XXXXXXX ASSET MANAGEMENT CORP.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
OCTOBER 12,1999
XXXXXXX INVESTORS TRUST, on behalf of
Xxxxxxx U.S. Treasury Money Market Fund
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXXXX & TANG ASSET MANAGEMENT, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
SUBADVISORY AGREEMENT
Dear Sirs:
Xxxxxxx Investors Trust (the "trust"), of which Xxxxxxx U.S. Treasury
Money Market Fund (the "fund") is a series, has been organized as a business
trust under the laws of the State of Delaware to engage in the business of an
investment company. The trust's shares of beneficial interest are currently
divided into six series (including the fund), each series representing the
entire undivided interest in a separate portfolio of assets.
The board of trustees of the trust (the "trustees") has selected
Xxxxxxx Asset Management Corp.(the "adviser") to provide overall investment
advice and management for the fund, and to provide certain other services, under
the terms and conditions provided in the investment advisory agreement, dated as
of the date hereof, between the trust, on behalf of the fund, and the adviser
(the "investment advisory agreement").
The adviser and the trustees have selected Xxxxx & Tang Asset
Management, L.P. (the "subadviser") to provide the adviser and the fund with the
advice and services set forth below, and the subadviser is willing to provide
such advice and services, subject to the review of the trustees and overall
supervision of the adviser, under the terms and conditions hereinafter set
forth. The subadviser hereby represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"). Accordingly, the trust, on behalf of the fund, and the adviser
agree with the subadviser as follows:
1. DELIVERY OF DOCUMENTS. The trust has furnished the subadviser with
copies, properly certified or otherwise authenticated, of each of the
following:
(1) agreement and declaration of trust of the trust, dated August 20,
1998 (the "declaration of trust");
(2) by-laws of the trust as in effect on the date hereof;
(3) resolutions of the trustees selecting the subadviser as the
investment subadviser to the fund and approving this subadvisory
agreement (the "agreement");
(4) resolutions of the trustees selecting the adviser as
investment adviser to the fund and approving the
investment advisory agreement and resolutions adopted by the
initial shareholder of the fund approving the investment advisory
agreement;
(5) the adviser's investment advisory agreement;
(6) the fund's prospectus and statement of additional information; and
(7) the trust's code of ethics.
The adviser will furnish the subadviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. INVESTMENT SERVICES. The subadviser will use its best efforts to
provide to the fund continuing and suitable investment advice with
respect to investments, subject always to the provisions of the
trust's declaration of trust and by-laws and the investment Company Act
of 1940, as amended (the "1940 Act"), and to the investment objective,
policies and restrictions (including, without limitation, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code") for qualification as a registered investment
company) of the fund, as each of the same shall be from time to time in
effect as set forth in the fund's prospectus and statement of
additional information, or any investment guidelines or other
instructions received in writing from the adviser, and subject,
further, to such policies and instructions
as the board of trustees may from time to time establish and deliver to
the subadviser.
In the performance of the subadviser's duties hereunder, subject always to the
provisions contained in the documents delivered to the subadviser pursuant to
section 1 above, as from time to time amended or supplemented, the subadviser
will, at its own expense:
(1) furnish the adviser and the fund with advice and
recommendations, consistent with the investment
policies, objectives and restrictions of the fund as
set forth above, with respect to the purchase,
holding and disposition of portfolio securities and
other permitted investments;
(2) furnish the adviser and the fund with advice in
connection with policy decisions to be made by the
board of trustees or any committee thereof about the
fund's investments and, as requested, furnish the
fund with research, economic and statistical data in
connection with the fund's investments and investment
policies;
(3) submit such reports relating to the valuation of the
fund's securities as the adviser may reasonably
request;
(4) subject to prior consultation with the adviser,
assist the fund in any negotiations relating to the
fund's investments with issuers, investment banking
firms, securities brokers or dealers and other
institutions or investors;
(5) consistent with the provisions of Section 7 of this
agreement, place orders for the purchase, sale or
exchange of portfolio securities for the fund's
account with brokers or dealers selected by the
adviser or the subadviser, provided that in
connection with the placing of such orders and the
selection of such brokers or dealers the subadviser
will seek to obtain best price and execution, except
as otherwise provided in the prospectus and statement
of additional information of the fund;
(6) from time to time or at any time requested by the
adviser or the trustees, make reports to the adviser
or the trustees, as requested, of the sub-adviser's
performance of the foregoing services;
(7) subject to the supervision of the adviser, maintain
and preserve the records required by the 1940 act to
be maintained by the subadviser (the subadviser
agrees that such records are the property of the
trust and copies will be surrendered to the trust
promptly upon request therefor);
(8) give instructions to the custodian (including any
sub-custodian) of the fund as to deliveries of
securities to and from such custodian and payments of
cash for the account of the fund, and advise the
adviser on the same day such instructions are given;
(9) cooperate generally with the fund and the adviser to
provide information necessary for the preparation of
registration statements and periodic reports to be
filed with the Securities and Exchange Commission,
including Form N-1A, semi-annual reports on Form
N-SAR, periodic statements, shareholder
communications and proxy materials furnished to
holders of shares of the fund, filings with states
and with United States agencies responsible for tax
matters, and other reports and filings of like
nature.
In the performance of its duties hereunder, the subadviser is and will be an
independent contractor and unless otherwise expressly provided or authorized
will have no authority to act for or represent the fund or trust in any way or
otherwise be deemed to be an agent of the fund, the trust or of the adviser.
3. EXPENSES PAID BY THE SUBADVISER. The subadviser will pay the
cost of maintaining the staff and personnel necessary for it
to perform its obligations under this agreement, the expenses
of office rent, telephone, telecommunications and other
facilities that it is obligated to provide in order to perform
the services specified in Section 2, and any other expenses
incurred by it in connection with the performance of its
duties hereunder.
4. EXPENSES OF THE FUND NOT PAID BY THE SUBADVISER. The
subadviser will not be required to pay any expenses which this
agreement does not expressly state will be payable by the
subadviser. In particular, and without limiting the generality
of the foregoing but subject to the provisions of Section 3,
the subadviser will not be required to pay any fund expense or
to reimburse the adviser for any such expense that the adviser
is required to pay.
5. COMPENSATION OF THE SUBADVISER. The adviser will pay the
subadviser, as compensation for services and expenses assumed
hereunder, a fee as set forth in Schedule I. Subadvisory fees
payable hereunder will be computed daily and paid monthly in
arrears. If this agreement is effective subsequent to the
first day of the month, or if this agreement is terminated,
the fee provided in this section will be computed on the basis
of the number of days in the month for which this Agreement is
in effect, subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of
the total number of days in such month. The subadviser
understands and agrees that neither the trust nor the fund has
any liability for the subadviser's fee hereunder. Calculations
of the subadviser's fee will be based on average net asset
values as provided by the adviser.
6. OTHER ACTIVITIES OF THE SUBADVISER AND ITS AFFILIATES. Nothing
herein contained will prevent the subadviser or any of its
affiliates or associates from engaging in any other business
or from acting as investment adviser or investment manager for
any other person or entity, whether or not having investment
policies or a portfolio similar to the fund. It is
specifically understood that officers, directors and employees
of the subadviser and its affiliates may engage in providing
portfolio management services and advice to other investment
advisory clients of the sub-adviser or of its affiliates.
7. AVOIDANCE OF INCONSISTENT POSITION. In connection with
purchases or sales of portfolio securities for the account of
the fund, neither the subadviser nor any of its directors,
officers or employees will act as principal or agent or
receive any commission. The subadviser will not knowingly
recommend that the fund purchase, sell or retain securities of
any issuer in which the subadviser has a financial interest
without obtaining prior approval of the adviser prior to the
execution of any such transaction. The subadviser will provide
quarterly reports to a designated representative of the
adviser reporting any violation of the subadviser's code of
ethics.
8. NO PARTNERSHIP OR JOINT VENTURE. The trust, the fund, the
adviser and the sub-adviser are not partners of or joint
venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers
or impose any liability as such on any of them.
9. LIMITATION OF LIABILITY OF THE SUBADVISER. The subadviser will
not be liable for any error of judgment or mistake of law or
for any loss suffered by the trust, the fund or the adviser in
connection with the matters to which this agreement relates,
except a loss resulting from willful misfeasance, bad faith or
gross negligence on the sub-adviser's part in the performance
of its duties or from reckless disregard by it of its
obligations and duties under this agreement.
10. DURATION AND TERMINATION OF THIS AGREEMENT. This agreement
will remain in effect until July 31, 2000 and from year to
year thereafter, but only so long as such continuance is
specifically approved at least annually in accordance with the
requirements of the 1940 Act as now in effect or as amended,
subject, however, to such exemptions as may be granted by the
securities and exchange commission by any rule, regulation,
order or interpretive position. This agreement may, on 60 days
written notice, be terminated at any time without the payment
of any penalty by the fund by vote of a majority of the
outstanding voting securities of the fund or by the board of
trustees or by the adviser or by the subadviser. Termination
of this agreement with respect to the fund will not be deemed
to terminate or otherwise invalidate any provisions of any
contract between you and any other series of the trust. This
agreement will automatically terminate in the event of its
assignment or upon the termination of the adviser's investment
advisory agreement. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the
1940 Act (including the definitions of "assignment,"
"interested person" and "voting security"), will apply.
11. AMENDMENT OF THIS AGREEMENT. No provision of this agreement
may be changed or waived orally, but only by an instrument in
writing signed by the party against which enforcement of the
change or waiver is sought. No amendment, transfer,
assignment, sale, hypothecation or pledge of this agreement
shall be effective until approved in accordance with the
requirements of the 1940 Act as now in effect or as amended,
subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation,
order or interpretive position.
12. MISCELLANEOUS.
(1) The captions in this agreement are included for
convenience of reference only and in no way define or
limit any of the provisions hereof or otherwise affect
their construction or
effect. This agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument. The name Xxxxxxx Investors Trust is the
designation of the trustees under the declaration of trust,
dated August 20, 1998 and the declaration of trust has been
filed with the Secretary of State of the State of Delaware.
The obligations of the trust and the fund are not personally
binding upon, nor will resort be had to the private property
of, any of the trustees, shareholders, officers, employees or
agents of the trust or the fund, but only the fund's property
shall be bound. The fund will not be liable for the
obligations of any other series of the trust.
(2) Nothing herein contained will limit or restrict the subadviser
or any of its officers, affiliates or employees from buying,
selling or trading in any securities for its or their own
account or accounts. The trust and fund acknowledge that the
subadviser and its officers, affiliates and employees, and its
other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at
the same time being acquired or disposed of by the fund. The
subadviser will have no obligation to acquire for the fund, a
position in any investment which the subadviser, its officers,
affiliates or employees may acquire for its or their own
accounts or for the account of another client if, in the sole
discretion of the sub-adviser, it is not feasible or desirable
to acquire a position in such investment for the fund. Nothing
herein contained will prevent the subadviser from purchasing
or recommending the purchase of a particular security for on
or more funds or clients while other funds or clients may be
selling the same security.
(3) Any information supplied by the subadviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is confidential and may be
used only by the fund and/or its agents, and only in
connection with the fund and its investments.
(4) GOVERNING LAW. This agreement shall be governed by the
substantive law of the State of New York and the applicable
provisions of the 1940 Act.
Yours very truly,
XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxxx X. Xxxxx
Its: EXECUTIVE VICE PRESIDENT
The foregoing agreement is hereby agreed to as of the date thereof.
XXXXXXX INVESTORS TRUST
on behalf of Xxxxxxx U.S. Treasury Money
Market Fund
By: /S/ XXXXXXX X. XXXXX
Its: EXECUTIVE VICE PRESIDENT
XXXXX & XXXX ASSET MANAGEMENT, L.P.
By: /S/ XXXXXXX XXXXXXXXX
ITS: CHIEF FINANCIAL OFFICER
SCHEDULE I
ANNUAL FEE RATE
FUND AS A PERCENTAGE OF
NAME ASSETS UNDER MANAGEMENT AVERAGE DAILY NET ASSETS
U.S. TREASURY
MONEY MARKET FUND LESS THAN $100 MILLION 0.15%
$100 MILLION BUT LESS THAN $150 MILLION 0.10%
$150 MILLION OR MORE 0.05%
The average net asset value for the month will be based on the net
asset value used in determining the price at which fund shares are sold,
repurchased or redeemed on each day of the month.
If this agreement becomes effective as to a fund subsequent to the
first day of a month, or terminates before the last day of a month, your
compensation for such fraction of the month will be determined by applying the
foregoing percentages to the average daily net asset value of the fund during
such fraction of a month and in the proportion that such fraction of a month
bears to the entire month.
