XXXXXX STREET FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed this 1st day of July 2002, by and between Xxxxxx Street
Capital Management (the "Adviser") and BNP Paribas Asset Management, Inc. (the
"Sub-Adviser").
WHEREAS, the Adviser is the investment adviser for the Xxxxxx Street
Funds, an open-end management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act") (the "Trust"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for the Xxxxxx Street Strategic Growth
Fund, an investment portfolio of the Trust (the "Fund").
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 Fund 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. Each of the Adviser and the Sub-Adviser represent and warrant that it
has full legal capacity, power, consents and authority to execute this
Agreement, to perform its obligations hereunder and to enable all transactions
contemplated hereby to be effected. The Adviser represents and warrants that the
Trust has adopted such compliance policies and procedures to guard against money
laundering activities as are required under the USA Patriot Act and any other
applicable laws and regulations; alternatively, the Adviser undertakes to obtain
that the Trust represents and warrants the same.
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 Amended and Restated Agreement and Declaration of
Trust, as filed with the Secretary of Commonwealth of Massachusetts on
September 1, 1994, and all amendments 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 amendments thereto;
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Sub-Adviser and approving this Agreement;
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(d) The Trust's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission (the
"SEC") and all amendments thereto;
(e) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (File No. 33-80514) and under the 1940
Act as filed with the SEC and all amendments thereto insofar as such
Registration Statement and such amendments relating to the Fund; and
(f) The Trust's most recent prospectus and Statement of Additional
Information for the Fund as presently in effect, and all amendments and
supplements thereto.
The Adviser will furnish the Sub-Adviser from time to time with copies of
all amendments of or supplements to the foregoing.
The Adviser acknowledges receipt of Part II of Form ADV from the
Sub-Adviser.
3. Management. Subject always 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 Fund and
place all orders for the purchase and sale of securities, all on behalf of the
Fund. In the performance of its duties, the Sub-Adviser will satisfy its
fiduciary duties to the Fund (as set forth in Section 8, below), and will
monitor the Fund's investments, 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 Fund as provided
by the Adviser from time to time. The Adviser acknowledges that the Sub-Adviser
cannot guarantee that the Fund's investment objective will be attained. The
Sub-Adviser and 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 Fund and to consult with each other regarding the investment affairs of the
Fund. The Sub-Adviser shall also make itself reasonably available to the Board
of Trustees at such times as the Board of Trustees shall request.
The Sub-Adviser represents and warrants that it is registered as an
investment adviser with the SEC and 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 Fund either directly with the issuer or with any broker or dealer.
In placing orders with brokers or dealers, the Sub-Adviser will take
reasonable care to obtain the best
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combination of prompt execution of orders in an effective manner and at
the most favorable net price at the time of dealing for the size of the
transaction. 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 advice and
other services. In no instance will portfolio securities be purchased from
or sold to the Adviser, the Sub-Adviser, SEI Investments Distribution Co.
or any affiliated person of either the Trust, Adviser, SEI Investments
Distribution Co. 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
the Fund, including, without limitation, review of the general investment
strategies of the Fund, respectively, the performance of the Fund 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 in
writing;
(e) will maintain books and records with respect to the Trust's
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;
(f) will act upon instructions from the Adviser not inconsistent
with the fiduciary duties hereunder; and
(g) will treat confidentially and as proprietary information of
the Trust all such records and other information relative to the Trust
maintained by the Sub-Adviser, and will not use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in
writing by the Trust, which approval shall not be unreasonably withheld
and may not be withheld where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by the Trust.
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 the Fund to the extent
permitted by applicable law.
If the Sub-Adviser deems the purchase or sale of a security to be in the
best interest of the Trust as well as other clients, the Sub-Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. However, on occasions aggregation may
result in obtaining a less favorable price. Allocation of the securities so
purchased or sold, as
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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 Trust and to such other clients and
applicable laws and regulations.
Performance by the Sub-Adviser of its duties hereunder may not be delegated to a
third-party. In compliance with all applicable laws and regulations, however,
the Sub-Adviser may utilize the services of its affiliated companies in carrying
out any or all of its duties. With respect to the use of such affiliates (and
their personnel) for the provision of investment advisory services, the
Sub-Adviser represents that it will comply with Unibanco (pub. avail. July 28,
1992), its progeny and such other no-action letters or U.S. Securities and
Exchange Commission rules, regulations and staff interpretive positions as may
be subsequently issued. The Sub-Adviser shall be liable for the acts or
omissions of such affiliates and their directors, partners, officers, employees,
or any other persons that the Sub-Adviser hires, employs, or contracts with, to
assist it in rendering services to the fund (for the avoidance of doubt, such
persons shall not include any brokers, dealers, clearing houses or other market
counterparties utilised by the Sub-Adviser) as if it performed such acts or
omissions itself.
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 Fund, 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
at an annual rate of 0.37% of the average daily net assets of each Fund. This
fee will be computed daily and paid to the Sub-Adviser quarterly.
In connection with this section 6, the Sub-Adviser acknowledges and agrees that
the Adviser may waive all or any portion of its management fee at such times and
for such periods of time as it determines in its sole and absolute discretion.
In the event of a partial waiver, the Sub-Adviser's fee shall be reduced pro
rata.
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. In addition, the Adviser understands 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
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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.
8. Standard of Care. The Sub-Adviser shall discharge its duties under
this Agreement with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims. The federal securities laws impose
liabilities under certain circumstances on persons who act in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation of
any rights which the Adviser may have against the Sub-Adviser under any federal
securities laws based on negligence and which cannot be modified in advance by
contract.
9. Limitation of Liability. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any act or omission in carrying out
its duties hereunder nor for any underperformance of the Fund, except a loss
resulting from willful misfeasance, bad faith or negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties hereunder. Each of the Adviser and Sub-Adviser agrees to indemnify the
other and hold it harmless from and against any and all actions, suits and
claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of the indemnifying party's willful
misfeasance, bad faith or negligence in the performance of its duties, or by
reason of its reckless disregard of its obligations and duties hereunder.
10. Duration and Termination. This Agreement will become effective as of
the date hereof provided that it has been approved by vote of a majority of the
outstanding voting securities of the Fund in accordance with the requirements
under the 1940 Act, and, unless sooner terminated as provided herein, will
continue in effect for two years.
Thereafter, if not terminated, this Agreement will continue in
effect for the Fund for successive periods of twelve (12) months, each ending on
the day preceding the anniversary of the Agreement's effective date of 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 by the
vote of a majority of all votes attributable to the outstanding shares of the
Fund. Notwithstanding the foregoing, this Agreement may be terminated as to the
Fund at any time, without the payment of any penalty, on not more than sixty
(60) days' and not less than thirty (30) days' written notice by the Adviser or
by the Sub-Adviser. This Agreement will immediately terminate in the event of
its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities", "interested persons" and "assignment" have the
same meaning of such terms in the 1940 Act.)
This Agreement will terminate automatically if the investment advisory
agreement between the Trust and the Adviser is terminated in which case the
Adviser will immediately notify the Sub-Adviser in writing.
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11. Amendment of this Agreement. 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.
12. Multiple Originals. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same document.
13. Custody. All securities and other assets of the Fund shall be
maintained with a custodian designated by the Adviser notified by the Adviser to
the Sub-Adviser. Sub-Adviser shall have no responsibility or liability with
respect to any custodial function. The Adviser shall direct the Custodian to
settle purchase and sale transactions entered into by the Sub-Adviser and to
provide the Sub-Adviser with the appropriate authorizations or information it
may request to enable it to effect transactions for the Fund.
14. 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. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and will be governed by the laws of the Commonwealth of
Massachusetts.
15. Entire Agreement. This Agreement constitutes the entire
understanding between the parties relating to the Trust and the Fund and
supersedes all prior understandings, arrangements, representations, proposals or
communications between the parties, whether written or oral.
16. Notices and Communications: All notices or communications will be
despatched or transmitted to the parties at the addresses shown below:
The Adviser:
Xxxxxx Street Capital Management, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
The Sub-Adviser:
BNP Paribas Asset Management Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000.
or at such other address as one party may notify in writing to the other
from time to time. All notices shall be effective, except where otherwise
provided in this Agreement, upon actual receipt.
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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.
XXXXXX STREET CAPITAL MANAGEMENT
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
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Title: President
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BNP PARIBAS ASSET MANAGEMENT, INC.
By: /s/ Xxx xx Xxxxxxx
--------------------------------
Name: Xxx xx Xxxxxxx
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Title: Chairman
-----------------------------
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
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Title: CEO
-----------------------------
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