EXHIBIT 5.3
101
THE NAVELLIER PERFORMANCE FUNDS
INVESTMENT ADVISORY AGREEMENT
FOR
THE NAVELLIER INTERNATIONAL GROWTH PORTFOLIO
AGREEMENT made as of the 9th day of May, 2003, by and between The
International Growth Portfolio ("Portfolio") of THE NAVELLIER PERFORMANCE FUNDS,
a business trust organized under the laws of the State of Delaware (the "Fund"),
and NAVELLIER MANAGEMENT, INC., a Delaware corporation (the "Adviser").
WHEREAS, the Fund intends to engage in business as an open-end
management investment company and is being registered as such under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund is to form a portfolio designated as the "Navellier
International Growth Portfolio" ("Portfolio"); and
WHEREAS, the Adviser is being registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser with an emphasis on over the counter stocks; and
WHEREAS, the Portfolio desires to retain the Adviser as investment
adviser to furnish advisory and portfolio management services to the Portfolio;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the Portfolio and the Adviser agree as follows:
1. Duties as Adviser. The Portfolio hereby appoints the Adviser to act
as the investment adviser to the Portfolio and, subject to the supervision of
the Board of Trustees of the Portfolio, to provide investment advisory services
to the Portfolio as hereinafter set forth: (i) to obtain and evaluate such
information and advice relating to the economy, securities markets, and
securities as it deems necessary or useful to discharge its duties hereunder;
(ii) to continuously manage the assets of the Portfolio in a manner consistent
with applicable law and the investment objectives and policies set forth in the
most current prospectus and statement of additional information of the Fund
under the Securities Act of 1933 (the "Prospectus"); (iii) to determine which
issuers will be deemed "Qualified Issuers" (as defined in the Prospectus); (iv)
to determine the timing of purchases, sales, and dispositions of securities; (v)
to take such further action in its sole discretion (but always in compliance
with applicable law and the Prospectus) without obligation to give prior notice
to the Board of Trustees of the Portfolio, or the Custodian, including the
placing of purchase and sale orders on behalf of the Portfolio as it shall deem
necessary and appropriate; (vi) to furnish to or place at the disposal of the
Portfolio such of the information, evaluations, analyses, and opinions
formulated or obtained by it in the discharge of its duties as the Portfolio
may, from time to time, reasonably request; (vii) to take such actions necessary
or appropriate to carry out the decisions of the Portfolio's Board of Trustees;
(viii) to make decisions for the Portfolio as to the manner in which voting
rights, rights to consent to trust action, and any other rights pertaining to
how the Portfolio's securities shall be exercised ("Portfolio Voting Rights").
The Portfolio has directed the Custodian, and Custodian as agreed, to act in
accordance with the instructions of the Adviser. The Adviser shall at no time
have custody of or physical control over the investment account assets or
securities, and the Adviser shall not be liable for any act or omission of the
Custodian. The Adviser shall maintain records required under the Investment
Advisers Act of 1940 ("Advisers Act") and shall make them available to the
Portfolio or its designees for review or inspection upon demand and at the
Adviser's expense.
2. Allocation of Charges and Expenses. The Adviser shall bear the cost
of rendering the investment advisory services to be performed by it under this
Agreement and shall, at its expense, maintain such staff and employ or retain
personnel and consult with other persons as it shall determine necessary.
Without limiting the generality of the foregoing, the staff and personnel of the
Adviser shall be deemed to include persons employed or otherwise retained by the
Adviser 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 Adviser
may deem appropriate. The Adviser shall, without expense to the Portfolio,
furnish the
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services of such members of the Adviser's organization as may be duly elected to
be officers of the Portfolio, subject to their individual consent to serve and
to any limitations imposed by law.
The Portfolio will pay or cause to be paid all other expenses of the
Portfolio (except for the expenses to be paid by the Portfolio's Distributor),
including, without limitation, the following: (i) services rendered by the
Custodian and the Transfer Agent, (ii) fees, voluntary assessments, and other
expenses incurred in connection with membership in investment company
organizations, (iii) cost of stock certificates, reports, proxy materials and
notices to shareholders, and other like miscellaneous expenses, (iv) brokerage
commissions and other brokerage expenses, (v) taxes (including any income or
franchise taxes), and any fees payable to federal, state, and other governmental
agencies, (vi) fees and salaries payable to the Trustees, officers, and advisory
board members of the Portfolio, if any, (vii) auditing the Fund's books and
accounts, (viii) the cost of bookkeeping and accounting services, (ix) any and
all Portfolio legal expenses, (x) costs of mailing and tabulating proxies and
costs of shareholders' and Trustees' meetings, (xi) the cost of investment
company literature and other publications provided by the Portfolio to its
Trustees and officers, (xii) costs of any liability, uncollectible items of
deposit and other insurance or fidelity bonds, (xiii) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Portfolio, (xiv)
costs of printing and mailing monthly statements and confirmations, (xv) expense
of organizing the Portfolio, (xvi) filing fees and expenses relating to the
registration and qualification of the Portfolio's shares under federal and/or
state securities laws and maintaining such registrations and qualifications and
(vii) other expenses properly payable by the Portfolio.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser hereunder, the Portfolio shall pay to the Adviser, on a monthly basis,
an annual fee of 0.84% (the "Management Fee") of the Portfolio's average daily
net assets. Payment of the Adviser's compensation for the preceding month shall
be made as promptly as possible after the last day of each such month. The
compensation for the period from the effective date hereof to the next
succeeding last day of the month shall be prorated according to the proportion
which such period bears to the full month ending on such date, and provided
further that, upon any termination of this Agreement before the end of the
month, such compensation for the period from the end of the last month ending
prior to such termination shall be prorated according to the proportion which
such period bears to a full month, and shall be payable upon the date of
termination. If the annual operating expenses borne by the Fund relating to any
Portfolio, including amounts payable to the Adviser hereunder paid or payable by
such Portfolio for any fiscal year, exceed the applicable expense limitations
imposed by state securities laws or regulations thereunder (as same may be
adjusted from time to time), the Adviser will reduce its Management Fee to the
extent of such excess and if required, pursuant to any such laws or regulations
((unless otherwise waived), will reimburse the Portfolio for annual operating
expenses in excess of any such expense limitation up to the amount of the
Management Fee payable to it during that fiscal year with respect to the
Portfolio. The Adviser has the right, but not the obligation, to waive any
portion or all of its Management Fee, from time to time.
The "average daily net assets" of the Portfolio for a particular period
shall be determined by adding together all calculations of net assets, as
regularly computed for the Portfolio on each business day during such period,
and dividing the resulting total by the number of business days during such
period.
4. Limitations of Liability of Adviser. The Adviser shall not be liable
for any error of judgment or mistake of law or fact, or, for any loss suffered
by the Portfolio or its investors in connection with the matters to which this
Agreement relates, except (i) a loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the Adviser in the performance of its
duties, or from reckless disregard by the Adviser of its obligations and duties
under this Agreement, or (ii) a loss for which the Adviser would not be
permitted to be indemnified under the federal Securities laws. The Portfolio
also agrees to indemnify Adviser to the extent provided for and agreed to by the
parties in that agreement entitled Indemnification Agreement executed by both
parties on this date and incorporated herein as Exhibit A and made a part
hereof.
5. Duration and Termination of this Agreement. This Agreement shall
become effective as of the date hereof and shall continue in effect unless
sooner terminated, as herein provided, for two years after the date hereof, and
thereafter only if approved at least annually: (a) by the Board of Trustees of
the Portfolio; or (b) by the vote of a majority (as defined in the Act) of the
outstanding voting securities of the Portfolio, and, in addition, (c) by the
vote of a majority of the Trustees of the Portfolio who are not parties hereto
nor interested persons of any party, as required by the Act.
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This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Trustees of the Portfolio, or by a vote of a majority
(as defined in the Act) of the outstanding voting securities of the Portfolio,
in either case upon written notice to the Adviser, and it may be terminated by
the Adviser upon sixty (60) days' written notice to the Portfolio. This
Agreement shall automatically terminate in the event of its assignment, within
the meaning of the Act, unless such automatic termination shall be prevented by
an exemptive order of the Securities and Exchange Commission.
6. Separate Contract. This Agreement is separate and distinct form, and
neither affects nor is affected by (i) the Fund's Distribution Agreement, and
(ii) the Fund's Administrative Services Agreement. Nothing contained in this
Agreement shall prevent the Adviser or any affiliated person of the Adviser from
acting as investment adviser or manager for any other person, firm, corporation,
or other entity and shall not in any way bind or restrict the Adviser or any
such affiliated person from buying, selling, or trading any securities,
commodities, futures contracts, or options on such contracts 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 Adviser to engage in any other business or to devote his time
and attention in part to the management or other aspects of any other business
whether of a similar or dissimilar nature.
7. Amendment. This Agreement may be amended from time to time by
agreement of the parties; provided, that such amendment shall be approved both
by the vote of a majority of Trustees of the Portfolio, including a majority of
Trustees who are not parties to this Agreement or interested persons of any such
party to this Agreement (other than as Trustees of the Portfolio) cast in person
at a meeting called for that purpose, and by the holders of a majority (as
defined in the Act) of the outstanding voting securities of the Portfolio.
This Agreement may be amended by agreement of the parties without the
vote or consent of the shareholders of the Portfolio 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 and/or state laws or regulations, but neither
the Portfolio nor the Investment Adviser shall be liable for failing to do so.
8. Binding Effect. This Agreement shall be binding upon, and inure to
the benefit of the Portfolio and the Adviser and their respective successors.
9. Name of the Portfolio. The Portfolio acknowledge that the name
"Navellier" is and shall remain the sole property of the Adviser,
notwithstanding the use thereof by the Portfolio. The Portfolio may use the name
"The Navellier Performance Fund, The Navellier Mid Cap Growth Portfolio Fund" or
any name derived from the name "Navellier" only for so long as this Agreement or
any extension, renewal, or amendment hereof remains in effect, including any
similar agreement with any organization which shall have succeeded to the
business of the Adviser and for only so long as Navellier Management, Inc.,
remains as Adviser to the Portfolio. At such time as such an agreement shall no
longer be in effect, or Adviser's services have terminated, the Portfolio will
(to the extent that it is lawfully able) cease to use such a name or any other
name connected with the Adviser or any organization which shall have succeeded
to the business of the Adviser.
10. Definitions. Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Prospectus. For the purpose of this
Agreement, the terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person," and "interested person" shall have the
respective meanings specified in the Investment Company Act of 1940.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and each party may
become a party hereto by executing a counterpart hereof. This Agreement and any
counterpart so executed shall be deemed to be one and the same instrument.
12. Applicable Law. This Agreement shall be governed by, and construed
in accordance with the laws of the State of Delaware. Any dispute or controversy
arising out of this Agreement shall be either submitted to arbitration (if both
parties agree) in Reno, Nevada (near the Fund's principal place of business) in
accordance with
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the rules and regulations of the National Association of Securities Dealers,
Inc., or decided by a trier of fact in a federal or state court in Reno, Nevada,
and in no other jurisdiction or court venued outside of Reno, Nevada.
13. Acknowledgement of Receipt of Form ADV Part II. The Portfolio
hereby acknowledges receipt of the Adviser's Form ADV Part II or its brochure as
required by Rule 204-3 promulgated under the Investments Advisers Act of 1940.
14. Integration of All Prior Discussions, Negotiations and Agreements.
This Agreement integrates all prior discussions, negotiations and agreements
between the parties relating to Adviser's and Portfolio's agreement relating to
the performance of investment advisory services for the Portfolio, and no
evidence or parol evidence may be introduced to vary or change the terms of this
written Agreement which is the full and final expression of the parties'
agreement. Any change in the terms of this Agreement must be in writing signed
by both parties.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Reno, Nevada.
THE NAVELLIER INTERNATIONAL GROWTH
PORTFOLIO OF THE NAVELLIER
PERFORMANCE FUNDS
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Trustee
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Trustee
Attest
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx, Trustee
NAVELLIER MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx, President
Attest
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