INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this 20th day of December, 2001,
between FORT PITT CAPITAL FUNDS (the "Trust"), a Delaware business trust, and
FORT PITT CAPITAL GROUP, INC. (the "Adviser"), a Pennsylvania corporation
registered under the Investment Advisers Act of 1940 (the "Advisers Act").
WITNESSETH:
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Trust desires to retain the Adviser to furnish certain
investment advisory services, as described herein, with respect to certain of
the series of the Trust, all as now are or may be hereafter listed on Exhibit A
to this Agreement (each, a "Fund"), which may be amended from time to time; and
WHEREAS, the Adviser represents that it is willing and possesses legal
authority to render such services subject to the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, the Trust and the Adviser do mutually agree and promise as
follows:
1. Appointment as Adviser. The Trust hereby appoints the Adviser to act as
investment adviser to each Fund subject to the terms and conditions set
forth in the Agreement. The Adviser hereby accepts such appointment and
agrees to furnish the services hereinafter described for the compensation
provided for in this Agreement.
2. Duties of Adviser.
(a) Investment Management Services. (1) Subject to the supervision of the
Trust's Board of Trustees (and except as otherwise permitted under the
terms of any exemptive relief obtained by the Adviser from the
Securities and Exchange Commission or by rule or regulation), the
Adviser will provide, or arrange for the provision of a continuous
investment program and overall investment strategies for each Fund,
including investment research and management with respect to all
securities and investments and cash equivalents in each Fund. The
Adviser will determine, or arrange for others to determine, from time
to time what securities and other investments will be purchased,
retained or sold by each Fund and will implement, or arrange for
others to implement, such determinations through the placement, in the
name of a Fund, of orders for the execution of portfolio transactions
with or through such brokers or dealers as may be so selected. The
Adviser will provide, or arrange for the provision of, the services
under this Agreement in accordance with the stated investment policies
and restrictions of each Fund as set forth in that Fund's current
prospectus and statement of additional information as currently in
effect and as supplemented or amended from time to time (collectively
referred to hereinafter as the "Prospectus") and subject to the
directions of the Trust's Board of Trustees.
(2) Subject to the provisions of this Agreement and the 1940 Act
and any exemptions thereto, the Adviser is authorized to appoint one
or more qualified subadvisers (each a "Subadviser') to provide each
Fund with certain services required by this Agreement. Each Subadviser
shall have such investment discretion and shall make all
determinations with respect to the investment of a Fund's assets as
shall be assigned to that Subadviser by the Adviser and the purchase
and sale of portfolio securities with respect to those assets and
shall take such steps as may be necessary to implement its decisions.
The Adviser shall not be responsible or liable for the investment
merits of any decision by a Subadviser to purchase, hold, or sell a
security for a Fund.
(3) Subject to the supervision and direction of the Trustees, the
Adviser shall (i) have overall supervisory responsibility for the
general management and investment of a Fund's assets; (ii) determine
the allocation of assets among the Subadvisers, if any; and (iii) have
full investment discretion to make all determinations with respect to
the investment of Fund assets not otherwise assigned to a Subadviser.
(4) The Adviser shall research and evaluate each Subadviser, if
any, including (i) performing initial due diligence on prospective
Subadvisers and monitoring each Subadviser's ongoing performance; (ii)
communicating performance expectations and evaluations to the
Subadvisers; and (iii) recommending to the Trust's Board of Trustees
whether a Subadviser's contract should be renewed, modified or
terminated. The Adviser shall also recommend changes or additions to
the Subadvisers and shall compensate the Subadvisers.
(5) The Adviser shall provide to the Trust's Board of Trustees
such periodic reports concerning a Fund's business and investments as
the Board of Trustees shall reasonably request.
(b) Compliance with Applicable Laws and Governing Documents. In the
performance of its duties and obligations under this Agreement, the
Adviser shall act in conformity with the Trust's Declaration of Trust
and By-Laws and the Prospectus and with the instructions and
directions received from the Trustees of the Trust and will conform to
and comply with the requirements of the 1940 Act, the Internal Revenue
Code of 1986, as amended (the "Code") (including the requirements for
qualification as a regulated investment company) and all other
applicable federal and state laws and regulations.
The Adviser acknowledges and agrees that subject to the supervision
and directions of the Trust's Board of Trustees, it shall be solely
responsible for compliance with all disclosure requirements under all
applicable federal and state laws and regulations relating to the
Trust or a Fund, including, without limitation, the 1940 Act, and the
rules and regulations thereunder, except that each Subadviser shall
have liability in connection with information furnished by the
Subadviser to a Fund or to the Adviser.
(c) Consistent Standards. It is recognized that the Adviser will perform
various investment management and administrative services for entities
other than the Trust and the Funds; in connection with providing such
services, the Adviser agrees to exercise the same skill and care in
performing its services under this Agreement as the Adviser exercises
in performing similar services with respect to the other fiduciary
accounts for which the Adviser has investment responsibilities.
(d) Brokerage. The Adviser is authorized, subject to the supervision of
the Trust's Board of Trustees, to establish and maintain accounts on
behalf of each Fund with, and place orders for the purchase and sale
of assets not allocated to a Subadviser, with or through, such
persons, brokers or dealers ("brokers") as Adviser may select and
negotiate commissions to be paid on such transactions. In the
selection of such brokers and the placing of such orders, the Adviser
shall seek to obtain for a Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services, as provided
below. In using its reasonable efforts to obtain for a Fund the most
favorable price and execution available, the Adviser, bearing in mind
the Fund's best interests at all times, shall consider all factors it
deems relevant, including price, the size of the transaction, the
nature of the market for the security, the amount of the commission,
if any, the timing of the transaction, market prices and trends, the
reputation, experience and financial stability of the broker involved,
and the quality of service rendered by the broker in other
transactions. Subject to such policies as the Trustees may determine,
the Adviser shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by
reason of its having caused a Fund to pay a broker that provides
brokerage and research services (within the meaning of Section 28(e)
of the Securities Exchange Act of 1934) to the Adviser an amount of
commission for effecting a Fund investment transaction that is in
excess of the amount of commission that another broker would have
charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided
by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of the Adviser with
respect to the accounts as to which it exercises investment
discretion.
It is recognized that the services provided by such brokers may
be useful to the Adviser in connection with the Adviser's services to
other clients. On occasions when the Adviser deems the purchase or
sale of a security to be in the best interests of a Fund as well as
other clients of the Adviser, 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, allocations of securities so sold
or purchased, as well as the expenses incurred in the transaction,
will be made by the Adviser in the manner the Adviser considers to be
the most equitable and consistent with its fiduciary obligations to
each Fund and to such other clients.
(e) Securities Transactions. The Adviser will not purchase securities or
other instruments from or sell securities or other instruments to a
Fund; provided, however, the Adviser may purchase securities or other
instruments from or sell securities or other instruments to a Fund if
such transaction is permissible under applicable laws and regulations,
including, without limitation, the 1940 Act and the Advisers Act and
the rules and regulations promulgated thereunder or any exemption
therefrom.
The Adviser agrees to observe and comply with Rule 17j-1 under
the 1940 Act and the Trust's and its Code of Ethics, as the same may
be amended from time.
(f) Books and Records. In accordance with the 1940 Act and the rules and
regulations promulgated thereunder, the Adviser shall maintain
separate books and detailed records of all matters pertaining to the
Funds and the Trust (the "Fund's Books and Records"), including,
without limitation, a daily ledger of such assets and liabilities
relating thereto and brokerage and other records of all securities
transactions. The Adviser acknowledges that the Fund's Books and
Records are property of the Trust. In addition, the Fund's Books and
Records shall be available to the Trust at any time upon request and
shall be available for telecopying without delay to the Trust during
any day that the Funds are open for business.
3. Expenses. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges,
if any) purchased for a Fund. The Adviser shall, at its sole expense,
employ or associate itself with such persons as it believes to be
particularly fitted to assist in the execution of its duties under this
Agreement.
It is understood that the Trust will pay all of it own expenses including,
without limitation, (1) all charges and expenses of any custodian or
depository appointed by the Trust for the safekeeping of its cash,
securities and other assets, (2) all charges and expenses paid to an
administrator appointed by the Trust to provide administrative or
compliance services, (3) the charges and expenses of any transfer agents
and registrars appointed by the Trust, (4) the charges and expenses of
independent certified public accountants and of general ledger accounting
and internal reporting services for the Trust, (5) the charges and expenses
of dividend and capital gain distributions, (6) the compensation and
expenses of the officers and Trustees of the Trust who are not "interested
persons" of the Adviser, (7) brokerage commissions and issue and transfer
taxes chargeable to the Trust in connection with securities transactions to
which the Trust is a party, (8) all taxes and fees payable by the Trust to
Federal, State or other governmental agencies; (9) the cost of stock
certificates, if any, representing shares of the Trust, (10) all expenses
of shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses and reports to shareholders, (11) charges and
expenses of legal counsel for the Trust in connection with legal matters
relating to the Trust, including without limitation, legal services
rendered in connection with the Trust's existence, financial structure and
relations with its shareholders, (12) insurance and bonding premiums, (13)
association membership dues, (14) bookkeeping and the costs of calculating
the net asset value of shares of the Trust's Funds, and (15) expenses
relating to the issuance, registration and qualification of the Trust's
shares.
4. Compensation. For the services provided and the expenses assumed with
respect to a Fund pursuant to this Agreement, the Adviser will be entitled
to the fee listed for each Fund on Exhibit A. Such fees will be computed
daily and payable monthly at an annual rate based on a Fund's average daily
net assets.
The method of determining net assets of a Fund for purposes hereof shall be
the same as the method of determining net assets for purposes of
establishing the offering and redemption price of the Shares as described
in each Fund's Prospectus. If this Agreement shall be effective for only a
portion of a month, the aforesaid fee shall be prorated for the portion of
such month during which the Agreement is in effect.
5. Representations and Warranties of Adviser. The Adviser represents and
warrants to the Trust as follows:
(a) The Adviser is registered as an investment adviser under the Advisers
Act;
(b) The Adviser is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania with
the power to own and possess its assets and carry on its business as
it is now being conducted;
(c) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly
authorized by all necessary action on the part of its shareholders
and/or directors, and no action by or in respect of, or filing with,
any governmental body, agency or official is required on the part of
the Adviser for the execution, delivery and performance by the Adviser
of this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii)
the Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instruments biding upon the
Adviser; and
(d) The Form ADV of the Adviser previously provided to the Trust is a true
and complete copy of the form filed with the SEC and the information
contained therein is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which
they were made, not misleading.
6. Survival of Representations and Warranties; Duty to Update Information. All
representations and warranties made by the Adviser pursuant to Section 5
shall survive for the duration of this Agreement and the parties hereto
shall promptly notify each other in writing upon becoming aware that any of
the foregoing representations and warranties are no longer true.
7. Liability and Indemnifications.
(a) Liability. In the absence of wilful misfeasance, bad faith or gross
negligence on the part of the Adviser or a reckless disregard of its
duties hereunder, the Adviser shall not be subject to any liability to
a Fund or the Trust, for any act or omission in the case of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of Fund assets;
provided, however, that nothing herein shall relieve the Adviser from
any of its obligations under applicable law, including, without
limitation, the federal and state securities laws.
(b) Indemnification. The Adviser shall indemnify the Trust and its
officers and trustees, for any liability and expenses, including
attorneys fees, which may be sustained as a result of the Adviser's
wilful misfeasance, bad faith, gross negligence, reckless disregard of
its duties hereunder or violation of applicable law, including,
without limitation, the federal and state securities laws.
8. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall continue
until December 31, 2003, and thereafter shall continue automatically
for successive annual periods, provided such continuance is
specifically approved at least annually by the Trust's Board of
Trustees or the vote of the lesser of (a) 67% of the shares of a Fund
represented at a meeting if holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy or
(b) more than 50% of the outstanding shares of the Fund; provided that
in either event its continuance also is approved by a majority of the
Trust's Trustees who are not "interested persons" (as defined in the
0000 Xxx) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
(b) Termination. Notwithstanding whatever may be provided herein to the
contrary, the Agreement may be terminated any time, without payment of
any penalty by vote of a majority of the Trust's Board of Trustees, or
by vote of a majority of the outstanding voting securities of a Fund,
or by the Adviser, in each case, on not less than sixty (60) days'
written notice to the other party.
This Agreement shall not be assigned (as such term is defined in the
0000 Xxx) and shall terminate automatically in the event of its
assignment.
9. Services Not Exclusive; License.
(a) Services Not Exclusive. The services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. It is understood that
the action taken by the Adviser under this Agreement may differ from
the advice given or the timing or nature of action taken with respect
to other clients of the Adviser, and that a transaction in a specific
security may not be accomplished for all clients of the Adviser at the
same time or at the same price.
(b) Grant. The parties acknowledge that the Adviser owns all right, title
and interest in and to the service marks and any United States service
xxxx registrations and/or applications therefor identified in Exhibit
B (collectively, the "Marks"). The Adviser hereby grants to the Trust
a worldwide, revocable, non-exclusive, royalty free license to use the
Marks during the term of this Agreement in connection with the
investment advisory services provided to the Trust under this
Agreement (the "Services").
(c) Registrations. The Adviser agrees to secure and maintain appropriate
state or federal trademark registrations for the Marks, including
without limitation those listed in Exhibit B. The Trust agrees to
cooperate in the filing of any affidavits and applications by
providing proof of use of the Marks upon the Adviser's reasonable
request.
(d) Quality of Services. The Trust agrees that the Services will not be of
lesser quality than the quality of comparable services being sold by
the Adviser, or its predecessor in interest, under the Marks at the
time of the execution of this Agreement. The Trust agrees that the
Adviser shall have the right to check the quality of the Services, and
for that purpose, the Adviser shall have access to the Trust's
premises at reasonable times during regular business hours. The Trust
agrees to provide the Adviser with samples of brochures, advertising,
or other materials bearing one or more of the Marks that are used in
connection with the sale of Services.
(e) Use of the Marks. The Trust agrees that it shall use the Marks only in
such forms and manners as may be approved by the Adviser, which
approval shall not be unreasonably withheld. Any sample or example of
art work submitted to the Adviser hereunder which has not been
disapproved within twenty (20) days after submission thereof shall be
deemed to have been approved. All advertising, promotion and other use
of the Marks will be in good taste and in such manner as will maintain
and enhance the value of the Marks and the Adviser's reputation, as
all goodwill and use of the Marks by the Trust will inure to the
benefit of the Adviser. The Trust agrees to change any use of the
Marks or any proposed use of the Marks to which the Adviser may have
reasonable objection.
(f) Suspected Infringement. The Trust shall immediately notify the Adviser
of any unauthorized use and/or suspected infringement of the Marks of
which it is or becomes aware. Such notification shall include, without
limitation, immediately forwarding to the Adviser any and all
documents relating to any such unauthorized use or suspected
infringement and providing the Adviser with any and all facts and
circumstances relating to such unauthorized use or suspected
infringement.
(g) Right to Xxx. The Adviser shall have the primary, and in the first
instance sole, right to institute a suit for infringement, unfair
competition, or other action with respect to any unauthorized use or
suspected infringement. The Adviser shall have the sole discretion to
determine how to handle or otherwise deal with any suspected
infringement or unauthorized use of the Marks, including the right to
settle or otherwise compromise any dispute or suit, and shall promptly
notify the Trust of its decision. The Adviser shall have no duty to
initiate such litigation if in its sole judgment such litigation is
not warranted or is not in its best interests. The Trust may join and
be represented in, at its own expense by its own counsel, any
proceeding relating to any unauthorized use or suspected infringement
to protect its own interests. The Trust agrees that it shall, at all
times, reasonably cooperate with the Adviser and its counsel, in all
respects, with respect to any unauthorized use or suspected or alleged
infringements at the Adviser's expense, including, but not limited to,
having the Trust's principals, trustees, directors, employees,
officers, and/or agents testify and making available any records,
papers, information, specimens, and the like when requested by the
Adviser. Any damages and/or recovery received pursuant to such
litigation or settlements or compromises shall be the sole and
exclusive property of the Adviser. If the Adviser decides in its
discretion not to take any action with respect to an unauthorized use
or suspected infringement, then the Trust may, at its own option and
sole expense, take such action on its own behalf as it deems
appropriate and any damages, recovery, settlement, or compromise
obtained thereby shall be for the account of the Trust.
(h) Termination of License. The license granted in this Section 9 shall
automatically terminate upon termination or expiration of this
Agreement. The Adviser may terminate the license granted in this
Section 9 upon thirty (30) days written notice to the Trust of the
occurrence of any of the following: (i) the failure of the Trust to
use the Marks for a continuous period of one year or more; (ii) the
failure of the Trust to comply with any of its obligations set forth
in this Section 9; or (iii) the failure of the Trust to cooperate with
the Adviser in the filing of affidavits, declarations or applications
required to maintain any registrations for the Marks.
10. Amendment. This Agreement may be amended by mutual consent of the parties,
provided that the terms of each such amendment shall be approved by the
Trust's Board of Trustees or by a vote of a majority of the outstanding
voting securities of a Fund (as required by the 1940 Act).
11. Confidentiality. Subject to the duties of the 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 a Fund and the Trust and the
actions of the Adviser and the Funds in respect thereof. In accordance with
Section 248.11 of Regulation S-P (17 CFR 248.1-248.30) ("Reg. S-P") Adviser
will not directly, or indirectly through an affiliate, disclose any
non-public personal information, as defined in Reg. S-P, received from the
Trust to any person that is not an affiliate of the Trust or the Adviser
and provided that any such information disclosed to an affiliate of the
Trust shall be under the same limitations of non-disclosure.
12. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party.
(a) If to the Adviser:
Fort Pitt Capital Group, Inc.
000 Xxxxxxx Xxxxx
Xxxxxx Plaza Eleven
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(b) If to the Trust:
Fort Pitt Capital Funds
920 Holiday Drive
Xxxxxx Plaza Eleven
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
13. Jurisdiction. This Agreement shall be governed by and construed to be in
accordance with substantive laws of the Commonwealth of Pennsylvania
without reference to choice of law principles thereof and in accordance
with the 1940 Act. In the case of any conflict, the 1940 Act shall control.
14. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, all of which shall together
constitute one and the same instrument.
15. Certain Definitions. For the purposes of this Agreement, "interested
person," "affiliated person," "assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions
as may be granted by the SEC.
16. Captions. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
17. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
ADVISER:
FORT PITT CAPITAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
TRUST:
FORT PITT CAPITAL FUNDS
By: /s/Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board of Trustees
EXHIBIT A
FORT PITT CAPITAL FUNDS
Investment Advisory Agreement
Effective August 17, 2001
Funds of the Trust Advisory Fees
----------------- ----------------------
For Each of the Fort Pitt Capital Funds
--------------------------------------------------
Fort Pitt Capital Total Return Fund 1.00% on all assets
FORT PITT CAPITAL FUNDS
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board of Trustees
FORT PITT CAPITAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
President
EXHIBIT B
FORT PITT CAPITAL FUNDS
Investment Advisory Agreement
Service Marks and any United States Service Xxxx Registrations and/or
Applications for Service Xxxx Registrations of Fort Pitt Capital
Group, Inc.
to be supplied
