AMENDMENT NUMBER ONE
TO THE
INVESTMENT ADVISORY AGREEMENT
This Amendment Number One, dated November 1, 2004, to the Investment
Advisory Agreement dated May 31, 1997 (the "Agreement") by and between
Xxx Xxxxxx Life Investment Trust (the "Trust"), a Delaware statutory
trust, and Xxx Xxxxxx Asset Management (the "Adviser," successor in
interest of Xxx Xxxxxx Asset Management, Inc.), a Delaware statutory
trust, hereby amends the terms and conditions of the Agreement in the
manner specified herein.
W I T N E S S E T H
WHEREAS, the Board of Trustees of the Fund at a meeting held on
September 23, 2004 has approved a change in the compensation payable
to the Adviser on behalf of the Money Market Portfolio; and
WHEREAS, the parties desire to amend and restate Section 4 of the
Agreement relating to the investment advisory fee.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby
agree to amend the Agreement, as follows:
Section 4 of the Agreement is hereby deleted in its entirety and
replaced with the following:
(4) Compensation Payable to the Adviser
The Trust shall pay to the Adviser, as compensation for the services
rendered, facilities furnished and expenses paid by the Adviser, a
monthly fee computed at the following annual rate:
.50% on the first $500 million of the Portfolios' average daily net
assets; .45% on the next $500 million of the Portfolios' average daily
net assets; and .40% of any excess over $1 billion.
For purposes of this calculation, assets of such Portfolios shall be
combined in calculating the investment advisory fee. Each Portfolio
shall bear its pro rata share of such fee based upon its average daily
net assets, and the amount allocated to the Money Market Portfolio is
hereby defined as the "Money Market Pro Rata Amount".
Notwithstanding the forgoing, the amount to be paid by the Money
Market Portfolio shall be the lesser of: (1) the Money Market Pro Rata
Amount as calculated above or (2) the amount calculated under the
following schedule applied to only the average daily net assets of the
Money Market Portfolio (the "Money Market Only Amount"):
AVERAGE DAILY FEE AS A PERCENT PER ANNUM
NET ASSETS OF AVERAGE DAILY NET ASSETS
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First $250 million 0.450%
Next $500 million 0.375%
Next $500 million 0.325%
Next $250 million 0.300%
Next $250 million 0.275%
Next $500 million 0.250%
Next $500 million 0.225%
Next $12.25 billion 0.200%
Next $ 2.5 billion 0.199%
Next $ 7.5 billion 0.198%
Next $ 5 billion 0.197%
Over $30 billion 0.196%
The Adviser agrees to forgo any difference between the Money Market
Pro Rata Amount and the Money Market Only Amount. The advisory fee
amounts payable by the other Portfolios (excluding the Money Market
Portfolio) are not impacted by the Money Market Only Amount and/or any
amounts the Adviser foregoes by applying the Money Market Only Amount.
Average daily net assets shall be determined by taking the average of
the net assets for each business day (for each calendar day, in the
case of the Money Market Portfolio) during a given calendar month
calculated in the manner provided in the Trust's Declaration of Trust.
Such fee shall be payable for each calendar month as soon as
practicable after the end of that month.
The fees payable to the Adviser by the Trust pursuant to this Section
4 shall be reduced by any commissions, tender solicitation and other
fees, brokerage or similar payments received by the Adviser, or any
other direct or indirect majority owned subsidiary of Xxx Xxxxxx
Investments Inc., in connection with the purchase and sale of portfolio
investments of the Trust, less any direct expenses incurred by such
person, in connection with obtaining such commissions, fees, brokerage
or similar payments. The Adviser shall use its best efforts to
recapture all available tender offer solicitation fees and exchange
offer fees in connection with the Trust's portfolio transactions and
shall advise the Trustees of any other commissions, fees, brokerage or
similar payments which may be possible for the Adviser or any other
direct or indirect majority owned subsidiary of Xxx Xxxxxx Investments
Inc. to receive in connection with Trust's portfolio transactions or
other arrangements which may benefit the Trust.
In the event that the ordinary business expenses of the Trust for any
fiscal year should exceed .95% of average daily net assets, the
compensation due the Adviser for such fiscal year shall be reduced by
the amount of such excess. The Adviser's compensation shall be so
reduced by a reduction or a refund thereof, at the time such
compensation is payable after the end of each calendar month during
such fiscal year of the Trust, and if such amount should exceed such
monthly compensation, the Adviser shall pay the Trust an amount
sufficient to make up the deficiency, subject to readjustment during
the Trust's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Trust shall include the investment advisory
fee and other operating expenses paid by the Trust except (i) for
interest and taxes; (ii) brokerage commissions; (iii) as a result of
litigation in connection with a suit involving a claim for recovery by
the Trust; (iv) as a result of litigation involving a defense against a
liability asserted against the Trust, provided that, if the Adviser
made the decision or took the actions which resulted in such claim, it
acted in good faith without negligence or misconduct; and (v) any
indemnification paid by the Trust to its officers and trustees and the
Adviser in accordance with applicable state and federal laws as a
result of such litigation.
If the Adviser shall serve for less than the whole of any month, the
foregoing compensation shall be prorated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
XXX XXXXXX LIFE INVESTMENT TRUST XXX XXXXXX ASSET
MANAGEMENT
By:
By:
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Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx, III
Executive Vice President
Managing Director
and Principal Executive Officer
427699.01-Chicago Server 1A - MSW
