PRINCIPAL FUNDS, INC.
AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
LARGECAP BLEND FUND II SERIES AND
LARGECAP GROWTH FUND I SERIES
AGREEMENT executed as of the 1st day of April, 2012, by and between PRINCIPAL
MANAGEMENT CORPORATION, an Iowa corporation (hereinafter called "the
Manager"), and ▇. ▇▇▇▇ PRICE ASSOCIATES, INC., a corporation organized and
existing under the laws of the State of Maryland, (hereinafter called "the
Sub-Advisor").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to each Series of
Principal Funds, Inc., (the "Fund"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Manager desires to retain the Sub-Advisor to furnish it with
portfolio selection and related research and statistical services in
connection with the investment advisory services for each of the Series
identified in Appendix A hereto of the Fund (hereinafter called "the
Series"), which the Manager has agreed to provide to the Fund, and the
Sub-Advisor desires to furnish such services; and
WHEREAS, The Manager has furnished the Sub-Advisor with copies properly
certified or authenticated of each of the following and will promptly provide
the Sub-Advisor with copies properly certified or authenticated of any
amendment or supplement thereto:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) The Fund's registration statement and financial statements
as filed
with the Securities and Exchange Commission;
(c) The Fund's Articles of Incorporation and By-laws;
(d) Policies, procedures or instructions adopted or approved by the
Board of Directors of the Fund relating to obligations and services
provided by the Sub-Advisor.
NOW, THEREFORE, in consideration of the premises and the terms and conditions
hereinafter set forth, the parties agree as follows:
1. Appointment of Sub-Advisor
In accordance with and subject to the Management Agreement, the Manager
hereby appoints the Sub-Advisor to perform the services described in
Section 2 below for investment and reinvestment of the securities and
other assets of the Series, subject to the control and direction of the
Manager and the Fund's Board of Directors, for the period and on the
terms hereinafter set forth. The Sub-Advisor accepts such appointment
and agrees to furnish the services hereinafter set forth for the
compensation herein provided. The Sub-Advisor shall for all purposes
herein be deemed to be an independent contractor and shall, except as
expressly provided or authorized, have no authority to act for or
represent the Fund or the Manager in any way or otherwise be deemed an
agent of the Fund or the Manager.
2. Obligations of and Services to be Provided by the Sub-Advisor
(a) Provide investment advisory services, including but not limited to
research, advice and supervision for the Series.
(b) Furnish to the Board of Directors of the Fund for approval (or any
appropriate committee of such Board), and revise from time to time
as economic conditions require, a recommended investment program for
the Series consistent with the Series' investment objective and
policies.
(c) Implement the approved investment program by placing orders for the
purchase and sale of securities without prior consultation with the
Manager and without regard to the length of time the securities have
been held, the resulting rate of portfolio turnover or any tax
considerations, subject always to the provisions of the Fund's
registration statement, Certificate of Incorporation and Bylaws and
the requirements of the 1940 Act, as each of the same shall be from
time to time in effect. The Subadvisor is not required to execute
foreign currency trades through the Custodian but may, in its sole
discretion and in accordance with its fiduciary duty, select the
custodian or counterparties for the execution of foreign currency
transactions.
(d) Instruct the Series' custodian to deliver for cash received,
securities or other cash and/or securities instruments sold,
exchanged, redeemed or otherwise disposed of from the Series, and to
pay cash for securities or other cash and/or securities instruments
delivered to the custodian and/or credited to the Series upon
acquisition of the same for the Series.
(e) The Sub-Advisor shall have no liability for the acts or omissions of
any custodian of the Fund's assets.
(f) Vote proxies, exercise conversion or subscription rights, and
respond to tender offers and other consent solicitations relating to
the Series' investment securities in the manner in which the Sub-
Advisor believes to be in the best interests of the Series provided
such materials have been forwarded to the Sub-Advisor in a timely
fashion by the Series' custodian, and shall review its proxy voting
activities on a periodic basis with the Manager. Upon sixty (60)
days' written notice to the Sub-Advisor, the Manager may withdraw
the authority granted to the Sub-Advisor to vote proxies pursuant to
this Section.
(g) Advise and assist the officers of the Fund, as requested by the
officers, in taking such steps as are reasonably necessary or
appropriate to carry out the decisions of its Board of Directors,
and any appropriate committees of such Board, regarding the general
conduct of the investment business of the Series.
(h) Maintain, in connection with the Sub-Advisor's investment advisory
services obligations, compliance with the 1940 Act and the
regulations adopted by the Securities and Exchange Commission
thereunder and the Series investment strategies and restrictions as
stated in the Fund's prospectus and statement of additional
information subject to receipt of such additional information as may
be required from the Manager and provided in accordance with Section
12(d) of this Agreement.
(i) Report to the Board of Directors of the Fund at such times and in
such detail as the Board of Directors may reasonably deem
appropriate in order to enable it to determine that the investment
policies, procedures and approved investment program of the Series
are being observed.
(j) Upon request, provide assistance and advice for the determination of
the fair value of certain securities when reliable market quotations
are not readily available for purposes of calculating net asset
value in accordance with procedures and methods established by the
Fund's Board of Directors.
(k) Furnish, at its own expense, (i) all necessary investment and
management facilities, including salaries of clerical and other
personnel required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
advisory affairs of the Series (excluding brokerage expenses and
pricing and bookkeeping services).
(l) Open accounts with broker-dealers and future commission merchants
("broker-dealers"), select broker-dealers to effect all transactions
for the Series, place all necessary orders with broker-dealers or
issuers (including affiliated broker-dealers), and negotiate
commissions, if applicable. To the extent consistent with applicable
law, purchase or sell orders for the Series may be aggregated with
contemporaneous purchase or sell orders of other clients of the Sub-
Advisor. In such event allocation of securities so sold or
purchased, as well as the expenses incurred in the transaction, will
be made by the Sub-Advisor in the manner the Sub-Advisor considers
to be the most equitable and consistent with its fiduciary
obligations to the Fund and to other clients. The Sub-Advisor will,
at the request of the Manager, the Fund or the Fund's Board of
Directors, provide quarterly brokerage allocation summary reports as
specified in Rule 31a-1(b)(9) under the 1940 Act and a copy of the
Sub-Advisor's trade allocation procedures which includes the basis
for the allocation of any aggregated trades. The Sub-Advisor shall
use its best efforts to obtain execution of transactions for the
Series at prices which are advantageous to the Series and at
commission rates that are reasonable in relation to the benefits
received. However, the Sub-Advisor may select brokers or dealers on
the basis that they provide brokerage, research or other services or
products to the Sub-Advisor. To the extent consistent with Section
28(e) of the Securities Exchange Act of 1934, and with applicable
law, the Sub-Advisor may pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the
amount of commission or dealer spread another broker or dealer would
have charged for effecting that transaction if the Sub-Advisor
determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research
products and/or services provided by such broker or dealer. This
determination, with respect to brokerage and research products
and/or services, may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor
and its affiliates have with respect to the Series as well as to
accounts over which they exercise investment discretion. Not all
such services or products need be used by the Sub-Advisor in
managing the Series. In addition, joint repurchase or other
accounts may not be utilized by the Series except to the extent
permitted under any exemptive order obtained by the Sub-Advisor
provided that all conditions of such order are complied with.
(m) Maintain all accounts, books and records with respect to the Series
as are required of an investment advisor of a registered investment
company pursuant to the 1940 Act and Investment Advisor's Act of
1940 (the "Investment Advisor's Act"), and the rules thereunder, and
furnish the Fund and the Manager with such periodic and special
reports as the Fund or Manager may reasonably request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Advisor hereby agrees that all records that it maintains for
the Series are the property of the Fund, agrees to preserve for the
periods described by Rule 31a-2 under the 1940 Act any records that
it maintains for the Account and that are required to be maintained
by Rule 31a-1 under the 1940 Act, and further agrees to surrender
promptly to the Fund any records that it maintains for the Series
upon request by the Fund or the Manager, provided, however, the Sub-
Advisor may retain copies of such records. The Sub-Advisor has no
responsibility for the maintenance of Fund records except insofar as
is directly related to the services provided to the Series.
(n) Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-
Advisor's Code of Ethics adopted pursuant to that Rule as the same
may be amended from time to time. The Manager acknowledges receipt
of a copy of Sub-Advisor's current Code of Ethics. Sub-Advisor
shall promptly forward to the Manager a copy of any material
amendment to the Sub-Advisor's Code of Ethics along with
certification that the Sub-Advisor has implemented procedures for
administering the Sub-Advisor's Code of Ethics.
(o) From time to time as the Manager or the Fund may request, furnish
the requesting party reports on portfolio transactions and reports
on investments held by the Series, all in such detail as the Manager
or the Fund may reasonably request. The Sub-Advisor will make
available its officers and employees to meet with the Fund's Board
of Directors at the Fund's principal place of business on such times
as mutually agreeable to the parties to review the investments of
the Series.
(p) Provide such information as is customarily provided by a sub-advisor
and may be required for the Fund or the Manager to comply with their
respective obligations under applicable laws, including, without
limitation, the Internal Revenue Code of 1986, as amended (the
"Code"), the 1940 Act, the Investment Advisers Act, the Securities
Act of 1933, as amended (the "Securities Act"), and any state
securities laws, and any rule or regulation thereunder.
(q) The Sub-Advisor is not the compliance agent for the Fund or for the
Manager, and does not have access to all of the Fund's books and
records necessary to perform certain compliance testing. To the
extent that the Sub-Advisor has agreed to perform the services
specified in this Section and in Section 2(h) hereof in accordance
with applicable law , the Act and the Advisers Act ("Applicable
Law")) and in accordance with the Trust Documents, policies and
determinations of the Board of Directors of the Fund and the Manager
and the Fund's Disclosure Documents (collectively, the "Charter
Requirements"), the Sub-Advisor shall perform such services based
upon its books and records with respect to the Fund, which comprise
a portion of the Fund's books and records, and upon written
instructions received from the Fund, the Manager or the Fund's
administrator, and shall not be held responsible under this Sub-
Advisory Agreement so long as it performs such services in
accordance with this Sub-Advisory Agreement, the Charter
Requirements, and Applicable Law based upon such books and records
and such instructions provided by the Fund, the Manager of the
Fund's administrator. The Sub-Advisor shall be afforded a
reasonable amount of time to implement any such instructions (for
example, if instructed not to trade on behalf of securities of
certain specified Manager or Fund affiliates, the Sub-Advisor shall
be afforded five business days after receipt of such instruction to
implement this trading restriction).
(r) Provide a copy of the Sub-Advisor's Form ADV and any material
amendments thereto promptly after the filing of such documents with
the Securities and Exchange Commission or other regulatory agency.
3. Prohibited Conduct
In providing the services described in this agreement, the Sub-Advisor
will not consult with any other investment advisory firm that provides
investment advisory services to any investment company sponsored by
Principal Life Insurance Company regarding transactions for the Fund in
securities or other assets.
4. Obligations of the Manager
During the term of this Agreement, the Manager shall furnish to the
Sub-Advisor at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared
for distribution to shareholders of the Fund or the public, which refer
to the name "▇. ▇▇▇▇ Price" and any other names of the Sub-Advisor or
its business or clients in any way, at a reasonable time prior to the
use thereof, and the Manager shall not use any such materials if the
Sub-Advisor reasonably objects in writing ten business days (or such
other time as may be mutually agreed) after receipt thereof. The
Manager shall ensure that materials prepared by employees or agents of
the Manager or its affiliates that refer to the Sub-Advisor or its
clients in any way are consistent with those materials previously
approved by the Sub-Advisor as referenced in the preceding sentence.
Upon termination of this Agreement for any reason, the Manager shall as
soon as practicable cease and cause the Fund to cease all use of the
name "▇. ▇▇▇▇ Price."
5. Compensation
As full compensation for all services rendered and obligations assumed
by the Sub-Advisor hereunder with respect to the Series, the Manager
shall pay the compensation specified in Appendix A to this Agreement.
6. Services to Other Clients
Nothing contained in this Agreement shall limit or restrict (i) the
freedom of the Sub-Advisor, or any affiliated person thereof, to render
investment management and corporate administrative services to other
investment companies, to act as investment manager or investment
counselor to other persons, firms, or corporations, or to engage in any
other business activities, or (ii) the right of any director, officer,
or employee of the Sub-Advisor, who may also be a director, officer, or
employee of the Fund, to engage in any other business or to devote his
or her time and attention in part to the management or other aspects of
any other business, whether of a similar nature or a dissimilar nature.
7. Liability of Sub-Advisor
Neither the Sub-Advisor nor any of its directors, officers, employees,
agents or affiliates shall be liable to the Manager, the Fund or its
shareholders for any loss suffered by the Manager or the Fund resulting
from any error of judgment or mistake of law made in the good faith
exercise of the Sub-Advisor's investment discretion in connection with
selecting investments for the Series or as a result of the failure by
the Manager or any of its affiliates to comply with the terms of this
Agreement and/or any insurance laws and rules, except for any errors,
mistakes, or losses resulting from willful misfeasance, bad faith or
gross negligence of, or from reckless disregard of, the duties of the
Sub-Advisor or any of its directors, officers, employees, agents
(excluding any broker-dealer selected by the Sub-Advisor), or
affiliates.
8. Supplemental Arrangements
The Sub-Advisor may enter into arrangements with other persons
affiliated with the Sub-Advisor or with unaffiliated third parties to
better enable the Sub-Advisor to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Sub-Advisor, subject to written notification to and approval of the
Manager and, where required by applicable law, the Board of Directors
of the Fund.
9. Regulation
The Sub-Advisor shall submit to all regulatory and administrative
bodies having jurisdiction over the services provided pursuant to this
Agreement any information, reports or other material which any such
body may request or require pursuant to applicable laws and
regulations.
10. Duration and Termination of This Agreement
This Agreement shall become effective on the latest of (i) the date of
its execution, (ii) the date of its approval by a majority of the Board
of Directors of the Fund, including approval by the vote of a majority
of the Board of Directors of the Fund who are not interested persons of
the Manager, the Sub-Advisor, Principal Life Insurance Company or the
Fund cast in person at a meeting called for the purpose of voting on
such approval or (iii) if required by the 1940 Act, the date of its
approval by a majority of the outstanding voting securities of the
Series. It shall continue in effect thereafter from year to year
provided that the continuance is specifically approved at least
annually either by the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund and in either
event by a vote of a majority of the Board of Directors of the Fund who
are not interested persons of the Manager, Principal Life Insurance
Company, the Sub-Advisor or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
If the shareholders of the Series fail to approve the Agreement or any
continuance of the Agreement in accordance with the requirements of the
1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with
respect to the Series pending the required approval of the Agreement or
its continuance or of any contract with the Sub-Advisor or a different
manager or sub-advisor or other definitive action; provided, that the
compensation received by the Sub-Advisor in respect to the Series
during such period is in compliance with Rule 15a-4 under the 1940 Act.
This Agreement may be terminated at any time, without the payment of
any penalty, by approval of the Board of Directors of the Fund or by
the Sub-Advisor, the Manager or by vote of a majority of the
outstanding voting securities of the Series on sixty days written
notice. This Agreement shall automatically terminate in the event of
its assignment. In interpreting the provisions of this Section 10, the
definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of "interested person," "assignment" and "voting security")
shall be applied.
11. Amendment of this Agreement
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.
No material amendment of this Agreement shall be effective until
approved, if required by the 1940 Act or the rules, regulations,
interpretations or orders issued thereunder, by vote of the holders of
a majority of the outstanding voting securities of the Series and by
vote of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, the Sub-Advisor, Principal Life
Insurance Company or the Fund cast in person at a meeting called for
the purpose of voting on such approval, and such amendment is signed by
both parties.
12. General Provisions
(a) Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Iowa. The captions in
this Agreement are included for convenience only and in no way
define or delimit any of the provisions hereof or otherwise affect
their construction or effect.
(b) Any notice under this Agreement shall be in writing, addressed
and delivered or mailed postage pre-paid to the other party at such
address as such other party may designate for the receipt of such
notices. Until further notice to the other party, it is agreed that
the address of the Manager for this purpose shall be Principal
Financial Group, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and the address of the
Sub-Advisor shall be ▇. ▇▇▇▇ Price Associates, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
Chief Legal Counsel.
(c) The Sub-Advisor will promptly notify the Manager in writing of
the occurrence of any of the following events:
(1) the Sub-Advisor fails to be registered as an investment
adviser under the Investment Advisers Act or under the laws of
any jurisdiction in which the Sub-Advisor is required to be
registered as an investment advisor in order to perform its
obligations under this Agreement.
(2) the Sub-Advisor is served or otherwise receives notice of
any action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, public board or body,
involving the affairs of the Series.
(d) The Manager shall provide (or cause the Series custodian to
provide) timely information to the Sub-Advisor regarding such
matters as the composition of the assets of the Series, cash
requirements and cash available for investment in the Series, any
applicable investment restrictions imposed by state insurance laws
and regulations, and all other reasonable information as may be
necessary for the Sub-Advisor to perform its duties and
responsibilities hereunder.
(e) This Agreement contains the entire understanding and
agreement of the parties.
(f) All information and advice furnished by one party to the other
party (including their respective agents, employees and
representatives) hereunder shall be treated as confidential and
shall not be disclosed to third parties, except as may be necessary
to comply with applicable laws, rules and regulations, subpoenas or
court orders. Without limiting the foregoing, the Manager
acknowledges that the securities holdings of the Series constitute
information of value to the Sub-Advisor, and agrees: (1) not to use
for any purpose, other than for the Manager or the Series, or their
agents, to supervise or monitor the Sub-Advisor, the holdings or
other trading-related information of the Series; and (2) not to
disclose the Series' holdings or otherwise trade on the information,
except: (a) as required by applicable law or regulation; (b) as
required by state or federal regulatory authorities; (c) to the
Board of Directors of the Fund, counsel to the Board, counsel to the
Fund, the administrator or any sub-administrator, the independent
accountants and any other agent of the Fund; or (d) as otherwise
agreed to by the parties hereto in writing. Further, the Manager
agrees that information supplied by the Sub-Advisor, including
approved lists, internal procedures, compliance procedures and any
board materials, is valuable to the Sub-Advisor, and the Manager
agrees not to disclose any of the information contained in such
materials, except: (i) as required by applicable law or regulation;
(ii) as required by state or federal regulatory authorities; (iii)
to the Board of Directors of the Fund, counsel to the Board, counsel
to the Fund, the administrator or any sub-administrator, the
independent accountants and any other agent of the Fund; or (iv) as
otherwise agreed to by the parties hereto in writing.
Without limiting the foregoing, the Sub-Advisor agrees that any and
all information that it obtains pursuant to this Sub-Advisory
Agreement regarding the Manager or its customers including, but not
limited to, approved lists, internal procedures, compliance
procedures and any board materials, is valuable to the Manager and
will be used exclusively to fulfill the Sub-Advisor's obligations
hereunder, and will not be disclosed to any other party, including
any affiliate of the Sub-Advisor or agent of the Series, except (i)
as necessary for the Sub-Advisor to fulfill its obligations pursuant
to this Sub-Advisory Agreement, (ii) as required by applicable law
or regulation; (iii) as required by state or federal regulatory
authorities; or (iv) as otherwise agreed to by the parties hereto in
writing. Notwithstanding the foregoing, the Manager agrees that the
Sub-Advisor may identify it or the Series as a client in promotional
materials.
(g) The Sub-Advisor represents that it will not enter into any
agreement, oral or written, or other understanding under which the
Fund directs or is expected to direct portfolio securities
transactions, or any remuneration, to a broker or dealer in
consideration for the promotion or sale of Fund shares or shares
issued by any other registered investment company. Sub-advisor
further represents that it is contrary to the Sub-advisor's policies
to permit those who select brokers or dealers for execution of fund
portfolio securities transactions to take into account the broker or
dealer's promotion or sale of Fund shares or shares issued by any
other registered investment company.
(h) The Sub-Advisor agrees that neither it nor any of its
affiliates will in any way refer directly or indirectly to its
relationship with the Fund, the Series, or the Manager or any of
their respective affiliates in offering, marketing or other
promotional materials without the express written consent of the
Manager. Notwithstanding the foregoing, the Manager agrees that the
Sub-Advisor may identify it or the Series as a client in promotional
materials.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCIPAL MANAGEMENT CORPORATION
By
____________________________________________
▇. ▇▇▇▇ PRICE ASSOCIATES, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇, Vice President
APPENDIX A
The Sub-Advisor shall serve as investment sub-advisor for the LargeCap
Blend Fund II Series and LargeCap Growth Fund I Series of the Fund. The
Manager will pay the Sub-Advisor, as full compensation for all services
provided under this Agreement, a fee computed at an annual rate as follows
(the "Sub-Advisor Percentage Fee"):
LargeCap Blend Fund II
First $050,000,000 of Assets 0.400%
Next $200,000,000 of Assets 0.350%
Next $350,000,000 of Assets 0.300%
Next $400,000,000 of Assets 0.275%
When assets exceed $1 billion 0.275% on all assets
LargeCap Growth Fund I
First $250,000,000 of Assets 0.400%
Next $250,000,000 of Assets 0.375%
Next $500,000,000 of Assets. 0.350%
When assets exceed $1 billion.......0.350% on the first
$1 billion and
0.325% on assets over
$1 billion
In calculating the fee for a Series, assets of any existing unregistered
separate account of Principal Life Insurance Company and any existing
investment company sponsored by Principal Life Insurance Company to which the
Sub-Advisor provides investment advisory services and which have the same
investment mandate as the Series, will be combined (together, the "Aggregated
Assets"). The fee charged for the assets in the Series shall be determined
by calculating a fee on the value of the Aggregated Assets using the above
fee schedule and multiplying the aggregate fee by a fraction, the numerator
of which is the amount of assets in the Series and the denominator of which
is the amount of the Aggregated Assets.
The Sub-Advisor Percentage Fee shall be accrued for each calendar day and the
sum of the daily fee accruals shall be paid monthly to the Sub-Advisor on or
before the fifth (5th) day of the next succeeding calendar month. The daily
fee accruals will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described
above and multiplying this product by the net assets of the Series as
determined in accordance with the Series' prospectus and statement of
additional information as of the close of business on the previous business
day on which the Series was open for business. Each month, the Manager will
provide the Sub-Advisor with a worksheet accompanying payment of the
subadvisory fee that sets forth the computation of such subadvisory fee. Cash
and cash equivalents shall be included in the Series net assets calculation
up to a maximum of 1.00% of the Series net assets. If the Manager requests
the Sub-Advisor to raise cash in the Series portfolio in excess of 1.00% of
the Series net assets for the purpose of funding redemptions from the Series,
such amount requested shall be included in the Series net assets calculation.
If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such 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 which such
period bears to the full month in which such effectiveness or termination
occurs.
TRP-1