EXHIBIT 5.2
XXXXXXXX-XXXXXXXXX SERIES TRUST
SUB-ADVISORY AGREEMENT FOR THE
INTERNATIONAL FIXED INCOME FUND
Agreement made as of this _____ day of ______________, 19___ by and among
Xxxxxxxx-Xxxxxxxxx Capital Management, a California limited partnership
("Manager"), Xxxxx Global Partners, plc, a United Kingdom corporation, (the
"Sub-Adviser"), and Xxxxxxxx-Xxxxxxxxx Series Trust, a Delaware Business Trust
(the "Trust").
WHEREAS, the Trust, a diversified open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), is a series type investment company that is currently comprised of six
series, each of which is a separate investment portfolio having its own
investment objectives and investment policies; and
WHEREAS, the Manager has entered into a Management Agreement dated
______________, 19___ (the "Management Agreement") pursuant to which the Manager
has been employed to act as the investment manager of the Trust, on behalf of
each of its series; and
WHEREAS, the Sub-Adviser is engaged in business as an investment adviser
and is registered as an investment adviser under the Investment Advisers Act of
1940; and
WHEREAS, the Manager desires to retain the Sub-Adviser to provide
investment advisory services to the Trust in connection with the management of
one series of the Trust, the International Fixed Income Fund ("Fund"), and the
Sub-Adviser is willing to render such investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Board of
Trustees of the Trust, the Sub-Adviser shall manage the investment operations of
the Fund and the composition of the Fund, including the purchase, reinvestment,
retention and disposition of securities of the Fund, in accordance with the
Fund's investment objectives, policies and restrictions as stated in the
Prospectus and Statement of Additional Information (as currently in effect for
the Fund and as amended or supplemented from time to time, being herein called
the "Prospectus"), and subject to the following understandings:
(i) The Sub-Adviser shall manage the Fund's investments and
determine from time to time what investments and securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the Fund's assets will
be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the Charter and By-laws
of the Trust and Prospectus and with the instructions, resolutions and direc-
tions of the Manager and of the Board of Trustees of the Trust and shall conform
to and comply with the requirements of the 1940 Act, the Internal Revenue Code
of 1986, as amended (the "Code") (including without limitation Sections 817(h)
and 851), and all other applicable federal and state laws and regulations and
shall specifically monitor and maintain compliance with the diversification
requirements of the Fund under Sections 817(h) and 851 of the Code.
(iii) The Sub-Adviser shall determine the securities to be
purchased or sold by the Fund and shall place orders with or through such
persons, brokers or dealers as may be necessary or desirable to carry out the
policy with respect to brokerage as set forth in the Fund's Prospectus or as the
Board of Trustees may direct from time to time. In providing the Trust with
investment management for the Fund, it is recognized that the Sub-Adviser will
give primary consideration to securing the most favorable price and efficient
execution considering all the 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 Trust 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 Trust 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 brokers
that provide brokerage and research products and/or services that charge an
amount of commission for effecting a securities transaction in excess of the
amount of commission another broker would have charged for effecting that trans-
action, 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 responsibil-
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ities of the Sub-Adviser for this or other advisory accounts, subject to review
by the Trust's Board of Trustees 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.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of the
Sub-Adviser, the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, shall be made by the Sub-Adviser in the manner the Sub-Adviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Trust and to such other clients.
(iv) The Sub-Adviser shall maintain, prepare and preserve all
books and records with respect to the Fund's portfolio transactions required by
applicable law/regulation, including without limitation, subparagraphs (b) (5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 and the provisions
of Rule 31a-2 under the 1940 Act, and shall render to the Trust's Board of
Trustees such periodic and special reports as the Board may reasonably request.
(v) The Sub-Adviser shall provide the Trust's Custodian on each
business day with information relating to all transactions concerning the Fund's
assets and shall provide the Manager with such information upon request of the
Manager. In performing the duties stated in Section 1, the Sub-Adviser will
regularly provide the Manager and the Trust with the benefits of such investment
research, advice and management as the Manager and the Board or officers of the
Trust may, from time to time, consider necessary for the proper management of
the Fund. In connection with its continuous program of evaluation of the assets
in the Fund, the Sub-Adviser will provide the Manager with all statistical
information with respect to investments of the Trust and such periodic and
special reports and information as the Manager or the Board or officers of the
Trust may reasonably request. Statistical information includes information
prepared in a manner consistent with the procedures and requirements established
by the Board, if any.
(vi) The investment management services provided by the Sub-
Adviser hereunder are not to be deemed
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exclusive, and the Sub-Adviser shall be free to render similar services to
others clients, provided, however, the Sub-Adviser agrees that, for a period of
three years from commencement of operations of the Trust, the Sub-Adviser shall
not sponsor, distribute, market, advise or sub-advise any mutual fund or other
investment company or separate account used to fund any variable annuity or
variable life insurance contract with investment objectives or investment
programs similar to those of the Fund, without Manager's written consent.
(b) The Sub-Adviser shall authorize and permit any of its officers or
employees who are officers of the Trust to serve in the capacities in which they
are elected. Services to be furnished by the Sub-Adviser under this Agreement
may be furnished through the medium of any of such officers or employees.
(c) The Sub-Adviser shall keep the Fund's books and records required
to be maintained, prepared and preferred by the Sub-Adviser pursuant to
paragraph 1(a) hereof and shall timely furnish to the Manager all information
relating to the Sub-Adviser's services hereunder needed by the Manager to keep
the other books and records of the Fund required by Rule 31a-1 under the 1940
Act. The Sub-Adviser agrees that all records which it maintains for the Fund
are the property of the Trust and the Sub-Adviser shall surrender promptly to
the Trust any of such records upon the Trust's request, provided however that
the Sub-Adviser may retain a copy of such records. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by it pursuant to paragraph
1(a) hereof. The Sub-Adviser also agrees, upon the request of the Manager or
the Trust, to promptly surrender the books and records to either party or make
the books and records available for inspection by representatives of any
regulatory authorities.
2. The Manager shall continue to have responsibility for all services to
be provided to the Trust and the Fund pursuant to the Management Agreement and
shall oversee and review the Sub-Adviser's performance of its duties under this
Agreement.
3. The Manager shall pay the Sub-Adviser, as compensation for the
services provided and the expenses assumed pursuant to this Agreement, a sub-
advisory fee at the annual rate of .50 of 1% of the Fund's average daily net
asset value. The Manager shall pay the sub-advisory fee at the end of each
calendar month. The Fund's net asset value shall be determined and computed in
accordance with the method for determining net asset value contained in the
Prospectus.
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The payment of the sub-advisory fees and the allocation of charges and
expenses between the Trust and the Manager are set forth in the Management
Agreement. Nothing in this Agreement shall change or affect that arrangement.
The payment of sub-advisory fees and the apportionment of any expenses related
to the services of the Sub-Adviser shall be the sole concern of the Manager and
the Sub-Adviser and shall not be the responsibility of the Trust.
4. The Sub-Adviser shall not be liable for any error of judgment or for
any loss suffered by the Trust or the Manager in connection with the matters to
which this Agreement relates, except a loss resulting from (i) a breach of
fiduciary duty with respect to the receipt of compensation for services or (ii)
willful misfeasance, bad faith or gross negligence on the Sub-Adviser's part in
the performance of its duties or from its reckless disregard of its obligations
and duties under this Agreement.
If any person who is a trustee, director, partner, officer or employee
of the Sub-Adviser is or becomes a trustee, director, partner, officer or
employee of the Trust and acts as such in any business of the Trust pursuant to
this Agreement, then such trustee, director, partner, officer or employee of the
Sub-Adviser shall be deemed to be acting in such capacity solely for the Trust,
and not as a trustee, director, partner, officer or employee of the Sub-Adviser
or under the control or direction of the Sub-Adviser, although paid by the Sub-
Adviser.
5. This Agreement shall continue in effect for a period of more than two
years from the date the Fund commences operation only so long as such
continuance is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may be
terminated by the Trust at any time, without the payment of any penalty, by the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Trust, or by the Manager
or the Sub-Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the other party. This
Agreement shall terminate automatically in the event of its assignment (as
defined in the 0000 Xxx) or upon the termination of the Management Agreement.
Termination by the Board or the Manager shall be subject to shareholder approval
only to the extent legally required by applicable law.
6. Except as set forth in Section 1(a)(vi) above, nothing in this
Agreement shall limit or restrict the right of any of the Sub-Adviser's
partners, officers or employees who may also be a Trustee, officer or employee
of the Trust to
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engage in any other business or to devote his or her time and attention to the
management of other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the Sub-Adviser's right to engage in
any other business or to render services of any kind to any other corporation,
firm, individual or association.
7. The Sub-Adviser acknowledges and agrees that its name and certain
information about the Sub-Adviser will be used in the Fund's Prospectus, proxy
statement, reports to shareholders, sales literature, marketing and other
literature, although not in the name of the Trust or the Fund. During the term
of this Agreement, the Manager agrees to furnish to Sub-Adviser at its principal
offices all Prospectuses, proxy statements, reports to shareholders, sales
literature or other material prepared for distribution to shareholders of the
Trust or the public, which refer to the Sub-Adviser in any way, prior to use
thereof, and not to use material if the Sub-Adviser reasonably objects in
writing five business days (or such other time as may be mutually agreed) after
receipt thereof. Such materials may be furnished to the Sub-Adviser hereunder
by first-class or overnight mail, facsimile transmission equipment or hand
delivery.
8. During the term of this Agreement the Sub-Adviser shall immediately
notify the Manager and Trust of any change in the membership of the Sub-
Adviser's partnership after such change.
9. This Agreement may be amended by mutual written consent, but only if
such amendment is in conformity with the requirements of the 1940 Act or other
applicable laws or the terms of the Charter and By-Laws of the Trust.
10. This Agreement shall be governed by the laws of the State of
California without regard to principles of conflicts of law. To the extent that
the applicable law of the State of California, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act or other federal laws
and regulations which may be applicable, the latter shall control.
11. If the Trust and Manager determine to add additional fixed income
series to the Trust and determine that such series are to be managed by an
unaffiliated third party sub-adviser, the parties agree that the Sub-Adviser
shall be given the first opportunity to negotiate in good faith with Manager and
the Trust to act as the sub-adviser for such series.
12. This Agreement is expressly conditioned upon commencement of
operations of the Trust (and Fund), and
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appointment of the Sub-Adviser to act as sub-adviser to the Manager of the Fund,
no later than June 30, 1996.
13. All notices contemplated by this Agreement shall be in writing and
delivered to the following addresses:
Xxxxxxxx-Xxxxxxxxx Series Trust
000 Xxxx Xxxxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx
Xxxxxxxx-Xxxxxxxxx Capital Management
000 Xxxx Xxxxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx
Xxxxx Global Partners
0000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attn:____________________
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.
XXXXX GLOBAL PARTNERS, plc
By: ___________________________
Name: ________________________
Title: _______________________
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
By:
--------------------------
E. Xxxxx Xxxxx, Jr.
General Counsel
XXXXXXXX-XXXXXXXXX SERIES TRUST
By:
--------------------------
Name: E. Xxxxx Xxxxx, Jr.
Title: Secretary
