INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES AGREEMENT BBH TRUST
SUB-ITEM
77Q1 (c): Exhibits
THIS
AGREEMENT, entered into on February 1, 2007, between BBH TRUST, a Delaware
statutory trust (the “Trust”) (the “Investment Company”), on behalf of each of
its series from time to time listed on Exhibit A hereto (each a “Fund”),
severally and not jointly, and ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO., a New York
limited partnership (“BBH&Co.”).
WHEREAS,
the Investment Company is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the “1940 Act”);
and
WHEREAS,
the Investment Company wishes to retain BBH&Co. to render investment
advisory services to the Funds and to provide for the administration of the
day
to day affairs of the Investment Company and each Fund, and BBH&Co. is
willing to render such services;
NOW,
THEREFORE, in consideration of the premises and mutual promises hereinafter
set
forth, the parties hereto agree as follows:
1. Appointment
as Investment Adviser and Administrator. The Investment Company
hereby appoints BBH&Co. as its investment adviser to the Funds and as its
administrator with respect to all aspects of the operations of each Fund,
subject to the general supervision of the trustees of the Investment Company
(the “Trustees”), for the period and on the terms set forth in this
Agreement. BBH&Co. accepts such appointments and agrees to render
the services and assume the obligations set forth in this Agreement, for the
compensation provided herein.
2. Responsibilities
as Investment Adviser. Subject to the general supervision of the
Trustees, BBH&Co. shall manage the investment operations of each Fund and
the composition of each Funds’ portfolios of securities and investments,
including cash, the purchase, retention and disposition thereof and agreements
relating thereto, in accordance with each Fund’s investment objective and
policies as stated in its Prospectus (as defined in paragraph 5 of this
Agreement) and subject to the following understandings:
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A.
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BBH&Co.
shall furnish a continuous investment program for each Fund’s portfolio
and determine from time to time what investments or securities will
be
purchased, retained, sold or lent by each Fund, and what portion
of the
assets will be invested or held uninvested as cash; provided,
however, BBH&Co. may employ or contract with such person,
persons, corporation or corporations at its own cost and expense
and
subject to its supervision and oversight as it shall determine in
order to
assist it in carrying out its responsibilities under this Agreement;
provided, further, that, with respect to the International Equity
Fund, BBH&Co. may employ or contract with such other person, persons,
corporation, or corporations at its own cost and expense and subject
to
its supervision as it shall determine in order to assist it in carrying
out its responsibilities under this
Agreement.
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B.
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BBH&Co.
shall use the same skill and care in the management of each Fund’s
portfolio as it uses in the administration of other accounts for
which it
has investment responsibility as
agent;
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C.
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BBH&Co.,
in the performance of its duties and obligations under this Agreement,
shall act in conformity with the Investment Company’s Agreement and
Declaration of Trust and By-Laws and the Prospectuses of each Fund
and
with the instructions and directions of the Trustees and will conform
to
and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations including, without limitation,
the
regulations and rulings of the New York State Banking
Department;
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D.
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BBH&Co.
shall determine the securities to be purchased, sold or lent by each
of
the Funds and as agent for the Funds will effect portfolio transactions
pursuant to its determinations either directly with the issuer or
with any
broker and/or dealer in such securities; in placing orders with brokers
and or dealers BBH&Co. intends to seek best price and execution for
purchases and sales; BBH&Co. shall also make recommendations regarding
whether or not the Funds shall enter into repurchase or reverse repurchase
agreements and interest rate futures contracts. On occasions when
BBH&Co. deems the purchase or sale of a security to be in the best
interest of the Funds as well as other customers, BBH&Co. may, to the
extent permitted by applicable laws and regulations, but shall not
be
obligated to, aggregate the securities to be so sold or purchased
in order
to obtain the best execution and lower brokerage commissions, if
any. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will
be made
by BBH&Co. in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Funds and to such
other
customers;
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E.
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BBH&Co.
shall maintain books and records with respect to the Funds’ securities
transactions and shall render to the Trustees such periodic and special
reports as the Trustees may reasonably request;
and
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F.
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the
investment management services of BBH&Co. to the Funds under this
Agreement are not to be deemed exclusive, and BBH&Co. shall be free to
render similar services to others.
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3. Responsibilities
as Administrator. Subject to the general supervision of the
Trustees, BBH&Co. shall administer all aspects of the operations of the
Investment Company and each Fund. In connection therewith,
BBH&Co. shall have the following responsibilities with respect to the
Investment Company:
(a) furnish
the Investment Company with adequate office facilities, utilities, office
equipment and related services;
(b) maintain
the financial and accounting records required to be maintained for each Fund
(including those records maintained by each Fund’s custodian);
(c) furnish
the Investment Company and each Fund with ordinary clerical, bookkeeping and
recordkeeping services;
(d) arrange,
but not pay for, the preparation for each Fund of all required tax returns
and
reports to its shareholders and the Securities and Exchange Commission (the
“Commission”) and the periodic updating of each Fund’s Prospectus;
and
(e) oversee
the performance of administrative and professional services to the Investment
Company and each Fund by others, including each Fund’s custodian, transfer agent
and shareholder servicing agent.
BBH&Co.
may subcontract for the
performance of its obligations hereunder with any one or more persons, including
one or more affiliates of BBH&Co.; provided, however, that
BBH&Co. shall not enter into any such subcontract unless the Trustees shall
have found the subcontracting party to be qualified to perform the obligations
sought to be subcontracted, and provided, further that unless the
Investment Company otherwise expressly agrees in writing, BBH&Co. shall be
as fully responsible to the Investment Company for the acts and omissions of
any
subcontractor as it would be for its own acts or omissions. If
permitted by any sub-administration agreement between any entity with whom
BBH&Co. has subcontracted its performance, the sub-administrator may
authorize and permit any of its directors, officers and employees who may be
elected as officers of the Investment Company to serve in the capacities in
which they are elected and the sub-administrator will pay the salaries of all
personnel of the Investment Company who are affiliated with the
sub-administrator.
4. Fees
and Expenses. In connection with the services rendered by
BBH&Co. under this Agreement, BBH&Co. will pay all expenses incurred by
it in connection with its activities under this Agreement, other than those
assumed by the Investment Company, as set forth in subsections (a) through
(m),
below. As full compensation for the services provided, the facilities
furnished and the expenses borne pursuant to this Agreement (other than as
set
forth in subsections (a) through (m), below), BBH&Co. shall receive a fee
from each Fund equal to the percentage per annum of the average daily net assets
of such Fund set forth on Exhibit A hereto. With respect to the Money
Market Fund, the Parties hereto agree that the breakpoint established, as set
forth on Exhibit A hereto, shall be reviewed every three (3) years, and may
be
adjusted upwards to take into account the effects of inflation, as measured
by
the Consumer Price Index or such other basis as the Investment Company and
BBH&Co. determine to be appropriate and subject to the approval of
shareholders of the Money Market Fund to the extent required by the ▇▇▇▇
▇▇▇. The fees set forth on Exhibit A shall be computed based on the
net assets of each Fund as of 4:00 P.M. New York time on each business and
will
be paid monthly during the succeeding calendar month. In the event
the expenses of any Fund for any fiscal year (including the fees payable to
BBH&Co., but excluding interest, taxes, brokerage commissions and litigation
and indemnification expenses and other extraordinary expenses not incurred
in
the ordinary course of such Fund's business) exceed the lowest applicable annual
expense limitation established pursuant to the statutes or regulations of any
jurisdiction in which Shares of such Fund are then qualified for offer and
sale,
the compensation due to BBH&Co. hereunder will be reduced by 50% of the
amount of such excess, or if such excess expenses exceed the amount of the
fees
payable to BBH&Co., BBH&Co. shall reimburse such Fund for 50% of the
amount by which such expenses exceed such fees. Any reduction in the
fee payable and any payment(s) by BBH&Co. to the Funds shall be made monthly
and subject to readjustment during the year.
The
following fees and expenses will be
borne directly by the Investment Company:
(a) the
fees and expenses of BBH&Co. or expenses otherwise incurred for a Fund in
connection with the management of the investment and reinvestment of its
assets;
(b) the
fees and expenses of Trustees of the Investment Company who are not affiliated
persons of BBH&Co. or of an investment company in which a Fund invests its
investable assets;
(c) the
fees and expenses of a Fund’s custodian which relate to (i) the custodial
function and the recordkeeping connected therewith, (ii) the maintenance of
the
required accounting records of the Fund not being maintained by BBH&Co. or
any sub-administrator, (iii) the pricing of the shares of the Fund, including
the cost of any pricing service or services which may be retained pursuant
to
the authorization of the Trustees of the Investment Company, and (iv) the
cashiering function in connection with the issuance and redemption of a Fund’s
securities;
(d) the
fees and expenses of a Fund’s transfer agent and shareholder servicing agent,
which relate to the maintenance of each shareholder account and the fees and
expenses of any eligible institution;
(e) the
charges and expenses of legal counsel and independent accountants for the
Investment Company and each Fund;
(f) brokers’
commissions and any issue or transfer taxes chargeable to a Fund in connection
with its securities transactions;
(g) all
taxes and corporate fees payable by the Investment Company and/or each Fund
to
federal, state or other governmental agencies;
(h) the
fees of any trade association of which the Investment Company may be a
member;
(i) the
cost of certificates, if any, representing shares of each Fund;
(j) the
fees and expenses involved in registering and maintaining registrations of
the
Investment Company and of Fund shares with the Commission, registering the
Investment Company as a broker or dealer and qualifying Fund shares under state
securities laws, including the preparation and printing of the Investment
Company’s registration statements and Fund prospectuses for filing under federal
and state securities laws for such purposes;
(k) the
cost of any liability insurance or fidelity bonds;
(l) allocable
communications expenses with respect to investor services and all expenses
of
shareholders’ and Trustees’ meetings and of preparing, printing and mailing
reports and prospectuses to Fund shareholders in the amount necessary for
distribution to shareholders; and
(m) litigation
and indemnification expenses and other extraordinary expenses not incurred
in
the ordinary course of business of the Investment Company or any
Fund. General expenses of the Investment Company shall be allocated
among each Fund and each Fund’s classes, as the case may be, on the basis of
relative net assets and direct expenses shall be charged directly to the
respective Fund and each Fund’s classes, as the case may be.
5. Delivery
of Documents, Amendments and Supplements. The Investment Company
has delivered copies of the following documents to BBH&Co. and will promptly
notify and deliver all future amendments and supplements, if any:
(a) Agreement
and Declaration of Trust of the Investment Company and any amendments thereto
(such Agreement and Declaration of Trust and any amendments thereto, as
presently in effect and further amended from time to time, are herein called
the
“Organizational Documents” with respect to each Fund);
(b) By-Laws
of the Investment Company (such By-Laws, as presently in effect and as amended
from time to time, are herein called the “By-Laws”);
(c) Certified
resolutions of the Trustees of the Investment Company authorizing the
appointment of BBH&Co. and approving the form of this Agreement;
Registration Statement under the 1940 Act and the Securities Act of 1933, as
amended, on Form N-1A (the “Registration Statement”) as filed with the
Commission relating to the Investment Company and the Funds’ shares, and all
amendments thereto;
(d) Notification
of Registration of the Investment Company under the 1940 Act on Form N-8A as
filed with the Commission; and
(e) Prospectuses
of the Funds (such prospectuses, as presently in effect and as amended or
supplemented with respect to the Funds from time to time, are herein called
the
“Prospectuses”).
In
addition, during the term of this
Agreement, the Investment Company agrees to furnish to BBH&Co. at its
principal office all proxy statements, reports to shareholders, sales
literature, or other material prepared for distribution to shareholders of
a
Fund or the public, which refer in any way to BBH&Co. or any affiliate of
BBH&Co. that it may employ or contract in order to assist it in carrying out
its responsibilities under this Agreement, prior to use thereof and not to
use
such material if BBH&Co. reasonably objects in writing within five business
days (or such other time as may be mutually agreed) after receipt
thereof. The Investment Company shall furnish or otherwise make
available to the BBH&Co. such other information relating to the business
affairs of the Investment Company and each Fund as BBH&Co. at any time, or
from time to time, reasonably requests in order to discharge its obligations
hereunder.
6. Books
and Records. BBH&Co. shall keep the Funds’ books and records
that are required to be maintained. BBH&Co. agrees that all
records that it maintains for each Fund is the property of the Fund and it
will
promptly surrender any of such records to the Fund upon the Fund’s
request. BBH&Co. further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are required
to
be maintained by BBH&Co. with respect to the Funds by Rule 31a-1 under the
1940 Act.
7. Term
of Agreement. This Agreement shall continue in effect for two
years from its effective date with respect to any Fund, as set forth on Exhibit
A, and thereafter only so long as its continuance is specifically approved
at
least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated with respect
to any Fund by the Investment Company at any time, without the payment of any
penalty, by vote of a majority of all the Trustees or by “vote of a majority of
the outstanding voting securities” of the Fund on 60 days written notice to
BBH&Co., or by BBH&Co. at any time, without the payment of any penalty,
on 90 days written notice to the Investment Company. This Agreement
will automatically and immediately terminate in the event of its
“assignment.”
8. Liability. BBH&Co.
shall not be liable for any error of judgment or mistake of law or for any
loss
suffered by any Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect
to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of
the ▇▇▇▇ ▇▇▇) or a loss resulting 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
Agreement. BBH&Co. shall, for all purposes herein, be deemed to
be an independent contractor and shall, unless otherwise expressly provided
herein or authorized by the Trustees, from time to time, have no authority
to
act for or represent the Funds or the Investment Company in any way or otherwise
be deemed an agent of the Funds or the Investment Company.
9. Scope
of Services. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of BBH&Co. who may also be an
officer or employee of the Investment Company to engage in any other business
or
to devote his time and attention in part to the management, administration,
as
the case may be, or other aspects of any business, whether of a similar or
a
dissimilar nature, nor limit or restrict the right of BBH&Co. to engage in
any other business or to render services of any kind to any other corporation,
firm, individual or association.
10. Amendment
of Agreement. This Agreement may be amended by mutual consent,
provided that any material amendment hereto shall be approved (a) by vote of
a
majority of the Trustees who are not parties to this Agreement or “interested
persons” of any such party, cast in person at a meeting called for the purpose
of voting on such amendment, and (b) by “vote of a majority of the outstanding
voting securities” of the Funds.
11. Terms. As
used in this Agreement, the terms “assignment,” “interested persons” and “vote
of a majority of the outstanding voting securities” shall have the meanings
assigned to them respectively in the 1940 Act.
12. Notices. Any
notice or other communication to be given pursuant to this Agreement shall
be in
writing and shall be duly given if delivered or mailed by registered mail,
postage prepaid to:
(a) In
the case of BBH&Co.: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President, or at such other address or to
such
other individual as shall be specified by BBH&Co.
(b) In
the case of BBH Trust, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ , Attention:
President, or at such other address or to such other individual as shall be
specified by the Investment Company.
13. Authorization;
No Personal Liability. The Trustees have authorized the execution
of this Agreement, in their capacity as Trustees and not individually, and
BBH&Co. agrees that neither the shareholders of each Fund nor the Trustees
nor any officer, employee, representative or agent of any Fund shall be
personally liable upon, nor shall resort be had to their private property for
the satisfaction of, obligations given, executed or delivered on behalf of
or by
the Investment Company, that the shareholders of each Fund, the Trustees,
officers, employees, representatives and agents of the Investment Company shall
not be personally liable hereunder, and that BBH&Co. shall look solely to
the property of the Investment Company for the satisfaction of any claim
hereunder.
14. Execution
in Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
15. Applicable
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. Separation
of Assets and Liabilities. The parties agree that the assets and
liabilities of each Fund are separate and distinct from the assets and
liabilities of each other Fund and that no Fund shall be liable or shall be
charged for any debt, obligation or liability of any other Fund, whether arising
under this Agreement or otherwise.
IN
WITNESS WHEREOF, the parties hereto
have caused this instrument to be executed by their officers or Partners
designated below on the day and year first above written.
BBH
TRUST ▇▇▇▇▇
BROTHERS ▇▇▇▇▇▇▇▇ & CO.
By:
/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇
▇▇▇▇▇▇
Name: ▇▇▇▇
▇.
▇▇▇▇▇▇▇ Name: ▇▇▇▇
▇ ▇▇▇▇▇▇
Title: President Title: Partner