Exhibit (d)(31)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of November 30, 2006, between THE RBB FUND, INC., a
Maryland corporation (herein called the "Fund"), and BEAR XXXXXXX ASSET
MANAGEMENT INC. (herein called the "Investment Adviser").
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"), and currently
offers or proposes to offer shares representing interests in separate investment
portfolios;
WHEREAS, the Fund desires to retain the Investment Adviser to render
certain investment advisory services to the Fund with respect to the Fund's Bear
Xxxxxxx CUFS MLP Mortgage Portfolio (the "Portfolio"), and the Investment
Adviser is willing to so render such services; and
WHEREAS, the Board of Directors of the Fund have approved this Agreement,
and the Adviser is willing to furnish such services upon the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
SECTION 1. APPOINTMENT. The Fund hereby appoints the Investment Adviser to
act as investment adviser for the Portfolio for the period and on the terms set
forth in this Agreement. The Investment Adviser accepts such appointment and
agrees to render the services herein set forth for the compensation herein
provided.
SECTION 2. DELIVERY OF DOCUMENTS. The Fund has furnished the Investment
Adviser with copies properly certified or authenticated of each of the
following:
(a) Resolutions of the Board of Directors of the Fund authorizing the
appointment of the Investment Adviser and the execution and delivery of this
Agreement;
(b) Each prospectus and statement of additional information relating
to any class of Shares representing interests in the Portfolio of the Fund in
effect under the Securities Act of 1933 (such prospectus and statement of
additional information, as presently in effect and as they shall from time to
time be amended and supplemented, are herein collectively called the
"Prospectus" and "Statement of Additional Information," respectively).
The Fund will promptly furnish the Investment Adviser from time to
time with copies, properly certified or authenticated, of all amendments of or
supplements to the foregoing, if any.
In addition to the foregoing, the Fund will also provide the
Investment Adviser with copies of the Fund's Charter and By-laws, and any
registration statement or service contracts related to the Portfolio, and will
promptly furnish the Investment Adviser with any amendments of or supplements to
such documents.
SECTION 3. MANAGEMENT.
(a) Subject to the supervision of the Board of Directors of the Fund
and subject to Section 3 (b) below, the Investment Adviser will provide for the
overall management of the Portfolio including (i) the provision of a continuous
investment program for the Portfolio, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in the Portfolio, (ii) the determination from time to time of what
securities and other investments will be purchased, retained, or sold by the
Fund for the Portfolio, and (iii) the placement from time to time of orders for
all purchases and sales made for the Portfolio. The Investment Adviser will
provide the services rendered by it hereunder in accordance with the Portfolio's
investment objectives, restrictions and policies as stated in the applicable
Prospectus and Statement of Additional Information, provided that the Investment
Adviser has actual notice or knowledge of any changes by the Board of Directors
to such investment objectives, restrictions or policies. The Investment Adviser
further agrees that it will render to the Fund's Board of Directors such
periodic and special reports regarding the performance of its duties under this
Agreement as the Board may reasonably request. The Investment Adviser agrees to
provide to the Fund (or its agents and service providers) prompt and accurate
data with respect to the Portfolio's transactions and, where not otherwise
available, the daily valuation of securities in the Portfolio.
(b) SUB-ADVISERS. The Investment Adviser may delegate certain of its
responsibilities hereunder with respect to provision of investment advisory
services set forth in Section 3(a) above to one or more other parties (each such
party, a "Sub-Adviser"), pursuant in each case to a written agreement with such
Sub-Adviser that meets the requirements of Section 15 of the 1940 Act and rules
thereunder applicable to contracts for service as investment adviser of a
registered investment company (including without limitation the requirements for
approval by the trustees of the Fund and the shareholders of the Portfolio),
subject, however, to such exemptions as may be granted by the U.S. Securities
and Exchange Commission upon application or by rule. Such Sub-Adviser may (but
need not) be affiliated with the Investment Adviser. Any delegation of services
pursuant to this Section 3(b) shall be subject to the following conditions:
1. Any fees or compensation payable to any Sub-Adviser shall be
paid by the Investment Adviser and no additional obligation
may be incurred on the Fund's behalf to any Sub-Adviser;
except that any Fund expenses that may be incurred by the
Investment Adviser and paid by the Fund to the Investment
Adviser directly may be incurred by the Sub-Adviser and paid
by the Fund to the Sub-Adviser directly, so long as such
payment arrangements are approved by the Fund and the
Investment Adviser prior to the Sub-Adviser's incurring such
expenses.
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2. If the Investment Adviser delegates its responsibilities to
more than one Sub-Adviser, the Investment Adviser shall be
responsible for assigning to each Sub-Adviser that portion
of the assets of the Portfolio for which the Sub-Adviser is
to act as Sub-Adviser, subject to the approval of the Fund's
Board of Trustees.
3. To the extent that any obligations of the Investment Adviser
or any Sub-Adviser require any service Provider of the Fund
or Portfolio to furnish information or services, such
information or services shall be furnished by the Fund's or
the Portfolio's service providers directly to both the
Investment Adviser and any Sub-Adviser.
SECTION 4. BROKERAGE. Subject to the Investment Adviser's obligation to
obtain best price and execution, the Investment Adviser shall have full
discretion to select brokers or dealers to effect the purchase and sale of
securities. When the Investment Adviser places orders for the purchase or sale
of securities for the Portfolio, in selecting brokers or dealers to execute such
orders, the Investment Adviser is expressly authorized to consider the fact that
a broker or dealer has furnished statistical, research or other information or
services for the benefit of the Portfolio directly or indirectly. Without
limiting the generality of the foregoing, the Investment Adviser is authorized
to cause the Portfolio to pay brokerage commissions which may be in excess of
the lowest rates available to brokers who execute transactions for the Portfolio
or who otherwise provide brokerage and research services utilized by the
Investment Adviser, provided that the Investment Adviser determines in good
faith that the amount of each such commission paid to a broker is reasonable in
relation to the value of the brokerage and research services provided by such
broker viewed in terms of either the particular transaction to which the
commission relates or the Investment Adviser's overall responsibilities with
respect to accounts as to which the Investment Adviser exercises investment
discretion. The Investment Adviser may aggregate securities orders so long as
the Investment Adviser adheres to a policy of allocating investment
opportunities to the Portfolio over a period of time on a fair and equitable
basis relative to other clients. In no instance will the Portfolio's securities
be purchased from or sold to the Fund's principal underwriter, the Investment
Adviser, or any affiliated person thereof, except to the extent permitted by SEC
exemptive order or by applicable law.
The Investment Adviser shall report to the Board of Directors of the Fund
at least quarterly with respect to brokerage transactions that were entered into
by the Investment Adviser, pursuant to the foregoing paragraph, and shall
certify to the Board that the commissions paid were reasonable in terms either
of that transaction or the overall responsibilities of the Investment Adviser to
the Fund and the Investment Adviser's other clients, that the total commissions
paid by the Fund were reasonable in relation to the benefits to the Fund over
the long term, and that such commissions were paid in compliance with Section
28(e) of the Securities Exchange Act of 1934.
SECTION 5. CONFORMITY WITH LAW; CONFIDENTIALITY. The Investment Adviser
further agrees that it will comply with all applicable rules and regulations of
all federal regulatory agencies having jurisdiction over the Investment Adviser
in the performance of its duties hereunder. The Investment Adviser will treat
confidentially and as
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proprietary information of the Fund all records and other information relating
to the Fund and will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Fund, which approval shall
not be unreasonably withheld and may not be withheld where the Investment
Adviser may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. Where the Investment Adviser
maybe exposed to civil or criminal contempt proceedings for failure to comply
with a request for records or other information relating to the Fund, the
Investment Adviser may comply with such request prior to obtaining the Fund's
written approval, provided that the Investment Adviser has taken reasonable
steps to promptly notify the Fund, in writing, upon receipt of the request.
SECTION 6. SERVICES NOT EXCLUSIVE. The Investment Adviser and its officers
may act and continue to act as investment managers for others, and nothing in
this Agreement shall in any way be deemed to restrict the right of the
Investment Adviser to perform investment management or other services for any
other person or entity, and the performance of such services for others shall
not be deemed to violate or give rise to any duty or obligation to the Portfolio
or the Fund.
Nothing in this Agreement shall limit or restrict the Investment Adviser or
any of its partners, officers, affiliates or employees from buying, selling or
trading in any securities for its or their own account. The Fund acknowledges
that the Investment Adviser and its partners, officers, affiliates, employees
and other clients may, at any time, have, acquire, increase, decrease, or
dispose of positions in investments which are at the same time being acquired or
disposed of for the Portfolio. The Investment Adviser shall have no obligation
to acquire for the Portfolio a position in any investment which the Investment
Adviser, its partners, officers, affiliates or employees may acquire for its or
their own accounts or for the account of another client, so long as it continues
to be the policy and practice of the Investment Adviser not to favor or disfavor
consistently or consciously any client or class of clients in the allocation of
investment opportunities so that, to the extent practical, such opportunities
will be allocated among clients over a period of time on a fair and equitable
basis.
The Investment Adviser agrees that this Section 6 does not constitute a
waiver by the Fund of the obligations imposed upon the Investment Adviser to
comply with Sections 17(d) and 17(j) of the 1940 Act, and the rules thereunder,
nor constitute a waiver by the Fund of the obligations imposed upon the
Investment Adviser under Section 206 of the Investment Advisers Act of 1940 and
the rules thereunder. Further, the Investment Adviser agrees that this Section 6
does not constitute a waiver by the Fund of the fiduciary obligation of the
Investment Adviser arising under federal or state law, including Section 36 of
the 1940 Act. The Investment Adviser agrees that this Section 6 shall be
interpreted consistent with the provisions of Section 17(i) of the 1940 Act.
SECTION 7. BOOKS AND RECORDS. In compliance with the requirements of Rule
3la-3 under the 1940 Act, the Investment Adviser hereby agrees that all records
which it maintains for the Portfolio are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request. The Investment Adviser further agrees
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to preserve for the periods prescribed by Rule 3la-2 under the 1940 Act the
records required to be maintained by Rule 3la-1 under the 1940 Act.
SECTION 8.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. The Portfolio shall bear all of its own expenses not
specifically assumed by the Investment Adviser. General expenses of the Fund not
readily identifiable as belonging to a Portfolio of the Fund shall be allocated
among all investment portfolios by or under the direction of the Fund's Board of
Directors in such manner as the Board determines to be fair and equitable.
Expenses borne by the Portfolio shall include, but are not limited to, the
following (or the Portfolio's share of the following): (a) the cost (including
brokerage commissions) of securities purchased or sold by the Portfolio and any
losses incurred in connection therewith; (b) fees payable to and expenses
incurred on behalf of the Portfolio by the Investment Adviser; (c) filing fees
and expenses relating to the registration and qualification of the Fund and the
Portfolio's shares under federal and/or state securities laws and maintaining
such registrations and qualifications; (d) fees and salaries payable to the
Fund's directors and officers; (e) taxes (including any income or franchise
taxes) and governmental fees; (f) costs of any liability and other insurance or
fidelity bonds; (g) any costs, expenses or losses arising out of a liability of
or claim for damages or other relief asserted against the Fund or the Portfolio
for violation of any law; (h) legal, accounting and auditing expenses, including
legal fees of special counsel for the independent directors; (i) charges of
custodians and other agents; (j) expenses of setting in type and printing
prospectuses, statements of additional information and supplements thereto for
existing shareholders, reports, statements, and confirmations to shareholders
and proxy material that are not attributable to a class; (k) costs of mailing
prospectuses, statements of additional information and supplements thereto to
existing shareholders, as well as reports to shareholders and proxy material
that are not attributable to a class; (1) any extraordinary expenses; (m) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (n) costs of mailing and tabulating proxies
and costs of shareholders' and directors' meetings; (o) costs of independent
pricing services to value a portfolio's securities; and (p) the costs of
investment company literature and other publications provided by the Fund to its
directors and officers. Distribution expenses, transfer agency expenses,
expenses of preparation, printing and mailing, prospectuses, statements of
additional information, proxy statements and reports to shareholders, and
organizational expenses and registration fees, identified as belonging to a
particular class of the Fund are allocated to such class.
SECTION 9. VOTING. The Investment Adviser shall have the authority to vote
as agent for the Fund, either in person or by proxy, tender and take all actions
incident to the ownership of all securities in which the Portfolio's assets may
be invested from time to time, subject to such policies and procedures as the
Board of Directors of the Fund may adopt from time to time.
SECTION 10. RESERVATION OF NAME. The Investment Adviser shall at all times
have all rights in and to the Portfolio's name and all investment models used by
or on behalf of the Portfolio. The Investment Adviser may use the Portfolio's
name or any portion thereof in connection with any other mutual fund or business
activity without the consent of any shareholder and the Fund shall execute and
deliver any and all documents required to indicate the consent of the Fund to
such use. The Fund hereby agrees that in the event that neither the Investment
Adviser nor any of its affiliates acts as investment adviser to the Portfolio,
the name
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of the Portfolio will be changed to one that does not contain the names "Bear
Xxxxxxx" or the initials "BS" or otherwise suggest an affiliation with the
Investment Adviser.
SECTION 11. COMPENSATION. (a) For the services provided and the expenses
assumed pursuant to this Agreement with respect to the Portfolio, the Fund will
pay the Investment Adviser from the assets of the Portfolio and the Investment
Adviser will accept as full compensation therefor a fee, computed daily and
payable monthly, at the annual rate of 0.48% of the Portfolio's average daily
net assets. For any period less than a full month during which this Agreement is
in effect, the fee shall be prorated according to the proportion which such
period bears to a full month. (b) The fee attributable to the Portfolio shall be
satisfied only against assets of the Portfolio and not against the assets of any
other investment portfolio of the Fund. The Investment Adviser may from time to
time agree not to impose all or a portion of its fee otherwise payable hereunder
(in advance of the time such fee or portion thereof would otherwise accrue)
and/or undertake to pay or reimburse the Portfolio for all or a portion of its
expenses not otherwise required to be borne or reimbursed by the Investment
Adviser.
SECTION 12. 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 Fund 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 or a loss resulting from willful misfeasance, bad
faith or gross 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 ("disabling conduct"). The Portfolio will
indemnify the Investment Adviser against and hold it harmless from any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any claim, demand, action or suit not
resulting from disabling conduct by the Investment Adviser. Indemnification
shall be made only following: (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Investment Adviser
was not liable by reason of disabling conduct or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Adviser was not liable by reason of disabling conduct by (a) the vote
of a majority of a quorum of directors of the Fund who are neither "interested
persons" of the Fund nor parties to the proceeding ("disinterested non-party
directors") or (b) an independent legal counsel in a written opinion. The
Investment Adviser shall be entitled to advances from the Portfolio for payment
of the reasonable expenses incurred by it in connection with the matter as to
which it is seeking indemnification in the manner and to the fullest extent
permissible under the Maryland General Corporation Law. The Investment Adviser
shall provide to the Portfolio a written affirmation of its good faith belief
that the standard of conduct necessary for indemnification by the Portfolio has
been met and a written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not been met. In
addition, at least one of the following additional conditions shall be met: (a)
the Investment Adviser shall provide a security in form and amount acceptable to
the Portfolio for its undertaking; (b) the Portfolio is insured against losses
arising by reason of the advance; or (c) a majority of a quorum of disinterested
non-party directors, or independent legal counsel, in a written opinion, shall
have determined, based upon a review of facts readily available to the Portfolio
at the time the advance is proposed to be made, that there is reason to believe
that the Investment Adviser will ultimately be found to be entitled to
indemnification.
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Any amounts payable by the Portfolio under this Section shall be satisfied only
against the assets of the Portfolio and not against the assets of any other
investment portfolio of the Fund.
The limitations on liability and indemnification provisions of this Section
12 shall not be applicable to any losses, claims, damages, liabilities or
expenses arising from the Investment Adviser's rights to the Portfolio's name.
The Investment Adviser shall indemnify and hold harmless the Fund and the
Portfolio for any claims arising from the use of the terms "Bear Xxxxxxx" or
"BS" in the name of the Portfolio.
SECTION 13. DURATION AND TERMINATION. This Agreement shall become effective
with respect to the Portfolio as of the date first above written and, unless
sooner terminated as provided herein, shall continue with respect to the
Portfolio until August 16, 2007. Thereafter, if not terminated, this Agreement
shall continue with respect to the Portfolio for successive annual periods
ending on August 16, provided 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 the Portfolio;
provided, however, that this Agreement may be terminated with respect to the
Portfolio by the Fund at any time, without the payment of any penalty, by the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Portfolio, on 60 days' prior written notice to the
Investment Adviser, or by the Investment Adviser at any time, without payment of
any penalty, on 60 days' prior written notice to the Fund. 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 person" and "assignment" shall have the same meaning as such terms
have in the 1940 Act).
SECTION 14.AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, discharged or terminated orally, except by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought, and no amendment of this Agreement affecting the
Portfolio shall be effective until approved by vote of the holders of a majority
of the outstanding voting securities of the Portfolio.
SECTION 15. 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 the parties hereto and their respective successors and shall be
governed by Delaware law.
SECTION 16. NOTICE. All notices hereunder shall be given in writing and
delivered by hand, national overnight courier, facsimile (provided written
confirmation of receipt is obtained and said notice is sent via first class mail
on the next business day) or mailed by certified mail, return receipt requested,
as follows:
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If to the Investment Adviser:
Bear Xxxxxxx Asset Management Inc.
Xxxxxxx Xxxxxxxxx
General Counsel
Bear Xxxxxxx Asset Management Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax:
If to the Fund:
The RBB Fund, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Fax: 000-000-0000
The effective date of any notice shall be (i) the date such notice is
sent if such delivery is effected by hand or facsimile, (ii) one business day
after the date such notice is sent if such delivery is effected by national
overnight courier; or (iii) the fifth (5th) Business Day after the date of
mailing thereof.
SECTION 19. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
without giving effect to the conflicts of laws principles thereof.
SECTION 20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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.
THE RBB FUND, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title:President and Treasurer
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BEAR XXXXXXX ASSET MANAGEMENT INC.
By: /s/ Xxxx Xxxxxxxxxx
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Name:
Title:
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