INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of ___________, 1995 between XXXXX TREASURY
FUND, a Massachusetts business trust (the "Trust"), on behalf of the Xxxxx
Treasury Bond 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 Bond 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:
(a) Agreement and Declaration of Trust of the Trust dated as
of ______ __, 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 ________________, 1995 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presently in effect and as amended and/or superseded from time to time, is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 ________ __, 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.
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, 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.
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) .70% 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.
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 ______________, 1997, 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 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.
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 Bond Fund
Attest:
By:
Title:
XXXXX MONEY MANAGEMENT INC.
Attest:
By:
Title:
