INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this _____ day of ________1998, by and between T. O.
Xxxxxxxxxx Trust, a Massachusetts business trust (the "Trust") created pursuant
to that certain Declaration of Trust of T.O. Xxxxxxxxxx Trust dated June 2,
1998, as amended from time to time (the "Declaration"), and T.O. Xxxxxxxxxx
Company, Inc., a Connecticut corporation (the "Advisor").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") consisting of an unlimited number of series or shares representing
beneficial interests in one of the separate series or classes of shares of the
Trust which are established and designated from time to time in accordance with
the Declaration (each a "Series" or "Class") and, each having its own
fundamental investment policies and restrictions;
WHEREAS, the "T.O. Xxxxxxxxxx Sector Rotation Fund" (the "Fund") is one of
the Series of Shares established and designated under the Declaration;
WHEREAS, the Trust has retained Firstar Trust Company, a Wisconsin
corporation, (the "Administrator") to provide administration of the Trust's
operations in respect of the Fund, subject to the control of the Board of
Trustees of the Fund; and
WHEREAS, the Trust desires to retain the Advisor to render investment
management services with respect to the Fund and the Advisor is willing to
render such services.
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. Definitions. All capitalized terms used and not otherwise defined
shall have the meanings given such terms in the Declaration.
2. Investment Advisory Services. The Trust hereby engages the Advisor, on
the terms and conditions hereafter set forth to provide the investment
advisory and investment management services (collectively called
"Investment Advisor Services") to manage the investment and
reinvestment of the assets, and to continuously review, supervise, and
administer the investment program of the Fund to determine in its
discretion the securities to be purchased or sold to provide the
Administrator and the Trust with copies of such records concerning the
Advisor's activities which the Trust shall request and that it is
required to maintain, provided that the Trust gives reasonable advance
notice of its request for such copies, and to render regular reports
to the Administrator and to the Trust's Officers and Trustees
concerning the Advisor's discharge of the foregoing responsibilities.
The Advisor shall provide the foregoing investment advisory
services subject to the control of the Board of Trustees of
the Trust and in compliance with such policies as the Trustees
may from time to time establish, and in compliance with the
objectives, policies, and limitations for the Fund set forth
in the Fund's Prospectus and Statement of Additional
Information, in each case as amended from time to time, and
applicable laws and regulations.
The Advisor accepts such engagement and agrees, at its own
expense, to render the Investment Advisory Services required
hereunder and to provide the office space, furnishings and
equipment and the personnel required by it to perform such
services on the terms and for the compensation provided
herein.
3. Portfolio Transactions. The Advisor is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Fund and is directed to use its best
efforts to obtain the best net results as described from time to time
in the Fund's Prospectuses and Statement of Additional Information.
The Advisor will promptly communicate to the Administrator and to the
officers and the Trustees of the Trust such information relating to
the portfolio transactions as they may reasonably request.
It is understood that the Advisor will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust
under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Trust to a
broker-dealer in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or as described from time to time by the
Fund's Prospectuses and Statement of Additional Information.
4. Compensation of the Advisor. For the Investment Advisory Services and
the related services to be rendered by the Advisor as provided in
Sections 2 and 3 of this Agreement, the Trust shall pay to the Advisor
compensation at the rate specified in the Schedule(s) which are
attached hereto and made a part of this Agreement. Such compensation
shall be paid to the Advisor at the end of each month, and calculated
by applying a daily rate, based on the annual percentage rates as
specified in the attached Schedule(s), to the assets of the Fund. The
fee shall be based on the average daily net assets of the Fund for the
month involved.
If at any time this Agreement is terminated, any fees or
compensation for services performed shall be pro rated to the
effective date of termination, and such pro rated fees or
compensation shall be paid to the Advisor promptly upon
receipt of an invoice therefor. All rights of compensation
under this Agreement for services performed shall survive the
termination of this Agreement.
5. Excess Expenses. If the expenses for the Fund for any fiscal
year (including fees and other amounts payable to the Advisor,
but excluding interest, taxes, brokerage costs, litigation,
and other extraordinary costs) as calculated every business
day would exceed the expense limitations imposed on investment
companies by any applicable statute or regulatory authority of
any jurisdiction in which shares of the Fund are qualified for
offer and sale, the Advisor shall bear such excess cost.
However, the Advisor will not bear expenses of the Fund which
would result in the Fund's inability to qualify as a regulated
investment company under provisions of the Internal Revenue
Code of 1986, as amended. Payment of expenses by the Advisor
pursuant to this Section 5 shall be settled on a monthly basis
(subject to fiscal year end reconciliation) by a reduction in
the fee payable to the Advisor for such month pursuant to
Section 4, and, if such reduction shall be insufficient to
offset such expenses, by reimbursing the Trust.
6. Reports. The Trust and the Advisor agree to furnish to each
other, if applicable, current prospectuses, proxy statements
and reports to shareholders in respect of the Fund, certified
copies of their financial statements, and such other
information with regard to their affairs as each may
reasonably request.
7. Status of the Advisor. (a) Advisor's performance of its services
required to be performed by it hereunder shall be performed as Advisor
to the Trust in respect of the Fund. Nothing in this Agreement shall
be construed as creating an agency relationship between the Trust or
the Fund and the Advisor with respect to any services or activities
whether or not expressly provided for in this Agreement. Nothing in
this Agreement shall be construed as creating a partnership, joint
venture, co-venture, joint undertaking or employment arrangement by or
between the Trust and Advisor. (b) It is understood that Advisor
performs or may perform investment advisory, investment management or
consulting services for accounts and/or clients other than the Trust.
The Trust acknowledges that Advisor may provide investment advice or
consulting services to any of its other accounts and/or clients that
may differ from advice given to the Trust, or take action with respect
to any of its other clients accounts and/or that may differ from the
nature of action recommended with respect to the Trust. It is
understood that Advisor shall have no obligation to purchase or sell,
or to recommend for purchase or sale for the Trust, any security which
Advisor, its principals, affiliates, employees or agents may purchase
or sell for its own or their own accounts or for the account of any
other client, if, in the opinion of Advisor, such transaction or
investment appears
unsuitable, impractical or undesirable for the Trust or does
not comply with the terms and provisions of the Fund's
Prospectus and Statement of Additional Information.
8. Certain Records. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the 1940 Act which are prepared or
maintained by the Advisor on behalf of the Trust are the
property of the Trust and will be surrendered promptly to the
Trust on request.
9. Limitation of Liability and Indemnification of the Advisor. The
duties of the Advisor shall be confined to those expressly set
forth herein, and no implied duties are assumed by or may be
asserted against the Advisor hereunder. The Advisor shall not be
liable for any error of judgment or mistake of law or for any
loss arising out of any investment or for any act or omission in
carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of
its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable state law or Federal
securities law which cannot be waived or modified hereby. (As
used in this Paragraph 9, the term "Advisor" shall include
directors, officers, employees and other corporate agents of the
Advisor as well as that corporation itself).
The Trust shall indemnify the Advisor (as such term is defined
for purposes of this paragraph 9) and hold it harmless from
and against any and all actions, suites and claims, whether
groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) arising directly or
indirectly out of the services rendered to the Trust hereunder
except to the extent that losses, damages, costs, charges,
fees, disbursements, payments, expenses or liabilities are
found by a court of competent jurisdiction in a judgment which
has become final in that it is no longer subject to appeal or
review to have resulted primarily from the Advisor's willful
misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of reckless disregard of
its obligations and duties hereunder, except as may otherwise
be provided under provisions of applicable state law or
federal securities laws which cannot be waived or modified
hereby. The indemnity and defense provisions set forth in this
Section 9 shall indefinitely survive the termination of this
Agreement.
The rights hereunder shall include the right to reasonable
advances or defense expenses in the event of any pending or
threatened litigation with respect to which indemnification
hereunder may ultimately be merited. In order that the
indemnification provision contained herein shall apply
however, it is understood that if in any case the Trust may be
asked to indemnify or hold the Advisor harmless, the Trust
shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that the Advisor will use all reasonable care to
identify and notify the Trust promptly concerning any
situation which presents or appears likely to present
probability of such a claim or indemnification against the
Trust, but failure to do so in good faith shall not affect the
rights hereunder.
The Advisor may apply to the Trust at any time for
instructions and may consult counsel for the Trust or its own
counsel and with accountants and other experts with respect to
any matter arising in connection with the Advisor's duties,
and the Advisor shall not be liable or accountable for any
action taken or omitted by it in good faith in accordance with
such instruction or with the opinion of such counsel,
accountants or other experts.
10. Permissible Interests. Trustees, agents, and shareholders of the
Trust are or may be interested in the Advisor (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and
shareholders of the Advisor are or may be interested in the Trust
as Trustees, shareholders or otherwise; and the Advisor (or any
successor) is or may be interested in the Trust as a shareholder
or otherwise. In addition, broker transactions for the Trust may
be effected through affiliates of the Advisor if approved by the
Board of Trustees, subject to applicable provisions of the 1940
Act, the Exchange Act and the rules and regulations promulgated
thereunder
11. License of the Advisor's Name. The Advisor hereby agrees to
grant a non-exclusive license to the Trust for use of its name
in the name of the Fund for the term of this Agreement and
such license shall terminate upon termination of this
Agreement.
12. Duration and Termination. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until two
years from date of execution, and thereafter, for periods of one
year so long as such continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust or by Majority Shareholder Vote; provided
however, that if the Shareholders of the Fund fail to approve the
Agreement as provided herein, the Advisor may continue to serve
hereunder in the manner and to the extent permitted by the 1940
Act and rules and regulations thereunder. The foregoing
requirement that continuance of this Agreement be "specifically
approved at least annually" shall be
construed in a manner consistent with the 1940 Act and the
rules and regulations promulgated thereunder.
This Agreement may be terminated as to the Fund at any time,
without the payment of any penalty by vote of a majority of
the Trustees of the Trust or by Majority Shareholder Vote on
not less than 30 days nor more than 60 days written notice to
the Advisor, or by the Advisor at any time without the payment
of any penalty, on 90 days written notice to the Trust. This
Agreement will automatically and immediately terminate in the
event of its assignment.
As used in this Section 12, the terms "assignment",
"interested persons", and a "vote of a majority of the
outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and
regulations promulgated thereunder, subject to such exemptions
as may be granted from time to time by the Securities and
Exchange Commission under said Act.
13. Change in the Advisor's Owners and Executive Officers. The
Advisor agrees that it shall notify the Trust of any change in
the owners and executive officers of the Advisor within a
reasonable time after such change.
14. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if (i) delivered by
overnight delivery by a nationally recognized carrier service
(ii) sent by telefax or (iii) sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to
the other party at the last address furnished by the other party
to the party giving notice: if to the Trust, or the Advisor, at
Two Xxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000, Telefax
(000) 000-0000. Any notice shall be deemed given when received if
sent by Telefax or by courier server or _____days after mailing,
if mailed.
15. Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
16. Governing Law. This Agreement shall be governed by the
internal laws of the Commonwealth of Massachusetts, without
regard to conflict of law principles; provided, however, that
nothing herein shall be construed as being inconsistent with
the 1940 Act.
A copy of the Declaration is on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees, and is not binding upon any of
the Trustees, officers, or shareholders of the Trust individually but binding
only upon the assets and
property of the Trust.
The Fund shall not be liable for the obligations of any other Series or Class of
the Trust. Without limiting the generality of the foregoing, the Advisor shall
look only to the assets of the Fund for payment of fees for services rendered to
the Fund.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
T.O. XXXXXXXXXX TRUST
By:________________________________
Attest:______________________________
T.O. XXXXXXXXXX COMPANY, INC.
By:________________________________
Attest:______________________________
