INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE WINTER HARBOR FUND
(The REvest Value Fund)
AND
XXXXXXX INVESTMENTS, INC.
Agreement made this 25th day of September, 1998, by and between THE WINTER
HARBOR FUND, a Delaware business trust (the "Fund"), and XXXXXXX INVESTMENTS,
INC. (formerly known as Royce, Xxxxxxx & Associates, Inc.), a Connecticut
corporation (the "Adviser").
The Fund and the Adviser hereby agree as follows in respect of The REvest
Value Fund, a series of the Fund (the "Series"):
1. DUTIES OF THE ADVISER. The Adviser shall, during the term and subject to
the provisions of this Agreement, (a) determine the composition of the portfolio
of the Series, the nature and timing of the changes therein and the manner of
implementing such changes, and (b) provide the Series with such investment
advisory, research and related services as the Series may, from time to time,
reasonably require for the investment of its funds. The Adviser shall perform
such duties in accordance with the applicable provisions of the Fund's Trust
Instrument, By-Laws and current prospectus and any directions it may receive
from the Fund's Trustees. Notwithstanding any other provision hereof, the
Adviser, with the approval of the Fund, may contract with one or more
sub-advisers to perform any of the investment advisory services; provided,
however, that any compensation paid will be the sole responsibility of the
Adviser.
2. EXPENSES PAYABLE BY THE SERIES. Except as otherwise provided in
Paragraphs 1 and 3 hereof, the Fund shall be responsible for effecting sales and
redemptions of the Series' shares, for determining the net asset value thereof
and for all of the Series' other operations and shall cause the Series to pay
all administrative and other costs and expenses attributable to its operations
and transactions, including, without limitation, transfer agent and custodian
fees; legal, administrative and clerical services; rent for office space and
facilities; auditing; preparation, printing and distribution of its
prospectuses, proxy statements, shareholders' reports and notices; supplies and
postage; Federal and state registration fees; Federal, state and local taxes;
non-affiliated Trustees' fees; and brokerage commissions.
3. EXPENSES PAYABLE BY THE ADVISER. The Adviser shall furnish, without
expense to the Fund or to the Series, the services of those of its officers and
full-time employees who may be duly elected executive officers or Trustees of
the Fund, subject to their individual consent to serve and to any limitations
imposed by law, and shall pay its pro rata share of all of the salaries and
expenses of the Fund's executive officers. For purposes of this Agreement, only
the President,
any Vice President and the Treasurer of the Fund shall be deemed to be executive
officers of the Fund. The Adviser shall also pay all expenses which it may incur
in performing its duties under Paragraph 1 hereof and shall reimburse the Fund
for any space leased by the Fund and occupied by the Adviser. In the event the
Fund shall qualify shares of the Series for sale in any jurisdiction, the
applicable statutes or regulations of which expressly limit the amount of the
Series' total annual expenses, the Adviser agrees to reduce its annual
investment advisory fee for the Series to the extent that such total annual
expenses (other than brokerage commissions and other capital items, interest,
taxes, distribution fees, extraordinary items and other excludable items,
charges, costs and expenses) exceed the limitations imposed on the Series by the
most stringent regulations of any such jurisdiction.
4. COMPENSATION OF THE ADVISER. The Fund agrees to cause the Series to pay
to the Adviser, and the Adviser agrees to accept, as compensation for the
services provided by the Advisor hereunder, advisory fees equal to 1% per annum
of the first $50,000,000 of the Series' average net assets and 0.75% per annum
of additional average net assets over $50,000,000. For purposes of calculating
these fees, average net assets will mean the average net assets of the Series at
the close of business on each day that the value of its net assets is computed
during the year. However, the Fund and the Adviser may agree in writing to
temporarily or permanently reduce such fee. Such compensation shall be accrued
on the Series' books at the close of business on each day that the value of its
net assets is computed during each year and shall be payable to the Adviser
monthly, on the last day of each month, and adjusted as of year-end if required.
5. EXCESS BROKERAGE COMMISSIONS. The Adviser is hereby authorized, to the
fullest extent now or hereafter permitted by law, to cause the Series to pay a
member of a national securities exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of such exchange, broker or dealer would have charged
for effecting that transaction, if the Adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and/or research services provided by such member, broker or dealer,
viewed in terms of either that particular transaction or its overall
responsibilities with respect to the Series.
6. ACTIVITIES OF THE ADVISER. The Adviser may engage in any other business
or render services to others, provided that the Adviser shall disclose such
activities to the Fund. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Adviser to engage in any other
business or to devote his or her time and attention in part to any other
business, whether of a similar or dissimilar nature. So long as this Agreement
or any extension, renewal or amendment remains in effect, the Adviser shall be
the only investment adviser for the Series, subject to the Adviser's right to
enter into sub-advisory agreements. The Adviser assumes no responsibility under
this Agreement other than to render the services called for hereunder, and shall
not be responsible for any action of or directed by the Fund's Trustees, or any
committee thereof, unless such action has been caused by the Adviser's gross
negligence, willful malfeasance, bad faith or reckless disregard of its
obligations and duties under this Agreement.
7. RESPONSIBILITY OF DUAL DIRECTORS, OFFICERS AND/OR EMPLOYEES. If any
person who is a director, officer or employee of the Adviser is or becomes a
Trustee, officer and/or employee of the Fund and acts as such in any business of
the Fund pursuant to this Agreement, then such
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director, officer and/or employee of the Adviser shall be deemed to be acting in
such capacity solely for the Fund, and not as a director, officer or employee of
the Adviser or under the control or direction of the Adviser, although paid by
the Adviser.
8. PROTECTION OF THE ADVISER. The Adviser shall not be liable to the Fund
or to the Series for any action taken or omitted to be taken by the Adviser in
connection with the performance of any of its duties or obligations under this
Agreement or otherwise as an investment adviser for the Series, and the Series
shall indemnify the Adviser and hold it harmless from and against all damages,
liabilities, costs and expenses (including reasonable attorneys' fees and
amounts reasonably paid in settlement) incurred by the Adviser in or by reason
of any pending, threatened or completed action, suit, investigation or other
proceeding (including an action or suit by or in the right of the Fund or the
Series or its security holders) arising out of or otherwise based upon any
action actually or allegedly taken or omitted to be taken by the Adviser in
connection with the performance of any of its duties or obligations under this
Agreement or otherwise as an investment adviser for the Series. Notwithstanding
the preceding sentence of this Paragraph 8 to the contrary, nothing contained
herein shall protect or be deemed to protect the Adviser against or entitle or
be deemed to entitle the Adviser to indemnification in respect of, any liability
to the Fund or to the Series or its security holders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its duties and obligations under this Agreement.
Determinations of whether and the extent to which the Adviser is entitled
to indemnification hereunder shall be made by reasonable and fair means,
including (a) a final decision on the merits by a court or other body before
whom the action, suit or other proceeding was brought that the Adviser was not
liable by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties, or (b) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the Adviser was not liable
by reason of such misconduct by (i) the vote of a majority of a quorum of the
Trustees of the Fund who are neither "interested persons" of the Fund (as
defined in Section 2(a) (19) of the Investment Company Act of 1940) nor parties
to the action, suit or other proceeding, or (ii) an independent legal counsel in
a written opinion.
9. EFFECTIVENESS, DURATION AND TERMINATION OF AGREEMENT. This Agreement
shall become effective on the later of (i) the date hereof, or (ii) the date on
which this Agreement is approved by the sole shareholder of the Series. This
Agreement shall remain in effect until the two year anniversary of such
effective date, and thereafter shall continue automatically for successive
annual periods, PROVIDED THAT such continuance is specifically approved at least
annually by (a) the vote of the Fund's Trustees, including a majority of such
Trustees who are not parties to this Agreement or "interested persons" (as such
term is defined in Section 2(a)(19) of the Investment Company Act of 1940) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval, or (b) the vote of a majority of the outstanding voting
securities of the Series and the vote of the Fund's Trustees, including a
majority of such Trustees who are not parties to this Agreement or "interested
persons" (as so defined) of any such party. This Agreement may be terminated at
any time, without the payment of any penalty, on 60 days' written notice by the
vote of a majority of the outstanding voting securities of the Series, or by the
vote of a majority of the Fund's Trustees or by the Adviser, and will
automatically terminate in the
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event of its "assignment" (as such term is defined for purposes of Section
15(a)(4) of the Investment Company Act of 1940); PROVIDED, HOWEVER, that the
provisions of Paragraph 8 of this Agreement shall remain in full force and
effect, and the Adviser shall remain entitled to the benefits thereof,
notwithstanding any such termination.
10. SHAREHOLDER LIABILITY. Notice is hereby given that this Agreement is
entered into on the Fund's behalf by an officer of the Fund in his capacity as
an officer and not individually and that the obligations of or arising out of
this Agreement are not binding upon any of the Fund's Trustees, officers,
employees, agents or shareholders individually, but are binding only upon the
assets and property of the Series.
11. NOTICES. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed, postage prepaid, to the other party at its
principal office.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
THE WINTER HARBOR FUND
By: /s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx, President
XXXXXXX INVESTMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx, President
