Exhibit 77Q1(e)(2)
Xxxxxx Global Income Fund
Form N-SAR for the period ended 12/31/97
File No. 811-5829
SUB-ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1997, by and between
XXXXXXX XXXXXX INVESTMENTS, INC., a Delaware corporation (the
"Adviser") and ZURICH INVESTMENT MANAGEMENT LIMITED, an English
corporation (the "Sub-Adviser").
WHEREAS, XXXXXX GLOBAL INCOME FUND, a Massachusetts business
trust (the "Fund") is a management investment company registered
under the Investment Company Act of 1940;
WHEREAS, the Fund has retained the Adviser to render to it
investment advisory and management services with regard to the
Fund's sole series (the "initial series") pursuant to an
Investment Management Agreement (the "Management Agreement"); and
WHEREAS, the Adviser desires at this time to retain the Sub-
Adviser to render investment advisory and management services
with respect to that portion of the portfolio of the Fund's
initial series allocated to the Sub-Adviser by the Adviser for
management, including services related to foreign securities,
foreign currency transactions and related investments, and the
Sub-Adviser is willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Adviser hereby employs the Sub-Adviser to manage the
investment and reinvestment of the assets of the initial series
of the Fund allocated by the Adviser in its sole discretion to
the Sub-Adviser for management, including services related to
foreign securities, foreign currency transactions and related
investments, in accordance with the applicable investment
objectives, policies and limitations and subject to the
supervision of the Adviser and the Board of Trustees of the Fund
for the period and upon the terms herein set forth, and to place
orders for the purchase or sale of portfolio securities for the
Fund's account with brokers or dealers selected by the Sub-
Adviser; and, in connection therewith, the Sub-Adviser is
authorized as the agent of the Fund to give instructions to the
Custodian of the Fund as to the deliveries of securities and
payments of cash for the account of the Fund. In connection with
the selection of such brokers or dealers and the placing of such
orders, the Sub-Adviser is directed to seek for the Fund best
execution of orders. Subject to such policies as the Board of
Trustees of the Fund determines and subject to satisfying the
requirements of Section 28(e) of the Securities Exchange Act of
1934, the Sub-Adviser shall not be deemed to have acted
unlawfully or to have breached any duty, created by this
Agreement or otherwise, solely by reason of its having caused the
Fund to pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of
commission another broker or dealer would have charged for
effecting that transaction, if the Sub-Adviser determined in good
faith that such amount of commission was reasonable in relation
to the value of the brokerage and research services provided by
such broker or dealer viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the clients of the Sub-Adviser as to which the Sub-
Adviser exercises investment discretion. The Adviser recognizes
that all research services and research that the Sub-Adviser
receives are available for all clients of the Sub-Adviser, and
that the Fund and other clients of the Sub-Adviser may benefit
thereby. The investment of funds shall be subject to all
applicable restrictions of the Agreement and Declaration of Trust
and By-Laws of the Fund as may from time to time be in force.
The Sub-Adviser accepts such employment and agrees during such
period to render such investment management services, to furnish
related office facilities and equipment and clerical, bookkeeping
and administrative services for the Fund, to permit any of its
officers or employees to serve without compensation as trustees
or officers of the Fund if elected to such positions and to
assume the obligations herein set forth for the compensation
herein provided. The Sub-Adviser shall for all purposes herein
provided be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund or the Adviser in any
way or otherwise be deemed an agent of the Fund or the Adviser.
It is understood and agreed that the Sub-Adviser, by separate
agreements with the Fund, may also serve the Fund in other
capacities.
The Sub-Adviser will keep the Fund and the Adviser informed of
developments materially affecting the Fund and shall, on the Sub-
Adviser's own initiative and as reasonably requested by the
Adviser or the Fund, furnish to the Fund and the Adviser from
time to time whatever information the Adviser reasonably believes
appropriate for this purpose. The Sub-Adviser agrees that, in
the performance of the duties required of it by this Agreement,
it will comply with the Investment Advisers Act of 1940 and the
Investment Company Act of 1940, and all rules and regulations
thereunder, and all applicable laws and regulations and with any
applicable procedures adopted by the Fund's Board of Trustees and
identified in writing to the Sub-Adviser.
The Sub-Adviser shall provide the Adviser with such investment
portfolio accounting and shall maintain and provide such detailed
records and reports as the Adviser may from time to time
reasonably request, including without limitation, daily
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processing of investment transactions and cash positions,
periodic valuations of investment portfolio positions as required
by the Adviser, monthly reports of the investment portfolio and
all investment transactions and the preparation of such reports
and compilation of such data as may be required by the Adviser to
comply with the obligations imposed upon it under Management
Agreement.
The Sub-Adviser shall provide adequate security with respect to
all materials, records, documents and data relating to any of its
responsibilities pursuant to this Agreement including any means
for the effecting of securities transactions.
The Sub-Adviser agrees that it will make available to the Adviser
and the Fund promptly upon their request copies of all of its
investment records and ledgers with respect to the Fund to assist
the Adviser and the Fund in monitoring compliance with the
Investment Company Act of 1940 and the Investment Advisers Act of
1940, as well as other applicable laws. The Sub-Adviser will
furnish the Fund's Board of Trustees such periodic and special
reports with respect to the Fund s portfolio as the Adviser or
the Board of Trustees may reasonably request.
In compliance with the requirements of Rule 31a-3 under the
Investment Company Act of 1940, the Sub-Adviser hereby agrees
that any records that it maintains for the Fund are the property
of the Fund and further agrees to surrender promptly to the Fund
copies of any such records upon the Fund's request. The Sub-
Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the Investment Company Act of 1940 any records
with respect to the Sub-Adviser s duties hereunder required to be
maintained by Rule 31a-1 under such Act to the extent that the
Sub-Adviser prepares and maintains such records pursuant to this
Agreement and to preserve the records required by Rule 204-2
under the Investment Advisers Act of 1940 for the period
specified in that Rule.
The Sub-Adviser agrees that it will immediately notify the
Adviser and the Fund in the event that the Sub-Adviser: (i)
becomes subject to a statutory disqualification that prevents the
Sub-Adviser from serving as an investment adviser pursuant to
this Agreement; or (ii) is or expects to become the subject of an
administrative proceeding or enforcement action by the United
States Securities and Exchange Commission, the Investment
Management Regulatory Organization ("IMRO") or other regulatory
authority.
The Sub-Adviser represents that it is an investment adviser
registered under the Investment Advisers Act of 1940 and other
applicable laws and it is regulated by IMRO and will treat the
Fund as a Non-Private Customer as defined by IMRO. The Sub-
Adviser agrees to maintain the completeness and accuracy of its
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registration on Form ADV in accordance with all legal
requirements relating to that Form. The Sub-Adviser acknowledges
that it is an "investment adviser" to the Fund within the meaning
of the Investment Company Act of 1940 and the Investment Advisers
Act of 1940.
The Sub-Adviser shall be responsible for maintaining an
appropriate compliance program to ensure that the services
provided by it under this Agreement are performed in a manner
consistent with applicable laws and the terms of this Agreement.
Furthermore, the Sub-Adviser shall maintain and enforce a Code of
Ethics that is in form and substance satisfactory to the Adviser.
Sub-Adviser agrees to provide such reports and certifications
regarding its compliance program as the Adviser or the Fund shall
reasonably request from time to time.
2. In the event that there are, from time to time, one or more
additional series of the Fund with respect to which the Adviser
desires to retain the Sub-Adviser to render investment advisory
and management services hereunder, the Adviser shall notify the
Sub-Adviser in writing. If the Sub-Adviser is willing to render
such services, it shall notify the Adviser in writing whereupon
such additional series shall become subject to this Agreement.
3. For the services and facilities described in Section 1, the
Adviser will pay to the Sub-Adviser, at the end of each calendar
month, a sub-advisory fee computed at an annual rate of .30% of
that portion of the average daily net assets of the initial
series of the Fund that is allocated by the Adviser to the Sub-
Adviser for management.
For the month and year in which this Agreement becomes effective
or terminates, there shall be an appropriate proration on the
basis of the number of days that the Agreement is in effect
during the month and year, respectively.
4. The services of the Sub-Adviser under this Agreement are not
to be deemed exclusive, and the Sub-Adviser shall be free to
render similar services or other services to others so long as
its services hereunder are not impaired thereby.
5. The Sub-Adviser shall arrange, if desired by the Fund, for
officers or employees of the Sub-Adviser to serve, without
compensation from the Fund, as trustees, officers or agents of
the Fund if duly elected or appointed to such positions and
subject to their individual consent and to any limitations
imposed by law.
6. The net asset value for each series of the Fund subject to
this Agreement shall be calculated as the Board of Trustees of
the Fund may determine from time to time in accordance with the
provisions of the Investment Company Act of 1940. On each day
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when net asset value is not calculated, the net asset value of a
series shall be deemed to be the net asset value of such series
as of the close of business on the last day on which such
calculation was made for the purpose of the foregoing
computations.
7. Subject to applicable statutes and regulations, it is
understood that certain trustees, officers or agents of the Fund
are or may be interested in the Sub-Adviser as officers,
directors, agents, shareholders or otherwise, and that the
officers, directors, shareholders and agents of the Sub-Adviser
may be interested in the Fund otherwise than as a trustee,
officer or agent.
8. The Sub-Adviser shall not be liable for any error of
judgment or of law or for any loss suffered by the Fund or the
Adviser in connection with the matters to which this Agreement
relates, except loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the
performance of its obligations and duties or by reason of its
reckless disregard of its obligations and duties under this
Agreement.
9. This Agreement shall become effective with respect to the
initial series of the Fund on the date hereof and shall remain in
full force until March 1, 1998, unless sooner terminated as
hereinafter provided. This Agreement shall continue in force
from year to year thereafter with respect to each such series,
but only as long as such continuance is specifically approved for
each series at least annually in the manner required by the
Investment Company Act of 1940 and the rules and regulations
thereunder; provided, however, that if the continuation of this
Agreement is not approved for a series, the Sub-Adviser may
continue to serve in such capacity for such series in the manner
and to the extent permitted by the Investment Company Act of 1940
and the rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Management
Agreement and may be terminated at any time with respect to any
series subject to this Agreement without the payment of any
penalty by the Adviser or by the Sub-Adviser on sixty (60) days
written notice to the other party. The Fund may effect
termination with respect to any such series without payment of
any penalty by action of the Board of Trustees or by vote of a
majority of the outstanding voting securities of such series on
sixty (60) days' written notice to the Adviser and the Sub-
Adviser.
This Agreement may be terminated with respect to any series at
any time without the payment of any penalty by the Board of
Trustees of the Fund, by vote of a majority of the outstanding
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voting securities of such series or by the Adviser in the event
that it shall have been established by a court of competent
jurisdiction that the Sub-Adviser or any officer or director of
the Sub-Adviser has taken any action which results in a breach of
the covenants of the Sub-Adviser set forth herein.
The terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the
compensation described in Section 3 earned prior to such
termination.
10. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
11. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
12. This Agreement shall be construed in accordance with
applicable federal law and the laws of the Commonwealth of
Massachusetts.
13. This Agreement is the entire contract between the parties
relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused
this Agreement to be executed as of the day and year first above
written.
XXXXXXX XXXXXX INVESTMENTS, INC.
By:
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Title:
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ZURICH INVESTMENT MANAGEMENT LIMITED
By:
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Title:
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