AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made October 30, 1995 by and
between Hawaiian Tax-Free Trust (the "Trust"), a Massachusetts
business trust, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, and Hawaiian Trust Company, Limited (the "Adviser"),
Financial Plaza of the Pacific, X.X. Xxx 0000, Xxxxxxxx, Xxxxxx
00000,
W I T N E S S E T H :
WHEREAS, the Trust and the Adviser have previously
entered into an investment advisory agreement; and
WHEREAS, the Trust and the Adviser now wish to amend
and restate their agreement as herein set forth, referred to
hereafter as "this Agreement";
NOW THEREFORE, in consideration of the mutual
promises and agreements herein contained and other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. In General
The Adviser agrees, all as more fully set forth
herein, to act as managerial investment adviser to the Trust with
respect to the investment of the Trust's assets, and to supervise
and arrange the purchase of securities for and the sale of
securities held in the portfolio of the Trust.
2. Duties and Obligations of the Adviser With Respect To
Investment of the Assets of the Trust
(a) Subject to the succeeding provisions of
this section and subject to the direction and control of the
Board of Trustees of the Trust, the Adviser shall:
(i) Supervise continuously the investment
program of the Trust and the composition of
its portfolio;
(ii) Determine what securities shall be
purchased or sold by the Trust;
(iii) Arrange for the purchase and the sale
of securities held in the portfolio of the
Trust; and
(iv) Either keep the accounting records of
the Trust, including the computation of net
asset value per share and the dividends or,
at its expense and responsibility, delegate
such duties in whole or in part to a company
satisfactory to the Trust.
(b) Any investment program furnished by the
Adviser under this section shall at all times conform to, and be
in accordance with, any requirements imposed by: (1) the
Investment Company Act of l940 (the "Act") and any rules or
regulations in force thereunder; (2) any other applicable laws,
rules and regulations; (3) the Declaration of Trust and By-Laws
of the Trust as amended from time to time; (4) any policies and
determinations of the Board of Trustees of the Trust; and (5) the
fundamental policies of the Trust, as reflected in its
registration statement under the Act or as amended by the
shareholders of the Trust.
(c) The Adviser shall give the Trust the
benefit of its best judgment and effort in rendering services
hereunder, but the Adviser shall not be liable for any loss
sustained by reason of the adoption of any investment policy or
the purchase, sale or retention of any security, whether or not
such purchase, sale or retention shall have been based upon (i)
its own investigation and research or (ii) investigation and
research made by any other individual, firm or corporation, if
such purchase, sale or retention shall have been made and such
other individual, firm or corporation shall have been selected in
good faith by the Adviser. Nothing herein contained shall,
however, be construed to protect the Adviser against any
liability to the Trust or its security holders by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard
of its obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent
the Adviser or any affiliated person (as defined in the Act) of
the Adviser from acting as investment adviser or manager for any
other person, firm or corporation and shall not in any way limit
or restrict the Adviser or any such affiliated person from
buying, selling or trading any securities for its own or their
own accounts or for the accounts of others for whom it or they
may be acting, provided, however, that the Adviser expressly
represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its
obligations to the Trust under this Agreement. It is agreed that
the Adviser shall have no responsibility or liability for the
accuracy or completeness of the Trust's Registration Statement
under the Act and the Securities Act of 1933, except for
information supplied by the Adviser for inclusion therein. The
Adviser shall promptly inform the Trust as to any information
concerning the Adviser appropriate for inclusion in such
Registration Statement, or as to any transaction or proposed
transaction which might result in an assignment of the Agreement.
The Trust agrees to indemnify the Adviser to the full extent
permitted by the Trust's Declaration of Trust.
(e) In connection with its duties to arrange
for the purchase and sale of the Trust's portfolio securities,
the Adviser shall select such broker-dealers ("dealers") as
shall, in the Adviser's judgment, implement the policy of the
Trust to achieve "best execution," i.e., prompt, efficient, and
reliable execution of orders at the most favorable net price.
The Adviser shall cause the Trust to deal directly with the
selling or purchasing principal or market maker without incurring
brokerage commissions unless the Adviser determines that better
price or execution may be obtained by paying such commissions;
the Trust expects that most transactions will be principal
transactions at net prices and that the Trust will incur little
or no brokerage costs. The Trust understands that purchases from
underwriters include a commission or concession paid by the
issuer to the underwriter and that principal transactions placed
through dealers include a spread between the bid and asked
prices. In allocating transactions to dealers, the Adviser is
authorized to consider, in determining whether a particular
dealer will provide best execution, the dealer's reliability,
integrity, financial condition and risk in positioning the
securities involved, as well as the difficulty of the transaction
in question, and thus need not pay the lowest spread or
commission available if the Adviser determines in good faith that
the amount of commission is reasonable in relation to the value
of the brokerage and research services provided by the dealer,
viewed either in terms of the particular transaction or the
Adviser's overall responsibilities as to the accounts as to which
it exercises investment discretion. If, on the foregoing basis,
the transaction in question could be allocated to two or more
dealers, the Adviser is authorized, in making such allocation, to
consider (i) whether a dealer has provided research services, as
further discussed below; and (ii) whether a dealer has sold
shares of the Trust or any other investment company or companies
having the Adviser as its investment adviser or having the same
sub-adviser, administrator or principal underwriter as the Trust.
Such research may be in written form or through direct contact
with individuals and may include quotations on portfolio
securities and information on particular issuers and industries,
as well as on market, economic, or institutional activities. The
Trust recognizes that no dollar value can be placed on such
research services or on execution services, that such research
services may or may not be useful to the Trust and/or other
accounts of the Adviser, and that research received by such other
accounts may or may not be useful to the Trust.
3. Allocation of Expenses
The Adviser agrees that it will furnish the Trust,
at the Adviser's expense, all office space, facilities, equipment
and clerical personnel necessary for carrying out its duties
under this Agreement. The Adviser agrees that it will supply, or
cause to be supplied, to any sub-adviser, administrator or
principal underwriter of the Trust all necessary financial
information in connection with such sub-adviser's,
administrator's or principal underwriter's duties under any
agreement between such sub-adviser, administrator or principal
underwriter and the Trust. The Adviser will also pay all
compensation of the Trust's officers, employees, and Trustees, if
any, who are affiliated persons of the Adviser, provided,
however, that if any Trustee is an affiliate of the Adviser
solely by reason of being a member of its Board of Directors, the
Trust may pay compensation to such Trustee, but at a rate no
greater than that it pays to its other Trustees. The Trust
agrees to bear the costs of preparing and setting in type its
prospectuses, statements of additional information and reports to
its shareholders, and the costs of printing or otherwise
producing and distributing those copies of such prospectuses,
statements of additional information and reports as are sent to
its shareholders. All costs and expenses not expressly assumed
by the Adviser under this Agreement or by such sub-adviser,
administrator or principal underwriter shall be paid by the
Trust, including, but not limited to (i) interest and taxes; (ii)
brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of its Trustees other than those
affiliated with the Adviser or such sub-adviser, administrator or
principal underwriter; (v) legal and audit expenses; (vi)
custodian and transfer agent, or shareholder servicing agent,
fees and expenses; (vii) expenses incident to the issuance of its
shares (including issuance on the payment of, or reinvestment of,
dividends); (viii) fees and expenses incident to the registration
under Federal or State securities laws of the Trust or its
shares; (ix) expenses of preparing, printing and mailing reports
and notices and proxy material to shareholders of the Trust; (x)
all other expenses incidental to holding meetings of the Trust's
shareholders; and (xi) such non-recurring expenses as may arise,
including litigation affecting the Trust and the legal
obligations for which the Trust may have to indemnify its
officers and Trustees.
4. Compensation of the Adviser
(a) The Trust agrees to pay the Adviser, and
the Adviser agrees to accept as full compensation all services
rendered by the Adviser as such, an annual management fee payable
monthly and computed on the net asset value of the Trust as of
the close of business each business day at the annual rate of .19
of 1% of such net asset value, provided, however, that for any
day that the Trust pays or accrues a fee under the Distribution
Plan of the Trust based upon the assets of the Trust, the annual
management fee shall be payable at the annual rate of .14 of 1%
of such net asset value.
(b) The Adviser agrees that the fee under (a)
above shall be reduced, but not below zero, by an amount equal to
its pro-rata portion (based upon the aggregate fees of the
Adviser and the Administrator) of the amount, if any, by which
the total expenses of the Trust in any fiscal year, exclusive of
taxes, interest, and brokerage fees, shall exceed the lesser of
(i) 2.5% of the first $30 million of average annual net assets of
the Trust plus 2% of the next $70 million of such net assets of
the Trust plus 1.5% of its average annual net assets in excess of
$100 million, or (ii) 25% of the Trust's total annual investment
income. The payment of the fee under (a) above at the end of any
month will be reduced or postponed so that at no time will there
be any accrued but unpaid liability under this expense
limitation, subject to readjustment during the year.
5. Duration and Termination
(a) This Amended and Restated Investment
Advisory Agreement shall become effective upon approval by the
shareholders of the Trust and shall, unless terminated as
hereinafter provided, continue in effect until the June 30 next
preceding the second anniversary of the effective date of this
Agreement, and from year to year thereafter, but only so long as
such continuance is specifically approved at least annually (1)
by a vote of the Trust's Board of Trustees, including a vote of a
majority of the Trustees who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party,
with votes cast in person at a meeting called for the purpose of
voting on such approval, or (2) by a vote of the holders of a
"majority" (as so defined) of the outstanding voting securities
of the Trust and by such a vote of the Trustees.
(b) This Agreement may be terminated by the
Adviser at any time without penalty upon giving the Trust sixty
days' written notice (which notice may be waived by the Trust)
and may be terminated by the Trust at any time without penalty
upon giving the Adviser sixty days' written notice (which notice
may be waived by the Adviser), provided that such termination by
the Trust shall be directed or approved by a vote of a majority
of its Trustees in office at the time or by a vote of the holders
of a majority (as defined in the Act) of the voting securities of
the Trust outstanding and entitled to vote. This Agreement shall
automatically terminate in the event of its assignment (as
defined in the Act).
6. Disclaimer of Shareholder Liability
The Adviser understands that the obligations
of this Agreement are not binding upon any shareholder of the
Trust personally, but bind only the Trust's property; the Adviser
represents that it has notice of the provisions of the Trust's
Declaration of Trust disclaiming shareholder liability for acts
or obligations of the Trust.
7. Notices of Meetings
The Trust agrees that notice of each meeting
of the Board of Trustees of the Trust will be sent to the Adviser
and that the Trust will make appropriate arrangements for the
attendance (as persons present by invitation) of such person or
persons as the Adviser may designate.
IN WITNESS WHEREOF, the parties hereto have
caused the foregoing instrument to be executed by their duly
authorized officers and their seals to be hereunto affixed, all
as of the day and year first above written.
ATTEST: Hawaiian Tax-Free Trust
________________________ By:___________________________________
Xxxxxxx X. Xxxxxxx
Assistant Secretary Senior Vice President
ATTEST: Hawaiian Trust Company, Limited
________________________ By:___________________________________
