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EXHIBIT 5(a)-3
INVESTMENT ADVISORY AGREEMENT
July 7, 1989
Great Western Financial
Advisors Corporation
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
XX Xxxxxx Trust Funds (the "Company"), an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts, hereby agrees
with Great Western Financial Advisors Corporation ("GW Advisors"), a corporation
organized under the laws of the state of California, as follows:
1. Investment Description; Appointment
The Company desires to employ the capital of GW California Municipal
Money Market Fund (the "Fund") by investing and reinvesting in investments of
the kind and in accordance with the limitations specified in its Master Trust
Agreement, as amended, and in its Prospectus and Statement of Additional
Information relating to the Fund as from time to time in effect, and in such
manner and to such extent as may from time to time be approved by the Board of
Trustees of the Company. Copies of the Company's Prospectus, Statement of
Additional Information and Master Trust Agreement, as amended, have been or will
be submitted to GW Advisors. The Company agrees to provide copies of all
amendments to the Company's Prospectus, Statement of Additional Information and
Master Trust Agreement to GW Advisors on an on-going basis. The Company desires
to employ and hereby appoints GW Advisors to act as investment advisor to the
Fund. GW Advisors accepts the appointment and agrees to furnish the services
described herein for the compensation set forth below.
2. Services as Investment Advisor
Subject to the supervision and direction of the Board of Trustees of
the Company, GW Advisors has general oversight responsibility for the investment
advisory services provided to the Fund and will exercise this responsibility in
accordance with the Company's Master Trust Agreement, the Investment Company Act
of 1940 and the Investment Advisers Act of 1940, as the same may from time to
time be amended, and with the Fund's
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investment objective(s) and policies as stated in the Company's Prospectus and
Statement of Additional Information relating to the Fund as from time to time in
effect. In connection therewith, GW Advisors will, among other things, (a)
participate in the formulation of the Fund's investment policies, (b) analyze
economic trends affecting the Fund, (c) monitor the expenses incurred by the
Fund, (d) monitor the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Act of 1934) that are provided to the
Fund and may be considered by the Fund's investment sub-adviser in selecting
brokers or dealers to execute particular transactions and (e) monitor and
evaluate the services provided by the Fund's investment sub-adviser under its
investment sub-advisory agreement, including, without limitation, the
sub-advisor's adherence to the Fund's investment objective(s) and policies and
the Fund's investment performance.
3. Information Provided to the Company
GW Advisors will keep the Company informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Company from
time to time with whatever information GW Advisors believes is appropriate for
this purpose.
4. Standard of Care
GW Advisors shall exercise its best judgment in rendering the services
described in paragraph 2 above. GW Advisors shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except (a) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940)
or (b) a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
5. Compensation
(a) In consideration of the services rendered pursuant to this
Agreement, the Company will pay GW Advisors on the first business day of each
month a fee for the previous month at the annual rate of .50% of the Fund's
average daily net assets, out of which fee GW Advisors shall pay to the
sub-investment advisor of the Fund (the "Sub-Advisor") the fee required under
the Investment Sub-Advisory Agreement relating to the Fund
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among the Company, GW Advisors and the Sub-Advisor. The fee for the period from
the date the Company's initial registration statement is declared effective by
the Securities and Exchange Commission to the end of the month during which the
initial registration statement is declared effective shall be prorated according
to the proportion that such period bears to the full monthly period.
(b) If in any month the aggregate average daily net assets of the Fund
together with the Company's GW U.S. Government Money Market and GW California
Municipal Money Market Funds (collectively, the "Money Market Funds") is greater
than $500 million, the fee to be paid to GW Advisors hereunder, net of amounts
payable to the Sub-Advisor, on the Fund's average daily net assets will be
reduced to .40% with respect to the Fund's prorated portion of the aggregate
average daily net assets of all the Money Market Funds in excess of $500 million
calculated by multiplying its average daily net assets by a fraction, the
numerator of which is such net assets and the denominator of which is the
aggregate average daily net assets of the Company Funds.
(c) Upon any termination of this Agreement before the end of a month,
the fee for such part of that month shall be prorated according to the
proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to GW Advisors, the value of the Fund's net assets
shall be computed at the times and in the manner specified in the Company's
Prospectus or Statement of Additional Information relating to the Fund as from
time to time in effect.
6. Expenses
GW Advisors will bear all expenses in connection with the performance
of its services under this Agreement, including, without limitation, payment of
the sub-advisory fee to the Sub-Advisor. The Company will bear certain other
expenses to be incurred in its operation, including but not limited to:
organizational expenses; taxes, interest, brokerage fees and commissions, if
any; fees of trustees of the Company who are not officers, directors, or
employees of GW Advisors, the Company's sub-investment advisors, the Fund's
sub-administrator or any of their affiliates; Securities and Exchange Commission
fees and state Blue Sky qualification fees; out-of-pocket expenses of
custodians, transfer and dividend disbursing agents and the Company's
sub-administrator and transaction charges of custodians; insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Company's
existence; costs attributable to investor services, including, without
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limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the shareholders of the Company and of the officers or Board of
Trustees of the Company; and any extraordinary expenses. In addition, the Fund
pays a distribution fee pursuant to the terms of a Distribution Plan adopted
under Rule 12b-1 of the Investment Company Act of 1940.
7. Reimbursement to the Company
If in any fiscal year of the Fund the aggregate expenses of the Fund
(including fees pursuant to this Agreement, the sub-advisory agreement with the
Sub-Advisor and the Fund's administration and sub-administration agreements, but
excluding interest, taxes, brokerage, distribution fees relating to the Fund
paid pursuant to the Company's Distribution Plan and, if permitted by the
relevant state securities commissions, extraordinary expenses) exceed the
expense limitations of any state having jurisdiction over the Fund, GW Advisors
will reimburse the Fund for the excess expense to the extent required by state
law. A fee reduction pursuant to this paragraph 7, if any, will be estimated and
reconciled monthly. GW Advisors shall not be required to reimburse any amount in
excess of the advisory fee paid to it pursuant to this Agreement.
8. Services to Other Companies or Accounts
The Company understands that GW Advisors now acts as investment adviser
to the other investment funds of the Company, and may act in the future as
investment adviser to fiduciary and other managed accounts and as investment
adviser to one or more other investment companies or series of investment
companies, and the Company has no objection to GW Advisors so acting. The
Company understands that the persons employed by GW Advisors to assist in the
performance of GW Advisors' duties hereunder will not devote their full time to
such service and nothing contained herein shall be deemed to limit or restrict
the right of GW Advisors or any affiliate of GW Advisors to engage in and devote
time and attention to other businesses or to render services of whatever kind or
nature.
9. Term of Agreement
This Agreement shall become effective as of the date the Fund commences
its investment operations and shall continue for an initial two-year term and
shall continue thereafter so long as such continuance is specifically approved
at least annually
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by (i) the Board of Trustees of the Company or (ii) a vote of a "majority" (as
defined in the Investment Company Act of 1940) of the Fund's outstanding voting
securities, provided that in either event the continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in said Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 60 days' written notice, by the Board of Trustees of the
Company or by vote of holders of a majority of the Fund's shares, or upon 90
days' written notice, by GW Advisors. This Agreement will also terminate
automatically in the event of its assignment (as defined in said Act). GW
Advisors agrees to notify the Company of any circumstances that might result in
this Agreement being deemed to be assigned.
10. Representations of the Company and GW Advisors
The Company represents that (i) a copy of its Master Trust Agreement,
dated February 22, 1989, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts, (ii) the
appointment of GW Advisors has been duly authorized and (iii) it has acted and
will continue to act in conformity with the requirements of the Investment
Company Act of 1940 and other applicable laws.
GW Advisors represents that it is authorized to perform the services
described herein.
11. Limitation of Liability
This Agreement has been executed on behalf of the Company by the
undersigned officer of the Company in his capacity as an officer of the Company.
The obligations of this Agreement shall be binding upon the assets and property
of the Fund only and not upon the assets and property of any other investment
fund of the Company and shall not be binding upon any Trustee, officer or
shareholder of the Fund and/or the Company individually.
12. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
13. Governing Law
This Agreement shall be governed in accordance with the laws of the
State of Massachusetts.
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If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
XX XXXXXX TRUST FUNDS
By: /s/
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President
Accepted:
GREAT WESTERN FINANCIAL ADVISORS CORPORATION
By: /s/
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Title: President
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