INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of May, 2002, by and between EQSF Advisers,
Inc., a [Delaware] corporation ("EQSF") (the "Adviser"), and Met Investors
Advisory LLC, a Delaware limited liability company (the "Manager").
WHEREAS, the Manager serves as investment manager of Met Investors Series
Trust (the "Trust"), a Delaware business trust which has filed a registration
statement (the "Registration Statement") under the Investment Company Act of
1940, as amended (the "1940 Act") and the Securities Act of 1933, as amended
(the "1933 Act") pursuant to a management agreement dated December 8, 2000, as
amended on February 12, 2001, October 1, 2001 and May 1, 2002 (the "Management
Agreement"); and
WHEREAS, the Trust is comprised of several separate investment portfolios,
one of which is the Third Avenue Small Cap Value Portfolio (the "Portfolio");
and
WHEREAS, the Manager desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser to assist the Manager
in performing investment advisory services for the Portfolio; and
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and is engaged in the business of
rendering investment advisory services to investment companies and other
institutional clients and desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs the Adviser to manage
the investment and reinvestment of the assets of the Portfolio, subject to
the control and direction of the Trust's Board of Trustees, for the period
and on the terms hereinafter set forth. The Adviser hereby accepts such
employment and agrees during such period to render the services and to
assume the obligations herein set forth for the compensation herein
provided. The Adviser 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 Manager, the Portfolio or the Trust in any way. The Adviser
may execute account documentation, agreements, contracts and other
documents requested by brokers, dealers, counterparties and other persons
in connection with its management of the assets of the Portfolio, provided
the Adviser receives the express agreement and consent of the Manager
and/or the Trust's Board of Trustees to execute such futures account
agreements, ISDA Master Agreements and other documents related thereto,
which consent shall not be unreasonably withheld. In such respect, and only
for this limited purpose, the Adviser shall act as the Manager's and the
Trust's agent and attorney-in-fact.
Copies of the Trust's Registration Statement, as it relates to the
Portfolio (the "Registration Statement"), and the Trust's Declaration of Trust
and Bylaws (collectively, the "Charter Documents"), each as currently in effect,
have been or will be delivered to the Adviser. The Manager agrees, on an ongoing
basis, to notify the Adviser of each change in the fundamental and
non-fundamental investment policies and restrictions of the Portfolio before
they become effective and to provide to the Adviser as promptly as practicable
copies of all amendments and supplements to the Registration Statement before
filing with the Securities and Exchange Commission ("SEC") and amendments to the
Charter Documents. The Manager will promptly provide the Adviser with any
procedures applicable to the Adviser adopted from time to time by the Trust's
Board of Trustees and agrees to promptly provide the Adviser copies of all
amendments thereto. The Adviser will not be bound to follow any change in the
investment policies, restrictions or procedures of the Portfolio or Trust,
however, until it has received written notice of any such change from the
Manager.
The Manager shall timely furnish the Adviser with such additional
information as may be reasonably necessary for or requested by the Adviser to
perform its responsibilities pursuant to this Agreement. The Manager shall
cooperate with the Adviser in setting up and maintaining brokerage accounts and
other accounts the Adviser deems advisable to allow for the purchase or sale of
various forms of securities pursuant to this Agreement.
2. Obligations of and Services to be Provided by the Adviser. The Adviser
undertakes to provide the following services and to assume the following
obligations:
a. The Adviser shall manage the investment and reinvestment of the
portfolio assets of the Portfolio, all without prior consultation with
the Manager, subject to and in accordance with the investment
objective and policies of the Portfolio set forth in the Trust's
Registration Statement and the Charter Documents, as such Registration
Statement and Charter Documents may be amended from time to time, in
compliance with the requirements applicable to registered investment
companies under applicable laws and those requirements applicable to
both regulated investment companies and segregated asset accounts
under Subchapters M and L of the Internal Revenue Code of 1986, as
amended (the "Code") and any written instructions which the Manager or
the Trust's Board of Trustees may issue from time-to-time in
accordance therewith. In pursuance of the foregoing, the Adviser shall
make all determinations with respect to the purchase and sale of
portfolio securities and shall take such action necessary to implement
the same. The Adviser shall render such reports to the Trust's Board
of Trustees and the Manager as they may reasonably request concerning
the investment activities of the Portfolio, provided that the Adviser
shall not be responsible for Portfolio accounting. Unless the Manager
gives the Adviser written instructions to the contrary, the Adviser
shall, in good faith and in a manner which it reasonably believes best
serves the interests of the Portfolio's shareholders, direct the
Portfolio's custodian as to how to vote such proxies as may be
necessary or advisable in connection with any matters submitted to a
vote of shareholders of securities held by the Portfolio.
b. To the extent provided in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, the Adviser
shall, in the name of the Portfolio, place orders for the execution of
portfolio transactions with or through such brokers, dealers or other
financial institutions as it may select including affiliates of the
Adviser. In selecting brokers or dealers to execute transactions on
behalf of the Portfolio, the Adviser will seek the best overall terms
available. In assessing the best overall terms available for any
transaction, the Adviser will consider factors it deems relevant,
including, without limitation, the 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
the commission, if any, for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a
particular transaction, and in evaluating the best overall terms
available, the Adviser is authorized to consider the brokerage and
research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to the Portfolio
and/or other accounts over which the Adviser or its affiliates (to the
extent permitted by law) exercise investment discretion.
In addition, subject to seeking the most favorable price and best execution
available, the Adviser may also consider sales of shares of the Trust as a
factor in the selection of brokers and dealers. Subject to seeking the most
favorable price and execution, the Board of Trustees or the Manager may request
the Adviser to effect transactions in portfolio securities through
broker-dealers in a manner that will help generate resources to: (i) pay the
cost of certain expenses which the Trust is required to pay or for which the
Trust is required to arrange payment; or (ii) finance activities that are
primarily intended to result in the sale of Trust shares.
c. In connection with the placement of orders for the execution of the
portfolio transactions of the Portfolio, the Adviser shall create and
maintain all necessary records pertaining to the purchase and sale of
securities by the Adviser on behalf of the Portfolio in accordance
with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the 1940 Act. All
records shall be the property of the Trust and shall be available for
inspection and use by the SEC, the Trust, the Manager or any person
retained by the Trust at all reasonable times. Where applicable, such
records shall be maintained by the Adviser for the periods and in the
places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of providing services pursuant to
this Agreement, but shall not be obligated to pay any expenses of the
Manager, the Trust, or the Portfolio, including without limitation:
(a) interest and taxes; (b) brokerage commissions and other costs in
connection with the purchase or sale of securities or other investment
instruments for the Portfolio; and (c) custodian fees and expenses.
e. The Adviser and the Manager acknowledge that the Adviser is not the
compliance agent for the Portfolio or for the Manager, and does not
have access to all of the Portfolio's books and records necessary to
perform certain compliance testing. To the extent that the Adviser has
agreed to perform the services specified in this Section 2 in
accordance with the Trust's Registration Statement and Charter
Documents, written instructions of the Manager and any policies
adopted by the Trust's Board of Trustees applicable to the Portfolio
(collectively, the "Charter Requirements"), and in accordance with
applicable law (including Subchapters M and L of the Code, the 1940
Act and the Advisers Act ("Applicable Law")), the Adviser shall
perform such services based upon its books and records with respect to
the Portfolio (as specified in Section 2.c. hereof), which comprise a
portion of the Portfolio's books and records, and upon information and
written instructions received from the Trust, the Manager or the
Trust's administrator, and shall not be held responsible under this
Agreement so long as it performs such services in accordance with this
Agreement, the Charter Requirements and Applicable Law based upon such
books and records and such information and instructions provided by
the Trust, the Manager or the Trust's administrator. The Adviser shall
have no responsibility to monitor certain limitations or restrictions
for which the Adviser has not been provided sufficient information in
accordance with Section 1 of this Agreement or otherwise. All such
monitoring shall be the responsibility of the Manager.
f. The Adviser makes no representation or warranty, express or implied,
that any level of performance or investment results will be achieved
by the Portfolio or that the Portfolio will perform comparably with
any standard or index, including other clients of the Adviser, whether
public or private.
g. The Adviser shall be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Portfolio. For both of
these reports, the Adviser shall only be responsible for reporting the
assets of the Portfolio it is managing. The Adviser shall not be
responsible for the preparation or filing of any other reports
required of the Portfolio by any governmental or regulatory agency,
except as expressly agreed to in writing.
3. Compensation of the Adviser. In consideration of services rendered pursuant
to this Agreement, the Manager will pay the Adviser a fee at the annual
rate of the value of the Portfolio's average daily net assets set forth in
Schedule A hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall serve for
less than the whole of any month, the foregoing compensation shall be
prorated. 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 Registration Statement.
4. Activities of the Adviser. The services of the Adviser hereunder are not to
be deemed exclusive, and the Adviser shall be free to render similar
services to others and to engage in other activities, so long as the
services rendered hereunder are not impaired. The Manager 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 as
investment adviser to other investment companies, and the Manager has no
objection to the Adviser so acting, provided that whenever the Portfolio
and one or more other accounts or investment companies advised by the
Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a methodology
believed to be equitable to each entity. The Adviser agrees to allocate
similarly opportunities to sell securities. The Manager recognizes that, in
some cases, this procedure may limit the size of the position that may be
acquired or sold for the Portfolio.
The Adviser shall be subject to a written code of ethics adopted by it that
conforms to the requirements of Rule 17j-1(b) of the 1940 Act, and shall not be
subject to any other code of ethics, including the Manager's code of ethics,
unless specifically adopted by the Adviser.
5. Use of Names. The Adviser hereby consents to the Portfolio being named the
Third Avenue Small Cap Value Portfolio. The Manager shall not use the name
"Third Avenue" and any of the names of the Adviser or its affiliated
companies and any derivative or logo or trade or service xxxx thereof, or
disclose information related to the business of the Adviser or any of its
affiliates in any prospectus, sales literature or other material relating
to the Trust in any manner not approved prior thereto by the Adviser;
provided, however, that the Adviser shall approve all uses of its name and
that of its affiliates which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state
securities commission; and provided, further, that in no event shall such
approval be unreasonably withheld. The Adviser shall not use the name of
the Trust, the Manager or any of their affiliates in any material relating
to the Adviser in any manner not approved prior thereto by the Manager;
provided, however, that the Manager shall approve all uses of its or the
Trust's name which merely refer in accurate terms to the appointment of the
Adviser hereunder or which are required by the SEC or a state securities
commission; and, provided, further, that in no event shall such approval be
unreasonably withheld.
The Manager recognizes that from time to time directors, officers and
employees of the Adviser may serve as directors, trustees, partners, officers
and employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities may
include the name "Third Avenue" or any derivative or abbreviation thereof as
part of their name, and that the Adviser or its affiliates may enter into
investment advisory, administration or other agreements with such other
entities.
Upon termination of this Agreement for any reason, the Manager shall within
30 days cease and cause the Portfolio to cease all use of the name and xxxx
"Third Avenue."
6. Liability and Indemnification.
a. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Adviser shall not be liable for any
losses, claims, damages, liabilities or litigation (including legal
and other expenses) incurred or suffered by the Manager or the Trust
as a result of any error of judgment or mistake of law by the Adviser
with respect to the Portfolio, except that nothing in this Agreement
shall operate or purport to operate in any way to exculpate, waive or
limit the liability of the Adviser for, and the Adviser shall
indemnify and hold harmless the Trust, the Manager, all affiliated
persons thereof (within the meaning of Section 2(a)(3) of the 1940 Act
) and all controlling persons (as described in Section 15 of the 1933
Act) (collectively, "Manager Indemnitees") against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal
and other expenses) to which any of the Manager Indemnitees may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, or under
any other statute, at common law or otherwise arising out of or based
on (i) any willful misconduct, bad faith, reckless disregard or gross
negligence of the Adviser in the performance of any of its duties or
obligations hereunder or (ii) any untrue statement of a material fact
contained in the Registration Statement, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the
Portfolio or the omission to state therein a material fact known to
the Adviser which was required to be stated therein or necessary to
make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Manager or the Trust by the Adviser Indemnitees (as defined below) for
use therein.
b. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Manager and the Trust shall not be liable
for any losses, claims, damages, liabilities or litigation (including
legal and other expenses) incurred or suffered by the Adviser as a
result of any error of judgment or mistake of law by the Manager with
respect to the Portfolio, except that nothing in this Agreement shall
operate or purport to operate in any way to exculpate, waive or limit
the liability of the Manager for, and the Manager shall indemnify and
hold harmless the Adviser, all affiliated persons thereof (within the
meaning of Section 2(a)(3) of the 0000 Xxx) and all controlling
persons (as described in Section 15 of the 1933 Act) (collectively,
"Adviser Indemnitees") against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other
expenses) to which any of the Adviser Indemnitees may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, or under any other
statute, at common law or otherwise arising out of or based on (i) any
willful misconduct, bad faith, reckless disregard or gross negligence
of the Manager in the performance of any of its duties or obligations
hereunder or (ii) any untrue statement of a material fact contained in
the Registration Statement, proxy materials, reports, advertisements,
sales literature, or other materials pertaining to the Portfolio or
the omission to state therein a material fact known to the Manager
which was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission
was made in reliance upon information furnished to the Manager or the
Trust by an Adviser Indemnitee for use therein.
7. Limitation of Trust's Liability. The Adviser acknowledges that it has
received notice of and accepts the limitations upon the Trust's liability
set forth in its Agreement and Declaration of Trust. The Adviser agrees
that any of the Trust's obligations shall be limited to the assets of the
Portfolio and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust officer,
employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement shall continue in
effect, unless sooner terminated as hereinafter provided, for a period of
two years from the date hereof and shall continue in full force and effect
for successive periods of one year thereafter, but only so long as each
such continuance as to the Portfolio is specifically approved at least
annually by vote of the holders of a majority of the outstanding voting
securities of the Portfolio or by vote of a majority of the Trust's Board
of Trustees; and further provided that such continuance is also approved
annually by the vote of a majority of the Trustees who are not parties to
this Agreement or interested persons of any such party. This Agreement may
be terminated as to the Portfolio at any time, without payment of any
penalty, by the Trust's Board of Trustees, by the Manager, or by a vote of
the majority of the outstanding voting securities of the Portfolio upon 60
days' prior written notice to the Adviser, or by the Adviser upon 90 days'
prior written notice to the Manager, or upon such shorter notice as may be
mutually agreed upon. This Agreement shall terminate automatically and
immediately upon termination of the Management Agreement between the
Manager and the Trust. This Agreement shall terminate automatically and
immediately in the event of its assignment. The terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have the
meaning set forth for such terms in the 1940 Act. This Agreement may be
amended at any time by the Adviser and the Manager, subject to approval by
the Trust's Board of Trustees and, if required by applicable SEC rules,
regulations, or orders, a vote of a majority of the Portfolio's outstanding
voting securities.
9. Confidential Relationship. Any information and advice furnished by any
party to this Agreement to the other party or parties shall be treated as
confidential and shall not be disclosed to third parties without the
consent of the other party hereto except as required by law, rule or
regulation.
The Manager hereby consents to the disclosure to third parties of (i)
investment results and other data of the Manager or the Portfolio in connection
with providing composite investment results of the Adviser and (ii) investments
and transactions of the Manager or the Portfolio in connection with providing
composite information of clients of the Adviser.
10. 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.
11. Custodian. The Portfolio assets shall be maintained in the custody of its
custodian. Any assets added to the Portfolio shall be delivered directly to
such custodian. The Adviser shall have no liability for the acts or
omissions of any custodian of the Portfolio's assets. The Adviser shall
have no responsibility for the segregation requirement of the 1940 Act or
other applicable law other than to notify the custodian of investments that
require segregation and appropriate assets for segregation.
12. Information. The Manager hereby acknowledges that it and the Trustees of
the Trust have been provided with all information necessary in connection
with the services to be provided by the Adviser hereunder, including a copy
of Part II of the Adviser's Form ADV at least 48 hours prior to the
Manager's execution of this Agreement, and any other information that the
Manager or the Trustees deem necessary.
13. Miscellaneous. This Agreement constitutes the full and complete agreement
of the parties hereto with respect to the subject matter hereof. Each party
agrees to perform such further actions and execute such further documents
as are necessary to effectuate the purposes hereof. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the
State of Delaware and the applicable provisions of the 1940 Act. The
captions in this Agreement are included for convenience only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement may be executed in several
counterparts, all of which together shall for all purposes constitute one
Agreement, binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
MET INVESTORS ADVISORY LLC
BY:
Authorized Officer
EQSF ADVISERS, INC.
BY:
Authorized Officer
SCHEDULE A
Percentage of average daily net assets
Third Avenue Small Cap Value Portfolio 0.50%
