EXHIBIT 99B5(II)
SUB-INVESTMENT ADVISORY AGREEMENT
BETWEEN
XXXXXXX PARTNERS, LTD.
AND
XXXX & ASSOCIATES
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this 1st day of
January , 1997, by and between XXXXXXX PARTNERS, LTD. (hereinafter referred to
as the "Investment Adviser") and XXXX & ASSOCIATES, a division of Xxxxxxx Xxxxx
& Associates (hereinafter referred to as the "Investment Manager"), which
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute but one
instrument.
WITNESSETH:
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WHEREAS, the General Partners (the "Partners") of the Investment Adviser
wish to enter into a contract with the Investment Manager to render the
Investment Adviser the following services:
To furnish research, analysis, advice and recommendations with respect to
the purchase and sale of securities and the making of investment commitments by
the Investment Adviser regarding assets of The Xxxxxxx Plan (hereinafter
-----------------
referred to as the "Fund") subject to oversight by the Board of Trustees of the
Fund and the supervision of the Investment Adviser.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and intending to be bound, the parties agree as follows:
1. As compensation for the services enumerated above, the Investment
Adviser will pay the Investment Manager an annual fee, which fee shall be
payable monthly.
The amount of such fee shall equal 0.42% of the average daily net
assets of the Fund with respect to the first $10 million in assets of the Fund,
0.40% of the next $5 million in assets, 0.35% of the next $10 million in assets,
and 0.25% of assets over $25 million.
2. This Agreement shall become effective as of the date first above
written, subject to the approval of the shareholders of the Fund in accordance
with the provisions of the Investment Company Act of 1940 (the "Act").
3. This Agreement shall continue for a period ending two years from
its effective date. It may be renewed thereafter by the Investment Adviser and
the Investment Manager for successive periods not exceeding one year only so
long as such renewal and continuance is specifically approved at least annually
by the Fund's Board of Trustees or by a vote of the majority of the outstanding
voting securities of the Fund as prescribed by the Act and
provided further that such continuance is approved at least annually thereafter
by a vote of a majority of the Fund's Trustees, who are not parties to such
Agreement or interested persons of such a party, cast in person at a meeting
called for the purpose of voting on such approval. This Agreement will terminate
automatically without the payment of any penalty upon termination of the
Investment Advisory Agreement or upon sixty days' written notice by the Fund to
the Investment Manager that the Trustees or the shareholders by vote of a
majority of the outstanding voting securities of the Fund, as provided by the
Act, has terminated the Investment Advisory Agreement. This Agreement may also
be terminated by the Investment Manager without penalty upon sixty days' written
notice to the Fund.
This Agreement shall terminate automatically in the event of its
assignment or the assignment of the Investment Advisory Agreement.
4. Subject to the supervision of the Board of Trustees of the Fund
and the Investment Adviser, the Investment Manager will provide recommendations
for a continuous investment program for the Fund, including investment research
and management with respect to securities and investments, including cash and
cash equivalents in the Fund. The Investment Manager will recommend to the
Investment Adviser from time to time what securities and other investments
should be purchased, retained or sold by the Fund. The Investment Manager will
provide the services under this Agreement in accordance with the Fund's
investment objective, policies and restrictions as stated in the Prospectus. The
Investment Manager further agrees that it:
a. will conform with all applicable Rules and Regulations of
the SEC and will, in addition, conduct its activities under this Agreement in
accordance with regulations of any other Federal or State agencies which now has
or in the future will have jurisdiction over its activities;
b. will recommend placement of orders pursuant to its
investment determinations for the Fund either directly with any broker or
dealer, or with the issuer. In recommending placement of orders with brokers or
dealers, the Investment Manager will attempt to assist the Investment Adviser to
obtain the best net price and the most favorable execution of its orders.
Consistent with this obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Investment Manager has been advised
that the Fund has authorized the Investment Adviser, in its discretion, to
purchase and sell securities to and from brokers and dealers who promote the
sale of Fund shares. In no instance will securities be purchased from or sold to
the Investment Manager or any affiliated person of the Investment Manager as
principal. Notwithstanding the foregoing sentence, the Investment Manager may
arrange for the execution of brokered transactions through an affiliated broker
dealer in conformity with policies and procedures for such purpose if, when, and
as established by the Trustees of the Fund.
c. will provide, at its own cost, all office space and
facilities necessary to furnish the foregoing services to be provided by the
Investment Manager of the Fund.
5. It is expressly understood and agreed that the services to be
rendered by the Investment Manager to the Investment Adviser under the
provisions of this Agreement are not to be deemed to be exclusive, and the
Investment Manager shall be free to render similar or different services to
others so long as its ability to render the services provided for in this
Agreement shall not be materially impaired thereby, and provided further that
the services to be rendered by the Investment Manager to the Investment Adviser
under this Agreement and the compensation provided for in Paragraph 1 hereof
shall be limited solely to services with reference to the Fund.
6. The Investment Adviser agrees that it will furnish currently to
the Investment Manager all information reasonably necessary to permit the
Investment Manager to give the advice called for under this Agreement and such
information with reference to the Fund that is reasonably necessary to permit
the Investment Manager to carry out its responsibilities under this Agreement,
and the parties agree that they will from time to time consult and make
appropriate arrangements as to specific information that is required under this
paragraph and the frequency and manner with which it shall be supplied.
7. The Investment Manager shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Investment Adviser or
the Fund in connection with any matters to which this Agreement relates except
that nothing herein contained shall be construed to protect the Investment
Manager against any liability by reason of the Investment Manager's willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
by reckless disregard of its obligations or duties under this Agreement.
8. In compliance with the provisions of the Investment Advisory
Agreement between the Fund and the Investment Adviser, the Investment Manager
agrees with the Investment Adviser that, subject to the terms and conditions of
this Paragraph 9, the Fund may use the name "Xxxxxxx" in, or as a portion of,
its name so long as the Investment Adviser, or any successor in interest,
continues as the Investment Adviser. Should the Fund terminate the Investment
Adviser or any successor in interest, or if the Investment Adviser shall give
notice of termination of the Investment Advisory Agreement, then the Investment
Adviser may elect to notify the Fund in writing that permission to use the name
"Xxxxxxx" has been withdrawn. It is understood that the Fund has, in its
Investment Advisory Agreement, expressly agreed that it, its Officers, Trustees
and Shareholders upon receipt of such notice, will take all necessary action and
proceed expeditiously to change the name of the Fund and not use any other name
or take any action which would indicate the Fund's continued association with
the Investment Adviser. If the use of the name "Xxxxxxx" is so withdrawn as
aforesaid, it is understood and agreed that there shall be no limitation with
respect to the future use of the name "Xxxxxxx" by the Investment Adviser or its
successor in interest.
9. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
applying the principles of conflicts of law thereunder.
10. Any notice to be given hereunder may be given by personal
notification or by first class mail, postage prepaid, to the party specified at
the address stated below:
a. To the Investment Adviser at:
----------------------------
Xxxxxxx Partners, Ltd.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Ally
b. To the Investment Manager at:
----------------------------
Xxxx and Associates
000 Xxxxxxx Xxx 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxx
c. To the Fund at:
--------------
The Xxxxxxx Plan
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Ally
d. With copies to:
--------------
Xxxxxx X. Del Xxxx, Esquire
Stradley, Ronon, Xxxxxxx & Young
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ATTEST: THE XXXXXXX PLAN
_________________________ By:__________________________
ATTEST: XXXXXXX PARTNERS, LTD.
By: COVENANT FUNDS, INC.
Managing General Partner
_________________________ By:__________________________
ATTEST: XXXX & ASSOCIATES
_________________________ By:__________________________
