XXXXXXX ASSET MANAGEMENT CORP.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
September , 1999
XXXXXXX INVESTORS TRUST, on behalf of
Xxxxxxx U.S. Treasury Money Market Fund
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXXXX & TANG ASSET MANAGEMENT, L.P.
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
Subadvisory Agreement
Dear Sirs:
Xxxxxxx Investors Trust (the "trust"), of which Xxxxxxx U.S. Treasury Money
Market Fund (the "fund") is a series, has been organized as a business trust
under the laws of the State of Delaware to engage in the business of an
investment company. The trust's shares of beneficial interest are currently
divided into five series (including the fund), each series representing the
entire undivided interest in a separate portfolio of assets.
The board of trustees of the trust (the "trustees") has selected Xxxxxxx
Asset Management Corp. (the "adviser") to provide overall investment advice and
management for the fund, and to provide certain other services, under the terms
and conditions provided in the investment advisory agreement, dated as of the
date hereof, between the trust, on behalf of the fund, and the adviser (the
"investment advisory agreement").
The adviser and the trustees have selected Xxxxx & Tang Asset Management,
L.P. (the "subadviser") to provide the adviser and the fund with the advice and
services set forth below, and the subadviser is willing to provide such advice
and services, subject to the review of the trustees and overall supervision of
the adviser, under the terms and conditions hereinafter set forth. The
subadviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). Accordingly, the trust, on behalf of the fund, and the
adviser agree with the subadviser as follows:
1. Delivery of Documents. The trust has furnished the subadviser with
copies, properly certified or otherwise authenticated, of each of the
following:
(1) agreement and declaration of trust of the trust, dated August 20,
1998 (the "declaration of trust");
(2) by-laws of the trust as in effect on the date hereof;
(3) resolutions of the trustees selecting the subadviser as the
investment subadviser to the fund and approving this subadvisory
agreement (the "agreement");
(4) resolutions of the trustees selecting the adviser as investment
adviser to the fund and approving the investment advisory
agreement and resolutions adopted by the initial shareholder of
the fund approving the investment advisory agreement;
(5) the adviser's investment advisory agreement;
(6) the fund's prospectus and statement of additional information;
and
(7) the trust's code of ethics.
The adviser will furnish the subadviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The subadviser will use its best efforts to
provide to the fund continuing and suitable investment advice with
respect to investments. Subject always to the provisions of the
trust's declaration of trust and by-laws and the Investment Company
Act of 1940, as amended (the "1940 Act"), and to the investment
objective, policies and restrictions (including, without limitation,
the requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code") for qualification as a registered investment
company) of the fund, as each of the same shall be from time to time
in effect as set forth in the fund's prospectus and statement of
additional information, or any investment guidelines or other
instructions received in writing from the adviser and subject,
further, to such policies and instructions as the board of trustees
may from time to time establish and deliver to the subadviser. In the
performance of the subadviser's duties hereunder, subject always to
the provisions contained in the documents delivered to the subadviser
pursuant to Section 1 above, as from time to time amended or
supplemented, the subadviser will, at its own expense:
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(1) furnish the adviser and the fund with advice and recommendations,
consistent with the investment policies, objectives and
restrictions of the fund as set forth above, with respect to the
purchase, holding and disposition of portfolio securities and
other permitted investments;
(2) furnish the adviser and the fund with advice in connection with
policy decisions to be made by the board of trustees or any
committee thereof about the fund's investments and, as requested,
furnish the fund with research, economic and statistical data in
connection with the fund's investments and investment policies;
(3) submit such reports relating to the valuation of the fund's
securities as the adviser may reasonably request;
(4) subject to prior consultation with the adviser, assist the fund
in any negotiations relating to the fund's investments with
issuers, investment banking firms, securities brokers or dealers
and other institutions or investors;
(5) consistent with the provisions of Section 7 of this agreement,
place orders for the purchase, sale or exchange of portfolio
securities for the fund's account with brokers or dealers
selected by the adviser or the subadviser, provided that in
connection with the placing of such orders and the selection of
such brokers or dealers the subadviser will seek to obtain best
price and execution, except as otherwise provided in the
prospectus and statement of additional information of the fund;
(6) from time to time or at any time requested by the adviser or the
trustees, make reports to the adviser or the trustees, as
requested, of the subadviser's performance of the foregoing
services;
(7) subject to the supervision of the adviser, maintain and preserve
the records required by the 1940 Act to be maintained by the
subadviser (the subadviser agrees that such records are the
property of the trust and copies will be surrendered to the trust
promptly upon request therefor);
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(8) give instructions to the custodian (including any sub-custodian)
of the fund as to deliveries of securities to and from such
custodian and payments of cash for the account of the fund, and
advise the adviser on the same day such instructions are given;
(9) cooperate generally with the fund and the adviser to provide
information necessary for the preparation of registration
statements and periodic reports to be filed with the Securities
and Exchange Commission, including Form N-1A, semi-annual reports
on Form N-SAR, periodic statements, shareholder communications
and proxy materials furnished to holders of shares of the fund,
filings with states and with United States agencies responsible
for tax matters, and other reports and filings of like nature.
In the performance of its duties hereunder, the sub-adviser is and will be an
independent contractor and unless otherwise expressly provided or authorized
will have no authority to act for or represent the fund or trust in any way or
otherwise be deemed to be an agent of the fund, the trust or of the adviser.
3. Expenses Paid by the Sub-adviser. The sub-adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its
obligations under this agreement, the expenses of office rent,
telephone, telecommunications and other facilities that it is
obligated to provide in order to perform the services specified in
Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder.
4. Expenses of the Fund Not Paid by the Sub-adviser. The sub-adviser will
not be required to pay any expenses which this agreement does not
expressly state will be payable by the sub-adviser. In particular, and
without limiting the generality of the foregoing but subject to the
provisions of Section 3, the sub-adviser will not be required to pay
any fund expense or to reimburse the adviser for any such expense that
the adviser is required to pay.
5. Compensation of the Sub-adviser. The adviser will pay the sub-adviser,
as compensation for services and expenses assumed hereunder, a fee as
set forth in Schedule I. Sub-advisory fees payable hereunder will be
computed daily and paid monthly in arrears. If this agreement is
effective subsequent to the first day of the month, or if this
agreement is terminated, the fee provided in
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this section will be computed on the basis of the number of days in
the month for which this Agreement is in effect, subject to a pro rata
adjustment based on the number of days elapsed in the current month as
a percentage of the total number of days in such month. The
sub-adviser understands and agrees that neither the trust nor the fund
has any liability for the subadviser's fee hereunder. Calculations of
the subadviser's fee will be based on average net asset values as
provided by the adviser.
6. Other Activities of the Subadviser and Its Affiliates. Nothing herein
contained will prevent the subadviser or any of its affiliates or
associates from engaging in any other business or from acting as
investment adviser or investment manager for any other person or
entity, whether or not having investment policies or a portfolio
similar to the fund. It is specifically understood that officers,
directors and employees of the subadviser and its affiliates may
engage in providing portfolio management services and advice to other
investment advisory clients of the subadviser or of its affiliates.
7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the fund, neither the
subadviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The subadviser will not
knowingly recommend that the fund purchase, sell or retain securities
of any issuer in which the subadviser has a financial interest without
obtaining prior approval of the adviser prior to the execution of any
such transaction. The subadviser will provide quarterly compliance
reports to a designated representative of the adviser reporting any
violation of the subadviser code of ethics.
8. No Partnership or Joint Venture. The trust, the fund, the adviser and
the subadviser are not partners of or joint venturers with each other
and nothing herein shall be construed so as to make them such partners
or joint venturers or impose any liability as such on any of them.
9. Limitation of Liability of the Subadviser. The subadviser will not be
liable for any error of judgment or mistake of law or for any loss
suffered by the trust, the fund or the adviser in connection with the
matters to which this agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the sub
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adviser's part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this agreement.
10. Duration and Termination of this Agreement. This agreement will remain
in effect until July 31, 2000 and from year to year thereafter, but
only so long as such continuance is specifically approved at least
annually in accordance with the requirements of the 1940 Act as now in
effect or as amended, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule,
regulation, order or interpretive position. This agreement may, on 60
days written notice, be terminated at any time without the payment of
any penalty by the fund by vote of a majority of the outstanding
voting securities of the fund or by the board of trustees or by the
adviser or by the sub-adviser. Termination of this agreement with
respect to the fund will not be deemed to terminate or otherwise
invalidate any provisions of any contract between you and any other
series of the trust. This agreement will automatically terminate in
the event of its assignment or upon the termination of the adviser's
investment advisory agreement. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and
"voting security"), will apply.
11. Amendment of this Agreement. No provision of this agreement may be
changed or waived orally, but only by an instrument in writing signed
by the party against which enforcement of the change or waiver is
sought. No amendment, transfer, assignment, sale, hypothecation or
pledge of this agreement shall be effective until approved in
accordance with the requirements of the 1940 Act as now in effect or
as amended, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission by any rule, regulation, order
or interpretive position.
12. Miscellaneous.
(1) The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an
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original, but all of which together shall constitute one and the
same instrument. The name Xxxxxxx Investors Trust is the
designation of the trustees under the declaration of trust, dated
August 20, 1998 and the declaration of trust has been filed with
the Secretary of State of the State of Delaware. The obligations
of the trust and the fund are not personally binding upon, nor
will resort be had to the private property of, any of the
trustees, shareholders, officers, employees or agents of the
trust or the fund, but only the fund's property shall be bound.
The fund will not be liable for the obligations of any other
series of the trust.
(2) Nothing herein contained will limit or restrict the sub-adviser
or any of its officers, affiliates or employees from buying,
selling or trading in any securities for its or their own account
or accounts. The trust and fund acknowledge that the sub-adviser
and its officers, affiliates and employees, and its other clients
may at any time have, acquire, increase, decrease or dispose of
positions in investments which are at the same time being
acquired or disposed of by the fund. The sub-adviser will have no
obligation to acquire for the fund, a position in any investment
which the sub-adviser, its officers, affiliates or employees may
acquire for its or 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 fund. Nothing herein contained will prevent
the sub-adviser from purchasing or recommending the purchase of a
particular security for one or more funds or clients while other
funds or clients may be selling the same security.
(3) Any information supplied by the sub-adviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is confidential and may be
used only by the fund and/or its agents, and only in connection
with the fund and its investments.
(4) Governing Law. This agreement shall be governed by the
substantive law of the State of New York and the applicable
provisions of the 1940 Act.
Yours very truly,
XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxx X. Xxxxxxx
Its: President and CEO
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The foregoing agreement is hereby
agreed to as of the date thereof.
XXXXXXX INVESTORS TRUST
on behalf of Xxxxxxx U.S. Treasury Money
Market Fund
By: Xxxxxxx X. Xxxxx
Its: Chief Financial Officer
XXXXX & XXXX ASSET MANAGEMENT, L.P.
By: Xxxxxxx XxXxxxxxx
Its: Chief Financial Officer
------------------------------
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SCHEDULE I
Annual Fee Rate as a Percentage
Fund of Average Daily Net Asset Value
---- --------------------------------
Xxxxxxx U.S. Treasury Money Market Fund
The average net asset value for the month will be based on the net asset
value used in determining the price at which fund shares are sold, repurchased
or redeemed on each day of the month.
If this agreement becomes effective as to a fund subsequent to the first
day of a month, or terminates before the last day of a month, your compensation
for such fraction of the month will be determined by applying the foregoing
percentages to the average daily net asset value of the fund during such
fraction of a month and in the proportion that such fraction of a month bears to
the entire month.
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