INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 2nd day of September, 1993 by and between TCW/DW
Balanced Fund, an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts (hereinafter called the "Fund"), and TCW Funds
Management, Inc., a California corporation (hereinafter called the "Investment
Adviser"):
WHEREAS, The Fund intends to engage in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, The Investment Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act"), and engages in the
business of acting as investment adviser; and
WHEREAS, The Fund desires to retain the Investment Adviser to render
investment advisory services in the manner and on the terms and conditions
hereinafter set forth; and
WHEREAS, The Investment Adviser desires to be retained to perform services
on said terms and conditions;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Adviser agree as follows:
Xxx0.Xxxx hereby retains the Investment Adviser to act as investment
adviser of the Fund and, subject to the supervision of the Trustees of
the Fund (the "Trustees"), to invest the Fund's assets as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Adviser shall
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; shall continuously invest
the assets of the Fund in a manner consistent with the investment objectives and
policies of the Fund; shall determine the securities and commodities to be
purchased, sold or otherwise disposed of by the Fund and the timing of such
purchases, sales and dispositions; and shall take such further action, including
the placing of purchase and sale orders on behalf of the Fund, as the Investment
Adviser shall deem necessary or appropriate. The Investment Adviser shall also
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses and opinions formulated or obtained by the Investment
Adviser in the discharge of its duties as the Fund may, from time to time,
reasonably request.
2.
The Investment Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Adviser shall be deemed to
include persons employed or otherwise retained by the Investment Adviser to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Adviser may
desire. The Investment Adviser shall provide the Fund's manager with such
records and information as may reasonably be required by the Fund's manager
pursuant to its obligations under its management agreement with the Fund to
maintain the Fund's books and records.
3.
The Fund will, from time to time, furnish or otherwise make available to
the Investment Adviser such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Adviser may reasonably require in order to discharge its duties and obligations
hereunder.
The4.Investment Adviser shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall,
at its own expense, pay the compensation of its directors, officers and
employees, if any, who are also Trustees or officers of the Fund.
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5.
The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund (except expenses borne by the Fund's manager pursuant to a
management agreement with the Fund), including without limitation: fees pursuant
to any management agreement into which the Fund may enter; fees pursuant to any
plan of distribution that the Fund may adopt; the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the safekeeping
of its cash, portfolio securities or commodities and other property, and any
stock transfer or dividend agent or agents appointed by the Fund; brokers'
commissions chargeable to the Fund in connection with portfolio transactions to
which the Fund is a party; all taxes, including securities or commodities
issuance and transfer taxes, and fees payable by the Fund to federal, state or
other governmental agencies; the cost and expense of engraving or printing
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the Fund and
its shares with the Securities and Exchange Commission and various states and
other jurisdictions (including filing fees and legal fees and disbursements of
counsel and the costs and expenses of preparing, printing, including
typesetting, and distributing prospectuses and statements of additional
information for such purposes); all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Adviser or the Fund's
manager or any corporate affiliate of either of them; all expenses incident to
the payment of any dividend or distribution program; charges and expenses of any
outside service used for pricing of the Fund's shares; charges and expenses of
legal counsel, including counsel to the Trustees of the Fund who are not
interested persons (as defined in the Act) of the Fund or the Investment Adviser
or the Fund's manager, and of independent accountants, in connection with any
matter relating to the Fund; membership dues of industry associations; interest
payable on Fund borrowings; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Fund which inure to its benefit;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto); and
all other charges and costs of the Fund's operation unless otherwise explicitly
provided herein.
6.
For the services to be rendered by the Investment Adviser, the Fund shall
pay to the Investment Adviser monthly compensation determined by applying
the annual rate of 0.30% to the Fund's average daily net assets. Such
calculation shall be made by applying 1/365th of the annual rate to the Fund's
net assets each day determined as of the close of business on that day or the
last previous business day. If this Agreement becomes effective subsequent to
the first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above.
7.
In the event the operating expenses of the Fund, including amounts
payable to the Investment Adviser pursuant to paragraph 6 hereof, for any
fiscal year ending on a date on which this Agreement is in effect, exceed the
expense limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Investment Adviser shall reduce its advisory fee to the extent of
40% of such excess and, if and to the extent required by law, pursuant to any
such laws or regulations, will reimburse the Fund for 40% of annual operating
expenses in excess of any expense limitation that may be applicable; provided,
however, there shall be excluded from such expenses the amount of any interest,
taxes, distribution fees, brokerage commissions and extraordinary expenses
(including but not limited to legal claims and liabilities and litigation costs
and any indemnification related thereto) paid or payable by the Fund. Such
reduction, if any, shall be computed and accrued weekly, shall be settled on a
monthly basis, and shall be based upon the expense limitation applicable to the
Fund as at the end of the last business day of the month. Should two or more
such expense limitations be applicable as at the end of the last full week of
the month, that expense limitation which results in the largest reduction in the
Investment Adviser's fee shall be applicable.
For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt securities in the Fund's portfolio accrued
to and including the last day of the Fund's fiscal year, and dividends declared
on equity securities in the Fund's portfolio, the record dates for which fall on
or prior to the last day of such fiscal year, but not include gains from the
sale of securities.
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8.
The Investment Adviser will use its best efforts in its investment of the
Fund's assets, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations hereunder, the
Investment Adviser shall not be liable to the Fund or any of its investors for
any error of judgment or mistake of law or for any act or omission by the
Investment Adviser or for any losses sustained by the Fund or its investors. The
Adviser shall be indemnified by the Fund as an agent of the Fund in accordance
with the terms of Section 4.8 of the Fund's By-Laws.
9.
Nothing contained in this Agreement shall prevent the Investment Adviser
or any affiliated person of the Investment Adviser from acting as
investment adviser or manager for any other person, firm or corporation
(including any other investment company), whether or not the investment
objectives or policies of any such other person, firm or corporation are similar
to those of the Fund, and shall not in any way bind or restrict the Investment
Adviser or any such affiliated person from buying, selling or trading any
securities or commodities for their own accounts or for the account of others
for whom the Investment Adviser or any such affiliated person may be acting.
Nothing in this Agreement shall limit or restrict the right of any Trustee,
officer or employee of the Investment Adviser to engage in any other business or
to devote his or her time and attention in part to the management or other
aspects of any other business whether of a similar or dissimilar nature.
10.
This Agreement shall remain in effect until April 30, 1995 and from year
to year thereafter provided such continuance is approved at least
annually by the vote of holders of a majority, as defined in the Act, of the
outstanding voting securities of the Fund or by the Board of Trustees of the
Fund; provided that in either event such continuance is also approved annually
by the vote of a majority of the Trustees of the Fund who are not parties to
this Agreement or "interested persons" (as defined in the Act) of any such
party, which vote must be cast in person at a meeting called for the purpose of
voting on such approval; provided, however, that (a) the Fund may, at any time
and without the payment of any penalty, terminate this Agreement upon thirty
days' written notice to the Investment Adviser, either by majority vote of the
Trustees of the Fund or by the vote of a majority of the outstanding voting
securities of the Fund; (b) this Agreement shall immediately terminate in the
event of its assignment (to the extent required by the Act and the rules
thereunder) unless such automatic terminations shall be prevented by an
exemptive order of the Securities and Exchange Commission; and (c) the
Investment Adviser may terminate this Agreement without payment of penalty on
thirty days' written notice to the Fund. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed post-paid, to the other
party at the principal office of such party.
11.
This Agreement may be amended by the parties without the vote or consent
of the shareholders of the Fund to supply any omission, to cure, correct
or supplement any ambiguous, defective or inconsistent provision hereof, or if
they deem it necessary to conform this Agreement to the requirements of
applicable federal laws or regulations, but neither the Fund nor the Investment
Adviser shall be liable for failing to do so.
12.
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent
the applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the Advisers Act or any
rules, regulations or orders of the Securities and Exchange Commission, the
latter shall control.
13.
The Fund acknowledges that Trust Company of the West, an affiliate of the
Investment Adviser, owns its own name, initials and logo. The Fund agrees
to change its name at the request of the Investment Adviser if this Agreement is
terminated for any reason.
14.
The Declaration of Trust establishing TCW/DW Balanced Fund, dated March
1, 1993, 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 TCW/DW Balanced Fund 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 TCW/DW
Balanced Fund shall be held to any personal liability, nor shall resort be had
to their private property for the satisfaction of any obligation or claim or
otherwise, in connection with the affairs of said TCW/DW Balanced Fund, but the
Trust Estate only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
TCW/DW BALANCED FUND
By ...................................
Attest:
.....................................
TCW FUNDS MANAGEMENT, INC.
By ...................................
Attest:
.....................................
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