SUB-ADVISORY AGREEMENT
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Agreement made as of December 18, 1996 between XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.("Xxxxxxxx Xxxxxxxx"), and XXXXXXXX CAPITAL MANAGEMENT
INTERNATIONAL INC., a New York corporation ("Sub-Adviser"), (the "Agreement").
RECITALS
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(1) Xxxxxxxx Xxxxxxxx has entered into a Investment Advisory and
Administration Contract, dated April 21, 1988, including an addendum dated
December 18, 1996 ("Advisory Contract"), with PaineWebber Managed Investments
Trust ("Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act");
(2) The Trust offers for public sale distinct series of shares of
beneficial interest and may offer additional distinct series in the future;
(3) Under the Advisory Contract Xxxxxxxx Xxxxxxxx has agreed to
provide certain investment advisory and administrative services to each series
of the Trust as now exists and as hereafter may be established;
(4) The Advisory Contract permits Xxxxxxxx Xxxxxxxx to delegate
certain of its duties as investment adviser under the Advisory Contract to a
sub-adviser; and
(5) Xxxxxxxx Xxxxxxxx desires to retain the Sub-Adviser to furnish
certain investment advisory services with respect to the PaineWebber Asia
Pacific Growth Fund ("Fund") series of the Trust, and the Sub-Adviser is willing
to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Appointment. Xxxxxxxx Xxxxxxxx hereby appoints the sub-adviser
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as an investment sub-adviser with respect to the Fund for the period and on the
terms set forth in this Agreement. The sub-adviser accepts that appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties as Sub-Adviser.
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(a) Subject to the supervision of and any written guidelines adopted
by the Trust's Board of Trustees (the "Board") and Xxxxxxxx Xxxxxxxx, the Sub-
Adviser will provide a continuous investment program for the Fund, including
investment research and management with respect to all securities and
investments and cash equivalents in the Fund. The Sub-Adviser will determine
from time to time what investments will be purchased, retained or sold by the
Fund. The Sub-Adviser will be responsible for placing purchase and sell orders
for investments and for other related transactions. The Sub-Adviser will
provide services under this Agreement in accordance with the Fund's investment
objective, policies and restrictions as stated in the Trust's currently
effective registration statement under the 1940 Act, and any amendments or
supplements thereto ("Registration Statement").
(b) The Sub-Adviser agrees that, in placing orders with brokers, it
will obtain the best net result in terms of price and execution; provided that,
on behalf of the Fund, the Sub-Adviser may, in its discretion, use brokers who
provide the Sub-Adviser with research, analysis, advice and similar services to
execute portfolio transactions, and the Sub-Adviser may pay to those brokers in
return for brokerage and research services a higher commission than may be
charged by other brokers, subject to the Sub-Adviser's determining in good faith
that such commission is reasonable in terms either of the particular transaction
or of the overall responsibility of the Sub-Adviser to the Fund and its other
clients and that the total commissions paid by the Fund will be reasonable in
relation to the benefits to the Fund over the long term. In no instance will
portfolio securities be purchased from or sold to the Sub-Adviser, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder. The Sub-Adviser may aggregate sales
and purchase orders with respect to the assets of the Fund with similar orders
being made simultaneously for other accounts advised by the Sub-Adviser or its
affiliates. Whenever the Sub-Adviser simultaneously places orders to purchase
or sell the same security on behalf of the Fund and one or more other accounts
advised by the Sub-Adviser, the orders will be allocated as to price and amount
among all such accounts in a manner believed to be equitable over time to each
account. Xxxxxxxx Xxxxxxxx recognizes that in some cases this procedure may
adversely affect the results obtained for the Fund.
(c) The Sub-Adviser will maintain all books and records required to be
maintained by the Sub-Adviser pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions by the Sub-
Adviser on behalf of the Fund, and will furnish the Board and Xxxxxxxx Xxxxxxxx
with such periodic and special reports as the Board or Xxxxxxxx Xxxxxxxx
reasonably may request. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records that it maintains
for the Fund are the property of the Trust, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records that it maintains for
the Trust and that are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Trust any records that it
maintains for the Fund upon request by the Trust.
(d) At such times as shall be reasonably requested by the Board or
Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide the Board and Xxxxxxxx Xxxxxxxx
with economic and investment analyses and reports as well as quarterly reports
setting forth the Fund's performance and make available to the Board and
Xxxxxxxx Xxxxxxxx any economic, statistical and investment services normally
available to institutional or other customers of the Sub-Adviser.
(e) In accordance with procedures adopted by the Board, as amended
from time to time, the Sub-Adviser is responsible for assisting in the fair
valuation of all portfolio securities and will use its reasonable efforts to
arrange for the provision of a price(s) from a party(ies) independent of the
Sub-Adviser for each portfolio security for which the custodian does not obtain
prices in the ordinary course of business from an automated pricing service.
3. Further Duties. In all matters relating to the performance of
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this Agreement, the Sub-Adviser will act in conformity with the Trust's
Declaration of Trust, By-Laws and Registration Statement; and with the written
instructions and written directions of the Board and Xxxxxxxx Xxxxxxxx; and will
comply with the requirements of the 1940 Act and the Investment Advisers Act of
1940, as amended ("Advisers Act") and the rules under each; Subchapter M of the
Internal Revenue Code ("Code"), as applicable to regulated investment companies;
the diversification requirements applicable to the Fund under Section 817(h) of
the Code; and all other applicable federal and state laws and regulations.
Xxxxxxxx Xxxxxxxx agrees to provide to the Sub-Adviser copies of the Trust's
Declaration of Trust, By-Laws, Registration Statement, written instructions and
directions of the Board and Xxxxxxxx Xxxxxxxx, and any amendments or supplements
to any of these materials as soon as practicable after such materials become
available; provided, however, that the Sub-Adviser's duty under this Agreement
to act in conformity with any document, instruction, or guidelines produced by
the Trust or Xxxxxxxx Xxxxxxxx shall not arise until it has been delivered to
the Sub-Adviser. Any changes to the Fund's objectives, policies or restrictions
will make due allowance for the time within which the Sub-Adviser shall have to
come into compliance.
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4. Expenses. During the term of this Agreement, the Sub-Adviser
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will bear all expenses incurred by it in connection
with its services under this Agreement. The Sub-Adviser shall not be
responsible for any expenses incurred by the Trust, the Fund or Xxxxxxxx
Xxxxxxxx.
5. Compensation.
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(a) For the services provided and the expenses assumed by the Sub-
Adviser pursuant to this Agreement, Xxxxxxxx Xxxxxxxx, not the Fund, will pay to
the Sub-Adviser a fee, computed daily and payable monthly, at an annual rate of
0.65% of the Fund's average daily net assets up to and including $100 million
and 0.55% of the Fund's average daily net assets in excess of $100 million
(computed in the manner specified in the Advisory Contract), and will provide
the Sub-Adviser with a schedule showing the manner in which the fee was
computed.
(b) The fee shall be computed daily and payable monthly to the Sub-
Adviser on or before the last business day of the next succeeding calendar
month.
(c) If this Agreement becomes effective or terminates before the end
of any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion that such period
bears to the full month in which such effectiveness or termination occurs.
6. Limitation Of Liability. The Sub-Adviser shall not be liable for
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any error of judgment or mistake of law or for any loss suffered by the Fund,
the Trust or its shareholders or by Xxxxxxxx Xxxxxxxx in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Nothing in this paragraph shall be deemed a limitation or waiver of
any obligation or duty that may not by law be limited or waived.
7. Representations of Sub-Adviser. The Sub-Adviser represents,
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warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met and will seek to continue to meet for so long as this Agreement remains
in effect, any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency necessary to
be met in order to perform the services contemplated by this Agreement; (iv) has
the authority to enter into and perform the services contemplated by this
Agreement; and (v) will promptly notify Xxxxxxxx Xxxxxxxx of the occurrence of
any event that would disqualify the Sub-Adviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise. In addition to being registered under as an investment adviser, the
Sub-Adviser is regulated in the conduct of its investment business in the United
Kingdom by the Investment Management Regulatory Organization Limited ("IMRO").
The Sub-Adviser confirms that the Fund is a Non-private Customer as defined by
IMRO.
(b) The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and will provide Xxxxxxxx
Xxxxxxxx and the Board with a copy of such code of ethics, together with
evidence of its adoption. Within fifteen days of the end of the last calendar
quarter of each year that this Agreement is in effect, the president or a vice-
president of the Sub-Adviser shall certify to Xxxxxxxx Xxxxxxxx that the Sub-
Adviser has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no
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violation of the Sub-Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such violation. Upon
the written request of Xxxxxxxx Xxxxxxxx, the Sub-Adviser shall permit Xxxxxxxx
Xxxxxxxx, its employees or its agents to examine the reports required to be made
to the Sub-Adviser by Rule 17j-1(c)(1) and all other records relevant to the
Sub-Adviser's code of ethics.
(c) Not less than 48 hours prior to the signing of this Agreement, the
Sub-Adviser has provided Xxxxxxxx Xxxxxxxx with a copy of its Form ADV, which as
of the date of this Agreement is its Form ADV as most recently filed with the
Securities and Exchange Commission ("SEC") and promptly will furnish a copy of
all amendments to Xxxxxxxx Xxxxxxxx at least annually.
(d) The Sub-Adviser will notify Xxxxxxxx Xxxxxxxx of any change of
control of the Sub-Adviser, including any change of its general partners or 25%
shareholders, as applicable, and any changes in the key personnel who are either
the portfolio manager(s) of the Fund or senior management of the Sub-Adviser, in
each case prior to or promptly after such change.
8. Services Not Exclusive. The Sub-Adviser may act as an investment
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adviser to any other person, firm or corporation, and
may perform management and any other services for any other person, association,
corporation, firm or other entity pursuant to any contract or otherwise, and
take any action or do anything in connection therewith or related thereto,
except as prohibited by applicable law; and no such performance of management or
other services or taking of any such action or doing of any such thing shall be
in any manner restricted or otherwise affected by any aspect of any relationship
of the Sub-Adviser to or with the Trust, Fund or Xxxxxxxx Xxxxxxxx or deemed to
violate or give rise to any duty or obligation of the Sub-Adviser to the Trust,
Fund or Xxxxxxxx Xxxxxxxx except as otherwise imposed by law or agreed upon in
writing between the Sub-Adviser and Xxxxxxxx Xxxxxxxx, the Trust or the Fund.
9. Duration and Termination.
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(a) This Agreement shall become effective upon the date first above
written.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from its effective date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (i) by a vote of a majority of those trustees of the Trust who
are not parties to this Agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting securities
of the Fund.
(c) Notwithstanding the foregoing, this Agreement may be terminated at
any time, without the payment of any penalty, by vote of the Board or by a vote
of a majority of the outstanding voting securities of the Fund on 60 days'
written notice to the Sub-Adviser. This Agreement may also be terminated,
without the payment of any penalty, by Xxxxxxxx Xxxxxxxx: (i) upon 120 days'
written notice to the Sub-Adviser; (ii) immediately upon material breach by the
Sub-Adviser of any of the representations and warranties set forth in Paragraph
7 of this Agreement; or (iii) immediately if, in the reasonable judgment of
Xxxxxxxx Xxxxxxxx, the Sub-Adviser becomes unable to discharge its duties and
obligations under this Agreement, including circumstances such as financial
insolvency of the Sub-Adviser or other circumstances that could adversely affect
the Fund. The Sub-Adviser may terminate this Agreement at any time, without the
payment of any penalty, on 120 days' written notice to Xxxxxxxx Xxxxxxxx. This
Agreement will terminate automatically in the event of its assignment or upon
termination of the Advisory Contract as it relates to the Fund.
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10. Amendment of this Agreement. No provision of this Agreement
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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. No amendment of this
Agreement shall be effective until approved (i) by a vote of a majority of those
trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, and (ii) by a vote of a majority of the Fund's
outstanding voting securities (unless in the case of (ii), the Trust receives an
SEC order or no-action letter permitting it to modify the Agreement without such
vote).
11. Governing Law. This Agreement shall be construed in accordance
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with the 1940 Act and the laws of the State of Delaware,
without giving effect to the conflicts of laws principles thereof. To the extent
that the applicable laws of the State of Delaware conflict with the applicable
provisions of the 1940 Act, the latter shall control.
12. Miscellaneous. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker," "investment
adviser," "net assets," "sale," "sell" and "security" shall have the same
meaning as such terms have in the 1940 Act, subject to such exemption as may be
granted by the SEC by any rule, regulation or order. Where the effect of a
requirement of the federal securities laws reflected in any provision of this
Agreement is made less restrictive by a rule, regulation or order of the SEC,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This Agreement may be
signed in counterpart.
13. Notices. Any written notice herein required is to be in writing
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and is deemed to have been given to the Sub-Adviser or Xxxxxxxx Xxxxxxxx upon
receipt of the same at their respective addresses set forth below.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and year first
above written.
XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attest:
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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Name: Xxxxx Xxxxx Name: Xxxxxx X. X'Xxxxxxx
Title: Assistant Vice President Title: Senior Vice President
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
XXXXXXXX CAPITAL MANAGEMENT
INTERNATIONAL INC.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attest: Attn: /s/ Xxxxxxxxx Xxx
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By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxxx Xxx
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Name: Name: Xxxxxxxxx Xxx
Title: Title: Vice President
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