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RESERVE INSTITUTIONAL TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, dated the 18th day of December, 1996, made and
entered into by and between Reserve Institutional Trust, organized as an
unincorporated business trust under the laws of the Commonwealth of
Massachusetts having its principal place of business in New York, New York,
("Trust") and RESERVE MANAGEMENT COMPANY, INC., a New Jersey corporation having
its principal place of business in Manhasset, New York ("Manager").
The parties agree as follows:
1. INVESTMENT SERVICES. The Manager shall select and
manage the Trust's investments and shall determine what investments shall be
made or disposed of by the Trust and shall effect such acquisitions and
dispositions, all in furtherance of the Trust's investment objective and
policies, subject to the overall control and direction of the Trust's Board of
Trustees. The Manager shall report on such activities to the Board of Trustees
of the Trust and shall submit such reports and other information thereon as the
Board of Trustees shall from time to time request.
2. OTHER SERVICES AND ASSUMPTION OF CERTAIN EXPENSES.
The manager shall furnish to the Trust, (i) office space and customary office
facilities to the extent that the Trust's activities occur in New York, and
(ii) all accounting, clerical and statistical services as may be required by
the Trust for the operation of its business and compliance with applicable
laws. The Manager shall pay all operating and other expenses of the Trust
except interest charges, taxes, brokerage fees and commissions, extraordinary
legal and accounting fees and expenses, and amounts payable under the Trust's
distribution plan and service plan.
3. COMPENSATION OF THE MANAGER. The Trust shall pay to
the Manager as compensation for the services rendered hereunder and as for full
reimbursement for all officers compensation and expenses of the Trust paid by
the Manager under paragraph 2 hereof, a Management fee computed on the basis of
the average closing value of the net assets of the Trust of 0.25% per annum of
such assets of each portfolio of the Trust.
The Management fee shall be computed and accrued daily and
shall be paid by the Trust to the Manager promptly after receipt of periodic
xxxxxxxx therefor.
4. COMPLIANCE WITH APPLICABLE REQUIREMENTS. This
Agreement will be performed in accordance with the requirements of the
Investment Company Act of 1940 (the "Act") and the Investment Advisers Act of
1940 and the rules and regulations under such acts, to the extent that the
subject matter of the Agreement is within the purview of such acts and such
rules and regulations. The Manager will assist the Trust in complying with the
requirements of the Act, and the Securities Act of 1933, and the rules and
regulations under such acts and in qualifying as a regulated investment company
under the Internal Revenue Code and applicable regulations of the Internal
Revenue Service thereunder. In carrying out its obligations under this
Agreement, the Manager shall at all times conform to the provisions of the
Declaration of Trust and By- Laws, the provisions of the currently effective
Registration Statement of the Trust under the Act and the Securities Act of
1933, and any other applicable provisions or state or Federal law.
5. TERMINATION. This Agreement shall be in effect until
the close of business on June 30, 1998 and shall continue in effect from year
to year thereafter but only
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so long as such continuance is specifically approved at least annually by (i)
either the Board of Trustees of the Trust or a majority vote of the outstanding
voting securities of the Trust, provided, however, that if the holders of the
Trust fail to approve the Agreement, as provided herein, the Manager may
continue to serve in such capacity in the manner and to the extent permitted by
the Investment Company Act of 1940, and the rules thereunder, and (ii) the vote
of a majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined in the Act) of either party of this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval.
Notwithstanding anything herein to the contrary, this
Agreement may be terminated at any time, without payment of any penalty, by the
Board of Trustees of the Trust or by vote of majority of the outstanding voting
securities of the Trust, on 60 days' written notice to the Manager, or by the
Manager on like notice to the Trust.
The name Reserve Institutional Trust shall be deemed to have
been licensed to the Trust by the Manager. In the event of termination of this
Agreement, the Manager may terminate or revoke such license on 90 days' written
notice to the Trust. On or before the date of such revocation or termination,
the Trust will change its name to another name which does not include the word
"Reserve".
6. NON-ASSIGNABILITY. This Agreement shall not be
assignable by either party hereto and shall automatically terminate forthwith
in the event of such assignment (within the meaning of the Act).
7. APPROVAL OF AGREEMENT AND AMENDMENTS. This Agreement
and any amendments hereto shall be approved by vote of the holders of a
majority (as defined in the Act) of the outstanding voting securities of the
Trust, provided, however, that if the holders of the Trust fail to approve the
Agreement as provided herein, the Manager may continue to serve in such
capacity in the manner and to the extent permitted by the Investment Company
Act of 1940 and the rules thereunder, and no amendment to this Agreement become
effective until so approved.
8. NON-EXCLUSIVITY. The services of the Manager to the
Trust are not to be deemed exclusive and the Trust agrees that the Manager is
free to render services to others and engage in other activities. For purposes
of this Agreement and the undertakings provided for herein, the Manager shall
at all times be considered as an independent contractor, and shall not be
considered as an agent of the Trust.
9. LIABILITY OF THE MANAGER. In performing its duties
hereunder, the Manager may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be provided by the Act, neither
the Manager nor its officers, directors, employees or agents shall be subject
to any liability for any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Manager's duties or by reason of reckless disregard of the Manager's
obligations and duties under this Agreement.
10. NOTICES. Any notices and communications required
hereunder shall be in writing and shall be deemed given when delivered in
person or when sent by first-class, registered or certified mail to the Manager
at 00 Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, to the Trust at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such addresses as either party may from
time to time specify by notice to the other.
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11. GOVERNING LAW. The terms and provisions of this
Agreement shall be interpreted under and governed by the law of the State of
New York.
12. SEVERABILITY. 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 be deemed to be severable.
13. SHAREHOLDER LIABILITY. The Manager understands and
agrees that the obligations of the Trust under this Agreement are not binding
upon any shareholder of the Trust personally, but bind only the Trust and the
Trust's property. The Manager represents that it has notice of the provisions
of the Declaration of Trust of the Trust disclaiming shareholder liability for
acts or obligations of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed on the day and year first above written.
RESERVE INSTITUTIONAL TRUST
By: \s\ Xxxxx X. Xxxx
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President
ATTEST:
\s\ Xxxx X. Xxxxxxxxx
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Secretary
RESERVE MANAGEMENT COMPANY, INC.
By: \s\ Xxxxx X. Xxxx
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Vice President
ATTEST:
\s\ Xxxx X. Xxxxxxxxx
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General Counsel
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