PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 29th day of December, 1995 among The GCG Trust (the
"Trust"), a Massachusetts business trust, Directed Services, Inc. ("Manager"), a
New York corporation, and Xxxx Xxxxx Management, Inc. ("Portfolio Manager"), a
New York corporation.
WHEREAS, the Trust is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, management
investment company;
WHEREAS, the Trust is authorized to issue separate series, each
of which will offer a separate class of shares of beneficial interest,
each series having its own investment objective or objectives,
policies, and limitations;
WHEREAS, the Trust currently offers shares in multiple series,
may offer shares of additional series in the future, and intends to
offer shares of additional series in the future;
WHEREAS, pursuant to a Management Agreement, effective as of
October 1, 1993, a copy of which has been provided to the Portfolio
Manager, the Trust has retained the Manager to render advisory,
management, and administrative services to many of the Trust's series;
and
WHEREAS, the Trust and the Manager wish to retain the Portfolio
Manager to furnish investment advisory services to one or more of the
series of the Trust, and the Portfolio Manager is willing to furnish
such services to the Trust and the Manager;
NOW THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Trust, the Manager, and the
Portfolio Manager as follows:
1. APPOINTMENT. The Trust and the Manager hereby appoint Xxxx Xxxxx
Management, Inc. to act as Portfolio Manager to the Series designated on
Schedule A of this Agreement (the "Series") for the periods and on the terms set
forth in this Agreement. The Portfolio Manager accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. PORTFOLIO MANAGEMENT DUTIES. Subject to the supervision of the Trust's
Board of Trustees and the Manager, the Portfolio Manager will provide a
continuous investment program for the Series' portfolio and determine the
composition of the assets of the Series' portfolio, including determination of
the purchase, retention, or sale of the securities, cash, and other investments
contained in the portfolio. The Portfolio Manager will provide investment
research and conduct a continuous program of evaluation, investment, sales, and
reinvestment of the Series' assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed, or exchanged
for the Series, when these transactions should be executed, and what portion of
the assets of the Series should be held in the various securities and other
investments in which it may invest, and the Portfolio Manager is hereby
authorized to execute and perform such services on
behalf of the Series. To the extent permitted by the investment policies of the
Series, the Portfolio Manager shall make decisions for the Series as to foreign
currency matters and make determinations as to and execute and perform foreign
currency exchange contracts on behalf of the Series. The Portfolio Manager will
provide the services under this Agreement in accordance with the Series'
investment objective or objectives, policies, and restrictions as stated in the
Trust's Registration Statement filed with the Securities and Exchange Commission
("SEC"), as amended, copies of which shall be sent to the Portfolio Manager by
the Manager. The Portfolio Manager further agrees as follows:
(a) The Portfolio Manager will (1) take all steps necessary to
manage the Series so that it will qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code, (2) take all
steps necessary to manage the Series so that the Series will comply
with the diversification requirements of Section 817(h) of the
Internal Revenue Code and regulations issued thereunder, and (3) use
reasonable efforts to manage the Series so that the Series will comply
with any other rules and regulations pertaining to investment vehicles
underlying variable annuity or variable life insurance policies. The
Manager or the Trust will notify the Portfolio Manager of any
pertinent changes, modifications to, or interpretations of Section
817(h) of the Internal Revenue Code and regulations issued thereunder.
(b) In performing its services hereunder, the Portfolio Manager
will conform with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Trust's
Board of Trustees of which the Portfolio Manager has been sent a copy,
and all applicable provisions of the Registration Statement of the
Trust under the Securities Act of 1933 (the "1933 Act") and the 1940
Act, as supplemented or amended, of which the Portfolio Manager has
received a copy. The Manager or the Trust will notify the Portfolio
Manager of pertinent provisions of applicable state insurance law with
which the Portfolio Manager must comply under this Paragraph 2(b).
(c) On occasions when the Portfolio Manager deems the purchase
or sale of a security to be in the best interest of the Series as well
as of other investment advisory clients of the Portfolio Manager or
any of its affiliates, the Portfolio Manager may, to the extent
permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be so sold or purchased with
those of its other clients where such aggregation is not inconsistent
with the policies set forth in the Registration Statement. 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
Portfolio Manager in a manner that is fair and equitable in the
judgment of the Portfolio Manager in the exercise of its fiduciary
obligations to the Trust and to such other clients, subject to review
by the Manager, who will be promptly notified, and the Board of
Trustees.
(d) In connection with the purchase and sale of securities for
the Series, the Portfolio Manager will arrange for the transmission to
the custodian and portfolio
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accounting agent for the Series on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not limited
to, CUSIP, SEDOL, or other numbers that identify securities to be purchased
or sold on behalf of the Series, as may be reasonably necessary to enable
the custodian and portfolio accounting agent to perform its administrative
and recordkeeping responsibilities with respect to the Series. With
respect to portfolio securities to be purchased or sold through the
Depository Trust Company, the Portfolio Manager will arrange for the
automatic transmission of the confirmation of such trades to the Trust's
custodian and portfolio accounting agent.
(e) The Portfolio Manager will monitor on a daily basis the
determination by the portfolio accounting agent for the Trust of the
valuation of portfolio securities and other investments of the Series.
The Portfolio Manager will assist the Manager, custodian and portfolio
accounting agent for the Trust in determining or confirming,
consistent with the procedures and policies stated in the Registration
Statement for the Trust, the value and liquidity of any portfolio
securities or other assets of the Series for which the custodian and
portfolio accounting agent seeks assistance from or identifies for
review by the Portfolio Manager. The Portfolio Manager will be
responsible for monitoring and maintaining industry classifications
for purposes of compliance with investment concentration requirements
under the 1940 Act.
(f) The Portfolio Manager will make available to the Trust and
the Manager, promptly upon request, all of the Series' investment
records and ledgers maintained by the Portfolio Manager (which shall
not include the records and ledgers maintained by the custodian or
portfolio accounting agent for the Trust) as are necessary to assist
the Trust and the Manager to comply with requirements of the 1940 Act
and the Investment Advisers Act of 1940 (the "Advisers Act"), as well
as other applicable laws. The Portfolio Manager will furnish to
regulatory authorities having the requisite authority any information
or reports in connection with such services which may be requested in
order to ascertain whether the operations of the Trust are being
conducted in a manner consistent with applicable laws and regulations.
(g) The Portfolio Manager will provide reports to the Trust's
Board of Trustees for consideration at meetings of the Board on the
investment program for the Series and the issuers and securities
represented in the Series' portfolio, will furnish the Trust's Board
of Trustees with respect to the Series such periodic and special
reports as the Trustees and the Manager may reasonably request, and
will attend Board meetings upon the request of the Board of Trustees.
(h) In rendering the services required under this Agreement, the
Portfolio Manager may, from time to time, employ or associate with
itself such person or persons as it believes necessary to assist it in
carrying out its obligations under this Agreement. However, the
Portfolio Manager may not retain as subadviser any company that would
be an "investment adviser," as that term is defined in the 1940 Act,
to the Series unless the contract with such company is approved by a
majority of the Trust's Board of Trustees and
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a majority of Trustees who are not parties to any agreement or contract
with such company and who are not "interested persons," as defined in the
1940 Act, of the Trust, the Manager, or the Portfolio Manager, or any such
company that is retained as subadviser, and is approved by the vote of a
majority of the outstanding voting securities of the applicable Series of
the Trust to the extent required by the 1940 Act. The Portfolio Manager
shall be responsible for making reasonable inquiries and for reasonably
ensuring that any employee of the Portfolio Manager, any subadviser that
the Portfolio Manager has employed or with which it has associated with
respect to the Series, or any employee thereof has not, to the best of the
Portfolio Manager's knowledge, in any material connection with the handling
of Trust assets:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement,
fraudulent conversion, or misappropriation of funds or
securities, involving violations of Sections 1341, 1342, or 1343
of Xxxxx 00, Xxxxxx Xxxxxx Code, or involving the purchase or
sale of any security; or
(ii) been found by any state regulatory authority, within the
last ten (10) years, to have violated or to have acknowledged
violation of any provision of any state insurance law involving
fraud, deceit, or knowing misrepresentation; or
(iii) been found by any federal or state regulatory authorities,
within the last ten (10) years, to have violated or to have
acknowledged violation of any provision of federal or state
securities laws involving fraud, deceit, or knowing
misrepresentation.
3. BROKER-DEALER SELECTION. The Portfolio Manager is responsible for
decisions to buy and sell securities and other investments for the Series'
portfolio, broker-dealer selection, and negotiation of brokerage commission
rates. The Portfolio Manager's primary consideration in effecting a security
transaction will be to obtain the best execution for the Series, taking into
account the factors specified in the prospectus and/or statement of additional
information for the Trust, which include price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature of the
market for the security, the timing of the transaction, the reputation, the
experience and financial stability of the broker-dealer involved, the quality of
the service, the difficulty of execution, the execution capabilities and
operational facilities of the firm involved, and the firm's risk in positioning
a block of securities. Accordingly, the price to the Series in any transaction
may be less favorable than that available from another broker-dealer if the
difference is reasonably justified, in the judgment of the Portfolio Manager in
the exercise of its fiduciary obligations to the Trust, by other aspects of the
portfolio execution services offered. Subject to such policies as the Board of
Trustees may determine and consistent with Section 28(e) of the Securities
Exchange Act of 1934, the Portfolio Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Series to pay a broker-dealer for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for
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effecting that transaction, if the Portfolio Manager or its affiliate determines
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the Portfolio Manager's
or its affiliate's overall responsibilities with respect to the Series and to
their other clients as to which they exercise investment discretion. To the
extent consistent with these standards, the Portfolio Manager is further
authorized to allocate the orders placed by it on behalf of the Series to the
Portfolio Manager if it is registered as a broker-dealer with the SEC, to its
affiliated broker-dealer, or to such brokers and dealers who also provide
research or statistical material, or other services to the Series, the Portfolio
Manager, or an affiliate of the Portfolio Manager. Such allocation shall be in
such amounts and proportions as the Portfolio Manager shall determine consistent
with the above standards, and the Portfolio Manager will report on said
allocation regularly to the Board of Trustees of the Trust indicating the
broker-dealers to which such allocations have been made and the basis therefor.
4. DISCLOSURE ABOUT PORTFOLIO MANAGER. The Portfolio Manager has reviewed
the post-effective amendment to the Registration Statement for the Trust filed
with the Securities and Exchange Commission and provided to the Portfolio
Manager that contains disclosure about the Portfolio Manager, and represents and
warrants that, with respect to the disclosure about the Portfolio Manager or
information relating, directly or indirectly, to the Portfolio Manager, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Portfolio Manager further represents and warrants
that it is a duly registered investment adviser under the Advisers Act and a
duly registered investment adviser in all states in which the Portfolio Manager
is required to be registered for purposes of this Agreement.
5. EXPENSES. During the term of this Agreement, the Portfolio Manager
will pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement. The
Manager or the Trust shall be responsible for all the expenses of the Trust's
operations including, but not limited to:
(a) Expenses of all audits by the Trust's independent public
accountants;
(b) Expenses of the Series' transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
(c) Expenses of the Series' custodial services including
recordkeeping services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value
of the Series' net assets;
(e) Expenses of obtaining daily pricing reports (as appropriate)
for the Series;
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(f) Expenses of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the Trust's
executive officers and employees, if any, who are not officers,
directors, stockholders, or employees of the Portfolio Manager or an
affiliate of the Portfolio Manager;
(h) Taxes levied against the Trust;
(i) Brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for the Series;
(j) Costs, including the interest expense, of borrowing money;
(k) Costs and/or fees incident to meetings of the Trust's
shareholders, the preparation and mailings of prospectuses and reports
of the Trust to its shareholders, the filing of reports with
regulatory bodies, the maintenance of the Trust's existence, and the
regulation of shares with federal and state securities or insurance
authorities;
(l) The Trust's legal fees, including the legal fees related to
the registration and continued qualification of the Trust's shares for
sale;
(m) Costs of printing stock certificates representing shares of
the Trust;
(n) Trustees' fees and expenses to trustees who are not
officers, employees, or stockholders of the Portfolio Manager or any
affiliate thereof;
(o) The Trust's pro rata portion of the fidelity bond required
by Section 17(g) of the 1940 Act, or other insurance premiums;
(p) Association membership dues;
(q) Extraordinary expenses of the Trust as may arise including
expenses incurred in connection with litigation, proceedings, and
other claims (unless the Portfolio Manager is responsible for such
expenses under Section 14 of this Agreement), and the legal
obligations of the Trust to indemnify its Trustees, officers,
employees, shareholders, distributors, and agents with respect
thereto; and
(r) Organizational and offering expenses.
6. COMPENSATION. For the services provided, the Manager will pay the
Portfolio Manager a fee, payable as described on Schedule B.
7. SEED MONEY. The Trust and the Manager agree that the Portfolio Manager
shall not be responsible for providing money for the initial capitalization of
the Series.
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8. COMPLIANCE. The Portfolio Manager agrees that it shall immediately
notify the Manager and the Trust (1) in the event that the SEC has censured the
Portfolio Manager; placed limitations upon its activities, functions or
operations; suspended or revoked its registration as an investment adviser; or
has commenced proceedings or an investigation that may result in any of these
actions, (2) upon having a reasonable basis for believing that the Series has
ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, (3) upon having a reasonable basis
for believing that the Series has ceased to comply with the diversification
provisions of Section 817(h) of the Internal Revenue Code or the Regulations
thereunder, or (4) upon discovery of any error in the pricing, trading, or
maintenance of the Series. The Portfolio Manager further agrees to notify the
Manager and the Trust immediately of any material fact known to the Portfolio
Manager respecting or relating to the Portfolio Manager that is not contained in
the Registration Statement or prospectus for the Trust provided to the Portfolio
Manager by the Manager, or any amendment or supplement thereto, or of any
statement contained therein that becomes untrue in any material respect.
The Manager agrees that it shall immediately notify the Portfolio Manager
(1) in the event that the SEC has censured the Manager or the Trust; placed
limitations upon either of their activities, functions, or operations; suspended
or revoked the Manager's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, (2)
upon having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code, (3) upon having a reasonable basis for believing
that the Series has ceased to comply with the diversification provisions of
Section 817(h) of the Internal Revenue Code or the Regulations thereunder, or
(4) upon discovery of any error in the pricing, trading, or maintenance of the
Series.
9. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Portfolio Manager hereby agrees that all records which
it maintains for the Series are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or the
Manager's request, although the Portfolio Manager may, at its own expense, make
and retain a copy of such records. The Portfolio Manager further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained with respect to the management of the Series'
portfolio by Rule 31a-l(b) and (f) under the 1940 Act and to preserve the
records with respect to the management of the Series' portfolio required by Rule
204-2 under the Advisers Act for the period specified in the Rule.
10. COOPERATION. Each party to this Agreement agrees to cooperate with
each other party and with all appropriate governmental authorities having the
requisite jurisdiction (including, but not limited to, the Securities and
Exchange Commission and state insurance regulators) in connection with any
investigation or inquiry relating to this Agreement or the Trust.
11. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER. The Manager and the
Trust agree that neither the Trust, the Manager, nor affiliated persons of the
Trust or the Manager shall give any
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information or make any representations or statements in connection with the
sale of shares of the Series concerning the Portfolio Manager, its affiliates,
or the Series other than the information or representations contained in the
Registration Statement, prospectus, or statement of additional information for
the Trust shares, as they may be amended or supplemented from time to time, or
in reports or proxy statements for the Trust (which information and
representations, insofar as they pertain to the Portfolio Manager and its
affiliates, shall have been made only in reliance on and in conformity with
information supplied by the Portfolio Manager or an affiliate), or in sales
literature or other promotional material approved in advance by the Portfolio
Manager, except with the prior permission of the Portfolio Manager. The parties
agree that in the event that the Manager or an affiliated person of the Manager
sends sales literature or other promotional material to the Portfolio Manager
for its approval and the Portfolio Manager has not commented within 7 days, the
Manager and its affiliated persons may use and distribute such sales literature
or other promotional material, and the Portfolio Manager shall be deemed to have
approved of the contents of such sales literature or other promotional material.
12. CONTROL. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and reserve the right to direct, approve, or disapprove any action
hereunder taken on its behalf by the Portfolio Manager.
13. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Portfolio Manager are not exclusive, and nothing in this Agreement shall prevent
the Portfolio Manager (or its affiliates) from providing similar services to
other clients, including investment companies (whether or not their investment
objectives and policies are similar to those of the Series) or from engaging in
other activities.
14. LIABILITY. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Trust and the Manager agree that
the Portfolio Manager, any affiliated person of the Portfolio Manager, and each
person, if any, who, within the meaning of Section 15 of the 1933 Act controls
the Portfolio Manager shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
the Portfolio Manager's negligent performance of its duties, or by reason of any
violation of the Portfolio Manager's obligations and duties under this
Agreement.
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15. INDEMNIFICATION.
(a) The Manager agrees to indemnify and hold harmless the
Portfolio Manager, any affiliated person of the Portfolio Manager, and
each person, if any, who, within the meaning of Section 15 of the 1933
Act controls ("controlling person") the Portfolio Manager (all of such
persons being referred to as "Portfolio Manager Indemnified Persons")
against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Portfolio
Manager Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, the Internal Revenue Code, under any other
statute, at common law or otherwise, arising out of the Manager's
responsibilities to the Trust which (1) may be based upon any willful
misfeasance, bad faith, or gross negligence in the performance of
duties under this Agreement or reckless disregard of obligations and
duties under this Agreement by the Manager, any of its employees or
representatives or any affiliate of or any person acting on behalf of
the Manager or (2) may be based upon any untrue statement or alleged
untrue statement of a material fact supplied by, or which is the
responsibility of, the Manager or the Trust and contained in the
Registration Statement or prospectus covering shares of the Trust or
the Series, or any amendment thereof or any supplement thereto, or the
omission or alleged omission to state therein a material fact known or
which should have been known to the Manager or the Trust 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 information furnished to the Manager or the Trust or to
any affiliated person of the Manager by a Portfolio Manager
Indemnified Person; provided however, that in no case shall the
indemnity in favor of the Portfolio Manager Indemnified Person be
deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its duties, or by
reason of its reckless disregard of obligations and duties under this
Agreement.
(b) Notwithstanding Section 14 of this Agreement, the Portfolio
Manager agrees to indemnify and hold harmless the Manager, any
affiliated person of the Manager, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act, controls ("controlling
person") the Manager (all of such persons being referred to as
"Manager Indemnified Persons") against any and all losses, claims,
damages, liabilities, or litigation (including legal and other
expenses) to which a Manager Indemnified Person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, the Internal Revenue
Code, under any other statute, at common law or otherwise, arising out
of the Portfolio Manager's responsibilities under this Agreement which
(1) may be based upon any willful misfeasance, bad faith, or gross
negligence in the performance of duties under this Agreement or
reckless disregard of obligations and duties under this Agreement by
the Portfolio Manager, any of its employees or representatives, or any
affiliate of or any person acting on behalf of the Portfolio Manager,
(2) may be based upon any negligence in the performance of its
obligations under Section 2, Paragraph (a) of this Agreement, or (3)
may be based upon any untrue statement or alleged untrue statement of
a material fact
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contained in the Registration Statement or prospectus covering the shares
of the Trust or a Series, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact known or
which should have been known to the Portfolio Manager and was required to
be stated therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in reliance upon
information furnished to the Manager, the Trust, or any affiliated person
of the Manager or Trust by the Portfolio Manager or any affiliated person
of the Portfolio Manager; provided, however, that in no case shall the
indemnity in favor of a Manager Indemnified Person be deemed to protect
such person against any liability to which any such person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence in
the performance of its duties, or by reason of its reckless disregard of
its obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this
Section 15 with respect to any claim made against a Portfolio Manager
Indemnified Person unless such Portfolio Manager Indemnified Person shall
have notified the Manager in writing within a reasonable time after the
summons, notice, or other first legal process or notice giving information
of the nature of the claim shall have been served upon such Portfolio
Manager Indemnified Person (or after such Portfolio Manager Indemnified
Person shall have received notice of such service on any designated agent),
but failure to notify the Manager of any such claim shall not relieve the
Manager from any liability which it may have to the Portfolio Manager
Indemnified Person against whom such action is brought otherwise than on
account of this Section 15. In case any such action is brought against the
Portfolio Manager Indemnified Person, the Manager will be entitled to
participate, at its own expense, in the defense thereof or, after notice to
the Portfolio Manager Indemnified Person, to assume the defense thereof,
with counsel satisfactory to the Portfolio Manager Indemnified Person. If
the Manager assumes the defense of any such action and the selection of
counsel by the Manager to represent both the Manager and the Portfolio
Manager Indemnified Person would result in a conflict of interests and
therefore, would not, in the reasonable judgment of the Portfolio Manager
Indemnified Person, adequately represent the interests of the Portfolio
Manager Indemnified Person, the Manager will, at its own expense, assume
the defense with counsel to the Manager and, also at its own expense, with
separate counsel to the Portfolio Manager Indemnified Person, which counsel
shall be satisfactory to the Manager and to the Portfolio Manager
Indemnified Person. The Portfolio Manager Indemnified Person shall bear
the fees and expenses of any additional counsel retained by it, and the
Manager shall not be liable to the Portfolio Manager Indemnified Person
under this Agreement for any legal or other expenses subsequently incurred
by the Portfolio Manager Indemnified Person independently in connection
with the defense thereof other than reasonable costs of investigation. The
Manager shall not have the right to compromise on or settle the litigation
without the prior written consent of the Portfolio Manager Indemnified
Person if the compromise or settlement results, or may result in a finding
of wrongdoing on the part of the Portfolio Manager Indemnified Person.
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(d) The Portfolio Manager shall not be liable under Paragraph
(b) of this Section 15 with respect to any claim made against a
Manager Indemnified Person unless such Manager Indemnified Person
shall have notified the Portfolio Manager in writing within a
reasonable time after the summons, notice, or other first legal
process or notice giving information of the nature of the claim shall
have been served upon such Manager Indemnified Person (or after such
Manager Indemnified Person shall have received notice of such service
on any designated agent), but failure to notify the Portfolio Manager
of any such claim shall not relieve the Portfolio Manager from any
liability which it may have to the Manager Indemnified Person against
whom such action is brought otherwise than on account of this Section
15. In case any such action is brought against the Manager
Indemnified Person, the Portfolio Manager will be entitled to
participate, at its own expense, in the defense thereof or, after
notice to the Manager Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Manager Indemnified Person.
If the Portfolio Manager assumes the defense of any such action and
the selection of counsel by the Portfolio Manager to represent both
the Portfolio Manager and the Manager Indemnified Person would result
in a conflict of interests and therefore, would not, in the reasonable
judgment of the Manager Indemnified Person, adequately represent the
interests of the Manager Indemnified Person, the Portfolio Manager
will, at its own expense, assume the defense with counsel to the
Portfolio Manager and, also at its own expense, with separate counsel
to the Manager Indemnified Person which counsel shall be satisfactory
to the Portfolio Manager and to the Manager Indemnified Person. The
Manager Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Portfolio Manager shall not
be liable to the Manager Indemnified Person under this Agreement for
any legal or other expenses subsequently incurred by the Manager
Indemnified Person independently in connection with the defense
thereof other than reasonable costs of investigation. The Portfolio
Manager shall not have the right to compromise on or settle the
litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may
result in a finding of wrongdoing on the part of the Manager
Indemnified Person.
16. DURATION AND TERMINATION. This Agreement shall become effective on
January 1, 1996, and shall continue in effect, unless sooner terminated as
provided herein, for two (2) years from January 1, 1996 and continue on an
annual basis thereafter with respect to the Series; provided that such annual
continuance is specifically approved each year by (a) the vote of a majority of
the entire Board of Trustees of the Trust, or by the vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Series, and
(b) the vote of a majority of those Trustees who are not parties to this
Agreement or interested persons (as such term is defined in the 0000 Xxx) of any
such party to this Agreement cast in person at a meeting called for the purpose
of voting on such approval. Any approval of this Agreement by the holders of a
majority of the outstanding shares (as defined in the 0000 Xxx) of the Series
shall be effective to continue this Agreement with respect to the Series
notwithstanding (i) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Series or (ii) that this
agreement has not been approved by the vote of a majority of the outstanding
shares of the Trust, unless such approval shall be required by any other
applicable law or otherwise. Notwithstanding
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the foregoing, this Agreement may be terminated: (a) by the Manager at any time
without penalty, upon sixty (60) days' written notice to the Portfolio Manager
and the Trust, (b) at any time without payment of any penalty by the Trust, upon
the vote of a majority of the Trust's Board of Trustees or a majority of the
outstanding voting securities of the Series, upon sixty (60) days' written
notice to the Manager and the Portfolio Manager, or (c) by the Portfolio Manager
at any time without penalty, upon sixty (60) days' written notice to the Manager
and the Trust. In the event of termination for any reason, all records of the
Series for which the Agreement is terminated shall promptly be returned to the
Manager or the Trust, free from any claim or retention of rights in such record
by the Portfolio Manager, although the Portfolio Manager may, at its own
expense, make and retain a copy of such records. This Agreement shall
automatically terminate in the event of its assignment (as such term is
described in the 1940 Act). In the event this Agreement is terminated or is not
approved in the manner described above, the Sections or Paragraphs numbered
2(f), 9, 10, 11, 14, 15, and 18 of this Agreement shall remain in effect, as
well as any applicable provision of this Paragraph numbered 16.
17. AMENDMENTS. 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, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Series, and (ii) the Trustees of the Trust,
including a majority of the Trustees of the Trust who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable
law.
18. USE OF NAME.
(a) It is understood that the name "Directed Services, Inc." or
any derivative thereof or logo associated with that name is the
valuable property of the Manager and/or its affiliates, and that the
Portfolio Manager has the right to use such name (or derivative or
logo) only with the approval of the Manager and only so long as the
Manager is Manager to the Trust and/or the Series. Upon termination
of the Management Agreement between the Trust and the Manager, the
Portfolio Manager shall forthwith cease to use such name (or
derivative or logo).
(b) It is understood that the name "Xxxx Xxxxx Management, Inc."
or any derivative thereof or logo associated with that name is the
valuable property of the Portfolio Manager and its affiliates and that
the Trust and/or the Series have the right to use such name (or
derivative or logo) in offering materials of the Trust only with the
approval of the Portfolio Manager and only for so long as the
Portfolio Manager is a portfolio manager to the Trust and/or the
Series. Upon termination of this Agreement between the Trust, the
Manager, and the Portfolio Manager, the Trust shall forthwith cease to
use such name (or derivative or logo).
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19. AGREEMENT AND DECLARATION OF TRUST. A copy of the Agreement and
Declaration of Trust for the Trust is on file with the Secretary of the
Commonwealth of Massachusetts. The Agreement and Declaration of Trust has been
executed on behalf of the Trust by Trustees of the Trust in their capacity as
Trustees of the Trust and not individually. The obligations of this Agreement
shall be binding upon the assets and property of the Trust and shall not be
binding upon any Trustee, officer, or shareholder of the Trust individually.
20. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the State of
New York, without giving effect to any provisions relating to conflict
of laws, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of
the SEC thereunder. The term "affiliate" or "affiliated person" as
used in this Agreement shall mean "affiliated person" as defined in
Section 2(a)(3) of the 0000 Xxx.
(b) The captions of this Agreement are included for convenience
only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) To the extent permitted under Section 16 of this Agreement,
this Agreement may only be assigned by any party with the prior
written consent of the other parties.
(d) 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, and to this extent, the provisions
of this Agreement shall be deemed to be severable.
(e) Nothing herein shall be construed as constituting the Portfolio
Manager as an agent of the Manager, or constituting the Manager as an agent
of the Portfolio Manager.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
THE GCG TRUST
By:
----------------------- ------------------------
Attest
----------------------- ------------------------
Title Title
DIRECTED SERVICES, INC.
By:
----------------------- ------------------------
Attest
----------------------- ---------------------------
Title Title
XXXX XXXXX MANAGEMENT, INC.
By:
----------------------- ------------------------
Attest
----------------------- ---------------------------
Title Title
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SCHEDULE A
The Series of The GCG Trust, as described in Section 1 of the attached
Portfolio Management Agreement to which Xxxx Xxxxx Management, Inc. shall act
as Portfolio Manager are as follows:
SMALL CAP SERIES
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SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Xxxx Xxxxx Management, Inc. ("Portfolio
Manager") to the following Series of The GCG Trust, pursuant to the attached
Portfolio Management Agreement, the Manager will pay the Portfolio Manager a
fee, payable monthly, based on the average daily net assets of the Series at the
following annual rates of the average daily net assets of the Series:
Series Rate
------ ----
Small Cap Series 0.50% of net assets
- 16 -
