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EXHIBIT 5(b)-7
INVESTMENT SUB-ADVISORY AGREEMENT
7/18, 1990
TCW Funds Management, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Dear Sirs:
XX Xxxxxx Trust Funds (the "Company"), an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts, and Great Western
Financial Advisors Corporation ("GW Advisors"), a corporation organized under
the laws of the state of California, hereby agree with TCW Funds Management,
Inc. (the "Sub-Adviser") as follows:
1. Investment Description; Appointment
The Company desires to employ the capital of GW Corporate Income Fund
(the "Fund") by investing and reinvesting in investments of the kind and in
accordance with the limitations specified in its Master Trust Agreement, as
amended, and in its Prospectus and Statement of Additional Information relating
to the Fund 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 Company's Prospectus and Statement of
Additional Information and the Company's Master Trust Agreement, as amended,
have been or will be submitted to the Sub-Adviser. The Company agrees to provide
copies of all amendments to the Fund's Prospectus and Statement of Additional
Information and the Company's Master Trust Agreement to the Sub-Adviser on an
on-going basis. The Company desires to employ and hereby appoints the
Sub-Adviser to act as investment sub-adviser to the Fund. The Sub-Adviser
accepts the appointment and agrees to furnish the services described herein for
the compensation set forth below.
2. Services as Investment Sub-Adviser
Subject to the supervision of the Board of Trustees of the Company and
of GW Advisors, the Fund's investment adviser, the Sub-Adviser will (a) act in
conformity with the Company's Master Trust Agreement, the Investment Company Act
of 1940, the Investment Advisers Act of 1940, the Internal Revenue Code and all
applicable banking laws and regulations, as the same may from time to time be
amended, (b) make investment decisions for the Fund in accordance with the
Fund's investment objective(s) and policies as stated in the Fund's Prospectus
and Statement of Additional Information as in effect and, after notice to the
Sub-Adviser, which may be amended from time to time, (c) place purchase and
sale orders on behalf of the Fund to effectuate the investment decisions made,
(d) maintain books
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and records with respect to the securities transactions of the Fund and will
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-Adviser 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-Adviser will
supervise the Fund's investments and conduct a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of the Fund's assets. In
addition, the Sub-Adviser will furnish the Fund or GW Advisors with whatever
statistical information the Fund or GW Advisors may reasonably request with
respect to the instruments that the Fund may hold or contemplate purchasing.
3. Brokerage
In executing transactions for the Fund and selecting brokers or
dealers, the Sub-Adviser 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 Fund and its shareholders. In assessing the best overall terms
available for any Fund transaction, the Sub-Adviser 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 Fund, in placing orders with brokers and dealers, the
Sub-Adviser 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-Adviser
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.
4. Information Provided to the Company
The Sub-Adviser will keep the Company and GW Advisors informed of
developments materially affecting the Fund, and will on its own initiative,
furnish the Company and GW Advisors on at least a quarterly basis with whatever
information the Sub-Adviser believes is appropriate for this purpose.
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5. Standard of Care
The Sub-Adviser shall exercise its best judgment in rendering the
services described in paragraphs 2 and 3 above. The Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund 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").
6. Compensation
In consideration of the services rendered pursuant to this Agreement,
GW Advisors will pay the Sub-Adviser on the first business day of each month a
fee for the previous month at the annual rate of .30% of the Fund's average
daily net assets up to $500 million, and .25% of the Fund's average daily net
assets in excess of $500 million. The Sub-Advisor shall have no right to obtain
compensation directly from the Fund or the Company for services provided
hereunder and agrees to look solely to GW Advisors 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-Adviser, the value of the Fund's net assets shall be computed at the
times and in the manner specified in the Fund's Prospectus or Statement of
Additional Information relating to the Fund as from time to time in effect.
7. Expenses
The Sub-Adviser 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
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commissions, if any; fees of trustees of the Company who are not officers,
directors or employees of the Sub-Adviser, GW Advisors, the Fund's 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 Fund and of the officers or Board of
Trustees of the Company; and any extraordinary expenses. In addition, the Fund
pays a distribution fee pursuant to the terms of a Distribution Plan adopted
under Rule 12b-1 of the Investment Company Act of 1940, as amended.
8. Services to Other Companies or Accounts
The Company understands that the Sub-Adviser 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 companies, and the Company has no objection to
the Sub-Adviser so acting, provided that whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Adviser 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. In addition, the Company understands that the persons employed by the
Sub-Adviser to assist in the performance of the Sub-Adviser'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-Adviser or any
affiliate of the Sub-Adviser 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 the Fund commences
its investment operations and shall continue for a one year term and shall
continue thereafter 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
Fund's 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
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purpose of voting on such approval. This Agreement is terminable, without
penalty, on 30 days' written notice, by GW Advisors, the Board of Trustees of
the Company or by vote of holders of a majority of the Fund's shares, or upon 90
days' written notice, by the Sub-Adviser and, will terminate automatically upon
any termination of the advisory agreement between the Company and GW Advisors.
In addition, this Agreement will also terminate automatically in the event of
its assignment (as defined in said Act). The Sub-Adviser 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-Adviser
The Company represents that (i) a copy of its Master Trust Agreement,
dated February 22, 1989, 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-Adviser 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.
The Sub-Adviser represents that it is authorized to perform the
services described herein.
11. Indemnification
GW Advisors shall indemnify and hold harmless the Sub-Adviser 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-Adviser of its
duties hereunder; provided, however, that nothing contained herein shall require
that the Sub-Adviser 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 the 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.
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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.
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
XX XXXXXX TRUST FUNDS
By: /s/
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Title:
GREAT WESTERN FINANCIAL
ADVISORS CORPORATION
By: /s/
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Title:
Accepted:
TCW FUNDS MANAGEMENT, INC.
By: /s/
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Title: President
By: /s/ Xxxxxx Xxxx
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Title: Vice President
