EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made as of January 27, 1993, between CFB MarketWatch Funds,
a Massachusetts business trust (herein called the "Trust"), and Central Fidelity
Bank, a state-chartered banking corporation having its principal place of
business in Richmond, Virginia (herein called the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Investment Adviser to furnish
investment advisory and administrative services to newly created investment
portfolios of the Trust and may retain the Investment Adviser to serve in such
capacity to certain additional investment portfolios of the Trust, all as now or
hereafter may be identified in Schedule A hereto, as such Schedule may be
amended from time to time (individually referred to herein as a "Fund" and
collectively as the "Funds") and the Investment Adviser represents that it is
willing and possesses legal authority to so furnish such services without
violation of applicable laws (including the Xxxxx-Xxxxxxxx Act) and regulations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Investment Adviser to act as
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investment adviser to the Funds for the period and on the terms set forth
in this Agreement. The Investment Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided. Additional investment portfolios may from time to time be added
to those covered by this Agreement by the parties executing a new Schedule
A which shall become effective upon its execution and shall supersede any
Schedule A having an earlier date.
2. Delivery of Documents. The Trust has furnished the Investment Adviser
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with copies properly certified or authenticated of each of the following:
(a) the Trust's Declaration of Trust, dated June 4, 1992, and filed with
the Secretary of State of Massachusetts on June 4, 1992, and any and
all amendments thereto or restatements thereof (such Declaration, as
presently in effect and as it shall from time to time be amended or
restated, is herein called the "Declaration of Trust");
(b) the Trust's By-Laws and any amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission on June 5,
1992, and all amendments thereto;
(e) the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended (the "1933 Act"), and under the 1940 Act as
filed with the Securities and Exchange Commission and all amendments
thereto; and
(f) the most recent Prospectus and Statement of Additional Information of
each of the Funds (such Prospectus and Statement of Additional
Information, as presently in effect, and all amendments and
supplements thereto, are herein collectively called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Trust's Board of Trustees,
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the Investment Adviser will provide a continuous investment program for the
Funds, including investment research and management with respect to all
securities and investments and cash equivalents in the Funds. The
Investment Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold by the Trust with
respect to the Funds. The Investment Adviser will provide the services
under this Agreement in accordance with each of the Fund's investment
objectives, policies, and restrictions as stated in the Prospectus and
resolutions of the Trust's Board of Trustees. The Investment Adviser
further agrees that it:
(a) will use the same skill and care in providing such services as it uses
in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission under the 1940 Act and in addition
will conduct its activities under this Agreement in accordance with
any applicable regulations of any governmental authority pertaining to
the investment advisory activities of the Investment Adviser;
(c) will not make loans to any person to purchase or carry units of
beneficial interest ("shares") in the Trust or make loans to the
Trust;
(d) will place or cause to be placed orders for the Funds either directly
with the issuer or with any broker or dealer. In placing orders with
brokers and dealers, the Investment Adviser will attempt to obtain
prompt execution of orders in an effective manner at the most
favorable price. Consistent with this obligation and to the extent
permitted by the 1940 Act, when the execution and price offered by two
or more brokers or dealers are comparable, the Investment Adviser may,
in
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its discretion, purchase and sell portfolio securities to and from
brokers and dealers who provide the Investment Adviser with research
advice and other services. In no instance will portfolio securities
be purchased from or sold to The Winsbury Company, the Investment
Adviser, or any affiliated person of the Trust, The Winsbury Company
or the Investment Adviser, except to the extent permitted by the 1940
Act and the Commission;
(e) will maintain all books and records with respect to the securities
transactions of the Funds and will furnish the Trust's Board of
Trustees with such periodic and special reports as the Board may
request;
(f) will treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust and the Funds
and prior, present, or potential shareholders, and will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld where the Investment
Adviser may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust;
(g) will maintain its policy and practice of conducting its fiduciary
functions independently. In making investment recommendations for the
Funds, the Investment Adviser's personnel will not inquire or take
into consideration whether the issuers of securities proposed for
purchase or sale for the Trust's account are customers of the
Investment Adviser or of its parent or its subsidiaries or affiliates.
In dealing with such customers, the Investment Adviser and its parent,
subsidiaries, and affiliates will not inquire or take into
consideration whether securities of those customers are held by the
Trust;
(h) will comply with the self-custody requirements of the 1940 Act and
Rule 17f-2 thereunder; and
(i) will promptly review all (1) current security reports, (2) summary
reports of transactions and pending maturities (including the
principal, cost and accrued interest on each portfolio security in
maturity date order) and (3) current cash position reports (including
cash available from portfolio sales and maturities and sales of a
Fund's shares less cash needed for redemptions and settlement of
portfolio purchases) upon receipt thereof from the Trust and will
report any errors or discrepancies in such reports to the Trust or its
designee within three (3) business days.
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4. Services Not Exclusive. The investment management services furnished by
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the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, the Investment Adviser hereby agrees that all records
which it maintains for the Funds 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 Investment Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser will
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pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Funds.
7. Compensation. For the services provided and the expenses assumed pursuant
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to this Agreement, each of the Funds will pay the Investment Adviser and
the Investment Adviser will accept as full compensation therefor a fee as
set forth on Schedule A hereto. The obligations of each Fund to pay the
above-described fee to the Investment Adviser will begin as of the
respective dates of the initial public sale of shares in such Fund. The
fee attributable to each Fund shall be the obligation of the Fund and not
of any other Fund.
If in any fiscal year the aggregate expenses of any of the Funds (as
defined under the securities regulations of any state having jurisdiction
over the Trust) exceed the expense limitations of any such state, the
Investment Adviser will reimburse the Fund for a portion of such excess
expenses equal to such excess times the ratio of the fees otherwise payable
by the Fund to the Investment Adviser hereunder to the aggregate fees
otherwise payable by the Fund to the Investment Adviser hereunder and to
The Winsbury Company under the Management and Administration Agreement
between The Winsbury Company and the Trust. The obligation of the
Investment Adviser to reimburse the Funds hereunder is limited in any
fiscal year to the amount of its fee hereunder for such fiscal year,
provided, however, that notwithstanding the foregoing, the Investment
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Adviser shall reimburse the Funds for such proportion of such excess
expenses regardless of the amount of fees paid to it during such fiscal
year to the extent that the securities regulations of any state having
jurisdiction over the Trust so require. Such expense reimbursement, if
any, will be estimated daily and reconciled and paid on a monthly basis.
8. Limitation of Liability. The Investment Adviser shall not be liable for
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any error of judgment or mistake of law or for any loss suffered by the
Funds 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 willful
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misfeasance, bad faith or gross negligence on the part of the Investment
Adviser in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement.
9. Term, Duration and Termination. This Agreement shall become effective with
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respect to each Fund listed on Schedule A hereof as of the date first
written above (or, if a particular Fund is not in existence on that date,
on the date a registration statement relating to that Fund becomes
effective with the Securities and Exchange Commission), provided that it
shall have been approved by vote of a majority of the outstanding voting
securities of such Fund, in accordance with the requirements under the 1940
Act, and, unless sooner terminated as provided herein, shall continue in
effect until March 31, 1994. Thereafter, if not terminated, this Agreement
shall continue in effect as to a particular Fund for successive one-year
terms, provided such continuance is specifically approved at least annually
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(a) by the vote of a majority of those members of the Trust's Board of
Trustees who are not parties to this Agreement or interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of all votes
attributable to the outstanding shares of such Fund. Notwithstanding the
foregoing, this Agreement may be terminated as to a particular Fund at any
time on sixty days' written notice, without the payment of any penalty, by
the Trust (by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of such Fund) or by the
Investment Adviser. This Agreement will immediately terminate in the event
of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities", "interested persons" and "assignment" shall
have the same meanings as ascribed to such terms in the 1940 Act.)
10. Investment Adviser's Representations. The Investment Adviser hereby
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represents and warrants that it is willing and possesses all requisite
legal authority to provide the services contemplated by this Agreement
without violation of applicable law and regulations, including but not
limited to the Xxxxx-Xxxxxxxx Act and the regulations promulgated
thereunder.
11. Amendment of this Agreement. No provision of this Agreement may be
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changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
12. Governing Law. This Agreement shall be governed by and provisions shall
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be construed in accordance with the laws of the Commonwealth of
Massachusetts.
13. Limitation of Liability of Trustees and Shareholders. The names "CFB
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MarketWatch Funds" and "Trustees of CFB MarketWatch Funds" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time
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to time under an Agreement and Declaration of Trust dated as of June 4,
1992 to which reference is hereby made and a copy of which is on file at
the office of the Secretary of State of The Commonwealth of Massachusetts
and elsewhere as required by law, and to any and all amendments thereto so
filed or hereafter filed. The obligations of "CFB MarketWatch Funds"
entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the
Trust and all persons dealing with any series of shares of the Trust must
look solely to the assets of the Trust belonging to such series for the
enforcement of any claims against the Trust.
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.
CFB MARKETWATCH FUNDS
By:/s/Xxxx X. Xxxxxxxxxx
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Title:President
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CENTRAL FIDELITY BANK
By:/s/Xxxxx X. Coeinger
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Title:Executive Vice President
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Dated: January 27, 1993
Schedule A
to the
Investment Advisory Agreement
between CFB MarketWatch Funds and
Central Fidelity Bank
Name of Fund Compensation*
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CFB MarketWatch
U.S. Treasury Money Market Fund Annual rate of fifty one-hundredths of
one percent (.50%) of the average daily
net assets of the CFB MarketWatch U.S.
Treasury Money Market Fund.
CFB MarketWatch
Short-Term Fixed Income Fund Annual rate of seventy four one-
hundredths of one percent (.74%) of the
average daily net assets of the CFB
MarketWatch Short-Term Fixed Income
Fund.
CFB MarketWatch
Intermediate Fixed Income Fund Annual rate of seventy four one-
hundredths of one percent (.74%) of the
average daily net assets of the CFB
MarketWatch Intermediate Fixed Income
Fund.
CFB MarketWatch
Virginia Municipal Bond Fund Annual rate of seventy four one-
hundredths of one percent (.74%) of the
average daily net assets of the CFB
MarketWatch Virginia Municipal Bond
Fund.
CFB MarketWatch
Equity Fund Annual rate of one percent (1.00%) of
the average daily net assets of the CFB
MarketWatch Equity Fund.
CFB MARKETWATCH FUNDS
By:/s/Xxxx X. Xxxxxxxxxx
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Title:President
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CENTRAL FIDELITY BANK
By:/s/Xxxxx X.Coeinger
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Title:Executive Vice President
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*All fees are computed daily and paid monthly.
