EXHIBIT 5(a)
INVESTMENT ADVISORY AGREEMENT
(Treasury Trust Fund and Prime Trust Fund)
AGREEMENT made as of December 7th, 1988, between
EMERALD FUNDS, a Massachusetts business trust (herein called the
"Trust"), and XXXXXXX XXXXX TRUST COMPANY, N.A., a national
banking association (herein called the "Investment Adviser"), a
wholly-owned subsidiary of Xxxxxxx Xxxxx, Inc.
WHEREAS, the Trust is registered as an open-end,
management investment company under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS, the Trust desires to retain the Investment
Adviser to furnish the investment advisory and other services set
forth herein to the Trust for its Treasury Trust Fund and Prime
Trust Fund portfolios (the "Funds"), and the investment Adviser
is willing to so furnish such services;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, it is agreed between the parties
hereto as follows:
1. APPOINTMENT.
(a) The Trust hereby appoints the Investment
Adviser to provide the investment advisory and other services set
forth herein to the Trust for its Treasury Trust Fund and Prime
Trust Fund for the period and on the terms set forth in this
Agreement. The Investment Adviser accepts such appointment and
agrees to furnish the services herein set forth.
(b) In the event that the Trust establishes one
or more portfolios other than the Treasury Trust Fund and Prime
Trust Fund with respect to which it desires to retain the
Investment Adviser to act as investment adviser hereunder, it
shall notify the Investment Adviser in writing. If the
investment Adviser is willing to render such services under this
Agreement it shall notify the Trust in writing whereupon such
portfolio shall become a Fund hereunder and shall be subject to
the provisions of this Agreement to the same extent as the two
Funds named above in subparagraph (a) except to the extent that
said provisions (including those relating to the compensation
payable by the Funds to the Investment Adviser) are modified with
respect to such Fund in writing by the Trust and the Investment
Adviser at the time.
2. DELIVERY OF DOCUMENTS.
The Trust has furnished the Investment Adviser
with copies properly certified or authenticated of each of the
following:
(a) The Trust's Agreement and Declaration of
Trust, as filed with the State Secretary of the
Commonwealth of Massachusetts on March 16, 1988, and
any amendments thereto (such Agreement and Declaration
of Trust, as presently in effect and as it shall from
time to time be amended, is herein called the
"Declaration of Trust");
(b) The Trust's Code of Regulations and any
amendments thereto;
(c) Resolutions of the Trust's Board of Trustees
authorizing the appointment of the Investment Adviser
and approving this Agreement;
(d) The Trust's Notification of Registration on
Form N-8A under the 1940 Act as filed with the
Securities and Exchange Commission on March 21, 1988
and any amendments thereto;
(e) The Trust's Registration on Form N-1A under
the Securities Act of 1933 as amended ("1933 Act")
(File No. 33-20658) and under the 1940 Act as filed
with the Securities and Exchange Commission on March
21, 1988 and any amendments thereto; and
(f) The most recent prospectus of the Funds (such
prospectus together with the related statement of
additional information, as presently in effect and all
amendments and supplements thereto, are herein called
"Prospectus").
The Trust will furnish the investment Adviser from time to time
with copies of all amendments of or supplements to the foregoing,
if any.
3. SERVICES.
Subject to the supervision of the Trust's Board of
Trustees, the Investment Adviser will oversee and assist in the
management of the investment portfolio of each Fund. The
Investment Adviser will provide the services rendered by it under
this Agreement in accordance with each Fund's investment
objective, policies and restrictions as stated in the Prospectus
and resolutions of the Trust's Board of Trustees. Without
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limiting the generality of the foregoing, the Investment Adviser
shall:
(a) establish and monitor general investment
criteria and policies for each Fund;
(b) recommend to the Board of Trustees of the
Trust a sub-adviser to manage each Fund's investment
portfolio and, upon proper authorization by the Board
of Trustees and the Funds, shareholders, to enter into
appropriate contractual arrangements regarding the
provision of sub-advisory services to the Funds;
(c) review and analyze on a periodic basis each
Fund's portfolio holdings and transactions in order to
determine their appropriateness in light of the Fund's
shareholder base;
(d) review and analyze on a periodic basis the
policies established by the sub-adviser for each Fund
with respect to the placement of orders for the
purchase or sale of portfolio securities; and
(e) provide, or cause to be provided, to the
Board of Trustees of the Trust such reports,
statistical data and economic information as may be
reasonably requested in connection with the investment
Adviser's services hereunder.
4. OTHER COVENANTS.
The Investment Adviser agrees that it:
(a) will comply with all applicable Rules and
Regulations of the Securities and Exchange Commission and will in
addition conduct its activities under this Agreement in
accordance with other applicable law;
(b) will use the same skill and care in providing
such services as it uses in providing services to fiduciary
accounts for which it has investment responsibilities; and
(c) will maintain a policy and practice of
conducting its investment advisory services hereunder
independently of the commercial banking operations of its
affiliates. If the Investment Adviser makes investment
recommendations for a Fund, its investment advisory personnel
will not inquire or take into consideration whether the issuer of
securities proposed for purchase or sale for the Fund's account
are customers of the commercial department of any of the
Investment Adviser's affiliates. In dealing with commercial
customers, the Investment Adviser's affiliates will not inquire
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or take into consideration whether securities of those customers
are held by the Funds.
5. SERVICES NOT EXCLUSIVE.
The services furnished by the Investment Adviser
hereunder are deemed not to be exclusive, and the Investment
Adviser shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired
thereby.
6. BOOKS AND RECORDS.
In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for each Fund are the property of the
Trust and further agrees to surrender promptly to the Trust any
of such records upon the Trust's request. The Investment Adviser
further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by
Rule 31a-1 under the 1940 Act.
7. EXPENSES.
During the term of this Agreement, the Investment
Adviser will pay all expenses incurred by it in connection with
its activities under this Agreement other than the cost of
securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any)
purchased or sold for any of the Funds.
8. NO COMPENSATION.
The Investment Adviser acknowledges that customer
accounts for which it exercises investment discretion and from
which it receives compensation will invest in shares of the
Funds, and agrees that it shall not be entitled to receive any
compensation from the Trust in consideration for the services
provided and the expenses assumed pursuant to this Agreement.
9. LIMITATION OF LIABILITY.
The Investment Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or negligence on
the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and
duties under this Agreement.
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10. DURATION AND TERMINATION.
This Agreement shall become effective as of the
date hereof with respect to the Funds listed in Section 1(a)
hereof, and with respect to any additional Fund, on the date of
receipt by the Trust of notice from the Investment Adviser in
accordance with Section 1(b) hereof that the Investment Adviser
is willing to serve as investment adviser with respect to such
Fund, provided that this Agreement (as supplemented by the terms
specified in any notice and agreement pursuant to Section 1(b)
hereof) shall have been approved by the shareholders of the Funds
in accordance with the requirements of the 1940 Act, and unless
sooner terminated as provided herein, shall continue in effect
until November 30, 1990. Thereafter, if not terminated, this
Agreement shall automatically continue in effect as to a
particular Fund for successive annual periods ending on
November 30, PROVIDED such continuance is specifically approved
at least annually (a) by the vote of a majority of those members
of the Trust's Board of Trustees who are not interested persons
of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund. Notwithstanding the
foregoing, this Agreement may be terminated as to any Fund at any
time, without the payment of any penalty, by the Trust (by vote
of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund), or by the Investment
Adviser, on sixty days, written notice. This Agreement will
immediately terminate in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" shall have the
same meaning as such terms have in the 1940 Act.)
11. AMENDMENT OF THIS AGREEMENT.
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. No amendment of this Agreement shall be effective as to
a particular Fund until approved by vote of a majority of the
outstanding voting securities of such Fund.
12. MISCELLANEOUS.
The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction
or effect. 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 thereby. This
Agreement shall be binding upon and shall inure to the benefit of
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the parties hereto and their respective successors and shall be
governed by New York law.
13. NAMES.
The names "Emerald Funds" and "Trustees of Emerald
Funds" refer respectively to the Trust created and the Trustees,
as trustees but not individually or personally, acting from time
to time under an Agreement and Declaration of Trust dated March
15, 1988, which is hereby referred to and a copy of which is on
file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Trust. The
obligations of "Emerald Funds" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents
are made not individually, but in such capacities, and are not
binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust
Property, and all persons dealing with any class of shares of the
Trust must look solely to the Trust Property belonging to such
class for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as
of the day and year first above written.
EMERALD FUNDS
Attest: (a Massachusetts business trust)
/s/ Xxxxx Xxxxxxxxx By /s/ Xxxxxxx Xxxxxxx
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[Seal]
XXXXXXX XXXXX TRUST COMPANY, N.A.
Attest:
By /s/ Xxxxxx X. Xxxxxxx, Xx.
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[Seal]
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