INVESTMENT ADVISORY AGREEMENT
________ __, 1997
Warburg, Xxxxxx Counsellors, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Warburg, Xxxxxx Trust II (the "Trust"), a business trust organized and
existing under the laws of the Commonwealth of Massachusetts is an open-end,
management investment company that currently offers two portfolios, one of which
is the Fixed Income Portfolio (the "Portfolio"). The Trust on behalf of the
Portfolio herewith confirms its agreement with Warburg, Xxxxxx Counsellors, Inc.
(the "Adviser") as follows:
1. Investment Description; Appointment
-----------------------------------
The Trust desires to employ the capital of the Portfolio by investing
and reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust, as may be
amended from time to time, and in its Prospectus and Statement of Additional
Information relating to the Portfolio as from time to time in effect, and in
such manner and to such extent as may from time to time be approved by the Board
of Trustees of the Trust. Copies of the Trust's Prospectus and Statement of
Additional Information relating to the Portfolio, as each may be amended from
time to time, have been or will be submitted to the Adviser. The Trust desires
to employ and hereby appoints the Adviser to act as investment adviser to the
Portfolio. The Adviser accepts the appointment and agrees to furnish the
services for the compensation set forth below.
2. Services as Investment Adviser
------------------------------
Subject to the supervision and direction of the Board of Trustees of
the Trust, the Adviser will (a) act in strict conformity with the Trust's
Agreement and Declaration of Trust, the Investment Company Act of 1940 and the
Investment Advisers Act of 1940, as the same may from time to time be amended,
(b) manage the Portfolio in accordance with the Portfolio's
1
investment objective and policies as stated in the Trust's Prospectus and
Statement of Additional Information relating to the Portfolio as from time to
time in effect, (c) make investment decisions for the Portfolio, (d) place
purchase and sale orders for securities on behalf of the Portfolio, and (e)
calculate and monitor the Portfolio's asset diversification each calendar
quarter so that on the last day of each calendar quarter the Portfolio will be
in compliance with the diversification requirements of Section 817(h) of the
Internal Revenue Code of 1986, as the same may be amended from time to time, and
regulations thereunder. In providing those services, the Adviser will provide
investment research and supervision of the Portfolio's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Portfolio's assets. In addition, the Adviser will furnish
the Trust with whatever statistical information the Trust may reasonably request
with respect to the securities that the Portfolio may hold or contemplate
purchasing.
3. Brokerage
---------
In executing transactions for the Portfolio and selecting brokers or
dealers, the Adviser will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any portfolio
transaction, the Adviser will consider all factors it deems relevant including,
but not limited to, breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the specific transaction and
for transactions executed through the broker or dealer in the aggregate. In
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Adviser may consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as the same may from time to time be
amended) provided to the Portfolio and/or other accounts over which the Adviser
or an affiliate exercises investment discretion.
4. Information Provided to the Trust
---------------------------------
The Adviser will keep the Trust informed of developments materially
affecting the Portfolio, and will, on its own initiative, furnish the Trust from
time to time with whatever
2
information the Adviser believes is appropriate for this purpose.
5. Standard of Care
----------------
The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 3 and 4 above. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust or the
Portfolio in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Adviser against any liability to the Trust or the Portfolio or to
shareholders of the Trust or the Portfolio to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or by reason of the Adviser's reckless
disregard of its obligations and duties under this Agreement.
6. Limitation of Liability
-----------------------
The Trust and the adviser agree that the obligations of the Trust
under this Agreement will not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Trust, individually, but are binding only upon the assets and property of the
Portfolio, as provided in the Declaration of Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the Trust, and signed
by an authorized officer of the Trust, acting as such, and neither the
authorization by the Trustees nor the execution and delivery by the officer will
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but will bind only the trust property of
the Portfolio as provided in the Declaration of Trust. No series of the Trust,
including the Portfolio, will be liable for any claims against any other series.
7. Compensation
------------
In consideration of the services rendered pursuant to this Agreement,
the Portfolio will pay the Adviser an annual fee calculated at an annual rate of
.50% of the Trust's average daily net assets. The fee for the period from the
date the Trust's initial registration statement relating to the Portfolio is
declared effective by the Securities and Exchange Commission to the end of the
year during which the initial registration
3
statement is declared effective shall be prorated according to the proportion
that such period bears to the full yearly period. Upon any termination of this
Agreement before the end of a year, the fee for such part of that year shall be
prorated according to the proportion that such period bears to the full yearly
period and shall be payable upon the date of termination of this Agreement. For
the purpose of determining fees payable to the Adviser, the value of the
Portfolio's net assets shall be computed at the times and in the manner
specified in the Trust's Prospectus or Statement of Additional Information
relating to the Portfolio as from time to time in effect.
8. Expenses
--------
The Adviser will bear all expenses in connection with the performance
of its services under this Agreement. The Portfolio will bear its proportionate
share of certain other expenses to be incurred in its operation, including:
investment advisory and administration fees; taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Trust who are not officers,
trustees, or employees of the Adviser or any of its affiliates; fees of any
pricing service employed to value shares of the Portfolio; Securities and
Exchange Commission fees and state blue sky qualification fees; charges of
custodians and transfer and dividend disbursing agents; the Portfolio's
proportionate share of insurance premiums; outside auditing and legal expenses;
costs of maintenance of the Portfolio's existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Portfolio and of the officers or Board of Trustees of the Trust; and any
extraordinary expenses.
The Portfolio will be responsible for nonrecurring expenses which may
arise, including costs of litigation to which the Portfolio is a party and of
indemnifying officers and Trustees of the Trust with respect to such litigation
and other expenses as determined by the Trustees.
9. Services to Other Companies or Accounts
---------------------------------------
The Trust understands that the Adviser now acts, will
4
continue to act and may act in the future as investment adviser to fiduciary and
other managed accounts and to one or more other investment companies or series
of investment companies, and the Trust has no objection to the Adviser so
acting, provided that whenever the Portfolio and one or more other accounts or
investment companies or portfolios advised by the Adviser have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each entity. The Trust
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for the Trust. In addition, the Trust understands that
the persons employed by the Adviser to assist in the performance of the
Adviser's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of the
Adviser or any affiliate of the Adviser to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
10. Term of Agreement
-----------------
This Agreement shall continue until April 17, 1998 and thereafter
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (a) the Board of
Trustees of the Trust or (b) a vote of a "majority" (as defined in the
Investment Company Act of 1940, as amended) of the Portfolio's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Board of Trustees who are not "interested persons"
(as defined in said Act) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
is terminable, without penalty, on 60 days' written notice, by the Board of
Trustees of the Trust or by vote of holders of a majority of the Portfolio's
shares, or upon 90 days' written notice, by the Adviser. This Agreement will
also terminate automatically in the event of its assignment (as defined in said
Act).
11. Representation by the Trust
---------------------------
The Trust represents that a copy of its Agreement and Declaration of
Trust, dated December 16, 1996, together with all amendments thereto, is on file
in the Secretary of State of the Commonwealth of Massachusetts.
5
12. Miscellaneous
-------------
The Trust recognizes that trustees, officers and employees of the
Adviser may from time to time serve as trustees, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"Warburg, Xxxxxx" as part of their names, and that the Adviser or its affiliates
may enter into advisory or other agreements with such other corporations and
trusts. If the Adviser ceases to act as the investment adviser of the
Portfolio's shares, the Trust agrees that, at the Adviser's request, the Trust's
license to use the words "Warburg, Xxxxxx" will terminate and that the Trust
will take all necessary action to change the name of the Trust to names not
including the words "Warburg, Xxxxxx".
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, XXXXXX TRUST II
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President & Secretary
Accepted:
WARBURG, XXXXXX COUNSELLORS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
6
1
INVESTMENT ADVISORY AGREEMENT
__________, 1997
Warburg, Xxxxxx Counsellors, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Warburg, Xxxxxx Trust II (the "Trust"), a business trust
organized and existing under the laws of the Commonwealth of Massachusetts is an
open-end, management investment company that currently offers two portfolios,
one of which is the Global Fixed Income Portfolio (the "Portfolio"). The Trust
on behalf of the Portfolio herewith confirms its agreement with Warburg, Xxxxxx
Counsellors, Inc. (the "Adviser") as follows:
1. Investment Description; Appointment
The Trust desires to employ the capital of the Portfolio by
investing and reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust, as may be
amended from time to time, and in its Prospectus and Statement of Additional
Information relating to the Portfolio as from time to time in effect, and in
such manner and to such extent as may from time to time be approved by the Board
of Trustees of the Trust. Copies of the Trust's Prospectus and Statement of
Additional Information relating to the Portfolio, as each may be amended from
time to time, have been or will be submitted to the Adviser. The Trust desires
to employ and hereby appoints the Adviser to act as investment adviser to the
Portfolio. The Adviser accepts the appointment and agrees to furnish the
services for the compensation set forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of
Trustees of the Trust, the Adviser will (a) act in strict conformity with the
Trust's Agreement and Declaration of Trust, the Investment Company Act of 1940
and the Investment Advisers Act of 1940, as the same may from time to time be
amended, (b) manage the Portfolio in accordance with the Portfolio's investment
objective and policies as stated in the Trust's Prospectus and Statement of
Additional Information relating to
2
the Portfolio as from time to time in effect, (c) make investment decisions for
the Portfolio, (d) place purchase and sale orders for securities on behalf of
the Portfolio, and (e) calculate and monitor the Portfolio's asset
diversification each calendar quarter so that on the last day of each calendar
quarter the Portfolio will be in compliance with the diversification
requirements of Section 817(h) of the Internal Revenue Code of 1986, as the same
may be amended from time to time, and regulations thereunder. In providing those
services, the Adviser will provide investment research and supervision of the
Portfolio's investments and conduct a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of the Portfolio's assets.
In addition, the Adviser will furnish the Trust with whatever statistical
information the Trust may reasonably request with respect to the securities that
the Portfolio may hold or contemplate purchasing.
3. Brokerage
In executing transactions for the Portfolio and selecting
brokers or dealers, the Adviser will use its best efforts to seek the best
overall terms available. In assessing the best overall terms available for any
portfolio transaction, the Adviser will consider all factors it deems relevant
including, but not limited to, breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
or dealer and the reasonableness of any commission for the specific transaction
and for transactions executed through the broker or dealer in the aggregate. In
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Adviser may consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as the same may from time to time be
amended) provided to the Portfolio and/or other accounts over which the Adviser
or an affiliate exercises investment discretion.
4. Information Provided to the Trust
The Adviser will keep the Trust informed of developments
materially affecting the Portfolio, and will, on its own initiative, furnish the
Trust from time to time with whatever information the Adviser believes is
appropriate for this purpose.
3
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraphs 2, 3 and 4 above. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust or the Portfolio in connection with the matters to which this Agreement
relates, provided that nothing herein shall be deemed to protect or purport to
protect the Adviser against any liability to the Trust or the Portfolio or to
shareholders of the Trust or the Portfolio to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or by reason of the Adviser's reckless
disregard of its obligations and duties under this Agreement.
6. Limitation of Liability
The Trust and the adviser agree that the obligations of the
Trust under this Agreement will not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust, individually, but are binding only upon the assets and
property of the Portfolio, as provided in the Declaration of Trust. The
execution and delivery of this Agreement have been authorized by the Trustees of
the Trust, and signed by an authorized officer of the Trust, acting as such, and
neither the authorization by the Trustees nor the execution and delivery by the
officer will be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but will bind only the trust
property of the Portfolio as provided in the Declaration of Trust. No series of
the Trust, including the Portfolio, will be liable for any claims against any
other series.
7. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Portfolio will pay the Adviser an annual fee calculated at an
annual rate of 1.00% of the Trust's average daily net assets. The fee for the
period from the date the Trust's initial registration statement relating to the
Portfolio is declared effective by the Securities and Exchange Commission to the
end of the year during which the initial registration statement is declared
effective shall be prorated according to the proportion that such period bears
to the full yearly period.
4
Upon any termination of this Agreement before the end of a
year, the fee for such part of that year shall be prorated according to the
proportion that such period bears to the full yearly period and shall be payable
upon the date of termination of this Agreement. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net assets shall be
computed at the times and in the manner specified in the Trust's Prospectus or
Statement of Additional Information relating to the Portfolio as from time to
time in effect.
8. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Portfolio will bear its
proportionate share of certain other expenses to be incurred in its operation,
including: investment advisory and administration fees; taxes, interest,
brokerage fees and commissions, if any; fees of Trustees of the Trust who are
not officers, trustees, or employees of the Adviser or any of its affiliates;
fees of any pricing service employed to value shares of the Portfolio;
Securities and Exchange Commission fees and state blue sky qualification fees;
charges of custodians and transfer and dividend disbursing agents; the
Portfolio's proportionate share of insurance premiums; outside auditing and
legal expenses; costs of maintenance of the Portfolio's existence; costs
attributable to investor services, including, without limitation, telephone and
personnel expenses; costs of preparing and printing prospectuses and statements
of additional information for regulatory purposes and for distribution to
existing shareholders; costs of shareholders' reports and meetings of the
shareholders of the Portfolio and of the officers or Board of Trustees of the
Trust; and any extraordinary expenses.
The Portfolio will be responsible for nonrecurring expenses
which may arise, including costs of litigation to which the Portfolio is a party
and of indemnifying officers and Trustees of the Trust with respect to such
litigation and other expenses as determined by the Trustees.
9. Services to Other Companies or Accounts
The Trust understands that the Adviser now acts, will continue
to act and may act in the future as investment adviser to fiduciary and other
managed accounts and to one or more other
5
investment companies or series of investment companies, and the Trust has no
objection to the Adviser so acting, provided that whenever the Portfolio and one
or more other accounts or investment companies or portfolios advised by the
Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed to
be equitable to each entity. The Trust recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for the
Trust. In addition, the Trust understands that the persons employed by the
Adviser to assist in the performance of the Adviser's duties hereunder will not
devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict the right of the Adviser or any affiliate of the
Adviser to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
10. Term of Agreement
This Agreement shall continue until April 17, 1998 and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by (a) the Board of
Trustees of the Trust or (b) a vote of a "majority" (as defined in the
Investment Company Act of 1940, as amended) of the Portfolio's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Board of Trustees who are not "interested persons"
(as defined in said Act) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
is terminable, without penalty, on 60 days' written notice, by the Board of
Trustees of the Trust or by vote of holders of a majority of the Portfolio's
shares, or upon 90 days' written notice, by the Adviser. This Agreement will
also terminate automatically in the event of its assignment (as defined in said
Act).
11. Representation by the Trust
The Trust represents that a copy of its Agreement and
Declaration of Trust, dated December 16, 1996, together with all amendments
thereto, is on file in the Secretary of State of the Commonwealth of
Massachusetts.
12. Miscellaneous
The Trust recognizes that trustees, officers and employees of
the Adviser may from time to time serve as trustees, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"Warburg, Xxxxxx" as part of their names, and that the Adviser or its affiliates
may enter into advisory or other agreements with such other corporations and
trusts. If the Adviser ceases to act as the investment adviser of the
Portfolio's shares, the Trust agrees that, at the Adviser's request, the Trust's
license to use the words "Warburg, Xxxxxx" will terminate and that the Trust
will take all necessary action to change the name of the Trust to names not
including the words "Warburg, Xxxxxx".
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, XXXXXX TRUST II
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President &
Secretary
Accepted:
WARBURG, XXXXXX COUNSELLORS, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
