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THE XXXXXX & RYGEL INVESTMENT GROUP
SUB-ADVISORY AGREEMENT BY AND BETWEEN
XXXXXX & RYGEL AND XXXXXXX-XXXXXX, LLC
This Sub-advisory Agreement is made as of June , 1999, by and between
Xxxxxx & Rygel, a California corporation (the "Adviser"), and Xxxxxxx-Xxxxxx,
LLC, a limited liability company organized under the laws of Delaware (the
"Sub-adviser").
WHEREAS, the Adviser has by separate contract agreed to serve as the
investment adviser to the Xxxxxx & Rygel European Emerging Growth Fund (the
"Fund"), an investment portfolio of The Xxxxxx & Rygel Investment Group (the
"Trust"), which is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company consisting of one or more investment series of
shares, each having its own assets and investment policies;
WHEREAS, the Adviser's contract with the Trust allows it to delegate
certain investment advisory services for the Trust with respect to each of the
Funds to other parties; and
WHEREAS, the Adviser desires to retain the Sub-adviser to perform
certain investment advisory services for the Trust with respect to the Fund, and
the Sub-adviser is willing to perform such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE TRUST.
(a) Investment Program. Subject to the control and supervision
of the Board of Trustees of the Trust (the "Board") and the Adviser,
the Sub-adviser will, at its expense, continuously furnish to the Fund
an investment program for such portion, if any, of Fund assets that is
allocated to it by the Adviser from time to time. With respect to such
assets, the Sub-adviser will make investment decisions and will place
all orders for the purchase and sale of portfolio securities. In the
performance of its duties, the Sub-adviser will act in the best
interests of the Fund and will comply with (i) applicable laws and
regulations, including, but not limited to, the 1940 Act, (ii) the
terms of this Agreement, (iii) the investment objective, policies, and
restrictions of the Fund as stated in the then-current Registration
Statement of the Trust, and (iv) such other guidelines as the Trustees
or Adviser may establish. The Adviser shall be responsible for
providing the Sub-adviser with current copies of the materials
specified in Subsections (a)(iii) and (iv) of this Section 1. At such
times as may be reasonably requested by the Board or the Adviser, the
Sub-adviser will provide them with economic and investment analysis and
reports, and make available to the Board any economical, statistical,
or investment services, normally available to similar investment
company clients of the Sub-adviser.
(b) Availability of Personnel. The Sub-adviser, at its
expense, will make available to the Trustees and the Adviser at
reasonable times its portfolio managers and other appropriate personnel
in order to review investment policies of the Fund and to consult with
the Trustees and the Adviser regarding the investment affairs of the
Fund, including economic, statistical, and investment matters relevant
to the Sub-adviser's duties hereunder, and will provide periodic
reports to the Trustees and the Adviser relating to the portfolio
strategies it employs.
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(c) Salaries and Facilities. The Sub-adviser, at its expense,
will pay for all salaries of personnel and facilities required for it
to execute its duties under this Agreement.
(d) Compliance Reports. The Sub-adviser, at its expense, will
provide the Adviser with reasonable compliance reports relating to its
duties under this Agreement as may be agreed to upon by such parties
from time to time.
(e) Valuation. The Sub-adviser, at its expense, will provide
the Trust's custodian with market price information relating to the
assets of the Fund at such times as the parties hereto may agree upon
from time to time.
(f) Executing Portfolio Transactions. The Sub-adviser will
place orders pursuant to its investment determinations for the Fund
either directly with the issuer or through other brokers. In the
selection of brokers and the placement of orders for the purchase and
sale of portfolio investments for the Fund, the Sub-adviser shall use
its best efforts to obtain for the Fund the most favorable price and
execution available. In using its best efforts to obtain the most
favorable price and execution available, the Sub-adviser, bearing in
mind the Fund's best interests as all times, shall consider all factors
it deems relevant, including by way of illustration, price, the size of
the transaction, the nature of the market for the security, the amount
of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial
stability of the broker involved and the quality of service rendered by
the broker in other transactions. In no instance will portfolio
securities of the Fund be purchased from or sold to the Sub-adviser or
any affiliated person of the Sub-adviser. The Trust agrees that any
entity or person associated with the Adviser or the Sub-adviser which
is a member of a national securities exchange is authorized to effect
any transaction on such exchange for the account of the Trust which is
permitted by Section 11(a) of the Securities Exchange Act of 1934, as
amended, and the Trust consents to the retention of compensation for
such transactions.
(g) Expenses. The Sub-adviser shall not be obligated to pay
any expenses of or for the Trust or for the Fund not expressly assumed
by the Sub-adviser pursuant to this Agreement.
2. BOOKS AND RECORDS. Pursuant to Rule 31a-3 under the 1940 Act, the
Sub-adviser agrees that: (a) all records it maintains for the Trust are the
property of the Trust; (b) it will surrender promptly to the Trust or the
Adviser any such records upon the Trust's or Adviser's request; (c) it will
maintain for the Trust the records that the Trust is required to maintain
pursuant to Rule 31a-1 insofar as such records relate to the investment affairs
of the Fund; and (d) it will preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records it maintains for the Trust.
3. OTHER AGREEMENTS. The Sub-adviser and persons controlled by or under
common control with the Sub-adviser have and may have advisory, management
service or other agreements with other organizations and persons, and may have
other interests and businesses. Nothing in this Agreement is intended to
preclude such other business relationships.
4. COMPENSATION. The Fund pays to the Adviser a monthly fee (the
"Advisory Fee") at the annual rate of 0.60% of the first $1 billion of average
daily net assets of the portfolio, and 0.50% thereafter. The Adviser will pay to
the Sub-adviser as compensation for the Sub-adviser's services rendered pursuant
to this Agreement a sub-advisory fee for the Fund equal to 100% of the Advisory
Fee earned and received by the Adviser for the Fund. Such fees shall be paid by
the Adviser (and not by the Trust) and shall be correspondingly reduced on a pro
rata basis by any reduction in the fees paid to the Adviser as a result of any
voluntary, statutory or regulatory limitation on investment company expenses.
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Such fees shall be paid within 15 business days of the end of each month. If the
Sub-adviser shall serve for less than the whole of a month, the compensation as
specified shall be prorated.
5. AMENDMENT OF AGREEMENT. This Agreement shall not be materially
amended unless the Adviser and Sub-adviser mutually agree to such amendment, and
such amendment is approved by the affirmative vote of a majority of the
outstanding shares of the Fund, if required by the 1940 Act, and by the vote,
cast in person at a meeting called for the purpose of voting on such approval,
of a majority of the members of the Board who are not interested persons of the
Trust, the Adviser or the Sub-adviser (the "Independent Trustees"). The
Sub-adviser agrees to notify the Adviser of any anticipated change in control of
the Sub-adviser within a reasonable time prior to such change.
6. DURATION AND TERMINATION OF THE AGREEMENT. This Agreement shall
become effective with respect to the Fund upon its execution; provided, however,
that this Agreement shall not become effective unless it first has been approved
by a vote of the Independent Trustees, cast in person at a meeting called for
the purpose of voting on such approval. This Agreement shall remain in full
force and effect with respect to the Fund continuously thereafter as follows:
(a) By vote of a majority of the (i) Independent Trustees, or
(ii) outstanding voting shares of the Fund, the Trust may at any time
terminate this Agreement with respect to the Fund without the payment
of penalty, by providing not more than 60 days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser
and the Sub-adviser.
(b) This Agreement will terminate automatically with respect
to the Fund without payment of any penalty, unless, within two years
after its initial effectiveness and at least annually thereafter, the
continuance of the Agreement is specifically approved by (i) the Board
of Trustees or the shareholders of the Fund by the affirmative vote of
a majority of the outstanding shares of the Fund, and (ii) a majority
of the Independent Trustees, by vote cast in person at a meeting called
for the purpose of voting on such approval. If the continuance of this
Agreement is submitted to the shareholders of the Fund for their
approval and such shareholders fail to approve such continuance as
provided herein, the Sub-adviser may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and regulations
thereunder.
(c) The Adviser may at any time terminate this Agreement with
respect to the Fund without the payment of any penalty by not less than
60 days' written notice delivered or mailed by registered mail, postage
prepaid, to the Sub-adviser and the Trust, and the Sub-adviser may at
any time without the payment of any penalty, terminate this Agreement
with respect to the Fund by not less than 90 days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser
and the Trust.
(d) This Agreement shall terminate automatically and
immediately with respect to the Fund without the payment of any
penalty, in the event of its assignment or if the Investment Management
Agreement between the Adviser and the Trust with respect to the Fund
shall terminate for any reason.
(e) This Agreement shall terminate automatically and
immediately with respect to the Fund unless approved by an affirmative
vote of a majority of the outstanding Shares of the Fund within 120
days after the date first set forth above.
Upon termination of this Agreement, the duties of the Adviser delegated to the
Sub-adviser under this Agreement automatically shall revert to the Adviser.
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7. NOTIFICATION OF THE ADVISER. The Sub-adviser promptly shall notify
the Adviser in writing of the occurrence of any of the following events:
(a) the Sub-adviser shall fail to be registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended, and under the laws of any jurisdiction in which the
Sub-adviser is required to be registered as an investment adviser in
order to perform its obligations under this Agreement.
(b) the Sub-adviser shall have been served or otherwise have
notice of any action, suit, or proceeding, inquiry, or investigation at
law or in equity, before or by any court, public board or body,
involving the affairs of the Trust or the Fund; or
(c) any other occurrence that might affect the ability of the
Sub-adviser to provide the services provided for under this Agreement.
8. DEFINITIONS. For the purposes of this Agreement, the terms "vote of
a majority of the outstanding shares," "affiliated person," "control,"
"interested person," and "assignment" shall have their respective meanings as
defined in the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission under said Act; and references to annual approvals by the Board of
Trustees shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
9. LIABILITY OF THE SUB-ADVISER. In the absence of its willful
misfeasance, bad faith, negligence, or disregard of its obligations and duties
hereunder, the Sub-adviser shall not be subject to any liability to the Adviser,
the Trust or their directors, Trustees, officers, or shareholders, for any act
or omission in the course of, or connected with, rendering services hereunder.
However, the Sub-adviser shall indemnify and hold harmless such parties from any
and all claims, losses, expenses, obligations and liabilities (including
reasonable attorneys fees) which arise or result from Sub-adviser's willful
misfeasance, bad faith, negligence, or disregard of its obligations and duties
hereunder.
10. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of California, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable laws of the State of California conflict with the applicable
provisions of the 1940 Act, the latter shall control.
11. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule, or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
12. MISCELLANEOUS. The captions in this agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
agreement is made less restrictive by a rule, regulation or order of the
Securities and Exchange
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Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, Xxxxxx & Rygel, and Xxxxxxx-Xxxxxx, LLC have each
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of the day and year first above written.
Attest: XXXXXX & RYGEL
By:______________________ By:________________________
Secretary Chairman
Attest: XXXXXXX-XXXXXX, LLC
By:______________________ By:________________________
Secretary President
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