INVESTMENT ADVISORY AGREEMENT
THE OFFITBANK INVESTMENT FUND, INC.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
____________, 1997
OFFITBANK
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
This will confirm the agreement between the undersigned (the "Company") and
you (the "Investment Adviser") as follows:
1. The Company is an open-end investment company which currently has
eleven investment portfolios. The Company proposes to engage in the business of
investing and reinvesting the assets of the OFFITBANK Total Return Fund,
OFFITBANK U.S. Government Securities Fund and OFFITBANK Mortgage Securities Fund
(individually a "Fund", collectively, the "Funds") in the manner and in
accordance with the investment objectives and limitations specified in the
Company's Articles of Incorporation and Articles Supplementary (the "Articles")
and the currently effective prospectus, including the documents incorporated by
reference therein (the "Prospectus"), relating to the Company and the Funds,
included in the Company's Registration Statement, as amended from time to time
(the "Registration Statement"), filed by the Company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the Securities Act of
1933, as amended. Copies of the documents referred to in the preceding sentence
have been furnished to the Investment Adviser. Any amendments to these
documents shall be furnished to the Investment Adviser.
2. The Company employs the Investment Adviser to (a) make investment
strategy decisions for the Funds, (b) manage the investing and reinvesting of
the Funds' assets as specified in paragraph 1, (c) place purchase and sale
orders on behalf of the Funds and (d) provide continuous supervision of each
Fund's investment portfolio.
3. (a) The Investment Adviser shall, at is expense, provide the
Funds with office space, furnishings and equipment and personnel required by it
to perform the services to be provided by the Investment Adviser pursuant to
this Agreement. The Investment Adviser has also agreed to pay the Company's
organizational expenses.
(b) Except as provided in subparagraph (a), the Company shall be
responsible for all of the Funds' expenses and
-2-
liabilities, including taxes; interest; fees (including fees paid to its
directors who are not affiliated with the Investment Adviser or any of its
affiliates); fees payable to the Securities and Exchange Commission; state
securities qualification fees; costs of preparing and printing prospectuses for
regulatory purposes and for distribution to existing shareholders; advisory and
administration fees, charges of the custodian and transfer agent; insurance
premiums; auditing any legal expenses; costs of shareholders' reports and
shareholders' meetings; any extraordinary expenses; and brokerage fees and
commissions, if any, in connection with the purchase or sale of portfolio
securities.
4. As manager of the Funds' assets, the Investment Adviser shall make
investments for the Funds' account in accordance with the investment objectives
and limitations set forth in the Articles, the Prospectus, the 1940 Act, the
provisions of the Internal Revenue Code of 1986, as amended, relating to
regulated investment companies, applicable banking laws and regulations, and
policy decisions adopted by the Company's Board of Directors from time to time.
The Investment Adviser shall advise the Company's officers and Board of
Directors, at such times as the Company's Board of Directors may specify, of
investments made for the Funds' accounts and shall, when requested by the
Company's officers or Board of Directors, supply the reasons for making such
investments.
5. The Investment Adviser is authorized on behalf of the Company, from
time to time when deemed to be in the best interests of the Company and to the
extent permitted by applicable law, to purchase and/or sell securities in which
the Investment Adviser or any of its affiliates underwrites, deals in and/or
makes a market and/or may perform or seek to perform investment banking services
for issuers of such securities. The Investment Adviser is further authorized,
to the extent permitted by applicable law, to select brokers for the execution
of trades for the Company, which broker may be an affiliate of the Investment
Adviser, provided that the best competitive execution price is obtained at the
time of the trade execution.
6. In consideration of the Investment Adviser's undertaking to render the
services described in this agreement, the Company agrees that the Investment
Adviser shall not be liable under this agreement for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with the
performance of this agreement, provided that nothing in this agreement shall be
deemed to protect or purport to protect the Investment Adviser against any
liability to the Company or its stockholders to which the Investment Adviser
would otherwise be subject by reason of willful misfeasance, bad faith or gross
-3-
negligence in the performance of the Investment Adviser's duties under this
agreement or by reason of the Investment Adviser's reckless disregard of its
obligations and duties hereunder.
7. In consideration of the services to be rendered by the Investment
Adviser under this agreement, the Company shall pay the Investment Adviser
monthly fees on the first Business Day (as defined in the Prospectus) of each
month based upon the average daily net assets of each Fund during the preceding
month (as determined on the days and at the time set forth in the Prospectus for
determining net asset value per share) at the following annual rates: ___% for
the assets of the OFFITBANK Total Return Fund not invested in the other Funds of
the Company; ___% for the assets of the OFFITBANK U.S. Government Securities
Fund; and ___% for the assets of the OFFITBANK Mortgage Securities Fund. If the
fees payable to the Investment Adviser pursuant to this paragraph 7 begins to
accrue before the end of any month or if this agreement terminates before the
end of any month, the fees for the period from such date to the end of such
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs. For
purposes of calculating each such monthly fee, the value of the Funds' net
assets shall be computed in the manner specified in the Prospectus and the
Articles for the computation of the value of the Funds' net asset in connection
with the determination of the net asset value of shares of the Funds' capital
stock
8. If the aggregate expenses incurred by, or allocated to, each Fund in
any fiscal year shall exceed the expense limitations applicable to such 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
reimburse such Fund for such excess. The Investment Adviser's reimbursement
obligation will be limited to the amount of fees it received under this
agreement during the period in which such expense limitations were exceeded,
unless otherwise required by applicable laws or regulations. With respect to
portions of a fiscal year in which this contract shall be in effect, the
foregoing limitations shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. Any payments required
to be made by this paragraph 8 shall be made once a year promptly after the end
of the Company's fiscal year.
9. This agreement shall continue in effect until two years from the date
hereof and thereafter with respect to each Fund for successive annual periods,
provided that such continuance is specifically approved at least annually (a) by
the vote of a
-4-
majority of such Fund's outstanding voting securities (as defined in the 0000
Xxx) or by the Company's Board of Directors and (b) by the vote, cast in person
at a meeting called for the purpose, of a majority of the Company's directors
who are not parties to this agreement or "interested persons" (as defined in the
0000 Xxx) of any such party. This agreement may be terminated by any Fund at
any time, without the payment of any penalty, by a vote of a majority of such
Fund's outstanding voting securities (as defined in the 0000 Xxx) or by a vote
of a majority of the Company's entire Board of Directors on 60 days' written
notice to the Investment Adviser or by the Investment Adviser on 60 days'
written notice to the Company. This agreement may remain in effect with respect
to a Fund even if it has been terminated in accordance with this paragraph with
respect to the other Funds. This agreement shall terminate automatically in the
event of its assignment (as defined in the 1940 Act).
10. Upon expiration or earlier termination of this agreement, the Company
shall, if reference to "OFFITBANK" is made in the corporate name of the Company
or in the names of the Funds and if the Investment Adviser requests in writing,
as promptly as practicable change its corporate name and the names of the Funds
so as to eliminate all reference to "OFFITBANK", and thereafter the Company and
the funds shall cease transacting business in any corporate name using the words
"OFFITBANK" or any other reference to the Investment Adviser or "OFFITBANK".
The foregoing rights of the Investment Adviser and obligations of the Company
shall not deprive the Investment Adviser, or any affiliate thereof which has
"OFFITBANK" in its name, of, but shall be in addition to, any other rights or
remedies to which the Investment Adviser and any such affiliate may be entitled
in law or equity by reason of any breach of this agreement by the Company, and
the failure or omission of the Investment Adviser to request a change of the
Company's or the Funds' name or a cessation of the use of the name of
"OFFITBANK" as described in this paragraph 10 shall not under any circumstances
be deemed a waiver of the right to require such change or cessation at any time
thereafter for the same or any subsequent breach.
-5-
11. Except to the extent necessary to perform the Investment Adviser's
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of the Investment Adviser, or any affiliate of the Investment
Adviser, or any employee of the Investment Adviser, to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
12. This agreement shall be governed by the laws of the State of Maryland.
If the foregoing correctly sets forth the agreement between the Company and
the Investment Adviser, please so indicate by signing and returning to the
Company the enclosed copy hereof.
Very truly yours,
THE OFFITBANK INVESTMENT FUND, INC.
By:
-----------------------------------
ACCEPTED:
OFFITBANK
By:
-------------------------
