EXHIBIT 5(B)
FORM OF SUBADVISORY AGREEMENT
(d) to take all such other actions as may be considered necessary or
appropriate to discharge its duties hereunder;
PROVIDED THAT any specific or general directions which the Trustees of the
Trust, or the Adviser may give to the Subadviser with regard to any of the
foregoing powers shall, unless the contrary is expressly stated therein,
override the general authority given by this provision to the extent that the
Trustees may, at any time and from time to time, direct, either generally or to
a limited extent and either alone or in concert with the Adviser or the
Subadviser (provided that such directions would not cause the Subadviser to
violate any fiduciary duties or any laws with regard to the Subadviser's duties
and responsibilities), all or any of the same as they shall think fit and, in
particular, the Adviser shall have the right to direct the Subadviser to place
trades through brokers and other agents of the Adviser's choice, subject to such
brokers or agents executing such trades on a "best execution basis", i.e. at the
best price and/or with research or other services which render that broker's
services the most appropriate for the Subadviser's needs, and further that the
Subadviser is satisfied that the dealing and execution quality of such brokers
are satisfactory to the Subadviser; and PROVIDED FURTHER that nothing herein
shall be construed as giving the Subadviser power to manage the aforesaid cash
and investments in such a manner as would cause the Fund to be considered a
"dealer" in stocks, securities or commodities for U.S. federal income tax
purposes.
The Adviser shall monitor and review the performance of the Subadviser under
this Agreement, including but not limited to the Subadviser's performance of the
duties delineated in subparagraphs (a)-(d) of this provision.
The Subadviser further agrees that, in performing its duties hereunder, it will
(a) (i) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code (the "Code") and all other
applicable federal and state laws and regulations, the Prospectus and Statement
of Additional Information for the Fund, and with any applicable procedures
adopted by the Trustees in writing and made available to Subadviser; (ii) manage
the Fund in accordance with the investment requirements for regulated investment
companies under Subchapter M of the Code and regulations issued thereunder;
(iii) direct the placement of orders pursuant to its investment determinations
for the Fund directly with the issuer, or with any broker or dealer, in
accordance with applicable policies expressed in the Fund's Prospectus and/or
Statement of Additional Information and in accordance with applicable legal
requirements.
(b) furnish to the Trust whatever non-proprietary reports it may
reasonably request with respect to the Fund's assets or contemplated
investments. In addition, the Subadviser will keep the Trust and the Trustees
informed of developments materially affecting the Fund's portfolio and shall, on
the Subadviser's own initiative, furnish to the Trust from time to time whatever
information the Subadviser believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar Administrators
Corp. (the "Administrator"), the Adviser, and the Trust, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Fund as may be required to assist the Adviser, the Administrator and the Trust
in their compliance with applicable laws and regulations. The Subadviser will
furnish the Trustees with such periodic and special reports regarding the Fund
as they may reasonably request;
(d) immediately notify the Adviser and the Trust in the event that the
Subadviser or any of its affiliates: (i) becomes aware that it is subject to a
statutory disqualification that prevents the Subadviser from serving as an
investment adviser pursuant to this Subadvisory Agreement; or (ii) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the Securities and Exchange Commission ("SEC") or other regulatory authority.
The Subadviser further agrees to notify the Trust and the Adviser immediately of
any material fact known to the Subadviser respecting or relating to the
Subadviser that is not contained in the Trust's Registration Statement, or any
amendment or supplement thereto, but that is required to be disclosed therein,
and of any statement contained therein that becomes untrue in any material
respect. The Trust, the Fund, Adviser, Administrator and their affiliates shall
likewise immediately notify the Subadviser if any of them become aware of any
regulatory action of the type described in this subparagraph 2(d).
3. ALLOCATION OF CHARGES AND EXPENSES. The Subadviser shall pay all expenses
associated with the management of its business operations in performing its
responsibilities hereunder, including the cost of its own overhead, research,
compensation and expenses of its directors, officers and employees, and other
internal operating costs; provided, however, that the Subadviser shall be
entitled to reimbursement on a monthly basis by the Adviser of all reasonable
out-of-pocket expenses properly incurred by it in connection with serving as
subadviser to the Fund. For the avoidance of doubt, the Fund shall bear its own
overhead and other internal operating costs (whether incurred directly or by the
Adviser or the Subadviser) including, without limitation:
a. the costs incurred by the Fund in the preparation and printing of the
Prospectus or any offering literature (including any form of advertisement or
other solicitation materials calculated to lead to investors subscribing for
shares);
b. all fees and expenses on behalf of the Fund to the Transfer Agent and
the Custodian;
c. the reasonable fees and expenses of accountants, auditors, lawyers and
other professional advisors to the Fund;
d. any interest, fee or charge payable on or on account of any borrowing by
the Fund;
e. fiscal and governmental charges and duties relating to the purchase,
sale, issue or redemption of shares and increases in authorized share capital of
the Fund;
f. the fees of any stock exchange or over-the-counter market on which the
shares may from time to time be listed, quoted or dealt in and the expenses of
obtaining any such listing, quotation or permission to deal;
g. the fees and expenses (if any) payable to Trustees;
h. brokerage, fiscal or governmental charges or duties in respect of or in
connection with the acquisition, holding or disposal of any of the assets of the
Fund or otherwise in connection with its business;
i. the expenses of publishing details and prices of shares in newspapers
and other publications;
j. all expenses incurred in the convening of meetings of shareholders or in
the preparation of agreements or other documents relating to the Fund or in
relation to the safe custody of the documents of title of any investments;
k. all Trustees communication costs; and
l. all premiums and costs for Fund insurance and blanket fidelity bonds.
4. COMPENSATION. As compensation for the advisory services provided by the
Subadviser under this Agreement, the Adviser will pay the Subadviser at the end
of each calendar month an advisory fee computed daily at an annual rate equal to
0.48 of 1% of the Fund's average daily net assets. The "average daily net
assets" of the Fund shall mean the average of the values placed on the Fund's
net assets as of 4:00 p.m. (New York time) on each day on which the net asset
value of the Fund is determined consistent with the provisions of Rule 22c-1
under the 1940 Act or, if the Fund lawfully determines the value of its net
assets as of some other time on each business day, as of such other time. The
value of net assets of the Fund shall always be determined pursuant to the
applicable provisions of the Fund's Declaration of Trust and the Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
Section 4, the value of the net assets of the Fund as last determined shall be
deemed to be the value of its net
assets as of the close of regular trading on the New York Stock Exchange, or as
of such other time as the value of the net assets of the Fund's portfolio may
lawfully be determined, on that day. If the determination of the net asset value
of the shares of the Fund has been so suspended for a period including any month
end when the Subadviser's compensation is payable pursuant to this Section, the
Subadviser's compensation payable at the end of such month shall be computed on
the basis of the value of the net assets of the Fund as last determined (whether
during or prior to such month). If the Fund determines the value of the net
assets of its portfolio more than once on any day, then the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this Section 4.
5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and records
with respect to its services to the Trust and the Fund as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by other
applicable legal provisions, and to preserve such records for the periods and in
the manner required by applicable laws or regulations. The Subadviser also
agrees that records it maintains and preserves pursuant to Rules 31a-2 under the
1940 Act (excluding trade secrets or intellectual property rights) in connection
with its services hereunder are the property of the Trust and will be
surrendered promptly to the Trust upon its request and the Subadviser further
agrees that it will furnish to regulatory authorities having the requisite
authority any information or reports in connection with its services hereunder
which may be requested in order to determine whether the operations of the Fund
are being conducted in accordance with applicable laws and regulations.
6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall exercise
its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust or the Fund or
the holders of the Fund's shares or by the Adviser in connection with the
matters to which this Subadvisory Agreement relates, provided that nothing in
this Subadvisory Agreement shall be deemed to protect or purport to protect the
Subadviser against liability to the Trust or the Fund or to holders of the
Fund's shares or to the Adviser to which the Subadviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of the Subadviser's reckless
disregard of its obligations and duties under this Subadvisory Agreement. As
used in this Section 6, the term "Subadviser" shall include any officers,
directors, employees or other affiliates of the Subadviser performing services
for the Fund.
7. SERVICES NOT EXCLUSIVE. It is understood that the services of the Subadviser
are not exclusive, and that nothing in this Subadvisory Agreement shall prevent
the Subadviser, its affiliates or its or their officers, directors and employees
from providing similar services to other investment companies (whether or not
their investment objectives and policies are similar to those of the Fund) or
from engaging in other investment advisory activities. When the Subadviser
recommends the purchase or sale of a security for other investment companies and
other clients, and at the same time the Subadviser recommends the purchase or
sale of the same security for the Fund, it is understood that in light of its
fiduciary duty to the Fund, such transactions will be executed on a basis that
is fair and equitable to the Fund, provided, however, that the Subadviser is not
required to recommend to the Fund the same investments it recommends to its
other clients. 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 shall act as a principal or agent or receive any
commission. If the Subadviser provides any advice to its clients concerning the
shares of the Fund, the Subadviser shall act solely as investment counsel for
such clients and not in any way on behalf of the Fund.
8. DURATION AND TERMINATION. This Subadvisory Agreement shall continue in effect
for a period of two years unless sooner terminated as provided herein.
Notwithstanding the foregoing, this Subadvisory Agreement may be terminated: (a)
at any time without penalty by the Fund or Adviser upon the vote of a majority
of the Trustees or by vote of the majority of the Fund's outstanding voting
securities, upon sixty (60) days' written notice to the Subadviser, or (b) by
the Subadviser without cause at any time without penalty, upon (60) days'
written notice to the Trust or Adviser. This Subadvisory Agreement will also
terminate automatically in the event of its assignment (as defined in the 0000
Xxx) or the assignment or termination of the Investment Advisory Agreement.
9. AMENDMENTS. No provision of this Subadvisory Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by both parties, and no material amendment of this Subadvisory Agreement
shall be effective until approved by an affirmative vote of (i) a majority of
the outstanding voting securities of the Fund, and (ii) a majority of the
Trustees of the Trust, including a majority of Trustees who are not interested
persons of any party to this Subadvisory Agreement, cast in person at a meeting
called for the purpose of voting on such approval, if such approval is required
by applicable law.
10. Indemnification. (a) The Adviser hereby agrees to indemnify the Subadviser
from and against all liabilities, losses, expenses, ,reasonable attorneys' fees
and costs (other than attorneys' fees and costs in relation to the preparation
of this Agreement; each party bearing responsibility for its own such costs and
fees) or damages (other than liabilities, losses, expenses, attorneys fees and
costs or damages arising from the Subadviser failing to meet the standard of
care required hereunder in the performance by the Subadviser of, or its failure
to perform, the services required hereunder), arising from the Adviser's (its
affiliates and their respective agents and employees) failure to perform its
duties or assume its obligations hereunder, or from its wrongful actions or
omissions, including but not limited to any claims for non-payment of advisory
fees; claims asserted or threatened by any shareholder of the Trust,
governmental or regulatory agency, or any other person; claims arising from any
wrongful act by the Trust or the Fund or any of their trustees, officers,
employees, or representatives, or by the Adviser, its officers, employees or
representatives, or from any actions by any representative of the Trust or the
Fund; any action or claim against the Subadviser based on any alleged untrue
statement or misstatement of material fact in any registration statement,
prospectus, shareholder report or other information or materials covering shares
filed or made public by the Trust on behalf of the Fund or any amendment thereof
or supplement thereto, or the failure or alleged failure to state therein a
material fact required to be stated in order that the statements therein are not
misleading, provided that such claim is not based upon information provided to
the Adviser by the Subadviser or approved by the Subadviser in the manner
provided in paragraph 12(b) of this Agreement, or which facts or information the
Subadviser failed to provide or disclose. With respect to any claim for which
the Subadviser shall be entitled to indemnity hereunder, the Adviser shall
assume the reasonable expenses and costs (including any reasonable attorneys'
fees and costs) of the Subadviser of investigating and/or defending any claim
asserted or threatened by any party, subject always to the Adviser first
receiving a written undertaking from the Subadviser to repay any amounts paid on
its behalf in the event and to the extent of any subsequent determination that
the Subadviser was not entitled to indemnification hereunder in respect of such
claim.
(b) The Subadviser hereby agrees to indemnify the Adviser, its affiliates, the
Trust and the Fund from and against all liabilities, losses, expenses,
reasonable attorneys' fees and costs (other than attorneys' fees and costs in
relation to the preparation of this Agreement; each party bearing responsibility
for its own such costs and fees) or damages (other than liabilities, losses,
expenses, attorneys' fees and costs or damages arising from the Adviser's
failure to perform its responsibilities hereunder or claims arising from its
acts or failure to act in performing this Agreement) arising from Subadviser's
(its affiliates, and their respective agents and employees) failure to perform
its duties and assume its obligations hereunder, or from any wrongful act of
Subadviser or its failure to act in performing this Agreement, including any
action or claim against the Adviser based on any alleged untrue statement or
misstatement of a material fact made or provided by and with the consent of
Subadviser contained in any registration statement, prospectus, shareholder
report or other information or materials relating to the Trust or the Fund and
shares issued by the Trust or the failure or alleged failure to state a material
fact therein required to be stated in order that the statement therein is not
misleading, which fact should have been made or provided by the Subadviser to
the Adviser. With respect to any claim for which the Adviser is entitled to
indemnity hereunder, the Subadviser shall assume the reasonable expenses and
costs (including any reasonable attorneys' fees and costs) of the Adviser of
investigating and/or defending any claim asserted or threatened by any party,
subject always to the Subadviser first receiving a written undertaking from the
Adviser to repay any amounts paid on its behalf in the event and to the extent
of any subsequent determination that the Adviser was not entitled to
indemnification hereunder in respect of such claim.
(c) In the event that the Subadviser or Adviser is or becomes a party to any
action or proceedings in respect of which indemnification may be sought
hereunder, the party seeking indemnification shall promptly notify the other
party thereof. After becoming notified of the same, the party from whom
indemnification is sought shall
be entitled to participate in any such action or proceeding and shall assume any
payment for the full defense thereof with counsel reasonably satisfactory to the
party seeking indemnification. After properly assuming the defense thereof, the
party from whom indemnification is sought shall not be liable hereunder to the
other party for any legal or other expenses subsequently incurred by such party
in connection with the defense thereof, other than damages, if any, by way of
judgment, settlement, or otherwise pursuant to this provision. The party from
whom indemnification is sought shall not be liable hereunder for any settlement
of any action or claim effected without its written consent, which consent shall
not be unreasonably withheld.
11. INDEPENDENT CONTRACTOR. Subadviser shall for all purposes of this Agreement
be deemed to be an independent contractor and, except as otherwise expressly
provided herein, shall have no authority to act for, bind or represent the Trust
or the Fund in any way or otherwise be deemed to be an agent of the Trust or the
Fund. Likewise, the Trust, the Fund, the Adviser, and their respective
affiliates, agents and employees shall not be deemed agents of the Subadviser
and shall have not authority to bind Subadviser.
12. USE OF NAME. (a) The Trust, on behalf of the Fund, and the Fund may, subject
to sub-clause (b) below, use the name, "Navellier Fund Management, Inc." or any
component, abbreviation or other name derived therefrom for promotional purposes
only for so long as this Agreement (or any extension, renewal or amendment
thereof) continues in force, unless the Subadviser shall specifically consent in
writing to such continued use thereafter. Any permitted use by the Trust or Fund
during the term hereof of the name of the Subadviser, Navellier or any
derivative thereof, shall in no way prevent the Subadviser or any of it
shareholders or any of their successors, from using or permitting the use of
such name (whether singly or in any combination with any other words) for, by or
in connection with an entity or enterprise other than the Trust or the Fund. The
name and right to the name Navellier Fund Management, Inc. or any derivation of
the name Navellier shall at all times be owned and be the sole and exclusive
property of Xxxxx Xxxxxxxxx and his affiliated entities. Navellier Fund
Management Inc., by entering into this Agreement, is allowing the Trust and the
Fund to use the name Navellier and/or derivatives thereof solely by or on behalf
of this Fund. At the conclusion of this Agreement or in the event of any
termination of this Agreement or if the Subadviser's services are terminated for
any reason, each of the authorized parties and their respective employees,
representatives, affiliates, and associates agree that they shall immediately
cease using the name Navellier and/or any derivatives of said name for any
purpose whatsoever.
(b) The Adviser and its affiliates shall not publish or distribute, and shall
cause the Fund not to publish or distribute to Fund shareholders, prospective
investors, sales agents or members of the public any disclosure document,
offering literature (including any form of advertisement or other solicitation
materials calculated to lead investors to subscribe for and purchase shares of
the Fund) or other document referring by name to the Subadviser, unless the
Subadviser shall have consented in writing to such references in the form and
context in which they appear; provided however, that where the Fund timely seeks
to obtain approval of disclosure contained in any documents required to be filed
by the Fund, and such approval is not forthcoming on or before the date on which
such documents are required by law to be filed, the Subadviser shall be deemed
to have consented to such disclosure.
13. MISCELLANEOUS. (a) This Subadvisory Agreement shall be governed by the laws
of the State of Nevada, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act, the Advisers Act, or rules or orders of
the SEC thereunder. In the event of any litigation in which the Adviser and the
Subadviser are adverse parties and there are no other parties to such
litigation, such action shall be brought in the United States District Court for
the State of Nevada, located in Reno, Nevada.
(b) The captions of this Subadvisory Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) This Agreement may be executed in one or more counterparts, all of which
taken together shall be deemed to constitute one and the same instrument.
14. NOTICES. Any notice, instruction or other instrument required or permitted
to be given hereunder may be delivered in person to the offices of the parties
as set forth therein during normal business hours, or delivered or sent
by prepaid registered mail, express mail or by facsimile to the parties at such
offices or such other address as may be notified by either party from time to
time. Such notice, instruction or other instrument shall be deemed to have been
served, in the case of a registered letter at the expiration of seventy-two (72)
hours after posting; in the case of express mail, within twenty-four (24) hours
after dispatch; and in the case of facsimile, immediately on dispatch, and if
delivered outside normal business hours it shall be deemed to have been received
at the next time after delivery or transmission when normal business hours
commence. Evidence that the notice, instruction or other instrument was properly
addressed, stamped and put into the post shall be conclusive evidence of
posting.
15. ATTORNEY'S FEES. In the event of a material breach of this Agreement by any
party hereto, the prevailing party, as determined by the trier of fact, shall be
entitled to reasonable attorneys' fees and costs as determined by the court in
such action, in addition to any other damages awarded.
16. NON-SOLICITATION. The Adviser, its affiliates and their respective agents
(including brokers engaged in marketing and selling shares of the Fund), and
each of their employees and affiliates agree not to knowingly solicit to invest,
or accept or retain as investors, in the Fund directly or indirectly any persons
or entities who are clients of or investors in any fund or investment vehicle
managed by any entity owned by Xxxxx Xxxxxxxxx.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the 1st day of February, 1996.
NORTHSTAR INVESTMENT MANAGEMENT NAVELLIER FUND MANAGEMENT, INC.
By: By:
--------------------------------- --------------------------------
Chairman and CEO President
