FORM OF XXXXXX XXXXXXX ASSET MANAGEMENT INC.
INVESTMENT ADVISORY AGREEMENT
OF THE XXXXXX XXXXXXX STRATEGIC ADVISER FUND, INC.
AGREEMENT made this by and between Xxxxxx Xxxxxxx
Strategic Adviser Fund, Inc., a Maryland corporation (the "Fund") and Xxxxxx
Xxxxxxx Asset Management Inc., a Delaware corporation (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
investment adviser to each of the Fund's Portfolios identified at Schedule A,
and any additional portfolios as may be added to Schedule A by mutual agreement
of the Fund and the Adviser, for the period and on such terms set forth in this
Agreement. The Fund employs the Adviser to manage the investment and
reinvestment of the assets of the Fund's Portfolios, to continuously review,
supervise and administer the investment program of each of the Portfolios, to
determine in its discretion the securities to be purchased or sold and the
portion of each such Portfolio's assets to be held uninvested, to provide the
Fund with records concerning the Adviser's activities which the Fund is required
to maintain, and to render regular reports to the Fund's officer and Board of
Directors concerning the Adviser's discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the Board of Directors of the Fund, and in
compliance with the objectives, policies and limitations set forth in the Fund's
prospectus and applicable laws and regulations. The Adviser accepts such
employment and agrees to render the services and to provide, at its own expense,
the office space, furnishing and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein.
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2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities for
each of the Fund's Portfolios and is directed to use its best efforts to obtain
the best available price and most favorable execution, except as prescribed
herein. Unless and until otherwise directed by the Board of Directors of the
Fund, the Adviser may also be authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent
an unlawful act or breach of any duty created by this Agreement or otherwise.
The Adviser will promptly communicate to the officers and Directors of the Fund
such information relating to portfolio transactions as they may reasonably
request.
3. COMPENSATION OF THE ADVISER. In recognition of the fact that the
Fund's investment in shares of other registered investment companies advised by
the Adviser or its affiliates will result in increased compensation to the
Adviser or its affiliates under their investment advisory contracts with those
investment companies, the receipt of such compensation is deemed to be
sufficient consideration for the services to be rendered by the Adviser as
provided in Section 1 of this Agreement.
4. OTHER SERVICES. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office
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facilities, equipment, personnel and services shall be provided for or
rendered by the Adviser and billed to the Fund at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) 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 Investment Company Act of 1940 ("1940
Act"), the Adviser shall not be subject to any liability whatsoever to the Fund,
or to any shareholder of the Fund, for any error or judgment, mistake of law or
any other act or omission in the course of, or connected with, rendering
services hereunder including, without limitation, for any losses that may be
sustained in connection with the purchase, holding, redemption or sale of any
security on behalf of any Portfolio of the Fund.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
shareholders or otherwise; and the Adviser (or any successor) is or may be
interested in the Fund as a shareholder or otherwise;
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and that the effect of any such interrelationships shall be governed by said
Articles of Incorporation and the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated
as provided herein, shall continue until ______________, 199__ and thereafter
for additional periods of one year from the anniversary thereof, but only so
long as such continuance is specifically approved at least annually (a) by
the vote of a majority of those members of the Board of Directors of the Fund
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
approval, and (b) by the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of each Portfolio of the Fund;
PROVIDED HOWEVER, that if the holders of any Portfolio fail to approve the
Agreement as provided herein, the Adviser may continue to serve in such
capacity in the manner and to the extent permitted by the 1940 Act and Rules
thereunder. This Agreement may be terminated by any Portfolio of the Fund at
any time, without the payment of any penalty, by vote of a majority of the
entire Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Portfolio on 60 days' written notice to
the Adviser. This Agreement may be terminated by the Adviser at any time,
without the payment of any penalty, upon 90 days' written notice to the Fund.
This agreement will automatically and immediately terminate in the event of
its assignment, PROVIDED that an assignment to a corporate successor to all
of substantially all of the Adviser's business or to a wholly-owned
subsidiary of such corporate successor which does not result in a change of
actual control of the Adviser's business shall not be deemed to be an
assignment for the purposes of this
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Agreement. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed postpaid, to the other party at any office
of such party and shall be deemed given when received by the addressee.
As used in this Section 9, the terms "assignment", "interested persons",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund 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 each Portfolio of the Fund.
11. USE OF NAME. The Fund agrees that if this Agreement is terminated and
the Adviser shall no longer be the adviser to the Fund, the Fund will, within a
reasonable period of time, change its name to delete reference to "Xxxxxx
Xxxxxxx".
12. SEVERABILITY. If any provisions 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.
13. APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of New York, PROVIDED, HOWEVER, that nothing herein shall
be construed as being inconsistent with the 1940 Act.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
XXXXXX XXXXXXX ASSET XXXXXX XXXXXXX STRATEGIC
MANAGEMENT INC. ADVISER FUND, INC.
By: By:
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SCHEDULE A
Strategic Adviser Aggressive Portfolio
Strategic Adviser Conservative Portfolio
Strategic Adviser Moderate Portfolio
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