SUBADVISORY AGREEMENT
AGREEMENT made as of the ___ day of _________, 2002, between XXXXX
MONEY MANAGEMENT, INC., 0000 Xxxxx Xxxx, Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
(hereinafter called the "Manager"), and DELRAY FINANCIAL CORPORATION, 00000 Xx.
Xxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 (hereinafter called the
"Subadviser").
WHEREAS, The Xxxxx Fund (the "Trust") is a Massachusetts business trust
organized with one or more series of shares, and is registered as an investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Manager has entered into Investment Advisory Agreement(s)
(the "Advisory Agreement") with the Trust, pursuant to which the Manager acts as
investment adviser to the portfolio assets of certain series of the Trust listed
on Schedule A hereto, as amended from time to time (each a "Fund" and,
collectively, the "Funds"); and
WHEREAS, the Manager desires to utilize the services of the Subadviser
as investment subadviser with respect to each Fund; and
WHEREAS, the Subadviser is willing to perform such services on the
terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
I. Duties of the Subadviser. The Subadviser will serve the Manager as investment
subadviser with respect to each Fund.
A. As investment subadviser to the Funds, the Subadviser is hereby
authorized and directed and hereby agrees, in accordance with the Subadviser's
best judgment and subject to the stated investment objectives, policies and
restrictions of the Funds as set forth in the current prospectuses and
statements of additional information of the Trust (including amendments) and in
accordance with the Trust's Declaration of Trust, as amended, and By-laws
governing the offering of its shares (collectively, the "Trust Documents"), the
1940 Act and the provisions of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), relating to regulated investment companies, and
subject to such resolutions as from time to time may be adopted by the Trust's
Board of Trustees, to render continuous investment advice to the Manager as to
the investment of the Funds' assets, provide supervision of the Funds' assets,
and furnish a continuous investment program for the Funds, as may be most
appropriate to the achievement of the investment objectives of the Funds as
stated in the aforesaid prospectuses, and to provide research and analysis
relative to the investment program and investments of the Funds and to monitor
on a continuing basis the performance of the portfolio securities of the Funds.
The Subadviser shall have no discretion regarding nor responsibility for the
implementation or execution of transactions which it recommends to the Manager
for any Fund, such discretion and responsibility being solely with the Manager
in the exercise of its independent judgement regarding the appropriateness of
the Subadviser's investment recommendations for the Fund in light of its
investment objectives, policies and restrictions. The Manager will make
available to the Subadviser certain research services.
B. The Subadviser shall (i) comply with all reasonable requests of the
Trust, or the independent auditors of the Trust, for information, including
information required in connection with the Trust's annual audit and filings
with the Securities and Exchange Commission (the "SEC") and state securities
commissions, and (ii) provide such other services as the Subadviser shall from
time to time determine to be necessary or useful to the administration of the
Funds, including, but not limited to, cooperation with the Manager in connection
with any examination of the Trust by the SEC or any other regulatory agency.
C. The Subadviser shall furnish to the Trust's Board of Trustees
periodic reports on the performance of its obligations under this Agreement and
shall supply such additional reports and information as the Trust's officers or
Board of Trustees shall reasonably request.
D. The investment advisory services provided by the Subadviser under this
Agreement are not to be deemed exclusive and the Subadviser shall be free to
render similar services to others, as long as such services do not impair the
services rendered to the Manager or the Trust.
II. Delivery of Documents to the Manager. The Subadviser has furnished the
Manager with copies of each of the following documents:
A. The Subadviser's current Form ADV and any amendments thereto; and
B. The Code of Ethics of the Subadviser as currently in effect.
The Subadviser will furnish the Manager from time to time with copies,
properly certified or otherwise authenticated, of all material amendments of or
supplements to the foregoing, if any. Additionally, the Subadviser will provide
to the Manager such other documents relating to its services under this
Agreement as the Manager may reasonably request on a periodic basis. Such
amendments or supplements as to items A and B above will be provided within 30
days of the time such materials became available to the Subadviser.
III. Expenses.
The Subadviser shall pay all of its expenses arising from the
performance of its obligations under Section I.
IV. Compensation.
The Manager shall pay to the Subadviser for its services hereunder, and
the Subadviser agrees to accept as full compensation therefor, a fee with
respect to each Fund as set forth on Schedule B. If the Subadviser shall serve
hereunder for less than the whole of any payment period, the fee hereunder shall
be prorated accordingly.
V. Independent Contractor.
In the performance of its duties hereunder, the Subadviser is and shall
be an independent contractor and, except as expressly provided herein or
otherwise authorized in writing, shall have no authority to act for or represent
the Trust, the Funds, any other series of the Trust or the Manager in any way or
otherwise be deemed to be an agent of the Trust, the Funds, any other series of
the Trust or the Manager.
VI. Term of Agreement.
This Agreement shall continue in full force and effect for two years
from the date of execution, and from year to year thereafter if such continuance
is approved in the manner required by the 1940 Act if the Subadviser shall not
have notified the Manager in writing at least 60 days prior to such date or
prior to such date of any year thereafter that it does not desire such
continuance. This Agreement may be terminated at any time, without payment of
penalty by a Fund, by vote of the Trust's Board of Trustees or a majority of the
outstanding voting securities of the applicable Fund (as defined by the 1940
Act), or by the Manager or by the Subadviser upon 60 days' written notice. This
Agreement will automatically terminate in the event of its assignment (as
defined by the 0000 Xxx) or upon the termination of the Advisory Agreement.
VII. Amendments.
This Agreement may be amended by consent of the parties hereto provided
that the consent of the applicable Fund is obtained in accordance with the
requirements of the 1940 Act.
VIII. Confidential Treatment.
It is understood that any information or recommendation supplied by the
Subadviser in connection with the performance of its obligations hereunder is to
be regarded as confidential and for use only by the Manager, the Trust or such
persons as the Manager may designate in connection with the Funds. It is also
understood that any information supplied to the Subadviser in connection with
the performance of its obligations hereunder, particularly, but not limited to,
any list of securities which, on a temporary basis, may or may not be bought or
sold for the Funds, and any nonpublic personal information of Fund shareholders,
as such information is defined under Regulation S-P, or any list derived from
such information, is to be regarded as confidential and for use only by the
Subadviser in connection with its obligation to provide investment advice and
other services to the Funds, and may not be disclosed to any third parties.
IX. Representations and Warranties. The Subadviser hereby represents and
warrants as follows:
A. The Subadviser is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940, as amended (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 Subadviser has all requisite authority to enter into, execute,
deliver and perform the Subadviser's obligations under this Agreement;
C. The Subadviser's performance of its obligations under this
Agreement does not conflict with any law, regulation or order to which the
Subadviser is subject; and
D. The Subadviser has reviewed the portion of (i) the registration
statement filed with the SEC, as amended from time to time, for the Funds
("Registration Statement"), and (ii) each Fund's prospectuses and statements of
additional information (including amendments) thereto, in each case in the form
received from the Manager with respect to the disclosure about the Subadviser
and the Funds of which the Subadviser has knowledge ("Subadviser and Fund
Information") and except as advised in writing to the Manager such Registration
Statement, prospectuses and statements of additional information (including
amendments) contain, as of their respective dates, no untrue statement of any
material fact of which the Subadviser has knowledge and do not omit any
statement of a material fact of which the Subadviser has knowledge that was
required to be stated therein or necessary to make the statements contained
therein not misleading.
X. Covenants. The Subadviser hereby covenants and agrees that, so long as this
Agreement shall remain in effect:
A. The Subadviser shall maintain the Subadviser'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 Subadviser's performance of its obligations under this
Agreement shall not conflict with any law, regulation or order to which the
Subadviser is then subject;
C. The Subadviser shall at all times comply with the Advisers Act and
the 1940 Act, and all rules and regulations thereunder, and all other applicable
laws and regulations, and the Registration Statement, prospectuses and
statements of additional information (including amendments) and with any
applicable procedures adopted by the Trust's Board of Trustees, provided that
such procedures are identified in writing to the Subadviser;
D. The Subadviser shall promptly notify the Manager and the Funds upon
the occurrence of any event that might disqualify or prevent the Subadviser from
performing its duties under this Agreement. The Subadviser shall promptly notify
the Manager and the Funds if there are any changes to its organizational
structure or the Subadviser has become the subject of any adverse regulatory
action imposed by any regulatory body or self-regulatory organization. The
Subadviser further agrees to notify the Manager of any changes relating to it or
the provision of services by it that would cause the Registration Statement,
prospectuses or statements of additional information (including amendments) for
the Funds to contain any untrue statement of a material fact or to omit to state
a material fact that is required to be stated therein or is necessary to make
the statements contained therein not misleading, in each case relating to
Subadviser and Fund Information; and
E. The Subadviser will render advice to the Manager regarding the
investment of each Fund's assets that is consistent with maintaining the Fund's
status as a regulated investment company under Subchapter M of the Internal
Revenue Code.
F. The Subadviser shall provide to the Trust's Board of Trustees a
copy of the Subadviser's Code of Ethics adopted pursuant to Rule 17j-1 under the
1940 Act and any amendments thereto, and all certifications required under that
rule.
XI. Use of Names.
A. The Subadviser acknowledges and agrees that the names "The Xxxxx
Fund" and "Xxxxx Money Management, Inc.," and abbreviations or logos associated
with those names, are the valuable property of the Manager and its affiliates;
that the Funds, the Manager and their affiliates have the right to use such
names, abbreviations and logos; and that the Subadviser shall use the names "The
Xxxxx Fund" and "Xxxxx Money Management, Inc.," and associated abbreviations and
logos, only in connection with the Subadviser's performance of its duties
hereunder. Further, in any communication with the public and in any marketing
communications of any sort, Subadviser agrees to obtain prior written approval
from Manager before using or referring to "The Xxxxx Fund" and "Xxxxx Money
Management, Inc.," or the Funds or any abbreviations or logos associated with
those names.
B. The Manager acknowledges that "Delray" and "Delray Financial" and
abbreviations or logos associated with those names are valuable property of
Delray Financial Corporation and are distinctive in connection with investment
advisory and related services provided by the Subadviser, the "Delray" name is a
property right of the Subadviser, and the "Delray" and "Delray Financial" names
are understood to be used by each Fund upon the conditions hereinafter set
forth; provided that each Fund may use such names only so long as the Subadviser
shall be retained as the investment subadviser of the Fund pursuant to the terms
of this Agreement. C. The Subadviser acknowledges that each Fund and its agents
may use the "Delray" and "Delray Financial" names in connection with accurately
describing the activities of the Fund, including use with marketing and other
promotional and informational material relating to the Fund with the prior
written approval always of the Subadviser. In the event that the Subadviser
shall cease to be the investment subadviser of a Fund, then the Fund at its own
or the Manager's expense, upon the Subadviser's written request: (i) shall cease
to use the Subadviser's name for any commercial purpose; and (ii) shall use its
best efforts to cause the Fund's officers and trustees to take any and all
actions that may be necessary or desirable to effect the foregoing and to
reconvey to the Subadviser all rights which a Fund may have to such name. The
Manager agrees to take any and all reasonable actions as may be necessary or
desirable to effect the foregoing and the Subadviser agrees to allow the Funds
and their agents a reasonable time to effectuate the foregoing.
D. The Subadviser hereby agrees and consents to the use of the
Subadviser's name upon the foregoing terms and conditions.
XII. Reports by the Subadviser and Records of the Funds.
The Subadviser shall furnish the Manager information and reports
necessary to the operation of the Funds, including information required to be
disclosed in the Trust's Registration Statement, in such form as may be mutually
agreed. The Subadviser shall immediately notify and forward to both the Manager
and legal counsel for the Trust any legal process served upon it on behalf of
the Manager or the Trust.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Subadviser agrees that all records it maintains for the Trust are the
property of the Trust and further agrees to surrender promptly to the Trust or
the Manager any such records upon the Trust's or the Manager's request. The
Subadviser further agrees to maintain for the Trust the records the Trust is
required to maintain under Rule 31a-1(b) insofar as such records relate to the
investment affairs of each Fund. The Subadviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records it maintains
for the Trust.
XIII. Indemnification.
The Subadviser agrees to indemnify and hold harmless the Manager, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act
("affiliated person") of the Manager and each person, if any, who, within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "1933
Act"), controls ("controlling person") the Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) to which the Manager, the Trust or such affiliated person or
controlling person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out
of Subadviser's responsibilities as subadviser of the Funds (1) to the extent of
and as a result of the willful misconduct, bad faith, or gross negligence of the
Subadviser, any of the Subadviser's employees or representatives or any
affiliate of or any person acting on behalf of the Subadviser, or (2) as a
result of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, prospectuses or statements of
additional information covering the Funds or the Trust or any amendment thereof
or any supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, if such a statement or omission was made in reliance
upon written information furnished by the Subadviser to the Manager, the Trust
or any affiliated person of the Manager or the Trust expressly for use in the
Trust's Registration Statement, or upon verbal information confirmed by the
Subadviser in writing expressly for use in the Trust's Registration Statement;
provided, however, that in no case is the Subadviser's indemnity in favor of the
Manager or any affiliated person or controlling person of the Manager deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misconduct, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
The Manager agrees to indemnify and hold harmless the Subadviser, any
affiliated person of the Subadviser and each controlling person of the
Subadviser, against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which the
Subadviser or such affiliated person or controlling person may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Manager's responsibilities as
investment manager of the Funds (1) to the extent of and as a result of the
willful misconduct, bad faith, or gross negligence of the Manager, any of the
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Manager, or (2) as a result of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
prospectuses or statements of additional information covering the Funds or the
Trust or any amendment thereof or any supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading, if such a statement
or omission was made by the Trust other than in reliance upon written
information furnished by the Subadviser, or any affiliated person of the
Subadviser, expressly for use in the Trust's Registration Statement or other
than upon verbal information confirmed by the Subadviser in writing expressly
for use in the Trust's Registration Statement; provided, however, that in no
case is the Manager's indemnity in favor of the Subadviser or any affiliated
person or controlling person of the Subadviser deemed to protect such person
against any liability to which any such person would otherwise be subject by
reason of willful misconduct, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
XIV. Notices.
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered or sent by pre-paid first
class letter post to the following addresses or to such other address as the
relevant addressee shall hereafter specify for such purpose to the others by
notice in writing and shall be deemed to have been given at the time of
delivery.
If to the Manager: XXXXX MONEY MANAGEMENT, INC.
0000 Xxxxx Xxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
If to the Trust: THE XXXXX FUND
0000 Xxxxx Xxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
If to the Subadviser: DELRAY FINANCIAL CORPORATION
00000 Xx. Xxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
XV. Limitation of Liability of the Trust, its Trustees, and Shareholders.
It is understood and expressly stipulated that none of the trustees,
officers, agents, or shareholders of any series of the Trust shall be personally
liable hereunder. It is understood and acknowledged that all persons dealing
with any series of the Trust must look solely to the property of such series for
the enforcement of any claims against that series as neither the trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of any series of the Trust. No series of the Trust shall
be liable for the obligations or liabilities of any other series of the Trust.
XVI. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or to impose
any duty upon either of the parties, to do anything in violation of any
applicable laws or regulations.
XVII. Severability.
Should any part of this Agreement be held 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 inure to the benefit
of the parties hereto and their respective successors.
XVIII. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all such counterparts shall constitute a
single instrument.
IN WITNESS WHEREOF, XXXXX MONEY MANAGEMENT, INC. AND DELRAY FINANCIAL
CORPORATION have each caused this instrument to be signed in duplicate on its
behalf by the officer designated below thereunto duly authorized.
XXXXX MONEY MANAGEMENT, INC.
By: /S/ XXXXX XXXXX
---------------
Title: Vice President
DELRAY FINANCIAL CORPORATION
By: /S/ XXXX X. XXXXXXXXX
---------------------
Title: President
SCHEDULE A
TO SUBADVISORY AGREEMENT BETWEEN
XXXXX MONEY MANAGEMENT, INC. AND DELRAY FINANCIAL CORPORATION
DATED AS OF __________, 2002
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Funds:
Xxxxx Millennium Opportunity Fund
Xxxxx Treasury Only Money Market Fund
SCHEDULE B
TO SUBADVISORY AGREEMENT BETWEEN
XXXXX MONEY MANAGEMENT, INC. AND DELRAY FINANCIAL CORPORATION
DATED AS OF ____________, 2002
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Fee schedule:
Xxxxx Millennium Opportunity Fund: The Adviser shall pay the Subadviser as
compensation for the Subadviser's services to be rendered hereunder a quarterly
fee in arrears at the rate of 10% of all fees payable during the same quarter by
the Fund to the Adviser for investment advisory services provided pursuant to
the Advisory Agreement, net of any fee waivers or expense reimbursements made by
the Adviser with respect to the Fund relating to such quarter.
Xxxxx Treasury Only Money Market Fund: The Adviser shall pay the Subadviser as
compensation for the Subadviser's services to be rendered hereunder a quarterly
fee in arrears at the rate of 10% of all fees payable during the same quarter by
the Fund to the Adviser for investment advisory services provided pursuant to
the Advisory Agreement, net of any fee waivers or expense reimbursements made by
the Adviser with respect to the Fund relating to such quarter.
