XXXX XXXXXXX WORLD FUND
Xxxx Xxxxxxx European Equity Fund
Interim Sub-Investment Management Contract
Dated December 14, 2000
XXXX XXXXXXX ADVISERS, INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
XXXX XXXXXXX WORLD FUND
- Xxxx Xxxxxxx European Equity Fund
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
000 Xxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Interim Sub-Investment Management Contract
Ladies and Gentlemen:
Xxxx Xxxxxxx World Fund (the "Trust") has been organized as a business trust
under the laws of The Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial
interest may be classified into series, each series representing the entire
undivided interest in a separate portfolio of assets. Series may be
established or terminated from time to time by action of the Board of
Trustees of the Trust. As of the date hereof, the Trust has three series of
shares, representing interests in Xxxx Xxxxxxx Pacific Basin Equities Xxxx,
Xxxx Xxxxxxx Health Sciences Fund and Xxxx Xxxxxxx European Equity Fund.
The Board of Trustees of the Trust (the "Trustees") has selected Xxxx Xxxxxxx
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Xxxx Xxxxxxx European Equity Fund (the "Fund"), and to
provide certain other services, under the terms and conditions provided in
the Investment Management Contract, dated as of the date hereof, between
the Trust, the Fund and the Adviser (the "Investment Management Contract").
The Adviser and the Trustees have selected Xxxxxxxx-Xxxxxxxxx Capital
Management (the "Sub-Adviser") to provide the Adviser and the Fund with the
advice and services set forth below, and the Sub-Adviser is willing to
provide such advice and services, subject to the review of the Trustees and
overall supervision of the Adviser, under the terms and conditions
hereinafter set forth. The Sub-Adviser hereby represents and warrants that
it is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended. Accordingly, the Trust, on behalf of the Fund, and the
Adviser agree with the Sub-Adviser as follows:
1. Delivery of Documents. The Trust has furnished the Sub-Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a) Amended and Restated Declaration of Trust of the Trust, dated February 8,
1994, as amended from time to time (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees approving the form of this Agreement by and
among the Adviser, the Sub-Adviser and the Trust, on behalf of the Fund;
(d) Resolutions of the Trustees selecting the Adviser as investment adviser for
the Fund and approving the form of the Investment Management Contract;
(e) the Investment Management Contract;
(f) the Fund's portfolio compliance checklists; and
(g) the Fund's current Registration Statement, including the Fund's Prospectus
and Statement of Additional Information;
(h) the Fund's Code of Ethics.
The Trust will furnish to the Sub-Adviser from time to time copies, properly
certified or otherwise authenticated, of all amendments of or supplements
to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts to provide
to the Fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund as set forth in the Fund's Prospectus and
Statement of Additional Information. In the performance of the
Sub-Adviser's duties hereunder, subject always (x) to the provisions
contained in the documents delivered to the Sub- Adviser pursuant to
Section 1, as each of the same may from time to time be amended or
supplemented, and (y) to the limitations set forth in the Registration
Statement of the Trust, on behalf of the Fund, as in effect from time to
time under the Securities Act of 1933, as amended, and the Investment
Company Act of 1940, as amended (the "1940 Act"), the Sub-Adviser will,
have investment discretion with respect to the Fund and will, at its own
expense:
(a) furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions of the
Fund as set forth in the Fund's Prospectus and Statement of Additional
Information, with respect to the purchase, holding and disposition of
portfolio securities including, the purchase and sale of options; (b)
furnish the Adviser and the Fund with advice as to the manner in which
voting rights, subscription rights, rights to consent to corporate action
and any other rights pertaining to the Fund's assets shall be exercised,
the Fund having the responsibility to exercise such voting and other
rights; (c) furnish the Adviser and the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies; (d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request; (e) subject to prior
consultation with the Adviser, engage in negotiations relating to the
Fund's investments with issuers, investment banking firms, securities
brokers or dealers and other institutions or investors;
(f) The Sub-Adviser shall have full authority and discretion to select brokers
and dealers to execute portfolio transactions for the Fund and for the
selection of the markets on or in which the transaction will be executed.
In providing the Fund with investment management, it is recognized that the
Sub-Adviser will give primary consideration to securing the most favorable
price and efficient execution considering all circumstances. Within the
framework of this policy, the Sub-Adviser may consider the financial
responsibility, research and investment information and other research
services and products provided by brokers or dealers who may effect or be a
party to any such transaction or other transactions to which the
Sub-Adviser's other clients may be a party. It is understood that it is
desirable for the Fund that the Sub-Adviser have access to brokerage and
research services and products and security and economic analysis provided
by brokers who may execute brokerage transactions at a higher cost to the
Fund than broker-dealers that do not provide such brokerage and research
services. Therefore, in compliance with Section 28(e) of the Securities
Exchange Act of 1934 ("1934 Act"), the Sub-Adviser is authorized to place
orders for the purchase and sale of securities for the Fund with such
brokers, that provide brokerage and research products and/or services that
charge an amount of commission for effecting securities transaction in
excess of the amount of commission another broker would have charged for
effecting that transaction, provided the Sub-Adviser determines in good
faith that such amount of commission was reasonable in relation to the
value of the brokerage and research products and/or services provided by
such broker viewed in terms of either that particular transaction or the
overall responsibilities of the Sub-Adviser for this or other advisory
accounts, subject to review by the Adviser from time to time with respect
to the extent and continuation of this practice. It is understood that the
information, services and products provided by such brokers may be useful
to the Sub-Adviser in connection with the Sub-Adviser's services to other
clients; (g) from time to time or at any time requested by the Adviser or
the Trustees, make reports to the Adviser or the Trust of the Sub-Adviser's
performance of the foregoing services; (h) subject to the supervision of
the Adviser, maintain all books and records with respect to the Fund's
securities transactions required by the 1940 Act, and preserve such records
for the periods prescribed therefor by the 1940 Act (the Sub-Adviser agrees
that such records are the property of the Trust and copies will be
surrendered to the Trust promptly upon request therefor); (i) give
instructions to the Fund's custodian as to deliveries of securities to and
from such custodian and transfer of payment of cash for the account of the
Fund, and advise the Adviser on the same day such instructions are given;
and
(j) cooperate generally with the Fund and the Adviser to provide information
necessary for the preparation of registration statements and periodic
reports to be filed with the Securities and Exchange Commission, including
Form N-1A, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with state
"blue sky" authorities and with United States agencies responsible for tax
matters, and other reports and filings of like nature. 3. Expenses Paid by
the Sub-Adviser. The Sub-Adviser will pay the cost of maintaining the staff
and personnel necessary for it to perform its obligations under this
Agreement, the expenses of office rent, telephone, telecommunications and
other facilities it is obligated to provide in order to perform the
services specified in Section 2, and any other expenses incurred by it in
connection with the performance of its duties hereunder. 4. Expenses of the
Fund Not Paid by the Sub-Adviser. The Sub-Adviser will not be required to
pay any expenses which this Agreement does not expressly make payable by
the Sub- Adviser. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 3, the Sub-Adviser will
not be required to pay under this Agreement: (a) the compensation and
expenses of Trustees and of independent advisers, independent contractors,
consultants, managers and other agents employed by the Trust or the Fund
other than through the Sub-Adviser; (b) legal, accounting and auditing fees
and expenses of the Trust or the Fund; (c) the fees and disbursements of
custodians and depositories of the Trust or the Fund's assets, transfer
agents, disbursing agents, plan agents and registrars; (d) taxes and
governmental fees assessed against the Trust or the Fund's assets and
payable by the Trust or the Fund; (e) the cost of preparing and mailing
dividends, distributions, reports, notices and proxy materials to
shareholders of the Trust or the Fund except that the Sub-Adviser shall
bear the costs of providing the information referred to in Section 2(j) to
the Adviser; (f) brokers' commissions and underwriting fees; and (g) the
expense of periodic calculations of the net asset value of the shares of
the Fund. 5. Compensation of the Sub-Adviser. For all services to be
rendered, facilities furnished and expenses paid or assumed by the
Sub-Adviser as herein provided for the Fund, the Adviser will pay the
Sub-Adviser quarterly, in arrears, a fee at the annual rate of 0.35% of the
Fund's average daily net assets. The "average daily net assets" of the Fund
shall be determined on the basis set forth in the Fund's Prospectus or
otherwise consistent with the 1940 Act and the regulations promulgated
thereunder. The Sub-Adviser will receive a pro rata portion of such fee for
any periods in which the Sub-Adviser advises the Fund less than a full
quarter. Fund shall not be liable to the Sub- Adviser for the Sub-Adviser's
compensation hereunder. Calculations of the Sub-Adviser's fee will be based
on average net asset values as provided by the Adviser. In addition to the
foregoing, the Sub-Adviser may from time to time agree not to impose all or
a portion of its fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/or undertake to pay
or reimburse the Fund for all or a portion of its expenses not otherwise
required to be borne or reimbursed by it. Any such fee reduction or
undertaking may be discontinued or modified by the Sub-Adviser at any time.
6. Other Activities of the Sub-Adviser and Its Affiliates. Nothing herein
contained shall prevent the Sub-Adviser or any associate of the Sub-Adviser
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, understood that
officers, directors and employees of the Sub-Adviser or its affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Sub-Adviser or its affiliates and to said
affiliates themselves. 7. Avoidance of Inconsistent Position. In connection
with purchases or sales of portfolio securities for the account of the
Fund, neither the Sub-Adviser nor any of its investment management
subsidiaries nor any of such investment management subsidiaries' directors,
officers or employees will act as principal or agent or receive any
commission, except as may be permitted by the 1940 Act and rules and
regulations promulgated thereunder. The Sub-Adviser shall not knowingly
recommend that the Fund purchase, sell or retain securities of any issuer
in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the Sub-Adviser or any of
its officers, affiliates or employees from buying, selling or trading in
any securities for its or their own account or accounts. The Trust and Fund
acknowledge the Sub-Adviser and its officers, affiliates, and employees,
and its other clients may at any time have, acquire, increase, decrease or
dispose of positions in investments which are at the same time being
acquired or disposed of hereunder. The Sub-Adviser shall have no obligation
to acquire with respect to the Fund, a position in any investment which the
Sub-Adviser, its officers, affiliates or employees may acquire for its or
their own accounts or for the account of another client, if in the sole
discretion of the Sub-Adviser, it is not feasible or desirable to acquire a
position in such investment on behalf of the Fund. Nothing herein contained
shall prevent the Sub-Adviser from purchasing or recommending the purchase
of a particular security for one or more funds or clients while other funds
or clients may be selling the same security. 8. No Partnership or Joint
Venture. The Trust, the Fund, the Adviser and the Sub-Adviser are not
partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on any of them. 9. Name of the Trust, the Fund and the
Sub-Adviser. The Trust and the Fund may use the name "Xxxx Xxxxxxx" or any
name or names derived from or similar to the names "Xxxx Xxxxxxx Advisers,
Inc." or "Xxxx Xxxxxxx Life Insurance Company" only for so long as this
Agreement remains in effect. At such time as this Agreement shall no longer
be in effect, the Trust and the Fund will (to the extent that they lawfully
can) cease to use such a name or any other name indicating that the Fund is
advised by or otherwise connected with the Adviser. The Fund acknowledges
that it has adopted the name Xxxx Xxxxxxx European Equity Fund through
permission of Xxxx Xxxxxxx Life Insurance Company, a Massachusetts
insurance company, and agrees that Xxxx Xxxxxxx Life Insurance Company
reserves to itself and any successor to its business the right to grant the
nonexclusive right to use the name "Xxxx Xxxxxxx" or any similar name or
names to any other corporation or entity, including but not limited to any
investment company of which Xxxx Xxxxxxx Life Insurance Company or any
subsidiary or affiliate thereof shall be the investment adviser. In
addition, the Fund and the Trust hereby consent to the reasonable use of
the name of the Fund in marketing/client materials developed and
distributed by or on behalf of Sub-Adviser. In addition, it is understood
that the name "Xxxxxxxx-Xxxxxxxxx" or the name of any of its affiliates, or
any derivative associated with those names, are the valuable property of
the Sub- Adviser and its affiliates and that the Fund, Trust and/or the
Adviser have the right to use such name(s) or derivative(s) in offering
materials and sales literature so long as this Agreement is in effect. Upon
termination of the Agreement, such authorization shall forthwith cease to
be in effect. 10. Limitation of Liability of Sub-Adviser. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for any
loss suffered by the Trust or the Fund or the Adviser in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the Sub-Adviser's
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Any person, even though
also employed by the Sub-Adviser, who may be or become an employee of and
paid by the Trust or the Fund shall be deemed, when acting within the scope
of his employment by the Trust or the Fund, to be acting in such employment
solely for the Trust or the Fund and not as the Sub-Adviser's employee or
agent. 11. Duration and Termination of this Agreement. This Agreement shall
remain in force until May 12, 2001. This Agreement may, on 60 days' written
notice, be terminated at any time without the payment of any penalty by the
Trust or the Fund by vote of a majority of the outstanding voting
securities of the Fund, by the Trustees, the Adviser or the Sub-Adviser.
Termination of this Agreement with respect to the Fund shall not be deemed
to terminate or otherwise invalidate any provisions of any contract between
the Sub-Adviser and any other series of the Trust. This Agreement shall
automatically terminate in the event of its assignment or upon termination
of the Investment Management Contract. In interpreting the provisions of
this Section 11, the definitions contained in Section 2(a) of the 1940 Act
(particularly the definitions of "assignment," "interested person" or
"voting security"), shall be applied. 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, and no amendment, transfer, assignment, sale, hypothecation or
pledge of this Agreement shall be effective until approved by (a) the
Trustees, including a majority of the Trustees who are not interested
persons of the Adviser, the Sub-Adviser, or (other than as Board members)
of the Trust or the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) a majority of the outstanding
voting securities of the Fund, as defined in the 1940 Act. 13. Governing
Law. This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts. 14. Severability. The provisions
of this Agreement are independent of and separable from each other, and no
provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be deemed
invalid or unenforceable in whole or in part. 15. Miscellaneous. (a) The
captions in this Agreement are included for convenience of reference only
and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. The name Xxxx Xxxxxxx World Fund is the designation of the
Trustees under the Amended and Restated Declaration of Trust dated February
8, 1994, as amended from time to time. The Declaration of Trust has been
filed with the Secretary of The Commonwealth of Massachusetts. The
obligations of the Trust and the Fund are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Fund, but only the
Fund's property shall be bound. The Trust or the Fund shall not be liable
for the obligations of any other series of the Trust. (b) Any information
supplied by the Sub-Adviser, which is not otherwise in the public domain,
in connection with the performance of its duties hereunder is to be
regarded as confidential and for use only by the Fund and/or its agents,
and only in connection with the Fund and its investments. 16.
Xxxxxxxx-Xxxxxxxxx undertakes to promptly notify Fund of any change in its
general partner(s). 17. The Fund agrees to obtain and maintain insurance
coverage satisfying any insurance requirements under the 1940 Act, to carry
errors and omissions coverage in the amount of $10,000,000. 18. The Adviser
has received from Sub-Adviser and reviewed the disclosure statement or
"brochure" required to be delivered pursuant to Rule 204-3 of the Act (the
"Brochure"), which Xxxxxxxx was received and reviewed by the Adviser more
than 48 hours prior to entering into this Agreement.
Yours very truly,
XXXX XXXXXXX WORLD FUND
on behalf of Xxxx Xxxxxxx European Equity Fund
By: ______________________________________
President
The foregoing contract
is hereby agreed to as
of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By: ______________________________________
President
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
By: ____________________________
Name:
Title:
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