Exhibit (d)(7)
XXXXX XXXXX MUTUAL FUNDS TRUST
INVESTMENT ADVISORY AND ADMINISTRATIVE AGREEMENT
ON BEHALF OF
XXXXX XXXXX LOW DURATION FUND
AGREEMENT made this 18th day of June, 2002, between Xxxxx Xxxxx Mutual
Funds Trust, a Massachusetts business trust (the "Trust"), on behalf of Xxxxx
Xxxxx Low Duration Fund (the "Fund") and Xxxxx Xxxxx Management, a Massachusetts
business trust ("Xxxxx Xxxxx").
1. Duties of Xxxxx Xxxxx. The Trust hereby employs Xxxxx Xxxxx to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Fund and to administer the Fund's affairs, subject to the
supervision of the Trustees of the Trust, for the period and on the terms set
forth in this Agreement.
Xxxxx Xxxxx hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of Xxxxx Xxxxx'x organization in the choice of
investments, in the purchase and sale of securities and in the administration of
the Fund and to furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Fund and for administering its affairs and to pay the salaries and fees of all
officers and Trustees of the Trust who are members of Xxxxx Xxxxx'x organization
and all personnel of Xxxxx Xxxxx performing services relating to research and
investment and administrative activities. Xxxxx Xxxxx shall for all purposes
herein be deemed to be an independent contractor and shall, except as otherwise
expressly provided or authorized, have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust.
Xxxxx Xxxxx shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Fund. As investment adviser to the Trust, Xxxxx Xxxxx shall
furnish continuously an investment program and shall determine from time to time
what securities and other investments shall be acquired, disposed of or
exchanged and what portion of the Fund's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust under the Investment Company Act
of 1940, all as from time to time amended. Xxxxx Xxxxx is authorized, in its
discretion and without prior consultation with the Trust, to buy, sell, and
otherwise trade in any and all types of securities, commodities and investment
instruments on behalf of the Fund. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Fund
and notify Xxxxx Xxxxx thereof in writing, Xxxxx Xxxxx shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. Xxxxx Xxxxx shall
take, on behalf of the Trust, all actions which it deems necessary or desirable
to implement the investment policies of the Trust and of the Fund.
Xxxxx Xxxxx shall place all orders for the purchase or sale of portfolio
securities for the account of the Fund either directly with the issuer or with
brokers or dealers selected by Xxxxx Xxxxx, and to that end Xxxxx Xxxxx is
authorized as the agent of the Fund to give instructions to the custodian of the
Fund as to deliveries of securities and payments of cash for the account of the
Fund. In connection with the selection of such brokers or dealers and the
placing of such orders, Xxxxx Xxxxx shall use its best efforts to seek to
execute security transactions at prices which are advantageous to the Fund and
(when a disclosed commission is being charged) at reasonably competitive
commission rates. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to Xxxxx Xxxxx and Xxxxx Xxxxx is expressly
authorized to pay any broker or dealer who provides such brokerage and research
services a commission for executing a security transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if Xxxxx Xxxxx determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities which Xxxxx Xxxxx
and its affiliates have with respect to accounts over which they exercise
investment discretion. Subject to the requirement set forth in the second
sentence of this paragraph, Xxxxx Xxxxx is authorized to consider, as a factor
in the selection of any broker or dealer with whom purchase or sale orders may
be placed, the fact that such broker or dealer has sold or is selling shares of
the Fund, or any other series of the Trust, or of any one or more investment
companies sponsored by Xxxxx Xxxxx or its affiliates.
2. Compensation of Xxxxx Xxxxx. For the services, payments and facilities
to be furnished hereunder by Xxxxx Xxxxx, Xxxxx Xxxxx shall be entitled to
receive from the Trust fees in an amount equal to 0.15% of the average daily net
assets per annum of the Fund. Such compensation shall be paid monthly in arrears
on the last business day of each month. The Fund's daily net assets shall be
computed in accordance with the Declaration of Trust of the Trust and any
applicable votes and determinations of the Trustees of the Trust. In case of
initiation or termination of the Agreement during any month with respect to the
Fund, the fee for that month shall be based on the number of calendar days
during which it is in effect.
Xxxxx Xxxxx may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. Xxxxx Xxxxx shall pay the entire
salaries and fees of all of the Trust's Trustees and officers who devote part or
all of their time to the affairs of Xxxxx Xxxxx, and the salaries and fees of
such persons shall not be deemed to be expenses incurred by the Trust for
purposes of this Section 3. Except as provided in the foregoing sentence, it is
understood that the Fund will pay all expenses other than those expressly stated
to be payable by Xxxxx Xxxxx hereunder, which expenses payable by the Fund shall
include, without implied limitation, (i) expenses of organizing and maintaining
the Fund and continuing its existence, (ii) registration of the Trust under the
Investment Company Act of 1940, (iii) commissions, spreads, fees and other
expenses connected with the acquisition, holding and disposition of securities
and other investments, (iv) auditing, accounting and legal expenses, (v) taxes
and interest, (vi) governmental fees, (vii) expenses of issue, sale and
redemption of shares, (viii) expenses of registering and qualifying the Trust,
the Fund and its shares under federal and state securities laws and of preparing
and printing registration statements or other offering statements or memoranda
for such purposes and for distributing the same to shareholders and investors,
and fees and expenses of registering and maintaining registrations of the Fund
and of the Fund's principal underwriter, if any, as broker-dealer or agent under
state securities laws, (ix) expenses of reports and notices to shareholders and
of meetings of shareholders and proxy solicitations therefor, (x) expenses of
reports to governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and disbursements of
custodians and subcustodians for all services to the Fund (including without
limitation safekeeping of funds, securities and other investments, keeping of
books, accounts and records, and determination of net asset values), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses for servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of Xxxxx Xxxxx'x
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940, and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees, officers and shareholders
with respect thereto.
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4. Other Interests. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in Xxxxx
Xxxxx as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of Xxxxx Xxxxx are or may be or
become similarly interested in the Fund, and that Xxxxx Xxxxx may be or become
interested in the Fund as a shareholder or otherwise. It is also understood that
trustees, officers, employees and shareholders of Xxxxx Xxxxx may be or become
interested (as directors, trustees, officers, employees, shareholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which Xxxxx Xxxxx may organize, sponsor or acquire, or
with which it may merge or consolidate, and which may include the words "Xxxxx
Xxxxx" or any combination thereof as part of their name, and that Xxxxx Xxxxx or
its subsidiaries or affiliates may enter into advisory or management agreements
or other contracts or relationships with such other companies or entities.
5. Limitation of Liability of Xxxxx Xxxxx. The services of Xxxxx Xxxxx to
the Trust and the Fund are not to be deemed to be exclusive, Xxxxx Xxxxx being
free to render services to others and engage in other business activities. In
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of Xxxxx Xxxxx, Xxxxx
Xxxxx shall not be subject to liability to the Trust or the Fund or to any
shareholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses which may be sustained in
the acquisition, holding or disposition of any security or other investment.
6. Sub-Advisers and Sub-Administrators. Xxxxx Xxxxx may employ one or more
sub-advisers or sub-administrators from time to time to perform such of the acts
and services of Xxxxx Xxxxx and upon such terms and conditions as may be agreed
upon between Xxxxx Xxxxx and such sub-adviser or sub-administrator and approved
by the Trustees of the Trust, all as permitted by the Investment Company Act of
1940.
7. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including June 30,
2004 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after June 30, 2004 is specifically approved at
least annually (i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Fund and (ii) by the vote
of a majority of those Trustees of the Trust who are not interested persons of
Xxxxx Xxxxx or the Trust cast in person at a meeting called for the purpose of
voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Trustees of the Trust or the trustees of Xxxxx Xxxxx, as
the case may be, and the Trust may, at any time upon such written notice to
Xxxxx Xxxxx, terminate this Agreement by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall terminate automatically in
the event of its assignment.
8. Amendments of the Agreement. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of Xxxxx Xxxxx or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the Fund.
9. Limitation of Liability. Xxxxx Xxxxx expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Fund, and Xxxxx Xxxxx hereby agrees that it
shall have recourse to the Trust or the Fund for payment of claims or
obligations as between the Trust or the Fund and Xxxxx Xxxxx arising out of this
Agreement and shall not seek satisfaction from the shareholders or any
shareholder of the Fund.
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10. Use of the Name "Xxxxx Xxxxx". Xxxxx Xxxxx hereby consents to the use
by the Fund of the name "Xxxxx Xxxxx" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of Xxxxx
Xxxxx or one of its affiliates as the investment adviser or administrator of the
Fund. The name "Xxxxx Xxxxx" or any variation thereof may be used from time to
time in other connections and for other purposes by Xxxxx Xxxxx and its
affiliates and other investment companies that have obtained consent to the use
of the name "Xxxxx Xxxxx". Xxxxx Xxxxx shall have the right to require the Fund
to cease using the name "Xxxxx Xxxxx" as part of the Fund's name if the Fund
ceases, for any reason, to employ Xxxxx Xxxxx or one of its affiliates as the
Fund's investment adviser or administrator. Future names adopted by the Fund for
itself, insofar as such names include identifying words requiring the consent of
Xxxxx Xxxxx, shall be the property of Xxxxx Xxxxx and shall be subject to the
same terms and conditions.
11. Certain Definitions. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, of the lesser of (a) 67 per centum or more of the shares of the
Fund present or represented by proxy at the meeting if the holders of more than
50 per centum of the shares of the Fund are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the shares of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
XXXXX XXXXX MUTUAL FUNDS TRUST
(on behalf of Xxxxx Xxxxx Low Duration Fund)
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
XXXXX XXXXX MANAGEMENT
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Vice President
and not individually
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