FORM OF
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PORTFOLIO MANAGEMENT AGREEMENT
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[FIXED INCOME II PORTFOLIO]
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AGREEMENT made this __________day of __________, 2000__, between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, LLP, Pennsylvania limited liability partnership, ("Portfolio
Manager") and THE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ TRUST, a Delaware business trust ("Trust").
WHEREAS, the Trust is registered as an open-end, diversified, management series
investment company under the Investment Company Act of 1940, as amended
("Investment Company Act") which currently offers seven series of beneficial
interests ("shares") representing interests in separate investment portfolios,
and may offer additional portfolios in the future; and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management for The Fixed Income II Portfolio of
the Trust ("Portfolio") and Portfolio Manager is willing, in accordance with the
terms and conditions hereof, to provide such services to the Trust;
NOW THEREFORE, in consideration of the promises and covenants set forth herein
and intending to be legally bound hereby, it is agreed between the parties as
follows:
1. APPOINTMENT OF PORTFOLIO MANAGER.
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The Trust hereby retains Portfolio Manager to provide the investment services
set forth herein and Portfolio Manager agrees to accept such appointment. In
carrying out its responsibilities under this Agreement, the Portfolio Manager
shall at all times act in accordance with the investment objectives, policies
and restrictions applicable to the Portfolio as set forth in the then current
Registration Statement of the Trust, applicable provisions of the Investment
Company Act and the rules and regulations promulgated under that Act and other
applicable federal securities laws.
2. DUTIES OF PORTFOLIO MANAGER.
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(a) Portfolio Manager shall provide a continuous program of investment
management for that portion of the assets of the Portfolio ("Account") that
may, from time to time be allocated to it by the Trust's Board of Trustees,
in writing, by an authorized officer of the Trust. It is understood that
the Account may consist of all, a portion of or none of the assets of the
Portfolio, and that the Board of Trustees has the right to allocate and
reallocate such assets to the Account at any time, and from time to time,
upon such notice to the Portfolio Manager as may be reasonably necessary,
in the view of the Trust, to ensure orderly management of the Account or
the Portfolio.
(b) Subject to the general supervision of the Trust's Board of Trustees,
Portfolio Manager shall have sole investment discretion with respect to the
Account, including investment research, selection of the securities to be
purchased and sold and the portion of the Account, if any, that shall be
held uninvested, and the selection of brokers and dealers through which
securities transactions in the Account shall be executed. Specifically, and
without limiting the generality of the foregoing, Portfolio Manager agrees
that it will:
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(i) promptly advise the Portfolio's designated custodian bank and
administrator or accounting agent of each purchase and sale, as the case may be,
made on behalf of the Account, specifying the name and quantity of the security
purchased or sold, the unit and aggregate purchase or sale price, commission
paid, the market on which the transaction was effected, the trade date, the
settlement date, the identity of the effecting broker or dealer and/or such
other information, and in such manner, as may from time to time be reasonably
requested by the Trust;
(ii) maintain all applicable books and records with respect to the
securities transactions of the Account. Specifically, Portfolio Manager agrees
to maintain with respect to the Account those records required to be maintained
under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the Investment Company Act with
respect to transactions in the Account including, without limitation, records
which reflect securities purchased or sold in the Account, showing for each such
transaction, the name and quantity of securities, the unit and aggregate
purchase or sale price, commission paid, the market on which the transaction was
effected, the trade date, the settlement date, and the identity of the effecting
broker or dealer. Portfolio Manager will preserve such records in the manner and
for the periods prescribed by Rule 31a-2 under the Investment Company Act.
Portfolio Manager acknowledges and agrees that all records it maintains for the
Trust are the property of the Trust and Portfolio Manager will surrender
promptly to the Trust any such records upon the Trust's request;
(iii) provide, in a timely manner, such information as may be reasonably
requested by the Trust or its designated agents in connection with, among other
things, the daily computation of the Portfolio's net asset value and net income,
preparation of proxy statements or amendments to the Trust's registration
statement and monitoring investments made in the Account to ensure compliance
with the various limitations on investments applicable to the Portfolio and to
ensure that the Portfolio will continue to qualify for the special tax treatment
accorded to regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended; and
(iv) render regular reports to the Trust concerning the performance of
Portfolio Manager of its responsibilities under this Agreement. In particular,
Portfolio Manager agrees that it will, at the reasonable request of the Board of
Trustees, attend meetings of the Board or its validly constituted committees and
will, in addition, make its officers and employees available to meet with the
officers and employees of the Trust at least quarterly and at other times upon
reasonable notice, to review the investments and investment program of the
Account.
3. PORTFOLIO TRANSACTION AND BROKERAGE.
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In placing orders for portfolio securities with brokers and dealers, Portfolio
Manager shall use its best efforts to execute securities transactions on behalf
of the Account in such a manner that the total cost or proceeds in each
transaction is the most favorable under the circumstances. Portfolio Manager
may, however, in its discretion, direct orders to brokers that provide to
Portfolio Manager research, analysis, advice and similar services, and Portfolio
Manager may cause the Account to pay to those brokers a higher commission than
may be charged by other brokers for similar transactions, provided that
Portfolio Manager determines in good faith that such commission is reasonable in
terms either of the particular transaction or of the overall responsibility of
the Portfolio Manager to the Account and any other accounts with respect to
which Portfolio Manager exercises investment discretion, and provided further
that the extent and continuation of any such
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practice is subject to review by the Trust's Board of Trustees. Portfolio
Manager shall not execute any portfolio transactions for the Trust with a broker
or dealer which is an "affiliated person" of the Trust or Portfolio Manager,
including any other investment advisory organization that may, from time to time
act as a portfolio manager for the Portfolio or any of the Trust's other
Portfolios, without prior written approval of the Trust. The Trust shall provide
a list of such affiliated brokers and dealers to Portfolio Manager and will
promptly advise Portfolio Manager of any changes in such list.
4. EXPENSES AND COMPENSATION.
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Except for expenses specifically assumed or agreed to be paid by the Portfolio
Manager under this Agreement, the Portfolio Manager shall not be liable for any
expenses of the Trust including, without limitation, (i) interest and taxes,
(ii) brokerage commissions and other costs in connectionw with the purchase and
sale of securities or other investment instruments with respect to the
Portfolio, and (iii) custodian fees and expenses. For its services under this
Agreement, Portfolio Manager shall be entitled to receive a fee, which fee shall
be payable monthly at the annual rate of .275% of the first $200 million of the
average daily net assets of the Account; .250% of the next $200 million of such
assets; and .200 of such assets over $400 million..
5. LIMITATION OF LIABILITY AND INDEMNIFICATION.
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(a) Portfolio Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the matters
to which this Agreement relates including, without limitation, losses that
may be sustained in connection with the purchase, holding, redemption or
sale of any security or other investment by the Trust except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of Portfolio Manager in the performance of its duties or from reckless
disregard by it of its duties under this Agreement.
(b) Notwithstanding the foregoing, Portfolio Manager expressly agrees that the
Trust may rely upon information provided, in writing, by Portfolio Manager
to the Trust (including, without limitation, information contained in
Portfolio Manager's then current Form ADV) in accordance with Section 9 of
the Agreement or otherwise, in preparing the Trust's registration statement
and amendments thereto and certain periodic reports relating to the Trust
and its Portfolios that are required to be furnished to shareholders of the
Trust and/or filed with the Securities and Exchange Commission ("SEC
Filings"), provided that a copy of any such filing is provided to Portfolio
Manager (i) at least 10 business days prior to the date on which it will
become effective, in the case of a registration statement; (ii) at least 10
business days prior to the date upon which it is filed with the SEC in the
case of the Trust's semi-annual report on Form N-SAR or any shareholder
report or proxy statement.
(c) Portfolio Manager agrees to indemnify and hold harmless the Trust and each
of its Trustees, officers and employees from any claims, liabilities and
expenses, including reasonable attorneys' fees, (collectively, "Losses") to
the extent that Losses are incurred as a result of statements contained in
an SEC Filing ("Disputed Statements") that are misleading either because
they are (i) untrue statements of material fact; or (ii) omitted to state
any material fact necessary in order to make the statements made, in the
light of the circumstances under which they are made, not misleading. For
purposes of the indemnification obligation set forth in this Section 5(c),
a Disputed Statement will be deemed misleading if so declared by a decision
of a court or administrative law judge or in an order of settlement issued
by any court or administrative body.
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(d) Portfolio Manager further agrees to indemnify and hold harmless the Trust
and each of its Trustees, from any Losses to the extent that such Losses
are incurred as a result of Disputed Statements that are alleged (i) to be
untrue statements of material fact; or (ii) to have omitted to state any
material fact necessary in order to make the statements made, in the light
of the circumstances under which they are made, provided that the
indemnification obligation set forth in this Section 5(d) is expressly
limited to Losses arising from Disputed Statements that accurately reflect
information provided to the Trust in writing by the Portfolio Manager and
that cannot be independently verified by the Trust. Further, the
indemnification set forth in this Section 5(d) will not require
reimbursement of fees or expenses other than those incurred by the Trust's
regular counsel in connection with such counsel's representation of the
Trust or its Trustees.
(e) The indemnification obligations set forth in Sections 5(c) and (d) shall
not apply unless (i) Disputed Statements accurately reflect information
provided to the Trust in writing by the Portfolio Manager; (ii) Disputed
Statements were included in an SEC Filing in reliance upon written
information provided to the Trust by the Portfolio Manager; (iii) the
Portfolio Manager was afforded the opportunity to review Disputed
Statements in connection with the 10 business day review requirement set
forth in Section 5(b) above; and (iv) upon receipt by the Trust of any
notice of the commencement of any action or the assertion of any claim to
which the indemnification obligations set forth in Section 5(c) and (d) may
apply, the Trust notifies the Portfolio Manager, within 30 days and in
writing, of such receipt and provides to Portfolio Manager the opportunity
to participate in the defense and/or settlement of any such action or
claim. Further, Portfolio Manager will not be required to indemnify any
person under this Section 5 to the extent that Portfolio Manager relied
upon statements or information furnished to the Portfolio Manager, in
writing, by any officer, employee or Trustee of the Trust, or by the
Trust's Custodian, Administrator or Accounting Agent or any other agent of
the Trust, in preparing written information provided to the Trust and upon
which the Trust relied in preparing any Disputed Statement.
(f) The Portfolio Manager shall not be liable for (i) any acts of any other
portfolio manager to the Portfolio or the Trust with respect to the portion
of the assets of the Account not managed by the Portfolio Manager; and (ii)
acts of the Portfolio Manager which result from acts of the Trust,
including, but not limited to, a failure of the Trust to provide accurate
and current information with respect to any records maintained by Trust or
any other portfolio manager to the Portfolio. The Trust agrees that the
Portfolio Manager shall manage the Account as if it was a separate
operating series and shall comply with (a) the objectives, policies, and
limitations for the Account set forth in the Trust's current prospectus and
statement of additional information, and (b) applicable laws and
regulations (including, but not limited to, the investment objectives,
policies and restrictions applicable to the Account and qualification of
the Account as a regulated investment company under the Internal Revenue
Code of 1986, as amended) with respect to the portion of the assets of the
Account not allocated to the Portfolio Manager. In no event shall the
Portfolio Manager or its Associated Persons have any liability arising from
the conduct of the Trust and any other portfolio manager with respect to
the portion of the Portfolio's assets not allocated to the Portfolio
Manager.
6. PERMISSIBLE INTEREST.
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Subject to and in accordance with the Trust's Declaration of Trust and By-laws
and corresponding governing documents of Portfolio Manager, Trustees , officers,
agents and shareholders of the Trust may have an interest in the Portfolio
Manager as officers, directors, agents
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and/or shareholders or otherwise. Portfolio Manager may have similar interests
in the Trust. The effect of any such interrelationships shall be governed by
said governing documents and the provisions of the Investment Company Act.
7. DURATION, TERMINATION AND AMENDMENTS.
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This Agreement shall become effective as of the date first written above and
shall continue in effect for two years. Thereafter, this Agreement shall
continue in effect from year to year for so long as its continuance is
specifically approved, at least annually, by (i) a majority of the Board of
Trustees or the vote of the holders of a majority of the Portfolio's outstanding
voting securities; and (ii) the affirmative vote, cast in person at a meeting
called for the purpose of voting on such continuance, of a majority of those
members of the Board of Trustees ("Independent Trustees ") who are not
"interested persons" of the Trust or any investment adviser to the Trust.
This Agreement may be terminated by the Trust or by Portfolio Manager at any
time and without penalty upon sixty days written notice to the other party,
which notice may be waived by the party entitled to it. This Agreement may not
be amended except by an instrument in writing and signed by the party to be
bound thereby provided that if the Investment Company Act requires that such
amendment be approved by the vote of the Board, the Independent Trustees and/or
the holders of the Trust's or the Portfolio's outstanding shareholders, such
approval must be obtained before any such amendment may become effective. This
Agreement shall terminate upon its assignment. For purposes of this Agreement,
the terms "majority of the outstanding voting securities, "assignment" and
"interested person" shall have the meanings set forth in the Investment Company
Act.
8. CONFIDENTIALITY; USE OF NAME.
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Portfolio Manager and the Trust acknowledge and agree that during the term of
this Agreement the parties may have access to certain information that is
proprietary to the Trust or Portfolio Manager, respectively (or to their
affiliates and/or service providers). The parties agree that their respective
officers and employees shall treat all such proprietary information as
confidential and will not use or disclose information contained in, or derived
from such material for any purpose other than in connection with the carrying
out of their responsibilities under this Agreement and the management of the
Trust's assets, provided, however, that this shall not apply in the case of (i)
information that is publicly available; and (ii) disclosures required by law or
requested by any regulatory authority that may have jurisdiction over Portfolio
Manager or the Trust, as the case may be, in which case such party shall request
such confidential treatment of such information as may be reasonably available.
In addition, each party shall use its best efforts to ensure that its agents or
affiliates who may gain access to such proprietary information shall be made
aware of the proprietary nature and shall likewise treat such materials as
confidential.
It is acknowledged and agreed that the names "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇," "▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Chief Investment Officers" (which is a registered trademark of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & Co., Inc. ("HCCI")), and derivative of either, as well as any logo
that is now or shall later become associated with either name ("Marks") are
valuable property of HCCI and that the use of the Marks, or any one of them, by
the Trust or its agents is subject to the license granted to the Trust by HCCI.
Portfolio Manager agrees that it will not use any ▇▇▇▇ without the prior written
consent of the Trust. Portfolio Manager consents to use of its name, performance
data, biographical data and other pertinent data by the Trust for use in
marketing and sales literature, provided that any such marketing and sales
literature shall not be used by the Trust without the prior written consent of
Portfolio Manager, which consent shall not be unreasonably withheld. The
provisions of this Section 8 shall survive termination of this Agreement.
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It is acknowledged and agreed that the name "▇▇▇▇▇▇ Anerson & ▇▇▇▇▇▇▇▇, LLP" and
any portion or derivative thereof, as well as any logo that is not or shall
later become assoicated with the name (`MAS Marks"), are valuable property of
the Portfolio Manager and that the use of the MAS Marks by the Trust or its
agents are permitted onlyso long as this Agreement is in place.
9. REPRESENTATION, WARRANTIES AND AGREEMENTS OF PORTFOLIO MANAGER.
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Portfolio Manager represents and warrants that:
(a) It is registered as an investment adviser under the Investment Advisers Act
of 1940 ("Investment Advisers Act"), it will maintain such registration in
full force and effect and will promptly report to the Trust the
commencement of any formal proceeding that could render the Portfolio
Manager ineligible to serve as an investment adviser to a registered
investment company under Section 9 of the Investment Company Act.
(b) Portfolio Manager represents that it is subject to a written code of ethics
("Portfolio Manager's Code") complying with the requirements of ▇▇▇▇ 17j-1
under the 1940 Act and Rule 204-2(a)(12) under the Investment Advisers Act
and will provide the Trust with a copy of such code of ethics. During the
period that this Agreement is in effect, an officer or director of
Portfolio Manager shall certify to the Trust, on a quarterly basis, that
Portfolio Manager has complied with the requirements of the Portfolio
Manager's Code during the prior year; and that either (i) that no violation
of such code occurred or (ii) if such a violation occurred, that
appropriate action was taken in response to such violation. In addition,
Portfolio Manager acknowledges that the Trust may, in response to
regulations or recommendations issued by the Securities and Exchange
Commission or other regulatory agencies, from time to time, request
additional information regarding the personal securities trading of its
directors, partners, officers and employees and the policies of Portfolio
Manager with regard to such trading. Portfolio Manager agrees that it make
every effort to respond to the Trust's reasonable requests in this area.
(c) Upon request of the Trust, Portfolio Manager shall promptly supply the
Trust with any information concerning Portfolio Manager and its
stockholders, employees and affiliates that the Trust may reasonably
require in connection with the preparation of its registration statements,
proxy materials, reports and other documents required, under applicable
state or Federal laws, to be filed with state or Federal agencies or to be
provided to shareholders of the Trust.
10. STATUS OF PORTFOLIO MANAGER.
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The Trust and Portfolio Manager acknowledge and agree that the relationship
between Portfolio Manager and the Trust is that of an independent contractor and
under no circumstances shall any employee of Portfolio Manager be deemed an
employee of the Trust or any other organization that the Trust may, from time to
time, engage to provide services to the Trust, its Portfolios or its
shareholders. The parties also acknowledge and agree that nothing in this
Agreement shall be construed to restrict the right of Portfolio Manager or its
affiliates to perform investment management or other services to any person or
entity, including without limitation, other investment companies and persons who
may retain Portfolio Manager to provide investment management services and the
performance of such services shall not be deemed to violate or give rise to any
duty or obligations to the Trust.
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11. COUNTERPARTS AND NOTICE.
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This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original. Any notice required to be given under this
Agreement shall be deemed given when received, in writing addressed and
delivered, by certified mail, by hand or via overnight delivery service as
follows:
If to the Trust:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Portfolio Manager:
▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. MISCELLANEOUS.
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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
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by the law of the state of Delaware provided
that nothing herein shall be construed as inconsistent with the Investment
Company Act or the Investment Advisers Act. The Trust acknowledges receipt of
Part II of Portolio Manager's Form ADV, copies of which have been provided to
the Trust's Board of Trustees. Portfolio Manager will notify the Trust within a
reasonalbe period of time of changes in the membership of its partnership.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trustee liability set forth in the Declaration of Trust of the
Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the assets of The Limited Duration
Municipal Bond Portfolio. Portfolio Manager further agrees that it will not seek
satisfaction of any such obligations from the shareholders or any individual
shareholder of the Trust, or from the Trustees of the Trust or any individual
Trustee of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized as of the day and year first written
above.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
By:
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The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust
(on behalf of The Fixed Income II Portfolio)
By:
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