TRIBUTARY FUNDS, INC. INVESTMENT SUB-ADVISORY AGREEMENT
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT (this "Agreement") is made and
entered this 7th day of March, 2011, by and between Tributary Capital
Management, LLC, a Colorado limited liability company (the "Adviser"), and
Kleinwort Xxxxxx Investors International Ltd., an Irish registered company (the
"Sub-Adviser").
RECITALS
WHEREAS, the adviser is the investment adviser for the Tributary
International Equity Fund, a diversified investment portfolio (the "Fund") of
Tributary Funds, Inc. (the "Company"), an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, Adviser desires to retain the Sub-Adviser as its agent to furnish
certain investment advisory services for the Fund as provided hereunder.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
AGREEMENT
1. Appointment. Adviser hereby appoints the Sub-Adviser to provide
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certain sub-investment advisory services to the Fund in furtherance of the
Advisory Agreement 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.
2. Delivery of Documents. Adviser has furnished the Sub-Adviser with
--------------------- copies properly certified or authenticated of each of the
following:
(a) The Company's Articles of Incorporation, as filed with the Secretary of
State of Nebraska on October 12, 1994, and all amendments thereto or
restatements thereof (the "Articles");
(b) The Company's By-Laws and amendments thereto (the "By-laws");
(c) Resolutions of the Company's Board of Directors (the "Board")
authorizing the appointment of Sub-Adviser and approving this Agreement;
(d) The Company'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 Company's Registration Statement on Form N-1A filed with the SEC
under the Securities Act of 1933, as amended, and under the 1940 Act and all
amendments thereto insofar as such Registration Statement and such amendments
relate to the Fund (the "Registration Statement"); and
(f) The Company's most recent prospectus and Statement of Additional
Information for the Fund filed in connection with the Registration Statement
(such prospectus and Statement of Additional Information, as presently in
effect, and all amendments and supplements thereto are herein collectively
called the "Prospectus").
The Adviser will promptly furnish the Sub-Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
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3. Management. Subject always to the supervision of the Board and the
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Adviser, in addition to the terms of the Advisory Agreement, the Sub-Adviser
will furnish an investment program including investment research, advice, and
supervision in respect of, and make investment decisions for, all assets of the
Fund on behalf of the Adviser and place all orders for the purchase and sale of
securities, all for the Adviser 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 Company's Articles of Incorporation and
By-laws, as amended from time to time, and the stated investment objectives,
policies, and restrictions of the Fund. The Sub-Adviser and Adviser will each
make its respective 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 at such
times as the Board shall request.
The Sub-Adviser's authority and discretion hereunder shall include,
without limitation, the power to lend any securities held by the Fund to such
persons, for such purposes and upon such terms and conditions as the Sub-Adviser
may deem advisable, provided that any such lending shall be in conformity with
the Fund's current investment objective and policies, as stated in its current
Prospectus and any guidelines adopted from time to time by the Board.
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 will:
(a) 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) 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 attempt to obtain the best
combination of prompt execution of orders in an effective manner and at the most
favorable price. Consistent with this obligation and any policies adopted by
the Board, and to the extent permitted by the 1940 Act, the Investment Advisers
Act of 1940 (the "Advisers Act") and Section 28(e) of the Securities Exchange
Act of 1934, 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. The Sub-Adviser may pay a
commission in excess of the commission another broker-dealer would have charged
if the Sub-Adviser determines in good faith that such commission is reasonable
in relation to the value of the brokerage and research services provided by such
broker-dealer, viewed either in terms of that particular transaction or the
Sub-Adviser's overall responsibilities to the accounts it manages. In no
instance will portfolio securities be purchased from or sold to Adviser, the
Sub-Adviser, Xxxxxxx Fund Services or any affiliated person of either the
Company, Adviser, Xxxxxxx Fund Services, or the Sub-Adviser, except as may be
permitted under the 1940 Act;
(c) 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, the management of the Fund, including, without
limitation, review of the general investment strategies of the Fund, 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;
(d) Maintain books and records with respect to the Company's securities
transactions and will furnish the Adviser and the Board such periodic and
special reports as the Board or the Adviser may request, including economic,
operational, and investment data and reports, including without
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limitation all information and materials reasonably requested by or requested to
be delivered to the Board pursuant to Section 15(c) of the 1940 Act;
(e) Act upon instructions from the Adviser not inconsistent with the
fiduciary duties hereunder;
(f) Treat confidentially and as proprietary information of the Company
all such records and other information relative to the Company 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 Company, 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 Company; and
(g) Conduct its activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining to the
investment advisory activities of the Sub-Adviser, including (i) the 1940 Act
and the rules adopted by the SEC thereunder, (ii) the Advisers Act and the rules
adopted by the SEC thereunder, (iii) the most recent Prospectus, (iv) the
Articles and the By-laws, and (v) the policies and procedures adopted by the
Board.
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.
4. Books and Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund, on behalf of the Company are the property of the Company
and further agrees to surrender promptly to the Company any of such records upon
the Company's request. The Sub-Adviser further agrees to preserve for the
periods prescribed by the 1940 Act, the records required to be maintained under
the 1940 Act.
5. Expenses. During the term of this Agreement, the Sub-Adviser will
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pay all expenses incurred by it in connection with its activities under this
Agreement, but excluding the cost of securities (including commission, issue and
transfer taxes, if any) purchased for or on behalf of the Fund. The Sub-Adviser
shall not be responsible for the following expenses relating to the operations
of the Fund: organizational expenses, taxes, interest, any brokerage fees and
commissions, fees of the directors of the Company, SEC fees, state securities
registration fees and expenses, costs of preparing and printing prospectuses for
regulatory purposes and for distribution to the Fund's current or prospective
shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and out-of-pocket expenses of the custodian and transfer agent, costs
of Fund accounting services, certain insurance premiums, costs of maintenance of
the Company's and the Fund's existence, costs of shareholders' and directors'
reports and meetings, distribution expenses, shareholder servicing expenses
incurred pursuant to the Company's Administrative Service Plan and other similar
arrangements, any extraordinary expenses incurred in the Fund's operation and
other operating expenses not assumed by the Company's service providers.
6. Compensation. For the services to be provided by the Sub-Adviser
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pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation thereof, a sub-advisory fee at
an annual rate of 0.50% of the average daily net assets of the Fund, paid at the
same time and in the same manner as the Fund pays the Adviser its advisory fee
pursuant to the Advisory Agreement. This fee will be computed daily and paid to
the Sub-Adviser monthly.
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7. Services to Others. Adviser understands, and has advised the Board,
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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.
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,
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 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
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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 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
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any error of judgment or mistake of law or for any act or omission in carrying
out its duties hereunder, 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 each other and hold each other 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) (collectively, "Damages") 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.
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(a) This Agreement will become effective as of the date hereof,
provided that it is 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 until
June 30, 2012.
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 (x)
-------- by the vote of a majority of those members of the Board who are not
interested persons (as set forth in the 0000 Xxx) of the Company the
Sub-Adviser, or the Adviser, cast in person at a meeting called for the purpose
of voting on such approval, and (y) by the vote of a majority of the Board or by
the vote of a majority of all votes attributable to the outstanding shares of
the Fund (as set forth in the 1940 Act).
(b) 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 Board or
the shareholders of the Fund (acting by a vote of at least a majority of the
outstanding voting securities), the Adviser, or by the Sub-Adviser. This
Agreement will immediately terminate in the event of its assignment (as set
forth in the 1940 Act).
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(c) Notwithstanding the foregoing, this Agreement will terminate
automatically if the Advisory Agreement is terminated.
(d) Notwithstanding the foregoing, this Agreement also may be terminated by
Adviser or the Fund: (i) upon a material breach by Sub-Adviser of any of the
representations and warranties set forth in Section 15, if such breach shall not
have been cured within a twenty (20) day period after notice of such breach, or
(ii) if Sub-Adviser becomes unable to discharge its duties and obligations under
this Agreement.
(e) Notwithstanding the foregoing, this Agreement may also be
terminated by Sub-Adviser upon a material breach by Adviser or its assigns, if
such breach shall not have been cured within a twenty (20) day period after
notice of such breach.
11. Amendment of this Agreement. No provision of this Agreement may be
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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
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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
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maintained with a custodian designated by the Adviser. Sub-Adviser shall have
no responsibility or liability with respect to any custodial function.
14. Adviser Representations and Warranties. The Adviser represents and
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warrants to Sub-Adviser that (a) the Adviser's entry into this Agreement on
behalf of the Fund and the performance of it and the Fund of their respective
obligations hereunder has been duly authorized by the Adviser, and to the best
of the Adviser's knowledge, by the Fund and the Company and will not cause the
Adviser, to the best of the Adviser's knowledge, the Fund or the Company to be
in violation of the 1940 Act or any other applicable law or regulation, (b) the
Adviser is registered as an investment adviser with the SEC under the Advisers
Act and is in compliance with all applicable rules and regulations of the SEC
pertaining to its investment advisory activities, (c) to the best of the
Adviser's knowledge, the Fund is the legal owner of all of its assets, and (d)
the Adviser is empowered to enter into this Agreement without the consent or
authority of any other party or, alternatively, has at the date hereof obtained
such consents as may be necessary to permit the making of this Agreement.
15. Sub-Adviser Representations and Warranties. The Sub-Adviser
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represents and warrants to Adviser that it (a) is registered as an investment
adviser under the Advisers Act and will continue to be so registered for so long
as this Agreement remains in effect, (b) is not prohibited by either the 1940
Act or the Advisers Act from performing the services contemplated by this
Agreement, (c) has met, and will continue to meet for so long as this Agreement
remains effective, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory
organization necessary to be met in order to perform the services contemplated
by this Agreement, including its adoption and implementation of written policies
and procedures reasonably designed to prevent violation of the federal
securities laws (as that term is used in Rule 38a-1 adopted under the 0000 Xxx)
by the Sub-Adviser and its supervised persons, (d) is empowered to enter into
this Agreement without the consent or authority of any other party or,
alternatively, has at the date hereof obtained such consents as may be necessary
to permit the making of this Agreement, and (e) will immediately notify Adviser
of the occurrence of any event that would disqualify it from serving as an
investment adviser to an investment company pursuant to Section 9(a) of the 1940
Act or otherwise, and of the institution of any administrative, regulatory, or
judicial proceeding against it that could have a material advise effect upon its
ability to fulfill its obligations under this Agreement.
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16. Reliance on Proper Instructions. The Sub-Adviser shall be fully
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protected in acting upon any proper instructions reasonably believed by it in
good faith to be genuine and signed or communicated by or on behalf of the
Adviser or the Fund, and the Sub-Adviser shall be under no duty to make any
investigation or inquiry regarding any proper instructions of the Adviser or the
Fund, as the case may be.
17. No Conflict. Unless the Sub-Adviser is otherwise informed in writing,
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it shall be entitled to assume that any action taken by it under the terms of
this Agreement, upon instructions of the Fund or the Adviser consistent with
Section 16, is not in conflict or contrary to any provision of any document
referred to in Section 2 hereof and may assume that such action is not in
conflict with any existing investment limit imposed on the Fund by law, by any
such document, or by contract or otherwise.
18. Receipt of Part II of Form ADV. The Adviser acknowledges and agrees on
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behalf of the Fund that either (i) the Fund has received Part II of the
Sub-Adviser's Form ADV at least forty-eight (48) hours prior to execution of
this Agreement or (ii) the Fund has received Part II of the Sub-Adviser's Form
ADV together with this Agreement and shall have the right to cancel this
Agreement, without penalty, within five (5) business days of the execution of
this Agreement.
19. Notices. Any notice or other communication required to be given
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pursuant to this Agreement shall be deemed duly given if delivered personally or
by overnight delivery service or mailed by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile addressed to the
parties at their respective addresses set forth below, or at such other address
as shall be designated by any party in a written notice to the other party.
(a) To Adviser at:
Tributary Capital Management, LLC
Attention: President
0000 Xxxxx Xxxxxx, Xxxx 0000
Xxxxx, XX 00000
(b) To Sub-Adviser at:
Kleinwort Xxxxxx Investors International Ltd.
Attention: Contract/Compliance Team
Xxxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxxx
Xxxxxx 0, Xxxxxxx
(c) To the Company at:
Tributary Funds, Inc.
Attention: Director of Fund Services
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
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20. Miscellaneous. The captions in this Agreement are included for
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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 state of
Nebraska without giving effect to such state's conflicts of laws provisions, and
the 1940 Act. To the extent that the applicable laws of the state of Nebraska
conflict with the applicable provisions of the 1940 Act, the latter shall
control. Sub-Adviser shall notify Adviser of any changes in its members or
managers within a reasonable time.
Signature Page Follows
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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.
TRIBUTARY CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: President
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KLEINWORT XXXXXX INVESTORS INTERNATIONAL LTD.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: Chief Executive Officer
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