ADVISORY AND SERVICE CONTRACT
(Xxxxxxx Dividend Fund, a Series of Xxxxxxx Investments)
THIS ADVISORY AND SERVICE CONTRACT is entered into effective as of
June 28, 1995, by and between XXXXXXX INVESTMENTS, a Massachusetts business
trust (the "Trust"), on behalf of its Series designated as "Xxxxxxx Dividend
Fund" (the "Series"), and XXXXXX MANAGEMENT CORPORATION, a Michigan
corporation (the "Adviser").
WHEREAS, the Trust is registered and operates as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Trust and the Adviser have previously entered into an
Advisory and Service Contract which reserves to them the right to negotiate
and execute a separate advisory and service contract with respect to a
particular series of shares of the Trust; and
WHEREAS, the Trust and the Adviser desire to enter into such a
separate agreement with respect to the Series; and
WHEREAS, the Trust desires to avail itself of the services,
information, advice, assistance and facilities of the Adviser and to have
the Adviser perform for it various investment advisory and research services
and other management services in connection with the Series; and
WHEREAS, the Adviser has been organized to operate as an investment
adviser and is registered under the Investment Advisers Act of 1940, as
amended, and desires to provide such investment advisory services to the
Trust;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Trust hereby engages the Adviser
to manage the investment and reinvestment of the assets of Xxxxxxx Dividend
Fund for the period and on the terms hereinafter set forth. The Adviser
hereby accepts such engagement and agrees during such period to render
services and to assume obligations herein set forth for the compensation
herein provided. The Adviser shall, for all purposes herein, be deemed to
be an independent contractor and shall, except as expressly provided or
authorized (whether herein or otherwise), have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of the Trust.
2. Duties of Adviser. In providing the services set forth herein,
the Adviser undertakes to afford to the Series the advice and assistance of
the Adviser's organization in the choice of investments and to furnish for
the use of the Series office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Series and
maintaining its organization, and to pay all promotional expenses, salaries
and fees of all officers and directors who are interested persons of the
Series and for all clerical services relating to research, statistical and
investment work. The investment policies and all other actions of the
Series are and shall at all times be subject to the control and direction
of its Board of Trustees. The Adviser may, at its expense, employ one or
more sub-advisers. References herein to the Adviser shall include any
sub-adviser employed by the Adviser. The Adviser is authorized to select
the brokers or dealers that will execute the purchases and sales of
securities of the Series. In making such selections, the Adviser is
authorized to consider such factors as it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution ability of the broker or dealer, and the
reasonableness of the commissions both for the specific transaction and on
a continuing basis. The commission paid to such broker or dealer may be
higher than that which might be charged by another broker or dealer for
effecting the same transaction if a good faith determination is made by the
Adviser that such commissions are reasonable in relation to the value of the
brokerage and research services provided, viewed in terms of either that
particular transaction or the overall responsibilities of the Adviser as to
the accounts as to which it exercises investment discretion. In making such
determination, the Adviser need not place or attempt to place a specific
dollar value on such services or on the portion of the commission reflecting
such services.
3. Permissible Interests. Subject to and in accordance with the
Declaration of Trust of the Trust and the Articles of Incorporation of the
Adviser, trustees, officers, and shareholders of the Series are, or may be
or become interested in the Adviser as directors, officers or otherwise and
directors, officers and shareholders or otherwise of the Adviser are or may
be or become interested in the Series as trustees, officers, shareholders
or otherwise, and the Adviser may be or become interested in the Series as
shareholder or otherwise; and the effect of any such interrelationships
shall be governed by said Declaration of Trust or Articles of Incorporation,
as the case may be, and the 1940 Act.
4. Compensation of the Adviser. For the services and facilities
to be furnished during any fiscal quarter by the Adviser hereunder, the
Series shall pay the Adviser as an advisory and service fee as soon as
practicable after the last day of such quarter, beginning with the quarter
ending September 30, 1995, an amount equal to the sum of 0.175% of the
average net assets of the Series not in excess of $50,000,000 and 0.150% of
the average net assets of the Series in excess of $50,000,000 but not in
excess of $200,000,000 and 0.125% of the average net assets of the Series
in excess of $200,000,000.
The Series' average net assets shall be the sum of the net assets at
the beginning and end of each month of the quarter, divided by six.
The Adviser shall reimburse the Series for any excess of annual
operating and management expenses, exclusive of taxes and interest but
including the Adviser's compensation, over 1-1/2% of the first
$30,000,000 of the Series' average net assets plus 1% of average net assets
in excess of $30,000,000 for any fiscal year.
5. Compensation Upon Termination. In case of termination of the
Agreement during any quarter, the fee for the quarter shall be reduced
proportionately on the basis of the number of calendar days during which it
is in effect and the fee computed upon the average daily net asset value for
the business days during which it is so in effect.
It is understood that the Series will pay all its expenses other than
those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Series shall include, without limitation, interest
charges, taxes, fees of trustees who are not interested persons of the
Series, other fees and commission of every kind, expenses of issue, sale,
repurchase, or redemption of shares, expenses of registering or qualifying
shares for sale, charges of custodians (including sums as custodian and for
keeping books and similar services to the Series), transfer agents
(including the printing and mailing of reports and notices to shareholders),
registrars, auditing and legal services, and other expenses not expressly
assumed by the Adviser under paragraph 2 hereof.
6. Status of Adviser. The services of the Adviser to the Series
are not to be deemed to be exclusive, the Adviser being free to render
services to others and engage in other activities.
7. Limitation of Liability of Adviser. In the absence of (i)
willful misfeasance, bad faith, gross negligence, (ii) reckless disregard
of obligations and duties hereunder on the part of the Adviser, or (iii) a
loss resulting from a breach of a fiduciary duty with respect to the receipt
of compensation for services (in which case any award for damages shall be
limited to period and amount set forth in Section 36(b)(3) of the 1940 Act),
the Adviser shall not be subject to liability whatsoever to the Series or
to any shareholder of the Series for any error or judgment, mistake of law
or any other act or omission in the course of, or connected with, rendering
services hereunder including without limitation, for any losses that may be
sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Series. It is agreed that the Adviser shall
have no responsibility or liability for the accuracy or completeness of the
Trust's Registration Statements under the 1940 Act or the Securities Act of
1933, except for information supplied by the Adviser for inclusion therein.
8. Limitation of Series' Liability. The Adviser acknowledges that
it has received notice of and accepts the limitations upon the Series's
liability set forth in its Declaration of Trust. The Adviser agrees that
the Series' obligations hereunder in any case shall be limited to the Series
and its assets and that the Adviser shall not seek satisfaction of any
obligation from the shareholders of a Series nor from any Trustee, officer,
employee or agent of the Series.
9. Purchase of Securities. The Adviser agrees that neither it nor
any of its officers or directors will take a long or short position in the
securities issued by the Series except that it or they may purchase from the
Series, or from a principal underwriter of the Series, shares issued by the
Series at the offering price in effect at the moment of such purchase.
10. Force Majeure. The Adviser shall not be liable for delays
or errors occurring by reason of circumstances beyond its control including,
but not limited to, acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot or failure of communication or power supply. In the
event of equipment breakdowns beyond its control, the Adviser shall take
reasonable steps to minimize service interruptions but shall have no
liability with respect thereto.
11. Renewal, Termination and Amendment. This Agreement shall
continue in effect, unless sooner terminated as hereinafter provided, for
a period of two years from the date hereof, and indefinitely thereafter,
with respect to the Series, if its continuance after such two-year period
shall be specifically approved at least annually by vote of the holders of
a majority of the outstanding voting securities of the Series or by the vote
of a majority of the Trust's Trustees; and further provided that such
continuance is also approved annually by the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of the
Adviser, cast in person at a meeting called for the purpose of voting on
such approval. Except for the first two-year period, if such approval is
not obtained, this Agreement shall terminate on the date which is 15 months
from the date of the last such approval. Either party hereto may, at any
time on 60 days' prior written notice to the other, terminate this
Agreement, without the payment of any penalty, by action of its Board of
Trustees or Board of Directors, as the case may be, or by the vote of a
majority of its outstanding voting securities. This agreement shall
terminate automatically in the event of its assignment. This Agreement may
be amended at any time by the parties hereto, subject to approval by the
Trust's Board of Trustees and, if required by applicable SEC rules and
regulations, a vote of the majority of the outstanding voting securities of
any Series affected by such change.
12. Severability. If any provisions 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.
13. Applicable Law. This Agreement shall be construed in accordance
with the laws of the State of Missouri, provided however, that nothing
herein shall be construed as being inconsistent with the 1940 Act.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
15. Definitions. The terms "vote of a majority of the outstanding
voting securities", "assigned" and "interested persons", when used herein,
shall have the respective meanings specified in the 1940 Act as now in
effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of the
date first above written.
XXXXXXX INVESTMENTS,
a Massachusetts business trust,
on behalf of XXXXXXX DIVIDEND FUND,
a series of such trust
By: /S/ XXXX X. XXXXXXXX
Xxxx X. Xxxxxxxx, Chairman
XXXXXX MANAGEMENT CORPORATION,
a Michigan corporation
By: /S/ XXXX X. XXXXXX
Xxxx X. Xxxxxx, President
