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Exhibit (d)(2)
FORM OF
SUB-ADVISORY AGREEMENT
October 30, 2000
Xxxxx & Xxxx Asset Management L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
WHEREAS, we have entered into a Management Agreement with The Valiant
Fund (the "Fund"), dated July 29, 1993 (the "Management Agreement") pursuant to
which we have been employed to manage the investment and reinvestment of the
Fund, subject to the general control of the Fund's Board of Trustees; and
WHEREAS, pursuant to the Management Agreement we have selected Xxxxx &
Tang Asset Management L.P., as our Sub-Advisor.
We herewith confirm our agreement with you as follows:
1. The Fund, as provided in the Management Agreement, engages in the
business of investing and reinvesting the assets of its various series
of shares (each a "Series") in securities of the types, and in
accordance with the limitations, specified in its Agreement and
Declaration of Trust, By-Laws and Registration Statement filed with the
Securities and Exchange Commission under the Investment Company Act of
1940 (the "1940 Act") and the Securities Act of 1933, including the
Prospectuses forming a part thereof (the "Registration Statement"), all
as from time to time in effect, and in such manner and to such extent
as may from time to time be authorized by the Fund's Board of Trustees.
We enclose copies of the documents listed above and will furnish you
such amendments thereto as may be made from time to time.
2. (a) We have been employed to manage the investment and reinvestment of
the Series' assets as above specified, and, without limiting the
generality of the foregoing, to provide the investment management
services specified in the Management Agreement.
(b) Subject to the general control of the Board of Trustees, we
hereby subcontract with you to implement a continuous
investment program for each of the Series and to make
decisions with respect to all purchases and sales of the
portfolio securities. To carry out such decisions, you are
hereby authorized, as our agent and attorney-in-fact, to place
orders for the investment and reinvestment of the Series'
assets. In all purchases, sales and other transactions in the
Fund's portfolio securities you are authorized to exercise
full discretion and act for us in the same manner and with the
same force and effect as the Fund itself might or could do
with respect to such purchases, sales or other transactions,
as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases,
sales or other transactions.
(c) You will report to the Fund's Board of Trustees, if requested,
at each meeting thereof all changes in the Series' portfolios
since your prior report, and will also keep us in touch with
important developments
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affecting the Series' portfolios and, on your initiative, will
furnish us from time to time with such information as you may
believe appropriate for these purposes, whether concerning the
individual entities whose securities are included in the
Series' portfolios, the activities in which such entities
engage, Federal income tax policies applicable to our
investments, or the conditions prevailing in the money markets
or the economy generally. You will also furnish us with such
statistical and analytical information with respect to the
Series' portfolio securities as you may believe appropriate or
as we may reasonably request. In making such purchases and
sales of the Series' portfolio securities, you will comply
with the policies set from time to time by the Fund's Board of
Trustees as well as the limitations imposed by our Agreement
and Declaration of Trust and by the provisions of the Internal
Revenue Code and the 1940 Act relating to regulated investment
companies and the limitations contained in the Registration
Statement.
(d) It is understood that you may from time to time employ,
subcontract with or otherwise associate with yourself,
entirely at your expense, such persons as you believe to be
particularly fitted to asset you in the execution of your
duties hereunder.
(e) You or your affiliates with also furnish us at your own
expense such investment advisory supervision and assistance as
you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to
which you may be subject.
3. We will expect of you, and you will give us the benefit of, your best
judgment and efforts in rendering these services to us and the Fund,
and we agree as an inducement to your undertaking these services that
you will not be liable hereunder for any mistake of judgment or for any
other cause, provided that nothing herein shall protect you against any
liability to us, the Fund, or to the Fund's security holders by reason
of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless
disregard of your obligations and duties hereunder.
4. In consideration of the foregoing we will pay you according to the
following schedule, based upon the aggregate average daily net assets
of the Fund's four Series:
FEE SCHEDULE
Level of Assets Fee in basis points
--------------- -------------------
First $500 million 6.0
Next $1 billion 5.0
Next $500 million 4.0
Over $2 billion 3.5
Your fee will be accrued daily, and will be payable on the last day of
each calendar month for services performed hereunder during that month,
or at such other times as you and we may agree from time to time. You
will be entitled to a minimum monthly fee of $30,000 in any month in
which the monthly calculation based on the fee schedule is less than
$30,000.
5. This Agreement will become effective on the date hereof and shall
continue in effect in respect of a Series for two years from the date
of this Agreement, and thereafter for successive twelve-month periods,
provided that such continuation is specifically approved at least
annually by the Fund's Board of Trustees or by a vote of a majority of
the outstanding voting securities, as defined in the 1940 Act and the
rules thereunder, of the Series in question and in either case, by a
majority of those of the Fund's trustees who are neither party to this
Agreement nor, other than by their service as trustees of the trust,
interested persons, as defined in the 1940 Act and the rules
thereunder, of any such person who is party to this Agreement. This
Agreement may be terminated at any time without the payment of any
penalty as to a Series (i) by vote of a
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majority of the Series's outstanding voting securities, as defined in
the 1940 Act and the rules thereunder, (ii) by the Fund's Board of
Trustees, on sixty days' written notice to you, (iii) by us on sixty
days' written notice to you, (iv) by you on sixty days' written notice
to us, or (v) upon the termination of the Management Agreement.
6. This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by you and this agreement shall terminate
automatically in the event of such transfer, assignment, sale,
hypothecation or pledge by you. The terms "transfer", "assignment" and
"sale" as used in this paragraph shall have the meanings ascribed
thereto by governing law and in applicable rules or regulations of the
Securities and Exchange Commission.
7. Except to the extent necessary to perform your obligations hereunder,
nothing herein shall be deemed to limit or restrict your right, or the
right of any of your employees, who may also be a director, officer or
employee of the Fund, or of a person affiliated with the Fund, as
defined in the 1940 Act, to engage in any other business or to devote
time and attention to the management or other aspects of any other
business, whether or a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or
association.
If the foregoing is in accordance with your understanding, you will
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
INTEGRITY MANAGEMENT & RESEARCH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President, The Valiant Fund
ACCEPTED:
XXXXX & XXXX ASSET MANAGEMENT L.P.
By: XXXXX & TANG ASSET MANAGEMENT, INC., as General Partner
By: /s/ Xxxxxxx Xx Xxxxxxx
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Name: Xxxxxxx Xx Xxxxxxx
Title: Chief Financial Officer, Xxxxx & Xxxx Asset Management L.P.
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