eUnitsTM 2 YEAR U.S. MARKET
PARTICIPATION TRUST:
UPSIDE TO CAP / BUFFERED DOWNSIDE
INVESTMENT ADVISORY AND
ADMINISTRATIVE AGREEMENT
AGREEMENT made this 25th day of
January, 2012, between eUnitsTM 2 Year U.S.
Market Participation Trust: Upside to Cap /
Buffered Downside, a Massachusetts business
trust (the "Trust"), and Xxxxx Xxxxx
Management, a Massachusetts business trust
("Xxxxx Xxxxx").
1. Duties of Xxxxx Xxxxx. The Trust
hereby employs Xxxxx Xxxxx 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.
Xxxxx Xxxxx hereby accepts such
employment, and undertakes to afford to the
Trust the advice and assistance of Xxxxx
Xxxxx'x organization in the choice of
investments, in the purchase and sale of
securities and in the administration of 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 and for administering
its affairs and to pay the salaries and fees of all
officers and Trustees of the Trust who are
members of Xxxxx Xxxxx'x organization and
all personnel of Xxxxx Xxxxx performing
services relating to research and investment
and administrative activities. Xxxxx Xxxxx
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.
Xxxxx Xxxxx 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 the Trust. As investment
adviser to the Trust, Xxxxx Xxxxx shall furnish
continuously an investment program and shall
determine from time to time what securities
and other investments shall be acquired,
disposed of 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
("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. Xxxxx Xxxxx is
authorized, in its discretion and without prior
consultation with the Trust, to buy, sell, 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 for the Trust and notify
Xxxxx Xxxxx thereof in writing, Xxxxx Xxxxx
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. Xxxxx Xxxxx shall take, on
behalf of the Trust, all actions which it deems
necessary or desirable to implement the
investment policies of the Trust.
Xxxxx Xxxxx shall place all orders for
the purchase or sale of portfolio securities for
the account of the Trust either directly with
the issuer or with brokers or dealers selected
by Xxxxx Xxxxx, and to that end Xxxxx Xxxxx
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
and the placing of such orders, Xxxxx Xxxxx
shall adhere to procedures adopted by the
Board of trustees of the Trust.
In connection with its administrative
responsibilities, Xxxxx Xxxxx (i) will assist in
preparing all annual, semi-annual and other
reports required to be sent to Trust
shareholders, and arrange for the printing and
dissemination of such reports to
shareholders; (ii) will prepare and assemble all
reports required to be filed by the Trust with
the Securities and Exchange Commission
("SEC") on Forms N-SAR and N-CSR, or on
such other form as the SEC may substitute for
Form N-SAR or N-CSR, and file such reports
with the SEC; (iii) will review the provision of
services by the Trust's independent
accountants, including, but not limited to, the
preparation by such accountants of audited
financial statements of the Trust and the
Trust's federal, state and local tax returns;
and make such reports and recommendations
to the Trustees of the Trust concerning the
performance of the independent accountants
as the Trustees deem appropriate; (iv) will
arrange for the filing with the appropriate
authorities all required federal, state and local
tax returns; (v) will arrange for the
dissemination to shareholders of the Trust's
proxy materials, and will oversee the
tabulation of proxies by the Trust's transfer
agent or other duly authorized proxy
tabulator; (vi) will review and supervise the
provision of custodian services to the Trust;
and make such reports and recommendations
to the Trustees concerning the provision of
such services as the Trustees deem
appropriate; (vii) will value all such portfolio
investments and other assets of the Trust as
may be designated by the Trustees (subject
to any guidelines, directions and instructions
of the Trustees), and review and supervise the
calculation of the net asset value of the
Trust's shares by the custodian; (viii) will
negotiate the terms and conditions under
which transfer agency and dividend
disbursing services will be provided to the
Trust, and the fees to be paid by the Trust in
connection therewith; review and supervise
the provision of transfer agency and dividend
disbursing services to the Trust; and make
such reports and recommendations to the
Trustees concerning the performance of the
Trust's transfer and dividend disbursing
agent as the Trustees deem appropriate; (ix)
will establish the accounting policies of the
Trust; reconcile accounting issues which may
arise with respect to the Trust's operations;
and consult with the Trust's independent
accountants, legal counsel, custodian,
accounting and bookkeeping agents and
transfer and dividend disbursing agent as
necessary in connection therewith; (x) will
determine the amount of all distributions to
be paid by the Trust to its shareholders;
prepare and arrange for the printing of
notices to shareholders regarding such
distributions and provide the Trust's transfer
and dividend disbursing agent and custodian
with such information as is required for such
parties to effect the payment of distributions
and to implement the Trust's dividend
reinvestment plan; (xi) will review the Trust's
bills and authorize payments of such bills by
the Trust's custodian; (xii) will make
recommendations to the Trustees as to
whether the Trust should make repurchase or
tender offers for its own shares; arrange for
the preparation and filing of all documents
required to be filed by the Trust with the SEC;
arrange for the preparation and dissemination
of all appropriate repurchase or tender offer
documents and papers on behalf of the Trust;
and supervise and conduct the Trust's
periodic repurchase or tender offers for its
own shares; (xiii) monitor any variance
between the market value and net asset value
per share, and periodically report to the
Trustees available actions that may conform
such values; (xiv) monitor the activities of any
shareholder servicing agent retained by Xxxxx
Xxxxx and periodically report to the Trustees
about such activities; (xv) will arrange for the
preparation and filing of all other reports,
forms, registration statements and
documents required to be filed by the Trust
with the SEC, the Financial Industry Regulatory
Authority and any securities exchange where
Trust shares are listed; and (xvi) will provide to
the Trust such other internal legal, auditing
and accounting services and internal
executive management and administrative
services as the Trustees deem appropriate to
conduct the Trust's business affairs.
2. Compensation of Xxxxx Xxxxx.
For the investment advisory services,
payments and facilities to be furnished
hereunder by Xxxxx Xxxxx, Xxxxx Xxxxx shall
be entitled to receive from the Trust
compensation in an amount equal to an
annual rate of 0.75% of the initial net assets of
the Trust.
Such compensation shall be paid
monthly in arrears. Xxxxx Xxxxx may, from
time to time, decide to delay payment of its
compensation. The Trust's net assets shall
be computed in accordance with the
Declaration of Trust and any applicable votes
and determinations of the Trustees of the
Trust.
In case of initiation or termination of
the Agreement (1) during any month, the fee
for that month shall be reduced
proportionately on the basis of the number of
calendar days during which the Agreement is
in effect; and (2) should the termination be as
a result of Xxxxx Xxxxx being replaced by
another investment manager, any fees
accumulated, but unpaid to Xxxxx Xxxxx, shall
be waived.
Xxxxx Xxxxx may, from time to time,
waive all or a part of the above compensation.
The Board of Trustees of the Trust has
currently determined that, based on the
current level of compensation payable to
Xxxxx Xxxxx by the Trust for its investment
advisory services under this Agreement, Xxxxx
Xxxxx shall receive no compensation from the
Trust in respect of the administrative services
to be rendered and the facilities to be
provided by Xxxxx Xxxxx in connection with
its administrative responsibilities under this
Agreement. If the Trustees subsequently
determine that the Fund should compensate
Xxxxx Xxxxx for such administrative services
and facilities, such compensation shall be set
forth in an amendment to this Agreement to
be entered into by the parties hereto.
3. Allocation of Charges and
Expenses. Xxxxx Xxxxx shall pay the entire
salaries and fees of all of the Trust's Trustees
and officers who devote part or all of their
time to the affairs of Xxxxx Xxxxx, and the
salaries and fees of such persons shall not be
deemed to be expenses incurred by the Trust
for purposes of this Section 3. Except as
provided in the foregoing sentence, it is
understood that the Trust will pay all
expenses other than those expressly stated to
be payable by Xxxxx Xxxxx 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, fees and other
expenses connected with the acquisition,
holding and disposition of securities and
other investments, (iv) auditing, accounting
and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of listing
shares of the Trust with a stock exchange, and
expenses of issue, sale, repurchase and
redemption (if any) of shares in the Trust,
including expenses of conducting tender
offers for the purpose of repurchasing Trust
shares, (viii) expenses of registering and
qualifying the Trust and its shares under
federal and state securities laws and of
preparing and printing registration
statements or other offering statements or
memoranda for such purposes, including
amendments, and for distributing the same to
shareholders and investors, and fees and
expenses of registering and maintaining
registrations of the Trust and of the Trust's
principal underwriter, if any, as broker-dealer
or agent under state securities laws, (ix)
expenses of reports and notices to
shareholders and of meetings of shareholders
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), (xiv) fees,
expenses and disbursements of transfer
agents, dividend disbursing agents,
shareholder servicing agents and registrars
for all services to the Trust, (xv) expenses for
servicing shareholder accounts, (xvi) any
direct charges to shareholders approved by
the Trustees of the Trust, (xvii) compensation
and expenses of Trustees of the Trust who are
not members of Xxxxx Xxxxx'x 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
shareholders with respect thereto.
4. Other Interests. It is understood
that Trustees and officers of the Trust and
shareholders of the Trust are or may be or
become interested in Xxxxx Xxxxx as trustees,
officers, employees, shareholders or
otherwise and that trustees, officers,
employees and shareholders of Xxxxx Xxxxx
are or may be or become similarly interested
in the Trust, and that Xxxxx Xxxxx may be or
become interested in the Trust as a
shareholder or otherwise. It is also
understood that trustees, officers, employees
and shareholders of Xxxxx Xxxxx 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 Xxxxx Xxxxx
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 Xxxxx Xxxxx 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 Xxxxx
Xxxxx. The services of Xxxxx Xxxxx to the
Trust are not to be deemed to be exclusive,
Xxxxx Xxxxx 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 Xxxxx Xxxxx, Xxxxx Xxxxx shall not be
subject to liability to the Trust or to any
shareholder of 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-Advisers and Sub-
Administrators. Xxxxx Xxxxx may employ one
or more sub-advisers or sub-administrators
from time to time to perform such of the acts
and services of Xxxxx Xxxxx including the
selection of brokers or dealers or other
persons to execute the Trust's portfolio
security transactions, and upon such terms
and conditions as may be agreed upon
between Xxxxx Xxxxx and such sub-adviser or
sub-administrator and approved by the
Trustees of the Trust, all as permitted by the
Investment Company Act of 1940. This
provision does not limit Xxxxx Xxxxx'x
ability, pursuant to this Agreement, to
provide the services contemplated without
the assistance of a sub-adviser. Moreover,
subject to approval of the Trust's Board of
Trustees, Xxxxx Xxxxx retains complete
authority at any time immediately to assume
direct responsibility for any function
delegated to a sub-adviser pursuant to this
Section 6 without the need for any approval
by the holders of the voting securities of the
Trust.
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 the second anniversary of the
execution of this Agreement and shall
continue in full force and effect indefinitely
thereafter, but only so long as such
continuance after such date 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 Xxxxx Xxxxx 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 Xxxxx Xxxxx, as
the case may be, and the Trust may, at any
time upon such written notice to Xxxxx Xxxxx,
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.
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
Xxxxx Xxxxx or the Trust cast in person at a
meeting called for the purpose of voting on
such approval, and (ii) if required by the
Investment Company Act of 1940, 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 limiting
the personal liability of the Trustees of the
Trust and the shareholders of the Fund, and
the Adviser hereby agrees that it shall have
recourse to the Trust or the Fund for payment
of claims or obligations as between the Trust
or the Fund and the Adviser arising out of this
Agreement and shall not seek satisfaction
from the Trustees or shareholders or any
Trustee of the Trust or shareholder of the
Fund.
10. Use of the Name "Xxxxx
Xxxxx". Xxxxx Xxxxx hereby consents to the
use by the Trust of the name "Xxxxx Xxxxx"
as part of the Trust's name; provided,
however, that such consent shall be
conditioned upon the employment of Xxxxx
Xxxxx or one of its affiliates as the investment
adviser or administrator of the Trust. The
name "Xxxxx Xxxxx" or any variation
thereof may be used from time to time in
other connections and for other purposes by
Xxxxx Xxxxx and its affiliates and other
investment companies that have obtained
consent to the use of the name "Xxxxx
Xxxxx". Xxxxx Xxxxx shall have the right to
require the Trust to cease using the name
"Xxxxx Xxxxx" as part of the Trust's name
if the Trust ceases, for any reason, to employ
Xxxxx Xxxxx or one of its affiliates as the
Trust's investment adviser or administrator.
Future names adopted by the Trust for itself,
insofar as such names include identifying
words requiring the consent of Xxxxx Xxxxx,
shall be the property of Xxxxx Xxxxx and shall
be subject to the same terms and conditions.
11. 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 SEC 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 shareholders, of the lesser of (a) 67 per
centum or more of the shares of the Trust
present or represented by proxy at the
meeting if the holders of more than 50 per
centum of the shares of the Trust are present
or represented by proxy at the meeting, or
(b) more than 50 per centum of the shares of
the Trust.
[Signature page follows.]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be
executed on the day and year first above
written.
eUnitsTM 2 YEAR
U.S. MARKET PARTICIPATION TRUST:
UPSIDE TO CAP /
BUFFERED DOWNSIDE
By: /s/ Xxxxxx
X. Xxxxxxxxxx
Xxxxxx X.
Xxxxxxxxxx
President
XXXXX XXXXX
MANAGEMENT
By: /s/ Xxxxxxx
X. Gemma
Xxxxxxx X.
Gemma
Vice
President
and not
individually
14
017_0168.doc
