INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this day of October, 1986 by and between XXXXXXX
XXXXX INSTITUTIONAL INTERMEDIATE FUND, a Massachusetts business trust (the
"Fund"), and XXXXXXX XXXXX ASSET MANAGEMENT, INC., a Delaware corporation (the
"Investment Adviser");
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940 (the "Investment Company Act");
WHEREAS, the Investment Adviser is engaged principally in rendering
management services and is registered as an investment adviser under the
Investment Advisers Act of 1940; and
WHEREAS, the Fund desires to retain the Investment Adviser to render
investment supervisory and corporate administrative services to the Fund in the
manner and on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Investment Adviser hereby agree as
follows:
ARTICLE 1. Duties of the Investment Adviser. The Fund hereby employs the
Investment Adviser to act as the manager and investment adviser of the Fund and
to furnish, or to arrange for affiliates to furnish, the Fund with investment
advisory and administrative service and to administer its affairs, subject to
the supervision of the Board of Trustees of the Fund for the period and on the
terms and conditions set forth in this Agreement. The Investment Adviser hereby
accepts such employment and agrees during such period, at its own expense, to
render the services and to assume the obligations herein set forth for the
compensation provided for herein. The Investment Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
(a) Investment Advisory Services. In acting as investment adviser to
the Fund, the Investment Adviser shall regularly provide the Fund with such
investment research, advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its funds and shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased, sold or exchanged and what portion of the assets
of the Fund shall be held in the various securities in which the Fund may
invest, subject always to the restrictions of the Fund's Declaration of Trust
and By-Laws, as amended from time to time, the provisions of the Investment
Company Act, and the statements relating to the Fund's investment objectives,
investment policies and investment restrictions as the same are set forth in the
currently effective prospectus of the Fund under the Securities Act of 1933 (the
"Prospectus"). Should the Board of Trustees of the Fund at any time, however,
make any definite determination as to investment policy and notify the
Investment Adviser thereof, the Investment Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Investment
Adviser shall take, on behalf of the Fund, all actions which it deems necessary
to implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of portfolio securities
for the Fund's account with brokers or dealers selected by it. In connection
with the selection of such brokers or dealers and the placing of such orders,
the Investment Adviser is directed at all times to seek to obtain for the Fund
the most favorable execution and price within the meaning of such terms as
determined by the Board of Trustees and set forth in the Prospectus. Subject to
this requirement and the provisions of the Investment Company Act, the
Securities Exchange Act of 1934, and other applicable provisions of law, nothing
shall prohibit the Investment Adviser from selecting brokers or dealers with
which it or the Fund is affiliated if permitted by applicable law or regulation.
(b) Administrative Services. In addition to the performance of
investment advisory services, the Investment Adviser shall perform, or supervise
the performance of, administrative services in connection with the management of
the Fund, including processing share orders, administering shareholder accounts
and handling shareholder relations. In this connection, the Investment Adviser
agrees to (i) assist in supervising all aspects of the Fund's operations,
including the coordination of all matters relating to the functions of the
custodian, transfer agent, other shareholder service agents, accountants,
attorneys and other parties performing services or operational functions for the
Fund, (ii) provide the Fund, at the Investment Adviser's expense, with the
services of persons competent to perform such administrative and clerical
functions as are necessary in order to provide effective administration of the
Fund, and (iii) provide the Fund, at the Investment Adviser's expense, with
adequate office space and related services necessary for its operations as
contemplated in this Agreement. The Fund agrees that the Investment Adviser may
arrange for the provision of services and the performance of functions referred
to in this subsection (b) by Xxxxxxx Xxxxx Funds Distributor, Inc., or other
affiliates of Xxxxxxx Xxxxx & Co., Inc.
ARTICLE 2. Allocation of Charges and Expenses.
(a) The Investment Adviser. The Investment Adviser assumes and shall
pay for maintaining the staff and personnel, and shall at its own expense
provide the equipment, office space and facilities necessary to perform its
obligations under this Agreement, and shall pay all compensation of officers of
the Fund and the fees of all Trustees of the Fund who are affiliated persons of
Xxxxxxx Xxxxx & Co., Inc. or its subsidiaries.
(b) The Fund. The Fund assumes and shall pay all expenses of the
Fund, including, without limitation: organization costs, taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports and prospectuses (except to the extent paid by the
Distributor), charges of the Custodian and Transfer Agent, expenses of
redemption of shares, Securities and Exchange Commission fees, expenses of
registering the shares under federal and state securities laws, fees and
expenses of directors who are not affiliated persons of Xxxxxxx Xxxxx & Co.,
Inc. or its subsidiaries, accounting and pricing costs (including the daily
calculation of net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Fund.
ARTICLE 3. Compensation of the Investment Adviser.
(a) Investment Advisory Fee. For the services rendered, the
facilities furnished and expenses assumed by the Investment Adviser, the Fund
shall pay to, the Investment Adviser at the end of each calendar month a fee at
an annual rate of 0.40% of the average daily value of the net assets of the
Fund, as determined and computed in accordance with the description of the
determination of net asset value contained in the Prospectus. During any period
when the determination of net asset value is suspended by the Board of Trustees
of the Fund, the net asset value as of the last business day prior to such
suspension shall for this purpose be deemed to be the net asset value at the
close of each succeeding business day until it is again determined.
(b) Expense Limitations. In the event the operating expenses of the
Fund, including the investment advisory fee payable to the Investment Adviser
pursuant to subsection (a) hereof, for any fiscal year ending on a date on which
this Agreement is in effect exceed the expense limitations applicable to the
Fund imposed by state securities laws or published regulations thereunder, as
such limitations may be raised or lowered from time to time, the Investment
Adviser shall reduce its investment advisory fee by the extent of such excess
and, if required pursuant to any such, laws or regulations, will reimburse the
Fund in the amount of such excess; provided, however, to the extent permitted by
law, there shall be excluded from such expenses the amount of any interest,
taxes, brokerage commissions and extraordinary expenses (including but not
limited to legal claims and liabilities and litigation costs and any
indemnification related thereto) paid or payable by the Fund. Whenever the
expenses of the Fund exceed a pro rata portion of the applicable annual expense
limitations, the estimated amounts of reimbursement under such limitations shall
be applicable as an offset against the monthly payment of the advisory fee due
to the Investment Adviser. Should two or more such expense limitations be
applicable as at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the Investment Adviser's
fee shall be applicable.
ARTICLE 4. Limitation of Liability of Trustees, Shareholders, Officers,
Employees and Agents. The Declaration of Trust establishing the Fund, dated
September 10, 1986, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Xxxxxxx Xxxxx Institutional Intermediate
Fund" refers to the Trustees under the Declaration collectively as Trustees, but
not as individuals or personally; and no Trustee, shareholder, officer, employee
or agent of the Fund may be held to any personal liability, nor may resort be
had to their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of said Fund but the Fund Property only
shall be liable.
ARTICLE 5. Limitation of Liability of the Investment Adviser. The
Investment Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with any investment
policy or the purchase, sale or redemption of any securities on the
recommendation of the Investment Adviser. Nothing herein contained shall be
construed to protect the Investment Adviser against any liability to the Fund or
its security holders to which the Investment Adviser shall otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence in the performance
of its duties on behalf of the Fund, reckless disregard of the Investment
Adviser's obligations and duties under this Agreement or the violation of any
applicable law. As used in this Article 5, the term "Investment Adviser" shall
include any affiliates of the Investment Adviser performing services for the
Fund contemplated hereby and directors, officers and employees of the Investment
Adviser and such affiliates.
ARTICLE 6. Activities of the Investment Adviser. The services of the
Investment Adviser under this Agreement are not to be deemed exclusive, and the
Investment Adviser shall be free to render similar services to others so long as
its services hereunder are not impaired thereby. It is understood that
trustees, officers, employees and the shareholders of the Fund are or may become
interested in the Investment Adviser, as directors, officers, employees or
shareholders or otherwise of the Investment Adviser and, are or may become
similarly interested in the Fund, and that the Investment Adviser is or may
become interested in the Fund as shareholder or otherwise.
ARTICLE 7. Duration and Termination of this Agreement. This Agreement
shall become effective as of the date first above written and shall remain in
force for two years and thereafter, but only so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of the
Fund, or by the vote of a majority of the outstanding voting securities of the
Fund, and (ii) by the vote of a majority of those Trustees who are not parties
to this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Trustees of the Fund or by vote of a majority of the
outstanding voting securities of the Fund on sixty days notice to the
Investment Adviser, or by the Investment Adviser, on sixty days written notice
to the Fund. This Agreement shall automatically terminate in the event of its
assignment.
ARTICLE 8. Amendments of this Agreement. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the Board of
Trustees of the Fund, or by vote of a majority of the outstanding voting
securities of the Fund, and (ii) by the vote of a majority of those Trustees of
the Fund who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
ARTICLE 9. Definition of Certain Terms. The terms "vote of a majority of
the outstanding voting securities", "assignment", "interested person" and
"affiliated person", when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act.
ARTICLE 10. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New Jersey
as at the time in effect and the applicable provisions of the Investment Company
Act. To the extent that the applicable law of the State of New Jersey, or any
of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXX XXXXX INSTITUTIONAL
INTERMEDIATE FUND
By
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President
ATTEST:
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Secretary
XXXXXXX XXXXX ASSET MANAGEMENT, INC.
By
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President
ATTEST:
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Secretary
