EXHIBIT (5)(A)
FORM OF
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE WINTER HARBOR FUND
(The REvest Small Cap Value Fund)
AND
XXXXXXX INVESTMENTS, INC.
Agreement made this ____ day of ___________, 1998, by and between THE
WINTER HARBOR FUND, a Delaware business trust (the "Fund"), and XXXXXXX
INVESTMENTS, INC. (formerly known as Royce, Xxxxxxx & Associates, Inc.), a
Connecticut corporation (the "Adviser").
The Fund and the Adviser hereby agree as follows in respect of The
REvest Small Cap Value Fund, a series of the Fund (the "Series"):
1. DUTIES OF THE ADVISER. The Adviser shall, during the term and
subject to the provisions of this Agreement, (a) determine the composition of
the portfolio of the Series, the nature and timing of the changes therein and
the manner of implementing such changes, and (b) provide the Series with such
investment advisory, research and related services as the Series may, from time
to time, reasonably require for the investment of its funds. The Adviser shall
perform such duties in accordance with the applicable provisions of the Fund's
Trust Instrument, By-Laws and current prospectus and any directions it may
receive from the Fund's Trustees. Notwithstanding any other provision hereof,
the Adviser, with the approval of the Fund, may contract with one or more
sub-advisers to perform any of the investment advisory services; provided,
however, that any compensation paid will be the sole responsibility of the
Adviser.
2. EXPENSES PAYABLE BY THE SERIES. Except as otherwise provided in
Paragraphs 1 and 3 hereof, the Fund shall be responsible for effecting sales and
redemptions of the Series' shares, for determining the net asset value thereof
and for all of the Series' other operations and shall cause the Series to pay
all administrative and other costs and expenses attributable to its operations
and transactions, including, without limitation, transfer agent and custodian
fees; legal, administrative and clerical services; rent for office space and
facilities; auditing; preparation, printing and distribution of its
prospectuses, proxy statements, shareholders' reports and notices; supplies and
postage; Federal and state registration fees; Federal, state and local taxes;
non-affiliated Trustees' fees; and brokerage commissions.
3. EXPENSES PAYABLE BY THE ADVISER. The Adviser shall furnish, without
expense to the Fund or to the Series, the services of those of its officers and
full-time employees who may be duly elected executive officers or Trustees of
the Fund, subject to their individual consent to serve and to any limitations
imposed by law, and shall pay its pro rata share of all of the salaries and
expenses of the Fund's executive officers. For purposes of this Agreement, only
the President, any Vice President and the Treasurer of the Fund shall be deemed
to be executive officers of the Fund. The Adviser shall also pay all expenses
which it may incur in performing its duties under Paragraph 1 hereof and shall
reimburse the Fund for any space leased by the Fund and occupied by the Adviser.
In the event the Fund shall qualify shares of the Series for sale in any
jurisdiction, the applicable statutes or regulations of which expressly limit
the amount of the Series' total annual expenses, the Adviser agrees to reduce
its annual investment advisory fee for the Series to the extent that such total
annual expenses (other than brokerage commissions and other capital items,
interest, taxes, distribution fees, extraordinary items and other excludable
items, charges, costs and expenses) exceed the limitations imposed on the Series
by the most stringent regulations of any such jurisdiction.
4. COMPENSATION OF THE ADVISER. The Fund agrees to cause the Series to
pay to the Adviser, and the Adviser agrees to accept, as compensation for the
services provided by the Advisor hereunder, advisory fees equal to 1% per annum
of the first $50,000,000 of the Series' average net assets and 0.75% per annum
of additional average net assets over $50,000,000. For purposes of calculating
these fees, average net assets will mean the average net assets of the Series at
the close of business on each day that the value of its net assets is computed
during the year. However, the Fund and the Adviser may agree in writing to
temporarily or permanently reduce such fee. Such compensation shall be accrued
on the Series' books at the close of business on each day that the value of its
net assets is computed during each year and shall be payable to the Adviser
monthly, on the last day of each month, and adjusted as of year-end if required.
5. EXCESS BROKERAGE COMMISSIONS. The Adviser is hereby authorized, to
the fullest extent now or hereafter permitted by law, to cause the Series to pay
a member of a national securities exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of such exchange, broker or dealer would have charged
for effecting that transaction, if the Adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and/or research services provided by such member, broker or dealer,
viewed in terms of either that particular transaction or its overall
responsibilities with respect to the Series.
6. ACTIVITIES OF THE ADVISER. The Adviser may engage in any other
business or render services to others, provided that the Adviser shall disclose
such activities to the Fund. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of the Adviser to engage in any
other business or to devote his or her time and attention in part to any other
business, whether of a similar or dissimilar nature. So long as this Agreement
or any extension, renewal or amendment remains in effect, the Adviser shall be
the only investment adviser for the Series, subject to the Adviser's right to
enter into sub-advisory agreements. The Adviser assumes no responsibility under
this Agreement other than to render the services called for hereunder, and shall
not be responsible for any action of or directed by the Fund's Trustees, or any
committee thereof, unless such action has been caused by the Adviser's gross
negligence, willful
malfeasance, bad faith or reckless disregard of its obligations and duties under
this Agreement.
7. RESPONSIBILITY OF DUAL DIRECTORS, OFFICERS AND/OR EMPLOYEES. If any
person who is a director, officer or employee of the Adviser is or becomes a
Trustee, officer and/or employee of the Fund and acts as such in any business of
the Fund pursuant to this Agreement, then such director, officer and/or employee
of the Adviser shall be deemed to be acting in such capacity solely for the
Fund, and not as a director, officer or employee of the Adviser or under the
control or direction of the Adviser, although paid by the Adviser.
8. PROTECTION OF THE ADVISER. The Adviser shall not be liable to the
Fund or to the Series for any action taken or omitted to be taken by the Adviser
in connection with the performance of any of its duties or obligations under
this Agreement or otherwise as an investment adviser for the Series, and the
Series shall indemnify the Adviser and hold it harmless from and against all
damages, liabilities, costs and expenses (including reasonable attorneys' fees
and amounts reasonably paid in settlement) incurred by the Adviser in or by
reason of any pending, threatened or completed action, suit, investigation or
other proceeding (including an action or suit by or in the right of the Fund or
the Series or its security holders) arising out of or otherwise based upon any
action actually or allegedly taken or omitted to be taken by the Adviser in
connection with the performance of any of its duties or obligations under this
Agreement or otherwise as an investment adviser for the Series. Notwithstanding
the preceding sentence of this Paragraph 8 to the contrary, nothing contained
herein shall protect or be deemed to protect the Adviser against or entitle or
be deemed to entitle the Adviser to indemnification in respect of, any liability
to the Fund or to the Series or its security holders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its duties and obligations under this Agreement.
Determinations of whether and the extent to which the Adviser is
entitled to indemnification hereunder shall be made by reasonable and fair
means, including (a) a final decision on the merits by a court or other body
before whom the action, suit or other proceeding was brought that the Adviser
was not liable by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties, or (b) in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that the Adviser was
not liable by reason of such misconduct by (i) the vote of a majority of a
quorum of the Trustees of the Fund who are neither "interested persons" of the
Fund (as defined in Section 2(a) (19) of the Investment Company Act of 1940) nor
parties to the action, suit or other proceeding, or (ii) an independent legal
counsel in a written opinion.
9. EFFECTIVENESS, DURATION AND TERMINATION OF AGREEMENT. This Agreement
shall become effective on the later of (i) the date hereof, or (ii) the date on
which this Agreement is approved by the sole shareholder of the Series. This
Agreement shall remain in effect until the two year anniversary of such
effective date, and thereafter shall continue automatically for successive
annual periods, PROVIDED THAT such continuance is
specifically approved at least annually by (a) the vote of the Fund's Trustees,
including a majority of such Trustees who are not parties to this Agreement or
"interested persons" (as such term is defined in Section 2(a)(19) of the
Investment Company Act of 1940) of any such party, cast in person at a meeting
called for the purpose of voting on such approval, or (b) the vote of a majority
of the outstanding voting securities of the Series and the vote of the Fund's
Trustees, including a majority of such Trustees who are not parties to this
Agreement or "interested persons" (as so defined) of any such party. This
Agreement may be terminated at any time, without the payment of any penalty, on
60 days' written notice by the vote of a majority of the outstanding voting
securities of the Series, or by the vote of a majority of the Fund's Trustees or
by the Adviser, and will automatically terminate in the event of its
"assignment" (as such term is defined for purposes of Section 15(a)(4) of the
Investment Company Act of 1940); PROVIDED, HOWEVER, that the provisions of
Paragraph 8 of this Agreement shall remain in full force and effect, and the
Adviser shall remain entitled to the benefits thereof, notwithstanding any such
termination.
10. SHAREHOLDER LIABILITY. Notice is hereby given that this Agreement
is entered into on the Fund's behalf by an officer of the Fund in his capacity
as an officer and not individually and that the obligations of or arising out of
this Agreement are not binding upon any of the Fund's Trustees, officers,
employees, agents or shareholders individually, but are binding only upon the
assets and property of the Series.
11. NOTICES. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed, postage prepaid, to the other party at its
principal office.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
THE WINTER HARBOR FUND
By:_________________________________
Name:
Title:
XXXXXXX INVESTMENTS, INC.
By:__________________________________
Xxxxxxxx X. Xxxx, President
