutual Funds of its responsibility for and control of the
conduct of the Short-to-Medium Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Short-to-Medium Series at the 2002 Annual
Meeting, and, unless sooner terminated as provided in paragraph 10 hereof, this
Agreement shall remain in effect through the close of business on October 31,
2004, and thereafter subject to the termination provisions and other terms and
conditions hereof; if: (a) such continuation shall be specifically approved at
least annually by the Board of Trustees, or by vote of a majority of the
outstanding voting securities of the Short-to-Medium Series, and concurrently
with such approval by the Board of Trustees or prior to such approval by the
holders of the outstanding voting securities of the Short-to-Medium Series, as
the case may be, by the vote, cast in person at a meeting called for the purpose
of voting on such approval, of a majority of the trustees of the Xxxxxx Mutual
Funds who are not parties to this Agreement or interested persons of any such
party; and (b) the Adviser shall have not notified the Short-to-Medium Series,
in writing, at least sixty (60) days prior to October 31 of each year after 2004
that it does not desire such continuation. The Adviser shall furnish to the
Short-to-Medium Series, promptly upon its request such information in the
possession of or readily available to the
Adviser as the Trustees of Xxxxxx Mutual Funds may at any time from time to time
deem reasonably necessary to evaluate the terms of this Agreement or any
exftension, renewal or amendment hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Short-to-Medium Series, and this
Agreement shall automatically and immediately terminate in the event of its
assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Short-to-Medium Series,
such action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Short-to-Medium Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the
Short-to-Medium Series whose services were made available to the Short-to-Medium
Series by the Adviser shall be liable to the Short-to-Medium Series for any
error of judgment or mistake of law or for any loss suffered by the
Short-to-Medium Series by reason of any action taken or omission to act
committed in connection with the matters to which this Agreement relates, except
that nothing herein contained shall be construed (i) to protect the Adviser or
any affiliated person of the Adviser (whether or not such affiliated person is
or was an officer, director or member of any advisory board of the
Short-to-Medium Series and/or Xxxxxx Mutual Funds) against any liability to the
Short-to-Medium Series or its security holders for any breach of fiduciary duty
with respect to the Adviser's receipt of compensation for services to the
Short-to-Medium Series, (ii) to protect the Adviser or any affiliated person of
the Adviser who is or was an officer, trustee or member of any advisory board of
the Short-to-Medium Series and/or Xxxxxx Mutual Funds against any liability to
the Short-to-Medium Series or its security holders for any act or practice (
other than the Adviser's receipt of compensation for services to the
Short-to-Medium Series) constituting a breach of fiduciary duty involving
personal misconduct in respect of the Short-to-Medium Series, (iii) to protect
the Adviser against any liability to the Short-to-Medium Series or its security
holders to which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations or duties, under this
Agreement, or (iv) to protect any affiliated person of the Adviser who is or was
a Trustee or officer of the Short-to-Medium Series or its security holders for
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office with the Short-to-Medium Series and/or Xxxxxx Mutual
Funds. In the event that any affiliated person of the Adviser shall become a
Trustee, officer or employee of the Short-to-Medium Series and/or Xxxxxx Mutual
Funds, then all actions taken or omissions to act made by such person in
connection with the discharge of his duties to the Short-to-Medium Series shall
be deemed to have been taken or made by such person solely in his capacity as
such Trustee, officer or employee of said entity, notwithstanding the fact that
the services of such person are being or have been furnished by the Adviser to
said entity as provided in this Agreement or that the compensation and expenses
of such person are being or have been paid by the Adviser or any other
affiliated person of the Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Short-to-Medium Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to said Act. Specifically, the terms "vote of a majority of the outstanding
voting securities", "interested person", assignment" and "affiliated person", as
used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have the meanings assigned
to them by Section 2(a) of the Investment Company Act of 1940, as amended. In
addition, where the effect of a requirement of the Investment Company Act of
1940, as amended, reflected in any provision of this Agreement is relaxed by a
rule, regulation or order of the Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
15. The Tennessee Tax-Free Short-to-Medium Series hereby delegates to and
the Adviser accepts delegation of the responsibilities embodied in the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds as adopted by the Board of
Trustees at its meeting on August 22, 2002 and as may be further amended to
conform with requirements of federal laws, rules and regulations. The Adviser
agrees that any and all records maintained by or created by the Adviser to
effectuate the Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be
available for inspection by federal examiners upon request. The Adviser
acknowledges and agrees that all employees of the Adviser will cooperate with
the Anti-Money Laundering Policy of Xxxxxx Mutual Funds and that failure to do
so, or involvement in money laundering activities, may result in suspension,
termination and/or civil or criminal liability. The Adviser further agrees that
any and all records maintained by or created by the Adviser to effectuate the
Anti-Money Laundering Policy of Xxxxxx Mutual Funds shall be available for
independent third party audit as determined by the Board of Trustees, and that
all employees of the Adviser will cooperate fully with the independent third
party auditors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Tennessee Tax-Free Short-to-Medium Series
By:___________________________________
Vice President
Attest________________________________
XXXXXX & COMPANY, INC.
By:___________________________________
President
Attest________________________________
INVESTMENT ADVISORY AGREEMENT, made this 1/st/ day of November 1997 and
amended October 29, 2002 by and between XXXXXX MUTUAL FUNDS, a Kentucky Business
Trust, for and on behalf of its Intermediate Government Bond Series,
(hereinafter called "Government Bond Series"), and XXXXXX & COMPANY, INC., a
corporation organized and existing under the laws of the State of Kentucky
(hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Government Bond Series is engaged in business as part of an
open-end management investment company which is registered as such under the
federal Investment Company Act of 1940; and
WHEREAS, the Adviser is engaged in the business of rendering investment
supervisory services with respect to municipal securities and is registered as
an investment adviser under the federal Investment Advisers Act of 1940; and
WHEREAS, the Government Bond Series desires to retain the Adviser to render
investment supervisory services and provide office space and facilities and
corporate administration to the Government Bond Series in the manner and on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser shall act as investment adviser and render investment
supervisory services to the Government Bond Series and shall provide the
Government Bond Series with office space and facilities and corporate
administration, subject to and upon the terms and conditions set forth in this
Agreement.
2. The Adviser shall obtain and evaluate such information relating to the
economy, industries, businesses, municipal issuers, securities markets and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder; shall formulate a continuing program for the management
of the assets and resources of the Government Bond Series in a manner consistent
with its investment objectives; shall determine the securities to be purchased
and sold by the Government Bond Series, and the portion of its assets to be held
in cash or cash equivalents, in order to carry out such program; and generally
shall take such other steps, including the placing of orders for the purchase or
sales of securities on behalf of the Government Bond Series, as the Adviser may
deem necessary or appropriate for the implementation of such program. The
Adviser shall also furnish to or place at the disposal of the Government Bond
Series such of the information, reports evaluations, analyses and opinions
formulated or obtained by the Adviser in the discharge of its duties hereunder
as the Government Bond Series may, at the time or from time to time, reasonably
request or as the Adviser may deem helpful to the Government Bond Series.
3. (a) The Adviser shall:
(i) Pay or provide for and furnish to the Government Bond Series such
office space, equipment facilities, personnel and services (exclusive of and in
addition to those provided by any custodian, transfer agent or other
institutional agent retained by the Government Bond Series) as the Government
Bond Series may reasonably require in the conduct of its business;
(ii) Maintain and preserve on behalf of the Government Bond Series,
for such periods and in such forms as are prescribed by rules and regulations of
the Securities and Exchange Commission (the "Commission"), all of the accounts,
books and other documents the Government Bond Series is required to maintain and
preserve pursuant to Section 31(a) of the Investment company Act of 1940 and the
rules and regulations of the Commission thereunder which are not
maintained and preserved on behalf of the Government Bond Series by any
custodian, transfer agent or other institutional agent retained by the
Government Bond Series;
(iii) Furnish the services and pay or provide for the compensation and
expenses of individuals competent (A) to perform for the Government Bond Series
all executive and administrative functions that are not assigned to any
custodian, transfer agent or other institutional agent retained by the
Government Bond Series, and (B) to supervise and coordinate the activities of
such institutional agents and the other agents (e.g., independent accountants
and legal counsel) retained by the Government Bond Series; and
(iv) Permit officers or employees of the Adviser who are duly elected
or appointed as officers, trustees, members of any committee of trustees or
members of any advisory board or committee of the Government Bond Series to
serve as such without remuneration from or other cost to the Government Bond
Series.
(b) The adviser shall pay all sales and promotional expenses
incurred in the distribution of shares of the Government Bond Series. The
expenses to be assumed and paid by the Adviser include the costs of:
(i) Media and direct mail advertising;
(ii) Printing copies of the prospectus of Xxxxxx Mutual Funds
and shareholder reports which are used in its sales or promotional efforts; it
being understood that the Government Bond Series will bear printing costs
relating to copies of its prospectus and reports which are distributed to its
shareholders;
(iii) Printing share purchase order forms to accompany the
prospectus of Xxxxxx Mutual Funds and
(iv) Corresponding and dealing with prospective investors, up
to and including receipt of their orders for the purchase of Government Bond
Series shares.
(c) The Government Bond Series shall bear all expenses of its
operation not specifically assumed by the Adviser as hereinabove set forth or as
provided elsewhere in this Agreement. The Adviser, in its sole discretion, may
at any time or from time to time pay or assume any expense that the Government
Bond Series would or might otherwise be required to bear. However, the Adviser's
payment or assumption of any such expenses on one or more occasion shall neither
relieve the Adviser of any obligation to the Government Bond Series pursuant to
paragraph 6(b) hereof nor obligate the Adviser to pay or assume the same or any
similar expense of the Government Bond Series on any subsequent occasion.
4. The Adviser may employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Adviser or the Government Bond Series with such statistical and
other factual information, such advice regarding economic factors and trends,
such advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or for the
discharge of Adviser's overall responsibilities with respect to the other
accounts which it serves as investment adviser. The Adviser and any individual
performing executive or administrative functions for the Government Bond Series
whose services were made available to it by the Adviser are specifically
authorized to allocate brokerage and principal business to firms that provide
such services or facilities and to cause the Government Bond Series to pay a
member of a securities exchange, or any other securities broker or dealer, an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange or another broker or dealer
would have charged for effecting that transaction, if the Adviser or the
individual allocating such brokerage determines in good faith that such amount
of commission is reasonable in relation to the
value of the brokerage and research services (as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided by such member,
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
the Adviser exercises investment discretion (as such term is defined in Section
3(a)(35) of the Securities Exchange act of 1934).
5. All accounts, books and other documents maintained and preserved by the
Adviser on behalf of the Government Bond Series pursuant to paragraph 3(a)(i)
hereof are the property of the Government Bond Series and shall be surrendered
by the Adviser promptly on request by the Government Bond Series. The Government
Bond Series shall furnish or otherwise make available to the Adviser such
financial reports, proxy statements and other information relating to the
business and affairs of the Government Bond Series as the Adviser may, at any
time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
6. As full compensation for all services rendered, facilities furnished and
expenses paid or assumed hereunder by the Adviser, the Government Bond Series
shall pay the Adviser a fee at the annual rate of .20 of 1% of the average daily
net assets of the Government Bond Series, as determined in accordance with the
Declaration of Trust of Xxxxxx Mutual Funds. The amounts due the Adviser in
payment of such fees shall be accrued daily by the Government Bond Series on the
basis of the net asset value of the Government Bond Series applicable to the
close of each business day, and in the case of any day which is not a business
day, the net asset value of the Government Bond Series applicable to the close
of the last preceding business day; and the total amount thus accrued with
respect to each calendar month or portion thereof during which this Agreement
remains in effect shall become due and payable to the Adviser in the first
business day of the next succeeding calendar month. The term "business day"
means a day for all or part of which the New York Stock Exchange is open for
unrestricted trading.
7. The Adviser agrees that neither it nor any of its officers or directors
shall take any long or short position in the shares of the Government Bond
Series; but this prohibition shall not prevent the purchase by or for the
Adviser or any of its officers or directors of shares of the Government Bond
Series at the price at which such shares are available to the public at the
moment of purchase.
8. Nothing herein contained shall be deemed to require the Government Bond
Series to take any action to the Declaration of Trust of Xxxxxx Mutual Funds or
the Trust By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the Board
of Trustees of Xxxxxx Mutual Funds of its responsibility for and control of the
conduct of the Government Bond Series.
9. The term of this Agreement shall begin on November 1, 2002 subject to
approval by the shareholders of the Government Bond Series at the 2002 Annual
Meeting, and, unless sooner terminated as provided in paragraph 10 hereof, this
Agreement shall remain in effect through the close of business on October 31,
2004, and thereafter subject to the termination provisions and other terms and
conditions hereof; if: (a) such continuation shall be specifically approved at
least annually by the Board of Trustees, or by vote of a majority of the
outstanding voting securities of the Government Bond Series, and concurrently
with such approval by the Board of Trustees or prior to such approval by the
holders of the outstanding voting securities of the Government Bond Series, as
the case may be, by the vote, cast in person at a meeting called for the purpose
of voting on such approval, of a majority of the trustees of the Xxxxxx Mutual
Funds who are not parties to this Agreement or interested persons of any such
party; and (b) the Adviser shall have not notified the Government Bond Series,
in writing, at least sixty (60) days prior to October 31 of each year after 2004
that it does not desire such continuation. The Adviser shall furnish to the
Government Bond Series, promptly upon its request such information in the
possession of or readily available to the Adviser as the Trustees of Xxxxxx
Mutual Funds may at any time from time to time deem reasonably necessary to
evaluate the terms of this Agreement or any extension, renewal or amendment
hereof.
10. This Agreement may not be amended, transferred, assigned, sold or in
any manner hypothecated or pledged, without the affirmative vote of a majority
of the outstanding voting securities of the Government Bond Series, and this
Agreement shall automatically and immediately terminate in the event of its
assignment.
11. This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) day notice in writing to the other
party; provided that in the case of termination by the Government Bond Series,
such action shall have been authorized by resolution of the Board of Trustees of
Xxxxxx Mutual Funds or by vote of a majority of the outstanding voting
securities of the Government Bond Series.
12. Neither the Adviser, any affiliated person of the Adviser, nor any
other person performing executive or administrative functions for the Government
Bond Series whose services were made available to the Government Bond Series by
the Adviser shall be liable to the Government Bond Series for any error of
judgment or mistake of law or for any loss suffered by the Government Bond
Series by reason of any action taken or omission to act committed in connection
with the matters to which this Agreement relates, except that nothing herein
contained shall be construed (i) to protect the Adviser or any affiliated person
of the Adviser (whether or not such affiliated person is or was an officer,
director or member of any advisory board of the Government Bond Series and/or
Xxxxxx Mutual Funds) against any liability to the Government Bond Series or its
security holders for any breach of fiduciary duty with respect to the Adviser's
receipt of compensation for services to the Government Bond Series, (ii) to
protect the Adviser or any affiliated person of the Adviser who is or was an
officer, trustee or member of any advisory board of the Government Bond Series
and/or Xxxxxx Mutual Funds against any liability to the Government Bond Series
or its security holders for any act or practice ( other than the Adviser's
receipt of compensation for services to the Government Bond Series) constituting
a breach of fiduciary duty involving personal misconduct in respect of the
Government Bond Series, (iii) to protect the Adviser against any liability to
the Government Bond Series or its security holders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations or duties, under this Agreement, or (iv) to protect any
affiliated person of the Adviser who is or was a Trustee or officer of the
Government Bond Series or its security holders for which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office with the Government Bond Series and/or Xxxxxx Mutual Funds. In the event
that any affiliated person of the Adviser shall become a Trustee, officer or
employee of the Government Bond Series and/or Xxxxxx Mutual Funds, then all
actions taken or omissions to act made by such person in connection with the
discharge of his duties to the Government Bond Series shall be deemed to have
been taken or made by such person solely in his capacity as such Trustee,
officer or employee of said entity, notwithstanding the fact that the services
of such person are being or have been furnished by the Adviser to said entity as
provided in this Agreement or that the compensation and expenses of such person
are being or have been paid by the Adviser or any other affiliated person of the
Adviser.
13. Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment supervisory services and
provide corporate administration to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
and until the Adviser shall otherwise consent, the Adviser shall be the only
investment adviser to the Government Bond Series.
14. 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 shall be resolved by reference to such
term or provision of that Act and to interpretations thereof, if any, by the
United States courts, or in the absence of any controlling decision of any
such court, by rules, regulations or orders of the Commission validly issued
pursuant to said Act. Specifically, the terms "vote of a majority of the
outstanding voting securities", "interested person", assignment" and "affiliated
person", as used in paragraphs 9, 10, 11, 12 and 13 hereof, shall have the
meanings assigned to them by Section 2(a) of the Investment Company Act of 1940,
as amended. In addition, where the effect of a requirement of the Investment
Company Act of 1940, as amended, reflected in any provision of this Agreement is
relaxed by a rule, regulation or order of the Commission, whether of special or
of general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
15. The Government Bond Series hereby delegates to and the Adviser accepts
delegation of the responsibilities embodied in the Anti-Money Laundering Policy
of Xxxxxx Mutual Funds as adopted by the Board of Trustees at its meeting on
August 22, 2002 and as may be further amended to conform with requirements of
federal laws, rules and regulations. The Adviser agrees that any and all records
maintained by or created by the Adviser to effectuate the Anti-Money Laundering
Policy of Xxxxxx Mutual Funds shall be available for inspection by federal
examiners upon request. The Adviser acknowledges and agrees that all employees
of the Adviser will cooperate with the Anti-Money Laundering Policy of Xxxxxx
Mutual Funds and that failure to do so, or involvement in money laundering
activities, may result in suspension, termination and/or civil or criminal
liability. The Adviser further agrees that any and all records maintained by or
created by the Adviser to effectuate the Anti-Money Laundering Policy of Xxxxxx
Mutual Funds shall be available for independent third party audit as determined
by the Board of Trustees, and that all employees of the Adviser will cooperate
fully with the independent third party auditors. (added by amendment
10/29/2002).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXX MUTUAL FUNDS for and on behalf of
Intermediate Government Bond Series
By:___________________________________
President
Attest________________________________
XXXXXX & COMPANY, INC.
By: ___________________________________
President
Attest________________________________
This Agreement be and hereby is amended to include numeric paragraph with
all other provisions remaining in full force and effect, this 29/th/ day of
October, 2002.
XXXXXX MUTUAL FUNDS for and on behalf of
Intermediate Government Bond Series
By:___________________________________
President
Attest________________________________
XXXXXX & COMPANY, INC.
By: ___________________________________
President
Attest________________________________