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EXHIBIT (6)(gg)
[FORM]
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of ___________, 1995 between THE PNC(R) FUND, a
Massachusetts business trust (the "Fund"), and BLACKROCK FINANCIAL MANAGEMENT,
INC., a Delaware corporation (the "Adviser").
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Fund desires to retain Adviser to furnish investment
advisory services to the Fund and the Adviser is willing to so furnish such
services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) The Fund hereby appoints Adviser to act as
investment advisor to the Fund's Multi-Sector Mortgage Securities Portfolio III
(the "Portfolio") for the period and on the terms set forth in this Agreement.
Adviser accepts such appointment and agrees to furnish the services herein set
forth for the compensation herein provided.
(b) In the event that the Fund establishes one or
more portfolios other than the Portfolio named above with respect to which it
desires to retain Adviser to act as investment adviser hereunder, the Fund
shall notify the Adviser in writing. If Adviser is willing to render such
services under this Agreement it shall notify the Fund in writing whereupon,
subject to such approval as may be required pursuant to Paragraph 10 hereof,
such portfolio shall become a "Portfolio" hereunder and shall be subject to the
provisions of this Agreement to the same extent as the Portfolio named above in
subparagraph (a) except to the extent that said provisions (including those
relating to the compensation payable by the Fund to Adviser) are modified with
respect to such portfolio in writing by the Fund and Adviser at the time.
2. Sub-Contractors. It is understood that from time to
time Adviser may, but is not required to, employ or associate with such person
or persons as Adviser may believe to be particularly fitted to assist it in the
performance of this Agreement; provided, however, that the compensation of such
person or persons shall be paid by Adviser and that Adviser shall be as fully
responsible to the Fund for the acts and omissions of
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any subcontractor as it is for its own acts and omissions. Such person or
persons shall be employed pursuant to sub-advisory agreements agreeable to the
Fund and approved in accordance with the provisions of the 1940 Act.
3. Delivery of Documents. The Fund has furnished the
Adviser with copies, properly certified or authenticated, of each of the
following:
(a) Resolutions of the Fund's Board of Trustees
authorizing the appointment of Adviser as the
Portfolio's advisor and approving this
Agreement;
(b) The Fund's Declaration of Trust as filed with
the State Secretary of the Commonwealth of
Massachusetts and the Boston City Clerk on
December 22, 1988:
(c) The Fund's Code of Regulations;
(d) The Fund's Notification of Registration on
Form N-8A under the 1940 Act as filed with
the Securities and Exchange Commission
("SEC") on December 23, 1988;
(e) The Fund's Registration Statement on Form
N-1A (the "Registration Statement") under the
Securities Act of 1933 and 1940 Act, as filed
with the SEC on December 23, 1988, and all
amendments thereto; and
(f) The Fund's most recent prospectus for the
Portfolio (such prospectus together with the
related statement of additional information,
as currently in effect and all amendments and
supplements thereto, are herein called
"Prospectus").
The Fund will furnish Adviser from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
4. Services. Subject to the supervision of the Fund's
Board of Trustees, Adviser will (either directly or through the sub-advisors
and other sub-contractors employed by it in accordance with Section 2 hereof)
provide a continuous investment program for the Portfolio, including investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Portfolio. Adviser will (either directly or through a
sub-advisor and/or other sub-contractors employed by it in accordance with
Paragraph 2 hereof)
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determine from time to time what securities and other investments will be
purchased, retained or sold by the Portfolio and will place the daily orders
for the purchase or sale of securities. Adviser will provide the services
rendered by it under this Agreement in accordance with the Portfolio's
investment objective, policies and restrictions as stated in the Portfolio's
Prospectus (as currently in effect and as it may be amended or supplemented
from time to time) and the resolutions of the Fund's Board of Trustees.
Adviser further agrees that it:
(a) will comply with all applicable rules and
regulations of the SEC and will in addition
conduct its activities under this Agreement
in accordance with other applicable law;
(b) will place orders either directly with the
issuer or with any broker or dealer. Subject
to the other provisions of this paragraph, in
placing orders with brokers and dealers,
Adviser will attempt to obtain the best price
and the most favorable execution of its
orders. In placing orders, Adviser will
consider the experience and skill of the
firm's securities traders as well as the
firm's financial responsibility and
administrative efficiency. Consistent with
this obligation, Adviser may, subject to the
approval of the Fund's Board of Trustees,
select brokers on the basis of the research,
statistical and pricing services they provide
to the Portfolio and other clients of Adviser
or a sub-advisor. Information and research
received from such brokers will be in
addition to, and not in lieu of, the services
required to be performed by Adviser
hereunder. A commission paid to such brokers
may be higher than that which another
qualified broker would have charged for
effecting the same transaction, provided that
Adviser determines in good faith that such
commission is reasonable in terms of either
the transaction or the overall responsibility
of Adviser and sub-advisor to the Portfolio
and their other clients and that the total
commissions paid by the Portfolio will be
reasonable in relation to the benefits to the
Portfolio over the long-term. In addition,
Adviser is authorized to take into account
the sale of shares of the Fund in allocating
purchase and sale orders for portfolio
securities to brokers or dealers (including
brokers and dealers that are affiliated with
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Adviser, the sub-advisor or the Fund's
distributor) in compliance with applicable
law. In no instance, however, will the
Portfolio's securities be purchased from or
sold to Adviser, the sub-advisor, the Fund's
distributor or any affiliated person thereof,
except to the extent permitted by the SEC or
by applicable law;
(c) will maintain books and records with respect
to each Portfolio's securities transactions
and will furnish the Fund's Board of Trustees
such periodic and special reports as the
Board may request;
(d) will maintain a policy and practice of
conducting its investment advisory services
hereunder independently of the commercial
banking operations of its affiliates. When
Adviser makes investment recommendations for
the Portfolio, its investment advisory
personnel will not inquire or take into
consideration whether the issuer of
securities proposed for purchase or sale for
the Portfolio's account are customers of the
commercial departments of its affiliates. In
dealing with commercial customers, Adviser
and the sub-advisors will not inquire or take
into consideration whether securities of
those customers are held by the Fund; and
(e) will treat confidentially and as proprietary
information of the Fund all records and other
information relative to the Fund, the
Portfolio and the Fund's prior, current or
potential shareholders, and will not use such
records and information for any purpose other
than performance of its responsibilities and
duties hereunder, except after prior
notification to and approval in writing by
the Fund, which approval shall not be
unreasonably withheld and may not be withheld
where Adviser may be exposed to civil or
criminal contempt proceedings for failure to
comply, when requested to divulge such
information by duly constituted authorities,
or when so requested by the Fund.
5. Services Not Exclusive. Adviser's services hereunder
are not deemed to be exclusive, and Adviser shall be free to render similar
services to others so long as its services under this Agreement are not
impaired thereby.
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6. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, Adviser hereby agrees that all
records which it maintains for the Portfolio are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction changes, if
any) purchased or sold for the Portfolio.
8. Compensation.
(a) For the services provided and the expenses
assumed pursuant to this Agreement the Fund will pay Adviser and Adviser will
accept as full compensation therefor a fee, computed daily and payable monthly,
at .25% of the Portfolio's average daily net assets.
(b) If in any fiscal year the aggregate expenses
of the Portfolio (as defined under the securities regulations of any state
having jurisdiction over the Fund) exceed the expense limitations of any such
state, Adviser will bear its share of the amount of such excess in proportion
to the aggregate fees otherwise payable to it hereunder and to the Fund's
co-administrators under their administration agreements with the Fund. The
obligation of the Adviser to reimburse the Fund under this Paragraph 8(b) is
limited in any fiscal year to the amount of its fees otherwise payable
hereunder attributable to the Portfolio for such fiscal year, provided,
however, that notwithstanding the foregoing, Adviser shall reimburse the Fund
for the full amount of its share of any such excess expenses regardless of the
amount of fees otherwise payable to it during such fiscal year to the extent
that the securities regulations of any state having jurisdiction over the Fund
so require. Such expense reimbursement, if any, will be estimated, reconciled
and paid on a monthly basis.
9. Limitation of Liability. Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations or duties under this Agreement.
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10. Duration and Termination. This Agreement will become
effective as of the date hereof with respect to the Portfolio listed in Section
1(a) hereof and, with respect to any additional portfolio, on the date of
receipt by the Fund of notice from the Adviser in accordance with Section 1(b)
hereof that the Adviser is willing to serve as investment adviser with respect
to such portfolio, provided that this Agreement (as supplemented by the terms
specified in any notice and agreement pursuant to Section 1(b) hereof) shall
have been approved by the shareholders of the Portfolio in accordance with the
requirements of the 1940 Act, and, unless sooner terminated as provided herein,
shall continue in effect with respect to each such Portfolio until March 31,
1997. Thereafter, if not terminated, this Agreement shall continue in effect
with respect to the Portfolio for successive annual periods ending on March 31,
provided such continuance is specifically approved at least annually (a) by
vote of a majority of those members of the Fund's Board of Trustees who are not
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 Fund's Board
of Trustees or by vote of a majority of the outstanding voting securities of
the Portfolio. Notwithstanding the foregoing, this Agreement may be terminated
with respect to the Portfolio at any time, without the payment of any penalty,
by the Fund (by vote of the Fund's Board of Trustees or by vote of a majority
of the outstanding voting securities of the Portfolio), or by Adviser on sixty
days' written notice. This Agreement will immediately terminate in the event
of its assignment (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall
have the same meaning as such terms in the 1940 Act.)
11. Amendment to 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 which enforcement of the
change, waiver, discharge or termination is sought. Any amendment of this
Agreement shall be subject to the 1940 Act.
12. Release. "The PNC(R) Fund" and "Trustees of The
PNC(R) Fund" refer respectively to the trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated December 22, 1988 which is hereby referred to and a
copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the Fund. The
obligations of "The PNC Fund" entered into in the name or on behalf thereof by
any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of the Fund
personally, but bind only the Trust Property (as defined in the Declaration of
Trust), and
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all persons dealing with any class of shares of the Fund must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Fund.
13. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. 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 not
be affected thereby. This Agreement shall be binding on, and shall inure to
the benefit of, the parties hereto and their respective successors and shall be
governed by Delaware law.
14. Counterparts. This Agreement may be executed in
counterparts by the parties hereto, each of which shall constitute an original
counterpart, and all of which, together, shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE PNC FUND
By: ______________________________
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: ______________________________
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