AMENDMENT NO. 3 TO INVESTMENT ADVISORY AGREEMENT
(PRIME TRUST AND TREASURY TRUST FUNDS)
This Amendment, dated as of the 1st day of December, 1996, is entered
into between EMERALD FUNDS (the "Trust"), a Massachusetts business trust, and
XXXXXXX CAPITAL ADVISORS, INC. (the "Investment Adviser").
WHEREAS, the Trust and Xxxxxxx Xxxxx Trust Company, N.A. ("BBTC")
entered into an Investment Advisory Agreement dated as of June 28, 1991 (the
"Advisory Agreement"), providing for investment advisory services for certain of
the Trust's portfolios, including its Equity Fund, U.S. Government Securities
Fund, Florida Tax-Exempt Fund, Small Capitalization Fund, Balanced Fund, Managed
Bond Fund and Short-Term Fixed Income Fund; and
WHEREAS, the Investment Adviser has assumed the rights and obligations
of BBTC under the Advisory Agreement pursuant to an Assumption Agreement dated
as of June 28, 1996; and
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the
event the Trust establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as
investment adviser under the Advisory Agreement, the Trust shall so notify the
Investment Adviser in writing and if the Investment Adviser is willing to render
such services it shall notify the Trust in writing, and the compensation to be
paid to the Investment Adviser shall be that which is agreed to in writing by
the Trust and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Trust
has notified the Investment Adviser that it desires to retain the Investment
Adviser to act as the investment adviser for its Prime Trust Fund and Treasury
Trust Fund (the "Additional Funds") under the Advisory Agreement, and the
Investment Adviser has notified the Trust that it is willing to so serve as
investment adviser for the Additional Funds; and
WHEREAS, Section 1(b) of the Advisory Agreement provides that said
Additional Funds will be subject to the provisions of the Advisory Agreement to
the same extent as the Funds named in subparagraph (a) thereof except to the
extent said provisions are modified with respect to an Additional Fund in
writing by the Trust and the Investment Adviser;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Adviser to
act as investment adviser to the Trust for the Additional Funds for the period
and on the terms set forth in the Advisory Agreement. The Investment Adviser
hereby accepts such appointment and agrees to render the services set forth in
the Advisory Agreement for the compensation herein provided.
2. SUBCONTRACTORS. It is understood that the Investment Adviser may
from time to time employ or associate with such person or persons as the
Investment Adviser may believe to be particularly fitted to assist it in the
performance of this Agreement with respect to the Additional Funds; provided,
however, that the compensation of such person or persons shall be paid by the
Investment Adviser. In addition, notwithstanding any such employment or
association, the Investment Adviser shall itself (a) establish and monitor
general investment criteria and policies for the Additional Funds, (b) review
and analyze on a periodic basis the Additional Funds' portfolio holdings and
transactions in order to determine their appropriateness in light of the
Additional Funds' shareholder base, and (c) review and analyze on a periodic
basis the policies established by any sub-adviser for the Additional Funds with
respect to the placement of orders for the purchase and sale of portfolio
securities. Subject to the foregoing, it is agreed that investment advisory
services to an Additional Fund may be provided by a sub-investment adviser (the
"Sub-Adviser") pursuant to a sub-advisory agreement agreeable to the Trust and
approved in accordance with the provisions of the 1940 Act (the "Sub-Advisory
Agreement").
3. COMPENSATION. For the services provided and the expenses assumed
pursuant to the Advisory Agreement, the Trust will pay the Investment Adviser,
and the Investment Adviser will accept as full compensation therefor from the
Trust, a fee, computed daily and payable monthly, at the following annual rates:
.10% of the average daily net assets of the Prime Trust Fund, and .10% of the
average daily net assets of the Treasury Trust Fund.
Such fee as is attributable to each Additional Fund shall be the
several (and not joint or joint and several) obligation of each such Fund.
If in any fiscal year the aggregate expenses of any Additional Fund
(as defined under the securities regulations of any state having jurisdiction
over such Fund) exceed the expense limitations of any such state, the Trust may
deduct from the fees to be paid hereunder, or the Investment Adviser will bear,
to the extent required by state law, that portion of the excess which bears the
same relation to the total of such excess as the Investment Adviser's fee
hereunder with respect to such Fund bears to the total fees otherwise payable
with respect to such Fund for the fiscal year by the Trust hereunder and under
the
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administration agreement between the Trust and its administrator. The
Investment Adviser's obligation is not limited to the amount of its fees
hereunder. Such deduction or payment, if any, will be estimated and accrued
daily and paid on a monthly basis.
4. AMENDMENTS. The last sentence of Section 11 of the Advisory
Agreement is amended and restated in its entirety to read: "With respect to
each Additional Fund, to the extent required by the 1940 Act, no amendment of
the Advisory Agreement shall be effective as to a particular Additional Fund
until approved by vote of a majority of the outstanding voting securities of
such Additional Fund."
5. CAPITALIZED TERMS. From and after the date hereof, the term
"Funds" as used in the Advisory Agreement shall be deemed to include the
Additional Funds. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Advisory Agreement.
6. MISCELLANEOUS. Except to the extent supplemented hereby, the
Advisory Agreement shall remain unchanged and in full force and effect and is
hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date and year first above written.
EMERALD FUNDS
By: Xxxx X. Xxxxxxxx
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Title: President
XXXXXXX CAPITAL ADVISORS, INC.
By: Xxxxx X. Xxxxx
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Title: President
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