EXHIBIT d(2)
INVESTMENT MANAGEMENT AGREEMENT
This INVESTMENT MANAGEMENT AGREEMENT (the "Agreement") is dated as of May 9,
1996, as amended April 30, 1999, by and between Xxxxxx Investment Trust
(formerly known as Xxxxxx Xxxxxxxx Investment Trust) (the "Trust"), a business
trust organized under the laws of the State of Delaware, whose principal place
of business is 0000 Xxxxxxxx Xxxx., Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, and Xxxxxx
Capital Management LLC (formerly known as Xxxxxx, Xxxxxxxx & Co., LLC), a
California limited liability company (the "Investment Manager"), whose principal
place of business is also 0000 Xxxxxxxx Xxxx., Xxxxxxx Xxxxx, Xxxxxxxxxx 00000,
with reference to the following facts:
RECITALS
WHEREAS, on or about April 1, 1996, the Trust filed a Registration Statement
on Form N-1A (File Nos. 33-32111 and 811-7581) (the "Registration Statement")
under the Investment Company Act of 1940, as amended (the "Investment Company
Act") and the Securities Act of 1933, as amended (the "1933 Act") with the
Securities and Exchange Commission (the "Commission") in connection with the
registration as an open-ended investment company of a separate series of the
beneficial interests of the Trust, par value $.00001 (the "Shares") designated
the Xxxxxx Xxxxxxxx Pride Fund (the "Fund") (now known as Xxxxxx Pride Value
Fund);
WHEREAS, the Investment Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act");
WHEREAS, the Trust desires to retain the Investment Manager to provide
general supervision relative to the management and administration of the affairs
of the Trust with respect to the Fund pursuant to the terms and conditions of
this Agreement;
WHEREAS, the Trust also desires to retain the Investment Manager for the
purpose of making investment decisions for the Trust with respect to the Fund
pursuant to the terms and conditions of this Agreement; and
WHEREAS, the Investment Manager desires to provide services to the Trust
with respect to the Fund pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
contained in this Agreement, the Trust and the Investment Manager (who are
sometimes individually referred to as a "party" and collectively referred to as
the "parties") agree as follows:
AGREEMENT
1. EMPLOYMENT
The Trust hereby employs the Investment Manager to provide general supervision
relative to the management and administration of the affairs of the Trust with
respect to the Fund and to also provide investment advisory services in
connection with the Fund, for the compensation and on the terms and conditions
set forth herein.
2. SCOPE OF MANAGEMENT SERVICES
In providing services to the Trust relative to the management and administration
of the Fund, the Investment Manager shall, subject to the supervision of the
Board of Trustees (the "Trustees" or the "Board") and officers of the Trust,
provide ongoing supervision of the operations and the functioning of the Trust
with respect to the Fund (including other service providers engaged by the Trust
to provide services to the Fund), and consult with or advise the Board on the
policies, procedures and operations relating to the Fund.
3. PROVISION OF INVESTMENT ADVISORY SERVICES
In providing investment advisory services to the Trust with respect to the Fund,
the Investment Manager shall manage the investment and reinvestment of the
Fund's assets and agrees to use its best professional judgment to make timely
investment decisions in accordance with the provisions of this Agreement,
subject to the direction of the Trustees and officers of the Trust, for the
period, in the manner and on the terms hereinafter set forth. In providing
portfolio management services to the Trust with respect to the Fund, the
Investment Manager shall be subject to the investment objectives, policies and
restrictions relating to the Fund as set forth in the then current Registration
Statement, including current Prospectus and Statement of Additional Information
(as they may be modified from time to time), the Trust Instrument and By-laws
and the investment restrictions set forth in the Investment Company Act and the
Rules thereunder (as and to the extent set forth in such Registration Statement
or in other documentation furnished to the Investment Manager by the Trust), to
the provisions of the Internal Revenue Code applicable to the Trust as a
regulated investment company and to the supervision and control of the Trustees.
The Investment Manager shall not, without the prior approval of the Trust,
effect any transactions which would cause the Trust to be out of compliance with
any of such objectives, restrictions or policies.
4. OTHER OBLIGATIONS AND SERVICES
The Investment Manager shall make available its officers and employees to the
Trustees and officers of the Trust for consultation and discussions regarding
the administration and management of the Trust with respect to the Fund and its
investment activities. The Investment Manager will adopt a written code of
ethics complying with the requirements of Rule 17j-1 under the Investment
Company 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, the President
or a Vice President of the Investment Manager shall certify to the Trust that
the Investment Manager has complied with the requirements of Rule 17j-1 during
the previous year and that there has been no violation of the Investment
Manager'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, the Investment Manager shall permit the Trust, its employees or its
agents to examine the reports required to be made by the Investment Manager by
Rule 17j-l(c)(l).
5. TRANSACTION PROCEDURES
All portfolio transactions for the Fund will be consummated by payment to or
delivery by the designated custodian of the Fund, BNY Western Trust Company, or
any successor thereof (the "Custodian"), or such depositories or agents as may
be designated by the Custodian in writing, as custodian for the Fund, of all
cash and/or securities due to or from the Fund, and the Investment Manager shall
not have possession or custody thereof or any responsibility or liability with
respect to such custody. The Investment Manager shall advise and confirm in
writing to the Custodian all investment orders for the Fund placed by it with
brokers and dealers at the time and in the manner set forth in Exhibit "A"
attached hereto (as amended from time to time). The Trust shall issue to the
Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Investment Manager. The Trust
shall be responsible for all custodial arrangements and the payment of all
custodial charges and fees, and, upon giving proper instructions to the
Custodian, the
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Investment Manager shall have no responsibility or liability with respect to
custodial arrangements or the acts, omissions or other conduct of the Custodian.
6. BROKERAGE TRANSACTIONS AND ALLOCATIONS
The Investment Manager shall have authority and discretion to select brokers and
dealers to execute Fund transactions initiated by the Investment Manager, and to
select the markets on or in which the transactions will be executed. The
Investment Manager will render regular reports to the Trust of the total
brokerage business placed on behalf of the Fund by the Investment Manager and
the manner in which such brokerage business has been allocated.
In selecting brokers and dealers to execute Fund transactions, and in selecting
markets, the Investment Manager's primary responsibility shall be to seek to
obtain best net price and execution for the Fund. However, this responsibility
shall not obligate the Investment Manager to solicit competitive bids for each
transaction or to seek the lowest available commission cost to the Fund, so long
as the Investment Manager reasonably believes that the broker or dealer selected
by it can be expected to obtain a "best execution" market price on the
particular transaction and determines in good faith that the commission cost is
reasonable in relation to the value of the brokerage and research services (as
defined in Section 28(e)(3) of the Securities Exchange Act of 1934, as amended),
provided by such broker or dealer to the Investment Manager viewed in terms of
either that particular transaction or of the Investment Manager's overall
responsibilities with respect to its clients, including the Trust and the Fund,
as to which the Investment Manager exercises investment discretion,
notwithstanding that the Trust and/or the Fund may not be the direct or
exclusive beneficiary of any such services or that another broker may be willing
to charge the Trust and/or the Fund a lower commission on the particular
transaction.
The Investment Manager shall not execute any portfolio transactions for the Fund
with a broker or dealer which is an "affiliated person" (as defined in the
Investment Company Act) of the Fund or of the Investment Manager without the
prior written approval of the Fund. The Fund will provide the Investment
Manager with a list of brokers and dealers which are "affiliated persons" of the
Trust and/or the Fund.
7. PROXIES
The Trust will vote all proxies solicited by or with respect to the issuers of
securities in which assets of the Fund may be invested from time to time. At
the request of the Trust, the Investment Manager shall provide the Trust with
its recommendations as to the voting of such proxies.
8. COMPENSATION
(a) Investment Management Fee. For the services provided under this
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Agreement by the Investment Manager, the Trust shall pay the Investment Manager
a fee (the "Investment Management Fee"), calculated on a daily basis for each
day during the effective term of this Agreement, equal to the sum of the net
asset value of the Fund for such day multiplied by a fraction, the numerator of
which is 1.00%, and the denominator of which is 365 (366 in leap years). If the
day for which calculation is required is a weekend or holiday or other day for
which the net asset value has not been computed, the net asset value for the
last day prior thereto shall be used for the calculation. The Trust shall
determine the amount of the Investment Management Fee on a monthly basis, and
shall pay the Investment Management Fee for each month to the Investment Manager
as promptly as possible after the first business day of the month following the
month of calculation.
(b) Reimbursement of Expenses. The Trust shall reimburse the Investment
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Manager Agent for its reasonable and actual out-of-pocket expenses incurred in
connection with the performance of its duties under this Agreement; provided,
however, the Investment Manager shall not be reimbursed for any out-of-pocket
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expenses for travel and lodging incurred for attendance at any meeting within of
the Los Angeles metropolitan area. Each written request for reimbursement of
the Investment Manager's expenses under this paragraph shall be directed to the
President of the Trust and shall show in reasonable detail the expenditures
incurred by the Investment Manager and the purposes therefor, together with any
documentation required by the Trust to verify such payment.
(c) Waiver of Fees and Expenses. The Investment Manager reserves the right
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from time to time in its sole discretion, and without any obligation to do so,
to reduce and/or waive all or a portion of the Investment Management Fee
otherwise payable hereunder and/or undertake to pay or reimburse the Fund for
all or a portion of its expenses not otherwise required to be borne or
reimbursed by the Investment Manager. Any such fee reduction, waiver or
undertaking may be discontinued or modified by the Investment Manager at any
time.
9. EXPENSES OF THE TRUST
It is understood that the Trust will pay all its expenses other than those
expressly assumed by the Investment Manager herein, which expenses payable by
the Trust shall include:
(a) Fees and expenses of the Investment Manager.
(b) Auditing and accounting fees and expenses.
(c) Fees and expenses for transfer agent, registrar, dividend disbursing
agent and shareholder recordkeeping services (including reasonable fees and
expenses payable to the Investment Manager for such services).
(d) Fees and expenses of the custodian of the Trust's assets, including
expenses incurred in performing fund accounting and recordkeeping services
provided by the custodian.
(e) Expenses of obtaining quotations for calculating the value of the Fund's
net assets.
(f) Salaries and other compensation of any of its executive officers and
employees who are not officers, directors, stockholders or employees of the
Investment Manager or any of its affiliates.
(g) Taxes and governmental fees levied against the Fund and the expenses of
preparing tax returns and reports.
(h) Brokerage fees and commissions in connection with the purchase and sale
of portfolio securities for the Fund.
(i) Organizational expenses.
(j) Costs, including the interest expense, of borrowing money.
(k) Costs and/or fees incident to a meeting of the trustees of the Trust
and/or shareholders of the Fund, the preparation and mailings of proxy material,
prospectuses and reports of the Trust to shareholders of the Fund, the filing of
reports with regulatory bodies, the maintenance of the legal existence of the
Trust and the Fund, membership dues and fees of investment company industry
trade associations, and the registration of Shares with federal and state
securities authorities.
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(l) Legal fees and expenses (including reasonable fees for legal services
rendered by the Investment Manager or its affiliates), including the legal fees
related to the registration and continued qualification of the Shares for sale
(and of maintaining the registration of the Fund).
(m) Costs of printing stock certificates, if any, representing Shares or any
other expenses, including clerical expenses of issue, redemption, or repurchase
of Shares.
(n) Trustees' fees and expenses of Trustees who are not directors, officers,
employees or stockholders of the Investment Manager or any of its affiliates.
(o) Its pro rata portion of the fidelity bond required by Section 17(g) of
the Investment Company Act, or other insurance premiums.
(p) Fees payable to federal and state authorities in connection with the
registration of the Shares.
(q) Litigation and indemnification expenses and other extraordinary expenses
not incurred in the ordinary course of the business of the Fund or the Trust.
10. OTHER INVESTMENT ACTIVITIES
(a) Other Accounts. The Trust acknowledges that the Investment Manager or
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one or more of its affiliates has investment responsibilities, renders
investment advice to and performs other investment advisory services for other
individuals or entities ("Client Accounts"), and that the Investment Manager,
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 Paragraphs 2 and 4
hereof, the Trust agrees that the Investment Manager or its affiliates may give
advice or execute investment responsibility and take such other action with
respect to other Client Accounts and Affiliated Accounts which may differ from
the advice given or the timing or nature of action taken with respect to the
Trust; provided, however, that the Investment Manager acts in good faith;
provided, further, that it is the Investment Manager's policy to allocate,
within its reasonable discretion, investment opportunities to the Trust over a
period of time on a fair and equitable basis relative to the Client Accounts and
the Affiliated Accounts, taking into account the cash position and the
investment objectives and policies of the Trust with respect to the Fund and any
specific investment restrictions applicable thereto. The Trust acknowledges that
one or more Client Accounts and Affiliated Accounts may at any time hold,
acquire, increase, decrease, dispose of or otherwise deal with positions in
investments in which the Trust and/or the Fund may have an interest from time to
time, whether in transactions which involve the Trust, the Fund or otherwise.
The Investment Manager shall have no obligation to acquire for the Trust and/or
the Fund a position in any investment which any Client Account or 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 Trust, the Fund
or otherwise.
(b) Cross-Interests. Subject to and in accordance with the Trust Instrument
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and By-Laws of the Trust and Section 10(a) of the Investment Company Act, it is
understood that the Trustees, officers and agents of the Trust and shareholders
of the Fund are or may be interested in the Investment Manager or its affiliates
as managers, officers, agents or members of the Investment Manager or its
affiliates; that the Investment Manager and its officers, agents and members or
its affiliates are or may be interested in the Trust as Trustees, officers,
agents or otherwise or may be interested in the Fund as shareholders or
otherwise; and that the effect of any such interests shall be governed by said
Trust Instrument, By-Laws and the Investment Company Act.
11. LIMITATION OF LIABILITY OF TRUST
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Reference is hereby made to the Trust Instrument dated March 26, 1996,
establishing the Trust, as amended, and the Certificate of Trust which has been
filed with the Secretary of State of the State of Delaware on March 26, 1996,
and elsewhere as required by law, and to any and all amendments thereto
hereafter filed. The name refers to the Trustees under said Trust Instrument
and Certificate of Trust, as Trustees and not personally, and no Trustee,
officer, agent or employee of the Trust or shareholder of the Fund shall be held
to any personal liability hereunder or in connection with the affairs of the
Trust or the Fund including, without limitation, any claims against or
obligations of the Trust or the Fund. The Trust estate alone shall be liable
for any such liabilities, claims or obligations (with the exception of any Fund
for whom the Investment Manager has not provided services under this Agreement
and for which the claims or obligations therefore do not relate). Without
limiting the generality of the foregoing, neither the Investment Manager nor any
of its managers, officers, members, employees or agents shall, under any
circumstances, have recourse or cause or willingly permit recourse to be had
directly or indirectly to any personal, statutory, or other liability of any
Trustee, officer, agent or employee of the Trust or shareholder of any Fund of
any successor of the Trust or any Fund, whether such liability now exists or is
hereafter incurred for claims against the Trust estate or obligations of the
Trust estate, but shall look for payment solely to said Trust estate, or the
assets of such successor of the Trust.
12. LIMITATION OF LIABILITY
(a) Limitation. The Investment Manager shall not be liable for any action
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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 or the Trustees
or officers of the Trust; provided, however, that such acts or omissions shall
not have resulted from the Investment Manager's willful misfeasance, bad faith,
gross negligence, a violation of the standard of care established by and
applicable to the Investment Manager in its actions under this Agreement or
reckless disregard of its obligations and duties hereunder (hereinafter
"Disabling Conduct"); provided, further, however, any stated limitations on
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liability shall not relieve the Investment Manager from any responsibility or
liability the Investment Manager may have under federal or state laws.
(b) Indemnification. The Fund will indemnify the Investment Manager
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against, and hold it harmless from, any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses) not
resulting from Disabling Conduct by the Investment Manager. Indemnification
shall be made only following: (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Investment Manager
was not liable by reason of Disabling Conduct or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Manager was not liable by reason of Disabling Conduct by (1) the vote
of a majority of a quorum of Trustees of the Fund who are neither "interested
persons" of the Fund, nor parties to the proceeding ("disinterested non-party
Trustees") or (2) an independent legal counsel in a written opinion. The
Investment Manager shall be entitled to advances from the Fund for payment of
the reasonable expenses incurred by it in connection with the matter as to which
it is seeking indemnification in the manner and to the fullest extent
permissible under the Delaware Business Trust Act. The Investment Manager shall
provide to the Fund a written affirmation of its good faith belief that the
standard of conduct necessary for indemnification by the Fund has been met and a
written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at least
one of the following additional conditions shall be met: (A) the Investment
Manager shall provide security in form and amount acceptable to the Fund for its
undertaking; (B) the Fund is insured against losses arising by reason of the
advance; or (C) a majority of a quorum of disinterested non-party Trustees, or
independent legal counsel, in a written opinion, shall have determined, based on
a review of facts readily available to the Fund at the time the advance is
proposed to be made, that there is reason to believe that the Investment Manager
will ultimately be found to be entitled to indemnification.
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(c) Investment Company Act. No provision of this Agreement shall be
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construed to protect the Investment Manager from liability in violation of
Section 17(i) of the Investment Company Act.
13. ADDITIONAL FUNDS
(a) Establishment of Additional Funds. In the event that the Trust
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establishes one or more portfolios or series other than the Fund (each an
"Additional Fund") with respect to which it desires to retain the Investment
Manager to provide management and investment advisory services pursuant to the
terms of this Agreement, the Trust shall promptly notify the Investment Manager
in writing. If the Investment Manager is willing to render such services with
respect to the Additional Fund, it shall notify the Trust in writing. Upon such
mutual consent by the parties, the provision to the Trust of fund accounting
services by the Investment Manager with respect to the Additional Fund and the
mutual rights and obligations of the parties shall, except as otherwise agreed
upon in writing by the parties, and subject to compliance with the requirements
of the Investment Company Act relative to Trustee and shareholder approval, be
governed by the terms of this Agreement (with the Fund and each Additional Fund
being collectively referred to as the Fund hereunder). The Trust shall have no
obligation to request the Investment Manager administer the Additional Fund
pursuant to the terms of this Agreement or otherwise, and the Investment Manager
shall have no obligation to agree to so administer the Additional Fund.
(b) Termination of Less than All Funds. In the event the Investment Manager
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provides fund advisory services to more than one Fund under the terms of this
Agreement, this Agreement shall, in the event it is specifically terminated with
respect to less than all of the Funds, remain in effect with respect to the
remaining Funds.
14. REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) By Trust. In addition to any other representations, covenants and
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warranties of the Trust under this Agreement, the Trust hereby represents,
warrants and covenants to the Investment Manager, each of which is deemed, as
the case may be, to be a separate representation, warranty and covenant, that:
(i) Corporate Organization. Power and Authority. The Trust: (1) is a
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business trust duly organized, validly existing and in good standing under
the laws of the State of Delaware; (2) has all requisite corporate power
and authority to enter into this Agreement; (3) has the corporate or other
power to own its properties and carry on its business as the same is now
being conducted; and (4) is in good standing and is qualified to transact
business in each jurisdiction in which the nature of property owned or
leased by it or the conduct of its business requires it to be so qualified,
except where the failure to be in good standing or to be duly qualified to
transact business would not be likely to have a material adverse effect on
the business, assets or financial condition of the Trust taken as a whole.
(ii) Authorization and Validity of Agreement. The execution and
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delivery of this Agreement by the Trust and the performance of the
transactions herein contemplated have been duly authorized by the Board of
Trustees of the Trust, and no further corporate or other action on the part
of the Trust is necessary to authorize this Agreement or the performance of
such transactions. This Agreement has been duly executed and delivered by
the Trust and, assuming due authorization, execution and delivery by the
Investment Manager, is valid or binding upon the Trust in accordance with
its terms (except as limited by (1) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in affect relating to
creditor's rights generally and (2) general principles of equity
{regardless of whether such enforcement is considered in a proceeding in
equity or at law}).
(iii) No Breach or Conflict. Neither the execution or delivery of
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this Agreement or the
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performance by the Trust of the transactions contemplated herein will
breach or conflict with any of the provisions of the Trust's Certificate of
Trust, Declaration of Trust or By-laws, nor, to the best of the knowledge
and belief of the Board of Trustees of the Trust, with or without the
giving of notice or the lapse of time or both, will (1) violate or
constitute an event of default under any agreement or other instrument or
any order, judgment or ruling of any governmental authority to which the
Trust is a party or by which any of its property is bound, or (2) require
the consent or approval of any other person or governmental authority,
except in each case with respect to any of the foregoing which would not be
likely to have a material adverse effect on the business, assets or
financial condition of the Trust taken as a whole.
(iv) Delivery of Prospectus. The Trust will deliver to the Investment
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Manager a true and complete copy of the then current Registration
Statement, including Prospectus and Statement of Additional Information,
for the Fund, as effective from time to time, and such other documents
governing the investment of the Fund's assets and such other information as
is necessary for the Investment Manager to carry out its obligations under
this Agreement.
(b) By Investment Manager. In addition to any other representations,
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covenants and warranties of the Investment Manager under this Agreement, the
Investment Manager hereby represents, warrants and covenants to the Trust, each
of which is deemed, as the case may be, to be a separate representation,
warranty and covenant, that:
(i) Corporate Organization. Power and Authority. The Investment
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Manager: (1) is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of California;
(2) has all requisite corporate power and authority to enter into this
Agreement; (3) has the corporate or other power to own its properties and
carry on its business as the same is now being conducted; and (4) is in
good standing and is qualified to transact business in each jurisdiction in
which the nature of property owned or leased by it or the conduct of its
business requires it to be so qualified, except where the failure to be in
good standing or to be duly qualified to transact business would not be
likely to have a material adverse effect on the business, assets or
financial condition of the Investment Manager taken as a whole.
(ii) Authorization and Validity of Agreement. The execution and
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delivery of this Agreement by the Investment Manager and the performance of
the transactions herein contemplated have been duly authorized by the
Managers of the Investment Manager, and no further corporate or other
action on the part of the Investment Manager is necessary to authorize this
Agreement or the performance of such transactions. This Agreement has been
duly executed and delivered by the Investment Manager and, assuming due
authorization, execution and delivery by the Trust, is valid or binding
upon the Investment Manager in accordance with its terms (except as limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in affect relating to creditor's rights generally and
(2) general principles of equity {regardless of whether such enforcement is
considered in a proceeding in equity or at law}).
(iii) No Breach or Conflict. Neither the execution or delivery of
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this Agreement or the performance by the Investment Manager of the
transactions contemplated herein will breach or conflict with any of the
provisions of the Articles of Organization or Operating Agreement of the
Investment Manager, nor, to the best of the knowledge and belief of the
Managers of the Investment Manager, with or without the giving of notice or
the lapse of time or both, will (1) violate or constitute an event of
default under any agreement or other instrument or any order, judgment or
ruling of any governmental authority to which the Investment Manager is a
party or by which any of its property is bound, or (2) require the consent
or approval of any other person or governmental authority, except in each
case with
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respect to any of the foregoing which would not be likely to have a
material adverse effect on the business, assets or financial condition of
the Investment Manager taken as a whole.
(iv) Performance. The Investment Manager will perform its obligations
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under this Agreement in accordance with the standard of care and diligence
of the industry.
(v) Registration. It is registered as an "Investment Adviser" under the
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Investment Advisers Act.
(vi) Records. It will maintain, keep current and preserve on behalf of
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the Trust, in the manner required or permitted by the Act and the Rules
promulgated thereunder, the records identified in Exhibit "A" attached
hereto (as Exhibit "A" may be amended from time to time). The Investment
Manager agrees that such records are the property of the Trust, and will be
surrendered to the Trust promptly upon request.
(vii) Information. Upon request, the Investment Manager will promptly
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supply the Trust with any information concerning the Investment Manager and
its managers, employees, members, agents and affiliates which the Trust may
reasonably require in connection with the preparation of the registration
statement, proxy material, reports, responses to shareholder inquiries or
other documents required to be filed under the Investment Company Act, the
1933 Act as amended, or other applicable securities laws with respect to
the Trust.
15. TERM; EARLY TERMINATION
(a) Initial Term; Renewals. This Agreement shall continue until two years
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from the date hereof and thereafter for successive one-year periods; provided,
however, such continuance is specifically approved at least annually by either:
(i) a vote of a majority of the Trustees of the Trust or (ii) a vote of a
majority of the outstanding voting securities of the Fund; provided, however,
that in either event the continuance is also approved by a vote of a majority of
those Trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan, in
this Agreement or any agreement related to the Plan (the "Qualified Trustees"),
by vote cast in person at a meeting called for the purpose of voting on such
approval.
(b) Voluntary Early Termination. This Agreement is terminable at any time
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without penalty: (i) by the Trust on not less than sixty (60) days' prior
written notice by vote of a majority of the Qualified Trustees, or by vote of
the holders of a majority of the outstanding voting securities of the Fund, or
(ii) by the Distributor upon not less than sixty (60) days' prior written
notice; provided, however, if requested by the Trust, the Distributor shall,
prior to the effective date of termination, and without waiving its right to
payment of compensation under this Agreement through the effective date of
termination, cease providing distribution services hereunder.
(c) Assignment. This Agreement shall terminate automatically in the event
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of its "assignment" as that term is defined in Section 2(a)(4) of the Investment
Company Act. The Investment Manager shall notify the Trust in writing
sufficiently in advance of any proposed change of control, as defined in Section
2(a)(9) of the Investment Company Act, that will enable the Trust to consider
whether an assignment as defined in Section 2(a)(4) of the Investment Company
Act will occur, and whether to take the steps necessary to enter into a new
contract with the Investment Manager. The Investment Manager shall notify the
Trust of any change in the membership of the Investment Manager within a
reasonable time after such change.
(d) Definitions. As used in this Agreement, the terms "specifically
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approved at least annually," "majority of the outstanding voting securities,"
and "interested persons" shall either have the same meaning as such terms have
in the Investment Company Act and the Rules thereunder or, if there is no
definition, be
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construed in a manner consistent with the Investment Company Act and the Rules
thereunder.
(e) Compensation. All accrued but unpaid compensation under this Agreement
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due the Investment Manager shall be paid on the effective date of termination.
16. AMENDMENT
This Agreement may be amended at any time, but only by written agreement among
the Investment Manager and the Trust, which amendment, other than amendments to
Exhibits A and B, is subject to the approval of the Trustees and the
shareholders of the Fund and to the extent required by the Investment Company
Act.
17. CONSULTANTS
The Investment Manager may, in its discretion in connection with the rendering
of the management services required under this Agreement, retain such
consultants or other parties as it may deem appropriate to furnish information,
clerical and other services and assistance in the performance of its duties;
provided, however, except as otherwise expressly provided in this Agreement, any
fee, compensation or expenses to be paid to any such parties shall be paid by
the Investment Manager, and no obligation shall be incurred on the Trust's
behalf in any such respects.
18. CONFIDENTIALITY
The Investment Manager agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Trust, the Fund and the prior, present or potential
shareholders of the Fund, and not to use such records and information for any
purpose other than performance of the Investment Manager's responsibilities and
to obtain approval in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld where the Investment Manager may
be exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
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19. NON-EXCLUSIVE AGENCY
Nothing contained in this Agreement shall prevent the Investment Manager, or any
affiliated person of the Investment Manager, from performing services similar to
those to be performed hereunder for any other person, firm, or corporation or
for its or their own accounts or for the accounts of others. The Investment
Manager shall not be obligated to give the Trust more favorable or preferential
treatment vis-a-vis its other clients.
20. INDEPENDENT CONTRACTOR
The Investment Manager is an independent contractor of the Trust and neither the
Investment Manager, nor any of its managers, officers or employees is or shall
be employees of the Fund in the performance of the Investment Manager's duties
hereunder. The Investment Manager shall be responsible for its own conduct and
the employment, control and conduct of its employees, and for injury to such
employees and agents or to others through employees and agents. The Investment
Manager assumes full responsibility for its employees and agents under
applicable statutes and agrees to pay all employment taxes thereunder.
21. MISCELLANEOUS
(a) Preparation of Agreement. Each party agrees that the other party shall
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not be construed to be solely responsible for the drafting of this Agreement,
and that any ambiguity in this Agreement or the interpretation thereof shall not
be construed against either party as the alleged draftsman of this Agreement.
(b) Cooperation. Each party agrees, without further consideration, to
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cooperate and diligently perform any further acts, deeds and things and to
execute and deliver any documents that may from time to time be reasonably
necessary or otherwise reasonably required to consummate, evidence, confirm
and/or carry out the intent and provisions of this Agreement, all without undue
delay or expense.
(c) Interpretation.
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(i) Entire Agreement/No Collateral Representations. Each party
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expressly acknowledges and agrees that this Agreement: (1) is the final,
complete and exclusive statement of the agreement of the parties with
respect to the subject matter hereof; (2) supersedes any prior or
contemporaneous agreements or understandings of any kind, oral or written
(collectively and severally, the "prior agreements"), and that any such
prior agreements are of no force or effect except as expressly set forth
herein; and (3) may not be varied, supplemented or contradicted by evidence
of prior agreements, or by evidence of subsequent oral agreements.
(ii) Amendment: Waiver; Forbearance. Except as expressly otherwise
------------------------------
provided herein, neither this Agreement nor any of its terms contained
herein may, as the case may be, be amended, supplemented, discharged or
terminated (other than by performance), except by a written instrument or
instruments signed by all of the parties to this Agreement. No waiver of
any acts or obligations hereunder shall be effective unless such waiver
shall be in a written instrument or instruments signed by each party
claimed to have given or consented to such waiver and each party affected
by such waiver. No forbearance by a party to seek a remedy for any
noncompliance or breach by another party hereto shall be deemed to be a
waiver by such forbearing party of its rights and remedies with respect to
such noncompliance or breach unless such waiver shall be in a written
instrument or instruments signed by the forbearing party.
(iii) Remedies Cumulative. The remedies of each party under this
-------------------
Agreement are cumulative and shall not exclude any other remedies to which
such party may be lawfully entitled.
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(iv) Severability. If any term or provision of this Agreement or the
------------
application thereof to any person or circumstance shall, to any extent, be
determined to be invalid, illegal or unenforceable under present or future
laws effective during the term of this Agreement, then and, in that event:
(A) the performance of the offending term or provision (but only to the
extent its application is invalid, illegal or unenforceable) shall be
excused as if it had never been incorporated into this Agreement, and, in
lieu of such excused provision, there shall be added a provision as similar
in terms and amount to such excused provision as may be possible and be
legal, valid and enforceable, and (B) the remaining part of this Agreement
(including the application of the offending term or provision to persons or
circumstances other than those as to which it is held invalid, illegal or
unenforceable) shall not be affected thereby and shall continue in full
force and effect to the fullest extent provided by law.
(v) Time is of the Essence. It is expressly understood and agreed that
----------------------
time of performance is strictly of the essence with respect to each and
every term, condition, obligation and provision hereof and that the failure
to timely perform any of the terms, conditions, obligations or provisions
hereof by any party shall constitute a material breach and a noncurable
(but waivable) default under this Agreement by the party so failing to
perform.
(vi) No Third Party Beneficiary. Notwithstanding anything else herein
--------------------------
to the contrary, the parties specifically disavow any desire or intention
to create any third party beneficiary obligations, and specifically declare
that no person, other than as set forth in this Agreement, shall have any
rights or remedies of any nature or kind whatsoever under or by reason of
this Agreement.
(vii) No Reliance Upon Prior Representation. Each party acknowledges
-------------------------------------
that no other party has made any oral representation or promise which would
induce them prior to executing this Agreement to change its position to its
detriment, partially perform, or part with value in reliance upon such
representation or promise; each party acknowledges that it has taken such
action at its own risk; and each party represents that it has not so
changed its position, performed or parted with value prior to the time of
their execution of this Agreement.
(viii) Headings; References; Incorporation; "Person"; Gender. The
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headings used in this Agreement are for convenience and reference purposes
only, and shall not be used in construing or interpreting the scope or
intent of this Agreement or any provision hereof. References to this
Agreement shall include all amendments or renewals thereof. All cross-
references in this Agreement, unless specifically directed to another
agreement or document, shall be construed only to refer to provisions
within this Agreement, and shall not be construed to be referenced to the
overall transaction or to any other agreement or document. Any exhibit
referenced in this Agreement shall be construed to be incorporated in this
Agreement. As used in this Agreement, the term "person" is defined in its
broadest sense as any individual, entity or fiduciary who has legal
standing to enter into any agreement. As used in this Agreement, each
gender shall be deemed to include the other gender, including neutral
genders or genders appropriate for entities, if applicable, and the
singular shall be deemed to include the plural, and vice versa, as the
context requires.
(d) Enforcement
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(i) Interpretation. This Agreement and the rights and remedies of each
--------------
party arising out of or relating to this Agreement (including, without
limitation, equitable remedies) shall be solely governed by, interpreted
under, and construed and enforced in accordance with the laws (without
regard to the conflicts of law principles thereof the State of California,
as if this Agreement were made, and as if its obligations are to be
performed, wholly within the State of California.
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(ii) Attorneys' Fees and Costs. If any party institutes or should the
-------------------------
parties otherwise become a party to any action or proceeding based upon or
arising out of this Agreement including, without limitation, to enforce or
interpret this Agreement or any provision hereof, or for damages by reason
of any alleged breach of this Agreement or any provision hereof, or for a
declaration of rights in connection herewith, or for any other relief,
including equitable relief, in connection herewith, the prevailing party in
any such action or proceeding, whether or not such action or proceeding
proceeds to final judgment or determination, shall be entitled to receive
from the non-prevailing party as a cost of suit, and not as damages, all
reasonable and actual costs and expenses (as defined below) of prosecuting
or defending the action or proceeding, as the case may be, including,
without limitation, reasonable attorneys' and other fees.
(e) Successors and Assigns. Neither party may assign its rights or delegate
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any of such party's duties or obligations under this Agreement, in whole or in
part, without the prior written consent of the other party. Any delegation of a
party's obligations under this Agreement shall in no way release the delegating
party from any of its obligations or liabilities under this Agreement. Subject
to the foregoing, all of the representations, warranties, covenants, conditions
and provisions of this Agreement shall be binding upon and shall inure to the
benefit of each party and such party's respective successors and permitted
assigns, spouses, heirs, executors, administrators, and personal and legal
representatives.
(f) Notices. Unless otherwise specifically provided in this Agreement, all
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notices, demands, requests, consents, approvals or other communications
(collectively and severally called "notices") required or permitted to be given
hereunder, or which are given with respect to this Agreement, shall be in
writing, and shall be given by: (i) personal delivery (which form of notice
shall be deemed to have been given upon delivery), (ii) by telegraph or by
private airborne/overnight delivery service (which forms of notice shall be
deemed to have been given upon confirmed delivery by the delivery agency), (iii)
by electronic or facsimile or telephonic transmission, provided the receiving
party has a compatible device or confirms receipt thereof (which forms of notice
shall be deemed delivered upon confirmed transmission or confirmation of
receipt), or (iv) by mailing in the United States mail by registered or
certified mail, return receipt requested, postage prepaid (which forms of notice
shall be deemed to have been given upon the fifth {5th} business day following
the date mailed). Each party, and their respective counsel, hereby agree that
if notice is to be given hereunder by such party's counsel, such counsel may
communicate directly with all principals, as required to comply with the
foregoing notice provisions. Notices shall be addressed at the addresses herein
above set forth in the introductory paragraph of this Agreement or to such other
address as the receiving party shall have specified most recently by like
notice, with a copy to the other parties hereto.
(g) Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, and all of which together shall constitute
one and the same instrument, binding on all parties hereto. Any signature page
of this Agreement may be detached from any counterpart of this Agreement and
reattached to any other counterpart of this Agreement identical in form hereto
by having attached to it one or more additional signature pages.
(h) Execution by All Parties Required to be Binding; Electronically
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Transmitted Documents. This Agreement shall not be construed to be an offer and
---------------------
shall have no force and effect until this Agreement is fully executed by all
parties hereto. If a copy or counterpart of this Agreement is originally
executed and such copy or counterpart is thereafter transmitted electronically
by facsimile or similar device, such facsimiled document shall for all purposes
be treated as if manually signed by the party whose facsimile signature appears.
WHEREFORE, the parties hereto have for purposes of this Agreement executed
this Agreement in the City of Xxxxxxx Hills, County of Los Angeles, State of
California, effective as of the date first written above.
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TRUST:
XXXXXX INVESTMENT TRUST,
a Delaware Business Trust
/s/ Xxxxxx X. Xxxxxx
By: ---------------------------------------------
Xxxxxx X. Xxxxxx, its President and Trustee
(and not individually)
INVESTMENT MANAGER:
XXXXXX CAPITAL MANAGEMENT, LLC,
a California limited liability company
/s/ Xxxxxx X. Xxxxxx
By: ---------------------------------------------
Xxxxxx X. Xxxxxx, its President and Manager
(and not individually)
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