SUB-INVESTMENT ADVISORY AGREEMENT
between
THE CHICAGO TRUST COMPANY
and
CHICAGO CAPITAL MANAGEMENT, INC.
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this 1st day
of July, 2000, by and between The Chicago Trust Company (hereinafter referred to
as the "Investment Advisor") and Chicago Capital Management, Inc. (hereinafter
referred to as the "Sub-Advisor"), which Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute but one instrument.
W I T N E S S E T H:
WHEREAS, the Investment Advisor wishes to enter into a contract with
the Sub-Advisor to render the Investment Advisor the following services:
Provide research, analysis, advice and recommendations with respect to
the purchase and sale of securities, and make investment commitments regarding
assets of the Alleghany/Chicago Trust Balanced Fund (hereinafter referred to as
the "Fund"; the Fund is a series of the Alleghany Funds, hereinafter referred to
as the "Trust"), subject to oversight by the Board of Trustees of the Trust and
the supervision of the Investment Advisor.
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and intending to be bound, the parties agree as follows:
1. As compensation for the services enumerated herein, the Investment
Advisor will pay the Sub-Advisor a fee, which shall be calculated monthly and
payable monthly, as set forth in Schedule A hereto.
If this Agreement shall become effective subsequent to the
first day of a month, or shall terminate before the last day of a month, the
Sub-Advisor's compensation for such fraction of the month shall 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.
2. This Agreement shall become effective as of the date first above
written, subject to the approval of the Trustees of the Trust in accordance with
the provisions of the Investment Company Act of 1940 (the "Act"). The Investment
Advisor will promptly advise the Sub-Advisor as to the giving of such approval.
The Investment Advisor represents that it is the investment advisor of the Fund,
with the authority as such to enter into this Agreement.
3. This Agreement shall continue for a period ending one year form its
effective date. It may be renewed thereafter by the Investment Advisor and the
Sub-Advisor for successive periods not exceeding one year only so long as such
renewal and continuance is specifically approved at least annually by the Board
of Trustees of the Trust or by a vote of the majority of the outstanding voting
securities of the Fund as prescribed by the Act and provided further that such
continuance is approved at least annually thereafter by a vote of a majority of
the Trust's Trustees, who are not parties to such Agreement or interested
persons of such a party, cast in person at a meeting called for the purpose of
voting on such approval. This Agreement will terminate automatically without the
payment of any penalty upon termination of the Investment Advisory Agreement
("Investment Advisory Agreement') relating to the Fund between the Trust and the
Investment Advisor (accompanied by simultaneous notice to the Sub-Advisor) or
upon sixty days' written notice by the Trust to the Sub-Advisor that the
Trustees of the Trust or the shareholders by vote of a majority of the
outstanding voting securities of the Fund, as provided by the Act, have
terminated the Investment Advisory Agreement. This Agreement may also be
terminated by the Sub-Advisor without penalty upon sixty days' written notice to
Investment Advisor and the Trust.
This Agreement shall terminate automatically in the event of
its assignment or (upon notice thereof to the Sub-Advisor) the assignment of the
Investment Advisory Agreement, unless its continuation thereafter is approved by
the Board of Trustees of the Trust and the shareholders of the Fund as required
by the Act (in each case as the term "assignment" is defined in section 2(a)(4)
of the Act).
4. Subject to the supervision of the Board of Trustees of the Trust and
the Investment Advisor, the Sub-Advisor will provide an investment program for
the Fund, including investment research and management with respect to
securities and investments, including cash and cash equivalents in the Fund, and
will determine from time to time what securities and other investments will be
purchased, retained or sold by the Fund. The Sub-Advisor will provide the
services under this Agreement in accordance with the Fund's investment objective
policies and restrictions as stated in the Prospectus (as used herein this term
includes the related Statement of Additional Information). The Sub-Advisor
further agrees that it:
(a) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission and will, in addition, conduct its
activities under this Agreement in accordance with regulations of any other
Federal or State agencies which now have or in the future will have jurisdiction
over its activities;
(b) will pay expenses incurred by it in connection with its
activities under this Agreement other than the cost of securities and other
investments (including brokerage commissions and other transaction changes, if
any) purchased for the Fund, provided that the Sub-Advisor will not pay for or
provide a credit with respect to any research provided to it in accordance with
Section 4(c);
(c) will place orders pursuant to its investment
determinations for the Fund either directly with any broker or dealer, or with
the issuer. In placing orders with brokers or dealers, the Sub-Advisor will
attempt to obtain the best overall price and the most favorable execution of its
orders, except as provided below. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are comparable,
the Sub-Advisor has been advised by the Investment Advisor that the Trust has
authorized the Investment Advisor to authorize the Sub-Advisor, in its
discretion, to purchase and sell securities to and from brokers and dealers who
promote the sale of Fund shares and the Investment Advisor hereby so authorizes
the Sub-Advisor. In no instance will securities be purchased from or sold to the
Sub-Advisor or any affiliated person of the Sub-Advisor as principal.
Notwithstanding the foregoing sentence, the Sub-Advisor may arrange for the
execution of brokered transactions through an affiliated broker dealer in
conformity with policies and procedures for such purpose if, when, and as
established by the Trustees of the Fund. Subject to policies established by the
Board of Trustees of the Trust and communicated to the Sub-Advisor, it is
understood that the Sub-Advisor will not be deemed to have acted unlawfully, or
to have breached a fiduciary duty to the Trust or in respect of the Fund, or be
in breach of any obligation owing to the Investment Advisor or the Trust or in
respect of the Fund under this Agreement, or otherwise, solely by reason of its
having caused the Fund to pay a member of a securities exchange, a broker or a
dealer a commission for effecting a securities transaction for the Fund in
excess of the amount of commission another member of an exchange, broker or
dealer would have charged if the Sub-Advisor determines in good faith that the
commission paid was reasonable in relation to the brokerage or research services
provided by such member, broker or dealer, viewed in terms of that particular
transaction or the Sub-Advisor's overall responsibilities with respect to the
accounts, including the Fund, as to which it exercises investment discretion.
(d) will review the daily valuation of securities owned by the
Fund as obtained on a daily basis by the Fund's administrator and furnished by
it to Sub-Advisor, and will promptly notify the Trust and the Investment Advisor
if the Sub-Advisor believes that any such valuations may not properly reflect
the market value of any securities owned by the Fund, provided, however, that
the Sub-Advisor is not required by this sub-paragraph to obtain valuations of
any such securities from brokers or dealers or otherwise, or to otherwise
independently verify valuations of any such securities.
(e) will attend regular business and investment-related
meetings with the Trust's Board of Trustees and the Investment Advisor if
requested to do so by the Trust and/or the Investment Advisor.
(f) maintain books and records with respect to the securities
transactions for the Fund, furnish to the Investment Advisor and the Trust's
Board of Trustees such periodic and special reports as they may request with
respect to the Fund, and provide in advance to the Investment Advisor all of the
Sub-Advisor's reports to the Trust's Board of Trustees for examination and
review within a reasonable time prior to the Trust's Board meetings.
5. Sub-Advisor agrees with respect to the services provided to the Fund
that it:
(a) will provide Investment Advisor with trade information and broker
confirms upon request; and
(b) will treat confidentially and as proprietary information
of the Trust all records and other information relative to the Fund and its
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 Trust, which approval may not be withheld where Sub-Advisor is advised by
counsel that the Sub-Advisor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust).
6. In compliance with the requirements of Rule 31a-3 under the Act,
Sub-Advisor acknowledges that all records which it maintains for the Trust are
the property of the Trust and agrees to surrender promptly to the Trust any of
such records upon the Trust's request, provided, that Sub-Advisor may retain
copies thereof at its own expense. Sub-Advisor further agrees to preserve for
the periods prescribed by Rule 31a-2 under the Act the records required to be
maintained by Rule 31a-1 under the Act relating to transactions placed by
Sub-Advisor for the Fund.
7. It is expressly understood and agreed that the services to be
rendered by the Sub-Advisor to the Investment Advisor under the provisions of
this Agreement are not to be deemed to be exclusive, and the Sub-Advisor shall
be free to provide similar or different services to others so long as its
ability to provide the services provided for in this Agreement shall not be
materially impaired thereby.
8. The Investment Advisor agrees that it will furnish currently to the
Sub-Advisor all information with reference to the Fund and the Trust that is
reasonably necessary to permit the Sub-Advisor to carry out its responsibilities
under this Agreement, and the parties agree that they will from time to time
consult and make appropriate arrangements as to specific information that is
required under this paragraph and the frequency and manner with which it shall
be supplied. Without limiting the generality of the foregoing, Investment
Advisor will furnish to Sub-Advisor procedures consistent with the Trust's
contract with the Fund's custodian from time to time (the "Custodian"), and
reasonably satisfactory to Sub-Advisor, for consummation of portfolio
transactions for the Fund by payment to or delivery by the Custodian of all cash
and/or securities or other investments due to or from the Fund, and Sub-Advisor
shall not have possession or custody thereof or any responsibility or liability
with respect to such custody. Upon giving proper instructions to the Custodian,
Sub-Advisor shall have no responsibility or liability with respect to custodial
arrangements or the acts, omissions or other conduct of the Custodian.
9. The Sub-Advisor and its directors, officers, stockholders, employees
and agents shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Investment Advisor or the Trust in connection with
any matters to which this Agreement relates or for any other act or omission in
the performance by the Sub-Advisor of its duties under this agreement except
that nothing herein contained shall be construed to protect the Sub-Advisor
against any liability by reason of the Sub-Advisor's willful misfeasance, bad
faith, or gross negligence in the performance of its duties or by reckless
disregard of its obligations or duties under this Agreement.
10. If any provision of this Agreement shall be held or made invalid by
a court decisions, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby. Except to the extent governed by federal law
including the Act, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without applying the
principles of conflicts of law thereunder.
11. No provision of this Agreement may be changed, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, discharge or termination is sought. No
amendment of this Agreement shall be effective with respect to the Trust until
approved in accordance with the Act.
12. Any notice to be given hereunder may be given by personal
notification or by facsimile transmission, to the party specified at the address
stated below:
To the Investment Advisor at: The Chicago Trust Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
To the Sub-Advisor at: Chicago Capital Management, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
To the Fund or the Trust at: The Alleghany Funds
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
With copies to:
or addressed as such party may from time to time designate by notice to other
parties in accordance herewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ATTEST: THE CHICAGO TRUST COMPANY
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
ATTEST: CHICAGO CAPITAL MANAGEMENT, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
SCHEDULE A SUMMARY
Effective July 1, 2000
Alleghany/Chicago Trust Balanced Fund
Investment Advisor will pay to Sub-Advisor an annual fee equal to .18%
of the daily net assets of the Fund.
