WS5266
U.S. SMALL COMPANY PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made this day of December 15, 1993 between U.S. SMALL
COMPANY PORTFOLIO, a New York trust, (the "Portfolio"), and XXXXX BROTHERS
XXXXXXXX & CO., a New York limited partnership (the "Adviser"),
WHEREAS, the Portfolio is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Portfolio desires to retain the Adviser to render
investment advisory services, and the Adviser is willing to render such
services;
NOW, THEREFORE, this Agreement
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Portfolio hereby appoints the Adviser to act as investment
adviser to the Portfolio for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Subject to the general supervision of the Board of Trustees of the
Portfolio, the Adviser shall manage the investment operations of the Portfolio
and the composition of the Portfolio's portfolio of securities and investments,
including cash, the purchase, retention and disposition thereof and agreements
relating thereto, in accordance with the Portfolio's investment objective and
policies as stated in the Registration Statement on Form N-1A (as defined in
paragraph 3 of this Agreement) and subject to the following understandings:
(a) the Adviser shall furnish a continuous investment program for the
Portfolio and determine from time to time what investments or securities will be
purchased, retained, sold or lent by the Portfolio, and what portion of the
assets will be invested or held uninvested as cash;
(b) the Adviser shall use the same skill and care in the management of
the Portfolio as it uses in the administration of other accounts for which it
has investment responsibility as agent;
(c) the Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Portfolio's Declaration of
Trust and By-Laws and the Registration Statement on Form N-1A of the Portfolio
and with the instructions and directions of the Trustees of the Portfolio and
will conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations including, without limitation,
the regulations and rulings of the New York State Banking Department;
(d) the Adviser shall determine the securities to be purchased, sold or
lent by the Portfolio and as agent for the Portfolio will effect portfolio
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities; in placing orders with brokers
and or dealers the Adviser intends to seek best price and execution for
purchases and sales and may effect transactions through itself on a securities
exchange provided that the commissions paid by the Portfolio are "reasonable and
fair" compared to commissions received by other broker-dealers having comparable
execution capability in connection with comparable transactions involving
similar securities and provided that the transactions in connection with which
such commissions are paid are effected pursuant to procedures established by the
Trustees of the Portfolio; the Adviser shall also make recommendations regarding
whether or not the Portfolio shall enter into repurchase or reverse repurchase
agreements, contracts providing for the making or acceptance of a cash
settlement based upon changes in the value of an index of securities, or put or
call option contracts, with respect to the Portfolio's portfolio.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Adviser, may, to the extent permitted by applicable laws and regulations, but
shall not be obligated to, aggregate the securities to be so sold or purchased
in order to obtain the best execution and lower brokerage commissions, if any.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers;
(e) the Adviser shall maintain books and records with respect to the
Portfolio's securities transactions and shall render to the Portfolio's Trustees
such periodic and special reports as the Trustees may reasonably request; and
(f) the investment management services of the Adviser to the Portfolio
under this Agreement are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others.
3. The Portfolio has delivered copies of each of the following
documents to the Adviser and will promptly notify and deliver to it all future
amendments and supplements, it any:
(a) Declaration of Trust of the Portfolio, dated June 15, 1993 (such
Declaration of Trust, as presently in effect and as amended from time to time,
is herein called the "Declaration of Trust");
(b) By-Laws of the Portfolio (such By-Laws, as presently in effect and
as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees of the Portfolio authorizing
the appointment of the Adviser and approving the form of this Agreement;
(d) Registration Statement under the 194O Act, as amended, on Form N-1A
(the "Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission"); and
(e) Notification of Registration of the Portfolio under the 1940 Act on
Form N-8A as filed with the Commission.
4. The Adviser shall keep the Portfolio's books and records required to
be maintained by it pursuant to paragraph 2(e). In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
all records which it maintains for the Portfolio are property of the Portfolio
and further agrees to surrender promptly to the Portfolio any such records upon
the Portfolio's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. During the term of this Agreement the Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Portfolio (including
taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Adviser will receive from the Portfolio as full compensation
therefor a fee at an annual rate equal to 0.65% of the portfolio's average daily
net assets. This fee will be computed based on net assets at 4:00 P.M. New York
time on each day the New York Stock Exchange is open for trading and will be
paid to the Adviser monthly during the succeeding calendar month.
7. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Portfolio in connection with the matters
to which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 0000 Xxx) or a loss resulting from wilful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for two years from the date
of its execution and thereafter, but only so long as its continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a majority
of all the Trustees of the Portfolio or by ,"vote of a majority of the
outstanding voting securities" of the Portfolio on 60 days' written notice to
the Adviser, or by the Adviser at any time, without the payment of any penalty,
on 90 days' written notice to the Portfolio. This Agreement will automatically
and immediately terminate in the event of its "assignment".
9. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Trustees of the Portfolio from time to time, have no authority
to act for or represent the Portfolio in any way or otherwise be deemed an agent
of the Portfolio.
10. This Agreement may be amended by mutual consent, but the consent of
the Portfolio must be approved (a) by vote of a majority of those Trustees of
the Portfolio who are not parties to this Agreement or "interested persons" of
any such party, cast in person at a meeting called for the purpose of voting on
such
amendment, and (b) by "vote of a majority of the outstanding voting securities"
of the Portfolio.
11. As used in this Agreement, the terms "assignment", "interested
persons" and "vote of a majority of the outstanding voting securities" shall
have the meanings assigned to them respectively in the 1940 Act.
12. Notices of any kind to be given to the Adviser by the Portfolio
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Treasurer, or at
such other address or to such other individual as shall be specified by the
Adviser to the Portfolio. Notices of any kind to be given to the Portfolio by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to the Portfolio at U.S. Small Company Portfolio, Xxxxxxxxxxx Xxxxx, Xxxx
Xxxxxx, P.O. Box 705, Xxxxxx Town, Grand Cayman BWI, or at such other address or
to such other individual as shall be specified by the Portfolio to the Adviser.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers or Partners designated below on the day and year
first above written.
U.S. SMALL COMPANY PORTFOLIO
ATTEST: By /S/ XXXXXX X. XXXXXXXX
XXXXX BROTHERS XXXXXXXX & CO.
ATTEST: By /s/ XXXXXX X. XXXXXX
WS5266
