XXXX XXXXXXX WORLD FUND
Xxxx Xxxxxxx European Equity Fund
Second Interim Sub-Investment Management Contract
Dated January 31, 2001
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
Second 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.
The fees payable to the Sub-Adviser by the Adviser under this
Sub-Investment Management Contract shall, upon receipt by the Adviser of
its fees under the Investment Management Contract, be paid by the Adviser
into an interest-bearing escrow account. If the holders of "a majority of
the outstanding voting securities" (as defined in the 1940 Act) of the Fund
have voted to approve a new Sub-Investment Management Contract with the
Sub-Adviser by May 12, 2001, the fees paid by the Adviser into such escrow
account (and interest thereon) shall be paid to the Sub-Adviser. If such
approval has not been obtained by May 12, 2001, this Sub-Investment
Management Contract shall terminate and the Sub-Adviser shall be paid from
the escrow account the lesser of: (i) the costs incurred in performing its
obligations under this Sub-Investment Management Contract (plus interest
earned on that amount while in escrow), or (ii) the total amount in the
escrow account (plus interest earned). 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, or
shareholder appproval of a new Agreement. This Agreement may, on 10 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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