SERVICES AGREEMENT
This AGREEMENT, dated as of April 11, 2003 by and between Xxxxxx Xxxxxxx
Asset & Investment Trust Management Co., Limited, a Japanese corporation with
its principal place of business at Yebisu Garden Xxxxx Xxxxx, 00-0, Xxxxx
0-Xxxxx, Xxxxxxx-xx, Xxxxx 000, Xxxxx ("MSAITM") and Xxxxxx Xxxxxxx Investment
Advisors Inc., a Delaware corporation with its principal place of business as
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 ("Affiliate"):
WITNESSETH
WHEREAS, MSAITM and Affiliate are both registered investment advisers in
their respective place of business; and
WHEREAS, MSAITM and Affiliate regularly retain each other's services as a
sub-adviser for investment advisory and management agreements and securities
investment trust;
WHEREAS, MSAITM and Affiliate wish to establish common terms and conditions
pursuant to which they wish to retain each other's advisory services from time
to time; and
WHEREAS, Service Agreements entered into prior to the date of this
Agreement are deemed ratified by the parties hereto, as evidenced by a new
Appendix entered into pursuant to the terms herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, MSAITM and Affiliate hereby agree as follows:
1. DEFINED TERMS
(a) Except as otherwise defined in this Agreement or in an Appendix, the
capitalized terms used in this Agreement shall have the following meanings:
"Adviser" shall mean for each Fund the party that is providing advisory
services pursuant to the Appendix for that Fund.
"Appendix" shall mean a Service Request that has been accepted in
accordance with the terms of this Agreement.
"Manager" shall mean for each Fund the party to which advisory services are
provided under this Agreement.
"Fund" shall mean the assets of a specified client designated as such in an
Appendix.
"Service Request" shall mean a request to provide advisory services under
this Agreement in the form of Exhibit A.
"Services" shall mean the services described in section 2.
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(b) Except where otherwise specified, all references to parties, sections,
sub-sections, Exhibits and Appendixes are to parties, sections, sub-sections,
Exhibits and Appendixes to this Agreement. All references to a singular noun
include the plural and each pronoun includes all genders.
2. DUTIES OF THE ADVISER
(a) Except as otherwise provided in an Appendix, the Adviser shall provide the
following services to the Manager.
(1) Where the Appendix specifies "investment advisory services" the
Adviser shall furnish (as may be requested by the Manager) one or more of the
following:
(i) recommendations concerning country and asset allocations for the
Fund, factual information, research reports, including reports (written and
oral), analyses, statistical information and advice concerning market trends;
(ii) investment recommendations regarding investment for the Fund,
including advice concerning specific industries, companies, and securities to be
purchased or sold by the Fund;
(iii) advice with respect to the derivative transactions to be engaged
in by the Fund, both for hedging and non-hedging purposes; and
(iv) such other information as may be requested from time to time.
(2) Where the Appendix specifies "discretionary investment management
services" the Adviser shall perform one or more of the following services in the
manner requested by the Manager:
(i) manage the investment of the assets of the Fund in accordance
with the investment objectives, policies and limitations set forth in the
relevant Appendix, and in that connection to review, supervise and administer
continuously the investment program of the Fund, to determine in the Adviser's
discretion the securities to be purchased or sold and the portion of the Fund's
assets to he held uninvested;
(ii) select and place orders for securities and other property
constituting assets of the Fund with brokers, dealers, banks, and members of
securities exchanges;
(iii) execute waivers, consents and other instruments with respect to
securities and other assets of the Fund
(iv) endorse, transfer or deliver such securities and to participate
in or consent to any plan of reorganization, merger, combination, consolidation,
liquidation or similar plan with reference to securities
(v) exercise any voting right exercisable by a holder of any of the
securities of the Fund;
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(vi) send the Manager daily trade details upon confirming transactions
with brokers, dealers, banks or members of securities exchanges;
(vii) maintain on behalf of the Manager the records regarding the
Agent's activities specified in the relevant Appendix; and
(viii) render regular reports to the Manager concerning the Adviser's
discharge of its obligations with respect to a Fund in accordance with the
requirements set forth in the relevant Appendix.
(b) In executing transactions pursuant to sub-section (a)(2), the Adviser shall
use its best efforts to obtain the best execution for the Fund, taking into
account factors including, without limitation, price (including applicable
brokerage commission and dealer spread), size of order, difficulty of execution,
operational facilities of the firm involved, the provision of research and
related services by the executing firm and the firm's risk in positioning a
block of securities. Subject to the foregoing criteria, the Adviser may effect
Fund transactions with any of its affiliated companies.
(c) The Adviser shall not delegate its function, powers, discretion, privileges
or duties under this section 2 to any person, firm or corporation without the
prior written consent of the Manager.
3. COMPENSATION
In exchange for the Services with respect to a Fund, the Manager shall pay
to the Adviser the fees and other compensation as may be separately agreed
between them.
4. NON-EXCLUSIVITY OF SERVICES
(a) Nothing in this Agreement or any Appendix shall be construed as prohibiting
the Adviser from providing services that are the same or similar to Services, or
entering into the same agreements as this with, others (including other
investments companies or other securities investment trusts), so long as the
Adviser's services to the Manager are not impaired thereby.
(b) Nothing in this Agreement or any Appendix shall prevent the Adviser or its
directors, employees, agents or customers from (i) being interested in the
Manager or any beneficial owner of any Fund, whether as directors, employees or
investors, or (ii) transacting with the Manager or the Funds in any capacity, or
(iii) investing in the same types of investment as the Funds. Nothing in this
Agreement or in any Appendix shall be construed to require the Adviser or its
directors, employees, agents or customers to account for any benefit arising
therefrom or disclose such interest.
5. STANDARD OF CARE; INDEMNIFICATION
(a) Unless otherwise provided in an Appendix, the Adviser shall perform
Services to the standard of a professional investment adviser.
(b) Unless otherwise provided in an Appendix, the Manager shall indemnify and
hold harmless the Adviser, its officers, directors, employees, shareholders and
affiliates (each an "Indemnified Party"), from and against any losses, costs and
expenses (including without limitation reasonable attorney's fees) incurred or
suffered by an Indemnified Party arising from
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any action, proceeding or claims which may be brought against such
Indemnification Party arising out of or in connection with the performance or
non-performance of its duties with respect to each Fund, other than losses,
costs and expenses resulting from willful misconduct or gross negligence in the
performance of such Indemnified Party's duties. This indemnification shall
survive the termination of the relevant Appendix.
6. DUARATION AND TERMINATION
(a) Unless otherwise provided in an Appendix, the duration of the Services to
be provided with respect to each Fund shall be for a term of one year and shall
at the end of each term renew automatically for a term of one year. Either party
may terminate an Appendix at any time by 60 days' prior notice or such longer
notice as may be specified in the Appendix.
(b) Termination of any Appendix shall not affect the right of the Adviser to
receive payments of any unpaid balance of the compensation described in Section
3 earned prior to such termination and shall not affect any other Appendix.
7. AMENDMENT; COUNTERPARTS
(a) This Agreement and each Appendix may be amended only by writing signed by
both parties.
(b) This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but which when taken together shall constitute one
and the same instrument.
8. ASSIGNMENT
This Agreement may not be assigned by either party without the express
written consent of the other party.
9. GOVERNING LAW
(a) This Agreement is governed by and shall be construed in accordance with the
laws of the State of New York and each party hereby consents to the
non-exclusive jurisdiction of the courts of the State of New York sitting in the
borough of Manhattan for the resolution of any disputes arising out of or in
connection with this Agreement.
(b) To the extent provided in an Appendix, the interpretation of that Appendix
and the provisions of this Agreement as applied to that Appendix shall be
construed in accordance with the laws of the jurisdiction specified in the
Appendix.
10. APPENDIX
(a) MSAITM and Affiliate hereby agree that each Appendix shall constitute a
separate investment advisory agreement between MSAITM and Affiliate
incorporating the terms and conditions specified in this Agreement and in the
Appendix. In the event of any inconsistencies between the provisions of this
Agreement and the provisions of an Appendix, the language of the Appendix shall
govern with respect to the Fund described in that Appendix and the language of
this Agreement shall govern in all other respects.
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(b) To obtain Services, a party must prepare and sign two copies of a Service
Request and send them to the other party. Upon the other party's execution and
return to the originating party of a Service Request, the Service Request shall
become an Appendix and shall constitute a binding agreement between the parties.
Each Appendix shall be deemed to constitute a delegation of all powers and
authority of the Manager to the extent necessary to enable the Adviser to
perform the Services in respect of that Appendix and an acceptance by the
Adviser of such delegation.
11. WARRANTIES
(a) Each party makes the following representation and undertakes in respect of
each Fund for which it is the Manager that:
(1) it has full power and capacity to execute and deliver the relevant
Appendix and the terms and conditions contained in this Agreement and that
Appendix will be legally binding upon it; and
(2) it has and shall maintain at all times relevant to any Fund (i) due
authorization to act as trustor, discretionary investment manager or investment
adviser for that Fund, and (ii) all necessary consents or approvals of any
governmental or other regulatory body; and shall comply with the terms of the
same and with all applicable laws, regulations or directives of such bodies and
authorities; and shall provide the Adviser with copies of such consents or
approvals as it may reasonable request.
(b) Each party makes the following representations and undertakes in respect of
each Fund for which it is the Adviser that:
(1) it has and at all times relevant to any Fund will have full power and
capacity to enter into and perform its obligations pursuant to this Agreement
and the relevant Appendix and that the terms and conditions contained in this
Agreement the relevant Appendix will be legally binding upon it; and
(2) it has and shall maintain at all times relevant to any Fund all
necessary consents or approvals of any governmental or other regulatory body and
shall comply with the terms of the same and with all applicable laws,
regulations or directives of such bodies and authorities and shall provide the
Manager with copies of such consents or approvals as it may reasonably request.
12. INDEPENDENT CONTRACTOR
The Adviser shall for all purposes be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Manager in any way or otherwise be deemed
as an agent of the Manager
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13. COMMUNICATIONS
(a) Any notices, records, communications or instructions to be given or served
under or in connection with this Agreement shall be in writing and shall be
sufficiently given or served if delivered or sent by, international courier
service or by facsimile transmission with confirmation by first class mail
return receipt requested to the address for the party set forth below to such
other address as that party may designate by notice:
If to MSAITM:
Xxxxxx Xxxxxxx Asset & Investment Trust Management Co., Limited
Xxxxxx Xxxxxx Xxxxx Xxxxx, 00-0, Xxxxx 4-Chome.
Shibuya-ku, Tokyo 150 (Japan)
(or such different address or fax number as notified).
If to Affiliate:
Xxxxxx Xxxxxxx Investment Advisors Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000 U.S.A
(b) All notices shall be deemed to be effective upon receipt.
(c) Each of the parties hereby consents to the recording of telephone
conversations between them.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth hereinabove.
XXXXXX XXXXXXX ASSET & INVESTMENT
TRUST MANAGEMENT CO., LIMITED
By: ______________________________
Name: Xxxx X. Xxxxxx
Title: President
XXXXXX XXXXXXX INVESTMENT
ADVISORS INC.
By: ______________________________
Name:
Title:
PLEASE READ THIS DOCUMENT AND THE AGREEMENT CAREFULLY.
(This document is delivered to you at the time of conclusion of this
contract pursuant to Article 15 of the Law Regulating Securities Investment
Advisory Business.)
APPENDIX NO. __
to the Services Agreement by and between
Xxxxxx Xxxxxxx Asset & Investment Trust Management Co., Limited
(Registration number of Investment Advisor:
Director General of the Kanto Financial Bureau No. 152,
Authorization number: Minister of Finance No. 118)
and Xxxxxx Xxxxxxx Investment Management Inc.
dated as of February 15, 2002 (the "Agreement")
PORTFOLIO NAME: ______________
PART A. PORTFOLIO DETAILS [TO BE INSERTED]
CLIENT NAME:
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ACCOUNT NUMBER:
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DATE OF MANAGEMENT AGREEMENT:
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POWER OF DELEGATION:
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GOVERNING LAW AND JURISDICTION: Japan
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EFFECTIVE DATE OF DELEGATION TO ADVISER:
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FUND MANAGER:
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PART B. SERVICES REQUESTED HEREBY (SPECIFY "ADVISORY SERVICES" OR "DISCRETIONARY
MANAGEMENT SERVICES"): DISCRETIONARY MANAGEMENT SERVICES
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DUTIES RETAINED BY THE MANAGER: ALL OTHER
This Appendix, together with the Agreement, shall constitute a Sub-Advisory
Agreement between the Manager and the Adviser relating to the Portfolio.
The Agreement shall become effective as of the date first above written and
shall remain in force until the date of termination of the investment management
agreement between the Portfolio and the Manager (the "Management Agreement")
(but not later than two years after the date hereof) and thereafter, but only so
long as such continuance is specifically approved at least annually by (i) the
Directors of the Portfolio or by the vote of a majority of the outstanding
voting securities of the Portfolio and (ii) a majority of those Directors who
are not parties to the Management Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
The Agreement may be terminated at any time, without the payment of any penalty,
by the Manager or by vote of a majority of the outstanding voting securities of
the Portfolio, or by the Adviser, on sixty days' written notice to the other
party. The Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Management Agreement.
The Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the Directors of the Portfolio or by the vote of a
majority of outstanding voting securities of the Portfolio and (ii) a majority
of
those Directors who are not parties to the Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such approval.
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person" used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
The attachment(s) to this Appendix (which is/are incorporated herein by
reference) contain(s) the investment guidelines and restrictions and any other
matters of which the Adviser needs to be aware to perform its obligations in
relation to the Portfolio. Except as specified herein, the terms and conditions
of the Agreement shall govern the obligations of the Manager and the Adviser
with respect to the Portfolio.
FEES:
Amounts payable to the Adviser by the Manager in respect of the Agreement will
not exceed the Adviser's cost for performing services under this Agreement until
any necessary regulatory licenses, registrations, approvals or consents or other
approvals or consents are obtained. Otherwise, the fees payable to the Adviser
by the Manager shall be such amount as is agreed from time to time by the
Adviser and the Manager, but not to exceed the amount paid by the Portfolio to
the Manager.
As Manager, the undersigned hereby requests Services described herein:
MANAGER
Xxxxxx Xxxxxxx Investment Management Inc.
By:___________________________________
Name:
Title:
We acknowledge and agree to provide the Services described herein, as Adviser:
ADVISER
Xxxxxx Xxxxxxx Asset & Investment Trust Management Co., Limited
By:______________________________
Name: Xxxx X. Xxxxxx
Title: Chief Investment Officer
PREFERENTIAL RIGHT TO BUSINESS BOND:
A person who executed an investment advisory agreement or discretionary
investment agreement with us shall have a preferential right over other
creditors to the business bond deposited by us with respect to any claims
arising from the Agreement.
