SUB-ADVISORY AGREEMENT
BETWEEN XXXXX FARGO MASTER TRUST, XXXXX FARGO
FUNDS MANAGEMENT, LLC AND LSV ASSET MANAGEMENT
This AGREEMENT is made as of this 31st day of October 2003, between Xxxxx
Fargo Master Trust (the "Trust"), a statutory trust organized under the laws of
the State of Delaware with its principal place of business at 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxx Fargo Funds Management, LLC
(the "Adviser"), a limited liability company organized under the laws of the
State of Delaware with its principal place of business at 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and LSV Asset Management (the
"Sub-Adviser"), a general partnership organized under the laws of the State of
Delaware, with its principal place of business at 0 Xxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Adviser and the Sub-Adviser are registered investment
advisers under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"); and
WHEREAS, the Trust is engaged in business as an open-end investment
company with one or more series of shares and is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust's Board of Trustees (the "Board") has engaged the
Adviser to perform investment advisory services for each series of the Trust
under the terms of an investment advisory agreement, dated August 6, 2003,
between the Adviser and the Trust (the "Advisory Agreement"); and
WHEREAS, the Adviser, acting pursuant to the Advisory Agreement, wishes to
engage the Sub-Adviser, and the Trust's Board has approved the engagement of the
Sub-Adviser, to provide investment advisory services to each series of the Trust
listed in Appendix A hereto as it may be amended from time to time (each a
"Fund" and collectively the "Funds"), and the Sub-Adviser is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, the Trust, the Adviser and Sub-Adviser agree as follows:
SECTION 1. APPOINTMENT OF SUB-ADVISER. The Trust is engaged in the
business of investing and reinvesting its assets in securities of the type and
in accordance with the limitations specified in its Declaration of Trust, as
amended or supplemented from time to time, By-Laws (if any) and Registration
Statement filed with the Securities and Exchange Commission (the "Commission")
under the 1940 Act and the Securities Act of 1933 (the "Securities Act"),
including any representations made in the prospectus and statement of additional
information relating to the Funds contained therein and as may be amended or
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Board.
1
Subject to the direction and control of the Board, the Adviser manages the
investment and reinvestment of the assets of the Funds and provides for certain
management and other services as specified in the Advisory Agreement.
Subject to the direction and control of the Board and the Adviser, the
Sub-Adviser shall manage the investment and reinvestment of the assets of the
Funds, and without limiting the generality of the foregoing, shall provide the
management and other services specified below, all in such manner and to such
extent as may be directed from time to time by the Adviser.
The investment authority granted to the Sub-Adviser shall include the
authority to exercise whatever powers the Trust may possess with respect to any
of its assets held by the Funds, including, but not limited to, the power to
exercise rights, options, warrants, conversion privileges, redemption
privileges, and to tender securities pursuant to a tender offer. The Sub-Adviser
shall not, however, be responsible for voting proxies, for participating in
class actions and/or other legal proceedings on behalf of the Funds, but will
provide such assistance as is reasonably requested by the Adviser.
SECTION 2. DUTIES OF THE SUB-ADVISER.
(a) The Sub-Adviser shall make decisions with respect to all purchases
and sales of securities and other investment assets for the Funds. To carry out
such decisions, the Sub-Adviser is hereby authorized, as agent and
attorney-in-fact for the Trust, for the account of, at the risk of and in the
name of the Trust, to place orders and issue instructions with respect to those
transactions of the Funds. In all purchases, sales and other transactions in
securities and other assets for the Funds, the Sub-Adviser is authorized to
exercise full discretion and act for the Trust and instruct the Fund's custodian
(the "Custodian") in the same manner and with the same force and effect as the
Trust might or could do with respect to such purchases, sales or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
The Sub-Adviser acknowledges that the Xxxxx Fargo Funds may engage
in transactions with certain sub-advisers in the fund complex (and their
affiliated persons) in reliance on exemptions under Rule 10f-3, Rule 12d3-1,
Rule 17a-10 and Rule 17e-1 under the 1940 Act. Accordingly, the Sub-Adviser
hereby agrees that it will not consult with any other sub-adviser of a fund in
the fund complex, or an affiliated person of a sub-adviser, concerning
transactions for a fund in securities or other fund assets. With respect to a
multi-managed Fund, the Sub-Adviser shall be limited to providing investment
advice with respect to only the discrete portion of the Fund's portfolio as may
be determined from time-to-time by the Board or the Adviser, and shall not
consult with the sub-adviser as to any other portion of the Fund's portfolio
concerning transactions for the Fund in securities or other Fund assets.
2
(b) The Sub-Adviser will report to the Board at each regular meeting
thereof regarding the investment performance of the Funds since the prior
report, and will also keep the Board informed of important developments
affecting the Trust, the Funds and the Sub-Adviser, and on its own initiative
will furnish the Board and the Adviser from time to time with such information
as the Sub-Adviser may believe appropriate, whether concerning the individual
companies whose securities are held by a Fund, the industries in which they
engage, or the economic, social or political conditions prevailing in each
country in which the Fund maintains investments. The Sub-Adviser will also
furnish the Board and the Adviser with such statistical and analytical
information with respect to securities held by the Funds as the Sub-Adviser may
believe appropriate or as the Board or the Adviser reasonably request.
The Sub-Adviser shall promptly notify the Adviser of (i) any changes
regarding the Sub-Adviser that would impact disclosure in the Trust's
Registration Statement, or (ii) any violation of any requirement, provision,
policy or restriction that the Sub-Adviser is required to comply with under
Section 6 of this Agreement. The Sub-Adviser shall immediately notify both the
Adviser and the Trust of any legal process served upon it in connection with its
activities hereunder, including any legal process served upon it on behalf of
the Adviser, the Funds or the Trust. The Sub-Adviser shall reasonably cooperate
with the Custodian in the Custodian's processing of class actions or other legal
proceedings relating to the holdings (historical and/or current) of the Funds.
(c) The Sub-Adviser may from time to time employ or sub-contract the
services of certain persons as the Sub-Adviser believes to be appropriate or
necessary to assist in the execution of the Sub-Adviser's duties hereunder;
provided, however, that the employment or association with any such person shall
not relieve the Sub-Adviser of its responsibilities or liabilities hereunder.
The cost of performance of such duties shall be borne and paid by the
Sub-Adviser. No obligation may be imposed on the Trust in any such respect.
The Sub-Adviser shall supervise and monitor the activities of its
representatives, personnel and agents in connection with the execution of its
duties and obligations hereunder. The appropriate personnel of the Sub-Adviser
will be made available to consult with the Adviser, the Trust and the Board at
reasonable times and upon reasonable notice concerning the business of the
Trust.
(d) The Sub-Adviser shall maintain records relating to portfolio
transactions and the placing and allocation of brokerage orders as are required
to be maintained by the Trust under the 1940 Act. The Sub-Adviser shall prepare
and maintain, or cause to be prepared and maintained, in such form, for such
periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Sub-Adviser
pursuant to this Agreement required to be prepared and maintained by the Trust
pursuant to the rules and regulations of any national, state, or local
government entity with jurisdiction over the Trust, including the Commission and
the Internal Revenue Service. The books and records pertaining to the Trust
which are in possession of the Sub-Adviser shall be the property of the Trust.
The Trust, or the Trust's authorized representatives (including the Adviser),
shall have access to such books and records at all times during the
3
Sub-Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the
Sub-Adviser to the Trust or the Trust's authorized representatives.
SECTION 3. DELIVERY OF DOCUMENTS TO THE SUB-ADVISER. The Adviser has
furnished the Sub-Adviser with true, correct and complete copies of the
following documents:
(a) The Declaration of Trust, as in effect on the date hereof;
(b) The Registration Statement filed with the Commission under the
1940 Act;
(c) The Advisory Agreement; and
(d) Written guidelines, policies and procedures adopted by the
Trust.
The Adviser will furnish the Sub-Adviser with all future amendments and
supplements to the foregoing as soon as practicable after such documents become
available. The Adviser shall furnish the Sub-Adviser with any further documents,
materials or information that the Sub-Adviser may reasonably request in
connection with the performance of its duties hereunder.
The Sub-Adviser shall furnish the Adviser with written certifications, in
such form as the Adviser shall reasonably request, that it has received and
reviewed the most recent version of the foregoing documents provided by the
Adviser and that it will comply with such documents in the performance of its
obligations under this Agreement.
SECTION 4. DELIVERY OF DOCUMENTS TO THE ADVISER. The Sub-Adviser has
furnished, and in the future will furnish, the Adviser with true, correct and
complete copies of each of the following documents:
(a) The Sub-Adviser's most recent Form ADV;
(b) The Sub-Adviser's most recent balance sheet;
(c) The current Code of Ethics of the Sub-Adviser, adopted
pursuant to Rule 17j-1 under the 1940 Act, and annual
certifications regarding compliance with such Code; and
(d) The results of any examination of the Sub-Adviser by the
Commission or other regulatory agency with respect to its
activities as an investment adviser.
The Sub-Adviser will furnish the Adviser with all such documents as soon
as practicable after such documents become available. The Sub-Adviser shall
furnish the Adviser with any further documents, materials or information as the
Adviser may reasonably request in connection with Sub-Adviser's performance of
its duties under this Agreement, including, but not limited to, information
regarding the Sub-Adviser's financial condition, level of insurance coverage and
any certifications or sub-certifications which may reasonably be requested in
connection with Fund registration statements, Form N-CSR filings or other
regulatory filings.
4
SECTION 5. CONTROL BY BOARD. As is the case with respect to the Adviser
under the Advisory Agreement, any investment activities undertaken by the
Sub-Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser on behalf of the Funds, shall at all times be
subject to the direction and control of the Trust's Board.
SECTION 6. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times comply
with:
(a) investment guidelines, policies and restrictions established by the
Board that have been communicated in writing to the Sub-Adviser;
(b) all applicable provisions of the 1940 Act and the Advisers Act, and
any rules and regulations adopted thereunder;
(c) the Registration Statement of the Trust, as it may be amended from
time to time, filed with the Commission under the Securities Act and the 1940
Act;
(d) the provisions of the Declaration of Trust of the Trust, as it may
be amended or supplemented from time to time;
(e) the provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Trust or the Funds, and any rules and regulations adopted
thereunder; and
(f) any other applicable provisions of state or federal law, and any
rules and regulations adopted thereunder.
SECTION 7. PROXIES. The Adviser shall have responsibility to vote proxies
solicited with respect to issuers of securities in which assets of the Funds are
invested from time to time in accordance with the Trust's policies on proxy
voting. The Sub-Adviser will provide, when requested by the Adviser, information
on a particular issuer to assist the Adviser in the voting of a proxy.
SECTION 8. BROKER-DEALER RELATIONSHIPS. The Sub-Adviser is responsible for
the purchase and sale of securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Sub-Adviser's primary
consideration in effecting a security transaction will be to obtain the best
price and execution. In selecting a broker-dealer to execute each particular
transaction for a Fund, the Sub-Adviser will consider among other things: the
best net price available, the reliability, integrity and financial condition of
the broker-dealer; the size of and difficulty in executing the order; and the
value of the expected contribution of the broker-dealer to the Fund on a
continuing basis. Accordingly, the price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the difference
is reasonably justified by other
5
aspects of the portfolio execution services offered. Subject to such policies as
the Board may from time to time determine, the Sub-Adviser shall not be deemed
to have acted unlawfully or to have breached any duty created by this Agreement
or otherwise solely by reason of having caused a Fund to pay a broker or dealer
that provides brokerage and research services to the Sub-Adviser an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities of the Sub-Adviser
with respect to the Fund and to other clients of the Sub-Adviser. The
Sub-Adviser is further authorized to allocate the orders placed by it on behalf
of the Funds to brokers and dealers who provide brokerage and research services
within the meaning of Section 28(e) of the Securities Exchange Act of 1934 and
in compliance therewith. Such allocation shall be in such amounts and
proportions as the Sub-Adviser shall determine and the Sub-Adviser will report
on said allocations regularly to the Board, indicating the brokers to whom such
allocations have been made and the basis therefore.
Provided the investment objectives of the Funds are adhered to, the
Sub-Adviser may aggregate sales and purchase orders of securities held in a Fund
with similar orders being made simultaneously for other portfolios managed by
the Sub-Adviser, if, in the Sub-Adviser's reasonable judgment, such aggregation
will result in an overall economic benefit to the Fund, taking into
consideration the advantageous selling or purchase price and brokerage
commission. In accounting for such aggregated order, price and commission shall
be averaged on a per bond or share basis daily. The Trust and the Adviser
acknowledge that the Sub-Adviser's determination of such economic benefit to the
Fund may be based on an evaluation that the Fund is benefited by relatively
better purchase or sales price, lower commission expenses and beneficial timing
of transactions, or a combination of these and other factors. The allocation of
securities so purchased or sold shall be made by the Sub-Adviser in the manner
that the Sub-Adviser considers to be most equitable and consistent with its
fiduciary obligations to the Fund and other clients. The Sub-Adviser represents
and acknowledges that it is solely responsible for complying with any and all
applicable pronouncements of the Commission or its staff with respect to the
requirements for aggregating trades as may be set out in any interpretive
release and/or no-action letters issued by the Commission staff ("SEC
Requirements"). The Sub-Adviser further agrees to hold the Trust and the Adviser
harmless from any and all loss, damage or liability resulting from the
Sub-Adviser's failure to comply with any applicable SEC Requirements. The
Sub-Adviser shall not be responsible for any acts or omissions by any broker or
dealer, provided that the Sub-Adviser did not act with negligence or willful
misconduct in the selection of such broker or dealer.
SECTION 9. EXPENSES. All of the ordinary business expenses incurred in the
operations of the Funds and the offering of their shares shall be borne by the
Funds unless specifically provided otherwise in this Agreement. The expenses
borne by the Funds include, but are not limited to, brokerage commissions,
taxes, legal, auditing or governmental fees, the cost of preparing share
certificates, custodian, transfer agent and
6
shareholder service agent costs, expense of issue, sale, redemption and
repurchase of shares, expenses of registering and qualifying shares for sale,
expenses relating to Board and shareholder meetings, the cost of preparing and
distributing reports and notices to shareholders, the fees and other expenses
incurred by the Funds in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to the Funds' shareholders.
The Sub-Adviser shall pay its own expenses in connection with the services
to be provided by it pursuant to this Agreement. In addition, the Sub-Adviser
shall be responsible for reasonable out-of-pocket costs and expenses incurred by
the Adviser or the Trust: (a) to amend the Trust's registration statement or
supplement the Fund's prospectus, and circulate the same, to reflect a change in
the personnel of the Sub-Adviser responsible for making investment decisions in
relation to a Fund; or (b) to obtain shareholder approval of a new sub-advisory
agreement as a result of a "change in control" (as such term in defined in
Section 2(a)(9) of the 0000 Xxx) of the Sub-Adviser, or to otherwise comply with
the 1940 Act, the Securities Act, or any other applicable statute, law, rule or
regulation, as a result of such change.
SECTION 10. COMPENSATION. As compensation for the sub-advisory services
provided under this Agreement, the Adviser shall pay the Sub-Adviser fees,
payable monthly, at the annual rates indicated on Appendix B hereto, as such
Schedule may be amended or supplemented as agreed to in writing by the parties
from time to time. It is understood that the Adviser shall be responsible for
the Sub-Adviser's fee for its services hereunder, and the Sub-Adviser agrees
that it shall have no claim against the Trust or the Funds with respect to
compensation under this Agreement.
SECTION 11. STANDARD OF CARE. The Trust and the Adviser will expect of the
Sub-Adviser, and the Sub-Adviser will give the Trust and the Adviser the benefit
of, the Sub-Adviser's best judgment and efforts in rendering its services to the
Trust, and the Sub-Adviser shall not be liable hereunder for any mistake in
judgment. In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Sub-Adviser or any of its officers, directors, employees or agents, the
Sub-Adviser shall not be subject to liability to the Adviser, to the Trust or to
any shareholders in the Trust for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
SECTION 12. NON-EXCLUSIVITY. The services of the Sub-Adviser to the
Adviser and the Trust are not to be deemed to be exclusive, and the Sub-Adviser
shall be free to render investment advisory and administrative or other services
to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or directors of the
Sub-Adviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies.
7
It is understood that the Sub-Adviser performs investment advisory
services for various clients, including accounts of clients in which the
Sub-Adviser or associated persons have a beneficial interest. The Sub-Adviser
may give advice and take action in the performance of its duties with respect to
any of its other clients, which may differ from the advice given, or the timing
or nature of action taken, with respect to the assets of the Funds. Nothing in
this Agreement shall be deemed to impose upon the Sub-Adviser any obligation to
purchase or sell for the Funds any security or other property that the
Sub-Adviser purchases or sells for its own accounts or for the account of any
other client.
SECTION 13. RECORDS. The Sub-Adviser shall, with respect to orders the
Sub-Adviser places for the purchase and sale of portfolio securities of the
Funds, maintain or arrange for the maintenance of the documents and records
required pursuant to Rule 31a-1 under the 1940 Act, as well as trade tickets and
confirmations of portfolio trades, and such other records as the Adviser
reasonably requests to be maintained. All such records shall be maintained in a
form acceptable to the Adviser and the Trust and in compliance with the
provisions of Rule 31a-1 or any successor rule. All such records will be the
property of the Trust, and will be made available for inspection by the Trust
and its authorized representatives (including the Adviser). The Sub-Adviser
shall promptly, upon the Trust's request, surrender to the Trust those records
which are the property of the Trust or any Fund; provided, however, that the
Sub-Adviser may retain copies of such records.
SECTION 14. TERM AND APPROVAL. This Agreement shall become effective with
respect to a Fund after it is approved in accordance with the express
requirements of the 1940 Act, and executed by the Trust, Adviser and Sub-Adviser
and shall thereafter continue from year to year, provided that the continuation
of the Agreement is approved in accordance with the requirements of the 1940
Act, which currently requires that the continuation be approved at least
annually:
(a) by the Board, or by the vote of "a majority of the outstanding
voting securities" of the Fund (as defined in Section 2(a)(42) of the 1940 Act),
and
(b) by the affirmative vote of a majority of the Trust's Trustees who
are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of a party to this Agreement (other than as Trustees of the Trust), by
votes cast in person at a meeting specifically called for such purpose.
SECTION 15. TERMINATION. As required under the 1940 Act, this Agreement
may be terminated with respect to a Fund at any time, without the payment of any
penalty, by vote of the Board or by vote of a majority of a Fund's outstanding
voting securities, or by the Adviser or Sub-Adviser, on sixty (60) days' written
notice to the other party. The notice provided for herein may be waived by the
party entitled to receipt thereof. This Agreement shall automatically terminate
in the event of its assignment, the term "assignment" for purposes of this
paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act, as it
may be interpreted by the Commission or its staff in
8
interpretive releases, or applied by the Commission staff in no-action letters,
issued under the 1940 Act.
This Agreement may also be terminated immediately by the Adviser,
the Sub-Adviser or the Trust in the event that a respective party: (i) breaches
a material term of this Agreement; or (ii) commits a material violation of any
governing law or regulation; or (iii) engages in conduct that would have a
material adverse effect upon the reputation or business prospects of a
respective party.
SECTION 16. INDEMNIFICATION BY THE SUB-ADVISER. In the absence of willful
misfeasance, bad faith, negligence or reckless disregard of obligations or
duties hereunder on the part of the Trust or the Adviser, or any of their
respective officers, directors, employees or agents, the Trust and the Adviser,
respectively, shall not be responsible for, and the Sub-Adviser hereby agrees to
indemnify and hold harmless the Trust and the Adviser (severally, but not
jointly) against any and all losses, damages, costs, charges, reasonable counsel
fees, payments, expenses, liability, claims, actions, suits or proceedings at
law or in equity whether brought by a private party or a governmental
department, commission, board, bureau, agency or instrumentality of any kind,
arising out of or attributable to the willful misfeasance, bad faith, negligent
acts or reckless disregard of obligations or duties hereunder on the part of the
Sub-Adviser or any of its officers, directors, employees affiliates or agents.
The Sub-Adviser shall not be liable hereunder for any for any losses or damages
arising from the Sub-Adviser's adherence to the Adviser's written instructions.
SECTION 17. INDEMNIFICATION BY THE TRUST AND THE ADVISER. In the absence
of willful misfeasance, bad faith, negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser or any of its
officers, directors, employees or agents, the Sub-Adviser shall not be
responsible for, and the Trust and the Adviser (severally, but not jointly)
hereby agree to indemnify and hold harmless the Sub-Adviser against any and all
losses, damages, costs, charges, reasonable counsel fees, payments, expenses,
liability, claims, actions, suits or proceedings at law or in equity whether
brought by a private party or a governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising out of or attributable to
conduct of the party from whom such indemnification is sought and relating to:
(i) the advertising, solicitation, sale, purchase or pledge of securities,
whether of the Funds or other securities, undertaken by the Funds, their
officers, directors, employees, affiliates or agents, (ii) any violations of the
securities laws, rules, regulations, statutes and codes, whether federal or of
any state, by the Funds or the Adviser, respectively, or their respective
officers, directors, employees, affiliates or agents, or (iii) the willful
misfeasance, bad faith, negligent acts or reckless disregard of obligations or
duties hereunder on the part of the Funds or the Adviser, respectively, or their
respective officers, directors, employees, affiliates or agents.
SECTION 18. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other
9
party, it is agreed that the address of the Trust shall be 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, and
that of the Adviser shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: C. Xxxxx Xxxxxxx, and that of the Sub-Adviser shall
be 0 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxxxxx.
SECTION 19. QUESTIONS OF INTERPRETATION. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such terms or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the Commission, or
interpretations of the Commission or its staff, or Commission staff no-action
letters, issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision of
this Agreement is revised by rule, regulation or order of the Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. The duties and obligations of the parties under this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
to the extent that state law is not preempted by the provisions of any law of
the United States heretofore or hereafter enacted.
SECTION 20. 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. If shareholder approval of an amendment is required
under the 1940 Act, no such amendment shall become effective until approved by a
vote of the majority of the outstanding shares of the affected Funds. Otherwise,
a written amendment of this Agreement is effective upon the approval of the
Board, the Adviser and the Sub-Adviser.
SECTION 21. XXXXX FARGO NAME. The Sub-Adviser and the Trust each agree
that the name "Xxxxx Fargo," which comprises a component of the Trust's name, is
a property right of the parent of the Adviser. The Trust agrees and consents
that: (i) it will use the words "Xxxxx Fargo" as a component of its corporate
name, the name of any series or class, or all of the above, and for no other
purpose; (ii) it will not grant to any third party the right to use the name
"Xxxxx Fargo" for any purpose; (iii) the Adviser or any corporate affiliate of
the Adviser may use or grant to others the right to use the words "Xxxxx Fargo,"
or any combination or abbreviation thereof, as all or a portion of a corporate
or business name or for any commercial purpose, other than a grant of such right
to another registered investment company not advised by the Adviser or one of
its affiliates; and (iv) in the event that the Adviser or an affiliate thereof
is no longer acting as investment adviser to any Fund, the Trust shall, upon
request by the Adviser, promptly take such action as may be necessary to change
its corporate name to one not containing the words "Xxxxx Fargo" and following
such change, shall not use the words "Xxxxx Fargo," or any combination thereof,
as a part of its corporate name or for any other commercial purpose, and shall
use its best efforts to cause its trustees, officers and shareholders to take
any and all actions that the Adviser may request to effect the
10
foregoing and to reconvey to the Adviser any and all rights to such words. The
Sub-Adviser may include the Xxxxx Fargo Funds in its representative client list.
SECTION 22. RISK ACKNOWLEDGEMENT. The Sub-Adviser does not guarantee the
future performance of the Funds or any specific level of performance, the
success of any investment decision or strategy that the Sub-Adviser may use, or
the success of the Sub-Adviser's overall management of the Funds. Each of the
Trust and the Adviser understand that investment decisions made for the Funds by
the Sub-Adviser are subject to various market, currency, economic and business
risks, and that those investment decisions will not always be profitable. The
Sub-Adviser will manage only the securities, cash and other investments
delegated to it which are held in the Funds' account(s) and, in making
investment decisions for the Funds, the Sub-Adviser will not consider any other
securities, cash or other investments owned by the Trust.
SECTION 23. AUTHORITY TO EXECUTE AGREEMENT. Each of the individuals whose
signature appears below represents and warrants that he or she has full
authority to execute this Agreement on behalf of the party on whose behalf he or
she has affixed his or her signature to this Agreement. The Trust and the
Adviser will deliver to the Sub-Adviser such evidence of its authority with
respect to this Agreement as Sub-Adviser may reasonably require. The Sub-Adviser
will deliver to the Trust and the Adviser such evidence of its authority with
respect to this Agreement as the Trust or the Adviser may reasonably require.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in triplicate by their respective officers on the day and year first
written above.
XXXXX FARGO MASTER TRUST
on behalf of the Funds
By: ____________________________________
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By: ____________________________________
Xxxxxx Xxxx
Senior Vice President
11
LSV ASSET MANAGEMENT
By: ____________________________________
Xxxxxxxx Xxxxxxxx
Partner and Chief Operating Officer
12
APPENDIX A
LSV INVESTMENT SUB-ADVISORY AGREEMENT
XXXXX FARGO MASTER TRUST
---------------------------------------
MASTER TRUST FUNDS
---------------------------------------
International Value Portfolio
---------------------------------------
Most recent annual approval by the Board of Trustees: April 4, 2005
Appendix A amended: October 1, 2005
13
APPENDIX B
LSV INVESTMENT SUB-ADVISORY AGREEMENT
FEE AGREEMENT
XXXXX FARGO MASTER TRUST
This fee agreement is made as of the 31st day of October, 2003, by and
between Xxxxx Fargo Funds Management, LLC (the "Adviser") and LSV Asset
Management (the "Sub-Adviser").
WHEREAS, the parties and Xxxxx Fargo Master Trust (the "Trust") have
entered into an Investment Sub-Advisory Agreement ("Sub-Advisory Agreement")
whereby the Sub-Adviser provides management and other services to each series of
the Trust listed in Appendix A to the Sub-Advisory Agreement (each a "Fund" and
collectively the "Funds"); and
WHEREAS, the Sub-Advisory Agreement provides that the fees to be paid to
the Sub-Adviser are to be as indicated on Appendix B;
NOW THEREFORE, the parties agree that the fees to be paid to the
Sub-Adviser under the Sub-Advisory Agreement shall be calculated and paid on a
monthly basis by applying the annual rates indicated below to each Fund's
average daily net assets throughout the month:
--------------------------------------------------------------------------------
NAME OF FUND BREAKPOINTS SUB-ADVISORY RATE
--------------------------------------------------------------------------------
International Value Portfolio $0-$150M 0.35%
$150M-$500M 0.40%
$500M-$750M 0.35%
$750M-$1B 0.325%
>$1B 0.30%
--------------------------------------------------------------------------------
If the Sub-Adviser shall provide management and other services for less
than the whole of a month, the foregoing compensation shall be prorated based on
the number of days in the month that such Sub-Adviser provided management and
other services to the Funds.
14
The foregoing fee schedule is agreed to as of October 1, 2005 and shall
remain in effect until changed in writing by the parties.
XXXXX FARGO FUNDS MANAGEMENT, LLC
By: ____________________________________
Xxxxxx Xxxx
Senior Vice President
LSV ASSET MANAGEMENT
By: ____________________________________
Xxxxxxxx Xxxxxxxx
Partner and Chief Operating Officer
15
