Exhibit d.2
Servicing Agreement between ▇▇▇▇▇/▇▇▇▇▇▇ Advisers LLC
and
▇▇▇▇▇ Consulting LLC
SERVICING AGREEMENT
THIS SERVICING AGREEMENT is made and entered into as of
this 1st day of March, 1999 by and among ▇▇▇▇▇/▇▇▇▇▇▇ Advisers, a New York
general partnership, ▇▇▇▇▇ Total Return Advisors, Inc., a Delaware corporation,
and ▇▇▇▇▇ Advisors Inc., a Delaware corporation (collectively, the "Company"),
and ▇▇▇▇▇ Consulting LLC, a New York limited liability company ("▇▇▇▇▇").
WHEREAS Phoenix Investment Partners, Ltd., a Delaware
corporation ("Phoenix"), has entered into an Acquisition Agreement (the
"Acquisition Agreement") with ▇▇▇▇▇/▇▇▇▇▇▇ Advisers, a New York general
partnership, Euclid Advisors LLC, a New York limited liability company, ▇▇▇▇▇
Advisors Inc., a Delaware corporation, ▇▇▇▇▇ Total Return Advisors, Inc., a
Delaware corporation, and ▇▇▇▇▇ Securities Corp., a New York corporation
(collectively, the "Sellers"), and the Equityholders named therein providing
for, among other things, the acquisition of all of the capital stock and
partnership interests of the Companies by Phoenix and/or one or more
wholly-owned subsidiaries of Phoenix (capitalized terms defined in the
Acquisition Agreement and not otherwise defined herein are used herein with such
defined meanings);
WHEREAS ▇▇▇▇▇ has heretofore performed services to the Company
and the Company is desirous of obtaining certain services and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
as the President of ▇▇▇▇▇ (the "President"), has indicated to the Company that
he and his designated research associates (the "Associates") will provide the
Company and its Affiliates with such services as are specified in this
Agreement; and
WHEREAS the Company and ▇▇▇▇▇ have provided investment
advisory services to investment companies registered under the Investment
Company Act of 1940 (each a "Fund" and collectively "Funds") and desire to
continue to provide those investment advisory services;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto, intending to be legally bound, agree as follows:
1. Services
1.1 For this engagement, the President and the Associates will
devote their skill and approximately one-half of their full working time
consistent with the practices of ▇▇▇▇▇ prior to the Closing Date, to the
business and affairs of the Company and its Affiliates and to the promotion of
its and their interests, in particular, performing asset allocation research and
analysis and providing advice thereon at a level and in a manner consistent with
the practices of ▇▇▇▇▇ and the Company prior to the Closing Date (the
"Services"). The Services will be performed by the President and the Associates
in a manner and at a level consistent with the practices of ▇▇▇▇▇ and the
Company prior to the Closing Date. This Agreement shall be effective as of the
Closing Date for the term described in Section 2 below.
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1.2 The Services will be provided to the Company and its
Affiliates during normal business hours at the offices of the Company in New
York City or at such other times and places mutually agreed upon and reasonably
convenient to both parties, taking into account the nature, exigencies and
reasons for the assistance required.
1.3 Notwithstanding Section 1.2, but subject to all of the
other terms and conditions of this Agreement, including in particular Sections 4
and 13, ▇▇▇▇▇ may continue to provide consulting services (whether in a
managerial, employee, consultant or other capacity) to the Affiliated Investment
Partnership Management Companies and the related investment partnerships and
Watermark Securities, Inc. and their successor or affiliate entities, as may
exist from time to time; provided, however, that in no event may ▇▇▇▇▇ provide
services to any "Competing Business" as defined in the
Noncompetition/Nonsolicitation Agreement dated the date hereof between the
President and Phoenix (the "Noncompetition/Nonsolicitation Agreement"). The
President shall also continue to be permitted to serve as the President of ▇▇▇▇▇
Series Trust, The ▇▇▇▇▇ Fund, Inc. and The ▇▇▇▇▇ Total Return Fund, Inc.
2. Term
2.1 This Agreement shall be effective as of the Closing Date
and shall continue until the third anniversary thereof (the "Term") or such
earlier date as provided in Section 2.2; and with respect to any Fund, unless
sooner terminated, this Agreement shall continue in effect for two years, and
thereafter until terminated, provided that the continuation of this Agreement
and the terms thereof are specifically approved annually in accordance with the
requirements of the Investment Company Act of 1940 by a majority of such Fund's
outstanding voting securities or a majority of its board of directors or
trustees, and, in any event, by a majority of the directors or trustees who are
not "interested persons", as defined in the Investment Company Act of 1940, cast
in person at a meeting called for the purpose of voting on such approval.
2.2 The Company may terminate this Agreement immediately for
Cause and in the event of the President's death or Disability, and upon 30 days'
notice in the event of termination without Cause; and with respect to any Fund,
this Agreement may be terminated at any time, without payment of any penalty, by
the board of directors or trustees of that Fund, or by a vote of a majority (as
defined in the Investment Company Act of 1940) of the outstanding voting
securities of the Fund to which this Agreement is applicable, upon not less than
sixty (60) days' written notice. With respect to any Fund, this Agreement shall
automatically terminate in the event of its assignment, within the meaning of
the Investment Company Act of 1940, unless such automatic termination shall be
prevented by an exemptive order of the Securities and Exchange Commission, and
shall automatically terminate upon the termination of the Fund's investment
advisory agreement with the company that serves as its investment adviser.
2.3 Upon termination of this Agreement by the Company for
Cause or in the event of the President's death or Disability, the Company's
payment to ▇▇▇▇▇ of fees earned to the date of such termination shall be in full
satisfaction of all claims against the Company under
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this Agreement. If ▇▇▇▇▇'▇ engagement with the Company hereunder is terminated
by the Company other than for Cause or the President's death or Disability, the
Company shall continue to pay to ▇▇▇▇▇ the Consulting Fees at a rate equal to
the average of the monthly Consulting Fees for the six months immediately
preceding the month in which such termination occurred (or for the number of
months in the Term that have elapsed as of the date of termination, if fewer)
for the remainder of the Term.
2.4 (i) For purposes of this Agreement, a termination of
▇▇▇▇▇'▇ engagement hereunder is for "Cause" if the termination is evidenced by a
reasonable determination made by the Chief Executive Officer of Phoenix that:
(a) ▇▇▇▇▇ has willfully neglected its assigned duties with the Company, which
neglect has continued for a period of at least thirty (30) days after a written
notice of such neglect was delivered to the President specifying the claimed
neglect, (b) the President has been enjoined (other than temporary suspensions
of not more than ninety-one (91) days) by the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any other
industry regulatory authority from working in the investment advisory or
securities industry, (c) the President has been convicted by a court of
competent jurisdiction of, or has pleaded guilty or nolo contendere to, any
felony or misdemeanor involving an investment or investment-related business,
(d) ▇▇▇▇▇ has engaged in a continuing violation of a material provision of this
Agreement, which violation has continued for a period of at least thirty (30)
days after a written notice of such violation was delivered to the President
specifying the claimed violation, or (e) the President has breached the
Noncompetition/Nonsolicitation Agreement.
(ii) For purposes of this Agreement, "Disability" means the
President's inability to perform the services he is required to perform under
this Agreement by reason of sickness, accident, injury, illness or any similar
event and which condition has existed for at least 180 consecutive days, or for
such shorter periods aggregating 180 days during any twelve month period.
3. Compensation
3.1 During the Term, for the Services to be provided by ▇▇▇▇▇
under this Agreement, the Company agrees, on a joint and several basis, to pay
▇▇▇▇▇ an annual consulting fee of $2,500,000 (the "Consulting Fees"). The
Consulting Fees shall be payable monthly in arrears on the fifth day of each
month. The Company shall allocate the Consulting Fees among the advisers
comprising the Company based on assets of each Fund managed by such advisers.
3.2 The Company shall provide or share with ▇▇▇▇▇ research
information, benefits and services, as defined in Section 28(e) of the
Securities Exchange Act of 1934, that results from brokerage transactions
implemented by the Company for the benefit of its clients.
3.3 The Company shall not have any liability with respect to
the compensation of employees retained by ▇▇▇▇▇ or by any affiliated entities.
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3.4 Subject to the provisions of Section 2.3 hereof, upon
termination of this engagement for any reason, the Company shall have no further
obligations under this Agreement, but ▇▇▇▇▇ shall continue to be bound by
Section 4 and the Company shall continue to be bound by Section 5 hereof.
4. Confidentiality of ▇▇▇▇▇
4.1 ▇▇▇▇▇ shall not at any time during the period of its
engagement with the Company hereunder or after the termination thereof directly
or indirectly divulge, furnish, use, publish or make accessible to any person or
entity any Confidential Information (as hereinafter defined) except in
connection with the performance of its duties hereunder. Any records of
Confidential Information prepared by ▇▇▇▇▇ or which come into its possession
during the term of this Agreement are and remain the property of the Company or
its Affiliates, as the case may be, and upon termination of the engagement all
such records and copies thereof shall be either left with or returned to such
entity. Confidential Information may be shared among the President and the
Associates or other employees of entities controlled by the President on a need
to know basis for purposes of providing the Services to the Company and its
Affiliates hereunder. Such Associates and any other employees shall be informed
of the confidential nature of such Confidential Information, the President shall
direct such Associates and any other employees to treat such information
confidentially and the President will be responsible for any breach of this
Section 4.1 by himself and by any persons to whom the President provides any
Confidential Information. Notwithstanding anything contained herein to the
contrary, the Company acknowledges that services overlapping or similar to the
Services provided by ▇▇▇▇▇, the President and the Associates hereunder are also
performed on behalf of the Affiliates of ▇▇▇▇▇ and such Services are often not
exclusively performed by ▇▇▇▇▇, the President and the Associates for the
Company. Consequently, the work product resulting from the Services is often
generated on behalf of both the Company and its Affiliates and the Affiliates of
▇▇▇▇▇ and is shared among the employees of these entities (the "Shared Work
Product"). The Company further acknowledges that the Confidential Information
that generates such Shared Work Product may become known to the employees of
▇▇▇▇▇'▇ Affiliates. The Company hereby agrees that the disclosure of
Confidential Information to the employees of the ▇▇▇▇▇ Affiliates who shall be
deemed employees covered by the fourth sentence of this Section 4.1, to the
extent such disclosure is necessary to generate any Shared Work Product, and the
use of Shared Work Product by the employees of the ▇▇▇▇▇ Affiliates, shall in no
event be deemed a breach of this Agreement.
4.2 The term "Confidential Information" includes, but is not
limited to, the following items, whether existing now or created in the future
and whether or not subject to trade secret or other statutory protection: (a)
all knowledge or information concerning the business, operations and assets of
the Company and its Affiliates which is not readily available to the public,
such as: internal operating procedures; investment strategies; sales data and
customer and client lists; financial plans, projections and reports; and
investment company programs, plans and products; (b) all property owned,
licensed and/or developed for the Company and/or its Affiliates or any of their
respective clients and not readily available to the public, such as computer
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systems, programs and software devices, including information about the design,
methodology and documentation therefor; (c) information about or personal to the
Company's and/or its Affiliates' clients; (d) information, materials, products
or other tangible or intangible assets in the Company's and/or its Affiliates'
possession or under any of their control which is proprietary to, or
confidential to or about, any other person or entity; and (e) records and
repositories of all of the foregoing, in whatever form maintained.
The foregoing notwithstanding, the following shall not be
considered Confidential Information: (aa) general skills and experience gained
by providing service to the Company; (bb) information publicly available or
generally known within the Company's trade or industry; (cc) information
independently developed by the President or the Associates other than in the
course of the performance of their duties which are exclusive to the Company
hereunder; and (dd) information which becomes available to the President or the
Associates on a non-confidential basis from sources other than the Company or
its Affiliates, provided the President or the Associates do not know or have
reason to know that such sources are prohibited by contractual, legal or
fiduciary obligation from transmitting the information. Failure to ▇▇▇▇ any
material or information "confidential" shall not affect the confidential nature
thereof. All the terms of this Section 4 shall survive the termination of this
Agreement. The obligations hereunder shall be in addition to, and not in
limitation of, any other obligations of confidentiality the President or the
Associates may have to the Company.
4.3 At any time when so requested, and upon termination of the
engagement under this Agreement for any reason whatsoever and irrespective of
whether such termination is voluntary on ▇▇▇▇▇'▇ part or not, ▇▇▇▇▇ will deliver
to the Company all information in its possession (whether or not Confidential
Information) pertaining exclusively to the Company or any of its Affiliates and,
to the extent any such information is Shared Work Product, shall provide copies
to the Company with the understanding that ▇▇▇▇▇ and its Affiliates shall also
retain copies of such information.
5. Confidentiality of the Company
5.1 The Company and its Affiliates and their respective
employees shall not at any time during the period of ▇▇▇▇▇'▇ engagement with the
Company hereunder or after the termination thereof directly or indirectly
divulge, furnish, use, publish or make accessible to any person or entity any
▇▇▇▇▇ Confidential Information (as hereinafter defined). It is expressly
understood that Shared Work Product may be shared among the Company and its
Affiliates and their respective employees. The Company and its Affiliates and
their respective employees shall be informed of the confidential nature of the
▇▇▇▇▇ Confidential Information, the Company shall direct such employees to treat
such information confidentially and the Company will be responsible for any
breach of this Section 5.1 by its employees.
5.2 The term "▇▇▇▇▇ Confidential Information" includes, but is
not limited to, the following items, whether existing now or created in the
future and whether or not subject to trade secret or other statutory protection:
(a) all knowledge or information concerning the
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business, operations and assets of ▇▇▇▇▇ and its Affiliates which is not readily
available to the public, such as: internal operating procedures; investment
strategies; sales data and customer and client lists; financial plans,
projections and reports; and investment company programs, plans and products;
(b) all property owned, licensed and/or developed for ▇▇▇▇▇ and/or its
Affiliates or any of their respective clients and not readily available to the
public, such as computer systems, programs and software devices, including
information about the design, methodology and documentation therefor; (c)
information about or personal to ▇▇▇▇▇'▇ and/or its Affiliates' clients; (d)
information, materials, products or other tangible or intangible assets in
▇▇▇▇▇'▇ and/or its Affiliates' possession or under any of their control which is
proprietary to, or confidential to or about, any other person or entity; and (e)
records and repositories of all of the foregoing, in whatever form maintained.
The foregoing notwithstanding, the following shall not be
considered ▇▇▇▇▇ Confidential Information: (aa) general skills and experience
gained by providing service to the Company and its Affiliates; (bb) information
publicly available or generally known within ▇▇▇▇▇'▇ trade or industry; (cc)
information independently developed by the Company and its Affiliates and their
respective employees; and (dd) information which becomes available to the
Company and its Affiliates and their respective employees on a non-confidential
basis from sources other than ▇▇▇▇▇, provided the Company and its Affiliates and
their respective employees do not know or have reason to know that such sources
are prohibited by contractual, legal or fiduciary obligation from transmitting
the information. All the terms of this Section 5 shall survive the termination
of this Agreement.
6. Ownership of Documents
All memoranda, papers, letters, notes, notebooks and all
copies thereof relating exclusively to the business or affairs of the Company
that are generated by ▇▇▇▇▇ or that come into its possession, in each case in
connection with its performance of Services to the Company under this Agreement,
shall be held by ▇▇▇▇▇ as the Company property and shall be delivered by ▇▇▇▇▇
to the Company as the Company may request. To the extent any such memoranda,
papers, letters, notes and notebooks are the product of ▇▇▇▇▇ Confidential
Information or are Shared Work Product, the Company understands and agrees that
▇▇▇▇▇ and its Affiliates shall also retain copies of such documentation and
information.
7. Prior Negotiations and Agreements
This Agreement contains the complete agreement concerning the
servicing arrangement between the parties. This Agreement may only be altered,
amended or rescinded by a duly executed written agreement.
8. Jurisdiction
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York governing contracts entered into
and to be performed entirely within
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New York without regard to any conflict of law rules and both parties consent to
the jurisdiction of the courts of New York.
9. Performance Waivers
Waiver of performance of any obligation by either party shall
not constitute a waiver of performance of any other obligations or constitute
future waiver of the same obligation.
10. Severability
If any section, subsection, clause or sentence of this
Agreement shall be deemed illegal, invalid or unenforceable under any applicable
law, actually applied by any court of competent jurisdiction, such illegality,
invalidity or unenforceability shall not affect the legality, validity and
enforceability of this Agreement or any other section, subsection, clause or
sentence thereof. Where, however, the provisions of any applicable law may be
waived, they are hereby waived by the parties to the full extent permitted by
such law to the end that this Agreement shall be a valid and binding agreement
enforceable in accordance with its terms.
11. Assignment
This Agreement shall inure to the benefit of and be binding
upon the Company and its successors (whether direct or indirect, by purchase,
merger, consolidation or otherwise) and assigns, and upon ▇▇▇▇▇ and its
successors and assigns (whether direct or indirect, by purchase, merger,
consolidation or otherwise). Except as provided in Section 2.2, this Agreement
shall not be assignable by ▇▇▇▇▇ other than with the express written consent of
the Company which shall not be unreasonably denied. The reorganization of ▇▇▇▇▇
and its affiliated entities, such that the Services of the President and the
Associates are provided through an affiliated entity, shall not constitute a
breach, assignment or termination of this Agreement by ▇▇▇▇▇.
12. Notices
All notices under this Agreement shall be in writing and shall
be deemed to have been given at the time when mailed by registered or certified
mail, addressed to the address below stated of the party to which notice is
given, or to such changed address as such party may have fixed by notice:
To the Company: ▇▇▇▇▇/▇▇▇▇▇▇ Advisers
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
and
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Phoenix Investment Partners, Ltd.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Senior Vice President and General Counsel
To ▇▇▇▇▇: ▇▇▇▇▇ Consulting LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
provided, however, that any notice of change of address shall be effective only
upon receipt.
13. Miscellaneous
The President hereby represents and warrants that this
Agreement (i) is valid, binding and enforceable in accordance with its terms and
(ii) does not conflict with any other agreement to which he is a party,
including any agreement with the Affiliated Investment Partnership Management
Companies and the related investment partnerships and Watermark Securities, Inc.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Very truly yours,
▇▇▇▇▇/▇▇▇▇▇▇ ADVISERS
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇ TOTAL RETURN ADVISORS, INC.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇ ADVISORS INC.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
ACCEPTED AND AGREED TO:
▇▇▇▇▇ CONSULTING LLC
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
ACCEPTED AND AGREED TO AS
TO SECTIONS 4.1 and 13:
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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