EXHIBIT 99.5.iii
XXXXXXX INVESTMENT TRUST
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this day of , 1996, by and between XXXXXXX INVESTMENT
TRUST (the "Trust"), a trust organized under the laws of the State of Delaware,
and XXXXXXX INVESTMENT PARTNERS, L.P. (the "Advisor"), a California corporation.
WITNESSETH:
Whereas, there is in existence an Investment Advisory Agreement by and
between the Trust and Xxxxxxx Investment Partners, Inc., which Agreement was
designed to cover only the series of the Trust now named Xxxxxxx International
Fund (the "International Fund"); and
Whereas, there is also in existence an Investment Advisory Agreement be
and between the Trust and Xxxxxxx Investment Partners, Inc., which Agreement
specifically covers the series of the Trust named the Xxxxxxx Small Cap
International Fund; and
Whereas, a new series of the Trust having separate assets and
liabilities has been created entitled the "Xxxxxxx Institutional International
Fund" (hereafter the "Institutional Fund"); and
Whereas, it is therefore desirable to have a new investment advisory
agreement (i.e., this Agreement) relating to the Institutional Fund so that said
existing Investment Advisory Agreements will apply only to the International
Fund and the Xxxxxxx Small Cap International Fund; this Agreement will apply
only to the Institutional Fund;
Now, therefore, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed by and between the parties hereto as
follows:
l. In General
The Trust hereby appoints the Advisor to act as investment adviser to
the Institutional Fund. The Advisor agrees, all as more fully set forth herein,
to provide professional investment management with respect to the investment of
the assets of the Institutional Fund and to supervise and arrange the purchase
and sale of securities held in the portfolio of the Institutional Fund.
2. Duties and Obligations of the Advisor
with respect to Management of the Institutional Fund
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of the
Trust, the Advisor shall:
(i) Decide what securities shall be purchased or sold
by the Institutional Fund and when; and
(ii) Arrange for the purchase and the sale of
securities held in the portfolio of the Institutional Fund by
placing purchase and sale orders for the Institutional Fund.
(b) Any investment purchases or sales made by the Advisor
shall at all times conform to, and be in accordance with, any
requirements imposed by: (l) the provisions of the Investment Company
Act of 1940 (the "Act") and of any rules or regulations in force
thereunder; (2) any other applicable provisions of law; (3) the
provisions of the Declaration of Trust and By-Laws of the Trust as
amended from time to time; (4) any policies and determinations of the
Board of Trustees of the Trust; and (5) the fundamental policies of the
Institutional Fund, as reflected in the Trust's registration statement
under the Act, or as amended by the shareholders of the Institutional
Fund.
(c) The Advisor shall give the Trust the benefit of its best
judgment and effort in rendering services hereunder. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard
of obligations or duties ("disabling conduct") hereunder on the part of
the Advisor (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity
affiliated with the Advisor) the Advisor shall not be subject to
liability to the Trust or to any shareholder of the Institutional Fund
for any act or omission in the course of, or connected with rendering
services hereunder, including without limitation, any error of judgment
or mistake of law or for any loss suffered by any of them in connection
with the matters to which this Agreement related, except to the extent
specified in Section 36(b) of the Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation
for services. Except for such disabling conduct, the Trust shall
indemnify the Advisor (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity
affiliated with the Advisor) from any liability arising from the
Advisor's conduct under this Agreement to
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the extent permitted by the Declaration of Trust and applicable law.
(d) Nothing in this Agreement shall prevent the Advisor or any
affiliated person (as defined in the Act) of the Advisor from acting as
investment adviser or manager and/or principal underwriter for any
other person, firm or corporation and shall not in any way limit or
restrict the Advisor or any such affiliated person from buying, selling
or trading any securities for its or their own accounts or the accounts
of others for whom it or they may be acting, provided, however, that
the Advisor expressly represents that it will undertake no activities
which, in its judgment, will adversely affect the performance of its
obligations to the Trust under this Agreement.
(e) It is agreed that the Advisor shall have no responsibility
or liability for the accuracy or completeness of the Trust's
Registration Statement under the Act except for information supplied by
the Advisor for inclusion therein.
3. Broker-Dealer Relationships
In connection with its duties set forth in Section 2(a)(ii) of this
Agreement to arrange for the purchase and the sale of securities held by the
Institutional Fund by placing purchase and sale orders for the Institutional
Fund, the Advisor shall select such broker-dealers ("brokers") as shall, in the
Advisor's judgment, implement the policy of the Trust to achieve "best
execution", i.e., prompt and efficient execution at the most favorable
securities price. In making such selection, the Advisor is authorized to
consider the reliability, integrity and financial condition of the broker. The
Advisor is also authorized to consider whether the broker provides brokerage
and/or research services to the Trust and/or other accounts of the Advisor. The
commissions paid to such brokers may be higher than another broker would have
charged if a good faith determination is made by the Advisor that the commission
is reasonable in relation to the services provided, viewed in terms of either
that particular transaction or the Advisor's overall responsibilities as to the
accounts as to which it exercises investment discretion. The Advisor shall use
its judgment in determining that the amount of commissions paid are reasonable
in relation to the value of brokerage and research services provided and need
not place or attempt to place a specific dollar value on such services or on the
portion of commission rates reflecting such services. To demonstrate that such
determinations were in good faith, and to show the overall reasonableness of
commissions
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paid, the Advisor shall be prepared to show that commissions paid (i) were for
purposes contemplated by this Agreement; (ii) provide lawful and appropriate
assistance to the Advisor in the performance of its decision-making
responsibilities; and (iii) were within a reasonable range as compared to the
rates charged by qualified brokers to other institutional investors as such
rates may become known from available information. The Trust recognizes that, on
any particular transaction, a higher than usual commission may be paid due to
the difficulty of the transaction in question. The Advisor also is authorized to
consider sales of shares of the Institutional Fund as a factor in the selection
of brokers to execute brokerage and principal transactions, subject to the
requirements of "best execution", as defined above.
4. Allocation of Expenses
The Advisor agrees that it will furnish the Trust, at the Advisor's
expense, with all office space and facilities, and equipment and clerical
personnel necessary for carrying out its duties under this Agreement. The
Advisor will also pay all compensation of all Trustees, officers and employees
of the Trust who are affiliated persons of the Advisor. All costs and expenses
not expressly assumed by the Advisor under this Agreement shall be paid by the
Trust, including, but not limited to (i) interest and taxes; (ii) brokerage
commissions; (iii) insurance premiums; (iv) compensation and expenses of its
Trustees other than those affiliated with the Advisor or the Administrator; (v)
legal and audit expenses; (vi) fees and expenses of the Institutional Fund's
custodian, transfer agent and accounting services agent; (vii) expenses incident
to the issuance of its shares, including stock certificates and issuance of
shares on the payment of, or reinvestment of, dividends; (viii) fees and
expenses incident to the registration under Federal or state securities laws of
the Institutional Fund or its shares; (ix) expenses of preparing, printing and
mailing reports, notices, proxy material and prospectuses to shareholders of the
Institutional Fund; (x) all other expenses incidental to holding meetings of the
Institutional Fund's shareholders; (xi) dues or assessments of or contributions
to the Investment Company Institute or any successor or other industry
association; (xii) such non-recurring expenses as may arise, including
litigation affecting the Trust and the legal obligations which the Trust may
have to indemnify its officers and Trustees with respect thereto; (xiii) fees of
the Institutional Fund's Administrator and (xiii) the organization costs of the
Institutional Fund.
5. Compensation of the Advisor
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(a) The Trust agrees to pay the Advisor and the Advisor agrees to accept as
full compensation for all services rendered by the Advisor as such, an annual
management fee, payable monthly and computed on the value of the net assets of
the Institutional Fund as of the close of business each business day at the
annual rate of 1% of such net assets of the Institutional Fund.
(b) In the event the expenses of the Institutional Fund (including the
fees of the Advisor and the Administrator and amortization of organization
expenses but excluding interest, taxes, brokerage commissions, extraordinary
expenses and sales charges and distribution fees) for any fiscal year exceed the
limits set by applicable regulations of state securities commissions in states
where the Institutional Fund's shares are registered or qualified for sale, the
Advisor will reduce its fee by the amount of such excess. Any such reductions
are subject to readjustment during the year. The payment of the management fee
at the end of any month will be reduced or postponed or, if necessary, a refund
will be made to the Institutional Fund so that at no time will there be any
accrued but unpaid liability under this expense limitation.
6. Duration and Termination
(a) This Agreement shall go into effect on the date set forth above and
shall, unless terminated as hereinafter provided, continue in effect until the
earlier of , 1997 or the first meeting of shareholders of the
Institutional Fund and, if approved at that meeting, until the next
after that meeting and thereafter from year to year, but only so long as such
continuance is specifically approved at least annually by the Trust's Board of
Trustees, including the vote of a majority of the Trustees who are not parties
to this Agreement or "interested persons" (as defined in the Act) of any such
party cast in person at a meeting called for the purpose of voting on such
approval, or by the vote of the holders of a "majority" (as so defined) of the
outstanding voting securities of the Institutional Fund.
(b) This Agreement may be terminated by the Advisor at any time without
penalty upon giving the Trust sixty (60) days' written notice (which notice may
be waived by the Trust) and may be terminated by the Trust at any time without
penalty upon giving the Advisor sixty (60) days' written notice (which notice
may be waived by the Advisor), provided that such termination by the Trust shall
be directed or approved by the vote of a majority of all of its Trustees in
office at the time or by the vote of the holders of a majority (as defined in
the Act) of the voting securities of the Institutional Fund. This Agreement
shall
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automatically terminate in the event of its assignment (as so defined).
7. General
The Advisor represents and warrants to the Trust that it is duly
qualified to conduct its business under the laws of the State of California and
is a registered investment adviser under the Investment Advisers Act of 1940 and
applicable state laws. This Agreement constitutes the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. This Agreement shall
be governed and construed in accordance with the laws of the State of California
(without regard to conflicts of law).
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by duly authorized persons and their seals to be
hereunto affixed, all as of the day and year first above written.
XXXXXXX INVESTMENT TRUST
By___________________________________
ATTEST:
__________________________________________
XXXXXXX INVESTMENT PARTNERS, INC.
By___________________________________
ATTEST:
__________________________________________
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