Exhibit (d)(2)
SUB-ADVISORY AGREEMENT
AGREEMENT, dated as of July 24, 2007 by and between XShares Advisors LLC
(the "Investment Adviser"), a Delaware limited liability company having its
principal office and place of business at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000, and Amerivest Investment Management, LLC (the "Sub-Adviser"), a Delaware
limited liability company having its principal office and place of business at
0000 Xxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000 and a wholly-owned subsidiary of
TD AMERITRADE Holding Corporation, whose headquarters are located at 0000 Xxxxx
000xx Xxxxxx, Xxxxx, XX 00000.
WHEREAS, the Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, the Investment Adviser has entered into an Investment Advisory
Agreement dated as of July 24, 2007 with TDAX Funds, Inc. (the "Corporation") an
investment company registered under the Investment Company Act of 1940, as
amended ("Investment Company Act");
WHEREAS, the Investment Adviser has entered into a separate Sub-Advisory
Agreement dated as of July 24, 2007 with BNY Investment Advisors ("BNY"), a
registered investment adviser under the Advisers Act;
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act;
WHEREAS, the Board of Directors of the Corporation and the Investment
Adviser desire to retain the Sub-Adviser to render investment advisory and other
services to the funds specified in Appendix A hereto, as amended from time to
time, each a series of the Corporation (each a "Fund" and collectively, the
"Funds"), in the manner and on the terms hereinafter set forth;
WHEREAS, the Investment Adviser has the authority under the Investment
Advisory Agreement, with the consent of the Board of Directors of the
Corporation (the "Board" or the "Directors") to select sub-advisers for each
Fund; and
WHEREAS, the Sub-Adviser is willing to furnish such services to the
Investment Adviser and each Fund;
NOW, THEREFORE, the Investment Adviser and the Sub-Adviser agree as
follows:
1. APPOINTMENT OF THE SUB-ADVISER
The Investment Adviser hereby appoints the Sub-Adviser to act as a
sub-adviser for each Fund, subject to the supervision and oversight of the
Investment Adviser and the
Directors of the Corporation, and in accordance with the terms and conditions of
this Agreement. The Sub-Adviser will be an independent contractor and will have
no authority to act for or represent the Corporation or the Investment Adviser
in any way or otherwise be deemed an agent of the Corporation or the Investment
Adviser except as expressly authorized in this Agreement or another writing by
the Corporation, the Investment Adviser and the Sub-Adviser.
2. ACCEPTANCE OF APPOINTMENT
The Sub-Adviser accepts that appointment and agrees to render the services
herein set forth, for the compensation herein provided.
The assets of each Fund will be maintained in the custody of a custodian
(who shall be identified by the Investment Adviser in writing). The Sub-Adviser
will not have custody of any securities, cash or other assets of the Fund and
will not be liable for any loss resulting from any act or omission of the
custodian other than acts or omissions arising in reliance on instructions of
the Sub-Adviser.
3. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE CORPORATION
A. As sub-adviser to each Fund, the Sub-Adviser will consult with the
Investment Advisor on the portfolio of securities and provide oversight over
BNY, such oversight to include review of the portfolio of securities of each
Fund in accordance with the terms of the Funds' prospectuses and statements of
additional information, assistance in the resolution of any pricing issues and
assistance in the development of trading strategies. Services performed by the
Sub-Adviser are subject to the direction, supervision and control of the
Investment Adviser and the Directors of the Corporation.
B. As part of the services it will provide hereunder, the Sub-Adviser
will:
(i) regularly monitor the portfolio of the Fund in comparison with
its Underlying Index and work with and supervise BNY to seek to obtain the
tracking error of the Fund to its Underlying Index as set forth by the
Corporation from time to time;
(ii) coordinate with BNY to keep the Directors of the Corporation
and the Investment Adviser fully informed on an ongoing basis of all
material facts concerning the investment and reinvestment of the assets of
each Fund and the operations of the Sub-Adviser and BNY, make regular and
periodic special written reports of such additional information concerning
the same as may reasonably be requested from time to time by the
Investment Adviser or the Directors of the Corporation, and attend
meetings with the Investment Adviser and/or the Directors, as reasonably
requested, to discuss the foregoing;
(iii) in accordance with procedures and methods established by the
Directors of the Corporation, which may be amended from time to time, and
in conjunction with BNY, promptly notify the Investment Adviser or the
Directors of the Corporation of
2
securities in a Fund for which fair valuation may be required or of
significant events that may require fair value pricing of all or a portion
of a Fund's portfolio, provide assistance in determining the fair value of
all securities and other investments/assets in the Fund, as necessary, and
use reasonable efforts to arrange for the provision of valuation
information or price(s) from party(ies) independent of the Sub-Adviser for
each security or other investment/asset in the Fund for which market
prices are not readily available; and
(iv) cooperate with and provide reasonable assistance to the
Investment Adviser, BNY, the Corporation's administrator, the
Corporation's custodian and foreign custodians, the Corporation's transfer
agent and pricing agents and all other agents and representatives of the
Corporation, and keep all such persons fully informed as to such matters
as they may reasonably deem necessary to the performance of their
obligations to the Corporation and the Investment Adviser, provide prompt
responses to reasonable requests made by such persons and maintain any
appropriate interfaces with each so as to promote the efficient exchange
of information.
C. In furnishing services hereunder, the Sub-Adviser shall be subject to,
and shall perform in accordance with the following: (i) the Corporation's
Articles of Incorporation, as the same may be hereafter modified and/or amended
from time to time ("Certificate of Incorporation"); (ii) the By-Laws of the
Corporation, as the same may be hereafter modified and/or amended from time to
time ("By-Laws"); (iii) the currently effective Prospectus and Statement of
Additional Information of the Corporation filed with the Securities and Exchange
Commission ("SEC") and delivered to the Sub-Adviser, as the same may be
hereafter modified, amended and/or supplemented ("Prospectus and SAI"); (iv) the
Investment Company Act and the Advisers Act and the rules under each, and all
other federal and state laws or regulations applicable to the Corporation and
the Fund(s); (v) any order or no-action letter of the SEC governing the
operation of the Corporation, (vi) the Corporation's Compliance Manual and other
policies and procedures adopted from time to time by the Board of Directors of
the Corporation; and (vii) the written instructions of the Investment Adviser.
Prior to the commencement of the Sub-Adviser's services hereunder, the
Investment Adviser shall provide the Sub-Adviser with current copies of the
Certificate of Incorporation, By-Laws, Prospectus and SAI, any order or
no-action letter of the SEC governing the operation of the Corporation,
Compliance Manual and other relevant policies and procedures that are adopted by
the Board of Directors. The Investment Adviser undertakes to provide the
Sub-Adviser with copies or other written notice of any amendments, modifications
or supplements to any such above-mentioned document.
D. The Sub-Adviser shall pay its own expenses in connection with the
services to be provided by it pursuant to this Agreement. In addition, the
Sub-Adviser shall be responsible for the compensation of officers or employees
of the Corporation who are also officers or employees of the Sub-Adviser, except
as may otherwise be determined by the Board. The Sub-Adviser hereby agrees to
pay or cause to be paid from its own resources, which may include the
sub-advisory fee paid to it by the Investment Adviser, all fees and expenses of
BNY, the Transfer-Agent, the Administrator and Accounting Agent, and the
Custodian engaged by the Investment Adviser on behalf of the
3
Corporation. Should Sub-Adviser fail to pay or cause to be paid (as required
above) the fees and expenses of BNY, the Transfer Agent, the Administrator and
Accounting Agent, and the Custodian, the Investment Adviser shall pay such
entities from its own resources and shall deduct such payments from the
Sub-Adviser's fee, as necessary. The Corporation is responsible for the payment
of all other expenses associated with its operation including, but not limited
to, (i) brokerage and other expenses (such as stamp taxes) connected with the
execution of portfolio transactions or in connection with creation and
redemption transactions, (ii) taxes, (iii) interest on borrowings, (iv) legal
fees or expenses in connection with any arbitration, litigation or pending or
threatened arbitration or litigation, including any settlements in connection
therewith, (v) compensation and expenses of the Directors of the Corporation who
are not officers, directors, partners or employees of the Investment Adviser,
and Sub-Adviser, or their affiliates (the "Independent Directors") as well as
the cost of Directors' Meetings, (vi) compensation and expenses of counsel to
the Corporation and counsel to the Independent Directors, (vii) if approved by
the Board, compensation and expenses of the Corporation's chief compliance
officer and expenses associated with the Corporation's compliance program,
(viii) fees and expenses of the Corporation's independent auditors, (ix)
registration fees, expenses associated with compliance by the Corporation with
mandatory regulatory mandates including those relating to the development and
distribution of its prospectus and shareholder reports, and extraordinary
expenses, (x) distribution fees and expenses paid by the Corporation under any
distribution plan adopted pursuant to Rule 12b-l under the 1940 Act, (xi) the
cost of director and officer errors and omissions insurance coverage, (xii) the
Funds' pro-rata portion of dues, fees and charges of any trade associations of
which the Corporation is a member, (xiii) certain out-of-pocket expenses,
including, but not limited to cost of obtaining prices for security valuations
(including manual broker quotes), Federal Reserve charges related to securities
transactions, postage and insurance on physical transfer items,
telecommunication charges, and proxy voting execution, advice and reporting etc.
and (xiv) the unitary advisory fee payable to the Investment Advisor pursuant to
the Investment Advisory Agreement. The payment or assumption by the Sub-Adviser
of any expense of the Corporation that the Sub-Adviser is not required by this
Agreement to pay or assume shall not obligate the Sub-Adviser to pay or assume
the same or any similar expense of the Corporation on any subsequent occasion.
In addition, at its expense, Sub-Adviser will furnish (i) all necessary
facilities and personnel, including salaries, expenses and fees of any personnel
required for them to faithfully perform their duties under this Agreement; and
(ii) furnish administrative facilities, including bookkeeping, and all equipment
necessary for the efficient conduct of the Sub-Adviser's duties under this
Agreement.
E. The Investment Adviser agrees that the Sub-Adviser and its affiliates
may give advice and take action in the performance of their duties with respect
to any of their other clients that may differ from advice given, or the timing
or nature of actions taken, with respect to a Fund. The Investment Adviser also
acknowledges that the Sub-Adviser and its affiliates are fiduciaries to other
entities, some of which have the same or similar investment objectives (and will
hold the same or similar investments) as a Fund, and that the Sub-Adviser will
carry out its duties hereunder together with its duties under such
relationships.
F. The Sub-Adviser is not authorized to engage in "soft-dollar"
transactions permitted by Section 28(e) of the Securities Exchange Act of 1934,
as amended
4
("Exchange Act"), without the express written approval of the Investment Adviser
or the Corporation's Board of Directors.
F. The Sub-Adviser will maintain and preserve all accounts, books and
records with respect to each Fund as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder.
4. COMPENSATION OF SUB-ADVISER
The Investment Adviser will pay the Sub-Adviser a fee at the annual rate
of .55 of 1% of each Fund's average daily net assets for the first $5 billion in
assets and .60 of 1% of each Fund's average daily net assets in excess of $5
billion as compensation for providing services in accordance with this
Agreement. The fee will be accrued daily, and will be payable on the last day of
each calendar month for services performed hereunder during that month or on
such other schedule as you shall request of us in writing.
5. LIABILITY AND INDEMNIFICATION
A. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, neither the Sub-Adviser nor any of its
officers, members or employees (its "Affiliates") shall be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Investment Adviser or the Corporation as a
result of any error of judgment by the Sub-Adviser or its Affiliates with
respect to each Fund, except that nothing in this Agreement shall operate or
purport to operate in any way to exculpate, waive or limit the liability of the
Sub-Adviser or its Affiliates for, and the Sub-Adviser shall indemnify and hold
harmless the Corporation or the Investment Adviser, all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the Investment Company Act)
and all controlling persons (as described in Section 15 of the Securities Act of
1933, as amended ("1933 Act")) (collectively, "Manager Indemnitees") against any
and all losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses) to which any of the Manager Indemnitees may become
subject under the 1933 Act, the Investment Company Act, the Advisers Act, or
under any other statute, or common law or otherwise arising out of or based on
(i) any breach by the Sub-Adviser of a Sub-Adviser representation or warranty
made herein, (ii) any willful misconduct, bad faith, reckless disregard or
negligence of the Sub-Adviser in the performance of any of its duties or
obligations hereunder or (iii) any untrue statement of a material fact contained
in the Prospectus or SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Fund(s) or the omission to
state therein a material fact known to the Sub-Adviser which was required to be
stated therein or necessary to make the statements therein not misleading,
except to the extent such information was furnished to Sub-Adviser by the
Investment Adviser or the Corporation for use therein, or the omission of such
information by the Sub-Adviser was based upon information received from the
Investment Adviser or the Corporation.
B. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, the Investment Adviser shall indemnify and
hold harmless
5
the Sub-Adviser, all affiliated persons thereof (within the meaning of Section
2(a)(3) of the Investment Company Act) and all controlling persons (as described
in Section 15 of the 1933 Act) (collectively, "Sub-Adviser Indemnitees") against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) to which any of the Sub-Adviser Indemnitees
may become subject under the 1933 Act, the Investment Company Act, the Advisers
Act, or under any other statute, at common law or otherwise, arising out of or
based on this Agreement; provided however, the Investment Adviser shall not
indemnify or hold harmless the Sub-Adviser Indemnitees for any losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) arising out of or based on (i) any breach by the Sub-Adviser of a
Sub-Adviser representation or warranty made herein, (ii) any willful misconduct,
bad faith, reckless disregard or negligence of the Sub-Adviser in the
performance of any of its duties or obligations hereunder or (iii) any untrue
statement of a material fact contained in the Prospectus or SAI, proxy
materials, reports, advertisements, sales literature, or other materials
pertaining to the Fund(s) or the omission to state therein a material fact known
to the Sub-Adviser which was required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or omission was
made in reliance upon information furnished to the Sub-Adviser by the Investment
Adviser.
C. A party seeking indemnification hereunder (the "Indemnified Party")
shall (i) provide prompt notice to the other of any claim ("Claim") for which it
intends to seek indemnification, (ii) grant control of the defense and /or
settlement of the Claim to the other party, and (iii) cooperate with the other
party in the defense thereof. The Indemnified Party shall have the right at its
own expense to participate in the defense of any Claim, but shall not have the
right to control the defense, consent to judgment or agree to the settlement of
any Claim without the written consent of the other party. The party providing
the indemnification shall not consent to the entry of any judgment or enter any
settlement which (i) does not include, as an unconditional term, the release by
the claimant of all liabilities for Claims against the Indemnified Party or (ii)
which otherwise adversely affects the rights of the Indemnified Party.
6. REPRESENTATIONS OF THE INVESTMENT ADVISER
The Investment Adviser represents, warrants and agrees that:
A. The Investment Adviser has been duly authorized by the Board of
Directors of the Corporation to delegate to the Sub-Adviser the provision of
investment services to each Fund as contemplated hereby.
B. The Corporation has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will provide the
Sub-Adviser with a copy of such code of ethics.
C. The Investment Adviser is currently in compliance and shall at all
times continue to be in compliance with the requirements imposed upon the
Investment Adviser by applicable law and regulations.
6
D. The Investment Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the Investment Company
Act, the Advisers Act or other law, regulation or order from performing the
services contemplated by this Agreement; (iii) has met and will seek to continue
to meet for so long as this Agreement is in effect, any other applicable federal
or state requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will promptly
notify the Sub-Adviser of the occurrence of any event that would disqualify the
Investment Adviser from serving as investment manager of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise.
7. REPRESENTATIONS OF THE SUB-ADVISER
The Sub-Adviser represents, warrants and agrees as follows:
A. The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the Investment Company Act, the
Advisers Act or other law, regulation or order from performing the services
contemplated by this Agreement; (iii) has met and will seek to continue to meet
for so long as this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; and (v) will promptly notify the
Investment Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise. The
Sub-Adviser will also promptly notify each Fund and the Investment Adviser if it
is served or otherwise receives notice of any action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, government
agency, self-regulatory organization, public board or body, involving the
affairs of the Fund(s) or the Sub-Adviser, provided, however, that routine
regulatory examinations of the Sub-Adviser shall not be required to be reported
by this provision.
B. The Sub-Adviser is currently in compliance and shall at all times
continue to be in compliance with the requirements imposed upon the Sub-Adviser
by applicable law and regulations.
C. The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and Rule 204A-1
under the Advisers Act and will provide the Investment Adviser and the Board
with a copy of such code of ethics, together with evidence of its adoption.
Within forty-five days of the end of the last calendar quarter of each year that
this Agreement is in effect, and as otherwise requested, the president, Chief
Operating Officer or a vice-president of the Sub-Adviser shall certify to the
Investment Adviser that the Sub-Adviser has complied with the requirements of
Rule 17j-1 and Rule 204A-1 during the previous year and that
7
there has been no material violation of the Sub-Adviser's code of ethics or, if
such a material violation has occurred, that appropriate action was taken in
response to such violation. Upon the written request of the Investment Adviser,
the Sub-Adviser shall permit the Investment Adviser, its employees or its agents
to examine the reports required to be made to the Sub-Adviser by Rule
17j-1(c)(1) and Rule 204A-1(b) and all other records relevant to the
Sub-Adviser's code of ethics.
D. The Sub-Adviser has provided the Corporation and the Investment Adviser
with a copy of its Form ADV, which as of the date of this Agreement is its Form
ADV as most recently filed with the SEC and promptly will furnish a copy of all
amendments to the Corporation and the Investment Adviser at least annually. Such
amendments shall reflect all changes in the Sub-Adviser's organizational
structure, professional staff or other significant developments affecting the
Sub-Adviser, as required by the Advisers Act.
F. The Sub-Adviser agrees to maintain an appropriate level of errors and
omissions or professional liability insurance coverage.
G. The Sub-Adviser agrees that neither it, nor any of its affiliates, will
knowingly in any way refer directly or indirectly to its relationship with the
Corporation, the Fund(s), the Investment Adviser or any of their respective
affiliates in offering, marketing or other promotional materials without the
express written consent of the Investment Adviser, except as required by rule,
regulation or upon the request of a governmental authority.
8. NON-EXCLUSIVITY
The services of the Sub-Adviser to the Investment Adviser, the Fund(s) and
the Corporation are not to be deemed to be exclusive, and the Sub-Adviser shall
be free to render investment advisory or other services to others and to engage
in other activities. It is understood and agreed that the directors, officers,
and employees of the Sub-Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers, directors, trustees, or employees of any other
firm or corporation.
9. SUPPLEMENTAL ARRANGEMENTS
The Sub-Adviser may from time to time employ or associate itself with any
person it believes to be particularly suited to assist it in providing the
services to be performed by such Sub-Adviser hereunder, provided that no such
person shall perform any services with respect to the Fund(s) that would
constitute an assignment or require a written advisory agreement pursuant to the
Investment Company Act. Any compensation payable to such persons shall be the
sole responsibility of the Sub-Adviser, and neither the Investment Adviser nor
the Corporation shall have any obligations with respect thereto or otherwise
arising under the Agreement.
10. REGULATION
The Sub-Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information,
8
reports, or other material which any such body by reason of this Agreement may
request or require pursuant to applicable laws and regulations and shall
promptly provide the Investment Adviser and Corporation with copies of such
information, reports and materials.
11. RECORDS
The records relating to the services provided under this Agreement shall
be the property of the Corporation and shall be under its control; however, the
Corporation shall furnish to the Sub-Adviser such records and permit it to
retain such records (either in original or in duplicate form) as it shall
reasonably require in order to carry out its business. In the event of the
termination of this Agreement, such other records shall promptly be returned to
the Corporation by the Sub-Adviser free from any claim or retention of rights
therein, provided that the Sub-Adviser may retain any such records that are
required by law or regulation. The Investment Adviser and the Sub-Adviser shall
keep confidential any information obtained in connection with its duties
hereunder and disclose such information only if the Corporation has authorized
such disclosure or if such disclosure is expressly required or requested by
applicable federal or state regulatory authorities, or otherwise required by
law.
12. DURATION OF AGREEMENT
This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved: (i) by a vote of a majority of those Directors of the Corporation who
are not "interested persons" (as defined in the Investment Company Act) of any
party to this Agreement ("Independent Directors"), cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by vote of a
majority of the Fund's outstanding securities. This Agreement shall continue in
effect for a period more than two years from the date of its execution only so
long as such continuance is specifically approved at least annually by the Board
of Directors provided that in such event such continuance shall also be approved
by the vote of a majority of the Independent Directors cast in person at a
meeting called for the purpose of voting on such approval. Additional Funds may
be added to Appendix A by the Investment Adviser upon sixty (60) days written
notice to the Sub-Adviser and only after the approval by the Board of Directors
of the Corporation, including a majority of the Independent Directors, cast in
person at a meeting called for the purpose of voting such approval and, if
required under the 1940 Act, a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Fund.
13. TERMINATION OF AGREEMENT
This Agreement may be terminated with respect to any Fund at any time,
without the payment of any penalty, by the Board of Directors, including a
majority of the Independent Directors, by the vote of a majority of the
outstanding voting securities of such Fund, on sixty (60) days' written notice
to the Investment Adviser and the Sub-Adviser. This Agreement will automatically
terminate, without the payment of any penalty in the event the Investment
Advisory Agreement between the Investment Adviser and the Corporation is
assigned (as defined in the Investment Company Act) or
9
terminates for any other reason. This Agreement will also terminate upon written
notice to the other party that the other party is in material breach of this
Agreement, unless the other party in material breach of this Agreement cures
such breach to the reasonable satisfaction of the party alleging the breach
within thirty (30) days after written notice. Any "assignment" (as that term is
defined in the Investment Company Act) of this Agreement will result in
automatic termination of this Agreement. The Sub-Adviser will notify the
Corporation and the Investment Adviser of any such assignment and of any changes
in key personnel who are either the portfolio manager(s) of the Funds or senior
management of the Sub-Adviser, in each case prior to or promptly after, such
change. The Sub-Adviser agrees to bear all reasonable legal, printing, mailing,
proxy and related expenses of the Corporation and the Investment Adviser, if
any, arising out of an assignment of this Agreement by the Sub-Adviser.
14. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to exemptive relief granted by the SEC,
this Agreement may be amended by the parties with respect to any Fund only if
such amendment, if material, is specifically approved by the vote of a majority
of the outstanding voting securities of such Fund (unless such approval is not
required by Section 15 of the Investment Company Act as interpreted by the SEC
or its staff or unless the SEC has granted an exemption from such approval
requirement) and by the vote of a majority of the Independent Directors cast in
person at a meeting called for the purpose of voting on such approval. The
required shareholder approval shall be effective with respect to the Fund if a
majority of the outstanding voting securities of the Fund vote to approve the
amendment, notwithstanding that the amendment may not have been approved by a
majority of the outstanding voting securities of any other Fund affected by the
amendment or all the Funds of the Corporation.
15. ASSIGNMENT
The Sub-Adviser shall not assign or transfer its rights and obligations
under this Agreement. Any assignment (as that term is defined in the Investment
Company Act) of the Agreement shall result in the automatic termination of this
Agreement, as provided in Section 13 hereof. The Sub-Adviser agrees to bear all
reasonable legal, printing, mailing, proxy and related expenses of the
Corporation and the Investment Adviser, if any, arising out of any assignment of
this Agreement by the Sub-Adviser. Notwithstanding the foregoing, no assignment
shall be deemed to result from any changes in the directors, officers or
employees of such Sub-Adviser except as may be provided to the contrary in the
Investment Company Act or the rules or regulations thereunder.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to each Fund.
10
17. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
18. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Investment Adviser
or Sub-Adviser in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this section.
19. SEVERABILITY AND SURVIVAL
Should any portion of this Agreement for any reason be held to be void in law or
in equity, the Agreement shall be construed, insofar as is possible, as if such
portion had never been contained herein. Sections 5, 11 and 20 shall survive the
termination of this Agreement.
20. CORPORATION AND SHAREHOLDER LIABILITY
The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Corporation's Certificate of
Incorporation and agrees that obligations, if any, assumed by the Corporation
pursuant to this Agreement shall be limited in all cases to the Corporation and
its assets, and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of the Fund. The Sub-Adviser
further agrees that it shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Fund(s), nor from the
Directors or any individual Director of the Corporation.
21. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, or any of the applicable
provisions of the Investment Company Act. To the extent that the laws of the
State of New York, or any of the provisions in this Agreement, conflict with
applicable provisions of the Investment Company Act, the latter shall control.
22. INTERPRETATION
Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the
Investment Company Act shall be resolved by reference to such term or provision
of the Investment Company Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court, by rules, regulations or orders of the SEC validly issued pursuant to the
Investment Company Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment," and
11
"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the SEC, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
[SIGNATURE PAGE TO FOLLOW]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.
XSHARES ADVISORS LLC AMERIVEST INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------- ----------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer Title: President
13
APPENDIX A
TO
SUB-ADVISORY AGREEMENT
TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange-Traded Fund
Dated: July 24, 2007
