INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Execution
Copy
THIS
AGREEMENT dated this 1st day of October, 2008 between Sun Capital Advisers
Trust, a Delaware statutory trust (the “Trust”), and Sun Capital Advisers LLC, a
Delaware limited liability company (the “Manager”).
W I T N E S S E T
H
WHEREAS,
the Trust is registered as an open-end, diversified, management investment
company under the Investment Company Act of 1940, as amended (the “1940 Act”),
and has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Registration Statement”) for the purpose of
registering its shares for public offering under the Securities Act of 1933, as
amended (the “1933 Act”), and
WHEREAS,
the parties hereto deem it mutually advantageous that the Manager should be
engaged, subject to the supervision of the Trust’s Board of Trustees and
officers, to manage the investment series of the Trust identified as the SC
PIMCO Total Return Fund (the “Fund”).
NOW,
THEREFORE, in consideration of the mutual covenants and benefits set forth
herein, the Trust and the Manager do hereby agree as follows:
1. (a) The
Manager will regularly provide the Trust with investment research, advice and
supervision and will furnish continuously an investment program for the Fund,
consistent with the investment objective and policies of the
Fund. The Manager will determine from time to time what securities
shall be purchased for the Fund, what securities shall be held or sold by the
Fund and what portion of the Fund’s assets shall be held uninvested as cash,
subject always to the provisions of the Trust’s Certificate of Trust, Agreement
and Declaration of Trust, By-Laws and its registration statements under the 1940
Act and under the 1933 Act covering the Trust’s shares, as filed with the
Commission, and to the investment objective, policies and restrictions of the
Fund, as each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Board of Trustees of the Trust
may from time to time establish. To carry out such determinations,
the Manager will exercise full discretion and act for the Trust in the same
manner and with the same force and effect as the Trust itself might or could do
with respect to purchases, sales or other transactions, as well as with respect
to all other things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions.
(b) The
Manager will, to the extent reasonably required in the conduct of the business
of the Trust and upon the Trust’s request, furnish to the Trust research,
statistical and advisory reports upon the industries, businesses, corporations
or securities as to which such requests shall be made, whether or not the Fund
shall at the time have any investment in such industries, businesses,
corporations or securities. The Manager will use its best efforts in
the preparation of such reports and will endeavor to consult the persons and
sources believed by it to have information available with respect to such
industries, businesses, corporations or entities.
(c) The
Manager will maintain all books and records with respect to the Fund’s
securities transactions required by subparagraphs (b)(5), (6), (9) and (10) and
paragraph (f) of Rule 31a-1 under the 1940 Act (other than those records
being maintained by the custodian or transfer agent appointed by the Trust) and
preserve such records for the periods prescribed therefor by Rule 31a-2 under
the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably
request.
2. (a) Except
as otherwise provided herein, the Manager, at its own expense, shall furnish to
the Trust office space in the offices of the Manager or in such other place as
may be agreed upon from time to time, and all necessary office facilities,
equipment and personnel for managing the Trust’s investments, and shall arrange,
if desired by the Trust, for members of the Manager’s organization to serve as
officers or agents of the Trust.
(b) The
Manager shall pay for the direct or allocated ordinary operating expenses of the
Fund, which include the fees, to the extent relating to the Fund, for custodial,
transfer agency, portfolio accounting, auditing, pricing and appraisal, dividend
disbursing and ordinary legal services of external legal counsel to the Trust;
fidelity bond insurance premiums; premiums for trustees and officers/errors and
omissions insurance (other than insurance exclusively for trustees who are not
“interested persons” (as defined in the 0000 Xxx) of the Trust), the
compensation (if any) of the Trustees and officers who are affiliated with, or
“interested persons” (as defined in the 0000 Xxx) of, the Manager; industry
association dues; the Fund’s share of any commitment fee, facility fee,
syndication or origination fee and interest charges for monies borrowed by the
Trust on behalf of the Fund, in each case, under a credit line maintained by the
Trust; federal and state share registration fees; the costs of the preparation,
printing and mailing of prospectuses and statements of additional information,
shareholder reports, proxy statements and information statements except to the
extent the responsibility of another party other than the Fund, the cost and
expense of shareholder and trustees’ meetings except to the extent the
responsibility of another party other than the Fund; and all other expenses
associated with the ordinary operations of the Fund.
(c) Notwithstanding
the foregoing, the Manager shall not pay for, and the Fund shall pay directly,
(i) all brokerage commissions and dealer or underwriter spreads payable on
portfolio brokerage transactions of the Fund, including any portion paid in
consideration of “research services” within the meaning of that term under
Section 28(e) of the Securities Exchange Act of 1934, as amended; (ii) fees
pursuant to a plan adopted under Rule 12b-1 under the 1940 Act; (iii) fees and
expenses which are approved by the Board and allocable as “class expenses” (as
that term is defined in Rule 18f-3 under the 0000 Xxx) to: (x) the “Service
Class” of shares of the Fund (or any class that is a successor thereto); and (y)
any class of shares that may be established after the date hereof pursuant to a
plan adopted pursuant to Rule 18f-3 under the 1940 Act; (iv) the fees and
expenses of trustees who are not “interested persons” (as defined in
the 0000 Xxx) of the Trust (including counsel fees and costs); (v) premiums for
trustees and officers errors and omissions insurance exclusively for persons who
are not “interested persons” (as defined in the 0000 Xxx) of the
Trust; (vi) salaries and other compensation of any of the Trust’s officers or
employees who are not officers, employees, directors, managers or members of the
Manager or any subadviser of the Fund, or any affiliate of the Manager or such
subadviser; (vii) expenses incurred in securities lending, directed brokerage,
brokerage recapture and similar revenue producing activities as approved by the
Trust’s Board; and (viii) all extraordinary expenses, including interest charges
other than those described in Section 2(b) above, fees paid in lieu of dividends
with respect to securities sold short; taxes; costs of litigation, other legal
proceedings or claims and other extraordinary legal expenses or expenses for
special consulting, expert or similar services in connection therewith; and the
amount of any indemnities paid by the Fund. For the avoidance of
doubt, it is agreed and understood that any fees or expenses paid or incurred by
any investment company or other pooled vehicle in which the Fund invests shall
not be construed as operating expenses of the Fund for purposes of this
agreement. Furthermore, it is agreed and understood that any service charges or
expenses charged against the account of, or billed directly to, shareholders of
the Fund, including charges for account maintenance, exchanges, redemptions,
wires or other services or transactions, shall not be payable by the Manager,
but may be received and retained by the Fund, the Manager, its affiliates or
other entities, as applicable.
(d) The
Trust, on behalf of the Fund, acknowledges that the Fund is one of several
investment series of the Trust, one or more of which may have fee and expense
arrangements with the Manager that are unlike the fee and expense arrangement
provided for in this agreement, and that pursuant to such other fee and expense
arrangements certain expenses of the type paid by the Manager hereunder with
respect to the Fund are instead directly borne by the relevant series. The
Trust, on behalf of the Fund, further acknowledges that certain expenses of the
Trust are allocated to series of the Trust in a manner approved by the Trust’s
Board of Trustees. The Manager and the Trust, on behalf of the Fund,
acknowledge and agree that, to the extent that the Manager agrees to assume any
expense hereunder, the Manager’s obligation relates solely to expenses described
that are incurred with respect to the Fund or to the Fund’s allocated share of
any described expense of the Trust and not to other amounts that are to be borne
by other series of the Trust pursuant to other agreements’ between the Manager
and the Trust with respect to such other series. It is also
understood that the Manager and/or the Fund may, from time to time with the
approval of the Board, allocate or reallocate expenses between the Fund and any
class of the Fund.
3. (a) The
Trust shall pay to the Manager, as compensation for the Manager’s services and
expenses assumed hereunder, a fee with respect to the Fund calculated as a
percentage of the Fund’s average daily net assets as set forth in Exhibit A
hereto. Management fees payable hereunder shall be computed daily and
paid monthly in arrears.
(b) In
the event of termination of this Agreement, the Management Fee shall be computed
on the basis of the period ending on the last business day on which this
Agreement is in effect subject to a pro rata adjustment based on the number of
days elapsed in the current month as a percentage of the total number of days in
such month.
(c) In
addition to the foregoing, the Manager may from time to time agree not to impose
all or a portion of its fee otherwise payable hereunder (in advance of the time
such fee or a portion thereof would otherwise accrue) and/or undertake to pay or
reimburse the Fund for all or a portion of its expenses not otherwise required
to be borne or reimbursed by the Manager. Any such fee reduction or
undertaking may be discontinued or modified by the Manager at any
time.
4. It
is understood that the Manager may employ at its own expense one or more
sub-investment advisers (each a “Subadviser”) to provide investment advisory
services to the Fund by entering into a written agreement with each such
Subadviser; provided, that any
such Subadviser and agreement first shall be approved by the vote of a majority
of the Trustees, including a majority of the Trustees who are not “interested
persons” (as defined in the 0000 Xxx) of the Trust, the Manager or any such
Subadviser, at a meeting of Trustees called for the purpose of voting on such
approval and, except as may be otherwise permitted by then current law or an
exemptive order issued by the Securities and Exchange Commission, by the
affirmative vote of a “majority of the outstanding voting securities” (as
defined in the 0000 Xxx) of the Fund. The authority given to the
Manager in Sections 1 through 6 hereof (but not the obligation to pay or
assume certain expenses) may be delegated by it under any such agreement; provided, that any
Subadviser shall be subject to the same restrictions and limitations on
investments and brokerage discretion as the Manager. In the event the
Manager employs one or more Subadvisers, the Manager shall oversee and
continually evaluate performance of any such Subadviser and shall make such
recommendations to the Trust’s Trustees from time to time concerning the
continuation, termination or modification of any such arrangements as the
Manager deems appropriate. Notwithstanding the foregoing, the Trust
agrees that the Manager shall not be accountable to the Trust or the Fund for
any loss or liability relating to specific investments directed solely by any
Subadviser.
5. The
Manager will not be liable for any error of judgment or mistake of law or for
any loss sustained by reason of the adoption of any investment policy or the
purchase, sale, or retention of any security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust or the Fund or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. (a) Nothing
in this Agreement will in any way limit or restrict the Manager or any of its
officers, directors, or employees from buying, selling or trading in any
securities for its or their own accounts or other accounts. The
Manager may act as an investment adviser to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by
law. The Trust recognizes that the Manager, in effecting transactions
for its various accounts, may not always be able to take or liquidate investment
positions in the same security at the same time and at the same
price.
(b) In
connection with purchases or sales of securities for the account of the Fund,
neither the Manager nor any of its Trustees, officers or employees will act as a
principal or agent or receive any commission except as permitted by the 1940
Act. The Manager shall arrange for the placing of all orders for the
purchase and sale of securities for the Fund’s account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager is directed at all times to seek for
the Fund the most favorable execution and net price available except as
described herein. It is also understood that it is desirable for the
Fund that the Manager have access to supplemental investment and market research
and security and economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
efficient execution. Therefore, the Manager is authorized to place
orders for the purchase and sale of securities for the Fund with such brokers,
subject to review by the Trust’s Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Manager in connection
with its or its affiliates’ services to other clients.
(c) On
occasions when the Manager deems the purchase or sale of a security to be in the
best interest of the Fund as well as another fund or other clients, the Manager,
to the extent permitted by applicable laws and regulations, may aggregate the
securities to be 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 the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such other funds or other clients.
7. This
Agreement shall become effective on the date hereof and shall remain in force as
to a Fund until September 30, 2010 and from year to year thereafter, but only so
long as its continuance is approved annually by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or “interested persons” (as defined in the 0000 Xxx) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a “majority of the outstanding voting securities” (as
defined in the 0000 Xxx) of the Fund, subject to the right of the Trust and the
Manager to terminate this contract as provided in Section 8 hereof.
8. Either
party hereto may, without penalty, terminate this Agreement by vote of its Board
of Trustees or Directors, as the case may be, or by vote of a “majority of its
outstanding voting securities” (as defined in the 0000 Xxx) and the giving of 60
days’ written notice to the other party. Termination of this
agreement shall have no effect on the Manager’s obligation to pay or otherwise
assume expenses which it has agreed to pay or assume hereunder, provided however
that the Manager’s obligation shall be subject to a pro rata adjustment in the
case of any ongoing expense accrued over time, based on the number of days
elapsed in the accrual period until the date of termination. Any
amounts prepaid by the Manager on behalf of the Fund hereunder that relate to a
period subsequent to the termination date shall be reimbursed by the Fund to the
Manager.
9. This
Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term “assignment”
shall have the meaning given it by Section 2(a)(4) of the 1940 Act.
10. The
Trust agrees that in the event that neither the Manager nor any of its
affiliates acts as an investment adviser to the Trust, the name of the Trust and
the Fund will be changed to one that does not contain the name “Sun Capital,” or
“Sun Life” or otherwise suggest an affiliation with the Manager.
11. The
Manager is an independent contractor and not an employee of the Trust for any
purpose. If any occasion should arise in which the Manager gives any
advice to its clients concerning the shares of the Fund, the Manager will act
solely as investment counsel for such clients and not in any way on behalf of
the Trust or any series thereof.
12. This
Agreement states the entire agreement of the parties hereto, and is intended to
be the complete and exclusive statement of the terms hereof. It may
not be added to or changed orally, and may not be modified or rescinded except
by a writing signed by the parties hereto and in accordance with the 1940 Act,
when applicable.
13. This
Agreement and all performance hereunder shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
14. Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms or provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction.
15. The
parties to this Agreement acknowledge and agree that all liabilities arising
hereunder, whether direct or indirect, and of any and every nature whatsoever
shall be satisfied solely out of the assets of the Fund and that no Trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing liabilities.
16. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above
written.
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By:
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/s/ Xxxxx X.
Xxxxx
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Xxxxx
X. Xxxxx
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Treasurer
and Chief Financial Officer
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SUN
CAPITAL ADVISERS LLC
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By:
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/s/ Xxxx X.
Xxxxxxxx
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Xxxx
X. Xxxxxxxx
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Senior
Managing Director – Investment Products and
Strategies
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By:
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/s/ Xxxxx X.
Xxxxxx
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Xxxxx
X. Xxxxxx
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Managing
Director and General Counsel
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::ODMA\PCDOCS\LEGALDOCS\101846\4
Execution
Copy
Exhibit
A
Fees
SC
PIMCO Total Return Fund
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Asset
Level
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Management
Fee as a percentage
of average daily net
assets
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All
Assets
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0.65%
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::ODMA\PCDOCS\LEGALDOCS\101846\4
