XXXX XXXXXXX ADVISERS, INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
August 29, 1996
XXXX XXXXXXX DECLARATION TRUST
on behalf of Xxxx Xxxxxxx V.A. Independence Equity Fund
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
INDEPENDENCE INVESTMENT ASSOCIATES, INC.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Sub-Investment Management Contract
Dear Sirs:
Xxxx Xxxxxxx Declaration Trust (the "Trust"), of which Xxxx Xxxxxxx
V.A. Independence Equity Fund (the "Fund") is a series, has been organized as a
business trust under the laws of The Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial interest
are currently divided into 10 series (including the Fund), each series
representing the entire undivided interest in a separate portfolio of assets.
This contract relates solely to the Fund.
The Board of Trustees of the Trust (the "Trustees") has selected Xxxx
Xxxxxxx Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund and to provide certain other services under the terms
and conditions provided in the investment management contract, dated as of the
date hereof, between the Trust, on behalf of the Fund, and the Adviser (the
"Investment Management Contract").
The Adviser and the Trustees have selected Independence Investment
Associates, Inc. (the "Sub-Adviser") to provide the Adviser and the Fund with
the advice and services set forth below, and the Sub-Adviser is willing to
provide such advice and services, subject to the review of the Trustees and
overall supervision of the Adviser, under the terms and conditions hereinafter
set forth. The Sub-Adviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended
(the "1940 Act"). Accordingly, the Trust, on behalf of the Fund, and the Adviser
agree with the Sub-Adviser as follows:
1. Delivery of Documents. The Trust has furnished the Sub-Adviser
with copies, properly certified or otherwise authenticated, of each of
the following:
(a) Declaration of Trust of the Trust, dated November 15, 1995
(the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Sub-Adviser as
the investment sub-adviser to the Fund and approving the form
of this Sub-Investment Management Contract (the "Contract")
and the resolution approving the Contract, adopted by the
initial sole shareholder of the Fund;
(d) Resolutions of the Trustees selecting the Adviser as
investment adviser to the Fund and approving the form of the
Investment Management Contract and resolutions adopted by the
initial shareholder of the Fund approving the form of the
Investment Management Contract;
(e) The Adviser's Investment Management Contract;
(f) Commitments, limitations and undertakings made by the
Trust to state "blue sky" authorities for the purpose of
qualifying shares of the Fund for sale in such states;
(g) The Fund's prospectus and statement of additional
information; and
The Adviser will furnish the Sub-Adviser from time to time
with copies, properly certified or otherwise authenticated, of all
amendments of or supplements to the foregoing, if any.
The Sub-Adviser has furnished the Adviser with a copy of the
Sub-Adviser's Code of Ethics, and will furnish the Adviser from time to
time with copies of any amendments to the code. The restrictions of the
Sub-Adviser may differ from those of the Trust where appropriate as
long as they maintain the same intent consistent with the sub adviser's
own procedures for recommending and purchasing securities.
2. Investment Services. The Sub-Adviser will use its best efforts
to provide to the Fund continuing and suitable investment advice with
respect to investments, in conformity with the investment policies,
objectives and restrictions of the Fund as set forth in the Fund's
Prospectus and Statement of Additional Information. In the performance
of the Sub-Adviser's duties hereunder, subject always to the provisions
contained in the documents delivered to the Sub-Adviser pursuant to
Section 1 above, as each of the same may from time to time be amended
or supplemented, the Sub-Adviser will have investment discretion with
respect to the Fund and will, at its own expense:
2
(a) furnish the Adviser and the Fund with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the Fund as set forth in the
Fund's prospectus and statement of additional information,
with respect to the purchase, holding and disposition of
portfolio securities and other permitted investments;
(b) furnish the Adviser and the Fund with advice as to the
manner in which voting rights, subscription rights, rights to
consent to corporate action and any other rights pertaining to
the Fund's assets shall be exercised, the Fund having the
responsibility to exercise such voting and other rights; and,
as requested, furnish the Fund with research, economic and
statistical data in connection with the Fund's investments and
investment policies;
(c) submit such reports relating to the valuation of the
Fund's securities as the Adviser may reasonably request;
(d) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers,
investment banking firms, securities brokers or dealers and
other institutions or investors;
(e) consistent with the provisions of Section 7 of this
Contract, place orders for the purchase, sale or exchange of
portfolio securities for the Fund's account with brokers or
dealers selected by the Adviser or the Sub-Adviser, provided
that in connection with the placing of such orders and the
selection of such brokers or dealers the Sub-Adviser shall
seek to obtain execution and pricing within the policy
guidelines determined by the Trustees and set forth in the
prospectus and statement of additional information of the Fund
as in effect and furnished to the Sub-Adviser from time to
time;
(f) from time to time or at any time requested by the Adviser
or the Trustees, make reports to the Adviser or the Trust, as
requested, of the Sub-Adviser's performance of the foregoing
services;
(g) subject to the supervision of the Adviser, maintain and
preserve the records required by the 1940 Act to be maintained
by the Sub-Adviser (the Sub-Adviser agrees that such records
are the property of the Trust and copies will be surrendered
to the Trust promptly upon request therefor);
(h) give instructions to the custodian (including any
subcustodian) of the Fund as to deliveries of securities to
and from such custodian and payments of cash for the account
of the Fund, and advise the Adviser on the same day such
instructions are given;
(i) cooperate generally with the Fund and the Adviser to
provide information necessary for the preparation of
registration statements and periodic reports to be filed with
the Securities and Exchange Commission, including Form N-1A,
semi-annual reports on
3
Form N-SAR, shareholder reports, periodic statements,
shareholder communications and proxy materials furnished to
holders of shares of the Fund, filings with state "blue sky"
authorities and with United States agencies responsible for
tax matters, and other reports and filings of like nature; and
(j) in the performance of its duties hereunder, the
sub-adviser is and shall be an independent contractor and
unless otherwise expressly provided or authorized shall have
no authority to act for or represent the Fund or Trust in any
way or otherwise be deemed to be an agent of the Fund, The
Trust or the Adviser.
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the
cost of maintaining the staff and personnel necessary for it to perform
its obligations under this Contract, the expenses of office rent,
telephone, telecommunications and other facilities it is obligated to
provide in order to perform the services specified in Section 2, and
any other expenses incurred by it in connection with the performance of
its duties hereunder.
4. Expenses of the Fund Not Paid by the Sub-Adviser. The
Sub-Adviser will not be required to pay any expenses which this
Contract does not expressly state shall be payable by the Sub-Adviser.
In particular, and without limiting the generality of the foregoing but
subject to the provisions of Section 3, the Sub-Adviser will not be
required to pay under this contract:
(a) the compensation and expenses of Trustees and of
independent advisers, independent contractors, consultants,
managers and other agents employed by the Trust or the Fund
other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the
Trust or the Fund;
(c) the fees and disbursements of custodians and depositories
of the Trust or the Fund's assets, transfer agents, disbursing
agents, plan agents and registrars;
(d) taxes and governmental fees assessed against the Trust or
the Fund's assets and payable by the Trust or the Fund;
(e) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders of the Trust or the Fund except that the
Sub-Adviser shall bear the costs of providing the information
referred to in Section 2(i) to the Adviser;
(f) brokers' commissions and underwriting fees; and;
(g) the expense of periodic calculations of the net asset
value of the shares of the Fund.
5. Compensation of the Sub-Adviser. For all services to be
rendered, facilities furnished and expenses paid or assumed by the
Sub-Adviser as herein provided for the Fund, the Adviser will pay the
Sub-Adviser quarterly, based on the "average daily net asset" value of
the Fund for each of the preceding 3 months, in arrears a fee at the
annual rate of 55% of the investment advisory fee payable to the
Adviser. The "average daily net assets" of the Fund shall be determined
on the basis set forth in the Fund's prospectus or otherwise consistent
with the 1940 Act and the
4
regulations promulgated thereunder. The Sub-Adviser will receive a pro
rata portion of such quarterly fee for any periods in which the
Sub-Adviser advises the Fund less than a full quarter. The Sub-Adviser
understands and agrees that neither the Trust nor the Fund has any
liability for the Sub-Adviser's fee hereunder. Calculations of the
Sub-Adviser's fee will be based on average net asset values as provided
by the Adviser.
In addition, the Sub-Adviser may agree not to impose all or a
portion of its fee (in advance of the time its fee would otherwise
accrue) and/or undertake to make any other payments or arrangements
necessary to limit the fund's expenses to any level the Sub-Adviser may
specify. Any fee reduction or undertaking shall constitute a binding
modification of this agreement while it is in effect but may be
discontinued or modified prospectively by the Sub-Adviser at any time.
6. Other Activities of the Sub-Adviser and Its Affiliates.
Nothing herein contained shall prevent the Sub-Adviser or any of its
affiliates or associates from engaging in any other business or from
acting as investment adviser or investment manager for any other person
or entity, whether or not having investment policies or a portfolio
similar to the Fund. It is specifically understood that officers,
directors and employees of the Sub-Adviser and those of its affiliates
may engage in providing portfolio management services and advice to
other investment advisory clients of the Sub-Adviser or of its
affiliates.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund,
neither the Sub-Adviser nor any of its directors, officers or employees
will act as principal or agent or receive any commission , except as
permitted by the 1940 Act and the rules and regulations promulgated
thereunder,. The Sub-Adviser shall not knowingly recommend that the
Fund purchase, sell or retain securities of any issuer in which the
Sub-Adviser has a financial interest without obtaining prior approval
of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own
account or accounts. The Trust and Fund acknowledge the Sub-Adviser and
its officers, affiliates and employees, and its other clients may at
any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of by
the Fund. The Sub-Adviser shall have no obligation to acquire with
respect to the Fund, a position in any investment which the
Sub-Adviser, its officers, affiliates or employees may acquire for its
or their own accounts or for the account of another client if, in the
sole discretion of the Sub-Adviser, it is not feasible or desirable to
acquire a position in such investment on behalf of the Fund. Nothing
herein contained shall prevent the Sub-Adviser from purchasing or
recommending the purchase of a particular security for one or more
funds or clients while other funds or clients may be selling the same
security.
8. No Partnership or Joint Venture. The Trust, the Fund, the
Adviser and the Sub-Adviser are not partners of or joint venturers with
each other and nothing herein shall be construed so as to make them
such partners or joint venturers or impose any liability as such on any
of them.
5
9. Limitation of Liability of the Sub-Adviser. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust, the Fund or the Adviser in connection
with the matters to which this Contract relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the Sub-Adviser's part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Contract. Any person, even though also employed by the Sub-Adviser, who
may be or become an employee of and paid by the Trust or the Fund shall
be deemed, when acting within the scope of his employment by the Trust
or the Fund, to be acting in such employment solely for the Trust or
the Fund and not as the Sub-Adviser's employee or agent.
10. Duration and Termination of this Contract. This Contract shall
remain in force until the second anniversary of the date upon which
this Contract was executed by the parties hereto, and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually by (a) a majority of the Trustees who are
not interested persons of the Adviser, of the Sub-Adviser or (other
than as Board members) of the Trust or the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and (b)
either (i) the Trustees or (ii) a majority of the outstanding voting
securities of the Fund. This Contract may, on 60 days' written notice,
be terminated at any time without the payment of any penalty by the
Trust on behalf of the Fund by vote of a majority of the outstanding
voting securities of the Fund or by the Board of Trustees or by the
Adviser or by the Sub-Adviser. Termination of this Contract with
respect to the Fund shall not be deemed to terminate or otherwise
invalidate any provisions of any contract between you and any other
series of the Trust. This Contract shall automatically terminate in the
event of its assignment or upon the termination of the Adviser's
Investment Management Contract. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and
"voting security") shall be applied.
11. Amendment of This Contract. No provision of this Contract may
be changed, discharged, terminated or waived orally, but only by an
instrument in writing signed by the party against which enforcement of
the change discharge, termination or waiver is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this
Contract shall be effective until approved by (a) the Trustees,
including a majority of the Trustees who are not interested persons of
the Adviser, the Sub-Adviser or (other than as Board members) the Trust
or the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) a majority of the outstanding voting
securities of the Fund, as defined in the 1940 Act.
12. Miscellaneous.
(a) The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument. The name Xxxx Xxxxxxx Declaration Trust is the
designation of the Trustees under the Declaration of Trust,
dated November 15, 1995 as amended from time to time. The
Declaration of Trust has been filed with the Secretary of
State of The Commonwealth of Massachusetts. The obligations of
the Trust and the Fund are
6
not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders,
officers, employees or agents of the Trust or the Fund, but
only the Fund's property shall be bound. The Trust or the Fund
shall not be liable for the obligations of any other series of
the Trust.
(b) Any information supplied by the Sub-Adviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is to be regarded as
confidential and for use only by the Fund and/or its agents,
and only in connection with the Fund and its investments.
(c) The Trust and the Fund may use the name "Independence" or
"NIXDEX" or any name similar to "Independence Investment
Associates, Inc." or "NIXDEX" only for so long as this
Agreement remains in effect. At such time as this Agreement
shall no longer be in effect, the Fund will (to the extent
that it lawfully can) cease to use such names or any other
names indicating that the Fund is advised by or otherwise
connected with the Sub-Adviser. The Fund agrees that the
Sub-Adviser reserves to itself and any successor to its
business the right to grant the non-exclusive right to use the
name "Independence" or "NIXDEX" or any similar name to any
other corporation or entity, including but not limited to any
investment company of which it or any of its subsidiaries or
affiliates shall be the investment adviser.
13. Governing Law. This Contract shall be construed in accordance
with the laws of The Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act.
14. Severability. The provisions of this contract are independent
of and separable from each other and no provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be deemed invalid or
unenforceable in whole or in part.
7
Yours very truly,
XXXX XXXXXXX ADVISERS, INC.
By: /s/Xxxx X. Xxxxx
----------------------------
Xxxx X. Xxxxx
Vice President and Secretary
The foregoing Contract is hereby agreed to as of the date thereof.
XXXX XXXXXXX DECLARATION TRUST
on behalf of Xxxx Xxxxxxx V.A. Independence Equity Fund
By: /s/Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
President
INDEPENDENCE INVESTMENT ASSOCIATES, INC.
By: /s/Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
8
XXXX XXXXXXX ADVISERS, INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
August 29, 1996
XXXX XXXXXXX DECLARATION TRUST
-- Xxxx Xxxxxxx V.A. Sovereign Investors Fund
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
SOVEREIGN ASSET MANAGEMENT CORPORATION
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Sub-Investment Management Contract
Dear Sirs:
Xxxx Xxxxxxx Declaration Trust (the "Trust"), of which Xxxx Xxxxxxx
V.A. Sovereign Investors Fund (the "Fund") is a series, has been organized as a
business trust under the laws of The Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial interest
are currently divided into ten series (including the Fund), each series
representing the entire undivided interest in a separate portfolio of assets.
This contract relates solely to the Fund.
The Board of Trustees of the Trust (the "Trustees") has selected Xxxx
Xxxxxxx Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund and to provide certain other services, under the terms
and conditions provided in the investment management contract, dated as of the
date hereof, between the Trust, on behalf of the Fund, and the Adviser (the
"Investment Management Contract").
The Adviser and the Trustees have selected Sovereign Asset Management
Corporation (the "Sub-Adviser") to provide the Adviser and the Fund with the
advice and services set forth below, and the Sub-Adviser is willing to provide
such advice and services, subject to the review of the Trustees and overall
supervision of the Adviser, under the terms and conditions hereinafter set
forth. The Sub-Adviser hereby represents and warrants that it is registered as
an investment adviser under the Investment Advisers Act of 1940, as amended (the
"1940 Act"). Accordingly, the Trust, on behalf of the Fund, and the Adviser
agree with the Sub-Adviser as follows:
1. Delivery of Documents. The Trust has furnished the Sub-Adviser
with copies, properly certified or otherwise authenticated, of each of
the following:
(a) Declaration of Trust of the Trust, dated November 15, 1995
(the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Sub-Adviser as
the investment sub-adviser to the Fund and approving the form
of this Sub-Investment Management Contract (the "Contract")
and the resolution approving the Contract, adopted by the
initial sole shareholder of the Fund;
(d) Resolutions of the Trustees selecting the Adviser as
investment adviser to the Fund and approving the form of the
Investment Management Contract and resolutions adopted by the
initial shareholder of the Fund approving the form of the
Investment Management Contract;
(e) The Adviser's Investment Management Contract;
(f) Commitments, limitations and undertakings made by the
Trust to state "blue sky" authorities for the purpose of
qualifying shares of the Fund for sale in such states;
(g) The Fund's prospectus and statement of additional
information; and
(h) The Trust's Code of Ethics.
The Adviser will furnish the Sub-Adviser from time to time
with copies, properly certified or otherwise authenticated, of all
amendments of or supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts
to provide to the Fund continuing and suitable investment advice with
respect to investments, in conformity with the investment policies,
objectives and restrictions of the Fund as set forth in the Fund's
Prospectus and Statement of Additional Information. The Sub-Adviser
will perform its duties in compliance with the Investment Compant Act,
the Internal Revenue Code and all other applicable federal and state
law. In the performance of the Sub-Adviser's duties hereunder, subject
always to the provisions contained in the documents delivered to the
Sub-Adviser pursuant to Section 1 above, as each of the same may from
time to time be amended or supplemented, the Sub-Adviser will have
investment discretion with respect to the Fund and will, at its own
expense:
(a) furnish the Adviser and the Fund with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the Fund as set forth in the
Fund's prospectus and statement of additional information,
with respect to the purchase, holding and disposition of
portfolio securities and other permitted investments;
2
(b) furnish the Adviser and the Fund with advice as to the
manner in which voting rights, subscription rights, rights to
consent to corporate action and any other rights pertaining to
the Fund's assets shall be exercised, the Fund having the
responsibility to exercise such voting and other rights; and,
as requested, furnish the Fund with research, economic and
statistical data in connection with the Fund's investments and
investment policies;
(c) submit such reports relating to the valuation of the
Fund's securities as the Adviser may reasonably request;
(d) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers,
investment banking firms, securities brokers or dealers and
other institutions or investors;
(e) consistent with the provisions of Section 7 of this
Contract, place orders for the purchase, sale or exchange of
portfolio securities for the Fund's account with brokers or
dealers selected by the Adviser or the Sub-Adviser, provided
that in connection with the placing of such orders and the
selection of such brokers or dealers the Sub-Adviser shall
seek to obtain execution and pricing within the policy
guidelines determined by the Trustees and set forth in the
prospectus and statement of additional information of the Fund
as in effect and furnished to the Sub-Adviser from time to
time;
(f) from time to time or at any time requested by the Adviser
or the Trustees, make reports to the Adviser or the Trust, as
requested, of the Sub-Adviser's performance of the foregoing
services;
(g) subject to the supervision of the Adviser, maintain and
preserve the records required by the 1940 Act to be maintained
by the Sub-Adviser (the Sub-Adviser agrees that such records
are the property of the Trust and copies will be surrendered
to the Trust promptly upon request therefor);
(h) give instructions to the custodian (including any
subcustodian) of the Fund as to deliveries of securities to
and from such custodian and payments of cash for the account
of the Fund, and advise the Adviser on the same day such
instructions are given;
(i) cooperate generally with the Fund and the Adviser to
provide information necessary for the preparation of
registration statements and periodic reports to be filed with
the Securities and Exchange Commission, including Form N-1A,
semi-annual reports on Form N-SAR, shareholder reports,
periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings
with state "blue sky" authorities and with United States
agencies responsible for tax matters, and other reports and
filings of like nature; and
3
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the
cost of maintaining the staff and personnel necessary for it to perform
its obligations under this Contract, the expenses of office rent,
telephone, telecommunications and other facilities it is obligated to
provide in order to perform the services specified in Section 2, and
any other expenses incurred by it in connection with the performance of
its duties hereunder.
4. Expenses of the Fund Not Paid by the Sub-Adviser. The
Sub-Adviser will not be required to pay any expenses which this
Contract does not expressly state shall be payable by the Sub-Adviser.
In particular, and without limiting the generality of the foregoing but
subject to the provisions of Section 3, the Sub-Adviser will not be
required to pay under this contract:
(a) the compensation and expenses of Trustees and of
independent advisers, independent contractors, consultants,
managers and other agents employed by the Trust or the Fund
other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the
Trust or the Fund;
(c) the fees and disbursements of custodians and depositories
of the Trust or the Fund's assets, transfer agents, disbursing
agents, plan agents and registrars;
(d) taxes and governmental fees assessed against the Trust or
the Fund's assets and payable by the Trust or the Fund;
(e) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders of the Trust or the Fund except that the
Sub-Adviser shall bear the costs of providing the information
referred to in Section 2(i) to the Adviser;
(f) brokers' commissions and underwriting fees; and;
(g) the expense of periodic calculations of the net asset
value of the shares of the Fund.
5. Compensation of the Sub-Adviser. For all services to be
rendered, facilities furnished and expenses paid or assumed by the
Sub-Adviser as herein provided for the Fund, the Adviser will pay the
Sub-Adviser quarterly, for each of the preceding 3 months, in arrears a
fee at the annual rate of 40% of the investment advisory fee payable to
the Adviser. The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or otherwise
consistent with the 1940 Act and the regulations promulgated
thereunder. The Sub-Adviser will receive a pro rata portion of such
monthly fee for any periods in which the Sub-Adviser advises the Fund
less than a full month. The Sub-Adviser understands and agrees that
neither the Trust nor the Fund has any liability for the Sub-Adviser's
fee hereunder. Calculations of the Sub-Adviser's fee will be based on
average net asset values as provided by the Adviser.
In addition, the Sub-Adviser may agree not to impose all or a
portion of its fee (in advance of the time its fee would otherwise
accrue) and/or undertake to make any other payments or arrangements
necessary to limit the fund's expenses to any level the Sub-Adviser
4
may specify. Any fee reduction or undertaking shall constitute a
binding modification of this agreement while it is in effect but may be
discontinued or modified prospectively by the Sub-Adviser at any time.
6. Other Activities of the Sub-Adviser and Its Affiliates.
Nothing herein contained shall prevent the Sub-Adviser or any of its
affiliates or associates from engaging in any other business or from
acting as investment adviser or investment manager for any other person
or entity, whether or not having investment policies or a portfolio
similar to the Fund. It is specifically understood that officers,
directors and employees of the Sub-Adviser and those of its affiliates
may engage in providing portfolio management services and advice to
other investment advisory clients of the Sub-Adviser or of its
affiliates.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund,
neither the Sub-Adviser nor any of its directors, officers or employees
will act as principal or agent or receive any commission , except as
permitted by the 1940 Act and the rules and regulations promulgated
thereunder. The Sub-Adviser shall not knowingly recommend that the Fund
purchase, sell or retain securities of any issuer in which the
Sub-Adviser has a financial interest without obtaining prior approval
of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own
account or accounts. The Trust and Fund acknowledge the Sub-Adviser and
its officers, affiliates and employees, and its other clients may at
any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of by
the Fund. The Sub-Adviser shall have no obligation to acquire with
respect to the Fund, a position in any investment which the
Sub-Adviser, its officers, affiliates or employees may acquire for its
or their own accounts or for the account of another client if, in the
sole discretion of the Sub-Adviser, it is not feasible or desirable to
acquire a position in such investment on behalf of the Fund. Nothing
herein contained shall prevent the Sub-Adviser from purchasing or
recommending the purchase of a particular security for one or more
funds or clients while other funds or clients may be selling the same
security.
8. No Partnership or Joint Venture. The Trust, the Fund, the
Adviser and the Sub-Adviser are not partners of or joint venturers with
each other and nothing herein shall be construed so as to make them
such partners or joint venturers or impose any liability as such on any
of them.
9. Limitation of Liability of the Sub-Adviser. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust, the Fund or the Adviser in connection
with the matters to which this Contract relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the Sub-Adviser's part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Contract. Any person, even though also employed by the Sub-Adviser, who
may be or become an employee of and paid by the Trust or the Fund shall
be deemed, when acting within the scope of his employment by the Trust
or the Fund, to be acting in such employment solely for the Trust or
the Fund and not as the Sub-Adviser's employee or agent.
5
10. Duration and Termination of this Contract. This Contract shall
remain in force until the second anniversary of the date upon which
this Contract was executed by the parties hereto, and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually by (a) a majority of the Trustees who are
not interested persons of the Adviser, of the Sub-Adviser or (other
than as Board members) of the Trust or the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and (b)
either (i) the Trustees or (ii) a majority of the outstanding voting
securities of the Fund. This Contract may, on 60 days' written notice,
be terminated at any time without the payment of any penalty by the
Trust on behalf of the Fund by vote of a majority of the outstanding
voting securities of the Fund or by the Board of Trustees or by the
Adviser or by the Sub-Adviser. Termination of this Contract with
respect to the Fund shall not be deemed to terminate or otherwise
invalidate any provisions of any contract between you and any other
series of the Trust. This Contract shall automatically terminate in the
event of its assignment or upon the termination of the Adviser's
Investment Management Contract. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and
"voting security") shall be applied.
11. Amendment of This Contract. No provision of this Contract may
be changed, discharged, terminated or waived orally, but only by an
instrument in writing signed by the party against which enforcement of
the change discharge, termination or waiver is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this
Contract shall be effective until approved by (a) the Trustees,
including a majority of the Trustees who are not interested persons of
the Adviser, the Sub-Adviser or (other than as Board members) the Trust
or the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) a majority of the outstanding voting
securities of the Fund, as defined in the 1940 Act.
12. Miscellaneous.
(a) The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument. The name Xxxx Xxxxxxx Declaration Trust is the
designation of the Trustees under the Declaration of Trust,
dated November 15, 1995 as amended from time to time. The
Declaration of Trust has been filed with the Secretary of
State of The Commonwealth of Massachusetts. The obligations of
the Trust and the Fund are not personally binding upon, nor
shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the
Trust or the Fund, but only the Fund's property shall be
bound. The Trust or the Fund shall not be liable for the
obligations of any other series of the Trust.
(b) Any information supplied by the Sub-Adviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is to be regarded as
confidential and for use only by the Fund and/or its agents,
and only in connection with the Fund and its investments.
6
13. Governing Law. This Contract shall be construed in accordance
with the laws of The Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act.
14. Severability. The provisions of this contract are independent
of and separable from each other and no provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be deemed invalid or
unenforceable in whole or in part.
Yours very truly,
XXXX XXXXXXX ADVISERS, INC.
By: /s/Xxxx X. Xxxxx
----------------------------
Xxxx X. Xxxxx
Vice President and Secretary
The foregoing Contract is hereby agreed to as of the date thereof.
XXXX XXXXXXX DECLARATION TRUST
on behalf of Xxxx Xxxxxxx V.A. Sovereign Investors Fund
By: /s/Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
President
SOVEREIGN ASSET MANAGEMENT CORPORATION
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
7
XXXX XXXXXXX ADVISERS, INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
August 29, 1996
XXXX XXXXXXX DECLARATION TRUST
-- Xxxx Xxxxxxx V.A. International Fund
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
XXXX XXXXXXX ADVISERS INTERNATIONAL LTD.
00 Xxxxx Xxxxxx
Xxxxxx, XX X0X 0XX
Sub-Investment Management Contract
Dear Sirs:
Xxxx Xxxxxxx Declaration Trust (the "Trust"), of which Xxxx Xxxxxxx
V.A. International Fund (the "Fund") is a series, has been organized as a
business trust under the laws of The Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial interest
are currently divided into ten series (including the Fund), each series
representing the entire undivided interest in a separate portfolio of assets.
This contract relates solely to the Fund.
The Board of Trustees of the Trust (the "Trustees") has selected Xxxx
Xxxxxxx Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund and to provide certain other services, under the terms
and conditions provided in the investment management contract, dated as of the
date hereof, between the Trust, on behalf of the Fund, and the Adviser (the
"Investment Management Contract").
The Adviser and the Trustees have selected Xxxx Xxxxxxx Advisers
International Ltd. (the "Sub-Adviser") to provide the Adviser and the Fund with
the advice and services set forth below, and the Sub-Adviser is willing to
provide such advice and services, subject to the review of the Trustees and
overall supervision of the Adviser, under the terms and conditions hereinafter
set forth. The Sub-Adviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended
(the "1940 Act"). Accordingly, the Trust, on behalf of the Fund, and the Adviser
agree with the Sub-Adviser as follows:
1. Delivery of Documents. The Trust has furnished the Sub-Adviser
with copies, properly certified or otherwise authenticated, of each of
the following:
(a) Declaration of Trust of the Trust, dated November 15, 1995
(the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Sub-Adviser as
the investment sub-adviser to the Fund and approving the form
of this Sub-Investment Management Contract (the "Contract")
and the resolution approving the Contract, adopted by the
initial sole shareholder of the Fund;
(d) Resolutions of the Trustees selecting the Adviser as
investment adviser to the Fund and approving the form of the
Investment Management Contract and resolutions adopted by the
initial shareholder of the Fund approving the form of the
Investment Management Contract;
(e) The Adviser's Investment Management Contract;
(f) Commitments, limitations and undertakings made by the
Trust to state "blue sky" authorities for the purpose of
qualifying shares of the Fund for sale in such states;
(g) The Fund's prospectus and statement of additional
information; and
(h) The Trust's Code of Ethics.
The Adviser will furnish the Sub-Adviser from time to time
with copies, properly certified or otherwise authenticated, of all
amendments of or supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts
to provide to the Fund continuing and suitable investment advice with
respect to investments, in conformity with the investment policies,
objectives and restrictions of the Fund as set forth in the Fund's
Prospectus and Statement of Additional Information. The Sub-Adviser
will perform its duties in compliance with the Investment Compant Act,
the Internal Revenue Code and all other applicable federal and state
law. In the performance of the Sub-Adviser's duties hereunder, subject
always to the provisions contained in the documents delivered to the
Sub-Adviser pursuant to Section 1 above, as each of the same may from
time to time be amended or supplemented, the Sub-Adviser will have
investment discretion with respect to the Fund and will, at its own
expense:
(a) furnish the Adviser and the Fund with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the Fund as set forth in the
Fund's prospectus and statement of additional information,
with respect to the purchase, holding and disposition of
portfolio securities and other permitted investments;
(b) furnish the Adviser and the Fund with advice as to the
manner in which voting rights, subscription rights, rights to
consent to corporate action and any other rights
2
pertaining to the Fund's assets shall be exercised, the Fund
having the responsibility to exercise such voting and other
rights; and, as requested, furnish the Fund with research,
economic and statistical data in connection with the Fund's
investments and investment policies;
(c) submit such reports relating to the valuation of the
Fund's securities as the Adviser may reasonably request;
(d) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers,
investment banking firms, securities brokers or dealers and
other institutions or investors;
(e) consistent with the provisions of Section 7 of this
Contract, place orders for the purchase, sale or exchange of
portfolio securities for the Fund's account with brokers or
dealers selected by the Adviser or the Sub-Adviser, provided
that in connection with the placing of such orders and the
selection of such brokers or dealers the Sub-Adviser shall
seek to obtain execution and pricing within the policy
guidelines determined by the Trustees and set forth in the
prospectus and statement of additional information of the Fund
as in effect and furnished to the Sub-Adviser from time to
time;
(f) from time to time or at any time requested by the Adviser
or the Trustees, make reports to the Adviser or the Trust, as
requested, of the Sub-Adviser's performance of the foregoing
services;
(g) subject to the supervision of the Adviser, maintain and
preserve the records required by the 1940 Act to be maintained
by the Sub-Adviser (the Sub-Adviser agrees that such records
are the property of the Trust and copies will be surrendered
to the Trust promptly upon request therefor);
(h) give instructions to the custodian (including any
subcustodian) of the Fund as to deliveries of securities to
and from such custodian and payments of cash for the account
of the Fund, and advise the Adviser on the same day such
instructions are given;
(i) cooperate generally with the Fund and the Adviser to
provide information necessary for the preparation of
registration statements and periodic reports to be filed with
the Securities and Exchange Commission, including Form N-1A,
semi-annual reports on Form N-SAR, shareholder reports,
periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings
with state "blue sky" authorities and with United States
agencies responsible for tax matters, and other reports and
filings of like nature; and
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the
cost of maintaining the staff and personnel necessary for it to perform
its obligations under this Contract, the expenses of office rent,
telephone, telecommunications and other facilities it is obligated to
provide in order to perform the services specified in Section 2, and
any other expenses incurred by it in connection with the performance of
its duties hereunder.
3
4. Expenses of the Fund Not Paid by the Sub-Adviser. The
Sub-Adviser will not be required to pay any expenses which this
Contract does not expressly state shall be payable by the Sub-Adviser.
In particular, and without limiting the generality of the foregoing but
subject to the provisions of Section 3, the Sub-Adviser will not be
required to pay under this contract:
(a) the compensation and expenses of Trustees and of
independent advisers, independent contractors, consultants,
managers and other agents employed by the Trust or the Fund
other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the
Trust or the Fund;
(c) the fees and disbursements of custodians and depositories
of the Trust or the Fund's assets, transfer agents, disbursing
agents, plan agents and registrars;
(d) taxes and governmental fees assessed against the Trust or
the Fund's assets and payable by the Trust or the Fund;
(e) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders of the Trust or the Fund except that the
Sub-Adviser shall bear the costs of providing the information
referred to in Section 2(i) to the Adviser;
(f) brokers' commissions and underwriting fees; and;
(g) the expense of periodic calculations of the net asset
value of the shares of the Fund.
5. Compensation of the Sub-Adviser. For all services to be
rendered, facilities furnished and expenses paid or assumed by the
Sub-Adviser as herein provided for the Fund, the Adviser will pay the
Sub-Adviser quarterly, for each of the preceding 3 months, in arrears a
fee at the annual rate of 70% of the investment advisory fee payable to
the Adviser. The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or otherwise
consistent with the 1940 Act and the regulations promulgated
thereunder. The Sub-Adviser will receive a pro rata portion of such
monthly fee for any periods in which the Sub-Adviser advises the Fund
less than a full month. The Sub-Adviser understands and agrees that
neither the Trust nor the Fund has any liability for the Sub-Adviser's
fee hereunder. Calculations of the Sub-Adviser's fee will be based on
average net asset values as provided by the Adviser.
In addition, the Sub-Adviser may agree not to impose all or a
portion of its fee (in advance of the time its fee would otherwise
accrue) and/or undertake to make any other payments or arrangements
necessary to limit the fund's expenses to any level the Sub-Adviser may
specify. Any fee reduction or undertaking shall constitute a binding
modification of this agreement while it is in effect but may be
discontinued or modified prospectively by the Sub-Adviser at any time.
4
6. Other Activities of the Sub-Adviser and Its Affiliates.
Nothing herein contained shall prevent the Sub-Adviser or any of its
affiliates or associates from engaging in any other business or from
acting as investment adviser or investment manager for any other person
or entity, whether or not having investment policies or a portfolio
similar to the Fund. It is specifically understood that officers,
directors and employees of the Sub-Adviser and those of its affiliates
may engage in providing portfolio management services and advice to
other investment advisory clients of the Sub-Adviser or of its
affiliates.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund,
neither the Sub-Adviser nor any of its directors, officers or employees
will act as principal or agent or receive any commission , except as
permitted by the 1940 Act and the rules and regulations promulgated
thereunder. The Sub-Adviser shall not knowingly recommend that the Fund
purchase, sell or retain securities of any issuer in which the
Sub-Adviser has a financial interest without obtaining prior approval
of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own
account or accounts. The Trust and Fund acknowledge the Sub-Adviser and
its officers, affiliates and employees, and its other clients may at
any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of by
the Fund. The Sub-Adviser shall have no obligation to acquire with
respect to the Fund, a position in any investment which the
Sub-Adviser, its officers, affiliates or employees may acquire for its
or their own accounts or for the account of another client if, in the
sole discretion of the Sub-Adviser, it is not feasible or desirable to
acquire a position in such investment on behalf of the Fund. Nothing
herein contained shall prevent the Sub-Adviser from purchasing or
recommending the purchase of a particular security for one or more
funds or clients while other funds or clients may be selling the same
security.
8. No Partnership or Joint Venture. The Trust, the Fund, the
Adviser and the Sub-Adviser are not partners of or joint venturers with
each other and nothing herein shall be construed so as to make them
such partners or joint venturers or impose any liability as such on any
of them.
9. Limitation of Liability of the Sub-Adviser. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust, the Fund or the Adviser in connection
with the matters to which this Contract relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the Sub-Adviser's part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Contract. Any person, even though also employed by the Sub-Adviser, who
may be or become an employee of and paid by the Trust or the Fund shall
be deemed, when acting within the scope of his employment by the Trust
or the Fund, to be acting in such employment solely for the Trust or
the Fund and not as the Sub-Adviser's employee or agent.
5
10. Duration and Termination of this Contract. This Contract shall
remain in force until the second anniversary of the date upon which
this Contract was executed by the parties hereto, and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually by (a) a majority of the Trustees who are
not interested persons of the Adviser, of the Sub-Adviser or (other
than as Board members) of the Trust or the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and (b)
either (i) the Trustees or (ii) a majority of the outstanding voting
securities of the Fund. This Contract may, on 60 days' written notice,
be terminated at any time without the payment of any penalty by the
Trust on behalf of the Fund by vote of a majority of the outstanding
voting securities of the Fund or by the Board of Trustees or by the
Adviser or by the Sub-Adviser. Termination of this Contract with
respect to the Fund shall not be deemed to terminate or otherwise
invalidate any provisions of any contract between you and any other
series of the Trust. This Contract shall automatically terminate in the
event of its assignment or upon the termination of the Adviser's
Investment Management Contract. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and
"voting security") shall be applied.
11. Amendment of This Contract. No provision of this Contract may
be changed, discharged, terminated or waived orally, but only by an
instrument in writing signed by the party against which enforcement of
the change discharge, termination or waiver is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this
Contract shall be effective until approved by (a) the Trustees,
including a majority of the Trustees who are not interested persons of
the Adviser, the Sub-Adviser or (other than as Board members) the Trust
or the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) a majority of the outstanding voting
securities of the Fund, as defined in the 1940 Act.
12. Miscellaneous.
(a) The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument. The name Xxxx Xxxxxxx Declaration Trust is the
designation of the Trustees under the Declaration of Trust,
dated November 15, 1995 as amended from time to time. The
Declaration of Trust has been filed with the Secretary of
State of The Commonwealth of Massachusetts. The obligations of
the Trust and the Fund are not personally binding upon, nor
shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the
Trust or the Fund, but only the Fund's property shall be
bound. The Trust or the Fund shall not be liable for the
obligations of any other series of the Trust.
(b) Any information supplied by the Sub-Adviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is to be regarded as
confidential and for use only by the Fund and/or its agents,
and only in connection with the Fund and its investments.
6
13. Governing Law. This Contract shall be construed in accordance
with the laws of The Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act.
14. Severability. The provisions of this contract are independent
of and separable from each other and no provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be deemed invalid or
unenforceable in whole or in part.
Yours very truly,
XXXX XXXXXXX ADVISERS, INC.
By: /s/Xxxx X. Xxxxx
----------------------------
Xxxx X. Xxxxx
Vice President and Secretary
The foregoing Contract is hereby agreed to as of the date thereof.
XXXX XXXXXXX DECLARATION TRUST
on behalf of Xxxx Xxxxxxx V.A. International Fund
By: /s/Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
President
XXXX XXXXXXX ADVISERS INTERNATIONAL LTD.
By: /s/Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman, President and CEO
7
