Exhibit (d)(vi)
SUB-INVESTMENT ADVISORY AGREEMENT FOR THE
FROLEY, REVY CONVERTIBLE SECURITIES FUND
This Agreement, dated as of the 30th day of September, 2002, made by
and between Froley, Revy Investment Company, Inc., a wholly-owned subsidiary of
First Republic Bank, with its principal offices at 00000 Xxxxxxxx Xxxx., Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx (the "Investment Advisor") and Trainer, Xxxxxxx &
Company, Inc., a wholly-owned subsidiary of First Republic Bank, with its
principal offices at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx (the
"Sub-Advisor").
WHEREAS, the Investment Advisor has been retained by Trainer Xxxxxxx
Funds, a Delaware business trust (the "Trust") operating as an open-end,
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"), to serve as investment advisor to its separate
investment series the Froley, Revy Convertible Securities Fund (the "Series");
and
WHEREAS, the Advisor desires to retain the Sub-Advisor to furnish
sub-investment advisory services with respect to the Series, and the Sub-Advisor
is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties as follows:
1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
sub-investment advisor to the Series for the period and on the terms set forth
in this Agreement. The Sub-Advisor accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Advisor has furnished the Sub-Advisor with
copies of each of the following:
(a) Resolutions of the Board of Trustees authorizing the appointment
of the Sub-Advisor and approving this Agreement;
(b) The Series' most recent prospectus and Statement of Additional
Information (such prospectus and Statement of Additional Information, as
presently in effect and all amendments and supplements thereto, are herein
called the "Prospectus").
The Advisor will furnish the Sub-Advisor from time to time with copies of
all amendments of or supplements to the foregoing.
3. Sub-Advisory Services. Subject to the supervision of the Board of
Trustees, the Sub-Advisor shall assist the Advisor with providing a continuous
investment program for the Series, including investment research with respect to
the Series' assets. The Sub-Advisor may
determine from time to time what securities and other investments will be
purchased, retained or sold by the Series. The Sub-Advisor will provide the
services under this Agreement in accordance with the Series' investment
objectives, policies and restrictions as stated in the Prospectus and
resolutions of the Board of Trustees. The Series wishes to be informed of
important developments materially affecting the Series and its shareholders, and
the Sub-Advisor agrees to furnish to the Series, from time to time, such
information as may be appropriate for this purpose. The Sub-Advisor further
agrees that it:
(a) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission;
(b) will place orders pursuant to its investment determinations for the
Series either directly with the issuer or with any broker or dealer. In
executing portfolio transactions, the Sub-Advisor will use its best efforts to
seek on behalf of the Series the best overall terms available. In assessing the
best overall terms available for any transaction, the Investment Advisor 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-Advisor may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Series and
any other accounts over which the Sub-Advisor exercises investment discretion.
The Sub-Advisor is authorized, subject to the prior approval of the Board of
Trustees, to pay a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Series which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction in such instances where the Sub-Advisor
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
as viewed in terms of that particular transaction or in terms of the overall
responsibilities of the Sub-Advisor to the Series. In addition, the Sub-Advisor
may take into account the sale of the Series' units in allocating purchase and
sale orders for portfolio securities to brokers or dealers (including affiliated
brokers and dealers that are affiliated with the Series, the Investment Advisor,
the Sub-Advisor or the principal underwriter), provided that the Sub-Advisor
believes that the quality of execution and the commission are comparable to what
they would be by other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Investment Advisor, the Sub-Advisor
or the principal underwriter or any affiliated person of either the Series, the
Investment Advisor, the Sub-Advisor or the principal underwriter or any
affiliated person of the Series, the Investment Advisor, the Sub-Advisor or the
principal underwriter, acting as principal in the transaction except to the
extent permitted by the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc.;
(c) will maintain all books and records with respect to the Series'
securities transactions which the Sub-Advisor is required to maintain under
applicable laws and will furnish the Board of Trustees such periodic and special
reports as the Board may request; and
(d) will treat confidentially and as proprietary information of the Series
all records and other information relative to the Series and prior, present or
potential shareholders, and will not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to, and approval in writing by, the Board of
Trustees, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Advisor may be exposed to civil or criminal contempt
proceeds for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Board of Trustees.
4. Services Not Exclusive. The investment advisory services furnished by
the Sub-Advisor hereunder are not to be deemed exclusive, and the Sub-Advisor
shall be free to furnish similar services to others whether or not for
compensation so long as its services under this Agreement are not impaired
thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Advisor hereby agrees that all records which it
maintains for the Series are the property of the Series and further agrees to
surrender promptly to the Series any of such records upon the Series' request.
The Sub-Advisor further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required by Rule 31a-1 to be maintained
under the 1940 Act.
6. Expenses. During the term of this Agreement, the Sub-Advisor will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Series.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, effective as of the date of the effectiveness of
this Agreement, the Advisor will pay the Sub-Advisor and the Sub-Advisor will
accept as full compensation therefor a fee, accrued daily and paid monthly, at
an annual rate of 0.0625% of the average daily net asset value of the Series,
not to exceed 10% of the net fee received by the Advisor.
8. Limitation of Liability. The Sub-Advisor shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Series in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Advisor in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
9. Duration and Termination. This Agreement will become effective at such
time as shall have been approved by the shareholders of the Series, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for two years, and
thereafter for successive periods of twelve months, provided such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board of Trustees who are not parties to this Agreement or
interested persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b)
by the Board of Trustees or by vote of a majority of the outstanding voting
securities of the Series. Notwithstanding, the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the Series (by
vote of the Board of Trustees or by vote of a majority of the outstanding voting
securities of the Series) on sixty days' written notice or by the Investment
Advisor or the Sub-Advisor on ninety days' written notice. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meaning of such terms
in the Act).
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective until approved by vote of a majority of the outstanding voting
securities of the Series.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall insure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Froley, Revy Investment Company, Inc.
By: /s/ Xxxxxx Xxxx X'Xxxxxxx
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Name: Xxxxxx Xxxx X'Xxxxxxx
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Title: President, Chief Executive Officer
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Trainer, Xxxxxxx & Company, Inc.
By: /s/ Xxxxxx Xxxxxxxx-Xxxxx
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Name: Xxxxxx Xxxxxxxx-Xxxxx
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Title: Chief Administrative Officer
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