XXXX XXXXXXX ADVISERS, INC.
Boston, Massachusetts
July 18, 1996
Indosuez Asia Advisers, Ltd.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000-0000
Xxxx Xxxx
Sub-Advisory Agreement
Dear Sirs:
Xxxx Xxxxxxx Pacific Basin Equities Fund (the "Fund"), which is a
series of Xxxx Xxxxxxx World Fund (the "Trust") has been organized under the
laws of the Commonwealth of Massachusetts to engage in the business of an
investment company. The Trust's shares of beneficial interest may be classified
into series and classes, each series representing the entire undivided interest
in a separate portfolio of assets. As of the date hereof, the Fund has three
classes of shares.
The Fund's Board of Trustees of the Trust (the "Trustees") and the
Fund's shareholders have approved the selection of Xxxx Xxxxxxx Advisers, Inc.
(the "Adviser") to provide overall investment advice and management for the
Fund, and to provide certain other services, under the terms and conditions
provided in the Investment Management Contract, dated May 5, 1987, as amended
December 19, 1989, between the Fund and the Adviser (the "Investment Management
Contract").
The Adviser and the Fund have selected Indosuez Asia Advisers, Ltd.
(the "Sub-Adviser") to provide the Adviser and the Fund with the advice and
services set forth below, and the Sub-Adviser is willing to provide such advice
and services, subject to the review of the Fund and the overall supervision of
the Adviser, under the terms and conditions hereinafter set forth. The
Sub-Adviser hereby represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
Accordingly, the Adviser agrees with the Sub-Adviser as follows:
1. Delivery of Documents. The Adviser has furnished the Sub-Adviser with
copies, properly certified or otherwise authenticated, of each of the following:
(a) The Amended and Restated Declaration of Trust of the Trust
dated February 28, 1992 (the "Declaration").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Board of Trustees approving the form of
this Agreement and resolutions adopted by the shareholders of
the Fund approving the form of this Agreement.
(d) Resolutions of the Board of Trustees selecting the Adviser as
investment adviser to the Fund and approving the form of the
Investment Management Contract and resolutions adopted by the
shareholders of the Fund approving the form of the Investment
Management Contract.
(e) The Adviser's Investment Management Contract.
(f) Commitments, limitations and undertakings made by the Trust to
state "blue sky" authorities for the purpose of qualifying
shares of the Fund for sale in such states.
(g) The Fund's portfolio compliance checklists.
(h) The Fund's Prospectus and Statement of Additional Information.
(i) The Trust's Code of Ethics.
The Adviser will furnish the Sub-Adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services and Duties. The Sub-Adviser will use its best
efforts to provide to the Fund continuing and suitable investment advice with
respect to investments, consistent with its investment policies, objectives and
restrictions as set forth in the Fund's Prospectus and Statement of Additional
Information. In the performance of the Sub-Adviser's duties hereunder, subject
always to the provisions contained in the documents delivered to the Sub-Adviser
pursuant to Section 1 above, as each of the same may from time to time be
amended or supplemented, the Sub-Adviser will, at its own expense:
(a) furnish the Adviser and the Fund with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the Fund as set forth above,
with respect to the purchase, holding and disposition of
portfolio securities including the purchase and sale of
options.
(b) furnish the Adviser and the Fund with advice as to the manner
in which voting rights, subscriptions rights, rights to
consent to corporate action and any other rights pertaining to
the Fund's assets shall be exercised, the Trust having the
responsibility to exercise such voting and other rights on
behalf of the Fund;
(c) furnish the Adviser and each Fund with research, economic and
statistical data in connection with the Fund's investments and
investment policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Adviser may reasonable request;
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(e) consistent with the provisions of Section 7 of this Agreement,
place orders for the purchase, sale or exchange of portfolio
securities for the Fund's account with brokers or dealers
selected by the Adviser or the Sub-Adviser, provided that in
connection with the placing of such orders and the selection
of such brokers or dealers the Sub-Adviser shall seek to
obtain best price and execution, except as otherwise provided
in the Prospectus and Statement of Additional Information of
the Fund;
(f) from time to time or at any time requested by the Adviser or
the Trust on behalf of the Fund, make reports to the Adviser
or the Trust, as requested, of the Sub-Adviser's performance
of the foregoing services;
(g) subject to the supervision of the Adviser, maintain and
preserve the records required by the Investment Company Act of
1940 to be maintained by the Sub-Adviser (the Sub-Adviser
agrees that such records are the property of the Fund and
copies will be surrendered to the Trust on behalf of the Fund
promptly upon request therefor);
(h) give instructions to the custodian (including any
subcustodian) of the Fund as to deliveries of securities to
and from such custodian and payments of cash for the account
of the Fund, and advise the Adviser on the same day such
instructions are given; and
(i) cooperate generally with the Fund and the Adviser to provide
information necessary for the preparation of registration
statements and periodic reports to be filed with the
Securities and Exchange Commission, including registration
statements on Form N-1A, semi-annual reports on Form N-SAR,
periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings
with state "blue sky" authorities and with United States and
foreign agencies responsible for tax matters, and other
reports and filings of like nature.
(j) In the performance of its duties hereunder, the Sub-Adviser is
and shall be an independent contractor and unless otherwise
expressly provided or authorized shall have no authority to
act for or represent the Fund or Trust in any way or otherwise
be deemed to be an agent of the Fund, the Trust or of the
Adviser.
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Agreement, the expenses of office rent, telephone, telecommunications
and other facilities required by it to perform the services specified in Section
2, and any other expenses, including legal, audit and professional fees and
expenses, incurred by it in connection with the performance of its duties
hereunder.
4. Expenses of the Funds Not Paid by the Sub-Adviser. The Sub-Adviser will
not be required to pay any expenses which this Agreement does not expressly
state shall by payable by the Sub-Adviser. In particular, and without limiting
the generality of the foregoing but subject to the provisions of Section 3, the
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Sub-Adviser will not be required to pay any Fund expenses or to reimburse the
Adviser for any such expenses that the Adviser is required to pay.
5. Compensation of the Sub-Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided, for the Fund, the Adviser will pay the Sub-Adviser quarterly, in
arrears a fee at the annual rate of (a) .30% of the first $100 million of the
Fund's average daily net assets managed by the Sub-Adviser plus (b) the
following additional amount, based on a percentage of the gross management fee
received by the Adviser pursuant to the Investment Management Contract with
respect to the Fund's average daily net assets in excess of $100 million which
are managed by the Sub-Adviser:
Average Daily Net Assets Percentage of Gross
Managed by Sub-Adviser Management Fee
More than $100 million up to $250 million 40%
More than $250 million 50%
The Sub-Adviser will receive a pro rata portion of such quarterly fee for any
periods in which the Sub-Adviser advises the Fund less than a full quarter. The
Sub-Adviser understands and agrees that neither the Trust nor the Fund has any
liability for the Sub-Adviser's compensation hereunder. Calculations of the
Sub-Adviser's fee will be based on average net asset values as provided by the
Adviser.
6. Other Activities of the Sub-Adviser and Its Affiliates. The Adviser and
Sub-Adviser may enter into a separate agreement which limits the ability of the
Sub-Adviser to act as Sub-Adviser for certain other investment companies and
advisory clients. However, nothing in this Agreement shall prevent the
Sub-Adviser or any of its affiliates or associates from engaging in any other
business or from acting as investment adviser or investment manager for any
other person or entity, whether or not having investment policies or portfolios
similar to the Fund. Subject to the provisions of such separate agreement, it is
specifically understood that officers, directors and employees of the
Sub-Adviser and those of its affiliates may engage in providing portfolio
management services and advice to other investment advisory clients of the
Sub-Adviser or of its affiliates.
7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the
Sub-Adviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The Sub-Adviser shall not
knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction. Access
persons (as defined in Rule 17j-1 under the Investment Company Act of 1940, as
amended) of the Sub-Adviser will provide personal trading reports to a
designated representative of the Adviser in accordance with the Trust's Code of
Ethics.
8. No Partnership or Joint Venture. The Adviser and the Sub-Adviser are
not currently partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such on any of them.
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9. Limitation of Liability of the Sub-Adviser. The Sub-Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust, the Fund or the Adviser in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith, or gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
10. Duration and Termination of this Agreement. Unless terminated as
provided below, this Agreement shall remain in force until June 30, 1998, and
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by (a) a majority of the Trustees of the
Trust who are not interested persons of the Adviser, of the Sub-Adviser or of
the Trust (other than as Board members), cast in person at a meeting called for
the purpose of voting on such approval, and (b) either (i) the Trustees of the
Trust or (ii) a majority of the outstanding voting securities of the Fund. This
Agreement may, on 60 days' written notice, be terminated at any time, without
the payment of any penalty by vote of a majority of the outstanding voting
securities of the Fund, by the Adviser or by the Sub-Adviser. Termination of
this Agreement shall not be deemed to terminate or otherwise invalidate any
other contract between you and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment or upon the
termination of the Adviser's Investment Management Contract. In interpreting the
provisions of this Section 10, the definitions contained in Section 2(a) of the
Investment Company Act of 1940, as amended (particularly the definitions of
"assignment", "interested person," and "voting security"), shall be applied.
11. Amendment of This Agreement. No provision of this Agreement may be
changed or waived orally, but only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this Agreement
shall be effective until approved by (a) the Board of Trustees of the Trust,
including a majority of the Trustees who are not interested persons of the
Adviser, the Sub-Adviser or the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) a majority of the outstanding
voting securities of the Fund, as defined in the Investment Company Act of 1940,
as amended.
12. Miscellaneous.
(a) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
(b) Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees
from buying, selling or trading in any securities for its or
their own account or accounts if done in full compliance with
the Trust's Code of Ethics. The Trust acknowledges that the
Adviser or sub-advisers engaged by it and their respective
officers, affiliates and employees, and their other clients
may at any time, have, acquire, increase, decrease or dispose
of positions in investments which are at the same time being
acquired or disposed of by the Fund.
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(c) Any of the shareholders, Trustees, officers and employees of
the Trust may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Sub-Adviser, any
interested person of the Sub-Adviser, any organization in
which the Sub-Adviser may have an interest or any organization
which may have an interest in the Sub-Adviser, and the
Sub-Adviser, any such interested person or any such
organization may have an interest in the Trust. Subject to the
provisions of any separate agreement between the Adviser and
the Sub-Adviser, the Sub-Adviser, the Adviser and the Trust
may have advisory, management, service or other contracts with
other individuals or entities, and may have other interests
and businesses. When a security proposed to be purchased or
sold for the Fund is also to be purchased or sold for other
accounts managed by the Sub-Adviser at the same time, the
Sub-Adviser shall make such purchases or sales on a pro-rata,
rotating or other equitable basis so as to avoid any one
account's being preferred over any other account.
13. Governing Law. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts and the applicable provisions of the
Investment Company Act of 1940.
Yours very truly,
XXXX XXXXXXX ADVISERS, INC.
By: /s/Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Chairman of the Board, President and
Chief Executive Officer
INDOSUEZ ASIA ADVISERS, LTD.
By: /s/Ian McEvatt
President
