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Exhibit 5A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 16th day of January, 1996 between XXXXX TREASURY FUND, a
Massachusetts business trust (the "Trust"), on behalf of the Xxxxx Treasury Only
Money Market Fund, and Xxxxx Money Management Inc., a corporation organized
under the laws of Florida (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest
(hereafter referred to as "Shares") in separate series with each such series
representing the interests in a separate portfolio of securities and other
assets;
WHEREAS, the Trust has established and presently offers (or intends to offer)
Shares of beneficial interest in a portfolio currently known as the Xxxxx
Treasury Only Money Market Fund (the "Fund"); and
WHEREAS, the Trust desires to retain the Adviser to render investment advisory
services to the Trust with respect to the Fund as indicated herein and the
Adviser is willing to so render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Trust hereby appoints the Adviser
to act as investment adviser to the Trust and the Fund for the
periods and on the terms herein set forth. The Adviser accepts
such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Delivery of Documents. The Trust has delivered (or will
deliver as soon as is possible) to the Adviser copies properly
certified or authenticated of each of the following documents:
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(a) Agreement and Declaration of Trust of the Trust dated
as of August 10, 1995 (such Agreement and Declaration
of Trust, as presently in effect and as amended from
time to time, is herein called the "Trust
Agreement"), copies of which are also on file with
the Secretary of the Commonwealth of Massachusetts;
(b) By-Laws of the Trust (such By-Laws, as presently in
effect and as amended from time to time, are herein
called the "By-Laws");
(c) Certified resolutions of the Shareholder(s) and the
Trustees of the Trust approving the terms of this
Agreement;
(d) Custodian Agreement (including related fee schedule)
dated January 15, 1996 between the Trust and PNC Bank
(such Agreement, as presently in effect and as
amended and/or superseded from time to time, is
herein called the "Custodian Agreement");
(e) Prospectus and Statement of Additional Information of
the Trust with respect to the Fund as currently in
effect (such Prospectus and Statement of Additional
Information, as currently in effect and as amended,
supplemented and/or superseded from time to time, is
herein called the "Prospectus"); and
(f) Registration Statement of the Trust under the
Securities Act of 1933 (the "1933 Act"), and the 1940
Act on Form N-1A as filed with the Securities and
Exchange Commission (the "Commission") on August 10,
1995, and as amended on Form N-1A (such Registration
Statement, as presently in effect and as amended from
time to time, is herein called the "Registration
Statement").
The Trust agrees to promptly furnish the Adviser from time to time with copies
of all amendments of or supplements to or otherwise current versions of any of
the foregoing documents not heretofore furnished.
3. Name of Trust or Fund. The Trust and the Fund may use any name
derived from the name "Xxxxx Money Management Inc.", if the Trust elects to do
so, only for so long as this Agreement, any other investment advisory or
management agreement between the Adviser and the Trust or any extension, renewal
or amendment hereof or thereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the Adviser's
business as investment adviser. At such time as such an agreement shall no
longer be in effect, the Fund (to the extent the Corporation has the legal power
to cause it to be done) cease to use such a name or any other name indicating
that it is advised or managed by or otherwise connected with the Adviser or any
organization which shall have so succeeded to the Adviser's business.
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4. Duties of Adviser.
(a) Subject to the general supervision of the Trustees of
the Trust, the Adviser shall manage the investment
operations of the Fund and the composition of the
Fund's assets, including the purchase, retention and
disposition thereof. In this regard, the Adviser:
(i) shall provide supervision of the Fund's
assets, furnish a continuous investment
program for the Fund, determine from time to
time what investments or securities will be
purchased, retained or sold by the Fund, and
what portion of the assets will be invested
or held uninvested as cash;
(ii) shall place orders with broker-dealers,
foreign currency dealers, futures
commissions merchants or others pursuant to
the Adviser's determinations in accordance
with the Fund's policies as expressed in the
Registration Statement; and
(iii) may, on occasions when it deems the purchase
or sale of a security to be in the best
interests of the Fund as well as its other
customers (including any other Fund or any
other investment company or trust or
advisory account for which the Adviser acts
as adviser), aggregate, to the extent
permitted by applicable laws and
regulations, the securities to be sold or
purchased in order to obtain the best net
price and the most favorable 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 obligations to the Fund and to
such other customers.
(b) The Adviser, in the performance of its duties
hereunder, shall act in conformity with the Trust
Agreement, By-Laws, Registration Statement and
Prospectus and with the instructions and directions
of the Trustees of the Trust, and will use its best
efforts to conform to the requirements of the 1940
Act, the Investment Advisers Act of 1940 (to the
extent applicable), the Internal Revenue Code of
1986, as amended, ( the "Code") relating to regulated
investment companies and all rules and regulations
thereunder, the Xxxxxxx Xxxxxxx and Securities Fraud
Enforcement Act of 1988 (to the extent applicable)
and all other applicable federal and state laws,
regulations and rulings, subject always to policies
and instructions adopted by the Trust's Board of
Trustees. In connection therewith,
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the Adviser shall use reasonable efforts or manage
the Fund so that it will qualify as a regulated
investment company under Subchapter M of the Code and
regulations issued thereunder.
(c) The Adviser shall render to the Trustees of the Trust
such periodic and special reports as the Trustees may
reasonably request.
(d) The Adviser shall notify the Trust of any material
change in the management of the Adviser within a
reasonable time after such change.
(e) The Adviser shall immediately notify the Trust in the
event that the Adviser or any of its affiliates: (1)
becomes aware that it is subject to a statutory
disqualification that prevents the Adviser from
serving as investment adviser pursuant to this
Agreement; or (2) becomes aware that it is the
subject of an administrative proceeding or
enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Adviser
further agrees to notify the Trust immediately of any
material fact known to the Adviser respecting or
relating to the Adviser that is not contained in the
Trust's Registration Statement regarding the Trust,
or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any
statement contained therein that becomes untrue in
any material respect.
(f) The services of the Adviser hereunder are not deemed
exclusive and the Adviser shall be free to render
similar services to others so long as its services
under this Agreement are not impaired thereby.
5. Allocation of Charges and Expenses. Except as otherwise
specifically provided in this section 5, the Adviser shall pay the compensation
and expenses of all trustees, officers and executive employees of the Trust
(including the Fund's share of payroll taxes) who are affiliated persons of the
Adviser, and the Adviser shall make available, without expense to the Fund, the
services of such of its directors, officers and employees as may duly be elected
officers of the Trust, subject to their individual consent to serve and to any
limitations imposed by law. The Adviser shall provide at its expense the
portfolio management services described in section 4 hereof, other than the cost
(including taxes and brokerage commissions, if any) of securities purchased for
the Fund..
The Adviser shall not be required to pay any expenses of the Fund other
than those specifically allocated to it in this section 5.
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6. Management Fee. For all services to be rendered,
payments to be made and costs to be assumed by the Adviser as provided in
sections 4 and 5 hereof, the Trust on behalf of the Fund shall pay the Adviser
on the last day of each month the unpaid balance of a fee equal to the excess of
(a) .50% of the average daily net assets as defined below of the Fund for such
month.
The "average daily net assets" of the Fund shall mean the average of
the values placed on the Fund's net assets as of 4:00 p.m. (New York time) on
each day on which the net asset value of the Fund is determined consistent with
the provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully
determines the value of its net assets as of some other time on each business
day, as of such time. The value of the net assets of the Fund shall always be
determined pursuant to the applicable provisions of the Declaration and the
Registration Statement. If the determination of net asset value does not take
place for any particular day, then for the purposes of this section 6, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of its net assets as of 4:00 p.m. (New York time), or as of such other time as
the value of the net assets of the Fund's portfolio may be lawfully determined
on that day. If the Fund determines the value of the net assets of its portfolio
more than once on any day, then the last such determination thereof on that day
shall be deemed to be the sole determination thereof on that day for the
purposes of this section 6.
The Adviser agrees that its gross compensation for any fiscal year
shall not be greater than an amount which, when added to the other expenses of
the Fund, shall cause the aggregate expenses of the Fund to equal the maximum
expenses under the lowest applicable expense limitation established pursuant to
the statutes or regulations of any jurisdiction in which the Shares of the Fund
may be qualified for offer and sale. Such calculation shall not take into
account expenses which may be excluded as provided under applicable law. Except
to the extent that such amount has been reflected in reduced payments to the
Adviser, the Adviser shall refund to the Fund the amount of any payment received
in excess of the limitation pursuant to this section 6 as promptly as
practicable after the end of such fiscal year, provided that the Adviser shall
not be required to pay the Fund an amount greater than the fee paid to it in
respect of such year pursuant to this Agreement. As used in this section 6,
"expenses" shall mean those expenses included in the applicable expense
limitation having the broadest specifications thereof, and "expense limitation"
means a limit on the maximum annual expenses which may be incurred by an
investment company determined (i) by multiplying a fixed percentage by the
average, or by multiplying more than one such percentage by different specified
amounts of the average, of the values of an investment company's net assets for
a fiscal year or (ii) by multiplying a fixed percentage by an investment
company's net investment income for a fiscal year. The words "lowest applicable
expense limitation" shall be construed to result in the largest reduction of the
Adviser's compensation for any fiscal year of the Fund; provided, however, that
nothing in this Agreement shall limit the Adviser's fees if not required by an
applicable statute or regulation referred to above in this section 6.
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The Adviser may waive all or a portion of its fees provided for
hereunder and such waiver shall be treated as a reduction in purchase price of
its services. The Adviser shall be contractually bound hereunder by the terms of
any publicly announced waiver of its fee, or any limitation of the Fund's
expenses, as if such waiver or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not
Exclusive. In connection with purchases or sales of portfolio securities and
other investments for the account of the Fund, neither the Adviser nor any of
its directors, officers or employees shall act as a principal or agent or
receive any commission. The Adviser or its agent shall arrange for the placing
of all orders for the purchase and sale of portfolio securities and other
investments for the Fund's account with brokers or dealers selected by the
Adviser in accordance with Fund policies as expressed in the Registration
Statement. If any occasion should arise in which the Adviser gives any advice to
its clients concerning the Shares of the Fund, the Adviser shall act solely as
investment counsel for such clients and not in any way on behalf of the Fund.
The Adviser's services to the Fund pursuant to this Agreement are not
be deemed to be exclusive and it is understood that the Adviser may render
investment advice, management and services to others. In acting under this
Agreement, the Adviser shall be an independent contractor and not an agent of
the Trust.
8. Limitation of Liability of Manager. As an inducement
to the Adviser's undertaking to render services pursuant to this Agreement, the
Trust agrees that the Adviser shall not be liable under this Agreement 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, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Adviser against any liability to the Trust, the Fund or its shareholders to
which the Adviser would otherwise be subject 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 hereunder. Any person, even
though also employed by the Adviser, who may be or become an employee of and
paid by the Fund shall be deemed when acting within the scope of his or her
employment by the Fund, to be acting in such employment solely for the Fund and
not as the Adviser's employee or agent.
9. Duration and Termination of This Agreement. This
Agreement shall remain in force until January 15, 1998, and continue in force
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of any
party to this agreement, 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 the vote of
a majority of the outstanding voting securities of the Fund. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least
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annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Fund or by the Trust's Board of Trustees on 60 days'
written notice to the Adviser, or by the Adviser on 60 days' written notice to
the Fund. This Agreement shall terminate automatically in the event of its
assignment.
10. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought, and no amendment of this
Agreement shall be effective until approved by the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval.
11. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or limit any of
the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously 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 interpreting the provisions of this Agreement, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"affiliated person," "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the SEC by any rule, regulation or
order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or
management agreements entered into between the Adviser and the Fund.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
XXXXX TREASURY FUND,
ON BEHALF OF XXXXX TREASURY
ONLY MONEY MARKET FUND
Attest:
XXXXXX X. XXXXXX By: XXXX X. XXXXXXXXX
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Title: President
XXXXX MONEY MANAGEMENT INC.
Attest:
XXXXXX X. XXXXXX By: XXXX X. XXXXXXXXX
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Title: President
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