EXHIBIT 5.6
INVESTMENT ADVISORY AGREEMENT
XXXXXX MID CAP VALUE FUND
(a Series of Xxxxxx Investment Portfolio Trust)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this ______
day of ________, 1998, between XXXXXX ASSOCIATES, INC., a Delaware corporation
("Xxxxxx Associates"), and XXXXXX INVESTMENT PORTFOLIO TRUST, a Delaware
business trust (the "Trust"), with respect to the XXXXXX MID CAP VALUE FUND, a
series of the Trust (the "Fund").
RECITALS
A. 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 its shares for public offering under the Securities Act of 1933, as
amended (the "1933 Act").
B. 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.
C. 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.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints Xxxxxx Associates as
investment adviser and manager with respect to the Fund for the period and on
the terms set forth in this Agreement. Xxxxxx Associates hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. INVESTMENT ADVISORY FUNCTIONS. Subject to the approval of the
Trustees of the Trust and, if required, the shareholders of the Fund, Xxxxxx
Associates is authorized to engage one or more sub-advisers in connection with
Xxxxxx Associates' duties and responsibilities under this Agreement, which
sub-advisers may be affiliates of Xxxxxx Associates. In its capacity as
investment adviser to the Fund, Xxxxxx Associates shall have the following
duties and responsibilities:
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(a) To manage the investment operations of the Fund and the
composition of its investment portfolio, and to determine without
prior consultation with the Trust, what securities and other
assets of the Fund will be acquired, held, disposed of or loaned,
in conformity with the investment objective, policies and
restrictions and the other statements concerning the Fund in the
Trust's trust instrument, as amended from time to time (the
"Trust Instrument"), bylaws, and registration statements under
the 1940 Act and the 1933 Act, the Investment Advisers Act of
1940, as amended (the "Advisers Act"), the rules thereunder, and
all other applicable federal and state laws and regulations, and
the provisions of the Internal Revenue Code of 1986, as amended,
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 decisions of Xxxxxx Associates, and the
investment considerations which have given rise to those
decisions;
(c) To place orders for the purchase and sale of securities for
investments of the Fund and for other related transactions or to
supervise the purchase and sale of securities as directed by any
sub-adviser engaged by Xxxxxx Associates pursuant to the
authority granted in this Section 2; to give instructions to the
custodian (including any subcustodian) of the Fund as to
deliveries of securities to and from such custodian and receipt
and payments of cash for the account of the Fund, and advise the
Trust on the same day such instructions are given; to submit such
reports relating to the valuation of the Fund's assets and to
otherwise assist in the calculation of the net asset value of
shares of the Fund as may reasonably be requested; on behalf of
the Fund, to exercise such voting rights, subscription rights,
rights to consent to corporate action and any other rights
pertaining to the Fund's assets that may be exercised, in
accordance with any policy pertaining to the same that may be
adopted or agreed to by the Trustees of the Trust, or, in the
event that the Trust retains the right to exercise such voting
and other rights, to furnish the Trust with advice as to the
manner in which such rights should be exercised;
(d) To maintain all books and records required to be maintained by
Xxxxxx Associates pursuant to the 1940 Act and the rules and
regulations promulgated thereunder, as the same may be amended
from time to time,
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with respect to transactions on behalf of the Fund, and shall
furnish the Trustees with such periodic and special reports as
the Trustees reasonably may request. Xxxxxx Associates agrees
that all records which it maintains for the Fund or the Trust are
the property of the Trust, agrees to permit the reasonable
inspection thereof by the Trust or its designees and agrees to
preserve for the periods prescribed under the 1940 Act any
records which it maintains for the Trust and which are required
to be maintained under the 1940 Act, and further agrees to
surrender promptly to the Trust or its designees any records
which it maintains for the Trust upon request by the Trust; and
(e) At such times as shall be reasonably requested by the Trustees,
to provide the Trustees with economic, operational and investment
data and reports, including without limitation all information
and materials reasonably requested by or requested to be
delivered to the Trustees of the Trust pursuant to Section 15(c)
of the 1940 Act, and make available to the Trustees any economic,
statistical and investment services normally available to similar
investment company clients of Xxxxxx Associates.
3. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, Xxxxxx Associates shall act in conformity with the Trust's Trust
Instrument, bylaws and currently effective registration statements under the
1940 Act and the 1933 Act and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees
of the Trust and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. The Trust agrees to provide Xxxxxx Associates with copies
of the Trust's Trust Instrument, bylaws, Registration Statements, written
policies, procedures and guidelines, and written instructions and directions of
the Trustees, and any amendments or supplements to any of them at, or, if
practicable, before the time such materials become effective.
4. 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
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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 may reasonably request to
enable it to perform its function under this Agreement; and
(d) To compensate Xxxxxx Associates for its services in accordance
with the provisions of Section 5 hereof.
5. COMPENSATION. The Trust shall pay to Xxxxxx Associates for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.75% of the average daily net asset value of the Fund. This fee
shall be computed and accrued daily and payable monthly on the last day of each
month during which or part of which this Agreement is in effect. 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.
6. EXPENSES.
(a) 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 hereunder or otherwise, including, but
not limited to, 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
and other service providers; 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 preparing, printing and mailing prospectuses
and statements of additional information to shareholders 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
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agency, registry, dividend disbursing, recordkeeping, bookkeeping, accounting
and blue sky monitoring and 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.
(b) EXPENSES PAID BY XXXXXX ASSOCIATES. Xxxxxx Associates shall pay all
its own costs and expenses incurred in rendering the services required under
this Agreement. In addition to such costs and expenses, Xxxxxx Associates shall
incur and pay the following expenses relating to the Fund's operations:
(i) Reasonable compensation, fees and related expenses of the
Trust's officers and Trustees, except for such Trustees who are not interested
persons of Xxxxxx Associates;
(ii) Rental of offices of the Trust; and
(iii) Fees of any sub-adviser engaged by Xxxxxx Associates pursuant
to the authority granted in Section 2 hereof.
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. Absent instructions from the Trust to the contrary, 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 an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker 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 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 1940 Act 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 with which it or any of its affiliates or the Fund is
affiliated. Xxxxxx Associates or such affiliated broker 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
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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. To the extent consistent with applicable law, purchase or sell orders
for the Fund may be aggregated with simultaneous purchase or sell orders for
other clients of Xxxxxx Associates. Whenever Xxxxxx Associates simultaneously
places orders to purchase or sell the same security on behalf of the Fund and
one or more other clients of Xxxxxx Associates, such orders will be allocated as
to price and amount among all such clients in a manner reasonably believed by
Xxxxxx Associates to be fair and equitable to each client. The Trust recognizes
that in some cases, this procedure may adversely affect the results obtained for
the Fund.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund 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 April 30, 2000,
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 Fund.
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 the Fund or Xxxxxx
Associates and, (ii) if required by applicable law, 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)
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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 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, so long as its
services under this Agreement are not materially adversely affected or otherwise
impaired thereby. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of Xxxxxx Associates to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature. 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", "approved at least annually" 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. Where the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is made less restrictive by a
rule, regulation, order,
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interpretation or other authority of the Securities and Exchange Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation, order, interpretation or other
authority.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
18. MISCELLANEOUS. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
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:_________________________
Xxxxxx X. Xxxxx
President
XXXXXX INVESTMENT PORTFOLIO TRUST, with
respect to the Xxxxxx Mid Cap Value Fund
By:_________________________
Xxxxxx X. Xxxxx
President
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