SUBADVISORY AGREEMENT
This Subadvisory Agreement is made and entered into on this 7th day of May 2002
and is effective as of the 28th day of June 2002 by and between Caterpillar
Investment Management, Inc. a Delaware corporation (the "Sub-Adviser"), and
Orbitex Management, Inc., a New York corporation (the "Adviser") and Orbitex
Group of Funds, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Adviser is engaged pursuant to an Investment Advisory Agreement
(the "Advisory Agreement") dated April 9, 1997, and amended on March 16, 2000,
with the Trust in the investment of the Trust's assets in accordance with the
Trust's Prospectus and Declaration of Trust (collectively the "Prospectus"); and
WHEREAS, pursuant to the Advisory Agreement, the Adviser may delegate its
responsibilities for the management of the investment of the assets of one or
more Funds of the Trust to one or more sub-advisers; and
WHEREAS, the Adviser desires, with the consent of the Trust, to so delegate
responsibility for management of the investments of one or more Funds of the
Trust to the Sub-Adviser, and the Sub-Adviser agrees to manage the investment of
one or more Funds in accordance with this Subadvisory Agreement and Prospectus;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Adviser, with the consent of the Trust, hereby appoints the
Sub-Adviser to act as the investment adviser with respect to one or
more funds (singly or collectively the "Fund") as identified in
"Schedule A", which is attached hereto and by this reference is
incorporated herein. The Sub-Adviser hereby accepts such appointment
and agrees to render the services herein set forth, for the
compensation set forth on Schedule B, which is attached hereto and by
this reference is incorporated herein. The Adviser represents to the
Sub-Adviser that it is authorized pursuant to the Advisory Agreement to
delegate to the Sub-Adviser all of the services to be performed by the
Sub-Adviser pursuant hereto.
2. Subject to the supervision of the Trustees of the Trust and the
Adviser, the Sub-Adviser will have discretionary authority to manage
the securities and investments (including cash) of the Fund, including
the purchase, retention and disposition thereof, and the execution of
agreements relating thereto in accordance with the Fund's investment
objectives, policies and restrictions as those are stated in the
Prospectus and further subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment
program to the Fund and in so doing shall determine
from time to time what investments or securities will
be purchased, retained or sold by the Fund, and what
portion of the assets will be invested or held
uninvested as cash;
(b) The Sub-Adviser in the performance of its duties and
obligations under this Agreement shall act in
conformity with the Trust's Agreement, the
Declaration
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of Trust, Bylaws and the Prospectus of the Trust, and
with the written instructions and written directions
of the Trustees of the Trust and, to the extent
consistent therewith and herewith, of the Adviser,
and will conform to and comply with the requirements
of the Investment Company Act of 1940, as amended
(the "1940 Act"), and all other applicable federal
and state laws and regulations;
(c) The Sub-Adviser shall determine the securities to be
purchased or sold by the Fund and, as agent for the
Fund, will effect transactions pursuant to its
determinations either directly with the issuer or
with or through any broker and/or dealer in such
securities. The Sub-Adviser shall also determine
whether or not the Fund shall enter into repurchase
agreements or engage in any other investment
transactions or techniques that are consistent with
subsection (b) above;
(d) The Sub-Adviser shall maintain such books and records
with respect to the securities transactions of the
Fund as may be required to be maintained by an
investment adviser of an investment company under the
1940 Act and shall render to the Adviser or Adviser's
designees, such periodic and special reports as the
Adviser may reasonably request;
(e) The Sub-Adviser shall, to the extent the information
is within its control, provide or cause to be
provided to the Trust's Custodian all reasonably
requested information relating to all transactions
concerning the assets of the Fund (other than share
transactions of the Fund);
(f) The investment advisory services of the Sub-Adviser
to the Fund under this Subadvisory Agreement are not
to be deemed exclusive, and the Sub-Adviser shall be
free to render similar service to others;
(g) The Sub-Adviser is authorized, subject to the
supervision of the Adviser and the Trustees of the
Trust, to place orders for the purchase and sale of
the Fund's investments with or through such persons,
brokers or dealers including the Sub-Adviser or
affiliates thereof, and to negotiate commissions to
be paid in such transactions in accordance with the
Fund's policy with respect to brokerage as set forth
in the Prospectus. The Sub-Adviser may, on behalf of
the Fund, pay brokerage commissions to a broker which
provides brokerage and research services to the
Sub-Adviser in excess of the amount another broker
would have charged for effecting the transaction and
the Sub-adviser shall not be deemed to have acted
unlawfully or to have breached any duty under this
agreement, provided the Sub-Adviser determines in
good faith that the amount is reasonable in relation
to the value of the brokerage and research services
provided by the executing broker in terms of the
particular transaction or in terms of the
Sub-Adviser's overall responsibilities with respect
to the Fund and the accounts as to which the
Sub-Adviser exercises investment discretion. It is
recognized that the services provided by such brokers
may be useful to the Sub-Adviser in connection with
the Sub-Adviser's services to other clients.
(h) On occasions when the Sub-Adviser deems the purchase
or sale of a security to be in the best interest of
the Fund as well as other clients, the Sub-Adviser
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may, to the extent permitted by applicable law and
regulations, but shall not be obligated to, aggregate
the securities to be so sold or purchased in order to
obtain the best execution or lower brokerage
commissions, if any. In such event, allocation of the
securities so sold or purchased, as well as the
expenses incurred in the transaction, will be made by
the Sub-Adviser in the manner it considers to be the
most equitable and consistent with its fiduciary
obligations to the Fund and, if applicable, to such
other clients.
(i) The Trust and the Adviser acknowledge that in order
to comply with U.S. securities laws and related
regulatory requirements, there may be periods when
the Sub-Adviser will not be permitted to initiate or
recommend certain types of transactions in the
securities of issuers for which affiliates of the
Sub-Adviser performing investment banking services,
and neither the Trust nor the Adviser will be advised
of that fact. For example, during certain periods
when affiliates of the Sub-Adviser are engaged in an
underwriting or other distribution of a company's
securities, the Sub-Adviser may be prohibited from
purchasing or recommending the purchase of certain
securities of that company for its clients.
Similarly, the Sub-Adviser may on occasion be
prohibited from selling or recommending the sale of
securities of a company for which affiliates are
providing investment-banking services.
(j) The Sub-Adviser shall provide marketing support to
the Adviser in connection with the sale of Trust
shares, as reasonably requested by the Adviser. Such
support shall include, but not necessarily be limited
to, presentations by the portfolio manager designated
from time to time by the Sub-Adviser to manage the
Sub-Adviser's duties under this Sub-advisory
agreement (the "Portfolio Manager") at investment
seminars, conferences and other industry meetings,
provided that the Sub-Adviser shall not be required
to make the Portfolio Manager available for purposes
of this Section 2(j) more than three (3) days per
calendar month or what is mutually agreed upon. Any
materials utilized by the Adviser which contain any
information relating to the Sub-Adviser shall be
submitted to the Sub-Adviser for approval prior to
use, not less than five (5) business days before such
approval is needed by the Adviser. Any materials
utilized by the Sub-Adviser which contain any
information relating to the Adviser or the Trust
shall be submitted to the Adviser for approval prior
to use, not less than five (5) business days before
such approval is needed by the Sub-Adviser, which
approval shall not be unreasonably withheld.
(k) The Trust and the Adviser represent that the
shareholders of the Fund have approved this
Sub-advisory agreement in accordance with the 1940
Act and that they have delivered true and correct
copies to the Sub-Adviser of, and agree to promptly
notify and deliver to the Sub-Adviser all future
amendments and supplements to, the Prospectus, the
Trust's Declaration of Trust, the Trust's Bylaws,
resolutions or other instructions of the Trustees or
the Adviser relevant to the Sub-Adviser's performance
of its duties under this Agreement, the Advisory
Agreement and the Trust's Declaration of Trust at
least five (5) business days prior to effectiveness.
(l) Except as provided in Schedule B, the Sub-Adviser
will bear all its expenses in connection with the
performance of its services under this Sub-Advisory
Agreement. All other expenses to be incurred in the
operation of the Fund
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(other than those borne by the Adviser) will be borne
by the Fund, except to the extent specifically
assumed by the Sub-Adviser.
3. The Sub-Adviser agrees that all records which it maintains for the Fund
pursuant to Section 2(d) of this Subadvisory Agreement are the property
of the Trust and will promptly surrender any of such records (or copies
of any such records of which the Sub-Adviser is required by law to
retain the originals) to the Adviser upon the Trustees' or the
Adviser's request. If applicable, the Sub-Adviser shall preserve all
records as required to be maintained by U.S. law.
4. For performance of the services hereunder with respect to the Fund, the
Adviser shall pay the Sub-Adviser pursuant to the Fee Schedule
contained in Schedule B. The fee prescribed in Schedule B shall be
calculated daily and payable monthly in arrears at an annual rate per
Schedule B of the Fund's average daily net assets for the preceding
month. Adviser shall be responsible for certain of Sub-Adviser's
expenses as set forth in Schedule B.
5. The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust, Fund or the
Adviser in connection with the matters to which this Subadvisory
Agreement relates, except for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Subadvisory Agreement.
6. The term of this Subadvisory Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided,
this Subadvisory Agreement shall remain in effect for a period of two
years from the date of this Subadvisory Agreement. Thereafter, this
Subadvisory Agreement shall continue in effect with respect to the
Funds from year to year, subject to the termination provisions and all
other terms and conditions hereof; provided such continuance with
respect to the Fund is in accordance with the Trust's Declaration of
Trust and the 1940 Act and the rules thereunder. The Sub-Adviser shall
furnish to the Trust or the Adviser, promptly upon its request, such
information as may reasonably be necessary to evaluate the terms of
this Subadvisory Agreement or any extension, renewal or amendment
thereof. This Subadvisory Agreement may be terminated at any time by
any party hereto, without the payment of any penalty, upon sixty (60)
days prior written notice to the other parties. This Sub-advisory
Agreement shall terminate automatically in the event of its assignment
(as that term is defined in the 1940 Act and the rules thereunder).
7. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall not, unless otherwise expressly
provided herein or authorized by the Trustees or the Adviser of the
Trust from time to time, have any authority to act for or represent the
Fund or Trust in any way or otherwise be deemed to be an agent of the
Fund or the Trust.
8. This Subadvisory Agreement may be amended only by a writing signed by
both parties and in accordance with Trust's Declaration of Trust and
the 0000 Xxx.
9. Any notice that is required to be given by the parties to each other
under the terms of this Subadvisory Agreement shall be in writing,
delivered, or mailed postpaid to the other party, or transmitted by
facsimile with acknowledgment of receipt, to the parties at the
following addresses or facsimile numbers, which may from time to time
be changed by the parties by notice to the other party:
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(a) If to the Sub-Adviser:
Caterpillar Investment Management, Inc. 000 Xxxxxxxx Xxxxxxxxx,
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xx. Xxxxx Xxxxxxxxx
(b) If to the Adviser:
Orbitex Management, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000.000.0000
Facsimile: 212.891.7939
Attention: M. Fyzul Khan
(c) If to the Trust:
Orbitex Group of Funds
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000.000.0000
Facsimile: 212.207.8464
Attention: M. Fyzul Khan
10. This Subadvisory Agreement shall be governed and construed in
accordance with the laws of the State of New York.
11. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have caused this Subadvisory
Agreement to be executed by their respective officers designated below
as of the day and year first above written.
ORBITEX Group of Funds
By: __________________________
Xxxxxxx X. Xxxxxxxxx, Chairman
ORBITEX Management, Inc.
By: ___________________________
Xxxx Xxxxxxxx, President
Caterpillar Investment Management, Inc.
By: ____________________________
Xxxxx Xxxxxxxxx, President
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SCHEDULE A
NAME OF FUND
ORBITEX Caterpillar Mid Cap Relative Value Fund
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SCHEDULE B
The compensation payable to the Sub-Adviser by the Adviser shall be forty (40)
basis points (0.40%) on average net assets, calculated monthly in arrears, and
paid by the fifth business day of each month. For the purpose of determining
fees payable to the Sub-Adviser, the value of the Fund's net assets shall be
computed at the times and in the manner specified in the Prospectus.
Upon any termination of this Subadvisory Agreement before the end of a month,
the fee for such part of that month shall be prorated according to the
proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Subadvisory Agreement.
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