Exhibit 5(d)
Form of Interim Investment Advisory Agreement
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this day of , by and between MUTUAL FUND
(the "Trust") on behalf of the series of the Trust
(the "Fund") and THE CHASE MANHATTAN BANK, a New York State chartered banking
corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Trust and the Adviser desire to enter into an agreement to
provide advisory services for the Fund on the terms and conditions hereinafter
set forth;
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:
1. Appointment. The Adviser agrees, all as more fully set
forth herein, to act as investment adviser to the Fund with respect to
the investment of its assets and to supervise and arrange the purchase
of securities for and the sale of securities held in the portfolio of
the Fund.
2. Duties and Obligations of the Adviser With Respect
to Investments of Assets of the 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 Adviser shall:
(i) supervise continuously the investment
program of the Fund and the composition of its
portfolio;
(ii) determine what securities shall be
purchased or sold by the Fund; and
(iii) arrange for the purchase and the sale
of securities held in the portfolio of the Fund.
(b) Any investment program furnished by the Adviser
under this section shall at all times conform to, and be in
accordance with, any requirements imposed by:
(i) the provisions of the Act and of any
rules or regulations in force thereunder;
(ii) any other applicable provisions of
state and federal law;
(iii) the provisions of the Declaration of
Trust and By-Laws of the Trust, as amended from
time to time;
(iv) any policies and determinations of the
Board of Trustees of the Trust; and
(v) the fundamental policies of the Fund, as
reflected in its Registration Statement under the
Act, as amended from time to time.
(c) In making recommendations for the Fund, Trust
Division personnel of the Adviser will not inquire or take
into consideration whether the issuer of securities proposed
for purchase or sale for the Fund's account are customers of
the Commercial Division of the Adviser. In dealing with
commercial customers, the Commercial Division will not inquire
or take into consideration whether securities of those
customers are held by the Fund.
(d) The Adviser shall give the Fund the benefit of
its best judgment and effort in rendering services hereunder,
but the Adviser shall not be liable for any loss sustained by
the Fund in connection with the matters to which this
Agreement relates, including specifically but not limited to,
the calculation of net asset value and the adoption of any
investment policy or the purchase, sale or retention of any
security, whether or not such purchase, sale or retention
shall have been based upon its own investigation and research
or upon investigation and research made by any other
individual, firm or corporation, if such purchase, sale or
retention shall have been made and such other individual, firm
or corporation shall have been selected in good faith. Nothing
herein contained shall, however, be construed to protect the
Adviser against any liability to the Fund or its security
holders by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under
this Agreement.
(e) Nothing in this Agreement shall prevent the
Adviser or any affiliated person (as defined in the Act) of
the Adviser from acting as investment adviser or manager for
any other person, firm or corporation (including other
investment companies) and shall not in
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any way limit or restrict the Adviser or any such affiliated
person from buying, selling or trading any securities for its
or their own accounts or for the accounts of others for whom
it or they may be acting; provided, however, that the Adviser
expressly represents that it will undertake no activities
which, in its judgment, will adversely affect the performance
of its obligations to the Fund under this Agreement.
(f) The Fund will supply the Adviser with certified
copies of the following documents: (i) the Trust's Declaration
of Trust and By-Laws, as amended; (ii) resolutions of the
Trust's Board of Trustees and shareholders authorizing the
appointment of the Adviser and approving this Agreement; (iii)
the Trust's Registration Statement, as filed with the SEC; and
(iv) the Fund's most recent prospectus and statement of
additional information. The Fund will furnish the Adviser from
time to time with copies of all amendments or supplements to
the foregoing, if any, and all documents, notices and reports
filed with the SEC.
(g) The Fund will supply, or cause its custodian bank
to supply, to the Adviser such financial information as is
necessary or desirable for the functions of the Adviser
hereunder.
3. Broker-Dealer Relationships. The Adviser is responsible for
decisions to buy and sell securities for the Fund, broker-dealer
selection and negotiation of its brokerage commission rates. The
Adviser's primary consideration in effecting a security transaction
will be execution at the most favorable price. The Fund understands
that a substantial majority of the Fund's portfolio transactions will
be transacted with primary market makers acting as principal on a net
basis, with no brokerage commissions being paid by the Fund. Such
principal transactions may, however, result in a profit to the market
makers. In certain instances the Adviser may make purchases of
underwritten issues at prices which include underwriting fees. In
selecting a broker or dealer to execute each particular transaction,
the Adviser will take the following into consideration; the best price
available; the reliability, integrity and financial condition of the
broker or dealer; the size of and difficulty in executing the order;
and the value of the expected contribution of the broker or dealer to
the investment performance of the Fund on a continuing basis.
Accordingly, the price to the Fund in any transaction may be less
favorable than that available from another broker or dealer if the
difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies as the Board of
Trustees may determine, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty
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created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Adviser an amount of commission for effecting
a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determines in good faith that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Adviser's
overall responsibilities with respect to the Fund. The Adviser is
further authorized to allocate the orders placed by it on behalf of the
Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund (which material or
services may also assist the Adviser in rendering services to other
clients). Such allocation shall be in such amounts and proportions as
the Adviser shall determine and the Adviser will report on said
allocations regularly to the Board of Trustees indicating the brokers
to whom such allocations have been made and the basis therefor.
4. Allocation of Expenses. The Adviser agrees that it will
furnish the Fund, at its expense, all office space and facilities,
equipment and clerical personnel necessary for carrying out its duties
under this Agreement and the keeping of certain accounting records of
the Fund. The Adviser agrees that it will supply to any sub-adviser or
administrator (the "Administrator") of the Fund all necessary financial
information in connection with the Administrator's duties under any
Agreement between the Administrator and the Trust. The Adviser will
also pay all compensation of all Trustees, officers and employees of
the Fund who are "affiliated persons" of the Adviser as defined in the
Act. All costs and expenses not expressly assumed by the Adviser under
this Agreement or by the Administrator under the administration
agreement between it and the Trust shall be paid by the Fund,
including, but not limited to (i) fees paid to the Adviser and the
Administrator; (ii) interest and taxes; (iii) brokerage commissions;
(iv) insurance premiums; (v) compensation and expenses of its Trustees
other than those affiliated with the Adviser or the Administrator; (vi)
legal, accounting and audit expenses; (vii) custodian and transfer
agent, or shareholder servicing agent, fees and expenses; (viii)
expenses, including clerical expenses, incident to the issuance,
redemption or repurchase of shares, including issuance on the payment
of, or reinvestment of, dividends; (ix) fees and expenses incident to
the registration under Federal or state securities laws of the Fund or
its shares; (x) expenses of preparing, setting in type, printing and
mailing prospectuses, statements of additional information, reports and
notices and proxy material to shareholders of the Fund;
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(xi) all other expenses incidental to holding meetings of the Fund's
shareholders; and (xii) such extraordinary expenses as may arise,
including litigation affecting the Fund and the legal obligations which
the Trust may have to indemnify its officers and Trustees with respect
thereto.
5. Compensation of the Adviser. (a) For the services to be
rendered and the expenses assumed by the Adviser, the Fund shall pay to
the Adviser monthly compensation at an annual rate, of % of the Fund's
average daily net assets, as set forth in Schedule A. 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. If the 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. Subject to the provisions of subsection
(b) hereof, payment of the Adviser's compensation for the preceding
month shall be made as promptly as possible after completion of the
computations contemplated by subsection (b) hereof.
(b) In the event the operating expenses of the Fund
including all investment advisory, sub-advisory and
administration fees, 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 the securities
laws or regulations thereunder of any state in which the
Fund's shares are qualified for sale, as such limitations may
be raised or lowered from time to time, the Adviser shall
reduce its investment advisory fee, but not below zero, to the
extent of its share of such excess expenses; provided,
however, 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.
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 Fund as at the end of
the last business day of the month. Should two or more of 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 Adviser's fee shall be
applicable. For the purposes of this paragraph, the Adviser's
share of any excess expenses shall be computed by multiplying
such excess expenses by a fraction, the numerator of which is
the amount of the investment advisory fee which would
otherwise be payable to the Adviser for such fiscal year were
it not
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for this subsection 5(b) and the denominator of which is the
sum of all investment advisory and administrative fees which
would otherwise be payable by the Fund were it not for the
expense limitation provisions of any investment advisory or
administrative agreement to which the Fund is a party.
6. Duration, Amendment and Termination. (a) This Agreement
shall go into effect as to the Fund on the date set forth above (the
"Effective Date") and shall, unless terminated as hereinafter provided,
continue in effect for two years from the Effective Date and shall
continue from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of
Trustees of the Trust, 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 Fund and by such a vote of the Trustees.
(b) This Agreement may not be amended except in
accordance with the provisions of the Act, including
specifically, the provisions of the Act and the rules and
regulations thereunder regarding series votes by shareholders
of the Fund.
(c) This Agreement may be terminated by the Adviser
at any time without penalty upon giving the Fund sixty (60)
days' written notice (which notice may be waived by the Fund)
and may be terminated by the Fund at any time without penalty
upon giving the Adviser sixty (60) days' written notice (which
notice may be waived by the Adviser), provided that such
termination by the Fund shall be approved by the vote of a
majority of all the 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 Fund at the time outstanding and
entitled to vote. This Agreement may only be terminated in
accordance with the provisions of the Act, and shall
automatically terminate in the event of its assignment (as
defined in the Act).
7. Board of Trustees Meeting. The Fund agrees that notice of
each meeting of the Board of Trustees of the Trust will be sent to the
Adviser and that the Fund will make appropriate arrangements for the
attendance (as persons present by invitation) of such person or persons
as the Adviser may designate.
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8. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other
party at such address as such other party may designate for the receipt
of such notice. Until further notice to the other party, it is agreed
that the address of the Fund for this purpose shall be 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and that of the Adviser shall be Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
9. Questions of Interpretation. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or
otherwise derived from a term or provision of the Act, as amended,
shall be resolved by reference to such term or provision of the Act and
to interpretations thereof, if any, by the United States Courts or in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission issued
pursuant to said Act. In addition, where the effect of a requirement of
the Act, reflected in any provision of this Agreement is revised by
rule, regulation or order of the Securities and Exchange Commission,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their seals to
be hereunder affixed, all as of the day and year first above written.
MUTUAL FUND
Name:
Title:
ATTEST:
THE CHASE MANHATTAN BANK
Name:
Title:
ATTEST:
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