INVESTMENT MANAGEMENT CONTRACT
BETWEEN
HILLVIEW INVESTMENT TRUST II
AND
HILLVIEW CAPITAL ADVISORS, LLC
Contract made as of June 12, 2000, between, Hillview Investment Trust II,
a Delaware business trust ("Trust"), and Hillview Capital Advisors, LLC, a
Delaware limited liability company (the "Adviser").
WHEREAS the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company; and
WHEREAS the Trust currently consists of two series -- Hillview Alpha Fund
and Hillview International Alpha Fund; and
WHEREAS the Trust hereafter may establish additional series of its shares
of beneficial interest (any such additional series, together with the series
named in the paragraph immediately preceding, are collectively referred to
herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Trust desires to retain Adviser as investment manager to
furnish certain investment advisory and portfolio management services to the
Trust and the Funds, and Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints Adviser as investment manager for
the period and on the terms set forth in this Contract. Adviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Trust's Board of Trustees ("Board"),
Adviser will provide a continuous investment program for each Fund, including
investment research and management with respect to all securities and
investments and cash equivalents in the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by the Fund, and the brokers and dealers through whom trades will be
executed. The Adviser may delegate to a Sub-Adviser, in whole or in part, its
duty to provide a continuous investment management program with respect to any
Fund, including the provision of investment management services with respect to
a portion of the Fund's assets, in accordance with Paragraph 4 of this Contract.
(b) Adviser agrees that in placing orders with brokers and dealers it will
attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Fund or provide the Trust or Adviser's other clients with research, analysis,
advice and similar services. Adviser may pay to brokers and dealers, in return
for research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to Adviser's determining in good faith that
such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of Adviser to such Fund and its
other clients and that the total commissions or spreads paid by such Fund will
be reasonable in relation to the benefits to the Fund over the long term. In no
instance will portfolio securities be purchased from or sold to Adviser or any
affiliated person thereof except in accordance with the federal securities laws
and the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever Adviser simultaneously places orders to purchase or sell the
same security on behalf of a Fund and one or more other accounts advised by
Adviser, 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 Trust
recognizes that in some cases this procedure may adversely affect the results
obtained for the Fund.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of each Fund, 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, Adviser
hereby agrees that all records which it maintains for the Trust are the property
of the Trust, agrees to preserve for periods prescribed by Rule 31a-2 under the
1940 Act any records which it maintains for the Trust and which are required to
be maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender
promptly to the Trust any records which it maintains for Trust upon request by
the Trust.
(d) Adviser will oversee the computation of the net asset value and the
net income of each Fund as described in the currently effective registration
statement of the Trust 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.
3. FURTHER DUTIES. In all matters relating to the performance of this Contract,
Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Trust 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.
4. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER. With respect to the
Trust and each Fund, Adviser may enter into one or more contracts ("Sub-Advisory
Contract") with a sub-adviser in which Adviser delegates to such sub-adviser the
performance of any or all of the services specified in Paragraph 2 of this
Contract, provided that: (i) each Sub-Advisory Contract imposes on the
sub-adviser bound thereby all the corresponding duties and conditions to which
Adviser is subject with respect to the delegated services under Paragraphs 2 and
3 of this Contract; (ii) each Sub-Advisory Contract meets all requirements of
the 1940 Act and rules thereunder, and (iii) Adviser shall not enter into a
Sub-Advisory Contract unless it is approved by the Board prior to
implementation.
5. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser 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,
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officer or employee of Adviser, who may also be a Trustee, officer or employee,
of the Trust, 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.
6. EXPENSES.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser.
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Adviser under this Contract; (iii) fees, and other compensation and expenses of
the Sub-Advisors pursuant to Sub-Advisory Contracts approved by the Trust; (iv)
investment consulting fees and related costs; (v) expenses of organizing the
Trust and the Fund; (vi) expenses of preparing and filing reports and other
documents with governmental and regulatory agencies; (vii) filing fees and
expenses relating to the registration and qualification of the Fund's shares and
the Trust under federal and/or state securities laws and maintaining such
registrations and qualifications; (viii) costs incurred in connection with the
issuance, sale or repurchase of the Fund's shares of beneficial interest; (ix)
fees and salaries payable to the Trust's Trustees who are not parties to this
Contract or interested persons of any such party ("Independent Trustees"); (x)
all expenses incurred in connection with the Independent Trustees' services,
including travel expenses; (xi) taxes (including any income or franchise taxes)
and governmental fees; (xii) costs of any liability, uncollectible items of
deposit and other insurance and fidelity bonds; (xiii) any costs, expenses or
losses arising out of a liability of or claim for damages or other relief
asserted against the Trust or Fund for violation of any law; (xiv) interest
charges; (xv) legal, accounting and auditing expenses, including legal fees of
special counsel for the Independent Trustees; (xvi) charges of custodians,
transfer agents, pricing agents and other agents; (xvii) expenses of disbursing
dividends and distributions; (xviii) expenses of setting in type, printing and
mailing reports, notices and proxy materials for existing shareholders; (xix)
any extraordinary expenses (including fees and disbursements of counsel, costs
of actions, suits or proceedings to which the Trust is a party and the expenses
the Trust may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by the
Trust or Fund; (xx) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xxi) costs of
mailing and tabulating proxies and costs of meetings of shareholders, the Board
and any committees thereof; (xxii) the cost of investment company literature and
other publications provided by the Trust to its Trustees and officers; and
(xxiii) costs of mailing, stationery and communications equipment.
(c) Adviser will assume the cost of any compensation for services provided
to the Trust received by the officers of the Trust and by the Interested
Trustees.
(d) The payment or assumption by Adviser of any expense of the Trust or a
Fund that Adviser is not required by this Contract to pay or assume shall not
obligate Adviser to pay or assume the same or any similar expense of the Trust
or a Fund on any subsequent occasion.
7. COMPENSATION.
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(a) For the services provided to each Fund listed in Appendix A under this
Contract, each Fund shall pay the Adviser an annual fee, payable monthly, based
upon the Fund's average daily assets as set forth in Appendix B. Such
compensation shall be paid solely from the assets of the Fund.
(b) For the services provided and the expenses assumed pursuant to this
Contract with respect to any other Fund hereafter established, the Fund will pay
to the Adviser from its assets a fee in an amount to be agreed upon in a written
fee agreement ("Fee Agreement") executed by the Trust on behalf of such Fund and
by the Adviser. All such Fee Agreements shall provide that they are subject to
all terms and conditions of this Contract.
(c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date 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.
8. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser and its
delegates, including any Sub-Adviser to any Fund or the Trust, shall not be
liable and the Trust shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by any Fund, the Trust or any of its
shareholders, in connection with the matters to which this Contract relates
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of Adviser in the performance by Adviser of its duties or from
reckless disregard by Adviser of its obligations and duties under this Contract.
Any person, even though also an officer, partner, employee, or agent of Adviser,
who may be or become an officer, Trustee, employee or agent of the Trust shall
be deemed, when rendering services to any Fund or the Trust or acting with
respect to any business of such Fund or the Trust, to be rendering such service
to or acting solely for the Fund or the Trust and not as an officer, partner,
employee, or agent or one under the control or direction of Adviser even though
paid by it.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to the any Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Fund's 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, with respect to any given Fund this Contract shall continue
automatically for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose voting
on such approval, and (ii) by the Board or by vote of a majority of the
outstanding voting securities of such Fund.
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(c) Notwithstanding the foregoing, with respect to the Trust 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 Fund on sixty days' written notice to Adviser or by Adviser at any time,
without the payment of any penalty, on sixty days' written notice to the Trust.
Termination of this Contract with respect to any given Fund shall not affect the
continued effectiveness of the Contract with respect to any other Fund. This
Contract will automatically terminate in the event of its assignment.
10. 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 amendment of this Contract shall be effective
until approved by vote of a majority of such Fund's outstanding voting
securities, when required by the 1940 Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. LICENSE AGREEMENT. The Trust shall have the non-exclusive right to use the
name "Hillview" to designate any current or future Fund only so long as Hillview
Capital Advisors, LLC serves as investment manager or adviser to the Trust with
respect to such Fund.
13. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Trust
personally, but shall only bind the assets and property of the Trust, as
provided in the Trust's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Trust and
shareholders of the Trust, and this Contract has been executed and delivered by
an authorized officer of the Trust acting as such; neither such authorization by
such Trustees and shareholders nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the Trust, as provided in the Trust's Agreement and Declaration of Trust.
14. MISCELLANEOUS. The captions in this Contract are included for convenience of
reference only and in no way define or limit 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," "interested person," "assignment," "broker,"
"dealer," "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 made less restrictive 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.
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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: HILLVIEW INVESTMENT TRUST II
By: /s/ M. ▇▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: SECRETARY Title: PRESIDENT AND TRUSTEE
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Attest: HILLVIEW CAPITAL ADVISORS, LLC
By: /s/ M. ▇▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: DIRECTOR OF INVESTMENT Title:PRESIDENT AND MANAGING PARTNER
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OPERATIONS
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APPENDIX A
TO
INVESTMENT MANAGEMENT CONTRACT
BETWEEN
HILLVIEW INVESTMENT TRUST II
AND
HILLVIEW CAPITAL ADVISORS, LLC
Hillview Alpha Fund
Hillview International Alpha Fund
APPENDIX B
TO
INVESTMENT MANAGEMENT CONTRACT
BETWEEN
HILLVIEW INVESTMENT TRUST II
AND
HILLVIEW CAPITAL ADVISORS, LLC
Each Fund shall pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 0.25% of the Fund's average daily assets. The Adviser may be
reimbursed by the Hillview Alpha Fund for payments made to limit the expenses of
that Fund so that its other expenses will not exceed 0.35% of the Fund's average
annual assets. The Adviser may be reimbursed by the Hillview International Alpha
Fund for payments made to limit the expenses of that Fund so that its other
expenses will not exceed 0.75% of the Fund's average annual assets. Such
reimbursement must occur within three years of the payment being made and must
not exceed the Fund's expense cap.
Dated: June 12, 2000
B-1