INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 4th day of April, 2002 by and between Xxxxxx
Xxxxxxx Small-Mid Special Value Fund, a Massachusetts business trust
(hereinafter called the "Fund"), and Xxxxxx Xxxxxxx Investment Advisors Inc., a
Delaware corporation (hereinafter called the "Investment Manager"):
WHEREAS, The Fund intends to engage in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, The Investment Manager is registered as an investment advisor
under the Investment Advisers Act of 1940, and engages in the business of
acting as investment advisor; and
WHEREAS, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, The Investment Manager desires to be retained to perform services
on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Board of Trustees,
manage the investment activities of the Fund as hereinafter set forth. Without
limiting the generality of the foregoing, the Investment Manager shall obtain
and evaluate such information and advice relating to the economy, securities
and commodities markets and securities and commodities as it deems necessary or
useful to discharge its duties hereunder; shall continuously manage the assets
of the Fund in a manner consistent with the investment objectives and policies
of the Fund; shall determine the securities and commodities to be purchased,
sold or otherwise disposed of by the Fund and the timing of such purchases,
sales and dispositions; and shall take such further action, including the
placing of purchase and sale orders on behalf of the Fund, as the Investment
Manager shall deem necessary or appropriate. The Investment Manager shall also
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses and opinions formulated or obtained by the Investment
Manager in the discharge of its duties as the Fund may, from time to time,
reasonably request.
2. The Investment Manager may (subject to approval of the Board of
Trustees) at its own expense, enter into a Sub-Advisory Agreement with a
Sub-Advisor to make determinations as to certain or all of the securities and
commodities to be purchased, sold or otherwise disposed of by the Fund and the
timing of such purchases, sales and dispositions and to take such further
action, including the placing of purchase and sale orders on behalf of the
Fund, as the Sub-Advisor, in consultation with the Investment Manager, shall
deem necessary or appropriate; provided that the Investment Manager shall be
responsible for monitoring compliance by such Sub-Advisor with the investment
policies and restrictions of the Fund and with such other limitations or
directions as the Trustees of the Fund may from time to time prescribe.
3. The Investment Manager shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Manager shall be deemed to
include persons employed or otherwise retained by the Investment Manager to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Manager may
desire. The Investment Manager shall, as agent for the Fund, maintain the
Fund's records and books of account (other than those maintained by the Fund's
transfer agent, registrar, custodian and other agencies). All such books and
records so maintained shall be the property of the Fund and, upon request
therefor, the Investment Manager shall surrender to the Fund such of the books
and records so requested.
4. The Fund will, from time to time, furnish or otherwise make available
to the Investment Manager such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Manager may reasonably require in order to discharge its duties and obligations
hereunder.
5. The Investment Manager shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this Agreement,
and shall, at its own expense, pay the compensation of the officers and
employees, if any, of the Fund who are also directors, officers or employees of
the Investment Manager, and provide such office space, facilities and equipment
and such clerical help and bookkeeping services as the Fund shall reasonably
require in the conduct of its business. The Investment Manager shall also bear
the cost of telephone service, heat, light, power and other utilities provided
to the Fund. Certain of the expenses borne by the Investment Manager pursuant
to this Agreement may be paid by any of its affiliates.
6. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including without limitation, fees pursuant to any plan of
distribution that the Fund may adopt; the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with portfolio
transactions to which the Fund is a party; all taxes, including securities or
commodities issuance and transfer taxes, and fees payable by the Fund to
federal, state or other governmental agencies; the cost and expense of
engraving or printing certificates representing shares of the Fund; all costs
and expenses in connection with the registration and maintenance of
registration of the Fund and its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing fees
and legal fees and disbursements of counsel); the cost and expense of printing,
including typesetting, and distributing prospectuses and statements of
additional information of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing proxy statements and reports to shareholders;
fees and travel expenses of trustees or members of any advisory board or
committee who are not employees of the Investment Manager or any corporate
affiliate of the Investment Manager; all expenses incident to the payment of
any dividend, distribution, withdrawal or redemption, whether in shares or in
cash; charges and expenses of any outside service used for pricing of the
Fund's shares; charges and expenses of legal counsel, including counsel to the
Trustees of the Fund who are not interested persons (as defined in the Act) of
the Fund or the Investment Manager, and of independent accountants, in
connection with any matter relating to the Fund; membership dues of industry
associations; interest payable on Fund borrowings; postage; insurance premiums
on property or personnel (including officers and Trustees) of the Fund which
inure to its benefit; extraordinary expenses (including but not limited to
legal claims and liabilities and litigation costs and any indemnification
related thereto); and all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein.
7. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the
Investment Manager monthly compensation determined by applying the annual rate
of 0.75% to the Fund's daily net Assets. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and accrued daily and the
amounts of the daily accruals shall be paid monthly as promptly as possible for
the preceding month. Such calculations shall be made by applying 1/365ths of
the annual rates to the Fund's net assets each day determined as of the close
of business on that day or the last previous business day. If this Agreement
becomes effective subsequent to the first day of a month or shall terminate
before the last day of a month, compensation for that part of the month this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above.
8. The Investment Manager will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund
or any of its investors for any error of judgment or mistake of law or for any
act or omission by the Investment Manager or for any losses sustained by the
Fund or its investors.
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9. Nothing contained in this Agreement shall prevent the Investment
Manager or any affiliated person of the Investment Manager from acting as
investment adviser or manager for any other person, firm or corporation and
shall not in any way bind or restrict the Investment Manager or any such
affiliated person from buying, selling or trading any securities or commodities
for their own accounts or for the account of others for whom they may be
acting. Nothing in this Agreement shall limit or restrict the right of any
Director, officer or employee of the Investment Manager 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 or dissimilar
nature.
10. This Agreement shall remain in effect until April 30, 2003 and from
year to year thereafter provided such continuance is approved at least annually
by the vote of holders of a majority, as defined in the Investment Company Act
of 1940, as amended (the "Act"), of the outstanding voting securities of the
Fund or by the Trustees of the Fund; provided, that in either event such
continuance is also approved annually by the vote of a majority of the Trustees
of the Fund who are not parties to this Agreement or "interested persons" (as
defined in the Act) of any such party, which vote must be cast in person at a
meeting called for the purpose of voting on such approval; provided, however,
that (a) the Fund may, at any time and without the payment of any penalty,
terminate this Agreement upon thirty days' written notice to the Investment
Manager, either by majority vote of the Trustees of the Fund or by the vote of
a majority of the outstanding voting securities of the Fund; (b) this Agreement
shall immediately terminate in the event of its assignment (to the extent
required by the Act and the rules thereunder) unless such automatic
terminations shall be prevented by an exemptive order of the Securities and
Exchange Commission; and (c) the Investment Manager may terminate this
Agreement without payment of penalty on thirty days' written notice to the
Fund. Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed post-paid, to the other party at the principal office of
such party.
11. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Investment Manager shall be liable for failing to do so.
12. This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
13. The Investment Manager and the Fund each agree that the name "Xxxxxx
Xxxxxxx," which comprises a component of the Fund's name, is a property right
of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. ("MSDW"), the parent of the Investment
Manager. The Fund agrees and consents that (i) it will only use the name
"Xxxxxx Xxxxxxx" as a component of its name and for no other purpose, (ii) it
will not purport to grant to any third party the right to use the name "Xxxxxx
Xxxxxxx" for any purpose, (iii) MSDW, or any corporate affiliate of MSDW, may
use or grant to others the right to use the name "Xxxxxx Xxxxxxx," or any
combination or abbreviation thereof, as all or a portion of a corporate or
business name or for any commercial purpose, including a grant of such right to
any other investment company, (iv) at the request of MSDW or any corporate
affiliate of MSDW, the Fund will take such action as may be required to provide
its consent to the use of the name "Xxxxxx Xxxxxxx," or any combination or
abbreviation thereof, by MSDW or any corporate affiliate of MSDW, or by any
person to whom MSDW or a corporate affiliate of MSDW shall have granted the
right to such use, and (v) upon the termination of any investment advisory
agreement into which a corporate affiliate of MSDW and the Fund may enter, or
upon termination of affiliation of the Investment Manager with its parent, the
Fund shall, upon request of MSDW or any corporate affiliate of MSDW, cease to
use the name "Xxxxxx Xxxxxxx" as a component of its name, and shall not use the
name, or any combination or abbreviation thereof, as a part of its name or for
any other commercial purpose, and shall cause its officers, trustees and
shareholders to take any and all actions which MSDW or any corporate affiliate
of MSDW, may request to effect the foregoing and to reconvey to MSDW any and
all rights to such name.
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14. The Declaration of Trust establishing Xxxxxx Xxxxxxx Small-Mid Special
Value Fund, dated February 21, 2002, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Xxxxxx
Xxxxxxx Small-Mid Special Value refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of Xxxxxx Xxxxxxx Small-Mid Special
Value shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise,
in connection with the affairs of said Xxxxxx Xxxxxxx Small-Mid Special Value
Fund, but the Trust Estate only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
XXXXXX XXXXXXX
SMALL-MID SPECIAL VALUE FUND
By:
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Attest:
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XXXXXX XXXXXXX INVESTMENT ADVISORS INC.
By:
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Attest:
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