Exhibit (d)(22)
INVESTMENT ADVISORY
AND
ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT, dated and effective as of this 17th day of September, 2001
is made and entered into by and between FREMONT MUTUAL FUNDS, INC., a Maryland
corporation (hereinafter called the "Company") and FREMONT INVESTMENT ADVISORS,
INC., a California corporation (hereinafter called the "Advisor"), on behalf of
the Fremont Institutional Yield+ Fund (the "Fund").
WHEREAS, the Company is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment advisory and management services and is so registered under the
Investment Advisers Act of 1940; and
WHEREAS, the Company is authorized to, and does, issue shares of capital
stock in separate series with each such series representing interests in a
separate portfolio of securities and other assets; and
WHEREAS, the Company intends to offer shares of capital stock in a newly
formed series called the Fremont Institutional Yield+ Fund (the "Fund"); and
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. The Company hereby appoints the Advisor to act as investment adviser and
administrator to the Fund for the period and on the terms herein set forth.
The Advisor accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided. The Advisor shall,
for all purposes herein, be deemed an independent contractor and not an
agent of the Company.
2. (a) The Advisor, as investment advisor to the Fund, agrees to provide
supervision of the portfolio of the Fund and to determine what securities
or other property shall be purchased or sold by the Fund. To assist in its
duties, the Advisor may engage a Sub-Advisor approved by the Board of
Directors and (if required by applicable law) the shareholders of the
Company. In overseeing the Fund's portfolio, the Advisor (and any
Sub-Advisor) shall give due consideration to the policies of the Fund as
expressed in the Company's Articles of Incorporation, By-laws, Form N-1A
Registration Statement under the 1940 Act and under the Securities Act of
1933, as amended (the "1933 Act"), and prospectus as in use from time to
time, as well as to the factors affecting the status of the Fund as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended. In its duties hereunder, the Advisor shall further be bound by any
and all determinations by the Board of Directors of the Company relating to
investment policy, which determinations shall in writing be communicated to
the Advisor. Subject to the foregoing, the Advisor will exercise all voting
rights with respect to portfolio securities and may delegate such voting
rights to any Sub-Advisor approved by the Board of Directors.
(b) To the extent authorized by the Board of Directors of the Company,
the Advisor shall make decisions for the Fund as to foreign currency
matters and make determinations as to, and execute and perform, foreign
exchange contracts or may delegate such decisions to any Sub-Advisor
approved by the Board of Directors.
(c) (i) The Advisor (and any Sub-Advisor engaged by the Advisor) shall
provide adequate facilities and qualified personnel for the placement of,
and shall place orders for the purchase, or other acquisition, and sale, or
other disposition, of portfolio securities for the Fund. With respect to
such transactions, the Advisor, or Sub-Advisor, subject to such direction
as may be furnished from time to time by the Board of Directors of the
Company, shall endeavor as the primary objective to obtain the most
favorable prices and executions of orders. Subject to such primary
objective, the Advisor or Sub-Advisor may place orders with brokerage firms
which furnish statistical and other information to the Advisor or
Sub-Advisor, taking into account the value and quality of the brokerage
services of such brokerage firms, including the availability and quality of
such statistical and other information. Receipt by the Advisor or
Sub-Advisor of any such statistical and other information and services
shall not be deemed to give rise to any requirement for abatement of the
advisory fee payable to the Advisor pursuant to Section 6 hereof.
(ii) On occasions when the Advisor deems the purchase or sale of
a security to be in the best interests of the Fund as well as other clients
of the Advisor, the Advisor, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so sold or purchased when
the Advisor believes that to do so will be in the best interests of the
Fund. 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
Advisor in the manner the Advisor considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
3. Subject to prior approval of the Board of Directors, the Advisor may,
but is not required to, retain one or more investment management
organizations ("Sub-Advisors") to make specific investment decisions with
respect to all or a portion of the assets of the Fund. If a Sub-Advisor is
engaged, all references in this Agreement to the Advisor shall be deemed
applicable to such Sub-Advisor as necessary and appropriate. The Advisor
may allocate portions of the Fund's assets among such Sub-Advisor(s) or
among itself and such Sub-Advisor(s). The Advisor shall monitor the
performance of such Sub-Advisor(s), shall allocate and reallocate assets
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among Sub-Advisors of the Fund with multiple Sub-Advisors, and shall
recommend the employment or termination of a particular Sub-Advisor when
deemed advisable. The Advisor will compensate such Sub-Advisor(s) from its
own resources, at no additional cost to the Company.
4. The Advisor, as administrator for the Fund, shall furnish the services
of persons to perform the executive, administrative, clerical, and
bookkeeping functions of the Company (other than services involving the
custody of portfolio securities) to the extent such services have not been
contracted for with third parties. The Advisor, as administrator for the
Fund, shall oversee the performance of third parties. The Advisor shall
also provide the Fund with suitable office space (which may be in the
offices of the Advisor); all necessary small office equipment and
utilities; and general purpose accounting forms, supplies, and postage used
at the offices of the Fund. These services are exclusive of the necessary
services and records at any dividend disbursing agent, transfer agent,
registrar or custodian, and accounting and bookkeeping services to be
provided by the custodian or other third-party service provider.
5. The Fund shall be responsible for paying for all costs and expenses
attendant to operating the Fund, including but not limited to (i) the
compensation payable hereunder to the Advisor for advisory and
administrative services; (ii) taxes; (iii) interest expense; (iv) portfolio
transaction costs, including, e.g., brokerage commissions and underwriting
discounts; (v) any other ordinary expenses incurred in the course of the
regular and ongoing operations of the Fund and (vi) any extraordinary costs
or expenses such as legal, accounting, or other costs or expenses not
incurred in the course of the regular and ongoing operations of the Fund.
6. (a) The Fund shall pay to the Advisor on or before the tenth (10th) day
of each month, as compensation for the services rendered by the Advisor
during the preceding month, an amount to be computed by applying to the
total net asset value of the Fund the applicable annual rates set forth on
Appendix A hereto.
(b) The fees on Appendix A shall be computed and accrued daily at one
three-hundred-sixty-fifth (1/365th) or one three-hundred-sixty-sixth
(1/366th), as appropriate, of the applicable rates set forth therein. The
net asset value of the Fund shall be determined in the manner set forth in
the Articles of Incorporation and applicable Prospectus of the Fund as of
the close of the New York Stock Exchange on each day on which said Exchange
is open, and in the case of Saturdays, Sundays, and other days on which
said exchange shall not be open in the manner further set forth in said
Articles of Incorporation and Prospectus. In the event of termination other
than at the end of a calendar month, the monthly fee shall be prorated for
the portion of the month prior to termination and paid on or before the
tenth (10th) day subsequent to termination.
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7. (a) The Advisor may voluntarily waive fees, reduce any portion of other
compensation or pay expenses owed to it which are the responsibility of the
Fund under this Agreement. Any such reduction, waiver, or payment
(collectively "subsidies") shall be applicable only to such specific
subsidy and shall not constitute an agreement to continue such subsidy in
the future. Any such subsidy will be agreed to prior to accrual of the
related expense or fee and will be estimated daily and reconciled and paid
on a monthly basis. The Advisor may also agree contractually to limit the
Fund's operating expenses. To the extent such a voluntary or contractual
expense limitation has been agreed to by the Advisor and such limit has
been disclosed to shareholders of the Fund in a prospectus, the limit
cannot be changed without first disclosing the change in an updated
prospectus.
(b) The Advisor may seek reimbursement in a subsequent fiscal year of
any reductions or payments of Fund expenses or fee waivers made by the
Advisor either voluntarily or pursuant to contract. The reimbursement of
any subsidy must be approved by the Company's Board of Directors and must
be sought no later than the end of the third fiscal year following the year
to which the subsidy relates, however, the Fund is permitted to look back
five years and four year respectively, during the initial six years and
seventh year of the Fund's operations. The Advisor may not request and
receive reimbursement for any subsidies before payment of the Fund's
ordinary operating expenses for the current year and cannot cause the Fund
to exceed any agreed upon expense limitation for that year in making such
reimbursement.
8. Nothing contained in this Agreement shall be construed to prohibit the
Advisor from performing investment advisory, management, or distribution
services for other investment companies and other persons or companies, or
to prohibit affiliates of the Advisor from engaging in such businesses or
in other related or unrelated businesses.
9. The Company agrees (i) not to hold the Advisor or any of its officers,
directors, agents or employees liable for, and (ii) to indemnify or insure
the Advisor and its officers, directors, agents and employees ("Indemnified
Parties") against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under the 1933 Act, 1940 Act, the Advisors Act,
under any other statute, at common law or otherwise, which (1) arises out
of an investment decision or other action taken or omitted by one or more
Indemnified Parties in good faith exercise of authority hereunder or
otherwise related to this Agreement or (2) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering the shares of the Company or
the Fund or any amendment thereof or any supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
a statement or omission was made in reliance upon information furnished to
the Indemnified Parties; provided, however, that in no case is Company's or
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Fund's indemnity in favor of Indemnified Parties deemed to protect such
Indemnified Parties against any liability to which any such Indemnified
Parties would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of his duties or by reason of
his reckless disregard of obligations and duties under this Agreement.
10. (a) This Agreement shall become effective with respect to the Fund on
the effective date designated herein (the "Effective Date"). Unless
terminated as herein provided, this Agreement shall remain in full force
and effect for two (2) year from the Effective Date and shall continue in
full force and effect for periods of one year after the effective date of
any renewal so long as such renewal with respect to the Fund is approved at
least annually (i) by either the Directors of the Company or by a vote of a
majority (as defined in the 0000 Xxx) of the outstanding voting securities
of the Fund, and (ii) in either event by the vote of a majority of the
Directors of the Company who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of the Advisor, cast in
person at a meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated with respect to the Fund at any
time, without payment of any penalty, by the Board of Directors of the
Company or by the vote of a majority (as defined in the 0000 Xxx) of the
outstanding voting securities of the Company, on thirty (30) days' written
notice to the Advisor, or by the Advisor on like notice to the Company.
(c) This Agreement shall automatically and immediately terminate in
the event of its assignment.
(d) This Agreement shall be governed by the laws of the State of
California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the
SEC thereunder.
(e) No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought and no amendment of this Agreement shall be effective
until approved by a vote of a majority of the outstanding voting securities
of the Fund, if such approval is required by applicable law.
11. (a) This Agreement supersedes any prior agreement relating to the
subject matter hereof between the parties.
(b) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate originals by their officers thereunto duly authorized as
of the date first above written.
FREMONT MUTUAL FUNDS, INC. FREMONT INVESTMENT ADVISORS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Redo
------------------------------- ------------------------------------
Xxxxx Xxxxxxx Xxxxx X. Redo
President Managing Director
ATTEST: ATTEST:
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
------------------------------- ------------------------------------
Xxxx Xxxxxx, Xxxx Xxxxxx
Secretary Secretary
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APPENDIX A
TO INVESTMENT ADVISORY
AND ADMINISTRATIVE AGREEMENT
(FREMONT INSTITUTIONAL YIELD+ FUND)
Investment Advisory Fee: 0.50% annually, based on average daily total net assets
Administrative Fee: 0.15% annually, based on average daily total net assets
