INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made as of 1st day of October, 1999 by and between Xxxxxxxxxx
Capital Partners LLC (the "Investment Adviser") and Xxxxxxxxxx Capital Trust
(the "Fund").
WHEREAS, the Fund is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"), and
is currently authorized to issue separate series of shares and the Trustees of
the Fund are authorized to reclassify and issue any unissued shares to any
number of additional classes or series (portfolios) each having its own
investment objective, policies and restrictions, all as more fully described in
the prospectus and the statement of additional information constituting parts of
the Fund's Registration Statement on Form N-1A filed the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended, and
the Act (the "Registration Statement," a copy of which is enclosed and any
amendments thereof will from time to time be furnished); and
WHEREAS, the Fund proposes to engage in the business of investing and
reinvesting the assets of each of its portfolios in securities ("the portfolio
assets") of the type and in accordance with the limitations specified in the
Fund's Trust Instrument and Registration Statement, and any representations made
in its prospectus and statement of additional information, all in such manner
and to such extent as may from time to time be authorized by the Trustees; and
WHEREAS, the Trustees of the Fund wish to employ Xxxxxxxxxx Capital Partners LLC
to manage the investment and reinvestment of the portfolio assets as above
specified and, without limiting the generality of the foregoing, to provide
management and other services specified below and acknowledges that it has
received at least 48 hours prior to entering into this agreement a copy of Form
ADV-Part II as filed by Xxxxxxxxxx Capital Partners LLC with the Commission.
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints Xxxxxxxxxx Capital Partners LLC as Investment
Adviser for the Fund to supervise and direct the investments of and
for the Fund and as the Fund's agent and attorney-in-fact with full
discretionary and exclusive power and authority to establish, maintain
and trade in brokerage accounts for and in the name of the Fund and
its objectives to buy, sell and trade in all stocks, bonds and other
assets of the Fund.
2. Unless advised by the Trustees of the Fund of an objection, the
Investment Adviser may direct that a portion of the brokerage
commissions that may be generated by the Fund be applied to payment
for brokerage and research services. Brokerage and research services
furnished by brokers may include, but are not limited to, written
information and analyses concerning specific securities, companies or
sectors; market, financial and economic studies and
forecasts as well as discussions with research personnel; financial
publications; and statistic and pricing services utilized in the
investment management process. Brokerage and research services
obtained by the use of commissions arising from the Fund's portfolio
transactions may be used by the Investment Adviser in its other
investment activities. In selecting brokers and negotiating commission
rates, the Investment Adviser will take into account the financial
stability and reputation of brokerage firms and the brokerage,
execution and research services provided by such brokers. The benefits
which the Fund may receive from such services may not be in direct
proportion to the commissions generated by the Fund. The Fund
acknowledges that since commission rates are generally negotiable,
selecting brokers on the basis of considerations which are not limited
to applicable commission rates may result in higher transaction costs
that would otherwise by obtainable.
3. The Investment Adviser, when in its sole discretion deems it to be in
the best interest of the Fund, xxxx xxxxx orders for the Fund with
orders for the same security for other accounts managed by the
Investment Adviser or its affiliates. In such instances, the Fund will
be charged the average price per unit for the security in such
transactions. Complete records of such transactions will be maintained
by the Investment Adviser and will be made available to the Fund upon
request.
4. The Investment Adviser shall report to the Board of Trustees at each
meeting thereof all changes in the portfolio assets since the prior
report, and will also keep the Trustees in touch with important
developments affecting the portfolio assets and on the Investment
Adviser's own initiative will furnish the Trustees from time to time
with such information as the Investment Adviser may believe
appropriate for this purpose, whether concerning the individual
issuers whose securities are included in the portfolio assets, the
industries in which they engage, or the conditions prevailing in the
economy generally. The Investment Adviser will also furnish the
Trustees with such statistical and analytical information with respect
to the portfolio assets as the Investment Adviser may believe
appropriate or as the Trustees reasonably may request. In making such
purchases and sales of the portfolio assets, the Investment Adviser
will bear in mind the policies set from time to time by the Board of
Trustees as well as the limitations imposed by the Fund's Trust
Instrument and in the Fund's Registration Statement, in each case as
amended from time to time, the limitations in the Act and of the
Internal Revenue Code of 1986, as amended, in respect of regulated
investment companies and the investment objectives, policies and
practices, including restrictions applicable to each of the Fund's
portfolios.
5. The Investment Adviser shall not be liable for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided
that nothing herein shall be deemed to protect, or purport to protect,
the Investment
Adviser against any liability to the Fund or to its security holders
to which the Investment Adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of the Investment
Adviser's reckless disregard of its obligations and duties hereunder.
It is understood that the Investment Adviser performs various
investment advisory and managerial services for others, and the Fund
agrees that the Investment Adviser may give advice and take action in
the performance of its duties with respect to others which may differ
from advice given or action taken with respect to the Fund. Nothing
contained herein shall in any way constitute a waiver or limitation of
any rights which the Fund's shareholders may have under common law, or
any federal or state securities laws.
6. This Agreement shall become effective on the date hereof and shall
remain in effect for two years and continue in effect thereafter with
respect to a portfolio only so long as its continuance with respect to
that portfolio is specifically approved at least annually by the Board
of Trustees or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of such portfolio, and, in either
case, by a vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Fund's Trustees who are
not parties to this Agreement or interested persons, as defined in the
Act, of any party to this Agreement (other than as Trustees of the
Fund), and provided further, however, that if the continuation of this
Agreement is not approved as to a portfolio, the Investment Adviser
may continue to render to such portfolio the services described herein
in the manner and to the extent permitted by the Act and the rules and
regulations thereunder. Upon the effectiveness of this Agreement, it
shall supersede all previous agreements between the parties covering
the subject matter hereof. This Agreement may be terminated with
respect to any portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities
(as defined in the Act) of such portfolio, or by a vote of the Board
of Trustees on 60 days' written notice to the Investment Adviser, or
by the Investment Adviser with respect to any portfolio on 60 days'
written notice to us.
7. This Agreement shall not be amended as to any portfolio unless such
amendment is approved by vote, cast in person at a meeting called for
the purpose of voting on such approval, of a majority of the Fund's
Trustees who are not parties to this Agreement or interested persons,
as defined in the Act, of any party to this Agreement (other than as
Trustees of the Fund), and, if required by law, by vote of a majority
of the outstanding voting securities (as defined in the Act) of such
portfolio. Shareholders of a portfolio not affected by any such
amendment shall have no right to participate in any such vote.
8. As to any particular portfolio, this Agreement may not be assigned by
the Investment Adviser and, as to such portfolio, this Agreement shall
terminate automatically in the event of any assignment by the
Investment Adviser. The
term "assignment" as used in this paragraph shall have the meaning
ascribed thereto by the Act and any regulations or interpretations of
the Commission thereunder.
9. If the Investment Adviser ceases to act as investment adviser to the
Fund, or, in any event, if the Investment Adviser so requests in
writing, the Fund agrees to take all necessary action to change its
name to a name not including the terms "Xxxxxxxxxx" or "Xxx Cap." The
Investment Adviser may from time to time make available without charge
to the Fund for its use of such marks or symbols owned by the
Investment Adviser, including marks or symbols containing the terms
"Xxxxxxxxxx" or "Val Cap" or any variation thereof, as the Investment
Adviser may consider appropriate. Any such marks or symbols so made
available will remain the Investment Adviser's property and it shall
have the right, upon notice in writing, to require the Fund to cease
the use of such xxxx or symbol at any time.
10. The compensation of the Investment Adviser for its services rendered
hereunder shall be calculated by the Investment Adviser and paid
monthly by the Fund in accordance with the schedule of fees attached
hereto as Exhibit A.
11. Unless otherwise agreed to in writing by the parties, the Fund shall
be responsible and hereby assume the obligation for payment of all of
its expenses, including: (a) payment to the Investment Adviser of the
fee provided for in Exhibit A; (b) custody, transfer and dividend
disbursing expenses; (c) fees of trustees who are not affiliated
persons; (d) legal and auditing expenses; (e) clerical, accounting and
other office costs; (f) the cost of personnel providing services to
the Fund; (g) costs of printing the Fund's prospectuses and
shareholder reports; (h) cost of maintenance of the Fund's corporate
existence; (i) interest charges, taxes, brokerage fees and
commissions; (j) costs of stationery and supplies; (k) expenses and
fees related to registration and filing with the Commission and with
state regulatory authorities; and (l) such promotional, shareholder
servicing and other expenses as may be contemplated by one or more
effective plans pursuant to Rule 12b-1 under the Act or one or more
effective non-Rule 12b-1 shareholder servicing plans, in each case
provided, however, that the Fund's payment of such promotional,
shareholder servicing and other expenses shall be in the amounts, and
in accordance with the procedures, set forth in such plan or plans.
12. Except to the extent necessary to perform the Investment Adviser's
obligations hereunder, nothing herein shall be deemed to limit or
restrict the right of the Investment Adviser or its members, officers
or employees to engage in any other business or to devote time and
attention to the management of other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of
any kind to any other individual or entity.
13. The validity of the Agreement and the rights and liabilities of the
parties hereunder shall be determined in accordance with the laws of
the State of New York without regard to its conflict of laws
provisions, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
14. The Investment Adviser shall promptly notify the Fund of any change in
the manager or managing member of the Investment Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
XXXXXXXXXX CAPITAL TRUST
By: /s/ XXXXXX X. XXXXXXX
----------------------
XXXXXXXXXX CAPITAL PARTNERS LLC
By: /s/ XXXXXXX X. XXXXXXX
----------------------
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
BETWEEN
XXXXXXXXXX CAPITAL TRUST
AND
XXXXXXXXXX CAPITAL PARTNERS LLC
FEE SCHEDULE
Xxxxxxxxxx Capital Trust (the "Fund") shall pay Xxxxxxxxxx Capital Partners LLC
(the "Investment Adviser") an annual investment advisory fee equal to (x) 0.75%,
less any applicable fee waivers, of the average daily net assets of each
portfolio of the Fund on the first $100 million of assets of each portfolio, and
(y) 0.70%, less any applicable fee waivers, of the average daily net assets of
each portfolio of the Fund on all amounts over the first $100 million of assets
of each portfolio.
The investment advisory fee will be paid monthly. The Investment Adviser's
compensation for the period from the date hereof through the last day of the
month of the effective date hereof will be prorated based on the proportion that
such period bears to the full month. In the event of any termination of this
Agreement, the Investment Adviser's compensation will be calculated on the basis
of a period ending on the last day on which this Agreement is in effect, subject
to proration based on the number of days elapsed in the current period as a
percentage of the total number of days in such period.
