Xxxxxxx Variable Life Investment Fund
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
September 7, 1998
Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investment Management Agreement
International Portfolio
Ladies and Gentlemen:
Xxxxxxx Variable Life Investment Fund (the "Fund") has been established as
a Massachusetts business trust to engage in the business of an investment
company. Pursuant to the Fund's Declaration of Trust, as amended from
time-to-time (the "Declaration"), the Board of Trustees has divided the Fund's
shares of beneficial interest, without par value, (the "Shares") into separate
series, or funds, including International Portfolio (the "Portfolio"). Series
may be abolished and dissolved, and additional series established, from time to
time by action of the Trustees.
The Fund, on behalf of the Portfolio, has selected you to act as the sole
investment manager of the Portfolio and to provide certain other services, as
more fully set forth below, and you have indicated that you are willing to act
as such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Fund on behalf of the
Portfolio agrees with you as follows:
1. Delivery of Documents. The Fund engages in the business of investing
and reinvesting the assets of the Portfolio in the manner and in accordance with
the investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Portfolio included in the Fund's Registration
Statement on Form N-1A, as amended from time to time, (the "Registration
Statement") filed by the Fund under the Investment Company Act of 1940, as
amended, (the "1940 Act") and the Securities Act of 1933, as amended. Copies of
the documents referred to in the preceding sentence have been furnished to you
by the Fund. The Fund has also furnished you with copies properly certified or
authenticated of each of the following additional documents related to the Fund
and the Portfolio:
(a) The Declaration dated December 11, 1997 as amended to date.
(b) By-Laws of the Fund as in effect on the date hereof (the "By-Laws").
(c) Resolutions of the Trustees of the Fund and the shareholders of the
Portfolio selecting you as investment manager and approving the form of
this Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial Interest
dated February 9, 1996 relating to the Portfolio.
The Fund will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Sublicense to Use the Xxxxxxx Trademarks. As exclusive licensee of the
rights to use and sublicense the use of the "Xxxxxxx," "Xxxxxxx Xxxxxx
Investments, Inc." and "Xxxxxxx, Xxxxxxx & Xxxxx, Inc." trademarks (together,
the "Xxxxxxx Marks"), you hereby grant the Fund a nonexclusive right and
sublicense to use (i) the "Xxxxxxx" name and xxxx as part of the Fund's name
(the "Portfolio Name"), and (ii) the Xxxxxxx Marks in connection with the Fund's
investment products and services, in each case only for so long as this
Agreement, any other investment management agreement between you and the Fund,
or any extension, renewal or amendment hereof or thereof remains in effect, and
only for so long as you are a licensee of the Xxxxxxx Marks, provided however,
that you agree to use your best efforts to maintain your license to use and
sublicense the Xxxxxxx Marks. The Fund agrees that it shall have no right to
sublicense or assign rights to use the Xxxxxxx Marks, shall acquire no interest
in the Xxxxxxx Marks other than the rights granted herein, that all of the
Fund's uses of the Xxxxxxx Marks shall inure to the benefit of Xxxxxxx Trust
Company as owner and licensor of the Xxxxxxx Marks (the "Trademark Owner"), and
that the Fund shall not challenge the validity of the Xxxxxxx Marks or the
Trademark Owner's ownership thereof. The Fund further agrees that all services
and products it offers in connection with the Xxxxxxx Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Fund rendered during the one-year period preceding the
date of this Agreement are acceptable. At your reasonable request, the Fund
shall cooperate with you and the Trademark Owner and shall execute and deliver
any and all documents necessary to maintain and protect (including but not
limited to in connection with any trademark infringement action) the Xxxxxxx
Marks and/or enter the Fund as a registered user thereof. At such time as this
Agreement or any other investment management agreement shall no longer be in
effect between you (or your successor) and the Fund, or you no longer are a
licensee of the Xxxxxxx Marks, the Fund shall (to the extent that, and as soon
as, it lawfully can) cease to use the Portfolio Name or any other name
indicating that it is advised by, managed by or otherwise connected with you (or
any organization which shall have succeeded to your business as investment
manager) or the Trademark Owner. In no event shall the Fund use the Xxxxxxx
Marks or any other name or xxxx confusingly similar thereto (including, but not
limited to, any name or xxxx that includes the name "Xxxxxxx") if this Agreement
or any other investment advisory agreement between you (or your successor) and
the Portfolio is terminated.
3. Portfolio Management Services. As manager of the assets of the
Portfolio, you shall provide continuing investment management of the assets of
the Portfolio in accordance with the investment objectives, policies and
restrictions set forth in the Prospectus and SAI; the applicable provisions of
the 1940 Act and the Internal Revenue Code of 1986, as amended, (the "Code")
relating to regulated investment companies and all rules and regulations
thereunder; and all other applicable federal and state laws and regulations of
which you have knowledge; subject always to policies and instructions adopted by
the Fund's Board of Trustees. In connection therewith, you shall use reasonable
efforts to manage the Portfolio so that it will qualify as a regulated
investment company under Subchapter M of the Code and regulations issued
thereunder. The Portfolio shall have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to your
investment advisory clients. In managing the Portfolio in accordance with the
requirements set forth in this section 3, you shall be entitled to receive and
act upon advice of counsel to the
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Fund or counsel to you. You shall also make available to the Fund promptly upon
request all of the Portfolio's investment records and ledgers as are necessary
to assist the Fund in complying with the requirements of the 1940 Act and other
applicable laws. To the extent required by law, you shall furnish to regulatory
authorities having the requisite authority any information or reports in
connection with the services provided pursuant to this Agreement which may be
requested in order to ascertain whether the operations of the Fund are being
conducted in a manner consistent with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Portfolio and place
orders with broker-dealers, foreign currency dealers, futures commission
merchants or others pursuant to your determinations and all in accordance with
Portfolio policies as expressed in the Registration Statement. You shall
determine what portion of the Portfolio's portfolio shall be invested in
securities and other assets and what portion, if any, should be held uninvested.
You shall furnish to the Fund's Board of Trustees periodic reports on the
investment performance of the Portfolio and on the performance of your
obligations pursuant to this Agreement, and you shall supply such additional
reports and information as the Fund's officers or Board of Trustees shall
reasonably request.
4. Administrative Services. In addition to the portfolio management
services specified above in section 3, you shall furnish at your expense for the
use of the Portfolio such office space and facilities in the United States as
the Portfolio may require for its reasonable needs, and you (or one or more of
your affiliates designated by you) shall render to the Fund administrative
services on behalf of the Portfolio necessary for operating as an open-end
investment company and not provided by persons not parties to this Agreement
including, but not limited to, preparing reports to and meeting materials for
the Fund's Board of Trustees and reports and notices to Portfolio shareholders;
supervising, negotiating contractual arrangements with, to the extent
appropriate, and monitoring the performance of, accounting agents, custodians,
depositories, transfer agents and pricing agents, accountants, attorneys,
printers, underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable to Portfolio operations; preparing
and making filings with the Securities and Exchange Commission (the "SEC") and
other regulatory and self-regulatory organizations, including, but not limited
to, preliminary and definitive proxy materials, post-effective amendments to the
Registration Statement, semi-annual reports on Form N-SAR and notices pursuant
to Rule 24f-2 under the 1940 Act; overseeing the tabulation of proxies by the
Portfolio's transfer agent; assisting in the preparation and filing of the
Portfolio's federal, state and local tax returns; preparing and filing the
Portfolio's federal excise tax return pursuant to Section 4982 of the Code;
providing assistance with investor and public relations matters; monitoring the
valuation of portfolio securities and the calculation of net asset value;
monitoring the registration of Shares of the Portfolio under applicable federal
and state securities laws; maintaining or causing to be maintained for the
Portfolio all books, records and reports and any other information required
under the 1940 Act, to the extent that such books, records and reports and other
information are not maintained by the Portfolio's custodian or other agents of
the Portfolio; assisting in establishing the accounting policies of the
Portfolio; assisting in the resolution of accounting issues that may arise with
respect to the Portfolio's operations and consulting with the Portfolio's
independent accountants, legal counsel and the Portfolio's other agents as
necessary in connection therewith; establishing and monitoring the Portfolio's
operating expense budgets; reviewing the Portfolio's bills; processing the
payment of bills that have been approved by an authorized person; assisting the
Portfolio in determining the amount of dividends and distributions available to
be paid by the Portfolio to its shareholders, preparing and arranging for the
printing of dividend notices to shareholders, and providing the transfer and
dividend paying agent, the custodian, and the accounting agent with such
information as is required for such parties to effect the payment of dividends
and distributions;
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and otherwise assisting the Fund as it may reasonably request in the conduct of
the Portfolio's business, subject to the direction and control of the Fund's
Board of Trustees. Nothing in this Agreement shall be deemed to shift to you or
to diminish the obligations of any agent of the Portfolio or any other person
not a party to this Agreement which is obligated to provide services to the
Portfolio.
5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Fund (including the
Portfolio's share of payroll taxes) who are affiliated persons of you, and you
shall make available, without expense to the Portfolio, the services of such of
your directors, officers and employees as may duly be elected officers of the
Fund, subject to their individual consent to serve and to any limitations
imposed by law. You shall provide at your expense the portfolio management
services described in section 3 hereof and the administrative services described
in section 4 hereof.
You shall not be required to pay any expenses of the Portfolio other than
those specifically allocated to you in this section 5. In particular, but
without limiting the generality of the foregoing, you shall not be responsible,
except to the extent of the reasonable compensation of such of the Portfolio's
Trustees and officers as are directors, officers or employees of you whose
services may be involved, for the following expenses of the Portfolio:
organization expenses of the Portfolio (including out-of-pocket expenses, but
not including your overhead or employee costs); fees payable to you and to any
other Portfolio advisors or consultants; legal expenses; auditing and accounting
expenses; maintenance of books and records which are required to be maintained
by the Portfolio's custodian or other agents of the Fund; telephone, telex,
facsimile, postage and other communications expenses; taxes and governmental
fees; fees, dues and expenses incurred by the Portfolio in connection with
membership in investment company trade organizations; fees and expenses of the
Portfolio's accounting agent, custodians, subcustodians, transfer agents,
dividend disbursing agents and registrars; payment for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates and, except as
provided below in this section 5, other expenses in connection with the
issuance, offering, distribution, sale, redemption or repurchase of securities
issued by the Portfolio; expenses relating to investor and public relations;
expenses and fees of registering or qualifying Shares of the Portfolio for sale;
interest charges, bond premiums and other insurance expense; freight, insurance
and other charges in connection with the shipment of the Portfolio's portfolio
securities; the compensation and all expenses (specifically including travel
expenses relating to Fund business) of Trustees, officers and employees of the
Fund who are not affiliated persons of you; brokerage commissions or other costs
of acquiring or disposing of any portfolio securities of the Portfolio; expenses
of printing and distributing reports, notices and dividends to shareholders;
expenses of printing and mailing Prospectuses and SAIs of the Portfolio and
supplements thereto; costs of stationery; any litigation expenses;
indemnification of Trustees and officers of the Fund; costs of shareholders' and
other meetings; and travel expenses (or an appropriate portion thereof) of
Trustees and officers of the Fund who are directors, officers or employees of
you to the extent that such expenses relate to attendance at meetings of the
Board of Trustees of the Fund or any committees thereof or advisors thereto held
outside of Boston, Massachusetts or New York, New York.
You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Portfolio if and to the
extent that (i) such expenses are required to be borne by a principal
underwriter which acts as the distributor of the Portfolio's Shares pursuant to
an underwriting agreement which provides that the underwriter shall assume some
or all of such expenses, or (ii) the Fund on behalf of the Portfolio shall have
adopted a plan in conformity with Rule 12b-1 under the 1940 Act providing that
the Portfolio (or some other party) shall assume some or all of such expenses.
You shall be required to pay such of the foregoing sales expenses as are not
required to be paid by the principal
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underwriter pursuant to the underwriting agreement or are not permitted to be
paid by the Portfolio (or some other party) pursuant to such a plan.
6. Management Fee. For all services to be rendered, payments to be made
and costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the
Fund on behalf of the Portfolio shall pay you in United States Dollars on the
last day of each month the unpaid balance of a fee equal to the excess of 1/12
of 0.875 of 1 percent of the average daily net assets as defined below of the
Portfolio for such month; provided that, for any calendar month during which the
average of such values exceeds $500 million the fee payable for that month based
on the portion of the average of such values in excess of $500 million shall be
1/12 of 0.725 of 1 percent of such portion over any compensation waived by you
from time to time (as more fully described below). You shall be entitled to
receive during any month such interim payments of your fee hereunder as you
shall request, provided that no such payment shall exceed 75 percent of the
amount of your fee then accrued on the books of the Portfolio and unpaid.
The "average daily net assets" of the Portfolio shall mean the average of
the values placed on the Portfolio's net assets as of 4:00 p.m. (New York time)
on each day on which the net asset value of the Portfolio is determined
consistent with the provisions of Rule 22c-1 under the 1940 Act or, if the
Portfolio lawfully determines the value of its net assets as of some other time
on each business day, as of such time. The value of the net assets of the
Portfolio shall always be determined pursuant to the applicable provisions of
the Declaration and the Registration Statement. If the determination of net
asset value does not take place for any particular day, then for the purposes of
this section 6, the value of the net assets of the Portfolio as last determined
shall be deemed to be the value of its net assets as of 4:00 p.m. (New York
time), or as of such other time as the value of the net assets of the
Portfolio's portfolio may be lawfully determined on that day. If the Portfolio
determines the value of the net assets of its portfolio more than once on any
day, then the last such determination thereof on that day shall be deemed to be
the sole determination thereof on that day for the purposes of this section 6.
You may waive all or a portion of your fees provided for hereunder and
such waiver shall be treated as a reduction in purchase price of your services.
You shall be contractually bound hereunder by the terms of any publicly
announced waiver of your fee, or any limitation of the Portfolio's expenses, as
if such waiver or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Portfolio, neither you nor any of your directors,
officers or employees shall act as a principal or agent or receive any
commission. You or your agent shall arrange for the placing of all orders for
the purchase and sale of portfolio securities and other investments for the
Portfolio's account with brokers or dealers selected by you in accordance with
Portfolio policies as expressed in the Registration Statement. If any occasion
should arise in which you give any advice to clients of yours concerning the
Shares of the Portfolio, you shall act solely as investment counsel for such
clients and not in any way on behalf of the Portfolio.
Your services to the Portfolio pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that you may render investment
advice, management and services to others. In acting under this Agreement, you
shall be an independent contractor and not an agent of the Fund. Whenever the
Portfolio and one or more other accounts or investment companies advised by the
Manager have available funds for investment, investments suitable and
appropriate for each shall be allocated in accordance with procedures believed
by the Manager to be equitable to each entity. Similarly, opportunities to sell
securities
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shall be allocated in a manner believed by the Manager to be equitable. The
Portfolio recognizes that in some cases this procedure may adversely affect the
size of the position that may be acquired or disposed of for the Portfolio.
8. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Fund agrees that
you shall not be liable under this Agreement for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, provided that nothing in this Agreement
shall be deemed to protect or purport to protect you against any liability to
the Fund, the Portfolio or its shareholders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties hereunder. Any person, even though also employed by you,
who may be or become an employee of and paid by the Portfolio shall be deemed,
when acting within the scope of his or her employment by the Portfolio, to be
acting in such employment solely for the Portfolio and not as your employee or
agent.
9. Duration and Termination of This Agreement. This Agreement shall remain
in force until September 30, 1999, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Fund, or by the vote of a majority of the outstanding
voting securities of the Portfolio. The aforesaid requirement that continuance
of this Agreement be "specifically approved at least annually" shall be
construed in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
This Agreement may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of the
outstanding voting securities of the Portfolio or by the Fund's Board of
Trustees on 60 days' written notice to you, or by you on 60 days' written notice
to the Fund. This Agreement shall terminate automatically in the event of its
assignment.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Xxxxxxx Variable
Life Investment Fund" refers to the Trustees under the Declaration collectively
as Trustees and not as individuals or personally, and that no shareholder of the
Portfolio, or Trustee, officer, employee or agent of the Fund, shall be subject
to claims against or obligations of the Fund or of the Portfolio to any extent
whatsoever, but that the Fund estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as
set forth in the Declaration and you agree that the obligations assumed by the
Fund on behalf of the Portfolio pursuant to this
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Agreement shall be limited in all cases to the Portfolio and its assets, and you
shall not seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other series of the Fund, or from any
Trustee, officer, employee or agent of the Fund. You understand that the rights
and obligations of each Portfolio, or series, under the Declaration are separate
and distinct from those of any and all other series.
12. Miscellaneous. The captions in this Agreement 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. 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 interpreting the provisions of this Agreement, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"affiliated person," "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the SEC by any rule, regulation or
order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Portfolio to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Fund on behalf of the Portfolio.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Fund, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
XXXXXXX VARIABLE LIFE INVESTMENT
FUND, on behalf of
International Portfolio
By: /s/ Xxxxxx X. XxXxxxxxx
--------------------------
Vice President
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The foregoing Agreement is hereby accepted as of the date hereof.
XXXXXXX XXXXXX INVESTMENTS, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Managing Director
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