EX-99.(d)(7)
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QUAKER INVESTMENT TRUST
SUB-INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the 8th day of August, 2003, between Quaker
Investment Trust (the "Trust"), an open-end management investment company,
Quaker Funds, Inc. a registered investment adviser and Investment Adviser to
each series of the Trust (the "Fund Manager") and Xxxxxx Capital Management (the
"Sub-Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
open-end management investment company of the series type under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios");
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in, among others, two Portfolios known as the Quaker Fixed Income Fund
and the Quaker High Yield Fund (each a "Fund" and together the "Funds");
WHEREAS, Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Adviser's Act") and engages in
the business of asset management;
WHEREAS, the Trust has retained Fund Manager to furnish investment advisory
services to each series of the Trust, including each Fund, pursuant to a written
agreement for such services;
WHEREAS, the Fund Manager desires to retain Sub-Adviser to furnish
day-to-day investment advisory services to each Fund pursuant to the terms and
conditions of this Agreement, Sub-Adviser is willing to so furnish such
services, and the Trust has approved such engagement;
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. APPOINTMENT
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The Trust and Fund Manager hereby appoint the Sub-Adviser to provide
day-to-day investment advisory services to each Fund for the periods and on the
terms set forth in this Agreement. Sub-Adviser accepts the appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. DELIVERY OF DOCUMENTS
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The Trust and/or Fund Manager have furnished Sub-Adviser with properly
certified or authenticated
copies of each of the following:
a. Resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
b. The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
c. The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus");
d. All compliance policies and/or procedures adopted by the Board of
Trustees of the Trust that are applicable to the operations of the
Funds; and
e. Any other investment policies, procedures and/or restrictions
applicable to the operations of the Funds.
The Trust and/or Fund Manager will furnish Sub-Adviser with properly
certified or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with the
SEC and/or state authorities, or at such time as officially adopted by the Board
of Trustees of the Trust, as applicable.
3. MANAGEMENT
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Subject to the supervision of the Trust's Board of Trustees and Fund
Manager, Sub-Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities,
investments, cash and cash equivalents in each Fund. Sub-Adviser will determine
what securities and other investments will be purchased, retained or sold by
each Fund and will execute such decisions. Sub-Adviser will choose such
investments and otherwise provide the services under this Agreement in
compliance with each Fund's investment objectives, policies and restrictions as
such are set forth in the Funds' Prospectus from time to time; provided that the
Trust and/or the Fund Manager shall provide the Sub-Adviser reasonable advance
notice of any change to such objectives, policies and restrictions. Sub-Adviser
further agrees that it will employ such efforts as required pursuant to its
fiduciary responsibilities under the Investment Advisers Act of 1940, as
amended, to:
(a) Conform its activities with respect to its activities under this
Agreement in all material respects to all applicable rules and regulations
adopted by the U.S. Securities and Exchange Commission (the "SEC") and
will, in addition, conduct its activities under this Agreement in
accordance with the regulations of any other federal and state agency which
may now or in the future have jurisdiction over its activities under this
Agreement;
(b) Place orders pursuant to its investment determinations for the Fund
either directly with the respective issuers or with a suitable broker or
dealer of its choosing. In placing orders with brokers or dealers,
Sub-Adviser will attempt to obtain the best execution of its orders under
the circumstances. Consistent with this obligation, when Sub-Adviser
believes two or more brokers or dealers are comparable in execution
quality, Sub-Adviser may prefer: (i) brokers and dealers who provide
Sub-Adviser with research advice and other services, or who recommend or
sell Trust shares, and (ii) brokers who are affiliated with the Fund,
Adviser, and/or Sub-Adviser; provided,
however, that in no instance will portfolio securities be purchased from or
sold to Sub-Adviser in principal transactions. The Board of Trustees of the
Trust has adopted procedures pursuant to Rule 17a-7 and Rule 17e-1 with
respect to transactions between the Fund and affiliated persons and the
Fund and Affiliated broker/dealers, respectively, and Sub-Advisor agrees to
comply with such procedures; and
(c) Provide, at its own cost, all office space, facilities and equipment
necessary for the conduct of its advisory activities on behalf of the
Funds.
4. SERVICES NOT EXCLUSIVE
(a) services to other funds. The advisory services to be furnished by
Sub-Adviser hereunder are not to be considered exclusive, and Sub-Adviser
shall be free to furnish similar services to others so long as its services
to the Fund under this Agreement are not materially impaired thereby.
(b) status of sub-adviser. Sub-Adviser shall for all purposes herein be deemed
to be an independent contractor and not an agent for the Trust, the Funds
or the Fund Manager and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust, Funds or
Fund Manager in any way.
5. BOOKS AND RECORDS
In compliance with Rule 31a-3 promulgated under the 1940 Act, Sub-Adviser
hereby agrees that all records which it maintains for the benefit of the Funds
are the property of the Funds and further agrees to surrender promptly to the
Funds any of such records upon the Funds' request. Sub-Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 promulgated under the 1940
Act, the records required to be maintained by it pursuant to Rule 31a-1
promulgated under the 1940 Act resulting from the services to the Funds provided
by Sub-Adviser pursuant to Section 3 of this Agreement.
6. EXPENSES
During the term of this Agreement, Sub-Adviser will pay all expenses
incurred by it in connection with its investment advisory services furnished to
the Funds other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for the
Funds.
7. COMPENSATION
The Fund Manager will pay to Sub-Adviser, and Sub-Adviser will accept as
full compensation for its services rendered hereunder, an investment advisory
fee, computed at the end of each month and payable within five (5) business days
thereafter, equal to the annual rate of:
For the Fixed Income Fund
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0.35 % of the average daily net assets of the Fund on assets up to $100
million; and
0.30% of the average daily net assets of the Fund on assets above $100
million.
For the High Yield Fund
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0.35 % of the average daily net assets of the Fund on assets up to $100
million; and
0.30% of the average daily net assets of the Fund on assets above $100
million.
All parties to this Agreement do hereby authorize and instruct the Trust's
Administrator, Citco-Quaker Fund Services, Inc., or its successor, to provide a
calculation each month of the gross amount due the Sub-Advisor from each Fund
and to remit such fee payments directly to Sub-Adviser. In the event that
Sub-Adviser's services to a Fund begin or end at a time other than the beginning
or end of a month, fees payable to the Sub-Adviser will be prorated for that
portion of the month during which services were actually provided.
8. LIMITATION OF LIABILITY
Sub-Adviser shall not be liable for any error of judgment, mistake of law
or loss suffered by the Fund in connection with the performance of this
Agreement, except a loss resulting from a breach of Sub-Adviser's fiduciary duty
with respect to the receipt of compensation for services or a loss to the Fund
resulting from willful malfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations or duties under this Agreement.
9. DURATION AND TERMINATION
This Agreement shall become effective as of the date first written above
and, unless sooner terminated as provided herein, shall continue in effect until
June 30, 2004. Thereafter, this Agreement shall be renewable for successive
periods of one year each, provided such continuance is specifically approved
annually:
(a) By the vote of a majority of those members of the Board of Trustees
who are not parties to the Agreement or interested persons of any such
party (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board of Trustees or a majority (as that term is
defined in the 0000 Xxx) of the outstanding voting securities of the
Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the
Trust or by Adviser or by Sub-Adviser at any time upon sixty (60) days written
notice, without payment of any penalty. Any such termination by the Trust must
be authorized by vote of the Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund. This Agreement will automatically
terminate in the event of its assignment (as that term is defined in the 1940
Act).
10. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by a written instrument signed by the party against
which enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement resulting in a material detriment to any Fund's
shareholders shall be effective until approved by vote of the holders of a
majority of the affected Fund's outstanding voting securities (as defined in the
1940 Act).
11. MISCELLANEOUS
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect. 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 binding on, and shall inure to the benefit of, the parties hereto and their
respective successors.
12. COUNTERPARTS
This Agreement may be executed in counterparts by the parties hereto, each
of which shall constitute an original, and all of which, together, shall
constitute one Agreement.
13. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by, the
laws of the Commonwealth of Pennsylvania.
14. NOTICES
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Sub-Adviser:
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Quaker Investment Trust Xxxxxx Capital Management
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 00 00 Xxxx Xxxxx Xxxx
Xxxxxx Xxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Xx. Attn: Xx. Xxxxxxx X. Xxxxxx
Chairman Title: Principal
If to the Fund Manager:
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Quaker Funds, Inc.
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 00
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
President
15. DISCLOSURES
Neither the Trust, the Fund nor the Fund Manager shall, without the written
consent of Sub-Adviser, which consent shall not be unreasonably withheld, make
representations regarding the Sub-Adviser or any of its affiliates in any
disclosure document, advertisement, sales literature or other promotional
materials, except to the extent that such disclosure relates to Sub-Advisor's
services to the Funds. The Sub-Adviser shall respond in writing within five (5)
business days of receipt of any written request for prior written consent and in
the event Sub-Adviser does not so respond, Sub-Adviser shall be deemed to have
consented to the disclosure document, advertisement, sales literature or other
promotional materials submitted in writing to the Sub-Adviser.
16. NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS
All obligations of the Funds hereunder shall be binding only upon the
assets of the applicable Fund and shall not be binding upon any trustee,
officer, employee, agent or shareholder of the Funds. Neither the authorization
of any action by the Trustees or shareholders of the Funds nor the execution of
this Agreement on behalf of the Funds shall impose any liability upon any
trustee, officer or shareholder of the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first written above.
Attest: QUAKER INVESTMENT TRUST
/s/ Xxxxxx Xxxxx
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By: Xxxxxx Xxxxx By: Xxxxxx X. Xxxx, Xx.
Title: Secretary Title: Chairman
Attest: QUAKER FUNDS, INC.
/s/ Xxxxxxx Xxxxxx
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By: Xxxxxxx Xxxxxx By: Xxxxx X. Xxxxxx
Title: Compliance Officer Title: President
Attest: XXXXXX CAPITAL MANAGEMENT
/s/ Xxxxxx X. Xxxxxx
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By: Xxxxxx X. Xxxxxx By: Xxxxxx X. Xxxxxx
Title: Principal Title: Principal
