INVESTMENT ADVISORY AGREEMENT - BALANCED AND BOND FUNDS
Agreement made as of this 8th day of November, 2002, by and between
Sentinel Variable Products Trust, a Delaware business trust and a series
investment company whose registration is pending under the Investment Company
Act of 1940 (hereinafter called the "Trust"), and NL Capital Management, Inc.,
a Vermont corporation, a registered investment adviser under the Investment
Advisers Act of 1940 (hereinafter called "Advisor").
WITNESSETH:
In consideration of the mutual promises and agreements herein
contained and other good and valuable considerations, the receipt of which is
hereby acknowledged, it is hereby agreed by and between the parties hereto as
follows:
1. Management of Securities Portfolios
Advisor agrees to act as investment adviser to the Trust with respect
to the investment of its assets in the Balanced Fund and the Bond Fund (the
"Funds") and in general to supervise the investments of the Funds, subject at
all times to the direction and control of the Board of Trustees of the Trust,
all as more fully set forth herein. This Agreement shall be in addition to and
shall not supercede the Investment Advisory Agreement dated as of November 1,
2000, which shall continue in full force and effect and under which Advisor
provides investment advisory services to the original five Funds of the Trust.
Advisor shall regularly provide investment advice to the Funds, and
shall, subject to the succeeding provisions of this section, continuously
supervise the investment and reinvestment of cash, securities or other
property comprising the assets of the Funds, and Advisor shall accordingly:
(a) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic or foreign, affecting the economy generally, the Funds, the
individual companies whose securities are included in the Funds' portfolios,
the industries in which they engage, and securities which Advisor considers
may be suitable for inclusion in the Funds' portfolios, and regularly report
thereon to the Board of Trustees of the Trust; and
(b) provide continuously an investment program for each Fund
consistent, in its opinion, with the investment policy and objectives for
which such portfolio is designed; and
(c) determine what securities shall be purchased or sold by
the Funds, and regularly report thereon to the Board of Trustees of the Trust;
and
(d) take, on behalf of the Funds, all actions which appear to
Advisor necessary to carry into effect such investment programs and
supervisory functions as aforesaid including the placing of purchase and sale
orders.
Any investment program provided by Advisor under this section, or any
supervisory functions taken hereunder by it shall at all times conform to, and
be in accordance with, any requirements imposed by the provisions of the
Investment Company Act of 1940 (the "1940 Act"), and any rules or regulations
in force thereunder, any other applicable provision of law, the provisions of
the Declaration of Trust of the Trust as amended from time to time,
resolutions as adopted and/or amended from time to time by the Board of
Trustees of the Trust, and the terms
of the registration statement of the Trust, as amended from time to time, under
the Securities Act of 1933 and the 0000 Xxx.
2. The Trust to Bear Other Expenses
It is understood and agreed that the Trust, in addition to the
advisory fee paid to Advisors set forth in Article 3 below, will bear and pay
for the expenses of operation of the Funds, including their (i) rent and
office equipment, if any; (ii) salaries and employee benefits including
applicable employment and payroll taxes, of their own administrative and
executive personnel who are not affiliated with Advisor, if any; (iii)
brokerage commissions and other costs in connection with the purchase or sale
of securities; (iv) all taxes and corporate fees payable by the Funds to
federal, state or other governmental agencies; (v) fees and costs of their
transfer agent, fund accounting and financial administration service provider,
custodian, registrar, independent legal counsel and auditors; (vi) expenses of
printing and mailing stock certificates, dividends, reports, notices and proxy
materials to their shareholders; (vii) fees and expenses incident to the
registration and maintenance of registration under the Securities Act of 1933
of shares of the Funds for public sale (other than costs of printing
prospectuses for prospective new shareholders) and the qualification of its
shares for offering and sale under state or other securities laws; (viii) fees
and expenses imposed on the Funds or the Trust under the 1940 Act; (ix)
insurance premiums for fidelity bonds and other coverage relating to their
operations; (x) all expenses incident to holding of meetings of their
shareholders; (xi) fees and expenses of Trustees who are not affiliated with
Advisor; (xii) their pro rata share of fees and dues of the Investment Company
Institute; and (xiii) such non-recurring expenses as may arise, including
actions, suits or proceedings, affecting the Funds or the Trust and the legal
obligation which the Trust may have to indemnify its officers and Trustees
with respect thereto.
3. Compensation of Advisors
As compensation in full for services rendered under this Agreement,
the Trust will pay, out of the assets of the applicable Fund, to Advisor a
monthly fee determined as follows:
(1) With respect to the Balanced Fund: 0.55% per annum of the average
daily net assets of the Fund.
(2) With respect to the Bond Fund: 0.40% per annum on the average
daily net assets of the Fund.
The amounts payable to Advisor shall be based upon the value of the
net assets as of the close of business each day, computed in accordance with
the Declaration of Trust of the Trust and the then current registration
statement of the Trust under the Securities Act of 1933 and the 1940 Act. Such
amounts shall be paid monthly.
4. Guarantee of Expense Limitation
If, for any fiscal year of the Trust, expenses (including management
fee and costs incident to its regular and executive personnel, but excluding
interest, taxes, brokerage fees and, where permitted, extraordinary expense)
borne by either Fund exceed expense limitations applicable to such Fund which
are imposed by state securities regulators as such limitations may be lowered
or raised from time to time, Advisor guarantees that it will reimburse the
Fund for any excess. The portion of any such reduction to be borne by Advisor
shall be deducted from the monthly investment advisory fee otherwise payable
to Advisor and, if such amount should exceed such monthly investment advisory
fees, Advisor agrees to repay to the appropriate Fund annually before
publication of the Trust's annual report to shareholders such sum as may be
required to make up the deficiency. For the purpose of this article, the term
"fiscal year" shall include the portion of the then current fiscal year which
shall have elapsed at the date of termination of this Investment Advisory
Agreement.
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5. Placing of Purchase and Sale Orders
Advisor shall not deal as principal with the Funds in the purchase
and sale of portfolio securities nor shall it receive any commissions or other
remuneration on the purchase or sale of portfolio securities by the Funds
(however, this provision shall not prevent Advisor from obtaining from brokers
or dealers, subject to applicable law, research or trade execution services in
connection with such purchases or sales of portfolio securities).
Advisor is authorized and directed to place the orders for the
purchase and sale of portfolio securities by the Funds and to supervise the
executions thereof. With respect to such transactions, whether through a
broker as agent or with a dealer as principal, Advisor's primary objective is
to obtain the best overall price and execution of each transaction, but
Advisor is permitted to cause the Funds to pay higher than the lowest
available commissions if it makes the required determinations under applicable
law. Such orders may be placed with qualified brokers and/or dealers who also
provide investment information or other services to the Trust. Management
shall report to the Trustees of the Trust at least quarterly on said
allocations of order and on the brokerage commissions and/or dealer
concessions involved, indicating to whom such allocations are made and the
basis thereof.
6. Nonexclusivity
Advisor's services to the Funds hereunder are not to be deemed
exclusive and Advisor shall be free to render similar services to others, so
long as its services hereunder are not impaired thereby.
7. National Life Services
National Life Insurance Company and its subsidiaries may furnish to
Advisor, in order to better enable it to fulfill its obligations hereunder,
office space, personnel and other services as are requested by Advisor, in all
cases for a reasonable charge. Advisor will present the details of any such
arrangements to the Board of Trustees of the Trust.
8. Affiliations of Advisor
It is understood that the Trustees and officers of the Trust may be
directors or officers of Advisor or an entity under common control, including
National Life Insurance Company, or any affiliate thereof, or otherwise be
interested in Advisor, and that the existence of such dual interest shall not
affect the validity of this Agreement or any transactions hereunder.
9. Liability of Advisor
In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of obligations or duties hereunder on the part of
Advisor, it shall not be subject to liability to the Funds or the Trust or to
any stockholder of the Funds or the Trust for any act or omission in the
course of, or in connection with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding or sale of any security.
10. Duration of this Agreement
This Agreement shall become effective upon the date set forth above
and shall continue in force and effect, unless terminated as hereinafter
provided, until December 31, 2003, and from year to year thereafter, provided
such continuance is specifically approved at least annually by the Board of
Trustees of the Trust, including specific approval (i) by a majority of the
Trustees who are not interested persons of a party to this Agreement (other
than as Trustees of the Trust) by votes cast in person at a meeting
specifically called for such purpose (Trustee vote) or (ii) as to each Fund,
by a vote of a majority of such Fund and a Trustee vote.
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11. Termination
This Agreement may be terminated by Advisor at any time without
penalty upon giving the Trust sixty (60) days' written notice (which notice
may be waived by the Trust) and may be terminated by the Trust, in its
entirety or as to a specific Fund of the Trust, at any time without penalty
upon giving Advisors sixty (60) days' written notice (which notice may be
waived by Advisor), provided that such termination by the Trust shall be
approved by the vote of a majority of the Board of Trustees of the Trust in
office at the time or by the vote of a majority of the outstanding voting
securities of the Trust, if such termination relates to the investment
advisory arrangements for all Funds of the Trust, or by the vote of a majority
of the outstanding voting securities of a specific Fund of The Trust, if such
termination relates to that Fund only. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for this
purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
12. Notification of Changes in Advisor
Advisor will notify the Trust of any change in the identities of the
shareholders of Advisor within a reasonable time after such change.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their
corporate seals to be hereunder affixed, all as of the day and year first
above written.
Attest: SENTINEL VARIABLE PRODUCTS TRUST
__________________________ BY:___________________________
D. Xxxxxxx Xxxxxx Xxxxxx X. XxxXxxx
Secretary Chairman
Attest: NL CAPITAL MANAGEMENT, INC.
__________________________ By:____________________________
Xxxxxx X. Xxxx
Chairman, President and
Chief Executive Officer
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