INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the 10th day of October, 1994 by and between
CORTLAND TRUST, INC., a Maryland corporation (the "Fund") on behalf of its
Municipal Money Market Fund Series, and XXXXX & XXXX ASSET MANAGEMENT, L.P., a
Delaware limited partnership (the "Manager"), with respect to the following
recital of fact:
RECITAL
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended, (the
"1940 Act") and the rules and regulations promulgated thereunder; and
WHEREAS, the Manager is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund is authorized to issue shares of common stock in separate
series, with each such series representing shares in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to offer shares in three series called the U.S.
Government Fund, the Cortland General Money Market Fund and the Municipal Money
Market Fund (such series, being referred to as the "Series"); and
WHEREAS, the Fund and the Manager desire to enter into an agreement to
provide for comprehensive management and investment advisory services for the
Municipal Money Market Fund (the "MMMF") on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of the Manager. The Manager shall manage the Fund's affairs
and shall supervise all aspects of the Fund's operations (except as otherwise
set forth herein) and provide or procure on behalf of the Fund all investment
management, administrative and distribution services, as set forth below,
subject at all times to the policies and control of the Fund's Board of
Directors. The Manager shall give the Fund the benefit of its best judgment,
efforts and facilities in rendering its services as Manager. The Manager shall,
for all purposes herein, be deemed an independent contractor and shall have,
unless otherwise expressly provided or authorized, no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund. The
Manager's specific responsibilities shall include the following:
2. Investment Management. The Manager shall act as investment manager for
the MMMF and shall, in such capacity, supervise the investment and reinvestment
of the cash, securities or other properties comprising the MMMF's portfolio,
subject at all times to the
policies and control of the Fund's Board of Directors. The Manager shall give
the MMMF the benefit of its best judgment, efforts and facilities in rendering
its services as investment manager.
3. Investment Analysis and Implementation. In carrying out its obligations
under paragraph 2 hereof, the Manager shall:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the MMMF's
portfolio and whether concerning the individual issuers whose securities
are included in the MMMF's portfolio or the activities in which the issuers
engage, or with respect to securities which the Manager considers desirable
for inclusion in the MMMF's portfolio:
(b) determine which issuers and securities shall be represented in the
MMMF's portfolio and regularly report thereon to the Fund's Board of
Directors;
(c) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Fund's Board of Directors; and
(d) take, on behalf of the MMMF, all actions which appear to the Fund
necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of securities for the MMMF.
4. Broker-Dealer Relationships. The Manager is responsible for decisions to
buy and sell securities for the MMMF's portfolio, broker-dealer selection, and
negotiation of brokerage commission rates. Allocation of transactions, including
their frequency, to various dealers will be determined by the Manager it its
best judgment and in a manner deemed to be in the best interest of shareholders
of the MMMF rather than by any formula. The primary consideration will be prompt
execution of orders in an effective manner at the most favorable price.
5. Control by Board of Directors. Any investment program undertaken by the
Manager pursuant to this Agreement, as well as any other activities undertaken
by the Manager on behalf of the MMMF pursuant thereto, shall at all times be
subject to any directives of the Board of Directors of the Fund.
6. Administrative Services. The Manager shall perform or monitor the
performance of, administrative and management services in connection with the
operations of the MMMF and shall investigate, assist in the selection of and
conduct relations with any of the following employed by the Fund to render
services to the MMMF and its stockholders: custodians, depositories, transfer
agents, if any, dividend and disbursing agents, other shareholder service agents
(including overseeing broker-dealers and financial institutions which have
entered into agreements with the MMMF's distributor to provide shareholder
account and/or distribution services as contemplated under the provisions of any
distribution agreement to be entered into between the Fund and the MMMF's
distributor), accountants, attorneys, underwriters, corporate fiduciaries,
insurers, banks and such other persons in any such capacity deemed to be
necessary or advisable. The Manager shall arrange and pay for the periodic
updating, printing and related expenses of the registration statement relating
to the MMMF's shares and supplements thereto, prepare and pay for the
preparation of all proxy statements and other required reports to
2
shareholders, and register or qualify, and maintain such registration or
qualification, for sale of the amount of shares required by the laws of any
state in which the Fund deems it appropriate to offer the MMMF's shares for
sale. The Manager shall provide the Fund's Board of Directors on a regular basis
financial reports on and analyses of the MMMF's operations and the operations of
comparable investment companies. The Manager shall make reports to the Board of
Directors of its performance of obligations hereunder and furnish advice and
recommendations with respect to other aspects of the business and affairs of the
MMMF as the Fund shall determine desirable.
7. Accounting Services. The Manager shall furnish, or cause to be
furnished, to the MMMF all necessary accounting services, including:
(i) the computation of the MMMF's net asset value per share at such
times on such dates and in the manner specified in the Fund's Articles of
Incorporation, By-Laws and/or currently effective registration statement;
(ii) the computation of the MMMF's net income per share for dividend
purposes at such times and dates and in the manner specified in the Fund's
Articles of Incorporation, By-Laws and/or currently effective registration
statement;
(iii) the accrual of interest and other income payable in respect of
the MMMF's portfolio securities;
(iv) the preparation and filing of all federal, state and local tax
reports with respect to the MMMF; and
(v) the maintenance of the books, accounts and financial records of
the MMMF and preservation thereof in accordance with the applicable
provisions of the 1940 Act.
The Manager shall furnish to the Fund or cause to be furnished to the Fund,
without charge to the Fund, the services of a principal financial officer and
such assistant officers as the Board of Directors may require and shall furnish
without charge to the MMMF all necessary office space, equipment, supplies and
utilities in order to perform the accounting functions.
8. Shareholder Account Record Services. The Fund serves as transfer agent
for its own shares. The Manager agrees to furnish all necessary data processing
equipment, supplies, personnel and services required for the Fund to maintain
its shareholder account records. In connection therewith, the Manager shall
receive all daily share purchase and redemption information including
information with respect to dividends reinvested, and shall timely post said
information to the accounts of shareholders of the Fund. The Manager shall
assist the Fund in maintaining all required books and records with respect to
shareholder purchases, redemptions, dividends paid and dividends reinvested and
shall assist the Fund by preparing for filing all required reports and returns,
including federal reports with respect to dividends paid and with respect to
proper tax identification number reporting.
9. Shareholder Services and Distribution. The Fund has adopted a plan of
distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan") and has
employed a registered broker-
3
dealer (the "Distributor") to serve as principal underwriter of the MMMF's
shares. In connection with the Plan, the Manager will be responsible for
conducting the Fund's relations with the Distributor and with broker/dealers and
financial institutions that may establish and maintain accounts with the MMMF on
behalf of their clients or customers.
10. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Manager shall at all times conform to:
(a) all applicable provisions of the 1940 Act; and
(b) the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and the 1940 Act; and
(c) the provisions of the Fund's Articles of Incorporation, as
amended; and
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
11. Expenses. The expenses connected with the MMMF shall be borne by the
Manager as follows:
(a) If requested by the Fund, the Manager shall furnish, at its
expense and without cost to the Fund, the services of a President,
Secretary and one or more Vice Presidents of the Fund, to the extent that
such additional officers may be required by the Fund or for the proper
conduct of the affairs of the MMMF.
(b) The Manger shall further maintain, at its expense and without cost
to the MMMF, a trading function in order to carry out its obligations under
subparagraph (d) of paragraph 3 hereof to place orders for the purchase and
sale of portfolio securities for the MMMF.
(c) The Manager shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations
under this Agreement. The Manager shall also provide the equipment, office
space, facilities and supplies necessary to perform the services set forth
in paragraphs 6, 7, 8, and 9 hereof as well as provide equipment, office
space, facilities and supplies necessary to maintain one or more offices of
the Fund, as may from time to time be required by the Fund's Board of
Directors. The Manager shall pay the compensation, if any, of officers of
the Fund who are officers or employees of the Manager. The Manager shall
timely pay (or reduce its fee in an amount equal to) all expenses of the
MMMF unless expressly assumed by the Fund or the Distributor; the charges
and expenses of any registrar, any custodian or depository appointed by the
Fund for the safekeeping of its cash, portfolio securities and other
property, and any stock transfer, dividend or accounting agent or agents
appointed by the Fund; all fees payable by the Fund to federal, state, or
other governmental agencies; the costs and expenses of engraving or
printing stock certificates representing shares of the Fund; all costs and
expenses in connection with the registration and maintenance of
registration of the MMMF and its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing
fees, legal fees and disbursements of counsel); the costs and
4
expenses of printing, including typesetting, and distributing prospectuses
and statements of additional information of the Fund and supplements
thereto to the MMMF's shareholders; all expenses of shareholders' meetings
(other than as set forth in subparagraph (d)(i) of this paragraph 11 and of
preparing, printing and mailing proxy statements and reports to
shareholders; all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in shares or in cash;
charges and expenses of any outside service used for pricing of the MMMF's
shares; routine fees and expenses of legal counsel and of independent
accountants, in connection with any matter relating to the Fund; postage;
insurance premiums on property or personnel (including officers and
directors) of the Fund which inure to its benefit; and all other charges
and costs of the MMMF's operations.
(d) The Fund shall be responsible for payment of the following
expenses not borne by the Manager: (i) the fees of the directors who are
not "interested persons" of the Fund, as defined by the 1940 Act, and
travel and related expenses of the directors for attendance at meetings,
(ii) membership dues of any industry association, (iii) interest, taxes and
brokerage commissions, (iv) extraordinary expenses, if any, including but
not limited to legal claims and liabilities and litigation costs and any
indemnification related thereto, and (v) any shareholder service or
distribution fee payable by the Fund under the Plan.
12. Compensation. For the services to be rendered, the facilities furnished
and the expenses assumed by the Manager, the Fund shall pay to the Manager on
behalf of the MMMF monthly compensation at the sum of the amounts determined by
applying the following annual rates to the Series' aggregate daily net assets:
.80% of the first $500 million of the Series' aggregate daily net assets, .775%
of the Series' aggregate daily net assets in excess of $500 million but less
than $1 billion, .75% of the Series' aggregate daily net assets in excess of $1
billion but less than $1.5 billion, plus .725% of the Series' aggregate daily
net assets in excess of $1.5 billion and then multiplying the result by a
fraction, the denominator of which is the average daily net assets of the Series
for the period and the numerator of which is the average daily net assets of the
MMMF for the period. 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 upon documentation that expenses to be paid or
assumed by the Manager have been paid on a timely basis and the appropriate
reserves for anticipated expenses of the Fund have been provided for
("Documentation"). 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; provided
however, that the Fund may reserve final payment of any amounts due pending
presentation of documentation that the expenses to be paid or assumed by the
Manager have in fact been paid. Subject to the provisions of paragraph 13
hereof, payment of the Manager's compensation for the preceding month shall be
made as promptly as possible following the submission to the Fund of
Documentation after completion of the computations contemplated by paragraph 13
hereof.
13. Expense Limitation. In the event the operating expenses of the MMMF
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 the MMMF
imposed by the securities laws or regulations thereunder of any state or
jurisdiction in which the MMMF's shares are qualified for sale, as such
limitations may be raised or lowered from time to time, the Manager shall reduce
its
5
management fee to the extent of such excess and, if required, pursuant to any
such laws or regulations, will reimburse the Fund 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 MMMF. 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 MMMF 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 Manager's
fee shall be applicable.
14. Non-Exclusivity. The services of the Manager to the MMMF are not to be
deemed to be exclusive, and the Manager shall be free to render investment
advisory, investment management and corporate administrative or other services
to others (including other investment companies) and to engage in other
activities, so long as its services under this Agreement are not impaired
thereby. It is understood and agreed that the employees of the Manager and the
officers or directors of New England Investment Companies, Inc., the sole
general partner of the Manager, may serve as officers or directors of the Fund,
and that officers or directors of the Fund may serve as employees of the Manager
or as officers or directors of New England Investment Companies, Inc. to the
extent permitted by law; and that the employees of the Manager and the officers
and directors of New England Investment Companies, Inc. 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.
15. Non-Exclusive Use of the Name "Cortland". The Fund acknowledges that it
adopted its name through the permission of the Manager. The Manager hereby
consents to the non-exclusive use by the Fund of the name "Cortland" only so
long as the Manager serves as the Series' manager. The Fund covenants and agrees
to protect, exonerate, defend, indemnify and hold harmless the Manager, its
officers, agents and employees from and against any and all costs, losses,
claims, damages or liabilities, joint or several, including all legal expenses
which may arise or have arisen out of the Fund's use or misuse of the name
"Cortland" or out of any breach of or failure to comply with this paragraph 15.
Neither the Fund nor the MMMF shall distribute or circulate any prospectus,
proxy statement, sales literature, promotional material or other printed matter
required to be filed with the Securities and Exchange Commission under Section
24(b) of the 1940 Act which contains any reference to the Manager or using the
name "Cortland" without the prior approval of the Manager and shall submit all
such materials requiring approval of the Manager in draft form, allowing
sufficient time for review by the Manager and its counsel prior to any deadline
for printing. If the Manager or any successor to its business shall cease to
furnish services to the MMMF under this Agreement or similar contractual
arrangement, the Fund:
(a) as promptly as practicable, will take all necessary action to
cause its Articles of Incorporation to be amended to accomplish a change of
name; and
6
(b) within 90 days after the termination of this Agreement or such
similar contractual arrangement, shall cease to use in any other manner,
including but not limited to use in any prospectus, sales literature or
promotional material, the name "Cortland" or any name, xxxx or logotype
derived from it or similar to it or indicating that the MMMF is managed by
or otherwise associated with the Manager.
16. Term. This Agreement shall become effective at the close of business on
the date hereof and shall remain in force and effect, subject to paragraph 17
hereof, until September 15, 1995.
17. Renewal. Following the expiration of its initial term, the Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually:
(a)(i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the MMMF's outstanding voting securities (as defined in Section
2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director of the Fund), but votes cast in person
at a meeting specifically called for such purpose.
18. Termination. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Fund's Board of Directors or by vote of a
majority of the MMMF's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), or by the Manager, on sixty (60) days' written notice
to the other party. This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning defined in Section
2(a)(4) of the 1940 Act.
19. Liability of Manager. In the absence of willful misfeasance, bad faith
or gross negligence on the part of the Manager or its officers or employees, or
the officers, directors or employees of its sole general partner, New England
Investment Companies, Inc., or reckless disregard by the Manager of its duties
under this Agreement, the Manager shall not be liable to the Fund or to any
stockholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may by sustained in
the purchase, holding or sale of any security, provided however, that the
Manager shall at all times act in good faith and agrees to use its best efforts
within reasonable limits to insure the accuracy of all services described in
paragraph 8 hereof, but assumes no responsibility and shall not be liable for
loss or damage due to errors in connection with services provided under
paragraph 8 unless said error is caused by the Manager's negligence, bad faith
or willful misconduct or that of its employees.
20. 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 Xxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, and
the address of the Manager for this purpose shall be 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
7
21. 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 1940 Act shall be resolved by reference to such term
or provision of the 1940 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 1940 Act reflected in the 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 this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.
CORTLAND TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxxx
President
Attest:
/s/ Xxxxxxxxxx X. Xxxx
Secretary
XXXXX & XXXX ASSET MANAGEMENT, L.P.
By: XXXXX & TANG ASSET
MANAGEMENT, INC.
General Partner
By: /s/ Xxxxxxx XxXxxxxxx
Attest:
/s/ Xxxxxxxx X. Xxxxxx
Secretary
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the 10th day of October, 1994 by and between
CORTLAND TRUST, INC., a Maryland corporation (the "Fund") on behalf of its U.S.
Government Fund Series, and XXXXX & XXXX ASSET MANAGEMENT, L.P., a Delaware
limited partnership (the "Manager"), with respect to the following recital of
fact:
RECITAL
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended, (the
"1940 Act") and the rules and regulations promulgated thereunder; and
WHEREAS, the Manager is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund is authorized to issue shares of common stock in separate
series, with each such series representing shares in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to offer shares in three series called the U.S.
Government Fund, the Cortland General Money Market Fund and the Municipal Money
Market Fund (such series, being referred to as the "Series"); and
WHEREAS, the Fund and the Manager desire to enter into an agreement to
provide for comprehensive management and investment advisory services for the
U.S. Government Fund (the "USGF") on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of the Manager. The Manager shall manage the Fund's affairs
and shall supervise all aspects of the Fund's operations (except as otherwise
set forth herein) and provide or procure on behalf of the Fund all investment
management, administrative and distribution services, as set forth below,
subject at all times to the policies and control of the Fund's Board of
Directors. The Manager shall give the Fund the benefit of its best judgment,
efforts and facilities in rendering its services as Manager. The Manager shall,
for all purposes herein, be deemed an independent contractor and shall have,
unless otherwise expressly provided or authorized, no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund. The
Manager's specific responsibilities shall include the following:
2. Investment Management. The Manager shall act as investment manager for
the USGF and shall, in such capacity, supervise the investment and reinvestment
of the cash, securities or other properties comprising the USGF's portfolio,
subject at all times to the policies and control
of the Fund's Board of Directors. The Manager shall give the USGF the benefit of
its best judgment, efforts and facilities in rendering its services as
investment manager.
3. Investment Analysis and Implementation. In carrying out its obligations
under paragraph 2 hereof, the Manager shall:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the USGF's
portfolio and whether concerning the individual issuers whose securities
are included in the USGF's portfolio or the activities in which the issuers
engage, or with respect to securities which the Manager considers desirable
for inclusion in the USGF's portfolio:
(b) determine which issuers and securities shall be represented in the
USGF's portfolio and regularly report thereon to the Fund's Board of
Directors;
(c) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Fund's Board of Directors; and
(d) take, on behalf of the USGF, all actions which appear to the Fund
necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of securities for the USGF.
4. Broker-Dealer Relationships. The Manager is responsible for decisions to
buy and sell securities for the USGF's portfolio, broker-dealer selection, and
negotiation of brokerage commission rates. Allocation of transactions, including
their frequency, to various dealers will be determined by the Manager it its
best judgment and in a manner deemed to be in the best interest of shareholders
of the USGF rather than by any formula. The primary consideration will be prompt
execution of orders in an effective manner at the most favorable price.
5. Control by Board of Directors. Any investment program undertaken by the
Manager pursuant to this Agreement, as well as any other activities undertaken
by the Manager on behalf of the USGF pursuant thereto, shall at all times be
subject to any directives of the Board of Directors of the Fund.
6. Administrative Services. The Manager shall perform or monitor the
performance of, administrative and management services in connection with the
operations of the USGF and shall investigate, assist in the selection of and
conduct relations with any of the following employed by the Fund to render
services to the USGF and its stockholders: custodians, depositories, transfer
agents, if any, dividend and disbursing agents, other shareholder service agents
(including overseeing broker-dealers and financial institutions which have
entered into agreements with the USGF's distributor to provide shareholder
account and/or distribution services as contemplated under the provisions of any
distribution agreement to be entered into between the Fund and the USGF's
distributor), accountants, attorneys, underwriters, corporate fiduciaries,
insurers, banks and such other persons in any such capacity deemed to be
necessary or advisable. The Manager shall arrange and pay for the periodic
updating, printing and related expenses of the registration statement relating
to the USGF's shares and supplements thereto, prepare and pay for the
preparation of all proxy statements and other required reports to
2
shareholders, and register or qualify, and maintain such registration or
qualification, for sale of the amount of shares required by the laws of any
state in which the Fund deems it appropriate to offer the USGF's shares for
sale. The Manager shall provide the Fund's Board of Directors on a regular basis
financial reports on and analyses of the USGF's operations and the operations of
comparable investment companies. The Manager shall make reports to the Board of
Directors of its performance of obligations hereunder and furnish advice and
recommendations with respect to other aspects of the business and affairs of the
USGF as the Fund shall determine desirable.
7. Accounting Services. The Manager shall furnish, or cause to be
furnished, to the USGF all necessary accounting services, including:
(i) the computation of the USGF's net asset value per share at such
times on such dates and in the manner specified in the Fund's Articles of
Incorporation, By-Laws and/or currently effective registration statement;
(ii) the computation of the USGF's net income per share for dividend
purposes at such times and dates and in the manner specified in the Fund's
Articles of Incorporation, By-Laws and/or currently effective registration
statement;
(iii) the accrual of interest and other income payable in respect of
the USGF's portfolio securities;
(iv) the preparation and filing of all federal, state and local tax
reports with respect to the USGF; and
(v) the maintenance of the books, accounts and financial records of
the USGF and preservation thereof in accordance with the applicable
provisions of the 1940 Act.
The Manager shall furnish to the Fund or cause to be furnished to the Fund,
without charge to the Fund, the services of a principal financial officer and
such assistant officers as the Board of Directors may require and shall furnish
without charge to the USGF all necessary office space, equipment, supplies and
utilities in order to perform the accounting functions.
8. Shareholder Account Record Services. The Fund serves as transfer agent
for its own shares. The Manager agrees to furnish all necessary data processing
equipment, supplies, personnel and services required for the Fund to maintain
its shareholder account records. In connection therewith, the Manager shall
receive all daily share purchase and redemption information including
information with respect to dividends reinvested, and shall timely post said
information to the accounts of shareholders of the Fund. The Manager shall
assist the Fund in maintaining all required books and records with respect to
shareholder purchases, redemptions, dividends paid and dividends reinvested and
shall assist the Fund by preparing for filing all required reports and returns,
including federal reports with respect to dividends paid and with respect to
proper tax identification number reporting.
9. Shareholder Services and Distribution. The Fund has adopted a plan of
distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan") and has
employed a registered broker-
3
dealer (the "Distributor") to serve as principal underwriter of the USGF's
shares. In connection with the Plan, the Manager will be responsible for
conducting the Fund's relations with the Distributor and with broker/dealers and
financial institutions that may establish and maintain accounts with the USGF on
behalf of their clients or customers.
10. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Manager shall at all times conform to:
(a) all applicable provisions of the 1940 Act; and
(b) the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and the 1940 Act; and
(c) the provisions of the Fund's Articles of Incorporation, as
amended; and
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
11. Expenses. The expenses connected with the USGF shall be borne by the
Manager as follows:
(a) If requested by the Fund, the Manager shall furnish, at its
expense and without cost to the Fund, the services of a President,
Secretary and one or more Vice Presidents of the Fund, to the extent that
such additional officers may be required by the Fund or for the proper
conduct of the affairs of the USGF.
(b) The Manger shall further maintain, at its expense and without cost
to the USGF, a trading function in order to carry out its obligations under
subparagraph (d) of paragraph 3 hereof to place orders for the purchase and
sale of portfolio securities for the USGF.
(c) The Manager shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations
under this Agreement. The Manager shall also provide the equipment, office
space, facilities and supplies necessary to perform the services set forth
in paragraphs 6, 7, 8, and 9 hereof as well as provide equipment, office
space, facilities and supplies necessary to maintain one or more offices of
the Fund, as may from time to time be required by the Fund's Board of
Directors. The Manager shall pay the compensation, if any, of officers of
the Fund who are officers or employees of the Manager. The Manager shall
timely pay (or reduce its fee in an amount equal to) all expenses of the
USGF unless expressly assumed by the Fund or the Distributor; the charges
and expenses of any registrar, any custodian or depository appointed by the
Fund for the safekeeping of its cash, portfolio securities and other
property, and any stock transfer, dividend or accounting agent or agents
appointed by the Fund; all fees payable by the Fund to federal, state, or
other governmental agencies; the costs and expenses of engraving or
printing stock certificates representing shares of the Fund; all costs and
expenses in connection with the registration and maintenance of
registration of the USGF and its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing
fees, legal fees and disbursements of counsel); the costs and expenses of
printing, including typesetting, and distributing prospectuses and
statements of additional
4
information of the Fund and supplements thereto to the USGF's shareholders;
all expenses of shareholders' meetings (other than as set forth in
subparagraph (d)(i) of this paragraph 11 and of preparing, printing and
mailing proxy statements and reports to shareholders; all expenses incident
to the payment of any dividend, distribution, withdrawal or redemption,
whether in shares or in cash; charges and expenses of any outside service
used for pricing of the USGF's shares; routine fees and expenses of legal
counsel and of independent accountants, in connection with any matter
relating to the Fund; postage; insurance premiums on property or personnel
(including officers and directors) of the Fund which inure to its benefit;
and all other charges and costs of the USGF's operations.
(d) The Fund shall be responsible for payment of the following
expenses not borne by the Manager: (i) the fees of the directors who are
not "interested persons" of the Fund, as defined by the 1940 Act, and
travel and related expenses of the directors for attendance at meetings,
(ii) membership dues of any industry association, (iii) interest, taxes and
brokerage commissions, (iv) extraordinary expenses, if any, including but
not limited to legal claims and liabilities and litigation costs and any
indemnification related thereto, and (v) any shareholder service or
distribution fee payable by the Fund under the Plan.
12. Compensation. For the services to be rendered, the facilities furnished
and the expenses assumed by the Manager, the Fund shall pay to the Manager on
behalf of the USGF monthly compensation at the sum of the amounts determined by
applying the following annual rates to the Series' aggregate daily net assets:
.80% of the first $500 million of the Series' aggregate daily net assets, .775%
of the Series' aggregate daily net assets in excess of $500 million but less
than $1 billion, .75% of the Series' aggregate daily net assets in excess of $1
billion but less than $1.5 billion, plus .725% of the Series' aggregate daily
net assets in excess of $1.5 billion and then multiplying the result by a
fraction, the denominator of which is the average daily net assets of the Series
for the period and the numerator of which is the average daily net assets of the
USGF for the period. 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 upon documentation that expenses to be paid or
assumed by the Manager have been paid on a timely basis and the appropriate
reserves for anticipated expenses of the Fund have been provided for
("Documentation"). 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; provided
however, that the Fund may reserve final payment of any amounts due pending
presentation of documentation that the expenses to be paid or assumed by the
Manager have in fact been paid. Subject to the provisions of paragraph 13
hereof, payment of the Manager's compensation for the preceding month shall be
made as promptly as possible following the submission to the Fund of
Documentation after completion of the computations contemplated by paragraph 13
hereof.
13. Expense Limitation. In the event the operating expenses of the USGF
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 the USGF
imposed by the securities laws or regulations thereunder of any state or
jurisdiction in which the USGF's shares are qualified for sale, as such
limitations may be raised or lowered from time to time, the Manager shall reduce
its management fee to the extent of such excess and, if required, pursuant to
any such laws or
5
regulations, will reimburse the Fund 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 USGF. 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 USGF 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 Manager's fee shall be applicable.
14. Non-Exclusivity. The services of the Manager to the USGF are not to be
deemed to be exclusive, and the Manager shall be free to render investment
advisory, investment management and corporate administrative or other services
to others (including other investment companies) and to engage in other
activities, so long as its services under this Agreement are not impaired
thereby. It is understood and agreed that the employees of the Manager and the
officers or directors of New England Investment Companies, Inc., the sole
general partner of the Manager, may serve as officers or directors of the Fund,
and that officers or directors of the Fund may serve as employees of the Manager
or as officers or directors of New England Investment Companies, Inc. to the
extent permitted by law; and that the employees of the Manager and the officers
and directors of New England Investment Companies, Inc. 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.
15. Non-Exclusive Use of the Name "Cortland". The Fund acknowledges that it
adopted its name through the permission of the Manager. The Manager hereby
consents to the non-exclusive use by the Fund of the name "Cortland" only so
long as the Manager serves as the Series' manager. The Fund covenants and agrees
to protect, exonerate, defend, indemnify and hold harmless the Manager, its
officers, agents and employees from and against any and all costs, losses,
claims, damages or liabilities, joint or several, including all legal expenses
which may arise or have arisen out of the Fund's use or misuse of the name
"Cortland" or out of any breach of or failure to comply with this paragraph 15.
Neither the Fund nor the USGF shall distribute or circulate any prospectus,
proxy statement, sales literature, promotional material or other printed matter
required to be filed with the Securities and Exchange Commission under Section
24(b) of the 1940 Act which contains any reference to the Manager or using the
name "Cortland" without the prior approval of the Manager and shall submit all
such materials requiring approval of the Manager in draft form, allowing
sufficient time for review by the Manager and its counsel prior to any deadline
for printing. If the Manager or any successor to its business shall cease to
furnish services to the USGF under this Agreement or similar contractual
arrangement, the Fund:
(a) as promptly as practicable, will take all necessary action to
cause its Articles of Incorporation to be amended to accomplish a change of
name; and
6
(b) within 90 days after the termination of this Agreement or such
similar contractual arrangement, shall cease to use in any other manner,
including but not limited to use in any prospectus, sales literature or
promotional material, the name "Cortland" or any name, xxxx or logotype
derived from it or similar to it or indicating that the USGF is managed by
or otherwise associated with the Manager.
16. Term. This Agreement shall become effective at the close of business on
the date hereof and shall remain in force and effect, subject to paragraph 17
hereof, until September 15, 1995.
17. Renewal. Following the expiration of its initial term, the Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually:
(a)(i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the USGF's outstanding voting securities (as defined in Section
2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director of the Fund), but votes cast in person
at a meeting specifically called for such purpose.
18. Termination. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Fund's Board of Directors or by vote of a
majority of the USGF's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), or by the Manager, on sixty (60) days' written notice
to the other party. This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning defined in Section
2(a)(4) of the 1940 Act.
19. Liability of Manager. In the absence of willful misfeasance, bad faith
or gross negligence on the part of the Manager or its officers or employees, or
the officers, directors or employees of its sole general partner, New England
Investment Companies, Inc., or reckless disregard by the Manager of its duties
under this Agreement, the Manager shall not be liable to the Fund or to any
stockholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may by sustained in
the purchase, holding or sale of any security, provided however, that the
Manager shall at all times act in good faith and agrees to use its best efforts
within reasonable limits to insure the accuracy of all services described in
paragraph 8 hereof, but assumes no responsibility and shall not be liable for
loss or damage due to errors in connection with services provided under
paragraph 8 unless said error is caused by the Manager's negligence, bad faith
or willful misconduct or that of its employees.
20. 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 Xxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, and
the address of the Manager for this purpose shall be 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
7
21. 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 1940 Act shall be resolved by reference to such term
or provision of the 1940 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 1940 Act reflected in the 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 this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.
CORTLAND TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxxx
President
Attest:
/s/ Xxxxxxxxxx X. Xxxx
Secretary
XXXXX & XXXX ASSET MANAGEMENT, L.P.
By: XXXXX & TANG ASSET
MANAGEMENT, INC.
General Partner
By: /s/ Xxxxxxx XxXxxxxxx
Attest:
/s/ Xxxxxxxx X. Xxxxxx
Secretary
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the 10th day of October, 1994 by and between
CORTLAND TRUST, INC., a Maryland corporation (the "Fund") on behalf of its
Cortland General Money Market Fund Series, and XXXXX & XXXX ASSET MANAGEMENT,
L.P., a Delaware limited partnership (the "Manager"), with respect to the
following recital of fact:
RECITAL
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended, (the
"1940 Act") and the rules and regulations promulgated thereunder; and
WHEREAS, the Manager is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund is authorized to issue shares of common stock in separate
series, with each such series representing shares in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to offer shares in three series called the U.S.
Government Fund, the Cortland General Money Market Fund and the Cortland
Municipal Money Market Fund (such series, being referred to as the "Series");
and
WHEREAS, the Fund and the Manager desire to enter into an agreement to
provide for comprehensive management and investment advisory services for the
Cortland General Money Market Fund (the "CGMMF") on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of the Manager. The Manager shall manage the Fund's affairs
and shall supervise all aspects of the Fund's operations (except as otherwise
set forth herein) and provide or procure on behalf of the Fund all investment
management, administrative and distribution services, as set forth below,
subject at all times to the policies and control of the Fund's Board of
Directors. The Manager shall give the Fund the benefit of its best judgment,
efforts and facilities in rendering its services as Manager. The Manager shall,
for all purposes herein, be deemed an independent contractor and shall have,
unless otherwise expressly provided or authorized, no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund. The
Manager's specific responsibilities shall include the following:
2. Investment Management. The Manager shall act as investment manager for
the CGMMF and shall, in such capacity, supervise the investment and reinvestment
of the cash, securities or other properties comprising the CGMMF's portfolio,
subject at all times to the
policies and control of the Fund's Board of Directors. The Manager shall give
the CGMMF the benefit of its best judgment, efforts and facilities in rendering
its services as investment manager.
3. Investment Analysis and Implementation. In carrying out its obligations
under paragraph 2 hereof, the Manager shall:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
CGMMF's portfolio and whether concerning the individual issuers whose
securities are included in the CGMMF's portfolio or the activities in which
the issuers engage, or with respect to securities which the Manager
considers desirable for inclusion in the CGMMF's portfolio:
(b) determine which issuers and securities shall be represented in the
CGMMF's portfolio and regularly report thereon to the Fund's Board of
Directors;
(c) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Fund's Board of Directors; and
(d) take, on behalf of the CGMMF, all actions which appear to the Fund
necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of securities for the CGMMF.
4. Broker-Dealer Relationships. The Manager is responsible for decisions to
buy and sell securities for the CGMMF's portfolio, broker-dealer selection, and
negotiation of brokerage commission rates. Allocation of transactions, including
their frequency, to various dealers will be determined by the Manager it its
best judgment and in a manner deemed to be in the best interest of shareholders
of the CGMMF rather than by any formula. The primary consideration will be
prompt execution of orders in an effective manner at the most favorable price.
5. Control by Board of Directors. Any investment program undertaken by the
Manager pursuant to this Agreement, as well as any other activities undertaken
by the Manager on behalf of the CGMMF pursuant thereto, shall at all times be
subject to any directives of the Board of Directors of the Fund.
6. Administrative Services. The Manager shall perform or monitor the
performance of, administrative and management services in connection with the
operations of the CGMMF and shall investigate, assist in the selection of and
conduct relations with any of the following employed by the Fund to render
services to the CGMMF and its stockholders: custodians, depositories, transfer
agents, if any, dividend and disbursing agents, other shareholder service agents
(including overseeing broker-dealers and financial institutions which have
entered into agreements with the CGMMF's distributor to provide shareholder
account and/or distribution services as contemplated under the provisions of any
distribution agreement to be entered into between the Fund and the CGMMF's
distributor), accountants, attorneys, underwriters, corporate fiduciaries,
insurers, banks and such other persons in any such capacity deemed to be
necessary or advisable. The Manager shall arrange and pay for the periodic
updating, printing and related expenses of the registration statement relating
to the CGMMF's shares and supplements thereto, prepare and pay for the
preparation of all proxy statements and other required reports to shareholders,
and register or qualify, and maintain such registration or qualification, for
sale of the amount of shares required by the laws of any state in which the Fund
deems it appropriate to offer the CGMMF's shares for sale. The Manager shall
provide the Fund's Board of Directors on a regular basis financial reports on
and analyses of the CGMMF's operations and the operations of comparable
investment companies. The Manager shall make reports to
2
the Board of Directors of its performance of obligations hereunder and furnish
advice and recommendations with respect to other aspects of the business and
affairs of the CGMMF as the Fund shall determine desirable.
7. Accounting Services. The Manager shall furnish, or cause to be
furnished, to the CGMMF all necessary accounting services, including:
(i) the computation of the CGMMF's net asset value per share at such
times on such dates and in the manner specified in the Fund's Articles of
Incorporation, By-Laws and/or currently effective registration statement;
(ii) the computation of the CGMMF's net income per share for dividend
purposes at such times and dates and in the manner specified in the Fund's
Articles of Incorporation, By-Laws and/or currently effective registration
statement;
(iii) the accrual of interest and other income payable in respect of
the CGMMF's portfolio securities;
(iv) the preparation and filing of all federal, state and local tax
reports with respect to the CGMMF; and
(v) the maintenance of the books, accounts and financial records of
the CGMMF and preservation thereof in accordance with the applicable
provisions of the 1940 Act.
The Manager shall furnish to the Fund or cause to be furnished to the Fund,
without charge to the Fund, the services of a principal financial officer and
such assistant officers as the Board of Directors may require and shall furnish
without charge to the CGMMF all necessary office space, equipment, supplies and
utilities in order to perform the accounting functions.
8. Shareholder Account Record Services. The Fund serves as transfer agent
for its own shares. The Manager agrees to furnish all necessary data processing
equipment, supplies, personnel and services required for the Fund to maintain
its shareholder account records. In connection therewith, the Manager shall
receive all daily share purchase and redemption information including
information with respect to dividends reinvested, and shall timely post said
information to the accounts of shareholders of the Fund. The Manager shall
assist the Fund in maintaining all required books and records with respect to
shareholder purchases, redemptions, dividends paid and dividends reinvested and
shall assist the Fund by preparing for filing all required reports and returns,
including federal reports with respect to dividends paid and with respect to
proper tax identification number reporting.
3
9. Shareholder Services and Distribution. The Fund has adopted a plan of
distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan") and has
employed a registered broker-dealer (the "Distributor") to serve as principal
underwriter of the CGMMF's shares. In connection with the Plan, the Manager will
be responsible for conducting the Fund's relations with the Distributor and with
broker/dealers and financial institutions that may establish and maintain
accounts with the CGMMF on behalf of their clients or customers.
10. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Manager shall at all times conform to:
(a) all applicable provisions of the 1940 Act; and
(b) the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and the 1940 Act; and
(c) the provisions of the Fund's Articles of Incorporation, as
amended; and
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
11. Expenses. The expenses connected with the CGMMF shall be borne by the
Manager as follows:
(a) If requested by the Fund, the Manager shall furnish, at its
expense and without cost to the Fund, the services of a President,
Secretary and one or more Vice Presidents of the Fund, to the extent that
such additional officers may be required by the Fund or for the proper
conduct of the affairs of the CGMMF.
(b) The Manger shall further maintain, at its expense and without cost
to the CGMMF, a trading function in order to carry out its obligations
under subparagraph (d) of paragraph 3 hereof to place orders for the
purchase and sale of portfolio securities for the CGMMF.
(c) The Manager shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations
under this Agreement. The Manager shall also provide the equipment, office
space, facilities and supplies necessary to perform the services set forth
in paragraphs 6, 7, 8, and 9 hereof as well as provide equipment, office
space, facilities and supplies necessary to maintain one or more offices of
the Fund, as may from time to time be required by the Fund's Board of
Directors. The Manager shall pay the compensation, if any, of officers of
the Fund who are officers or employees of the Manager. The Manager shall
timely pay (or reduce its fee in an amount equal to) all expenses of the
CGMMF unless expressly assumed by the Fund or the Distributor; the charges
and expenses of any registrar, any custodian or depository appointed by the
Fund for the safekeeping of its cash, portfolio securities and other
property, and any stock transfer, dividend or accounting agent or agents
appointed by the Fund; all fees payable by the Fund to federal, state, or
other governmental agencies; the costs and expenses of engraving or
printing stock certificates representing shares of the Fund; all costs and
expenses in connection with the registration and maintenance of
registration of the CGMMF and
4
its shares with the Securities and Exchange Commission and various states
and other jurisdictions (including filing fees, legal fees and
disbursements of counsel); the costs and expenses of printing, including
typesetting, and distributing prospectuses and statements of additional
information of the Fund and supplements thereto to the CGMMF's
shareholders; all expenses of shareholders' meetings (other than as set
forth in subparagraph (d)(i) of this paragraph 11 and of preparing,
printing and mailing proxy statements and reports to shareholders; all
expenses incident to the payment of any dividend, distribution, withdrawal
or redemption, whether in shares or in cash; charges and expenses of any
outside service used for pricing of the CGMMF's shares; routine fees and
expenses of legal counsel and of independent accountants, in connection
with any matter relating to the Fund; postage; insurance premiums on
property or personnel (including officers and directors) of the Fund which
inure to its benefit; and all other charges and costs of the CGMMF's
operations.
(d) The Fund shall be responsible for payment of the following
expenses not borne by the Manager: (i) the fees of the directors who are
not "interested persons" of the Fund, as defined by the 1940 Act, and
travel and related expenses of the directors for attendance at meetings,
(ii) membership dues of any industry association, (iii) interest, taxes and
brokerage commissions, (iv) extraordinary expenses, if any, including but
not limited to legal claims and liabilities and litigation costs and any
indemnification related thereto, and (v) any shareholder service or
distribution fee payable by the Fund under the Plan.
12. Compensation. For the services to be rendered, the facilities furnished
and the expenses assumed by the Manager, the Fund shall pay to the Manager on
behalf of the CGMMF monthly compensation at the sum of the amounts determined by
applying the following annual rates to the Series' aggregate daily net assets:
.80% of the first $500 million of the Series' aggregate daily net assets, .775%
of the Series' aggregate daily net assets in excess of $500 million but less
than $1 billion, .75% of the Series' aggregate daily net assets in excess of $1
billion but less than $1.5 billion, plus .725% of the Series' aggregate daily
net assets in excess of $1.5 billion and then multiplying the result by a
fraction, the denominator of which is the average daily net assets of the Series
for the period and the numerator of which is the average daily net assets of the
CGMMF for the period. 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 upon documentation that expenses to be paid or
assumed by the Manager have been paid on a timely basis and the appropriate
reserves for anticipated expenses of the Fund have been provided for
("Documentation"). 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; provided
however, that the Fund may reserve final payment of any amounts due pending
presentation of documentation that the expenses to be paid or assumed by the
Manager have in fact been paid. Subject to the provisions of paragraph 13
hereof, payment of the Manager's compensation for the preceding month shall be
made as promptly as possible following the submission to the Fund of
Documentation after completion of the computations contemplated by paragraph 13
hereof.
13. Expense Limitation. In the event the operating expenses of the CGMMF
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 the
CGMMF imposed by the securities laws or
5
regulations thereunder of any state or jurisdiction in which the CGMMF's shares
are qualified for sale, as such limitations may be raised or lowered from time
to time, the 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 Fund 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 CGMMF. 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 CGMMF 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 Manager's fee shall be applicable.
14. Non-Exclusivity. The services of the Manager to the CGMMF are not to be
deemed to be exclusive, and the Manager shall be free to render investment
advisory, investment management and corporate administrative or other services
to others (including other investment companies) and to engage in other
activities, so long as its services under this Agreement are not impaired
thereby. It is understood and agreed that the employees of the Manager and the
officers or directors of New England Investment Companies, Inc., the sole
general partner of the Manager, may serve as officers or directors of the Fund,
and that officers or directors of the Fund may serve as employees of the Manager
or as officers or directors of New England Investment Companies, Inc. to the
extent permitted by law; and that the employees of the Manager and the officers
and directors of New England Investment Companies, Inc. 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.
15. Non-Exclusive Use of the Name "Cortland". The Fund acknowledges that it
adopted its name through the permission of the Manager. The Manager hereby
consents to the non-exclusive use by the Fund of the name "Cortland" only so
long as the Manager serves as the Series' manager. The Fund covenants and agrees
to protect, exonerate, defend, indemnify and hold harmless the Manager, its
officers, agents and employees from and against any and all costs, losses,
claims, damages or liabilities, joint or several, including all legal expenses
which may arise or have arisen out of the Fund's use or misuse of the name
"Cortland" or out of any breach of or failure to comply with this paragraph 15.
Neither the Fund nor the CGMMF shall distribute or circulate any
prospectus, proxy statement, sales literature, promotional material or other
printed matter required to be filed with the Securities and Exchange Commission
under Section 24(b) of the 1940 Act which contains any reference to the Manager
or using the name "Cortland" without the prior approval of the Manager and shall
submit all such materials requiring approval of the Manager in draft form,
allowing sufficient time for review by the Manager and its counsel prior to any
deadline for printing. If the Manager or any successor to its business shall
cease to furnish services to the CGMMF under this Agreement or similar
contractual arrangement, the Fund:
6
(a) as promptly as practicable, will take all necessary action to
cause its Articles of Incorporation to be amended to accomplish a change of
name; and
(b) within 90 days after the termination of this Agreement or such
similar contractual arrangement, shall cease to use in any other manner,
including but not limited to use in any prospectus, sales literature or
promotional material, the name "Cortland" or any name, xxxx or logotype
derived from it or similar to it or indicating that the CGMMF is managed by
or otherwise associated with the Manager.
16. Term. This Agreement shall become effective at the close of business on
the date hereof and shall remain in force and effect, subject to paragraph 17
hereof, until September 15, 1995.
17. Renewal. Following the expiration of its initial term, the Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually:
(a)(i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the CGMMF's outstanding voting securities (as defined in
Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director of the Fund), but votes cast in person
at a meeting specifically called for such purpose.
18. Termination. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Fund's Board of Directors or by vote of a
majority of the CGMMF's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), or by the Manager, on sixty (60) days' written notice
to the other party. This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning defined in Section
2(a)(4) of the 1940 Act.
19. Liability of Manager. In the absence of willful misfeasance, bad faith
or gross negligence on the part of the Manager or its officers or employees, or
the officers, directors or employees of its sole general partner, New England
Investment Companies, Inc., or reckless disregard by the Manager of its duties
under this Agreement, the Manager shall not be liable to the Fund or to any
stockholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may by sustained in
the purchase, holding or sale of any security, provided however, that the
Manager shall at all times act in good faith and agrees to use its best efforts
within reasonable limits to insure the accuracy of all services described in
paragraph 8 hereof, but assumes no responsibility and shall not be liable for
loss or damage due to errors in connection with services provided under
paragraph 8 unless said error is caused by the Manager's negligence, bad faith
or willful misconduct or that of its employees.
20. 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 Xxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx
0
Xxxxxx 00000, and the address of the Manager for this purpose shall be 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
21. 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 1940 Act shall be resolved by reference to such term
or provision of the 1940 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 1940 Act reflected in the 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 this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.
CORTLAND TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxxx
President
Attest:
/s/ Xxxxxxxxxx X. Xxxx
Secretary
XXXXX & XXXX ASSET MANAGEMENT, L.P.
By: XXXXX & TANG ASSET
MANAGEMENT, INC.
General Partner
By: /s/ Xxxxxxx XxXxxxxxx
Attest:
/s/ Xxxxxxxx X. Xxxxxx
Secretary
