EXHIBIT 5(r)
ADVISORY AGREEMENT
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AGREEMENT made this ___ day of July, 1998, by and between Xxxxxx Xxxxxx
Funds, a Massachusetts business trust (the "Trust"), with respect to its Xxxxxx
Xxxxxx High Yield Fund II series (the "Series"), and Xxxxxx, Xxxxxx & Company,
Incorporated, a Massachusetts corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust and the Adviser wish to enter into an agreement setting
forth the terms upon which the Adviser will perform certain services for the
Series;
NOW THEREFORE, in consideration of the premises and covenants hereinafter
contained, the parties agree as follows:
1. The Trust hereby employs the Adviser to manage the investment and
reinvestment of the assets belonging to the Series and to perform the other
services herein set forth, subject to the supervision of the Board of Trustees
of the Trust. The Adviser hereby accepts such employment and agrees, at its own
expense, to render the services and to assume the obligations herein set forth,
for the compensation herein provided. The Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
2. In carrying out its obligations to manage the investment and
reinvestment of the assets belonging to the Series, the Adviser shall:
(a) obtain and evaluate such economic, statistical and financial data
and information and undertake such additional investment research as it
shall believe necessary or advisable for the management of the investment
and reinvestment of the assets belonging to the Series in accordance with
the Series' investment objective and policies;
(b) take such steps as are necessary to implement the investment
policies of the Series by purchase and sale of securities, including the
placing of orders for such purchase and sale; and
(c) regularly report to the Board of Trustees with respect to the
implementation of the investment policies of the Series.
3. All activities in connection with the management of the affairs of the
Series undertaken by the Adviser pursuant to this Agreement shall at all times
be subject to the supervision and control of the Board of Trustees, any duly
constituted committee thereof or any officer of the Trust acting pursuant to
like authority.
4. In addition to performing at its expense the obligations set forth in
section 2 hereof, the Adviser shall furnish to the Trust at the Adviser's own
expense or pay the expenses of the Trust for the following:
(a) office space in such place or places as may be agreed upon from
time to time, and all necessary office supplies, facilities and equipment;
(b) necessary executive and other personnel for managing the affairs
of the Series (exclusive of those related to and to be performed under
contract for custodial, transfer, dividend and plan agency services by the
entity or entities selected to perform such services and exclusive of any
managerial functions described in section 5); and
(c) compensation, if any, of Trustees of the Trust who are directors,
officers, partners or employees of the Adviser or any affiliated person
(other than a registered investment company) of the Adviser.
5. Except as the Adviser may otherwise agree from time to time, nothing
in section 4 hereof shall require the Adviser to bear, or to reimburse the Trust
for:
(a) any of the costs of printing and distributing the items referred
to in subsection (n) of this section 5;
(b) any of the costs of preparing, printing and distributing sales
literature;
(c) compensation of Trustees of the Trust who are not directors,
officers, partners or employees of the Adviser or of any affiliated person
(other than a registered investment company) of the Adviser;
(d) registration, filing and other fees in connection with
requirements of regulatory authorities;
(e) the charges and expenses of the custodian appointed by the Trust
for custodial, paying agent, transfer agent and plan agent services;
(f) charges and expenses of independent accountants retained by the
Trust;
(g) charges and expenses of any transfer agents and registrars
appointed by the Trust;
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(h) brokers' commissions and issue and transfer taxes chargeable to
the Trust in connection with securities transactions to which the Trust is
a party;
(i) taxes and fees payable by the Trust to Federal, State or other
governmental agencies;
(j) any cost of certificates representing shares of the Series;
(k) legal fees and expenses in connection with the affairs of the
Trust including registering and qualifying its shares with Federal and
State regulatory authorities;
(l) expenses of meetings of shareholders and Trustees of the Trust;
(m) interest, including interest on borrowings by the Trust;
(n) the cost of services, including services of counsel, required in
connection with the preparation of the Trust's registration statements and
prospectuses, including amendments and revisions thereto, annual,
semiannual and other periodic reports of the Trust, and notices and proxy
solicitation material furnished to shareholders of the Trust or regulatory
authorities; and
(o) the Trust's expenses of bookkeeping, accounting, auditing and
financial reporting, including related clerical expenses.
6. The services of the Adviser to the Trust hereunder are not to be
deemed exclusive and the Adviser shall be free to render similar services to
others, so long as its services hereunder are not impaired thereby.
7. As full compensation for all services rendered, facilities furnished
and expenses borne by the Adviser hereunder, the Trust shall pay the Adviser
compensation at the annual percentage rate of 0.60%, or such lesser rate as the
Adviser may agree to from time to time. Such compensation shall be payable
monthly in arrears or at such other intervals, not less frequently than
quarterly, as the Board of Trustees of the Trust may from time to time determine
and specify in writing to the Adviser. The Adviser hereby acknowledges that
the Trust's obligation to pay such compensation is binding only on the assets
and property belonging to the Series.
8. If the total of all ordinary business expenses of the Series or the
Trust as a whole (including investment advisory fees but excluding taxes and
portfolio brokerage commissions) for any fiscal year exceeds the lowest
applicable percentage of average net assets or income limitations prescribed by
any state in which shares of the Series are qualified for sale, the Adviser
shall pay any such excess. Solely for purposes of applying such limitations
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in accordance with the foregoing sentence, the Series and the Trust shall each
be deemed to be a separate fund subject to such limitations. Should the
applicable state limitation provisions fail to specify how the average net
assets of the Trust or belonging to the Series are to be calculated, that figure
shall be calculated by reference to the average daily net assets of the Trust or
the Series, as the case may be.
9. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Trust may be a partner, shareholder, director,
officer, employee or agent of, or be otherwise interested in, the Adviser, any
affiliated person of the Adviser, any organization in which the Adviser may have
an interest or any organization which may have an interest in the Adviser; that
the Adviser, any such affiliated person or any such organization may have an
interest in the Trust; and that the existence of any such dual interest shall
not affect the validity hereof or of any transactions hereunder except as
otherwise provided in the Agreement and Declaration of Trust of the Trust and
the Articles of Organization of the Adviser, respectively, or by specific
provisions of applicable law.
10. This Agreement shall become effective as of the date of its execution,
and
(a) unless otherwise terminated, this Agreement shall continue in
effect for two years from the date of execution, and from year to year
thereafter only so long as such continuance is specifically approved at
least annually (i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Series, and (ii) by
vote of a majority of the Trustees of the Trust who are not interested
persons of the Trust or the Adviser, cast in person at a meeting called for
the purpose of voting on such approval;
(b) this Agreement may at any time be terminated on sixty days'
written notice to the Adviser either by vote of the Board of Trustees of
the Trust or by vote of a majority of the outstanding voting securities of
the Series;
(c) this Agreement shall automatically terminate in the event of its
assignment;
(d) this Agreement may be terminated by the Adviser on ninety days'
written notice to the Trust;
(e) if the Adviser requires the Trust or the Series to change its name
so as to eliminate all references to the words "Xxxxxx" or "Xxxxxx," then
this Agreement shall automatically terminate at the time of such change
unless the continuance of this Agreement after such change shall have been
specifically approved by vote of a majority of the outstanding voting
securities of the Series and by vote of a majority of the Trustees of the
Trust who are not interested persons of the Trust or the Adviser, cast in
person at a meeting called for the purpose of voting on such approval.
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Termination of this Agreement pursuant to this section 10 shall be without
payment of any penalty.
11. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Trust shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust or the Adviser, cast in person at a meeting
called for the purposes of voting on such approval.
12. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have their respective meanings defined in the Investment
Company Act of 1940 and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. References in this Agreement to any assets, property or
liabilities "belonging to" the Series shall have the meaning defined in the
Trust's Agreement and Declaration of Trust and By-Laws as amended from time to
time.
13. In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Adviser, or reckless disregard of its obligations and duties
hereunder, the Adviser shall not be subject to any liability to the Trust, to
any shareholder of the Trust or to any other person, firm or organization, for
any act or omission in the course of, or connected with, rendering services
hereunder.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
XXXXXX XXXXXX FUNDS,
on behalf of its
Xxxxxx Xxxxxx High Yield Fund II series
By: __________________________
Name:
Title:
XXXXXX, XXXXXX & COMPANY, INCORPORATED
By __________________________
Name:
Title:
A copy of the Agreement and Declaration of Trust establishing the Trust is
on file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed with respect to the
Trust's Xxxxxx Xxxxxx Managed Bond Fund series on behalf of the Trust by
officers of the Trust as officers and not individually and that the obligations
of or arising out of this Agreement are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets and
property belonging to the Series.
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