REPUBLIC FUNDS
REPUBLIC EQUITY FUND
SUBADVISORY AGREEMENT
AGREEMENT, effective commencing on April 7, 0000, xxxxxxx Xxxx, Xxxxxx
& Co. (the "Subadviser") and Republic National Bank of New York (the "Manager").
WHEREAS, the Manager has been retained by Republic Funds, a
Massachusetts business trust (the "Trust") registered as an open end diversified
investment management company under the Investment Company Act of 1940, as
amended (the "1940 Act"), to provide investment advisory services to Republic
Equity Fund (the "Fund") pursuant to a Master Investment Advisory Contract and
Supplement thereto dated April 7, 1995 (the "Management Agreement");
WHEREAS, the Trust's Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the 0000 Xxx) of the
Trust and the Fund's shareholders have approved the appointment of the
Subadviser to perform certain investment advisory services for the Fund pursuant
to this Subadvisory Agreement and the Subadviser is willing to perform such
services for the Fund;
WHEREAS, the Subadviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Subadviser as
follows:
1. APPOINTMENT. The Manager hereby appoints the Subadviser to
perform advisory services to the Fund for the periods and on the terms set forth
in this Subadvisory Agreement. The Subadviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein
provided.
2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the
Trustees of the Trust and the Manager, the Subadviser will[, IN COORDINATION
WITH THE MANAGER,] (a) provide a program of continuous investment management for
the Fund in accordance with the Fund's investment objectives, policies and
limitations as stated in the Fund's Prospectus and Statement of Additional
Information included as part of the Trust's Registration Statement on behalf of
the Fund filed with the Securities and Exchange Commission, as they may be
amended from time to time, copies of which shall be provided to the Subadviser
by the Manager; (b) make investment decisions for the Fund; and (c) place orders
to purchase and sell securities for the Fund. In particular, the Subadviser will
be responsible for the market timing of purchases and sales and for all yield
enhancement strategies used in managing the Fund's investment portfolio.
In performing its investment management services to the Fund hereunder,
the Subadviser will provide the Fund with ongoing investment guidance and policy
direction, including oral and written research, analysis, advice, statistical
and economic data and judgments regarding individual investments, general
economic conditions and trends and long-range investment policy. The Subadviser
will determine the securities, instruments, repurchase agreements, options and
other
investments and techniques that the Fund will purchase, sell, enter into or use,
and will provide an ongoing evaluation of the Fund's portfolio. The Subadviser
will determine what portion of the Fund's portfolio shall be invested in
securities and other assets.
The Subadviser further agrees that, in performing its duties hereunder,
it will:
(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code"),
and all other applicable federal and state laws and regulations, and with any
applicable procedures adopted by the Trustees;
(b) manage the Fund so that it will qualify, and continue to qualify
(except where extraordinary circumstances dictate otherwise), as a regulated
investment company under Subchapter M of the Code and regulations issued
thereunder, and conduct periodically such Subchapter M compliance reviews as the
Manager and Subadviser determine appropriate;
(c) place orders pursuant to its investment determinations for the Fund
directly with the issuer, or with any broker or dealer, in accordance with
applicable policies expressed in the Fund's Prospectus and/or Statement of
Additional Information and in accordance with applicable legal requirements;
(d) furnish to the Trust or to the Manager whatever statistical
information the Trust or the Manager may reasonably request with respect to the
Fund's assets or contemplated investments. In addition, the Subadviser will keep
the Trust, the Trustees and the Manager informed of developments materially
affecting the Fund's portfolio and shall, on the Subadviser's own initiative,
furnish to the Trust and the Manager from time to time whatever information the
Subadviser believes appropriate for this purpose;
(e) make available to the Manager and the Trust, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Fund as may be required to assist the Manager and the Trust in their compliance
with applicable laws and regulations. The Subadviser will furnish the Trustees
with such periodic and special reports regarding the Fund as they may reasonably
request;
(f) immediately notify the Manager and the Trust in the event that the
Subadviser or any of its affiliates: (1) becomes aware that it is subject to a
statutory disqualification that prevents the Subadviser from serving as an
investment adviser pursuant to this Subadvisory Agreement; or (2) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the Securities and Exchange Commission ("SEC") or other regulatory authority.
The Subadviser further agrees to notify the Trust and the Manager immediately of
any material fact known to the Subadviser respecting or relating to the
Subadviser that is not contained in the Trust's Registration Statement with
respect to the Fund, or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any statement contained therein that
becomes untrue in any material respect.
3. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise
specifically provided in this Section 3, the Subadviser shall pay the
compensation and expenses of all its directors, partners, officers and employees
who serve as officers and executive employees of the Trust (including the Fund's
share of payroll taxes), and the Subadviser shall make available, without
expense to the Fund, the service of its directors, partners, officers and
employees who may be duly elected officers of the Trust, subject to their
individual consent to serve and to any limitations imposed by law.
The Subadviser shall not be required to pay any expenses of the Fund
other than those specifically allocated to the Subadviser in this Section 3. In
particular, but without limiting the generality of the foregoing, the Subadviser
shall not be responsible, except to the extent of the reasonable compensation of
such of the Trust's employees as are officers or employees of the Subadviser
whose services may be involved, for the following expenses of the Fund:
organization and certain offering expenses of the Fund (including out-of-pocket
expenses); fees payable to the Manager and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Fund in connection with membership in investment company trade
organizations; cost of insurance relating to fidelity coverage for the Trust's
officers and employees; fees and expenses of any custodian, subcustodian,
transfer agent, registrar, or dividend disbursing agent of the Fund; payments
for maintaining the Fund's financial books and records and calculating the daily
net asset value of the Fund's shares; other payments for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates and other expenses
in connection with the issuance, offering, distribution or sale of securities
issued by the Fund; expenses relating to investor and public relations; expenses
of registering and qualifying shares of the Fund for sale; freight, insurance
and other charges in connection with the shipment of the portfolio securities of
the Fund; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities or other assets of the Fund, or of entering into other
transactions or engaging in any investment practices with respect to the Fund;
expenses of printing and distributing Prospectuses, Statements of Additional
Information, reports, notices and dividends to stockholders; costs of
stationery; litigation expenses; costs of stockholders' and other meetings; the
compensation and all expenses (specifically including travel expenses relating
to the Fund's business) of officers, trustees and employees of the Trust who are
not "interested persons" (as defined in the 0000 Xxx) of the Subadviser; and
travel expenses (or an appropriate portion thereof) of officers or trustees of
the Trust who are officers, directors or employees of the Subadviser to the
extent that such expenses relate to attendance at meetings of the Trustees of
the Trust or any committees thereof or advisers thereto.
4. COMPENSATION. As compensation for the services provided and expenses
assumed by the Subadviser under this Agreement, the Trust will pay the
Subadviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily on the basis of the Fund's average daily net assets,
in accordance with the following schedule of annual rates.
NET ASSETS FEE RATE
Up to $50 million 0.325%
$50,000,001 - $100 million 0.25%
$100,000,001 - $200 million 0.20%
Over $200 million 0.15%
The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such other time. The value of net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Trust's Declaration of Trust and
Registration Statement. If, pursuant to such provisions, the determination of
net asset value is suspended for any particular business day, then for the
purposes of this Section 4, the value of the net assets of the Fund as last
determined shall be deemed to be the value of its net assets as of the close of
regular trading on the New York Stock Exchange, or as of such other time as the
value of the net assets of the Fund's portfolio may lawfully be determined, on
that day. If the determination of the net asset value of the shares of the Fund
has been so suspended for a period including any quarter end when the
Subadviser's compensation is payable pursuant to this Section, then the
Subadviser's compensation payable at the end of such month shall be computed on
the basis of the value of the net assets of the Fund as last determined (whether
during or prior to such quarter). If the Fund determines the value of the net
assets of its portfolio more than once on any day, then the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this Section 4. In the event that this
Agreement is terminated pursuant to Section 10 hereof, the Subadviser shall be
entitled to a pro rata portion of the fee under this Section 4 through and
including the date upon which the Agreement is terminated and the Subadviser
ceases to provide investment advisory services to the Fund hereunder.
5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by that Section, and those rules and legal provisions. The Subadviser
also agrees that records it maintains and preserves pursuant to Rules 31a-1 and
Rule 31a-2 under the 1940 Act and otherwise in connection with its services
hereunder are the property of the Fund and will be surrendered promptly to the
Fund upon its request. The Subadviser further agrees that it will furnish to
regulatory authorities having the requisite authority any information or reports
in connection with its services hereunder which may be requested in order to
determine whether the operations of the Fund are being conducted in accordance
with applicable laws and regulations.
6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or the holders
of the Fund's shares in connection with the matters to which this Subadvisory
Agreement relate, provided that nothing in this Subadvisory Agreement shall be
deemed to protect or purport to protect the Subadviser against any liability to
the Fund or to holders of the Fund's shares to which the Subadviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Subadviser's reckless disregard of its obligations and duties under this
Subadvisory Agreement. As used in this Section 6, the term "Subadviser" shall
include any officers, directors, partners, employees or other affiliates of the
Subadviser performing services for the Fund.
7. INDEMNIFICATION.
(a) The Subadviser hereby agrees to indemnify and hold harmless the
Manager from any controversies, claims, suits, losses, liabilities, judgments,
awards or settlements, and costs or expenses, including reasonable legal fees,
caused by, or in any way related to, the investment decisions rendered by the
Subadviser concerning the Fund in a manner inconsistent with Section 6 hereof,
any failure of the Subadviser to fulfill any of its other obligations under this
Subadvisory Agreement, any material misrepresentation, or omission to disclose
material facts, by the Subadviser to the Manager or any shareholder of the Fund,
or any violation of applicable law, by the Subadviser. The Subadviser also
agrees to indemnify and hold harmless the Manager with respect to any losses
incurred as the result of errors made by the Subadviser in transmitting orders
to any broker for execution.
(b) The Manager hereby agrees to indemnify and hold harmless the
Subadviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any way related to, its failure to fulfill any of
its obligations under this Subadvisory Agreement.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.
8. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser from providing similar services to other investment
companies (whether or not their investment objectives and policies are similar
to those of the Fund) or from engaging in other activities, provided such other
services and activities do not, during the term of this Subadvisory Agreement,
interfere in a material manner with the Subadviser's ability to meet its
obligations to the Trust and the Fund hereunder. When the Subadviser recommends
the purchase or sale of a security for other investment companies and other
clients, and at the same time the Subadviser recommends the purchase or sale of
the same security for the Fund, the Subadviser may, but shall be under no
obligation to, aggregate the orders for securities to be purchased or sold. It
is understood that in light of its fiduciary duty to the Fund, such transactions
will be executed on a basis that is fair and equitable to the Fund. In
connection with purchases or sales of portfolio securities for the account of
the Fund, neither the Subadviser nor any of its directors, partners, officers or
employees shall act as a principal or agent or receive any commission.
9. DOCUMENTATION. The Fund shall provide the Subadviser with the
following documents, as requested by the Subadviser:
(a) the Trust's registration statement relating to the Fund, and
any amendments thereto;
(b) the Declaration of Trust and By-laws (and any amendments
thereto) of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing
the appointment of Lord, Xxxxxx & Co. to serve as Subadviser and approving this
Subadvisory Agreement;
(d) the Trust's Notification of Registration on Form N-8A; and
(e) the Fund's current Prospectus and any supplements thereto.
10. DURATION AND TERMINATION. This Subadvisory Agreement shall continue
until April 7, 1997 unless sooner terminated as provided herein. Notwithstanding
the foregoing, this Subadvisory Agreement may be terminated: (a) at any time
without penalty upon thirty (30) days' written notice to the Subadviser by (i)
the Fund upon the vote of a majority of the Trustees or upon the vote of a
majority of the Fund's outstanding voting securities, or (ii) the Manager, or
(b) by the Subadviser upon thirty (30) days' written notice to the Fund,
provided that the Subadviser shall continue to be responsible for managing the
assets of the Fund for sixty (60) business days after the end of the notice
period unless the Fund shall agree in writing to shorten the period. Anything to
the contrary herein notwithstanding, any termination carried out pursuant to
this Section 10(b) shall be without penalty and, further, the compensation
schedule set forth in Section 4 hereof shall apply to the service of the
Subadviser beyond the end of the notice period provided in this Section 10(b).
This Subadvisory Agreement will also terminate automatically in the event of its
assignment (as defined in the 0000 Xxx) or the assignment or termination of the
Management Agreement.
11. AMENDMENTS. No provision of this Subadvisory 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 Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
majority of the outstanding voting securities of the Fund, and (ii) a majority
of the Trustees, including a majority of the Trustees who are not "interested
persons" (as defined in the 0000 Xxx) of any party to this Subadvisory
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
12. NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be given in writing and mailed, faxed or
delivered to the other party at its address as follows:
IF TO THE MANAGER:
Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxxxx
IF TO THE SUBADVISER:
Lord, Xxxxxx & Co.
The General Motors Building
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention:
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. MISCELLANEOUS.
a. This Subadvisory Agreement shall be governed by the laws of the
State of New York, 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. Exclusive original jurisdiction to any claim, action or dispute
between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.
b. The captions of this Subadvisory 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.
c. If any provision of this Subadvisory Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Subadvisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Subadvisory Agreement shall be deemed to be severable.
d. Nothing herein shall be construed as constituting the Subadviser, or
any of its directors, officers or employees, an agent of the Manager or the
Fund, nor the Manager, or any of its directors, officers or employees, an agent
of the Subadviser.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of April 7, 1995.
LORD, XXXXXX & CO.
By
Name:
Title:
REPUBLIC NATIONAL BANK OF NEW YORK
By
Name:
Title:
FT4228A
