Exhibit 5(c)
INVESTMENT SUB-ADVISORY AGREEMENT
---------------------------------
Between PROVIDIAN INVESTMENT ADVISORS, INC.
and
BLAIRLOGIE CAPITAL MANAGEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT is entered into as of this 25th
day of March, 1997, by and between Providian Investment Advisors, Inc. (the
"Adviser"), a Delaware corporation, and Blairlogie Capital Management (the
"Sub-Adviser"), a Scottish limited partnership.
WITNESSETH:
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WHEREAS, the Providian Series Trust (the "Trust"), a Massachusetts business
trust, has retained the Adviser to render investment advisory services pursuant
to an Investment Advisory Agreement entered into as of March 25, 1997, and such
agreement authorizes the Adviser to engage sub-advisers to discharge the
Adviser's responsibilities with respect to the investment management of the
Trust, a copy of which agreement has been provided to the Sub-Adviser and is
incorporated by reference herein;
WHEREAS, the Trust is an open-end management investment company, registered
as such pursuant to the provisions of the Investment Company Act of 1940 (the
"1940 Act");
WHEREAS, the Trust currently consists of nine separate series, each having
different investment objectives and policies;
WHEREAS, the Adviser and the Sub-Adviser are each an investment adviser,
registered as such pursuant to the provisions of the Investment Advisers Act of
1940 (the "Advisers Act"), and each is engaged in the business of rendering
investment advice and investment management services as an independent
contractor;
WHEREAS, the Adviser desires to retain the Sub-Adviser to render advice and
services to the Trust in connection with management and operation of its
International Active Fund (the "Fund") pursuant to terms and conditions set
forth herein; and
WHEREAS, the Sub-Adviser desires and has agreed to render such advice and
furnish such services with regard to the Fund pursuant to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants, conditions and agreements contained herein, and for such
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties, each intending to be legally bound hereby,
mutually agree as follows:
1. Employment. The Adviser hereby employs the Sub-Adviser, and the Sub-
Adviser hereby accepts such employment, to render investment advice and
investment management services with respect to the Fund, subject to the
supervision and direction of the Adviser and the Trust. In the event the Adviser
wishes to retain the Sub-Adviser to render investment advisory services to one
or more additional funds, other than the Fund, the Adviser shall notify the Sub-
Adviser in writing. If the Sub-Adviser is willing to render such services, it
shall notify the Adviser in writing, whereupon such fund shall become a Fund
hereunder and be subject to this Agreement.
2. Sub-Adviser Duties. Subject to the supervision of the Adviser and the
Trust and the investment policies set forth in the Fund's registration
statement, as amended and supplemented from time to time (the "Registration
Statement"), filed with the Securities and Exchange Commission ("SEC"), the Sub-
Adviser shall provide a continuous investment program for the Fund, and
determine the composition of the assets of the Fund, including determination of
the purchase, retention or sale of the securities, cash, and other investments,
including futures contracts and options thereon, for the Fund. The Sub-Adviser
shall provide investment research and analysis, which may consist of
computerized investment methodology, and shall conduct a continuous program of
evaluation, investment, sales, and reinvestment of the Fund's assets by
determining the securities and other investments that shall be purchased,
entered into, sold, closed, or exchanged for the Fund, when these transactions
should be executed, and what portion of the assets of the Fund should be held in
the various securities and other investments in which it may invest, and the
Sub-Adviser is hereby authorized to execute and perform such services on behalf
of the Fund. To the extent permitted by the investment policies of the Fund, the
Sub-Adviser shall make decisions for the Fund as to foreign currency matters and
make determinations as to the retention or disposition of foreign currencies or
securities or other instruments denominated in foreign currencies, or derivative
instruments based upon foreign currencies, including forward foreign currency
contracts and options and futures on foreign currencies and shall execute and
perform the same on behalf of the Fund. In performing these duties, the Sub-
Adviser:
(a) Shall (1) manage the Fund so that it will qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code and (2)
manage the Fund so as to ensure compliance by the Fund with the diversification
requirements of Section 817(h) of the Internal Revenue Code and Regulations
issued thereunder. The Adviser shall notify the Sub-Adviser of any amendments to
Section 817(h) of the Internal Revenue Code and Regulations issued thereunder.
In managing the Fund in accordance with these requirements, the Sub-Adviser
shall be entitled to receive and act upon advice
of counsel to the Trust, counsel to the Adviser, or counsel to the Sub-Adviser
that is also acceptable to the Adviser.
(b) In managing the Fund, shall conform with (1) the 1940 Act and all
rules and regulations thereunder, and releases and interpretations related
thereto, (2) all other applicable federal and state laws and regulations
pertaining to investment vehicles underlying variable annuity and/or variable
life insurance contracts, (3) any applicable procedures, policies and guidelines
adopted by the Trustees of the Trust (the "Trustees"), (4) the Fund's
objectives, investment policies and investment restrictions as stated in the
Fund's Prospectus and Statement of Additional Information, and (5) the
provisions of the Fund's Registration Statement filed on Form N-1A under the
Securities Act of 1933 (the "1933 Act") and the 0000 Xxx. Until the Adviser
delivers any supplements or amendments to the Sub-Adviser, the Sub-Adviser shall
be fully protected in relying on the Fund's Registration Statement previously
furnished to the Sub-Adviser by the Adviser.
(c) Is responsible, in connection with its responsibilities under this
Paragraph, for decisions to buy and sell securities and other investments for
the Fund, for broker-dealer and future commissions merchants ("FCM") selection
and for negotiation of commission rates. The Sub-Adviser's primary consideration
in effecting a security or other transaction will be to obtain the best
execution for the Fund, taking into account the factors specified in the
Prospectus and Statement of Additional Information for the Fund, as amended or
supplemented from time to time. Subject to such policies as the Trustees may
determine, and consistent with Section 28(e) of the Securities Exchange Act of
1934 (the "1934 Act"), the Sub-Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Fund to pay a broker or dealer, acting
as agent, for a portfolio transaction effected at a price in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Sub-Adviser's (or its affiliates) overall
responsibilities with respect to the Fund and to its other clients as to which
it exercises investment discretion. To the extent consistent with these
standards, and in accordance with Section 11(a) of the 1934 Act and Rule 11a2-
2(T) thereunder, and subject to any other applicable laws and regulations
including Section 17(e) of the 1940 Act, the Sub-Adviser is further authorized
to allocate the orders placed by it on behalf of the Fund to the Sub-Adviser if
it is registered as a broker or dealer with the SEC or as a FCM with the
Commodities Futures Trading Commission ("CFTC"), to any of its affiliates that
are registered as a broker or dealer with the SEC or as a FCM with the CFTC, or
to such brokers and dealers that also provide research or statistical research
and material or other services to the Fund or the Sub-Adviser. Such allocation
shall be in such amounts and proportions as the Sub-Adviser shall determine
consistent with the above standards, and, upon request, the Sub-Adviser shall
report on said allocation to the Adviser and the Trust, indicating the brokers,
dealers or FCMs to which such allocations have been made and
the basis therefor. Sub-Adviser will report to the Adviser any soft dollar
arrangements that result in services to the Trust and/or the Sub-Adviser as may
be reasonably requested by the Trustees.
(d) May, on occasions when the purchase or sale of a security is
deemed to be in the best interest of the Fund, as well as any other investment
advisory clients, to the extent permitted by applicable laws and regulations,
aggregate the securities to be so sold or purchased with those of its other
clients where such aggregation is not inconsistent with the policies set forth
in the Fund's Registration Statement. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transactions, will be made by the Sub-Adviser in the exercise of its fiduciary
obligations to the Fund and to such other clients in a manner that in its
judgment is fair and equitable.
(e) Shall, in connection with the purchase and sale of securities for
the Fund, together with the Adviser, arrange for the daily transmission to the
Fund's custodian and recordkeeping agent of such confirmation(s), trade tickets,
and other documents and information, including, but not limited to, CUSIP,
Sedol, or other numbers that identify securities to be purchased or sold on
behalf of the Fund, as may be reasonably necessary to enable the custodian and
recordkeeping agent to perform its administrative and recordkeeping
responsibilities with respect to the Fund. With respect to portfolio securities
to be purchased or sold through the Depository Trust Company, the Sub-Adviser
shall arrange for the automatic transmission of the confirmation of such trades
to the Fund's custodian and recordkeeping agent and, if required, to the
Adviser.
(f) Shall assist the custodian and recordkeeping agent for the Fund in
determining or confirming, consistent with the procedures and policies stated in
the Registration Statement for the Fund, the value of any portfolio securities
or other assets of the Fund for which the custodian and recordkeeping agent
seeks assistance from the Sub-Adviser or identifies for review by the Sub-
Adviser.
(g) Shall make available to the Trust and the Adviser promptly upon
request, any of the Fund's investment records and ledgers maintained by the Sub-
Adviser (which shall not include the records and ledgers maintained by the
custodian and recordkeeping agent for the Fund), as are necessary to assist the
Trust and the Adviser in compliance with requirements of the 1940 Act and the
Advisers Act, as well as other applicable laws. The Sub-Adviser shall furnish to
regulatory authorities having the requisite authority any information or reports
in connection with such services which may be requested in order to ascertain
whether the operations of the Fund are being conducted in a manner consistent
with applicable laws and regulations.
(h) Shall regularly report to the Trust on the investment program for
the Fund and the issuers and securities represented in the Fund's portfolio, and
shall furnish the Trust such periodic and special reports as the Trustees and
the Adviser may reasonably request.
(i) Shall not disclose or use any records or information obtained
pursuant to this Agreement (excluding investment research and investment advice)
in any manner whatsoever except as expressly authorized in this Agreement or in
the ordinary course of business in connection with placing orders for the
purchase and sale of securities, and shall keep confidential any information
obtained pursuant to the Agreement, and disclose such information only if the
Trust has authorized such disclosure, or if such disclosure is required by
applicable federal or state law or regulations or regulatory authorities having
the requisite authority. The Trust and the Adviser shall not disclose or use any
records or information respecting the Sub-Adviser obtained pursuant to this
Agreement in any manner whatsoever except as expressly authorized in this
Agreement, and shall keep confidential any information obtained pursuant to this
Agreement, and disclose such information only as expressly authorized in this
Agreement, if the Trust has authorized such disclosure, or if such disclosure is
required by applicable federal or state law or regulations or regulatory
authorities having the requisite authority.
(j) Shall be responsible for making reasonable inquiries and for
reasonably ensuring that any employee of the Sub-Adviser has not, to the best of
the Sub-Adviser's knowledge:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor involving the purchase or sale of any security or arising out of
such person's conduct as an underwriter, broker, dealer, investment adviser,
municipal securities dealer, government securities broker, government securities
dealer, transfer agent, or entity or person required to be registered under the
Commodity Exchange Act, or as an affiliated person, salesperson, or employee of
any investment company, bank, insurance company, or entity or person required to
be registered under the Commodity Exchange Act; or
(ii) been permanently or temporarily enjoined by reason of any
misconduct, by order, judgment, or decree of any court of competent jurisdiction
from acting as an underwriter, broker, dealer, investment adviser, municipal
securities dealer, government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered under the
Commodity Exchange Act, or as an affiliated person, salesperson or employee of
any investment company, bank, insurance company, or entity or person required to
be registered under the Commodity Exchange Act or from engaging in or continuing
any conduct or practice in connection with any such activity or in connection
with the purchase or sale of any security.
(k) Shall provide to Adviser and the Trust by April 1 of each calendar
year a copy of the Sub-Adviser's Form ADV as amended and most recently filed
with the SEC and a list of persons who the Sub-Adviser has authorized to give
written and/or oral instructions to Custodians of Fund assets for the Fund.
3. Best Efforts. The Sub-Adviser hereby agrees to use its best judgment
and efforts in rendering the advice and services with respect to the Fund as
contemplated by this Agreement. The Sub-Adviser further agrees to use its best
efforts in the preparation of reports and information and in the management of
the respective assets of the Fund pursuant to this Agreement. For this purpose
the Sub-Adviser shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from time
to time determine to be necessary to the performance of its obligations under
this Agreement. Without limiting the generality of the foregoing, the staff and
personnel of the Sub-Adviser shall be deemed to include persons employed or
retained by the Sub-Adviser to furnish statistical, research, and other factual
information, advice regarding economic factors and trends, information with
respect to technical and scientific developments, and such other information,
advice and assistance as the Sub-Adviser may desire and request.
4. Independent Contractor. The Sub-Adviser shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for or represent the
Adviser, the Trust or the Fund in any way, or in any way be deemed an agent of
the Adviser, the Trust or the Fund. It is expressly understood and agreed that
the services to be rendered by the Sub-Adviser pursuant to the provisions of
this Agreement are not to be deemed exclusive with respect to the Sub-Adviser's
rendering of services, and the Sub-Adviser shall therefore be free to render
similar or different services to others, provided, that its ability to render
the services described herein shall not be impaired thereby.
5. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the current
Registration Statement for the Fund filed with the SEC and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
information relating, directly or indirectly, to the Sub-Adviser, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Sub-Adviser further represents and warrants that it
is a duly registered investment adviser under the Advisers Act and a duly
registered investment adviser in all states in which the Sub-Adviser is required
to be registered. The Sub-Adviser agrees promptly to provide written notice to
the Adviser and the Trust of any change in ownership of the Sub-Adviser or the
identity of the primary manager of the Fund and any other matter which is
disclosed in the Registration Statement and becomes untrue.
6. Furnishing of Information. The Sub-Adviser shall from time to time
furnish to the Adviser detailed statements of the investments and assets of the
Fund. The Sub-Adviser shall provide any materials reasonably related to the
investment advisory services provided hereunder as may be reasonably requested
in writing by the designated officers of the Adviser, the Trust or the Fund or
as may be required by any governmental agency having jurisdiction. The Adviser
shall from time to time furnish to the Sub-Adviser information pertaining to the
investment objectives and needs of the Fund, and
shall make available to the Sub-Adviser such financial reports, proxy
statements, legal and other information in the possession of or available to the
Adviser relating to Fund investments, as the same may be relevant to the
performance by the Sub-Adviser of its obligations hereunder. The Adviser shall
furnish such other information as the Sub-Adviser may reasonably request.
7. Books and Records. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or the
Adviser's request, although the Sub-Adviser may, at its own expense, make and
retain a copy of such records. The Sub-Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act and to preserve the records
required by Rule 204-2 under the Advisers Act for the period specified in the
Rule. The Sub-Adviser agrees that it will maintain all records and accounts
regarding the investment activities of the Fund in a confidential manner. Within
five (5) business days of a written request, all such records and accounts shall
be made available to the accountants or auditors of the Fund during regular
business hours at the Sub-Adviser's offices. In the event of termination for any
reason, all records of the Fund shall promptly be returned to the Adviser or the
Trust, free from any claim or retention of rights in such record by the Sub-
Adviser, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records.
8. Tender Offers. The Sub-Adviser hereby agrees that whenever the Sub-
Adviser has determined that the Fund should tender securities pursuant to a
"tender offer solicitation," the Sub-Adviser shall designate an affiliate as the
"tendering dealer," so long as such affiliate is legally permitted to act in
such capacity under the federal securities laws, the rules promulgated
thereunder and the rules of any securities exchange or association of which such
affiliate may be a member. Such affiliated dealer shall not be obligated to make
any additional commitments of capital, expense or personnel beyond that
committed as of the date of this Agreement (other than normal periodic fees or
payments necessary to maintain its corporate existence and its membership in the
National Association of Securities Dealers, Inc.). This Agreement shall not
obligate the Sub-Adviser or such affiliate to (i) act pursuant to the foregoing
requirement under any circumstance in which either might reasonably believe that
liability might be imposed upon it as a result of so acting, or (ii) institute
legal or other proceedings to collect fees which may be considered to be due to
it from others as a result of such a tender, unless the Fund shall enter into an
agreement with the Sub-Adviser or such affiliate to reimburse it for all
expenses connected with attempting to collect such fees (including legal fees
and expenses and that portion of the compensation due to their respective
employees which amount is directly attributable to the time involved in
attempting to collect such fees).
9. Expenses. During the term of this Agreement, the Sub-Adviser shall pay
all expenses incurred by it and its staff and for their activities in connection
with its
services under this Agreement. The Sub-Adviser shall not be responsible for any
of the following:
(a) Expenses of audits by the Fund's independent public accountants;
(b) Expenses of the Fund's transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
(c) Expenses of the Fund's custodial services including recordkeeping
services provided by the custodian;
(d) Expenses of the Fund's recordkeeping services provided by the
recordkeeping agent;
(e) Expenses of obtaining quotations for calculating the value of the
Fund's net assets;
(f) Expenses of obtaining portfolio activity reports for the Fund;
(g) Expenses of maintaining the Trust's tax records;
(h) Salaries and other compensation of any of the Trust's executives
officers and employees, if any, who are not officers, directors, stockholders,
or employees of the Sub-Adviser or its subsidiaries or affiliates (except that
the Adviser, or any of its subsidiaries or affiliates, shall bear the expense
with respect to executive officers and employees, if any, who are officers,
directors, stockholders or employees of the Adviser or of its subsidiaries or
affiliates);
(i) Taxes, if any, levied against the Trust or the Fund;
(j) Brokerage fees and commissions in connection with the purchase and
sale of portfolio securities for the Fund;
(k) Costs, including the interest expenses, of borrowing money;
(l) Costs and/or fees incident to meetings of the Trust's
shareholders, the preparation and mailings of prospectuses and reports of the
Trust to its shareholders, the filing of reports with regulatory bodies, the
maintenance of the Trust's or the Fund's existence, and the registration of
shares with federal and state securities or insurance authorities;
(m) The Trust's legal fees, including the legal fees related to the
registration and continued qualification of the Trust's shares for sale;
(n) Costs of printing "share" stock certificates, if any, representing
shares of the Trust;
(o) Trustees' fees and expenses of Trustees who are not officers,
employees, or Stockholders of the Sub-Adviser or any affiliate thereof (except
that the Adviser shall bear the expense of any trustee who is an officer,
employee, or stockholder of the Adviser or any affiliate thereof);
(p) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance obtained by the Trust;
(q) Association membership dues;
(r) Extraordinary expenses of the Trust as may arise including
expenses incurred in connection with litigation, proceedings and other claims
and the legal obligations of the Trust to indemnify its trustees, officers,
employees, shareholders, distributors, and agents with respect thereto (unless
Sub-Adviser is responsible for such expenses under Paragraph 15 of this
Agreement); and
(s) Organizational and offering expenses and, if applicable,
reimbursement (with interest) of underwriting discounts and commissions.
10. Advisory Fees.
(a) In exchange for the rendering of advice and services pursuant
hereto, the Adviser shall pay to the Sub-Adviser on behalf of the Fund, and the
Sub-Adviser shall accept as full compensation for all investment advisory
services furnished to the Fund and as full reimbursement for all expenses
assumed by the Sub-Adviser, an advisory fee based on the net assets of the Fund.
The fee is equal to 0.65% annually on assets up to $50 million and 0.50%
annually on assets above $50 million.
(b) The advisory fee shall be accrued daily by the Fund and paid by
the Adviser to the Sub-Adviser monthly in arrears as of the last valuation date.
(c) In the case of termination of this Agreement during any month, the
advisory fee for that month shall be prorated according to the number of
business days during which the Agreement was in effect.
(d) The advisory fee payable hereunder shall be reduced to the extent
that an affiliate of the Sub-Adviser has actually received cash payments of
tender offer solicitation fees (less certain costs and expenses incurred in
connection therewith) as referred to in Paragraph 8 hereof.
11. Seed Money. The Adviser agrees that the Sub-Adviser shall be not be
responsible for providing money for the initial capitalization of the Fund.
12. Compliance. (a) Nothing contained herein shall be deemed to require
the Adviser or the Fund to take any action contrary to (i) the Agreement and
Declaration of Trust of the Trust, (ii) the By-laws of the Trust, (iii) the
Registration Statement or (iv) any applicable statute or regulation.
(b) The Sub-Adviser agrees that it shall notify the Adviser and the
Trust immediately (i) in the event that the SEC has censured the Sub-Adviser;
placed limitations upon its activities, functions or operations; suspended or
revoked its registration as an investment adviser, or has commenced proceedings
or an investigation that may result in any of these actions, (ii) upon having a
reasonable basis for believing that the Fund has ceased to qualify or might not
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code, or (iii) upon having a reasonable basis for believing that the
Fund has ceased to comply with the diversification provisions of Section 817(h)
of the Internal Revenue Code or the regulations thereunder. The Sub-Adviser
further agrees to notify the Adviser and the Trust immediately of any material
fact known to the Sub-Adviser respecting or relating to the Sub-Adviser that is
not contained in the Registration Statement for the Fund, or any amendment or
supplement thereto, or of any statement contained therein that becomes untrue in
any material respect.
(c) The Adviser agrees that it shall notify the Sub-Adviser
immediately (i) in the event that the SEC has censured the Adviser or the Trust;
placed limitations upon their activities, functions, or operations; suspended or
revoked the Adviser's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, (ii)
upon having a reasonable basis for believing that a Fund has ceased to qualify
or might not qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code, or (iii) upon having a reasonable basis for believing
that the Fund has ceased to comply with the diversification provisions of
Section 817(h) of the Internal Revenue Code or the regulations thereunder.
13. Cooperation. Each party to this Agreement agrees to cooperate with
each other party and with all appropriate governmental authorities having the
requisite jurisdiction (including, but not limited to, the SEC and state
insurance authorities) in connection with any investigation or inquiry relating
to this Agreement or the Trust.
14. Responsibility and Control. Notwithstanding any other provision of
this Agreement, it is understood and agreed that the Trust shall at all times
retain the ultimate responsibility for and control of all functions performed
pursuant to this Agreement and reserves the right to direct, approve or
disapprove any action hereunder taken on its behalf by the Sub-Adviser.
15. Indemnification. (a) The Sub-Adviser agrees to indemnify and hold
harmless, the Adviser, any affiliated person within the meaning of Section
2(a)(3) of
the 1940 Act ("affiliated person") of the Adviser, and each person, if any, who,
within the meaning of Section 15 of the 1933 Act, controls ("controlling
person") the Adviser (collectively, "Adviser Indemnified Persons") against any
and all losses, claims, damages, liabilities or litigation (including legal and
other expenses) to which an Adviser Indemnified Person may become subject under
the 1933 Act, the 1940 Act, the Advisers Act, any other statute, at common law
or otherwise, arising out of the Sub-Adviser's responsibilities to the Fund
which (i) may be based upon any negligence or willful misconduct by the Sub-
Adviser, any of its employees or representatives, or any affiliate of or any
person acting on behalf of the Sub-Adviser (other than a Sub-Adviser Indemnified
Person), or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement covering
the shares of the Trust or the Fund, or any amendment thereof or any supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not misleading
if such a statement or omission was made in reliance upon information furnished
to the Adviser, the Trust, or any affiliated person of the Adviser or Trust by
the Sub-Adviser or any affiliated person of the Sub-Adviser (other than a Sub-
Adviser Indemnified Person); provided, however, that in no case is the Sub-
Adviser's indemnity in favor of Adviser Indemnified Persons deemed to protect
such persons against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or negligence in the
performance of his or her duties or by reason of reckless disregard of
obligations and duties under this Agreement.
(b) The Adviser agrees to indemnify and hold harmless the Sub-Adviser,
any affiliated person of the Sub-Adviser and any controlling person of the Sub-
Adviser (collectively, "Sub-Adviser Indemnified Persons") against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses) to which a Sub-Adviser Indemnified Person may become subject under the
1933 Act, the 1940 Act, the Advisers Act, any other statute, at common law or
otherwise, arising out of the Adviser's responsibilities as adviser of the Fund
which (i) may be based upon any negligence or willful misconduct by the Adviser,
any of its employees or representatives or any affiliate of or person acting on
behalf of the Adviser (other than an Adviser Indemnified Person) or (ii) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement covering shares of the Trust or the
Fund, or any amendment thereof or any supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading if such statement or
omission was made in reliance upon information furnished to the Sub-Adviser, the
Trust or any affiliated person of the Sub-Adviser or Trust by an Adviser or any
affiliated person of the Adviser (other than an Adviser Indemnified Person);
provided, however, that in no case is the Adviser's indemnity in favor of Sub-
Adviser Indemnified Persons deemed to protect such persons against any liability
to which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or negligence in the performance of his or her duties or
by reason of reckless disregard of obligations and duties under this Agreement.
16. Liability. Except as provided in Paragraph 15 and as may otherwise be
required by the 1940 Act or the rules thereunder or other applicable law, the
Trust and the Adviser agree that the Sub-Adviser, any affiliated person of Sub-
Adviser and any controlling person of the Sub-Adviser shall not be liable for or
subject to any damages, expenses, or losses in connection with any act or
omission connected with or arising out of any services rendered under this
Agreement, except by reason of willful misfeasance, bad faith, or negligence in
the performance of the Sub-Adviser's duties, or by reason of reckless disregard
of the Sub-Adviser's obligations and duties under this Agreement.
17. Limitation of Liability. A copy of the Agreement and Declaration of
Trust for the Trust is on file with the Secretary of the Commonwealth of
Massachusetts. The Agreement and Declaration of Trust has been executed on
behalf of the Trust by a Trustee in his or her capacity as Trustee and not
individually. The obligations of this Agreement shall be binding upon the assets
and property of the Trust and shall not be binding upon any Trustee, officer,
employee, agent or shareholder, whether past, present, or future, of the Trust
individually.
18. Term of Agreement. This Agreement shall become effective on the date
hereof and shall continue in effect for two years from such date unless sooner
terminated as hereinafter provided, and shall continue in effect from year to
year thereafter so long as such continuation is approved at least annually by
(i) the Trustees or by vote of a majority of the outstanding voting securities
of the Fund, and (ii) the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any such party, with such vote being
cast in person at a meeting called for the purpose of voting on such approval.
19. Termination. This Agreement may be terminated without payment of any
penalty (a) by the Trustees or by vote of a majority of the outstanding voting
securities of the Fund, upon sixty (60) days written notice to the Adviser and
the Sub-Adviser, (b) by the Adviser upon sixty (60) days written notice to the
Sub-Adviser and the Trust, or (c) by the Sub-Adviser upon sixty (60) days
written notice to the Adviser and the Trust. This Agreement shall terminate
automatically in the event of any transfer or assignment hereof, as defined in
the 1940 Act. In the event this Agreement is terminated or is not approved in
the manner described above, Paragraphs 2(g), 2(i), 7, 13, 14, 15 and 16 this
Agreement, as well as any applicable provision of this Paragraph, shall remain
in effect.
20. Notices. Unless otherwise specified herein, all notices, instructions
and advice with respect to security transactions or any other matters
contemplated by this Agreement shall be deemed duly given when deposited in the
mail postage prepaid and addressed to the Sub-Adviser at 0000 Xxxxxxx Xxxxx
Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000, Attn: Xxxxxx DeVoreor to the Adviser at 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, Attn: President, or at such other
address or addresses as shall be specified, in each case, in a notice similarly
given.
21. No Waiver. The waiver by any party of any breach of or default under
any provision or portion of this Agreement shall not operate as or be construed
to be a waiver of any subsequent breach or default.
22. Severability. The provisions of this Agreement shall be considered
severable and if for any reason any provision of this Agreement which is not
essential to the effectuation of the basic purpose of this Agreement is deemed
to be invalid or contrary to any existing or future law, such invalidity shall
not impair the operation of or affect any other provision of this Agreement
which is valid.
23. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
24. Entire Agreement. This Agreement represents the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior understandings or agreements between the parties
pertaining to the subject matter hereof, whether oral or written. This Agreement
may only be modified or amended by mutual written agreement of the parties
hereto and, as required, upon approval of a majority of the outstanding voting
securities of the Fund.
25. Definitions. For purposes of application and operation of the
provisions of this Agreement, the term "majority of the outstanding voting
securities" shall have the meaning as set forth in the 1940 Act.
26. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky.
27. Advertising. Sub-Adviser shall not use any sales promotion or other
advertising materials relating to the Trust or the Adviser without the Adviser's
prior written consent.
28. Insurance. Sub-Adviser shall have and maintain Errors and Omissions
liability insurance covering Sub-Adviser's duties under this Agreement, with
limits of $5,000,000 per occurrence and $5,000,000 annual aggregate. Sub-
Adviser shall also maintain a fidelity bond in an amount and of a nature
reasonably determined by Adviser. Sub-Adviser shall name the Trust and the
Adviser as additional insureds and shall provide evidence of such coverage at
least annually.
IN WITNESS WHEREOF, the parties hereto have caused this Sub-Advisory
Agreement to be duly executed and attested by their duly authorized officers on
the day and year first above written.
PROVIDIAN INVESTMENT
ADVISORS, INC.
ATTEST:
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------
/s/ R. Xxxxxxx Xxxxxx Xxxxxxxxx X. Xxxxxxx, President
and Chief Financial Officer
BLAIRLOGIE CAPITAL
MANAGEMENT
ATTEST:
By: /s/ J. Xxxxxx X. Xxxxxxxx
------------------------------------
/s/ Xxxx Xxxxxxxx J. Xxxxxx X. Xxxxxxxx
Chief Financial Officer
