XXXX XXXXXXX INVESTMENT TRUST III Xxxx Xxxxxxx International Fund Sub-Investment
Management Contract Dated May11, 2001 XXXX XXXXXXX ADVISERS, INC. 000 Xxxxxxxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 XXXX XXXXXXX INVESTMENT TRUST III - Xxxx
Xxxxxxx International Fund 000 Xxxxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT 000 Xxxx Xxxxxxxx Xxx Xxxxx, Xxxxxxxxxx
00000 Sub-Investment Management Contract Ladies and Gentlemen: Xxxx Xxxxxxx
Investment Trust III (the "Trust") has been organized as a business trust under
the laws of The Commonwealth of Massachusetts to engage in the business of an
investment company. The Trust's shares of beneficial interest may be classified
into series, each series representing the entire undivided interest in a
separate portfolio of assets. Series may be established or terminated from time
to time by action of the Board of Trustees of the Trust. As of the date hereof,
the Trust has four series of shares, representing interests in Xxxx Xxxxxxx
Global Xxxx, Xxxx Xxxxxxx Large Cap Growth Xxxx, Xxxx Xxxxxxx International
Fund, and Xxxx Xxxxxxx Mid Cap Growth Fund. The Board of Trustees of the Trust
(the "Trustees") has selected Xxxx Xxxxxxx Advisers, Inc. (the "Adviser") to
provide overall investment advice and management for the Xxxx Xxxxxxx
International Fund (the "Fund"), and to provide certain other services, under
the terms and conditions provided in the Investment Management Contract, dated
July 1, 1996, between the Trust, the Fund and the Adviser (the "Investment
Management Contract"). The Adviser and the Trustees have selected
Xxxxxxxx-Xxxxxxxxx Capital Management (the "Sub-Adviser") to provide the Adviser
and the Fund with the advice and services set forth below, and the Sub-Adviser
is willing to provide such advice and services, subject to the review of the
Trustees and overall supervision of the Adviser, under the terms and conditions
hereinafter set forth. The Sub-Adviser hereby represents and warrants that it is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended. Accordingly, the Trust, on behalf of the Fund, and the Adviser agree
with the Sub-Adviser as follows: 0.Xxxxxxxx of Documents. The Trust has
furnished the Sub-Adviser with copies, properly certified or otherwise
authenticated, of each of the following: (a)Amended and Restated Declaration of
Trust of the Trust, dated July 1, 1996, as amended from time to time (the
"Declaration of Trust"); (b)By-Laws of the Trust as in effect on the date
hereof; (c)Resolutions of the Trustees approving the form of this Agreement by
and among the Adviser, the Sub-Adviser and the Trust, on behalf of the Fund;
(d)Resolutions of the Trustees selecting the Adviser as investment adviser for
the Fund and approving the form of the Investment Management Contract; (e)the
Investment Management Contract; (f)the Fund's portfolio compliance checklists;
(g)the Fund's current Registration Statement, including the Fund's Prospectus
and Statement of Additional Information; and (h)the Fund's Code of Ethics. The
Trust will furnish to the Sub-Adviser from time to time copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any. 2.Investment Services. The Sub-Adviser will use its best
efforts to provide to the Fund continuing and suitable investment advice with
respect to investments, consistent with the investment policies, objectives and
restrictions of the Fund as set forth in the Fund's Prospectus and Statement of
Additional Information. In the performance of the Sub-Adviser's duties
hereunder, subject always (x) to the provisions contained in the documents
delivered to the Sub- Adviser pursuant to Section 1, as each of the same may
from time to time be amended or supplemented, and (y) to the limitations set
forth in the Registration Statement of the Trust, on behalf of the Fund, as in
effect from time to time under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended (the "1940 Act"), the Sub-Adviser
will have investment discretion with respect to the Fund and will, at its own
expense: (a)furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions of the Fund
as set forth in the Fund's Prospectus and Statement of Additional Information,
with respect to the purchase, holding and disposition of portfolio securities
including the purchase and sale of options; (b)furnish the Adviser and the Fund
with advice as to the manner in which voting rights, subscription rights, rights
to consent to corporate action and any other rights pertaining to the Fund's
assets shall be exercised, the Fund having the responsibility to exercise such
voting and other rights; (c)furnish the Adviser and the Fund with research,
economic and statistical data in connection with the Fund's investments and
investment policies; (d)submit such reports relating to the valuation of the
Fund's securities as the Trustees may reasonably request; (e)subject to prior
consultation with the Adviser, engage in negotiations relating to the Fund's
investments with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors; (f)The Sub-Adviser shall have full
authority and discretion to select brokers and dealers to execute portfolio
transactions for the Fund and for the selection of the markets on or in which
the transaction will be executed. In providing the Fund with investment
management, it is recognized that the Sub-Adviser will give primary
consideration to securing the most favorable price and efficient execution
considering all circumstances. Within the framework of this policy, the
Sub-Adviser may consider the financial responsibility, research and investment
information and other research services and products provided by brokers or
dealers who may effect or be a party to any such transaction or other
transactions to which the Sub-Adviser's other clients may be a party. It is
understood that it is desirable for the Fund that the Sub-Adviser have access to
brokerage and research services and products and security and economic analysis
provided by brokers who may execute brokerage transactions at a higher cost to
the Fund than broker-dealers that do not provide such brokerage and research
services. Therefore, in compliance with Section 28(e) of the Securities Exchange
Act of 1934 ("1934 Act"), the Sub-Adviser is authorized to place orders for the
purchase and sale of securities for the Fund with such brokers, that provide
brokerage and research products and/or services that charge an amount of
commission for effecting securities transaction in excess of the amount of
commission another broker would have charged for effecting that transaction,
provided the Sub-Adviser determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research products
and/or services provided by such broker viewed in terms of either that
particular transaction or the overall responsibilities of the Sub-Adviser for
this or other advisory accounts, subject to review by the Adviser from time to
time with respect to the extent and continuation of this practice. It is
understood that the information, services and products provided by such brokers
may be useful to the Sub-Adviser in connection with the Sub-Adviser's services
to other clients; (g)from time to time or at any time requested by the Adviser
or the Trustees, make reports to the Adviser or the Trust of the Sub-Adviser's
performance of the foregoing services; (h)subject to the supervision of the
Adviser, maintain all books and records with respect to the Fund's securities
transactions required by the 1940 Act, and preserve such records for the periods
prescribed therefor by the 1940 Act (the Sub-Adviser agrees that such records
are the property of the Trust and copies will be surrendered to the Trust
promptly upon request therefor); (i)give instructions to the Fund's custodian as
to deliveries of securities to and from such custodian and transfer of payment
of cash for the account of the Fund, and advise the Adviser on the same day such
instructions are given; and (j)cooperate generally with the Fund and the Adviser
to provide information necessary for the preparation of registration statements
and periodic reports to be filed with the Securities and Exchange Commission,
including Form N-1A, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with state "blue
sky" authorities and with United States agencies responsible for tax matters,
and other reports and filings of like nature. 3.Expenses Paid by the
Sub-Adviser. The Sub-Adviser will pay the cost of maintaining the staff and
personnel necessary for it to perform its obligations under this Agreement, the
expenses of office rent, telephone, telecommunications and other facilities it
is obligated to provide in order to perform the services specified in Section 2,
and any other expenses incurred by it in connection with the performance of its
duties hereunder. 4.Expenses of the Fund Not Paid by the Sub-Adviser. The
Sub-Adviser will not be required to pay any expenses which this Agreement does
not expressly make payable by the Sub- Adviser. In particular, and without
limiting the generality of the foregoing but subject to the provisions of
Section 3, the Sub-Adviser will not be required to pay under this Agreement:
(a)the compensation and expenses of Trustees and of independent advisers,
independent contractors, consultants, managers and other agents employed by the
Trust or the Fund other than through the Sub-Adviser; (b)legal, accounting and
auditing fees and expenses of the Trust or the Fund; (c)the fees and
disbursements of custodians and depositories of the Trust or the Fund's assets,
transfer agents, disbursing agents, plan agents and registrars; (d)taxes and
governmental fees assessed against the Trust or the Fund's assets and payable by
the Trust or the Fund; (e)the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to shareholders of the Trust
or the Fund except that the Sub-Adviser shall bear the costs of providing the
information referred to in Section 2(j) to the Adviser; (f)brokers' commissions
and underwriting fees; and (g)the expense of periodic calculations of the net
asset value of the shares of the Fund. 5.Compensation of the Sub-Adviser. For
all services to be rendered, facilities furnished and expenses paid or assumed
by the Sub-Adviser as herein provided for the Fund, the Adviser will pay the
Sub-Adviser quarterly, in arrears, a fee at the annual rate of : (i) 0.50% of
the first $500,000,000 of the average daily net asset value of the Fund; and
(ii) 0.45% of the average daily net asset value of the Fund in excess of
$500,000,000. The "average daily net assets" of the Fund shall be determined on
the basis set forth in the Fund's Prospectus or otherwise consistent with the
1940 Act and the regulations promulgated thereunder. The Sub-Adviser will
receive a pro rata portion of such fee for any periods in which the Sub-Adviser
advises the Fund less than a full quarter. The Fund shall not be liable to the
Sub-Adviser for the Sub-Adviser's compensation hereunder. Calculations of the
Sub-Adviser's fee will be based on average net asset values as provided by the
Adviser. In addition to the foregoing, the Sub-Adviser may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by it. Any such fee reduction or
undertaking may be discontinued or modified by the Sub-Adviser at any time.
6.Other Activities of the Sub-Adviser and Its Affiliates. Nothing herein
contained shall prevent the Sub-Adviser or any associate of the Sub-Adviser from
engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity. It is understood that
officers, directors and employees of the Sub-Adviser or its affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Sub-Adviser or its affiliates and to said affiliates
themselves. 7.Avoidance of Inconsistent Position. In connection with purchases
or sales of portfolio securities for the account of the Fund, neither the
Sub-Adviser nor any of its investment management subsidiaries nor any of such
investment management subsidiaries' directors, officers or employees will act as
principal or agent or receive any commission, except as may be permitted by the
1940 Act and rules and regulations promulgated thereunder. The Sub-Adviser shall
not knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction. Nothing
herein contained shall limit or restrict the Sub-Adviser or any of its officers,
affiliates or employees from buying, selling or trading in any securities for
its or their own account or accounts. The Trust and Fund acknowledge the
Sub-Adviser and its officers, affiliates, and employees, and its other clients
may at any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of hereunder.
The Sub-Adviser shall have no obligation to acquire with respect to the Fund, a
position in any investment which the Sub-Adviser, its officers, affiliates or
employees may acquire for its or their own accounts or for the account of
another client, if in the sole discretion of the Sub-Adviser, it is not feasible
or desirable to acquire a position in such investment on behalf of the Fund.
Nothing herein contained shall prevent the Sub-Adviser from purchasing or
recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security. 0.Xx
Partnership or Joint Venture. The Trust, the Fund, the Adviser and the
Sub-Adviser are not partners of or joint venturers with each other and nothing
herein shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them. 0.Xxxx of the Trust, the Fund and
the Sub-Adviser. The Trust and the Fund may use the name "Xxxx Xxxxxxx" or any
name or names derived from or similar to the names "Xxxx Xxxxxxx Advisers, Inc."
or "Xxxx Xxxxxxx Life Insurance Company" only for so long as this Agreement
remains in effect. At such time as this Agreement shall no longer be in effect,
the Trust and the Fund will (to the extent that they lawfully can) cease to use
such a name or any other name indicating that the Fund is advised by or
otherwise connected with the Adviser. The Fund acknowledges that it has adopted
the name Xxxx Xxxxxxx International Fund through permission of Xxxx Xxxxxxx Life
Insurance Company, a Massachusetts insurance company, and agrees that Xxxx
Xxxxxxx Life Insurance Company reserves to itself and any successor to its
business the right to grant the nonexclusive right to use the name "Xxxx
Xxxxxxx" or any similar name or names to any other corporation or entity,
including but not limited to any investment company of which Xxxx Xxxxxxx Life
Insurance Company or any subsidiary or affiliate thereof shall be the investment
adviser. In addition, the Fund and the Trust hereby consent to the reasonable
use of the name of the Fund in marketing/client materials developed and
distributed by or on behalf of Sub-Adviser. In addition, it is understood that
the name "Xxxxxxxx-Xxxxxxxxx" or the name of any of its affiliates, or any
derivative associated with those names, are the valuable property of the Sub-
Adviser and its affiliates and that the Fund, Trust and/or the Adviser have the
right to use such name(s) or derivative(s) in offering materials and sales
literature so long as this Agreement is in effect. Upon termination of the
Agreement, such authorization shall forthwith cease to be in effect.
10.Limitation of Liability of Sub-Adviser. The Sub-Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust or the Fund or the Adviser in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the Sub-Adviser's part in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also employed by the Sub-Adviser, who may be
or become an employee of and paid by the Trust or the Fund shall be deemed, when
acting within the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the Sub-Adviser's
employee or agent. 11. Duration and Termination of this Agreement. This
Agreement shall remain in force until June 30, 2002. This Agreement may, on 60
days' written notice, be terminated at any time without the payment of any
penalty by the Trust or the Fund by vote of a majority of the outstanding voting
securities of the Fund, by the Trustees, the Adviser or the Sub-Adviser.
Termination of this Agreement with respect to the Fund shall not be deemed to
terminate or otherwise invalidate any provisions of any contract between the
Sub-Adviser and any other series of the Trust. This Agreement shall
automatically terminate in the event of its assignment or upon termination of
the Investment Management Contract. In interpreting the provisions of this
Section 11, the definitions contained in Section 2(a) of the 1940 Act
(particularly the definitions of "assignment," "interested person" or "voting
security"), shall be applied. 12.Amendment of this Agreement. No provision of
this Agreement may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by (a) the Trustees, including a majority of the Trustees who are
not interested persons of the Adviser, the Sub-Adviser, or (other than as Board
members) of the Trust or the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) a majority of the outstanding voting
securities of the Fund, as defined in the 1940 Act. 13.Governing Law. This
Agreement shall be governed and construed in accordance with the laws of the
Commonwealth of Massachusetts. 14.Severability. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be deemed invalid or unenforceable in
whole or in part. 15.Miscellaneous. (a) The captions in this Agreement are
included for convenience of reference only and in no way define or limit any of
the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name Xxxx Xxxxxxx Investment Trust III is the
designation of the Trustees under the Amended and Restated Declaration of Trust
dated July 1, 1996, as amended from time to time. The Declaration of Trust has
been filed with the Secretary of The Commonwealth of Massachusetts. The
obligations of the Trust and the Fund are not personally binding upon, nor shall
resort be had to the private property of, any of the Trustees, shareholders,
officers, employees or agents of the Fund, but only the Fund's property shall be
bound. The Trust or the Fund shall not be liable for the obligations of any
other series of the Trust. (b) Any information supplied by the Sub-Adviser,
which is not otherwise in the public domain, in connection with the performance
of its duties hereunder is to be regarded as confidential and for use only by
the Fund and/or its agents, and only in connection with the Fund and its
investments. 16.Xxxxxxxx-Xxxxxxxxx undertakes to promptly notify Fund of any
change in its general partner(s). 17.The Fund agrees to obtain and maintain
insurance coverage satisfying any insurance requirements under the 1940 Act, to
carry errors and omissions coverage in the amount of $10,000,000. Yours very
truly, XXXX XXXXXXX INVESTMENT TRUST III on behalf of Xxxx Xxxxxxx International
Fund By: ______________________________________ President The foregoing contract
is hereby agreed to as of the date hereof. XXXX XXXXXXX ADVISERS, INC. By:
______________________________________ President XXXXXXXX-XXXXXXXXX CAPITAL
MANAGEMENT By: ____________________________ Name: Title:
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