SUB-ADVISORY AGREEMENT
Exhibit
EX-99.d.2
THIS
SUB-ADVISORY AGREEMENT is made as of the 31st
day of
March 2005 (“Contract”), among Hillview Investment Trust II, a Delaware
statutory trust (“Trust”), Hillview Capital Advisors, LLC (“Adviser”), a limited
liability company organized under the laws of the State of Delaware and Xxxxxx
Associates, L.P. a limited partnership organized under the laws of the State
of
Illinois (“Sub-Adviser”).
WHEREAS,
the Adviser has entered into an Interim Investment Management Contract dated
March 31, 2005 (“Management Agreement”) with the Trust, an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (“1940 Act”), and anticipates entering into a final investment
management agreement with the Trust upon shareholder approval of such agreement
on or before August 26, 2005; and
WHEREAS,
the Hillview Alpha Fund (“Fund”) is a series of the Trust; and
WHEREAS,
under the Management Agreement, the Adviser has agreed to provide certain
investment advisory and administrative services to the Fund; and
WHEREAS,
the Adviser is authorized under the Management Agreement to delegate its
investment advisory responsibilities to one or more persons or companies;
and
WHEREAS,
the Sub-Adviser is willing to furnish such services to the Adviser and the
Fund;
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, Trust, Adviser and the Sub-Adviser agree as follows:
1. Appointment.
The
Trust hereby appoints and employs the Sub-Adviser as a discretionary portfolio
manager, on the terms and conditions set forth herein, of those assets of the
Fund which the Adviser determines to assign to the Sub-Adviser (those assets
being referred to as the “Fund Account”). The Sub-Adviser’s responsibility for
providing portfolio management services to the Fund shall be limited to the
Fund
Account. The Adviser may, from time to time, make additions to and withdrawals,
including cash and cash equivalents, from the Fund Account.
2. Acceptance
of Appointment.
The
Sub-Adviser accepts that appointment and agrees to render the services herein
set forth, for the compensation herein provided.
3. Duties
as Sub-Adviser.
(a) Subject
to the supervision and direction of the Trust’s Board of Trustees (“Board”) and
of the Adviser, and all written guidelines adopted by the Trust or the Adviser
that are provided to the Sub-Adviser, the Sub-Adviser will provide a continuous
investment program with respect to the Fund Account, including investment
research and management for all securities and investments and cash equivalents
in the Fund Account. The Sub-Adviser will determine from time to time what
investments in the Fund Account will be purchased, retained or sold by the
Fund.
The Sub-Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions with respect to the Fund Account.
The Sub-Adviser
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will
provide services under this Contract in accordance with the Fund’s investment
objective, policies and restrictions and the description of its investment
strategy and style, all as stated in the Trust’s registration statement under
the 1940 Act, and any amendments or supplements thereto (“Registration
Statement”) of which the Sub-Adviser has notice. The Sub-Adviser shall not
consult with any other sub-adviser of the Fund concerning transactions for
the
Fund in securities or other assets.
(b) The
Sub-Adviser agrees that, in placing orders with brokers, it will seek to obtain
the best net result in terms of price and execution; provided that, on behalf
of
the Fund, the Sub-Adviser may, in its discretion, use brokers (including brokers
that may be affiliates of the Sub-Adviser to the extent permitted by Section
3(c) hereof) who provide the Sub-Adviser with research, analysis, advice and
similar services to execute portfolio transactions, and the Sub-Adviser may
pay
to those brokers in return for brokerage and research services a higher
commission than may be charged by other brokers, subject to the Sub-Adviser’s
determining in good faith that such commission is reasonable in terms either
of
the particular transaction or of the overall responsibility of the Sub-Adviser
to the Fund and its other clients and that the total commissions paid by the
Fund will be reasonable in relation to the benefits to the Fund over the long
term. In no instance will portfolio securities be purchased from or sold to
the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder. Whenever
the
Sub-Adviser simultaneously places orders to purchase or sell the same security
on behalf of the Fund and one or more other accounts advised by the Sub-Adviser,
the orders will be allocated as to price and amount among all such accounts
in a
manner believed to be equitable over time to each account. The Adviser
recognizes that in some cases this procedure may adversely affect the results
obtained for the Fund.
(c) The
Sub-Adviser will not execute without the prior written approval of the Adviser
any portfolio transactions for the Fund Account with a broker which is (i)
an
affiliated person of the Trust, including the Adviser or any Sub-Adviser for
any
Fund of the Trust; (ii) a principal underwriter of the Fund's shares; or (iii)
an affiliated person of such an affiliated person or principal underwriter.
The
Adviser agrees that it will provide the Sub-Adviser with a list of such brokers
and dealers and will, from time to time, update such list as
necessary.
(d) The
Sub-Adviser will maintain all books and records required to be maintained
pursuant to the 1940 Act and the rules and regulations promulgated thereunder
with respect to actions by the Sub-Adviser on behalf of the Fund, and will
furnish the Board and the Adviser with such periodic and special reports as
the
Board or the Adviser reasonably may request. In compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records
that it maintains for the Fund are the property of the Trust, agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act any records that
it
maintains for the Trust and that are required to be maintained by Rule 31a-1
under the 1940 Act, and further agrees to surrender promptly to the Trust a
complete set of any records that it maintains for the Fund upon request by
the
Trust.
(e) All
transactions will be consummated by payment to or delivery by the custodian
designated by the Trust (the “Custodian”), or such depositories or agents as may
be designated by the Custodian in writing, of all cash and/or securities due
to
or from the Fund Account,
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and
the
Sub-Adviser shall not have possession or custody thereof. The Sub-Adviser shall
advise the Custodian and confirm in writing to the Trust and to the Adviser
or
any other designated agent of the Fund all investment orders for the Fund
Account placed by it with brokers and dealers at the time and in the manner
set
forth in Rule 31a-1 under the 1940 Act. For purposes of the foregoing sentence,
communication to the Custodian via DTC is acceptable. The Trust shall issue
to
the Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Sub-Adviser. The Trust shall
be
responsible for all custodial arrangements and the payment of all custodial
charges and fees, and, upon giving proper instructions to the Custodian, the
Sub-Adviser shall have no responsibility or liability with respect to custodial
arrangements or the acts, omissions or other conduct of the Custodian, except
that it shall be the responsibility of the Sub-Adviser to communicate it to
the
Adviser if the Custodian fails to confirm in writing proper execution of the
instructions.
(f) At
such
times as shall be reasonably requested by the Board or the Adviser, the
Sub-Adviser will provide the Board and the Adviser with economic and investment
analyses and reports as well as quarterly reports setting forth the performance
of the Fund Account and make available to the Board and Adviser any economic,
statistical and investment services that the Sub-Adviser normally makes
available to its institutional or other customers.
(g) In
accordance with procedures adopted by the Board, as amended from time to time,
the Sub-Adviser is responsible for assisting in the fair valuation of all
portfolio securities and will use its reasonable efforts to arrange for the
provision of valuation information or a price(s) from a party(ies) independent
of the Sub-Adviser for each portfolio security for which the custodian does
not
obtain prices in the ordinary course of business from an automated pricing
service.
4. Further
Duties.
In all
matters relating to the performance of this Contract, the Sub-Adviser will
act
in conformity with the Trust’s Declaration of Trust, By-Laws and Registration
Statement of which it has received notice and with the written instructions
and
written directions of the Board and the Adviser; and will comply with the
requirements of the 1940 Act and the Investment Advisers Act of 1940, as amended
(“Advisers Act”) and the rules under each, and all other federal and state laws
and regulations applicable to the Trust and the Fund. The Adviser agrees to
provide to the Sub-Adviser copies of the Trust’s Declaration of Trust, By-Laws,
Registration Statement, written instructions and directions of the Board and
the
Adviser, and any amendments or supplements to any of these materials as soon
as
practicable after such materials become available.
5. Proxies.
The
Sub-Adviser will vote all proxies solicited by or with respect to issuers of
securities in which assets of the Fund Account may be invested from time to
time. At the request of the Sub-Adviser, the Adviser shall provide the
Sub-Adviser with its or the Trust’s recommendations as to the voting of such
proxies. The Adviser shall instruct the Custodian to forward or cause to be
forwarded to the Sub-Adviser all relevant proxy solicitation
materials.
6. Expenses.
During
the term of this Contract, the Sub-Adviser will bear all expenses incurred
by it
in connection with its services under this Contract other than the cost of
securities (including brokerage commissions, transactional fees and taxes,
if
any) purchased for the Fund. The Fund shall be responsible for its
expenses.
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7. Compensation.
The
compensation of the Sub-Adviser for its services under this Contract shall
be
calculated and paid by the Trust in accordance with the attached Schedule A.
8. Limitation
of Liability.
The
Sub-Adviser shall not be liable for any error of judgment or mistake of law
or
for any loss suffered by the Fund, the Trust, its shareholders or by the Adviser
in connection with the matters to which this Contract relates, except 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 Contract. Nothing in this paragraph shall
be
deemed a limitation or waiver of any obligation or duty that may not by law
be
limited or waived.
9. Indemnification.
(a) The
Adviser and the Trust shall indemnify the Sub-Adviser or any of its directors,
officers, employees or affiliates for all losses, damages, liabilities, costs
and expenses (including legal) (“Losses”) as they are incurred by the
Sub-Adviser by reason of or arising out of any act or omission by the Adviser
or
Trust under this Agreement, or any breach of warranty, representation or
agreement hereunder, except to the extent that such Losses arise as a result
of
the negligence of the Sub-Adviser or the Sub-Adviser’s breach of fiduciary duty
to the Adviser or the Trust.
(b) The
Sub-Adviser shall indemnify the Adviser or any of its directors, officers,
employees or affiliates for all losses, damages, liabilities, costs and expenses
(including legal) (“Losses”) as they are incurred by the Adviser by reason of or
arising out of any act or omission by the Sub-Adviser under this Agreement,
or
any breach of warranty, representation or agreement hereunder, except to the
extent that such Losses arise as a result of the negligence of the Adviser
or
the Adviser’s breach of fiduciary duty to the Sub-Adviser.
(c) The
Sub-Adviser shall indemnify the Trust or any of its directors, officers,
employees or affiliates for all losses, damages, liabilities, costs and expenses
(including legal) (“Losses”) as they are incurred by the Trust by reason of or
arising out of any act or omission by the Sub-Adviser under this Agreement,
or
any breach of warranty, representation or agreement hereunder, except to the
extent that such Losses arise as a result of the negligence of the Trust or
the
Trust’s breach of fiduciary duty to the Sub-Adviser.
10. Representations,
Warranties and Agreements of the Trust.
The
Trust represents, warrants and agrees that:
(a) Each
of
the Adviser and the Sub-Adviser has been duly appointed by the Board of Trustees
of the Trust to provide investment services to the Fund Account as contemplated
hereby.
(b) The
Trust
will deliver to the Sub-Adviser a true and complete copy of the Fund’s
Registration Statement as effective from time to time and such other documents
or instruments governing the investment of the Fund Account and such other
information as is necessary for the Sub-Adviser to carry out its obligations
under this Contract.
(c) The
Trust
is currently in compliance and shall at all times continue to comply with the
requirements imposed upon the Trust by applicable law and
regulations.
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11. Representations
of Adviser.
The
Adviser represents, warrants and agrees that:
(a) The
Adviser has been duly authorized by the Board of Trustees of the Trust to
delegate to the Sub-Adviser the provision of investment services to the Fund
Account as contemplated hereby.
(b) The
Adviser is currently in compliance and shall at all times continue to comply
with the requirements imposed upon the Adviser by applicable law and
regulations.
12. Representations
of Sub-Adviser.
The
Sub-Adviser represents, warrants and agrees as follows:
(a) The
Sub-Adviser (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Contract remains
in effect; (ii) is not prohibited by the 1940 Act, the Advisers Act or
other law, regulation or order from performing the services contemplated by
this
Contract; (iii) has met and will seek to continue to meet for so long as
this Contract remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Contract; (iv) has the authority to enter into and
perform the services contemplated by this Contract; and (v) will promptly
notify Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise. The Sub-Adviser will
also
immediately notify the Fund and the Adviser if it is served or otherwise
receives notice of any action, suit, proceeding, inquiry or investigation,
at
law or in equity, before or by any court, public board or body, involving the
affairs of the Fund.
(b) The
Sub-Adviser has adopted a written code of ethics complying with the requirements
of Rule 17j-1 under the 1940 Act and will provide the Adviser and the Board
with
a copy of such code of ethics, together with evidence of its adoption. Within
forty-five days of the end of the last calendar quarter of each year that this
Contract is in effect, the president, Chief Operating Officer or a
vice-president of the Sub-Adviser shall certify to the Adviser that the
Sub-Adviser has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no violation of the Sub-Adviser’s code of ethics
or, if such a violation has occurred, that appropriate action was taken in
response to such violation. Upon the written request of the Adviser, the
Sub-Adviser shall permit the Adviser, its employees or its agents to examine
the
reports required to be made to the Sub-Adviser by Rule 17j-1(c)(1) and all
other
records relevant to the Sub-Adviser’s code of ethics.
(c) The
Sub-Adviser has provided the Trust and the Adviser with a copy of its Form
ADV,
which as of the date of this Agreement is its Form ADV as most recently filed
with the Securities and Exchange Commission (“SEC”) and promptly will furnish a
copy of all amendments to the Trust and the Adviser at least annually. Such
amendments shall reflect all changes in the Sub-Adviser’s organizational
structure, professional staff or other significant developments affecting the
Sub-Adviser, as required by the Investment Advisers Act of 1940.
(d) The
Sub-Adviser will notify the Trust and the Adviser of any change of control
of
the Sub-Adviser, including any change of its general partners, controlling
persons or 25%
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shareholders,
as applicable, and any changes in the key personnel who are either the portfolio
manager(s) of the Fund Account or senior management of the Sub-Adviser, in
each
case prior to, or promptly after, such change. The Sub-Adviser agrees to bear
all reasonable expenses of the Fund, if any, arising out of such change in
control.
(e) The
Sub-Adviser agrees to maintain an appropriate level of errors and omissions
or
professional liability insurance coverage.
(f) The
Sub-Adviser agrees that neither it, nor any of its affiliates, will in any
way
refer directly or indirectly to its relationship with the Trust, the Fund,
the
Adviser or any of their respective affiliates in offering, marketing or other
promotional materials without the express written consent of the Adviser.
However, the Sub-Adviser may use the performance of the Fund Account in its
composite performance.
13. Services
Not Exclusive.
The
services furnished by the Sub-Adviser hereunder are not to be deemed to be
exclusive, and the Sub-Adviser shall be free to furnish similar services to
others, except as prohibited by applicable law or agreed upon in writing among
the Sub-Adviser, the Fund and the Adviser.
14. Confidentiality.
Subject
to the duty of the Sub-Adviser and the Adviser to comply with applicable law,
including any demand of any regulatory or taxing authority having jurisdiction,
the parties hereto shall treat as confidential all material non public
information pertaining to the Fund Account and the actions of the Sub-Adviser,
the Adviser and the Fund in respect thereof. Unless such use is required by
law,
the Adviser and the Trust may not use Sub-Adviser’s name, investment performance
information, other descriptive biographical information about the Sub-Adviser
or
its personnel, or other pertinent information regarding the Sub-Adviser in
offering documents for the Fund, and in marketing or advertising materials
relating to the Fund, the Trust or the Adviser, without consent of the
Sub-Adviser, which will not be unreasonably withheld.
15. Duration
and Termination.
(a) This
Contract shall become effective upon the date first above written, provided
that
this Contract shall not take effect unless it has first been approved (i) by
a
vote of a majority of those trustees of the Trust who are not parties to this
Contract or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. Adviser shall provide
Sub-Adviser with verification that such approval has occurred.
(b) Unless
sooner terminated as provided herein, this Contract shall continue in effect
for
two years from its effective date. Thereafter, if not terminated, this Contract
shall continue automatically for successive periods of twelve months each,
provided that such continuance is specifically approved at least annually:
(i)
by a vote of a majority of those trustees of the Trust who are not parties
to
this Contract or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval, and (ii) by the
Board
or by vote of a majority of the outstanding voting securities of the Fund.
Adviser shall provide Sub-Adviser with verification that such approvals have
occurred.
(c) Notwithstanding
the foregoing, this Contract may be terminated by any party hereto at any time,
without the payment of any penalty, immediately upon written notice to the
other
parties hereto in the event of material breach of any provision thereof by
the
party so notified if such breach shall not have been cured within a 20-day
period after notice of such breach; or otherwise, by any party upon thirty
(30)
days written notice to the other
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parties
hereto. The Agreement may also be terminated immediately if, in the reasonable
judgment of the Trust or the Adviser, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Contract, including
circumstances such as financial insolvency of the Sub-Adviser or other
circumstances that could adversely affect the Fund. This Contract will terminate
automatically in the event of its assignment or upon termination of any future
investment management agreement entered into between the Adviser and the Trust
as it relates to the Fund. This Contract shall not terminate upon termination
of
the Management Agreement defined herein. 16. Amendment
of this Contract.
No
provision of this Contract may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Contract shall be effective until approved by a vote of a
majority of those trustees of the Trust who are not parties to this Contract
or
interested persons of any such party.
17. Trust
and Shareholder Liability.
The
Adviser and Sub-Adviser are hereby expressly put on notice of the limitation
of
shareholder liability as set forth in the Declaration of Trust of the Trust
and
agree that obligations assumed by the Trust pursuant to this Agreement shall
be
limited in all cases to the Trust and its assets, and if the liability relates
to one or more series, the obligations hereunder shall be limited to the
respective assets of the Fund. The Adviser and Sub-Adviser further agree that
they shall not seek satisfaction of any such obligation from the shareholders
or
any individual shareholder of the Fund, nor from the Trustees or any individual
Trustee of the Trust.
18. Governing
Law.
This
Contract shall be construed in accordance with the 1940 Act and the laws of
the
State of Delaware, without giving effect to the conflicts of laws principles
thereof. To the extent that the applicable laws of the State of Delaware
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
19. Miscellaneous.
The
captions in this Contract 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 Contract shall be held or
made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Contract shall not be affected thereby. This Contract shall be binding upon
and
shall inure to the benefit of the parties hereto and their respective
successors. As used in this Contract, the terms “majority of the outstanding
voting securities,” “affiliated person,” “interested person,” “assignment,”
“broker,” “investment adviser,” “net assets,” “sale,” “sell” and “security”
shall have the same meaning as such terms have in the 1940 Act, subject to
such
exemption as may be granted by the SEC by any rule, regulation or order. Where
the effect of a requirement of the federal securities laws reflected in any
provision of this Contract is made less restrictive by a rule, regulation or
order of the SEC, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
This Contract and the Schedule(s) attached hereto embody the entire agreement
and understanding among the parties. This Contract may be signed in
counterpart.
20. Notices.
Any
notice herein required is to be in writing and is deemed to have been given
to
the Sub-Adviser or Adviser upon receipt of the same at their respective
addresses set forth below. All written notices required or permitted to be
given
under this Contract will be delivered by
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personal
service, by postage mail - return receipt requested or by facsimile machine
or a
similar means of same day delivery which provides evidence of receipt (with
a
confirming copy by mail as set forth herein). All notices provided to Adviser
will be sent to the attention of Xxxxxx Xxxxxxx. All notices provided to the
Sub-Adviser will be sent to the attention of Xxxxx Xxxxx.
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of
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IN
WITNESS
WHEREOF, the parties hereto have caused this instrument to be executed by their
duly authorized signatories as of the date and year first above
written.
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on
behalf of
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HILLVIEW
ALPHA FUND
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000
Xxx Xxxxx Xxxxxxxx
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Xxxxxxx,
Xxxxxxxxxxxx 00000
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Attest:
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By:
/s/
Xxxxxx x. Xxxxxxx
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By:
/s/
Xxxxx X. Xxxxxxx
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Name:
Xxxxxx X. Xxxxxxx
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Name:
Xxxxx X. Xxxxxxx
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Title:
Treasurer
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Title:
President
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HILLVIEW
CAPITAL ADVISORS, LLC
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000
Xxx Xxxxx Xxxxxxxx
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Xxxxxxx,
Xxxxxxxxxxxx 00000
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Attest:
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By:
/s/
Xxxxxx X. Xxxxxxx
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By:/s/
Xxxxx X. Xxxxxxx
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Name:
Xxxxxx X. Xxxxxxx
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Name:
Xxxxx X. Xxxxxxx
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Title:
Chief Operating Officer
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Title:
Chief Executive Officer
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XXXXXX
ASSOCIATES, L.P.
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Xxx
Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
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Xxxxxxx,
XX 00000-0000
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Attest:
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By:
/s/
Xxxxx Xxxxx
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By:
/s/
Xxxx X. Xxxxx
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Name:
Xxxxx Xxxxx
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Name:
Xxxx X. Xxxxx
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Title:
Senior Paralegal
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Title:
Chief Operating Officer
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9
Exhibit
A
Sub-Advisory
Fees
This
Exhibit A contains the sub-advisory fee information required by Section 7 of
the
Sub-Advisory Agreement among Hillview Investment Trust II (“Trust”), Hillview
Capital Advisors, LLC (“Adviser”) and Xxxxxx Associates, L.P. (“Sub-Adviser”)
relating to the Alpha Fund series (“Fund”) of the Trust.
Fee
Schedule.
Fees
payable to the Sub-Adviser pursuant to this Contract shall be payable within
ten
days after receipt by the Trust of the Sub-Adviser’s xxxx after the end of each
calendar quarter for services rendered during the prior quarter (or billing
period, if less than a calendar quarter). The fees are calculated as of the
close of trading on the last business day of the calendar quarter by applying
the applicable fee rate to the average daily assets of the Fund allocated to
the
Sub-Adviser for that period. For purposes of calculating the fee, the value
of
the Fund’s assets shall be determined in the same manner as that which the Fund
uses to determine the net asset value of its shares. The applicable annualized
fee rate shall be 0.75% on the first $20,000,000.00 of the Fund’s assets
allocated to the Sub-Adviser, and 0.60% on the next $55 million of the Fund’s
assets allocated to the Sub-Adviser, and 0.55% on all of the Fund’s assets
allocated to the Sub-Adviser in excess of $75 million.
