INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of July 1, 1999, by and between EQ Financial
Consultants, Inc., a Delaware corporation ("EQ Financial" or the "Manager"), and
Credit Suisse Asset Management, LLC (the "Adviser").
WHEREAS, EQ Advisors Trust (the "Trust") is registered as an investment
company under the Investment Company Act of 1940, as amended (the "Investment
Company Act");
WHEREAS, the Trust's shareholders are and will be separate accounts
maintained by insurance companies for variable life insurance policies and
variable annuity contracts (the "Policies") under which income, gains, and
losses, whether or not realized, from assets allocated to such accounts are, in
accordance with the Policies, credited to or charged against such accounts
without regard to other income, gains, or losses of such insurance companies;
WHEREAS, the Trust is and will continue to be a series fund having two
or more investment portfolios, each with its own investment objectives, policies
and restrictions;
WHEREAS, EQ Financial is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act"), and is the
investment manager to the Trust;
WHEREAS, the Adviser is registered as an investment adviser under the
Advisers Act;
WHEREAS, the Investment Company Act prohibits any person from acting as
an investment adviser to a registered investment company except pursuant to a
written contract (the "Agreement"); and
WHEREAS, the Board of Trustees of the Trust and EQ Financial desire to
retain the Adviser to render investment advisory services to the portfolio
specified in Schedule A hereto ("Portfolio") in the manner and on the terms
hereinafter set forth.
NOW, THEREFORE, EQ Financial and Adviser agree as follows:
1. APPOINTMENT OF ADVISER
The Manager hereby appoints the Adviser to act as investment adviser
for the Portfolio and to manage the investment and reinvestment of the assets of
the Portfolio, subject to the supervision of the Trustees of the Trust and the
terms and conditions of this Agreement. The Adviser will be an independent
contractor and will have no authority to act for or represent the Trust or
Manager in any way or otherwise be deemed an agent of the Trust or Manager
except as expressly authorized in this Agreement or another writing by the
Trust, Manager and the Adviser. Notwithstanding the foregoing, the Adviser may
execute account documentation, agreements, contracts and other documents as the
Adviser may be requested by brokers, dealers, counterparts and other persons in
connection with the Adviser's management of the assets of the
Portfolio, provided that the Adviser receives the express agreement and consent
of the Manager and/or the Trust's Board of Trustees to execute such
documentation, agreements, contracts and other documents. In such respect, and
only for this limited purpose, the Adviser shall act as the Manager and/or the
Trust's agent and attorney-in-fact.
2. SERVICES TO BE RENDERED BY THE ADVISER TO THE TRUST
A. The Adviser will manage the investment and reinvestment of the
assets of the Portfolio and determine the composition of the assets of the
Portfolio, subject always to the direction and control of the Trustees of the
Trust and the Manager and in accordance with the provisions of the Trust's
registration statement, as amended from time to time. In fulfilling its
obligations to manage the investment and reinvestment of the assets of the
Portfolio, the Adviser will:
(i) obtain and evaluate pertinent economic, statistical,
financial, and other information affecting the economy generally and
individual companies or industries, the securities of which are
included in the Portfolio or are under consideration for inclusion in
the Portfolio;
(ii) formulate and implement a continuous investment program
for the Portfolio (a) consistent with the investment objectives,
policies and restrictions of the Portfolio as stated in the Trust's
Agreement and Declaration of Trust, By-Laws, and such Portfolio's
currently effective Prospectus and Statement of Additional Information
("SAI") as amended from time to time, and (b) in compliance with the
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, and requirements applicable to
registered investment companies under applicable laws;
(iii) take whatever steps are necessary to implement the
investment program for the Portfolio by the purchase and sale of
securities and other investments authorized under the Trust's Agreement
and Declaration of Trust, By-Laws, and such Portfolio's currently
effective Prospectus and SAI, including the placing of orders for such
purchases and sales;
(iv) regularly report to the Trustees of the Trust and the
Manager with respect to the implementation of the investment program
and, in addition, provide such statistical information and special
reports concerning the Portfolio and/or important developments
materially affecting the investments held, or contemplated to be
purchased, by the Portfolio, as may reasonably be requested by the
Manager or the Trustees of the Trust, including attendance at Board of
Trustees Meetings, as reasonably requested, to present such information
and reports to the Board; and
(v) provide determinations of the fair value of certain
portfolio securities when market quotations are not readily available
for the purpose of calculating the
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Portfolio's net asset value in accordance with procedures and methods
established by the Trustees of the Trust;
(vi) provide any and all information, records and supporting
documentation about accounts the Adviser manages that have investment
objectives, policies, and strategies substantially similar to those
employed by the Adviser in managing the Portfolio which may be
reasonably necessary, under applicable laws, to allow the Portfolio or
its agent to present information concerning the Adviser's prior
performance in the Prospectus, and the SAI of the Portfolio and any
permissible reports and materials prepared by the Portfolio or its
agent; and
(vii) establish appropriate interfaces with the Trust's
administrator and Manager in order to provide such administrator and
Manager with all necessary information requested by the administrator
and Manager.
B. To facilitate the Adviser's fulfillment of its obligations under
this Agreement, the Manager and the Trust will undertake the following:
(i) the Manager agrees promptly to provide the Adviser with
all amendments or supplements to the Registration Statement, the
Trust's Agreement and Declaration of Trust, and By-Laws;
(ii) the Trust and the Manager each agrees, on an ongoing
basis, to notify the Adviser expressly in writing of each change in the
fundamental and nonfundamental investment policies of the Portfolio;
(iii) the Manager agrees to provide or cause to be provided to
the Adviser with such assistance as may be reasonably requested by the
Adviser in connection with its activities pertaining to the Portfolio
under this Agreement, including, without limitation, information
concerning the Portfolio, its available funds, or funds that may
reasonably become available for investment, and information as to the
general condition of the Portfolio's affairs;
(iv) the Manager agrees to provide or cause to be provided to
the Adviser on an ongoing basis, such information as is reasonably
requested by the Adviser for performance by the Adviser of its
obligations under this Agreement, and the Adviser shall not be in
breach of any term of this Agreement or be deemed to have acted
negligently if the Manager fails to provide or cause to be provided
such requested information and the Adviser relies on the information
most recently furnished to the Adviser; and
(v) the Manager will promptly provide the Adviser with any
guidelines and procedures applicable to the Adviser or the Portfolio
adopted from time to time by the Board of Trustees of the Trust and
agrees to promptly provide the Adviser copies of all amendments
thereto.
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C. The Adviser, at its expense, will furnish: (i) all necessary
investment and management facilities and investment personnel, including
salaries, expenses and fees of any personnel required for it to faithfully
perform its duties under this Agreement; and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Portfolio (excluding that
necessary for the determination of net asset value and shareholder accounting
services). The Adviser shall not be obligated to pay any expenses of or for the
Portfolio not expressly assumed by the Adviser pursuant to this Section 2.
D. The Adviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein. The Adviser will place
all necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions if applicable. The Adviser is directed at all times to
seek to execute brokerage transactions for the Portfolio in accordance with such
policies or practices as may be established by the Board of Trustees and
described in the Trust's currently effective Prospectus and SAI, as amended from
time to time. In placing orders for the purchase or sale of investments for the
Portfolio, in the name of the Portfolio or its nominees, the Adviser shall use
its best efforts to obtain for the Portfolio the most favorable price and best
execution available, considering all of the circumstances, and shall maintain
such records as are required of an investment adviser under applicable law.
Subject to the appropriate policies and procedures approved by the
Board of Trustees, the Adviser may, to the extent authorized by Section 28(e) of
the Securities Exchange Act of 1934, cause the Portfolio to pay a broker or
dealer that provides brokerage or research services to the Manager, the Adviser,
or the Portfolio an amount of commission for effecting a portfolio transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines, in good faith,
that such amount of commission is reasonable in relationship to the value of
such brokerage or research services provided viewed in terms of that particular
transaction or the Adviser's overall responsibilities to the Portfolio or its
other advisory clients. To the extent authorized by said Section 28(e) and the
Trust's Board of Trustees, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of such action. 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.
E. On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other clients of
the Adviser, the Adviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the manner the Adviser considers to
be the most equitable and consistent with its fiduciary obligations to the
Portfolio and to its other clients.
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F. The Adviser will maintain all accounts, books and records with
respect to the Portfolio as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder.
3. COMPENSATION OF ADVISER
The Manager will pay the Adviser, with respect to the Portfolio, the
compensation specified in Appendix A to this Agreement. Payments shall be made
to the Adviser on the first day of each month; however, this advisory fee will
be calculated on the daily average value of the Portfolio's assets and accrued
on a daily basis.
4. LIABILITY OF ADVISER
Neither the Adviser nor any of its directors, officers, or employees
shall be liable to the Manager, the Trust or any shareholder thereof or any
service provider to any Portfolio for any loss suffered by the Manager, the
Trust or any shareholder thereof or any service provided to any Portfolio
resulting from its acts or omissions as Adviser to the Portfolio, except for
losses resulting from willful misconduct, bad faith, or gross negligence in the
performance of, or from reckless disregard of, the duties of the Adviser or any
of its directors, officers or employees. The Adviser, its directors, officers or
employees shall not be liable to the Manager or the Trust for any loss suffered
as a consequence of any action or inaction of other service providers to the
Trust, provided such action or inaction of such other service providers to any
Portfolio is not a result of the willful misconduct, bad faith or gross
negligence in the performance of, or from reckless disregard of, the duties of
the Adviser under this Agreement.
5. NON-EXCLUSIVITY
The services of the Adviser to the Portfolio and the Trust are not to
be deemed to be exclusive, and the Adviser shall be free to render investment
advisory or other services to others (including other investment companies) and
to engage in other activities. It is understood and agreed that the directors,
officers, and employees of the Adviser are not prohibited from engaging in any
other business activity or from rendering services to any other person, or from
serving as partners, officers, directors, trustees, or employees of any other
firm or corporation, including other investment companies. Furthermore, the
Trust and the Manager recognize that the Adviser may give advice, and take
action, with respect to its other clients that may differ from the advice given,
or the time or nature of action taken, with respect to the Portfolio.
6. SUPPLEMENTAL ARRANGEMENTS
The Adviser may enter into arrangements with other persons affiliated
with the Adviser for the provision of certain personnel and facilities to the
Adviser to better enable it to fulfill its duties and obligations under this
Agreement.
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7. REGULATION
The Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
8. RECORDS
The records relating to the services provided under this Agreement
shall be the property of the Trust and shall be under its control; however, the
Trust shall furnish to the Adviser such records and permit it to retain such
records (either in original or in duplicate form) as it shall reasonably require
in order to carry out its duties. In the event of the termination of this
Agreement, such records shall promptly be returned to the Trust by the Adviser
free from any claim or retention of rights therein. The Adviser shall keep
confidential any information obtained in connection with its duties hereunder
and disclose such information only if the Trust has authorized such disclosure
or if such disclosure is expressly required or requested by applicable federal
or state regulatory authorities.
9. DURATION OF AGREEMENT
This Agreement shall become effective with respect to the Portfolio on
the later of the date of its execution or the date of the commencement of
operations of the Portfolio. This Agreement will continue in effect for a period
more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually by the Board of Trustees,
provided that in such event such continuance shall also be approved by the vote
of a majority of the Trustees who are not "interested persons' (as defined in
the Investment Company Act) ("Independent Trustees") of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
10. INDEMNIFICATIONS
A. The Manager shall indemnify the Adviser and its controlling persons,
officers, directors, employees, agents, legal representatives and persons
controlled by it (which shall not include the Trust or any Portfolio)
(collectively, "Adviser Related Persons") to the fullest extent permitted by law
against any and all loss, damage, judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees (collectively "Losses"),
incurred by the Adviser or Adviser Related Persons arising from or in connection
with this Agreement or the performance by the Adviser or Adviser Related Persons
of its or their duties hereunder so long as such Losses arise out of the
Manager's gross negligence, willful misconduct or bad faith, in performing its
responsibilities hereunder or under its agreements with the Trust or the gross
negligence, willful misconduct or bad faith of any companies affiliated with the
Manager that provide services to the Trust, including, without limitation, such
Losses arising under any applicable law or that may be based upon any untrue
statement of a material fact contained in the Trust's registration statement, or
any amendment thereof or any supplement thereto, or the
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omission to state therein a material fact known or which should have been known
and 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 written information furnished to the Manager or the Trust by the Adviser or
an Adviser Related Person specifically for inclusion in the registration
statement or any amendment or supplement thereto, except to the extent any such
Losses referred to in this paragraph A (i.e., paragraph A.) result from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Adviser or an Adviser Related Person in the performance of any of its duties
under, or in connection with, this Agreement.
B. The Adviser shall indemnify the Manager and its controlling persons,
officers, directors, employees, agents, legal representatives and persons
controlled by it (which shall not include the Trust or any Portfolio)
(collectively, "Manager Related Persons") to the fullest extent permitted by law
against any and all Losses incurred by the Manager or Manager Related Persons
arising from or in connection with this Agreement or the performance by the
Manager or Manager Related Persons of its or their duties hereunder so long as
such Losses arise out of the Adviser's gross negligence, willful misconduct or
bad faith in performing its responsibilities hereunder, including, without
limitation, such Losses arising under any applicable law or that may be based
upon any untrue statement of a material fact contained in the Trust's
registration statement, or any amendment thereof or any supplement thereto or
the omission to state therein a material fact known or which should have been
known and was required to be stated therein or necessary to make the statements
therein not misleading, provided that such statement or omission was made in
reliance upon written information furnished by the Adviser or Adviser Related
Person to the Manager or the Trust, except to the extent any such Losses
referred to in this paragraph B (i.e., paragraph B.) result from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Manager or a Manager Related Person in the performance of any of its duties
under, or in connection with, this Agreement.
C. The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
11. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Trustees, including a majority of the Independent
Trustees, by the vote of a majority of the outstanding voting securities of the
Portfolio, on sixty (60) days' written notice to the Manager and the Adviser, or
by the Manager or Adviser on sixty (60) days' written notice to the Trust and
the other party. This Agreement will automatically terminate, without the
payment of any penalty, in the event of its assignment (as defined in the
Investment Company Act) or in the event the Investment Management Agreement
between the Manager and the Trust is assigned or terminates for any other
reason. This Agreement will also terminate upon written notice to the other
party that the other party is in material breach of this Agreement, unless the
other party in material breach of this Agreement cures such breach to the
reasonable satisfaction of the party alleging the breach within thirty (30) days
after written notice.
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12. PROVISION OF CERTAIN INFORMATION BY ADVISER
The Adviser will promptly notify the Manager in writing of the
occurrence of any of the following events:
A. the Adviser fails to be registered as an investment adviser under
the Advisers Act or under the laws of any jurisdiction in which the Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement;
B. the Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before or by
any court, public board, or body, involving the affairs of the Trust; and/or
C. the chief executive officer or controlling stockholder of the
Adviser or the portfolio manager of the Portfolio changes or there is a change
in actual control or management of the Adviser.
13. USE OF ADVISER'S NAME
Neither the Trust nor the Manager or any affiliate or agent thereof
shall make reference to or use the name, and any derivative thereof or logo
associated with that name, of the Adviser or any of its affiliates in any
advertising or promotional materials without the prior approval of the Adviser,
which approval shall not be unreasonably withheld or delayed. Upon termination
of this Agreement, the Manager and the Trust shall forthwith cease to use such
name (or derivative or logo) as soon as reasonably practicable.
14. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the
rules or regulations thereunder or pursuant to any exemptive relief granted by
the Securities and Exchange Commission ("SEC"), this Agreement may be amended by
the parties only if such amendment, if material, is specifically approved by the
vote of a majority of the outstanding voting securities of the Portfolio (unless
such approval is not required by Section 15 of the Investment Company Act as
interpreted by the SEC or its staff) and by the vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to the Portfolio if a majority of the outstanding voting securities
of the Portfolio vote to approve the amendment, notwithstanding that the
amendment may not have been approved by a majority of the outstanding voting
securities of any other portfolio affected by the amendment or all the
portfolios of the Trust.
15. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to the Portfolio listed in Appendix A.
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16. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
17. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of each applicable party
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. The specific person to whom notice shall be
provided for each party will be specified in writing to the other party. Notice
shall be deemed given on the date delivered or mailed in accordance with this
paragraph.
18. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed, insofar as is possible,
as if such portion had never been contained herein.
19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, or any of the applicable
provisions of the Investment Company Act. To the extent that the laws of the
State of Delaware, or any of the provisions in this Agreement, conflict with
applicable provisions of the Investment Company Act, the latter shall control.
Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Investment Company Act shall be resolved by reference to such term or
provision of the Investment Company Act and to interpretations thereof, if any,
by the United States courts or, in the absence of any controlling decision of
any such court, by rules, regulations or orders of the SEC validly issued
pursuant to the investment Company Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested persons,"
"assignment," and "affiliated persons," as used herein shall have the meanings
assigned to them by Section 2(a) of the Investment Company Act. In addition,
where the effect of a requirement of the Investment Company Act reflected in any
provision of this Agreement is relaxed by a rule, regulation or order of the
SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
EQ FINANCIAL CONSULTANTS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
Executive Vice President
CREDIT SUISSE ASSET MANAGEMENT, LLC
By: /s/ Xxx Xxxxxx
--------------------------------
Xxx Xxxxxx
Director and General Counsel
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APPENDIX A
Portfolio Advisory Fee
Warburg Pincus Small .50% of the Portfolio's
Company Value Portfolio average daily assets
Dated: July 1, 1999
