INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 6th day of September, 2005, by and between Gallatin
Asset Management, Inc., a Delaware corporation ("Gallatin") (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 from time to time (the "Management Agreement"); and
WHEREAS, the Trust is comprised of several separate investment portfolios,
one of which is the Cyclical Growth ETF 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
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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 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
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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 Section 817(h) of the Internal Revenue Code of 1986, as
amended (the "Code") including but not limited to, the diversification
requirements of Section 817(h) of the Code and the regulations thereunder 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.
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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 and,
complying with Section 28(e) of the Securities Exchange Act of 1934, may pay a
commission on transactions in excess of the amount of commission another
broker-dealer would have charged. Subject to seeking the most favorable price
and execution, the Board of Trustees or the Manager may cause the Adviser to
effect transactions in portfolio securities through broker-dealers in a manner
that will help generate resources to pay the cost of certain expenses which the
Trust is required to pay or for which the Trust is required to arrange payment.
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 the diversification
requirements of section 817(h) 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, as part of a complete
portfolio compliance testing program, perform quarterly diversification testing
under Section 817(h) of the Code. The Adviser shall provide timely notice each
calendar quarter that such diversification was
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satisfied or if not satisfied, that corrections were made within 30 days of the
end of the calendar quarter. 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. 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.
h. In accordance with procedures and methods established by the Trustees
of the Trust and 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 and shall be provided to the Adviser on a timely basis, provide assistance
in determining the fair value of all securities and other investments/assets in
the Portfolio, as necessary, and use reasonable efforts to arrange for the
provision of valuation information or a price(s) from a party(ies) independent
of the Adviser for each security or other investment/asset in the Portfolio for
which market prices are not readily available.
i. The Adviser will notify the Trust and the Manager of any assignment
of this Agreement or change of control of the Adviser, as applicable, and any
changes in the key personnel who are either the portfolio manager(s) of the
Portfolio or senior management of the Adviser, in each case prior to or
promptly after, such change. The Adviser agrees to bear all reasonable expenses
of the Trust, if any, arising out of any assignment by, or change in control
of, the Adviser.
3. Compensation of the Adviser. In consideration of services rendered
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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. Fee Waiver. Notwithstanding the provisions of the above Section 3 and
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subject to the approval of the continuance of this Agreement as set forth in
Section 9, for a period of up to three years following the date of the
commencement of the Portfolio's operations, the Adviser agrees to waive a
portion of its advisory fee as set forth in Schedule A hereto.
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5. Activities of the Adviser. The services of the Adviser hereunder are not
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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 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.
6. Use of Names. The Manager shall not use the name "Gallatin" or "A.G.
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Xxxxxxx" and any of the other 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 "X.X. Xxxxxxx," "Gallatin" 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 and the Trust to cease all use of the
name and xxxx "X.X. Xxxxxxx" or "Gallatin".
7. Liability and Indemnification.
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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
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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, (ii) any failure by the Manager to properly notify the
Adviser of changes to the Registration Statement or any Charter Requirements
that leads to any such losses, claims, damages, liabilities or litigation to
which any of the Adviser Indemnitees may be subject or (iii) 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.
8. Limitation of Trust's Liability. The Adviser acknowledges that it has
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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.
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9. Renewal, Termination and Amendment. This Agreement shall continue in
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effect, unless sooner terminated as hereinafter provided, until December 31,
2006 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. Subject to approval of the Manager, the Manager
understands and acknowledges that the Adviser may transfer responsibility for
the day-to-day management of the Portfolio to an affiliated person of the
Adviser. If such transfer does not satisfy Rule 2a-6 under the 1940 Act, the
Manager agrees to recommend that the Trust's Board of Trustees approve a new
advisory agreement, the terms of which are substantially identical to the terms
of this agreement, with the Adviser's affiliated person, subject to the Manager
first determining that such a recommendation is in the best interests of the
Portfolio and its shareholders. 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.
10. Confidential Relationship. Any information and advice furnished by any
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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.
11. Severability. If any provision of this Agreement shall be held or made
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invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
12. Custodian. The Portfolio assets shall be maintained in the custody of
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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
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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.
13. Information. The Manager hereby acknowledges that it and the Trustees of
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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.
14. Transactions with Sub-Advisory Affiliates
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The Manager understands and acknowledges that the Adviser may engage, in
accordance with applicable law, in transactions on behalf of the Portfolio with
sub-advisers, or affiliated persons of such sub-advisers to other series of the
Trust. The Adviser agrees not to consult with such other sub-advisers (or their
affiliated persons) concerning transactions for the portfolio in securities or
other assets. The Manager also understands and acknowledges that the Adviser,
or its affiliated persons, may be engaged by sub-advisers of other series of
the Trust to perform transactions on behalf of such other series of the Trust.
15. Miscellaneous. This Agreement constitutes the full and complete
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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.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
MET INVESTORS ADVISORY LLC
BY:
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Authorized Officer
GALLATIN ASSET MANAGEMENT, INC.
BY:
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Authorized Officer
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SCHEDULE A
Percentage of average daily net assets
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Cyclical Growth ETF Portfolio 0.25%. Fee waiver equal to an annual rate of 0.10% for the first 12-month period following
the commencement of the Portfolio's operations or until the Portfolio's net assets reach $150
million, whichever comes first; fee waiver equal to an annual rate of 0.05% for the second 12-
month period following the commencement of the Portfolio's operations or from $150 million
until the Portfolio's net assets reach $250 million, whichever comes first; and fee waiver equal
to an annual rate of 0.025% for the third 12-month period following the commencement of the
Portfolio's operations or from $250 million until the Portfolio's assets reach $300 million,
whichever comes first.
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