Schwartz Investment Trust Bloomfield Hills, Michigan 48301
Xxxxxxxx
Investment Trust
0000 Xxxx
Xxxxx Xxxx
Xxxxxxxxxx
Xxxxx, Xxxxxxxx 00000
Xxxxxxxx
Investment Counsel, Inc.
0000 Xxxx
Xxxxx Xxxx
Xxxxxxxxxx
Xxxxx, Xxxxxxxx 00000
Re: Advisory
Agreement
Ladies
and Gentlemen:
Xxxxxxxx
Investment Trust (the "Trust") is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act"), and subject to the rules and regulations promulgated
thereunder. The Trust has established the Ave Xxxxx World Equity Fund
(the "Fund") as a series of shares of the Trust.
1. Appointment as
Adviser. The Trust being duly authorized hereby appoints and
employs Xxxxxxxx Investment Counsel, Inc. ("Adviser") as discretionary portfolio
manager, on the terms and conditions set forth herein, of the Fund.
2. Acceptance of Appointment;
Standard of Performance. Adviser accepts the appointment as
discretionary portfolio manager and agrees to use its best professional judgment
to make timely investment decisions for the Fund in accordance with the
provisions of this Agreement.
3. Portfolio Management
Services of Adviser. Adviser is hereby employed and authorized
to select portfolio securities for investment
by the Trust on behalf of the Fund, to purchase and sell securities of the Fund,
and upon making any purchase or sale decision, to place orders for the execution
of such portfolio
transactions
in accordance with paragraphs 5 and 6 hereof. In providing portfolio
management services to the Fund, Adviser shall be subject to such investment
restrictions as are set forth in the Act and the rules thereunder, the Internal
Revenue Code of 1986, applicable state securities laws, the supervision and
control of the Trustees of the Trust, such specific instructions as the Trustees
may adopt and communicate to Adviser and the investment objectives, policies and
restrictions of the Trust applicable to the Fund furnished pursuant to paragraph
4. Adviser is not authorized by the Trust to take any action,
including the purchase or sale of securities for the Fund, in contravention of
any restriction, limitation, objective, policy or instruction described in the
previous sentence. Adviser shall maintain on behalf of the Trust the
records listed in Schedule A hereto (as amended from time to
time). At the Trust's reasonable request, Adviser will consult with
the Trust with respect to any decision made by it with respect to the
investments of the Fund.
4. Investment Objectives,
Policies and Restrictions. The Trust will provide Adviser with
the statement of investment objectives, policies and restrictions applicable to
the Fund as contained in the Trust's registration statements under the Act and
the Securities Act of 1933, and any instructions adopted by the Trustees
supplemental thereto. The Trust will provide Adviser with such
further information concerning the investment objectives, policies and
restrictions applicable thereto as Adviser may from time to time reasonably
request. The Trust
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retains
the right, on written notice to Adviser from the Trust, to modify any such
objectives, policies or restrictions in any manner at any time.
5.
Transaction
Procedures. All transactions will be consummated by payment to
or delivery by US Bank, or any successor custodian (the "Custodian"), or such
depositories or agents as may be designated by the Custodian in writing, as
custodian for the Trust, of all cash and/or securities due to or from the Fund,
and Adviser shall not have possession or custody thereof. Adviser
shall advise Custodian and confirm in writing to the Trust and to Ultimus Fund
Solutions, LLC, or any other designated agent of the Trust, all investment
orders for the Fund placed by it with brokers and dealers. Adviser
shall issue to the Custodian such instructions as may be appropriate in
connection with the settlement of any transaction initiated by the
Adviser.
6. Allocation of
Brokerage. Adviser shall have authority and discretion to
select brokers and dealers to execute portfolio transactions initiated by
Adviser and to select the markets on or in which the transactions will be
executed.
In doing
so, the Adviser will give primary consideration to securing the most favorable
price and efficient execution. Consistent with this policy, the
Adviser may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Adviser may be a party. It is
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understood
that neither the Trust nor the Adviser has adopted a formula for allocation of
the Trust's investment transaction business. It is also understood
that it is desirable for the Trust that the Adviser have access to supplemental
investment and market research and security and economic analyses provided by
certain brokers who may execute brokerage transactions at a higher commission to
the Trust than may result when allocating brokerage to other brokers on the
basis of seeking the lowest commission. Therefore, the Adviser is
authorized to place orders for the purchase and sale of securities for the Fund
with such certain brokers, subject to review by the Trust's Trustees from time
to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers
may be useful to the Adviser in connection with its services to other
clients.
On occasions when the Adviser deems the
purchase or sale of a security to be in the best interest of the Fund as well as
other clients, the Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as expenses incurred
in the transaction, will be made by the Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the Trust
and to such other clients.
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For each fiscal quarter of the Trust,
Adviser shall prepare and render reports to the Trust's Trustees of the total
brokerage business placed and the manner in which the allocation has been
accomplished. Such reports shall set forth at a minimum the
information required to be maintained by Rule 31a-1(b)(9) under the
Act.
7. Administrative Services of
Adviser. The Adviser shall furnish to the Trust on behalf of
the Fund, but only to the extent that the Trust does not have in effect a
contract or contracts requiring a party of parties other than the Trust to
furnish one or more of the following described services to the Trust, adequate
(i) office space, which may be space within the offices of the Adviser or
in such other place as may be agreed upon from time to time, and (ii)
office furnishings, facilities and equipment as may be reasonably required for
managing and administering the operations and conducting the business of the
Trust, including complying with the securities, tax and other reporting
requirements of the United States and the various states in which the Trust does
business, conducting correspondence and other communications with the
shareholders of the Fund, and maintaining records in connection with the
investment and business activities of the Fund.
8. 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, Adviser shall provide the Trust
with its recommendations as to the voting of such proxies.
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9. Reports to
Adviser. The Trust will provide Adviser with such periodic
reports concerning the status of the Fund as Adviser may reasonably
request.
10. Fees for
Services. For all of the services to be rendered and payments
made as provided in this Agreement, the Fund will pay the Adviser a fee,
computed and accrued daily and paid quarterly, at the annual rate of 0.95% of
the Fund's average daily net assets.
Adviser agrees to reduce any portion of
its compensation and/or to pay any portion of the Fund’s expenses as necessary
to limit the ordinary operating expenses of the Fund (including fees and other
amounts payable to the Adviser, but excluding interest, taxes, brokerage costs,
litigation, and other extraordinary costs) to no greater than 1.25% per annum
until at least May 1, 2013. Any such fee reduction or expense payment
by the Adviser shall be reimbursed by the Fund to the Adviser in the first,
second or third (or any combination thereof) fiscal year next succeeding the
fiscal year of such fee reduction or expense payment, provided that the
aggregate expenses for the next succeeding fiscal year, second succeeding fiscal
year or third succeeding fiscal year do not exceed any limitation on expenses to
which the Adviser has agreed, either pursuant to the terms of this Agreement or
otherwise. Such reimbursement may be made to the Adviser prior to the
Fund’s payment of current expenses if so requested by the Adviser even if such
reimbursement may require the Adviser to reduce its fees hereunder to pay
current Fund expenses.
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11. Allocation of Charges and
Expenses. Adviser shall employ or provide and compensate the
executive, administrative, secretarial and clerical personnel necessary to
provide the services set forth herein, and shall bear the expense
thereof. Adviser shall compensate all Trustees, officers and
employees of the Trust who are also officers, partners or employees of
Adviser.
Adviser will compensate the Trust's
principal underwriter for the performance of its obligations under the
Underwriting Agreement with the Trust.
The Fund will be responsible for the
payment of all operating expenses of the Fund, including fees and expenses
incurred by the Fund in connection with membership in investment company
organizations, brokerage fees and commissions, legal, auditing and accounting
expenses, expenses of registering shares under Federal and State securities
laws, insurance expenses, taxes or governmental fees, fees and expenses of the
custodian, the transfer and dividend disbursing agent and the accounting and
pricing agent of the Fund, expenses including clerical expenses of issue, sale,
redemption or repurchase of shares of the Fund, the fees and expenses of
Trustees of the Trust who are not affiliated with Adviser, the cost of preparing
and distributing reports and notices to shareholders, the cost of printing or
preparing prospectuses for delivery to the Fund's shareholders, the cost of
printing or preparing stock certificates or any other documents, statements or
reports to shareholders, expenses of shareholders' meetings and proxy
solicitations, such extraordinary or non-
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recurring
expenses as may arise, including litigation to which the Trust may be a party
and indemnification of the Trust's officers and Trustees with respect thereto,
or any other expense not specifically described above incurred in the
performance of the Trust's obligations. All other expenses not
expressly assumed by Adviser herein incurred in connection with the registration
of shares and operations of the Fund will be borne by the Fund.
12. Other Investment Activities
of Adviser. The Trust acknowledges that Adviser or one or more
of its affiliates may have investment responsibilities or render investment
advice to or perform other investment advisory services for other individuals or
entities and that Adviser, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in any securities for its
or their respective accounts ("Affiliated Accounts"). Subject to the
provisions of paragraph 2 hereof, the Trust agrees that Adviser or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Affiliated Accounts which may differ from the
advice given or the timing or nature of action taken with respect to the Fund,
provided that Adviser acts in good faith, and provided further, that it is
Adviser's policy to allocate, within its reasonable discretion, investment
opportunities to the Fund over a period of time on a fair and equitable basis
relative to the Affiliated Accounts, taking into account the investment
objectives and policies of the Fund and any specific investment restrictions
applicable thereto. The Trust acknowledges that one
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or more
of the Affiliated Accounts may at any time hold, acquire, increase, decrease,
dispose of or otherwise deal with positions in investments in which the Fund may
have an interest from time to time, whether in transactions which involve the
Fund or otherwise. Adviser shall have no obligation to acquire for the Fund a
position in any investment which any Affiliated Account may acquire, and the
Trust shall have no first refusal, co-investment or other rights in respect of
any such investment, either for the Fund or otherwise.
13. Certificate of
Authority. The Trust and the Adviser shall furnish to each
other from time to time certified copies of the resolutions of their Trustees or
Board of Directors or executive committees, as the case may be, evidencing the
authority of officers and employees who are authorized to act on behalf of the
Trust, the Fund and/or the Adviser.
14. Liabilities of
Adviser. Adviser shall not be liable for any action taken,
omitted or suffered to be taken by it in its reasonable judgment, in good faith
and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement, or in accordance with (or in the absence
of) specific directions or instructions from the Trust, provided, however, that
such acts or omissions shall not have resulted from Adviser's willful
misfeasance, bad faith or gross negligence, a violation of the standard of care
established by and applicable to Adviser in its actions under this Agreement or
breach of its duty or of its obligations hereunder. Nothing in
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this
paragraph 14 shall be construed in a manner inconsistent with Sections 17(h) and
(i) of the Act.
15. Confidentiality. Subject
to the duty of Adviser and the Trust to comply with applicable law, including
any demand of any regulatory or taxing authority having jurisdiction, the
parties hereto shall treat as confidential all information pertaining to the
Fund and the actions of Adviser and the Trust in respect thereof.
16. Assignment. No
assignment of this Agreement shall be made by Adviser, and this Agreement shall
terminate automatically in the event of such assignment. Adviser
shall notify the Trust in writing sufficiently in advance of any proposed change
of control, as defined in Section 2(a)(9) of the Act, as will enable the Trust
to consider whether an assignment will occur, and to take the steps necessary to
enter into a new contract with Adviser.
17. Representation, Warranties
and Agreements of the Trust. The Trust represents, warrants
and agrees that:
A. Adviser
has been duly appointed by the Trustees of the Trust to provide investment
services to the Fund as contemplated hereby.
B. The
Trust will deliver to Adviser a true and complete copy of its then current
prospectus and statement of additional information as effective from time to
time and such other documents or instruments governing the investments of the
Fund and such other information as is necessary for Adviser to carry out its
obligations under this Agreement.
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C. The
Trust is currently in compliance and shall at all times comply with the
requirements imposed upon the Trust by applicable law and
regulations.
18. Representations, Warranties
and Agreements of Adviser. Adviser represents, warrants and
agrees that:
A. Adviser
is registered as an investment adviser under the Investment Advisers Act of
1940.
B. Adviser
will maintain, keep current and preserve on behalf of the Trust, in the manner
and for the time periods required or permitted by the Act, the records
identified in Schedule A. Adviser agrees that such records (unless
otherwise indicated on Schedule A) are the property of the Trust, and will be
surrendered to the Trust promptly upon request.
C. Adviser
will complete such reports concerning purchases or sales of securities on behalf
of the Fund as the Trust may from time to time require to ensure compliance with
the Act, the Internal Revenue Code of 1986 and applicable state securities
laws.
D. Adviser
has adopted a written code of ethics complying with the requirements of Rule
17j-1 under the Act and will provide the Trust with a copy of the code of ethics
and evidence of its adoption. Within forty-five (45) days of the end
of the last calendar quarter of each year while this Agreement is in effect, an
officer of Adviser shall certify to the Trust that Adviser has complied with the
requirements of Rule 17j-1 during the previous year and that there has been no
violation of the
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Adviser's
code of ethics or, if such a violation has occurred, that appropriate action was
taken in response to such violation. Upon the written request of the
Trust, Adviser shall permit the Trust, its employees or its agents to examine
the reports required to be made to Adviser by Rule 17j-1(c)(1).
E. Adviser
will promptly after filing with the Securities and Exchange Commission an
amendment to its Form ADV furnish a copy of such amendment to the
Trust.
F. Upon
request of the Trust, Adviser will provide assistance to the Custodian in the
collection of income due or payable to the Fund.
G. Adviser
will immediately notify the Trust of the occurrence of any event which would
disqualify Adviser from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the Act or otherwise.
19.
Amendment. This
Agreement may be amended at any time, but only by written agreement between
Adviser and the Trust, which amendment, other than amendments to Schedule A, is
subject to the approval of the Trustees and the shareholders of the Fund in the
manner required by the Act and the rules thereunder, subject to any applicable
exemptive order of the Securities and Exchange Commission modifying the
provisions of the Act with respect to approval of amendments to this
Agreement.
20. Effective Date;
Term. This Agreement shall become effective on the date of its
execution and shall remain in force for a period of two (2) years from such
date, and from year to
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year
thereafter but only so long as such continuance is specifically approved at
least annually by the vote of a majority of the Trustees who are not interested
persons of the Trust or the Adviser, cast in person at a meeting called for the
purpose of voting on such approval, and by a vote of the Board of Trustees or of
a majority of the outstanding voting securities of the Fund. The
aforesaid requirement that this Agreement may be continued "annually" shall be
construed in a manner consistent with the Act and the rules and regulations
thereunder.
21. Termination. This
Agreement may be terminated by either party hereto, without the payment of any
penalty, immediately upon written notice to the other in the event of a breach
of any provision thereof by the party so notified, or otherwise upon sixty (60)
days' written notice to the other, but any such termination shall not affect the
status, obligations or liabilities of any party hereto to the
other.
22. Limitation of
Liability. The term "Xxxxxxxx Investment Trust" means and
refers to the Trustees from time to time serving under the Trust's Agreement and
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto may be, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Trust,
personally, but bind only the trust property of the Trust. The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed by an officer of the
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Trust,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust.
23. Definitions. As
used in paragraphs 16 and 20 of this Agreement, the terms "assignment,"
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the Act and the rules and
regulations thereunder.
24. Applicable
Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the State of
Michigan.
ACCEPTANCE
The foregoing Agreement is hereby
accepted.
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INVESTMENT COUNSEL, INC.
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Attest:
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By:
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Secretary
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Title:
President
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| Date: | April 23, 2010 | |||
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SCHEDULE
A
RECORDS TO BE MAINTAINED BY
THE ADVISER
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1.
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(Rule
31a-1(b)(5) and (6)) A record of each brokerage order, and all
other portfolio purchases or sales, given by the Adviser on behalf of the
Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall
include:
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A.
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The
name of the broker;
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B.
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The
terms and conditions of the order and of any modification or cancellation
thereof;
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C.
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The
time of entry or cancellation;
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D.
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The
price at which executed;
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E.
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The
time of receipt of a report of execution;
and
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F.
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The
name of the person who placed the order on behalf of the
Trust.
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2.
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(Rule
31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the basis
or bases upon which the allocation of orders for the purchase and sale of
portfolio securities to named brokers or dealers was effected, and the
division of brokerage commissions or other compensation on such purchase
and sale orders. Such
record:
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A.
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Shall
include the consideration given to:
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(i)
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The
sale of shares of the Fund by brokers or
dealers.
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(ii)
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The
supplying of services or benefits by brokers or dealers
to:
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(a)
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The
Trust;
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(b)
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The
Adviser;
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(c)
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The
Trust's principal underwriter; and
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(d)
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Any
person affiliated with the foregoing
persons.
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(iii)
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Any
other consideration other than the technical qualifications of the brokers
and dealers as such.
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B.
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Shall
show the nature of the services or benefits made
available.
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C.
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Shall
describe in detail the application of any general or specific formula or
other determinant used in arriving at such allocation of purchase and sale
orders and such division of brokerage commissions or other
compensation.
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D.
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The
name of the person responsible for making the determination of such
allocation and such division of brokerage commissions or other
compensation.
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3.
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(Rule
31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an
authorization is made by a committee or group, a record shall be kept of
the names of its members who participate in the
authorization. There shall be retained as part of this
record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of portfolio securities and
such other information as is appropriate to support the
authorization.*
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4.
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(Rule
31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisers by rule
adopted under Section 204 of the Investment Advisers Act of 1940, to the
extent such records are necessary or appropriate to record the Adviser's
transactions with respect to the
Fund.
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_______________________
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*
Such information might include: the current Form 10-K, annual
and quarterly reports, press releases, reports by analysts and from
brokerage firms (including their recommendation; i.e., buy, sell, hold) or
any internal reports or portfolio adviser
reviews.
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