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EXHIBIT (d)(2)
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
Effective as of
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State Street Global Advisors
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
The Worldwide Index Funds (the "Company"), an business trust
organized under the laws of the Commonwealth of Massachusetts, and LMI
Investment Advisors LLC ("LMI"), a limited liability company organized under the
laws of the state of Delaware, hereby agree with State Street Bank and Trust
Company, a trust company organized under the laws of the Commonwealth of
Massachusetts, acting through its division, State Street Global Advisors (the
"Sub-Advisor"), as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Company desires to employ the capital of the Company's
investment funds listed on Annex A hereto (individually, a "Fund" and
collectively, the "Funds") by investing and reinvesting in investments of the
kind and in accordance with the limitations specified in its Agreement and
Declaration of Trust, as amended ("Declaration of Trust"), and in their
Prospectus and Statement of Additional Information relating to the Funds as in
effect and which may be amended from time to time, and in such manner and to
such extent as may from time to time be approved by the Board of Trustees of the
Company. Copies of the Funds' Prospectus and Statement of Additional Information
and the Company's Declaration of Trust, as amended, have been or will be
submitted to the Sub-Advisor. The Company agrees to provide copies of all
amendments to the Funds' Prospectus and Statement of Additional Information and
the Company's Declaration of Trust to the Sub-Advisor on an on-going basis. The
Company desires to employ and hereby appoints the Sub-Advisor to act as
investment sub-advisor to the Funds. The Sub-Advisor accepts the appointment and
agrees to furnish the services described herein for the compensation set forth
below.
2. SERVICES AS INVESTMENT SUB-ADVISOR
Subject to the supervision of the Board of Trustees of the
Company and of LMI, the Funds' investment adviser, the Sub-Advisor will (a) act
in conformity with the Company's Declaration of Trust, the Investment Company
Act of 1940, the Investment Advisers Act of 1940
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(as applicable) and the Internal Revenue Code of 1986, as the same may from time
to time be amended, (b) make investment decisions for the Funds in accordance
with the Funds' investment objectives and policies as stated in the Funds'
Prospectus and Statement of Additional Information as in effect and, after
notice to the Sub-Advisor, which may be amended from time to time, (c) place
purchase and sale orders on behalf of the Funds to effectuate the investment
decisions made, (d) maintain books and records with respect to the securities
transactions of the Funds and furnish the Company's Board of Trustees such
periodic, regular and special reports as the Board may request; and (e) treat
confidentially and as proprietary information of the Company, all records and
other information relative to the Company and prior, present or potential
shareholders; and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and such records may not be withheld
where the Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company. In providing those
services, the Sub-Advisor will supervise the Funds' investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Funds' assets. In addition, the Sub-Advisor will furnish the
Funds or LMI with whatever statistical information the Funds or LMI may
reasonably request with respect to the instruments that the Funds may hold or
contemplate purchasing.
3. BROKERAGE
In executing transactions for the Funds and selecting brokers
or dealers, the Sub- Advisor will use its best efforts to seek the best overall
terms available and shall execute or direct the execution of all such
transactions in a manner permitted by law and in a manner that is in the best
interest of the Funds and their shareholders. In assessing the best overall
terms available for any Funds transactions, the Sub-Advisor will consider all
factors it deems relevant including, but not limited to, breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and on a continuing basis. Pursuant to
its investment determinations for the Funds, in placing orders with brokers and
dealers, the Sub-Advisor will attempt to obtain the best net price and the most
favorable execution of its orders. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are comparable,
the Sub-Advisor may, in its discretion, purchase and sell portfolio securities
to and from brokers and dealers who provide the Company with research advice and
other services. LMI hereby authorizes the Sub-Adviser to execute security
transactions through State Street Brokerage Services, Inc., an affiliate of
Sub-Advisor, at the discretion of Sub-Advisor, to the extent that such
transactions are consistent with requirements of the Investment Company Act of
1940 and are executed on terms which are at least as favorable as are generally
available from other brokers. If LMI or the Company requests the Sub-Advisor to
execute transactions through a specific broker, the Sub-Advisor shall not be
liable for any loss by reason thereof.
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LMI authorizes and empowers the Sub-Advisor to direct the
Company's custodian (the "Custodian") to open and maintain brokerage accounts
for securities and other property, including financial and commodity futures and
commodities and options thereon (all such accounts hereinafter called "brokerage
accounts") for and in the name of the Company and to execute for the Company as
its agent and attorney-in-fact any required standard customer agreements with
such broker or brokers as the Sub-Advisor shall select as provided above. The
Sub-Advisor may, using such of the securities and other property of the Funds as
the Sub- Advisor deems necessary or desirable, direct the Custodian to deposit
for the Company original and maintenance brokerage and margin deposits and
otherwise direct payments of cash, cash equivalents and securities and other
property into such brokerage accounts and to such brokers as the Sub-Advisor
deems desirable or appropriate.
The Sub-Advisor further shall have the authority to instruct the Custodian (i)
to pay cash for securities and other property delivered to the Custodian for the
Funds, (ii) to deliver securities and other property against payment for the
Funds, and (iii) to transfer assets and funds to such brokerage accounts as the
Sub-Advisor may designate, all consistent with the powers, authorities and
limitations set forth herein. The Sub-Advisor shall not have authority to cause
the Custodian to deliver securities and other property or pay cash to the
Sub-Advisor.
4. INFORMATION PROVIDED TO THE COMPANY
The Sub-Advisor will keep the Company and LMI informed of
developments materially affecting the Funds, and will on its own initiative,
furnish the Company and LMI on at least a quarterly basis with whatever
information the Sub-Advisor believes is appropriate for this purpose.
5. STANDARD OF CARE
The Sub-Advisor shall exercise its best judgment in rendering
the services described in paragraphs 2 and 3 above. The Sub-Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Funds in connection with the matters to which this Agreement relates, except
(a) a loss resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the
Investment Company Act of 1940, as amended) or (b) a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement (each such breach, act or omission described in (a) or (b) shall be
referred to as "Disqualifying Conduct").
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6. COMPENSATION
In consideration of the services rendered pursuant to this
Agreement, LMI will pay the Sub-Advisor on the first business day of each month
a fee for the previous month as detailed in Annex A attached to this Agreement.
The Sub-Advisor shall have no right to obtain compensation directly from the
Funds or the Company for services provided hereunder and agrees to look solely
to LMI for payment of fees due. Upon any termination of this Agreement before
the end of a month, the fee for such part of that month shall be prorated
according to the proportion that such period bears to the full monthly period
and shall be payable upon the date of termination of this Agreement. For the
purpose of determining fees payable to the Sub-Advisor, the value of the Funds'
net assets shall be computed at the times and in the manner specified in the
Funds' Prospectus or Statement of Additional Information relating to the Funds
as from time to time in effect.
Should it be determined that the Investment Sub-Advisory
Agreements between the Company, LMI and Sub-Advisor for the Funds listed in
Annex A, are terminated as a result of the assignment thereof prior to the
effective date of this Agreement, compensation hereunder shall commence as of
the date of such termination.
7. EXPENSES
The Sub-Advisor will bear all expenses in connection with the
performance of its services under this Agreement, which expenses shall not
include brokerage fees or commissions in connection with the effectuation of
securities transactions. The Company will bear certain other expenses to be
incurred in its operation, including but not limited to: organizational
expenses, taxes, interest, brokerage fees and commissions, if any; fees of
trustees of the Company who are not officers, directors or employees of the
Sub-Advisor, LMI, the Funds' sub- administrator or any of their affiliates;
Securities and Exchange Commission fees and state Blue Sky qualification fees;
out-of-pocket expenses of custodians, transfer and dividend disbursing agents
and the Company's sub-administrator and transaction charges of custodians;
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Company's existence; costs attributable to investor services, including
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Funds and of the officers or
Board of Trustees of the Company; and any extraordinary expenses.
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Company understands that the Sub-Advisor now acts, will
continue to act and may act in the future as investment adviser to fiduciary and
other managed accounts and as investment adviser to one or more other investment
companies or series of investment
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companies, and the Company has no objection to the Sub-Advisor so acting,
provided that whenever the Funds and one or more other accounts or investment
companies advised by the Sub-Advisor have available funds for investment,
investments suitable and appropriate for each will be allocated in accordance
with procedures believed to be equitable to each entity. Similarly,
opportunities to sell securities will be allocated in an equitable manner. The
Company recognizes that in some cases this procedure may limit the size of the
position that may be acquired or disposed of for the Funds. In addition, the
Company understands that the persons employed by the Sub-Advisor to assist in
the performance of the Sub-Advisor's duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict the right of the Sub-Advisor or any affiliate of the Sub-Advisor to
engage in and devote time and attention to other business or to render services
of whatever kind or nature.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date first
written above, shall continue for a period of two years thereafter, and shall
continue in effect for a period of more than two years thereafter only so long
as such continuance is specifically approved at least annually by (i) the Board
of Trustees of the Company or (ii) a vote of a "majority" (as defined in the
Investment Company Act of 1940, as amended) of the Funds' outstanding voting
securities, provided that in either event the continuance is also approved by a
majority of the Board of Trustees who are not "interested persons" (as defined
in said Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 30 days' written notice, by LMI, the Board of Trustees of
the Company or by vote of holders of a majority of a Fund's shares, or upon 90
days' written notice by the Sub-Advisor, and will terminate automatically upon
any termination of the advisory agreement between the Company and LMI. In
addition, this Agreement will also terminate automatically in the event of its
assignment (as defined in said Act). The Sub-Advisor agrees to notify the
Company of any circumstances that might result in this Agreement being deemed to
be assigned.
10. REPRESENTATIONS OF THE COMPANY AND THE SUB-ADVISOR
The Company represents that: (i) a copy of its Declaration of
Trust, dated June 1, 1998, together with all amendments thereto, is on file in
the office of the Secretary of the Commonwealth of Massachusetts; (ii) the
appointment of the Sub-Advisor has been duly authorized; and (iii) it has acted
and will continue to act in conformity with the Investment Company Act of 1940,
as amended, and other applicable laws.
LMI represents that: (i) it is authorized to perform the
services herein; (ii) the appointment of the Sub-Advisor has been duly
authorized; and (iii) it will act in conformity with the Investment Company Act
of 1940, as amended, and other applicable laws.
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The Sub-Advisor represents that it is authorized to perform
the services described herein.
11. INDEMNIFICATION
LMI shall indemnify and hold harmless the Sub-Advisor from and
against any and all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses), howsoever arising from or in
connection with this Agreement or the performance by the Sub-Advisor of its
duties hereunder; provided, however, that nothing contained herein shall require
that the Sub-Advisor be indemnified for Disqualifying Conduct.
12. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. No amendment of this Agreement shall be effective with
respect to any Fund until approved by vote of a majority of the outstanding
voting securities of such Fund.
13. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Company by
the undersigned officer of the Company in his capacity as an officer of the
Company. The obligations of this Agreement shall be binding upon the assets and
property of each Fund only and not upon the assets and property of any other
investment fund of the Company and shall not be binding upon any Trustee,
officer or shareholder of the Fund and/or the Company individually.
14. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the
parties hereto.
15. GOVERNING LAW
This Agreement shall be governed in accordance with the laws
of the Commonwealth of Massachusetts.
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If the foregoing accurately sets forth our agreement, kindly
indicate your acceptance hereof by signing and returning the enclosed copy
hereof.
Very truly yours,
WORLDWIDE INDEX FUNDS
Dated: By: /s/ F. Xxxxx Xxxxxx
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Name: F. Xxxxx Xxxxxx
Title: President
LMI INVESTMENT ADVISORS LLC
Dated: By: /s/ F. Xxxxx Xxxxxx
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Name: F. Xxxxx Xxxxxx
Title: Member
Accepted:
STATE STREET BANK AND TRUST
COMPANY
By Dated:
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Name:
Title:
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ANNEX A
For the services provided and expenses assumed pursuant to the
Agreement, the Sub-Advisor will be paid a monthly fee, absent fee waivers, based
upon each Fund's average daily net assets as follows:
FUND FEE
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AUSTRALIA INDEX FUND.................................................. __%
FRANCE INDEX FUND..................................................... __%
GERMANY INDEX FUND.................................................... __%
HONG KONG INDEX FUND.................................................. __%
ITALY INDEX FUND...................................................... __%
JAPAN INDEX FUND...................................................... __%
NETHERLANDS INDEX FUND................................................ __%
SPAIN INDEX FUND...................................................... __%
SWEDEN INDEX FUND..................................................... __%
SWITZERLAND INDEX FUND ............................................... __%
UNITED KINGDOM INDEX FUND............................................. __%
EUROPE INDEX FUND..................................................... __%
INTERNATIONAL INDEX FUND.............................................. __%
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