AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT
AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 4th day of April, 2012, by and between TD Asset Management USA Funds Inc., a Maryland corporation, whose address is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Fund”) and TDAM USA Inc., a Delaware corporation, whose address is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Investment Manager”). This Agreement was originally made as of October 15, 1996 and amended and restated as of April 4, 2012.
WITNESSETH:
WHEREAS, the Fund is an open-end, diversified management investment company, registered under the Investment Company Act of 1940, as amended (the “1940 Act”), with distinct series of shares each having its own investment objectives, policies and restrictions, including the Fund’s TDAM Money Market Portfolio, TDAM U.S. Government Portfolio, TDAM Municipal Portfolio, TDAM California Municipal Money Market Portfolio, TDAM New York Municipal Money Market Portfolio, TDAM Institutional Money Market Fund, TDAM Institutional Municipal Money Market Fund, TDAM Institutional U.S. Government Fund, TDAM Institutional Treasury Obligations Money Market Fund, TDAM Short-Term Investment Fund and TDAM Short-Term Bond Fund (each, a “Portfolio”), and including such other Portfolios as may hereafter be offered by the Fund, all as more fully described in the Fund’s Registration Statement on Form N-1A under the 1940 Act and the Securities Act of 1933, as amended (the “Registration Statement”), as filed with the Securities and Exchange Commission (the “Commission”) relating to the Fund and shares of the Fund’s capital stock, and all amendments thereto;
WHEREAS, the Investment Manager is registered as an investment adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Fund and the Investment Manager desire to enter into an agreement to provide for comprehensive management and investment advisory services to each Portfolio upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is hereby agreed by and between the parties hereto as follows:
1. Duties of Investment Manager. (a) The Fund hereby employs the Investment Manager to act as the investment adviser for each of the Portfolios and to manage the investment and reinvestment of the assets of each Portfolio in accordance with the investment objectives, policies and restrictions of each such Portfolio as the same are set forth in the Registration Statement, and in accordance with the requirements of the 1940 Act and all other applicable state and federal laws, rules and regulations, subject to the supervision of the Board of Directors of the Fund (the “Board”) for the period and upon the terms herein set forth. The investment of funds shall also be subject to all applicable restrictions of the Articles of Incorporation and By-laws of the Fund as may from time to time be in force. Without limiting the generality of the foregoing, the Investment Manager shall:
(i) obtain and evaluate pertinent information about significant developments and economic, statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or a Portfolio specifically, and whether concerning the individual issuers whose securities are included in a Portfolio or the activities in which such issuers engage, or with respect to securities which the Investment Manager considers desirable for inclusion in a Portfolio;
(ii) determine which issuers and securities shall be represented in a Portfolio and regularly report thereon to the Board;
(iii) formulate and implement continuing programs for the purchases and sales of securities of such issuers and lists of approved investments for each Portfolio and regularly report thereon to the Board;
(iv) make decisions with respect to and take, on behalf of each Portfolio, all actions which appear necessary to carry into effect such purchase and sale programs and supervisory functions aforesaid, including the placing of orders for the purchase and sale of securities for such Portfolio.
(b) The Investment Manager accepts such employment and agrees during such period to render such services and to assume the obligations herein set forth for the compensation herein provided. The Investment Manager shall give each Portfolio the benefit of its best judgment, efforts and facilities in rendering its services as an investment manager. The Investment Manager shall for all purposes herein provided be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund. It is understood and agreed that the Investment Manager, by separate agreements with the Fund, may also serve the Fund in other capacities. It is further agreed that the Investment Manager and its officers and directors are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers or directors of any other firm or corporation, including other investment companies, so long as its or their services hereunder are not impaired thereby. It is further agreed that personnel of the Investment Manager may invest in securities for their own account pursuant to a code of ethics that sets forth all employees’ fiduciary responsibilities regarding the Fund, establishes procedures for personal investing and restricts certain transactions.
(c) The Investment Manager shall keep any books and records relevant to the provision of its investment advisory services to each Portfolio and shall specifically maintain all books and records with respect to each Portfolio’s securities and portfolio transactions and shall render to the Fund’s Board of Directors such periodic and special reports as the Board may reasonably request. The Investment Manager agrees that all records which it maintains for the Fund are the property of the Fund and it will surrender promptly to the Fund any such records upon the Fund’s request, provided however that the Investment Manager may retain a copy of such records. The Investment Manager further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records kept by the Investment Manager in connection with investment advisory services provided pursuant hereto.
(d) The Fund has delivered to the Investment Manager copies of each of the following documents and will deliver to it all future amendments and supplements thereto, if any:
(i) The Registration Statement; and
(ii) The Prospectus of each Portfolio (such Prospectus and the related Statement of Additional Information of the Portfolio, as currently in effect and as amended or supplemented from time to time, being herein collectively called the “Prospectus”).
(e) The Fund shall at all times keep the Investment Manager fully informed with regard to the securities owned by each Portfolio, its funds available or to become available for investment, and generally as to the condition of its affairs. The Fund shall furnish the Investment Manager with a copy of all financial statements and each report prepared by certified public accountants with respect to it, and with such other information with regard to its affairs as the Investment Manager may from time to time reasonably request.
| -2- |
(f) Any investment program undertaken by the Investment Manager pursuant to this Agreement, as well as any other activities undertaken by the Investment Manager on behalf of any Portfolio pursuant thereto, shall at all times be subject to any directives of the Board.
2. Expenses. The Investment Manager shall pay all of its expenses arising from the performance of its obligations under Section 1 of this Agreement and shall pay any salaries, fees and expenses of Fund directors or officers who are employees, officers or directors of the Investment Manager.
The Investment Manager shall not be required to pay any other expenses of the Fund or the Portfolios, including (a) the fees and expenses of directors who are not “interested person” of the Fund, as defined by the 1940 Act, and travel and related expenses of the directors for attendance at meetings; (b) the fees and expenses of the custodian and transfer agent of the Fund or any pricing service, including but not limited to fees and expenses relating to Fund accounting, pricing of portfolio shares, and computation of net asset value; (c) the fees and expenses of calculating yield and/or performance of the Portfolios; (d) the charges and expenses of legal counsel and independent accountants; (e) taxes and corporate fees payable to governmental agencies; (f) the costs of share certificates and of membership dues of any trade association of which the Fund is a member; (g) reimbursement of each Portfolio’s share of the organization expenses of the Fund; (h) the fees and expenses involved in registering and maintaining registration of the Fund and the Portfolios’ shares with the Commission, blue sky service providers, registering the Fund as a broker or dealer and qualifying the shares of the Portfolios (or applying for applicable exemptions, as the case may be) under state securities laws, including the preparation and printing of the registration statements and prospectuses for such purposes; (i) allocable communications expenses with respect to investor services, expenses of shareholders’ and Board of Directors’ meetings and preparing, printing and mailing proxies, prospectuses and reports to shareholders; (j) costs of acquiring and disposing of portfolio securities, including but not limited to brokers’ commissions, dealers’ xxxx-ups and any issue or transfer taxes chargeable in connection with the Portfolios’ transactions; (k) the cost of stock certificates representing shares of the Portfolios, if any; (1) insurance expenses, including, but not limited to, the cost of a fidelity bond, directors and officers insurance and errors and omissions insurance; and (m) litigation and indemnification expenses, expenses incurred in connection with mergers, and other extraordinary expenses not incurred in the ordinary course of the Portfolios’ business.
3. Compensation. (a) For the services described in Section 1 hereof, the Fund, on behalf of each Portfolio, will pay to the Investment Manager promptly after the end of each calendar month, an investment management fee computed at the annual rate applicable to such Portfolio set forth on Schedule A hereto. The fee as computed in accordance with Schedule A shall be based upon the net assets of each Portfolio as to which this Agreement is then effective. The value of the net assets for each Portfolio shall be calculated in accordance with the provisions of the Portfolio’s Prospectus. For purposes of this Agreement, on each day when net asset value is not calculated, the net assets of any Portfolio shall be deemed to be the net assets of such Portfolio as of the close of business on the last day on which net asset value was determined. Except as hereinafter set forth, compensation under this Agreement shall be calculated and accrued daily and the amounts of the daily accruals shall be paid monthly in arrears (i.e., the applicable annual fee rate divided by 365 as applied to each prior day’s net assets in order to calculate the daily accrual). If this Agreement becomes effective subsequent to the first day of a month or shall terminate before the last day of a month, compensation for that part of the month this Agreement is in effect shall be prorated in a manner consistent with the calculation of the fees as set forth above.
(b) In the event the operating expenses of a Portfolio including all management fees, for any fiscal year ending on a date on which this Agreement is in effect exceed the expense limitation applicable to such Portfolio imposed by the securities laws or regulations thereunder of any state or jurisdiction in which the Portfolio’s shares are qualified for sale, as such limitations may be raised or lowered from time to time, the Investment Manager shall reduce its management fee to the extent of such excess and, if required, pursuant to any such laws or regulations, will reimburse the Portfolio for any annual operating expenses (after reductions of all management fees) in excess of any expense limitation that may be applicable; provided, however, there shall be excluded from such expenses the amount of any interest, taxes, brokerage commission 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 and attributable to the Portfolio. Such reduction, if any, shall be computed and accrued daily, shall be settled on a monthly basis and shall be based upon the expense limitation applicable to the Portfolio as at the end of the last business day of the month. 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 Manager’s fee shall be applicable.
| -3- |
4. Brokerage. In managing the assets of each Portfolio, the Investment Manager shall purchase securities from or through and sell securities to or through such persons, brokers or dealers as the Investment Manager shall deem appropriate in conformity with applicable law and with the terms of the Registration Statement, and as the Board may direct from time to time. Without limiting the generality of the foregoing, the Investment Manager will implement the Fund’s policy of seeking the best execution of orders, which includes best net prices, in effecting purchases and sales of portfolio securities for the account of each Portfolio.
On occasions when the Investment Manager deems the purchase or sale of securities to be in the best interest of one or more Portfolios as well as other clients of the Investment Manager, the Investment Manager, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities to be so sold or purchased in order to obtain the most favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Investment Manager in accordance with its policy for aggregation of orders, as in effect from time to time, which has been approved by the Board.
5. Interested Persons. No director, officer or employee of the Fund shall receive from the Fund any salary or other compensation as such director, officer or employee while he or she is at the same time a director, officer or employee of the Investment Manager or any affiliated person (as defined in the 1940 Act) thereof. The Investment Manager shall authorize and permit any of its directors, officers and employees who may be elected as directors or officers of the Fund to serve in the capacities in which they are elected, subject to their individual consent and to any limitations imposed by law. All services to be furnished by the Investment Manager under this Agreement may be furnished through the medium of any such directors, officers or employees of the Investment Manager.
6. Limitation of Liability. Subject to Section 36 of the 1940 Act, the Investment Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by any Portfolio in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Investment Manager in the performance of its obligations and duties or by reason of its reckless disregard of its obligations and duties under this Agreement.
7. Term of Agreement. This Agreement shall become effective upon its execution by an authorized officer of the respective parties hereto. This Agreement shall continue in effect until April __, 2013, and thereafter from year to year so long as such continuation is specifically approved at least annually in conformity with the requirements of the 1940 Act with regard to investment advisory contracts; provided, however, that this Agreement may be terminated at any time without the payment of any penalty, on behalf of any or all of the Portfolios, by the Fund, by the Board or, with respect to any Portfolio, by “vote of a majority of the outstanding voting securities” (as defined in the 0000 Xxx) of that Portfolio, or by the Investment Manager on not less than 60 days’ written notice to the other party. This Agreement shall terminate automatically in the event of its “assignment” (as defined in the 1940 Act).
| -4- |
Termination of this Agreement shall not affect the right of the Investment Manager to receive payments on any unpaid balance of the compensation described in Section 3 hereof earned prior to such termination.
8. Amendments; Partial Invalidity. This Agreement may be amended by mutual consent but the consent of the Fund must be obtained in conformity with the requirements of the 1940 Act. If any provision of this Agreement shall he held or made invalid by a court decision, statute, rule or otherwise, the remainder shall not be thereby affected.
9. Notices. All notices or other communications hereunder to either party shall be in writing and shall be deemed to be received on the earlier of the date actually received or on the fourth day after postmark if such notice is mailed first class postage prepaid. Notice shall be addressed: (a) if to the Fund, to: President, TD Asset Management USA Funds Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or (b) if to the Investment Manager, to: President, TDAM USA Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or at such other address as either party may designate by written notice to the other. Notice shall also be deemed sufficient if given by telex, telecopier, telegram or similar means of same day delivery (with a confirming copy by mail as provided herein).
10. Separate Portfolios. This Agreement shall be construed to be made by the Fund as a separate agreement with respect to each Portfolio, and under no circumstances shall the rights, obligations or remedies with respect to a particular Portfolio be deemed to constitute a right, obligation or remedy applicable to any other Portfolio.
11. Entire Agreement; Governing Law. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed in accordance with applicable federal law and the laws of the State of New York. Anything herein to the contrary notwithstanding, this Agreement shall not be construed to require, or to impose any duty upon, either of the parties to do anything in violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Investment Manager have caused this Agreement to the executed as of the day and year first above written.
TD ASSET MANAGEMENT USA FUNDS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
WITNESS:
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
TDAM USA INC.
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
WITNESS:
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
| -5- |
SCHEDULE A
Fees
For the services provided by the Investment Manager under the foregoing agreement to each of the following Portfolios, the Investment Manager will receive the following fees:
In the case of each of the TDAM Money Market Portfolio, TDAM U.S. Government Portfolio, TDAM Municipal Portfolio, TDAM California Municipal Money Market Portfolio, TDAM New York Municipal Money Market Portfolio, TDAM Institutional Money Market Fund, TDAM Institutional Municipal Money Market Fund, TDAM Institutional U.S. Government Fund and TDAM Institutional Treasury Obligations Money Market Fund, an annual investment management fee, payable monthly, on a graduated basis equal to 0.10 of 1% of the first $1 billion of average daily net assets of the Portfolio, 0.09 of 1% of the next $1 billion of average daily net assets of the Portfolio, and 0.08 of 1% of average daily net assets of the Portfolio over $2 billion.
In the case of the TDAM Short-Term Investment Fund, an annual investment management fee, payable monthly, equal to 0.20 of 1% of average daily net assets.
In the case of the TDAM Short-Term Bond Fund, an annual investment management fee, payable monthly, equal to 0.25 of 1% of average daily net assets.
