Exhibit 99.5(c)
SUB-INVESTMENT ADVISORY AGREEMENT
between
GUARDIAN XXXXXXX XXXXXXX LIMITED, incorporated under the Companies Acts and
having its Registered Office at 0 Xxxxxxx Xxxx, Xxxxxxxxx XX0 0XX (hereinafter
called "the Company") OF THE ONE PART
and
XXXXXXX XXXXXXX OVERSEAS LIMITED, a company incorporated under the Companies
Acts and having its Registered Office at 0 Xxxxxxx Xxxxx, Xxxxxxxxx, XX0 0XX
(hereinafter called "the Manager") OF THE OTHER PART
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WHEREAS:
(A) The Park Avenue Portfolio (hereinafter called the "Client") is engaged
in business as an open-end management investment company and is registered as
such under the U.S. Investment Company Act of 1940, as amended.
(B) The Client is authorised to issue shares of beneficial interest in one
or more series, the shares of which will represent and correspond to interests
in one or more separate portfolios of securities and other assets held by the
Client.
(C) The Company is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the U.S. Investment Advisers Act of 1940, as amended, and is a member of, and
regulated in the conduct of its investment business by, the Investment
Management Regulatory Organisation Limited.
(D) The Manager is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the U.S. Investment Advisers Act of 1940, as amended, and is a member of, and
regulated in the conduct of its investment business by, the Investment
Management Regulatory Organisation Limited.
(E) The Client desires the Company to render investment management
services to the Client and to those of its Series which are named in written Fee
Appendices as described herein in the manner set forth and in the terms and
conditions set forth in a separate Investment Management Agreement of even date
herewith.
(F) The Company, in turn, desires the Manager to render sub-investment
management services to the Client and to those of its Series which are named in
written Fee Appendices as described herein in the manner and on the terms and
conditions hereinafter set forth.
IT IS HEREBY AGREED AND DECLARED as follows:
1. Definitions
1.1 In this Agreement the following words and expressions shall
where not inconsistent with the context have the following meanings
respectively:
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(a) "Articles" means the Articles of Association of the
Company as amended from time to time;
(b) "Associate" means and includes any corporation which in
relation to the person concerned (being a corporation) is a Holding
Company or a Subsidiary or a Subsidiary of any such Holding Company
or a corporation (or a Subsidiary of a corporation) at least
one-third of the issued share capital of which is beneficially owned
by the person concerned or an Associate thereof under the preceding
part of this definition and includes any firm the partners of which
or any one or more of them are beneficially entitled whether
directly or indirectly or through the medium of a corporation or
corporations to at least three-quarters of the issued equity share
capital of the person concerned (being a corporation) and includes
any partner in any such firm. Where the person concerned is an
individual, firm or other unincorporated body the expression
"Associate" means and includes any corporation directly or
indirectly or through the medium of a corporation or corporations
controlled by such person and any partner in any such firm;
(c) "Business Day" means a day on which the New York Stock
Exchange is open for business;
(d) "Commencement Date" means 11 January 1993 or, if later,
the date on which a copy of this Agreement signed by or on behalf of
the Manager has been signed by or on behalf of the Company and
returned to the Manager;
(e) "Custodian" means State Street Bank & Trust Company,
Boston, Massachusetts, U.S.A. and its agents and sub-custodian banks
or such other bank or banks as may in the future serve as custodian
of the Investments;
(f) "Directors" means the Board of Directors of the Company
from time to time including any duly appointed committee thereof;
(g) "Fee Appendix" means the Sub-Investment Advisory Fee
Appendix entered into by the Manager and the Company which sets
forth the compensation to be paid by the Company to the Manager for
services rendered hereunder with respect to any Series. Each Fee
Appendix shall be subject to the terms and conditions of this
agreement;
(h) "Holding Company" means a holding company as defined in
Section 736 of the Companies Xxx 0000;
(i) "IMRO" means Investment Management Regulatory Organisation
limited;
(j) "Investments" means the assets and rights from time to
time of each Series comprised in the Portfolio of such Series;
(k) "Investment Policy" means the investment objective,
policies and restrictions of a Series which are set out in the
current Registration Statement on Form N-1A as filed on behalf of
the Client with the SEC and as amended from time to time following
written notice given by the Company to the Manager;
(l) "Investment Management Agreement" means the investment
advisory agreement between the Company and the Client of even date
herewith.
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(m) "Portfolio" means the investments and cash which may from
time to time comprise the assets of a Series which are the subject
of the Investment Management Agreement;
(n) "Rules" means the rules (including any regulations) made
by the board of IMRO, as altered, amended, added to or cancelled
from time to time whether by the board of IMRO or pursuant to the
Financial Services Xxx 0000, together with the Statutory Rules;
(o) "SEC" means the U.S. Securities and Exchange Commission;
(p) "Series" means a separate portfolio of assets of the
Client which has been named in a written Fee Appendix;
(q) "Statutory Rules" means rules or regulations made under
Chapter V of the Financial Services Xxx 0000 which an binding on the
Manager;
(r) "Subsidiary" means a subsidiary as defined in Section 736
of the Companies Xxx 0000;
(s) "U.S." means the United States of America;
(t) "1940 Act" means the U.S. Investment Company Act of 1940,
as amended;
(u) any reference to the Company, Client, a Series or the
Manager includes a reference to its duly authorised agents or
delegates;
(v) words importing the singular number shall be deemed to
include the plural number and vice versa;
(w) words importing the masculine gender only shall include
the feminine gender and vice versa;
(x) words importing persons shall include companies or
associations or bodies of persons, whether corporate or not; and
(y) any reference to this Agreement shall be deemed to be a
reference to this Agreement as it may from time to time be
supplemented by a Fee Appendix.
1.2 Words and expressions contained in this Agreement (but not
defined herein) shall bear the same meanings as in the Articles.
1.3 The headings to the Clauses of this Agreement are for
convenience only and shall not affect the construction & interpretation
thereof.
1.4 References herein to statutory provisions shall be construed as
references to those provisions as respectively amended or re-enacted from
time to time and shall include any provision of which they an reenactments
(whether with or without modification).
2. Appointment
2.1 The Company HEREBY APPOINTS the Manager as Sub-Investment
Manager in relation to the Portfolio of each Series and the Manager
accepts such appointment on the terms and conditions of this Agreement.
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2.2 The appointment of the Manager as Sub-Investment Manager as
aforesaid shall take effect from the Commencement Date, and shall continue
in full force and effect with respect to each Series, provided it is
initially and continually approved in accordance with the 1940 Act, and
unless and until terminated in accordance with the provisions hereof.
3. Investment Management Functions of the Manager
3.1 During the continuance of its appointment as Sub-Investment
Manager of the Company, subject to Cause 3.2 below and without prejudice
to the generality of Clause 2.1 above the Manager shall (subject to the
overall supervision of the Directors):
(a) manage the investment and re-investment of the Portfolio
of each Series on a discretionary basis with a view to achieving the
investment objective contained in the Investment Policy;
(b) provide valuations of the Investments in accordance with
the provisions of Clause 11;
(c) as and when requested by the Company and/or the Client
supply the Company and/or the Client with such information in
connection with the Portfolio of each Series as may be in the
possession of the Manager or may reasonably be obtained from or
provided by them;
3.2 Any investment activity undertaken by the Manager pursuant to
this Agreement and any other activities undertaken by the Manager on
behalf of the Company or the Client or any Series shall at all times be
subject to any written directives of the Directors or of the Board of
Trustees of the Client, as the case may be, any duly constituted committee
of such Board, or any officer of the Company or of the Client acting
pursuant to the written directives of its respective Board.
3.3 The Manager shall keep or cause to be kept on behalf of each
Series such books, records and statements to give a complete record of all
transactions carried out by the Manager on behalf of each Series in
relation to the investment and reinvestment of the Portfolio of such
Series and such other books, records and statements as may be required by
law and as may be necessary to give a complete record of all other
transactions carried out by the Manager on behalf of each Series and shall
permit the Company and its employees and agents and the auditors for the
time being of the Company and/or the Client and each Series to inspect
such books, records and statements at all reasonable times.
3.4 All records required to be maintained and preserved by the
Manager on behalf of each Series or the Portfolio of such Series pursuant
to the provisions of rules or regulations of the SEC under Section 31(a)
of the 1940 Act are the property of the Client and will be surrendered by
the Manager promptly on request by the Client.
3.5 The Manager hereby warrants that it holds and undertakes that it
will continue to hold, all licences, permissions, authorisations and
consents necessary to enable it to carry out its duties hereunder in the
ordinary course of business and that all such licences, permissions,
authorisations and consents are and will remain in full force and effect
during the continuance of this Agreement.
3.6 The services to be provided under this Agreement shall be so
provided on the basis that the Company and the Client are "Non-Private
Customers" as defined in the Rules.
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4. Manager's Specific Powers and Obligations in Relation to Investment
Management
4.1 Consistent with the Investment Policy and subject to any written
directions (in accordance with Clause 3.2 above) communicated to the
Manager, the Manager shall have and is hereby granted the authority, power
and right for the Portfolio of each Series and in the name of the Client
and each Series to supervise and direct the investments of each Series in
its discretion and without prior consultation with the Client or the
Company:
(a) to issue orders and instructions with respect to the
disposition of Investments, moneys and other assets of the Portfolio
of each Series;
(b) to purchase (or otherwise acquire), sell (or otherwise
dispose of) and invest in investments, moneys and other assets for
the account of each Series and effect foreign exchange transactions
on behalf of each Series and for the account of each Series in
connection with any such purchase, other acquisition, sale or other
disposal;
(c) to enter into, make and perform all contracts, agreements
and other undertakings as may in the opinion of the Manager be
necessary or advisable or incidental to the carrying out of the
objectives of this Agreement;
(d) subject to the Rules, to aggregate transactions for the
Portfolio of each Series with those of other clients and Associates
without prior reference to the Company, the Client or any Series or
such other clients. Aggregation may operate on some occasions to the
advantage of a Series and on other occasions to the disadvantage of
a Series. Also the Manager may act as agent for the Client and each
Series in relation to transactions in which it is also acting as
agent for its Associates;
(e) to purchase and sell Investments on any Recognised or
Designated Investment Exchange as defined in the Rules (including
for this purpose over the counter markets) or through such other
intermediary as the Manager may in its discretion consider;
(f) to purchase or subscribe for Investments Not Readily
Realisable (as defined in the Rules). However, such investments
carry a high risk of not being readily realisable, market-makers may
not be prepared to deal in them and proper information for
determining their current value may not be available. The purchase
of such investments is subject to such restrictions as may be set
out in this Agreement not inconsistent with the Investment Policy;
(g) to accept offers of new issues, or rights issues and
offers of paper and/or cash alternatives in takeover bids on behalf
of each Series;
(h) to invest in Contingent Liabilities Transactions and
Options effected otherwise than under the rules of a Recognised or
Designated Investment Exchange (as defined in the Rules) or in a
contract traded thereon;
(i) for the purposes of carrying out transactions in futures
and options only, to deposit or pledge investments comprised in the
Portfolio of each Series and such other documents of title and
certificates evidencing tide to such investments and other property
as may be required in order to satisfy the counterparty's margin or
collateral requirements. In all other circumstances and except (a)
with the written consent of and on terms agreed with the Company and
the Client or (b) if appropriate, as may be provided in the Client's
current Registration Statement filed with the SEC (as
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amended from time to time) investments comprised in the Portfolio of
a Series and documents of title and certificates evidencing title to
such investments and other property acquired under this Agreement
may not be lent to a third party nor may money be borrowed on the
Client's or a Series' behalf against the security of such
investments, documents and property.
4.2 As Investments may be denominated in different currencies, a
movement of exchange rates may have a separate effect, unfavourable as
well as favourable, on the gain or loss otherwise experienced in the
Investments.
4.3 The Company understands, and has informed the Manager that the
Client understands, that markets involving Contingent Liability
Transactions can be highly volatile and that such instruments carry a high
risk of loss and that a relatively small adverse market movement may
result not only in loss of the original investment but also an
unquantifiable further loss exceeding any margin deposited. The Company
further understands, and has informed the Manager that the Client
understands, that the Client may be required to pay on behalf of a Series
a deposit or margin in support of a transaction or to supplement that
payment after the transaction has been effected and that the consequence
of non-payment may result in the loss of deposit or margin.
4.4 The Company confirms to the Manager that the Client has received
from the Company the appropriate risk disclosure statements required under
paragraph 12(a) of Schedule 4 of Chapter III of the Rules.
4.5 The Manager shall observe and comply with all resolutions of the
Directors of which it has written notice and other lawful orders and
directions given in writing to it from time to time by the Directors
including those orders and directions emanating from the Client and all
activities engaged in by the Manager hereunder pursuant to Clause 3 above
shall at all times be subject to the control of and review by the
Directors, acting on behalf of the Client, and without limiting the
generality of the foregoing the Directors may from time to time:
(a) prohibit the Manager from investing the Portfolio of any
Series in any investment or in any currency or country or in or with
any person;
(b) require the Manager to sell any investment or (subject to
the availability of funds) to purchase, on behalf of a Series, any
investment;
(c) notify the Manager, in writing, of any amendments to the
Investment Policy of any Series;
and the Manager shall and shall procure that any person, firm
or company to whom it delegates any of its functions hereunder shall
give effect to all such decisions.
5. Payment Due on Investments
The Company undertakes to the Manager that it shall be responsible
for any unpaid calls or other sums which may become payable upon any of
the Investments or any rates, taxes or other imposts or similar
liabilities levied or arising on or in respect of any of the Investments
but only to the extent that the Client, on behalf of a Series, has failed
to pay same.
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6. Cold Calls
The Company and the Manager are free under this Agreement at any
time to telephone or otherwise communicate with each other (which in the
case of the Manager, its directors, employees or representatives, may
constitute a "Cold Call" in terms of IMRO's Rules) to discuss the
Portfolio of any Series, its composition and investment policy or any
changes therein, or any individual investment, current or proposed.
7. Custody Arrangements
7.1 The Company will as the written request of the Manager arrange
with the Client, on behalf of a Series, for the opening of bank accounts
in the name of each Series with the Custodian. All sums belonging to a
Series including proceeds of sales and income received on investments
shall be credited directly to such accounts. The Manager will hold no
moneys on behalf of a Series, and accepts no liability for any default by
the Custodian. These bank accounts and moneys are not Client Bank Accounts
or Clients' Money (as defined in the Rules).
7.2 Securities forming part of the Portfolio of each Series will be
registered in the name of the Custodian or held to its order. The Manager
accepts no liability for any default by the Custodian or sub-custodian
banks.
8. Settlement
The Manager will attend to the settlement and delivery of all
purchases and sales of Investments and deal with issues, rights
entitlements and any other matters affecting such investments. The Manager
will also be entitled to instruct the Custodian to make delivery of
documents of title or certificates evidencing title when settling
transactions.
9. Voting
Any rights conferred by Investments of a Series shall be exercised
in such manner as the Manager may determine (subject to the rights of the
Directors to give instruction to the Manager regarding the exercise of
such rights) and subject as aforesaid the Manager may in its discretion
refrain from the exercise of such rights. The Company shall from time to
time, upon request from the Manager, procure that the Client, on behalf of
each Series, shall execute and deliver or cause to be executed and
delivered to the Manager or its nominee(s) such powers of attorney or
proxies as may reasonably be required authorising such attorneys or
proxies to exercise any rights or otherwise act in respect of all or any
part of the Investments. Without prejudice to the generality of the
foregoing the Manager will be entitled to give voting instructions to the
Custodian in respect of the exercise of any voting or other rights
attached to any Investment at the discretion of the Manager or as the
Company and/or the Client may instruct from time to time.
10. Lending and Borrowing
10.1 Subject to the Investment Policy of a Series and as provided in
this Clause 10, investments comprised in the Portfolio of a Series and
documents of title and certificates evidencing title to such investments
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and other property acquired under this Agreement may not be lent to a
third party nor may money be borrowed on the Client's or a Series' behalf
against the security of such investments, documents and property.
10.2 Subject to the Investment Policy of a Series, an overdraft
facility or line of credit may be established on behalf of each Series and
may be used as a temporary measure for the extraordinary or emergency
needs of each Series.
10.3 Subject to the Investment Policy of a Series and to the
temporary borrowing facility provided for in 10.2 above, the Manager may
not commit the Client or a Series to supplement the monies in the
Portfolio of a Series either by borrowing on its behalf or by committing
it to a contract the performance of which may require them to supplement
the Portfolio of such Series.
11. Reporting
11.1 The Manager shall arrange to notify the Company and the Client
(by fax) of transactions in each Series on a daily basis and will instruct
brokers to send the original contract note to the Custodian and copies to
the Company and the Client.
11.2 The Manager shall supply quarterly, on a Series by Series
basis, to the Company and the Client the following:
(a) reports incorporating inter alia investment policy, which
will be sent within twenty-five working days of the end of the
quarter to which the report relates;
(b) a Portfolio valuation prepared by Datastream or some other
mutually agreed and reputable supplier of valuation services. Such
valuations will show the number of units of each investment or other
asset held, the book cost and the aggregate value of each as at the
valuation date and will normally use middle market prices for listed
investments. In the event of any change in this method the Manager
will notify the Company and the Client accordingly;
(c) a statement of any income received on the investments
held;
(d) a schedule detailing the performance of each Series broken
down into major sectors and comparing the return of the relevant
index against the return of each Series. The returns will be
compiled by the WM Company using information supplied by the
Manager; and
(e) schedules showing transactions undertaken during the
period under review.
11.3 The Manager shall attend meetings with the Company and/or the
Client from time to time as required by the Directors. Instructions as to
the management of the Portfolio of a Series given orally to the Manager at
such meetings will be confirmed in writing to the Manager as provided for
in Clause 23.
12. Material Interests
12.1 Except as specified in Clause 4.1(d) of this Agreement, the
Manager may not effect transactions for the Portfolio of a Series in which
it has directly or indirectly a material interest or any relationship with
another party which may involve a conflict of the Manager's duty to the
Company and/or the Client or any Series without prior reference to the
Company, other than transactions in units in unit trusts managed by
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Xxxxxxx Xxxxxxx & Co. Limited, an Associate of the Manager, in accordance
with the provisions of sub-clause 12.2 of this Agreement.
12.2 For the purposes of sub-clause 12.1 of this Agreement the
Manager may not effect transactions for the Portfolio of a Series in units
in unit trusts managed by Xxxxxxx Xxxxxxx & Co. Limited unless the Manager
shall first have been issued with an order of exemption by the SEC in
accordance with sub-section 17(a)(1)(b) of the 1940 Act.
13. Relevant Arrangements
The Manager may not effect transactions for the Portfolio of a
Series with or through the agency of a person who provides services under
any arrangement where that person will from time to time provide to or
procure for the Manager services or other benefits which result, or are
designed to result, in an improvement in the services which the Manager
provides to its clients and for which it may make no direct payment but
may undertake to place business with that person.
14. Taxation
Bank statements and vouchers will be sent by the Custodian to the
Client to enable the Client, on behalf of each Series, to reclaim any
credits in respect of or tax deducted from the income of the Portfolio of
such Series.
15. Fees
In consideration for the services to be provided by the Manager as
Sub-Investment Manager under this Agreement the Company shall, during the
continuance of this Agreement, pay to the Manager, fees calculated by
reference to the value of the Portfolio of each Series all in accordance
with the provisions set forth in the applicable Fee Appendix. All such Fee
Appendices shall provide that they are subject to all terms and conditions
of this Sub-Investment Advisory Agreement.
Compensation under this Agreement and the related Fee Appendices for
all Series shall be calculated and accrued daily and the amounts of the
daily accruals shall be paid quarterly, or at such other intervals agreed
to by the parties. If this Agreement becomes effective with respect to a
Series subsequent to the First day of a quarter or shall terminate before
the last day of a quarter, compensation for that part of the quarter
during which this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fees as set forth in the applicable
Fee Appendix.
16. Indemnity
16.1 Neither the Manager nor any of its officers, directors, or
employees, nor any person performing executive, administrative, trading,
or other functions for the Client or any Series and/or the Company (at the
direction or request of the Manager) or the Manager in connection with the
Manager's discharge of its obligations undertaken or reasonably assumed
with respect to this Agreement, shall be liable for any error of judgment
or mistake of law or for any loss suffered by the Client or any Series
and/or the Company in connection with the matters to which this Agreement
relates, except for loss resulting from wilful misfeasance or misconduct,
wilful default, bad faith, or gross negligence in the performance of its
or his/her duties on
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behalf of the Client or any Series and/or the Company or from reckless
disregard by the Manager or any such person of the duties of the Manager
under this Agreement.
16.2 The Manager shall not be liable for the consequences of any
investment decision made hereunder or in respect of any other fund managed
by the Manager or any of its Associates which is a permitted investment
hereunder. The Manager acts only as agent for the Client and each Series
and the Company hereby undertakes to indemnify the Manager against all
actions, proceedings, claims, demands, costs and expenses which may be
brought against, suffered or incurred by the Manager by reason of its
performance of such duties, including all legal, professional and other
expenses incurred.
16.3 Notwithstanding the provisions of Clause 16.2, the Manager will
indemnify the Company and/or the Client and each Series in respect of any
loss incurred as a result of negligence or fraud by the Manager or any of
its Associates or their respective employees in their performance of the
duties under the terms of this Agreement.
17. Term and Termination of Agreement
17.1 The term of this Agreement shall begin on 11 January 1993,
provided that, with respect to any Series, this Agreement shall not take
effect unless it has first been approved by the Board of Trustees of the
Client, including a majority of the Trustees who are not "interested
persons" (as defined in the 0000 Xxx) and by a majority of the outstanding
voting securities of that Series (as defined in the 0000 Xxx) and, unless
sooner terminated as hereinafter provided, this Agreement shall remain in
effect until 1 January 1995. Thereafter, this Agreement shall continue in
effect from year to year, with respect to the Company and each Series,
subject to the termination provisions and all other terms and conditions
hereof, provided such continuance is approved at least annually by the
vote of holders of a majority of the outstanding voting securities of each
Series (as defined in the 0000 Xxx) or by the Board of Trustees of the
Client, provided, that in either event, such continuance is also approved
annually by the vote of a majority of the Board of Trustees of the Client
who are not parties to this Agreement and are not "interested persons" (as
defined in the 0000 Xxx) of any party, which vote must be cast in person
at a meeting called for the purpose of voting on such approval. The
Manager shall furnish to the Client, on behalf of each Series, promptly
upon its request, such information as may reasonably be necessary to
evaluate the terms of this Agreement or any extension, renewal or
amendment hereof.
17.2 The Manager acknowledges that this Agreement may be terminated
by the Company in accordance with the following provisions of this Clause
17.2. Subject to Clause 17.3 below, the Client may, with respect to a
Series, either by majority vote of its Board of Trustees or by the vote of
a majority of the outstanding voting securities of such Series (as defined
in the 1940 Act), at any time and without the payment of any penalty,
direct the Company to terminate this Agreement upon sixty days written
notice to the Manager.
17.3 The Manager acknowledges that this Agreement may also be
terminated in accordance with the following provisions of this Clause
17.3. The Client shall also be entitled forthwith to direct the Company to
terminate the appointment of the Manager as Sub-Investment Manager
hereunder with respect to a Series, notwithstanding any period remaining
in accordance with this Clause or, no notice having been given:
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(i) if the Manager shall commit any material breach of its
obligations under this Agreement and (if such breach shall be
capable of remedy) shall fail within thirty days of receipt of
notice in writing served by the Company requiring it so to do to
make good such breach;
(ii) if an order is made or a resolution passed to wind up the
Manager or if a receiver is appointed to the whole or any part of
the property and undertaking of the Manager;
(iii) if the Shareholders Agreement dated 7 November 1990
between the Guardian Insurance & Annuity Company, Inc., the Manager
and the Company is terminated or expires by effluxion of time.
17.4 The Manager may terminate this Agreement with respect to a
Series without payment of penalty upon sixty days written notice to the
Company.
17.5 The Manager shall also be entitled to terminate forthwith this
Agreement with respect to a Series, notwithstanding any period remaining
in accordance with this Clause or, no notice having been given, if (i) the
said Shareholders Agreement between The Guardian Insurance & Annuity
Company, Inc. and the Manager and the Company is terminated or expires by
effluxion of time, or (ii) an order is made or a resolution passed to wind
up the Company, or (iii) if the Company shall commit any material breach
of its obligations under this Agreement and (if such breach shall be
capable of remedy) shall fail within 30 days of receipt of notice in
writing served by the Manager requiring it so to do to make good such
breach, or (iv) a receiver is appointed to the whole or any part of the
property and undertaking of the Company.
17.6 Termination of this Agreement as detailed in this Clause with
respect to any Series shall in no way affect the continued validity of
this Agreement or the performance thereunder with respect to any other
Series.
17.7 This Agreement shall immediately terminate in the event of its
assignation or assignment (as that term is defined in the 1940 Act) by
either party unless such automatic termination shall be prevented by an
exemptive order or rule of the SEC.
17.8 On the termination of the appointment of the Manager under the
provisions of this Clause the Manager shall be entitled to receive all
fees accrued due and outlays incurred up to the date of such termination
but shall not in the case of termination under sub-clause 17.2., 17.3 or
17.4 above, be entitled to compensation in respect of such termination.
17.9 On termination of the appointment of the Manager under the
provisions of this Clause the Manager shall deliver to the Company, or as
it shall direct, all books of account, records, registers, correspondence,
documents and assets in relation to the affairs of or belonging to the
Company and/or the Client or any Series in the possession of or under the
control of the Manager as sub-investment manager, and take all necessary
steps to vest in the Company any assets previously held in the name of or
to the order of the Manager as sub-investment manager, on behalf of the
Company.
17.10 Termination of the appointment of the Manager hereunder shall
be without prejudice to transactions already initiated, which transactions
shall be completed.
17.11 The Company and the Manager will co-operate with each other to
ensure that transactions in progress at the date of termination of the
Manager's appointment hereunder shall be completed by the Company in
accordance with the terms of such transactions and, to this end, the
Manager shall provide the Company with all necessary information and
documentation to secure implementation thereof.
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18. Non-Exclusivity
18.1 The services of the Manager hereunder are not to be deemed
exclusive and the Manager or any Associate thereof shall be free to render
investment management services, investment advisory services and corporate
administrative services to other parties (including without prejudice to
the generality of the foregoing other investment companies) on such terms
as the Manager or such Associate may arrange so long as its services under
this Agreement are not thereby impaired and to retain for its own use and
benefit fees or other moneys payable thereby. The Manager shall not be
deemed to be affected with notice of or to be under any duty to disclose
to the Company any fact or thing which may come to the notice of it or any
servant or agent of it in the course of the Manager rendering the said
services to others or in the course of its business in any other capacity
or in any manner whatsoever otherwise than in the course of carrying out
its duties under this Agreement.
18.2 The Manager agrees to permit individuals who are directors or
officers of the Manager to serve as directors or officers of the Company
and/or the Client.
19. Confidentiality
Neither of the parties hereto shall during the continuance of this
Agreement or after its termination, disclose to any person, firm or fund
whatsoever (except in the case of the Manager, with the written authority
of the Company and/or the Client or unless ordered to do so by a court of
competent jurisdiction or any regulatory body) any information of a
confidential nature relating to the business investments finances or other
matters of a confidential nature of the other party (or of the Client or
any Series) of which it may have become possessed during the period of
this Agreement and each party shall use its reasonable endeavours to
prevent any such disclosure as aforesaid.
20. Complaints
20.1 The Manager has established procedures in accordance with the
requirements of IMRO for the effective consideration of complaints by the
Company.
20.2 Should the Company and/or the Client wish to make a complaint
to the Manager about any aspect of the Manager carrying out its duties
under this Agreement or otherwise it shall in the first instance do so by
letter addressed to the director or directors of the Manager responsible
for the performance of the Manager's duties hereunder; if no satisfactory
resolution of the complaint is achieved within five days the Company
and/or the Client may repeat the complaint by letter addressed to the
Chairman of the Manager. If no satisfactory resolution is achieved within
ten days of the original complaint the Company and/or the Client may then
make its complaint (insofar as such complaint relates to the Manager's
duties as sub-investment manager hereunder) to IMRO. Notwithstanding the
above provisions the Company and/or the Client has a right of complaint
direct to IMRO.
20.3 A booklet setting out the right to investors compensation under
the Securities and Investments Board's Scheme in the event of the
Manager's inability to meet any liabilities to the Company and/or the
Client is available on request from the Manager.
12
21. Arbitration
Without prejudice to the rights of the Company in accordance with
Clause 20 hereof any matters of difference between the parties arising out
of or in connection with this Agreement shall be submitted to arbitration
to be determined under Scottish Law before a sole Arbiter to be agreed
between the parties and in default of agreement to be appointed by the
President of the Law Society of Scotland for the time being. No action
shall be brought upon by any issue between the parties arising out of or
in connection with this Agreement until the same has been submitted to
arbitration pursuant hereto and an award made. Section 3(3) of the
Administration of Justice (Scotland) Act 1972 shall not apply to this
Agreement.
22. Amendments
This Agreement may be amended by mutual consent, but no amendment
shall be effective as to any given Series until it is approved by vote of
a majority of such Series' outstanding voting securities, and by the vote
of a majority of the members of the Board of Trustees of the Client,
including a majority of the Trustees who are not deemed to be interested
persons" (as defined in the 1940 Act).
Notwithstanding the foregoing, where the effect of a requirement of
the 1940 Act which is reflected in any provision of this Agreement is
relaxed by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the
effect of such rule, regulation or order.
23. Notices
Any notice required to be given under this Agreement shall be in
writing, delivered personally or sent by first class prepaid letter or
transmitted by telex or facsimile and shall be deemed duly served if left
at or sent or (as appropriate) transmitted to the following addresses (or
to the most recent of any other address of which a party hereto shall have
given notice to the other party pursuant to this Clause):
(a) if to the Company at:
0 Xxxxxxx Xxxxx
Xxxxxxxxx XX0 0XX
Xxxxxxxx
For the attention of: X. Xxxxxxx
Facsimile number: 031-222-4099
(b) if to the Manager at:
0 Xxxxxxx Xxxxx
Xxxxxxxxx XX0 0XX
Xxxxxxxx
For the attention of: X. Xxxxxxx
Facsimile number: 031-222-4099
(c) if to the Client at:
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx 00000
X.X.X.
For the attention of: X.X. Xxxxx
Facsimile number: 000-000-0000
13
Notices sent by first class prepaid letter shall be deemed to be
served seven business days after posting. Evidence that the Notice was
properly addressed, stamped and put into post shall be conclusive evidence
of posting. A notice sent by facsimile transmission shall be deemed to
have been served at the time when a complete and legible copy is received
by the addressee. In this Clause "business day" means a day on which
normal banking business is carried on in Edinburgh and New York City.
24. Reliance on documents
Wherever pursuant to any provision of this Agreement any notice,
instruction or other communication is to be given by, or on behalf of, the
Company (or its Directors) to the Manager as sub-investment manager and
the Manager may accept as sufficient evidence thereof:
(i) a document signed or purporting to be signed on behalf of
the issuing party by such person or persons whose signature the
Manager is for the time being authorized by such issuing party to
accept; or
(ii) a message by tested telex, telecopier, facsimile machine
or cable transmitted by, or on behalf of, the Company (or its
Directors) by such person or persons whose messages the Manager is
for the time being authorized by the Company or its Directors to
accept, and the Manager shall not be obliged to accept any document
or message signed or transmitted or purporting to be signed or
transmitted by any other person.
25. Client's Rights Under this Agreement
The Manager agrees that the Client, in any question with the Manager
in relation to its duties as sub-investment manager hereunder, may rely on
any of the provisions of this Agreement as if it were a party hereto. The
Company shall deliver a certified copy of this Agreement to the Client by
way of intimation of the Client's rights hereunder.
26. Invalidity
The invalidity or unenforceability of any part of this Agreement
shall not prejudice or affect the validity or enforceability of the
remainder.
27. Proper Law
Notwithstanding any conflict of laws, principles or provisions which
may otherwise apply, this Agreement and the rights and obligations of the
parties shall be governed by and are to be construed in accordance with
the law of Scotland and, to the extent applicable, in accordance with the
1940 Act: IN WITNESS WHEREOF these presents typewritten on this and the
preceding pages are executed as follows: they are subscribed
for and on behalf of Xxxxxxx Xxxxxxx Overseas Limited by ,
one of its Directors, at Edinburgh, Scotland on January 1993
before these witnesses, of , , and , of
, ; and they are subscribed for and on behalf of
14
Guardian Xxxxxxx Xxxxxxx Limited by Xxxx X. Xxxxx, one of its Directors at
New York, United States of America on January 1993 before these
witnesses, Xxxxxx X. Xxxxxx, Xx. and Xxxxxxx X. Xxxxxx, Xx. both of 000
Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx.
For Guardian Xxxxxxx Xxxxxxx Limited:
/s/ Xxxxxx X. Xxxxxx, Xx. Witness /s/ Xxxx X. Xxxxx
------------------------- -------------------------------------
/s/ Xxxxxxx X. Xxxxxx, Xx. Witness
--------------------------
For Xxxxxxx Xxxxxxx Overseas Limited:
Witness
-------------------------- -------------------------------------
Witness
-------------------------- -------------------------------------
15
SUB-INVESTMENT ADVISORY AGREEMENT FEE APPENDIX
Fee Appendix made as of January 11, 1993, between GUARDIAN XXXXXXX XXXXXXX
LIMITED (the "Company"), a company incorporated under the Companies Act and
registered as an investment adviser under the U.S. Investment Advisers Act of
1940, as amended ("Adviser's Act") and XXXXXXX XXXXXXX OVERSEAS LIMITED (the
"Manager"), a company incorporated under the Companies Act and registered under
the Adviser's Act.
WHEREAS The Park Avenue Portfolio, a Massachusetts business trust (the
"Client") has appointed the Company as investment adviser and administrator for
each series of shares of beneficial interest of the Client for which it may
enter into an Investment Advisory Fee Agreement pursuant to the Investment
Advisory Agreement dated January 11, 1993 between the Client and the Company
("Investment Advisory Agreement"); and
WHEREAS the Company has appointed the Manager as sub-investment adviser
for each series of shares of beneficial interest of the Client for which it may
enter into a Fee Appendix to the Sub-Investment Advisory Agreement dated January
11, 1993 between the Company and the Manager ("Sub-Investment Advisory
Agreement"); and
WHEREAS The Guardian Xxxxxxx Xxxxxxx International Fund (the "Series") has
been established as a series of shares of the Client;
NOW, THEREFORE, the parties agree as follows:
1. The Sub-Investment Advisory Agreement is hereby adopted for the Series.
The Series shall be one of the "Series" referred to in the Sub-Investment
Advisory Agreement. Certain capitalized terms used without definition in this
Fee Appendix have the meaning specified in the Sub-Investment Advisory
Agreement.
2. For the services provided and the expenses assumed pursuant to the
Sub-Investment Advisory Agreement, the Company will pay to the Manager a fee
(exclusive of Value Added Tax), computed daily and paid quarterly (or at such
other intervals as the parties may from time to time agree), at the monthly rate
of one thirtieth of one percent of:
A where:
---
B
"A" means the aggregate of the Values of the Portfolio as at the close of
business on each Business Day falling in that quarter; and
"B" means the number of Business Days falling in that quarter.
3. Said fees due to the Manager shall be invoiced by the Manager to the
Company following the end of each quarter and shall be due and payable within
ten days of the relevant invoice. The Company shall be entitled to make such
payments on account as it may in its absolute discretion determine.
4. For the purposes of paragraph 2 above:
(i) the "Value of the Portfolio" means the aggregate of the values of the
assets of the Portfolio of the Series at the close of business on a Business
Day. The aggregate of the values of the assets shall be calculated by taking the
value of securities held in the Portfolio of the Series, plus any cash or other
assets (including dividends payable and declared but not collected) less all
liabilities (including accrued expenses, but excluding capital and surplus);
(ii) the "value of an asset" shall be taken:
(1) in the case of an investment quoted on a Stock Exchange
where market price is the recognised basis of quotation,
at the price of such investment at the close of business
of the appropriate exchange on the relevant Valuation
Date or, if there have been no sales during the day, at
the mean of the closing bid and asked prices;
(2) in the case of an investment traded only on the
over-the-counter market, at the mean between the bid and
asked prices;
(3) in the case of unquoted investments and other
investments for which market quotations are not readily
available, at the value ascertained in accordance with
such manner as the Board of Trustees of the Client have
deemed appropriate to reflect the fair value thereof;
(iii) when any asset is held or liability is outstanding in a
currency other than U.S. dollars, such asset or liability shall be notionally
converted into the U.S. dollar equivalents at the prevailing market rates quoted
by the Custodian at the close of business on the Business Day, on the relevant
Valuation Date or, if such Valuation Date is not a Business Day, on the
immediately preceding Business Day.
5. The Company shall procure that Xxxxxxx Xxxxxxx & Co. shall be
responsible for furnishing such office space, facilities and equipment and such
clerical help, administrative and bookkeeping services in Edinburgh as the
Series shall reasonably require in the conduct of its business in accordance
with the Administrative and Secretarial Agreement between Xxxxxxx Xxxxxxx & Co.
and the Company.
6. This Fee Appendix shall be subject to all terms and conditions of the
Sub-investment Advisory Agreement.
7. This Fee Appendix shall become effective upon the date hereabove
written, provided that it shall not take effect unless it has first been
approved (i) by a vote of the Board of Trustees of the Client, including a
majority of those Trustees of the Client who are not parties to this Fee
Appendix or the Sub-Investment Advisory Agreement or interested persons of any
such persons at a meeting called for the purpose of such approval and (ii) by
vote of a majority of the Series' outstanding voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the 11th day of January, 1993.
FOR GUARDIAN XXXXXXX XXXXXXX LIMITED:
/s/ Xxxxxx X. Xxxxxx, Xx. Witness /s/ Xxxx X. Xxxxx
-------------------------- -----------------------------------
/s/ Xxxxxxx X. Xxxxxx, Xx. Witness
--------------------------
For Xxxxxxx Xxxxxxx Overseas Limited:
/s/ [ILLEGIBLE]
-----------------------------------
/s/ [ILLEGIBLE] Witness
--------------------------
/s/ [ILLEGIBLE] Witness
--------------------------
