XXXXXXX ASSET MANAGEMENT CORP.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
May 3, 1999
XXXXXXX INVESTORS TRUST, on behalf of
Xxxxxxx Financial Services Fund
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
MENDON CAPITAL ADVISORS CORP.
1325 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Sub-advisory Agreement
Dear Sirs:
Xxxxxxx Investors Trust (the "trust"), of which Xxxxxxx Financial Services
Fund (the "fund") is a series, has been organized as a business trust under the
laws of the State of Delaware to engage in the business of an investment
company. The trust's shares of beneficial interest are currently divided into
five series (including the fund), each series representing the entire undivided
interest in a separate portfolio of assets.
The board of trustees of the trust (the "trustees") has selected Xxxxxxx
Asset Management Corp. (the "adviser") to provide overall investment advice and
management for the fund, and to provide certain other services, under the terms
and conditions provided in the investment advisory agreement, dated as of the
date hereof, between the trust, on behalf of the fund, and the adviser (the
"investment advisory agreement").
The adviser and the trustees have selected Mendon Capital Advisors Corp.
(the "sub-adviser") to provide the adviser and the fund with the advice and
services set forth below, and the sub-adviser is willing to provide such advice
and services, subject to the review of the trustees and overall supervision of
the adviser, under the terms and conditions hereinafter set forth. The
sub-adviser hereby represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). Accordingly, the trust, on behalf of the fund, and the
adviser agree with the sub-adviser as follows:
1. Delivery of Documents. The trust has furnished the sub-adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a) agreement and declaration of trust of the trust, dated August 20,
1998 (the "declaration of trust");
(b) by-laws of the trust as in effect on the date hereof;
(c) resolutions of the trustees selecting the sub-adviser as the
investment sub-adviser to the fund and approving this sub-advisory
agreement (the "agreement");
(d) resolutions of the trustees selecting the adviser as investment
adviser to the fund and approving the investment advisory agreement
and resolutions adopted by the initial shareholder of the fund
approving the investment advisory agreement;
(e) the adviser's investment advisory agreement;
(f) the fund's prospectus and statement of additional information; and
(g) the trust's code of ethics.
The adviser will furnish the sub-adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The sub-adviser will use its best efforts to provide to
the fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the fund as set forth in the fund's prospectus and statement
of additional information. In the performance of the sub-adviser's duties
hereunder, subject always to the provisions contained in the documents
delivered to the sub-adviser pursuant to Section 1 above, as from time to
time amended or supplemented, the sub-adviser will, at its own expense:
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(a) furnish the adviser and the fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions
of the fund as set forth above, with respect to the purchase,
holding and disposition of portfolio securities and other permitted
investments;
(b) furnish the adviser and the fund with advice in connection with
policy decisions to be made by the board of trustees or any
committee thereof about the fund's investments and, as requested,
furnish the fund with research, economic and statistical data in
connection with the fund's investments and investment policies;
(c) submit such reports relating to the valuation of the fund's
securities as the adviser may reasonably request;
(d) subject to prior consultation with the adviser, assist the fund in
any negotiations relating to the fund's investments with issuers,
investment banking firms, securities brokers or dealers and other
institutions or investors;
(e) consistent with the provisions of Section 7 of this agreement, place
orders for the purchase, sale or exchange of portfolio securities
for the fund's account with brokers or dealers selected by the
adviser or the sub-adviser, provided that in connection with the
placing of such orders and the selection of such brokers or dealers
the sub-adviser will seek to obtain best price and execution, except
as otherwise provided in the prospectus and statement of additional
information of the fund;
(f) from time to time or at any time requested by the adviser or the
trustees, make reports to the adviser or the trustees, as requested,
of the sub-adviser's performance of the foregoing services;
(g) subject to the supervision of the adviser, maintain and preserve the
records required by the Investment Company Act of 1940 (the "1940
Act") to be maintained by the sub-adviser (the sub-adviser agrees
that such records are the property of the trust and copies will be
surrendered to the trust promptly upon request therefor);
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(h) give instructions to the custodian (including any sub-custodian) of
the fund as to deliveries of securities to and from such custodian
and payments of cash for the account of the fund, and advise the
adviser on the same day such instructions are given;
(i) cooperate generally with the fund and the adviser to provide
information necessary for the preparation of registration statements
and periodic reports to be filed with the Securities and Exchange
Commission, including Form N-1A, semi-annual reports on Form N-SAR,
periodic statements, shareholder communications and proxy materials
furnished to holders of shares of the fund, filings with states and
with United States agencies responsible for tax matters, and other
reports and filings of like nature.
In the performance of its duties hereunder, the sub-adviser is and will be
an independent contractor and unless otherwise expressly provided or
authorized will have no authority to act for or represent the fund or trust
in any way or otherwise be deemed to be an agent of the fund, the trust or
of the adviser.
3. Expenses Paid by the Sub-adviser. The sub-adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its
obligations under this agreement, the expenses of office rent, telephone,
telecommunications and other facilities that it is obligated to provide in
order to perform the services specified in Section 2, and any other expenses
incurred by it in connection with the performance of its duties hereunder.
4. Expenses of the Fund Not Paid by the Sub-adviser. The sub-adviser will not
be required to pay any expenses which this agreement does not expressly
state will be payable by the sub-adviser. In particular, and without
limiting the generality of the foregoing but subject to the provisions of
Section 3, the sub-adviser will not be required to pay any fund expense or
to reimburse the adviser for any such expense that the adviser is required
to pay.
5. Compensation of the Sub-adviser. The adviser will pay the sub-adviser, as
compensation for services and expenses assumed hereunder, a fee as set forth
in Schedule I. Sub-advisory fees payable hereunder will be computed daily
and paid monthly in arrears. If this agreement is effective subsequent to
the first day of the month, or if this agreement is terminated, the fee
provided in this section will be computed on the basis
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of the number of days in the month for which this agreement is in effect,
subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month. The
sub-adviser understands and agrees that neither the trust nor the fund has
any liability for the sub-adviser's fee hereunder. Calculations of the
sub-adviser's fee will be based on average net asset values as provided by
the adviser.
6. Other Activities of the Sub-adviser and Its Affiliates. Nothing herein
contained will prevent the sub-adviser or any of its affiliates or
associates from engaging in any other business or from acting as investment
adviser or investment manager for any other person or entity, whether or not
having investment policies or a portfolio similar to the fund. It is
specifically understood that officers, directors and employees of the
sub-adviser and its affiliates may engage in providing portfolio management
services and advice to other investment advisory clients of the sub-adviser
or of its affiliates.
7. Avoidance of Inconsistent Position. In connection with purchases or sales of
portfolio securities for the account of the fund, neither the sub-adviser
nor any of its directors, officers or employees will act as principal or
agent or receive any commission. The sub-adviser will not knowingly
recommend that the fund purchase, sell or retain securities of any issuer in
which the sub-adviser has a financial interest without obtaining prior
approval of the adviser prior to the execution of any such transaction.
Access persons (as defined in Rule 17j-1 under the 0000 Xxx) of the
sub-adviser will provide personal trading reports to a designated
representative of the adviser in accordance with the trust's code of ethics.
8. No Partnership or Joint Venture. The trust, the fund, the adviser and the
sub-adviser are not partners of or joint venturers with each other and
nothing herein shall be construed so as to make them such partners or joint
venturers or impose any liability as such on any of them.
9. Limitation of Liability of the Sub-adviser. The sub-adviser will not be
liable for any error of judgment or mistake of law or for any loss suffered
by the trust, the fund or the adviser in connection with the matters to
which this agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the subadviser's part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this agreement.
10. Duration and Termination of this Agreement. This agreement will remain in
effect until April 30, 2001 and from year to year thereafter, but only so
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long as such continuance is specifically approved at least annually by (a) a
majority of the trustees who are not interested persons of the adviser, of
the sub-adviser or (other than as board members) of the trust, cast in
person at a meeting called for the purpose of voting on such approval, and
(b) either (i) the trustees or (ii) a majority of the outstanding voting
securities of the fund. This agreement may, on 60 days written notice, be
terminated at any time without the payment of any penalty by the fund by
vote of a majority of the outstanding voting securities of the fund or by
the board of trustees or by the adviser or by the sub-adviser. Termination
of this agreement with respect to the fund will not be deemed to terminate
or otherwise invalidate any provisions of any contract between you and any
other series of the trust. This agreement will automatically terminate in
the event of its assignment or upon the termination of the adviser's
investment advisory agreement. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and "voting
security"), will be applied.
11. Amendment of this Agreement. No provision of this agreement may be changed
or waived orally, but only by an instrument in writing signed by the party
against which enforcement of the change or waiver is sought. No amendment,
transfer, assignment, sale, hypothecation or pledge of this agreement will
be effective until approved by (a) the trustees, including a majority of the
trustees who are not interested persons of the adviser, the sub-adviser or
(other than as board members) the trust, cast in person at a meeting called
for the purpose of voting on such approval, and (b) a majority of the
outstanding voting securities of the fund, as defined in the 1940 Act.
12. Miscellaneous.
(a) The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. This
agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The
name Xxxxxxx Investors Trust is the designation of the trustees
under the declaration of trust, dated August 20, 1998 and the
declaration of trust has been filed with the Secretary of State of
the State of Delaware. The obligations of the trust and the fund are
not personally binding upon, nor will resort be had to the private
property of, any of the trustees, shareholders, officers, employees
or agents of the trust or the fund, but only the fund's property
will
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be bound. The fund will not be liable for the obligations of any
other series of the trust.
(b) Nothing herein contained will limit or restrict the sub-adviser or
any of its officers, affiliates or employees from buying, selling or
trading in any securities for its or their own account or accounts.
The trust and fund acknowledge that the sub-adviser and its
officers, affiliates and employees, and its other clients may at any
time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of
by the fund. The sub-adviser will have no obligation to acquire for
the fund, a position in any investment which the sub-adviser, its
officers, affiliates or employees may acquire for its or their own
accounts or for the account of another client if, in the sole
discretion of the sub-adviser, it is not feasible or desirable to
acquire a position in such investment for the fund. Nothing herein
contained will prevent the sub-adviser from purchasing or
recommending the purchase of a particular security for one or more
funds or clients while other funds or clients may be selling the
same security.
(c) Any information supplied by the sub-adviser, which is not otherwise
in the public domain, in connection with the performance of its
duties hereunder is confidential and may be used only by the fund
and/or its agents, and only in connection with the fund and its
investments.
(d) Governing Law. This agreement shall be governed by the substantive
law of the State of New York and the applicable provisions of the
1940 Act.
Yours very truly,
XXXXXXX ASSET MANAGEMENT CORP.
By:_______________________________
Its: ______________________________
The foregoing agreement is hereby
agreed to as of the date thereof.
XXXXXXX INVESTORS TRUST
on behalf of Xxxxxxx Financial
Services Fund
By:______________________________
Its:______________________________
MENDON CAPITAL ADVISORS CORP.
By:______________________________
Its:______________________________
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SCHEDULE I
Annual Fee Rate as a Percentage
Fund of Average Daily Net Asset Value
---- --------------------------------
Xxxxxxx Financial Services Fund _____
The average net asset value for the month will be based on the net asset
value used in determining the price at which fund shares are sold, repurchased
or redeemed on each day of the month.
If this agreement becomes effective as to a fund subsequent to the first
day of a month, or terminates before the last day of a month, your compensation
for such fraction of the month will 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.
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