INVESTMENT ADVISORY AGREEMENT
XXXXXX STREET FUNDS
AGREEMENT made as of this 31st day of March, 1999, by and between Xxxxxx
Street Funds, a Massachusetts business trust (the Trust), and First Hawaiian
Bank (the Adviser).
WHEREAS, the Trust is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the 1940 Act), consisting
of several series of shares, each having its own investment policies: and
WHEREAS, the Trust has retained SEI Investments Mutual Fund Services (the
Administrator) to provide administration of the Trust's operations, subject to
the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Xxxxxx Street Equity Fund, Xxxxxx Street
Hawaii Municipal Bond Fund, Xxxxxx Street High Grade Income Fund, Xxxxxx Street
Money Market Fund and Xxxxxx Street Treasury Money Market Fund and such other
funds as the Trust and the Adviser may agree upon (the Funds), and the Adviser
is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, to supervise and monitor the
investment activities of any sub-advisers appointed for the Funds by the
Trustees of the Trust, and to continuously review, supervise, and administer the
investment program of the Funds, to determine in its discretion the securities
to be purchased or sold, to provide the Administrator and the Trust with records
concerning the Adviser's activities which the Trust is required to maintain, and
to render regular reports to the Administrator and to the Trust's officers and
Trustees concerning the Adviser's discharge of the foregoing responsibilities.
The Adviser may delegate all or any portion of its responsibilities hereunder to
one or more sub-advisers, subject to the supervision of the Adviser and the
Board of Trustees of the Trust.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish,
and in compliance with the objectives, policies, and limitations for
each Fund set forth in each such Fund's prospectus (such prospectus
and the statement of additional information as currently in effect and
as amended or supplemented from time to time, being herein referred to
as the Prospectus) and applicable laws and regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to determine the
securities to be purchased or sold by the Funds and will place orders with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage set forth in each Fund's Prospectus or as the Board of Trustees may
direct from time to time, in conformity with federal securities laws. In
providing the Funds with investment supervision, the Adviser will give primary
consideration to securing the most favorable price and efficient execution.
Within the framework of this policy, the Adviser may consider the financial
responsibility, research and investment information and other services provided
by brokers or dealers who may effect or be a party to any such transaction or
other transactions to which the Adviser's other clients may be a party. It is
understood that it is desirable for the Funds that the Adviser have access to
supplemental investment and market research and security and economic analysis
provided by brokers who may execute brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore, the
Adviser is authorized to place orders for the purchase and sale of securities
for the Funds with such brokers, subject to review by the Trust's Board of
Trustees from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers may be
useful to the Adviser in connection with the Adviser's services to other
clients.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of a Fund as well as other clients of the
Adviser, the Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and efficient
execution. 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 Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligation to the Funds
and to such other clients.
The Adviser will promptly communicate to the Administrator and to the
officers and the Board of Trustees of the Trust such information
relating to fund transactions as they may reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, solely by reason of its having directed a securities
transaction on behalf of the Trust to a broker-dealer in compliance
with the provisions of Section 28(e) of the Securities Exchange Act of
1934.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust shall pay
to the Adviser compensation at the rate specified in the Schedule(s) which are
attached hereto and made a part of this Agreement. Such compensation shall be
paid to the Adviser at the end of each month, and calculated by applying a daily
rate, based on the annual percentage rates as specified in the attached
Schedule(s), to the assets. The fee shall be based on the average daily net
assets for the month involved. If this Agreement becomes effective subsequent
to the first day of a month or terminates before the last day of a month, the
Adviser's compensation for that part of the month in which this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the fees
as set forth above. Payment of the Adviser's compensation for the preceding
month shall be made promptly.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
4. EXCESS EXPENSES. If the expenses for any Fund for any fiscal year
(including fees and other amounts payable to the Adviser, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary costs) as
calculated every business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory authority of any
jurisdiction in which Shares are qualified for offer and sale, the Adviser shall
bear such excess cost. However, the Adviser will not bear expenses of the Trust
or any Fund which would result in the Trust's inability to qualify as a
regulated investment company under provisions of the Internal Revenue Code.
Payment of expenses by the Adviser pursuant to this Section 4 shall be settled
on a monthly basis (subject to fiscal year end reconciliation) by a reduction in
the fee payable to the Adviser for such month pursuant to Section 3 and, if such
reduction shall be insufficient to offset such expenses, by reimbursing the
Trust.
5. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, 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 THE ADVISER. The services of the Adviser to the Trust are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Trust are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way otherwise be deemed an agent of the Trust.
7. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act which are prepared or maintained by the Adviser on behalf of the Trust
are the property of the Trust and will be surrendered promptly to the Trust on
request.
8. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall be
confined to those expressly set forth herein, and no implied duties are assumed
by or may be asserted against the
Adviser hereunder. The Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
state law which cannot be waived or modified hereby. (As used in this
Paragraph 8, the term "Adviser" shall include directors, officers, employees and
other corporate agents of the Adviser as well as that corporation itself).
9. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the Trust are
or may be interested in the Adviser (or any successor thereof) as directors,
partners, officers or shareholders, or otherwise; directors, partners, officers,
agents, and shareholders of the Adviser are or may be interested in the Trust as
Trustees, shareholders or otherwise; and the Adviser (or any successor) is or
may be interested in the Trust as a shareholder or otherwise. In addition,
brokerage transactions for the Trust may be effected through affiliates of the
Adviser if approved by the Board of Trustees, subject to the rules and
regulations of the Securities and Exchange Commission.
10. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from the date of
execution, and thereafter, for periods of one year so long as such continuance
thereafter is specifically approved at least annually (a) by the vote of a
majority of those Trustees of the Trust 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 Trustees of the Trust or by
vote of a majority of the outstanding voting securities of each Fund; provided,
however, that if the shareholders of any Fund fail to approve the Agreement as
provided herein, the Adviser may continue to serve hereunder in the manner and
to the extent permitted by the 1940 Act and rules and regulations thereunder.
The foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder.
This Agreement may be terminated as to any Fund at any time, without
the payment of any penalty by vote of a majority of the Trustees of
the Trust or by vote of a majority of the outstanding voting
securities of the Fund on not less than 30 days' nor more than 60
days' written notice to the Adviser, or by the Adviser at any time
without the payment of any penalty, on 90 days written notice to the
Trust. This Agreement will automatically and immediately terminate in
the event of its assignment. 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.
As used in this Section 10, the terms "assignment," "interested
persons," and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and rules and regulations thereunder; subject to such exemptions
as may be granted by the Securities and Exchange Commission under said
Act.
11. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Trust, at Xxx Xxxxxxx Xxxxxx Xxxx, Xxxx, XX 00000, Attention Legal Department
and if to the Adviser at: 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000.
12. SEVERABILITY. 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 bet be affected thereby.
A copy of this Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and that the obligations of this instrument are not binding upon any
of the Trustees, officers, or shareholders of the Trust individually, but
binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
XXXXXX STREET FUNDS FIRST HAWAIIAN BANK
By: /s/ Xxxxxx X. X'Xxxxxxx, By: /s/ Xxxxxx X. Xxx,
--------------------------- --------------------------------
Vice President and Assistant Executive Vice President
Secretary
Attest: /s/ Xxxx Xxxx Attest: /s/ Xxxxxxx X. Xxxxxx
----------------------- ----------------------------
SCHEDULE A DATED MARCH 31, 1999
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED MARCH 31, 0000
XXXXXXX
XXXXXX XXXXXX FUNDS
AND
FIRST HAWAIIAN BANK
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Xxxxxx Street Equity Fund .74%
Xxxxxx Street Hawaii Municipal Bond Fund .35%
Xxxxxx Street High Grade Income Fund .55%
Xxxxxx Street Money Market Fund .30%
Xxxxxx Street Treasury Money Market Fund .30%
