RESEARCH SUPPORT AGREEMENT
RELATING TO
WORLDWIDE HEALTH SCIENCES PORTFOLIO
This RESEARCH SUPPORT AGREEMENT
(the "Agreement") effective this 1st day of July,
2016 is between Xxxxx Xxxxx Management, a
Massachusetts business trust (the "Adviser"), and
OrbiMed Advisors LLC, a Delaware limited liability
company ("OrbiMed").
WHEREAS, Worldwide Health Sciences
Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end, management
investment company;
WHEREAS, the Portfolio is a master fund in
a master feeder structure whereby, among other
potential investors, one or more investment
companies registered with the Securities and
Exchange Commission (the "SEC") may invest its
assets in the Portfolio (each, a "Feeder Fund");
WHEREAS, pursuant to an Investment
Advisory Agreement dated July 1, 2016 (the
"Advisory Agreement"), a copy of which has been
provided to OrbiMed, the Portfolio has retained the
Adviser to render investment advisory and
management services to the Portfolio as described
more fully in the Advisory Agreement;
WHEREAS, OrbiMed employs scientific,
medical, investment and other professionals in
various locations globally to engage in investment
research and analysis of health sciences
companies and the health care sector; and
WHEREAS, OrbiMed is willing to provide
research services described herein to the Adviser
with respect to the Portfolio's investment program,
and the Adviser desires that OrbiMed provide such
research services to the Adviser under this
Agreement.
NOW, THEREFORE, in consideration of the
promises and mutual covenants herein contained, it
is agreed between the Adviser and OrbiMed as
follows:
1. Research Services. OrbiMed
hereby agrees to provide to the Adviser its views
and opinions on issues relating to the management
of the Portfolio, including, but not limited to, the
following: (i) prospects for individual public
companies in the healthcare sector and the
attractiveness of their securities as investments; (ii)
regulatory developments affecting and potentially
affecting healthcare companies; (iii) medical
discoveries and advancements; (iv) industry trends;
(v) regional/country preferences; (vi) sub-sector
preferences; (vii) reports on recent interactions with
management of healthcare companies; (viii)
company valuations; (ix) pre-initial public offering
due diligence; (x) matters relating to portfolio
construction; and (xi) such other matters as the
Adviser may reasonably request ("Research
Information", and the provision of such Research
Information by OrbiMed to the Adviser, the
"Research Services"). Research Information may
be delivered by OrbiMed to the Adviser and
persons affiliated with the Adviser providing
portfolio management services to the Portfolio
through periodic meetings or individual
consultations (either in person or via
teleconference), and may include written and oral
reports and analyses.
OrbiMed and the Adviser agree that (1) in
Research Information that OrbiMed provides to the
Adviser, OrbiMed will not include any information
regarding a health sciences company with respect
to which information OrbiMed has a legal or
contractual obligation of confidentiality and (2)
where a health sciences company is the subject of
a specific Research Information question or request
from the Adviser and OrbiMed has a representative
on such company's board of directors, OrbiMed will
disclose that relationship to the Adviser. In
addition, the Adviser agrees that it will not disclose
any non-public information regarding the Portfolio
to OrbiMed.
The parties acknowledge that the Adviser
has sole responsibility for determining the securities
and other investments to be acquired, disposed of
or exchanged by the Portfolio and for implementing
the Portfolio's investment program, and OrbiMed
shall have no responsibility for such matters. The
parties further agree that OrbiMed will be an
independent contractor and will have no authority to
act for or represent the Portfolio or Adviser in any
way or otherwise be deemed an agent unless
expressly authorized in this Agreement or in
another writing by the Portfolio and Adviser.
2. Compliance. As required by Rule
206(4)-7 under the Investment Advisers Act of 1940
(the "Advisers Act"), OrbiMed has adopted written
policies and procedures reasonably designed to
prevent violation by it, or any of its supervised
persons, of the Advisers Act and the rules under
the Advisers Act and all other laws and regulations
relevant to the performance of its duties under this
Agreement ("OrbiMed Procedures") and has
designated a chief compliance officer ("CCO")
responsible for administering OrbiMed Procedures.
OrbiMed shall perform its duties hereunder
in accordance with (i) the 1940 Act and all rules
and regulations thereunder; (ii) all other applicable
federal and state laws and regulations; and (iii) any
procedures adopted by the Board of Trustees of the
Portfolio (the "Board") and reasonably deemed
applicable by the Adviser to OrbiMed relative to the
services it provides under the Agreement (provided
that OrbiMed has been or will be provided by the
Adviser with a copy of any current or future
procedures and has been provided with a
reasonable period of time to understand and adapt
to such procedures) (the "Portfolio Procedures").
Prior to the Effective Date (as defined below), the
Adviser shall inform OrbiMed in writing of the
Portfolio Procedures then in existence to which
OrbiMed will be subject and will also specify
compliance reporting obligations of OrbiMed to the
Adviser and the Portfolio's CCO. The parties
acknowledge that changes in regulations and
regulatory guidance may result in new or altered
Portfolio Procedures and, in such event, the
Adviser will inform OrbiMed of any such new or
altered Portfolio Procedures to which it will be
subject. The Adviser agrees that, provided it is
within its ability, it will allow for a reasonable
implementation period for any such revised
Portfolio Procedures and OrbiMed agrees it will
make a reasonable effort to implement any such
revised Portfolio Procedures within such
implementation period, provided that doing so
would not cause OrbiMed to incur additional
significant fees or expenses or otherwise conflict
with OrbiMed's Procedures.
OrbiMed will provide the Adviser and/or the
Portfolio and their respective CCOs with such
written compliance reports relating to the
operations and compliance procedures of OrbiMed
relevant to the Portfolio as may be required by law
or regulation or otherwise as the Adviser may
reasonably request from time to time. Such written
compliance reports may include responses to
questions regarding material breaches of Portfolio
Procedures, OrbiMed Procedures related to the
Research Services or material violations of
applicable laws or regulations (including the 0000
Xxx) relating to the Portfolio.
OrbiMed will maintain all books and records
with respect to the Research Information as may be
required of an investment adviser to a registered
investment company pursuant to the 1940 Act and
the Advisers Act and the rules thereunder.
OrbiMed agrees that it shall submit to all regulatory
and administrative bodies having jurisdiction over
the services provided pursuant to this Agreement
and any information, reports or other material which
any such body by reason of this Agreement may
request or require pursuant to applicable laws and
regulations.
3. Expenses. During the term of this
Agreement, OrbiMed will pay all expenses incurred
by it and its staff and for their activities in
connection with its duties under this Agreement,
including, but not limited to, rental and overhead
expenses, expenses of OrbiMed's personnel,
insurance of OrbiMed and its personnel, and taxes
of OrbiMed. The Adviser and the Portfolio shall be
responsible for all expenses of the respective
operations including, without limitation, those
described in the Advisory Agreement.
4. Compensation. For the services
provided to the Adviser, the Adviser will pay
OrbiMed the compensation described on Schedule
A. The Adviser is solely responsible for the
payment of fees to OrbiMed, and OrbiMed agrees
to seek payment of its fees solely from the Adviser.
The Portfolio shall have no liability for OrbiMed's
fees hereunder.
5. Limitation of Liability of OrbiMed. In
the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or
duties hereunder on the part of OrbiMed, OrbiMed
shall not be subject to liability to the Adviser for any
act or omission in the course of, or connected with,
rendering services hereunder or for any losses
which may be sustained in the Adviser's
acquisition, holding or disposition of any security or
other investment based on the services provided by
OrbiMed under this Agreement.
6. Use of Names. It is understood that
the names "OrbiMed", "OrbiMed Advisors LLC" or
any derivative thereof or logos associated with
those names are the valuable property of OrbiMed
and its affiliates. For so long as this Agreement
remains in effect, the Adviser or its affiliates will
have the right to use such names (or derivatives or
logos) in, but only in, regulatory filings and offering
and sales materials of the Portfolio and any Feeder
Funds (if applicable) substantially in accordance
with past practice between the Parties. Any other
use shall require approval in advance from the
OrbiMed. Upon termination of this Agreement, the
Portfolio and any Feeder Funds (if applicable) shall
as soon as is reasonably possible cease to use
such names (or derivatives or logos), except to the
extent that the Adviser is required to provide a
description of any party responsible for historical
performance or disclose prior Portfolio service
providers in regulatory filings.
It is further understood that the names
"Xxxxx Xxxxx Management" or any derivative
thereof or logos associated with those names are
the valuable property of the Adviser and its affiliates
and that OrbiMed has the right to use such names
(or derivatives or logos) in client lists or similar
marketing materials. Any other use shall require
approval in advance from the Adviser. Upon
termination of this Agreement OrbiMed shall as
soon as is reasonably possible cease to use such
names (or derivatives or logos).
7. Services to Other Clients. Except
as may otherwise be agreed, the services of
OrbiMed rendered under this Agreement are not to
be deemed to be exclusive, OrbiMed being free to
render services to others and engage in other
business activities. OrbiMed and the Adviser
acknowledge that OrbiMed provides advice and
research to its clients and accounts ("Clients") that
are specific to the service requirements and
investment mandates of each such Client. As
such, it is possible that OrbiMed's views as
expressed to one Client versus another Client may
differ or conflict. In such cases, OrbiMed will
endeavor to act in accordance with its duties to
each such Client. In addition, OrbiMed's
management of its Clients' portfolios may affect the
nature and/or limit the extent of the Research
Information OrbiMed can provide to the Adviser
with respect to particular companies, including,
without limitation, where OrbiMed has received
confidential information regarding a company or
has a representative on the company's board of
directors.
8. Duration and Termination. This
Agreement shall become effective upon the date
first stated above (the "Effective Date"), subject to
the condition that the Portfolio's Board, including a
majority of those Trustees who are not interested
persons (as such term is defined in the 0000 Xxx) of
the Adviser or OrbiMed (the "Independent
Trustees"), and a majority of the outstanding voting
securities of the Portfolio, shall have approved this
Agreement in the manner required by the 1940 Act.
Unless terminated as herein provided, this
Agreement shall remain in full force and effect for
five years and may be continued thereafter upon
the mutual agreement of the parties (the "Term"
and the date on which the Agreement terminates,
the "Termination Date"), provided that after one (1)
year from the Effective Date it is specifically
approved at least annually (i) by the Board or by
vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the
Portfolio and (ii) by the vote of a majority of the
Independent Trustees cast in person at a meeting
called for the purpose of voting on such approval.
Notwithstanding the foregoing, this
Agreement may be terminated by the Adviser prior
to the Termination Date upon the occurrence of any
of the following: (i) the removal, resignation or
replacement of the Adviser as investment adviser
to the Portfolio; (ii) the appointment of a non-EVM
affiliated sub-adviser to oversee the day-to-day
management of the Portfolio; or (iii) a material
breach by OrbiMed of this Agreement, including but
not limited to the failure by OrbiMed to perform its
specified duties and responsibilities hereunder,
provided, that the Adviser has given OrbiMed
written notice of such breach and OrbiMed has not
cured the breach within 30 days of OrbiMed's
receipt of such notice.
In addition, the Agreement may be
terminated by the Board or a majority of the
outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser and
OrbiMed without payment of any penalty by the
Portfolio, or by OrbiMed upon 60 days' prior written
notice, provided, however, that OrbiMed may
terminate this Agreement at any time without
penalty, effective upon written notice to the Adviser,
in the event either OrbiMed (acting in good faith) or
the Adviser ceases to be registered as an
investment adviser under the Advisers Act or
otherwise becomes legally incapable of providing
investment services pursuant to this Agreement.
This Agreement shall automatically
terminate in the event of its assignment (as such
term is described in the 1940 Act) and OrbiMed
shall notify the Adviser if OrbiMed has determined
to proceed with any such assignment. In such
event, the Adviser agrees that, so long as OrbiMed
is not in breach of this Agreement and continues to
be capable of providing the services under this
Agreement, it will propose to the Board a new
Research Support Agreement between the Adviser
and OrbiMed on substantially similar terms as set
forth herein. If Portfolio and/or Feeder Fund
shareholder approval of such new Research
Support Agreement is required, the Adviser also
will prepare the required proxy materials and
oversee the proxy solicitation to approve the new
Research Support Agreement. OrbiMed agrees it
will be responsible for any third-party costs in
connection with any proxy solicitation precipitated
by its assignment of this Agreement.
9. Notices. Any notice must be in
writing and shall be sufficiently given (i) when
delivered in person; (ii) when dispatched by
electronic mail or electronic facsimile transfer
(confirmed in writing by postage prepaid first class
air mail simultaneously dispatched); (iii) when sent
by internationally recognized overnight courier
service (with receipt confirmed by such overnight
courier service); or (iv) when sent by registered or
certified mail, to the other party at the address of
such party set forth below or at such other address
as such party may from time to time specify in
writing to the other party.
If to the Adviser: If to OrbiMed:
Xxxxx Xxxxx Management OrbiMed Advisors LLC
Two International Place 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Chief Legal Officer Attention: General Counsel
10. Amendments of the Agreement.
This Agreement may be amended by a writing
signed by all parties hereto, provided that no
amendment to this Agreement shall be effective
until approved (i) by the vote of a majority of the
Independent Trustees cast in person at a meeting
called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding
voting securities of the Portfolio.
11. Limitation of Liability. OrbiMed
expressly acknowledges the provision in the
Declaration of Trust of the Adviser limiting the
personal liability of the Trustee and officers of the
Adviser, and OrbiMed hereby agrees that it shall
have recourse to the Adviser for payment of claims
or obligations as between the Adviser and OrbiMed
arising out of this Agreement and shall not seek
satisfaction from any Trustee or officer of the
Adviser.
12. Certain Definitions. The terms
"assignment" and "interested persons" when used
herein shall have the respective meanings specified
in the 1940 Act as now in effect or as hereafter
amended subject, however, to such exemptions as
may be granted by the SEC by any rule, regulation
or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote,
at a meeting of Holders, of the lesser of (a) 67 per
centum or more of the Interests in the Portfolio
present or represented by proxy at the meeting if
the Holders of more than 50 per centum of the
outstanding Interests in the Portfolio are present or
represented by proxy at the meeting, or (b) more
than 50 per centum of the outstanding Interests in
the Portfolio. The terms "Holders" and "Interests"
when used herein shall have the respective
meanings specified in the Declaration of Trust of
the Portfolio.
13. Miscellaneous. This Agreement
shall be governed by the laws of the
Commonwealth of Massachusetts, provided that
nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or
rules or orders of the SEC thereunder, and without
regard for the conflicts of laws principle thereof.
The captions of this Agreement are included for
convenience only and in no way define or limit any
of the provisions hereof or otherwise affect their
construction or effect.
If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall
not be affected thereby, and to this extent, the
provisions of this Agreement shall be deemed to be
severable.
Nothing herein shall be construed as constituting
OrbiMed as an agent or co-partner of the Adviser,
or constituting the Adviser as an agent or co-
partner of OrbiMed.
This Agreement may be executed in counterparts.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed on the
day and year first above written.
Xxxxx Xxxxx Management
By: /s/ Xxxxxxx X. Gemma
Name: Xxxxxxx X. Gemma
Title: Vice President
OrbiMed Advisors LLC
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Managing Member
SCHEDULE A
For the services rendered under this Agreement,
OrbiMed is entitled to receive from the Adviser a
fee computed daily and payable monthly equal to
the following asset-based fee (the "Base Fee") as
adjusted by the performance-based adjustment set
forth below:
Base Fee:
Average Daily Net Assets Annual Fee Rate
Up to $500 million 0.100%
$500 million but less than $1 billion 0.092%
$1 billion but less than $1.5 billion 0.083%
$1.5 billion but less than $2 billion 0.075%
$2 billion but less than $2.5 billion 0.068%
$2.5 billion and over 0.068%
The Portfolio's net asset value shall be computed in
accordance with the Declaration of Trust of the
Portfolio and any applicable votes and
determinations of the Trustees of the Portfolio.
For purposes of determining the Base Fee, the
applicable Annual Fee Rate will increase or
decrease proportionately with (i) any increase or
decrease in the base fee paid to the Adviser
pursuant to the terms of the Advisory Agreement;
(ii) the addition of, or any increase or decrease in,
any other fees paid to the Adviser for providing
investment advisory, investment management or
similar services to the Portfolio; or (iii) any changes
in net amounts paid to the Adviser by the Portfolio
pursuant to a fee reduction agreement or expense
reimbursement agreement entered into between
the Adviser and the Portfolio. A decrease that
effectively constitutes or is associated primarily with
re-characterization or re-denomination of revenue
paid by the Portfolio to the Adviser (e.g., from
advisory to administrative) will not be treated as a
decrease for purposes of the foregoing.
Performance-Based Adjustment: Over the first
three years of the Term of this Agreement (the
"Three-Year Term"), OrbiMed will receive a portion
of the performance fee paid to the Adviser pursuant
to the Advisory Agreement (the "Performance
Fee"), based on the aggregate "in-the-money"
amount of relative performance of the Portfolio
attributable to OrbiMed's tenure as investment
adviser of the Portfolio. By way of example, if
OrbiMed's tenure as investment adviser accounts
for 90% of the outperformance for a given 36-
month Performance Fee measurement period,
OrbiMed would receive 90% of the Performance
Fee paid by the Portfolio with respect to such
Performance Fee measurement period. If there is
no Performance Fee paid by the Portfolio for a
given measurement period, OrbiMed shall receive
no Performance Fee (regardless of OrbiMed's past
performance). If Performance Fees are paid
(versus received) by the Adviser for a given
Performance Fee measurement period, OrbiMed
would participate in payments made, proportional to
the contribution of OrbiMed's tenure as investment
manager to the aggregate underperformance over
such Performance Fee measurement period. After
the Three-Year Term, OrbiMed shall not participate
in performance fees received or paid.
The foregoing obligation of the Adviser to pay
OrbiMed the specified portion of the Performance
Fee will survive any termination, other than a
termination initiated by OrbiMed or a termination for
an uncured material breach as set out in Section 8
of this Agreement, and will continue to be in effect
for the relevant remainder of the Three-Year Term,
provided that the Adviser as investment adviser to
the Portfolio continues to be entitled to collect the
portion of the Performance Fee attributable to
OrbiMed's tenure as investment adviser to the
Portfolio under the terms of the Advisory
Agreement.
13
EXECUTION VERSION
