INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of June 30, 2000, by and between Allied
Investment Advisors, Inc., a Maryland corporation (the "Adviser"), AIB Govett,
Inc., a Maryland corporation (the "Sub-Adviser"), and ARK Funds, a Massachusetts
business trust (the "Trust").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and offers for public sale distinct series of shares of beneficial
interest (each a "Portfolio"); and
WHEREAS, the Adviser is the investment adviser for each of the
Portfolios of the Trust; and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for each Portfolio listed in Schedule A
(each a "Fund" and collectively, the "Funds");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to
provide certain sub-investment advisory services to the Funds for the period and
on the terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-
Adviser with copies properly certified or authenticated of each of the
following:
(a) The Trust's Agreement and Declaration of Trust, as filed
with the Secretary of State of the Commonwealth of Massachusetts on
March 19, 1993, and all amendments and supplements thereto or
restatements thereof (such Declaration, as presently in effect and as
it shall from time to time be amended or restated, is herein called the
"Declaration of Trust");
(b) The Trust's By-Laws and all amendments thereto;
(c) Resolutions of the Trust's Board of Trustees authorizing
the appointment of the Sub-Adviser and approving this Agreement;
(d) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), (File No.
33-53690) and under the 1940 Act (File No. 811-7310), as filed with the
Securities and Exchange Commission
("SEC") and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Funds; and
(e) The Trust's most recent prospectus and statement of
additional information for the Funds (such prospectus and statement of
additional information, as presently in effect, and all amendments and
supplements thereto, are herein collectively called the "Prospectus").
The Adviser will furnish the Sub-Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of
Trustees and the Adviser, the Sub-Adviser will furnish an investment program in
respect of, and make investment decisions for, all assets of the Funds and place
all orders for the purchase and sale of securities, all on behalf of the Funds.
In the performance of its duties, the Sub-Adviser will satisfy its fiduciary
duties to the Funds (as set forth in Section 8, below), and will monitor the
investments of each of the Funds, and will comply with the provisions of the
Trust's Declaration of Trust and By-Laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the respective Funds.
The Sub-Adviser and the Adviser will each make its officers and employees
available to the other from time to time at reasonable times to review
investment policies of the Funds and to consult with each other regarding the
investment affairs of the Funds. The Sub-Adviser shall also make itself
available to the Board of Trustees at such times as the Board of Trustees shall
reasonably request.
The Sub-Adviser represents and warrants that it is in compliance
with all applicable rules and regulations of the SEC pertaining to its
investment advisory activities and agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(b) will conform with all applicable rules and regulations
of the SEC pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment
determinations for the Funds either directly with the issuer or with
any broker or dealer. In placing orders with brokers or dealers, the
Sub-Adviser will attempt to obtain the best combination of prompt
execution of orders in an effective manner and at the most favorable
price. Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the
Sub-Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Sub-Adviser
with research, analysis, advice and other services. In no instance will
portfolio securities be purchased from or sold to any affiliated person
of either the Trust, the Adviser, or the Sub-Adviser, except as may be
permitted under the 1940 Act;
(d) will report regularly to the Adviser and will make
appropriate persons available for the purpose of reviewing at
reasonable times with representatives of the Adviser and the Board of
Trustees the management of each of the Funds, including,
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without limitation, review of the respective investment strategies of
the Funds, the performance of the Funds in relation to standard
industry indices, interest rate considerations and general conditions
affecting the marketplace and will provide various other reports from
time to time as reasonably requested by the Adviser;
(e) will maintain books and records with respect to the Funds'
securities transactions and will furnish the Adviser and the Trust's
Board of Trustees such periodic and special reports as the Board of
Trustees or the Adviser may request; and
(f) will act upon instructions from the Adviser not
inconsistent with the fiduciary duties hereunder.
The Sub-Adviser shall have the right to execute and deliver, or cause
its nominee to execute and deliver, all proxies and notices of meetings and
other notices affecting or relating to the securities of each of the Funds.
4. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Funds, on behalf of the Trust, are the property of the Trust
and further agrees to surrender promptly to the Trust any of such records upon
the Trust's request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement.
6. COMPENSATION. 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 as
set forth on Schedule A attached to this Agreement.
7. SERVICES TO OTHERS. The Adviser understands, and has advised the
Trust's Board of Trustees, that the Sub-Adviser now acts, and may in the future
act, as an investment adviser to fiduciary and other managed accounts, and as
investment adviser, sub-investment adviser, and/or administrator to other
investment companies. The Adviser has no objection to the Sub-Adviser's acting
in such capacities, provided that whenever the Fund and one or more other
investment companies advised by the Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed by the Sub-Adviser to be equitable to each
company. The Adviser recognizes, and has advised the Trust's Board of Trustees,
that in some cases this procedure may adversely affect the size of the position
that a Fund may obtain in a particular security. In addition, the Adviser
understands, and has advised the Trust's Board of Trustees, that the persons
employed by the Sub-Adviser to assist in the Sub-Adviser's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement will be deemed to limit or restrict the right of the
Sub-Adviser or any of its affiliates to engage in and devote time and attention
to other businesses or to render services of whatever kind or nature so long as
its services under this Agreement are not impaired thereby.
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8. LIMITATION OF LIABILITY OF SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgement or mistake of law or for any loss suffered by
the Funds or the Adviser in connection with the matters to which this Agreement
relates including, without limitation, losses that may be sustained in
connection with the purchase, holding, redemption, or sale of any security on
behalf of the Funds, except a loss resulting from the willful misfeasance, bad
faith or gross negligence of the Sub-Adviser in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
9. DURATION AND TERMINATION. As to each Fund, this Agreement will
become effective as of the date set forth on Schedule A provided that it
has been approved by vote of a majority of the outstanding voting securities of
the respective Fund in accordance with the requirements under the 1940 Act, and,
unless sooner terminated as provided herein, will continue in effect for
successive periods of 12 months, each ending on the day preceding the
anniversary of the Agreement's effective date for such Fund in each year,
PROVIDED that such continuation is specifically approved at least annually (a)
by the vote of a majority of those members of the Trust's Board of Trustees who
are not interested persons of the Trust, the Sub-Adviser, or the Adviser, cast
in person at a meeting called for the purpose of voting on such approval, and
(b) by the vote of a majority of the Trust's Board of Trustees or, as to each
Fund, by the vote of the holders of a majority of the outstanding voting
securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to
any or all Funds at any time, without the payment of any penalty, by the
Adviser, by vote of the Board of Trustees of the Trust or by vote of a majority
of the outstanding voting securities of a Fund on sixty (60) days' written
notice to the Sub-Adviser and by the Sub-Adviser on sixty (60) days' written
notice to the Adviser and the Trust. This Agreement will terminate automatically
upon termination of the investment advisory agreement between the Trust and the
Adviser. This Agreement will automatically and immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person" and "assignment" have the
same meanings of such terms in the 1940 Act). Termination of this Agreement with
respect to any Fund shall in no way affect the continued validity of this
Agreement or the performance thereunder with respect to any other Fund.
10. AMENDMENT OF THIS AGREEMENT. No material provision of this
Agreement may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby.
The names "ARK Funds" and "Trustees of ARK Funds" refer respectively to
the Trust created by, and the Trustees, as trustees but not individually or
personally, acting from time to time under, the Declaration of Trust, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of State of the Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "ARK Funds" entered in the name or on behalf thereof
by any of the Trustees, representatives or agents are
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made not individually but only in such capacities and are not binding upon any
of the Trustees, shareholders or representatives of the Trust personally, but
bind only the assets of the Trust. Persons dealing with a Fund must look solely
to the assets of the Trust belonging to the Fund for the enforcement of any
claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
ALLIED INVESTMENT ADVISORS, INC.
By: /s/J. Xxxx Xxx
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Name: J. Xxxx Xxx
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Title: Chief Investment Officer
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AIB GOVETT, INC.
By: /s/ Colin Kreidewolf
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Name: Colin Kreidewolf
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Title: Senior Vice President
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ARK FUNDS
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Senior Vice President
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