EXHIBIT 5.1
INVESTMENT ADVISORY AGREEMENT
XXXXXX SMALL COMPANY GROWTH FUND
(A SERIES OF XXXXXX INVESTMENT PORTFOLIO TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this
_____ day of October, 1994, between XXXXXX ASSOCIATES, INC., a Delaware
corporation ("Xxxxxx Associates"), and XXXXXX INVESTMENT PORTFOLIO TRUST, a
Delaware business trust (the "Trust") with respect to XXXXXX SMALL COMPANY
GROWTH FUND, a series of the Trust (the "Fund").
W I T N E S S E T H:
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WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered it shares for public offering under the
Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate series of
shares, each with its own separate investment portfolio, one of such series
created by the Trust being the Fund; and
WHEREAS, the Trust and Xxxxxx Associates deem it mutually
advantageous that Xxxxxx Associates should assist the Trustees and officers
of the Trust in the management of the securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. MANAGEMENT FUNCTIONS. In addition to the expenses which
Xxxxxx Associates may incur in the performance of its investment advisory
functions under this Agreement, and the expenses which it may expressly
undertake to incur and pay under other agreements with the Trust or
otherwise, Xxxxxx Associates shall incur and pay the following expenses
relating to the Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the
Trust's officers and its Trustees (the "Trustees"), except for
such Trustees who are not interested persons of Xxxxxx
Associates;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the Fund, other
than expenses incurred in complying with federal and state laws
and the law of any foreign country or territory or other
jurisdiction applicable to the issue, offer or sale of shares of
the Fund including without limitation registration fees and
costs, the costs of preparing the registration statement
relating to the Fund and
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amendments thereto, and the costs and expenses of preparing,
printing, and mailing prospectuses (and statements of additional
information) to persons other than shareholders of the Fund.
2. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment
adviser to the Fund, Xxxxxx Associates shall have the following
responsibilities:
(a) To furnish continuous advice and recommendations to the Fund
as to the acquisition, holding or disposition of any or all
of the securities or other assets which the Fund may own or
contemplate acquiring from time to time, giving due consideration
to the investment policies and restrictions and the other
statements concerning the Fund in the Trust's Trust Instrument,
Bylaws, and registration statements under the 1940 Act and the
1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated
investment company;
(b) To cause its officers to attend meetings and furnish oral or
written reports, as the Trust may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully
informed as to the condition of the investment portfolio of the
Fund, the investment recommendations of Xxxxxx Associates, and
the investment considerations which have given rise to those
recommendations; and
(c) To supervise the purchase and sale of securities as directed
by the appropriate officers of the Trust.
3. OBLIGATIONS OF TRUST. The Trust shall have the following
obligations under this Agreement:
(a) To keep Xxxxxx Associates continuously and fully informed as
to the composition of the investment portfolio of the Fund and
the nature of all of the Fund's assets and liabilities from time
to time;
(b) To furnish Xxxxxx Associates with a certified copy of any
financial statement or report prepared for the Fund by certified
or independent public accountants and with copies of any
financial statements or reports made to the Fund's shareholders
or to any governmental body or securities exchange;
(c) To furnish Xxxxxx Associates with any further materials or
information which Xxxxxx Associates
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may reasonably request to enable it to perform its function
under this Agreement; and
(d) To compensate Xxxxxx Associates for its services and reimburse
Xxxxxx Associates for its expenses incurred hereunder in
accordance with the provisions of paragraph 4 hereof.
4. COMPENSATION. The Trust shall pay to Xxxxxx Associates for
its services under this Agreement a monthly fee, payable on the last day of
each month during which or part of which this Agreement is in effect, of 1/12
of 0.9% of the average daily closing net asset value of the Fund for such
month. For the month during which this Agreement becomes effective and the
month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar
days of such month during which this Agreement is effective.
5. EXPENSES PAID BY THE TRUST. The Trust assumes and shall pay
all expenses incidental to its operations and business not specifically
assumed or agreed to be paid by Xxxxxx Associates pursuant to Section 1
hereof, including, but not limited to, investment adviser fees; any
compensation, fees or reimbursements which the Trust pays to its Trustees who
are not interested persons of Xxxxxx Associates; compensation of the Fund's
custodian, transfer agent, registrar and dividend disbursing agent; legal,
accounting, audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including
any appropriate commissions paid to Xxxxxx Associates or its affiliates for
effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates and expenses
of delivering such certificates to the purchasers thereof; expenses of local
representation in Delaware; expenses of shareholders' meetings and of
preparing, printing and distributing proxy statements, notices, and reports
to shareholders; expenses of preparing and filing reports and tax returns
with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio
pricing services and systems for compliance with blue sky laws, and all costs
involved in preparing, printing and mailing prospectuses and statements of
additional information of the Fund; and all fees, dues and other expenses
incurred by the Trust in connection with the membership of the Trust in any
trade association or other investment company organization. To the extent
that Xxxxxx Associates shall perform any of the above described
administrative and clerical functions, including transfer agency, registry,
dividend disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and
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registration functions, and the preparation of reports and returns, the Trust
shall pay to Xxxxxx Associates compensation for, or reimburse Xxxxxx
Associates for its expenses incurred in connection with, such services as
Xxxxxx Associates and the Trust shall agree from time to time, any other
provision of this Agreement notwithstanding.
6. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the
investment advice and recommendations of Xxxxxx Associates as being advisory
only, and shall retain full control over its own investment policies.
However,the Trustees may delegate to the appropriate officers of the Trust,
or to a committee of the Trustees, the power to authorize purchases, sales or
other actions affecting the portfolio of the Fund in the interim between
meetings of the Trustees.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement,
brokerage commissions paid by the Fund upon the purchase or sale of its
portfolio securities shall be considered a cost of securities of the Fund and
shall be paid by the Fund. Xxxxxx Associates is authorized and directed to
place Fund portfolio transactions only with brokers and dealers who render
satisfactory service in the execution of orders at the most favorable prices
and at reasonable commission rates, provided, however, that Xxxxxx Associates
may pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if Xxxxxx Associates
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer viewed in terms of either that particular transaction or the
overall responsibilities of Xxxxxx Associates. Xxxxxx Associates is also
authorized to consider sales of Fund shares as a factor in selecting
broker-dealers to execute Fund portfolio transactions. In placing portfolio
business with such broker-dealers, Xxxxxx Associates shall seek the best
execution of each transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the Investment
Company Act of 1940 and the Securities Exchange Act of 1934, as amended, and
in the event that Xxxxxx Associates or an affiliate is registered as a
broker-dealer, Xxxxxx Associates may select a broker or dealer with which it
or the Fund is affiliated. Xxxxxx Associates or such affiliated
broker-dealer may effect or execute Fund portfolio transactions, whether on a
securities exchange or in the over-the-counter market, and receive separate
compensation from the Fund therefor. Notwithstanding the foregoing, the Trust
shall retain the right to direct the placement of all portfolio transactions,
and the Trustees of the Trust may establish policies or guidelines to be
followed by Xxxxxx Associates in placing portfolio transactions for the Trust
pursuant to the foregoing provisions. Xxxxxx Associates shall report on the
placement of portfolio transactions in the prior fiscal quarter at each
quarterly meeting of such Trustees.
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8. TERMINATION. This Agreement may be terminated at any time,
without penalty, by the Trustees of the Trust, or by the shareholders of the
Trust acting by vote of at least a majority of its outstanding voting
securities, provided in either case that sixty (60) days' advance written
notice of termination be given to Xxxxxx Associates at its principal place of
business. This Agreement may be terminated by Xxxxxx Associates at any time,
without penalty, by giving sixty (60) days' advance written notice of
termination to the Trust, addressed to its principal place of business. The
Trust agrees that, consistent with the terms of the Trust's Trust Instrument,
the Trust shall cease to use the name "Xxxxxx" in connection with the Fund as
soon as reasonably practicable following any termination of this Agreement if
Xxxxxx Associates does not continue to provide investment advice to the Fund
after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in
the event of any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until the last
day of April, 1995, unless sooner terminated in accordance with its terms,
and shall continue in effect from year to year thereafter only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Trust or the affirmative vote of a majority of the
outstanding voting securities of the Trust. The annual approvals provided
for herein shall be effective to continue this Agreement from year to year if
given within a period beginning not more than sixty (60) days prior to the
last day of April of each applicable year, notwithstanding the fact that more
than three hundred sixty-five (365) days may have elapsed since the date on
which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only
if such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons of Xxxxxx
Associates and, if required by applicable law, (ii) by the affirmative vote
of a majority of the outstanding voting securities of the Fund.
12. ALLOCATION OF EXPENSES. The Trustees shall determine the
basis for making an appropriate allocation of the Trust's expenses (other
than those directly attributable to the Fund) between the Fund and any other
series of the Trust and between the Fund and other investment companies
managed by Xxxxxx Associates.
13. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that
the Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of
State of the State of Delaware. All parties to this Agreement acknowledge
and agree that
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the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect
to such series only, and not against the assets of the Trust generally or
against the assets held with respect to any other series and further that no
trustee, officer or holder of shares of beneficial interest of the Trust
shall be personally liable for any of the foregoing.
14. LIMITATION OF LIABILITY OF XXXXXX ASSOCIATES. Xxxxxx
Associates shall not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission taken
with respect to the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder and except to the extent
otherwise provided by law. As used in this Section 14, "Xxxxxx Associates"
shall include any affiliate of Xxxxxx Associates performing services for the
Trust contemplated hereunder and directors, officers and employees of Xxxxxx
Associates and such affiliates.
15. ACTIVITIES OF XXXXXX ASSOCIATES. The services of Xxxxxx
Associates to the Trust hereunder are not to be deemed to be exclusive, and
Xxxxxx Associates and its affiliates are free to render services to other
parties. It is understood that trustees, officers and shareholders of the
Trust are or may become interested in Xxxxxx Associates as directors,
officers and shareholders of Xxxxxx Associates, that directors, officers,
employees and shareholders of Xxxxxx Associates are or may become similarly
interested in the Trust, and that Xxxxxx Associates may become interested in
the Trust as a shareholder or otherwise.
16. CERTAIN DEFINITIONS. The terms "vote of a majority of the
outstanding voting securities", "assignment" and "interested persons" when
used herein, shall have the respective meanings specified in the 1940 Act, as
now in effect or hereafter amended, and the rules and regulations thereunder,
subject to such orders, exemptions and interpretations as may be issued by
the Securities and Exchange Commission under said Act and as may be then in
effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Investment Advisory Agreement as of the date and
year first above written.
XXXXXX ASSOCIATES, INC.
By
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Title:
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XXXXXX INVESTMENT PORTFOLIO TRUST
By
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Title:
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