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Exhibit 99(b)(d)(ii)
INVESTMENT ADVISORY AGREEMENT
This Agreement, dated as of the 14th day of NOVEMBER, 1998, made by and
between Trainer, Xxxxxxx First Mutual Funds, a business trust (the "Trust")
operating as an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), on behalf of TRAINER,
XXXXXXX TOTAL RETURN BOND FUND (the "Series") and Trainer, Xxxxxxx & Co., Inc.,
a wholly-owned subsidiary of First Republic Bank, with its principal offices at
000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 ( "Investment Advisor").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Act; and
WHEREAS, the Trust desires to retain the Investment Advisor to furnish
investment advisory and administrative services with respect to the Series, and
the Investment Advisor is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Advisor to act
as investment advisor to the Series for the period and on the terms set forth in
this Agreement. The Investment Advisor accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Series has furnished the Investment
Advisor with copies of each of the following:
(a) Resolutions of the Board of Trustees authorizing the
appointment of the Investment Advisor and approving this Agreement;
(b) The Series most recent prospectus and Statement of
Additional Information (such prospectus and Statement of Additional Information,
as presently in effect and all amendments and supplements thereto, are herein
called the "Prospectus").
The Series will furnish the Investment Advisor from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT Subject to the supervision of the Board of Trustees, the
Investment Advisor will provide a continuous investment program for the Series,
including investment research and day-to-day management of the Series' assets.
The Investment Advisor will determine from time to time what securities and
other investment will be purchased, retained or sold by the Series. The
Investment Advisor will provide the services under this Agreement in accordance
with the Series' investment objective, policies and restrictions as stated in
the Prospectus and resolutions of the Board of Trustees. The Series wishes to be
informed of important developments materially affecting the Series and its
shareholders, and the Investment Advisor agrees to furnish to the Series, from
time to time, such information as may be appropriate for this purpose. The
Investment Advisor further agrees that it:
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(a) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission;
(b) will place orders pursuant to its investment
determinations for the Series either directly with the issuer or with any broker
or dealer. In executing portfolio transactions, the Investment Advisor will use
its best efforts to seek on behalf of the Series the best overall terms
available. In assessing the best overall terms available for any transaction,
the Investment Advisor shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In evaluating the best overall terms available, and
in selecting the broker-dealer to execute a particular transaction, the
Investment Advisor may also consider the brokerage and research services (as
those terms are defined in Section 28 (e) of the Securities Exchange Act of
1934) provided to the Series and any other accounts over which the Investment
Advisor exercises investment discretion. The Investment Advisor is authorized,
subject to the prior approval of the Board of Trustees, to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Series which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction in such instances where the Investment Advisor determines in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer as viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Investment Advisor to the Series. In addition, the Investment Advisor may
take into account the sale of the Series' units in allocating purchase and sale
orders for portfolio securities to brokers or dealers (including affiliated
brokers and dealers that are affiliated with the Series, the Investment Advisor
or the principal underwriter), provided that the Investment Advisor believes
that the quality of execution and the commission are comparable to what they
would be by other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Investment Advisor, the principal
underwriter or any affiliated person of either the Series, the Investment
Advisor or the principal underwriter or any affiliated person of the Series, the
Investment Advisor or the principal underwriter, acting as principal in the
transaction except to the extent permitted by the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.;
(c) will maintain all books and records with respect to the
Series' securities transactions which the Series is required to maintain under
applicable laws and will furnish the Board of Trustees such periodic and special
reports as the Board may request; and
(d) will treat confidentially and as proprietary information
of the Series all records and other information relative to the Series 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 Board of Trustees, which approval shall not be unreasonably withheld and
may not be withheld where the Investment Advisor 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
Board of Trustees.
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4. SERVICES NOT EXCLUSIVE. The investment management services furnished
by the Investment Advisor hereunder are not to be deemed exclusive, and the
Investment Advisor shall be free to furnish similar services to others whether
or not for compensation 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
under the 1940 Act, the Investment Advisor hereby agrees that all records which
it maintains for the Series are the property of the Series and further agrees to
surrender promptly to the Series any of such records upon the Series' request.
The Investment Advisor further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required by Rule 31a-1 to be
maintained under the 1940 Act.
6. EXPENSES. During the term of this Agreement, the Investment Advisor
will 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 Series.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, effective as of the date of the effectiveness of
this Agreement, the Series will pay the Investment Advisor and the Investment
Advisor will accept as full compensation therefor a fee, accrued daily and paid
monthly, at an annual rate of 0.45 of 1% of the daily net asset value of the
Series.
If in any fiscal year the aggregate expenses of the Series (as defined
under the securities regulations of any state having jurisdiction over the
Series) exceed the expense limitations of any such state, the Investment Advisor
will reimburse the Series for such excess expenses. The obligation of the
Investment Advisor to reimburse the Series 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 Advisor shall reimburse the
Series 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 Series 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 Advisor shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Series 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 misfeasance, bad
faith or gross negligence on the part of the Investment Advisor in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective at
such time as shall have been approved by the shareholders of the Series, in
accordance with the requirements under the 1940 Act, and the existing advisory
contract with Trainer, Xxxxxxx & Co., Inc. shall have been terminated, and,
unless sooner terminated as provided herein, shall continue in effect until
NOVEMBER 14, 1999, and thereafter for successive periods of twelve months each
ending on November of each year, provided such continuance is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Trustees who are not parties to this
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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
Board of Trustees or by vote of a majority of the outstanding voting securities
of the Series. Notwithstanding the foregoing, this Agreement may be terminated
at any time, without the payment of any penalty, by the Series (by vote of the
Board of Trustees or by vote of a majority of the outstanding voting securities
of the Series) on sixty days' written notice or by the Investment Advisor on
ninety days' written notice. 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 meaning of such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
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. No amendment of this Agreement shall be
effective until approved by vote of a majority of the outstanding voting
securities of the Series.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit 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 this Agreement shall not be affect
thereby. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Delaware law.
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.
Trainer, Xxxxxxx First Mutual Funds
on behalf of
TRAINER, XXXXXXX TOTAL RETURN BOND FUND
BY
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President
Trainer, Xxxxxxx & Co., Inc.
BY
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Managing Director
