Exhibit 99(d)(7)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT, made as of the 31/st/ day of October, 2000, among Munder
Capital Management (the "Advisor"), a Delaware partnership, Framlington Overseas
Investment Management Limited (the "Sub-Advisor"), a subsidiary of Framlington
Group Limited, a private limited company, incorporated in England and in Wales
and registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and The Munder Funds, Inc. (the "Company"), a Maryland
corporation and a diversified open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act").
WHEREAS, the Advisor has entered into an Investment Advisory Agreement,
dated July 2, 1998 with the Company (the "Investment Advisory Agreement"),
pursuant to which the Advisor will act as investment advisor to the Company;
WHEREAS, the shares of the Company are divided into more than one
separate series; and
WHEREAS, the Advisor wishes to retain the Sub-Advisor to render
investment advisory services to the portfolios of the Company listed on Appendix
A attached hereto (the "Fund"), and the Sub-Advisor is willing to furnish such
services to the Fund.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the Company, the Advisor and the
Sub-Advisor as follows:
1. Appointment
The Advisor hereby appoints the Sub-Advisor to act as sub-investment
advisor to the Fund for the periods and on the terms set forth herein. The
Sub-Advisor accepts the appointment and agrees to furnish the services set forth
herein for the compensation provided herein.
2. Services as Sub-Investment Advisor
Subject to the general supervision and direction of the Board of
Directors of the Company and the Advisor, the Sub-Advisor will (i) manage a
portion of each of the investments of the Fund, or a portion thereof as
designated by the Advisor in accordance with the Fund's investment objectives,
restricitions and policies as stated in the Fund's Prospectus and the Statement
of Additional Information filed with the Securities and Exchange Commission, as
they may be amended from time to time; (ii) make investment decisions for the
Fund; (iii) place purchase and sale orders on behalf of each Fund; and (iv)
select brokers-dealers to execute trades on behalf of the Fund.
The Sub-Advisor further agrees that, in performing its duties
hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code, of 1986, as amended (the "Code"),
and all other applicable federal and state laws and regulations, and with any
applicable procedures adopted by the Company's Directors as advised to the
Sub-Advisor from time to time;
(b) use reasonable efforts to manage the Fund so that it will qualify,
and continue to qualify, as a regulated investment company under Subchapter M of
the Code and regulations issued thereunder;
(c) maintain books and records with respect to the Fund's securities
transactions, render to the Advisor or Board such periodic and special reports
as the Board of Directors of the Company may reasonably request, and keep the
Advisor and the Directors informed of developments materially affecting the
Fund's portfolios;
(d) make available to the Fund's administrator and the Company,
promptly upon their request, such copies of the investment records and ledgers
with respect to the Fund as may be required to assist the administrator and the
Company in their compliance with applicable laws and regulations; and
(e) immediately notify the Company in the event that the Sub-Advisor or
any of its affiliates: (1) becomes aware that it is subject to a statutory
disqualification that prevents the Sub-Advisor from serving as investment
advisor pursuant to this Agreement; or (2) becomes aware that it is the subject
of an administrative proceeding or enforcement action by the Securities and
Exchange Commission or other regulatory authority. The Sub-Advisor further
agrees to notify the Company immediately of any material fact known to the
Sub-Advisor respecting or relating to the Sub-Advisor that is not contained in
the Company's Registration Statement regarding the Fund, or any amendment or
supplement thereto, but that is required to be disclosed therein, and of any
statement contained therein that becomes untrue in any material respect.
3. Documents
The Advisor has delivered properly certified or authenticated copies of
each of the following documents to the Sub-Advisor and will deliver to it all
future amendments and supplements thereto, if any:
(a) certified resolution of the Board of Directors of the Company
authorizing the appointment of the Sub-Advisor and approving the form of this
Agreement;
(b) the Registration Statement describing the Fund as filed with the
Securities and Exchange Commission and any amendments thereto; and
(c) exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration Statement
described above.
4. Brokerage
In selecting brokers-dealers to execute transactions on behalf of the
Fund, the Sub-Advisor will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Fund
transaction, the Sub-Advisor will consider all factors it deems relevant,
including, but not limited to, the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker-dealer and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. In selecting brokers-dealers to execute a
particular transaction, and in evaluating the best overall terms available, the
Sub-Advisor is authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "1934 Act")) provided to the Fund and/or other accounts over
which the Sub-Advisor or its affiliates exercise investment discretion. The
parties hereto acknowledge
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that it is desirable for the Company that the Sub-Advisor have access to
supplemental investment and market research and security and economic analysis
provided by brokers-dealers who may execute brokerage transactions at a higher
cost to the Company than may result when allocating brokerage to other brokers
on the basis of seeking the most favorable price and efficient execution.
Therefore, the Sub-Advisor may cause the Fund to pay a broker-dealer which
furnishes brokerage and research services a higher commission than that which
might be charged by another broker-dealer for effecting the same transaction,
provided that the Sub-Advisor determines in good faith that such commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer, viewed in terms of either the particular
transaction or the overall responsibilities of the Sub-Advisor to the Fund. It
is understood that the services provided by such brokers may be useful to the
Sub-Advisor in connection with the Sub-Advisor's services to other clients. In
accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder and
subject to any other applicable laws and regulations, the Sub-Advisor and its
affiliates are authorized to effect portfolio transactions for the Fund and to
retain brokerage commissions on such transactions.
5. Records
The Sub-Advisor agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be maintained
by the Sub-Advisor with respect to the Fund by the 1940 Act. The Sub-Advisor
further agrees that all records which it maintains for the Fund are the property
of the Fund and it will promptly surrender any of such records upon request.
6. Standard of Care
The Sub-Advisor shall exercise its best judgment in rendering the
services under this Agreement. The Sub-Advisor shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Advisor, the Fund
or the Fund's shareholders in connection with the matters to which this
Agreement relates, provided that nothing herein shall be deemed to protect or
purport to protect the Sub-Advisor against any liability to the Advisor, the
Fund or to the Fund's shareholders to which the Sub-Advisor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of the Sub-Advisor's reckless
disregard of its obligations and duties under this Agreement. As used in this
Section 6, the term "Sub-Advisor" shall include any officers, directors,
employees, or other affiliates of the Sub-Advisor performing services with
respect to the Fund.
7. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Advisor will pay the Sub-Advisor a fee at an annual rate based on the Fund's
average daily net assets as set forth on Appendix A. This fee shall be computed
and accrued daily and payable monthly. For the purpose of determining fees
payable to the Sub-Advisor, the value of the Fund's average daily net assets
shall be computed at the times and in the manner specified in the Fund's
Prospectuses or Statement of Additional Information. As to the Fund, if, in any
fiscal year, the Advisor determines to waive fees payable to it by the Fund or
reimburse expenses to the Fund, the Sub-Advisor will bear that portion of the
fee waiver or expense reimbursement which bears the same relation to such fee
waiver or expense reimbursement as the fee payable by the Fund to the
Sub-Advisor during such year bears to the total of (i) the annual fee payable by
the Fund to the Sub-Advisor plus (ii) the annual fee payable by the Fund to the
Advisor, in each case without giving effect to the fee waiver or expense
reimbursement.
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8. Expenses
The Sub-Advisor will bear all expenses in connection with the
performance of its services under this Agreement. The Fund will bear certain
other expenses to be incurred in its operation, including: taxes, interest,
brokerage fees and commissions, if any, fees of Directors of the Company who are
not officers, directors, or employees of the Advisor or any Sub-Advisor;
Securities and Exchange Commission fees and state blue sky qualification fees;
charges of custodians and transfer and dividend disbursing agents; the Fund's
proportionate share of insurance premiums; outside auditing and legal expenses;
costs of maintenance of the Fund's existence; costs attributable to investor
services, including, without limitation, telephone and personal expenses;
charges of an independent pricing service; 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 Fund and of the officers or Board of
Directors of the Company; and any extraordinary expenses.
9. Services to Other Companies or Accounts
The investment advisory services of the Sub-Advisor to the Fund under
this Agreement are not to be deemed exclusive, and the Sub-Advisor, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Fund) and to engage in the activities, so
long as its services hereunder are not impaired thereby.
10. Duration and Termination
This Agreement shall become effective on the date first above written
and shall continue in effect, unless sooner terminated as provided herein, for
two years from such date and shall continue from year to year thereafter,
provided each continuance is specifically approved at least annually by (i) the
vote of a majority of the Board of Directors of the Company or (ii) a vote of a
"majority" (as defined in the 0000 Xxx) of the Fund's outstanding voting
securities, provided that in either event the continuance is also approved by a
majority of the Board of Directors who are not "interested persons" (as defined
in the 0000 Xxx) 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 and without prejudice to securities transactions on
behalf of the Fund in process at the time of termination, (a) on sixty (60)
days' written notice by the Board of Directors of the Company or by vote of
holders of a "majority" (as defined in the 0000 Xxx) of the Fund's shares, (b)
on 90 days' written notice by the Advisor or (c) on ninety (90) days' written
notice by the Sub-Advisor. This Agreement will be terminated automatically in
the event of its "assignment" (as defined in the 1940 Act).
All transactions already initiated hereunder at the time of termination
shall be completed in accordance with the Sub-Advisor's usual practice.
On termination, the Sub-Advisor shall be entitled to charge the Advisor
no additional fee save for:
a) a proportion of the fee, corresponding to that part of the period
by reference to which any periodic fees are payable, which has
expired at the date of termination;
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b) any additional expenses which the Sub-Advisor necessarily incurs in
terminating this Agreement.
11. Amendment
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, and no amendment of this Agreement shall be effective with respect to
the Fund until approved by an affirmative vote of (i) a majority of the
outstanding voting securities of the Fund, and (ii) a majority of the Directors
of the Company, including a majority of Directors who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable
law.
12. Names
It is understood that the name "Framlington Overseas Investment
Management Limited" or any derivative thereof or logo associated with that name
is the valuable property of the Sub-Advisor and its affiliates, and that the
Fund has the right to use such name (or derivative thereof or associated logo)
only so long as this Agreement shall continue with respect to that Fund. Upon
termination of this Agreement, the Fund shall forthwith cease to use such name
(or derivative thereof or associated logo). To the extent used in the United
States, it is understood that the name "Munder Bio(Tech)2 Fund" or any
derivative thereof or logo associated with that name is the valuable property of
the Company and the Sub-Advisor shall have the right to use such name (or
derivative thereof or associated logo) anywhere in the world for so long as this
Agreement shall continue. For the avoidance of doubt, after termination of this
Agreement, the Sub-Advisor shall not use any derivative or logo of Munder
Bio(Tech)2 Fund which includes the name Munder and/or Munder Bio(Tech)2, except
as is currently in use.
13. Miscellaneous
(a) The provisions set forth on Appendix B with respect to the
Sub-Advisor are incorporated herein by reference and considered part of this
Agreement. This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.
(b) Titles or captions of sections contained in this Agreement are
inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or the intent of
any provisions thereof.
(c) This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement, binding on all
the parties.
(d) This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and interpreted, construed and enforced in
accordance with the laws of the State of Michigan.
(e) If any provisions of this Agreement or the application thereof to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of this
Agreement or the application of such provision to such person or circumstance,
other than these as to which it is so determined to be invalid or unenforceable,
shall not be affected thereby, and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.
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(f) Notices of any kind to be given to the Sub-Advisor by the Advisor
shall be in writing and shall be duly given if mailed or delivered to the
Sub-Advisor at 000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, or at such other
address or to such individual as shall be specified by the Sub-Advisor to the
Advisor. Notices of any kind to be given to the Advisor by the Sub-Advisor shall
be in writing and shall be duly given if mailed or delivered to 000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such the address or to such individual
as shall be specified by the Company to the Sub-Advisor.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE MUNDER FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
MUNDER CAPITAL MANAGEMENT
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
FRAMLINGTON OVERSEAS INVESTMENT
MANAGEMENT LIMITED
By: /s/ Xxxxxx X. Xxxxxx
--------------------
APPENDIX A
Annual Fees (as a Percentage of
Funds Average Daily Net Assets)
----- -------------------------
Munder Bio(Tech)/2/ Fund 0.625%
APPENDIX B
ADDITIONAL IMRO PROVISIONS
--------------------------
The provisions set forth herein are subject to the limitations of the 1940 Act,
the Advisers Act and the Fund's Prospectus and Statement of Additional
Information. In the extent of a conflict of terms or provisions between this
Appendix B and the Agreement, the Agreement shall govern.
1. Framlington Overseas Investment Management Limited (the "Sub-Advisor") is
regulated in the conduct of its investment business in the United Kingdom
by the Investment Management Regulatory Organization ("IMRO").
2. Services
The Sub-Advisor will provide discretionary investment management services
for Munder Capital Management (the "Advisor"). Further details of the
services to be provided are set out in the Investment Sub-Advisory
Agreement (the "Agreement") to which this Appendix B is incorporated by
reference. Such services are to be provided on the basis that the Advisor
falls within the category of non-private investor.
3. Fees
Details of the Sub-Advisory fees are set out in Paragraph 7 of the
Agreement. Any remuneration received by the Sub-Advisor hereunder shall
supplement any other remuneration receivable by the Sub-Advisor in
connection with transactions effected by the Sub-Advisor with or for the
Advisor under this or any other agreement with the Advisor.
4. Termination
The provisions in respect of termination of the Agreement are set out in
Paragraph 10 of the Agreement. Termination of the Agreement by either party
shall be without prejudice to the completion of any transaction already
initiated which shall be completed in accordance with market practice.
5. The Portfolio
The investment objectives and any restrictions on the types of investments
and markets in which transactions may be affected are prescribed in
applicable laws (see Paragraph 2 of the Agreement) and are set-out in the
Fund's Prospectus and the Statement of Additional Information or as
notified to and accepted by the Sub-Advisor in accordance with the terms of
the Agreement.
6. Subject to the 1940 Act, the Investment Adviser's Act, the Prospectus and
the Statement of Additional Information, the Sub-Advisor shall be entitled
without prior reference to the Advisor to effect on behalf of the Advisor
transactions:
a) in investments the price of which may be being stabilized;
b) in units in Collective Investment Schemes which are not Regulated
Collective Investment Schemes and which are not regulated in
accordance with the 1940 Act and other applicable laws; and
c) where the Sub-Advisor may act as a principal or as agent between
another client or any Associate of the Sub-Advisor and the Advisor
provided that the terms of the transaction are at least as good as
those generally available elsewhere.
7. The Sub-Advisor may commit the Advisor to supplement the Fund either by
borrowing or by committing the Advisor to a contract the performance of
which may require the Advisor to supplement the Fund but such borrowing may
only take place in accordance with the 1940 Act.
With respect to the above, borrowing shall only be effected on a short-term
basis ancillary to the proper management of the Fund pending settlement of
other transactions or to protect against currency fluctuations and in any
event will be in accordance with relevant regulations and the guidelines
set out in the Prospectus and the Statement of Additional Information.
8. Subject to the 1940 Act, the Advisers Act, the Prospectus and the Statement
of Additional Information, the Sub-Advisor may effect without prior
reference to the Advisor transactions involving an obligation to underwrite
any issue or offer for sale of investments by or through parties unrelated
to the Sub-Advisor (and there are no restrictions on the categories of
securities which may be so underwritten) provided that such underwriting
shall be limited to 25% of the value of any Fund.
9. Valuation, Reports and Records
The Sub-Advisor shall send to the Advisor, at least once every calendar
quarter, a statement of the contents and valuation of the Funds, the
transactions entered into during such period and other information required
by the IMRO Rules to be contained in such statement. Such statement may
contain a measure of performance of the Funds by reference to the
appropriate indices.
The Sub-Advisor shall forward contract notes to the administrator of the
Funds, State Street Bank and Company Company, as soon as possible after the
transaction at the address set out in the Prospectus or to such other
address as the Advisor may provide to the Sub-Advisor for that purpose.
10. Complaints
The Sub-Advisor has in operation, and ensures compliance with, a written
procedure for the effective consideration and proper handling of any
complaints the Advisor may have. The Advisor also has the right to make a
complaint direct to the Investment Ombudsman, at 0 Xxxxxxxxxx Xxxxx, Xxxxxx
XX0X 0XX.
Such procedure ensures that (unless a complaint can be settled instantly
and directly by the representative or employee of the Sub-Advisor
responsible for the matters involved in the complaint and does not involve
sums which are material in relation to the financial circumstances of the
complainant) the complaint is considered by an officer or employee of
appropriate seniority who was not himself concerned in the matter or (where
this is not possible) by a person of appropriate standing who is not an
officer or employee of the Sub-Advisor.
11. Compensation
In the event that the Sub-Advisor is unable to meet any liabilities to the
Advisor, the Advisor can apply to the Sub-Advisor or to IMRO for a
statement describing the rights to compensation.
12. Hedging
Where a liability in one currency is to be matched by an asset in a
different currency or where all or part of the investments are denominated
in a currency other than sterling, a movement of exchange rates may have a
separate effect, unfavorable as well as favorable, on the gain or loss
otherwise experienced on the investment.
13. Investments Not Readily Realisable
In relation to any Investments Not Readily Realisable in which the Funds
may be invested, the Advisor is advised that these are not readily
realisable, that there can not be any certainty that market makers will be
prepared to deal in them and that proper information for determining their
current value may not be available. The Sub-Advisor will notify the Advisor
of any transaction in an Investment Not Readily Realisable in the six
monthly statements, or as requested by the Advisor.
"Investment Not Readily Realisable"has the meaning assigned to it by the
IMRO Rules and includes, inter alia, investments (which are not life
policies or units in Regulated Collective Investment Schemes) which are not
traded on or under the rules of a recognized investment exchange and
investments which are so traded, but not with sufficient frequency or
regularity for a reliable quoted price for such transactions to be
available.
14. Margined Transactions, Options, Futures and Contracts for Differences
The Sub-Advisor shall be entitled without prior reference to, or the
written consent of, the Advisor, to effect transactions in Margined
Transactions, Options, Futures and Contracts for Differences. The Advisor
is warned that the markets can be highly volatile and that such investments
may carry a high risk of loss. The Sub-Advisor will only carry out such
transactions in accordance with the Agreement, and the provisions of the
Prospectus, the Statement of Additional Information, and applicable laws
and regulations.
"Margined Transactions" has the meaning assigned to it by the IMRO Rules
and includes, inter alia, a transaction relating to a Future, an Option or
a Contract for Differences under the terms of which the Advisor may be
liable to make deposits in cash or collateral to secure performance of
obligations which he may have to perform when the transaction fails to be
completed or upon the earlier closing out of his position.
15. Warrants
Warrants often involve a high degree of gearing so that a relatively small
movement in the price of the security to which the warrant relates may
result in a disproportionately large movement, unfavourable as well as
favourable, in the price of the warrant.
