EXHIBIT 5.7
SUB-ADVISORY AGREEMENT
XXXXXX MID CAP VALUE FUND
(A SERIES OF XXXXXX INVESTMENT PORTFOLIO TRUST)
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective as
of the _______ day of ___________, 1998, by and between XXXXXX ASSOCIATES, INC.,
a Delaware corporation ("Xxxxxx") and PERKINS, WOLF, XXXXXXXXX & COMPANY, a
Delaware corporation ("PWM").
WHEREAS, Xxxxxx has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Xxxxxx Investment Portfolio Trust, a Delaware
business trust (the "Trust") and an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), with respect to the Xxxxxx Mid Cap Value Fund, a series of the Trust (the
"Fund") pursuant to which Xxxxxx has agreed to provide investment advisory
services with respect to the Fund; and
WHEREAS, PWM is engaged in the business of rendering investment advisory
services and is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, Xxxxxx desires to retain PWM to furnish investment advisory
services with respect to the Fund, and PWM is willing to furnish such services;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DUTIES OF PWM. Xxxxxx hereby engages the services of PWM as
subadviser in furtherance of the Advisory Agreement. PWM agrees to perform the
following duties, subject to the oversight of Xxxxxx and to the overall control
of the officers and the Board of Trustees (the "Trustees") of the Trust:
(a) PWM shall manage the investment operations of the Fund and the
composition of its investment portfolio, shall determine without prior
consultation with the Trust or Xxxxxx, what securities and other assets of the
Fund will be acquired, held, disposed of or loaned, and shall direct Xxxxxx with
respect to the execution of trades in connection with such determinations, in
conformity with the investment objectives, policies and restrictions and the
other statements concerning the Fund in the Trust's trust instrument, as amended
from time to time (the "Trust Instrument"), bylaws and registration statements
under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act"),
the Advisers Act, the rules thereunder and all other
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applicable federal and state laws and regulations, and the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), applicable to the Fund
as a regulated investment company;
(b) PWM shall cause its officers to attend meetings and furnish oral
or written reports, as the Trust or Xxxxxx may reasonably require, in order to
keep Xxxxxx, the Trustees and appropriate officers of the Trust fully informed
as to the condition of the investment portfolio of the Fund, the investment
decisions of PWM, and the investment considerations which have given rise to
those decisions;
(c) PWM shall maintain all books and records required to be
maintained by PWM pursuant to the 1940 Act, the Advisers Act, and the rules and
regulations promulgated thereunder, as the same may be amended from time to
time, with respect to transactions on behalf of the Fund, and shall furnish the
Trustees and Xxxxxx with such periodic and special reports as the Trustees or
Xxxxxx reasonably may request. PWM hereby agrees that all records which it
maintains for the Fund or the Trust are the property of the Trust, agrees to
permit the reasonable inspection thereof by the Trust or its designees and
agrees to preserve for the periods prescribed under the 1940 Act and the
Advisers Act any records which it maintains for the Trust and which are required
to be maintained under the 1940 Act and the Advisers Act, and further agrees to
surrender promptly to the Trust or its designees any records which it maintains
for the Trust upon request by the Trust;
(d) At such times as shall be reasonably requested by the Trustees or
Xxxxxx, PWM shall provide the Trustees and Xxxxxx with economic, operational and
investment data and reports, including without limitation all information and
materials reasonably requested by or requested to be delivered to the Trustees
of the Trust pursuant to Section 15(c) of the 1940 Act, and shall make available
to the Trustees and Xxxxxx any economic, statistical and investment services
normally available to similar investment company clients of PWM; and
(e) PWM will provide to Xxxxxx for regulatory filings and other
appropriate uses materially accurate and complete information relating to PWM as
may reasonably be requested by Xxxxxx from time to time and, notwithstanding
anything herein to the contrary, PWM shall be liable to Xxxxxx for all damages,
costs and expenses, including without limitation reasonable attorneys' fees
(hereinafter referred to collectively as "Damages"), incurred by Xxxxxx as a
result of any material inaccuracies or omissions in such information provided by
PWM to Xxxxxx; provided, however, that PWM shall not be liable to the extent
that any Damages are based upon inaccuracies or omissions made in reliance upon
information furnished to PWM by Xxxxxx.
2. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, PWM shall act in conformity with the Trust's Trust Instrument,
bylaws and currently effective registration statements under the 1940 Act and
the 1933 Act and any amendments or supplements thereto (the "Registration
Statements") and with the written policies, procedures and guidelines
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of the Fund, and written instructions and directions of the Trustees and Xxxxxx
and shall comply with the requirements of the 1940 Act, the Advisers Act, the
rules thereunder, and all other applicable federal and state laws and
regulations. Xxxxxx agrees to provide to PWM copies of the Trust's Trust
Instrument, bylaws, Registration Statement, written policies, procedures and
guidelines and written instructions and directions of the Trustees and Xxxxxx,
and any amendments or supplements to any of them at, or, if practicable, before
the time such materials become effective.
3. OBLIGATIONS OF XXXXXX. Xxxxxx shall have the following obligations
under this Agreement:
(a) To keep PWM continuously and fully informed (or cause the
custodian of the Fund's assets to keep PWM so informed) as to the composition of
the investment portfolio of the Fund and the nature of all of the Fund's assets
and liabilities from time to time;
(b) To furnish PWM with a certified copy of any financial statement
or report prepared for the Fund by certified or independent public accountants
and with copies of any financial statements or reports made to the Fund's
shareholders or to any governmental body or securities exchange;
(c) To furnish PWM with any further materials or information which
PWM may reasonably request to enable it to perform its function under this
Agreement; and
(d) To compensate PWM for its services in accordance with the
provisions of Section 4 hereof.
4. COMPENSATION. Xxxxxx shall pay to PWM for its services under this
Agreement a fee, payable in United States dollars, at an annual rate of 0.75% of
the first $50,000,000 of average daily net assets of the Fund, 0.375% of the
next $50,000,000 of average daily net assets of the Fund and 0.20% on any part
of the average daily net assets of the Fund in excess of $100,000,000; provided
that, notwithstanding the foregoing, during the first 2-1/2 years from the
effective date of this Agreement, the fee paid by Xxxxxx to PWM for its services
hereunder shall be at a rate not less than $400,000 per year, minus the amount
of all consulting fees paid or payable to PWM by Xxxxxx pursuant to that certain
Consulting Agreement, dated April 8, 1998, between Xxxxxx and PWM. Such fee
shall be computed and accrued daily and payable monthly as of the last day of
each month during which or part of which this Agreement is in effect. For the
month during which this Agreement becomes effective and the month during which
it terminates, however, there shall be an appropriate proration of the fee
payable for such month based on the number of calendar days of such month during
which this Agreement is effective.
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5. EXPENSES AND EXCLUDED EXPENSES. During the term of this Agreement,
Xxxxxx shall reimburse PWM for PWM's reasonable ordinary and necessary expenses
associated with maintaining a one-person office in which to perform its services
for the Fund under this Agreement and, subject to the prior approval of Xxxxxx,
for PWM's reasonable ordinary and necessary travel and other business expenses
incurred by PWM in performing its services hereunder. Other than the foregoing,
PWM shall pay all its own costs and expenses incurred in rendering its services
under this Agreement.
6. REPRESENTATIONS OF PWM. PWM hereby represents, warrants and covenants
to Xxxxxx as follows:
(a) PWM: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met, and
will continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary to be met in order
to perform the services contemplated by this Agreement; (iv) has the legal and
corporate authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify Xxxxxx of the occurrence of any event
that would disqualify PWM from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise, and of the
institution of any administrative, regulatory or judicial proceeding against PWM
that could have a material adverse effect upon PWM's ability to fulfill its
obligations under this Agreement.
(b) PWM has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Xxxxxx with a
copy of such code of ethics, together with evidence of its adoption. Within 45
days after the end of the last calendar quarter of each year that this Agreement
is in effect, the president or a vice president of PWM shall certify to Xxxxxx
that PWM has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no violation of PWM's code of ethics or, if such a
violation has occurred, that appropriate action was taken in response to such
violation. Upon the written request of Xxxxxx, PWM shall permit Xxxxxx, its
employees or its agents to examine the reports required to be made to PWM by
Rule 17j-1(c)(1) and all other records relevant to PWM's code of ethics.
(c) PWM has provided Xxxxxx with a copy of its Form ADV as most
recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendment to Xxxxxx.
(d) PWM will notify Xxxxxx of any change in the identity or control
of its shareholders owning a 10% or greater interest in PWM, or any change that
would constitute a change in control of PWM under the 1940 Act, prior to any
such change if PWM is aware, or
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should be aware, of any such change, but in any event as soon as any such change
becomes known to PWM.
7. REPRESENTATIONS OF XXXXXX. Xxxxxx hereby represents, warrants and
covenants to PWM as follows:
(a) Xxxxxx: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from fulfilling its obligations under this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary to be met in order
to fulfill its obligations under this Agreement; (iv) has the legal and
corporate authority to enter into and perform this Agreement; and (v) will
immediately notify PWM of the occurrence of any event that would disqualify
Xxxxxx from serving as an investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise, and of the institution of any
administrative, regulatory or judicial proceeding against Xxxxxx that could have
a material adverse effect upon Xxxxxx'x ability to fulfill its obligations under
this Agreement.
(b) Xxxxxx has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide PWM with a copy
of such code of ethics, together with evidence of its adoption.
(c) Xxxxxx has provided PWM with a copy of its Form ADV as most
recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendment to PWM.
(d) Xxxxxx will notify PWM of any change in the identity or control
of its shareholders owning a 10% or greater interest in Xxxxxx, or any change
that would constitute a change in control of Xxxxxx under the 1940 Act, prior to
any such change if Xxxxxx is aware, or should be aware, of any such change, but
in any event as soon as any such change becomes known to Xxxxxx.
8. TERM. This Agreement shall become effective as of the date first set
forth above and shall continue in effect until April 30, 2000, unless sooner
terminated in accordance with its terms, and shall continue in effect from year
to year thereafter only so long as such continuance is specifically approved at
least annually by the vote of a majority of the Trustees of the Trust who are
not parties hereto or interested persons of the Trust, Xxxxxx or PWM, cast in
person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting
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securities of the Fund. Xxxxxx shall use its best efforts consistent with the
fiduciary obligations of all parties to obtain such annual approvals of this
Agreement.
9. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Fund acting by vote of at
least a majority of its outstanding voting securities, provided in any such case
that 60 days' advance written notice of termination be given to PWM at its
principal place of business. This Agreement may also be terminated by Xxxxxx or
the Trust: (i) upon a material breach by PWM of any of the representations and
warranties set forth in Section 6 of this Agreement, if such breach shall not
have been cured within a 20-day period after notice of such breach; or (ii) if
PWM becomes unable to discharge its duties and obligations under this Agreement.
This Agreement may be terminated by PWM at any time, without penalty: (i) by
giving 60 days' advance written notice of termination to Xxxxxx and to the
Trust, or (ii) upon a material breach by Xxxxxx of any of the representations
and warranties set forth in Section 7 of this Agreement, if such breach shall
not have been cured within a 20-day period after notice of such breach. In
addition, this Agreement shall terminate, without penalty, upon the termination
of the Advisory Agreement.
10. ASSIGNMENT. This Agreement shall automatically terminate in the event
of its assignment.
11. AMENDMENTS. This Agreement may be amended by the parties only in a
written instrument signed by the parties to this Agreement and only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of the Trust or
Xxxxxx, PWM or their affiliates, and (ii) if required by applicable law, by the
affirmative vote of a majority of the outstanding voting securities of the Fund.
12. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of State
of the State of Delaware. All parties to this Agreement acknowledge and agree
that the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect to
such series only, and not against the assets of the Trust generally or against
the assets held with respect to any other series and further that no Trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
13. LIMITATION OF LIABILITY OF PWM. Xxxxxx will not seek to hold PWM, and
PWM shall not be, liable for any error of judgment or mistake of law or for any
loss arising out of any investment or for any act or omission taken with respect
to the Fund, except for willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of
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reckless disregard of its obligations and duties hereunder and except to the
extent otherwise provided by law. As used in this section, "PWM" shall include
any affiliate of PWM performing services for the Fund contemplated hereunder and
directors, officers and employees of PWM and such affiliates.
14. ACTIVITIES OF PWM. The services of PWM hereunder are not to be deemed
to be exclusive, and PWM is free to render services to other parties, so long as
its services under this Agreement are not materially adversely affected or
otherwise impaired thereby. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of PWM to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar or a dissimilar
nature. It is understood that Trustees, officers and shareholders of the Trust
are or may become interested in PWM as directors, officers and shareholders of
PWM, that directors, officers, employees and shareholders of PWM are or may
become similarly interested in the Trust, and that PWM may become interested in
the Trust as a shareholder or otherwise.
15. THIRD PARTY BENEFICIARY. The parties expressly acknowledge and agree
that the Trust is a third party beneficiary of this Agreement and that the Trust
shall have the full right to xxx upon and enforce this Agreement in accordance
with its terms as if it were a signatory hereto.
16. NOTICES. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered personally or
by overnight delivery service or mailed by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile addressed to the
parties at their respective addresses set forth below, or at such other address
as shall be designated by any party in a written notice to the other party.
(a) To Xxxxxx at:
Xxxxxx Associates, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
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Phone: (000) 000-0000
Fax: (000) 000-0000
(b) To PWM at:
Perkins, Wolf, XxXxxxxxx & Company
00 X. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx, Xx., Esq.
Xxxxxxxxx Xxxxxxx Xxxxxxx Weary & Xxxxxxxx L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
(c) To the Trust at:
Xxxxxx Investment Portfolio Trust
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
17. CERTAIN DEFINITIONS. As used in this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," "approved at least
annually," and "interested persons" shall have the respective meanings specified
in the 1940 Act, as now in effect or hereafter
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amended, and the rules and regulations thereunder, subject to such orders,
exemptions and interpretations as may be issued by the SEC under the 1940 Act
and as may be then in effect. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made less
restrictive by a rule, regulation, order, interpretation or other authority of
the SEC, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation, order, interpretation
or other authority.
18. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
19. MISCELLANEOUS. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of 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.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an originally, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers designated below as of the day and year first
above written.
XXXXXX ASSOCIATES, INC.
By:________________________________
Xxxxxx X. Xxxxx
President
PERKINS, WOLF, XXXXXXXXX & COMPANY
By:________________________________
Xxxxxx X. Xxxxxxx
President
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