INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
AND
XXXXX X. XXXXXX & COMPANY
AGREEMENT made as of the the 3rd day of September, 1996 by and between
The OFFITBANK Variable Insurance Fund, Inc., a Maryland corporation which may
issue one or more series of shares (hereinafter the "Company"), and Xxxxx X.
Xxxxxx and Company, a New York partnership (hereinafter the "Adviser").
1. STRUCTURE OF AGREEMENT. The Company is entering into this Agreement
on behalf of the Company's DJG Value Equity Fund series (the "Fund") severally
and not jointly with respect to the other series portfolios of the Company. The
responsibilities and benefits set forth in this Agreement shall relate solely to
the Fund and no other series portfolio of the Company shall have any
responsibility for any obligation arising out of this Agreement. Without
otherwise limiting the generality of the foregoing,
(a) any breach of any term of this Agreement regarding the Company with
respect to the Fund shall not create a right or obligation with
respect to any other series portfolio of the Company;
(b) under no circumstances shall the Adviser have the right to set off
claims relating to the Fund by applying property of any other series
portfolio of the Company; and
(c) the business and contractual relationships created by this Agreement,
consideration for entering into this Agreement, and the consequences
of such relationship and consideration relate solely to the Company
and the Fund.
2. DELIVERY OF DOCUMENTS. The Company has delivered to the Adviser
copies of each of the following documents and will deliver to it all future
amendments and supplements thereto, if any:
(a) The Company's Articles of Incorporation (the "Articles");
(b) The By-Laws of the Company;
(c) Resolutions of the Board of Directors of the Company authorizing the
execution and delivery of this Agreement;
(d) The Company's Registration Statement under the Securities Act of 1933,
as amended (the "1933 Act"), and the Investment Company Act of 1940,
as amended (the "1940 Act"), on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission") on July 20, 1994 and all
subsequent amendments thereto relating to the Fund (the "Registration
Statement");
(e) Notification of Registration of the Company under the 1940 Act on Form
N-8A as filed with the Commission; and
(f) The Prospectus and Statement of Additional Information of the Fund
(collectively, the "Prospectus").
3. INVESTMENT ADVISORY SERVICES. The Company hereby appoints the
Adviser, and the Adviser hereby undertakes, to act as investment adviser of the
Fund and, subject to the supervision of the Company's Board of Directors, to (a)
make investment strategy decisions for the Fund, (b) manage the investing and
reinvesting of the Fund's assets, (c) place purchase and sale orders on behalf
of the Fund and (d) provide continuous supervision of the Fund's investment
portfolio. The Adviser shall, subject to review by the Board of Directors,
furnish such other services as the Adviser shall from time to time determine to
be necessary or useful to perform its obligations under this Agreement.
As manager of the Fund's assets, the Adviser shall make investments for
the Fund's account in accordance with the investment objectives and limitations
set forth in the Articles, the Prospectuses, the 1940 Act, the provisions of the
Internal Revenue Code of 1986, as amended, including Subchapters L and M,
relating to variable contracts and regulated investment companies, respectively,
and policy decisions adopted by the Company's Board of Directors from time to
time. The Adviser shall advise the Company's officers and Board of Directors, at
such times as the Company's Board of Directors may specify, of investments made
for the Fund's account and shall, when requested by the Company's officers or
Board of Directors, supply the reasons for making such investments.
The Adviser is authorized on behalf of the Company, from time to time
when deemed to be in the best interests of the Company and to the extent
permitted by applicable law, regulations and public positions of the Securities
and Exchange Commission, to aggregate the securities to be sold or purchased for
the Fund with those sold or purchased for other accounts advised or managed by
the Adviser, including proprietary accounts, in order to obtain best execution
provided that the Fund is not disadvantaged vis a vis any other account, in
accordance with the Fund's Code of Ethics. The Adviser is further authorized, to
the extent
-2-
permitted by applicable law, to select brokers for the execution of trades for
the Company, which broker may be the adviser or an affiliate of the Adviser,
subject to best execution.
4. EXPENSES. (a) The Adviser shall, at its expense, provide the Fund
with office space, furnishings and equipment and personnel required by it to
perform the services to be provided by the Adviser pursuant to this Agreement.
(b) Except as provided in subparagraph (a), the Company shall be
responsible for all of the Fund's expenses and liabilities, including, but not
limited to, taxes; interest; fees (including fees paid to its directors who are
not affiliated with the Adviser or any of its affiliates); fees payable to the
Securities and Exchange Commission; state securities qualification fees; costs
of preparing and printing Prospectuses for regulatory purposes and for
distribution to existing shareholders; advisory and administration fees; charges
of the custodian and transfer agent; insurance premiums; auditing and legal
expenses; costs of shareholders' reports and shareholders' meetings; any
extraordinary expenses; and brokerage fees and commissions, if any, in
connection with the purchase or sale of portfolio securities.
5. COMPENSATION. In consideration of the services to be rendered by the
Adviser under this Agreement, the Company shall pay the Adviser monthly fees on
the first Business Day (as defined in the Prospectuses) of each month based upon
the average daily net assets of the Fund during the preceding month (as
determined on the days and at the time set forth in the Prospectus for
determining net asset value per share) at the annual rate of 0.80%. If the fees
payable to the Adviser pursuant to this paragraph begin to accrue before the end
of any month or if this Agreement terminates before the end of any month, the
fees for the period from such date to the end of such month or from the
beginning of such month to the date of termination, as the case may be, shall be
calculated based on the average daily net assets of the days of the month that
the agreement was in effect. For purposes of calculating each such monthly fee,
the value of the Fund's net assets shall be computed in the manner specified in
the Prospectus and the Articles for the computation of the value of the Fund's
net assets in connection with the determination of the net asset value of shares
of the Fund's capital stock.
If the aggregate expenses incurred by, or allocated to, the Fund in any
fiscal year shall exceed the lowest expense limitation, if applicable to the
Fund, imposed by state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Adviser shall
reimburse the Fund for such excess. The Adviser's reimbursement obligation will
be limited to the amount of fees it received under this Agreement during the
period in which such expense limitations were exceeded, unless otherwise
required by applicable laws or regulations. With respect to portions of a fiscal
year in which this Agreement shall be in effect, the foregoing limitations shall
be prorated according to the proportion which that portion of the fiscal year
bears to the full fiscal year. Any payments required to be made by this
paragraph shall be made once a year promptly after the end of the Company's
fiscal year.
-3-
In consideration of the Adviser's undertaking to render the services
described in this Agreement, the Company agrees that the Adviser shall not be
liable under this Agreement for any error of judgment or mistake of law or for
any loss suffered by the Company in connection with the performance of this
Agreement, provided that nothing in this Agreement shall be deemed to protect or
purport to protect the Investment Adviser against any liability to the Company
or its stockholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties under this Agreement or by reason of the Adviser's reckless
disregard of its obligations and duties hereunder.
6. NON-EXCLUSIVE SERVICES. Except to the extent necessary to perform
the Investment Adviser's obligations under this Agreement, nothing herein shall
be deemed to limit or restrict the right of the Adviser, or any affiliate of the
Adviser, including any employee of the Adviser, to engage in any other business
or to devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
7. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall
become effective on the date hereof, provided that it shall have been approved
by a majority of the outstanding voting securities of the Fund, in accordance
with the requirements of the 1940 Act, or such later date as may be agreed by
the parties following such shareholder approval (the "Effective Date").
(a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph, this Agreement shall continue in force for two years from the
Effective Date and indefinitely thereafter, but only so long as the continuance
after such date shall be specifically approved at least annually by vote of the
Directors of the Company or by vote of a majority of the outstanding voting
securities of the Fund.
(b) This Agreement may be modified by mutual consent, such consent on
the part of the Company to be authorized by vote of a majority of the
outstanding voting securities of the Fund.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Directors of the
Company who are not parties to this Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on thirty (30) days prior
written notice to the other, terminate this Agreement, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
by action of its authorized officers or, with
-4-
respect to a Fund, by vote of a majority of the outstanding voting securities of
the Fund. This Agreement shall terminate automatically in the event of its
assignment.
8. USE OF NAME. Upon expiration or earlier termination of this
Agreement, the Company shall, as to any reference to "Xxxxx X. Xxxxxx and
Company" or "DJG" (hereinafter, collectively, "DJG") as promptly as practicable
change the name of the Fund so as to eliminate all reference to "DJG", and
thereafter the Fund shall cease transacting business in any corporate name using
the words "DJG" or any other reference to the Adviser or "DJG". The foregoing
rights of the Adviser and obligations of the Company shall not deprive the
Adviser, or any affiliate thereof which has "DJG" in its name, of, but shall be
in addition to, any other rights or remedies to which the Adviser and any such
affiliate may be entitled in law or equity by reason of any breach of this
Agreement by the Company, and the failure or omission of the Adviser to request
a change of the Fund's name or a cessation of the use of the name of "DJG" as
described in this paragraph shall not under any circumstances be deemed a waiver
of the right to require such change or cessation at any time thereafter for the
same or any subsequent breach.
9. CERTAIN DEFINITIONS. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
10. INDEPENDENT CONTRACTOR. The Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Company, from time
to time, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
11. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Maryland, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
12. SEVERABILITY. 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 affected thereby and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
13. NOTICES. Notices of any kind to be given to the Adviser hereunder
by the Company shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 or at such other address or to such individual as shall be so specified by
the Adviser to the Company. Notices of any kind
-5-
to be given to the Company hereunder by the Adviser shall be in writing and
shall be duly given if mailed or delivered to the Company at 000 Xxxx Xxxxxx,
Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 or at such other address or to such
individual as shall be so specified by the Company to the Adviser. Notices shall
be effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, and their
respective seals to be hereunto affixed, all as of the date written above.
THE OFFITBANK VARIABLE INSURANCE XXXXX X. XXXXXX & COMPANY
FUND, INC.
By: /s/Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx
------------------------- -------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxxx
President Co-Managing Partner
-6-
