MASTER INVESTMENT ADVISORY AGREEMENT
Exhibit (d)(1)
THIS AGREEMENT is made this 1st day of June, 2010, by and between Invesco Xxx
Xxxxxx Exchange Fund, a California limited partnership (the “Fund”), and Invesco Advisers, Inc., a
Delaware corporation (the “Adviser”).
RECITALS
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as amended (the
“1940 Act”), as an open-end management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of 1940, as amended (the
“Advisers Act”), as an investment advisor and engages in the business of acting as an investment
advisor;
WHEREAS, the Fund and the Adviser desire to enter into an agreement to provide for investment
advisory services to the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Advisory Services. The Adviser shall act as investment advisor for the Fund and shall,
in such capacity, supervise all aspects of the Fund’s operations, including the investment and
reinvestment of cash, securities or other properties comprising the Fund’s assets, subject at all
times to the policies and control of the Board of Managing General Partners. The Adviser shall
give the Fund the benefit of its best judgment, efforts and facilities in rendering its services
as investment advisor.
2. Investment Analysis and Implementation. In carrying out its obligations under Section 1
hereof, the Adviser shall:
(a) supervise all aspects of the operations of the Fund;
(b) obtain and evaluate pertinent information about significant developments and
economic, statistical and financial data, domestic, foreign or otherwise, whether affecting
the economy generally or the Fund, and whether concerning the individual issuers whose
securities are included in the assets of the Fund or the activities in which such issuers
engage, or with respect to securities which the Adviser considers desirable for inclusion in
the Fund’s assets;
(c) determine which issuers and securities shall be represented in the Fund’s investment
portfolios and regularly report thereon to the Board of Managing General Partners;
(d) formulate and implement continuing programs for the purchases and sales of the
securities of such issuers and regularly report thereon to the Board of Managing General
Partners; and
(e) take, on behalf of the Fund, all actions which appear to the Fund necessary to carry
into effect such purchase and sale programs and supervisory functions as aforesaid, including
but not limited to the placing of orders for the purchase and sale of securities for the Fund.
3. Securities Lending Duties and Fees. The Adviser agrees to provide the following
services in connection with the securities lending activities of the Fund: (a) oversee
participation in the securities lending program to ensure compliance with all applicable
regulatory and investment guidelines; (b) assist the securities lending agent or principal (the
“Agent”) in determining which specific securities are available for loan; (c) monitor the Agent
to ensure that securities loans are effected in accordance with the Adviser’s instructions and
with procedures adopted by the Board of Managing General Partners; (d) prepare appropriate
periodic reports for, and seek appropriate approvals from, the Board of Managing General Partners
with respect to securities lending activities; (e) respond to Agent inquiries; and (f) perform
such other duties as necessary.
As compensation for such services provided by the Adviser in connection with securities
lending activities, the Fund shall pay the Adviser a fee equal to 25% of the net monthly interest
or fee income retained or paid to the Fund from such activities.
4. Delegation of Responsibilities. The Adviser is authorized to delegate any or all of its
rights, duties and obligations under this Agreement to one or more sub-advisers, and may enter
into agreements with sub-advisers, and may replace any such sub-advisers from time to time in its
discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from time to time or are
interpreted from time to time by the staff of the Securities and Exchange Commission (“SEC”), and
if applicable, exemptive orders or similar relief granted by the SEC and upon receipt of approval
of such sub-advisers by the Board of Managing General Partners and by shareholders (unless any
such approval is not required by such statutes, rules, regulations, interpretations, orders or
similar relief).
5. Independent Contractors. The Adviser and any sub-advisers shall for all purposes herein
be deemed to be independent contractors and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed
to be an agent of the Fund.
6. Control by Board of Managing General Partners. Any investment program undertaken by the
Adviser pursuant to this Agreement, as well as any other activities undertaken by the Adviser on
behalf of the Fund, shall at all times be subject to any directives of the Board of Managing
General Partners.
7. Compliance with Applicable Requirements. In carrying out its obligations under this
Agreement, the Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and any rules and
regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the same may be amended
from time to time under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Certificate and Agreement of Limited Partnership, as the same
may be amended from time to time;
(d) the provisions of the by-laws of the Fund, as the same may be amended from time to
time; and
(e) any other applicable provisions of state, federal or foreign law.
8. Broker-Dealer Relationships. The Adviser is responsible for decisions to buy and sell
securities for the Fund, broker-dealer selection, and negotiation of brokerage commission rates.
(a) The Adviser’s primary consideration in effecting a security transaction will be to
obtain the best execution.
(b) In selecting a broker-dealer to execute each particular transaction, the Adviser will
take the following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the broker-dealer to the
investment performance of the Fund on a continuing basis. Accordingly, the price to the Fund
in any transaction may be less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the fund execution services offered.
(c) Subject to such policies as the Board of Managing General Partners may from time to
time determine, the Adviser shall not be deemed to have acted unlawfully or to have breached
any duty created by this Agreement or otherwise solely by reason of its having caused the Fund
to pay a broker or dealer that provides brokerage and research services to the Adviser an
amount of commission for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting
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that transaction, if the Adviser determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research services provided by
such broker or dealer, viewed in terms of either that particular transaction or the Adviser’s
overall responsibilities with respect to the Fund, and to other clients of the Adviser as to
which the Adviser exercises investment discretion. The Adviser is further authorized to
allocate the orders placed by it on behalf of the Fund to such brokers and dealers who also
provide research or statistical material, or other services to the Fund, to the Adviser, or to
any sub-adviser. Such allocation shall be in such amounts and proportions as the Adviser shall
determine and the Adviser will report on said allocations regularly to the Board of Managing
General Partners indicating the brokers to whom such allocations have been made and the basis
therefor.
(d) With respect to the Fund, to the extent the Adviser does not delegate trading
responsibility to one or more sub-advisers, in making decisions regarding broker-dealer
relationships, the Adviser may take into consideration the recommendations of any sub-adviser
appointed to provide investment research or advisory services in connection with the Fund, and
may take into consideration any research services provided to such sub-adviser by
broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act, the Securities
Exchange Act of 1934, and rules and regulations thereunder, as such statutes, rules and
regulations are amended from time to time or are interpreted from time to time by the staff of
the SEC, any exemptive orders issued by the SEC, and any other applicable provisions of law,
the Adviser may select brokers or dealers with which it or the Fund are affiliated.
9. Compensation. The compensation that the Fund shall pay the Adviser is set forth in
Appendix A attached hereto.
10. Expenses of the Fund. All of the ordinary business expenses incurred in the operations
of the Fund and the offering of its shares shall be borne by the Fund unless specifically
provided otherwise in this Agreement. These expenses borne by the Fund include but are not
limited to brokerage commissions, taxes, legal, accounting, auditing, or governmental fees, the
cost of preparing share certificates, custodian, transfer and shareholder service agent costs,
expenses of issue, sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and other expenses
incurred by the Fund in connection with membership in investment company organizations and the
cost of printing copies of prospectuses and statements of additional information distributed to
the Fund’s shareholders.
11. Services to Other Companies or Accounts. The Fund understands that the Adviser now
acts, will continue to act and may act in the future as investment manager or Adviser to
fiduciary and other managed accounts, and as investment manager or adviser to other investment
companies, including any offshore entities, or accounts, and the Fund has no objection to the
Adviser so acting, provided that whenever the Fund and one or more other investment companies or
accounts managed or advised by the Adviser have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a formula believed to be
equitable to each company and account. The Fund recognizes that in some cases this procedure may
adversely affect the size of the positions obtainable and the prices realized for the Fund.
12. Non-Exclusivity. The Fund understands that the persons employed by the Adviser to
assist in the performance of the Adviser’s duties under this Agreement will not devote their full
time to such service and nothing contained in this Agreement shall be deemed to limit or restrict
the right of the Adviser or any affiliate of the Adviser to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature. The Fund further
understands and agrees that officers or directors of the Adviser may serve as officers or
partners of the Fund, and that officers or partners of the Fund may serve as officers or
directors of the Adviser to the extent permitted by law; and that the officers and directors of
the Adviser are not prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors or trustees of any
other firm or trust, including other investment advisory companies.
13. Effective Date, Term and Approval. This Agreement shall become effective with respect
to the Fund, if approved by the shareholders of the Fund, on the date indicated above. If so
approved, this Agreement shall
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thereafter continue in force and effect until two years after the date indicated above, and
may be continued from year to year thereafter, provided that the continuation of the Agreement is
specifically approved at least annually:
(a) (i) by the Board of Managing General Partners or (ii) by the vote of “a majority of
the outstanding voting securities” of the Fund (as defined in Section 2(a)(42) of the 0000
Xxx); and
(b) by the affirmative vote of a majority of the Managing General Partners who are not
parties to this Agreement or “interested persons” (as defined in the 0000 Xxx) of a party to
this Agreement (other than as Managing General Partners of the Fund), by votes cast in person
at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Fund at any time, without the
payment of any penalty, by vote of the Board of Managing General Partners or by vote of a
majority of the outstanding voting securities of the Fund, or by the Adviser, on sixty (60) days’
written notice to the other party. The notice provided for herein may be waived by the party
entitled to receipt thereof. This Agreement shall automatically terminate in the event of its
assignment, the term “assignment” for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless it is in writing
and signed by the party against which enforcement of the amendment is sought.
16. Liability of Adviser and Fund. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part of the Adviser or
any of its officers, directors or employees, the Adviser shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
17. Liability of Shareholders. Notice is hereby given that, as provided by applicable law,
the obligations of or arising out of this Agreement are not binding upon any of the shareholders
of the Fund individually but are binding only upon the assets and property of the Fund and that
the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the
same limitation on personal liability as shareholders of private corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing, addressed and
delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at
such address as such party may designate for the receipt of such notice. Until further notice to
the other party, it is agreed that the address of the Fund and that of the Adviser shall be 00
Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000.
19. Questions of Interpretation. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or provision of the
1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940
Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in
the absence of any controlling decision of any such court, by rules, regulations or orders of the
SEC issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act
or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or
order of the SEC, such provision shall be deemed to incorporate the effect of such rule,
regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed
in accordance with the laws (without reference to conflicts of law provisions) of the State of
Texas.
20. License Agreement. The Fund shall have the non-exclusive right to use the name
“Invesco” to designate any current or future series of shares only so long as Invesco Advisers,
Inc. serves as investment manager or Adviser to the Fund with respect to such series of shares.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate
by their respective officers on the day and year first written above.
| Invesco Xxx Xxxxxx Exchange Fund | ||||
Attest: |
||||
| By: | ||||
Assistant Secretary |
||||
| Name: | ||||
| Title: | ||||
(SEAL) |
||||
| Invesco Advisers, Inc. | ||||
Attest: |
||||
| By: | ||||
Assistant Secretary |
||||
| Name: | ||||
| Title: | ||||
(SEAL) |
||||
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APPENDIX A
COMPENSATION TO THE ADVISER
The Fund shall pay the Adviser, out of its assets, as full compensation for all services
rendered, an advisory fee for the Fund set forth below. Such fee shall be calculated by applying
the following annual rates to the average daily net assets of the Fund for the calendar year.
| Fund | Annual Rate | |
Invesco Xxx Xxxxxx Exchange Fund
|
0.30% of the Fund’s average net assets |
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