7
NYA 625217.2
AMENDED AND RESTATED INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN
XXX XXXXXX ASSET MANAGEMENT
AND
XXXXXX XXXXXXX INVESTMENT MANAGEMENT LIMITED
THIS AGREEMENT is made as of this 22 day of May, 2006 by and
between XXX XXXXXX ASSET MANAGEMENT ("VKAM") a Delaware statutory
trust, and XXXXXX XXXXXXX INVESTMENT MANAGEMENT LIMITED (the
"Local Manager"), a company organized under the laws of England.
WHEREAS, VKAM acts as investment adviser to Xxx Xxxxxx
Series Fund, Inc. (the "Company") and each of its series
identified at Schedule A (the "Funds");
WHEREAS, the Local Manager has available a staff of
experienced investment personnel and facilities for providing
investment sub-advisory services to the Funds;
WHEREAS, the Local Manager is an investment adviser
registered under the Investment Advisers Act of 1940, as amended,
and is willing to provide VKAM with investment management
services on the terms and conditions hereinafter set forth and
including the terms and conditions contained in Annex 1 to this
Agreement; and
WHEREAS, VKAM and the Local Manager (jointly referred to as
"the Advisers") desire to enter into an agreement for the Local
Manager to provide investment management services to the Company
and to VKAM with respect to the investment of the assets of each
of the Funds.
NOW THEREFORE it is mutually agreed:
1. Investment Management Services.
(a) Investment Management
(i) Effective on May 22, 2006, and subject to the overall
policies, control, direction and review of the Company's
Directors and VKAM, the Local Manager shall act as discretionary
investment manager to VKAM and manage the investment and
reinvestment of the assets of each of the Funds, continuously
review, supervise and administer the investment program of each
of the Funds, determine in its discretion the securities to be
purchased or sold and the portion of each Fund's assets to be
held uninvested, to provide the Company with records concerning
the Local Manager's activities which the Company is required to
maintain, and to render regular reports to the Company's officers
and Board of Directors concerning the Local Manager's discharge
of the foregoing responsibilities. VKAM and its affiliates shall
for all purposes herein be deemed an Intermediate Customer as
defined under the rules and guidance promulgated by the Financial
Services Authority (hereinafter referred to as the "FSA Rules").
The Local Manager and its affiliates shall for all purposes
herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no
authority to act for or represent the Funds in any way or
otherwise be deemed an agent of the Funds.
(ii) The Local Manager shall have full discretion, power and
authority on the Funds' behalf to buy, sell, retain, exchange or
otherwise deal in investments and other assets, make deposits,
subscribe to issues and offers for sale and accept placings of
any investments, enter into foreign currency transactions on a
spot or forward basis, effect transactions on any markets, take
all day to day decisions and otherwise act as the Local Manager
judges appropriate in relation to the investment and reinvestment
of the portfolio of assets of the Funds. This includes
performing all acts and executing all documents which the Local
Manager reasonably considers incidental thereto, including
(without limitation) power to execute and deliver all
applications, requests, or claims for refund, reduction,
repayment or credit of, or exemption or relief from, any
withholding tax or similar taxes in any jurisdiction in which
such applications, requests or claims may be made. Subject to
guidelines adopted by the Funds, the Local Manager shall also
make recommendations or take action as to the manner in which
voting rights, rights to consent to corporate action and any
other rights pertaining to the portfolio of assets of the Funds
shall be exercised.
(iii) In performing these services, the Local Manager shall
always adhere to the restrictions of the Company's Articles of
Incorporation and By-Laws, as they may be amended and/or restated
from time to time and as provided to the Local Manager by VKAM,
the provisions of the Investment Company Act and the statements
relating to each Fund's respective investment objective(s),
investment policies and investment restrictions as the same are
set forth in the currently effective prospectus and statement of
additional information relating to the shares of each Fund under
the Securities Act of 1933, as amended (the "Prospectus" and
"Statement of Additional Information", respectively), as well as
to the supervision of VKAM and the Board of Directors of the
Company.
(iv) Unless otherwise instructed by VKAM or the Directors, and
subject to the provisions of this Agreement and to any guidelines
or limitations specified from time to time by VKAM or by the
Directors, the Local Manager shall have executed and performed on
behalf of and at the expense of the respective Funds:
(1) Purchases, sales, exchanges, conversions, and placement or
orders for execution; and
(2) Reporting of all transactions to VKAM and to other entities
as directed by VKAM or by the Directors.
(v) The Local Manager shall provide the Directors at least
quarterly, in advance of the regular meetings of the Directors, a
report of its activities hereunder on behalf of the Company and
the Funds and the Local Manager's proposed strategy for the next
quarter, all in such form and detail as requested by the
Directors. The Local Manager shall also make an investment
officer available to attend such meetings of the Directors as the
Directors may reasonably request.
(vi) The Local Manager may, where reasonable, employ
agents (including affiliates) to perform any administrative,
dealing or ancillary services required to enable the Local
Manager to perform its services under this Sub-Advisory
Agreement.
(b) Restriction of the Local Manager's Powers
(i) In carrying out its duties hereunder, the Local Manager
shall comply with all reasonable instructions of the Company or
VKAM in connection therewith. Such instructions may be given by
letter, telex, telefax or telephone confirmed by telex, by the
Directors or by any other person authorized by a resolution of
the Directors provided a certified copy of such resolution has
been supplied to the Local Manager.
(ii) All securities, cash and other assets of the Funds shall be
placed and maintained in the care of a member bank of the Federal
Reserve System of the United States approved by the Directors as
custodian and one or more "Eligible Foreign Custodians" (as
defined in Rule 17f-5 under the Investment Company Act of 1940,
as amended (the "1940 Act")).
(iii) Persons authorized by resolution of the Directors shall
have the right to inspect and copy contracts, notes, vouchers,
and copies of entries in books or electronic recording media
relating to the Company's transactions at the registered office
of the Local Manager at any time during normal business hours.
Such records, in relation to each transaction effected by the
Local Manager on behalf of the Company shall be maintained by the
Local Manager for a period of seven years from the date of such
transaction.
(c) Purchase and Sale of Securities
In performing the services described above, the Local
Manager shall use its best efforts to obtain for the Funds the
most favorable price and execution available. Subject to prior
authorization of appropriate policies and procedures by the
Directors, the Local Manager may, to the extent authorized by
law, cause the Funds to pay a broker or dealer who provides
brokerage and research services an amount of commission for
effecting the Funds' investment transactions in excess of the
amount of commission another broker or dealer would have charged
for effecting such transactions, in recognition of the brokerage
and research services provided by the broker or dealer. To the
extent authorized by law, the Local Manager shall not be deemed
to have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of such action.
(d) Custodian
The Local Manager shall not act as custodian for the
securities or any other assets of the Company. All such assets
shall be held by the custodian or sub-custodian appointed by the
Directors or by a Fund's "Foreign Custody Manager" (as defined by
Rule 17f-5 under the 1940 Act).
2. Duties of VKAM.
(a) Provision of Information
VKAM shall advise the Local Manager from time to time with
respect to each Fund of its investment objective and policies and
of any changes or modifications thereto, as well as any specific
investment restrictions and limitations by sending to the Local
Manager a copy of each registration statement and amendment
thereto relating to the Company as filed with the Securities and
Exchange Commission. As requested by the Local Manager, VKAM
shall furnish such information to the Local Manager as to
holdings, purchases, and sales of the securities under its
management as will reasonably enable the Local Manager to furnish
its investment advice under this Agreement.
(b) Compensation to the Local Manager
For the services rendered, the facilities furnished and
expenses assumed by the Local Manager, VKAM shall pay to the
Local Manager a fee in an amount to be determined from time to
time by VKAM and the Local Manager but in no event in excess of
the amount that VKAM actually received for providing services to
the Company pursuant to the investment advisory agreement between
VKAM and the Fund.
3. Miscellaneous.
(a) Activities of the Local Manager
The services of the Local Manager as sub-adviser to VKAM
under this Agreement are not to be deemed exclusive, the Local
Manager and its affiliates being free to render services to
others. It is understood that shareholders, directors, officers
and employees of the Local Manager may become interested in the
Company or VKAM as shareholders, directors, officers, partners or
otherwise.
(b) Limitation of Liability of the Local Manager
No warranty is given by the Local Manager as to the
performance or profitability of the Funds or any part of them.
If a percentage restriction contained in the Funds'
investment objective(s) or investment restrictions (as the same
are set forth in the Funds' currently effective Prospectus and
Statement of Additional Information) is adhered to at the time of
investment, a later change in percentage resulting from a change
in values or assets will not constitute a violation of such
restriction.
The Local Manager will not be responsible to VKAM or the
Funds for the solvency, actions or omissions of any counterparty,
broker, dealer, market-maker, bank, custodian or sub-custodian,
with whom it transacts business on VKAM's behalf, other than
affiliates of the Local Manager.
Nothing in this Agreement will exclude or restrict any
liability which the Local Manager has under the Financial
Services and Markets Xxx 0000, FSA Rules or the Regulatory System
in relation to VKAM and which may not be excluded or restricted
thereunder.
The Local Manager shall not be liable 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 performance of
investment management services rendered with respect to the
Funds, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder. The
exception in the previous sentence shall apply to each limitation
of the Local Manager's liability contained in this Section 3(b).
As used in this Section 3(b), the Local Manager shall include any
affiliates of the Local Manager performing services for the Local
Manager contemplated hereby and directors, officers and employees
of the Local Manager and such affiliates.
(c) Services to Other Clients
VKAM acknowledges that the Local Manager may have investment
responsibilities, or render investment advice to, or perform
other investment advisory services for, other individuals or
entities ("Clients"). Subject to the provisions of this
paragraph, VKAM agrees that the Local Manager may give advice or
exercise investment responsibility and take such other action
with respect to such Clients which may differ from advice given
or the timing or nature of action taken with respect to the
Company, provided that the Local Manager acts in good faith, and
provided, further, that it is the Local Manager's policy to
allocate, within its reasonable discretion, investment
opportunities to the Funds over a period of time on a fair and
equitable basis relative to the Clients, taking into account the
investment objectives and policies of the Funds and any specific
investment restrictions and limitations applicable thereto. VKAM
acknowledges that one or more of the Clients may at any time
hold, acquire, increase, decrease, dispose of or otherwise deal
with positions in investments in which the Funds may have an
interest from time to time, whether in transactions which may
involve the Funds or otherwise. The Local Manager shall have no
obligation to acquire for any Fund a position in any investment
which any Client may acquire, and VKAM shall have no first
refusal, coinvestment or other rights in respect of any such
investment, either for the Funds or otherwise.
(d) Best Efforts
It is understood and agreed that in furnishing the
investment advice and other services as herein provided, the
Local Manager shall use its best professional judgment to
recommend actions which will provide favorable results for the
Funds. The Local Manager shall not be liable to the Company or
to any shareholder of the Company to any greater degree than
VKAM.
(e) Compliance with Applicable Laws and Regulations.
The Local Manager shall obtain and at all times maintain and
comply with the terms of all relevant authorizations, licenses,
consents, approvals and registrations and comply with all
relevant laws and regulations, necessary for the purpose of
performing any of its duties and obligations under this
Agreement. The Local Manager shall inform VKAM as soon as
possible if at any time the Local Manager becomes unable to
comply with the terms of or maintain any such authorizations,
licenses, consents, approvals or registrations.
(f) Duration of Agreement
(i) This Agreement, unless terminated pursuant to paragraph
(ii), (iii) or (iv) below, shall continue in effect for two years
from the date hereof, and thereafter shall continue in effect
from year to year, provided that its continued applicability is
specifically approved at least annually by the Directors or by a
vote of the holders of a majority of the outstanding shares of
the appropriate Funds. In addition, such continuation shall be
approved by vote of a majority of the Directors who are not
parties to this Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. As used in this paragraph, the term
"interested person" shall have the same meaning as set forth in
the 1940 Act.
(ii) This Agreement may be terminated by sixty (60) days' written
notice by either VKAM or the Local Manager to the other party,
provided that VKAM's termination of this Agreement shall be
approved by vote of a majority of the Directors who are not
parties to this Agreement or interested persons of any such
party. The Agreement may also be terminated at any time, without
the payment of any penalty, with respect to one or more Funds (by
vote of the Directors or, by the vote of a majority of the
outstanding voting securities of such Fund(s)), on sixty (60)
days' written notice to both VKAM and the Local Manager. This
Agreement shall automatically terminate in the event of the
termination of the investment advisory agreement between VKAM and
the Company.
(iii) This Agreement shall terminate in the event of its
assignment. The term "assignment" for this purpose shall have
the same meaning set forth in Section 2(a)(4) of the 1940 Act.
(iv) This Agreement shall terminate forthwith by notice in
writing on the happening of any of the following events:
(1) If VKAM or the Local Manager shall go into liquidation
(except a voluntary liquidation for the purpose of and followed
by a bona fide reconstruction or amalgamation upon terms
previously approved in writing by the party not in liquidation)
or if a receiver or receiver and manager of any of the assets of
either of them is appointed; or
(2) If either of the parties hereto shall commit any breach of
the provisions hereof and shall not have remedied such breach
within 30 days after the service of notice by the party not in
breach on the other requiring the same to be remedied.
(v) Termination shall be without prejudice to the completion of
any transactions which the Local Manager shall have committed to
on behalf of the Funds prior to the time of termination. the
Local Manager shall not effect and the Company shall not be
entitled to instruct the Local Manager to effect any further
transactions on behalf of the Funds subsequent to the time
termination takes effect.
(vi) On the termination of this Agreement and completion of all
matters referred to in the foregoing paragraph (v) the Local
Manager shall deliver or cause to be delivered to the Company
copies of all documents, records and books of the Company
required to be maintained pursuant to Rules 31 a-1 or 31 a-2 of
the 1940 Act which are in the Local Manager's possession, power
or control and which are valid and in force at the date of
termination.
(g) Notices
Any notice, request, instruction, or other document to be
given under this Agreement by any party hereto to the other
parties shall be in writing and delivered personally or sent by
mail or telecopy (with a hard copy to follow):
If to the Local Manager to:
Xxxxxx Xxxxxxx Investment Management Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxx
Xxxxxx Xxxxxxx, X00 0XX
If to VKAM, to:
Xxx Xxxxxx Asset Management
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Secretary
or at such other address for a party as shall be specified by
like notice. Any notice that is delivered personally in the
manner provided herein shall be deemed to have been duly given to
the party to whom it is directed upon actual receipt by such
party (or its agent for notices hereunder). Any notice that is
addressed and mailed in the manner herein provided shall be
presumed to have been duly given to the party to which it is
addressed, on the date three (3) days after mailing, and in the
case of delivery by telecopy, on the date the hard copy is
received.
(h) Choice of Law
This Agreement shall be construed according to, and the
rights and liabilities of the parties hereto shall be governed
by, the laws of the United States and the State of New York,
without regard to the conflicts of laws principles thereof.
IN WITNESS WHEREOF, the Agreement has been executed as of
the date first above given.
XXX XXXXXX ASSET MANAGEMENT XXXXXX XXXXXXX INVESTMENT
MANAGEMENT LIMITED
By: /s/ Xxxxxx X. Robison___ By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx Xxxxx
Title: Managing Director Title: Director
Schedule A
Fund
Global Franchise Fund
Global Value Equity Fund
SUB-ADVISORY AGREEMENT
ANNEX 1
1. Dealing and Counterparties
1.1 The Local Manager will act in good faith and with due
diligence in its choice and use of counterparties. Unless
directed by VKAM or a Fund to use a specific counterparty,
the Local Manager undertakes to secure Best Execution (as
defined in the FSA Rules) of all the Fund's transactions.
In securing Best Execution, the Local Manager will take
reasonable care to obtain the best available price in
accordance with FSA Rules. Subject thereto, the Local
Manager may deal on such markets or exchanges and with such
counterparties (including any affiliate) as it thinks fit.
All transactions will be effected in accordance with the
rules and regulations of the relevant market or exchange,
and the Local Manager may take all such steps as may be
required or permitted by such rules and regulations and/or
by appropriate market practice.
1.2 If any counterparty should fail to deliver any necessary
documents or to complete any transaction, the Local Manager
will take all reasonable steps on behalf of VKAM or the
applicable Fund to rectify such failure or obtain
compensation. VKAM shall procure that such Fund pay all
reasonable costs and expenses properly incurred by the Local
Manager.
1.3 The Local Manager may aggregate a Fund's orders with orders
of other clients (whether or not connected with the Local
Manager). VKAM is aware and has made the Funds aware that
the aggregation of a Fund's orders with those of other
clients may result in such Fund obtaining on some occasions
a more favourable price and on others a less favourable
price, than if such orders had not been aggregated.
2. Material Interests
2.1 The Local Manager and any affiliate may, subject to the
limitations of the U.S. Investment Company Act of 1940 (as
amended), and to the overriding principles of suitability
and Best Execution and without prior reference to VKAM or a
Fund, effect transactions in which the Local Manager or
affiliate has, directly or indirectly, a material interest
or a relationship of any description with another party,
which may involve a potential conflict with the Local
Manager's duty to VKAM or the Funds. Neither the Local
Manager nor any affiliate shall be liable to account to VKAM
or a Fund for any profit, commission or remuneration made or
received from or by reason of such transactions or any
connected transactions nor will the Local Manager's fees,
unless otherwise provided, be abated. For example, such
potential conflicting interests or duties may arise because:
(a)any of the Local Manager's or affiliate's directors or
employees is a director of, holds or deals in securities
of, or is otherwise interested in any company whose
securities are held or dealt in on behalf of the Fund;
(b)the transaction is in the securities of a company for
which an affiliate has provided corporate finance
advice, underwritten, managed or arranged an issue or
offer for sale;
(c)the Local Manager deals on behalf of a Fund with an
affiliate;
(e)the Local Manager may effect transactions involving
placings and/or new issues with an Affiliate who may be
acting as principal or receiving agent's commission.
Affiliates may retain any agent's commission or discount
or other benefit (including directors' fees) that
accrues to them; or
(f)the transaction is in units or shares of a collective
investment scheme (regulated or unregulated) of which
the Local Manager or any affiliate is the manager,
operator, banker, adviser, custodian or director.
2.2 Nothing in this Agreement shall oblige the Local Manager or
any affiliate to accept responsibilities more extensive than
those set out in this Agreement or shall give rise to any
fiduciary or equitable duties which would prevent or hinder
any affiliate acting both as market-maker and broker,
principal or agent, dealing with other affiliates and other
clients and generally effecting transactions as provided
above nor from retaining any remuneration received in
respect thereof.
3. Records and Reports
3.1 The Local Manager will keep accurate and detailed records
with respect to all receipts, investments, sales,
disbursements and other transactions carried out by the
Local Manager for VKAM or with a Fund.
3.2 All records held pursuant to this clause by the Local
Manager shall be open to inspection by VKAM or the Funds and
the Local Manager will provide VKAM and the Fund with such
access as it itself has to records held by any relevant
third party, in each case at reasonable times during
business hours and upon the giving of reasonable notice by
VKAM or a Fund.
3.3 The Local Manager shall, not later than 10 working days
following the end of each calendar month, furnish to VKAM a
statement showing all transactions that have occurred in the
Funds and a monthly listing of all investments and cash
balances held as of the end of such month.
3.4 The monthly statement will show the cost or amount realised
(in the case of any relevant new purchase or sale) and,
where available, the current value (where applicable) of
each investment held in the Funds and any income arising on
a Fund's account during the relevant calendar month, and
will also include a statement showing the measure of the
performance of the assets of the Fund. The basis of all
valuations will be as stated in the first monthly statement,
unless otherwise agreed.
3.5 The Local Manager will not provide VKAM with an individual
trade confirmation of each portfolio transaction unless VKAM
has specifically requested the Local Manager to do so.
4. Force Majeure
The Local Manager shall not be responsible or liable to VKAM
or the Funds for any failure or delay in the performance of
its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of
God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruptions,
loss or malfunctions of utilities; computer (hardware or
software) or communications services; accidents; labor
disputes; acts of civil or military authority or
governmental actions; it being understood that the Local
Manager shall use reasonable efforts which are consistent
with accepted practices in the investment management
industry to resume performance as soon as practicable under
the circumstances.
5. Complaints
The Local Manager maintains procedures in accordance with
FSA Rules for the effective consideration and handling of
client complaints. Complaints will be considered promptly by
the appropriate supervisory manager who is not personally
involved in the subject matter of the complaint. Where
appropriate, the complaint will be passed to the Compliance
Officer.
6. Confidentiality and Disclosure
The Local Manager and VKAM undertake to keep private and
confidential all information acquired in connection with
this Agreement, and not to disclose such information to any
person except to the extent that:
(a)the other party gives prior consent; or
(b)the Local Manager is required to disclose the
information by the FSA, the Bank of England, the London
Stock Exchange or any other recognised investment
exchange, the City Panel on Takeovers and Mergers or any
other regulatory authority having jurisdiction over the
Local Manager or the performance by it of its
obligations under this Agreement or by English Law; or
(c)disclosure to a counterparty to a transaction effected
for a Fund is required as a condition to such
transaction; or
(d)disclosure is necessary to enable the Local Manager to
perform its obligations under this Agreement.
7. Data Protection
7.1 The Local Manager will, in connection with the Sub-Advisory
Agreement, comply (where applicable) with the UK Data
Protection Xxx 0000 and other applicable data protection
laws and regulations (together, the "Data Protection Laws").
7.2 VKAM will comply (where applicable) with the Data Protection
Laws and (where applicable) take all reasonable steps to
ensure that it has obtained all necessary consents for the
Local Manager to process any personal data for the purposes
of the Agreement.
_______________________________
For ease of reference, the words "Xxx Xxxxxx," which begin the
name of each Fund, have been omitted.
