WARNING: THE XXXXX SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
Kobrick Investment Trust
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
July 7, 1999
Kobrick Funds LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Advisory Agreement
Ladies and Gentlemen:
Kobrick Investment Trust (the "Trust") is a diversified open-end
management investment company registered under the Investment
Company Act
of 1940, as amended (the "Act"), and subject to the rules and
regulations
promulgated thereunder. The Trust's shares of beneficial interest
are
divided into three separate series, the Kobrick Growth Fund, the
Kobrick
Capital Fund and the Kobrick Emerging Growth Fund (the "Funds").
Each such
share of a Fund represents an undivided interest in the assets,
subject to
the liabilities, allocated to that Fund. Each Fund has a separate
investment objective and separate investment policies.
1. Appointment as Adviser. The Trust being duly authorized
hereby
appoints and employs Kobrick Funds, LLC ("Adviser") as
discretionary
portfolio manager, on the terms and conditions set forth herein,
of the
Funds.
2. Acceptance of Appointment; Standard of Performance. Adviser
accepts the appointment as discretionary portfolio manager and
agrees to
use its best professional judgment to make timely investment
decisions for
the Funds in accordance with the provisions of this Agreement.
3. Portfolio Management Services of Adviser. Adviser is hereby
employed and authorized to select portfolio securities for
investment by
the Trust on behalf of the Funds, to purchase and sell securities
of the
Funds, and upon making any purchase or sale decision, to place
orders for
the execution of such portfolio transactions in accordance with
paragraphs
5 and 6 hereof. In providing portfolio management services to the
Funds,
Adviser shall be subject to such investment restrictions as are
set forth
in the Act and the rules thereunder, the Internal Revenue Code of
1986, the
supervision and control of the Trustees of the Trust, such
specific
instructions as the Trustees may adopt and communicate to Adviser
and the
investment objectives, policies and restrictions of the Trust
applicable to
the Funds furnished pursuant to paragraph 4. Adviser is not
authorized by
the Trust to take any action, including the purchase or sale of
securities
for the Funds, in contravention of any restriction, limitation,
objective,
policy or instruction described in the previous sentence. Adviser
shall
maintain on behalf of the Trust the records listed in Schedule A
hereto (as
amended from time to time). At the Trust's reasonable request,
Adviser
will consult with the Trust with respect to any decision made by
it with
respect to the investments of the Funds.
4. Investment Objectives, Policies and Restrictions. The Trust
will provide Adviser with the statement of investment objectives,
policies
and restrictions applicable to the Funds as contained in the
Trust's
registration statements under the Act and the Securities Act of
1933, and
any instructions adopted by the Trustees supplemental thereto.
The Trust
will provide Adviser with such further information concerning the
investment objectives, policies and restrictions applicable
thereto as
Adviser may from time to time reasonably request. The Trust
retains the
right, on written notice to Adviser from the Trust, to modify any
such
objectives, policies or restrictions in any manner at any time.
5. Transaction Procedures. All transactions will be consummated
by payment to or delivery by State Street Bank and Trust Company
or any
successor custodian (the "Custodian"), or such depositories or
agents as
may be designated by the Custodian in writing, as custodian for
the Trust,
of all cash and/or securities due to or from the Funds, and
Adviser shall
not have possession or custody thereof. Adviser shall advise
Custodian and
confirm in writing to the Trust and to Boston Financial Data
Services,
Inc., or any other designated agent of the Trust, all investment
orders for
the Funds placed by it with brokers and dealers. Adviser shall
issue to
the Custodian such instructions as may be appropriate in
connection with
the settlement of any transaction initiated by the Adviser.
6. Allocation of Brokerage. Adviser shall have authority and
discretion to select brokers and dealers to execute portfolio
transactions
initiated by Adviser and to select the markets on or in which the
transactions will be executed.
In doing so, the Adviser will give primary consideration to
securing
the most favorable price and efficient execution. Consistent with
this
policy, the Adviser may consider the financial responsibility,
research and
investment information and other services provided by brokers or
dealers
who may effect or be a party to any such transaction or other
transactions
to which other clients of the Adviser may be a party. It is
understood
that neither the Trust nor the Adviser has adopted a formula for
allocation
of the Trust's investment transaction business. It is also
understood that
it is desirable for the Trust that the Adviser have access to
supplemental
investment and market research and security and economic analyses
provided
by certain brokers who may execute brokerage transactions at a
higher
commission to the Trust than may result when allocating brokerage
to other
brokers on the basis of seeking the lowest commission. Therefore,
the
Adviser is authorized to place orders for the purchase and sale of
securities for the Funds with such certain brokers, subject to
review by
the Trust's Trustees from time to time with respect to the extent
and
continuation of this practice. It is understood that the services
provided
by such brokers may be useful to the Adviser in connection with
its
services to other clients.
On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Funds as well as other
clients,
the Adviser, to the extent permitted by applicable laws and
regulations,
may, but shall be under no obligation to, aggregate the securities
to be
sold or purchased in order to obtain the most favorable price or
lower
brokerage commissions and efficient execution. In such event,
allocation
of the securities so purchased or sold, as well as expenses
incurred in the
transaction, will be made by the Adviser in the manner it
considers to be
the most equitable and consistent with its fiduciary obligations
to the
Trust and to such other clients.
For each fiscal quarter of the Trust, Adviser shall prepare and
render reports to the Trust's Trustees of the total brokerage
business
placed and the manner in which the allocation has been
accomplished. Such
reports shall set forth at a minimum the information required to
be
maintained by Rule 31a-1(b)(9) under the Act.
7. Proxies. The Trust will vote all proxies solicited by or
with
respect to the issuers of securities in which assets of the Funds
may be
invested from time to time. At the request of the Trust, Adviser
shall
provide the Trust with its recommendations as to the voting of
such
proxies.
8. Reports to Adviser. The Trust will provide Adviser with such
periodic reports concerning the status of the Funds as Adviser may
reasonably request.
9. Fees for Services. For all of the services to be rendered
and
payments made as provided in this Agreement, the Kobrick Growth
Fund, the
Kobrick Capital Fund and Kobrick Emerging Growth Fund will each
pay the
Adviser a monthly advisory fee computed daily at the annual rate
of 1.00%
of the average of the values of the net assets of the Fund as
determined at
the close of each business day during the month.
10. Allocation of Charges and Expenses. Adviser shall employ or
provide and compensate the executive, administrative, secretarial
and
clerical personnel necessary to provide the services set forth
herein, and
shall bear the expense thereof. Adviser shall compensate all
Trustees,
officers and employees of the Trust who are also shareholders or
employees
of Adviser. Adviser will pay all expenses incurred in connection
with the
sale or distribution of the Funds' shares to the extent such
expenses are
not assumed by the appropriate fund under the Trustees'
Distribution
Expense Plan.
The Funds will be responsible for the payment of all operating
expenses of the Trust, including fees and expenses incurred by the
Trust in
connection with membership in investment company organizations,
brokerage
fees and commissions, legal, auditing and accounting expenses,
expenses of
registering shares under federal and state securities laws,
insurance
expenses, taxes or governmental fees, fees and expenses of the
custodian,
the transfer, shareholder service and dividend disbursing agent
and the
accounting and pricing agent of the Funds, expenses including
clerical
expenses of issue, sale, redemption or repurchase of shares of the
Funds,
the fees and expenses of Trustees of the Trust who are not
interested
persons of the Trust, the cost of preparing, printing and
distributing
prospectuses, statements, reports and other documents to
shareholders,
expenses of shareholders' meetings and proxy solicitations, and
such
extraordinary or non-recurring expenses as may arise, including
litigation
to which the Trust may be a party and indemnification of the
Trust's
officers and Trustees with respect thereto, or any other expense
not
specifically described above incurred in the performance of the
Trust's
obligations. All other expenses not expressly assumed by Adviser
herein
incurred in connection with the organization, registration of
shares and
operations of the Funds will be borne by the Funds.
11. Other Investment Activities of Adviser. The Trust
acknowledges
that Adviser or one or more of its affiliates may have investment
responsibilities or render investment advice to or perform other
investment
advisory services for other individuals or entities and that
Adviser, its
affiliates or any of its or their directors, officers, agents or
employees
may buy, sell or trade in any securities for its or their
respective
accounts ("Affiliated Accounts"). Subject to the provisions of
paragraph 2
hereof, the Trust agrees that Adviser or its affiliates may give
advice or
exercise investment responsibility and take such other action with
respect
to other Affiliated Accounts which may differ from the advice
given or the
timing or nature of action taken with respect to the Funds,
provided that
Adviser acts in good faith, and provided further, that it is
Adviser's
policy to allocate, within its reasonable discretion, investment
opportunities to the Funds over a period of time on a fair and
equitable
basis relative to the Affiliated Accounts, taking into account the
investment objectives and policies of the Funds and any specific
investment
restrictions applicable thereto. The Trust acknowledges that one
or more
of the Affiliated Accounts may at any time hold, acquire,
increase,
decrease, dispose of or otherwise deal with positions in
investments in
which the Funds may have an interest from time to time, whether in
transactions which involve the Funds or otherwise. Adviser shall
have no
obligation to acquire for the Funds a position in any investment
which any
Affiliated Account may acquire, and the Trust shall have no first
refusal,
co-investment or other rights in respect of any such investment,
either for
the Funds or otherwise.
12. Certificate of Authority. The Trust and the Adviser shall
furnish to each other from time to time certified copies of the
resolutions
of their Trustees or Board of Directors or executive committees,
as the
case may be, evidencing the authority of officers and employees
who are
authorized to act on behalf of the Trust, the Funds and/or the
Adviser.
13. Limitation of Liability. Adviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its
reasonable
judgment, in good faith and believed by it to be authorized or
within the
discretion or rights or powers conferred upon it by this
Agreement, or in
accordance with (or in the absence of) specific directions or
instructions
from the Trust, provided, however, that such acts or omissions
shall not
have resulted from Adviser's willful misfeasance, bad faith or
gross
negligence, a violation of the standard of care established by and
applicable to Adviser in its actions under this Agreement or
breach of its
duty or of its obligations hereunder. Nothing in this paragraph
13 shall
be construed in a manner inconsistent with Sections 17(h) and (i)
of the
Act.
14. Confidentiality. Subject to the duty of Adviser and the
Trust
to comply with applicable law, including any demand of any
regulatory or
taxing authority having jurisdiction, the parties hereto shall
treat as
confidential all information pertaining to the Funds and the
actions of
Adviser and the Trust in respect thereof.
15. Assignment. No assignment of this Agreement shall be made by
Adviser, and this Agreement shall terminate automatically in the
event of
such assignment. Adviser shall notify the Trust in writing
sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of
the Act, as will enable the Trust to consider whether an
assignment will
occur, and to take the steps necessary to enter into a new
contract with
Adviser.
16. Representation, Warranties and Agreements of the Trust. The
Trust represents, warrants and agrees that:
A. Adviser has been duly appointed by the Trustees of the
Trust
to provide investment services to the Funds as contemplated
hereby.
B. The Trust will deliver to Adviser true and complete
copies of
its then current prospectuses and statements of additional
information as effective from time to time and such other
documents or instruments governing the investments of the
Funds
and such other information as is necessary for Adviser to
carry
out its obligations under this Agreement.
C. The Trust is currently in compliance and shall at all
times
comply with the requirements imposed upon the Trust by
applicable law and regulations.
17. Representations, Warranties and Agreements of Adviser.
Adviser
represents, warrants and agrees that:
A. Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940.
B. Adviser will maintain, keep current and preserve on
behalf of
the Trust, in the manner and for the time periods required or
permitted by the Act, the records identified in Schedule A.
Adviser agrees that such records (unless otherwise indicated
on
Schedule A) are the property of the Trust, and will be
surrendered to the Trust promptly upon request.
C. Adviser will complete such reports concerning purchases
or
sales of securities on behalf of the Funds as the Trust may
from time to time require to ensure compliance with the Act,
the Internal Revenue Code of 1986 and applicable state
securities laws.
X. Xxxxxxx has adopted a written code of ethics complying
with the
requirements of Rule 17j-1 under the Act and will provide the
Trust with a copy of the code of ethics and evidence of its
adoption. Within forty-five (45) days of the end of the last
calendar quarter of each year while this Agreement is in
effect, an officer of Adviser shall certify to the Trust that
Adviser has complied with the requirements of Rule 17j-1
during
the previous quarter and that there has been no violation of
the Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to
such
violation. Upon the written request of the Trust, Adviser
shall permit the Trust, its employees or its agents to
examine
the reports required to be made to Adviser by Rule 17j-
1(c)(1).
E. Adviser will, promptly after filing with the Securities
and
Exchange Commission an amendment to its Form ADV, furnish a
copy of such amendment to the Trust.
F. Upon request of the Trust, Adviser will provide
assistance to
the Custodian in the collection of income due or payable to
the
Funds.
X. Adviser will immediately notify the Trust of the
occurrence of
any event which would disqualify Adviser from serving as an
investment adviser of an investment company pursuant to
Section
9(a) of the Act or otherwise.
18. Amendment. This Agreement may be amended at any time, but
only
by written agreement between Adviser and the Trust, which
amendment, other
than amendments to Schedule A, is subject to the approval of the
Trustees
and the shareholders of the Funds in the manner required by the
Act and the
rules thereunder, subject to any applicable exemptive order of the
Securities and Exchange Commission modifying the provisions of the
Act with
respect to approval of amendments to this Agreement.
19. Effective Date; Term. This Agreement shall become effective
on
the date of its execution and shall remain in force for a period
of two (2)
years from such date, and from year to year thereafter but only so
long as
such continuance is specifically approved at least annually by the
vote of
a majority of the Trustees who are not interested persons of the
Trust or
the Adviser, cast in person at a meeting called for the purpose of
voting
on such approval, and by a vote of the Board of Trustees or of a
majority
of the outstanding voting securities of the Funds. The aforesaid
requirement that this Agreement may be continued "annually" shall
be
construed in a manner consistent with the Act and the rules and
regulations
thereunder.
20. Termination. This Agreement may be terminated by either
party
hereto, without the payment of any penalty, immediately upon
written notice
to the other in the event of a breach of any provision thereof by
the party
so notified, or otherwise upon sixty (60) days' written notice to
the
other, but any such termination shall not affect the status,
obligations or
liabilities of any party hereto to the other.
21. Limitation of Liability. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any
of the
trustees, shareholders, nominees, officers, agents or employees of
the
Trust, personally, but bind only the trust property of the Trust.
The
execution and delivery of this Agreement have been authorized by
the
trustees of the Trust and signed by an officer of the Trust,
acting as
such, and neither such authorization by such trustees nor such
execution
and delivery by such officer shall be deemed to have been made by
any of
them individually or to impose any liability on any of them
personally, but
shall bind only the trust property of the Trust.
22. Use of Names. The names "Kobrick" and "Kobrick Funds" are
the
property right of the Adviser. The Adviser and Xxxxxxxxx X.
Xxxxxxx may
use the names "Kobrick" and "Kobrick Funds" in other connections
and for
other purposes, including without limitation in the name of other
investment companies, corporations or business that it may manage,
advise,
sponsor or own, or in which it may have a financial interest. The
Trust
will discontinue any use of the names "Kobrick" and "Kobrick
Funds" if the
Adviser ceases to be employed as the Trust's portfolio manager.
23. Definitions. As used in paragraphs 15 and 19 of this
Agreement, the terms "assignment," "interested person" and "vote
of a
majority of the outstanding voting securities" shall have the
meanings set
forth in the Act and the rules and regulations thereunder.
24. Applicable Law. To the extent that state law is not
preempted
by the provisions of any law of the United States heretofore or
hereafter
enacted, as the same may be amended from time to time, this
Agreement shall
be administered, construed and enforced according to the laws of
The
Commonwealth of Massachusetts.
KOBRICK INVESTMENT TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Title: President
Date: July 7, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
KOBRICK FUNDS LLC
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Title: President
Date: July 7, 1999
SCHEDULE A
RECORDS TO BE MAINTAINED BY THE ADVISER
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order,
and all
other portfolio purchases or sales, given by the Adviser on behalf
of
the Funds for, or in connection with, the purchase or sale of
securities, whether executed or unexecuted. Such records shall
include:
A. The name of the broker;
B. The terms and conditions of the order and of any
modification or
cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
X. The name of the person who placed the order on behalf of
the
Trust.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter,
completed within
ten (10) days after the end of the quarter, showing specifically
the
basis or bases upon which the allocation of orders for the
purchase and
sale of portfolio securities to named brokers or dealers was
effected,
and the division of brokerage commissions or other compensation on
such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Trust by brokers or
dealers.
(ii) The supplying of services or benefits by brokers or
dealers
to:
(a) The Trust;
(b) The Adviser; and,
(c) Any person affiliated with the foregoing
persons.
(iii) Any other consideration other than the
technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made
available.
X. Xxxxx describe in detail the application of any general
or
specific formula or other determinant used in arriving at
such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
D. The name of the person responsible for making the
determination of
such allocation and such division of brokerage commissions or
other compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate
memorandum
identifying the person or persons, committees or groups
authorizing the
purchase or sale of portfolio securities. Where an authorization
is
made by a committee or group, a record shall be kept of the names
of its
members who participate in the authorization. There shall be
retained
as part of this record any memorandum, recommendation or
instruction
supporting or authorizing the purchase or sale of portfolio
securities
and such other information as is appropriate to support the
authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as
are
required to be maintained by registered investment advisers by
rule
adopted under Section 204 of the Investment Advisers Act of 1940,
to the
extent such records are necessary or appropriate to record the
Adviser's
transactions with respect to the Funds.
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* Such information might include: the current Form 10-K, annual
and
quarterly reports, press releases, reports by analysts and from
brokerage firms (including their recommendation; i.e., buy, sell,
hold)
or any internal reports or portfolio adviser reviews.
TRADOCS: 1205269.3 (ptzp03!.doc)
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