INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of April 13, 1995 between XXXXXXXX XXXXXXXX/XXXXXX,
XXXXXXX INVESTMENT TRUST II, a Massachusetts business trust ('Fund') and
XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC. ('Manager'), a Delaware corporation
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended ('1934 Act'), and as an investment adviser under the Investment Advisers
Act of 1940, as amended.
WHEREAS the Fund is registered under the Investment Company Act of
1940, as amended ('1940 Act'), as an open-end management investment company, and
intends to offer for public sale distinct shares of beneficial interest
('Shares'), which may be offered in separate and distinct classes of shares,
each corresponding to a distinct portfolio ('Series'); and
WHEREAS the Fund desires to retain Manager as investment adviser and
administrator to furnish certain administrative, investment advisory and
portfolio management services to the Fund and each Series as now exists and as
hereafter may be established, and Manager 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 Fund hereby appoints Manager as investment adviser
and administrator of the Fund and each Series for the period and on the terms
set forth in this Contract. Manager accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Duties as Investment Adviser.
(a) Subject to the supervision of the Fund's Board of Trustees
('Board'), Manager will provide a continuous investment program for each Series,
including investment research and management with respect to all securities and
investments and cash equivalents in each Series. Manager will determine from
time to
time what securities and other investments will be purchased, retained or sold
by each Series.
(b) Manager agrees that in placing orders with brokers, it will
attempt to obtain the best net result in terms of price and execution; provided
that, on behalf of any Series, Manager may, in its discretion, use brokers who
provide the Series with research, analysis, advice and similar services to
execute portfolio transactions on behalf of the Series, and Manager may pay to
those brokers in return for brokerage and research services a higher commission
than may be charged by other brokers, subject to Manager's determining in good
faith that such commission is reasonable in terms either of the particular
transaction or of the overall responsibility of Manager to such Series and its
other clients and that the total commissions paid by such Series will be
reasonable in relation to the benefits to the Series over the long term. In no
instance will portfolio securities be purchased from or sold to Manager, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder, or any applicable exemptive orders.
Whenever Manager simultaneously places orders to purchase or sell the same
security on behalf of a Series and one or more other accounts advised by
Manager, such orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable to each account. The Fund
recognizes that in some cases this procedure may adversely affect the results
obtained for the Series.
(c) Manager will oversee the maintenance of all books and records with
respect to the securities transactions of each Series, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Manager hereby agrees that all records which it maintains for the Fund are the
property of the Fund, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Fund and which
are required to be maintained by Rule 31a-1 under the 1940 Act and further
agrees to surrender promptly to the Fund any records which it maintains for the
Fund upon request by the Fund.
(d) Manager will oversee the computation of the net asset value and
the net income of each Series as described in the currently effective
registration statement of the Fund under the Securities Act of 1933, as amended,
and the 1940 Act and any supplements thereto ('Registration Statement') or as
more frequently requested by the Board.
(e) The Fund hereby authorizes Manager and any entity or person
associated with Manager which is a member of a national securities exchange to
effect any transaction on such exchange for
- 2 -
the account of any Series, which transaction is permitted by Section 11(a) of
the 1934 Act, and the Fund hereby consents to the retention of compensation by
Manager or any person or entity associated with Manager for such transaction.
3. Duties as Administrator. Manager will administer the affairs of the
Fund and each Series subject to the supervision of the Board and the following
understandings:
(a) Manager will supervise all aspects of the operations of the Fund
and each Series, including oversight of transfer agency, custodial and
accounting services, except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the Board of its
responsibility for and control of the conduct of the affairs of the Fund and
each Series.
(b) Manager will provide the Fund and each Series with such corporate,
administrative and clerical personnel (including officers of the Fund) and
services as are reasonably deemed necessary or advisable by the Board, including
the maintenance of certain books and records of the Fund and each Series.
(c) Manager will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of the Fund's Registration
Statement, proxy material, tax returns and required reports to each Series'
shareholders and the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.
(d) Manager will provide the Fund and each Series with, or obtain for
it, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
(e) Manager will provide the Board on a regular basis with economic
and investment analyses and reports and make available to the Board upon request
any economic, statistical and investment services normally available to
institutional or other customers of Manager.
4. Further Duties. In all matters relating to the performance of this
Contract, Manager will act in conformity with the Declaration of Trust, By-Laws
and currently effective Registration Statement of the Fund, as delivered to
Manager and upon which it shall be entitled to rely, and with the instructions
and directions of the Board, and will comply with the requirements of the 1940
Act, the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Delegation of Manager's Duties as Investment Adviser and
Administrator. With respect to any or all Series, Manager may
- 3 -
enter into one or more contracts ('Sub-Advisory or Sub-Administration Contract')
with a sub-adviser or sub-administrator in which Manager delegates to such
sub-adviser or sub-administrator any or all of its duties specified in
Paragraphs 2 and 3 of this Contract, provided that each Sub-Advisory or
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Manager is subject by
Paragraphs 2, 3 and 4 of this Contract, and further provided that each
Sub-Advisory or Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder.
6. Services Not Exclusive. The services furnished by Manager hereunder
are not to be deemed exclusive and Manager shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Manager, who may also be a Trustee, officer or
employee of the Fund, 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 nature or a dissimilar nature.
7. Expenses.
(a) During the term of this Contract, each Series will bear all
expenses, not specifically assumed by Manager, incurred in its operations and
the offering of its shares.
(b) Expenses borne by each Series will include but not be limited to
the following (or each Series' proportionate share of the following): (i) the
cost (including brokerage commissions) of securities purchased or sold by the
Series and any losses incurred in connection therewith; (ii) fees payable to and
expenses incurred on behalf of the Series by Manager under this Contract; (iii)
expenses of organizing the Fund and the Series; (iv) filing fees and expenses
relating to the registration and qualification of the Series' shares and the
Fund under federal and/or state securities laws and maintaining such
registration and qualification; (v) fees and salaries payable to the Fund's
Trustees and officers who are not interested persons of the Fund or Manager;
(vi) all expenses incurred in connection with the Trustees' services, including
travel expenses in the case of Trustees who are not interested persons of the
Fund or Manager; (vii) taxes (including any income or franchise taxes) and
governmental fees; (viii) costs of any liability, uncollectible items of deposit
and other insurance and fidelity bonds; (ix) any costs, expenses or losses
arising out of a liability of or claim for damages or other relief asserted
against the Fund or Series for violation of any law and any indemnification
relating thereto; (x) legal, accounting and auditing expenses, including legal
fees of special counsel for those Trustees of the Fund who are not interested
persons of the
- 4 -
Fund; (xi) charges of custodians, transfer agents and other agents; (xii) costs
of preparing share certificates; (xiii) expenses of setting in type and printing
prospectuses and supplements thereto, statements of additional information and
supplements thereto, reports and proxy materials for existing shareholders;
(xiv) costs of mailing prospectuses and supplements thereto, statements of
additional information and supplements thereto, reports and proxy materials to
existing shareholders; (xv) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Fund is a party and the expenses the Fund may incur as a result of its legal
obligation to provide indemnification to its officers, Trustees, agents and
shareholders or to Manager) incurred by the Fund or Series; (xvi) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xvii) cost of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xviii) the cost of investment company literature and other
publications provided by the Fund to its Trustees and officers; (xix) costs of
mailing, stationery and communications equipment; (xx) expenses incident to any
dividend, withdrawal or redemption options; (xxi) charges and expenses of any
outside pricing service used to value portfolio securities and (xxii) interest
on borrowings of the Fund.
(c) Manager will assume the cost of any compensation for services
provided to the Fund received by the officers of the Fund and by those Trustees
who are interested persons of the Fund.
(d) The payment or assumption by Manager of any expenses of the Fund
or a Series that Manager is not required by this Contract to pay or assume shall
not obligate Manager to pay or assume the same or any similar expense of the
Fund or a Series on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed pursuant to
this Contract with respect to the Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Emerging
Markets Equity Fund, the Fund will pay to Manager a fee, computed daily and paid
monthly, at an annual rate of 1.62% of such Series' average daily net assets up
to $100 million, and 1.50% of such Series' average daily net assets over $100
million.
(b) For the services provided and the expenses assumed pursuant to
this Contract with respect to the Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Municipal
Bond Fund, the Fund will pay to Manager a fee, computed daily and paid monthly,
at an annual rate of .60% of the Fund's average daily net assets.
- 5 -
(c) For the services provided and the expenses assumed pursuant to
this Contract with respect to any Series hereafter established, the Trust will
pay to Manager from the assets of such Series a fee in an amount to be agreed
upon in a written fee agreement ('Fee Agreement') executed by the Fund on behalf
of such Series and by Manager. All such Fee Agreements shall provide that they
are subject to all terms and conditions of this Contract.
(d) The fee shall be computed daily and paid monthly to Manager on or
before the first business day of the next succeeding calendar month.
(e) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective day 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 which such period bears to the
full month in which such effectiveness or termination occurs.
9. Limitation of Liability of Manager. Manager and its delegates,
including any Sub-Adviser or Sub-Administrator to the Fund, shall not be liable
for any error of judgment or mistake of law or for any loss suffered by any
Series, the Fund or any of its shareholders, in connection with the matters to
which this Contract relates, except to the extent that such a loss results 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
and duties under this Contract. Any person, even though also an officer,
director, employee, or agent of Manager, who may be or become an officer,
Trustee, employee or agent of the Fund shall be deemed, when rendering services
to any Series or the Fund or acting with respect to any business of such Series
or the Fund, to be rendering such service to or acting solely for the Series or
the Fund and not as an officer, director, employee, or agent or one under the
control or direction of Manager even though paid by it.
10. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written provided that, with respect to any Series, this Contract shall not take
effect unless it has first been approved (i) by a vote of a majority of those
Trustees of the Fund who are not parties to this Contract or interested persons
of any such party cast in person at a meeting called for the purpose of voting
on such approval, and (ii) by vote of a majority of that Series' outstanding
voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall
- 6 -
continue automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of those Trustees of the Fund who are not parties to this Contract
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of a Series with respect to that
Series.
(c) Notwithstanding the foregoing, with respect to any Series this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of such Series on sixty days' written notice to Manager or by Manager
at any time, without the payment of any penalty, on sixty days' written notice
to the Fund. Termination of this Contract with respect to any given Series shall
in no way affect the continued validity of this Contract or the performance
thereunder with respect to any other Series. This Contract will automatically
terminate in the event of its assignment.
11. Amendment of this Contract. No provision of this Contract 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 Contract
as to any given Series shall be effective until approved by vote of a majority
of such Series' outstanding voting securities.
12. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Delaware, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act, provided, however,
that Section 13 below will be construed in accordance with the laws of the
Commonwealth of Massachusetts. To the extent that the applicable laws of the
State of Delaware or the Commonwealth of Massachusetts conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. Limitation of Liability of the Trustees and Shareholders of the
Trust. No Trustee, shareholder, officer, employee or agent of any Series shall
be liable for any obligations of any Series or the Fund under this Contract, and
Manager agrees that, in asserting any rights or claims under this Contract, it
shall look only to the assets and property of the Fund in settlement of such
right or claim, and not to such Trustee, shareholder, officer, employee or
agent. The Fund represents that a copy of its Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts and the Boston City
Clerk.
- 7 -
14. Miscellaneous. The captions in this Contract 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 Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms 'majority of the outstanding voting securities', 'affiliated person',
'interested person', 'assignment', 'broker', 'investment adviser', 'national
securities exchange', 'net assets', 'prospectus', 'sale', 'sell' and 'security'
shall have the same meaning as such terms have in the 1940 Act, subject to such
exemption as may be granted by the Securities and Exchange Commission by any
rule, regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is affected by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
Attest: XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
________________________________ By _____________________________________
Attest: XXXXXXXX XXXXXXXX/XXXXXX, XXXXXXX
INVESTMENT TRUST II
________________________________ By _____________________________________
- 8 -
