SUB-ADVISORY AGREEMENT
(XXXXXX ASSOCIATES, INC./BAY ISLE FINANCIAL CORPORATION)
XXXXXX INFORMATION TECHNOLOGY FUND
(A SERIES OF XXXXXX INVESTMENT PORTFOLIO TRUST)
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective as
of the _____ day of _______________, 1999, by and between XXXXXX ASSOCIATES,
INC., a Delaware corporation ("Xxxxxx Associates"), and BAY ISLE FINANCIAL
CORPORATION, a California corporation ("Bay Isle").
RECITALS
X. Xxxxxx Associates 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 Information Technology Fund, a series of the
Trust (the "Fund"), pursuant to which Xxxxxx Associates has agreed to provide
investment advisory services with respect to the Fund.
B. Bay Isle 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").
X. Xxxxxx Associates desires to retain Bay Isle to furnish investment
advisory services with respect to the Fund, and Bay Isle is willing to furnish
such services.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. DUTIES OF BAY ISLE. Xxxxxx Associates hereby engages the services of
Bay Isle as sub-adviser for the Fund in furtherance of the Advisory Agreement.
Bay Isle agrees to perform the following duties, subject to the oversight of
Xxxxxx Associates and to the overall control of the officers and the Trustees of
the Trust:
(a) Bay Isle shall manage the investment operations of the Fund and
the composition of its investment portfolio, and determine without prior
consultation with Xxxxxx Associates or the Trust, what securities and other
assets of the Fund will be acquired, held, disposed of or loaned, and shall
direct Xxxxxx Associates with respect to the execution of trades
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in connection with such determinations, in conformity with the investment
objective, 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 1940 Act and the
Advisers Act, the rules and regulations thereunder, and all other applicable
federal and state laws and regulations, and the provisions of the Internal
Revenue Code of 1986, as amended, applicable to the Fund as a regulated
investment company;
(b) Bay Isle shall cause its officers to attend meetings and furnish
oral or written reports, as the Trust or Xxxxxx Associates may reasonably
require, in order to keep Xxxxxx Associates, 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 Bay Isle, and the investment
considerations which have given rise to those decisions;
(c) Bay Isle shall maintain all books and records required to be
maintained by Bay Isle 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 Associates with such periodic and special reports as the
Trustees or Xxxxxx Associates reasonably may request. Bay Isle 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) Bay Isle shall submit such reports relating to the valuation of
the Fund's assets and to otherwise assist in the calculation of the net asset
value of shares of the Fund as may reasonably be requested;
(e) Bay Isle shall, on behalf of the Fund, exercise such voting
rights, subscription rights, rights to consent to corporate action and any other
rights pertaining to the Fund's assets that may be exercised, in accordance with
any policy pertaining to the same that may be adopted or agreed to by the
Trustees of the Trust, or, in the event that the Trust retains the right to
exercise such voting and other rights, to furnish the Trust with advice as may
reasonably requested as to the manner in which such rights should be exercised;
(f) At such times as shall be reasonably requested by the Trustees or
Xxxxxx Associates, Bay Isle shall provide the Trustees and Xxxxxx Associates
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
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Section 15(c) of the 1940 Act, and shall make available to the Trustees and
Xxxxxx Associates any economic, statistical and investment services normally
available to similar investment company clients of Bay Isle; and
(g) Bay Isle will provide to Xxxxxx Associates for regulatory filings
and other appropriate uses materially accurate and complete information relating
to Bay Isle as may reasonably be requested by Xxxxxx Associates from time to
time and, notwithstanding anything herein to the contrary, Bay Isle shall be
liable to Xxxxxx Associates for all damages, costs and expenses, including
without limitation reasonable attorneys' fees (hereinafter referred to
collectively as "Damages"), incurred by Xxxxxx Associates as a result of any
material inaccuracies or omissions in such information provided by Bay Isle to
Xxxxxx Associates; provided, however, that Bay Isle shall not be liable to the
extent that any Damages are based upon inaccuracies or omissions made in
reliance upon information furnished to Bay Isle by Xxxxxx Associates.
2. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, Bay Isle 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 of the Fund, and written instructions and directions of the Trustees
and Xxxxxx Associates and shall comply with the requirements of the 1940 Act,
the Advisers Act, the rules and regulations thereunder, and all other applicable
federal and state laws and regulations. Xxxxxx Associates agrees to provide to
Bay Isle 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 Associates, and any amendments or
supplements to any of them at, or, if practicable, before the time such
materials become effective. Bay Isle shall maintain errors and omissions
insurance in an amount at least equal to that disclosed to the Trustees in
connection with their approval of this Agreement.
3. OBLIGATIONS OF XXXXXX ASSOCIATES. Xxxxxx Associates shall have the
following obligations under this Agreement:
(a) To keep Bay Isle continuously and fully informed (or cause the
custodian of the Fund's assets to keep Bay Isle 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 Bay Isle 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;
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(c) To furnish Bay Isle with any further materials or information
which Bay Isle may reasonably request to enable it to perform its function under
this Agreement; and
(d) To compensate Bay Isle for its services in accordance with the
provisions of Section 4 hereof.
4. COMPENSATION. Xxxxxx Associates shall pay to Bay Isle for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.45% of the average daily net asset value of the Fund. This 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.
5. EXPENSES AND EXCLUDED EXPENSES. Bay Isle shall pay all its own costs
and expenses incurred in fulfilling its obligations under this Agreement.
6. REPRESENTATIONS OF BAY ISLE. Bay Isle hereby represents, warrants and
covenants to Xxxxxx Associates as follows:
(a) Bay Isle: (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 Associates of the occurrence
of any event that would disqualify Bay Isle 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 Bay Isle that could have a material adverse effect upon Bay
Isle's ability to fulfill its obligations under this Agreement.
(b) Bay Isle has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Xxxxxx Associates
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 Bay Isle shall
certify to Xxxxxx Associates that Bay Isle has complied with the requirements of
Rule 17j-1 during the previous year and that there has been no violation of Bay
Isle's code of ethics or, if such a violation has occurred, that appropriate
action was taken in response to such
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violation. Upon the written request of Xxxxxx Associates, Bay Isle shall permit
Xxxxxx Associates, its employees or its agents to examine the reports required
to be made to Bay Isle by Rule 17j-1(c)(1) and all other records relevant to Bay
Isle's code of ethics.
(c) Bay Isle has provided Xxxxxx Associates 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 Associates.
(d) Bay Isle will notify Xxxxxx Associates of any change in the
identity or control of its shareholders owning a 10% or greater interest in Bay
Isle, or any change that would constitute a change in control of Bay Isle under
the 1940 Act, prior to any such change if Bay Isle is aware, or should be aware,
of any such change, but in any event as soon as any such change becomes known to
Bay Isle.
7. REPRESENTATIONS OF XXXXXX ASSOCIATES. Xxxxxx Associates hereby
represents, warrants and covenants to Bay Isle as follows:
(a) Xxxxxx Associates: (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 Bay Isle of the occurrence of any
event that would disqualify Xxxxxx Associates 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 Associates that could have a material adverse effect
upon Xxxxxx Associates' ability to fulfill its obligations under this Agreement.
(b) Xxxxxx Associates has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and will provide Bay Isle
with a copy of such code of ethics, together with evidence of its adoption.
(c) Xxxxxx Associates has provided Bay Isle 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 Bay Isle.
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(d) Xxxxxx Associates will notify Bay Isle of any change in the
identity or control of its shareholders owning a 10% or greater interest in
Xxxxxx Associates, or any change that would constitute a change in control of
Xxxxxx Associates under the 1940 Act, prior to any such change if Xxxxxx
Associates is aware, or should be aware, of any such change, but in any event as
soon as any such change becomes known to Xxxxxx Associates.
8. TERM. This Agreement shall become effective as of the date first set
forth above and shall continue in effect until April 30, 2001, 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 Associates or Bay
Isle, 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 securities of
the Fund. Xxxxxx Associates 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 Bay Isle at its
principal place of business. This Agreement may also be terminated by Xxxxxx
Associates or the Trust: (i) upon a material breach by Bay Isle 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 Bay Isle becomes unable to discharge its duties and
obligations under this Agreement. This Agreement may be terminated by Bay Isle
at any time, without penalty: (i) by giving 60 days' advance written notice of
termination to Xxxxxx Associates and to the Trust, or (ii) upon a material
breach by Xxxxxx Associates 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
Associates, Bay Isle 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.
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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 BAY ISLE. Xxxxxx Associates will not seek
to hold Bay Isle, and Bay Isle 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
reckless disregard of its obligations and duties hereunder and except to the
extent otherwise provided by law. As used in this section, "Bay Isle" shall
include any affiliate of Bay Isle performing services for the Fund contemplated
hereunder and directors, officers and employees of Bay Isle and such affiliates.
14. ACTIVITIES OF BAY ISLE. The services of Bay Isle hereunder are not to
be deemed to be exclusive, and Bay Isle 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 Bay
Isle 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 Bay Isle as directors,
officers and shareholders of Bay Isle, that directors, officers, employees and
shareholders of Bay Isle are or may become similarly interested in the Trust,
and that Bay Isle may become interested in the Trust as a shareholder or
otherwise.
15. THIRD PARTY BENEFICIARIES. The parties expressly acknowledge and
agree that the Trust and the Fund are third party beneficiaries of this
Agreement and that the Trust and the Fund shall have the full right to xxx upon
and enforce this Agreement in accordance with its terms as if they were
signatories hereto. Any oversight, monitoring or evaluation of the activities
of Bay Isle by Xxxxxx Associates, the Trust or the Fund shall not diminish or
relieve in any way the liability of Bay Isle for any of its duties and
responsibilities under this Agreement.
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 and followed by copy
in first class postal mail, addressed to the parties at their respective
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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 Associates 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
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) To Bay Isle at:
Bay Isle Financial Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
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
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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 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
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BAY ISLE FINANCIAL CORPORATION
By:________________________________
Xxxx X. Xxxxxxx
President
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