SUB-ADVISORY AGREEMENT
AGREEMENT made as of the ___ day of ______, 20____ by and between Xxxxxx Global Investments,
Inc., a Delaware corporation (the “Advisor”), and________, a ________ (the “Sub-Advisor”).
WHEREAS, the Advisor and the Sub-Advisor are registered investment advisers under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”), and engage in the business of
providing investment management services; and
WHEREAS, the Advisor has been retained to act as investment adviser pursuant to an Investment
Advisory Agreement, dated July 1, 2005 (the “Advisory Agreement”), with MGI Funds (the “Trust”), a
Delaware statutory trust registered with the U.S. Securities and Exchange Commission (the “SEC”) as
an open-end management investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”), which consists of several separate series of shares, each having its own investment
objectives and policies, and which is authorized to create additional series in the future; and
WHEREAS, the Advisory Agreement permits the Advisor, subject to the supervision and direction
of the Trust’s Board of Trustees, to delegate certain of its duties under the Advisory Agreement to
other investment advisers, subject to the requirements of the 1940 Act; and
WHEREAS, the Advisor desires to retain the Sub-Advisor to assist the Advisor in the provision
of a continuous investment program for that portion of one or more of the Trust’s series’ (each a
“Fund”) assets which the Advisor will assign to the Sub-Advisor (the “Sub-Advisor Assets”), and the
Sub-Advisor is willing to render such services, subject to the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of mutual covenants recited below, the parties agree and
promise as follows:
1. Appointment as Sub-Advisor. The Advisor hereby appoints the Sub-Advisor to act as
investment adviser for and to manage the Sub-Advisor Assets, subject to the supervision of the
Advisor and the Board of Trustees of the Trust, and subject to the terms of this Agreement; and the
Sub-Advisor hereby accepts such appointment. In such capacity, the Sub-Advisor shall be
responsible for the investment management of the Sub-Advisor Assets. The Sub-Advisor agrees to
exercise the same degree of skill, care and diligence in performing its services under this
Agreement as the Sub-Advisor exercises in performing similar services with respect to other
fiduciary accounts for which the Sub-Advisor has investment responsibilities, and that a prudent
manager would exercise under the circumstances.
2. Duties of the Sub-Advisor.
(a) Investments. The Sub-Advisor is hereby authorized and directed, and hereby
agrees, subject to the stated investment objectives, policies and restrictions of each Fund
as set forth in such Fund’s prospectus and statement of additional information
as currently in effect and as amended from time to time (collectively referred to as
the “Prospectus”) and subject to the directions of the Advisor and the Trust’s Board of
Trustees, to purchase, hold and sell investments for the Sub-Advisor Assets and to monitor
such investments on an ongoing basis. In providing these services, the Sub-Advisor will
conduct an ongoing program of investment, evaluation and, if appropriate, sale and
reinvestment of the Sub-Advisor Assets. The Advisor agrees to provide the Sub-Advisor
information concerning (i) a Fund; (ii) its assets available or to become available for
investment; and (iii) the conditions of a Fund’s or the Trust’s affairs as relevant to the
Sub-Advisor.
(b) Compliance with Applicable Laws, Governing Documents and Trust Compliance
Procedures. In the performance of its duties and obligations under this Agreement, the
Sub-Advisor shall, with respect to Sub-Advisor Assets, (i) act in conformity with: (A) the
Trust’s Agreement and Declaration of Trust (the “Declaration of Trust”) and By-Laws; (B) the
Prospectus; (C) the policies and procedures for compliance by the Trust with the Federal
Securities Laws (as that term is defined in Rule 38a-1 under the 0000 Xxx) provided to the
Sub-Advisor (together, the “Trust Compliance Procedures”); and (D) the instructions and
directions received in writing from the Advisor or the Trustees of the Trust; and (ii)
conform to and comply with the requirements of the 1940 Act, the Advisers Act, and all other
federal laws applicable to registered investment companies’ and Sub-Advisors’ duties under
this Agreement. The Advisor will provide the Sub-Advisor with any materials or information
that the Sub-Advisor may reasonably request to enable it to perform its duties and
obligations under this Agreement.
The Advisor will provide the Sub-Advisor with reasonable advance notice, in writing,
of: (i) any change in a Fund’s investment objectives, policies and restrictions as stated
in the Prospectus; (ii) any change to the Trust’s Declaration of Trust or By-Laws; or (iii)
any material change in the Trust Compliance Procedures; and the Sub-Advisor, in the
performance of its duties and obligations under this Agreement, shall manage the Sub-Advisor
Assets consistently with such changes, provided the Sub-Advisor has received such prior
notice of the effectiveness of such changes from the Trust or the Advisor. In addition to
such notice, the Advisor shall provide to the Sub-Advisor a copy of a modified Prospectus
and copies of the revised Trust Compliance Procedures, as applicable, reflecting such
changes. The Sub-Advisor hereby agrees to provide to the Advisor in a timely manner, in
writing, such information relating to the Sub-Advisor and its relationship to, and actions
for, a Fund as may be required to be contained in the Prospectus or in the Trust’s
registration statement on Form N-1A, or otherwise as reasonably requested by the Advisor.
In order to assist the Trust and the Trust’s Chief Compliance Officer (the “Trust CCO”)
to satisfy the requirements contained in Rule 38a-1 under the 1940 Act, the Sub-Advisor
shall provide to the Trust CCO: (i) direct access to the Sub-Advisor’s chief compliance
officer (the “Sub-Advisor CCO”), as reasonably requested by the Trust CCO; (ii) quarterly
reports confirming that the Sub-Advisor has complied with the Trust Compliance Procedures in
managing the Sub-Advisor Assets; and (iii) quarterly certifications that there were no
Material Compliance Matters (as that term is defined by
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Rule 38a-1(e)(2)) that arose under the Trust Compliance Procedures that related to the
Sub-Advisor’s management of the Sub-Advisor Assets.
(c) Sub-Advisor Compliance Policies and Procedures. The Sub-Advisor shall
promptly provide the Trust CCO with copies of: (i) the Sub-Advisor’s policies and
procedures for compliance by the Sub-Advisor with the Federal Securities Laws (together, the
“Sub-Advisor Compliance Procedures”), and (ii) any material changes to the Sub-Advisor
Compliance Procedures. The Sub-Advisor shall cooperate fully with the Trust CCO so as to
facilitate the Trust CCO’s performance of the Trust CCO’s responsibilities under Rule 38a-1
to review, evaluate and report to the Trust’s Board of Trustees on the operation of the
Sub-Advisor Compliance Procedures, and shall promptly report to the Trust CCO any Material
Compliance Matter arising under the Sub-Advisor Compliance Procedures involving the
Sub-Advisor Assets. The Sub-Advisor shall provide to the Trust CCO: (i) quarterly reports
confirming the Sub-Advisor’s compliance with the Sub-Advisor Compliance Procedures in
managing the Sub-Advisor Assets, and (ii) certifications that there were no Material
Compliance Matters involving the Sub-Advisor that arose under the Sub-Advisor Compliance
Procedures that affected the Sub-Advisor Assets. At least annually, the Sub-Advisor shall
provide a certification to the Trust CCO to the effect that the Sub-Advisor has in place and
has implemented policies and procedures that are reasonably designed to ensure compliance by
the Sub-Advisor with the Federal Securities Laws.
(d) Voting of Proxies. Unless otherwise instructed by the Advisor or the
Trust, the Sub-Advisor shall have the power, discretion and responsibility to vote, either
in person or by proxy, all securities in which the Sub-Advisor Assets may be invested from
time to time, and shall not be required to seek instructions from the Advisor, the Trust or
a Fund. The Sub-Advisor shall also provide its Proxy Voting Policy (the “Proxy Policy”),
and, if requested by the Advisor, a summary of such Proxy Policy suitable for including in
the Prospectus, and will provide the Advisor with any material amendment to the Proxy Policy
within a reasonable time after such amendment has taken effect. If both the Sub-Advisor and
another person managing assets of a Fund have invested in the same security, the Sub-Advisor
and such other entity will each have the power to vote its pro rata share of the security.
(e) Agent. Subject to any other written instructions of the Advisor or the
Trust, the Sub-Advisor is hereby appointed the Advisor’s and the Trust’s agent and
attorney-in-fact for the limited purposes of executing account documentation, agreements,
contracts and other documents as the Sub-Advisor shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of the Sub-Advisor
Assets, provided that, the Sub-Advisor’s actions in executing such documents shall comply
with federal regulations, all other federal laws applicable to registered investment
companies and the Sub-Advisor’s duties and obligations under this Agreement and the Trust’s
governing documents.
(f) Brokerage. The Sub-Advisor will place orders pursuant to the Sub-Advisor’s
investment determinations for a Fund either directly with an issuer or with any broker or
dealer selected by the Sub-Advisor, pursuant to this paragraph. In executing
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portfolio transactions and selecting brokers or dealers, the Sub-Advisor will use its
best efforts to seek, on behalf of a Fund, the best overall execution available. In
assessing the best overall terms available for any transaction, the Sub-Advisor shall
consider all factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms available, and
in selecting the broker or dealer to execute a particular transaction, the Sub-Advisor may
also consider the brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) provided to a
Fund and/or other accounts over which the Sub-Advisor may exercise investment discretion.
The Sub-Advisor is authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for any of the Funds
that is in excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Sub-Advisor determines in good faith
that such commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that particular transaction
or in terms of the overall responsibilities of the Sub-Advisor to a Fund. Such
authorization is subject to termination at any time by the Board of Trustees of the Trust
for any reason. In addition, the Sub-Advisor is authorized to allocate purchase and sale
orders for portfolio securities to brokers or dealers that are affiliated with the Advisor,
the Sub-Advisor, the Trust’s principal underwriter, or other sub-advisors (if applicable) if
the Sub-Advisor believes that the quality of the transaction and the commission are
comparable to what they would be with other qualified firms, and provided that the
transactions are consistent with the Trust’s Rule 17e-1 and Rule 10f-3 procedures. The
Advisor will identify all brokers and dealers affiliated with the Trust, the Advisor, and
the Trust’s principal underwriter (and the other Sub-Advisors of the Fund, to the extent
such information is necessary for the Sub-Advisor to comply with applicable federal
securities laws), other than those whose sole business is the distribution of mutual fund
shares, who effect securities transactions for customers. The Advisor shall promptly
furnish a written notice to the Sub-Advisor if the information so provided is no longer
accurate.
In connection with its management of the Sub-Advisor Assets and consistent with its
fiduciary obligation to the Sub-Advisor Assets and other clients, the Sub-Advisor, to the
extent permitted by applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities or futures contracts 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 or futures contracts so purchased or sold, as well as
the expenses incurred in the transaction, will be made by the Sub-Advisor in the manner the
Sub-Advisor considers to be, over time, the most equitable and consistent with its fiduciary
obligations to the Sub-Advisor’s Assets and to such other clients.
(g) Securities Transactions. In no instance will any Fund’s portfolio
securities be purchased from or sold to the Advisor, the Sub-Advisor, the Trust’s principal
underwriter, or any affiliated person the Trust, the Advisor, the Sub-Advisor or the
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Trust’s principal underwriter, acting as principal in the transaction, except to the
extent permitted by the SEC and the 1940 Act, including Rule 17a-7 thereunder.
The Sub-Advisor acknowledges that the Advisor and the Trust may rely on Rule 17a-7,
Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the Sub-Advisor
hereby agrees that it shall not consult with any other sub-advisor to the Fund with respect
to transactions in securities for the Sub-Advisor Assets or any other transactions of Fund
assets.
The Sub-Advisor is authorized to engage in transactions in which the Sub-Advisor, or an
affiliate of the Sub-Advisor, acts as a broker for both the Fund and for another party on
the other side of the transaction (“agency cross transactions”). The Sub-Advisor shall
effect any such agency cross transactions in compliance with Rule 206(3)-2 under the
Advisers Act and any other applicable provisions of the federal securities laws and shall
provide the Advisor with periodic reports describing such agency cross transactions. By
execution of this Agreement, the Advisor authorizes the Sub-Advisor or its affiliates to
engage in agency cross transactions, as described above. The Advisor may revoke its consent
at any time by written notice to the Sub-Advisor.
The Sub-Advisor hereby represents that it has implemented policies and procedures that
will prevent the disclosure by it, its employees or its agents of the Trust’s portfolio
holdings to any person or entity other than the Advisor, the Trust’s custodian, or other
persons expressly designated by the Advisor.
(h) Code of Ethics. The Sub-Advisor hereby represents that it has adopted
policies and procedures and a code of ethics that meet the requirements of Rule 17j-1 under
the 1940 Act and Rule 204A-1 under the Advisers Act. Copies of such policies and procedures
and code of ethics and any changes or supplements thereto shall be delivered to the Advisor
and the Trust, and any material violation of such policies, and procedures and code of
ethics by personnel of the Sub-Advisor, the sanctions imposed in response thereto, and any
issues arising under such policies, and procedures and code of ethics shall be reported to
the Advisor and the Trust at the times and in the format reasonably requested by the Advisor
and the Board of Trustees.
(i) Books and Records. The Sub-Advisor shall maintain separate detailed
records of all matters pertaining to the Sub-Advisor Assets, including, without limitation,
brokerage and other records of all securities transactions. Any records required to be
maintained and preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act that are prepared or maintained by the Sub-Advisor on behalf of the Trust
are the property of the Trust and will be surrendered promptly to the Trust upon request.
The Sub-Advisor further agrees to preserve for the periods prescribed in Rule 31a-2 under
the 1940 Act the records required to be maintained under Rule 31a-1 under the 1940 Act.
(j) Information Concerning Sub-Advisor Assets and the Sub-Advisor. From time
to time as the Advisor, and any consultants designated by the Advisor, or the Trust may
request, the Sub-Advisor will furnish the requesting party reports on portfolio
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transactions and reports on Sub-Advisor Assets held in the portfolio, all in such
detail as the Advisor, its consultant(s) or the Trust may reasonably request. The
Sub-Advisor will provide the Advisor with information (including information that is
required to be disclosed in the Prospectus) with respect to the portfolio managers
responsible for Sub-Advisor Assets, any changes in the portfolio managers responsible for
Sub-Advisor Assets, any changes in the ownership or management of the Sub-Advisor, or of
material changes in the control of the Sub-Advisor. The Sub-Advisor will promptly notify
the Advisor of any pending investigation, material litigation, administrative proceeding or
any other significant regulatory inquiry. Upon reasonable request, the Sub-Advisor will
make available its officers and employees to meet with the Trust’s Board of Trustees to
review the Sub-Advisor Assets.
(k) Valuation of Sub-Advisor Assets. The Sub-Advisor agrees to monitor the
Sub-Advisor Assets and to notify the Advisor or its designee on any day that the Sub-Advisor
determines that a significant event has occurred with respect to one or more securities held
in the Sub-Advisor Assets. As requested by the Advisor or the Trust’s Valuation Committee,
the Sub-Advisor hereby agrees to provide additional assistance to the Valuation Committee of
the Trust, the Advisor and the Trust’s pricing agents in valuing Sub-Advisor Assets held in
the portfolio. Such assistance may include fair value pricing of portfolio securities, as
requested by the Advisor. The Sub-Advisor agrees that it will act, at all times, in
accordance with the Trust’s Valuation Procedures, and will provide such certifications or
sub-certifications relating to its compliance with the Trust’s Valuation Procedures as
reasonably may be requested, from time to time, by the Advisor or the Trust.
The Sub-Advisor also will provide such information or perform such additional acts as
are customarily performed by a Sub-Advisor and may be required for a Fund or the Advisor to
comply with their respective obligations under applicable federal securities laws,
including, without limitation, the 1940 Act, the Advisers Act, the 1934 Act, the Securities
Act of 1933, as amended (the “Securities Act”), and any rule or regulation thereunder.
(l) Custody Arrangements. The Sub-Advisor, on each business day, shall provide
the Advisor, its consultant(s) and the Trust’s custodian such information as the Advisor and
the Trust’s custodian may reasonably request relating to all transactions concerning the
Sub-Advisor Assets.
(m) Historical Performance Information. To the extent agreed upon by the
parties, the Sub-Advisor will provide the Trust with historical performance information on
similarly managed investment companies or for other accounts to be included in the
Prospectus or for any other uses permitted by applicable law.
(n) Regulatory Examinations. The Sub-Advisor will cooperate promptly and fully
with the Advisor and/or the Trust in responding to any regulatory or compliance examinations
or inspections (including information requests) relating to the Trust, the Fund or the
Advisor brought by any governmental or regulatory authorities having appropriate
jurisdiction (including, but not limited to, the SEC).
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3. Independent Contractor. In the performance of its duties hereunder, the
Sub-Advisor is and shall be an independent contractor and, unless otherwise expressly provided
herein or otherwise authorized in writing, shall have no authority to act for or represent a Fund,
the Trust or the Advisor in any way or otherwise be deemed an agent of a Fund, the Trust or the
Advisor.
4. Services to Other Clients. Nothing herein contained shall limit the freedom of the
Sub-Advisor or any affiliated person of the Sub-Advisor to render investment advisory, supervisory
and other services to other investment companies, to act as investment adviser or investment
counselor to other persons, firms or corporations, or to engage in other business activities. It
is understood that the Sub-Advisor may give advice and take action for its other clients that may
differ from advice given, or the timing or nature of action taken, for a Fund. The Sub-Advisor is
not obligated to initiate transactions for a Fund in any security that the Sub-Advisor, its
principals, affiliates or employees may purchase or sell for its or their own accounts or other
clients.
5. Expenses. During the term of this Agreement, the Sub-Advisor will pay all expenses
incurred by it in connection with its activities under this Agreement, other than the costs of
securities, commodities and other investments (including brokerage commissions and other
transaction charges, if any) purchased or otherwise acquired, or sold or otherwise disposed of, for
a Fund. The Sub-Advisor, at its sole expense, shall employ or associate itself with such persons
as it believes to be particularly fitted to assist it in the execution of its duties under this
Agreement. The Trust or the Advisor, as the case may be, shall reimburse the Sub-Advisor for any
expenses as may be reasonably incurred by the Sub-Advisor, at the request of and on behalf of a
Fund or the Advisor. The Sub-Advisor shall keep and supply to the Trust and the Advisor reasonable
records of all such expenses.
6. Compensation. For the services provided and the expenses assumed with respect to a
Fund pursuant to this Agreement, the Sub-Advisor will be entitled to the fee listed for the Fund(s)
on Exhibit A. Such fees will be computed in accordance with Exhibit A.
If this Agreement is terminated prior to the end of any calendar quarter, the fee shall be
prorated for the portion of any quarter in which this Agreement is in effect according to the
proportion which the number of calendar days, during which this Agreement is in effect, bears to
the number of calendar days in the quarter, and shall be payable within ten (10) days after the
date of termination.
7. Representations and Warranties of the Sub-Advisor. The Sub-Advisor represents and
warrants to the Advisor and the Trust as follows:
(a) The Sub-Advisor is registered as an investment adviser under the Advisers Act;
(b) The Sub-Advisor is a ______, duly organized and validly existing under the laws of
_________, with the power to own and possess its assets and carry on its business as it is
now being conducted;
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(c) The execution, delivery and performance by the Sub-Advisor of this Agreement are
within the Sub-Advisor’s powers and have been duly authorized by all necessary action on the
part of its ___________ and no action by or in respect of, or filing with, any governmental
body, agency or official is required on the part of the Sub-Advisor for the execution,
delivery and performance by the Sub-Advisor of this Agreement, and the execution, delivery
and performance by the Sub-Advisor of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule or regulation; (ii) the
Sub-Advisor’s governing instruments; or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Sub-Advisor; and
(d) The Form ADV of the Sub-Advisor previously provided to the Advisor (a copy of which
is attached as Exhibit B to this Agreement) is a true and complete copy of the form as
currently filed with the SEC and the information contained therein is accurate and complete
in all material respects and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which they are made, not
misleading. The Sub-Advisor will promptly provide the Advisor and the Trust with a complete
copy of all subsequent amendments to its Form ADV.
8. Representations and Warranties of the Advisor. The Advisor represents and warrants
to the Sub-Advisor and the Trust as follows:
(a) The Advisor is registered as an investment adviser under the Advisers Act;
(b) The Advisor is a corporation duly organized and validly existing under the laws of
the State of Delaware, with the power to own and possess its assets and carry on its
business as it is now being conducted;
(c) The execution, delivery and performance by the Advisor of this Agreement are within
the Advisor’s powers and have been duly authorized by all necessary action on the part of
its Board of Directors, and no action by or in respect of, or filing with, any governmental
body, agency or official is required on the part of the Advisor for the execution, delivery
and performance by the Advisor of this Agreement, and the execution, delivery and
performance by the Advisor of this Agreement do not contravene or constitute a default under
(i) any provision of applicable law, rule or regulation; (ii) the Advisor’s governing
instruments; or (iii) any agreement, judgment, injunction, order, decree or other instrument
binding upon the Advisor;
(d) The Advisor acknowledges that it received a copy of the Sub-Advisor’s Form ADV (a
copy of which is attached as Exhibit B) prior to the execution of this Agreement;
(e) The Advisor and the Trust have duly entered into the Advisory Agreement pursuant to
which the Trust authorized the Advisor to enter into this Agreement; and
(f) The Advisor and the Trust have policies and procedures designed to detect and deter
disruptive trading practices, including “market timing,” and the Advisor and the
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Trust each agree that they will continue to enforce and abide by such policies and
procedures, as amended from time to time, and comply with all existing and future laws
relating to such matters or to the purchase and sale of interests in the Funds generally.
9. Survival of Representations and Warranties; Duty to Update Information. All
representations and warranties made by the Sub-Advisor and the Advisor pursuant to Sections 7 and 8
of this Agreement, respectively, shall survive for the duration of this Agreement and the parties
hereto shall promptly notify each other in writing upon becoming aware that any of the foregoing
representations and warranties are no longer true.
10. Liability and Indemnification.
(a) Liability. The duties of the Sub-Advisor shall be confined to those
expressly set forth herein, with respect to the Sub-Advisor Assets. The Sub-Advisor shall
not be liable for any loss arising out of any portfolio investment or disposition hereunder,
except a loss resulting from willful misfeasance, bad faith or negligence in the performance
of its duties, or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable state law that cannot be
waived or modified hereby. Under no circumstances shall the Sub-Advisor be liable for any
loss arising out of any act or omission taken by another sub-advisor, or any other third
party, in respect of any portion of the Trust’s assets not managed by the Sub-Advisor
pursuant to this Agreement. Under no circumstances shall either party hereto be liable to
the other for special, punitive or consequential damages, arising under or in connection
with this Agreement, even if previously informed of the possibility of such damages.
(b) Indemnification. The Sub-Advisor shall indemnify the Advisor, the Trust
and each Fund, and their respective affiliates and controlling persons (the “Sub-Advisor
Indemnified Persons”) for any liability and expenses, including reasonable attorneys’ fees,
which the Advisor, the Trust or a Fund and their respective affiliates and controlling
persons may sustain as a result of the Sub-Advisor’s willful misfeasance, bad faith,
negligence, or reckless disregard of its duties hereunder; provided, however, that the
Sub-Advisor Indemnified Persons shall not be indemnified for any liability or expenses which
may be sustained as a result of the Advisor’s willful misfeasance, bad faith, negligence, or
reckless disregard of its duties hereunder.
The Advisor shall indemnify the Sub-Advisor, its affiliates and its controlling persons
(the “Advisor Indemnified Persons”) for any liability and expenses, including reasonable
attorneys’ fees, howsoever arising from, or in connection with, the Advisor’s breach of this
Agreement or its representations and warranties herein or as a result of the Advisor’s
willful misfeasance, bad faith, negligence, reckless disregard of its duties hereunder or
violation of applicable law; provided, however, that the Advisor Indemnified Persons shall
not be indemnified for any liability or expenses which may be sustained as a result of the
Sub-Advisor’s willful misfeasance, bad faith, negligence, or reckless disregard of its
duties hereunder.
11. Duration and Termination.
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(a) Duration. This Agreement, unless sooner terminated as provided herein,
shall for the Fund(s) listed on Exhibit A attached hereto remain in effect from the date of
execution (the “Effective Date”), until two years from the Effective Date, and thereafter,
for periods of one year, so long as such continuance thereafter is specifically approved at
least annually (i) by the vote of a majority of those Trustees of the Trust who are not
interested persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by the Trustees of the Trust, or by the
vote of a majority of the outstanding voting securities of each Fund (except as such vote
may be unnecessary pursuant to relief granted by an exemptive order from the SEC). The
foregoing requirement that continuance of this Agreement be “specifically approved at least
annually” shall be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
(b) Termination. This Agreement may be terminated as to any Fund at any time,
without the payment of any penalty by: (i) the vote of a majority of the Trustees of the
Trust, the vote of a majority of the outstanding voting securities of the Fund, or the
Advisor, or (ii) the Sub-Advisor on not less than 90 days written notice to the Advisor and
the Trust. This Agreement may also be terminated as to any Fund at any time by any party
hereto immediately upon written notice to the other parties in the event of a breach of any
provision to this Agreement by any of the parties.
This Agreement shall not be assigned and shall terminate automatically in the event of
its assignment, except as provided otherwise by any rule, exemptive order issued by the SEC,
or No Action Letter provided or pursuant to the 1940 Act, or upon the termination of the
Advisory Agreement. In the event that there is a proposed change in control of the
Sub-Advisor that would act to terminate this Agreement, if a vote of shareholders to approve
continuation of this Agreement is at that time deemed by counsel to the Trust to be required
by the 1940 Act or any rule or regulation thereunder, the Sub-Advisor agrees to assume all
reasonable costs associated with soliciting shareholders of the appropriate Fund(s) of the
Trust to approve continuation of this Agreement. Such expenses include the costs of
preparation and mailing of a proxy statement, and of soliciting proxies. In the event that
such proposed change in control of the Sub-Advisor shall occur following either: (i)
receipt by the Advisor and the Trust of an exemptive order issued by the SEC with respect to
the appointment of sub-advisors absent shareholder approval, or (ii) the adoption of
proposed Rule 15a-5 under the 1940 Act, the Sub-Advisor agrees to assume all reasonable
costs and expenses (including the costs of mailing) associated with the preparation of a
statement, required by the exemptive order or Rule 15a-5, containing all information that
would be included in a proxy statement (an “Information Statement”). In addition, if the
Sub-Advisor shall resign, the Sub-Advisor agrees to assume all reasonable costs and expenses
(including the costs of mailing) associated with the preparation of an Information
Statement.
This Agreement shall extend to and bind the heirs, executors, administrators and
successors of the parties hereto.
12. Amendment. This Agreement may be amended by mutual consent of the parties,
provided that the terms of any material amendment shall be approved by: (a) the Trust’s Board
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of Trustees, and (b) the vote of a majority of those Trustees of the Trust who are not
interested persons of any party to this Agreement cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable law, and unless
otherwise permitted pursuant to exemptive relief granted by the SEC or No Action position granted
by the SEC or its staff, by a vote of the majority of a Fund’s outstanding securities.
13. Confidentiality. Any information or recommendations supplied by either the
Advisor or the Sub-Advisor, that are not otherwise in the public domain or previously known to the
other party in connection with the performance of its obligations and duties hereunder, including
portfolio holdings of the Trust, financial information or other information relating to a party to
this Agreement, are to be regarded as confidential (“Confidential Information”) and held in the
strictest confidence. Except as may be required by applicable law or rule or as requested by
regulatory authorities having jurisdiction over a party to this Agreement, Confidential Information
may be used only by the party to which said information has been communicated and such other
persons as that party believes are necessary to carry out the purposes of this Agreement, the
custodian, and such persons as the Advisor may designate in connection with the Sub-Advisor Assets.
Nothing in this Agreement shall be construed to prevent the Sub-Advisor from giving other entities
investment advice about, or trading on their behalf, in the securities of a Fund or the Advisor.
14. Use of Sub-Advisor’s Name. During the term of this Agreement, the Advisor shall
have permission to use the Sub-Advisor’s name in the marketing of the Fund, and agrees to furnish
the Sub-Advisor at its principal office all prospectuses, proxy statements and reports to
shareholders prepared for distribution to shareholders of the Fund or the public, which refer to
the Sub-Advisor in any way.
15. Notice. Any notice, advice or report to be given pursuant to this Agreement shall
be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage
prepaid addressed by the party giving notice to the other party at the last address furnished by
the other party:
(a) If to the Advisor:
Xxxxxx Global Investments, Inc.
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Counsel
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Counsel
(b) If to the Sub-Advisor:
16. Governing Law. This Agreement shall be governed by the internal laws of the State
of New York without regard to conflict of law principles; provided, however that nothing herein
shall be construed as being inconsistent with the 1940 Act. Where the effect of a requirement of
the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order
of the SEC, whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
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17. Entire Agreement. This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and understandings relating to this
Agreement’s subject matter. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together, constitute only one
instrument.
18. 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.
19. Certain Definitions. For the purposes of this Agreement and except as otherwise
provided herein, “interested person,” “affiliated person,” “affiliates,” “controlling persons” and
“assignment” shall have their respective meanings as set forth in the 1940 Act, subject, however,
to such exemptions as may be granted by the SEC, and the term “Fund” or “Funds” shall refer to
those Fund(s) for which the Sub-Advisor provides investment management services and as are listed
on Exhibit A to this Agreement.
20. Captions. The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first written above.
| ADVISOR XXXXXX GLOBAL INVESTMENTS, INC. |
||||
| By: | ||||
| SUB-ADVISOR |
||||
| By: | ||||
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EXHIBIT A
BETWEEN XXXXXX GLOBAL INVESTMENTS, INC.
AND
[NAME OF SUB-ADVISOR]
AND
[NAME OF SUB-ADVISOR]
_________, 2010
[NAME OF FUND]
FEE SCHEDULE
ASSETS |
COMPENSATION |
Computation
As soon as practicable after the end of each calendar quarter, the Sub-Advisor shall send to
the Advisor a calculation (the “Calculation”) in reasonable detail of the fee for the calendar
quarter then ended as of the close of business on the last day of such calendar quarter. The
Advisor may approve or disapprove the Calculation within ten (10) business days of its receipt. In
the event that the Calculation has been accurately prepared in accordance with the terms of this
Agreement, the Advisor shall pay the fee to the Sub-Advisor. In the event of a dispute between the
parties regarding the accuracy of the Calculation, it is hereby agreed that all discussions in
resolution of such dispute will be conducted promptly and in good faith.
The foregoing fee shall be accrued for each calendar day and the sum of the daily fee accruals
shall be paid quarterly in arrears by the Advisor to the Sub-Advisor as described herein. The
daily fee accruals will be computed by multiplying the fraction of one over the number of calendar
days in the year by the applicable annual rate set forth in the schedule above and multiplying this
product by the net assets of the Sub-Advisors Assets, as determined in accordance with the
Prospectus as of the close of business on the previous business day on which the Trust was open for
business. If this Agreement is terminated prior to the end of any calendar quarter, the fee shall
be prorated for the portion of any quarter in which this Agreement is in effect according to the
proportion which the number of calendar days, during which this Agreement is in effect, bears to
the number of calendar days in the quarter.
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EXHIBIT B
SUB-ADVISOR
FORM ADV
(Please attach)
14
