Exhibit 5(a)
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
(Money Portfolio)
AGREEMENT made as of August 16, 1988 between THE RBB FUND,
INC., a Maryland corporation (herein called the "Company"), and PROVIDENT
INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation (herein called the
"Investment Advisor").
WHEREAS, the Company is registered as an open-end,
diversified, management investment company under the Investment Company Act of
1940 (the "1940 Act") and currently offers shares representing interests in
seven separate investment portfolios; and
WHEREAS, the Company desires to retain the Investment Advisor
to render investment advisory and administration services with respect to the
Company's Money Market Portfolio (the "Portfolio"), and the Investment Advisor
is willing to so render such services,
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby, it is
agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Investment
Advisor to act as investment advisor to the Company for the Portfolio for the
period and on the terms set forth in this Agreement. The Investment Advisor
accepts such appointment and agrees to render the services herein set forth,
for the compensation herein provided. The Company's Common Stock, $.001 par
value (the "Shares") has been classified into fourteen different classes of
Common Stock: the "Class A Shares", the "Class B Shares", the "Class C Shares",
the "Class D Shares", the "Class E Shares", the "Class F Shares", the "Class G
Shares", the "Class H Shares", the "Class I Shares", the "Class J Shares", the
"Class K Shares", the "Class L Shares", the "Class M Shares, and the "Class N
Shares", respectively. The Portfolio contains four classes of Shares: the Class
E Shares, the Class G Shares, the Class I Shares, and the Class L Shares.
2. Delivery of Documents. The Company has furnished the
Investment Advisor with copies properly certified or authenticated of each of
the following:
(a) Articles of Incorporation of the Company,
filed with the Secretary of State of Maryland on February 29, 1988, as amended
(such Articles of Incorporation, as presently in effect and as they shall from
time to time be amended, herein called the "Articles of Incorporation");
(b) Articles Supplementary of the Company,
filed with the Secretary of State of the State of Maryland on March 24, 1988
and all further Articles of Supplementary filed with the State of Maryland
("Articles Supplementary");
(c) By-Laws of the Company, as amended (such
By-Laws, as presently in effect and as they shall from time to time be
amended, herein called the "By-Laws");
(d) Resolutions of the Board of Directors of the
Company authorizing the appointment of the Investment Advisor and the execution
and delivery of this Agreement;
(e) A copy of each Distribution Agreement
between the Company and Planco Financial Services, Inc. (the "Distributor")
relating to any class of the Portfolio and the form of each related Dealer
Agreement, if any, for broker-dealers participating in the distribution of
any class of Shares representing interests in the Portfolio ("Participating
Dealers");
(f) Each Plan of Distribution pursuant to Rule 12b-1
under the 1940 Act relating to any class of Shares representing interests in
the Portfolio;
(g) Each Shareholder Servicing Agreement, if
any, relating to any class of Shares representing interests in the Portfolio;
(h) Each Non-12b-l Shareholder Services Plan,
if any, relating to any class of Shares representing interests in the
Portfolio;
(i) Notification of Registration of the Company
under the 1940 Act on Form N-8A as filed with the Securities and Exchange
Commission ("SEC") on March 24, 1988 and all amendments thereto;
(j) The most recent Registration Statement of the
Company on Form N-lA under the Securities Act of 1933 (the "1933 Act") (File
No. 33-20827) and under the 1940 Act filed with the SEC on March 24, 1988
relating to the Shares, and all amendments thereto (the "Registration
Statement"); and
(k) Each Prospectus relating to any class of
Shares representing interests in the Portfolio in effect under the 1933 Act
(such prospectuses, as presently in effect and as they shall from time to
time be amended and supplemented, are herein collectively called the
"Prospectuses").
The Company will furnish the Investment Advisor from time to
time with copies, properly certified or authenticated, of all amendments of or
supplements to the foregoing, if any.
3. Management of the Portfolio. Subject to the supervision of
the Board of Directors of the Company, the Investment Advisor will provide for
the overall management of the Portfolio, including (i) the provision of a
continuous investment program for the Portfolio, including investment research
and management with respect to all securities, investments, cash and cash
equivalents in the Portfolio, (ii) the determination from time to time of what
securities and other investments will be purchased, retained or sold by the
Company for the Portfolio, (iii) the placement of orders for all purchases and
sales made for the Portfolio, and (iv) coordination of contractual
relationships and communications between the Company and its contractual
service providers. The Investment Advisor will provide the services rendered by
it hereunder in accordance with the investment objectives, restrictions and
policies of the Portfolio as stated in the applicable Prospectus and the
applicable statement of additional information contained in the Registration
Statement. The Investment Advisor further agrees that it will maintain all
books and records with respect to the securities transactions of the Portfolio,
keep its respective books of account and will render to the Company's Board of
Directors such periodic and special reports as the Board may request.
4. Sub-Advisory Agreement. The Investment Advisor will receive
statistical and credit advice, as well as computer and research services from
Provident National Bank (the "Sub-Advisor"), and the Sub-Advisor's fees for
such services will be paid by the Investment Advisor from the fees it receives
from the Company pursuant to Paragraph 11. Notwithstanding anything herein to
the contrary, this Agreement shall not be effective until the Investment
Advisor and the Sub-Advisor deliver to the Company a duly executed copy of a
Sub-Advisory Agreement in substantially the form of Exhibit A hereto pursuant
to which the Sub-Advisor will provide the Investment Advisor with certain
investment advisory services on behalf of the Portfolio, as described in the
preceding sentence. The Investment Advisor agrees to give the Company prompt
written notice of any termination of or notice to terminate the Sub-Advisory
Agreement by any person other than the Company.
5. Brokerage. The Investment Advisor may place orders either
directly with the issuer or with any broker or dealer. In placing orders with
brokers and dealers, the Investment Advisor will attempt to obtain the best net
price and the most favorable execution of its orders. In placing orders with
such broker or dealer, the Investment Advisor will consider the experience and
skill of the firm's securities traders as well as the firm's financial
responsibility and administrative efficiency. Consistent with this obligation,
when the execution and price offered by two or more brokers or dealers are
comparable, the Investment Advisor may, in its discretion, purchase and sell
the Portfolio's securities to and from brokers and dealers who provide the
Company with research advice and other services. In no instance will the
Portfolio's securities be purchased from or sold to the Distributor, the
Investment Advisor or any affiliated person thereof, except to the extent
permitted by SEC exemptive order or by applicable law.
6. Administration Services.
(a) The Investment Advisor will perform the
following administration and accounting functions on a daily basis:
(1) Journalize the Portfolio's investment,
capital share and income and expense activities;
(2) Verify investment buy/sell trade tickets and
transmit trades to the Company's custodian for proper settlement;
(3) Maintain individual ledgers for investment
securities;
(4) Maintain historical tax lots for each
security;
(5) Reconcile cash and investment balances of
the Portfolio with the custodian, and prepare the beginning cash balance
available for investment purposes;
(6) Update the cash availability throughout
the day as required;
(7) Post to and prepare the Portfolio's
Statement of Assets and Liabilities and the Statement of Operations;
(8) Calculate various contractual expenses
(e.g., custody fees);
(9) Monitor the expense accruals and notify
management of the Company of any proposed adjustments;
(10) Control all disbursements from the
Portfolio and authorize such disbursements upon Written Instructions;
(11) Calculate capital gains and losses;
(12) Determine the Portfolio's net income;
(13) Obtain security market quotes from
services approved by management of the Company, or if such quotes are
unavailable, then obtain such prices from management of the Company, and
in either case calculate the market value of the Portfolio's investments;
(14) Compute the net asset value of the
Portfolio; and
(15) Compute the Portfolio's yields, total
return, expense ratios, Portfolio turnover rate, and, Portfolio average
dollar-weighted maturity.
(b) In addition to the accounting services
described in the foregoing Paragraph 6(a), the Investment Advisor will:
(1) Prepare monthly financial statements, which will
include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses;
(2) Prepare quarterly broker security
transactions summaries;
(3) Supply various normal and customary
Portfolio and Company statistical data as requested on an ongoing basis;
(4) Prepare for execution and file the
Portfolio's and Company's Federal and state tax returns;
(5) Prepare and file the Company's Semi-Annual
Reports with the SEC on Form N-SAR and prepare and file the Company's
Rule 24f-2 Notice with the SEC;
(6) Prepare and file with the SEC the
Portfolio's and Company's annual, semi-annual, and quarterly Shareholder
reports;
(7) Assist with the preparation of registration
statements on Form N-1A and other filings relating to the registration
of Shares;
(8) Monitor the Company's status as a regulated
investment company under Sub-chapter M of the Internal Revenue Code of 1986,
as amended;
(9) Qualify the Class E Shares, the Class G
Shares, the Class I Shares, and the Class L Shares for sale in each state in
which the Company's Board of Directors determines to sell the Class E Shares,
the Class G Shares, the Class I Shares, or the Class L Shares and make all
filings and take all appropriate actions necessary to maintain and renew such
registrations of the Class E Shares, the Class G shares, the Class I Shares,
and the Class L Shares;
(10) Monitor the Company's compliance with the
amounts and conditions of each such state qualification; and
(11) Maintain the Company's fidelity bond as
required by the 1940 Act and obtain a directors and officers liability policy.
(c) The Investment Advisor shall act as liaison
with the Company's independent public accountants and shall provide account
analyses, fiscal year summaries, and other audit related schedules. The
Investment Advisor shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion, as such
may be required by the Company from time to time.
7. Conformity with Law; Confidentiality. The Investment
Advisor further agrees that it will comply with all applicable Rules and
Regulations of all Federal regulatory agencies having jurisdiction over the
Investment Advisor in the performance of its duties hereunder (herein called
the "Rules"). The Investment Advisor will treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and prior, present or potential shareholders, and will
not use such records and information for any purpose other than performance of
its responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where the Investment Advisor may
be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Company.
8. Services Not Exclusive. The investment management and
administration services rendered by the Investment Advisor hereunder are not to
be deemed exclusive, and the Investment Advisor shall be free to render similar
services to others so long as its services under this Agreement are not
impaired thereby.
9. Books and Records. In compliance with the requirements of
Rule 3la-3 of the Rules, the Investment Advisor hereby agrees that all records
which it maintains for the Portfolio are the property of the Company and
further agrees to surrender promptly to the Company any of such records upon
the Company's request. The Investment Advisor further agrees to preserve for
the periods prescribed by Rule 3la-2 the records required to be maintained by
Rule 3la-1 of the Rules.
10. Expenses. During the term of this Agreement, the Investment
Advisor will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of (including brokerage commissions,
if any) securities purchased for the Portfolio, the cost of any independent
pricing service used in valuing the Portfolio's securities and fees and
expenses of registering and qualifying shares for distribution under state
securities laws.
In addition, if the expenses borne by the Portfolio in any
fiscal year exceed the most restrictive applicable expense limitations imposed
by the securities regulations of any state in which the Shares are registered
or qualified for sale to the public, the Investment Advisor shall reimburse the
Portfolio for any excess up to the amount of the fees payable by the Portfolio
to it during such fiscal year pursuant to Paragraph 11 hereof; Provided,
however, that notwithstanding the foregoing, the Investment Advisor shall
reimburse the Portfolio for such excess expenses regardless of the amount of
such fees payable to it during such fiscal year to the extent that the
securities regulations of any state in which the Shares are registered or
qualified for sale so require.
Compensation.
(a) For the services provided and the expenses
assumed pursuant to this Agreement with respect to the Portfolio, the Company
will pay the Investment Advisor from the assets of the Portfolio and the
Investment Advisor will accept as full compensation therefor a fee, computed
daily and payable monthly, at the following annual rate: .45% of-the first
$250 million of the Portfolio's average daily net assets, .40% of the
next $250 million of the Portfolio's average daily net assets, and .35% of the
Portfolio's average daily net assets in excess of $500 million.
(b) The fee attributable to the Portfolio shall
be satisfied only against the assets of the Portfolio and not against the
assets of any other investment portfolio of the Company.
12. Limitation of Liability of the Investment Advisor. The
Investment Advisor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Company in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Advisor in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Notwithstanding the foregoing, the Investment Advisor shall be liable to the
Company for the acts and omissions of the Sub-Advisor to the extent that the
Sub-Advisor is liable to the Investment Advisor for such acts or omissions
under the Sub-Advisory Agreement between the Investment Advisor and the
Sub-Advisor.
13. Duration and Termination. This Agreement shall become
effective with respect to the Portfolio upon approval of this Agreement by vote
of a majority of the outstanding voting securities of the Portfolio and, unless
sooner terminated as provided herein, shall continue with respect to the
Portfolio until August 16, 1990. Thereafter, if not terminated, this Agreement
shall continue with respect to the Portfolio for successive annual periods
ending on August 16, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Board of
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, and (b) by the Board of Directors of the Company or
by vote of a majority of the outstanding voting securities of the Portfolio;
provided, however, that this Agreement may be terminated with respect to the
Portfolio by the Company at any time, without the payment of any penalty, by
the Board of Directors of the Company or by vote of a majority of the
outstanding voting securities of the Portfolio, on 60 days' written notice to
the Investment Advisor, or by the Investment Advisor at any time, without
payment of any penalty, on 90 days' written notice to the Company. This
Agreement will immediately terminate in the event of its assignment and will
immediately terminate with respect to the Portfolio upon any termination of the
Sub-Advisory Agreement. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person" and "assignment" shall have
the same meaning as such terms have in the 1940 Act).
14. Delegation. On thirty (30) days prior written notice to the
Fund, the Investment Advisor may delegate those of its duties set forth in
Paragraph 6 hereof to any wholly-owned direct or indirect subsidiary of
Provident National Bank or PNC Financial Corp, provided that (i) the delegate
agrees with the Investment Advisor to comply with all relevant provisions of
the 1940 Act; and (ii) the Investment Advisor and such delegate shall promptly
provide such information as the Fund may request, and respond to such questions
as the Fund may ask, relative to the delegation, including (without limitation)
the capabilities of the delegate. Any delegation under this paragraph shall not
be deemed an assignment for purposes of paragraph 13 hereof. Notwithstanding
any such delegation, the Investment Advisor shall remain responsible for the
performance of its duties set forth in Paragraph 6 hereof and shall hold the
Fund harmless from the acts and omissions, under the standards of care provided
for herein, of any delegate chosen pursuant to this Paragraph 14.
15. Amendment of this Agreement. No provision of this Agreement
may be changed, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, discharge
or termination is sought, and no amendment of this Agreement affecting the
Portfolio shall be effective until approved by vote of the holders of a
majority of the outstanding voting securities of the Portfolio.
16. Miscellaneous. 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. 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
(Corporate Seal) The RBB Fund, INC.
Attest: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxx
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President
(Corporate Seal)
PROVIDENT INSTITUTIONAL
Attest: /s/Xxxxxx X. Gram MANAGEMENT CORPORATION
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By: /s/ Xxxxxx X. Neim
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President
