Exhibit A
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this ____ day of _____________, 1998
among The GCG Trust (the "Trust"), a Massachusetts business
trust, Directed Services, Inc. ("Manager"), a New York
corporation, and ________________________________________
("Portfolio Manager"), a Delaware 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 24, 1997, 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;
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
among the Trust, the Manager, and the Portfolio Manager as
follows:
1. Appointment. The Trust and the Manager hereby
appoint ______________________________________ to act as
Portfolio Manager to the Series designated on Schedule A of
this Agreement (each a "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. In
the event the Trust designates one or more series other than
the Series with respect to which the Trust and the Manager
wish to retain the Portfolio Manager to render investment
advisory services hereunder, they shall notify the Portfolio
Manager in writing. If the Portfolio Manager is willing to
render such services, it shall notify the Trust and Manager
in writing, whereupon such series shall become a Series
hereunder, and be subject to this Agreement.
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 each Series' portfolio and determine
the composition of the assets of each 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 each
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 each
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 each 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) manage each Series
so that it will qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code,
(2) manage each Series so as to ensure compliance by the
Series with the diversification requirements of Section
817(h) of the Internal Revenue Code and regulations
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issued thereunder, and (3) use reasonable efforts to
manage the Series so as to ensure compliance by each
Series 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) 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 the 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 a 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 and the Board of Trustees.
(d) In connection with the purchase and sale of
securities for a Series, the Portfolio Manager will
arrange for the transmission to the custodian and
portfolio 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 custodian and portfolio
accounting agent for the Trust of the valuation of
portfolio securities and other investments of the
Series. The Portfolio Manager will assist the 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 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.
(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, and 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.
(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
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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 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 each 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, and 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 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
SECommission 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
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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.
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 each Series's net assets;
(e) Expenses of obtaining Portfolio Activity Reports
and Analyses of International Management Reports (as
appropriate) for each Series;
(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 15 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 monthly as
described in Schedule B.
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7. Seed Money. The Manager agrees that the Portfolio
Manager shall not be responsible for providing money for the
initial capitalization of the Series.
8. Compliance.
(a) 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, or (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.
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, or
any amendment or supplement thereto, or of any statement
contained therein that becomes untrue in any material
respect.
(b) 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, or (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.
9. Insurance Company Offerees. All parties acknowledge
that the Trust will offer its shares so that it may serve as
an investment vehicle for variable annuity contracts and
variable life insurance policies issued by insurance
companies. The Trust and the Manager agree that shares of
the Series may be offered only to the separate accounts and
general account of insurance companies that are approved in
writing by the Portfolio Manager. The Portfolio Manager
agrees that shares of this Series may be offered to separate
accounts and the general account of Golden American Variable
Life Insurance Company and to the general and separate
accounts of any insurance companies that are or become
affiliated with Golden American Life Insurance Company. The
Manager and Trust agree that the Portfolio Manager shall be
under no obligation to investigate insurance companies to
which the Trust offers or proposes to offer its shares.
10.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 by
Rule 31a-l under the 1940 Act and to preserve the records
required by Rule 204-2 under the Advisers Act for the period
specified in the Rule.
11.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 SEC and state insurance
regulators) in connection with any investigation or inquiry
relating to this Agreement or the Trust.
12.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 information or make any representations or
statements in connection with the sale of shares of the
Series concerning the Portfolio Manager 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, 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
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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 30 days, the Manager and its
affiliated persons may use and distribute such sales
literature or other promotional material, although, in such
event, the Portfolio Manager shall not be deemed to have
approved of the contents of such sales literature or other
promotional material.
13.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.
00.Xxxxxxxx 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.
15.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 willful misfeasance, bad faith, or gross
negligence in the performance of the Portfolio Manager's
duties, or by reason of reckless disregard of the Portfolio
Manager's obligations and duties under this Agreement.
16.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
misfeasance, malfeasance, or nonfeasance 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 and contained in the
Registration Statement or prospectus covering shares of
the Trust or a 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 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 15 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 as Portfolio Manager of the Series
which (1) may be based upon any misfeasance,
malfeasance, or nonfeasance 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 a failure to
comply with Section 2, Paragraph (a) of this Agreement,
or (3) may be based upon any untrue
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statement or alleged
untrue statement of a material fact 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 16 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 16. 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.
(d) The Portfolio Manager shall not be liable under
Paragraph (b) of this Section 16 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 16. 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
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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.
17.Duration and Termination. This Agreement shall
become effective on the date first indicated above. Unless
terminated as provided herein, the Agreement shall remain in
full force and effect for two (2) years from such date and
continue on an annual basis thereafter with respect to each
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 each 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. The Portfolio Manager shall not provide
any services for such Series or receive any fees on account
of such Series with respect to which this Agreement is not
approved as described in the preceding sentence. However,
any approval of this Agreement by the holders of a majority
of the outstanding shares (as defined in the 0000 Xxx) of a
Series shall be effective to continue this Agreement with
respect to such 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 the foregoing, this Agreement may
be terminated for each or any Series hereunder: (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 each
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 each 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. The 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),
10, 11, 12, 15, 16, and 19 of this Agreement shall remain in
effect, as well as any applicable provision of this
Paragraph numbered 17.
18.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.
19.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 "______________
________________________" 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 with the approval of the Portfolio Manager and 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).
A-8
20.Amended and Restated Agreement and Declaration of
Trust. A copy of the Amended and Restated Agreement and
Declaration of Trust for the Trust is on file with the
Secretary of the Commonwealth of Massachusetts. The Amended
and Restated 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.
21.Miscellaneous.
(a) This Agreement shall be governed by the laws of
the State of Delaware, 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 17 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.
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
_____________________________________
______________________________ By: _____________________________
Attest
______________________________ _________________________________
Title Title
A-9
SCHEDULE A
The Series of The GCG Trust, as described in Section 1
of the attached Portfolio Management Agreement, to which
_____________________________________ shall act as Portfolio
Manager is as follows:
Capital Appreciation Series
SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by ______________________
__________________ ("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
------ ----
Capital Appreciation 0.50%
A-10
