INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this (_____) day of June, 1998 by and between XXXXXXX
XXXXX XXXXXXX XXXXX FUNDS FOR INSTITUTIONS SERIES, a Massachusetts business
trust (the "Trust"), with respect to XXXXXXX XXXXX RATED INSTITUTIONAL FUND, a
series of the Trust (the "Fund"), and FUND ASSET MANAGEMENT, L.P., a Delaware
corporation (the "Adviser");
W I T N E S S E T H: WHEREAS, the Trust is engaged in business as a
diversified open-end management investment company and is registered as such
under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Adviser is engaged principally in rendering advisory services
and is registered as an investment adviser under the Investment Advisers Act of
1940; and
WHEREAS, the Trust desires to retain the Adviser to render investment
supervisory and corporate administrative services to the Fund in the manner and
on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Adviser hereby agree as follows:
ARTICLE 1. Duties of the Adviser. The Trust hereby employs the Adviser to
act as the manager and investment adviser of the Fund and to furnish, or to
arrange for affiliates to furnish, the Fund with investment advisory and
administrative service and to administer its affairs, subject to the supervision
of the Board of Trustees of the Trust for the period and on the terms and
conditions set forth in this Agreement. The Adviser hereby accepts such
employment and agrees during such period, at its own expense, to render the
services and to assume the obligations herein set forth for the compensation
provided for herein. The Adviser shall for all purposes herein be deemed to be
an independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
(a) Investment Advisory Services. In acting as investment adviser to the
Fund, the Adviser shall regularly provide the Fund with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its assets and shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased, sold or exchanged and what portion of the assets
of the Fund shall be held in the various securities in which the Fund may
invest, subject always to the restrictions of the Trust's Declaration of Trust
and By-Laws, as amended from time to time, the provisions of the 1940 Act, and
the statements relating to the Fund's investment objectives, investment policies
and investment restrictions as the same are set forth in the currently effective
Prospectus and Statement of Additional Information of the Fund under the
Securities Act of 1933 (the "Prospectus"). Should the Board of Trustees of the
Trust at any time, however, 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 shall
take, on behalf of the Fund, all actions which it deems necessary to implement
the investment policies determined as provided above, and in particular to place
all orders for the purchase or sale of portfolio securities for the Fund's
account with brokers or dealers selected by it, and to that end, the Investment
Adviser is authorized as the Agent of the Fund to give instructions to the
Custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed at all times to
seek to obtain execution and prices within the policy guidelines determined by
the Board of Trustees and set forth in the Prospectus. Subject to this
requirement and the provisions of the 1940 Act, the Securities Exchange Act of
1934, and other applicable provisions of law, nothing shall prohibit the Adviser
from selecting brokers or dealers with which it or the Trust is affiliated if
permitted by applicable law or regulation.
(b) Administrative Services. In addition to the performance of investment
advisory services, the Adviser shall perform, or supervise the performance of,
administrative services in connection with the management of the Fund, including
processing share orders, administering shareholder accounts and handling
shareholder relations. In this connection, the Adviser agrees to (i) assist in
supervising all aspects of the Fund's operations, including the coordination of
all matters relating to the functions of the custodian, transfer agent, other
shareholder service agents, accountants, attorneys and other parties performing
services or operational functions for the Fund, (ii) provide the Fund, at the
Adviser's expense, with the services of persons competent to perform such
administrative and clerical functions as are necessary in order to provide,
effective administration of the Fund, and (iii) provide the Fund, at the
Adviser's expense, with adequate office space and related services necessary for
its operations as contemplated in this Agreement. The Trust agrees that the
Adviser may arrange for the provision of services and the performance of
functions referred to in this subsection (b) by Xxxxxxx Xxxxx Funds Distributor,
Inc., or other affiliates of Xxxxxxx Xxxxx & Co., Inc.
(c) Notice Upon Change in Partners of Investment Adviser. The Investment
Adviser is a limited partnership and its limited partner is Xxxxxxx Xxxxx & Co.,
Inc. and its general partner is Princeton Services, Inc. The Investment Adviser
will notify the Fund of any change in the membership of the partnership within a
reasonable time after such change.
ARTICLE 2. Allocation of Charges and Expenses.
(a) The Adviser. The Adviser assumes and shall pay for maintaining the
staff and personnel, and shall at its own expense provide the equipment, office
space and facilities necessary to perform its obligations under this Agreement,
and shall pay all compensation of officers of the Trust and of all Trustees of
the Trust who are affiliated persons of Xxxxxxx Xxxxx & Co., Inc. or its
subsidiaries.
(b) The Trust. The Trust assumes and shall pay all expenses of the Fund,
including, without limitation: organizational costs, taxes, shareholder
servicing costs, expenses for legal and auditing services, costs of printing
proxies, stock certificates, shareholder reports and prospectuses and statements
of additional information (except to the extent paid by the Distributor),
charges of the Custodian and Transfer Agent, expenses of portfolio transactions,
expenses of redemption of shares, Securities and Exchange Commission fees,
expenses of registering the shares under federal and state securities laws, fees
and expenses of directors who are not affiliated persons of Xxxxxxx Xxxxx & Co.,
Inc. or its subsidiaries, accounting and pricing costs (including the daily
calculation or net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Trust. It is also understood that the Fund will
reimburse the Adviser for its costs in providing accounting services to the
Fund. The Distributor will pay certain of the expenses of the Fund in connection
with the continuous offering of Fund shares.
ARTICLE 3. Compensation of the Adviser. For the services rendered, the
facilities furnished and expenses assumed by the Adviser, the Trust shall pay
the Adviser at the end of each calendar month a fee at an annual rate of 0.20%
of the average daily value of the net assets of the Fund, as determined and
computed in accordance with the description of the determination of net asset
value contained in the Prospectus. During any period when the determination of
net asset value is suspended by the Board of Trustees of the Trust, the net
asset value as of the last business day prior to such suspension shall for this
purpose be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
ARTICLE 4. Limitation of Liability of Trustees, Shareholders, Officers,
Employees and Agents. The Declaration of Trust establishing the Trust, dated May
7, 1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Xxxxxxx Xxxxx Funds For Institutions
Series" refers to the Trustees under the Declaration collectively as Trustees,
but not as individuals or personally; and no Trustee, shareholder, officer,
employee or agent of the Trust may be held to any personal liability, nor may
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise in connection with the affairs of said Trust but the Trust
Property only shall be liable.
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ARTICLE 5. Limitation of Liability of the Adviser. The Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with any investment policy or the purchase, sale or
redemption of any securities on the recommendation of the Adviser. Nothing
herein contained shall be construed to protect the Adviser against any liability
to the Trust or its security holders to which the Adviser shall otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence in the
performance of its duties on behalf of the Trust, reckless disregard of the
Adviser's obligations and duties under this Agreement or the violation of any
applicable law. As used in this Article 5, the term "Adviser" shall include any
affiliates of the Adviser performing services for the Trust contemplated hereby
and directors, officers and employees of the Adviser and such affiliates.
ARTICLE 6. Activities of the Adviser. The services of the Adviser under
this Agreement are not to be deemed exclusive, and the Adviser and its
affiliates shall be free to render similar services to others so long as its
services hereunder are not impaired thereby. It is understood that trustees,
officers, employees and shareholders of the Trust are or may become interested
in the Adviser and its affiliates, as directors, officers, employees or
shareholders or otherwise of the Adviser and are or may become similarly
interested in the Trust, and that the Adviser and its affiliates are or may
become interested in the Trust as shareholder or otherwise.
ARTICLE 7. Duration and Termination of this Agreement. This Agreement
shall become effective as of the date first above written and shall remain in
force until June __, 2000 and thereafter, but only so long as such continuance
is specifically approved at least annually by (i) the Board of Trustees of the
Trust, or by the vote of a majority of the outstanding voting securities of the
Fund, and (ii) by the vote of a majority of those Trustees 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.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund on sixty days' notice to the Adviser,
or by the Adviser, on sixty days' written notice to the Trust. This Agreement
shall automatically terminate in the event of its assignment.
ARTICLE 8. Amendments of this Agreement. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the vote of a
majority of the outstanding voting securities of the Fund, and (ii) the vote of
a majority of those Trustees of the Trust 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.
ARTICLE 9. Definition of Certain Terms. The terms "vote of a majority of
the outstanding voting securities", "assignment", "interested person" and
"affiliated person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act.
ARTICLE 10. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect and the applicable provisions of the 1940 Act. To the
extent that the applicable law of the State of New York, or any of the
provisions herein, conflicts with the applicable provisions of the 1940 Act, the
latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXX XXXXX FUNDS FOR INSTITUTIONS SERIES
By
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Name:
Title:
Attest:
By
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Name:
Title:
FUND ASSET MANAGEMENT, L.P.
By: Princeton Services, Inc.,
General Partner
By
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Name:
Title:
Attest:
By
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Name:
Title:
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