SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, dated July 7,
1998, between Xxxxxxx Xxxxxxx Trees & Xxxxx, Inc.,
a New York Corporation (the "Adviser") and Xxxxxxx
Xxxxxxx Trees & Xxxxx a corporation organized under
the laws of the United Kingdom (the "Sub-Adviser").
In consideration of the mutual agreements
herein made, the parties hereto agree as follows:
1. Attorney-in-Fact. The Adviser
appoints the Sub-Adviser as its attorney-in-fact to
invest and reinvest the assets of the Global High
Yield Portfolio (the "Portfolio") of FFTW Funds,
Inc. (the "Fund"), as fully as the Adviser could
do. The Sub-Adviser hereby accepts this
appointment.
2. Duties of the Sub-Adviser. (a)
The Sub-Adviser shall be responsible for
coordinating with the Adviser in managing the
investment portfolio of the Portfolio, including,
without limitation, providing investment research,
advice and supervision, determining with the
Adviser which portfolio securities shall be
purchased or sold by the Portfolio, purchasing and
selling securities on behalf of the Portfolio and
determining with the Adviser how voting and other
rights with respect to portfolio securities of the
Portfolio shall be exercised, subject in each case
to the control of the Board of Directors of the
Fund (the "Board") and in accordance with the
objectives, policies and principles of the
Portfolio set forth in the Registration Statement,
as amended, of the Fund, the requirements of the
Investment Company Act of 1940, as amended, (the
"Act") and other applicable law. In performing
such duties, the Sub-Adviser shall provide such
office space, and such executive and other
personnel as shall be necessary for the operations
of the Portfolio. In managing the Portfolio in
accordance with the requirements set forth in this
paragraph 2, the Sub-Adviser shall be entitled to
act upon advice of counsel to the Fund, counsel to
the Adviser or counsel to the Sub-Adviser.
(b) Subject to Section 36 of the Act, the
Sub-Adviser shall not be liable to the Adviser or
the Fund for any error of judgment or mistake of
law or for any loss arising out of any investment
or for any act or omission in the management of the
Portfolio and the performance of its duties under
this Agreement except for losses arising out of the
Sub-Adviser's bad faith, willful misfeasance or
gross negligence in the performance of its duties
or by reason of its reckless disregard of its
obligations and duties under this Agreement. It is
agreed that the Sub-Adviser shall have no
responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement
under the Act and the Securities Act of 1933 except
for information supplied by the Sub-Adviser for
inclusion therein about the Sub-Adviser. The
Adviser agrees to indemnify the Sub-Adviser for any
claims, losses, costs, damages, or expenses
(including fees and disbursements of counsel, but
excluding the ordinary expenses of the Sub-Adviser
arising from the performance of its duties and
obligations under this Agreement) whatsoever
arising out of the performance of this Agreement
except for those claims, losses, costs, damages and
expenses resulting from the Sub-Adviser's bad
faith, willful misfeasance or 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 Sub-Adviser and its officers may
act and continue to act as investment advisers and
managers for others (including, without limitation,
other investment companies), and nothing in this
Agreement will in any way be deemed to restrict the
right of the Sub-Adviser to perform investment
management or other services for any other person
or entity, and the performance of such services for
others will not be deemed to violate or give rise
to any duty or obligation to the Fund.
(d) Except as provided in Paragraph 5,
nothing in this Agreement will 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 Adviser acknowledges that the
Sub-Adviser and its officers, affiliates or
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 for the account
of the Portfolio. The Sub-Adviser will have no
obligation to acquire for the Portfolio 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 for the
account of the Portfolio.
3. Expenses. The Sub-Adviser shall
pay all of its expenses arising from the
performance of its obligations under this Agreement
except as provided in Section 2(b) of this
Agreement.
4. Compensation. (a) As
compensation for the services performed and the
facilities and personnel provided by the
Sub-Adviser pursuant to this Agreement, the Adviser
will pay to the Sub-Adviser promptly at the end of
each calendar month, a fee, calculated on each day
during such month, at an annual rate of 0.50% of
the Portfolio's average daily net assets. The
Sub-Adviser shall be entitled to receive during any
month such interim payments of its fee hereunder as
the Sub-Adviser shall request, provided that no
such payment shall exceed 50% of the amount of such
fee then accrued on the books of the Adviser and
unpaid.
(b) If the Sub-Adviser shall serve
hereunder for less than the whole of any month, the
fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the
"average daily net assets" of the Portfolio shall
mean the average of the values placed on the
Portfolio's net assets on each day pursuant to the
applicable provisions of the Fund's Registration
Statement, as amended.
5. Purchase and Sale of Securities.
The Sub-Adviser shall purchase securities from or
through and sell securities to or through such
persons, brokers or dealers as the Sub-Adviser
shall deem appropriate in order to carry out the
policy with respect to the allocation of portfolio
transactions as set forth in the Registration
Statement of the Fund, as amended, or as the Board
may direct from time to time. The Sub-Adviser will
use its reasonable best efforts to execute all
purchases and sales with dealers and banks on a
best net price basis. Neither the Sub-Adviser nor
any of its officers, affiliates, or employees will
act as principal or receive any compensation from
the Portfolio in connection with the purchase or
sale of investments for the Portfolio other than
the fee referred to in Paragraph 4 hereof.
6. Term of Agreement. This Agreement
shall continue in full force and effect until two
years from the date hereof, and will continue in
effect from year to year thereafter if such
continuance is approved in the manner required by
the Act, provided that this Agreement is not
otherwise terminated. The Sub-Adviser and the
Adviser may terminate this Agreement at any time,
without payment of penalty, upon 60 days' written
notice to any other party hereto. The Fund may
terminate this Agreement with respect to the
Portfolio at any time, without payment of penalty,
on 60 days' written notice to the Sub-Adviser by
vote of either the Board or a majority of the
outstanding stockholders of the Portfolio. This
Agreement will automatically terminate in the event
of its assignment (as defined by the Act).
7. Fee Waivers. The Sub-Adviser
agrees to waive all or a portion of its fee to the
extent necessary to meet the expense cap stated in
the Fund's Registration Statement, as amended,
based on a formula whereby the Adviser, Sub-Adviser
and Administrator share in the waiving of fees on a
prorata basis (based on their relative fee
schedules) so long as the Adviser and Administrator
continues to voluntarily waive its fees.
8. Miscellaneous. This Agreement
shall be governed by and construed in accordance
with the laws of the State of New York. Anything
herein to the contrary notwithstanding, this
Agreement shall not be construed to require or to
impose any duty upon either of the parties to do
anything in violation of any applicable laws or
regulations.
IN WITNESS WHEREOF, the Adviser and the
Sub-Adviser have caused this Agreement to be
executed by their duly authorized officers as of
the date first written above.
ATTEST
XXXXXXX XXXXXXX TREES & XXXXX
By:_______________________
By:_______________________
Xxxxx X. Hard
General Manager
ATTEST
XXXXXXX XXXXXXX TREES & XXXXX, INC.
By:/s/Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
By:/s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Managing Director
