BOSTON INCOME PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 15th day of March, 2001, between Boston Income
Portfolio, a New York trust (the "Trust"), and Boston Management and Research, a
Massachusetts business trust (the "Adviser").
1. DUTIES OF THE ADVISER. The Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
the Trustees of the Trust, for the period and on the terms set forth in this
Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for the Trust and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Trust.
The Adviser shall pay the salaries and fees of all officers and Trustees of the
Trust who are members of the Adviser's organization and all personnel of the
Adviser performing services relating to research and investment activities. The
Adviser shall for all purposes herein be deemed to be an independent contractor
and shall, except as otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its portfolio. As investment adviser to the Trust, the Adviser
shall furnish continuously an investment program and shall determine from time
to time what securities and other investments shall be purchased, sold or
exchanged and what portion of the Trust's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust under the Investment Company Act
of 1940, all as from time to time amended. The Adviser is authorized, in its
discretion and without prior consultation with the Trust, to buy, sell, lend and
otherwise trade in any and all types of securities, commodities and investment
instruments on behalf of the Trust. Should the Trustees of the Trust at any
time, however, make any specific determination as to investment policy and
notify the Adviser thereof in writing, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Trust, all actions which it deems necessary or desirable
to implement the investment policies of the Trust.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the Trust's account with brokers or dealers or other persons
selected by the Adviser, and to that end the Adviser is authorized as the agent
of the Trust to give instructions to the custodian of the Trust as to deliveries
of securities and payments of cash for the account of the Trust. In connection
with the selection of such brokers or dealers or other persons and the placing
of such orders, the Adviser shall use its best efforts to seek to execute
security transactions at prices which are advantageous to the Trust and at
reasonably competitive spreads or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser
and the Adviser is expressly authorized to pay any broker or dealer who provides
such brokerage and research services a commission for executing a security
transaction which is 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 and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
overall responsibilities which the Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. Subject to the
requirement set forth in the second sentence of this paragraph, the Adviser is
authorized to consider, as a factor in the selection of any broker or dealer
with whom purchase or sale orders may be placed, the fact that such broker or
dealer has sold or is selling shares of any one or more investment companies
sponsored by the Adviser or its affiliates or shares of any other investment
company or series thereof that invests substantially all of its assets in the
Trust.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, the Adviser shall be entitled to
receive from the Trust compensation in an amount equal to 5/96 of 1% (equivalent
to 0.625% annually) of the average daily net assets of the Trust throughout each
month, computed in accordance with the Declaration of Trust of the Trust and any
applicable votes of the Trustees of the Trust. In case of initiation or
termination of the Agreement during any month, the fee for that month shall be
reduced proportionately on the basis of the number of calendar days during which
it is in effect and the fee shall be computed upon the basis of the average of
valuations made throughout such period.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Trust shall include, without implied
limitation, (i) expenses of organizing and maintaining the Trust and continuing
its existence, (ii) registration of the Trust under the Investment Company Act
of 1940, (iii) commissions, spreads, fees and other expenses connected with the
purchase or sale of securities, (iv) auditing, accounting and legal expenses,
(v) taxes and interest, (vi) governmental fees, (vii) expenses of issue, sale,
and redemption of Interests in the Trust, (viii) expenses of registering and
qualifying the Trust and Interests in the Trust under federal and state
securities laws and of preparing and printing registration statements or other
offering statements or memoranda for such purposes and for distributing the same
to Holders and investors, and fees and expenses of registering and maintaining
registrations of the Trust and of the Trust's placement agent as broker-dealer
or agent under state securities laws, (ix) expenses of reports and notices to
Holders and of meetings of Holders and proxy solicitations therefor, (x)
expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds, securities and other
investments, keeping of books, accounts and records, and determination of net
asset values, book capital account balances and tax capital account balances),
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, Holder servicing agents and registrars for all services to the Trust,
(xv) expenses for servicing the account of Holders, (xvi) any direct charges to
Holders approved by the Trustees of the Trust, (xvii) compensation and expenses
of Trustees of the Trust who are not members of the Adviser's organization, and
(xviii) such non-recurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the obligation of the
Trust to indemnify its Trustees, officers and Holders with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees and officers of the
Trust and Holders of Interests in the Trust are or may be or become interested
in the Adviser as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Adviser are or may be
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or become similarly interested in the Trust, and that the Adviser may be or
become interested in the Trust as a Holder or otherwise. It is also understood
that trustees, officers, employees and shareholders of the Adviser may be or
become interested (as directors, trustees, officers, employees, shareholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser may organize, sponsor or acquire, or
with which it may merge or consolidate, and which may include the words "Xxxxx
Xxxxx" or "Boston Management and Research" or any combination thereof as part of
their name, and that the Adviser or its subsidiaries or affiliates may enter
into advisory or management agreements or other contracts or relationships with
such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
the Trust are not to be deemed to be exclusive, the Adviser being free to render
services to others and engage in other business activities. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any Holder of Interests in the
Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the acquisition,
holding or disposition of any security or other investment.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such investment adviser
and approved by the Trustees of the Trust, all as permitted by the Investment
Company Act of 1940.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including March 31,
2002 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after March 31, 2002 is specifically approved
at least annually (i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust and (ii) by the vote
of a majority of those Trustees of the Trust who are not interested persons of
the Adviser or the Trust cast in person at a meeting called for the purpose of
voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Trustees of the Trust or the trustees of the Adviser, as
the case may be, and the Trust may, at any time upon such written notice to the
Adviser, terminate this Agreement by vote of a majority of the outstanding
voting securities of the Trust. This Agreement shall terminate automatically in
the event of its assignment.
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8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the
Trust.
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust (Section 5.2 and 5.6)
limiting the personal liability of the Trustees and officers of the Trust, and
the Adviser hereby agrees that it shall have recourse to the Trust for payment
of claims or obligations as between the Trust and the Adviser arising out of
this Agreement and shall not seek satisfaction from any Trustee or officer of
the Trust.
10. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of Holders, of
the lesser of (a) 67 per centum or more of the Interests in the Trust present or
represented by proxy at the meeting if the Holders of more than 50 per centum of
the outstanding Interests in the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding Interests in the
Trust. The terms "Holders" and "Interests" when used herein shall have the
respective meanings specified in the Declaration of Trust of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
BOSTON INCOME PORTFOLIO
By: /s/ Xxxxx X. Xxxxxx
----------------------------
President
BOSTON MANAGEMENT AND RESEARCH
By: /s/ Xxxx X. Xxxxxx
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Vice President
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