Exhibit (d)(2)
Xxxxx Selected Advisers - NY, Inc.
000 Xxxxx Xxx
Xxx Xxxx XX 00000
Re: Sub-Advisory Agreement for Xxxxx Variable Account Fund, Inc.
This is to confirm that Xxxxx Selected Advisers, L.P. (the "Adviser")
is retaining Xxxxx Selected Advisers - NY, Inc. ("DSA-NY") as investment
sub-adviser for the portfolio of Xxxxx Variable Account Fund, Inc.
(the "Fund").
The terms and conditions of your retention are as follows:
1. Service as Sub-Adviser. DSA-NY shall act as an investment sub-adviser for
the Fund and will provide such investment management and research services as
the Adviser shall request subject to the general supervision of the Board of
Directors of the Fund, Xxxxx Selected Advisers, L.P. (the "Adviser") and to any
applicable provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Fund, (b) the prospectus, statement of
additional information and other information set forth in the Fund's
registration documents under the Securities Act of 1933 and the Investment
Company Act of 1940 ("1940 Act"), including any supplements thereto, (c) the
Investment Advisory Agreement between the Adviser and the Fund (the "Investment
Advisory Agreement"), the Adviser's and the Fund's Code of Ethics and (d) any
additional policies or guidelines established by the Fund's Board of Directors
or the Adviser. DSA-NY acknowledges receipt of copies of the above documents as
in effect on the date of acceptance of this letter. The Adviser agrees that it
will promptly deliver to DSA-NY any amendments, changes or additions of or to
these documents.
2. Securities Transactions. DSA-NY agrees that all securities transactions will
conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which are
hereby incorporated by reference herein) and the registration documents, and
(c) those investment and brokerage policies or guidelines directed by the Board
of Directors of the Fund, any committee thereof and the Adviser.
3. Independent Contractor. DSA-NY shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of the Fund, DSA-NY shall have no authority to represent the Fund or
the Adviser in any way or otherwise be an agent of the Adviser or the Fund,
except with regard to the execution of securities transactions on behalf of the
Fund with registered broker/dealers, including broker/dealers affiliated with
the Adviser, provided such transactions comply with Rule 17e-1 of the 1940 Act.
4. Reports and Other Documentation. DSA-NY shall provide the Adviser with any
reports, analyses or other documentation the Adviser requests including those
related to placement of security transactions, its administrative
responsibilities and its responsibility to monitor compliance with stated
investment objectives, policies and limitations and the investment
performance of the Fund. DSA-NY agrees, directly or through an agent, to provide
daily information in respect to any portfolio transactions of the Fund to the
Adviser. DSA-NY agrees to provide all documentation reasonably required by the
Adviser to maintain Fund's accounting records in accordance with the 1940 Act
and the Investment Advisers Act of 1940 and the regulations issued thereunder,
and to preserve copies of all documents and records related to asset
transactions, positions and valuations related to the Fund in the manner and for
the periods prescribed by such regulations. DSA-NY further agrees that all
documents and records it maintains relating to the Fund, are the property of the
Fund and will be surrendered to the Adviser or the Fund upon the request of
either. DSA-NY agrees to provide information and to allow inspection of such
documents and records at reasonable times by any authorized representative of
the Adviser, the Fund's Board of Directors or any committee thereof, the Fund's
independent public accountants or appropriate regulatory authorities. DSA-NY
shall provide to the Adviser a copy of its Form ADV as filed with the SEC and as
amended from time to time and a written list of persons DSA-NY has authorized to
give written and/or oral instructions to the Adviser and the Fund custodian.
5. Personnel Available. DSA-NY agrees to make its personnel who are engaged in
activities on behalf of the Fund available at reasonable times for
consultations with the Adviser's personnel and the Fund's Board of Directors or
any committee thereof, including attendance at their meetings, wherever
situated. In addition, personnel of DSA-NY, at the request of the Adviser, will
attend other meetings to be scheduled at mutually convenient times and shall be
reimbursed for its reasonable expenses in connection therewith.
6. Office facilities, equipment and personnel. DSA-NY agrees to provide all
office facilities, equipment and personnel for carrying out its duties
hereunder at its own expense. In addition, DSA-NY shall, if requested by the
Adviser or the Fund, employ at its own expense and subject to the prior written
approval of the Adviser which approval shall not be unreasonably withheld (i) a
public auditing firm, (ii) attorneys and (iii) such other professional staff as
in the sole discretion of the Adviser are necessary to assure the fulfillment
of the terms and conditions of this agreement.
7. Non Exclusive Services. It is agreed that DSA-NY's services are not to be
deemed exclusive and DSA-NY shall be free to render similar services or other
services to others provided that (i) its services hereunder are not impaired
and are not in violation of federal or state securities laws and (ii) that it
shall not provide services to any registered investment company other than the
Fund or other investment companies managed by the Adviser without the Adviser's
prior express written permission.
8. Limitation of Liability, Expenses of Claims. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties hereunder, DSA-NY, its officers, directors and employees
shall not be subject to liability for any act or omission in the cause of, or
connected with, rendering service hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security. In the event of any
claim, arbitration, suit, or administrative proceedings in which DSA-NY or the
Adviser is a party and in which it is finally determined that there is
liability or wrongdoing by only one of us, the party liable or found to be the
wrongdoer shall pay for all liability and expenses of such claim or proceeding
including reasonable attorneys' fees. If it is determined that there is
liability or wrongdoing by both or
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none of us, then each shall pay their own liability and expenses. In the event
of any settlement of any such claim, arbitration, suit or proceeding before
final determination by a court or arbitrator(s), the liability and expenses
shall be assumed as agreed between the parties, but if there is no agreement
within thirty (30) days of such settlement, then the assumption of liability and
expenses shall be settled by arbitration, in accordance with the then applicable
rules of the American Arbitration Association. Judgment upon the award rendered
by the arbitrator shall be final and binding and may be entered in any court
having jurisdiction. The parties shall pay for their own costs and expenses in
respect to any such arbitration and may be included in the arbitrator's award.
9. Compliance with Law, Code of Ethics. As investment sub-adviser, DSA-NY
understands that it will be responsible for complying with all provisions of
applicable law, including the 1940 Act, the Investment Advisers Act of 1940,
and the Xxxxxxx Xxxxxxx and Securities Fraud Enforcement Act of 1988 and all
rules and regulations thereunder. DSA-NY agrees to adopt and comply with the
"Code of Ethics of and for Xxxxx Selected Advisers, L.P. and the Companies For
Which It Acts As Investment Adviser" as in effect from time to time and to keep
in effect a policy and supervisory procedures designed to prevent xxxxxxx
xxxxxxx.
10. Payment for Services, Payment of Expenses. The parties acknowledge that
DSA-NY is controlled by or under common control with the Adviser. The Adviser
shall pay DSA-NY all reasonable direct and indirect costs associated with the
maintenance of an office and the performance of the terms of this Agreement.
The Adviser shall also reimburse expenses expressly approved for reimbursement
by the Adviser. Payment for DSA-NY's services and reimbursement of expenses
approved by the Adviser shall be made monthly, in arrears, by the 15th day of
the following month.
11. Term of Agreement, Effective Date. This Agreement shall become effective
for an initial period of not more than two years from its effective date, and
shall continue in full force and effect continuously thereafter, if its
continuance is approved at least annually as required by the 1940 Act;
provided, however, that if the continuation of this Agreement is not approved,
DSA-NY may continue to serve in the manner and to the extent permitted by the
1940 Act and the rules and regulations thereunder.
The effective date of this Agreement shall be the later of (i) the effective
date of the initial registration statement covering the offer and sale of our
shares under the Securities Act of 1933, or (ii) the date this Agreement has
been approved as required by the 1940 Act.
12. Termination of Agreement., No Assignment. This Agreement shall
automatically terminate immediately in the event of its assignment (except as
otherwise permitted by the 1940 Act or rules thereunder) or in the event of the
termination of the Investment Advisory Agreement. This Agreement may be
terminated without payment of any penalty at any time (a) upon sixty (60) days'
written notice to DSA-NY by the Adviser or upon such sixty (60) days' written
notice to DSA-NY by the Fund pursuant to action by its Board of Directors or by
the vote of a majority of the outstanding voting securities of the Fund, or (b)
upon 60 or more days' written notice by DSA-NY to the Adviser. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and regulations
thereunder. Termination of this Agreement shall not affect DSA-NY's right to
receive payments
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on any unpaid balance of the compensation earned and reimbursable expenses
incurred prior to such termination. Upon receipt of notification of termination
as provided above DSA-NY shall immediately cease all activities in connection
with the Fund except as otherwise directed by the Adviser.
13. Use of "Xxxxx" Name. DSA-NY agrees that it shall abide by the terms of the
agreement of the Adviser with the Fund as to the names of the Fund and the
Adviser and shall not use the name of the Adviser or the Fund without the prior
written consent of the Adviser or the Fund.
14. Independent Provisions. If any provisions of this Agreement shall be held
or made invalid by a court decision, statute or rule or otherwise, the
remainder shall not be thereby affected.
15. Applicable State Law. The Agreement shall be construed according to the
laws of the State of New Mexico. It may be executed in counterparts each of
which shall be deemed an original and all of which together shall constitute
one and the same agreement.
If the foregoing terms and conditions are acceptable to you, please acknowledge
in the space provided. Upon your acceptance, the retention and the mutual
obligations in respect thereto shall be effective as provided herein.
Sincerely,
Xxxxx Selected Advisers, L.P.
By Venture Advisers, Inc.,
General Partner
By:_________________________
Its:_________________________
Accepted and Approved this ___ day of June, 1999
Xxxxx Selected Advisers - NY, Inc.
By:__________________________
Its:__________________________
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