Exhibit (d)(6)
SUB-ADVISORY AGREEMENT
AGREEMENT made this 7th day of September, 1998, by and between DEUTSCHE
INVESTMENT MANAGEMENT (AMERICAS), INC., a Delaware corporation (the "Adviser")
and DREMAN VALUE MANAGEMENT, L.L.C., a Delaware limited liability company (the
"Sub-Adviser") as amended and restated as of March 31, 2002.
WHEREAS, XXXXXXX VALUE SERIES, INC., formerly known as XXXXXX VALUE
SERIES, INC., a Maryland corporation (the "Fund") is a management investment
company registered under the Investment Company Act of 1940, as amended ("the
Investment Company Act");
WHEREAS, the Fund has retained the Adviser to render to it investment
advisory and management services with regard to the Fund, including the series
known as the Xxxxxxx-Xxxxxx High Return Equity Fund (the "High Return Series"),
pursuant to an Investment Management Agreement (the "Management Agreement"); and
WHEREAS, the Adviser desires at this time to retain the Sub-Adviser to
render investment advisory and management services for the High Return Series
and the Sub-Adviser is willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. Appointment of the Sub-Adviser.
------------------------------
(a) The Adviser hereby employs the Sub-Adviser to manage the investment
and reinvestment of the assets of the High Return Series in accordance with the
applicable investment objectives, policies and limitations and subject to the
supervision of the Adviser and the Board of Directors of the Fund for the period
and upon the terms herein set forth, and to place orders for the purchase or
sale of portfolio securities for the High Return Series account with brokers or
dealers selected by the Sub-Adviser; and, in connection therewith, the
Sub-Adviser is authorized as the agent of the High Return Series to give
instructions to the Custodian and Accounting Agent of the Fund as to the
deliveries of securities and payments of cash for the account of the High Return
Series. In connection with the selection of such brokers or dealers and the
placing of such orders, the Sub-Adviser is directed to seek for the High Return
Series best execution of orders. Subject to such policies as the Board of
Directors of the Fund determines and subject to satisfying the requirements of
Section 28(e) of the Securities Exchange Act of 1934, the Sub-Adviser 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 the High Return
Series 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 Sub-Adviser
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
Sub-Adviser's overall responsibilities with respect to the clients of the
Sub-Adviser as to which the Sub-Adviser exercises investment discretion. The
Adviser recognizes that all research services and research that the Sub-Adviser
receives are available for all clients of the Sub-Adviser, and that the High
Return Series and other clients of the Sub-Adviser may benefit thereby. The
investment of funds shall be subject to all applicable restrictions of the
Agreement and Certificate of Incorporation and By-Laws of the Fund as may from
time to time be in force.
(b) The Sub-Adviser accepts such employment and agrees during the
period of this Agreement to render such investment management services in
accordance with the applicable investment
objectives, policies and limitations set out in the Fund's prospectus and
Statement of Additional Information, as amended from time to time, to furnish
related office facilities and equipment and clerical, bookkeeping and
administrative services for the High Return Series, and to assume the other
obligations herein set forth for the compensation herein provided. The
Sub-Adviser shall assume and pay all of the costs and expenses of performing its
obligations under this Agreement. The Sub-Adviser shall for all purposes herein
provided be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Fund, the High Return Series or the Adviser in any way or
otherwise be deemed an agent of the Fund, the High Return Series or the Adviser.
(c) The Sub-Adviser will keep the Adviser, for itself and on behalf of
the Fund, informed of developments materially affecting the Fund or the High
Return Series and shall, on the Sub-Adviser's own initiative and as reasonably
requested by the Adviser, for itself and on behalf of the Fund, furnish to the
Adviser from time to time whatever information the Adviser reasonably believes
appropriate for this purpose.
(d) The Sub-Adviser shall provide the Adviser with such investment
portfolio accounting and shall maintain and provide such detailed records and
reports as the Adviser may from time to time reasonably request, including
without limitation, daily processing of investment transactions and periodic
valuations of investment portfolio positions as required by the Adviser, monthly
reports of the investment portfolio and all investment transactions and the
preparation of such reports and compilation of such data as may be required by
the Adviser to comply with the obligations imposed upon it under the Management
Agreement. The Sub-Adviser agrees to install in its offices computer equipment
or software, as provided by the Adviser at its expense, for use by the
Sub-Adviser in performing its duties under this Sub-Advisory Agreement,
including inputting on a daily basis that day's portfolio transactions in the
High Return Series.
(e) The Sub-Adviser shall maintain and enforce adequate security
procedures with respect to all materials, records, documents and data relating
to any of its responsibilities pursuant to this Agreement including all means
for the effecting of securities transactions.
(f) The Sub-Adviser agrees that it will provide to the Adviser or the
Fund promptly upon request reports and copies of such of its investment records
and ledgers with respect to the High Return Series as appropriate to assist the
Adviser and the Fund in monitoring compliance with the Investment Company Act
and the Investment Advisers Act of 1940 (the "Advisers Act"), as well as other
applicable laws. The Sub-Adviser will furnish the Fund's Board of Directors such
periodic and special reports with respect to the High Return Series as the
Adviser or the Board of Directors may reasonably request, including statistical
information with respect to the High Return Series' securities.
(g) In compliance with the requirements of Rule 31a-3 under the
Investment Company Act, the Sub-Adviser hereby agrees that any records that it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly any such records upon the Fund's or the Adviser's request,
although the Sub-Adviser may, at the Sub-Adviser's own expense, make and retain
copies of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the Investment Company Act any records
with respect to the Sub-Adviser's duties hereunder required to be maintained by
Rule 31a-1 under the Investment Company Act to the extent that the Sub-Adviser
prepares and maintains such records pursuant to this Agreement and to preserve
the records required by Rule 204-2 under the Advisers Act for the period
specified in that Rule.
(h) The Sub-Adviser agrees that it will immediately notify the Adviser
and the Fund in the event that the Sub-Adviser: (i) becomes subject to a
statutory disqualification that prevents the Sub-
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Adviser from serving as an
investment adviser pursuant to this Agreement; or (ii) is or expects to become
the subject of an administrative proceeding or enforcement action by the United
States Securities and Exchange Commission ("SEC") or other regulatory authority.
(i) The Sub-Adviser agrees that it will immediately forward, upon
receipt, to the Adviser, for itself and as agent for the Fund, any
correspondence from the SEC or other regulatory authority that relates to the
High Return Series.
(j) The Sub-Adviser acknowledges that it is an "investment adviser" to
the Fund within the meaning of the Investment Company Act and the Advisers Act.
(k) The Sub-Adviser shall be responsible for maintaining an appropriate
compliance program to ensure that the services provided by it under this
Agreement are performed in a manner consistent with applicable laws and the
terms of this Agreement. The Sub-Adviser agrees to provide such reports and
certifications regarding its compliance program as the Adviser or the Fund shall
reasonably request from time to time.
(l) The Sub-Adviser maintains a written Code of Ethics that complies
with the requirements of Rule 17j-1 under the Investment Company Act. The
Sub-Adviser certifies that it has adopted procedures reasonably necessary to
prevent its "access persons," as such term is defined in Rule 17j-1, from
violating the Code of Ethics. The Sub-Adviser shall notify the Board upon the
adoption of any material change to its Code of Ethics so that the Board,
including a majority of the Directors who are not interested persons of the
Fund, may approve such change not later than six months after its adoption by
the Sub-Adviser, as required by Rule 17j-1. The Sub-Adviser also shall provide
the Fund with a copy of any amendments to its Code of Ethics that do not
represent a material change to such Code. Within 45 days of the end of each
calendar year while this Agreement is in effect (or more frequently if required
by Rule 17j-1 or as the Fund may reasonably request), the Sub-Adviser shall
provide the Board with a written report that, as required by Rule 17j-1: (i)
describes any issue arising under the Sub-Adviser's Code of Ethics or procedures
since the last report to the Board, including, but not limited to, information
about material violations of the Code or procedures and sanctions imposed in
response to the material violations, and (ii) certifies that the Sub-Adviser has
adopted procedures reasonably necessary to prevent its access persons from
violating its Code of Ethics. Upon the written request of the Fund, the
Sub-Adviser shall permit the Fund to examine the reports to be made by the
Sub-Adviser under Rule 17j-1(d) and the records the Sub-Adviser maintains
pursuant to Rule 17j-1(f).
2. Compensation.
------------
For the services and facilities described herein, the Adviser will pay
to the Sub-Adviser, 15 days after the end of each calendar month, a sub-advisory
fee computed by applying the annual rates set forth in Appendix A to the
applicable average daily net assets of the High Return Series.
For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during the month and year, respectively.
The Adviser further agrees that, notwithstanding Appendix A, the
minimum amounts payable to the Sub-Adviser during the following periods that the
Sub-Adviser serves under this Agreement shall be (i) a pro rata share of an
annualized amount of $8.0 million from the date of this Agreement through
December 31, 2002, (ii) $8.0 million in each of the years 2003 through 2006; and
(iii) $4.0 million for January 1, 2007 through June 30, 2007. The payments made
under the foregoing sentence shall be made by the fifteenth day following the
end of the period to which such payment relates. The Adviser shall not be
3
obligated to pay any amounts pursuant to this paragraph in excess of the
sub-advisory fee payable under the first paragraph of this Section 2 in respect
of any period in which the termination of this Agreement becomes effective or
any later period.
The Adviser will pay to the Sub-Adviser the additional subadvisory fees
calculated in accordance with Appendix B ("Additional Subadvisory Fees") if the
total purchase price paid by clients (net of sales loads) for shares less the
total redemption proceeds (net of sales loads) for shares repurchased and
redeemed with respect to the High Return Series and the SVS Dreman High Return
Equity Portfolio ("HRE Portfolio") taken together ("Net Cash Flows") (i) are not
at least $1 billion for the period starting on September 19, 2001 and ending one
year after the Base Date, or (ii) are not at least $1.5 billion for the period
starting on September 19, 2001 and ending two years after the Base Date. In this
Agreement, the "Base Date" is the effective date of this Agreement. The Adviser
shall not be obligated to pay any Additional Subadvisory Fees pursuant to this
Agreement in respect of any period in which the termination of this Agreement
becomes effective or any later period.
3. Net Asset Value. The net asset value for the High Return Series
shall be calculated as the Board of Directors of the Fund may determine from
time to time in accordance with the provisions of the Investment Company Act. On
each day when net asset value is not calculated, the net asset value of the High
Return Series shall be deemed to be the net asset value as of the close of
business on the last day on which such calculation was made for the purpose of
the foregoing computations.
4. Duration and Termination.
------------------------
(a) This Agreement shall become effective with respect to the
High Return Series on the first business day following the date it is approved
in the manner required by the Investment Company Act and the rules and
regulations thereunder and shall remain in full force until June 30, 2007,
unless sooner terminated or not annually approved as hereinafter provided.
Notwithstanding the foregoing, this Agreement shall continue in force through
June 30, 2007, and from year to year thereafter, only as long as such
continuance is specifically approved at least annually and in the manner
required by the Investment Company Act and the rules and regulations thereunder,
with the first annual renewal to be coincident with the next renewal of the
Management Agreement.
(b) This Agreement shall automatically terminate in the event
of its assignment or in the event of the termination of the Management
Agreement. In addition, the Adviser has the right to terminate this Agreement
upon immediate notice if the Sub-Adviser becomes statutorily disqualified from
performing its duties under this Agreement or otherwise is legally prohibited
from operating as an investment adviser.
(c) If a party breaches this Agreement in any material respect
which is not cured within sixty (60) days of the other party giving it written
notice of such breach, the other party may effect termination of this Agreement
on written notice to the defaulting party.
(d) This Agreement may be terminated at any time, without the
payment by the Fund of any penalty, by the Board of Directors of the Fund, or by
vote of a majority of the outstanding voting securities of the High Return
Series, or by the Adviser. The Fund may effect termination of this Agreement by
action of the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the High Return Series on sixty (60) days
written notice to the Adviser and the Sub-Adviser. The Adviser may effect
termination of this Agreement on sixty (60) days written notice to the
Sub-Adviser.
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(e) The Sub-Adviser may not terminate this Agreement prior to
February 4, 2004 except pursuant to Section 4(c). The Sub-Adviser may terminate
this Agreement effective on or after February 4, 2004 upon ninety (90) days
written notice to the Adviser.
(f) The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder.
(g) Termination of this Agreement shall not affect the right
of the Sub-Adviser to receive payments on any unpaid balance of the compensation
described in the first paragraph of Section 2 earned prior to such termination.
(h) The provisions of Section 9 shall survive the termination
of this Agreement.
5. Representations and Warranties. The Sub-Adviser hereby represents
and warrants as follows:
(a) The Sub-Adviser is registered with the SEC as an
investment adviser under the Advisers Act, and such registration is current,
complete and in full compliance with all material applicable provisions of the
Advisers Act and the rules and regulations thereunder;
(b) The Sub-Adviser has all requisite authority to enter into,
execute, deliver and perform the Sub-Adviser's obligations under this Agreement;
(c) The Sub-Adviser's performance of its obligations under
this Agreement does not conflict with any law, regulation or order to which the
Sub-Adviser is subject; and
(d) The Sub-Adviser has reviewed the portion of (i) the
registration statement filed with the SEC, as amended from time to time for the
Fund ("Registration Statement"), and (ii) the Fund's prospectus and supplements
thereto, in each case in the form received from the Adviser with respect to the
disclosure about the Sub-Adviser and the High Return Series of which the
Sub-Adviser has knowledge (the "Sub-Adviser and High Return Information") and
except as advised in writing to the Adviser such Registration Statement,
prospectus and any supplement contain, as of its date, no untrue statement of
any material fact of which the Sub-Adviser has knowledge and do not omit any
statement of a material fact of which the Sub-Adviser has knowledge which was
required to be stated therein or necessary to make the statements contained
therein not misleading.
6. Covenants. The Sub-Adviser hereby covenants and agrees that,
so long as this Agreement shall remain in effect:
(a) The Sub-Adviser shall maintain the Sub-Adviser's
registration as an investment adviser under the Advisers Act, and such
registration shall at all times remain current, complete and in full compliance
with all material applicable provisions of the Advisers Act and the rules and
regulations thereunder;
(b) The Sub-Adviser's performance of its obligations under
this Agreement shall not conflict with any law, regulation or order to which the
Sub-Adviser is then subject;
(c) The Sub-Adviser shall at all times comply with the
Advisers Act and the Investment Company Act, and all rules and regulations
thereunder, and all other applicable
5
laws and regulations, and the Registration Statement, prospectus and any
supplement and with any applicable procedures adopted by the Fund's Board of
Directors, provided that such procedures are substantially similar to those
applicable to similar funds for which the Board of Directors of the Fund is
responsible and that such procedures are identified in writing to the
Sub-Adviser;
(d) The Sub-Adviser shall promptly notify the Adviser and the
Fund upon the occurrence of any event that might disqualify or prevent the
Sub-Adviser from performing its duties under this Agreement. The Sub-Adviser
further agrees to notify the Adviser of any changes that would cause the
Registration Statement or prospectus for the Fund to contain any untrue
statement of a material fact or to omit to state a material fact which is
required to be stated therein or is necessary to make the statements contained
therein not misleading, in each case relating to Sub-Adviser and High Return
Information; and
(e) For the entire time this Agreement is in effect and for a period of two
years thereafter, the Sub-Adviser shall maintain a claims made bond issued by a
reputable fidelity insurance company against larceny and embezzlement, covering
each officer and employee of the Sub-Adviser, at a minimum level of $3 million
which provides coverage for acts or alleged acts which occurred during the
period of this Agreement.
7. Use of Names.
------------
(a) The Sub-Adviser acknowledges and agrees that the names Xxxxxxx
Value Series, and Xxxxxxx (whether used by themselves or in combination with
other words), and abbreviations or logos associated with those names, are the
valuable property of the Adviser and its affiliates; that the Fund, the Adviser
and their affiliates have the right to use such names, abbreviations and logos;
and that the Sub-Adviser shall use the names Xxxxxxx Value Series and Xxxxxxx,
and associated abbreviations and logos, only in connection with the
Sub-Adviser's performance of its duties hereunder. Further, in any communication
with the public and in any marketing communications of any sort, the Sub-Adviser
agrees to obtain prior written approval from the Adviser before using or
referring to Xxxxxxx Value Series, Xxxxxxx, or Xxxxxxx-Xxxxxx High Return Equity
Fund or any abbreviations or logos associated with those names; provided that
nothing herein shall be deemed to prohibit the Sub-Adviser from referring to the
performance of the High Return Series in the Sub-Adviser's marketing material as
long as such marketing material does not constitute "sales literature" or
"advertising" for the High Return Series, as those terms are used in the rules,
regulations and guidelines of the SEC and the National Association of Securities
Dealers, Inc.
(b) The Adviser acknowledges that "Dreman" is distinctive in connection
with investment advisory and related services provided by the Sub-Adviser, the
"Dreman" name is a property right of the Sub-Adviser, and the "Dreman" name as
used in the name of the High Return Series is understood to be used by the Fund
upon the conditions hereinafter set forth; provided that the Fund may use such
name only so long as the Sub-Adviser shall be retained as the investment
sub-adviser of the High Return Series pursuant to the terms of this Agreement.
(c) The Adviser acknowledges that the Fund and its agents may use the
"Dreman" name in the name of the High Return Series for the period set forth
herein in a manner not inconsistent with the interests of the Sub-Adviser and
that the rights of the Fund and its agents in the "Dreman" name are limited to
their use as a component of the High Return Series name and in connection with
accurately describing the activities of the High Return Series, including use
with marketing and other promotional and informational material relating to the
High Return Series. In the event that the Sub-Adviser shall cease to be the
investment sub-adviser of the High Return Series, then the Fund at its own or
the Adviser's expense, upon the Sub-Adviser's written request: (i) shall cease
to use the Sub-Adviser's name as part of the name of the High Return Series or
for any other commercial purpose (other than referring to the High Return
Series' former name in the Fund's Registration Statement, proxy materials and
other Fund documents to
6
the extent required by law, referring to the Fund's performance record for the
period for which the Sub-Adviser subadvised the Adviser in respect of the Fund
and, for a reasonable period using the name in informing others of the name
change); and (ii) shall use its best efforts to cause the Fund's officers and
directors to take any and all actions which may be necessary or desirable to
effect the foregoing and to reconvey to the Sub-Adviser all rights which the
Fund may have to such name. The Adviser agrees to take any and all reasonable
actions as may be necessary or desirable to effect the foregoing and the
Sub-Adviser agrees to allow the Fund and its agents a reasonable time to
effectuate the foregoing.
(d) The Sub-Adviser hereby agrees and consents to the use of the
Sub-Adviser's name upon the foregoing terms and conditions.
8. Standard of Care. Except as may otherwise be required by law,
and except as may be set forth in paragraph 9, the Sub-Adviser shall not be
liable for any error of judgment or of law or for any loss suffered by the Fund,
the High Return Series or the Adviser in connection with the matters to which
this Agreement relates, except loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the performance of
its obligations and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
9. Indemnifications.
----------------
(a) The Sub-Adviser agrees to indemnify and hold harmless the
Adviser and the Fund against any losses, expenses, claims, damages or
liabilities (or actions or proceedings in respect thereof), to which the Adviser
or the Fund may become subject arising out of or based on the breach by the
Sub-Adviser of any provisions of this Agreement or any wrongful action by the
Sub-Adviser; provided, however, that the Sub-Adviser shall not be liable under
this paragraph in respect of any loss, expense, claim, damage or liability to
the extent that a court having jurisdiction shall have determined by a final
judgment, or independent counsel agreed upon by the Sub-Adviser and the Adviser
or the Fund, as the case may be, shall have concluded in a written opinion, that
such loss, expense, claim, damage or liability resulted primarily from the
Adviser's or the Fund's willful misfeasance, bad faith or gross negligence or by
reason of the reckless disregard by the Adviser or the Fund of its duties. The
foregoing indemnification shall be in addition to any rights that the Adviser or
the Fund may have at common law or otherwise. The Sub-Adviser's agreements in
this paragraph shall, upon the same terms and conditions, extend to and inure to
the benefit of each person who may be deemed to control the Adviser or the Fund
, be controlled by the Adviser or the Fund, or be under common control with the
Adviser or the Fund and their affiliates, directors, officers, employees and
agents. The Sub-Adviser's agreement in this paragraph shall also extend to any
of the Fund's, High Return Series', and Adviser's successors or the successors
of the aforementioned affiliates, directors, officers, employees or agents.
(b) The Adviser agrees to indemnify and hold harmless the
Sub-Adviser against any losses, expenses, claims, damages or liabilities (or
actions or proceedings in respect thereof), to which the Sub-Adviser may become
subject arising out of or based on the breach by the Adviser of any provisions
of this Agreement or the Management Agreement, or any wrongful action by the
Adviser or its affiliates in the distribution of the Fund's shares, or any
wrongful action by the Fund other than wrongful action that was caused by the
breach by the Sub-Adviser of the provisions of this Agreement; provided,
however, that the Adviser shall not be liable under this paragraph in respect of
any loss, expense, claim, damage or liability to the extent that a court having
jurisdiction shall have determined by a final judgment, or independent counsel
agreed upon by the Adviser and the Sub-Adviser shall have concluded in a written
opinion, that such loss, expense, claim, damage or liability resulted primarily
from the Sub-Adviser's willful misfeasance, bad faith or gross negligence or by
reason of the reckless disregard by the Sub-Adviser of its duties. The foregoing
indemnification shall be in addition to any rights that the Sub-Adviser may have
at common law or otherwise. The Adviser's agreements in this paragraph shall,
upon the same terms and
7
conditions, extend to and inure to the benefit of each person who may be deemed
to control the Sub-Adviser, be controlled by the Sub-Adviser or be under common
control with the Sub-Adviser and to each of the Sub-Adviser's and each such
person's respective affiliates, directors, officers, employees and agents. The
Adviser's agreements in this paragraph shall also extend to any of the
Sub-Adviser's successors or the successors of the aforementioned affiliates,
directors, officers, employees or agents.
(c) Promptly after receipt by a party indemnified under
paragraph 9(a) or 9(b) above of notice of the commencement of any action,
proceeding, or investigation for which indemnification will be sought, such
indemnified party shall promptly notify the indemnifying party in writing; but
the omission so to notify the indemnifying party shall not relieve it from any
liability which it may otherwise have to any indemnified party unless such
omission results in actual material prejudice to the indemnifying party. In case
any action or proceeding shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, individually or
jointly with any other indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of any action or proceeding, the indemnifying party shall not be liable
to the indemnified party for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying party does not elect to
assume the defense of any action or proceeding, the indemnifying party on a
monthly basis shall reimburse the indemnified party for the reasonable legal
fees and other costs of defense thereof. Regardless of whether or not the
indemnifying party shall have assumed the defense of any action or proceeding,
the indemnified party shall not settle or compromise the action or proceeding
without the prior written consent of the indemnifying party, which shall not be
unreasonably withheld.
10. Survival. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
11. Notices. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such notice.
12. Governing Law. This Agreement shall be construed in accordance
with applicable federal law and the laws of the State of New York without giving
effect to the rules of conflict of laws in the State of New York to the extent
those rules would require or permit the application of another jurisdiction's
laws.
13. Miscellaneous.
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(a) The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(b) Terms not defined herein shall have the meaning set forth
in the Fund's prospectus.
(c) 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.
8
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of the day and year first above written.
DEUTSCHE INVESTMENT MANAGEMENT (AMERICAS), INC.
By:
---------------------------------------
Title:
DREMAN VALUE MANAGEMENT, L.L.C.
By:
---------------------------------------
Title:
FOR THE PURPOSE OF ACCEPTING ITS
OBLIGATIONS UNDER SECTION 7 HEREIN
ONLY
XXXXXXX VALUE SERIES, INC.
By: ______________________________
Title:______________________________
9
APPENDIX A
INVESTMENT MANAGEMENT SUB-ADVISORY FEE
Applicable Average Daily Net Assets
(thousands) Annual Rate
----------------------------------- -----------
$ 0 - $ 250,000 0.240 of 1%
$ 250,000 - $ 1,000,000 0.230 of 1%
$ 1,000,000 - $ 2,500,000 0.224 of 1%
$ 2,500,000 - $ 5,000,000 0.218 of 1%
$ 5,000,000 - $ 7,500,000 0.208 of 1%
$ 7,500,000 - $ 10,000,000 0.205 of 1%
$ 10,000,000 - $ 12,500,000 0.202 of 1%
Over $ 12,500,000 0.198 of 1%
00
XXXXXXXX X
ADDITIONAL SUBADVISORY FEES
------------------------- ---------------------- ---------------------------------------------------- ----------------------
Measurement Date Net Cash Flows (from Deemed additional assets Period for which
(taken from the the Commencement deemed additional
Base Date) Date through the assets are attributed
Measurement Date)
------------------------- ---------------------- ---------------------------------------------------- ----------------------
One year Less than $500 $500 million Base Date though the
million less Net Cash Flows through the one year one year Measurement
Measurement Date Date
("One Year Shortfall")
------------------------- ---------------------- ---------------------------------------------------- ----------------------
18 Less than $1 billion $1 billion Base Date through
months* less Net Cash Flows through the 18 month the one year
Measurement Date Measurement Date
less the One Year Shortfall (if applicable)
------------------------- ---------------------- ---------------------------------------------------- ----------------------
Two years Less than $750 $750 million One year Measurement
million less Net Cash Flows through the two year Date through the two
Measurement Date year Measurement Date
("Two Year Shortfall")
------------------------- ---------------------- ---------------------------------------------------- ----------------------
30 months** Less than $1.5 $1.5 billion One year Measurement
(applies if there was billion less Net Cash Flows through the 30 month Date though the 30
no Two Year Shortfall) Measurement Date month Measurement
Date
------------------------- ---------------------- ---------------------------------------------------- ----------------------
30 months** Less than $1.5 $1.5 billion One year Measurement
(applies if there was a billion less Net Cash Flows through the 30 month Date though the two
Two Year Shortfall) Measurement Date year Measurement Date
less the Two Year Shortfall
------------------------- ---------------------- ---------------------------------------------------- ----------------------
And Two year Measurement
$1.5 billion Date though the 30
less Net Cash Flows through the 30 month month Measurement
Measurement Date Date
------------------------- ---------------------- ---------------------------------------------------- ----------------------
--------
* Does not apply if Net Cash Flows were at least $1 billion through the
one year Measurement Date.
** Does not apply if Net Cash Flows were at least $1.5 billion through the
two year Measurement Date.
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The Additional Subadvisory Fee for a Measurement Date is calculated by:
(a) determining the deemed additional assets using the third column in the
above table;
(b) attributing the deemed additional assets to each of the High Return
Series and the HRE Portfolio for the period specified in the fourth
column of the above table in proportion to the amounts of their
respective average daily net assets for that attribution period; and
(c) calculating the additional subadvisory fees that the Adviser would have
paid the Sub-Adviser if the average daily net assets of the High Return
Series had included during the attribution period the deemed additional
assets attributable to the High Return Series, determined in accordance
with paragraph (b), using the current fee schedule in this Agreement.
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