SUB-ADVISORY AGREEMENT
Xxxxx Equity Growth Series
This Sub-Advisory Agreement (this "Agreement") is
entered into as of the 1st day of May,
1996 by and between TNE Advisers, Inc., a Massachusetts
corporation (the "Manager") and Xxxx
Xxxxx Management, Inc. (the "Sub-Adviser").
WHEREAS, the Manager has entered into an Advisory
Agreement dated May 1, 1996 (the
"Advisory Agreement") with New England Zenith Fund (the
"Trust"), pursuant to which the
Manager provides portfolio management and administrative
services to the Xxxxx Equity Growth
Series of the Trust (the "Series");
WHEREAS, the Advisory Agreement provides that the
Manager may delegate any or all of
its portfolio management responsibilities under the Advisory
Agreement to one or more sub-advisers;
WHEREAS, the Manager and the Trustees of the Trust
desire to retain the Sub-Adviser to
render portfolio management services in the manner and on
the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth in
this Agreement, the Manager and the Sub-Adviser agree as
follows:
1. Sub-Advisory Services.
a. The Sub-Adviser shall, subject to the supervision of
the Manager and in cooperation with
any administrator appointed by the Manager (the
"Administrator"), manage the investment and
reinvestment of the assets of the Series. The Sub-Adviser
shall manage the Series in conformity
with (1) the investment objective, policies and restrictions
of the Series set forth in the Trust's
prospectus and statement of additional information relating
to the Series, (2) any additional policies
or guidelines established by the Manager or by the Trust's
trustees that have been furnished in
writing to the Sub-Adviser and (3) the provisions of the
Internal Revenue Code (the "Code")
applicable to "regulated investment companies" (as defined
in Section 851 of the Code) and Section
817 of the Code, all as from time to time in effect
(collectively, the "Policies"), and with all
applicable provisions of law, including without limitation
all applicable provisions of the Investment
Company Act of 1940 (the "1940 Act") and the rules and
regulations thereunder. Subject to the
foregoing, the Sub-Adviser is authorized, in its discretion
and without prior consultation with the
Manager, to buy, sell, lend and otherwise trade in any
stocks, bonds and other securities and
investment instruments on behalf of the Series, without
regard to the length of time the securities
have been held and the resulting rate of portfolio turnover
or any tax considerations; and the majority
or the whole of the Series may be invested in such
proportions of stocks, bonds, other securities or
investment instruments, or cash, as the Sub-Adviser shall
determine. Notwithstanding the foregoing
provisions of this Section 1.a, however, the Sub-Adviser
shall, upon written instructions from the
Manager, effect such portfolio transactions for the Series
as the Manager shall determine are
necessary in order for the Series to comply with the
Policies.
b. The Sub-Adviser shall furnish the Manager and the
Administrator monthly, quarterly and
annual reports concerning transactions and performance of
the Series in such form as may be
mutually agreed upon, and agrees to review the Series and
discuss the management of the Series with
representatives or agents of the Manager, the Administrator
or the Trust at their reasonable request.
The Sub-Adviser shall permit all books and records with
respect to the Series to be inspected and
audited by the Manager and the Administrator at all
reasonable times during normal business hours,
upon reasonable notice. The Sub-Adviser shall also provide
the Manager, the Administrator or the
Trust with such other information and reports as may
reasonably be requested by the Manager, the
Administrator or the Trust from time to time, including
without limitation all material as reasonably
may be requested to the Trustees of the Trust pursuant to
Section 15(c) of the 1940 Act.
c. The Sub-Adviser shall provide to the Manager a copy
of the Sub-Adviser's Form ADV
as filed with the Securities and Exchange Commission and as
amended from time to time and a list
of the persons whom the Sub-Adviser wishes to have
authorized to give written and/or oral
instructions to custodians of assets of the Series.
2. Obligations of the Manager.
a. The Manager shall provide (or cause the Trust's
custodian to provide) timely information
to the Sub-Adviser regarding such matters as the composition
of assets of the Series, cash
requirements and cash available for investment in the
Series, and all other information as may be
reasonably necessary for the Sub-Adviser to perform its
responsibilities hereunder.
b. The Manager has furnished the Sub-Adviser a copy of
the prospectus and statement of
additional information of the Series and agrees during the
continuance of this Agreement to furnish
the Sub-Adviser copies of any revisions or supplements
thereto at, or, if practicable, before the time
the revisions or supplements become effective. The Manager
agrees to furnish the Sub-Adviser with
minutes of meetings of the Trustees of the Trust applicable
to the Series to the extent they may affect
the duties of the Sub-Adviser, and with copies of any
financial statements or reports made by the
Series to its shareholders, and any further materials or
information which the Sub-Adviser may
reasonably request to enable it to perform its functions
under this Agreement.
3. Custodian. The Manager shall provide the Sub-Adviser
with a copy of the Series's
agreement with the custodian designated to hold the assets
of the Series (the "Custodian") and any
modifications thereto (the "Custody Agreement"), copies of
such modifications to be provided to the
Sub-Adviser a reasonable time in advance of the
effectiveness of such modifications. The assets of
the Series shall be maintained in the custody of the
Custodian identified in, and in accordance with
the terms and conditions of, the Custody Agreement (or any
sub-custodian properly appointed as
provided in the Custody Agreement). The Sub-Adviser shall
have no liability for the acts or
omissions of the Custodian, unless such act or omission is
required by and taken in reliance upon
instruction given to the Custodian by a representative of
the Sub-Adviser properly authorized to give
such instruction under the Custody Agreement. Any assets
added to the Series shall be delivered
directly to the Custodian.
4. Proprietary Rights. The Manager agrees and
acknowledges that the Sub-Adviser is the
sole owner of the name and xxxx "Xxxxx" and that all use of
any designation consisting in whole or
part of "Xxxxx" (an "Xxxxx Xxxx") under this Agreement shall
inure to the benefit of the Sub-Adviser. The Manager on its
own behalf and on behalf of the Series agrees not to use any
Xxxxx
Xxxx in any advertisement or sales literature or other
materials promoting the Series, except with
the prior written consent of the Sub-Adviser. Without the
prior written consent of the Sub-Adviser,
the Manager shall not, and the Manager shall use its best
efforts to cause the Trust not to, make
representations regarding the Sub-Adviser in any disclosure
document, advertisement or sales
literature or other materials relating to the Series. Upon
termination of this Agreement for any
reason, the Manager shall cease, and the Manager shall use
its best efforts to cause the Series to
cease, all use of any Xxxxx Xxxx(s) as soon as reasonably
practicable.
5. Expenses. Except for expenses specifically assumed
or agreed to be paid by the Sub-Adviser pursuant hereto, the
Sub-Adviser shall not be liable for any expenses of the
Manager or the
Trust including, without limitation, (a) interest and taxes,
(b) brokerage commissions and other costs
in connection with the purchase or sale of securities or
other investment instruments with respect to
the Series, and (c) custodian fees and expenses. The Sub-
Adviser will pay its own expenses incurred
in furnishing the services to be provided by it pursuant to
this Agreement.
6. Purchase and Sale of Assets. Absent instructions
from the Manager to the contrary, the
Sub-Adviser shall place all orders for the purchase and sale
of securities for the Series with brokers
or dealers selected by the Sub-Adviser, which may include
brokers or dealers affiliated with the Sub-Adviser, provided
such orders comply with Rule 17e-1 under the 1940 Act in all
respects. To the
extent consistent with applicable law, purchase or sell
orders for the Series may be aggregated with
contemporaneous purchase or sell orders of other clients of
the Sub-Adviser. In that event,
allocation of the securities purchased or sold, as well as
the expenses incurred in the transaction, will
be made by the Sub-Adviser in the manner it considers to be
most equitable and consistent with its
fiduciary obligations to the Series and to its other
clients. The Manager recognizes that in some
cases this procedure may adversely affect the price paid or
received by the Series or the size of the
position obtainable or disposable for the Series.
7. Compensation of the Sub-Adviser. As full
compensation for all services rendered,
facilities furnished and expenses borne by the Sub-Adviser
hereunder, the Manager shall pay the
Sub-Adviser compensation at the annual rate of 0.45% of the
first $100 million of the average daily
net assets of the Series, 0.40% of the next $400 million of
such assets and 0.35% of such assets in
excess of $500 million. Such compensation shall be payable
monthly in arrears or at such other
intervals, not less frequently than quarterly, as the
Manager is paid by the Series pursuant to the
Advisory Agreement. The Manager may from time to time waive
the compensation it is entitled to
receive from the Trust, however, and any such waiver will
have no effect on the Manager's
obligation to pay the Sub-Adviser the compensation provided
for herein.
8. Non-Exclusivity. The Manager and the Series agree
that the services of the Sub-Adviser
are not to be deemed exclusive and that the Sub-Adviser and
its affiliates are free to act as
investment manager and provide other services to various
investment companies and other managed
accounts, except as the Sub-Adviser and the Manager or the
Administrator may otherwise agree from
time to time in writing before or after the date hereof.
This Agreement shall not in any way limit
or restrict the Sub-Adviser or any of its directors,
officers, employees or agents from buying, selling
or trading any securities or other investment instruments
for its or their own account or for the
account of others for whom it or they may be acting,
provided that such activities do not adversely
affect or otherwise impair the performance by the Sub-
Adviser of its duties and obligations under
this Agreement. The Manager and the Series recognize and
agree that the Sub-Adviser may provide
advice to or take action with respect to other clients,
which advice or action, including the timing
and nature of such action, may differ from or be identical
to advice given or action taken with respect
to the Series. The Sub-Adviser shall for all purposes
hereof be deemed to be an independent
contractor and shall, unless otherwise provided or
authorized, have no authority to act for or
represent the Trust or the Manager in any way or otherwise
be deemed an agent of the Trust or the
Manager.
9. Liability. Except as may otherwise be provided by
the 1940 Act or other federal
securities laws, neither the Sub-Adviser nor any of its
officers, directors, employees or agents (the
"Indemnified Parties") shall be subject to any liability to
the Manager, the Trust, the Series or any
shareholder of the Series for, and the Manager shall
indemnify and hold harmless the Indemnified
Parties against any loss, liability, cost, damage or expense
(including reasonable attorney fees)
arising from any claim or demand based upon, any error of
judgment, any mistake of law or any loss
arising out of any investment or other act or omission in
the course of, connected with, or arising out
of any service to be rendered under this Agreement, except
by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Sub-
Adviser's duties or by reason of reckless
disregard by the Sub-Adviser of its obligations and duties.
The Manager acknowledges and agrees
that the Sub-Adviser makes no representation or warranty,
express or implied, that any level of
performance or investment results will be achieved by the
Series or that the Series will perform
comparably with any standard or index, including other
clients of the Sub-Adviser, whether public
or private.
10. Effective Date and Termination. This Agreement shall
become effective as of the date
of its execution, and
a. unless otherwise terminated, this Agreement shall
continue in effect for two years from
the date of execution, and from year to year thereafter so
long as such continuance is specifically
approved at least annually (i) by the Board of Trustees of
the Trust or by vote of a majority of the
outstanding voting securities of the Series, and (ii) by
vote of a majority of the trustees of the Trust
who are not interested persons of the Trust, the Manager or
the Sub-Adviser, cast in person at a
meeting called for the purpose of voting on such approval;
b. this Agreement may at any time be terminated on sixty
days' written notice to the Sub-Adviser either by vote of
the Board of Trustees of the Trust or by vote of a majority
of the
outstanding voting securities of the Series;
c. this Agreement shall automatically terminate in the
event of its assignment or upon the
termination of the Advisory Agreement;
d. this Agreement may be terminated by the Sub-Adviser
on sixty days' written notice to
the Manager and the Trust, or, if approved by the Board of
Trustees of the Trust, by the Manager on
sixty days' written notice to the Sub-Adviser; and
e. if the Sub-Adviser requires the Series to change its
name so as to eliminate all references
to the word "Xxxxx," then this Agreement shall automatically
terminate at the time of such change
unless the continuance of this Agreement after such change
shall have been specifically approved
by vote of a majority of the outstanding voting securities
of the Series and by vote of a majority of
the Trustees of the Trust who are not interested persons of
the Trust or the Sub-Adviser, cast in
person at a meeting called for the purpose of voting on such
approval.
Termination of this Agreement pursuant to this Section 10
shall be without the payment of any
penalty.
11. Amendment. This Agreement may be amended at any time
by mutual consent of the
Manager and the Sub-Adviser, provided that, if required by
law, such amendment shall also have
been approved by vote of a majority of the outstanding
voting securities of the Series and by vote
of a majority of the trustees of the Trust who are not
interested persons of the Trust, the Manager or
the Sub-Adviser, cast in person at a meeting called for the
purpose of voting on such approval.
12. Certain Definitions. For the purpose of this
Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person,"
"affiliated person" and "assignment" shall
have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission
under the 1940 Act.
13. General.
a. The Sub-Adviser may perform its services through any
employee, officer or agent of the
Sub-Adviser, and the Manager shall not be entitled to the
advice, recommendation or judgment of
any specific person; provided, however, that the persons
identified in the prospectus of the Series
shall perform the portfolio management duties described
therein until the Sub-Adviser notifies the
Manager that one or more other employees, officers or agents
of the Sub-Adviser, identified in such
notice, shall assume such duties as of a specific date.
b. If any term or provision of this Agreement or the
application thereof to any person or
circumstances is held to be invalid or unenforceable to any
extent, the remainder of this Agreement
or the application of such provision to other persons or
circumstances shall not be affected thereby
and shall be enforced to the fullest extent permitted by
law.
c. This Agreement shall be governed by and interpreted
in accordance with the laws of the
Commonwealth of Massachusetts.
TNE ADVISERS, INC.
By:
________________________________
Xxxxxxxxx X. Xxxxxxxxxx
President
XXXX XXXXX MANAGEMENT, INC.
By:
_________________________________
Name:
______________________________
Title:
_______________________________
