FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION INSTITUTIONAL PORTFOLIOS
AGREEMENT made this ______day of______________, 2005, by and between
Constellation Investment Management Company, LP (the "Adviser") and JS Asset
Management LLC (the "Sub-Adviser").
WHEREAS, Constellation Institutional Portfolios, a Delaware business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into a Management Agreement (the
"Management Agreement") with the Trust, pursuant to which the Adviser act as
investment manager to each series of the Trust; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in connection with the management of
those series of the Trust set forth on Schedule A of this Agreement (each a
"Fund" and collectively the "Funds"), and the Sub-Adviser is willing to render
such services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage those assets of a
Fund that the Adviser determines to allocate to the Sub-Adviser (the "Allocated
Assets"), including the purchase, retention and disposition of the Allocated
Assets, in accordance with each Fund's investment objectives, policies and
restrictions as stated in the Fund's prospectus and statement of additional
information, as currently in effect and as amended or supplemented from time to
time (referred to collectively as the "Prospectus"), and subject to the
following:
(a) The Sub-Adviser shall, subject to the direction of the Adviser,
determine from time to time what Allocated Assets will be purchased, retained or
sold by the Fund, and what portion of the Allocated Assets will be invested or
held uninvested in cash.
(b) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration
of Trust (as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and will
conform to and comply with the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Allocated Assets to be
purchased or sold by the Fund as provided in subsection (a) and will place
orders with or through such persons, brokers or dealers to carry out the policy
with respect to brokerage set forth in each Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the Adviser may
direct from time to time, in conformity with federal securities laws. In
executing Fund transactions and selecting brokers or dealers, the Sub-Adviser
will use its best efforts to seek on behalf of each Fund the best overall terms
available. In assessing the best overall terms available for any transaction,
the Sub-Adviser shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall terms available, and in
selecting the broker-dealer to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934). Consistent
with any guidelines established by the Adviser or the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a fund
transaction for a Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Sub-Adviser determines in good faith that such commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer -- - viewed in terms of that particular transaction or in terms
of the overall responsibilities of the Sub-Adviser to the Fund and other
accounts as to which it exercises investment discretion. In addition, to the
extent permitted by applicable law, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers or dealers (including brokers
and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's
principal underwriter) to take into account the sale of shares of the Trust if
the Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms.
(d) The Sub-Adviser shall maintain all books and records with respect
to transactions involving the Allocated Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports and such other information relating to the Fund as
the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall
keep the books and records relating to the Allocated Assets required to be
maintained by the Sub-Adviser under this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under this
Agreement needed by the Adviser to keep the other books and records of a Fund
required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to
the Adviser any other information relating to the Allocated Assets that is
required to be filed by the Adviser or the Trust with the SEC or sent to
shareholders under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from the SEC.
The Sub-Adviser agrees that all records that it maintains on behalf of a Fund
are property of the Fund and the Sub-Adviser will surrender promptly to the Fund
any of such records upon the Fund's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the duration of
this Agreement, the Sub-Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be maintained
by it pursuant to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this Agreement (or, if there is no
successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide each Fund's custodian on each
business day with information relating to all transactions concerning the Fund's
Allocated Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser
under this Agreement are not to be deemed exclusive and the Sub-Adviser shall be
free to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall be responsible for voting all proxies that it
receives in relation to the Allocated Assets. The Adviser shall instruct the
custodian and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) Except as specifically permitted in writing by the Adviser, or as
otherwise permitted or required to comply with the requirements of the 1940 Act
(including the rules adopted thereunder), the Sub-Adviser shall not consult with
any other sub-adviser to the Trust or a Fund concerning the purchase, retention
or disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers or
employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to each Fund pursuant to the
Management Agreement and shall oversee and review the Sub-Adviser's performance
of its duties under this Agreement; provided, however, that in connection with
its management of the Allocated Assets, nothing herein shall be construed to
relieve the Sub-Adviser of responsibility for compliance with the Trust's
Declaration of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the 1940
Act, the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser
with copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the State of Delaware (such Agreement and Declaration of
Trust, as in effect on the date of this Agreement and as amended from time to
time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of
this Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) for each Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor,
a sub-advisory fee at the rate specified on Schedule B of this Agreement. The
fee will be calculated based on the monthly average net value of the Allocated
Assets under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation (including
any then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless
the Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser' s
obligation under this Section 5 shall be reduced to the extent that the claim
against, or the loss, liability or damage experienced by the Adviser, is caused
by or is otherwise directly related to the Adviser's own, or any other
sub-adviser's, willful misfeasance, bad faith or negligence, or to the reckless
disregard of its duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of each Fund. This Agreement shall continue in
effect for a period of more than two years from the date hereof only so long as
continuance is specifically approved at least annually in conformance with the
1940 Act; provided, however, that this Agreement may be terminated with respect
to a Fund (a) by the Fund at any time, without the payment of any penalty, by
the vote of a majority of Trustees of the Trust or by the vote of a majority of
the outstanding voting securities of the Fund, (b) by the Adviser at any time,
without the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the Adviser.
This Agreement shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement with the
Trust. As used in this Section 6, the terms "assignment" and "vote of a majority
of the outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws
of the Commonwealth of Pennsylvania, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
8. 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 shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: 0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: President
To the Sub-Adviser at: 00000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn.: ________________
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to this Agreement's subject matter. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but such counterparts shall, together, constitute only one
instrument.
11. USE OF NAMES.
(a) The Sub-Adviser hereby agrees to grant a non-exclusive,
non-assignable license to the Trust for use of the names "JS Asset Management"
or "JSAM" in the name of each series of the Trust for which the Sub-Adviser
provides investment management services pursuant to this Agreement for so long
as the Sub-Adviser continues to provide such services to such series, and such
license shall terminate upon termination of this Agreement.
(b) The Adviser shall not permit the use of the Sub-Adviser's name,
investment performance information or other pertinent information regarding the
Sub-Adviser in marketing or advertising materials relating to the Fund, the
Trust or the Adviser, without the prior written consent of the Sub-Adviser,
which consent shall not be unreasonably withheld.
A copy of the Declaration of Trust is on file with the Secretary of State of the
State of Delaware, and notice is hereby given that the obligations of this
instrument are not binding upon any of the Trustees, officers or shareholders of
the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
CONSTELLATION INVESTMENT MGT. Co, LP
By:__________________________
Name: _______________________
Title: ______________________
JS ASSET MANAGEMENT LLC
By: _________________________
Name: _______________________
Title: ______________________
SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
LISTING OF FUND(s)
NAME OF FUND
JSAM Large Cap Value Portfolio
JSAM Value Portfolio
SCHEDULE B
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
NAME OF PORTFOLIO ANNUAL BASIC FEE RATE
---------------------------------- ---------------------------------------------
JSAM Large Cap Value Fund 0.40% on assets up to $250m;
0.35% on assets thererafter
JSAM Value Fund 0.50% on assets up to $250m;
0.45% on assets thererafter
