FIRST FOCUS FUNDS, INC.
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed this ____ day of __________________ 2002, by and
between the First National Bank of Omaha, a national banking association, (the
"Adviser") and KBC Asset Management International Limited, an Irish registered
company (the "Sub-Adviser").
WHEREAS, the Adviser is the investment adviser for the First Focus
Funds, Inc., an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") (the "Company"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for the First Focus International Equity
Fund, a diversified investment portfolio of the Company (the "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to
provide certain sub-investment advisory services to the Fund for the period
and on the terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Adviser has furnished the
Sub-Adviser with copies properly certified or authenticated of each of the
following:
(a) The Company's Agreement and Articles of Incorporation, as filed
with the Secretary of State of Nebraska on October 12, 1994, and all amendments
thereto or restatements thereof (such Declaration, as presently in effect and as
it shall from time to time be amended or restated, is herein called the
"Articles of Incorporation");
(b) The Company's By-Laws and amendments thereto;
(c) Resolutions of the Company's Board of Directors authorizing
the appointment of the Sub-Adviser and approving this Agreement;
(d) The Company's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission (the "SEC") and
all amendments thereto;
(e) The Company's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") (File No. 33-85982) and
under the 1940 Act as filed with the SEC and all amendments thereto insofar as
such Registration Statement and such amendments relate to the Fund; and
(f) The Company's most recent prospectus and Statement of Additional
Information for the Fund (such prospectus and Statement of Additional
Information, as presently in effect, and all amendments and supplements thereto
are herein collectively called the "Prospectus").
The Adviser will furnish the Sub-Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of the Company's Board
of Directors and the Adviser, the Sub-Adviser will furnish an investment program
in respect of, and make investment decisions for, all assets of the Fund and
place all orders for the purchase and sale of securities, all on behalf of the
Fund. In the performance of its duties, the Sub-Adviser will satisfy its
fiduciary duties to the Fund (as set forth in Section 8, below), and will
monitor the Fund's' investments, and will comply with the provisions of the
Company's Articles of Incorporation and By-Laws, as amended from time to time,
and the stated investment objectives, policies and restrictions of the Fund. The
Sub-Adviser and Adviser will each make its officers and employees available to
the other from time to time at reasonable times to review investment policies of
the Fund and to consult with each other regarding the investment affairs of the
Fund. The Sub-Adviser shall also make itself reasonably available to the Board
of Directors at such times as the Board of Directors shall request.
The Sub-Adviser's authority and discretion hereunder shall include,
without limitation, the power to lend any securities held by the Fund to such
persons, for such purposes and upon such terms and conditions as the Sub-Adviser
may deem advisable, provided that any such lending shall be in conformity with
the Fund's current investment objective and policies, as stated in its current
Prospectus and Statement of Additional Information.
The Sub-Adviser represents and warrants that it is registered as an
investment adviser with the SEC and is in compliance with all applicable rules
and regulations of the SEC pertaining to its investment advisory activities, and
agrees that it:
(a) will use the same skill and care in providing such services
as it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable rules and regulations of the
SEC pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In placing
orders with brokers or dealers, the Sub-Adviser will attempt to obtain the best
combination of prompt execution of orders in an effective manner and at the most
favorable price. Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the Sub-Adviser may,
in its discretion, purchase and sell portfolio securities to and from brokers
and dealers who provide the Sub-Adviser with research advice and other services.
The Adviser, on behalf of the Fund, may authorize the Sub-Adviser to pay a
commission in excess of the commission another broker-dealer would have charged
if the Sub-Adviser determines in good faith that such commission is reasonable
in relation to the value of the brokerage and research services provided by such
broker-dealer, viewed either in terms of that particular transaction or the
Sub-Adviser's overall responsibilities to the accounts it manages. In no
instance will portfolio securities be purchased from or sold to the Adviser, the
Sub-Adviser, SEI Investments Distribution Co. or any affiliated person of either
the Company, Adviser, SEI Investments Distribution Co. or the Sub-Adviser,
except as may be permitted under the 1940 Act;
(d) will report regularly to the Adviser and will make appropriate
persons available for the purpose of reviewing at reasonable times with
representatives of the Adviser and the Board of Directors the management of the
Fund, including, without limitation, review of the general investment strategies
of the Fund, respectively, the performance of the Fund in relation to standard
industry indices, interest rate considerations and general conditions affecting
the marketplace and will provide various other reports from time to time as
reasonably requested by the Adviser;
(e) will maintain books and records with respect to the Company's
securities transactions and will furnish the Adviser and the Company's Board of
Directors such periodic and special reports as the Board of Directors or the
Adviser may request;
(f) will act upon instructions from the Adviser not inconsistent with
the fiduciary duties hereunder; and
(g) will treat confidentially and as proprietary information of the
Company all such records and other information relative to the Company
maintained by the Sub-Adviser, and will not use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company.
The Sub-Adviser shall have the right to execute and deliver, or cause
its nominee to execute and deliver, all proxies and notices of meetings and
other notices affecting or relating to the securities of the Fund.
4. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund, on behalf of the Company are the property of the Company
and further agrees to surrender promptly to the Company any of such records upon
the Company's request. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. Expenses. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement, but excluding the cost of securities (including commission, issue and
transfer taxes, if any) purchased for or on behalf of the Fund. As between the
Adviser and the Sub-Adviser, the Adviser shall bear the following expenses
relating to its operations and the operations of the Funds: organizational
expenses, taxes, interest, any brokerage fees and commissions, fees of the
Directors of the Company, SEC fees, state securities registration fees and
expenses, costs of preparing and printing prospectuses for regulatory purposes
and for distribution to the Fund's current shareholders, outside auditing and
legal expenses, advisory and administration fees, fees and out-of-pocket
expenses of the custodian and transfer agent, costs of Fund accounting services,
certain insurance premiums, costs of maintenance of the Company's and the Fund's
existence, costs of shareholders' and Directors' reports and meetings,
distribution expenses incurred pursuant to the Company's Distribution and
Shareholder Service Plan, any extraordinary expenses incurred in the Funds'
operation and other operating expenses not assumed by the Company's service
providers.
6. Compensation. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser,
and the Sub-Adviser agrees to accept as full compensation therefor, a
sub-advisory fee at an annual rate of 0.50% on the average daily net assets of
each Fund. This fee will be computed daily and paid to the Sub-Adviser
quarterly.
7. Services to Others. The Adviser understands, and has advised the
Company's Board of Directors, that the Sub-Adviser now acts, and may in the
future act, as an investment adviser to fiduciary and other managed accounts,
and as investment adviser, sub-investment adviser, and/or administrator to other
investment companies. The Adviser has no objection to the Sub-Adviser's acting
in such capacities, provided that whenever the Fund and one or more other
investment companies advised by the Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed by the Sub-Adviser to be equitable to each
company. In addition, the Adviser understands that the persons employed by the
Sub-Adviser to assist in the Sub-Adviser's duties under this Agreement will not
devote their full time to such service and nothing contained in this Agreement
will be deemed to limit or restrict the right of the Sub-Adviser or any of its
affiliates to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
8. Standard of Care. The Sub-Adviser shall discharge its duties under
this Agreement with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims. The federal securities laws impose
liabilities under certain circumstances on persons who act in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation of
any rights which the Adviser may have against Sub-Adviser under any federal
securities laws based on negligence and which cannot be modified in advance by
contract.
9. Limitation of Liability. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any act or omission in carrying out
its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties hereunder. Each of the Adviser
and Sub-Advisor agrees to indemnify the other and hold it harmless from and
against any and all actions, suits and claims, whether groundless or otherwise,
and from and against any and all losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) arising directly or indirectly out of the
indemnifying party's willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties hereunder.
10. Duration and Termination. This Agreement will become effective as
of the date hereof provided that it has been approved by vote of a majority of
the outstanding voting securities of the Fund in accordance with the
requirements under the 1940 Act, and, unless sooner terminated as provided
herein, will continue in effect until June 30, 2003.
Thereafter, if not terminated, this Agreement will continue in effect
for the Fund for successive periods of twelve (12) months, each ending on the
day preceding the anniversary of the Agreement's effective date of each year,
provided that such continuation is specifically approved at least annually (a)
by the vote of a majority of those members of the Company's Board of Directors
who are not interested persons of the Company, the Sub-Adviser, or the Adviser,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the vote of a majority of the Company's Board of Directors or by the
vote of a majority of all votes attributable to the outstanding shares of the
Fund. Notwithstanding the foregoing, this Agreement may be terminated as to the
Fund at any time, without the payment of any penalty, on not more than sixty
(60) days' and not less than thirty (30) days' written notice by the Adviser or
by the Sub-Adviser. This Agreement will immediately terminate in the event of
its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities", "interested persons" and "assignment" have the
same meaning of such terms in the 1940 Act.)
This Agreement will terminate automatically if the investment advisory
agreement between the Company and the Adviser is terminated.
11. 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.
12. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed hall be deemed to be an
original, but such counterparts shall together constitute but one and the same
document.
13. Custody. All securities and other assets of the Fund shall
be maintained with a custodian designated by the Adviser. Sub-Adviser
shall have no responsibility or liability with respect to any custodial
function.
14. 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. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and will be governed by the laws of the state of Nebraska.
Sub-Adviser shall notify the Adviser of any changes in its partners within a
reasonable time.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
FIRST NATIONAL BANK OF OMAHA
By:________________________________
Name:______________________________
Title:_____________________________
KBC ASSET MANAGEMENT
INTERNATIONAL LIMITED
By:________________________________
Name:______________________________
Title:_____________________________
