KEYPORT VARIABLE INVESTMENT TRUST
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT ("Agreement"), made this 7th day of June, 1993, between
KEYPORT VARIABLE INVESTMENT TRUST, a business trust organized under the laws of
the Commonwealth of Massachusetts (the "Trust"), on its own behalf and on behalf
of the Colonial-Keyport U.S. Government Fund, the Colonial-Keyport Growth and
Income Fund, and the Colonial-Keyport Utilities Fund (collectively, the
"Funds"), and KEYPORT ADVISORY SERVICES CORP., a corporation organized under the
laws of the Commonwealth of Massachusetts (the "Manager").
WHEREAS, the Trust has been organized as an open-end management investment
company registered as such under the Investment Company Act of 1940, as amended
("Investment Company Act") and is authorized to issue shares of beneficial
interest in one or more separate series each representing interests in a
separate portfolio of securities and other assets, including the Funds, which
shares are to be issued and sold to and held by various separate accounts of
Keyport Life Insurance Company ("Keyport"), and Liberty Life Assurance Company
of Boston ("Liberty Life") or separate accounts of other insurance companies
that are affiliated or are not affiliated with Keyport ("Participating Insurance
Company");
WHEREAS, the Trust may in the future create additional fund(s) that may be
covered by appropriate separate agreements;
WHEREAS, the Trust desires the Manager to render certain administrative services
and to render total investment management services to the Trust and the Funds,
all in the manner and on the terms and conditions hereinafter set forth;
WHEREAS, the Trust authorizes the Manager to enter into sub-advisory agreements
with one or more firms registered as investment advisers under the Investment
Advisors Act of 1940, as amended ("the Investment Adviser's Act), to manage all
or a portion of a Fund's assets, as determined by the Manager from time to time
("Sub-Adviser")
WHEREAS, the Manager is registered as an investment adviser under the Investment
Adviser's Act, and desires to provide services to the Trust and the Funds in
consideration of and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Trust, on its own behalf and on behalf of the Funds, and the
Manager agree as follows:
1. Employment of the Investment Adviser.
The Trust hereby employs the Manager (i) to provide certain administrative and
limited oversight services and (ii) to provide investment management and related
services to the Trust and the Funds, all in the manner set forth in Section 2 of
this Agreement, subject to the direction of the Trustees, and for the period, in
the manner, and on the terms set forth hereinafter. The Manager hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations herein set forth. The Manager shall for all purposes
herein be deemed to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no authority to act
for or represent the Trust in any way or otherwise be deemed an agent of the
Trust.
2. Obligations of, and Services to be Provided by, the Manager.
The Manager undertakes to provide the services hereinafter set forth and to
assume the following obligations:
A. Administrative Services.
(a) The Manager will provide general administrative services as hereinafter set
forth ("Administrative Services"), all subject to the overall direction and
control of the Board of Trustees of the Trust (the "Board").
(b) Such Administrative Services shall not include investment advisory,
custodian, underwriting and distribution, transfer agency or accounting
services, but shall include, (i) the provision of office space, equipment and
facilities necessary in connection with the services to be performed hereunder
and the maintenance of the headquarters of the Trust; (ii) the maintenance of
the corporate books and records of the Trust, other than its accounting books
and records and those of its records maintained by the Sub-Advisers referred to
in subsection 2(B)(c) below, the transfer agent, the custodian and the pricing
and bookkeeping agent; (iii) all dealings and relationships with the Trustees
for meetings of the Board, the scheduling of such meetings and the conduct
thereof; (iv) preparation and filing of proxy materials and making arrangements
for meetings of shareholders or beneficial owners of the Funds; (v) preparation
and filing of all required reports and all updating and other amendments to the
Trust's registration statement under the Investment Company Act, the Securities
Act of 1933 and the rules and regulations thereunder; (vi) calculation of
distributions required or advisable under the Investment Company Act and the
Internal Revenue Code; (vii) periodic computation and reporting to the Trust of
each Fund's compliance with diversification and other portfolio requirements of
the Investment Company Act and the Internal Revenue Code; (viii) development and
implementation of general shareholder and beneficial owner correspondence and
communications relating to the Funds, including the preparation and filing of
shareholder and beneficial owner reports as are required or deemed advisable;
and (ix) general oversight of the custodial, net asset value computation,
portfolio accounting, financial statement preparation, legal, tax and accounting
services performed for the Trust or the Funds by others.
It is understood that the Manager may, in its discretion and at its expense,
delegate some or all of its administrative duties and responsibilities under
this subsection 2(A) to its affiliate, Liberty Investment Services, Inc.
B. Investment Advisory Services.
(a) The Manager shall have responsibility for the management and investment of
the assets of each Fund, subject to and in accordance with the separate
investment objectives, policies and limitations of each Fund, as provided in the
Trust's Prospectus and Statement of Additional Information and governing
instruments, as amended from time to time, and any directions and policies which
the Trustees may issue to the Manager from time to time.
(b) The Manager shall provide a continuous investment program for each Fund,
shall revise each such program as necessary, and shall monitor implementation of
the program.
(c) The Manager may delegate its investment responsibilities under paragraph 2
(B)(a) with respect to the Trust or any Fund to one or more persons or companies
("SubAdvisers") pursuant to an agreement among the Trust, such Fund and each
Sub-Adviser ("Sub-Advisory Agreement"). Each SubAdvisory Agreement may provide
that the Sub-Adviser, subject to the control and supervision of the Trustees and
the Manager, shall have full investment discretion for the affected Fund and
shall make all determinations with respect to the investment of that Fund's
assets or any portion thereof specified by the Manager. Any selection of duties
pursuant to this paragraph shall comply with any applicable provisions of
Section 15 of the Investment Company Act, except to the extent permitted by any
exemptive order of the Securities and Exchange commission or similar relief.
(d) The Manager shall be solely responsible for paying the fees of each
Sub-Adviser from the fees it collects as provided in paragraph 6 below.
(e) The Manager shall evaluate possible Sub-Advisers and shall advise the
Trustees of the candidates which the Manager believes are best suited to invest
the assets of each Fund; shall monitor and evaluate the investment performance
of each SubAdviser; shall recommend changes of or additions of Sub-Advisers when
appropriate and shall coordinate the investment activities of the Sub-Advisers.
(f) It is understood that the Manager may seek advice with respect to the
performance of any or all of its duties under Paragraphs 2(B)(b) and (c) from a
person or company ("Consultant") pursuant to an agreement among the Manager, the
Trust and the Consultant ("Fund Consulting Agreement"). The Fund Consulting
Agreement may provide that the Consultant, subject to the control and
supervision of the Trustees and the Manager, shall provide assistance to the
Manager with respect to each Fund's investment program, the selection,
monitoring and evaluation of Sub-Advisers and the allocation of each Fund's
assets to the Sub-Advisers.
(g) The Funds shall be solely responsible for paying the fees of any Consultant.
(h) The Manager shall render regular reports to the Trustees relating to the
performance of its duties specified in paragraphs 2(B)(a), (b) and (c).
C. Expenses Borne By Manager.
To the extent necessary to perform its obligations under this Agreement, the
Manager, at its own expense, shall furnish executive and other personnel and
office space, equipment and facilities, and shall pay any other expenses
incurred by it, in connection with the performance of its duties hereunder,
except that the Trust or the Funds, as appropriate, shall reimburse the Manager
for its out-of-pocket costs, including telephone, postage and supplies, incurred
by it in connection with communications with shareholders and beneficial owners
of the Funds. The Manager shall pay all salaries, fees and expenses of Trustees
or officers of the Trust who are employees of the Manager. The Manager shall not
be obligated to bear any other expenses incidental to the operations and
business of the Trust. The Manager shall not be required to pay or provide any
credit for services provided by the Trust's custodian, transfer agent or other
agents.
D. Provision of Information Necessary for Preparation of Registration
Statement Amendments and Other Materials.
The Manager will make available and provide such information as the Trust may
reasonable request for use in the preparation of its registration statement,
reports and other documents required by federal laws and any securities and
insurance laws of the other states and other jurisdictions in which the Trust's
shares are sold.
E. Code of Ethics.
The Manager has adopted a written code of ethics complying with the requirements
of Rule 17j-1 under the Investment Company Act and has provided the Trust with a
copy of the code of ethics and evidence of its adoption. Within fortyfive (45)
days of the end of the last calendar quarter of each year while this Agreement
is in effect, an executive officer of the Manager shall verify to the Trustees
that the Manager has complied with the requirements of Rule 17j-1 during the
previous year and that there has been no violation of the Manager's code of
ethics or, if such a violation has occurred, that appropriate action was taken
in response to such violation. Upon the written request of the Trust, the
Manager shall permit the Trust to examine the reports required to be made to the
Manager by Rule 17j-1(c)(1).
F. Disqualification.
The Manager shall immediately notify the Trustees of the occurrence of any event
which would disqualify the Manager from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the Investment Company Act of any
other applicable statute or regulation.
G. Other Obligations and Service.
The Manager shall make its officers and employees available to the Trustees and
officers of the Trust for consulting and discussions regarding the management of
the Trust and its investment activities.
3. Execution and Allocation of Portfolio Brokerage.
A. The manager, subject to the control and direction of the Trustees, and any
Sub-Advisers, subject to the control and direction of the Trustees and the
Manager, shall have authority and discretion, as appropriate, to select brokers
and dealers to execute portfolio transactions for each Fund, and for the
selection of the markets on or in which the transactions will be executed.
B. In acting pursuant to paragraph 3(A), the Manager and the Sub-Advisers may
place orders through such brokers and dealers in conformity with the policy with
respect to brokerage set forth in the Trust's registration statement.
C. It is understood that neither the Trust, the Manager nor any Sub-Advisers
will adopt a formula for allocation of the Trust's brokerage, except as may be
provided for in the Custody Services Agreement with the Trust's Custodian.
D. It is understood that the Manager or a Sub-Adviser may, to the extent
permitted by applicable laws and regulations, aggregate securities to be sold or
purchased for a Fund and for other clients in order to obtain the most favorable
price and efficient execution. In that event, allocation of the securities
purchased or sold, as well as expenses incurred in the transaction, will be made
by the Manager or Sub-Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Trust and to its
other clients.
E. The Manager shall provide such reports as the Trustees may reasonably request
with respect to each Fund's total brokerage and the manner in which that
brokerage was allocated.
4. Expenses of the Trust.
It is understood that the Trust (or each of its Funds, where applicable) will
pay, or will enter into arrangements that require third parties to pay, all of
the expenses of the Trust or the Funds, other than those expressly assumed by
the Manager herein, including without limitation:
A. Advisory, sub-advisory and administrative fees;
B. Fees for services of independent public accountants;
C. Legal and consulting fees;
D. Transfer agent, custodian and portfolio recordkeeping and tax
information services;
E. Expenses of periodic calculations of the Funds' net asset values and of
equipment for communication among the Funds' custodian, transfer agent and
others;
F. Taxes and the preparation of the Funds' tax returns;
G. Brokerage fees and commissions;
H. Interest;
I. Costs of Board of Trustees and shareholder meetings;
J. Updates and printing of prospectuses and reports to shareholders;
K. Fees for filing reports with regulatory bodies and the maintenance of the
Trust's existence;
L. Membership dues for industry trade associations;
M. Fees to federal authorities for the registration of the shares of the Fund;
N. Fees and expenses of Trustees who are not directors, officers, employees or
stockholders of the Manager of its affiliates;
0. Insurance and fidelity bond premiums;
P. Litigation and other extraordinary expenses of a non-recurring nature.
5. Activities and Affiliates of the Manager.
A. The Trust acknowledges that the Manager or one or more of its affiliates may
have investment or administrative responsibilities or render investment advice
to or perform other investment advisory services for other individuals or
entities, and that the Manager, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in securities for its or
their respective accounts ("Affiliated Accounts"). Subject to the provisions of
paragraph 3, the Trust agrees that the Manager or its affiliates may give advice
or exercise investment responsibility and take such other action with respect to
Affiliated Accounts which may differ from the advice given or the timing or
nature of action with respect to the Funds, provided that the Manager acts in
good faith. The Trust acknowledges that one or more of the Affiliated Accounts
may at any time hold, acquire, increase, decrease, dispose of or otherwise deal
with positions in investments in which the Funds may have an interest. The
Manager shall have no obligation to recommend for a Fund a position in any
investment which an Affiliated Account may acquire, and the Trust shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Funds or otherwise.
B. Subject to and in accordance with the Declaration of Trust and By-Laws of the
Trust as currently in effect and the Investment Company Act and the rules
thereunder, it is understood that Trustees, officers and agents of the Trust and
shareholders of the Trust are or may be interested persons as defined by the
Investment Company Act ("Interested Persons") of the Manager or its affiliates
as directors, officers, agents and shareholders of the Manager or its
affiliates; that directors, officers, agents and shareholders of the Manager or
its affiliates are or may be Interested Persons of the Trust as Trustees,
officers, agents, shareholders or otherwise; that the Manager or its affiliates
may be Interested Persons of the Trust as shareholders or otherwise; and that
the effect of any such interests shall be governed by said Declaration of Trust,
By-Laws and the Investment Company Act and the rules thereunder.
6. Compensation of the Manager.
For all services to be rendered and payments made pursuant to this Agreement,
the Trust, on its own behalf and on behalf of each Fund, will pay the Manager on
the last day of each month a fee at an annual rate equal to a percentage of the
net asset value of each Fund as follows: the Colonial Government Securities
Income Fund -- 0.60%; the Colonial Growth and Income Fund -- 0.65%; the Colonial
Utilities Income Fund -- 0.65%. The fee shall be accrued for each calendar day
and the sum of the daily fee accruals shall be paid monthly on or before the
tenth day of the following calendar month. The daily accruals of the fee will be
computed by (i) multiplying the annual percentage rate referred to above by the
fraction the numerator of which is one and the denominator of which is the
number of calendar days in the year, and (ii) multiplying the product obtained
pursuant to (i) above by the net asset value of each Fund as determined in
accordance with the Trust's prospectus as of the previous business day on which
each Fund was open for business. The foregoing fee shall be prorated for any
month during which this Agreement is in effect for only a portion of the month.
7. Liabilities of the Manager.
A. Except as provided below, in the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties hereunder on
the part of the Manager, the Manager 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 that may
be sustained in the purchase, holding or sale of any security.
B. The Manager shall indemnify and hold harmless the Trust from any loss, cost,
expense or damage resulting from the failure of any sub-Advisor to comply with
(i) any statement included in the Prospectus and Statement of Additional
Information of the Trust, or (ii) instructions given by the Manager to any
Sub-Advisor for the purpose of ensuring the Trust's compliance with securities,
tax and other requirements applicable to the Trust's business and the investment
activities of its Funds; provided, however, that the indemnification provided in
this subsection 7(B) shall apply only to the extent that a Sub-Adviser is liable
to the Trust and, after demand by the Trust, is unable or refuses to discharge
its obligations to the Trust.
C. No provision of this Agreement shall be construed to protect any Trustee of
Officer of the Trust, or the Manager, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
8. Effective Date: Term.
This Agreement shall become effective on the date first written above and shall
continue until two years from its date of execution, and from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually by a vote of the Trustees, including the vote of a majority of
the Trustees who are not interested persons of the Trust, cast in person at a
meeting called for the purpose of voting on such approval, or by vote of a
majority of the outstanding voting securities. The aforesaid provision shall be
construed in a manner consistent with the Investment Company Act and the rules
and regulations thereunder.
9. Assignment.
No "assignment" of this Agreement shall be made by the Manager, and this
Agreement shall terminate automatically in the event of any such assignment. The
Manager shall notify the Trust in writing in advance of any proposed change of
"control" to enable the Trust to take the steps necessary to enter into a new
advisory contract.
10. Amendment
This Agreement may be amended at any time, but only by written Agreement between
the Manager and the Trust, which is subject to the approval of the Trustees of
the Trust and the shareholders of any affected Fund in the manner required by
the Investment Company Act and the rules thereunder.
11. Termination.
This Agreement:
(a) may at any time be terminated without payment of any penalty, by the Trust
or, as to any Fund, by that Fund (by the Board of Trustees of the Trust or by
the vote of a majority of the outstanding voting securities) on sixty (60) days'
written notice to the Manager;
(b) shall immediately terminate in the event of its assignment; and
(c) may be terminated by the Manager on sixty (60) days written notice to the
Trust.
12. Definitions.
As used in this Agreement, the terms "affiliated person," "assignment,"
"control," "interested person" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the Investment Company Act and
the rules and regulations thereunder, subject to any applicable orders of
exemption issued by the SEC.
13. Notice.
Any notice under this Agreement shall be given in writing addressed and
delivered or mailed postpaid to the other party to this Agreement at its
principal place of business.
14. Severability.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
15. Shareholder Liability.
The Manager is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Declaration of Trust of the Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more Funds, the obligations thereunder shall be limited to the respective assets
of such Funds. The Manager further agrees that it shall not seek satisfaction of
any such obligation from the shareholders of the Funds, nor from the Trustees or
any individual Trustee of the Trust.
16. Governing Law.
This Agreement shall be interpreted under, and the performance of the Manager
under this Agreement shall be consistent with, the provisions of the Agreement
and Declaration of Trust and By-Laws of the Trust, as in effect from time to
time, the terms of the Investment Company Act, other applicable laws and
regulations thereunder (including any amendments hereafter adopted), the
Internal Revenue Code of 1986, and regulations thereunder, and the Trust's
prospectus and statement of additional information. The provisions of this
Agreement shall be construed and interpreted in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to the conflict of laws
provisions thereof, provided, however, that if such law or any of the provisions
of this Agreement conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
17. Severability.
If any provision of this Agreement shall be held or made invalid by a court
decision, a statute, a rule, or otherwise, the remainder of this Agreement shall
not be affected thereby.
18. Effective Date.
This Agreement shall become effective as of its date.
19. Use of Manager's Name.
The Trust may use the name "Keyport" or any other name derived from the name
"Keyport" only for so long as this Agreement or any extension, renewal, or
amendment hereof remains in effect, including any similar agreement with any
organization that shall have succeeded to the business of the Manager. At such
time as this Agreement or any extension, renewal or amendment hereof, or such
other similar agreement shall no longer be in effect, the Trust will cease to
use any name derived from the name "Keyport," any name similar thereto, or any
other name indicating that it is managed by or otherwise connected with the
Manager, or with any organization which shall have succeeded to Manager's
business as investment advisor or manager.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement on the
date first above written.
ATTEST KEYPORT VARIABLE INVESTMENT TRUST on its own behalf and on behalf of
each FUND
Xxxx Xxxxxxxxx By:Xxxxxxx X. Xxxxxxxxxxx
Title: Assistant Secretary
ATTEST KEYPORT ADVISORY SERVICES CORP.
Xxxxxx X. Xxxxx By:Xxxx X. XxXxxxx, Xx.
Title: Secretary
