REPUBLIC PORTFOLIOS
FIXED INCOME PORTFOLIO
SUBADVISORY AGREEMENT
AGREEMENT, effective commencing on , between Xxxxxx Xxxxxxxx &
Xxxxxxxx, LLP (or any successor-in-interest (by merger or otherwise) thereto or
transferee thereof that does not involve an "assignment" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act") and that is a
limited partnership or other entity wholly owned, directly or indirectly, by
Xxxxxx Xxxxxxx Asset Management Holdings, Inc. and/or its affiliates; Xxxxxx
Xxxxxxxx & Xxxxxxxx, LLP or such successor-in-interest or transferee being
referred to herein as the "Subadviser") and Republic National Bank of New York
(the "Adviser").
WHEREAS, the Adviser serves as investment adviser to the Republic
Portfolios, a New York master trust fund (the "Portfolio Trust"), which is
registered as an open-end diversified investment management company under the
1940 Act and consists of one or more series, one of which is Fixed Income
Portfolio (the "Portfolio Series");
WHEREAS, the Adviser wishes to appoint the Subadviser to perform
advisory services to the Portfolio Series and the Portfolio Trust's Board of
Trustees (the "Trustees"), including a majority of the Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of the Portfolio Trust and the
Portfolio Series' investors have approved the appointment of the Subadviser to
perform certain investment advisory services for the Portfolio Series pursuant
to this Subadvisory Agreement and the Subadviser is willing to perform such
services for the Portfolio Series;
WHEREAS, the Subadviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:
1. APPOINTMENT. The Adviser hereby appoints the Subadviser to perform
advisory services to the Portfolio Series for the periods and on the terms set
forth in this Subadvisory Agreement. The Subadviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein
provided.
2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the
Trustees of the Portfolio Trust and the Adviser, the Subadviser will (a) provide
a program of continuous investment management for the Portfolio Series in
accordance with the Portfolio Series's investment objectives, policies and
limitations as stated in the Portfolio Trust's registration statement on Form
N-1A as filed with the Securities and Exchange Commission ("SEC"), as it may be
amended from time to time (the "Registration Statement"), copies of which shall
be provided to the Subadviser by the Portfolio Trust; (b) make investment
decisions for the Portfolio Series; and (c) place orders to purchase and sell
securities for the
Portfolio Series. In particular, the Subadviser will be responsible for the
market timing of purchases and sales and for all yield enhancement strategies
used in managing the Portfolio Series's investment portfolio.
In performing its investment management services to the Portfolio
Series hereunder, the Subadviser will provide the Portfolio Series with ongoing
investment guidance and policy direction, including oral and written research,
analysis, advice, statistical and economic data and judgments regarding
individual investments, general economic conditions and trends and long-range
investment policy. The Subadviser will determine the securities, instruments,
repurchase agreements, options and other investments and techniques that the
Portfolio Series will purchase, sell, enter into or use, and will provide an
ongoing evaluation of the Portfolio Series's portfolio. The Subadviser will
determine what portion of the Portfolio Series's portfolio shall be invested in
securities and other assets.
The Subadviser further agrees that, in performing its duties hereunder,
it will:
(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code"),
and all other applicable federal and state laws and regulations, and with any
applicable procedures adopted by the Trustees;
(b) manage the Portfolio Series so that it will qualify, and continue
to qualify (except where extraordinary circumstances dictate otherwise), as a
regulated investment company under Subchapter M of the Code and regulations
issued thereunder, and conduct periodically such Subchapter M compliance reviews
as the Portfolio Trust and Subadviser determine appropriate;
(c) place orders pursuant to its investment determinations for the
Portfolio Series directly with the issuer, or with any broker or dealer, in
accordance with applicable policies expressed in the Portfolio Series's
Registration Statement and in accordance with applicable legal requirements;
(d) furnish to the Portfolio Trust or to the Adviser whatever
statistical information the Portfolio Trust or the Adviser may reasonably
request with respect to the Portfolio Series's assets or contemplated
investments. In addition, the Subadviser will keep the Portfolio Trust, the
Trustees and the Adviser informed of developments materially affecting the
Portfolio Series's portfolio and shall, on the Subadviser's own initiative,
furnish to the Portfolio Trust and the Adviser from time to time whatever
information the Subadviser believes appropriate for this purpose;
(e) make available to the Portfolio Trust, promptly upon request, such
copies of its investment records and ledgers with respect to the Portfolio
Series as may be required to assist the Portfolio Trust in its compliance with
applicable laws and regulations. The Subadviser will furnish the Trustees with
such periodic and special reports regarding the Portfolio Series as they may
reasonably request;
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(f) immediately notify the Portfolio Trust and the Adviser in the event
that the Subadviser or any of its affiliates: (1) becomes aware that it is
subject to a statutory disqualification that prevents the Subadviser from
serving as an investment adviser pursuant to this Subadvisory Agreement; or (2)
becomes aware that it is the subject of an administrative proceeding or
enforcement action by the SEC or other regulatory authority. The Subadviser
further agrees to notify the Portfolio Trust and the Adviser immediately of any
material fact known to the Subadviser respecting or relating to the Subadviser
that is not contained in the Registration Statement, or any amendment or
supplement thereto, with respect to the Portfolio Series but that is required to
be disclosed therein, and of any statement contained therein that becomes untrue
in any material respect.
3. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically
provided in this Section 3, the Subadviser shall pay the compensation and
expenses of all its directors, partners, officers and employees who serve as
officers and executive employees of the Portfolio Trust (including the Portfolio
Series's share of payroll taxes), and the Subadviser shall make available,
without expense to the Portfolio Series, the service of its directors, partners,
officers and employees who may be duly elected officers of the Portfolio Trust,
subject to their individual consent to serve and to any limitations imposed by
law.
The Subadviser shall not be required to pay any expenses of the
Portfolio Series other than those specifically allocated to the Subadviser in
this Section 3. In particular, but without limiting the generality of the
foregoing, the Subadviser shall not be responsible, except to the extent of the
reasonable compensation of such of the Portfolio Trust's employees as are
officers or employees of the Subadviser whose services may be involved, for the
following expenses of the Portfolio Series: organization and certain offering
expenses of the Portfolio Series (including out-of-pocket expenses); fees
payable to any other Portfolio Trust advisers or consultants; legal expenses;
auditing and accounting expenses; interest expenses; telephone, telex,
facsimile, postage and other communications expenses; taxes and governmental
fees; dues and expenses incurred by or with respect to the Portfolio Trust in
connection with membership in investment company trade organizations; cost of
insurance relating to fidelity coverage for the Portfolio Trust's officers and
employees; fees and expenses of any custodian, subcustodian, transfer agent,
registrar, or disbursing agent of the Portfolio Series; payments for maintaining
the Portfolio Series's financial books and records and calculating the daily net
asset value of the Portfolio Series; other payments for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses relating to investor and public relations;
freight, insurance and other charges in connection with the shipment of the
portfolio securities of the Portfolio Series; brokerage commissions or other
costs of acquiring or disposing of any portfolio securities or other assets of
the Portfolio Series, or of entering into other transactions or engaging in any
investment practices with respect to the Portfolio Series; expenses of preparing
and filing Registration Statements, reports and notices to investors; costs of
stationery; litigation expenses; costs of investors' and other meetings; the
compensation and all expenses (specifically including travel expenses relating
to the Portfolio Series's business) of officers, trustees and employees of the
Portfolio Trust who are not "interested persons" (as defined in
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the 0000 Xxx) of the Subadviser; and travel expenses (or an appropriate portion
thereof) of officers or trustees of the Portfolio Trust who are officers,
directors or employees of the Subadviser to the extent that such expenses relate
to attendance at meetings of the Trustees of the Portfolio Trust or any
committees thereof or advisers thereto.
4. COMPENSATION. As compensation for the services provided and expenses
assumed by the Subadviser under this Agreement, the Portfolio Trust will pay the
Subadviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily on the basis of the Portfolio Series's average daily
net assets, in accordance with the following schedule of annual rates.
NET ASSETS FEE RATE
Up to $50 million 0.375%
$50,000,001 - $95 million 0.25%
$95,000,001 - $150 million $300,000
$150,000,001 - $250 million 0.20%
Over $250 million 0.15%
The "average daily net assets" of the Portfolio Series shall mean the average of
the values placed on the Portfolio Series's net assets as of 4:00 p.m. (New York
time) on each day on which the net asset value of the Portfolio Series is
determined consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Portfolio Series lawfully determines the value of its net assets as of
some other time on each business day, as of such other time. The value of net
assets of the Portfolio Series shall always be determined pursuant to the
applicable provisions of the Portfolio Trust's Declaration of Trust and
Registration Statement. If, pursuant to such provisions, the determination of
net asset value is suspended for any particular business day, then for the
purposes of this Section 4, the value of the net assets of the Portfolio Series
as last determined shall be deemed to be the value of its net assets as of the
close of regular trading on the New York Stock Exchange, or as of such other
time as the value of the net assets of the Portfolio Series's portfolio may
lawfully be determined, on that day. If the determination of the net asset value
of the interests of the Portfolio Series has been so suspended for a period
including any quarter end when the Subadviser's compensation is payable pursuant
to this Section, then the Subadviser's compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
Portfolio Series as last determined (whether during or prior to such quarter).
If the Portfolio Series determines the value of the net assets of its portfolio
more than once on any day, then the last such determination thereof on that day
shall be deemed to be the sole determination thereof on that day for the
purposes of this Section 4. In the event that this Agreement is terminated
pursuant to Section 10 hereof, the Subadviser shall be entitled to a PRO RATA
portion of the fee under this Section 4 through and including the date upon
which the Agreement is terminated and the Subadviser ceases to provide
investment advisory services to the Portfolio Series hereunder.
5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and
records with respect to its services to the Portfolio Series as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by other
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applicable legal provisions, and to preserve such records for the periods and in
the manner required by that Section, and those rules and legal provisions. The
Subadviser also agrees that records it maintains and preserves pursuant to Rules
31a-1 and Rule 31a-2 under the 1940 Act and otherwise in connection with its
services hereunder are the property of the Portfolio Trust and will be
surrendered promptly to the Portfolio Trust upon its request. The Subadviser
further agrees that it will furnish to regulatory authorities having the
requisite authority any information or reports in connection with its services
hereunder which may be requested in order to determine whether the operations of
the Portfolio Series are being conducted in accordance with applicable laws and
regulations.
6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio Series or
the holders of the Portfolio Series's interests in connection with the matters
to which this Subadvisory Agreement relate, provided that nothing in this
Subadvisory Agreement shall be deemed to protect or purport to protect the
Subadviser against any liability to the Portfolio Series or to holders of the
Portfolio Series's interests to which the Subadviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Subadviser's reckless
disregard of its obligations and duties under this Subadvisory Agreement. As
used in this Section 6, the term "Subadviser" shall include any officers,
directors, partners, employees or other affiliates of the Subadviser performing
services for the Portfolio Series.
7. INDEMNIFICATION.
(a) The Subadviser hereby agrees to indemnify and hold harmless the
Portfolio Trust and the Adviser from any controversies, claims, suits, losses,
liabilities, judgments, awards or settlements, and costs or expenses, including
reasonable legal fees, caused by, or in any way related to, the investment
decisions rendered by the Subadviser concerning the Portfolio Series in a manner
inconsistent with Section 6 hereof, any failure of the Subadviser to fulfill any
of its other obligations under this Subadvisory Agreement, any material
misrepresentation, or omission to disclose material facts, by the Subadviser to
the Portfolio Trust, the Adviser or any investor of the Portfolio Series, or any
violation of applicable law, by the Subadviser. The Subadviser also agrees to
indemnify and hold harmless the Portfolio Trust and the Adviser with respect to
any losses incurred as the result of errors made by the Subadviser in
transmitting orders to any broker for execution.
(b) The Adviser hereby agrees to indemnify and hold harmless the
Subadviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any way related to, its failure to fulfill any of
its obligations under this Subadvisory Agreement.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
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in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.
8. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser from providing similar services to other investment
companies (whether or not their investment objectives and policies are similar
to those of the Portfolio Series) or from engaging in other activities, provided
such other services and activities do not, during the term of this Subadvisory
Agreement, interfere in a material manner with the Subadviser's ability to meet
its obligations to the Adviser, the Portfolio Trust and the Portfolio Series
hereunder. When the Subadviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Subadviser recommends the purchase or sale of the same security for the
Portfolio Series, the Subadviser may, but shall be under no obligation to,
aggregate the orders for securities to be purchased or sold. It is understood
that in light of its fiduciary duty to the Portfolio Series, such transactions
will be executed on a basis that is fair and equitable to the Portfolio Series.
In connection with purchases or sales of portfolio securities for the account of
the Portfolio Series, neither the Subadviser nor any of its directors, partners,
officers or employees shall act as a principal or agent or receive any
commission.
9. DOCUMENTATION. The Portfolio Series shall provide the Subadviser
with the following documents, as requested by the Subadviser:
(a) the Registration Statement and any amendments thereto;
(b) the Declaration of Trust and By-laws (and any amendments thereto)
of the Portfolio Trust;
(c) resolutions of the Trustees authorizing the appointment of the
Subadviser to serve as Subadviser and approving this Subadvisory Agreement; and
(d) the Portfolio Trust's Notification of Registration on Form N-8A.
10. DURATION AND TERMINATION. This Subadvisory Agreement shall continue
until unless sooner terminated as provided herein. Notwithstanding the
foregoing, this Subadvisory Agreement may be terminated: (a) at any time without
penalty upon thirty (30) days' written notice to the Subadviser by the Portfolio
Series upon the vote of a majority of the Trustees or upon the vote of a
majority of the Portfolio Series's outstanding voting securities, (b) at any
time without penalty upon thirty (30) days' written notice to the Subadviser by
the Adviser; or (c) by the Subadviser upon thirty (30) days' written notice to
the Portfolio Series and the Adviser, provided that the Subadviser shall
continue to be responsible for managing the assets of the
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Portfolio Series for sixty (60) business days after the end of the notice period
unless the Portfolio Series shall agree in writing to shorten the period.
Anything to the contrary herein notwithstanding, any termination carried out
pursuant to this Section 10(c) shall be without penalty and, further, the
compensation schedule set forth in Section 4 hereof shall apply to the service
of the Subadviser beyond the end of the notice period provided in this Section
10(c). This Subadvisory Agreement will also terminate automatically in the event
of its "assignment" (as defined in the 0000 Xxx) or the assignment or
termination of the Management Agreement.
11. AMENDMENTS. No provision of this Subadvisory 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, and no amendment of this Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
"majority of the outstanding voting securities" (as defined in the 0000 Xxx) of
the Portfolio Series, and (ii) a majority of the Trustees, including a majority
of the Trustees who are not "interested persons" (as defined in the 0000 Xxx) of
any party to this Subadvisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.
12. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be given in writing and mailed, faxed or delivered to
the other party at its address as follows:
IF TO THE ADVISER:
Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
IF TO THE SUBADVISER:
Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000-0000
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. MISCELLANEOUS.
(a) This Subadvisory Agreement shall be governed by the laws of the
State of New York, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder. Exclusive original jurisdiction to any claim, action or dispute
between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.
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(b) The captions of this Subadvisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) If any provision of this Subadvisory Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Subadvisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Subadvisory Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Subadviser,
or any of its directors, officers or employees, an agent of the Adviser, the
Portfolio Trust or the Portfolio Series, nor the Adviser, or any of its
directors, officers or employees, an agent of the Subadviser.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of .
XXXXXX, XXXXXXXX & XXXXXXXX
By ______________________________
Name:
Title:
REPUBLIC NATIONAL BANK OF NEW YORK
By ______________________________
Name:
Title:
FT4206C
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