SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of December 10, 2002 by
and between XXXXXXX AND X. XXXXXXXXXXXX ADVISERS, INC., a registered investment
adviser organized under the laws of the State of New York (the "Adviser"), and
IRIDIAN ASSET MANAGEMENT LLC, a registered investment adviser organized under
the laws of Delaware (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and First Eagle Funds, a Delaware
business trust (the "Trust"), have entered into an Investment Advisory Agreement
dated February 27, 1998, as amended from time to time (the "Investment Advisory
Agreement"), pursuant to which the Adviser has agreed to provide investment
advisory services to the Trust; and
WHEREAS, the Trust is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end management investment
company, may issue shares in Series and, as of the date hereof, has issued one
Series designated as the First Eagle Fund of America (together with any
successor Series thereto, "FEFA"); and
WHEREAS, under the terms of the Investment Advisory Agreement,
the Adviser is responsible for general oversight, maintenance of required books
and records, compliance and shareholder service and distribution support on
behalf of FEFA; and
WHEREAS, the Subadviser is engaged in the business of
rendering investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act");
and
WHEREAS, Xx. Xxxxx X. Xxxxx ("Xxxxx") and Xx. Xxxxxx X. Xxxx
("Xxxx") have been providing investment advisory services to FEFA as employees
of the Adviser and now desire to terminate their employment relationship with
the Adviser, but are willing to continue to provide such services as employees
of the Subadviser; and
WHEREAS, the Adviser desires to retain the Subadviser to
furnish investment advisory services to FEFA, subject to the oversight and
review of the Adviser, and the Subadviser is willing to furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto
as follows:
1. DUTIES OF THE SUBADVISER. (a) The Adviser hereby engages
the services of the Subadviser in furtherance of the Investment Advisory
Agreement. Pursuant to this Agreement and subject to the oversight and review of
the Adviser, the Subadviser will manage the investment and reinvestment of the
assets of FEFA. The Subadviser will determine, in its discretion and subject to
the oversight and review of the Adviser, the securities or commodity, currency
or other futures contracts and options to be purchased or sold by FEFA, and
shall provide the Adviser and the Trust on each business day with information
relating to all transactions concerning FEFA's assets. The Subadviser shall also
provide the Adviser with such
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records and information concerning its activities with respect to or affecting
FEFA as the Adviser may reasonably request. The Subadviser shall discharge the
foregoing responsibilities subject to the control of the officers and the Board
of Trustees of the Trust and in compliance with (i) the Trust's current
prospectus and statement of additional information, in particular, the
objectives, policies, and limitations for FEFA set forth therein, (ii) the
Agreement and Declaration of Trust and By-Laws of the Trust, (iii) applicable
laws and regulations, and (iv) such compliance or similar policies or procedures
as the Board of Trustees of the Trust or the Adviser may from time to time adopt
as to which the Subadviser has prior written notice, in each case as may be
amended from time to time. The Subadviser shall cooperate with the Adviser as
may be reasonably requested in connection with the Adviser's responsibilities to
FEFA. The Subadviser shall also promptly review, and with respect to matters
relating or information known to it, provide comments on, any FEFA offering or
disclosure materials provided to it for review.
The Subadviser represents and warrants to the Adviser that the
Subadviser's operations and investment management activities on behalf of FEFA
will at all times be in compliance with all applicable federal and state laws
governing FEFA's operations and investments. Without limiting the foregoing, the
Subadviser represents and warrants that it will (i) invest and reinvest FEFA's
assets in a manner that will enable FEFA to be treated as a "regulated
investment company" under subchapter M, chapter 1 of the Internal Revenue Code
of 1986, as amended (the "Code"); and (ii) comply with (1) the provisions of the
Act and rules adopted thereunder; and (2) applicable federal and state
securities, commodities and banking laws. The Subadviser further represents and
warrants that to the extent that any statements or omissions made in any
Registration Statement for shares of the Trust, or any amendments or supplements
thereto, are made in reliance upon and in conformity with information furnished
by the Subadviser for use therein, such Registration Statement and any
amendments or supplements thereto will conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations of the
Securities and Exchange Commission thereunder (the "1933 Act") and the Act and
will not, as to information relating to the Subadviser and its activities on
behalf of FEFA, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading at the time such information is furnished. In
addition, the Subadviser shall promptly advise the Adviser of any modifications
or supplements to such information furnished by it to the extent such
modifications or supplements become necessary to ensure that such information
continues to not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
(b) The Subadviser agrees to maintain a level of errors and
omissions or professional liability insurance coverage that is from time to time
reasonably satisfactory to the Adviser.
(c) FEFA's assets shall be maintained in the custody of the
custodian identified by the Adviser in writing ("Custodian"). The Subadviser
shall not be liable for any
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loss resulting from any act or omission of the Custodian other than acts or
omissions arising in reliance on instructions of the Subadviser.
2. FUND TRANSACTIONS. The Subadviser is responsible for
decisions to buy or sell securities, futures or other options and other
investments for the assets of FEFA, selection of broker-dealers and futures
commission merchants, and negotiation of brokerage commission and futures
commission merchants' rates. In providing FEFA with investment management, it is
recognized that the Subadviser will give primary consideration to securing the
most favorable prices and efficient executions. Consistent with this policy, the
Subadviser may consider the financial responsibility, research and investment
information and other services provided by brokers, dealers or futures
commission merchants who may effect or be a party to any such transaction or
other transactions to which other clients of the Subadviser may be a party. It
is understood that none of the Trust, the Adviser nor the Subadviser has adopted
a formula for allocation of the FEFA's investment business. It is also
understood that it is desirable for FEFA that the Subadviser have access to
supplemental investment and market research and security and economic analysis
provided by brokers or futures commission merchants who may execute brokerage
transactions at a higher cost to the Trust and FEFA than may result when
allocating brokerage to other brokers or futures commission merchants on the
basis of seeking the most favorable prices and efficient executions. Therefore,
the Subadviser is authorized to place orders for the purchase and sale of
securities or futures for FEFA with such brokers or futures commission
merchants, subject to review by the Adviser and the Trust's Board of Trustees,
from time to time, with respect to the extent and continuation of this practice,
and in accordance with any applicable policies or procedures as may be adopted
by the Trust's Board of Trustees or the Adviser from time to time as to which
the Subadviser has prior written notice. The Subadviser shall not be deemed to
have acted unlawfully or to have breached any duty, created by this Agreement or
otherwise, solely by reason of its having caused FEFA to pay a broker or dealer
an amount of commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Subadviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of either that
particular transaction or the Subadviser's overall responsibilities with respect
to the clients of the Subadviser as to which the Subadviser exercises investment
discretion. The Adviser recognizes that all research services and research that
the Subadviser receives are available for all clients of the Subadviser, and
that FEFA and other clients of the Sub-Adviser may benefit thereby.
The Subadviser will promptly communicate to the Adviser and to
the officers and Board of Trustees of the Trust such information relating to
FEFA transactions as they may reasonably request.
To the extent consistent with applicable law and with any
applicable policies or procedures adopted by the Board of Trustees of the Trust
or the Adviser from time to time as to which the Subadviser has prior written
notice, the Subadviser may aggregate purchase or sell orders for FEFA with
contemporaneous purchase or sell orders of other clients of the Subadviser or
its affiliated persons. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by
the Subadviser in the manner the Subadviser determines to be equitable and
consistent with its and its affiliates' fiduciary
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obligations to FEFA and to such other clients. The Adviser hereby acknowledges
that such aggregation of orders may not result in more favorable pricing or
lower brokerage commissions in all instances.
3. DELIVERY OF DOCUMENTS. The Adviser has delivered to the
Subadviser copies of each of the following documents and will deliver to it all
future amendments and supplements, if any:
(a) The Agreement and Declaration of Trust filed with the
State of Delaware;
(b) The By-Laws of the Trust;
(c) Certified resolutions of the Board of Trustees of the
Trust (i) authorizing the appointment of the Adviser and approving the
form of the Investment Advisory Agreement; and (ii) authorizing the
appointment of the Subadviser and approving the form of this Agreement;
(d) The Registration Statement under the Act and the 1933 Act,
on Form N-1A, as filed with the Securities and Exchange Commission
relating to the Trust and the Trust's Shares and all amendments or
supplements thereto;
(e) The Trust's Notification of Registration under the Act on
Form N-8A as filed with the Securities Exchange Commission and all
amendments thereto;
(f) The Prospectus and Statement of Additional Information of
the Trust as currently in effect;
(g) The Code of Ethics of the Trust as currently in effect;
and
(h) A list of affiliated brokers and underwriters for
reporting transactions under applicable provisions of the Act.
The Adviser will also deliver copies of any compliance or
similar policies or procedures of the Trust or the Adviser relevant to the
performance of the Subadviser's duties under this Agreement.
The Adviser will furnish the Subadviser from time to time with
copies, properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any. Such amendments or supplements generally
will be provided within 30 days of the time such materials became available to
the Adviser and, until so provided, the Subadviser may continue to rely on those
documents previously provided.
During the term of this Agreement, the Adviser also will
furnish to the Subadviser prior to use thereof copies of all FEFA documents,
proxy statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders or the public that refer in any way to
the Subadviser, and will not use such material if the Subadviser reasonably
objects in writing within five business days (or such other time period as may
be mutually agreed) after receipt thereof. However, the Adviser and the
Subadviser may agree amongst themselves that
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certain of the above-mentioned documents do not need to be furnished to the
Subadviser prior to the document's use.
4. CODE OF ETHICS. The Subadviser agrees to observe and comply
with Rule 17j-1 under the Act, as the same may be amended from time to time. In
this regard, the Subadviser shall, among other things, adopt internal
procedures, including a Code of Ethics as required by such Rule, and shall
periodically report any issues arising under such procedures to the Adviser and
the Board of Trustees of the Trust.
5. COMPENSATION OF THE SUBADVISER. (a) So long as this
Agreement remains in force in accordance with Section 13 hereof, the Adviser
shall pay the Subadviser compensation equal to fifty percent (50%) of (i) the
combined investment management fee (currently 1.00% of average daily net assets
of FEFA) paid by the Trust for FEFA to the Adviser pursuant to the Investment
Advisory Agreement, and services fee (currently 0.25% of average daily net
assets of FEFA) paid by the Trust for FEFA to the Adviser's affiliate, Xxxxxxx
and S. Bleichroeder, Inc. ("A&SB"), pursuant to the Distribution and Services
Agreement by and between the Trust and A&SB dated February 27, 1998, as amended
from time to time (the "Services Agreement"), and retained by A&SB after payment
to unaffiliated third parties, less (ii) both (x) administrative expenses borne
by the Adviser, including, without limitation, overhead and similar expenses,
applicable to performance of investment advisory services and related functions
with respect to FEFA, and (y) direct marketing costs, including, without
limitation, advertising costs, rebates to third parties, and other direct
expenses relating to the solicitation of investors or otherwise increasing the
assets of FEFA, if any, with respect to the Adviser, A&SB or FEFA; other than
with respect to clause (ii) (x) of this Section 5, all as determined in
substantially the same manner as determined previously under any predecessor
arrangements between the Adviser and each of Xxxxx and Xxxx, and provided,
however, that the deductions contemplated by clause (ii) (x) of this Section 5
shall begin the day following the second anniversary of the effective date
hereof and shall not be made with respect to such expenses accrued with respect
to any period prior to such date. Such compensation shall be paid to the
Subadviser on a monthly basis or other periodic basis corresponding to the
payment of the investment management fee by the Trust for FEFA to the Adviser
pursuant to the Investment Advisory Agreement or the payment of the services fee
by the Trust for FEFA to A&SB pursuant to the Services Agreement, as applicable.
In no event shall the Subadviser be entitled to any compensation based on or any
portion of the investment management fee paid to the Adviser by the Trust or
services fee paid to A&SB by the Trust with respect to any Series as to which
the Subadviser has not been retained to provide investment advisory services.
Further, in calculating the compensation of the Subadviser, there shall be no
charge to the Subadviser for the administrative or direct marketing costs
attributable, in whole or in part, to any such other Series. Marketing,
shareholder services or similar fees or costs are described in this Section 5
only to serve as reference amounts for purposes of calculating the compensation
to be paid to the Subadviser.
(b) The Adviser shall promptly advise the Subadviser of any
change in, or waiver of, the investment management fee paid by the Trust for
FEFA under the Investment Management Agreement or in the fees paid to A&SB under
the Services Agreement.
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6. REPORTS AND COMPLIANCE MONITORING. In furtherance of the
Subadviser's duties, the Subadviser shall (i) prepare such written and oral
reports for the Board of Trustees of the Trust or the Adviser related to the
investment operations of FEFA as the Adviser shall reasonably request,
consistent with past practice, (ii) provide the Board of Trustees of the Trust
on a periodic basis with such information as to the Subadviser's services
(whether with respect to FEFA or otherwise) as may be reasonably necessary to
enable to the Trustees to evaluate the performance of the Subadviser and the
reasonableness of its fees hereunder, and (iii) coordinate with and provide
access to its offices to the Adviser to the extent necessary for the Adviser to
monitor compliance by the Subadviser with FEFA's investment objectives, policies
and limitations, applicable compliance or similar policies or procedures and
with applicable regulations.
7. STATUS OF THE SUBADVISER. (a) The Subadviser shall be
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent FEFA or the
Adviser in any way or otherwise be deemed an agent of FEFA or the Adviser.
(b) Subject to the Subadviser's policies concerning the
allocation of investment opportunities as described in its Form ADV (a copy of
which has been provided to the Adviser) and compliance with applicable law and
the Subadviser's Code of Ethics, nothing in this Agreement shall impose upon the
Subadviser any obligation to purchase or sell, or recommend for purchase or
sale, for FEFA any security which it or its officers, directors, affiliates or
employees may purchase or sell for the Subadviser or such officer's, director's,
affiliate's or employee's own accounts or for the account of any of the
Subadviser's clients, advisory or otherwise. Subject to the same proviso, the
Subadviser may give advice and take action with respect to other funds or
clients, or for its own account that may differ from the advice or the timing or
nature of action taken with respect to FEFA. Other than as provided in Section
10 hereof, nothing in this Agreement shall be implied to prevent Subadviser from
providing investment advice and other services to other funds or clients.
8. CERTAIN RECORDS. The Subadviser hereby undertakes and
agrees to maintain, in the form and for the period required by Rule 204-2 under
the Advisers Act, all books and records relating to FEFA or its investors that
are required to be maintained by the Subadviser pursuant to the requirements of
such Rule. The Subadviser agrees that all books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Trust's auditors, the Trust or any
representative of the Trust, the Adviser, or any governmental agency or other
instrumentality having regulatory authority over the Trust.
9. SUBADVISER'S STANDARD OF CARE; LIMITATIONS OF LIABILITY.
(a) The Subadviser will give the Trust and the Adviser the benefit of the
Subadviser's best judgment and efforts in rendering its services to FEFA.
(b) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties ("disabling conduct")
hereunder on the part of the Subadviser (and/or its officers,
directors/trustees, agents, employees, controlling persons,
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shareholders, members and any other person or entity affiliated with the
Subadviser), the Subadviser shall not be subject to liability to the Adviser or
the Trust or to any shareholder of the Adviser or the Trust or any Series
thereof for any act or omission in the course of, or connected with, rendering
services hereunder, including without limitation, any error of judgment or
mistake of law or for any loss suffered by any of them in connection with the
matters to which this Agreement relates, except to the extent specified in
Section 36(b) of the Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Except for such
disabling conduct on the part of the Subadviser (and/or its officers,
directors/trustees, partners, agents, employees, controlling persons,
shareholders, members and any other person or entity affiliated with the
Subadviser), the Adviser shall indemnify the Subadviser (and its officers,
directors/trustees, partners, agents, employees, controlling persons,
shareholders, members and any other person or entity affiliated with the
Subadviser) (each, an "Indemnified Party") from any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses), to which such an Indemnified Party may become subject under the Act
or the 1933 Act, under other statutes, at common law or otherwise, arising from
(i) the Subadviser's provision of services under this Agreement, (ii) the offer
or sale of shares of the Trust or any Series thereunder, or (iii) any statements
or omissions made in any Registration Statement for shares of the Trust, or any
amendments or supplements thereto, other than those made in reliance upon and in
conformity with information furnished by the Subadviser for use therein. In no
case, however, shall such an indemnity be owed by the Adviser to an Indemnified
Party with respect to liabilities not arising from conduct of the Adviser or the
Trust.
(c) The Subadviser agrees to indemnify and hold harmless the
Adviser and its affiliates and each of its directors and officers and each
person, if any, who controls the Adviser within the meaning of section 15 of the
1933 Act against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Adviser or its
affiliates or such directors, officers or controlling person may become subject
under the Act or the 1933 Act, under other statutes, at common law or otherwise,
which may be based upon (i) any wrongful act under or breach of this Agreement
by the Subadviser, or (ii) any failure by the Subadviser to comply with the
representations and warranties set forth in Section 1 of this Agreement;
provided, however, that in no case is the Subadviser's indemnity in favor of any
person deemed to protect such other persons against any liability to which such
person would otherwise be subject by reasons of willful misfeasance, bad faith,
or gross negligence in the performance of his, her or its duties or by reason of
his, her or its reckless disregard of obligation and duties under this
Agreement. The Subadviser shall not be liable to the Adviser for any acts of the
Adviser with respect to any portion of the assets of the Trust not managed by
the Subadviser.
(d) The rights and obligations under Sections 9(b) and 9(c)
hereof shall survive the termination or expiration of this Agreement.
10. NON-COMPETITION; NON-SOLICITATION. (a) The Subadviser
hereby covenants and agrees that during the term of this Agreement (including
any renewal or extension hereof), it will not, directly or indirectly, (i)
establish, sponsor or advise any registered mutual fund for U.S. equity
securities following an investment strategy substantially similar to a mid-cap
value or mid-cap blend strategy (each as defined by reference to the
Morningstar, Inc. mutual fund strategy classification of the same name, or any
successor classification(s) thereto)
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(a "Mid-Cap Strategy"); provided, however, that nothing contained herein shall
prevent or restrict the Subadviser from acting as a subadviser to any mutual
fund, including, without limitation, a mutual fund for U.S. equity securities
following a Mid-Cap Strategy, except that the Subadviser may not advise or
subadvise a mutual fund which (x) is established, sponsored or advised by The
Governor and Company of the Bank of Ireland (the "Bank") or any entity directly
or indirectly controlling, controlled by or under common control with the Bank;
(y) follows a Mid-Cap Strategy; and (z) is marketed in whole or in part in the
United States, unless the Subadviser complies with the notice requirements set
forth in the last sentence of this Section 10(a), or (ii) solicit, initiate or
encourage investors in FEFA, to the extent such investors are known or made
known to the Subadviser (each, a "FEFA Investor"), for or to invest in any
product other than FEFA if such solicitation would reasonably be expected to
result or results in any such FEFA Investor withdrawing assets from FEFA, except
that (subject to the limitations of Section 10(c) below) the Subadviser may
directly or indirectly advertise or promote any other product by means of
blanket mailings, form letters, the publication of advertisements and other
general solicitation, so long as it uses all commercially reasonable efforts,
directly and indirectly, to ensure that no such mailings or form letters are
sent to FEFA. Notwithstanding anything contained in clause (i) of this paragraph
to the contrary, but subject to the limitations set forth in clause (ii) of this
paragraph, the Subadviser may advise or subadvise one or more mutual funds
established, sponsored or advised by the Bank or any entity directly or
indirectly controlling, controlled by or under common control with the Bank,
including, without limitation, a mutual fund for U.S. equity securities
following a Mid-Cap Strategy; provided, however, that if such mutual fund is
marketed in whole or in part in the United States, the Subadviser must have
given the Adviser at least 120 days' written notice (together with a reasonable
description of such proposed mutual fund) before the Subadviser commences
performance of such advisory or subadvisory services.
(b) The Subadviser hereby covenants and agrees that following
the termination or expiration of the term of this Agreement (including any
renewal or extension hereof) and continuing for a period of two years
thereafter, it will not, directly or indirectly, solicit, initiate or encourage
FEFA Investors for or to invest in any registered mutual fund for U.S. equity
securities following a Mid-Cap Strategy; provided that, subject to the
limitations in Section 10(c) below, (A) nothing herein shall prohibit the
Subadviser, directly or indirectly, from advertising or promoting investment
products and services other than a registered mutual fund for U.S. equity
securities following such an investment strategy, and (B) nothing herein shall
prohibit the Subadviser, directly or indirectly, from advertising or promoting
any registered mutual fund for U.S. securities following such an investment
strategy by means of blanket mailings, form letters, the publication of
advertisements and other general solicitation, so long as it uses all
commercially reasonable efforts, directly and indirectly, to ensure that no such
mailings or form letters are sent to FEFA Investors.
(c) Notwithstanding any other provision of this Agreement to
the contrary, during the term of this Agreement (including any extension or
renewal hereof) and at any time thereafter, no advertising, marketing or
disclosure (including prospectuses or similar materials) with respect to the
Subadviser and its investment products and services, including any registered
mutual fund formed, sponsored, managed or sub-advised directly or indirectly by
the Subadviser, shall include, and the Subadviser shall not encourage or
cooperate with any press coverage in connection therewith that includes, the
name, track record of or any other direct or indirect
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reference to FEFA (except that the track record of FEFA, but not the name or any
successor name of or other direct or indirect reference to FEFA, may be used to
the extent required by applicable law or regulation).
(d) By their signatures below, each of Xxxxx, Xxxx and LC
Capital Management, LLC agree to be bound by the provisions of this Section 10
as fully as if each was itself or himself the Subadviser hereunder.
11. NON-DISCLOSURE. (a) Except (i) with the prior written
consent of the Adviser in each instance or (ii) as may be necessary to perform
the Subadviser's services hereunder or (iii) as may be required by law or as
directed by a court of competent jurisdiction, governmental agency or
self-regulatory organization, the Subadviser shall not disclose, use, publish,
or in any other manner reveal, directly or indirectly, at any time during the
term of this Agreement (including any renewal or extension thereof) and
continuing for a period of five years thereafter, any confidential information
relating to the Adviser or any subsidiary or affiliate thereof, including
confidential information relating to investors in FEFA (regardless of whether
such investor information is presented on an investor-by-investor basis,
aggregated or presented as a composite or otherwise) acquired by it prior to,
during the course of, or incident to, its appointment hereunder; provided,
however, that nothing contained in this Section 11 shall prevent the Subadviser
from soliciting any FEFA Investor at any time using any means, unless such
solicitation (including the period during which such solicitation may be made)
or means are proscribed by Section 10 hereof. If the Subadviser determines that
as a matter of law it is required to disclose any such confidential information
or if the Subadviser is directed by a court of competent jurisdiction,
governmental agency or self-regulatory organization to disclose any such
confidential information, it shall promptly give the Adviser written notice
thereof and will use reasonable efforts (at no cost to the Subadviser) to assist
the Adviser in seeking an appropriate protective order or other reasonable
assurances as to the treatment of any such required or directed disclosure.
Notwithstanding the first sentence of this paragraph, but subject to the
exceptions thereto, personally identifiable financial information relating to
investors in FEFA shall at all times during the term of this Agreement
(including any extension or renewal hereof) and at any time thereafter be
maintained in accordance with the principles of the Trust's privacy policies as
described in the Prospectus for the Trust from time to time.
(b) Except (i) with the prior written consent of the
Subadviser in each instance or (ii) for the sole and exclusive purpose of the
Adviser exercising its obligations under the Investment Advisory Agreement or
its fiduciary duties in providing investment advisory services to the Trust or
(iii) as may be required by law or as directed by a court of competent
jurisdiction, governmental agency or self-regulatory organization, the Adviser
shall not disclose, use, publish, or in any other manner reveal, directly or
indirectly, at any time during the term of this Agreement (including any renewal
or extension thereof) and continuing for a period of five years thereafter, any
confidential information relating to the Subadviser or any subsidiary or
affiliate thereof provided to or otherwise obtained by the Adviser during the
course of or in connection with the Subadviser's appointment hereunder. If the
Adviser determines that as a matter of law it is required to disclose any such
confidential information or if the Adviser is directed by a court of competent
jurisdiction, governmental agency or self-regulatory organization to disclose
any such confidential information, it shall promptly give the Subadviser written
notice thereof and will use reasonable efforts (at no cost to the Adviser) to
assist the Subadviser in seeking an
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appropriate protective order or other reasonable assurances as to the treatment
of any such required or directed disclosure.
(c) For purposes of this Agreement, the term "confidential
information" does not include information which (i) becomes generally available
to the public other than as a result of a disclosure by the party otherwise
owing an obligation of confidentiality as to such information (or by the
officers, employees or agents of such party), or (ii) becomes available to the
party otherwise owing an obligation of confidentiality as to such information
(or by the officers, employees or agents of such party) on a non-confidential
basis from a source other than the party to which such obligation is owed (or
its officers, employees or agents) provided in each such case that such source
is not known by the party otherwise owing such obligation to be bound by a
confidentiality agreement with or other obligation of secrecy to the party to
which such obligation is owed or to any subsidiary or affiliate thereof.
12. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall
become effective upon approval by vote of a majority of the outstanding voting
securities (as defined in the Act) of FEFA.
13. DURATION AND TERMINATION OF THE AGREEMENT. (a) This
Agreement shall remain in force for a period of two years from the day that it
becomes effective under Section 12 hereof, and from year to year thereafter so
long as such continuance is specifically approved at least annually (i) by
either the vote of the Board of Trustees of the Trust, or by the affirmative
vote of a majority of the outstanding voting securities (as defined in the Act)
of FEFA, and (ii) by the vote of a majority of the Trust's trustees who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time, without
payment of a penalty by FEFA and the Trust, by vote of the Board of Trustees, or
by vote of a majority of the outstanding voting securities (as defined in the
Act) of FEFA, or by the Adviser or by the Subadviser, on not less than 30 nor
more than 60 days' written notice; provided, however, that this Agreement may
not be terminated by the Subadviser unless another subadvisory agreement has
been approved by the Trust in accordance with the Act, or after 120 days'
written notice, whichever is earlier, and provided further that the Adviser may
at its election shorten such 120 day period to any period of not less than 30
days. This Agreement shall automatically terminate in the event of its
assignment (as defined by the Act). The Adviser shall promptly notify the
Subadviser of any transaction or other event that results in an "assignment" of
this Agreement within the meaning of the Act.
(c) This Agreement shall terminate in the event that the
Investment Advisory Agreement by and between the Trust and the Adviser is
terminated, and any such termination of this Agreement shall not result in any
liability by the Adviser to the Subadviser or require any payment by the Adviser
to the Subadviser other than as contemplated under Section 13(e) below.
(d) The expiration or termination of this Agreement shall not
affect the effectiveness of the Investment Advisory Agreement by and between the
Trust and the Adviser.
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(e) Upon the expiration of this Agreement (including any
renewal or extension hereof) or its termination pursuant to any provision of
this Section 13, the Subadviser shall not be entitled to any further
compensation hereunder, except that the Adviser shall pay the Subadviser any
compensation accrued under Section 5 hereof through the date of such expiration
or termination. Any such payments shall be made promptly in accordance with
prior practice.
14. RETURN OF BOOKS AND RECORDS. In the event of the
termination of this Agreement, the Subadviser shall deliver to the Adviser (and
shall not keep in its possession or deliver to anyone other than the Adviser)
any and all books and records with respect to the Adviser, the Trust, FEFA or
its investors (in their capacity as investors in FEFA) in the Subadviser's
control, including, without limitation, disks, tapes and print-outs relating to
investor files, data, notes, reports, correspondence and other documents or
property, together with all copies thereof (in whatever medium recorded)
belonging to the Adviser, its successors or assigns. By their signatures below,
each of Xxxxx and Xxxx agree that the rights and obligations under the preceding
sentence shall extend to all books and records maintained under their direction
or control pursuant to any predecessor relationship between Xxxxx or Levy and
the Adviser.
15. VIOLATION OF COVENANTS. (a) The Subadviser agrees and
acknowledges that the violation of any of the covenants or agreements in
Sections 10 or 11(a) hereof would cause irreparable injury to the Adviser, A&SB
and/or any entity directly controlling, controlled by or under common control
with either of them and that the remedy at law for any violation or threatened
violation thereof would be inadequate and that the Adviser, A&SB and/or any
entity directly controlling, controlled by or under common control with either
of them shall be entitled to temporary and permanent injunctive or other
equitable relief without the necessity of proving actual damages.
(b) The Adviser agrees and acknowledges that the violation of
any of the agreements in Section 11(b) hereof would cause irreparable injury to
the Subadviser, the Bank and/or any entity directly or indirectly controlling,
controlled by or under common control with either of them and that the remedy at
law for any violation or threatened violation would be inadequate and that the
Subadviser, the Bank and/or any entity directly or indirectly controlling,
controlled by or under common control with either of them shall be entitled to
the temporary and permanent injunctive or other equitable relief without the
necessity of proving actual damages.
(c) The Adviser and the Subadviser recognize that the laws and
public policies of the various states of the United States and the District of
Columbia may differ as to the validity and enforceability of agreements similar
to those contained in Sections 10 and 11 hereof. It is the intention of the
Adviser and the Subadviser that the provisions of Sections 10 and 11 shall be
enforced to the fullest extent permissible under the laws and public policies of
each state and jurisdiction in which such enforcement is sought, but that the
unenforceability (or the modification to conform with such laws or public
policies) of any provision hereof shall not render unenforceable or impair the
remainder of Sections 10 and 11. Accordingly, if any provision of Sections 10 or
11 shall be determined to be invalid or unenforceable, either in whole or in
part, this Agreement shall be deemed amended to delete or modify, as necessary,
the offending provision and to alter the provisions of Sections 10 or 11 in
order to render the same valid and enforceable to the fullest extent permissible
as aforesaid.
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16. INSTRUCTIONS. The Subadviser is authorized to honor and
act on any notice, instruction or confirmation given by the Trust or the Adviser
in writing signed or sent by one of the persons whose names, addresses and
specimen signatures shall be provided by the Trust or the Adviser from time to
time.
17. 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.
18. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes
the entire Agreement between the parties with respect to the subject matter
hereof. This Agreement may be amended by mutual consent in writing, but the
consent of the Trust must be obtained in conformity with the requirements of the
Act.
19. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York and the applicable provisions
of the Act. To the extent the applicable laws of the State of New York, or any
of the provisions herein, conflict with the applicable provisions of the Act,
the latter shall control.
20. COUNTERPARTS. This Agreement may be executed 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.
21. NOTICES. All notices shall be in writing and deemed
properly given when delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as follows:
Subadviser: Iridian Asset Management LLC
000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Copy to: Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Adviser: Xxxxxxx and S. Bleichroeder Advisers, Inc.
00 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
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Copy to: Shearman & Sterling
000 Xxxxxxxxx Xxx.
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
13
IN WITNESS WHEREOF, the parties have caused their respective
duly authorized officers to execute this Agreement as of the date first above
written.
XXXXXXX AND S. BLEICHROEDER ADVISERS, INC.
By:
_________________________________
Name:
Title:
IRIDIAN ASSET MANAGEMENT LLC
By:
_________________________________
Name:
Title:
The undersigned hereby agree to be bound by the provisions of Section 10 hereof
and, in the case of Xxxxx X. Xxxxx and Xxxxxx X. Xxxx, the applicable provisions
of Section 14 hereof; provided, however, that none of the undersigned shall be
deemed to be guarantors of the performance of the Subadviser with respect to
such Sections.
LC CAPITAL MANAGEMENT, LLC
By:
_________________________________
Name:
Title:
_________________________________
Xxxxx X. Xxxxx
_________________________________
Xxxxxx X. Xxxx
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