INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of July 28, 1995 by and between SHORT-TERM WORLD
INCOME PORTFOLIO, a New York trust (herein called the "Portfolio"), and Xxxxxxx
Partners, Inc., an Illinois corporation (herein called the "Adviser").
WHEREAS, the Portfolio is registered as an open-end, non-diversified,
management investment company under the Investment Company Act of 1940 (the
"1940 Act"); and
WHEREAS, the Portfolio desires to retain the Adviser to render
investment advisory services, and the Adviser is willing to so render such
services on the terms hereinafter set forth;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. The Portfolio hereby appoints the Adviser to act as investment
adviser to the Portfolio 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.
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 Portfolio 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 Portfolio'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 the
Portfolio), transfer agent, registrar and dividend disbursing agent of the
Portfolio; 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 expenses of executing portfolio transactions; expenses of investors'
and Trustees' meetings; organization expenses; and extraordinary expenses.
3. (a) The Adviser shall provide to the Portfolio investment guidance
and policy direction in connection with the management of the Portfolio,
including research, analysis, advice, statistical and economic data and
information and judgments of both a macroeconomic and microeconomic character.
The Adviser will determine the securities to be purchased, sold or lent
by the Portfolio 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
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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 Portfolio and/or other accounts over which
the Adviser or any of its affiliates exercises investment discretion. Subject to
the review of the Portfolio's Board of Trustees from time to time with respect
to the extent and continuation of the policy, 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 Portfolio 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 intends to
seek best price and execution for purchases and sales and may effect
transactions through itself and its affiliates on a securities exchange provided
that the commissions paid by the Portfolio 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 Portfolio.
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 Portfolio's portfolio securities shall be exercised, provided,
however, that 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. The Adviser will determine what portion of securities owned by the
Portfolio shall be invested in securities described by the policies of the
Portfolio and what portion, if any, should be invested otherwise or held
uninvested. The Adviser will determine whether and to what extent to employ
various investment techniques available to the Portfolio, including, among other
things, implementation of a global investment strategy, engaging in hedging
transactions, selection of derivative securities and entering into foreign
currency transactions. In effecting transactions with respect to securities or
other property for the account of the Portfolio, the Adviser may deal with
itself and its affiliates, with the Trustees of the Portfolio or with other
persons to the extent such actions are permitted by the 0000 Xxx.
(b) The Adviser also shall provide to the Portfolio's officers
administrative assistance in connection with the operation of the Portfolio,
which shall include compliance with all reasonable requests of the Portfolio for
information, including information required in connection with the Portfolio's
filings with the Securities and Exchange Commission and state securities
commissions.
(c) As manager of the assets of the Portfolio, the Adviser shall make
investments for the account of the Portfolio in accordance with the Adviser's
best judgment and within the Portfolio's 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 Portfolio and on the performance of its
obligations under this Agreement and shall supply such additional reports and
information as the Portfolio'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 Portfolio 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
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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 Portfolio and to such other customers.
4. The Adviser shall give the Portfolio 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 Portfolio
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 Portfolio 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 Portfolio shall pay the Adviser a fee accrued daily and paid
monthly at an annual rate equal to 0. 25 % of the Portfolio's 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 prorated according to the proportion which the period
bears to the FRILL month in which the effectiveness or termination occurs. For
purposes of calculating the monthly fees, the value of the net assets of the
Portfolio shall be computed in the manner specified in its Registration
Statement on Form N-IA 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.
6. This Agreement shall be effective as to the Portfolio as of the date
this Agreement shall have been approved by the investor(s) in both the Portfolio
and the SBC Short-Term World Income Fund ("SBC Fund") of SwissKey Funds in the
manner contemplated by Section 15 of the 1940 Act and, unless sooner terminated
as provided herein, shall continue until the earlier of (a) the consummation of
the transaction that provides for the acquisition of substantially all of the
assets of the SBC Fund in exchange for the SwissKey Class shares of the Brinson
Short-Term Global Income Fund of The Xxxxxxx Funds, as described in the
Registration Statement of The Xxxxxxx Funds filed on Form N-14 with the
Securities and Exchange Commission on June 27, 1995, or (b) the second
anniversary of such date. Thereafter, if not terminated, this Agreement shall
continue in effect as to the Portfolio for successive periods of 12 months each,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Board of Trustees of the Portfolio
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 (b) by the Board of Trustees of the Portfolio by vote of A majority of the
outstanding voting securities of the Portfolio; provided, however, that this
Agreement may be terminated by the Portfolio at any time, without the payment of
any penalty, by the Board of Trustees of the Portfolio or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to the Adviser, or by the Adviser as to the Portfolio at any time, without
payment of any penalty, on 90 days' written notice to the Portfolio. This
Agreement will immediately terminate in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting securities",
"interested 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.
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8. The investment management services of the Adviser to the Portfolio
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.
9. This Agreement shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act.
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.
SWISSKEY FUNDS
Attest:
/s/Xxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Secretary President
THE XXXXXXX FUNDS
Attest:
/s/Xxxxx X. Xxxxxxx By: /s/X. Xxxxxx McFarian
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Xxxxx X. Xxxxxxx X. Xxxxxx McFarian
Assistant Secretary President
