SUB-ADVISORY AGREEMENT
AMSTAR INVESTMENT TRUST
This SUB-ADVISORY AGREEMENT is made as of _____________, 2002, by and among
Amstar Investment Trust, a Delaware business trust (the "Trust"), Amstar
Investment Management LLC, a Delaware limited liability company (the "Advisor"),
and Xxxxxxxxxx Capital Partners, LLC, a Delaware Limited Liability Company (the
"Sub-Advisor").
WHEREAS, the Trust is a Delaware business trust registered as an open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act"); and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and has been retained by the Trust
to provide investment advisory services to the Trust;
WHEREAS, the Sub-Advisor also is an investment advisor registered under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust and the Advisor desire to retain the Sub-Advisor to
furnish it with portfolio management services in connection with the Advisor's
investment advisory activities on behalf of the Amstar Value Fund (the "Fund"),
a series of the Trust, and the Sub-Advisor is willing to furnish such services
to the Advisor and the Fund;
NOW THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. EMPLOYMENT OF THE SUB-ADVISOR. In accordance with and subject to the
Investment Advisory Agreement between the Trust and the Advisor, the Trust and
the Advisor hereby appoints the Sub-Advisor to manage the investment and
reinvestment of the assets of the Fund, subject to the control and direction of
the Advisor and the Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Sub-Advisor hereby accepts such employment and agrees
during such period to render the services and to perform the duties called for
by this Agreement for the compensation herein provided. The Sub-Advisor shall at
all times maintain its registration as an investment advisor under the
Investment Advisers Act of 1940 and shall otherwise comply in all material
respects with all applicable laws and regulations, both state and federal. The
Sub-Advisor shall for all purposes herein be deemed an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust or the Fund.
2. DUTIES OF THE SUB-ADVISOR. The Sub-Advisor will provide the following
services and undertake the following duties:
a. The Sub-Advisor will manage the investment and reinvestment of
the assets of the Fund, subject to and in accordance with the investment
objectives, policies and restrictions of the Fund and any directions which the
Advisor or the Trust's Board of
Trustees may give from time to time with respect to the Fund. In furtherance of
the forgoing, the Sub-Advisor will make all determinations with respect to the
investment of the assets of the Fund and the purchase and sale of portfolio
securities and shall take such steps as may be necessary or advisable to
implement the same. The Sub-Advisor also will determine the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the portfolio securities will be exercised. The Sub-Advisor will
render regular reports to the Trust's Board of Trustees and to the Advisor (or
such other advisor or advisors as the Advisor shall engage to assist it in the
evaluation of the performance and activities of the Sub-Advisor). Such reports
shall be made in such form and manner and with respect to such matters regarding
the Fund and the Sub-Advisor as the Trust or the Advisor shall from time to time
request.
b. The Sub-Advisor shall provide support to the Advisor with respect
to the marketing of the Fund, including but not limited to: (i) permission to
use the Sub-Advisor's name as provided in Section 5, (ii) permission to use the
past performance and investment history of the Sub-Advisor as the same is
applicable to the Fund, (iii) access to the individual(s) responsible for
day-to-day management of the Fund for marketing conferences, teleconferences and
other activities involving the promotion of the Fund, subject to the reasonable
request of the Advisor, and (iv) permission to use biographical and historical
data of the Sub-Advisor and individual manager(s).
c. The Sub-Advisor will, in the name of the Fund, place orders for
the execution of all portfolio transactions in accordance with the policies with
respect thereto set forth in the Trust's registration statements under the 1940
Act and the Securities Act of 1933, as such registration statements may be in
effect from time to time. In connection with the placement of orders for the
execution of portfolio transactions, the Sub-Advisor will create and maintain
all necessary brokerage records of the Fund in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property of the Trust
and shall be available for inspection and use by the Securities and Exchange
Commission (the "SEC"), the Trust or any person retained by the Trust. Where
applicable, such records shall be maintained by the Advisor for the periods and
in the places required by Rule 31a-2 under the 1940 Act. When placing orders
with brokers and dealers, the Sub-Advisor's primary objective shall be to obtain
the most favorable price and execution available for the Fund, and in placing
such orders the Sub-Advisor may consider a number of factors, including, without
limitation, the overall direct net economic result to the Fund (including
commissions, which may not be the lowest available but ordinarily should not be
higher than the generally prevailing competitive range), the financial strength
and stability of the broker, the efficiency with which the transaction will be
effected, the ability to effect the transaction at all where a large block is
involved and the availability of the broker or dealer to stand ready to execute
possibly difficult transactions in the future. The Sub-Advisor is specifically
authorized, to the extent authorized by law (including, without limitation,
Section 28(e) of the Securities Exchange Act of 1934, as amended), to pay a
broker or dealer who provides research services to the Sub-Advisor an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another
broker or dealer would have charged for effecting such transaction, in
recognition of such additional research services rendered by the broker or
dealer, but only if the Sub-Advisor determines in good faith that the excess
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of the particular
transaction or the Sub-Advisor's overall responsibilities with respect to
discretionary accounts that it manages, and that the Fund derives or will derive
a reasonably significant benefit from such research services. The Sub-Advisor
will present a written report to the Board of Trustees of the Trust, at least
quarterly, indicating total brokerage expenses, actual or imputed, as well as
the services obtained in consideration for such expenses, broken down by
broker-dealer and containing such information as the Board of Trustees
reasonably shall request.
d. In the event of any reorganization or other change in the
Sub-Advisor, its investment principals, supervisors or members of its investment
(or comparable) committee, the Sub-Advisor shall give the Advisor and the
Trust's Board of Trustees written notice of such reorganization or change within
a reasonable time (but not later than 30 days) after such reorganization or
change.
e. The Sub-Advisor will bear its expenses of providing services to
the Fund pursuant to this Agreement except such expenses as are undertaken by
the Advisor or the Trust.
f. The Sub-Advisor will manage the Fund and the investment and
reinvestment of such assets so as to comply with the provisions of the 1940 Act,
the current Prospectus and Statement of Additional Information of the Fund, and
with Subchapter M of the Internal Revenue Code of 1986, as amended.
3. COMPENSATION OF THE SUB-ADVISOR.
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a. As compensation for the services to be rendered and duties
undertaken hereunder by the Sub-Advisor, the Advisor will pay to the Sub-Advisor
a monthly sub-advisory fee equal to 0.425% per annum of the average daily net
assets of the Fund. The Sub-Advisor's fee will not be reduced to the extent the
Advisor waives any of its advisory fees or reimburses expenses of the Fund.
During the first year of operations of the Fund, the Sub-Advisor has agreed to
reduce a portion of its sub-advisory fees based on the attached schedule (see
Schedule A).
b. The Sub-Advisor reserves the right to waive all or a part of its
fees hereunder and reimburse other Fund expenses in order to maintain the
applicable expense cap for each class of shares of the Fund.
4. ACTIVITIES OF THE SUB-ADVISOR. It is understood that the Sub-Advisor
may perform investment advisory services for various other clients, including
other investment companies. The Sub-Advisor will report (generally via
conference call or in writing) to the Board of Trustees of the Trust (at regular
quarterly meetings and at such other times as such Board of Trustees reasonably
shall request) (i) information regarding any potential conflicts of interest
arising by reason of its continuing provision of advisory services to the Fund
and to its other accounts, and (ii) such other information as the Board of
Trustees shall reasonably request regarding the Fund, the Fund's performance,
the services provided by the Sub-Advisor to the Fund as compared to its other
accounts and the plans of, and the capability of, the Sub-Advisor with respect
to providing future services to the Fund and its other accounts. At least
annually, the Sub-Advisor shall report to the Trustees the total number and type
of such other accounts and the approximate total asset value thereof (but not
the identities of the beneficial owners of such accounts). The Sub-Advisor
agrees to submit to the Trust a statement defining its policies with respect to
the allocation of business among the Fund and its other clients.
It is understood that the Sub-Advisor may become interested in the Fund as
a shareholder or otherwise.
The Sub-Advisor has supplied to the Advisor and the Trust copies of its
Form ADV with all exhibits and attachments thereto (including the Sub-Advisor's
statement of financial condition) and will hereafter supply to the Advisor,
promptly upon the preparation thereof, copies of all amendments or restatements
of such document.
The Sub-Advisor has also delivered to the Advisor and the Trust copies of
its code of ethics complying with the requirements of Rule 17j-1 under the 1940
Act (the "Code"). If in the opinion of counsel to the Trust, the code of ethics
does not satisfy the requirements of Rule 17j-1, the Sub-Advisor will adopt a
code of ethics that does. The Sub-Advisor shall promptly furnish the Advisor and
Trust with all amendments of or supplements to the code at least annually. On an
annual basis, the Sub-Advisor shall report on compliance by the access persons
of the Fund with its Code to the Advisor and to the Board and upon the written
request of the Advisor or the Trust, the Sub-Advisor shall permit the Advisor
and the Trust, or their respective representatives to examine the reports
required to be made to the Sub-Advisor by the access persons of the Fund under
the code.
5. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Sub-Advisor in any prospectus, sales literature or other material relating
to the Advisor or the Trust in any manner not approved in advance by the
Sub-Advisor; provided, however, that the Sub-Advisor will approve all uses of
its name which merely refer in accurate terms to its appointment hereunder or
which are required by the SEC or a state securities commission; and provided
further, that in no event shall such approval be unreasonably withheld. The
Sub-Advisor shall not use the name of the Advisor or the Trust in any material
relating to the Sub-Advisor in any manner not approved in advance by the Advisor
or the Trust, as the case may be; provided, however, that the Advisor and the
Trust shall each approve all uses of their respective names which merely refer
in accurate terms to the appointment of the Sub-Advisor hereunder or which are
required by the SEC or a state securities commission; and, provided further,
that in no event shall such approval be unreasonably withheld.
6. LIMITATION OF LIABILITY OF THE SUB-ADVISOR. The Sub-Advisor shall not
be liable for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Sub-Advisor against any liability to the Advisor, the
Trust or to any shareholder to which the Sub-Advisor would otherwise be subject
by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of the Sub-Advisor's reckless disregard of its
obligations and duties hereunder. As used in this Section 6, the term
"Sub-Advisor" shall include the Sub-Advisor and/or any of its affiliates and the
directors, officers and employees of the Sub-Advisor and/or any of its
affiliates.
7. LIMITATION OF TRUST'S LIABILITY. The Sub-Advisor acknowledges that it
has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration of Trust. The Sub-Advisor agrees that (i) the
Trust's obligations to the Sub-Advisor under this Agreement (or indirectly under
the Advisory Agreement) shall be limited in any event to the assets of the Fund
and (ii) the Sub-Advisor shall not seek satisfaction of any such obligation from
the holders of shares of the Fund nor from any Trustee, officer, employee or
agent of the Trust.
8. FORCE MAJEURE. The Sub-Advisor shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Sub-Advisor shall take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
9. RENEWAL, TERMINATION AND AMENDMENT.
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a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, until __________, 2004; and it shall continue
thereafter provided that such continuance is specifically approved by the
parties and, in addition, at least annually by (i) the vote of the holders of a
majority of the outstanding voting securities (as herein defined) of the Fund or
by vote of a majority of the Trust's Board of Trustees and (ii) by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of either the Advisor or the Sub-Advisor, cast in person at a meeting
called for the purpose of voting on such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor if the Fund receives an exemptive order issued
by the Securities and Exchange Commission permitting the Advisor to enter into
and materially amend sub-advisory agreements of the Trust, without shareholder
approval subject to oversight of the Trust's Board of Trustees ("Exemptive
Order"), by the Trust's Board of Trustees or by a vote of the majority of the
outstanding voting securities of the Fund, in any such case upon not less than
60 days' prior written notice to the Sub-Advisor and (ii) by the Sub-Advisor
upon not less than 60 days' prior written notice to the Advisor and the Trust.
This Agreement shall terminate automatically in the event of (A) its assignment
or (B) the termination of the Advisory Agreement between the Trust and the
Advisor.
c. This Agreement may be amended at any time by the parties hereto,
subject to approval by the Trust's Board of Trustees and, or by the Advisor,
subject to oversight by the Trust's Board of Trustees, if
the Fund receives an Exemptive Order and, if required by applicable SEC rules
and regulations, a vote of the majority of the outstanding voting securities of
the Fund.
d. The terms "assignment," "interested persons" and "majority of the
outstanding voting securities" shall have the meaning set forth for such terms
in the 1940 Act.
10. SEVERABILITY. If any provision of this Agreement shall become or shall
be found to be invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. NOTICE. Any notices under this Agreement shall be in writing addressed
and delivered personally (or by telecopy) or mailed postage-paid, to the other
party at such address as such other party may designate in accordance with this
paragraph for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Advisor for
this purpose shall be 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and that
the address of the Sub-Advisor shall be 1270 Avenue of the Xxxxxxxx, Xxxxx 000,
Xxx Xxxx, Xxx Xxxx 00000.
12. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The captions in this Agreement
are included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
AMSTAR INVESTMENT TRUST AMSTAR INVESTMENT MANAGEMENT LLC
By: _____________________________ By:_____________________________
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman Title: President
XXXXXXXXXX CAPITAL PARTNERS, LLC
By: _____________________________
Name: _______________________
Title: ______________________
SCHEDULE A
Special Fee Arrangement
During the first year of the Fund's operations, the Sub-Advisor has agreed to
the following compensation schedule:
1St Quarter - Sub-Advisor will receive 70% of its applicable fee;
2nd Quarter - Sub-Advisor will receive 80% of its applicable fee;
3rd Quarter - Sub-Advisor will receive 90% of its applicable fee; and
4th Quarter - Sub-Advisor will receive 100% of its applicable fee.
(If the Fund reaches $25 million in net assets prior to the beginning of the 4th
Quarter of the Fund's first year of operations, the Sub-Advisor will immediately
begin to receive 100% of its applicable fee.)
The above schedule only applies in the Fund's first year of operations, after
which the Sub-Advisor will be paid 100% of its applicable fee.
Such fees shall be computed and paid monthly.
If the Sub-Advisor serves in such capacity for less than the whole of a month,
the compensation to the Sub-Advisor shall be prorated. For purposes of
calculating the Sub-Advisor's fee, the daily value of the Fund's net assets
shall be computed by the same method as the Trust uses to compute the net asset
value of the Fund for purposes of purchases and redemptions of shares thereof.
SUB-ADVISORY AGREEMENT
AMSTAR INVESTMENT TRUST
This SUB-ADVISORY AGREEMENT is made as of _____________, 2002, by and among
Amstar Investment Trust, a Delaware business trust (the "Trust"), Amstar
Investment Management LLC, a Delaware limited liability company (the "Advisor"),
and MBIA Capital Management Corporation, a Delaware corporation (the
"Sub-Advisor").
WHEREAS, the Trust is a Delaware business trust registered as an open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act"); and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and has been retained by the Trust
to provide investment advisory services to the Trust;
WHEREAS, the Sub-Advisor also is an investment advisor registered under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust and the Advisor desire to retain the Sub-Advisor to
furnish it with portfolio management services in connection with the Advisor's
investment advisory activities on behalf of the Amstar Total Return Fund (the
"Fund"), a series of the Trust, and the Sub-Advisor is willing to furnish such
services to the Advisor and the Fund;
NOW THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. EMPLOYMENT OF THE SUB-ADVISOR. In accordance with and subject to the
Investment Advisory Agreement between the Trust and the Advisor, the Trust and
the Advisor hereby appoints the Sub-Advisor to manage the investment and
reinvestment of the assets of the Fund, subject to the control and direction of
the Advisor and the Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Sub-Advisor hereby accepts such employment and agrees
during such period to render the services and to perform the duties called for
by this Agreement for the compensation herein provided. The Sub-Advisor shall at
all times maintain its registration as an investment advisor under the
Investment Advisers Act of 1940 and shall otherwise comply in all material
respects with all applicable laws and regulations, both state and federal. The
Sub-Advisor shall for all purposes herein be deemed an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust or the Fund.
2. DUTIES OF THE SUB-ADVISOR. The Sub-Advisor will provide the following
services and undertake the following duties:
a. The Sub-Advisor will manage the investment and reinvestment of
the assets of the Fund, subject to and in accordance with the investment
objectives, policies and restrictions of the Fund and any directions which the
Advisor or the Trust's Board of
Trustees may give from time to time with respect to the Fund. In furtherance of
the forgoing, the Sub-Advisor will make all determinations with respect to the
investment of the assets of the Fund and the purchase and sale of portfolio
securities and shall take such steps as may be necessary or advisable to
implement the same. The Sub-Advisor also will determine the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the portfolio securities will be exercised. The Sub-Advisor will
render regular reports to the Trust's Board of Trustees and to the Advisor (or
such other advisor or advisors as the Advisor shall engage to assist it in the
evaluation of the performance and activities of the Sub-Advisor). Such reports
shall be made in such form and manner and with respect to such matters regarding
the Fund and the Sub-Advisor as the Trust or the Advisor shall from time to time
request.
b. The Sub-Advisor shall provide support to the Advisor with respect
to the marketing of the Fund, including but not limited to: (i) permission to
use the Sub-Advisor's name as provided in Section 5, (ii) permission to use the
past performance and investment history of the Sub-Advisor as the same is
applicable to the Fund, (iii) access to the individual(s) responsible for
day-to-day management of the Fund for marketing conferences, teleconferences and
other activities involving the promotion of the Fund, subject to the reasonable
request of the Advisor, and (iv) permission to use biographical and historical
data of the Sub-Advisor and individual manager(s).
c. The Sub-Advisor will, in the name of the Fund, place orders for
the execution of all portfolio transactions in accordance with the policies with
respect thereto set forth in the Trust's registration statements under the 1940
Act and the Securities Act of 1933, as such registration statements may be in
effect from time to time. In connection with the placement of orders for the
execution of portfolio transactions, the Sub-Advisor will create and maintain
all necessary brokerage records of the Fund in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property of the Trust
and shall be available for inspection and use by the Securities and Exchange
Commission (the "SEC"), the Trust or any person retained by the Trust. Where
applicable, such records shall be maintained by the Advisor for the periods and
in the places required by Rule 31a-2 under the 1940 Act. When placing orders
with brokers and dealers, the Sub-Advisor's primary objective shall be to obtain
the most favorable price and execution available for the Fund, and in placing
such orders the Sub-Advisor may consider a number of factors, including, without
limitation, the overall direct net economic result to the Fund (including
commissions, which may not be the lowest available but ordinarily should not be
higher than the generally prevailing competitive range), the financial strength
and stability of the broker, the efficiency with which the transaction will be
effected, the ability to effect the transaction at all where a large block is
involved and the availability of the broker or dealer to stand ready to execute
possibly difficult transactions in the future. The Sub-Advisor is specifically
authorized, to the extent authorized by law (including, without limitation,
Section 28(e) of the Securities Exchange Act of 1934, as amended), to pay a
broker or dealer who provides research services to the Sub-Advisor an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another
broker or dealer would have charged for effecting such transaction, in
recognition of such additional research services rendered by the broker or
dealer, but only if the Sub-Advisor determines in good faith that the excess
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of the particular
transaction or the Sub-Advisor's overall responsibilities with respect to
discretionary accounts that it manages, and that the Fund derives or will derive
a reasonably significant benefit from such research services. The Sub-Advisor
will present a written report to the Board of Trustees of the Trust, at least
quarterly, indicating total brokerage expenses, actual or imputed, as well as
the services obtained in consideration for such expenses, broken down by
broker-dealer and containing such information as the Board of Trustees
reasonably shall request.
d. In the event of any reorganization or other change in the
Sub-Advisor, its investment principals, supervisors or members of its investment
(or comparable) committee, the Sub-Advisor shall give the Advisor and the
Trust's Board of Trustees written notice of such reorganization or change within
a reasonable time (but not later than 30 days) after such reorganization or
change.
e. The Sub-Advisor will bear its expenses of providing services to
the Fund pursuant to this Agreement except such expenses as are undertaken by
the Advisor or the Trust.
f. The Sub-Advisor will manage the Fund and the investment and
reinvestment of such assets so as to comply with the provisions of the 1940 Act,
the current Prospectus and Statement of Additional Information of the Fund, and
with Subchapter M of the Internal Revenue Code of 1986, as amended.
3. COMPENSATION OF THE SUB-ADVISOR.
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a. As compensation for the services to be rendered and duties
undertaken hereunder by the Sub-Advisor, the Advisor will pay to the Sub-Advisor
a monthly sub-advisory fee equal to 0.30% per annum of the average daily net
assets of the Fund. The Sub-Advisor's fee will not be reduced to the extent the
Advisor waives any of its advisory fees or reimburses expenses of the Fund.
During the first year of operations of the Fund, the Sub-Advisor has agreed to
reduce a portion of its sub-advisory fees based on the attached schedule (see
Schedule A).
b. The Sub-Advisor reserves the right to waive all or a part of its
fees hereunder and reimburse other Fund expenses in order to maintain the
applicable expense cap for each class of shares of the Fund.
4. ACTIVITIES OF THE SUB-ADVISOR. It is understood that the Sub-Advisor
may perform investment advisory services for various other clients, including
other investment companies. The Sub-Advisor will report (generally via
conference call or in writing) to the Board of Trustees of the Trust (at regular
quarterly meetings and at such other times as such Board of Trustees reasonably
shall request) (i) information regarding any potential conflicts of interest
arising by reason of its continuing provision of advisory services to the Fund
and to its other accounts, and (ii) such other information as the Board of
Trustees shall reasonably request regarding the Fund, the Fund's performance,
the services provided by the Sub-Advisor to the Fund as compared to its other
accounts and the plans of, and the capability of, the Sub-Advisor with respect
to providing future services to the Fund and its other accounts. At least
annually, the Sub-Advisor shall report to the Trustees the total number and type
of such other accounts and the approximate total asset value thereof (but not
the identities of the beneficial owners of such accounts). The Sub-Advisor
agrees to submit to the Trust a statement defining its policies with respect to
the allocation of business among the Fund and its other clients.
It is understood that the Sub-Advisor may become interested in the Fund as
a shareholder or otherwise.
The Sub-Advisor has supplied to the Advisor and the Trust copies of its
Form ADV with all exhibits and attachments thereto (including the Sub-Advisor's
statement of financial condition) and will hereafter supply to the Advisor,
promptly upon the preparation thereof, copies of all amendments or restatements
of such document.
The Sub-Advisor has also delivered to the Advisor and the Trust copies of
its code of ethics complying with the requirements of Rule 17j-1 under the 1940
Act (the "Code"). If in the opinion of counsel to the Trust, the code of ethics
does not satisfy the requirements of Rule 17j-1, the Sub-Advisor will adopt a
code of ethics that does. The Sub-Advisor shall promptly furnish the Advisor and
Trust with all amendments of or supplements to the code at least annually. On an
annual basis, the Sub-Advisor shall report on compliance by the access persons
of the Fund with its Code to the Advisor and to the Board and upon the written
request of the Advisor or the Trust, the Sub-Advisor shall permit the Advisor
and the Trust, or their respective representatives to examine the reports
required to be made to the Sub-Advisor by the access persons of the Fund under
the code.
5. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Sub-Advisor in any prospectus, sales literature or other material relating
to the Advisor or the Trust in any manner not approved in advance by the
Sub-Advisor; provided, however, that the Sub-Advisor will approve all uses of
its name which merely refer in accurate terms to its appointment hereunder or
which are required by the SEC or a state securities commission; and provided
further, that in no event shall such approval be unreasonably withheld. The
Sub-Advisor shall not use the name of the Advisor or the Trust in any material
relating to the Sub-Advisor in any manner not approved in advance by the Advisor
or the Trust, as the case may be; provided, however, that the Advisor and the
Trust shall each approve all uses of their respective names which merely refer
in accurate terms to the appointment of the Sub-Advisor hereunder or which are
required by the SEC or a state securities commission; and, provided further,
that in no event shall such approval be unreasonably withheld.
6. LIMITATION OF LIABILITY OF THE SUB-ADVISOR. The Sub-Advisor shall not
be liable for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Sub-Advisor against any liability to the Advisor, the
Trust or to any shareholder to which the Sub-Advisor would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of
the Sub-Advisor's reckless disregard of its obligations and duties hereunder. As
used in this Section 6, the term "Sub-Advisor" shall include the Sub-Advisor
and/or any of its affiliates and the directors, officers and employees of the
Sub-Advisor and/or any of its affiliates.
7. LIMITATION OF TRUST'S LIABILITY. The Sub-Advisor acknowledges that it
has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration of Trust. The Sub-Advisor agrees that (i) the
Trust's obligations to the Sub-Advisor under this Agreement (or indirectly under
the Advisory Agreement) shall be limited in any event to the assets of the Fund
and (ii) the Sub-Advisor shall not seek satisfaction of any such obligation from
the holders of shares of the Fund nor from any Trustee, officer, employee or
agent of the Trust.
8. FORCE MAJEURE. The Sub-Advisor shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Sub-Advisor shall take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
9. RENEWAL, TERMINATION AND AMENDMENT.
----------------------------------
a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, until __________, 2004; and it shall continue
thereafter provided that such continuance is specifically approved by the
parties and, in addition, at least annually by (i) the vote of the holders of a
majority of the outstanding voting securities (as herein defined) of the Fund or
by vote of a majority of the Trust's Board of Trustees and (ii) by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of either the Advisor or the Sub-Advisor, cast in person at a meeting
called for the purpose of voting on such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor if the Fund receives an exemptive order issued
by the Securities and Exchange Commission permitting the Advisor to enter into
and materially amend sub-advisory agreements of the Trust, without shareholder
approval subject to oversight of the Trust's Board of Trustees ("Exemptive
Order"), by the Trust's Board of Trustees or by a vote of the majority of the
outstanding voting securities of the Fund, in any such case upon not less than
60 days' prior written notice to the Sub-Advisor and (ii) by the Sub-Advisor
upon not less than 60 days' prior written notice to the Advisor and the Trust.
This Agreement shall terminate automatically in the event of (A) its assignment
or (B) the termination of the Advisory Agreement between the Trust and the
Advisor.
c. This Agreement may be amended at any time by the parties hereto,
subject to approval by the Trust's Board of Trustees and, or by the Advisor,
subject to oversight by the Trust's Board of Trustees, if
the Fund receives an Exemptive Order and, if required by applicable SEC rules
and regulations, a vote of the majority of the outstanding voting securities of
the Fund.
d. The terms "assignment," "interested persons" and "majority of the
outstanding voting securities" shall have the meaning set forth for such terms
in the 1940 Act.
10. SEVERABILITY. If any provision of this Agreement shall become or shall
be found to be invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. NOTICE. Any notices under this Agreement shall be in writing addressed
and delivered personally (or by telecopy) or mailed postage-paid, to the other
party at such address as such other party may designate in accordance with this
paragraph for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Advisor for
this purpose shall be 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and that
the address of the Sub-Advisor shall be 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000.
12. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The captions in this Agreement
are included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
AMSTAR INVESTMENT TRUST AMSTAR INVESTMENT MANAGEMENT LLC
By: _____________________________ By:_____________________________
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman Title: President
MBIA CAPITAL MANAGEMENT CORP
By: _____________________________
Name: _______________________
Title: ______________________
SCHEDULE A
Special Fee Arrangement
During the first year of the Fund's operations, the Sub-Advisor has agreed to
the following compensation schedule:
1St Quarter - Sub-Advisor will receive 70% of its applicable fee;
2nd Quarter - Sub-Advisor will receive 80% of its applicable fee;
3rd Quarter - Sub-Advisor will receive 90% of its applicable fee; and
4th Quarter - Sub-Advisor will receive 100% of its applicable fee.
(If the Fund reaches $25 million in net assets prior to the beginning of the 4th
Quarter of the Fund's first year of operations, the Sub-Advisor will immediately
begin to receive 100% of its applicable fee.)
The above schedule only applies in the Fund's first year of operations, after
which the Sub-Advisor will be paid 100% of its applicable fee.
Such fees shall be computed and paid monthly.
If the Sub-Advisor serves in such capacity for less than the whole of a month,
the compensation to the Sub-Advisor shall be prorated. For purposes of
calculating the Sub-Advisor's fee, the daily value of the Fund's net assets
shall be computed by the same method as the Trust uses to compute the net asset
value of the Fund for purposes of purchases and redemptions of shares thereof.
SUB-ADVISORY AGREEMENT
AMSTAR INVESTMENT TRUST
This SUB-ADVISORY AGREEMENT is made as of _____________, 2002, by and among
Amstar Investment Trust, a Delaware business trust (the "Trust"), Amstar
Investment Management LLC, a Delaware limited liability company (the "Advisor"),
and Xxxxxx Xxxx Investment Management Inc., a Delaware corporation (the
"Sub-Advisor").
WHEREAS, the Trust is a Delaware business trust registered as an open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act"); and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and has been retained by the Trust
to provide investment advisory services to the Trust;
WHEREAS, the Sub-Advisor also is an investment advisor registered under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust and the Advisor desire to retain the Sub-Advisor to
furnish it with portfolio management services in connection with the Advisor's
investment advisory activities on behalf of the Amstar International Equity Fund
(the "Fund"), a series of the Trust, and the Sub-Advisor is willing to furnish
such services to the Advisor and the Fund;
NOW THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. EMPLOYMENT OF THE SUB-ADVISOR. In accordance with and subject to the
Investment Advisory Agreement between the Trust and the Advisor, the Trust and
the Advisor hereby appoints the Sub-Advisor to manage the investment and
reinvestment of the assets of the Fund, subject to the control and direction of
the Advisor and the Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Sub-Advisor hereby accepts such employment and agrees
during such period to render the services and to perform the duties called for
by this Agreement for the compensation herein provided. The Sub-Advisor shall at
all times maintain its registration as an investment advisor under the
Investment Advisers Act of 1940 and shall otherwise comply in all material
respects with all applicable laws and regulations, both state and federal. The
Sub-Advisor shall for all purposes herein be deemed an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust or the Fund.
2. DUTIES OF THE SUB-ADVISOR. The Sub-Advisor will provide the following
services and undertake the following duties:
a. The Sub-Advisor will manage the investment and reinvestment of
the assets of the Fund, subject to and in accordance with the investment
objectives, policies and restrictions of the Fund and any directions which the
Advisor or the Trust's Board of
Trustees may give from time to time with respect to the Fund. In furtherance of
the forgoing, the Sub-Advisor will make all determinations with respect to the
investment of the assets of the Fund and the purchase and sale of portfolio
securities and shall take such steps as may be necessary or advisable to
implement the same. The Sub-Advisor also will determine the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the portfolio securities will be exercised. The Sub-Advisor will
render regular reports to the Trust's Board of Trustees and to the Advisor (or
such other advisor or advisors as the Advisor shall engage to assist it in the
evaluation of the performance and activities of the Sub-Advisor). Such reports
shall be made in such form and manner and with respect to such matters regarding
the Fund and the Sub-Advisor as the Trust or the Advisor shall from time to time
request.
b. The Sub-Advisor shall provide support to the Advisor with respect
to the marketing of the Fund, including but not limited to: (i) permission to
use the Sub-Advisor's name as provided in Section 5, (ii) permission to use the
past performance and investment history of the Sub-Advisor as the same is
applicable to the Fund, (iii) access to the individual(s) responsible for
day-to-day management of the Fund for marketing conferences, teleconferences and
other activities involving the promotion of the Fund, subject to the reasonable
request of the Advisor, and (iv) permission to use biographical and historical
data of the Sub-Advisor and individual manager(s).
c. The Sub-Advisor will, in the name of the Fund, place orders for
the execution of all portfolio transactions in accordance with the policies with
respect thereto set forth in the Trust's registration statements under the 1940
Act and the Securities Act of 1933, as such registration statements may be in
effect from time to time. In connection with the placement of orders for the
execution of portfolio transactions, the Sub-Advisor will create and maintain
all necessary brokerage records of the Fund in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property of the Trust
and shall be available for inspection and use by the Securities and Exchange
Commission (the "SEC"), the Trust or any person retained by the Trust. Where
applicable, such records shall be maintained by the Advisor for the periods and
in the places required by Rule 31a-2 under the 1940 Act. When placing orders
with brokers and dealers, the Sub-Advisor's primary objective shall be to obtain
the most favorable price and execution available for the Fund, and in placing
such orders the Sub-Advisor may consider a number of factors, including, without
limitation, the overall direct net economic result to the Fund (including
commissions, which may not be the lowest available but ordinarily should not be
higher than the generally prevailing competitive range), the financial strength
and stability of the broker, the efficiency with which the transaction will be
effected, the ability to effect the transaction at all where a large block is
involved and the availability of the broker or dealer to stand ready to execute
possibly difficult transactions in the future. The Sub-Advisor is specifically
authorized, to the extent authorized by law (including, without limitation,
Section 28(e) of the Securities Exchange Act of 1934, as amended), to pay a
broker or dealer who provides research services to the Sub-Advisor an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another
broker or dealer would have charged for effecting such transaction, in
recognition of such additional research services rendered by the broker or
dealer, but only if the Sub-Advisor determines in good faith that the excess
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of the particular
transaction or the Sub-Advisor's overall responsibilities with respect to
discretionary accounts that it manages, and that the Fund derives or will derive
a reasonably significant benefit from such research services. The Sub-Advisor
will present a written report to the Board of Trustees of the Trust, at least
quarterly, indicating total brokerage expenses, actual or imputed, as well as
the services obtained in consideration for such expenses, broken down by
broker-dealer and containing such information as the Board of Trustees
reasonably shall request.
d. In the event of any reorganization or other change in the
Sub-Advisor, its investment principals, supervisors or members of its investment
(or comparable) committee, the Sub-Advisor shall give the Advisor and the
Trust's Board of Trustees written notice of such reorganization or change within
a reasonable time (but not later than 30 days) after such reorganization or
change.
e. The Sub-Advisor will bear its expenses of providing services to
the Fund pursuant to this Agreement except such expenses as are undertaken by
the Advisor or the Trust.
f. The Sub-Advisor will manage the Fund and the investment and
reinvestment of such assets so as to comply with the provisions of the 1940 Act,
the current Prospectus and Statement of Additional Information of the Fund, and
with Subchapter M of the Internal Revenue Code of 1986, as amended.
3. COMPENSATION OF THE SUB-ADVISOR.
-------------------------------
a. As compensation for the services to be rendered and duties
undertaken hereunder by the Sub-Advisor, the Advisor will pay to the Sub-Advisor
a monthly sub-advisory fee equal to 0.50% per annum of the average daily net
assets of the Fund. The Sub-Advisor's fee will not be reduced to the extent the
Advisor waives any of its advisory fees or reimburses expenses of the Fund.
During the first year of operations of the Fund, the Sub-Advisor has agreed to
reduce a portion of its sub-advisory fees based on the attached schedule (see
Schedule A).
b. The Sub-Advisor reserves the right to waive all or a part of its
fees hereunder and reimburse other Fund expenses in order to maintain the
applicable expense cap for each class of shares of the Fund.
4. ACTIVITIES OF THE SUB-ADVISOR. It is understood that the Sub-Advisor
may perform investment advisory services for various other clients, including
other investment companies. The Sub-Advisor will report (generally via
conference call or in writing) to the Board of Trustees of the Trust (at regular
quarterly meetings and at such other times as such Board of Trustees reasonably
shall request) (i) information regarding any potential conflicts of interest
arising by reason of its continuing provision of advisory services to the Fund
and to its other accounts, and (ii) such other information as the Board of
Trustees shall reasonably request regarding the Fund, the Fund's performance,
the services provided by the Sub-Advisor to the Fund as compared to its other
accounts and the plans of, and the capability of, the Sub-Advisor with respect
to providing future services to the Fund and its other accounts. At least
annually, the Sub-Advisor shall report to the Trustees the total number and type
of such other accounts and the approximate total asset value thereof (but not
the identities of the beneficial owners of such accounts). The Sub-Advisor
agrees to submit to the Trust a statement defining its policies with respect to
the allocation of business among the Fund and its other clients.
It is understood that the Sub-Advisor may become interested in the Fund as
a shareholder or otherwise.
The Sub-Advisor has supplied to the Advisor and the Trust copies of its
Form ADV with all exhibits and attachments thereto (including the Sub-Advisor's
statement of financial condition) and will hereafter supply to the Advisor,
promptly upon the preparation thereof, copies of all amendments or restatements
of such document.
The Sub-Advisor has also delivered to the Advisor and the Trust copies of
its code of ethics complying with the requirements of Rule 17j-1 under the 1940
Act (the "Code"). If in the opinion of counsel to the Trust, the code of ethics
does not satisfy the requirements of Rule 17j-1, the Sub-Advisor will adopt a
code of ethics that does. The Sub-Advisor shall promptly furnish the Advisor and
Trust with all amendments of or supplements to the code at least annually. On an
annual basis, the Sub-Advisor shall report on compliance by the access persons
of the Fund with its Code to the Advisor and to the Board and upon the written
request of the Advisor or the Trust, the Sub-Advisor shall permit the Advisor
and the Trust, or their respective representatives to examine the reports
required to be made to the Sub-Advisor by the access persons of the Fund under
the code.
5. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Sub-Advisor in any prospectus, sales literature or other material relating
to the Advisor or the Trust in any manner not approved in advance by the
Sub-Advisor; provided, however, that the Sub-Advisor will approve all uses of
its name which merely refer in accurate terms to its appointment hereunder or
which are required by the SEC or a state securities commission; and provided
further, that in no event shall such approval be unreasonably withheld. The
Sub-Advisor shall not use the name of the Advisor or the Trust in any material
relating to the Sub-Advisor in any manner not approved in advance by the Advisor
or the Trust, as the case may be; provided, however, that the Advisor and the
Trust shall each approve all uses of their respective names which merely refer
in accurate terms to the appointment of the Sub-Advisor hereunder or which are
required by the SEC or a state securities commission; and, provided further,
that in no event shall such approval be unreasonably withheld.
6. LIMITATION OF LIABILITY OF THE SUB-ADVISOR. The Sub-Advisor shall not
be liable for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Sub-Advisor against any liability to the Advisor, the
Trust or to any shareholder to which the Sub-Advisor would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of
the Sub-Advisor's reckless disregard of its obligations and duties hereunder. As
used in this Section 6, the term "Sub-Advisor" shall include the Sub-Advisor
and/or any of its affiliates and the directors, officers and employees of the
Sub-Advisor and/or any of its affiliates.
7. LIMITATION OF TRUST'S LIABILITY. The Sub-Advisor acknowledges that it
has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration of Trust. The Sub-Advisor agrees that (i) the
Trust's obligations to the Sub-Advisor under this Agreement (or indirectly under
the Advisory Agreement) shall be limited in any event to the assets of the Fund
and (ii) the Sub-Advisor shall not seek satisfaction of any such obligation from
the holders of shares of the Fund nor from any Trustee, officer, employee or
agent of the Trust.
8. FORCE MAJEURE. The Sub-Advisor shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Sub-Advisor shall take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
9. RENEWAL, TERMINATION AND AMENDMENT.
----------------------------------
a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, until __________, 2004; and it shall continue
thereafter provided that such continuance is specifically approved by the
parties and, in addition, at least annually by (i) the vote of the holders of a
majority of the outstanding voting securities (as herein defined) of the Fund or
by vote of a majority of the Trust's Board of Trustees and (ii) by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of either the Advisor or the Sub-Advisor, cast in person at a meeting
called for the purpose of voting on such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor if the Fund receives an exemptive order issued
by the Securities and Exchange Commission permitting the Advisor to enter into
and materially amend sub-advisory agreements of the Trust, without shareholder
approval subject to oversight of the Trust's Board of Trustees ("Exemptive
Order"), by the Trust's Board of Trustees or by a vote of the majority of the
outstanding voting securities of the Fund, in any such case upon not less than
60 days' prior written notice to the Sub-Advisor and (ii) by the Sub-Advisor
upon not less than 60 days' prior written notice to the Advisor and the Trust.
This Agreement shall terminate automatically in the event of (A) its assignment
or (B) the termination of the Advisory Agreement between the Trust and the
Advisor.
c. This Agreement may be amended at any time by the parties hereto,
subject to approval by the Trust's Board of Trustees and, or by the Advisor,
subject to oversight by the Trust's Board of Trustees, if
the Fund receives an Exemptive Order and, if required by applicable SEC rules
and regulations, a vote of the majority of the outstanding voting securities of
the Fund.
d. The terms "assignment," "interested persons" and "majority of the
outstanding voting securities" shall have the meaning set forth for such terms
in the 1940 Act.
10. SEVERABILITY. If any provision of this Agreement shall become or shall
be found to be invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. NOTICE. Any notices under this Agreement shall be in writing addressed
and delivered personally (or by telecopy) or mailed postage-paid, to the other
party at such address as such other party may designate in accordance with this
paragraph for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Advisor for
this purpose shall be 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and that
the address of the Sub-Advisor shall be 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
12. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The captions in this Agreement
are included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
AMSTAR INVESTMENT TRUST AMSTAR INVESTMENT MANAGEMENT LLC
By: _____________________________ By:_____________________________
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman Title: President
XXXXXX XXXX INVESTMENT MANAGEMENT,
INC.
By: _____________________________
Name: _______________________
Title: ______________________
SCHEDULE A
Special Fee Arrangement
During the first year of the Fund's operations, the Sub-Advisor has agreed to
the following compensation schedule:
1St Quarter - Sub-Advisor will receive 70% of its applicable fee;
2nd Quarter - Sub-Advisor will receive 80% of its applicable fee;
3rd Quarter - Sub-Advisor will receive 90% of its applicable fee; and
4th Quarter - Sub-Advisor will receive 100% of its applicable fee.
(If the Fund reaches $25 million in net assets prior to the beginning of the 4th
Quarter of the Fund's first year of operations, the Sub-Advisor will immediately
begin to receive 100% of its applicable fee.)
The above schedule only applies in the Fund's first year of operations, after
which the Sub-Advisor will be paid 100% of its applicable fee.
Such fees shall be computed and paid monthly.
If the Sub-Advisor serves in such capacity for less than the whole of a month,
the compensation to the Sub-Advisor shall be prorated. For purposes of
calculating the Sub-Advisor's fee, the daily value of the Fund's net assets
shall be computed by the same method as the Trust uses to compute the net asset
value of the Fund for purposes of purchases and redemptions of shares thereof.
SUB-ADVISORY AGREEMENT
AMSTAR INVESTMENT TRUST
This SUB-ADVISORY AGREEMENT is made as of _____________, 2002, by and among
Amstar Investment Trust, a Delaware business trust (the "Trust"), Amstar
Investment Management LLC, a Delaware limited liability company (the "Advisor"),
and Financial Management Advisors, LLC, a Delaware Limited Liability Company
(the "Sub-Advisor").
WHEREAS, the Trust is a Delaware business trust registered as an open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act"); and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and has been retained by the Trust
to provide investment advisory services to the Trust;
WHEREAS, the Sub-Advisor also is an investment advisor registered under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust and the Advisor desire to retain the Sub-Advisor to
furnish it with portfolio management services in connection with the Advisor's
investment advisory activities on behalf of the Amstar High Yield Fund (the
"Fund"), a series of the Trust, and the Sub-Advisor is willing to furnish such
services to the Advisor and the Fund;
NOW THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. EMPLOYMENT OF THE SUB-ADVISOR. In accordance with and subject to the
Investment Advisory Agreement between the Trust and the Advisor, the Trust and
the Advisor hereby appoints the Sub-Advisor to manage the investment and
reinvestment of the assets of the Fund, subject to the control and direction of
the Advisor and the Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Sub-Advisor hereby accepts such employment and agrees
during such period to render the services and to perform the duties called for
by this Agreement for the compensation herein provided. The Sub-Advisor shall at
all times maintain its registration as an investment advisor under the
Investment Advisers Act of 1940 and shall otherwise comply in all material
respects with all applicable laws and regulations, both state and federal. The
Sub-Advisor shall for all purposes herein be deemed an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust or the Fund.
2. DUTIES OF THE SUB-ADVISOR. The Sub-Advisor will provide the following
services and undertake the following duties:
a. The Sub-Advisor will manage the investment and reinvestment of
the assets of the Fund, subject to and in accordance with the investment
objectives, policies and restrictions of the Fund and any directions which the
Advisor or the Trust's Board of
Trustees may give from time to time with respect to the Fund. In furtherance of
the forgoing, the Sub-Advisor will make all determinations with respect to the
investment of the assets of the Fund and the purchase and sale of portfolio
securities and shall take such steps as may be necessary or advisable to
implement the same. The Sub-Advisor also will determine the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the portfolio securities will be exercised. The Sub-Advisor will
render regular reports to the Trust's Board of Trustees and to the Advisor (or
such other advisor or advisors as the Advisor shall engage to assist it in the
evaluation of the performance and activities of the Sub-Advisor). Such reports
shall be made in such form and manner and with respect to such matters regarding
the Fund and the Sub-Advisor as the Trust or the Advisor shall from time to time
request.
b. The Sub-Advisor shall provide support to the Advisor with respect
to the marketing of the Fund, including but not limited to: (i) permission to
use the Sub-Advisor's name as provided in Section 5, (ii) permission to use the
past performance and investment history of the Sub-Advisor as the same is
applicable to the Fund, (iii) access to the individual(s) responsible for
day-to-day management of the Fund for marketing conferences, teleconferences and
other activities involving the promotion of the Fund, subject to the reasonable
request of the Advisor, and (iv) permission to use biographical and historical
data of the Sub-Advisor and individual manager(s).
c. The Sub-Advisor will, in the name of the Fund, place orders for
the execution of all portfolio transactions in accordance with the policies with
respect thereto set forth in the Trust's registration statements under the 1940
Act and the Securities Act of 1933, as such registration statements may be in
effect from time to time. In connection with the placement of orders for the
execution of portfolio transactions, the Sub-Advisor will create and maintain
all necessary brokerage records of the Fund in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property of the Trust
and shall be available for inspection and use by the Securities and Exchange
Commission (the "SEC"), the Trust or any person retained by the Trust. Where
applicable, such records shall be maintained by the Advisor for the periods and
in the places required by Rule 31a-2 under the 1940 Act. When placing orders
with brokers and dealers, the Sub-Advisor's primary objective shall be to obtain
the most favorable price and execution available for the Fund, and in placing
such orders the Sub-Advisor may consider a number of factors, including, without
limitation, the overall direct net economic result to the Fund (including
commissions, which may not be the lowest available but ordinarily should not be
higher than the generally prevailing competitive range), the financial strength
and stability of the broker, the efficiency with which the transaction will be
effected, the ability to effect the transaction at all where a large block is
involved and the availability of the broker or dealer to stand ready to execute
possibly difficult transactions in the future. The Sub-Advisor is specifically
authorized, to the extent authorized by law (including, without limitation,
Section 28(e) of the Securities Exchange Act of 1934, as amended), to pay a
broker or dealer who provides research services to the Sub-Advisor an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another
broker or dealer would have charged for effecting such transaction, in
recognition of such additional research services rendered by the broker or
dealer, but only if the Sub-Advisor determines in good faith that the excess
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of the particular
transaction or the Sub-Advisor's overall responsibilities with respect to
discretionary accounts that it manages, and that the Fund derives or will derive
a reasonably significant benefit from such research services. The Sub-Advisor
will present a written report to the Board of Trustees of the Trust, at least
quarterly, indicating total brokerage expenses, actual or imputed, as well as
the services obtained in consideration for such expenses, broken down by
broker-dealer and containing such information as the Board of Trustees
reasonably shall request.
d. In the event of any reorganization or other change in the
Sub-Advisor, its investment principals, supervisors or members of its investment
(or comparable) committee, the Sub-Advisor shall give the Advisor and the
Trust's Board of Trustees written notice of such reorganization or change within
a reasonable time (but not later than 30 days) after such reorganization or
change.
e. The Sub-Advisor will bear its expenses of providing services to
the Fund pursuant to this Agreement except such expenses as are undertaken by
the Advisor or the Trust.
f. The Sub-Advisor will manage the Fund and the investment and
reinvestment of such assets so as to comply with the provisions of the 1940 Act,
the current Prospectus and Statement of Additional Information of the Fund, and
with Subchapter M of the Internal Revenue Code of 1986, as amended.
3. COMPENSATION OF THE SUB-ADVISOR.
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a. As compensation for the services to be rendered and duties
undertaken hereunder by the Sub-Advisor, the Advisor will pay to the Sub-Advisor
a monthly sub-advisory fee equal to 0.425% per annum of the average daily net
assets of the Fund. The Sub-Advisor's fee will not be reduced to the extent the
Advisor waives any of its advisory fees or reimburses expenses of the Fund.
During the first year of operations of the Fund, the Sub-Advisor has agreed to
reduce a portion of its sub-advisory fees based on the attached schedule (see
Schedule A).
b. The Sub-Advisor reserves the right to waive all or a part of its
fees hereunder and reimburse other Fund expenses in order to maintain the
applicable expense cap for each class of shares of the Fund.
4. ACTIVITIES OF THE SUB-ADVISOR. It is understood that the Sub-Advisor
may perform investment advisory services for various other clients, including
other investment companies. The Sub-Advisor will report (generally via
conference call or in writing) to the Board of Trustees of the Trust (at regular
quarterly meetings and at such other times as such Board of Trustees reasonably
shall request) (i) information regarding any potential conflicts of interest
arising by reason of its continuing provision of advisory services to the Fund
and to its other accounts, and (ii) such other information as the Board of
Trustees shall reasonably request regarding the Fund, the Fund's performance,
the services provided by the Sub-Advisor to the Fund as compared to its other
accounts and the plans of, and the capability of, the Sub-Advisor with respect
to providing future services to the Fund and its other accounts. At least
annually, the Sub-Advisor shall report to the Trustees the total number and type
of such other accounts and the approximate total asset value thereof (but not
the identities of the beneficial owners of such accounts). The Sub-Advisor
agrees to submit to the Trust a statement defining its policies with respect to
the allocation of business among the Fund and its other clients.
It is understood that the Sub-Advisor may become interested in the Fund as
a shareholder or otherwise.
The Sub-Advisor has supplied to the Advisor and the Trust copies of its
Form ADV with all exhibits and attachments thereto (including the Sub-Advisor's
statement of financial condition) and will hereafter supply to the Advisor,
promptly upon the preparation thereof, copies of all amendments or restatements
of such document.
The Sub-Advisor has also delivered to the Advisor and the Trust copies of
its code of ethics complying with the requirements of Rule 17j-1 under the 1940
Act (the "Code"). If in the opinion of counsel to the Trust, the code of ethics
does not satisfy the requirements of Rule 17j-1, the Sub-Advisor will adopt a
code of ethics that does. The Sub-Advisor shall promptly furnish the Advisor and
Trust with all amendments of or supplements to the code at least annually. On an
annual basis, the Sub-Advisor shall report on compliance by the access persons
of the Fund with its Code to the Advisor and to the Board and upon the written
request of the Advisor or the Trust, the Sub-Advisor shall permit the Advisor
and the Trust, or their respective representatives to examine the reports
required to be made to the Sub-Advisor by the access persons of the Fund under
the code.
5. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Sub-Advisor in any prospectus, sales literature or other material relating
to the Advisor or the Trust in any manner not approved in advance by the
Sub-Advisor; provided, however, that the Sub-Advisor will approve all uses of
its name which merely refer in accurate terms to its appointment hereunder or
which are required by the SEC or a state securities commission; and provided
further, that in no event shall such approval be unreasonably withheld. The
Sub-Advisor shall not use the name of the Advisor or the Trust in any material
relating to the Sub-Advisor in any manner not approved in advance by the Advisor
or the Trust, as the case may be; provided, however, that the Advisor and the
Trust shall each approve all uses of their respective names which merely refer
in accurate terms to the appointment of the Sub-Advisor hereunder or which are
required by the SEC or a state securities commission; and, provided further,
that in no event shall such approval be unreasonably withheld.
6. LIMITATION OF LIABILITY OF THE SUB-ADVISOR. The Sub-Advisor shall not
be liable for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Sub-Advisor against any liability to the Advisor, the
Trust or to any shareholder to which the Sub-Advisor would otherwise be subject
by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of the Sub-Advisor's reckless disregard of its
obligations and duties hereunder. As used in this Section 6, the term
"Sub-Advisor" shall include the Sub-Advisor and/or any of its affiliates and the
directors, officers and employees of the Sub-Advisor and/or any of its
affiliates.
7. LIMITATION OF TRUST'S LIABILITY. The Sub-Advisor acknowledges that it
has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration of Trust. The Sub-Advisor agrees that (i) the
Trust's obligations to the Sub-Advisor under this Agreement (or indirectly under
the Advisory Agreement) shall be limited in any event to the assets of the Fund
and (ii) the Sub-Advisor shall not seek satisfaction of any such obligation from
the holders of shares of the Fund nor from any Trustee, officer, employee or
agent of the Trust.
8. FORCE MAJEURE. The Sub-Advisor shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Sub-Advisor shall take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
9. RENEWAL, TERMINATION AND AMENDMENT.
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a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, until __________, 2004; and it shall continue
thereafter provided that such continuance is specifically approved by the
parties and, in addition, at least annually by (i) the vote of the holders of a
majority of the outstanding voting securities (as herein defined) of the Fund or
by vote of a majority of the Trust's Board of Trustees and (ii) by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of either the Advisor or the Sub-Advisor, cast in person at a meeting
called for the purpose of voting on such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor if the Fund receives an exemptive order issued
by the Securities and Exchange Commission permitting the Advisor to enter into
and materially amend sub-advisory agreements of the Trust, without shareholder
approval subject to oversight of the Trust's Board of Trustees ("Exemptive
Order"), by the Trust's Board of Trustees or by a vote of the majority of the
outstanding voting securities of the Fund, in any such case upon not less than
60 days' prior written notice to the Sub-Advisor and (ii) by the Sub-Advisor
upon not less than 60 days' prior written notice to the Advisor and the Trust.
This Agreement shall terminate automatically in the event of (A) its assignment
or (B) the termination of the Advisory Agreement between the Trust and the
Advisor.
c. This Agreement may be amended at any time by the parties hereto,
subject to approval by the Trust's Board of Trustees and, or by the Advisor,
subject to oversight by the Trust's Board of Trustees, if
the Fund receives an Exemptive Order and, if required by applicable SEC rules
and regulations, a vote of the majority of the outstanding voting securities of
the Fund.
d. The terms "assignment," "interested persons" and "majority of the
outstanding voting securities" shall have the meaning set forth for such terms
in the 1940 Act.
10. SEVERABILITY. If any provision of this Agreement shall become or shall
be found to be invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. NOTICE. Any notices under this Agreement shall be in writing addressed
and delivered personally (or by telecopy) or mailed postage-paid, to the other
party at such address as such other party may designate in accordance with this
paragraph for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Advisor for
this purpose shall be 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and that
the address of the Sub-Advisor shall be 0000 Xxxxxx xx xxx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000.
12. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The captions in this Agreement
are included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
AMSTAR INVESTMENT TRUST AMSTAR INVESTMENT MANAGEMENT LLC
By: _____________________________ By:_____________________________
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman Title: President
FINANCIAL MANAGEMENT ADVISORS, LLC
By: _____________________________
Name: _______________________
Title: ______________________
SCHEDULE A
Special Fee Arrangement
During the first year of the Fund's operations, the Sub-Advisor has agreed to
the following compensation schedule:
1St Quarter - Sub-Advisor will receive 70% of its applicable fee;
2nd Quarter - Sub-Advisor will receive 80% of its applicable fee;
3rd Quarter - Sub-Advisor will receive 90% of its applicable fee; and
4th Quarter - Sub-Advisor will receive 100% of its applicable fee.
(If the Fund reaches $25 million in net assets prior to the beginning of the 4th
Quarter of the Fund's first year of operations, the Sub-Advisor will immediately
begin to receive 100% of its applicable fee.)
The above schedule only applies in the Fund's first year of operations, after
which the Sub-Advisor will be paid 100% of its applicable fee.
Such fees shall be computed and paid monthly.
If the Sub-Advisor serves in such capacity for less than the whole of a month,
the compensation to the Sub-Advisor shall be prorated. For purposes of
calculating the Sub-Advisor's fee, the daily value of the Fund's net assets
shall be computed by the same method as the Trust uses to compute the net asset
value of the Fund for purposes of purchases and redemptions of shares thereof.
