EXHIBIT 5(A)
NORTHSTAR EMERGING MARKETS VALUE FUND
SUBADVISORY AGREEMENT
AGREEMENT made this 8th day of November, 1997 by and between Northstar
Investment Management Corporation, Delaware Corporation (hereinafter the
"Adviser"), investment adviser for the Northstar Emerging Markets Fund
(hereinafter the "Fund") a series of the Northstar Trust (the "Trust") and
Xxxxxxx Investment Partners, L.P., a California limited partnership (hereinafter
the "Subadviser").
WHEREAS, the Adviser has been retained by the Trust on behalf of the
Fund to provide investment advisory services to the Fund pursuant to an
Investment Advisory Agreement made on November 8, 1993, as amended and restated
November 8, 1997 (the "Investment Advisory Agreement"); and
WHEREAS, the Fund's Trustees, including a majority of the Trustees who
are not "interested persons," as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Fund's shareholders have approved the
appointment of the Subadviser to perform certain investment advisory services
for the Fund pursuant to this Subadvisory Agreement with the Adviser and the
Subadviser is willing to perform such services for the Fund;
WHEREAS, the Subadviser is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended ("Advisers Act") ;
NOW THEREFORE, in consideration of the promises and mutual convenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:
1. Appointment. The Adviser hereby appoints the Subadviser to perform
advisory services to the Fund for the periods and on the terms set forth in this
Subadvisory Agreement. The Subadviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Duties of Subadviser. The Adviser hereby authorizes Subadviser to
manage the investment and reinvestment of cash and investments comprising those
assets of the Fund with power on behalf of and in the name of the Fund at
Subadviser's discretion, subject at all times to the supervision of the Adviser
and the Trustees of the Fund:
(a) to direct the purchase, subscription or other acquisition, and
the sale, redemption, and exchange of investments, subject to the duty to render
to the Trustees of the Fund and the Adviser written reports of the composition
of the portfolio of the Fund as often as the Adviser or the Trustees of the Fund
shall reasonably require;
(b) to make all decisions relating to the manner, method, and
timing of investment transactions, to select brokers, dealers and other
intermediaries by or through whom such transactions will be effected, and to
engage such consultants, analysts and experts in connection therewith as may be
considered necessary or appropriate;
(c) to direct banks, brokers or custodians to disburse funds or
assets solely in order to execute investment transactions for the Fund, provided
the Subadviser shall have no authority to direct the transfer of the Fund's
funds or assets to itself or other affiliated persons and shall have no
authority over the disbursement (as opposed to investment decisions) of funds or
assets nor any custody of any of the Fund's funds or assets; and
(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 Fund or the Adviser may give in
writing to the Subadviser with regard to any of the foregoing powers shall,
unless the contrary is expressly stated herein, override the general authority
given by this provision to the extent that the Trustees of the Fund 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) above.
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 of 1986, as amended,
(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, and (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 Fund whatever non-proprietary reports the Fund
may reasonably request with respect to the Fund's assets or contemplated
investments. In addition, the Subadviser will keep the Fund and the Trustees
informed of developments materially affecting the Fund's portfolio and shall, on
the Subadviser's own initiative, furnish to the Fund from time to time whatever
information the Subadviser believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar
Administrators Corporation (the "Administrator"), the Adviser, and the Fund,
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 Fund 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 Fund 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 Fund and the Adviser immediately of
any material fact known to the Subadviser respecting or relating to the
Subadviser that is not contained in the Fund's Registration Statement, or any
amendment or supplement thereto, but that is required to be disclosed therein,
and of any statement contained therein respecting or relating to the Subadviser
that becomes untrue in any material respect. The Adviser shall likewise
immediately notify the Subadviser if it becomes aware of any regulatory action
of the type described in this subparagraph 2(d) respecting or relating to the
Fund, the Adviser, or any Affiliates of the Adviser.
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 partners, officers and employees, and
other internal operating costs. 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 its 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
(1) all premiums and costs for Fund insurance and blanket fidelity
bonds.
4. Compensation. The Subadviser agrees to waive all compensation until
the Fund's net assets exceed $25 million or until April 1, 1998, whichever comes
first. After the Fund's net assets exceed $25 million or April 1, 1998,
whichever comes first, the Adviser will pay the Subadviser at the end of each
calendar month an advisory fee computed daily at an annual rate equal to fifty
(50) percent of the management fee that the Fund pays the Adviser.
5. Books and Records. The Subadviser agrees to maintain such books and
records with respect to its services to 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 Fund and will be surrendered promptly
to the Fund 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 business judgment and reasonable care 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 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 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 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, except as may
otherwise be agreed by the Adviser and the Subadviser, the services of the
Subadviser are not exclusive. 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 partners officers or employees shall act as
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
and shall continue automatically for successive annual periods provided that
such continuance is specifically approved at least annually by the affirmative
vote of (i) a majority of the Trustees of the Trust who are not interested
persons of the Trust (as defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on such approval, and (ii) a majority of the
Trustees of the Trust or the holders of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act). 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 (as defined in
the 1940 Act), upon sixty (60) days' written notice to the Subadviser, or (b) by
the Subadviser at any time without penalty, upon (60) days' written notice to
the Fund 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 Fund, 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 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: (i)
the Adviser's (or 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 claims asserted or
threatened by any shareholder of the Fund, governmental or regulatory agency, or
any other person; (ii) claims arising from any wrongful act by the Fund or any
of the Fund's trustees, officers, employees, or representatives, or by the
Adviser, its officers, employees or representatives, or from any actions by the
Fund's distributors or any representative of the Fund; (iii) 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 relating to the Fund or shares issued by 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 which facts or
information of a material nature 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 final determination by a court 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 and the Fund from and against all liabilities, losses, expenses,
reasonable attorneys' fees and costs 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 or its
agents' and employees' failure to perform its duties and assume its obligations
hereunder, or from any failure of Subadviser to meet the standard of care set
forth in Section 6 of 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 the Subadviser contained in any registration statement,
prospectus, shareholder report or other information or materials relating to the
Fund or shares issued by the Fund, or the failure or alleged failure to state a
material fact therein required to be stated in order that the statements therein
are 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 final determination by a court 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 (the "Indemnitee") shall
promptly notify the other party thereof. After becoming notified of the same,
the party from whom indemnification is sought (the "Indemnitor") shall be
entitled to participate in any such action or proceeding and shall assume any
payment for the full defense of the Indemnitee therein with counsel reasonably
satisfactory to the party seeking indemnification. The Indemnitor shall not, in
connection with any action or proceeding or separate but similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegation or circumstances, be liable for the fees or expenses of more than one
separate firm of attorneys at any time for Indemnitees. After properly assuming
the defense thereof, the Indemnitor shall not be liable hereunder to the
Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than damages, if any,
by way of judgment, settlement, or otherwise pursuant to this provision. The
Indemnitor 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. The Indemnitee shall fully cooperate with the Indemnitor
in the defense of any claim and any litigation or other legal proceedings
resulting from the claim. The Indemnitee may participate in the defense of the
claim and any litigation or other legal proceedings resulting from the claim.
The Indemnitee may employ separate counsel to participate in such defense, and
the fees and expenses of such counsel shall not be at the expense of the
Indemnitee, but only if the employment thereof (a) has been specifically
authorized in writing by the Indemnitor, which authorization shall not be
unreasonably withheld and (b) relates to the defense of any claim or any
litigation or other legal proceedings resulting from the claim to the extent the
claim or any litigation or other legal proceedings resulting from the claim
seeks injunctive, specific performance or other nonmonetary relief involving or
affecting the business, operations or assets of the Indemnitee (or an Affiliate
of the Indemnitee).
The provisions of this Section 10 shall survive the termination of this
Agreement.
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 Fund in any way or otherwise be deemed to be an agent of the Fund. Likewise,
the Fund, the Adviser and their respective affiliates, agents and employees
shall not be deemed agents of the Subadviser and shall have no authority to bind
Subadviser.
12. Use of Names. (a) The Fund may, subject to sub-clause (b) below,
use the name, "Xxxxxxx Investment Partners, L.P. ." ("Brandes") or the name of
any principal of Brandes, or any component, abbreviation or other name derived
therefrom for promotional purposes only for so long as this Subadvisory
Agreement (or any extension, renewal or amendment thereof) continues in force,
unless the Subadviser or such principal shall specifically consent in writing to
such continued use thereafter. Any permitted use by the Fund during the term
hereof of the name of the Subadviser or any of its principals, 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 Fund. At the conclusion of this
Subadvisory Agreement or in the event of any termination of this Subadvisory
Agreement for any reason, each of the
authorized parties and their respective employees, representatives, affiliates,
and associates agree that they shall immediately cease using each such name and
any derivatives of said names for any purpose whatsoever.
(b) The Adviser and its affiliates on one hand, and the Subadviser
on the other, shall not publish or distribute, and the Adviser 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 or its affiliates on one
hand and the Adviser or its affiliates on the other, unless the other party
shall have consented in writing to such references in the form and context in
which they appear.
13. Change in Identity. The Subadviser shall notify the Adviser of any
change in the identity or control of its general or limited partners promptly
after such change occurs.
14. Miscellaneous.
(a) This Subadvisory Agreement shall be governed by the laws of
the State of Massachusetts (without regard to principles of conflicts of law),
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.
(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.
15. 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 addressed to its President. 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.
16. Attorneys' 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year set forth
above.
Northstar Investment Management Corporation
By:_____________________________________
Xxxx X. Xxxxxx
Chairman and CEO
Xxxxxxx Investment Partners, L.P.
By:______________________________________
Xxxxxxx X. Xxxxxxx
Managing Director
