INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of December 31, 1997, by and between
WILLIAMSBURG INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), on
behalf of THE XXXXXXXXX EQUITY FUND, and XXXXXXXXX & COMPANY LLC, a Virginia
limited liability company (the "Adviser"), registered as an investment adviser
under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Trust is registered as a no-load, open-end management investment
company of the series type under the Investment Company Act of 1940, as amended
(the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment advisory
and administrative services to The Xxxxxxxxx Equity Fund series of the Trust,
and the Adviser is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to The Xxxxxxxxx Equity Fund series of the Trust (the "Fund") for
the period and on the terms set forth in this Agreement. The Adviser
accepts such appointment and agrees to furnish the services herein set
forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with copies
properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the Commonwealth of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's Bylaws (such Bylaws, as presently in effect and as they
shall from time to time be amended, are herein called the "Bylaws");
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940 Act and
under the Securities Act of 1933 as amended, relating to shares of
beneficial interest of the Trust (herein called the "Shares") as filed
with the Securities and Exchange Commission ("SEC") and all amendments
thereto;
(e) The Fund's Prospectus (such Prospectus, as presently in effect and all
amendments and supplements thereto are herein called the
"Prospectus").
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with
the SEC.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of Trustees,
the Adviser will provide a continuous investment program for the Fund,
including investment research and management with respect to all
securities, investments, cash and cash equivalents of the Fund. The Adviser
will determine from time to time what securities and other investments will
be purchased, retained or sold by the Fund. The Adviser will provide the
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in its Prospectus. The
Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of
the SEC and will, in addition, conduct its activities under this
Agreement in accordance with regulations of any other Federal and
State agencies which may now or in the future have jurisdiction over
its activities under this Agreement;
(b) Will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the Adviser believes two
or more brokers or dealers are comparable in price and execution, the
Adviser may prefer: (i) brokers and dealers who provide the Fund with
research advice and other services, or who recommend or sell Fund
shares, and (ii) brokers who are affiliated with the Trust or the
Adviser, PROVIDED, HOWEVER, that in no instance will portfolio
securities be purchased from or sold to the Adviser or any affiliated
person of the Adviser in principal transactions;
(c) Will provide certain executive personnel for the Trust as may be
mutually agreed upon from time to time with the Board of Trustees, the
salaries and expenses of such personnel to be borne by the Adviser
unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
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Notwithstanding the foregoing, the Adviser may obtain the services of an
investment counselor or sub-adviser of its choice subject to the approval
of the Board of Trustees. The cost of employing such counselor or
sub-adviser will be paid by the Adviser and not by the Fund.
4. SERVICES NOT EXCLUSIVE. The advisory 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.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains
for the benefit of the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by it pursuant to Rule 31a-1 under the 1940 Act that are not
maintained by others on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory services
pertaining to the Fund. In the event that there is no distribution plan
under Rule 12b-1 of the 1940 Act in effect for the Fund, the Adviser will
pay the entire cost of the promotion and sale of Fund shares.
Notwithstanding the foregoing, the Fund shall pay the expenses and costs of
the following:
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transactions
of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio securities;
(d) Fees and expenses of the Fund's administration agent, the Fund's
transfer and shareholder servicing agent and the Fund's accounting
agent or, if the Trust performs any such services without an agent,
the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entity;
(g) Compensation of Trustees who are not interested persons of the Adviser
as that term is defined by law;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and expenses;
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(j) Costs of setting in type, printing and mailing Prospectuses, reports
and notices to existing shareholders;
(k) The investment advisory fee payable to the Adviser, as provided in
paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with any Distribution
Plan as and if approved by the shareholders of the Fund.
7. COMPENSATION. For the services provided and the expenses assumed by the
Adviser pursuant to this Agreement, the Fund will pay the Adviser and the
Adviser will accept as full compensation an investment advisory fee at the
annual rate of 0.75% of the daily average net assets of the Fund, computed
at the end of each month and payable within five (5) business days
thereafter.
8.(a)LIMITATION OF LIABILITY. The Adviser shall not be liable for any error of
judgment, mistake of law or for any other loss whatsoever suffered by the
Trust in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from wilful misfeasance, bad
faith or gross negligence on the part of the Adviser in the performance of
its duties or from reckless disregard by it of its obligations and duties
under this Agreement.
8.(b)INDEMNIFICATION OF ADVISER. Subject to the limitations set forth in this
Subsection 8(b), the Trust shall indemnify, defend and hold harmless (from
the assets of the Fund or Funds to which the conduct in question relates)
the Adviser against all loss, damage and liability, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Adviser in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, related
to or resulting from this Agreement or the performance of services
hereunder, except with respect to any matter as to which it has been
determined that the loss, damage or liability is a direct result of (i) a
breach of fiduciary duty with respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless
disregard by it of its duties under this Agreement (either and both of the
conduct described in clauses (i) and (ii) above being referred to
hereinafter as "DISABLING CONDUCT"). A determination that the Adviser is
entitled to indemnification may be made by (i) a final decision on the
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merits by a court or other body before whom the proceeding was brought that
the Adviser was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Adviser for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Adviser was not
liable by reason of Disabling Conduct by (a) vote of a majority of a quorum
of Trustees who are neither "interested persons" of the Trust as the quoted
phrase is defined in Section 2(a)(19) of the 1940 Act nor parties to the
action, suit or other proceeding on the same or similar grounds that is
then or has been pending or threatened (such quorum of Trustees being
referred to hereinafter as the "INDEPENDENT TRUSTEES"), or (b) an
independent legal counsel in a written opinion. Expenses, including
accountants' and counsel fees so incurred by the Adviser (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties), may be paid from time to time by the Fund or Funds to which the
conduct in question related in advance of the final disposition of any such
action, suit or proceeding; PROVIDED, that the Adviser shall have
undertaken to repay the amounts so paid if it is ultimately determined that
indemnification of such expenses is not authorized under this Subsection
8(b) and if (i) the Adviser shall have provided security for such
undertaking, (ii) the Trust shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of the Independent
Trustees, or an independent legal counsel in a written opinion, shall have
determined, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the Adviser
ultimately will be entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved
(i) by a majority of the Independent Trustees or (ii) by an independent
legal counsel in a written opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the recovery from the Adviser of
any amount paid to the Adviser in accordance with either of such clauses as
indemnification of the Adviser is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable
belief that the Adviser's action was in or not opposed to the best
interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in its conduct under the
Agreement.
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The right of indemnification provided by this Subsection 8(b) shall
not be exclusive of or affect any of the rights to indemnification to which
the Adviser may be entitled. Nothing contained in this Subsection 8(b)
shall affect any rights to indemnification to which Trustees, officers or
other personnel of the Trust, and other persons may be entitled by contract
or otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may
be necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Adviser is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
8.(c)The provisions contained in Section 8 shall survive the expiration or other
termination of this Agreement, shall be deemed to include and protect the
Adviser and its directors, officers, employees and agents and shall inure
to the benefit of its/their respective successors, assigns and personal
representatives.
9. DURATION AND TERMINATION. This Agreement shall be effective on the date
hereof and, unless sooner terminated as provided herein, shall continue in
effect until March 31, 1999. Thereafter, this Agreement shall be renewable
for successive periods of one year each, provided such continuance is
specifically approved annually:
(a) By a vote of the majority of those members of the Board of Trustees
who are not parties to this Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in person
at a meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board or a majority (as that term is defined in
the 0000 Xxx) of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund
or by the Adviser at any time on sixty (60) days' written notice, without
the payment of any penalty, provided that termination by the Fund must be
authorized either by vote of the Board of Trustees or by vote of a majority
of the outstanding voting securities of the Fund. This Agreement will
automatically terminate in the event of its assignment (as that term is
defined in the 1940 Act).
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10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by a written instrument
signed by the party against which enforcement of this change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective until approved by a vote of the holders of a majority of
the Fund's outstanding voting securities (as defined in the 1940 Act).
11. SHAREHOLDER LIABILITY. The Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Agreement and
Declaration of Trust of the Trust, which is on file with the Secretary of
the Commonwealth of Massachusetts, and agrees that obligations assumed by
the Trust pursuant to this Agreement shall be limited in all cases to the
Fund and its assets. The Adviser agrees that it shall not seek satisfaction
of any such obligations from the shareholders or any individual shareholder
of the Fund, nor from the Trustees or any individual Trustee of the Trust.
12. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
13. APPLICABLE LAW. This Agreement shall be construed in accordance with, and
governed by, the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: WILLIAMSBURG INVESTMENT TRUST
By: /s/ Xxx Xxxxx By: /s/ Xxxx X. Xxxxx
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Title: Trader Title: Chairman
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ATTEST: XXXXXXXXX & COMPANY LLC
By: /s/ Xxxxx Xxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
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Title: Branch Administration Title: Executive Vice President
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