PINEBRIDGE MUTUAL FUNDS INTERIM INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of March 26,
2010, by and between the PineBridge Mutual Funds, a Delaware statutory trust
(“Trust”), on behalf of the series of the Trust listed on Schedule A hereto, as
may be amended from time to time (the “Fund”), and PineBridge Investments LLC, a
Delaware limited liability company (“Adviser”).
WHEREAS, the Trust is registered under
the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end
management investment company consisting of one or more separate funds, each
having its own assets and investment objectives, policies and restrictions;
and
WHEREAS, the Adviser is registered as
an investment adviser under the Investment Advisers Act of 1940, as amended
(“Advisers Act”); and
WHEREAS, the Trust desires to retain
the Adviser to provide investment advisory and portfolio management services to
the Fund pursuant to the terms and provisions of this Agreement, and the Adviser
is willing to furnish such services.
NOW, THEREFORE, in consideration of the
premises and mutual covenants herein contained, it is agreed between the parties
hereto as follows:
1. Appointment. The
Trust hereby appoints the Adviser to serve as the investment adviser of the
Trust and the Fund listed on Schedule A hereto, as amended from time to time,
for the period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to render the services herein set
forth for compensation as set forth on Schedule A. In the performance
of its duties, the Adviser will act in the best interests of the Trust and the
Fund and will perform its duties hereunder for the Trust and the Fund in
conformity with: (a) applicable laws and regulations, including, but not limited
to, the 1940 Act and the Advisers Act; (b) the terms of this Agreement; (c) the
investment objectives, policies and restrictions of the Fund as stated in the
Trust’s currently effective registration statement under the Securities Act of
1933, as amended, and the 1940 Act; (d) the Trust’s Declaration of Trust and
Bylaws; and (e) such other guidelines as the Board of Trustees of the Trust (the
“Board”) reasonably may establish or approve. The Adviser will be an
independent contractor and will have no authority to act for or represent the
Trust or Fund in any way or otherwise be deemed to be an agent of the Trust or
Fund unless expressly authorized in this Agreement or in another appropriate
written format.
2. Duties of the
Adviser.
(a) Investment Program. Subject
to supervision by the Board, the Adviser will provide a continuous investment
program for the Fund and shall determine what securities and other investments
will be purchased, retained, sold or loaned by the Fund and what portion of such
assets will be invested or held uninvested as cash. The Adviser will
exercise full discretion and act for the Fund in the same manner and with the
same force and effect as the Fund itself might or could do with respect to
purchases, sales, or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct of such purchases,
sales or other transactions. The Adviser will be responsible for
preserving the confidentiality of information concerning the holdings,
transactions, and business activities of the Trust and the Fund in conformity
with the requirements of the 1940 Act, other applicable laws and regulations,
and any policies that are approved by the Board.
(b) Exercise of
Rights. The Adviser, unless and until otherwise directed by
the Board, will exercise all rights of security holders with respect to
securities held by the Fund, including, but not limited to: voting proxies;
converting, tendering, exchanging or redeeming securities; acting as a claimant
in class action litigation (including litigation with respect to securities
previously held); and exercising rights in the context of a bankruptcy or other
reorganization.
(c) Execution of Transactions
and Selection of Broker-Dealers. The Adviser shall be
responsible for effecting transactions for the Fund and selecting brokers or
dealers to execute such transactions for the Fund. In the selection
of brokers or dealers (which may include brokers or dealers affiliated with the
Adviser) and the placement of orders for the purchase and sale of portfolio
investments for the Fund, the Adviser shall use its best efforts to obtain for
the Fund the best execution available, except to the extent that it may be
permitted to pay higher brokerage commissions for brokerage or research services
as described below. In using its best efforts to obtain the best
execution available, the Adviser, bearing in mind the Fund’s best interests at
all times, shall consider all factors it deems relevant, including by way of
illustration, price, the size of the transaction, the nature of the market for
the security, the amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation, experience and financial
stability of the broker or dealer involved and the quality of execution and
research services provided by the broker or dealer. Subject to such
policies as the Board may determine, the Adviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage or research services to the Adviser an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser’s overall responsibilities with respect to
the Fund and to other clients of the Adviser as to which the Adviser exercises
investment discretion. The Trust hereby agrees that any entity or
person associated with the Adviser which is a member of a national securities
exchange is authorized to effect any transaction on such exchange for the
account of the Trust which is permitted by Section 11(a) of the Securities
Exchange Act of 1934, as amended, and the Trust hereby consents to the retention
of compensation for such transactions.
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(d) Reports to the
Board. Upon request, the Adviser shall provide to the Board
such analyses and reports as may be required by law or otherwise reasonably
required to fulfill its responsibilities under this Agreement.
(e) Delegation of
Authority. Any of the duties specified in this Paragraph 2
with respect to the Fund may be delegated by the Adviser, at the Adviser’s
expense, to an appropriate party, including an affiliated party (“Subadviser”),
subject to such approval by the Board and shareholders of the Fund to the extent
required by the ▇▇▇▇ ▇▇▇. The retention of one or more Subadvisers by
the Adviser pursuant to this Paragraph 2(e) shall in no way reduce the
obligations of the Adviser under this Agreement and the Adviser shall be
responsible to the Trust for all acts or omissions of each Subadviser in
connection with the performance of the Adviser’s duties under this
Agreement. In connection with the delegation of responsibilities to a
Subadviser, the Adviser shall:
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(i)
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Oversee
the performance of delegated functions by each Subadviser and furnish the
Board with periodic reports concerning the performance of delegated
responsibilities by the Subadviser;
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(ii)
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Allocate
the portion of the assets of the Fund to be managed by one or more
Subadvisers for such fund and coordinate the activities of all
Subadvisers;
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(iii)
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If
appropriate, recommend changes in a Subadviser or the addition of a
Subadviser, subject to the necessary approvals under the 1940 Act;
and
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(iv)
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Be
responsible for compensating the Subadviser in the manner specified in its
agreement with the Subadviser.
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3. Services
Not Exclusive. The services
furnished by the Adviser hereunder are not to be deemed exclusive and the
Adviser shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby. Nothing in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Adviser, who may also be a Trustee, officer, or employee of the
Trust, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar or dissimilar nature.
4. Compliance
with Rule 38a-1. The Adviser shall
maintain policies and procedures that are reasonably designed to prevent
violations of the federal securities laws, and shall employ personnel to
administer the policies and procedures who have the requisite level of skill and
competence required to effectively discharge its
responsibilities. The Adviser shall also provide the Trust’s chief
compliance officer with periodic reports regarding its compliance with the
federal securities laws, and shall promptly provide special reports in the event
of any material violation of the federal securities laws.
5. Books and
Records. The Adviser will
maintain all accounts, books and records with respect to the Fund as are
required pursuant to the 1940 Act and Advisers Act and the rules
thereunder. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains for
the Trust are the property of the Trust and further agrees to surrender promptly
to the Trust any of such records upon the Trust’s request. The
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.
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6. Expenses
of the Adviser and the Trust. During the term
of this Agreement, the Fund will bear all fees and expenses not specifically
waived, assumed or agreed to be paid by the Adviser and incurred in its
operations and the offering of its shares. Expenses borne by the Fund
will include, but not be limited to, the following (or the Fund’s proportionate
share of the following): brokerage commissions and issue and transfer taxes
relating to securities purchased or sold by the Fund or any losses incurred in
connection therewith; expenses of organizing the Fund; filing fees and expenses
relating to the registration and qualification of the Fund’s shares under
federal or state securities laws and maintaining such registrations and
qualifications; distribution and service fees; fees and salaries payable to the
Trustees and officers of the Trust who are not officers, directors/trustees,
partners or employees of the Adviser or its affiliates; taxes (including any
income or franchise taxes) and governmental fees; costs of any liability,
uncollectible items of deposit and other insurance (including directors’ and
officers’ errors and omissions insurance) or fidelity bonds; any costs, expenses
or losses arising out of any liability of or claim for damage or other relief
asserted against the Trust or the Fund for violation of any law; legal,
accounting and auditing expenses, including legal fees of counsel to the Trust
or the Fund for services rendered to the Trust or the Fund and legal fees of
special counsel for the trustees who are not interested persons of the Fund or
the Adviser (“Independent Trustees”); charges of custodians, transfer agents,
proxy voting services and expenses relating to proxy solicitation and tabulation
services and services of other agents; costs of preparing share certificates;
expenses of printing and mailing prospectuses and supplements thereto
for shareholders, reports and statements to shareholders and proxy materials;
all expenses incidental to holding shareholder and Board meetings; costs
incurred for any pricing or valuation services; any expenses of the Adviser
resulting from new services necessitated by regulatory or legal changes
affecting mutual funds occurring after the date of this Agreement; any
extraordinary expenses (including fees and disbursements of counsel) incurred by
the Trust or Fund; and fees and other expenses incurred in connection with
membership in investment company organizations.
7. Compensation. For the services
provided and the expenses assumed pursuant to this Agreement with respect to the
Fund, the Trust will pay the Adviser, effective from the date of this Agreement,
a fee which is computed daily and paid monthly from the Fund’s assets at the
annual rates as percentages of the Fund’s average daily net assets as set forth
in the attached Schedule A, which Schedule can be modified from time to time to
reflect changes in annual rates or the addition or deletion of the Fund from the
terms of this Agreement, subject to appropriate approvals required by the 1940
Act. If this Agreement becomes effective or terminates with respect
to the Fund before the end of any month, the fee for the period from the
effective date to the end of the month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
proportion that such period bears to the full month in which such effectiveness
or termination occurs.
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8. Limitation
of Liability of the Adviser. The Adviser shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Fund in connection with the matters to which this
Agreement relates except a loss resulting from the 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 and duties under this
Agreement. Any person, even though also an officer, partner,
employee, or agent of the Adviser, who may be or become an officer, Board
member, employee or agent of the Trust shall be deemed, when rendering services
to the Trust or acting in any business of the Trust, to be rendering such
services to or acting solely for the Trust and not as an officer, partner,
employee, or agent or one under the control or direction of the Adviser even
though paid by it.
9. Duration
and Termination. The term of this
Agreement shall begin on the date first above written and, unless sooner
terminated as hereinafter provided, this Agreement shall remain in effect until
the earlier of (i) 150 days from the date first above written, or (ii) the
effective date of a new investment advisory agreement by and between the Trust
on behalf of the Fund, and the Adviser, that has been approved by a vote of the
majority of the outstanding voting securities of the Fund; provided, however,
that it shall remain in effect for such longer period as the Securities and
Exchange Commission (“SEC”) or its staff shall permit. This Agreement
may be terminated at any time with respect to the Fund, without payment of any
penalty, by vote of the Board, including a majority of the Independent Trustees,
or by vote of a majority of the outstanding voting securities of the Fund, or by
Adviser on 60 days’ written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment.
10. Amendments. 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, and no material amendment of
this Agreement as to the Fund shall be effective until approved by the Board and
the Fund’s shareholders to the extent required by the 1940 Act.
11. Trust and
Shareholder Liability. The Adviser is
hereby expressly put on notice of the limitation of shareholder liability as set
forth in the Declaration of Trust and agrees that obligations assumed by the
Trust pursuant to this Agreement shall be limited in all cases to the Trust and
its assets, and if the liability relates to the Fund, the obligations hereunder
shall be limited to the respective assets of the Fund. The Adviser
further agrees that it shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Fund, nor from the
Trustees or any individual Trustee of the Trust.
12. Non-Binding
Agreement. This Agreement is
executed by the Trust’s Trustees and/or officers in their capacities as Trustees
and/or officers and the obligations of this Agreement are not binding upon any
of them or the shareholders individually; rather, they are binding only upon the
assets and property of the Trust.
13. Governing
Law. This Agreement
shall be construed in accordance with the laws of the State of New York, without
giving effect to the conflicts of laws principles thereof, and in accordance
with the 1940 Act. To the extent that the applicable laws of the
State of New York conflict with the applicable provisions of the 1940 Act, the
latter shall control.
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14. Definitions. As used in this
Agreement, the terms “majority of the outstanding voting securities,”
“interested person,” and “assignment” shall have the same meanings as such terms
have in the 1940 Act.
15. Entire
Agreement. This Agreement
embodies the entire agreement and understanding between the parties hereto, and
supersedes all prior amendments and understandings relating to the subject
matter hereof.
16. Notices. All notices
required to be given pursuant to this Agreement shall be delivered or mailed to
the last known business address of the Trust (attention: Secretary) or the
Adviser (attention: General Counsel) (or to such other address or contact as
shall be designated by the Trust or the Adviser in a written notice to the other
party) in person or by registered or certified mail or a private mail or
delivery service providing the sender with notice of receipt. Notice shall be
deemed to be given on the date delivered or mailed in accordance with this
Paragraph 16.
17. Force
Majeure. The Adviser shall
not be liable for delays or errors occurring by reason of circumstances beyond
its control, including but not limited to acts of civil or military authority,
national emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot, or failure of communication or power supply. In the
event of equipment breakdowns beyond its control, the Adviser shall take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto.
18. 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 not be affected
thereby. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors.
19. The 1940
Act. Where the effect
of a requirement of the 1940 Act reflected in any provision of this Agreement is
altered by a rule, regulation or order of the SEC, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
20. Headings. The headings 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.
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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.
By: /s/ ▇▇▇▇▇
▇▇▇▇▇
PINEBRIDGE
INVESTMENTS LLC
By: /s/ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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SCHEDULE
A
Advisory
Fees
As compensation pursuant to Paragraphs
1 and 7 of the Interim Investment Advisory Agreement for services rendered
pursuant to such Agreement, the Fund shall pay to the Adviser a fee, computed
daily and paid monthly, at the following annual rates as a percentage of the
Fund’s average daily net assets:
Fund Advisory
Fee
PineBridge
US Small Cap Growth
Fund 0.90%
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