IMPACT MANAGEMENT INVESTMENT TRUST
SUB-INVESTMENT ADVISER AGREEMENT
--------------------------------
AGREEMENT, made January ___, 2001, between Equity Assets Management,
Inc. (the "Fund Manager"), Xxxxxxxxx Capital Management Corporation (the
"Sub-Adviser"), a Pennsylvania Corporation, and Impact Management Investment
Trust.
WHEREAS, the Fund Manager has entered into an Investment Advisory
Agreement with Impact Management Investment Trust (the "Company") pursuant to
which the Fund Manager acts as the adviser to Impact Total Return Portfolio
("Fund");
WHEREAS, the Company is a Massachusetts Business Trust authorized to
issue shares in series and classes and is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the Fund is one series of the Company;
WHEREAS, the Sub-Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, the Fund Manager wishes to retain the Sub-Adviser to render
investment advisory services in connection with the management of the Fund, and
the Sub-Adviser is willing to furnish such services to the Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Fund Manager, the Sub-Adviser, and
the Company on behalf of the Fund as follows:
1. Appointment
-----------
The Fund Manager, with the consent and approval of the Company and its
shareholders, hereby appoints the Sub-Adviser to act as Sub-Investment Adviser
to the Fund for the period and on the terms set forth herein. The Sub-Adviser
accepts the appointment and agrees to furnish the services set forth herein for
the compensation provided herein.
2. Services as Sub-Investment Adviser
----------------------------------
Subject to the general supervision and direction of the Board of
Trustees of the Company, the Sub-Adviser will (a) manage the Fund in accordance
with the Fund's Prospectuses and Statement of Additional Information filed with
the Securities and Exchange Commission, as they may be amended from time to
time; (b) make investment decisions for the Fund; (c) place purchase and sale
orders on behalf of the Fund; and (d) employ professional portfolio managers and
securities analysts to provide research services to the Fund. In providing those
services, the Sub-Adviser will provide the Fund ongoing research, analysis,
advice, and judgments regarding individual investments, general economic
conditions and trends and long-range investment
policy. In addition, the Sub-Adviser will furnish the Fund with whatever
statistical information the Fund may reasonably request with respect to the
securities that the Fund may hold or contemplate purchasing.
The Sub-Adviser further agrees that, in performing its duties
hereunder, it will:
a. comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code") and all
other applicable federal and state laws and regulations, and with any applicable
procedures adopted by the Trustees;
b. use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder,
c. maintain books and records with respect to the Fund's securities
transactions, render to the Board of Trustees of the Company such periodic and
special reports as the Board may reasonably request, and keep the Trustees
informed of developments materially affecting the Fund's portfolio;
d. make available to the Fund's administrator, and the Company, promptly
upon their request, such copies of any investment records and ledgers with
respect to the Fund as may be required to assist the administrator and the
Company in their compliance with applicable laws and regulations. The
Sub-Adviser will furnish the Trustees with such periodic and special reports
regarding the Fund as they may reasonably request;
e. immediately notify the Company in the event that the Sub-Adviser or
any of its affiliates; (1) becomes aware that it is subject to a statutory
disqualification that prevents the Sub-Adviser from serving as sub-investment
adviser pursuant to this Agreement; or (2) becomes aware that it is the subject
of an administrative proceeding or enforcement action by the Securities and
Exchange Commission ("SEC") or other regulatory authority. The Sub-Adviser
further agrees to notify the company immediately of any material fact known to
the Sub-Adviser respecting or relating to the Sub-Adviser that is not contained
in the Company's Registration Statement regarding the Fund, or any amendment or
supplement thereto, but that is required by federal regulation to be disclosed
therein, and of any statement contained therein that becomes untrue in any
material respect.
3. Documents
---------
The Fund has delivered properly certified or authenticated copies of
each of the following documents to the Sub-Adviser and will deliver to it all
future amendments and supplements thereto, if any:
a. certified resolution of the Board of Trustees of the Company
authorizing the appointment of the Sub-Adviser and approving the form of this
Agreement;
-2-
b. the Registration Statement as filed with the Securities and Exchange
Commission and any amendments thereto;
c. exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration Statement
described above.
4. Brokerage
---------
Subject to the Sub-Adviser's obligation to obtain best execution, the
Sub-Adviser shall have full discretion to select brokers or dealers to effect
the purchase and sale of securities. When the Sub-Adviser places orders for the
purchase or sale of securities for the Fund, in selecting brokers or dealers to
execute such orders, the Sub-Adviser is expressly authorized to consider the
fact that a broker or dealer has furnished statistical research or other
information or services for the benefit of the Fund directly or indirectly.
Without limiting the generality of the foregoing, the Sub-Adviser is authorized
to cause the Fund to negotiate and pay brokerage commissions which may be in
excess of the lowest rates available to brokers who execute transactions for the
Fund or who otherwise provide brokerage and research services utilized by the
Sub-Adviser, provided that the Sub-Adviser determines in good faith that the
amount of each such commission paid to a broker is reasonable in relation to the
value of the brokerage and research services provided by such broker viewed in
terms of either the particular transaction to which the commission relates or
the Sub-Adviser's overall responsibilities with respect to accounts as to which
the Sub-Adviser exercises investment discretion. The Sub-Adviser may aggregate
securities orders so long as the Sub-Adviser adheres to a policy of allocating
investment opportunities to the Fund over a period of time on a fair and
equitable basis relative to other clients. In no instance will the Fund's
securities be purchased from or sold to the Fund's principal underwriter, the
Sub-Adviser, or any affiliated person thereof, except to the extent permitted by
SEC exemptive order or by applicable law.
5. Records
-------
The Sub-Adviser agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be maintained
by the Sub-Adviser with respect to the Fund by the 1940 Act. The Sub-Adviser
further agrees that all records which it maintains for the Fund are the property
of the Fund and it will promptly surrender any of such records upon request.
6. Standard of Care
----------------
The Sub-Adviser shall exercise its best judgment in rendering the
services under this Agreement. The Sub-Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund or the Fund's
shareholders in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Sub-Adviser against any liability to the Fund or to its shareholders to
which the Sub-Adviser would otherwise be subject by reason of misfeasance, bad
faith or negligence on its part in the performance of its duties or by reason of
the Sub-Advisers reckless disregard of its obligations and duties under this
Agreement. As used in this Section 6, the term "Sub-Adviser"
-3-
shall include any officers, directors, employees, or other affiliates of the
Sub-Adviser performing services with respect to the Fund.
7. Compensation
------------
In consideration of the services rendered pursuant to this Agreement,
the Fund Manager will pay the Sub-Adviser a fee at an annual rate equal to 0.60%
of the average daily net assets of the Fund. This fee shall be computed and
accrued daily and payable monthly. For the purpose of determining fees payable
to the Sub-Adviser, the value of the Fund's average daily net assets shall be
computed at the times and in the manner specified in the Fund's Prospectuses or
Statement of Additional Information.
8. Expenses
--------
The Sub-Adviser will bear all expenses in connection with the
performance of its services under this Agreement, with the exception of the cost
of investment securities, commodities or other instruments purchased for the
Fund. The Fund will bear certain other expenses to be incurred in its operation,
including: taxes, interest, brokerage fees and commission, if any, fees of
Trustees of the Company who are not officers, directors or employees of the
Sub-Adviser; Securities and Exchange Commission fees and state blue sky
qualification fees; charges of custodians and transfer and dividend disbursing
agents; the Fund's proportionate share of insurance premiums; outside auditing
and legal expenses; costs of maintenance of the Fund's existence; cost
attributable to investor services, including, without limitation, telephone and
personnel expenses; charges of an independent pricing service; costs of
preparing and printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders' cost of
shareholders reports and meetings of the shareholders of the Fund and of the
officers or Board of Trustees of the Company; and any extraordinary expenses. In
addition, the Fund will pay distribution fees pursuant to Distribution Plans
adopted under Rule 12b-1 of the 1940 Act.
9. Services to Other Companies or Accounts
---------------------------------------
The investment advisory services of the Sub-Adviser to the Fund under
this Agreement are not to be deemed exclusive, and the Sub-Adviser, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Fund) and to engage in other activities, so
long as its services hereunder are not impaired thereby. No provision of this
Agreement shall limit or restrict Sub-Adviser or any such affiliated person from
buying, selling or trading any securities or other investments (including any
securities or other investments which the Fund is eligible to buy) for its or
their own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that Sub-Advisor agrees that it will not undertake
any activities which, in its reasonable judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement.
-4-
10. Duration and Termination
------------------------
This Agreement shall become effective on January ___, 2001, and shall
remain in effect, unless sooner terminated as provided herein, for two years
from such date and shall continue from year to year thereafter, provided each
continuance is specifically approved at least annually by (i) the vote of a
majority of the Board of Trustees of the Company or (ii) a vote of a "majority"
(as defined in the 0000 Xxx) of the Fund's outstanding voting securities,
provided that in either event the continuance is also approved by a majority of
the Board of Trustees who are not "interested persons" (as defined in the 0000
Xxx) of any party to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on sixty (60) days' written notice by the Board of Trustees of
the Company or by vote of holders of a majority of the Fund's shares or by the
Sub-Adviser. This Agreement will also terminate automatically in the event of
its "assignment" (as defined in the 1940 Act).
11. Amendment
---------
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
an affirmative vote of (i) a majority of the outstanding voting securities of
the Fund, and (ii) a majority of the Trustees of the Company, including a
majority of Trustees who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
12. Use of Name
-----------
It is understood that the name of Xxxxxxxxx Capital Management, or any
derivation thereof or logo associated with that name is the valuable property of
the Sub-Adviser and its affiliates, and that the Fund has the right to use such
name (or derivative or logo) only so long as this Agreement shall continue with
respect to the Fund. Upon termination of this Agreement, the Fund shall
forthwith cease to use such name (or derivative or logo).
13. Miscellaneous
-------------
a. This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.
b. Titles or captions of Sections contained in this Agreement are
inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or the intent of
any provisions thereof.
c. This Agreement may be executed in several counterparts, all of which
together shall for all purposes constitute one Agreement, binding on all the
parties.
-5-
d. This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and interpreted, construed and enforced in accordance with
the laws of the state of Pennsylvania.
e. If any provision of this Agreement or the application thereof to any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of this
Agreement or the application of such provision to such person or circumstance,
other than those as to which it is so determined to be invalid or unenforceable,
shall not be affected thereby, and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.
f. Notices of any kind to be given to the Sub-Adviser by the Company or
the Fund Manager shall be in writing and shall be duly given if mailed or
delivered to the Sub-Adviser at: Xxxxxxxxx Capital Management, 000 Xxxx
Xxxxxxxxxx Xxxx, Xxxxx 0000, Xxxxx, XX 00000, or at such other address or to
such individual as shall be specified by the Sub-Adviser to the Company. Notices
of any kind to be given to the Company or the Fund Manager by the Sub-Adviser
shall be in writing and shall be duly given if mailed or delivered to: Impact
Management Investment Trust, 000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000, or at such other address or to such individual as shall be specified by
the Company or the Fund Manager to the Sub-Adviser.
-6-
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first above
written.
Xxxxxxxxx Capital Management
By: _____________________________
President
Equity Assets Management, Inc.
By: _____________________________
President
Impact Management Investment Trust
By: _____________________________
President
-7-
