Exhibit 00.X0
XXXXXX XXXXXX FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 15 day of December, 2006 between Xxxxxx Street Funds
(the "Trust"), Xxxxxx Street Capital Management (the "Adviser") and Xxxxxxx
Xxxxxxx Trees & Xxxxx, Inc. (the "Sub-Adviser").
WHEREAS, Xxxxxx Street Funds, a Massachusetts business trust (the "Trust"),
is registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 31, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser acts as investment adviser to the series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Money Market Fund and Treasury Money Market Fund
(each a "Fund" and together, the "Funds"), and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage, in consultation
with and subject to the direction of the Adviser, all of the securities and
other assets of the Funds entrusted to it hereunder (the "Assets"),
including the purchase, retention and disposition of the Assets, in
accordance with the Funds' investment objectives, policies and restrictions
as stated in the Funds' prospectus(es) and statements of additional
information, as currently in effect and as amended or supplemented from
time to time (referred to collectively as the "Prospectuses"), and subject
to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Funds, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser may delegate some of the performance of the services to its
subsidiaries or affiliates. The Sub-Adviser will, however, remain
responsible to the Adviser for any such delegated functions.
(c) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein), the Prospectuses, and with the written instructions
and directions of the Adviser and of the Board of Trustees of the Trust
received from time to time, and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986 (the
"Code"), and all other applicable federal and state laws and regulations,
as each is amended from time to time.
(d) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Funds as provided in subparagraph (a) and will place orders with or through
such persons, brokers or dealers to carry out the policy with respect to
brokerage set forth in the Funds' Registration Statement (as defined
herein) and Prospectuses or as the Board of Trustees or the Adviser may
direct in writing from time to time, in conformity with all federal
securities laws. Additionally, the Sub-Adviser is authorized to execute
agreements as agent for the Funds with brokers or dealers necessary to
carry out its duties under this Agreement. In executing Fund transactions
and selecting brokers or dealers, the Sub-Adviser will use its best
efforts to seek on behalf of the Funds the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-
Adviser shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker-dealer to execute a particular
transaction, the Sub-Adviser may also consider the brokerage and research
services provided (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934 (the "Exchange Act")). Consistent with any
guidelines established by the Board of Trustees of the Trust and Section
28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-Adviser determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer --
viewed in terms of that particular transaction or in terms of the overall
responsibilities of the Sub-Adviser to its discretionary clients,
including the Funds. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) and to take into account the sale of
shares of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Funds' Assets be
purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal
underwriter, or any affiliated person of either the Trust, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission ("SEC") and the 1940 Act.
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(e) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Fund required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Funds are property of the Funds
and the Sub-Adviser will surrender promptly to the Funds any of such
records upon the Funds' request; provided, however, that the Sub-Adviser
may retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to this Agreement, and shall transfer said
records to any successor sub-adviser upon the termination of this Agreement
(or, if there is no successor sub-adviser, to the Adviser).
(f) The Sub-Adviser shall provide the Funds' custodian on each business day
with information relating to all transactions concerning the Funds' Assets
and shall provide the Adviser with such information upon request of the
Adviser. The Adviser has obtained the agreement of the Funds' custodian to
act in accordance with the instructions of the Sub-Adviser.
(g) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar or different services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
Nothing in this Agreement shall limit or restrict the Sub-Adviser or any of
its officers, employees, affiliates, or subsidiaries from buying, selling,
or trading in any securities for its or their own account or accounts in
compliance with applicable federal securities laws as well as the
Sub-Adviser's Code of Ethics. The Trust and the Adviser acknowledge that
the Sub-Adviser and its officers, employees, affiliates, or subsidiaries
and its other clients may at any time have, acquire, increase, decrease, or
dispose of positions in investments that are at the same time being
acquired or disposed of for the accounts of the Funds in a manner
consistent with the Sub-Adviser's Code of Ethics. The Sub-Adviser will have
no obligation to acquire for the Funds a position in any investment that
the Sub-Adviser, its officers, employees, affiliates, or subsidiaries may
acquire for its or
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their own accounts or for the account of another client, if in the sole
discretion of the Sub-Adviser, it is not feasible or desirable to acquire a
position in such investment for the accounts of the Funds.
(h) The Sub-Adviser shall as soon as reasonably practicable notify the Adviser
of any financial condition that is likely to impair the Sub-Adviser's
ability to fulfill its commitment under this Agreement.
(i) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held as Assets in the Funds. The Adviser shall instruct the
custodian and other parties providing services to the Funds to promptly
forward misdirected proxies to the Sub-Adviser.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Funds pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectuses, the written instructions
and directions of the Board of Trustees of the Trust, the requirements of
the 1940 Act, the Code, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
properly certified or authenticated copies of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws"); and
(c) Prospectuses.
The Adviser agrees to promptly furnish the Sub-Adviser with copies of any
changes, amendments or other modifications made to the Declaration of
Trust, the By-Laws, the Prospectuses, the Investment Guidelines or any
other document relating to the Sub-Adviser's services hereunder.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule which is
attached hereto and made part of this Agreement. The fee will be
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calculated based on the average daily value of the Assets under the
Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee. All rights of
compensation under this Agreement for services performed as of the
termination date shall survive the termination of this Agreement.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually: (a) by
the vote of a majority of those Trustees of the Trust who are not parties
to this Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval, and (b) by
the Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Funds; provided, however, that if the shareholders
of the Funds fail to approve the Agreement as provided herein, the Adviser
may continue to serve hereunder in the manner and to the extent permitted
by the 1940 Act and rules and regulations thereunder. The foregoing
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
This Agreement may be modified by mutual consent subject to the provisions
of Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the U.S. Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.
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This Agreement may be terminated as to the Funds at any time, without the
payment of any penalty by vote of a majority of the Board of Trustees of
the Trust or by vote of a majority of the outstanding voting securities of
the Funds on not less than 30 days nor more than 60 days written notice to
the Adviser, or by the Adviser at any time without the payment of any
penalty, on 90 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such
party.
As used in this Section 6, the terms "assignment," "interested persons,"
and a "vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder; subject to such exemptions as may be granted by the
Commission under said Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: Xxxxxx Street Capital Management
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
To the Sub-Adviser at: Xxxxxxx Xxxxxxx Trees & Xxxxx, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx,
Managing Director
10. ANTI MONEY LAUNDERING. The Adviser agrees to provide the Sub-Adviser with
any documentation that it may reasonably require in order to comply with
all applicable anti money laundering regulation, including but not limited
to that of the United States and the United Kingdom. In addition, the
Adviser agrees that the Sub-Adviser may provide
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copies of such documentation to counterparties which they may reasonably
require in order to fulfill their anti-money laundering procedures.
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
In the event the terms of this Agreement are applicable to more than one
portfolio of the Trust (for purposes of this Section 11, each a "Fund"),
the Adviser is entering into this Agreement with the Sub-Adviser on behalf
of the respective Funds severally and not jointly, with the express
intention that the provisions contained in each numbered paragraph hereof
shall be understood as applying separately with respect to each Fund as if
contained in separate agreements between the Adviser and Sub-Adviser for
each such Fund. In the event that this Agreement is made applicable to any
additional Funds by way of a Schedule executed subsequent to the date first
indicated above, provisions of such Schedule shall be deemed to be
incorporated into this Agreement as it relates to such Fund so that, for
example, the execution date for purposes of Section 6 of this Agreement
with respect to such Fund shall be the execution date of the relevant
Schedule.
This Agreement may be amended in writing at any time by the mutual
agreement of the Trust, the Adviser and the Sub-Adviser.
12. MISCELLANEOUS.
(a) A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
(b) Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of
the SEC, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
(c) The Adviser and the Fund, hereby consents to being treated by the
Sub-Adviser as a "qualified eligible person" as defined in the rules
promulgated under the United States Commodity Exchange Act (the "CEA") for
the purposes of the CEA and the regulations thereunder.
(d) The Sub-Adviser represents to the Adviser and the Funds that it is a
"registered commodity trading adviser", as such term is defined in the CEA
and the regulations
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promulgated thereunder and shall during the term of this Agreement satisfy
all applicable requirements of the CEA relating to a registered commodity
trading advisor.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN
CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE CLIENTS, THIS BROCHURE OR ACCOUNT
DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE
COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM
OR UPON THE ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE
COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING
PROGRAM OR ACCOUNT DOCUMENT.
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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.
XXXXXX STREET FUNDS XXXXXXX XXXXXXX TREES & XXXXX, INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Title: Vice President Title: Chief Legal Risk Officer,
Managing Director
XXXXXX STREET CAPITAL MANAGEMENT
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: XXXX X. XXXXXXXX
Title: SENIOR VICE PRESIDENT
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SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXX STREET FUNDS,
XXXXXX STREET CAPITAL MANAGEMENT,
AND
XXXXXXX XXXXXXX TREES & XXXXX, INC.
COMPENSATION
Funds:
- Money Market Fund
- Treasury Money Market Fund
Fees:
Pursuant to Article 4, the Trust shall pay the Adviser compensation calculated
daily and paid monthly at an annual rate as follows:
0.060% of the aggregate average daily net assets up to $500 million
0.020% of the aggregate average daily net assets in excess of $500 million
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