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EXHIBIT 5(a)
INVESTMENT ADVISORY AGREEMENT BETWEEN REGISTRANT AND ERNST & COMPANY
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INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 27th day of October, 1995, between THE COVENTRY
GROUP (the "Trust"), a Massachusetts business trust having its principal place
of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and ERNST & COMPANY, a
Delaware corporation (the "Investment Adviser"), having its principal place of
business at Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Investment Adviser to furnish
investment advisory and administrative services to certain investment
portfolios of the Trust and may retain the Investment Adviser to serve in such
capacity with respect to certain additional investment portfolios of the Trust,
all as now or hereafter may be identified in Schedule A hereto as such Schedule
may be amended from time to time (individually referred to herein as a "Fund"
and collectively referred to herein as the "Funds") and the Investment Adviser
represents that it is willing and possesses legal authority to so furnish such
services without violation of applicable laws and regulations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1 . Appointment. The Trust hereby appoints the Investment Adviser to act
as investment adviser to the Funds for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
Additional investment portfolios may from time to time be added to those
covered by this Agreement by the parties executing a new Schedule A which shall
become effective upon its execution and shall supersede any Schedule A having
an earlier date.
2. Delivery of Documents. The Trust has furnished the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) the Trust's Declaration of Trust, dated January 8, 1992, and
filed with the Secretary of State of Massachusetts on January
8, 1992, and any and all amendments thereto or restatements
thereof (such Declaration, as presently in effect and as it
shall from time to time be amended or restated, is herein
called the "Declaration of Trust");
(b) the Trust's By-Laws and any amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this
Agreement;
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(d) the Trust's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange
Commission (the "Commission") on January 8, 1992, and all
amendments thereto;
(e) the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under
the 1940 Act as filed with the Commission and all amendments
thereto; and
(f) the most recent prospectus and Statement of Additional
Information of each of the Funds (such Prospectus and
Statement of Additional Information, as presently in effect,
and all amendments and supplements thereto, are herein
collectively called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with copies of
all amendments of or supplements to the foregoing.
3. Management; Use of Subadvisers. Subject to the supervision of the
Trust's Board of Trustees, the Investment Adviser will provide a
continuous investment program for the Funds, including investment
research and management with respect to all securities and investments
and cash equivalents in the Funds. Subject to appropriate Board of
Trustees and shareholder approval, the Investment Adviser may enter
into a contractual relationship with one or more subadvisers (each a
"Subadviser", collectively the "Subadvisers") concerning the provision
of investment management services contemplated hereunder; provided,
however, that the Investment Adviser shall not be relieved of its
obligations under this Agreement by the appointment of a Subadviser
and, provided further, that the Investment Adviser shall be
responsible, to the extent provided in Section 3(a) and Section 8
hereof, for all acts of any such Subadviser as if such acts were its
own. In each contract that the Investment Adviser enters into with a
Subadviser, the Investment Adviser shall review the activities of each
Subadviser for purposes of ensuring compliance with each of the
representations and warranties contained herein. A Subadviser,
subject to the review of the Adviser, may determine from time to time
the securities and other investments to be purchased, retained or sold
by the Funds. The Investment Adviser and each Subadviser will provide
the services under this Agreement in accordance with each respective
Fund's investment objectives, policies, and restrictions as stated in
the Prospectus and resolutions of the Trust's Board of Trustees. The
Investment Adviser further agrees that it:
(a) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which
it has investment responsibilities.
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(b) will conform with all applicable Rules and Regulations of the
Commission under the 1940 Act and in addition will conduct its
activities under this Agreement in accordance with any
applicable regulations of any governmental authority
pertaining to the investment advisory activities of the
Investment Adviser;
(c) will place or cause to be placed orders for the Funds either
directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Investment
Adviser will attempt to obtain prompt execution of orders in
an effective manner at the most favorable price. Consistent
with this obligation and to the extent permitted by the 1940
Act, when the execution and price offered by two or more
brokers or dealers are comparable, the Investment Adviser may,
in its discretion, purchase and sell portfolio securities to
and from brokers and dealers who provide the Investment
Adviser with research advice and other services. In no
instance will portfolio securities be purchased from or sold
to BISYS Fund Services, the Investment Adviser, any Subadviser
or any affiliated person of the Trust, BISYS Fund Services,
any Subadviser or the Investment Adviser, except to the extent
permitted by the 1940 Act and the Commission;
(d) will maintain or cause to be maintained all books and records
with respect to the securities transactions of the Funds and
will furnish the Trusts Board of Trustees with such periodic
and special reports as the Board may request; and
(e) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the
Trust and the Funds and prior, present, or potential
shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld where the
Investment Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or
when so requested by the Trust.
4. Services Not Exclusive. The investment management services furnished
by the Investment Adviser hereunder are not to be deemed exclusive,
and the Investment Adviser shall be free to furnish similar services
to others so long as its services under this Agreement are not
impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Funds are the property of the Trust
and further agrees to surrender promptly
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to the Trust any of such records upon the Trust's request. The
Investment Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including
brokerage commissions, if any) purchased for the Funds.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Investment
Adviser and the Investment Adviser will accept as full compensation
therefor a fee as set forth on Schedule A hereto. The obligation of
each Fund to pay the above-described fee to the Investment Adviser
will begin as of the date of the initial public sale of shares in such
Fund. The fee attributable to each Fund shall be the obligation of
that Fund and not of any other Fund.
If in any fiscal year the aggregate expenses of any of the Funds (as
defined under the securities regulations of any state having
jurisdiction over the Trust) exceed the expense limitations of any
such state, the Investment Adviser will reimburse the Fund for a
portion of such excess expenses equal to such excess times the ratio
of the fees otherwise payable by the Fund to the Investment Adviser
hereunder to the aggregate fees otherwise payable by the Fund to the
Investment Adviser hereunder and to BISYS Fund Services under the
Management and Administration Agreement between BISYS Fund Services
and the Trust. The obligation of the Investment Adviser to reimburse
the Funds hereunder is limited in any fiscal year to the amount of its
fee hereunder for such fiscal year, provided, however, that
notwithstanding the foregoing, the Investment Adviser shall reimburse
the Funds for such proportion of such excess expenses regardless of
the amount of fees paid to it during such fiscal year to the extent
that the securities regulations of any state having jurisdiction over
the Trust so require. Such expense reimbursement, if any, will be
estimated daily and reconciled and paid on a monthly basis.
8. Limitation of Liability. The Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered
by the Funds in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Investment Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
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9. Duration and Termination. This Agreement will become effective with
respect to each Fund listed on Schedule A as of the date first written
above (or, if a particular Fund is not in existence on that date, on
the date a registration statement relating to that Fund becomes
effective with the Commission), provided that it shall have been
approved by vote of a majority of the outstanding voting securities of
such Fund, in accordance with the requirements under the 1940 Act,
and, unless sooner terminated as provided herein, shall continue in
effect until October 27, 1997. Thereafter, if not terminated, this
Agreement shall continue in effect as to a particular Fund for
successive one-year terms, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority
of those members of the Trust's Board of Trustees who are not parties
to this Agreement or interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of all votes
attributable to the outstanding shares of such Fund. Notwithstanding
the foregoing, this Agreement may be terminated as to a particular
Fund at any time on sixty days' written notice, without the payment of
any penalty, by the Trust (by vote of the Trust's Board of Trustees or
by vote of a majority of the outstanding voting securities of such
Fund) or by the Investment Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement,
the terms "majority of the outstanding voting securities", "interested
persons" and "assignment" shall have the same meanings as ascribed to
such terms in the 1940 Act.)
10. Investment Adviser's Representations. The Investment Adviser hereby
represents and warrants that it is willing and possesses all requisite
legal authority to provide the services contemplated by this Agreement
without violation of applicable law and regulations.
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.
12. Governing Law. This Agreement shall be governed by and its provisions
shall be construed in accordance with the laws of the Commonwealth of
Massachusetts.
13. Miscellaneous. The names "The Coventry Group" and "Trustees of The
Coventry Group" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from
time to time under an Agreement and Declaration of Trust dated as of
January 8, 1992, to which reference is hereby made and a copy of which
is on file at the office of the Secretary of State of The Commonwealth
of Massachusetts and elsewhere as required by law, and to any and
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all amendments thereto so filed or hereafter filed. The obligations
of "The Coventry Group" entered into in the name or on behalf thereof
by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of
the Trustees, shareholders or representatives of the Trust personally,
but bind only the assets of the Trust and all persons dealing with any
series of shares of the Trust must look solely to the assets of the
Trust belonging to such series for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE COVENTRY GROUP
By:
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Name:
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Title:
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ERNST & COMPANY
By:
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Name:
----------------------------
Title:
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Schedule A
to the
Investment Advisory Agreement
between The Coventry Group and
Ernst & Company
Name of Fund Compensation
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Ernst Asia Fund Annual rate of one percent
Ernst Global Resources Fund of the average daily net
assets of such Funds.
Ernst Global Asset Allocation Fund Annual rate of 1.10% of the average
daily net assets of the Fund
Ernst Global Smaller Companies Fund Annual rate of 1.10% of the average
daily net assets of the Fund
Ernst Australia-New Zealand Fixed Annual rate of .60% of the average daily
Income Fund net assets of the Fund
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THE COVENTRY GROUP
By:
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Name:
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Title:
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Date:
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ERNST & COMPANY
By:
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Name:
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Title:
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Date:
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All fees are computed daily and paid monthly.
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