INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this fifteenth day of September, 1998 by and
between THE XXXXXXX TRUST, a Delaware business trust (the "Trust"), on behalf of
its series of funds designated on Schedule A attached hereto (the "Fund") and
XXXXXXX ASSET MANAGEMENT, INC., a New York corporation (the "Investment
Adviser");
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, the Investment Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"), and engages in the business of acting as an investment adviser;
and
WHEREAS, the Trust and the Investment Adviser desire to enter
into an agreement to provide for the management of the assets of the Fund on 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 whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Management. The Investment Adviser shall act as investment
adviser for the Trust and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Trust's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Adviser shall give the Trust the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser. The Investment Adviser shall, for all purposes herein, be deemed an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Duties of Investment Advisor. In carrying out its
obligation under paragraph 1 hereof, the Investment Adviser shall:
(a) supervise and manage all aspects of the Fund's
operations;
(b) provide the Fund or obtain for it, and thereafter
supervise, such executive, administrative, clerical and
shareholder servicing services as are deemed advisable
by the Trust's Board of Trustees;
(c) arrange, but not pay for, the periodic updating of
prospectuses and supplements thereto, proxy material,
tax returns, reports to the Funds' shareholders and
reports to and filings with the Securities and Exchange
Commission, state Blue Sky authorities;
(d) provide the Funds with, or obtain for them, adequate
office space and all necessary office equipment and
services, including telephone service, heat, utilities,
stationery supplies and similar items for the Funds'
principal office;
-2-
(e) provide the Board of Trustees of the Trust on a regular
basis with financial reports and analyses on the Fund's
operations and the operations of comparable investment
companies;
(f) 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 Funds, and
whether concerning the individual issuers whose
securities are included in the Funds or the activities
in which they engage, or with respect to securities
which the Investment Adviser considers desirable for
inclusion in the Funds;
(g) determine what issuers and securities shall be
represented in the Funds' portfolio and regularly
report them to the Board of Trustees of the Trust;
(h) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers
and regularly report thereon to the Board of Trustees
of the Trust; and
(i) take, on behalf of the Funds, all actions which appear
to the Funds necessary to carry into effect such
purchase and sale programs and supervisory functions as
aforesaid, including the placing of orders for the
purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is
responsible for decisions to buy and sell securities for the Funds,
broker-dealer selection, and negotiation of brokerage commission rates. The
Investment Adviser may select Xxxxxxx & Co., Inc. or any other affiliated person
of the Trust or the Investment Adviser to the extent permitted pursuant to the
Trust's procedures for securities transactions with affiliated brokers pursuant
to Section
-3-
17(e)(2) and Rule 17e-1 under The Investment Company Act. The Investment
Adviser's primary consideration in effecting a security transaction will be
execution at a price that is reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions, including similar securities being purchased or
sold on a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular
transaction, the Investment 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 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
portfolio execution services offered. Subject to such policies and procedures as
the Board of Trustees may determine, the Investment 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 Funds to pay a broker or
dealer that provides brokerage and research services to the Investment Adviser
for the Funds' use an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Investment 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
-4-
transaction or the Investment Adviser's overall responsibilities with respect to
the Funds. The Investment Adviser is further authorized to allocate the orders
placed by it on behalf of the Funds to such brokers and dealers who also provide
research or statistical material, or other services to the Funds or the
Investment Adviser for the Fund's use. Such allocation shall be in such amounts
and proportions as the Investment Adviser shall determine and the Investment
Adviser will report on said allocations regularly to the Board of Trustees of
the Trust indicating the brokers to whom such allocations have been made and the
basis therefor.
4. Control by Board of Trustees. Any investment program
undertaken by the Investment Adviser pursuant to this Agreement, as well as any
other activities undertaken by the Investment Adviser on behalf of the Funds
pursuant thereto, shall at all times be subject to any directives of the Board
of Trustees of the Trust.
5. Compliance with Applicable Requirements. In carrying out
its obligations under this Agreement, the Investment Adviser shall at all times
conform to:
(a) all applicable provisions of the Investment Company
Act and the Investment Advisers Act and any rules and regulations adopted
thereunder as amended; and
(b) the provisions of the Registration Statements of the
Funds under the Securities Act of 1933, as amended, and the Investment Company
Act; and
(c) the provisions of the Trust Instrument of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as
amended; and
(e) any other applicable provisions of state and federal
law.
-5-
6. Expenses. The expenses connected with the Fund shall be
allocable between the Funds and the Investment Adviser as follows:
(a) The Investment Adviser shall furnish, at its expense
and without cost to the Trust, the services of a President, Secretary and one or
more Vice Presidents of the Funds, to the extent that such additional officers
may be required by the Funds for the proper conduct of its affairs.
(b) The Investment Adviser shall further maintain, at its
expense and without cost to the Fund, a trading function in order to carry out
its obligations under subparagraph (i) of paragraph 2 hereof to place orders for
the purchase and sale of portfolio securities for the Funds.
(c) Nothing in subparagraph (a) hereof shall be construed
to require the Investment Adviser to bear:
(i) any of the costs (including applicable office space,
facilities and equipment) of the services of a principal
financial officer of the Funds whose normal duties consist of
maintaining the financial accounts and books and records of the
Funds; including the reviewing of calculations of net asset value
and preparing tax returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the personnel
operating under the direction of such principal financial
officer. Notwithstanding the obligation of
-6-
the Funds to bear the expense of the functions referred to in
clauses (i) and (ii) of this subparagraph (c), the Investment
Adviser may pay the salaries, including any applicable employment
or payroll taxes and other salary costs, of the principal
financial officer and other personnel carrying out such functions
and the Fund shall reimburse the Investment Adviser therefor upon
proper accounting.
(d) All of the ordinary business expenses incurred in the
operations of the Funds and the offering of its shares shall be borne by the
Funds unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing, taxes or
governmental fees, networking servicing costs, fund accounting servicing costs,
administrative servicing costs, fulfillment servicing costs, the cost of
preparing share certificates, custodian, depository, transfer and shareholder
service agent costs, expenses of issue, sale, redemption and repurchase of
shares, expenses of registering and qualifying shares for sale, insurance
premiums on property or personnel (including officers and trustees if available)
of the Funds which inure to its benefit, expenses relating to trustee and
shareholder meetings, the cost of preparing and distributing reports and notices
to shareholders, the fees and other expenses incurred by the Funds in connection
with membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed to
shareholders.
7. Delegation of Responsibilities. The Investment Adviser may
delegate the performance of certain investment advisory services to a
subadvisor.
-7-
8. Compensation. The Funds shall pay the Investment Adviser in
full compensation for services rendered hereunder an annual investment advisory
fee, payable monthly, of the percentage of the Fund's average daily net assets
set forth on Schedule A attached hereto. The average daily net asset value of
the Funds shall be determined in the manner set forth in the Registration
Statement of the Funds.
The Investment Adviser may from time to time and for such
periods as it deems appropriate voluntarily reduce its compensation hereunder
(and/or voluntarily assume expenses) for the Funds. The Investment Adviser may,
at any later date, recoup such amounts after such time as the Investment Adviser
is no longer reducing its compensation and/or assuming expenses for the Funds
provided that the aggregate expenses in the year such amounts are recouped do
not exceed any limitation to which the Investment Adviser has agreed.
9. Non-Exclusivity. The services of the Investment Adviser to
the Funds are not to be deemed to be exclusive, and the Investment Adviser shall
be free to render investment advisory and corporate administrative or other
services to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or Partners of the
Investment Adviser may serve as officers or trustees of the Trust, and that
officers or trustees of the Trust may serve as officers or partners of the
Investment Adviser to the extent permitted by law; and that the officers and
partners of the Investment Adviser are not prohibited from engaging in any other
business activity or from rendering
-8-
services to any other person, or from serving as partners, officers or partners
of any other firm or corporation, including other investment companies.
10. Term and Approval. This Agreement shall become effective
at the close of business on the date hereof and shall remain in force and effect
for two years and thereafter from year to year, provided that such continuance
is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the
vote of a majority of the Funds' outstanding voting securities (as defined in
Section 2(a)(42) of the Investment Company Act); and
(b) by the affirmative vote of a majority of the Trustees
who are not parties to this Agreement or interested persons of a party to this
Agreement (other than as Trust trustees), by votes cast in person at a meeting
specifically called for such purpose.
11. Termination. This Agreement may be terminated at any time
with respect to any or all Funds, without the payment of any penalty, by vote of
the Trust's Board of Trustees or by vote of a majority of the Funds' outstanding
voting securities, or by the Investment Adviser, on sixty (60) days' written
notice to the other party. The notice provided for herein may be waived by
either party. Termination of this Agreement with respect to one Fund shall not
affect the binding nature of the Agreement on the remaining Funds. This
Agreement shall automatically terminate in the event of its assignment, the term
"assignment" for the purpose having the meaning defined in Section 2(a)(4) of
the Investment Company Act.
12. Liability of Investment Adviser and Indemnification. In
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties
-9-
hereunder on the part of the Investment Adviser or any of its officers, trustees
or employees, it shall not be subject to liability to the Trust or to any
shareholder of the Trust for any 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.
13. Liability of Trustees and Shareholders. A copy of the
Certificate of Trust of the Trust is on file with the Secretary of State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the trustees of the Trust as trustees and not individually and that the
obligations of this instrument are not binding upon any of the trustees or
shareholders individually but are binding only upon the assets and property of
the Funds.
14. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
Trust and that of the Investment Adviser shall be 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
15. 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 Investment Company Act
shall be resolved by reference to such term or
-10-
provision of the 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 Securities and Exchange Commission issued
pursuant to said Act. In addition, where the effect of a requirement of the
Investment Company Act reflected in any provision of this Agreement is released
by rules, regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
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 above written.
THE XXXXXXX TRUST,
Attest: By: /s/Xxxx Kick
------------
Xxxx Kick, Chief Financial Officer
Xxxxxxxxx Xxxxxxxxx, Xx., Secretary
XXXXXXX ASSET MANAGEMENT,
INC.
Attest:
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx, Chairman
Xxxxxxxxx Xxxxxxxxx, Xx.
-11-
SCHEDULE A
The Xxxxxxx Trust:
------------------
Advisory Fee
================================================================================
Ramirez Cash Management Money Market 0.35% Average Daily Net Assets
Fund
--------------------------------------------------------------------------------
Xxxxxxx New York Tax-Free Money 0.35% Average Daily Net Assets
Market Fund
--------------------------------------------------------------------------------
Xxxxxxx U.S. Treasury Money Market 0.35% Average Daily Net Assets
Fund
================================================================================
-12-
