UST045
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of October 26, 1993 by and between EXCELSIOR FUNDS, a
Delaware business trust (herein called the "Trust"), and UNITED STATES TRUST
COMPANY OF NEW YORK, a New York trust company (herein called the "Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services with respect to the series (the "Series") of the Trust as
listed on Exhibit A hereto, and the Adviser is willing to so render such
services on the terms hereinafter set forth;
NOW, THEREFORE, this Agreement
W I T N E S E T H:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. The Trust hereby appoints the Adviser to act as investment adviser
to the Trust with respect to the Series for the period and on the terms set
forth in this Agreement. The Adviser accepts such appointment and agrees to
render the services herein set forth for the compensation herein provided. In
providing the services and assuming the obligations set forth herein, the
Adviser may, at its expense, employ one or more subadvisers. References herein
to the Adviser shall include any subadviser employed by the Adviser. Any
agreement between the Adviser and a subadviser shall be subject to the renewal,
termination and amendment provisions of paragraph 6 hereof.
2. (a) The Adviser shall, at its expense, (i) employ or associate with
itself such persons as it believes appropriate to assist it in performing its
obligations under this Agreement and (ii) provide all services, equipment and
facilities necessary to perform its obligations under this Agreement.
(b) The Trust shall be responsible for all of its expenses and
liabilities, including compensation of its independent Trustees; taxes and
governmental fees; interest charges; fees and expenses of the Trust's
independent auditors and legal counsel; trade association membership dues; fees
and expenses of any custodian (including safekeeping of funds and securities,
maintenance of books and accounts and calculation of the net asset value of
beneficial interests of each Series), transfer agent, registrar and dividend
disbursing agent of the Trust; expenses of preparing and mailing reports to
investors and to regulatory agencies; the cost of office supplies, including
stationery; travel expenses of all officers, Trustees and employees; insurance
premiums; brokerage and other
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expenses of executing portfolio transactions; expenses of investors' and
Trustees' meetings; organization expenses; and extraordinary expenses.
3. (a) Subject to the general supervision of the Board of Trustees of
the Trust, the Adviser shall formulate and provide an appropriate investment
program on a continuous basis in connection with the management of each Series,
including research, analysis, advice, statistical and economic data and
information and judgments of both a macroeconomic and microeconomic character.
The Adviser shall provide additional investment services, as specified and
agreed to by the parties from time to time in writing, with respect to any
Series all of whose assets are invested in a corresponding HubSM investment
company. However, the Adviser shall not be responsible for providing any of the
services set forth in this Agreement to any Series unless the Board of Trustees
of the Trust (i) determines that it will not invest all of the assets of that
Series into a corresponding HubSM investment company and (ii) provides a written
request to the Adviser specifying which services the Adviser shall perform for
such Series.
The Adviser will determine the securities to be purchased, sold or lent
by the Trust and will place orders pursuant to its determinations either
directly with the issuer or with any broker or dealer who deals in such
securities. In placing orders with brokers and dealers, the Adviser will use its
reasonable best efforts to obtain the best net price and the most favorable
execution of its orders, after taking into account all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with this obligation, the
Adviser may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers and dealers who provide brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934) to or for the benefit of the Trust and/or other accounts over which the
Adviser or any of its affiliates exercises investment discretion. Subject to the
review of the Trust's Board of Trustees from time to time with respect to the
extent and continuation of the policy on purchase and sale of portfolio
securities set forth in this paragraph, the Adviser is authorized to pay to a
broker or dealer who provides such brokerage and research services a commission
for effecting a securities transaction for the Trust which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Adviser determines in good faith that such commission
was reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of the Adviser with respect to the
accounts as to which it exercises investment discretion.
In placing orders with brokers and/or dealers, the Adviser may effect
transactions through itself and its affiliates on a securities exchange provided
that the commissions paid by the Trust are "reasonable and fair" compared to
commissions received by other broker-dealers having comparable execution
capability in connection with comparable transactions involving similar
securities and provided that the transactions in connection with which such
commissions are paid are effected pursuant to procedures established by the
Board of the Trustees of the Trust. Pursuant to such authorizations, an
affiliated broker-dealer may transmit, clear and settle transactions for the
Trust that are
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executed on a securities exchange provided that it arranges for unaffiliated
brokers to execute such transactions.
The Adviser shall determine from time to time the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the Trust's portfolio securities shall be exercised. The Adviser
will determine what portion of securities owned by the Trust shall be invested
in securities described by the policies of the Trust and what portion, if any,
should be held uninvested. The Adviser will determine whether and to what extent
to employ various investment techniques available to the Trust, including among
others but without limitation, implementation of a global investment strategy,
engaging in hedging transactions, selection of derivative securities and
entering into foreign currency transactions.
Notwithstanding the foregoing, should the Board of Trustees at any time
make any definite determination as to investment policy and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. In effecting transactions with respect to
securities or other property for the account of a Series of the Trust, the
Adviser may deal with itself and its affiliates, with the Trustees of the Trust
or with other persons to the extent such actions are permitted by the 0000 Xxx.
(b) The Adviser also shall provide to the Trust's officers assistance
in connection with the operation of the Trust, which shall include compliance
with all reasonable requests of the Trust for information, including information
required in connection with the Trust's filings with the Securities and Exchange
Commission and state securities commissions.
(c) As manager of the assets of the Series, the Adviser shall make
investments for the account of the Series in accordance with the Adviser's best
judgment and within the respective Series' investment objectives and
restrictions, the 1940 Act and the provisions of the Internal Revenue Code of
1986 relating to regulated investment companies subject to policy decisions
adopted by the Board of Trustees.
(d) The Adviser shall furnish to the Board of Trustees periodic reports
on the investment performance of the Trust and on the performance of its
obligations under this Agreement and shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
(e) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Trust as well as other customers, the
Adviser, to the extent permitted by applicable law, may aggregate the securities
to be so sold or purchased in order to obtain the best execution or lower
brokerage commissions, if any. The Adviser may also on occasions purchase or
sell a particular security for one or more customers in different amounts. On
either occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Trust and to such other customers.
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4. The Adviser shall give the Trust the benefit of the Adviser's best
judgment and efforts in rendering services under this Agreement. As an
inducement to the Adviser's undertaking to render these services, the Trust
agrees that the Adviser shall not be liable under this Agreement for any mistake
in judgment or in any other event whatsoever provided that nothing in this
Agreement shall be deemed to protect or purport to protect the Adviser against
any liability to the Trust or its investors 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.
5. In consideration of the services to be rendered by the Adviser under
this Agreement, the Trust shall pay the Adviser a fee accrued daily and paid
monthly from each Series at an annual rate equal to that specified in Exhibit A
hereunder for that Series' average daily net assets. If the fees payable to the
Adviser pursuant to this paragraph 5 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 that date to the end of that month or from the beginning of that
month to the date of termination, as the case may be, shall be paid for the
portion of the month accrued as set forth in the preceding sentence. For
purposes of calculating the monthly fees, the value of the net assets of each
Series of the Trust shall be computed in the manner specified in its
Registration Statement on Form N-1A for the computation of net asset value. For
purposes of this Agreement, a "business day" is any day the New York Stock
Exchange is open for trading.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Adviser hereby agrees that all records which it maintains for the Trust are
property of the Trust and further agrees to surrender promptly to the Trust any
such records upon the Trust's request. The Adviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act any such records
required to be maintained by Rule 31a-1 under the 1940 Act.
6. This Agreement shall be effective as to each Series as of the date
such Series commences investment operations, after this Agreement shall have
been approved by the Board of Trustees of the Trust and by the investor(s) in
such Series in the manner contemplated by Section 15 of the 1940 Act and, unless
sooner terminated as provided herein, shall continue until the second
anniversary of the date hereof. Thereafter, if not terminated, this Agreement
shall continue in effect as to each Series of the Trust for successive periods
of 12 months each, provided such continuance is specifically approved at least
annually by the vote of a majority of those members of the Board of Trustees of
the Trust 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; and either (a) by the vote of a majority of the full Board of Trustees
or (b) by vote of a majority of the outstanding voting securities of such
Series; provided, however, that this Agreement may be terminated as to one or
more Series, by the Trust at any time, without the payment of any penalty, by
action of the Board of Trustees or by vote of a majority of the outstanding
voting securities of such Series on 60 days' written notice to the Adviser, or
by the Adviser, as to one or more Series, at any time, without payment of any
penalty, on not more than 90 days' written notice to the Trust. This Agreement
will terminate immediately in the event of its assignment. Termination of this
Agreement with respect to any
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particular Series shall not be deemed a termination with respect to any other
Series. (As used in this Agreement, the terms "majority of the outstanding
voting securities", "interested person" and "assignment" shall have the same
meanings as such terms have in the 1940 Act and the rules and regulatory
constructions thereunder.)
7. Except to the extent necessary to perform the 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, or 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 trust,
corporation, firm, individual or association.
8. The investment management services of the Adviser to the Trust under
this Agreement are not to be deemed exclusive as to the Adviser and the Adviser
will be free to render similar services to others.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of this Agreement shall be effective as to any
Series of the Trust until approved by vote of the holders of a majority of the
outstanding voting securities of such Series.
This agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.
Should any part of this Agreement be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the benefit
of the parties hereto and their respective successors, to the extent permitted
by law.
9. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts provided that nothing herein shall be construed in
a manner inconsistent with the requirements of the 1940 Act.
The undersigned officer of the Trust has executed this Agreement not
individually, but as President under the Trust's Trust Instrument, dated October
25, 1993, as amended. Pursuant to the Declaration of Trust the obligations of
this Agreement are not binding upon any of the Trustees or investors of the
Trust individually, but bind only the trust estate.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
EXCELSIOR FUNDS
Attest:
/S/ XXXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxxx
Assistant Secretary President
UNITED STATES TRUST COMPANY OF NEW YORK
Attest:
/S/ X. X. XXXXXX By: /S/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title:
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Exhibit A
EXCELSIOR FUNDS
SCHEDULE OF SERIES AND FEES UNDER INVESTMENT
ADVISORY AGREEMENT
SERIES NAMES Fee (as a percentage of the
average daily net assets of a
FUND)
Excelsior Equity Fund 0.65%
Excelsior Income and Growth Fund 0.65%
Excelsior Income Fund 0.65%
Excelsior Total Return Bond Fund 0.65%
Excelsior Institutional Money Fund 0%
Excelsior Institutional Treasury Money Fund 0%
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