EX-99.d.7.
SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into as of the [ ] day of [ ], 2007, by
and among ABERDEEN FUNDS (the "Trust"), a Delaware statutory trust, ABERDEEN
ASSET MANAGEMENT INC. (the "Adviser") a Delaware corporation registered under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
ABERDEEN ASSET MANAGEMENT INVESTMENT SERVICES LIMITED, a United Kingdom
corporation (the "Subadviser"), and also registered under the Advisers Act.
W I T N E S S E T H:
WHEREAS, the Trust is registered with the U.S. Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser has, pursuant to an Investment Advisory Agreement with
the Trust dated as of the [ ] day of [ ], 2007 (the "Advisory Agreement"), been
retained to act as investment adviser for certain of the series of the Trust
that are listed on Exhibit A to this Agreement (each, a "Fund");
WHEREAS, the Adviser represents that it is willing and possesses legal
authority to render such services subject to the terms and conditions set forth
in this Agreement;
WHEREAS, the Trust and the Adviser each represent that the Advisory
Agreement permits the Adviser to delegate certain of its duties under the
Advisory Agreement to other investment advisers, subject to the requirements of
the 1940 Act; and
WHEREAS, the Adviser desires to retain Subadviser to assist it in the
provision of a continuous investment program for that portion of the Fund's
assets that the Adviser will assign to the Subadviser, and Subadviser is willing
to render such services subject to the terms and conditions set forth in this
Agreement,
NOW, THEREFORE, the parties do mutually agree and promise as follows with
respect to each Fund:
1. Appointment as Subadviser. The Adviser hereby appoints the Subadviser to
act as investment adviser for the Fund and to assist the Adviser with the
oversight of the investment program of the Fund ("Oversight Services") and to
manage that portion or all of the assets of the Fund that the Adviser from time
to time upon reasonable prior notice allocates to, and puts under the control
of, the Subadviser (the "Subadviser Assets") subject to the supervision of the
Adviser and the Board of Trustees of the Trust and subject to the terms of this
Agreement ("Investment Services"); and the Subadviser hereby accepts such
appointment. In such capacity, the Subadviser shall be responsible for the
investment management of the Subadviser Assets. It is recognized that the
Subadviser and certain of its affiliates now act, and that from time to time
hereafter may act, as investment adviser to one or more other investment
companies and to fiduciary or other managed accounts and that the Adviser and
the Trust cannot object to such activities.
2. Duties of Subadviser.
(a) Oversight Services. The Subadviser shall, at the request of the
Adviser, assist the Adviser with the Adviser's overall supervisory
responsibility for the general management and investment of a Fund's assets
and assist the Adviser in monitoring the ongoing performance of subadvisers
for a Fund.
(b) Investment Decision Services. The Subadviser is hereby authorized
and directed and hereby agrees, subject to the stated investment policies
and restrictions of the Fund as set forth in the Fund's prospectus and
statement of additional information as currently in effect and, as soon as
practical after the Trust, the Fund or the Adviser notifies the Subadviser
thereof, as supplemented or amended from time to time (collectively
referred to hereinafter as the "Prospectus") and subject to the directions
of the Adviser and the Trust's Board of Trustees, to monitor on a
continuous basis the performance of the Subadviser Assets and to conduct a
continuous program of investment, evaluation and, if appropriate, sale and
reinvestment of the Subadviser Assets. The Adviser agrees to provide the
Subadviser with such assistance as may be reasonably requested by the
Subadviser in connection with the Subadviser's activities under this
Agreement, including, without limitation, providing information concerning
the Fund, its funds available, or to become available, for investment and
generally as to the conditions of the Fund's or the Trust's affairs.
(c) Compliance with Applicable Laws, Governing Documents and Trust
Compliance Procedures. In the performance of its services under this
Agreement, the Subadviser shall act in conformity with: (i) the Prospectus;
(ii) the Trust's Agreement and Declaration of Trust and By-Laws as
currently in effect and, as soon as practical after the Trust, the Fund or
the Adviser notifies the Subadviser thereof, as supplemented, amended
and/or restated from time to time (referred to hereinafter as the
"Declaration of Trust" and "By-Laws," respectively); (iii) the policies and
procedures for compliance by the Trust with the Federal Securities Laws (as
that term is defined in Rule 38a-1 under the 0000 Xxx) provided to the
Subadviser (together, the "Trust Compliance Procedures"); and (iv) with the
instructions and directions received in writing from the Adviser or the
Trustees of the Trust. The Subadviser in performing its services under this
Agreement will conform to, and comply with, the requirements of the 1940
Act, the Internal Revenue Code of 1986, as amended (the "Code"), and all
other applicable federal and state laws and regulations. Without limiting
the preceding sentence, the Adviser promptly shall notify the Subadviser as
to any act or omission of the Subadviser hereunder that the Adviser
reasonably deems to constitute or to be the basis of any noncompliance or
nonconformance with any of the Trust's Declaration of Trust and By-Laws,
the Prospectus and Trust Compliance Procedures, the instructions and
directions received in writing from the Adviser or the Trustees of the
Trust or the 1940 Act, the Code, and all other applicable federal and state
laws and regulations. Notwithstanding the foregoing, the Adviser shall
remain responsible for ensuring the Fund's and the Trust's overall
compliance with the 1940 Act, the Code and all other applicable federal and
state laws and regulations and the Subadviser is only obligated to comply
with this subsection (b) with respect to the Subadviser Assets. The Adviser
timely will provide the Subadviser with a copy of the minutes of the
meetings of the Board of Trustees of the Trust to the extent they may
affect a Fund or the services of the Subadviser, copies of any financial
statements or reports made by a Fund to its shareholders, and any further
materials or information which the Subadviser may reasonably request to
enable it to perform its functions under this Agreement.
The Adviser shall perform quarterly and annual tax compliance tests to
ensure that the Fund is in compliance with Subchapter M and Section 817(h)
of the Code. In connection with such compliance tests, the Adviser shall
inform the Subadviser at least ten (10) business days prior to a calendar
quarter end if the Subadviser Assets are out of compliance with the
diversification requirements under either Subchapter M or Section 817(h).
If the Adviser notifies the Subadviser that the Subadviser Assets are not
in compliance with such requirements noted above, the Subadviser will take
prompt action to bring the Subadviser Assets back into compliance within
the time permitted under the Code thereunder.
The Adviser will provide the Subadviser with reasonable advance notice
of any change in a Fund's investment objectives, policies and restrictions
as stated in the Prospectus, and the Subadviser shall, in the performance
of its duties and obligations under this Agreement, manage the Subadviser
Assets consistent with such changes, provided that the Subadviser has
received prompt notice of the effectiveness of such changes from the Trust
or the Adviser. In addition to such notice, the Adviser shall provide to
the Subadviser a copy of a modified Prospectus reflecting such changes. The
Adviser acknowledges and will ensure that the Prospectus will at all times
be in compliance with all disclosure requirements under all applicable
federal and state laws and regulations relating to the Trust or the Fund,
including, without limitation, the 1940 Act, and the rules and regulations
thereunder, and that the Subadviser shall have no liability in connection
therewith, except as to the accuracy of material information furnished in
writing by the Subadviser to the Trust or to the Adviser specifically for
inclusion in the Prospectus. The Subadviser hereby agrees to provide to the
Adviser in a timely manner such information relating to the Subadviser and
its relationship to, and actions for, the Trust as may be required to be
contained in the Prospectus or in the Trust's Registration Statement on
Form N-1A.
In order to assist the Trust and the Trust's Chief Compliance Officer
(the "Trust CCO") to satisfy the requirements contained in Rule 38a-1 under
the 1940 Act, the Subadviser shall provide to the Trust CCO: (i) direct
access to the Subadviser's chief compliance officer (the "Subadviser CCO"),
as reasonably requested by the Trust CCO; (ii) quarterly reports confirming
that the Subadviser has complied with the Trust Compliance Procedures in
managing the Subadviser Assets; and (iii) quarterly certifications that
there were no Material Compliance Matters (as that term is defined by Rule
38a-1(e)(2)) that arose under the Trust Compliance Procedures that related
to the Subadviser's management of the Subadviser Assets.
(d) Subadviser Compliance Policies and Procedures. The Subadviser
shall promptly provide the Trust CCO with copies of: (i) the Subadviser's
policies and procedures for compliance by the Subadviser with the Federal
Securities Laws (together, the "Subadviser Compliance Procedures"), and
(ii) any material changes to the Subadviser Compliance Procedures. The
Subadviser shall cooperate fully with the Trust CCO so as to facilitate the
Trust CCO's performance of the Trust CCO's responsibilities under Rule
38a-1 to review, evaluate and report to the Trust's Board of Trustees on
the operation of the Subadviser Compliance Procedures, and shall promptly
report to the Trust CCO any Material Compliance Matter arising under the
Subadviser Compliance Procedures involving the Subadviser Assets. The
Subadviser shall provide to the Trust CCO: (i) quarterly reports confirming
the Subadviser's compliance with the Subadviser Compliance Procedures in
managing the Subadviser Assets, and (ii) certifications that there were no
Material Compliance Matters involving the Subadviser that arose under the
Subadviser Compliance Procedures that affected the Subadviser Assets. At
least annually, the Subadviser shall provide a certification to the Trust
CCO to the effect that the Subadviser has in place and has implemented
policies and procedures that are reasonably designed to ensure compliance
by the Subadviser with the Federal Securities Laws.
(e) Voting of Proxies. The Adviser hereby delegates to the Subadviser
the Adviser's discretionary authority to exercise voting rights with
respect to the securities and other investments in the Subadviser Assets
and authorizes the Subadviser to delegate further such discretionary
authority to a designee identified in a notice given to the Trust and the
Adviser. The Subadviser, including without limitation its designee, shall
have the power to vote, either in person or by proxy, all securities in
which the Subadviser Assets may be invested from time to time, and shall
not be required to seek or take instructions from, the Adviser, the Fund or
the Trust or take any action with respect thereto. If both the Subadviser
and another entity managing assets of the Fund have invested the Fund's
assets in the same security, the Subadviser and such other entity will each
have the power to vote its pro rata share of the Fund's security.
The Subadviser will establish a written procedure for proxy voting in
compliance with current applicable rules and regulations, including but not
limited to Rule 30b1-4 under the 1940 Act. The Subadviser will provide the
Adviser or its designee, a copy of such procedure and establish a process
for the timely distribution of the Subadviser's voting record with respect
to the Fund's securities and other information necessary for the Fund to
complete information required by Form N-1A under the 1940 Act and the
Securities Act of 1933, as amended (the "Securities Act"), Form N-PX under
the 1940 Act, and Form N-CSR under the Xxxxxxxx-Xxxxx Act of 2002, as
amended, respectively.
(f) Agent. Subject to any other written instructions of the Adviser or
the Trust, the Subadviser is hereby appointed the Adviser's and the Trust's
agent and attorney-in-fact for the limited purposes of executing account
documentation, agreements, contracts and other documents as the Subadviser
shall be requested by brokers, dealers, counterparties and other persons in
connection with its management of the Subadviser Assets. The Subadviser
agrees to provide the Adviser and the Trust with copies of any such
agreements executed on behalf of the Adviser or the Trust.
(g) Brokerage. The Subadviser is authorized, subject to the
supervision of the Adviser and the plenary authority of the Trust's Board
of Trustees, to establish and maintain accounts on behalf of the Fund with,
and place orders for the investment and reinvestment, including without
limitation purchase and sale of the Subadviser Assets with or through, such
persons, brokers (including, to the extent permitted by applicable law, any
broker affiliated with the Subadviser) or dealers (collectively "Brokers")
as Subadviser may elect and negotiate commissions to be paid on such
transactions. The Subadviser, however, is not required to obtain the
consent of the Adviser or the Trust's Board of Trustees prior to
establishing any such brokerage account. The Subadviser shall place all
orders for the purchase and sale of portfolio investments for a Fund's
account with Brokers selected by the Subadviser. In the selection of such
Brokers and the placing of such orders, the Subadviser shall seek to obtain
for the Fund the most favorable price and execution available, except to
the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services, as provided below. In using its reasonable
efforts to obtain for a Fund the most favorable price and execution
available, the Subadviser, bearing in mind the best interests of each Fund
at all times, shall consider all factors it deems relevant, including
price, the size of the transaction, the breadth and nature of the market
for the security, the difficulty of the execution, the amount of the
commission, if any, the timing of the transaction, market prices and
trends, the reputation, experience and financial stability of the Broker
involved, and the quality of service rendered by the Broker in other
transactions. Notwithstanding the foregoing, neither the Trust, the Fund
nor the Adviser shall instruct the Subadviser to place orders with any
particular Broker(s) with respect to the Subadviser Assets. Subject to such
policies as the Trustees may determine, or as may be mutually agreed to by
the Adviser and the Subadviser, the Subadviser is authorized but not
obligated to cause, and 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 Fund to pay a Broker that provides
brokerage and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to the Subadviser an amount of commission
for effecting a Subadviser Assets investment transaction that is in excess
of the amount of commission that another Broker would have charged for
effecting that transaction if, but only if, the Subadviser determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such Broker viewed in terms
of either that particular transaction or the overall responsibility of the
Subadviser with respect to the accounts as to which it exercises investment
discretion.
It is recognized that the services provided by such Brokers may be
useful to the Subadviser in connection with the Subadviser's services to
other clients. On occasions when the Subadviser deems the purchase or sale
of a security to be in the best interests of the Fund with respect to the
Subadviser Assets as well as other clients of the Subadviser, the
Subadviser, to the extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the securities to be
sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of
securities so sold or purchased, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
considers to be the most equitable and consistent with its fiduciary
obligations to each Fund and to such other clients. It is recognized that
in some cases, this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtainable for, or
disposed of by, the Fund with respect to the Subadviser Assets.
(h) Securities Transactions. The Subadviser and any affiliated person
of the Subadviser will not purchase securities or other instruments from or
sell securities or other instruments to the Fund; provided, however, the
Subadviser or any affiliated person of the Subadviser may purchase
securities or other instruments from or sell securities or other
instruments to the Fund if such transaction is permissible under applicable
laws and regulations, including, without limitation, the 1940 Act and the
Advisers Act and the rules and regulations promulgated thereunder.
The Subadviser acknowledges that the Adviser and the Trust may rely on
Rule 17a-7, Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the
1940 Act, and the Subadviser hereby agrees that it shall not consult with
any other subadviser to the Trust with respect to transactions in
securities for the Subadviser Assets or any other transactions of Trust
assets.
The Subadviser, on its own behalf and with respect to its Access
Persons (as defined in subsection (e) of Rule 17j-1 under the 1940 Act),
agrees to observe and comply with Rule 17j-1 and its Code of Ethics (which
shall comply in all material respects with Rule 17j-1), as the same may be
amended from time to time. On at least an annual basis, the Subadviser will
comply with the reporting requirements of Rule 17j-1, which may include
either (i) certifying to the Adviser that the Subadviser and its Access
Persons have complied with the Subadviser's Code of Ethics with respect to
the Subadviser Assets or (ii) identifying any violations which have
occurred with respect to the Subadviser Assets. The Subadviser will have
also submitted its Code of Ethics for its initial approval by the Board of
Trustees no later than the date of execution of this agreement and
subsequently within six months of any material change thereto.
(i) Books and Records. The Subadviser shall maintain separate detailed
records as are required by applicable laws and regulations of all matters
hereunder pertaining to the Subadviser Assets (the "Fund's Records"),
including, without limitation, brokerage and other records of all
securities transactions. The Subadviser acknowledges that the Fund's
Records are property of the Trust; except to the extent that the Subadviser
is required to maintain the Fund's Records under the Advisers Act or other
applicable law and except that the Subadviser, at its own expense, is
entitled to make and keep a copy of the Fund's Records for its internal
files. The Fund's Records shall be available to the Adviser or the Trust at
any time upon reasonable request during normal business hours and shall be
available for telecopying promptly to the Adviser during any day that the
Fund is open for business as set forth in the Prospectus.
(j) Information Concerning Subadviser Assets and Subadviser. From time
to time as the Adviser or the Trust reasonably may request in good faith,
the Subadviser will furnish the requesting party reports on portfolio
transactions and reports on the Subadviser Assets, all in such reasonable
detail as the parties may reasonably agree in good faith. The Subadviser
will also inform the Adviser in a timely manner of material changes in
portfolio managers responsible for Subadviser Assets, any changes in the
ownership or management of the Subadviser, or of material changes in the
control of the Subadviser. Upon the Trust's or the Adviser's reasonable
request, the Subadviser will make available its officers and employees to
meet with the Trust's Board of Trustees to review the Subadviser Assets via
telephone on a quarterly basis and on a less frequent basis as agreed upon
by the parties in person.
Subject to the other provisions of this Agreement, the Subadviser will
also provide such information or perform such additional acts with respect
to the Subadviser Assets as are reasonably required for the Trust or the
Adviser to comply with their respective obligations under applicable laws,
including without limitation, the Code, the 1940 Act, the Advisers Act, and
the Securities Act, and any rule or regulation thereunder.
(k) Custody Arrangements. The Trust or the Adviser shall notify the
Subadviser of the identities of its custodian banks and the custody
arrangements therewith with respect to the Subadviser Assets and shall give
the Subadviser written notice of any changes in such custodian banks or
custody arrangements. The Subadviser shall on each business day provide the
Adviser and the Trust's custodian such information as the Adviser and the
Trust's custodian may reasonably request in good faith relating to all
transactions concerning the Subadviser Assets. The Trust shall instruct its
custodian banks to (A) carry out all investment instructions as may be
directed by the Subadviser with respect to the Subadviser Assets (which
instructions may be orally given if confirmed in writing); and (B) provide
the Subadviser with all operational information necessary for the
Subadviser to trade the Subadviser Assets on behalf of the Fund. The
Subadviser shall have no liability for the acts or omissions of the
authorized custodian(s), unless such act or omission is required by and
taken in reliance upon instructions given to the authorized custodian(s) by
a representative of the Subadviser properly authorized (pursuant to written
instruction by the Adviser) to give such instructions.
(l) Valuation of Subadviser Assets. The Subadviser agrees to monitor
the Subadviser Assets and to notify the Adviser or its designee on any day
that the Subadviser determines that a significant event has occurred with
respect to one or more securities held in the Subadviser Assets. As
requested by the Adviser or the Trust's Valuation Committee, the Subadviser
hereby agrees to provide additional assistance to the Valuation Committee
of the Trust, the Adviser and the Trust's pricing agents in valuing
Subadviser Assets held in the portfolio. Such assistance may include fair
value pricing of portfolio securities, as requested by the Adviser. The
Subadviser agrees that it will act, at all times, in accordance with the
Trust's Valuation Procedures, and will provide such certifications or
sub-certifications relating to its compliance with the Trust's Valuation
Procedures as reasonably may be requested, from time to time, by the
Adviser or the Trust.
The Subadviser also will provide such information or perform such
additional acts as are customarily performed by a Subadviser and may be
required for a Fund or the Adviser to comply with their respective
obligations under applicable federal securities laws, including, without
limitation, the 1940 Act, the Advisers Act, the 1934 Act, the Securities
Act, and any rule or regulation thereunder.
3. Independent Contractor. In the performance of its services hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund, the Trust or the Adviser in any way
or otherwise be deemed an agent of the Fund, the Trust or the Adviser.
4. Expenses. During the term of this Agreement, Subadviser will pay all
expenses incurred by it in connection with its activities under this Agreement.
The Subadviser shall, at its sole expense, employ or associate itself with such
persons as it believes to be particularly fitted to assist it in the execution
of its duties under this Agreement. The Subadviser shall not be responsible for
the Trust's, the Fund's or Adviser's expenses, which shall include, but not be
limited to, the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for a
Fund and any losses incurred in connection therewith, expenses of holding or
carrying Subadviser Assets, including, without limitation, expenses of dividends
on stock borrowed to cover a short sale and interest, fees or other charges
incurred in connection with leverage and related borrowings with respect to the
Subadviser Assets, organizational and offering expenses (which include, but are
not limited to, out-of-pocket expenses, but not overhead or employee costs of
the Subadviser); expenses for legal, accounting and auditing services; taxes and
governmental fees; dues and expenses incurred in connection with membership in
investment company organizations; costs of printing and distributing shareholder
reports, proxy materials, prospectuses, stock certificates and distribution of
dividends; charges of the Fund's custodians and sub-custodians, administrators
and sub-administrators, registrars, transfer agents, dividend disbursing agents
and dividend reinvestment plan agents; payment for portfolio pricing services to
a pricing agent, if any; registration and filing fees of the SEC; expenses of
registering or qualifying securities of the Fund for sale in the various states;
freight and other charges in connection with the shipment of the Fund's
portfolio securities; fees and expenses of non-interested Trustees; salaries of
shareholder relations personnel; costs of shareholders meetings; insurance;
interest; brokerage costs; and litigation and other extraordinary or
non-recurring expenses. The Trust or the Adviser, as the case may be, shall
reimburse the Subadviser for any expenses of the Funds or the Adviser as may be
reasonably incurred by such Subadviser on behalf of the Fund or the Adviser. The
Subadviser shall keep and supply to the Trust and the Adviser reasonable records
of all such expenses.
5. Compensation. The Subadviser receives no compensation for the Oversight
Services provided pursuant to this Agreement. For the Investment Decision
Services provided pursuant to this Agreement, the Subadviser is entitled to the
fee listed for the Fund on Exhibit A hereto. Such fees will be computed daily
and paid no later than the seventh (7th) business day following the end of each
month, from the Adviser or the Trust, calculated at an annual rate based on the
Subadviser Assets' average daily net assets.
The method of determining the net asset value of the Subadviser Assets for
purposes hereof shall be the same as the method of determining net asset value
for purposes of establishing the offering and redemption price of the shares of
the Trust as described in the Fund's Prospectus. If this Agreement shall be
effective for only a portion of a month with respect to the Fund, the aforesaid
fee shall be prorated for the portion of such month during which this Agreement
is in effect for the Fund.
6. Representations and Warranties of Subadviser. The Subadviser represents
and warrants to the Adviser and the Trust as follows:
(a) The Subadviser is registered as an investment adviser under the
Advisers Act;
(b) The Subadviser is registered as a Commodity Trading Advisor under
the Commodity Exchange Act, as amended (the "CEA"), with the Commodity
Futures Trading Commission (the "CFTC"), or is not required to file such
registration;
(c) The Subadviser is corporation duly organized and operating under
the laws of the United Kingdom with the power to own and possess its assets
and carry on its business as it is now being conducted and as proposed to
be conducted hereunder;
(d) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly authorized
by all necessary actions of its directors or shareholders, and no action
by, or in respect of, or filing with, any governmental body, agency or
official is required on the part of the Subadviser for execution, delivery
and performance by the Subadviser of this Agreement, and the execution,
delivery and performance by the Subadviser of this Agreement do not
contravene or constitute a violation of, or a material default under, (i)
any provision of applicable law, rule or regulation, (ii) the Subadviser's
governing instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Subadviser; and
(e) The Form ADV of the Subadviser provided to the Adviser and the
Trust is a true and complete copy of the form, including that part or parts
of the Form ADV filed with the SEC, that part or parts maintained in the
records of the Adviser, and/or that part or parts provided or offered to
clients, in each case as required under the Advisers Act and rules
thereunder, and the information contained therein is accurate and complete
in all material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
7. Representations and Warranties of Adviser. The Adviser represents and
warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the
Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the CFTC and the National Futures Association or is not
required to file such exemption;
(c) The Adviser is a corporation duly organized and validly existing
under the laws of the State of Delaware with the power to own and possess
its assets and carry on its business as it is now being conducted and as
proposed to be conducted hereunder;
(d) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized by
all necessary action on the part of its directors or shareholders, and no
action by, or in respect of, or filing with, any governmental body, agency
or official is required on the part of the Adviser for the execution,
delivery and performance by the Adviser of this Agreement, and the
execution, delivery and performance by the Adviser of this Agreement do not
contravene or constitute a violation of, or a material default under, (i)
any provision of applicable law, rule or regulation, (ii) the Adviser's
governing instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Adviser;
(e) The Form ADV of the Adviser provided to the Subadviser and the
Trust is a true and complete copy of the form, including that part or parts
of the Form ADV filed with the SEC, that part or parts maintained in the
records of the Adviser, and/or that part or parts provided or offered to
clients, in each case as required under the Advisers Act and rules
thereunder, and the information contained therein is accurate and complete
in all material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
(f) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(g) The Adviser and the Trust have duly entered into the Advisory
Agreement pursuant to which the Trust authorized the Adviser to delegate
certain of its duties under the Advisory Agreement to other investment
advisers, including without limitation, the appointment of a subadviser
with respect to assets of each of the Trust's mutual fund series, including
without limitation the Adviser's entering into and performing this
Agreement.
8. Representations and Warranties of the Trust. The Trust represents and
warrants to the Adviser and the Subadviser as follows:
(a) The Trust is a statutory trust duly formed and validly existing
under the laws of the State of Delaware with the power to own and possess
its assets and carry on its business as it is now being conducted and as
proposed to be conducted hereunder;
(b) The Trust is registered as an investment company under the 1940
Act and has elected to qualify and has qualified, together with the Fund,
as a regulated investment company under the Code, and the Fund's shares are
registered under the Securities Act;
(c) The execution, delivery and performance by the Trust of this
Agreement are within the Trust's powers and have been duly authorized by
all necessary action on the part of the Trust and its Board of Trustees,
and no action by, or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Trust for the execution,
delivery and performance by the Adviser of this Agreement, and the
execution, delivery and performance by the Trust of this Agreement do not
contravene or constitute a default under (i) any provision of applicable
law, rule or regulation, (ii) the Trust's governing instruments, or (iii)
any agreement, judgment, injunction, order, decree or other instrument
binding upon the Trust; and
(d) The Trust acknowledges that it received a copy of the Subadviser's
Form ADV prior to the execution of this Agreement.
9. Survival of Representations and Warranties; Duty to Update Information.
All representations and warranties made by the Subadviser, the Adviser and the
Trust pursuant to the recitals above and Sections 6, 7 and 8, respectively,
shall survive for the duration of this Agreement and the parties hereto shall
promptly notify each other in writing upon becoming aware that any of the
foregoing representations and warranties are no longer true or accurate in all
material effects.
10. Liability and Indemnification.
(a) Liability. The Subadviser shall exercise its best judgment in
rendering its services in accordance with the terms of this Agreement, but
otherwise, in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser or a reckless disregard of its
duties hereunder, the Subadviser, each of its affiliates and all respective
partners, officers, directors and employees ("Affiliates") and each person,
if any, who within the meaning of the Securities Act controls the
Subadviser ("Controlling Persons"), if any, shall not be subject to any
expenses or liability to the Adviser, any other subadviser to a Fund, the
Trust or a Fund or any of a Fund's shareholders, in connection with the
matters to which this Agreement relates, including without limitation for
any losses that may be sustained in the purchase, holding or sale of
Subadviser Assets. The Adviser shall exercise its best judgment in
rendering its obligations in accordance with the terms of this Agreement,
but otherwise (except as set forth in Section 10(c) below), in the absence
of willful misfeasance, bad faith or gross negligence on the part of the
Adviser or a reckless disregard of its duties hereunder, the Adviser, any
of its Affiliates and each of the Adviser's Controlling Persons, if any,
shall not be subject to any liability to the Subadviser, for any act or
omission in the case of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of
Subadviser Assets. Notwithstanding the foregoing, nothing herein shall
relieve the Adviser and the Subadviser from any of their obligations under
applicable law, including, without limitation, the federal and state
securities laws and the CEA.
(b) Indemnification. The Subadviser shall indemnify the Adviser, the
Trust and the Fund, and their respective Affiliates and Controlling Persons
for any liability and expenses, including without limitation reasonable
attorneys' fees and expenses, which the Adviser, the Trust and/or the Fund
and their respective Affiliates and Controlling Persons may sustain as a
result of the Subadviser's willful misfeasance, bad faith, gross
negligence, reckless disregard of its duties hereunder or violation of
applicable law, including, without limitation, the federal and state
securities laws or the CEA. The Adviser shall indemnify the Subadviser, its
Affiliates and its Controlling Persons, for any liability and expenses,
including without limitation reasonable attorneys' fees and expenses, which
may be sustained as a result of the Adviser's willful misfeasance, bad
faith, gross negligence, reckless disregard of its duties hereunder or
violation of applicable law, including, without limitation, the federal and
state securities laws or the CEA.
The Trust shall indemnify the Subadviser, its Affiliates and its
Controlling Persons, for any liability and expenses, including without
limitation reasonable attorneys' fees and expenses, which may be sustained
as a result of the Trust's willful misfeasance, bad faith, gross
negligence, reckless disregard of its duties hereunder or violation of
applicable law, including, without limitation, the federal and state
securities laws or the CEA.
(c) The Subadviser shall not be liable to the Adviser for (i) any acts
of the Adviser or any other subadviser to a Fund with respect to the
portion of the assets of that Fund not managed by Subadviser, or (ii) acts
of the Subadviser which result from acts of the Adviser, including, but not
limited to, a failure of the Adviser to provide accurate and current
information with respect to any records maintained by the Adviser or any
other subadviser to a Fund, which records are not also maintained by or
otherwise available to the Subadviser upon reasonable request. The Adviser
agrees that Subadviser shall manage the Subadviser Assets as if they were a
separate operating Fund as set forth in Section 2(c) of this Agreement. The
Adviser shall indemnify the Subadviser, its Affiliates and Controlling
Persons from any liability arising from the conduct of the Adviser and any
other subadviser with respect to the portion of the Fund's assets not
allocated to the Subadviser.
11. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall continue
until [ ], with respect to any Fund covered by this Agreement initially and
for any Fund subsequently added to this Agreement, an initial period of no
more than two years, and thereafter shall continue automatically for
successive annual periods with respect to each such Fund, provided such
continuance is specifically approved at least annually by the Trust's Board
of Trustees or vote of the lesser of (a) 67% of the shares of the Fund
represented at a meeting if holders of more than 50% of the outstanding
shares of the Fund are present in person or by proxy or (b) more than 50%
of the outstanding shares of the Fund; provided that in either event its
continuance also is approved by a majority of the Trust's Trustees who are
not "interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval.
(b) Termination. Notwithstanding whatever may be provided herein to
the contrary, this Agreement may be terminated at any time with respect to
the Fund, without payment of any penalty:
(i) By vote of a majority of the Trust's Board of Trustees, or by
"vote of a majority of the outstanding voting securities" of the Fund
(as defined in the 1940 Act), or by the Adviser, in each case, upon
not more than 60 days' written notice to the Subadviser;
(ii) By any party hereto immediately upon written notice to the
other parties in the event of a breach of any provision of this
Agreement by either of the other parties; or
(iii) By the Subadviser upon not more than 60 days' written
notice to the Adviser and the Trust.
This Agreement shall not be assigned (as such term is defined in the
0000 Xxx) and shall terminate automatically in the event of its assignment
or upon the termination of the Advisory Agreement.
12. Duties of the Adviser. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Fund.
13. Reference to Adviser and Subadviser.
(a) Neither the Adviser nor any Affiliate or agent of the Adviser
shall make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients, except references concerning the
identity of and services provided by the Subadviser to a Fund, which
references shall not differ in substance from those included in the
Prospectus and this Agreement, in any advertising or promotional materials
without the prior approval of Subadviser, which approval shall not be
unreasonably withheld or delayed. The Adviser hereby agrees to make all
reasonable efforts to cause the Fund and any Affiliate thereof to satisfy
the foregoing obligation.
(b) Neither the Subadviser nor any Affiliate or agent of the
Subadviser shall make reference to or use the name of the Adviser or any of
its Affiliates, or any of their clients, except references concerning the
identity of and services provided by the Adviser to a Fund or to the
Subadviser, which references shall not differ in substance from those
included in the Prospectus and this Agreement, in any advertising or
promotional materials without the prior approval of Adviser, which approval
shall not be unreasonably withheld or delayed. The Subadviser hereby agrees
to make all reasonable efforts to cause any Affiliate of the Subadviser to
satisfy the foregoing obligation.
14. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of any material amendment shall be approved by:
(a) the Trust's Board of Trustees or by a vote of a majority of the outstanding
voting securities of the Funds (as required by the 1940 Act), and (b) the vote
of a majority of those 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.
15. Confidentiality. Subject to the duties of the Adviser, the Trust and
the Subadviser to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential and shall not disclose any and all information pertaining
to the Fund and the actions of the Subadviser, the Adviser and the Fund in
respect thereof; except to the extent:
(a) Authorized. The Adviser or the Trust has authorized such
disclosure;
(b) Court or Regulatory Authority. Disclosure of such information is
expressly required or requested by a court or other tribunal of competent
jurisdiction or applicable federal or state regulatory authorities;
(c) Publicly Known Without Breach. Such information becomes known to
the general public without a breach of this Agreement or a similar
confidential disclosure agreement regarding such information;
(d) Already Known. Such information already was known by the party
prior to the date hereof;
(e) Received From Third Party. Such information was or is hereafter
rightfully received by the party from a third party (expressly excluding
the Fund's custodian, prime broker and administrator) without restriction
on its disclosure and without breach of this Agreement or of a similar
confidential disclosure agreement regarding them; or
(f) Independently Developed. The party independently developed such
information.
16. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Aberdeen Asset Management Investment Services Limited
Xxx Xxx Xxxxxxxxxx
Xxxxxx
Xxxxxx Xxxxxxx
XX0X0XX
Facsimile: 00-000-000-0000
(b) If to the Adviser:
Aberdeen Asset Management Inc.
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(c) If to the Trust:
Xxxxxxxx Xxxxx
0 Xxxxx Xxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
17. Jurisdiction. This Agreement shall be governed by and construed in
accordance with substantive laws of the State of Delaware without reference to
choice of law principles thereof and in accordance with the 1940 Act. In the
case of any conflict, the 1940 Act shall control.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
19. Certain Definitions. For the purposes of this Agreement and except as
otherwise provided herein, "interested person," "affiliated person," and
"assignment" shall have their respective meanings as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the SEC.
20. Captions. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
21. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.
22. Entire Agreement. This Agreement, together with all exhibits,
attachments and appendices, contains the entire understanding and agreement of
the parties with respect to the subject matter hereof.
23. Aberdeen Funds and its Trustees. The terms "Aberdeen Funds" and the
"Trustees of Aberdeen Funds" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under the Declaration of Trust made and dated as of [ ], 2007, as has been
or may be amended and/or restated from time to time, and to which reference is
hereby made.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
TRUST
ABERDEEN FUNDS
By:
Name:
Title:
ADVISER
ABERDEEN ASSET MANAGEMENT INC.
By:
Name:
Title:
SUBADVISER
ABERDEEN ASSET MANAGEMENT
INVESTMENT SERVICES LIMITED
By:
Name:
Title:
EXHIBIT A
SUBADVISORY AGREEMENT AMONG
ABERDEEN ASSET MANAGEMENT INC.,
ABERDEEN FUNDS
AND ABERDEEN ASSET MANAGEMENT INVESTMENT SERVICES LIMITED
Effective [ ], 2007
Funds of the Trust Advisory Fees
Aberdeen China Opportunities Fund 0.625% on assets up to $500 million
0.600% on assets of $500 million but less than $2 billion
0.575% on assets of $2 billion and more
Aberdeen Developing Markets Fund 0.525% on assets up to $500 million
0.500% on assets of $500 million but less than $2 billion
0.475% on assets of $2 billion or more
Aberdeen International Equity Fund 0.450% on assets up to $500 million
0.425% on assets of $500 million but less than $2 billion
0.400% on assets of $2 billion or more
Aberdeen Select Worldwide Fund 0.450% on assets up to $500 million
0.425% on assets of $500 million but less than $2 billion
0.400% on assets of $2 billion or more
Aberdeen Global Utilities Fund 0.350% on assets up to $500 million
0.325% on assets of $500 million but less than $2 billion
0.300% on assets of $2 billion or more
TRUST
ABERDEEN FUNDS
By:
Name:
Title:
ADVISER
ABERDEEN ASSET MANAGEMENT INC.
By:
Name:
Title:
SUBADVISER
ABERDEEN ASSET MANAGEMENT
INVESTMENT SERVICES LIMITED
By:
Name:
Title:
