THE COVENTRY GROUP
on behalf of
WILLAMETTE SMALL CAP GROWTH FUND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, effective commencing on , 1998 between Willamette Asset
Managers, Inc. (the "Adviser") and The Coventry Group. (the "Trust") on behalf
of Willamette Small Cap Growth Fund (the "Fund").
WHEREAS, the Trust is a Massachusetts business trust of the series type
organized under a Declaration of Trust dated January 8, 1992, (the
"Declaration") and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, diversified management investment
company, and the Fund is a new series of the Trust;
WHEREAS, the Trust wishes to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to furnish such
services to the Fund;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Trust and the Adviser as follows:
1. Appointment. The Trust hereby appoints the Adviser to act as investment
adviser to the Fund for the periods and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties; Authority to Delegate to Sub-Adviser. Subject to
the supervision of the Trustees of the Trust, the Adviser will (a) provide a
program of continuous investment management for the Fund in accordance with the
Fund's investment objectives, policies and limitations as stated in the Fund's
prospectus and Statement of Additional Information included as part of the
Trust's Registration Statement filed with the Securities and Exchange
Commission, as they may be amended from time to time, copies of which shall be
provided to the Adviser by the Trust; (b) make investment decisions for the
Fund; and (c) place orders to purchase and sell securities for the Fund. The
Adviser is authorized, at its own expense, to delegate to a sub-adviser such of
its responsibilities hereunder as may be specified in an agreement with such
sub-adviser, subject to such approvals by the Trustees and shareholders of the
Fund as are required by the 1940 Act. In the event the Adviser does so delegate
to a sub-adviser, the Adviser is further responsible for supervising the
activities and performance of the sub-adviser, for taking reasonable steps to
assure that the sub-adviser complies with the Fund's investment policies and
procedures and with applicable legal requirements, and for reporting to the
Trustees regarding these matters.
In performing its investment management services to the Fund hereunder,
the Adviser will provide the Fund with ongoing investment guidance and policy
direction, including oral and written research, analysis, advice, statistical
and economic data and judgments regarding individual investments, general
economic conditions and trends and long-range investment policy. Subject to the
Fund's investment objective and policies, the Adviser will determine the
securities, instruments, repurchase agreements, options and other investments
and techniques that the Fund will purchase, sell, enter into or use, and will
provide an ongoing evaluation of the Fund's portfolio. The Adviser will
determine what portion of the Fund's portfolio shall be invested in securities
and other assets, and what portion if any, should be held uninvested.
The Adviser further agrees that, in performing its duties hereunder, it
will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, the Internal Revenue Code (the "Code") and all other applicable
federal and state laws and regulations, and with any applicable procedures
adopted by the Trustees;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder;
(c) place orders pursuant to its investment determinations for the Fund directly
with the issuer, or with any broker or dealer, in accordance with applicable
policies expressed in the Fund's prospectus and/or Statement of Additional
Information and in accordance with applicable legal requirements;
(d) furnish to the Trust, or to the Fund's administrator, BISYS Fund Services,
("Administrator") if so directed, whatever statistical information the Trust or
Administrator may reasonably request with respect to the Fund's assets or
contemplated investments. In addition, the Adviser will keep the Trust and the
Trustees informed of developments materially affecting the Fund's portfolio and
shall, on the Adviser's own initiative, furnish to the Trust from time to time
whatever information the Adviser believes appropriate for this purpose;
(e) make available to the Administrator, and the Trust, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Fund as may be required to assist the Administrator and the Trust in their
compliance with applicable laws and regulations. The Adviser will furnish the
Trustees with such periodic and special reports regarding the Fund as they may
reasonably request;
(f) 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
("SEC") 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 Fund, or any amendment or supplement thereto, but that
is required to be disclosed thereon, and of any statement contained therein that
becomes untrue in any material respect;
(g) in making investment decisions for the Fund, use no inside information that
may be in its possession or in the possession of any of its affiliates, nor will
the Adviser seek to obtain any such information.
3. Allocation of Charges and Expenses. Except as otherwise specifically provided
in this section 3, the Adviser shall pay the compensation and expenses of all
its directors, officers and employees who serve as officers and executive
employees of the Trust or Fund (including the Trust's or Fund's share of payroll
taxes), and the Adviser shall make available, without expense to the Fund, the
service of its directors, officers and employees who may be duly elected
officers of the Trust, subject to their individual consent to serve and to any
limitations imposed by law. The Adviser shall also pay the fees of any
sub-adviser.
The Adviser shall not be required to pay any expenses of the Fund or Trust
other than those specifically allocated to the Adviser in this section 3. In
particular, but without limiting the generality of the foregoing, the Adviser
shall not be responsible, except to the extent of the reasonable compensation of
such of the Trust's or Fund's employees as are officers or employees of the
Adviser whose services may be involved, for any expenses of other series of the
Trust or for the following expenses of the Fund or Trust: organization and
certain offering expenses of the Fund (including out-of-pocket expenses, but not
including the Adviser's overhead and employee costs); fees payable to the
Adviser and to any other Fund advisers or consultants; legal expenses; auditing
and accounting expenses; interest expenses; telephone, telex, facsimile, postage
and other communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by or with respect to the Fund in connection with membership
in investment company trade organizations; cost of insurance relating to
fidelity coverage for the Trust's officers and employees; fees and expenses of
the Fund's Administrator or of any custodian, subcustodian, transfer agent, fund
accounting agent, registrar, or dividend disbursing agent of the Fund; payments
for portfolio pricing or valuation services to pricing agents, accountants,
bankers and other specialists, if any; expenses of preparing share certificates,
if any; other expenses in connection with the issuance, offering, distribution
or sale of securities issued by the Fund; expenses relating to investor and
public relations; expenses of registering shares of the Fund for sale and of
compliance with applicable state notice filing requirements; freight, insurance
and other charges in connection with the shipment of the Fund's portfolio
securities; brokerage commissions or other costs of acquiring or disposing of
any portfolio securities or other assets of the Fund, or of entering into other
transactions or engaging in any investment practices with respect to the Fund;
expenses of printing and distributing prospectuses, Statements of Additional
Information, reports, notices and dividends to shareholders; costs of stationery
or other office supplies; any litigation expenses; costs of shareholders' and
other meetings; the compensation and all expenses (specifically including travel
expenses relating to the Fund's business) of officers, Trustees and employees of
the Trust who are not interested persons of the Adviser; and travel expenses (or
an appropriate portion thereof) of officers or Trustees of the Trust who are
officers, Trustees or employees of the Adviser to the extent that such expenses
relate to attendance at meetings of the Board of Trustees of the Trust with
respect to matters concerning the Fund, or any committees thereof or advisers
thereto.
4. Compensation. As compensation for the services provided and expenses assumed
by the Adviser under this Agreement, the Trust will arrange for the Fund to pay
the Adviser at the end of each calendar month an advisory fee computed daily at
an annual rate equal to 1.20% of the Fund's average daily net assets. 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 other time. The value of net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
section 4, 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 the close of the New York Stock
Exchange, or as of such other time as the value of the net assets of the Fund's
portfolio may lawfully be determined, on that day. If the determination of the
net asset value of the shares of the Fund has been so suspended for a period
including any month end when the Adviser's compensation is payable pursuant to
this section, then the Adviser's compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month). 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 4.
5. Books and Records. The Adviser agrees to maintain such books and records with
respect to its services to the Fund as are required by Section 31 under the 1940
Act, and rules adopted thereunder, and by other applicable legal provisions, and
to preserve such records for the periods and in the manner required by that
Section, and those rules and legal provisions. The Adviser also agrees that
records it maintains and preserves pursuant to Rules 31a-1 and Rule 31a-2 under
the 1940 Act and otherwise in connection with its services hereunder are the
property of the Trust and will be surrendered promptly to the Trust upon its
request. And the Adviser further agrees that it will furnish to regulatory
authorities having the requisite authority any information or reports in
connection with its services hereunder which may be requested in order to
determine whether the operations of the Fund are being conducted in accordance
with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Adviser shall exercise its
best judgment in rendering the services provided by it under this Agreement. The
Adviser shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund or the holders of the Fund's shares 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 to holders of the Fund's shares to which
the Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or by
reason of the Adviser's reckless disregard of its obligations and duties under
this Agreement. As used in this Section 6, the term "Adviser" shall include any
officers, directors, employees or other affiliates of the Adviser performing
services with respect to the Fund.
7. Services Not Exclusive. It is understood that the services of the Adviser are
not exclusive, and that nothing in this Agreement shall prevent the Adviser from
providing similar services to other investment companies or to other series of
investment companies, including the Trust (whether or not their investment
objectives and policies are similar to those of the Fund) or from engaging in
other activities, provided such other services and activities do not, during the
term of this Agreement, interfere in a material manner with the Adviser's
ability to meet its obligations to the Fund hereunder. When the Adviser
recommends the purchase or sale of a security for other investment companies and
other clients, and at the same time the Adviser recommends the purchase or sale
of the same security for the Fund, it is understood that in light of its
fiduciary duty to the Fund, such transactions will be executed on a basis that
is fair and equitable to the Fund. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any of
its directors or officers (or persons acting in similar capacities) or employees
shall act as a principal or agent or receive any commission. If the Adviser
provides 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 Trust or the Fund.
8. Duration and Termination. This Agreement shall continue until , 2000, and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by (i) the Trustees
or (ii) a vote of a "majority" (as defined in the 0000 Xxx) of the Fund's
outstanding voting securities (as defined in the 1940 Act), provided that in
either event the continuance is also approved by a majority of the Trustees who
are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. Notwithstanding the
foregoing, this Agreement may be terminated: (a) at any time without penalty by
the Fund upon the vote of a majority of the Trustees or by vote of the majority
of the Fund's outstanding voting securities, upon sixty (60) days' written
notice to the adviser or (b) by the Adviser at any time without penalty, upon
sixty (60) days' written notice to the Trust. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
9. 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 amendment of this Agreement shall be effective until approved by
an affirmative vote of (i) a majority of the outstanding voting securities of
the Fund, and (ii) a majority of the Trustees, including a majority 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, if such approval is
required by applicable law.
10. Proxies. Unless the Trust gives written instructions to the contrary, the
Adviser shall vote all proxies solicited by or with respect to the issuers of
securities in which assets of the Fund may be invested. The Adviser shall use
its best good faith judgment to vote such proxies in a manner which best serves
the interests of the Fund's shareholders.
11. Name Reservation. The Trust acknowledges and agrees that the Adviser has
property rights relating to the use of the term "Willamette" and has permitted
the use of such term by the Trust and the Fund. The Trust agrees that, unless
otherwise authorized by the Adviser: (i) it will use the term "Willamette" only
as a component of the name of the Fund and for no other purposes; (ii) it will
not purport to grant to any third party any rights in such name; (iii) at the
request of the Adviser, the Trust will take such action as may be required to
provide its consent to use of the term by the Adviser, or any affiliate of the
Adviser to whom the Adviser shall have granted the right to such use; and (iv)
the Adviser may use or grant to others the right to use the term, or any
abbreviation thereof, as all or a portion of a corporate or business name or for
any commercial purpose, including a grant of such right to any other investment
company. Upon termination of this Agreement, the Trust shall, upon request of
the Adviser, cease to use the term "Willamette" as part of the name of the Fund,
or in connection with the Trust or any series of the Trust. In the event of any
such request by the Adviser that use of the term "Willamette" shall cease, the
Trust shall cause its officers, directors and shareholders to take any and all
such actions which the Adviser may request to effect such request and to
reconvey to the Adviser any and all rights to the term "Willamette."
12. Miscellaneous.
a. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder.
b. The captions of this Agreement are included for convenience only and in no
way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
c. 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 hereby and, to this extent, the provisions of this Agreement shall
be deemed to be severable.
d. Nothing herein shall be construed as constituting the Adviser as an agent of
the Trust or the Fund.
e. The names "The Coventry Group" and "Trustees of the Coventry Group"
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated as of January 8, 1992 to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
the Commonwealth of Massachusetts and elsewhere as required by law, and to any
and all amendments thereto so filed or hereafter filed. The obligations of "The
Coventry Group" entered into in the name or on behalf thereof, or in the name or
on behalf of any series or class of shares of the Trust, by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the assets of the Trust, and all persons dealing
with any series or class of shares of the Trust must look solely to the assets
of the Trust belonging to such series or class for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of , 1998.
THE COVENTRY GROUP
By
President
WILLAMETTE ASSET MANAGERS, Inc.
By:
President
