INVESTMENT ADVISORY AGREEMENT
October 4, 1993
Bank Xxxxxx Xxxx & Co., Ltd.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
BJB Investment Funds (the "Trust"), a business trust organized under
the law of The Commonwealth of Massachusetts, herewith confirms its
agreement with Bank Xxxxxx Xxxx & Co., Ltd., New York branch (the
"Adviser"), regarding investment advisory services to be provided by the
Adviser in connection with the Trust's BJB International Equity Fund (the
"Fund") as follows:
1. Investment Description; Appointment
The Trust desires to employ the Fund's capital by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in the Trust's Master Trust Agreement, as the same
may from time to time be amended, and in its Registration Statement as
from time to time in effect, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Trust.
Copies of the Trust's Registration Statement and Master Trust Agreement
have been or will be submitted to the Adviser. The Trust agrees to provide
copies of all amendments to the Trust's Registration Statement and Master
Trust Agreement to the Adviser on an on-going basis. The Trust desires to
employ and hereby appoints the Adviser to act as investment adviser and
servicing agent to the Fund. The Adviser accepts the appointment and
agrees to furnish the services described herein for the compensation set
forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of Trustees of
the Trust, the Adviser will (a) act in accordance with the Trust's Master
Trust Agreement, the Investment Company Act of 1940 and the Investment
Advisors Act of 1940, as the same from time to time be amended, (b) manage
the Fund's assets in accordance with its investment objective and policies
as stated in the Trust's Registration Statement as from time to time in
effect, (c) make investment decisions and exercise voting rights in
respect of portfolio securities for the Fund and (d) place purchase and
sale orders on behalf of the Fund. In providing these services, the
Adviser will provide investment research and supervision of the Fund's
investments and conduct a continual program of investment, evaluation and,
if appropriate, sale and reinvestment of the Fund's assets. In addition,
the Adviser will furnish the Fund with
whatever statistical information the Fund may reasonably request with respect
to the securities that the Fund may hold or contemplate purchasing.
3. Services as Servicing Agent.
Subject to the supervision and direction of the Board of Trustees of
the Trust, The Adviser undertakes to perform the following administrative
and shareholder services to the extent that no other party is obligated to
perform them on behalf of the Fund:
(a) Furnishing certain internal executive and administrative
services; responding to shareholder inquiries; and providing stationery
and office supplies in connection with the foregoing;
(b) Providing the Fund with office space (which may be in The
Adviser's own offices);
(c) Furnishing certain corporate secretarial services, including
assisting in the preparation of materials for meetings of the Board of
Trustees;
(d) Coordinating and preparation of proxy statements and annual
and semi-annual reports to the Fund's shareholders;
(e) Assisting in the preparation of the Fund's tax returns;
(f) Assisting in monitoring and developing compliance procedures
for the Fund which will include, among other matters, procedures for
monitoring compliance with the Fund's investment objective, policies,
restrictions, tax matters and applicable laws and regulations;
(g) Acting as liaison between the Fund and the Fund's
independent public accountants, counsel, custodian or custodians,
administrator and transfer and dividend-paying agent and registrar, and
taking all reasonable action in the performance of its obligations under
this Agreement to assure that all necessary information is made available
to each of them; and
(h) Furnishing to the Board of Trustees quarterly written
reports which set out the amounts expended under the Distribution and
Shareholder Services Plans and the purposes for which those expenditures
were made.
In performing all services under this Agreement, The Adviser shall
act in conformity with applicable law, the Trust's Master Trust Agreement
and By-Laws, and all amendments thereto, and the investment objective,
investment policies and other practices and policies set forth in the
Trust's Registration Statement, as such Registration Statement and
practices and policies may be amended from time to time.
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4. Brokerage
In executing transactions for the Fund and selecting brokers or
dealers, the Adviser will use its best efforts to seek the best overall
terms available. In assessing the best overall terms available for any
Fund transaction, the Adviser will consider all factors it deems relevant
including, but not limited to, breadth of the market in the security, the
price of the security, the financial condition and execution capability of
the broker or dealer and the reasonableness of any commission for the
specific transaction on a continuing basis. In selecting brokers or
dealers to execute a particular transaction and in evaluating the best
overall terms available, the Adviser may consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Trust and/or other
accounts over which the Adviser or an affiliate exercises investment
discretion.
5. Information Provided to the Trust
The Adviser will use its best efforts to keep the Trust informed of
developments materially affecting the Fund, and will, on its own
initiative, furnish the Trust from time to time whatever information the
Adviser believes is appropriate for this purpose.
6. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services described in paragraphs 2, 3, 4 and 5 above. The Adviser shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which this
Agreement relates, provided that nothing herein shall be deemed to protect
or purport to protect the Adviser against any liability to the Fund or its
shareholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties from reckless disregard by it of its obligations
and duties under this Agreement ("disabling conduct"). The Fund will
indemnify the Adviser against, and hold it harmless from, any and all
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or
suit not resulting from disabling conduct by the Adviser. Indemnification
shall be made only following: (i) a final decision on the merits by a
court or other body before whom the proceeding was brought that the person
to be indemnified was not liable by reason of disabling conduct or (ii) in
the absence of such a decision, a reasonable determination, based upon a
review of the facts, that the person to be indemnified was not liable by
reason of disabling conduct by (a) the vote of a majority of a quorum of
non-party trustees who are not "interested persons" of the Trust or (b) an
independent legal counsel in a written opinion.
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7. Compensation
(a) In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Adviser after the end of each calendar
quarter thereafter a fee for the previous quarter calculated at an annual
rate of 1.00% of the Fund's average daily net assets. The fee for the
period from the date Post-Effective Amendment No. 3 is declared effective
by the Securities and Exchange Commission to the end of the first calendar
quarter during which such Post-Effective Amendment is declared effective
shall be pro-rated according to the proportion that such period bears to
the full quarterly period.
(b) Upon any termination of this Agreement before the end of a
quarter, the fee for such part of that quarter shall be prorated according
to the proportion that such period bears to the full quarterly period and
shall be payable upon the date of termination of this Agreement. For the
purpose of determining fees payable to the Adviser, the value of the Fund's
net assets shall be computed at the times and in the manner specified in
the Trust's Registration Statement as from time to time in effect.
8. Expenses
The Adviser will bear all expenses in connection with the performance
of its services under this Agreement, including compensation of and office
space for its officers and employees connected with investment and
economic research, trading and investment management and administration of
the Fund, as well as the fees of all Trustees of the Trust who are
affiliated with the Adviser or any of its affiliates. The Fund will bear
certain other expenses to be incurred in its operation, including:
organizational expenses; taxes, interest, brokerage costs and
commissions; fees of Trustees of the Trust who are not officers,
directors, or employees of the Adviser, the Fund's distributor or
administrator or any of their affiliates; Securities and Exchange
Commission fees; state Blue Sky qualification fees; charges of the
custodian, any subcustodians, and transfer and dividend-paying agents;
insurance premiums; outside auditing, pricing and legal expenses; costs of
maintenance of the Trust's existence; costs attributable to investor
services, including, without limitation, telephone and personnel
expenses; costs of printing stock certificates; costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders; costs
of shareholders' reports and meetings of the shareholders of the Fund and
of the officers or Board of Trustees of the Trust; membership fees in
trade associations; litigation and other extraordinary or non-recurring
expenses. In addition, the Fund will pay distribution fees pursuant to a
Distribution Plan adopted under Rule 12b-1 of the Investment Company Act
of 1940, as amended, and pursuant to a Shareholder Services Plan.
9. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement and the Fund's sub-advisory agreement, but
excluding distribution fees, interest, taxes, brokerage and, if permitted
by state securities commissions, extraordinary expenses) exceed the
expense limitation of any state having jurisdiction over the Fund, the
Adviser will
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reimburse the Fund for such excess expenses in the same proportion as
its fees under this Agreement bear to the combined fees for investment
advice and sub-investment advice. The Adviser's expense reimbursement
obligation will be limited to the amount of its fees received pursuant
to this Agreement. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
10. Services to Other Companies or Accounts
The Trust understands that the Adviser now acts, will continue to
act, or may in the future act, as investment adviser to fiduciary and
other managed accounts or as investment adviser to one or more other
investment companies, and the Trust has no objection to the Adviser so
acting, provided that whenever the Fund and one or more other accounts or
investment companies advised by the Adviser have available funds for
investment, investments suitable and appropriate for each will be
allocated in accordance with procedures believed to be equitable to each
entity. Similarly, opportunities to sell securities will be allocated in
an equitable manner. The Trust recognizes that in some cases this
procedure may adversely affect the size of the position that may be
acquired or disposed of for the Fund. In addition, the Trust understands
that the persons employed by the Adviser to assist in the performance of
the Adviser's duties hereunder will not devote their full time to such
service and nothing contained herein 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.
11. Term of Agreement
This Agreement shall become effective as of the date the Fund
commences its investment operations and shall continue for an initial
two-year term and shall continue thereafter so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of
the Trust or (ii) a vote of a "majority" (as defined in the Investment
Company Act of 1940, as amended) of the Fund's outstanding voting
securities, provided that in either event the continuance is also approved
by a majority of the Board of Trustees who are not "interested persons"
(as defined in said Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement is terminable, without penalty, on 60 days' written notice,
by the Board of Trustees of the Trust or by vote of holders of a majority
of the Fund's shares, or upon 60 days' written notice, by the Adviser.
This Agreement will also terminate automatically in the event of its
assignment (as defined in said Act).
12. Representation by the Trust
The Trust represents that copy of its Master Trust Agreement, dated
April 30, 1992 together with all amendments thereto, is on file in the
office of the Secretary of The Commonwealth of Massachusetts.
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13. Limitation of Liability
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the
trust property of the Fund, as provided in the Master Trust Agreement of
the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees and the sole shareholder of Fund shares and
signed by an authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees and shareholder nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Fund as provided in its Master
Trust Agreement. The obligations of this Agreement shall be binding only
upon the assets and property of the Fund and not upon the assets and
property of any other sub-trust of the Trust.
14. Miscellaneous
If the Adviser ceases to act as investment adviser to the Fund, the
Trust agrees that, at the request of the Adviser, the Trust's license to
use "BJB" or any variation thereof indicating a connection to the Adviser
will terminate and that the Trust will take all necessary action to change
the names of the Trust and the Fund to names that do not include "BJB" or
any such variation.
15. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
16. Governing Law
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York without giving effect to
the conflicts of laws principles thereof.
* * * * *
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If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
BJB INVESTMENT FUNDS
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
Accepted:
BANK XXXXXX XXXX & CO., LTD.
By: /s/ Xxxxx Xxxx
----------------------------
Name: Xxxxx Xxxx
Title: Sr. Vice President
By: /s/ Xxxx Xxxxxx
----------------------------
Name: Xxxx Xxxxxx
Title: Sr. Vice President
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