EXHIBIT (g)(2)
XXXXX XXXXX RISK-MANAGED DIVERSIFIED EQUITY INCOME FUND
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT effective the 4th day of June, 2007, between Xxxxx Xxxxx Management, a
Massachusetts business trust (the "Adviser"), and Rampart Investment Management
Company, Inc., a Massachusetts corporation (the "Sub-Adviser").
WHEREAS, Xxxxx Xxxxx Risk-Managed Diversified Equity Income Fund (the "Trust")
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a closed-end, management investment company; and
WHEREAS, pursuant to an Investment Advisory Agreement, dated June 4, 2007 (the
"Advisory Agreement"), a copy of which has been provided to the Sub-Adviser, the
Trust has retained the Adviser to render advisory and management services with
regard to the Trust's options strategy; and
WHEREAS, pursuant to authority granted to the Adviser in the Advisory Agreement,
the Adviser wishes to retain the Sub-Adviser to furnish investment advisory
services to the Trust related to the Trust's options strategy, and the
Sub-Adviser is willing to furnish such services to the Trust and the Adviser.
NOW, THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Adviser and the Sub-Adviser
as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to act as the
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust related to the Trust's option strategy on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth herein for the compensation herein
provided. The Sub-Adviser shall not be responsible for aspects of the Trust's
investment program other than its option strategy, including without limitation
purchases and sales of securities other than options, selection of brokers to
conduct such purchases and sales of securities other than options, compliance
with investment policies and restrictions other than those concerning options,
or proxy voting.
2. SUB-ADVISER DUTIES. Subject to the supervision of the Trust's Board of
Trustees (the "Board") and the Adviser, the Sub-Adviser will provide a
continuous investment program relating to the Trust's purchase or sale of
options for the Trust's portfolio. Subject to approval of the Trust's Board and
notice to the Sub-Adviser, the Adviser retains complete authority immediately to
assume direct responsibility for any function delegated to the Sub-Adviser under
this Agreement. Subject to the foregoing, the Sub-Adviser will provide options
investment research and conduct a continuous program of options evaluation,
investment, sales, and reinvestment of the Trust's assets by determining the
options strategy that the Trust shall pursue, including which options shall be
purchased, entered into, sold, closed, or exchanged for the Trust, when these
transactions should be executed, and what portion of the assets of the Trust
shall have options written against. The Sub-Adviser will provide the services
under this Agreement in accordance with the Trust's investment objective or
objectives, policies, and restrictions as stated in the Trust's Registration
Statement filed with the Securities and Exchange Commission ("SEC"), as amended
(the "Registration Statement"), copies of which shall be sent to the Sub-Adviser
by the Adviser prior to the commencement of this Agreement and promptly
following any such amendment. The Adviser and the Sub-Adviser further agree as
follows:
a. Each of the Adviser and the Sub-Adviser will conform materially
with the 1940 Act and all rules and regulations thereunder, all other applicable
federal and state laws and regulations, with materially any applicable
procedures adopted by the Trust's Board of which the Sub-Adviser has been sent a
copy, and the provisions of the Registration Statement, of which the Sub-Adviser
has received a
copy and with the Sub-Adviser's portfolio manager operating policies and
procedures as are approved by the Adviser. Each of the Adviser and the
Sub-Adviser shall exercise reasonable care in the performance of its duties
under the Agreement.
b. In connection with any purchase and sale of securities for the
Trust related to the implementation of the options strategy developed by the
Sub-Adviser, the Sub-Adviser will arrange for the transmission to the custodian
for the Trust (the "Custodian") on a daily basis such confirmation, trade
tickets, and other documents and information, including, but not limited to,
Cusip, Cedel, or other numbers that identify options to be purchased or sold on
behalf of the Trust, as may be reasonably necessary to enable the Custodian to
perform its administrative and recordkeeping responsibilities with respect to
the Trust. With respect to options to be settled through the Trust's Custodian,
the Sub-Adviser will arrange for the prompt transmission of the confirmation of
such options trades to the Trust's Custodian.
c. The Sub-Adviser will assist the Custodian in determining or
confirming, consistent with the procedures and policies stated in the
Registration Statement or adopted by the Board, the value of any options or
other assets of the Trust for which the Sub-Adviser is responsible and for which
the Custodian seeks assistance from or identifies for review by the Sub-Adviser;
provided that the Sub-Adviser shall be responsible for determining in good
faith, consistent with the procedures and policies stated in the Registration
Statement or adopted by the Board, the fair value of the Trust's portfolio of
options for which the Sub-Adviser is responsible and shall obtain at its own
expense pricing services for the Trust's portfolio of options from Interactive
Data ("IDS"), Bloomberg, or another pricing service to be mutually agreed. The
parties acknowledge that the Sub-Adviser is not a custodian of the Trust's
assets and will not take possession or custody of such assets.
d. Following the end of the Trust's semi-annual period and fiscal
year, the Sub-Adviser will assist the Adviser in preparing a letter to
shareholders containing a discussion of relevant investment factors in respect
of both the prior quarter and the fiscal year to date.
e. The Sub-Adviser will complete and deliver to the Adviser for each
quarter by the 5th business day of the following quarter a written compliance
checklist in a form provided by the Adviser relating to the performances of the
Sub-Adviser under this Agreement.
f. The Sub-Adviser will make available to the Trust and the Adviser,
promptly upon request, any of the Trust's investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and ledgers
maintained by the Custodian or portfolio accounting agent for the Trust) as are
necessary to assist the Trust and the Adviser to comply with requirements of the
1940 Act and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and the rules under each, as well as other applicable laws. The
Sub-Adviser will furnish to regulatory authorities having the requisite
authority any information or reports in connection with such services in respect
to the Trust which may be requested by such authorities in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
g. The Sub-Adviser will provide reports to the Board for consideration
at meetings of the Board on the options portion of the investment program for
the Trust and the options purchased and sold for the Trust's portfolio, and will
furnish the Board with such periodic and special reports as the Board and the
Adviser may reasonably request.
h. The Adviser shall assure that the Trust complies with its
investment policies and restrictions as set forth in the Registration Statement,
except for policies and restrictions concerning implementation of the Trust's
options strategy, and the Adviser acknowledges that the Sub-Adviser shall
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not be responsible for the Trust's compliance with its investment policies and
restrictions other than those concerning implementation of the Trust's option
strategy.
i. The Adviser acknowledges that the Sub-Adviser shall not be
responsible for meeting or monitoring compliance with the income and asset
diversification requirements of Section 851 of the Internal Revenue Code, and
the Adviser acknowledges that the Adviser is responsible for the same.
3. BROKER-DEALER SELECTION. The Sub-Adviser is authorized to make decisions
to buy and sell options for the Trust's portfolio, and to select broker-dealers
and to negotiate brokerage commission rates in effecting an option transaction.
The Sub-Adviser's primary consideration in effecting an option transaction will
be to obtain the best execution for the Trust, taking into account the factors
specified in the prospectus and/or statement of additional information for the
Trust, and determined in consultation with the Adviser, which include price
(including the applicable brokerage commission or dollar spread), the size of
the order, the nature of the market for the option, the timing of the
transaction, the reputation, experience and financial stability of the
broker-dealer involved, the quality of the service, the difficulty of execution,
and the execution capabilities and operational facilities of the firm involved,
and the firm's risk in positioning a block of options. Accordingly, the price to
the Trust in any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified, in the judgment
of the Sub-Adviser in the exercise of its fiduciary obligations to the Trust, by
other aspects of the portfolio execution services offered. The Sub-Adviser shall
not receive any research service from any broker-dealer or from any third party
that is paid by such broker-dealer in return for placing trades through such
broker-dealer on behalf of the Trust. The Sub-Adviser will consult with the
Adviser to ensure that portfolio transactions on behalf of the Trust are
directed to broker-dealers on the basis of criteria reasonably considered
appropriate by the Adviser. To the extent consistent with these standards, the
Sub-Adviser is further authorized to allocate the orders placed by it on behalf
of the Trust to an affiliated broker-dealer. Such allocation shall be in such
amounts and proportions as the Sub-Adviser shall determine consistent with the
above standards, and the Sub-Adviser will report on said allocation regularly to
the Trust's Board indicating the broker-dealers to which such allocations have
been made and the basis therefore.
4. DISCLOSURE ABOUT SUB-ADVISER. The Sub-Adviser has reviewed the most
recent Amendment to the Registration Statement that contains disclosure about
the Sub-Adviser, and represents and warrants that, with respect only to the
disclosure expressly concerning the Sub-Adviser, its business, operations, or
employees, such Registration Statement contains, as of the date hereof, no
untrue statement of any material fact and do not omit any statement of a
material fact which was required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. The Sub-Adviser further represents and warrants that
it is a duly registered investment adviser under the Advisers Act and will
maintain such registration so long as this Agreement remains in effect. The
Adviser hereby acknowledges that it has received a copy of the Sub-Adviser's
Form ADV, Part II at least 48 hours prior to entering into this Agreement.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it and its staff and for their activities in connection
with its duties under this Agreement including, but not limited to, rental and
overhead expenses, expenses of the Sub-Adviser's personnel, pricing services in
accordance with Section 2, insurance of the Sub-Adviser and its personnel,
research services, and taxes of the Sub-Adviser. The Adviser or the Trust shall
be responsible for all other expenses of the Trust's or the Adviser's
operations, including without limitation costs of marketing or distributing
shares of the Trust, brokerage expenses and commissions, custody and banking
expenses, administration expenses, legal, audit and other professional expenses,
governmental filing fees, and costs of communications with shareholders.
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6. COMPENSATION. For the services provided to the Trust, the Adviser will
pay the Sub-Adviser an annual fee equal to the amount specified in Schedule A
hereto, payable monthly in arrears on the last business day of each month. The
fee will be appropriately prorated to reflect any portion of a calendar month
that this Agreement is not in effect among the parties. The Adviser is solely
responsible for the payment of fees to the Sub-Adviser, and the Sub-Adviser
agrees to seek payment of its fees solely from the Adviser. The Trust shall have
no liability for Sub-Adviser's fee hereunder.
7. MATERIALS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses, proxy
statements, and reports to shareholders prepared for distribution to
shareholders of the Trust, all sales literature or advertisements for the Trust,
and all other communications with the public of the Trust, or the Adviser that
refer to the Sub-Adviser in any way, prior to the use thereof, and the Adviser
shall not use any such materials if the Sub-Adviser reasonably objects in
writing within 2 business days (or such other period as may be mutually agreed)
after receipt thereof. The Sub-Adviser's right to object to such materials is
limited to reasonable objections related to the portions of such materials that
expressly relate to the Sub-Adviser, its services and its clients. The Adviser
agrees to use its reasonable best efforts to ensure that materials prepared by
its employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved by
the Sub-Adviser as referenced in the first sentence of this paragraph.
8. COMPLIANCE.
a. As required by Rule 206(4)-7 under the Advisers Act, the
Sub-Adviser has adopted written policies and procedures reasonably designed to
prevent violation by it, or any of its supervised persons, of the Advisers Act
and the rules under the Advisers Act and all other laws and regulations relevant
to the performance of its duties under this Agreement. The Sub-Adviser has
designated a chief compliance officer responsible for administering these
compliance policies and procedures. The chief compliance officer at the
Sub-Adviser's expense shall provide such written compliance reports relating to
the operations and compliance procedures of the Sub-Adviser to the Adviser
and/or the Trust and their respective chief compliance officers as may be
required by law or regulation or as are otherwise reasonably requested.
Moreover, the Sub-Adviser agrees to use such other or additional compliance
techniques as the Adviser or the Board may reasonably adopt or approve,
including written compliance procedures.
b. The Sub-Adviser agrees that it shall promptly notify, if legally
permitted, the Adviser and the Trust (1) in the event that the SEC has censured
the Sub-Adviser; placed limitations upon its activities, functions or
operations; suspended or revoked its registration as an investment adviser;
commenced proceedings or an investigation (formally or informally) that may
result in any of these actions; or corresponded with the Sub-Adviser on a
non-routine basis concerning either the Sub-Adviser's performances under this
Agreement or any other matter that might materially affect the ability of the
Sub-Adviser to perform its duties under this Agreement, including sending a
deficiency letter or raising issues about the business, operations, or practices
of the Sub-Adviser, (2) in the event of any notice of investigation,
examination, inquiry, audit or subpoena of the Sub-Adviser or any of its
officers or employees by any federal, state, municipal or other governmental
department, commission, bureau, board, agency or instrumentality. If legally
permitted, the Sub-Adviser will furnish the Adviser, upon request, copies of any
and all documents relating to the foregoing. The Sub-Adviser further agrees to
notify the Adviser and the Trust promptly of any material fact known to the
Sub-Adviser respecting or relating to the Sub-Adviser that is not contained in
the Registration Statement or prospectus for the Trust, or any amendment or
supplement thereto that is required to be so contained, or if any statement
contained therein concerning the Sub-Adviser that becomes untrue in any material
respect.
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c. The Adviser agrees that it shall promptly notify, if legally
permitted, the Sub-Adviser (1) in the event that the SEC has censured the
Adviser or the Trust; placed limitations upon either of their activities,
functions, or operations; suspended or revoked the Adviser's registration as an
investment adviser; suspended or revoked the Trust's registration under the 1940
Act, issued any stop order concerning any offering of the Trust's securities, or
has commenced proceedings or an investigation that may result in any of these
actions, or corresponded with the Adviser or the Trust on a non-routine basis
concerning the management or operations of the Trust or the advisory services
provided by the Adviser to the Trust that would have a material adverse impact
on the Sub-Adviser or (2) upon having a reasonable basis for believing that the
Trust has ceased to qualify or might not qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code. If legally permitted,
the Adviser will furnish the Sub-Adviser, upon request, copies of any and all
documents relating to the foregoing.
d. The Sub-Adviser will provide the Adviser with such reports,
presentations, certifications and other information as the Adviser may
reasonably request from time to time concerning the business and operations of
the Sub-Adviser in performing services hereunder or generally concerning the
Sub-Adviser's investment advisory services, the Sub-Adviser's compliance with
applicable federal, state and local law and regulations, and changes in the
Sub-Adviser's key personnel, investment strategies, policies and procedures, and
other matters that are likely to have a material impact on the Sub-Advisers
duties hereunder. The Adviser and the Trust shall provide the Sub-Adviser with
such reports as the Sub-Adviser may from time to time reasonably request
concerning their compliance with applicable federal, state and local law and
regulations.
9. BOOKS AND RECORDS. The Sub-Adviser hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or the
Adviser's request in compliance with the requirements of Rule 31a-3 under the
1940 Act, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
10. COOPERATION; CONFIDENTIALITY; PROPRIETARY RIGHTS. Each party to this
Agreement agrees to cooperate with the other party and with all appropriate
governmental authorities having the requisite jurisdiction (including, but not
limited to, the SEC) in connection with any investigation or inquiry relating to
this Agreement or the Trust. Subject to the foregoing, the Sub-Adviser shall
treat as confidential and use only in connection with the Trust in accordance
with this Agreement all information pertaining to the Trust, actions of the
Trust or the Adviser, and the Adviser shall treat as confidential and use only
in connection with the Trust in accordance with this Agreement all information
furnished to the Trust or the Adviser by the Sub-Adviser (and all derivative
works produced therefrom), in connection with its duties under this Agreement
except that the aforesaid information need not be treated as confidential if
required to be disclosed under applicable law, if generally available to the
public through means that do not involve a breach of this section by the
Sub-Adviser or the Adviser, or if available from a source other than the
Adviser, Sub-Adviser or the Trust. The parties acknowledge that any breach of
the undertaking in the immediately preceding sentence might result in immediate,
irreparable injury to another party and that, accordingly, equitable remedies,
including ex parte remedies, are appropriate in the event of any actual,
apparent, or threatened breach of such undertaking.
The Adviser acknowledges that the Sub-Adviser is the sole owner of the
names "Rampart Investment Management" and "ROMS", and all related names, marks,
and trade dress (the "Rampart Marks") and all associated goodwill. The Adviser
shall not take any action inconsistent with such ownership, including, without
limitation, contesting the Sub-Adviser's ownership of or validity of the Rampart
Marks. The Adviser agrees that all use of the Rampart Marks under this Agreement
inures to the benefit of the Sub-Adviser. Apart from the license granted in the
next paragraph, the Adviser shall
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acquire no right, title or interest of any kind or nature whatsoever in the
Rampart Marks and the goodwill associated therewith by virtue of this Agreement.
The Adviser shall upon request execute and deliver such documents as the
Sub-Adviser may reasonably require to further evidence, assure, and confirm the
rights of the Sub-Adviser in the Rampart Marks.
The Sub-Adviser hereby grants to the Adviser and the Trust a non-exclusive
worldwide license to use, publish, reproduce, modify, and distribute the Rampart
Marks solely in connection with the conduct of the business of the Trust and in
accordance with this Agreement (the "License"). The Adviser and the Trust shall
not use, publish, reproduce, modify or distribute any Rampart Marks for any
other purpose. The Adviser and the Trust shall comply with the reasonable
written instructions of the Sub-Adviser concerning the use of the Rampart Marks
under the License, including instructions concerning trademark notices and
updates of the Rampart Marks. The Sub-Adviser shall have the right to monitor
and observe the Adviser's and the Trust's use of the Rampart Marks pursuant to
the License for the purpose of protecting and maintaining its control over the
nature and quality of the Rampart Marks, and the Adviser shall upon request
supply Rampart with a written accounting of such use.
The Adviser acknowledges that the Sub-Adviser is the sole owner of the
Rampart Options Management System ("ROMS"). The Adviser shall not take any
action inconsistent with such ownership, including, without limitation,
contesting the Sub-Adviser's ownership of ROMS. The Adviser shall acquire no
right, title or interest of any kind or nature whatsoever in ROMS under this
Agreement. This section does not prohibit the Advisor, for the Trust or other
clients, or the Trust from either (1) contesting what constitutes part of ROMS;
(2) from using any systems, methods or processes for selecting or trading
options that are not proprietary to the Sub-Adviser; or (3)without the use of
any proprietary processes, methods, or systems of the Sub-Adviser, managing the
options strategy of the Trust where a portion of the stocks in the portfolio
have options written on them with the intention of generating income.
11. CONTROL. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
12. LIABILITY.
a. Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, the Adviser agrees that the Sub-Adviser, any
affiliated person of the Sub-Adviser, and each person, if any, who, within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "1933
Act"), controls the Sub-Adviser shall not be liable for, or subject to, any
damages, expenses, or losses in connection with, any act or omission connected
with or arising out of any services rendered under this Agreement, except by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of the Sub-Adviser's duties, or any breach by the Sub-Adviser of its obligations
or duties under this Agreement.
b. Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, the Sub-Adviser agrees that the Adviser, any
affiliated person of the Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls the Adviser shall not be liable
for, or subject to, any damages, expenses, or losses in connection with, any act
or omission connected with or arising out of any services rendered under this
Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Adviser's duties, or any breach by the
Adviser of its obligations or duties under this Agreement.
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13. INDEMNIFICATION.
a. The Adviser agrees to indemnify and hold harmless the Sub-Adviser,
any affiliated person of the Sub-Adviser, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act controls ("controlling person") the
Sub-Adviser (all of such persons being referred to as "Sub-Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out
of the Adviser's responsibilities to the Sub-Adviser which (1) may be based upon
the Adviser's gross negligence, willful misfeasance, or bad faith in the
performance of its duties, or by reason of the Adviser's disregard of its
obligations and duties under this Agreement and to the Trust, or (2) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or prospectus covering shares of the
Trust, or any amendment thereof or any supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon and conformity with information
furnished by the Sub-Adviser to the Adviser or the Trust expressly for inclusion
in such Registration Statements, prospectuses, amendments, or supplements either
in writing or orally with a subsequent confirmation by the Sub-Adviser of the
information as it appears in the Registration Statement or prospectus; provided
however, that in no case shall the indemnity in favor of the Sub-Adviser
Indemnified Person be deemed to protect such person against any liability to
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its duties, or by reason of
its breach or reckless disregard of its obligations or duties under this
Agreement.
b. Notwithstanding Section 12 of this Agreement, the Sub-Adviser
agrees to indemnify and hold harmless the Adviser, any affiliated person of the
Adviser, and any controlling person of the Adviser (all of such persons being
referred to as "Adviser Indemnified Persons") against any and all losses,
claims, damages, liabilities, or litigation (including legal and other expenses)
to which an Adviser Indemnified Person may become subject under the 1933 Act,
1940 Act, the Advisers Act, under any other statute, at common law or otherwise,
arising out of the Sub-Adviser's responsibilities as Sub-Adviser of the Trust
which (1) may be based upon the Sub-Adviser's gross negligence, willful
misfeasance, or bad faith in the performance of its duties, or by reason of the
Sub-Adviser's disregard of its obligations or duties under this Agreement, or
(2) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or prospectus covering the
shares of the Trust, or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact known or which should have
been known to the Sub-Adviser and was required to be stated therein or necessary
to make the statements therein not misleading, if such a statement or omission
was made in reliance upon and conformity with information furnished by the
Sub-Adviser to the Adviser or the Trust expressly for inclusion in such
Registration Statements, prospectuses, amendments, or supplements either in
writing or orally with a subsequent confirmation by the Sub-Adviser of the
information as it appears in the Registration Statement or prospectus; provided,
however, that in no case shall the indemnity in favor of an Adviser Indemnified
Person be deemed to protect such person against any liability to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence in the performance of its duties, or by reason of its breach or
reckless disregard of its obligations and duties under this Agreement.
c. The Adviser shall not be liable under Paragraph (a) of this Section
13 with respect to any claim made against a Sub-Adviser Indemnified Person
unless such Sub-Adviser Indemnified Person shall have notified the Adviser in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Sub-Adviser Indemnified Person (or after such Sub-Adviser Indemnified Person
shall have received notice of such
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service on any designated agent), but failure to notify the Adviser of any such
claim shall not relieve the Adviser from any liability which it may have to the
Sub-Adviser Indemnified Person against whom such action is brought except to the
extent the Adviser is prejudiced by the failure or delay in giving such notice.
In case any such action is brought against the Sub-Adviser Indemnified Person,
the Adviser will be entitled to participate, at its own expense, in the defense
thereof or, after notice to the Sub-Adviser Indemnified Person, to assume the
defense thereof, with counsel satisfactory to the Sub-Adviser Indemnified
Person. If the Adviser assumes the defense of any such action and the selection
of counsel by the Adviser to represent the Adviser and the Sub-Adviser
Indemnified Person would result in a conflict of interests and therefore, would
not, in the reasonable judgment of the Sub-Adviser Indemnified Person,
adequately represent the interests of the Sub-Adviser Indemnified Person, the
Adviser will, at its own expense, assume the defense with counsel to the Adviser
and, also at its own expense, with separate counsel to the Sub-Adviser
Indemnified Person, which counsel shall be satisfactory to the Adviser and to
the Sub-Adviser Indemnified Person. The Sub-Adviser Indemnified Person shall
bear the fees and expenses of any additional counsel retained by it, and the
Adviser shall not be liable to the Sub-Adviser Indemnified Person under this
Agreement for any legal or other expenses subsequently incurred by the
Sub-Adviser Indemnified Person independently in connection with the defense
thereof other than reasonable costs of investigation; provided however, the
Adviser shall be responsible for the additional counsel of Sub-Adviser in the
event the Adviser is determined to have made the fraudulent representations, by
the final decision of a court of competent jurisdiction (that is not subject to
appeal or as to which the time for appeal has elapsed), and such representations
are the basis for which Sub-Adviser's liability is based. The Adviser shall not
have the right to compromise on or settle the litigation without the prior
written consent of the Sub-Adviser Indemnified Person if the compromise or
settlement results, or may result in a finding of wrongdoing on the part of the
Sub-Adviser Indemnified Person.
d. The Sub-Adviser shall not be liable under Paragraph (b) of this
Section 13 with respect to any claim made against an Adviser Indemnified Person
unless such Adviser Indemnified Person shall have notified the Sub-Adviser in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Adviser Indemnified Person (or after such Adviser Indemnified Person shall have
received notice of such service on any designated agent), but failure to notify
the Sub-Adviser of any such claim shall not relieve the Sub-Adviser from any
liability which it may have to the Adviser Indemnified Person against whom such
action is brought except to the extent the Sub-Adviser is prejudiced by the
failure or delay in giving such notice. In case any such action is brought
against the Adviser Indemnified Person, the Sub-Adviser will be entitled to
participate, at its own expense, in the defense thereof or, after notice to the
Adviser Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Adviser Indemnified Person. If the Sub-Adviser assumes the
defense of any such action and the selection of counsel by the Sub-Adviser to
represent both the Sub-Adviser and the Adviser Indemnified Person would result
in a conflict of interests and therefore, would not, in the reasonable judgment
of the Adviser Indemnified Person, adequately represent the interests of the
Adviser Indemnified Person, the Sub-Adviser will, at its own expense, assume the
defense with counsel to the Sub-Adviser and, also at its own expense, with
separate counsel to the Adviser Indemnified Person, which counsel shall be
satisfactory to the Sub-Adviser and to the Adviser Indemnified Person. The
Adviser Indemnified Person shall bear the fees and expenses of any additional
counsel retained by it, and the Sub-Adviser shall not be liable to the Adviser
Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Adviser Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The Sub-Adviser shall not have the right to compromise on or
settle the litigation without the prior written consent of the Adviser
Indemnified Person if the compromise or settlement results, or may result in a
finding of wrongdoing on the part of the Adviser Indemnified Person.
8
14. DURATION AND TERMINATION.
a. This Agreement shall become effective upon the date of its
execution, subject to the condition that the Trust's Board, including a majority
of those Trustees who are not interested persons (as such term is defined in the
0000 Xxx) of the Adviser or the Sub-Adviser, and the Holders of Interests in the
Trust, shall have approved this Agreement in the manner required by the 1940
Act. Unless terminated as provided herein, this Agreement shall remain in full
force and effect through and including the second anniversary of the execution
of this Agreement and shall continue in full force and affect indefinitely
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Board, or by the vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Trust, and (b) the vote of
a majority of those Trustees who are not interested persons (as such term is
defined in the 0000 Xxx) of any such party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval.
b. Notwithstanding the foregoing, this Agreement may be terminated:
(a) by the Adviser at any time without payment of any penalty, upon 60 days'
prior written notice to the Sub-Adviser and the Trust; (b) at any time without
payment of any penalty by the Trust, by the Trust's Board or a majority of the
outstanding voting securities of the Trust, upon 60 days' prior written notice
to the Adviser and the Sub-Adviser, or (c) by the Sub-Adviser upon 3 months'
prior written notice unless the Trust or the Adviser requests additional time to
find a replacement for the Sub-Adviser, in which case the Sub-Adviser shall
allow the additional time requested by the Trust or Adviser not to exceed 3
additional months beyond the initial three-month notice period; provided,
however, that the Sub-Adviser may terminate this Agreement at any time without
penalty, effective upon written notice to the Adviser and the Trust, in the
event either the Sub-Adviser (acting in good faith) or the Adviser ceases to be
registered as an investment adviser under the Advisers Act or otherwise becomes
legally incapable of providing investment management services pursuant to its
respective contract with the Trust.
c. In the event of termination for any reason, all records of the
Trust shall promptly be returned to the Adviser or the Trust, free from any
claim or retention of rights in such record by the Sub-Adviser, although the
Sub-Adviser may, at its own expense, make and retain a copy of such records.
This Agreement shall automatically terminate in the event of its assignment (as
such term is described in the 1940 Act). In the event this Agreement is
terminated or is not approved in the manner described above, the Sections or
Paragraphs numbered 9, 10, 11, 12, and 13 of this Agreement shall remain in
effect, as well as any applicable provision of this Section 14 and, to the
extent that only amounts are owed to the Sub-Adviser as compensation for
services rendered while the agreement was in effect, Section 6.
15. NOTICES. Any notice must be in writing and shall be sufficiently given
(1) when delivered in person, (2) when dispatched by electronic mail or
electronic facsimile transfer (confirmed in writing by postage prepaid first
class air mail simultaneously dispatched), (3) when sent by internationally
recognized overnight courier service (with receipt confirmed by such overnight
courier service), or (4) when sent by registered or certified mail, to the other
party at the address of such party set forth below or at such other address as
such party may from time to time specify in writing to the other party.
9
If to the Trust:
Xxxxx Xxxxx Risk-Managed Diversified Equity Income Fund
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Legal Officer
If to the Adviser:
Xxxxx Xxxxx Management
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Legal Officer
If to the Sub-Adviser:
Rampart Investment Management Company, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
16. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved as required by applicable law.
17. MISCELLANEOUS.
a. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder, and without regard for the conflicts of laws principles thereof. The
term "affiliate" or "affiliated person" as used in this Agreement shall mean
"affiliated person" as defined in Section 2(a)(3) of the 0000 Xxx.
b. The Adviser and the Sub-Adviser acknowledge that the Trust enjoys
the rights of a third-party beneficiary under this Agreement, and the Adviser
acknowledges that the Sub-Adviser enjoys the rights of a third party beneficiary
under the Advisory Agreement.
c. The Sub-Adviser expressly acknowledges the provision in the
Declaration of Trust of the Adviser limiting the personal liability of the
Trustee and officers of the Adviser, and the Sub-Adviser hereby agrees that it
shall have recourse to the Adviser for payment of claims or obligations as
between the Adviser and the Sub-Adviser arising out of this Agreement and shall
not seek satisfaction from the Trustee or any officer of the Adviser.
d. The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
10
e. To the extent permitted under Section 14 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other party. This Agreement shall terminate upon its assignment, and for
purposes of this section the term "assignment" shall have the meaning assigned
to it in the 1940 Act.
f. 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, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
g. Nothing herein shall be construed as constituting the Sub-Adviser
as an agent or copartner of the Adviser, or constituting the Adviser as an agent
or co-partner of the Sub-Adviser.
h. This Agreement may be executed in counterparts.
i. The Sub-Adviser shall not be responsible for any failure to perform
its duties under this Agreement as a result of war, acts of terrorism, natural
disasters, failures of electricity, telephone lines, and other utility services,
closures of securities and options markets, and other events beyond the
reasonable control of the Sub-Adviser provided the Sub-Adviser has maintained
contingency procedures reasonably designed, where possible, to prevent and
mitigate the effect of such events.
[Signature page follows.]
11
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
XXXXX XXXXX MANAGEMENT
By: /s/ Xxxxxxxxx X. Marius
------------------------------------
Name: Xxxxxxxxx X. Marius
Vice President, and not
individually
RAMPART INVESTMENT MANAGEMENT
COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
President
12
SCHEDULE A
Annual Investment Sub-Advisory Fee
0.20% annually of the Trust's average net assets that are subject to a written
put strategy on individual stocks as determined by the Adviser from time to time
and 0.05% annually of the Trust's average net assets not subject to such written
put strategy on individual stocks.
13
