EX-99.23.d.ii
ALPHA ANALYTICS INVESTMENT GROUP, LLC
INTERIM SUB-ADVISER AGREEMENT
INTERIM SUB-ADVISER AGREEMENT executed as of June 20, 2001 between ALPHA
ANALYTICS INVESTMENT GROUP, LLC (the "Adviser") and CAMBIAR INVESTORS, INC. (the
"Sub-Adviser").
Alpha Analytics Investment Trust (the "Trust") has been organized to
engage in the business of an investment company. The Trust currently offers two
series of shares to investors, one of which is the Alpha Analytics Value Fund
(the "Fund").
Pursuant to a management agreement dated December 8, 1998 (the
"Management Agreement"), the Adviser was selected by the Trust to act as the
investment adviser to the Fund.
Pursuant to a sub-adviser agreement dated October 20, 2000 (the
"Sub-Adviser Agreement"), the Sub-Adviser was selected by the Adviser as the
sub-adviser to the Fund, the Sub-Adviser Agreement having been acknowledged and
approved by the Trust and the Fund shareholders.
Certain principals of the Sub-Adviser are negotiating the acquisition
of a controlling interest in the Sub-Adviser (the "Acquisition"). The
Acquisition will result in the automatic termination of the Sub-Adviser
Agreement.
The Adviser and Sub-Adviser desire to enter into this interim
sub-adviser agreement ("Interim Sub-Adviser Agreement") pursuant to the terms of
Rule 15a-4 of the Investment Company Act of 1940, as amended ("1940 Act")
pending approval of a final sub-adviser agreement by a majority of the Fund's
outstanding voting securities designating Sub-Adviser as the sub-adviser of the
Fund.
Therefore, in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of the Trust, an
Ohio business trust, the Sub-Adviser, at its expense, will
furnish continuously an investment program for the Alpha
Analytics Value Fund (the "Fund") series of shares of the
Trust. The Sub-Adviser will use its best judgment to make
investment decisions on behalf of the Fund, place all orders
for the purchase and sale of portfolio securities and execute
all agreements related thereto. In the performance of its
duties, the Sub-Adviser will comply with the provisions of the
Agreement and Declaration of Trust and By-laws of the Trust
and the objective and policies of the Fund as set forth in the
then current Registration Statement of the Trust filed with
the Securities and Exchange Commission ("SEC") and any
applicable federal and state laws, and will comply with other
policies which the Trustees of the Trust (the "Trustees") or
the Adviser, as the case may be, may from time to time
-1-
determine and which are furnished to the Sub-Adviser. The
Sub-Adviser shall make its officers and employees available to
the Adviser from time to time at reasonable times to review
investment policies of the Fund and to consult with the
Adviser regarding the investment affairs of the Fund. The
Sub-Adviser will provide the Trust's custodian with such
information relating to the Trust as may be required under the
terms of the then current custody agreement between the Trust
and the custodian. In the performance of its duties hereunder,
the Sub-Adviser is and shall be an independent contractor and,
unless otherwise expressly provided or authorized, shall have
no authority to act for or represent the Trust in any way or
otherwise be deemed to be an agent of the Trust.
(b) The Sub-Adviser will maintain books and records with respect
to the securities transactions of the Fund and shall render to
the Adviser such periodic and special reports as the Adviser
or the Trustees may request. The Sub-Adviser agrees that all
records that it maintains for the Trust are the property of
the Trust and it will promptly surrender any of such records
to the Trust upon the Trust's request. The Sub-Adviser further
agrees to preserve, for the periods prescribed by Rule 31a-2
under the Investment Company Act of 1940, as amended ("1940
Act"), any such records as are required to be maintained by
the Sub-Adviser with respect to the Trust by Rule 31a-1 under
the 1940 Act.
(c) During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities and
investments purchased for the Fund (including taxes and
brokerage commissions, if any).
2. BROKERAGE
In placing orders with brokers and/or dealers, the Sub-Adviser is
directed at all times to seek best qualitative execution for
purchases and sales on behalf of the Fund, taking into account such
factors as price (including the applicable brokerage commission or
dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and
research services provided by the broker or dealer. Sub-Adviser
should generally seek favorable prices and commission rates that are
reasonable in relation to the benefits received. Subject to such
conditions as may be imposed by the Trust's Board of Trustees, the
Sub-Adviser may pay commissions to brokers and/or dealers that are
higher than might be charged by another qualified broker to obtain
brokerage and/or research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) considered by the Sub-Adviser to be useful or
desirable in the performance of the Sub-Adviser's duties hereunder,
if the Sub-Adviser determines in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage
and research services provided by the executing broker or dealer. The
determination may be viewed in terms of either a particular
transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund and to accounts over which the Sub-Adviser
exercises investment discretion. The Fund and the Sub-Adviser
understand and acknowledge that, although the information may be
useful to the Fund and the Sub-Adviser, it is not possible to place a
dollar value on such information. The Board shall periodically review
the commissions paid by the Fund to determine if the commissions paid
over representative periods of time were reasonable in relation to
the benefits to the Fund.
-2-
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best
qualitative execution as described above, the Sub-Adviser may give
consideration to sales of shares of the Fund as a factor in the
selection of brokers and dealers to execute the Fund's portfolio
transactions.
Subject to the foregoing and to such conditions as may be imposed by
the Adviser or the Trust's Board of Trustees and the provisions of
the 1940 Act, Exchange Act, and other applicable law, nothing herein
shall prohibit the Sub-Adviser from selecting brokers and/or dealers
who are "affiliated persons" of the Sub-Adviser, the Adviser or the
Trust. On occasions when the Sub-Adviser deems the purchase or sale
of a security to be in the best interest of the Fund as well as other
customers, the Sub-Adviser may, to the extent permitted by applicable
laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event,
allocation of the securities so purchased or sold, as 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 Fund and, if applicable, to
such other customers.
If any occasion should arise in which the Sub-Adviser gives any
advice to clients of Sub-Adviser concerning the shares of the Fund,
Sub-Adviser will act solely as investment counsel for such client and
not in any way on behalf of the Fund.
3. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, member, director,
officer or employee of, or be otherwise interested in, the
Sub-Adviser, and in any person controlled by or under common control
with the Sub-Adviser, and that the Sub-Adviser and any person
controlled by or under common control with the Sub-Adviser may have
an interest in the Trust. It is also understood that the Sub-Adviser
and persons controlled by or under common control with the
Sub-Adviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other
interests and businesses.
4. COMPENSATION TO BE PAID BY THE ADVISER TO THE SUB-ADVISER
The Adviser will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered, a fee, determined as described in
Schedule A which is attached hereto and made a part hereof. Such fee
shall be paid by the Adviser and not by the Trust.
The compensation earned under this Interim Sub-Adviser Agreement will
be held in an interest bearing escrow account with the Fund's
custodian or a bank mutually agreed upon by the Trust and the
Sub-Adviser. If a majority of the Fund's outstanding voting
securities approve a final sub-adviser agreement with the Sub-Adviser
by the end of the 150-day period following the closing of the
Acquisition, the amount in the escrow account (including interest
earned) will be paid to the Sub-Adviser.
-3-
If a majority of the Fund's outstanding voting securities do not
approve a final sub-adviser contract with the Sub-Adviser, the
Sub-Adviser will be paid, out of the escrow account, the lesser of
(1) any costs incurred by the Sub-Adviser in performing services
under this Interim Sub-Adviser Agreement (plus interest earned on
that amount while in escrow), or (2) the total amount in the escrow
account (plus interest earned).
5. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement (including Schedule A attached hereto)
may be changed, waived, discharged or terminated orally, and no
amendment of this Agreement (including Schedule A attached hereto)
shall be effective until approved by the Board, including a majority
of the trustees who are not interested persons of the Adviser, the
Sub-Adviser or the Trust, cast in person at a meeting called for the
purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange
Commission or its staff) by vote of the holders of a majority of the
outstanding voting securities of the series to which the amendment
relates.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on a change in control of the
Sub-Adviser in connection with the Acquisition, and shall remain in
force for a period not to exceed 150 days thereafter.
This Agreement may, on ten days written notice, be terminated with
respect to the Fund, at any time without the payment of any penalty,
by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically
terminate in the event of its assignment.
In the event of termination of this Agreement, the Fund will no
longer use the name "Cambiar Investors, Inc." in materials relating
to the Fund except as may be required by the 1940 Act and the rules
and regulations thereunder. All rights to the name "Alpha Analytics"
belong to the Adviser.
7. CERTAIN DEFINITIONS
For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "control," "interested person"
and "assignment" shall have their respective meanings defined in the
1940 Act and rules and regulations thereunder, subject, however, to
such exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a
manner consistent with the 1940 Act and the rules and regulations
thereunder; and the term "brokerage and research services" shall have
the meaning given in the Exchange Act and the rules and regulations
thereunder.
-4-
8. NON-LIABILITY OF SUB-ADVISER
Neither the Sub-Adviser nor its shareholders, officers, directors,
employees, agents, control persons or affiliates of any thereof,
shall be liable for any error of judgment or mistake of law or for
any loss suffered by any Fund in connection with the matters to which
this Agreement relates except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Agreement, except as otherwise may be required by the 1940 Act.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file
with the Secretary of the State of Ohio, and notice is hereby given
that this instrument is executed by the Trustees as trustees and not
individually and that the obligations of this instrument are not
binding upon any of the Trustees, officers or shareholders
individually but are binding only upon the assets and property of the
Fund.
10. SEVERABILITY
In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder
of this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of
Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by
reference to such term or provision of the Act and to
interpretation thereof, if any, by the United States courts or
in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In
addition, where the effect of a requirement of the 1940 Act,
reflected in any provision of this Agreement is revised by
rule, regulation, order or interpretation of the Securities
and Exchange Commission or its staff, such provision shall be
deemed to incorporate the effect of such rule, regulation,
order or interpretation.
12. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address
as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the
address of the Trust and the Adviser is 0000 Xxxxxx xx xxx Xxxxx,
Xxxxx 0000, Xxx Xxxxxxx, XX 00000, and the address of the Sub-Adviser
is 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000
-5-
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that he has
the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.
15. CAPTIONS
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.
-6-
IN WITNESS WHEREOF, the parties have caused this instrument to be signed by
their officers designated below, all as of the day and year first above written.
ALPHA ANALYTICS INVESTMENT GROUP, LLC
By: /S/
------------------------------
Print Name: Xxxxxx X. Xxxxxx
Title: President
CAMBIAR INVESTORS, INC.
By: /S/
------------------------------
Print Name: Xxxxx Xxxxxx
Title: Senior Vice President
By signature below, the Trust acknowledges, as of the day and year first above
written, that this Interim Sub-Adviser Agreement has been approved by the Trust
as required by the 1940 Act.
ALPHA ANALYTICS INVESTMENT TRUST
By: /S/
------------------------------
Print Name: Xxxxxx X. Xxxxxx
Title: President
-7-
SCHEDULE A
The Manager will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of 0.50% of the average daily net assets of the Fund.
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net asset value during each month at the
close of business on each business day during such month while this Agreement is
in effect. Net asset value shall be calculated in the manner specified in the
Trust's Prospectus.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full quarter, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full quarter.
-8-
