Exhibit 99.2(g)(ii)
UM INVESTMENT TRUST II
SUB-ADVISORY AGREEMENT
(Undiscovered Managers Spinnaker Fund)
This Sub-Advisory Agreement (this "Agreement") is entered into as of April
28, 2004 by and between X.X. Xxxxxx Investment Management Inc., a Delaware
corporation (the "Manager"), and Trail Ridge Capital LLC, a Delaware limited
liability company (the "Sub-Adviser").
WHEREAS, the Manager has entered into a Management Agreement dated April
28, 2004 (the "Management Agreement") with UM Investment Trust II, a
Massachusetts business trust (the "Trust"), on behalf of its Undiscovered
Managers Spinnaker Fund series (the "Series"), pursuant to which the Manager
provides portfolio management and administrative services to the Series;
WHEREAS, the Management Agreement provides that the Manager may delegate
any or all of its portfolio management responsibilities under the Management
Agreement to one or more sub-advisers; and
WHEREAS, the Manager desires to retain the Sub-Adviser to render portfolio
management services in the manner and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Manager and the Sub-Adviser agree as follows:
1. SUB-ADVISORY SERVICES.
a. The Sub-Adviser shall, subject to the supervision of the Manager
and in cooperation with any administrator appointed by the Manager (the
"Administrator"), manage the investment and reinvestment of the assets of the
Series. The Sub-Adviser shall manage the Series in conformity with (1) the
investment objectives, policies and restrictions of the Series set forth in the
Trust's offering memorandum relating to the Series, (2) any additional policies
or guidelines established by the Manager or by the Trust's trustees that have
been furnished in writing to the Sub-Adviser and (3) the provisions of the
Internal Revenue Code of 1986 (the "Code") applicable to "regulated investment
companies" (as defined in Section 851 of the Code), all as from time to time in
effect (collectively, the "Policies"), and with all applicable provisions of
law, including without limitation all applicable provisions of the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations thereunder.
Subject to the foregoing, the Sub-Adviser is authorized, in its discretion and
without prior consultation with the Manager, to buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments
(including interests in pooled investment vehicles) on behalf of the Series,
without regard to the length of time the securities have been held and the
resulting rate of portfolio turnover; and the majority or the whole of the
Series may be invested in such proportions of
stocks, bonds, other securities or investment instruments, or cash, as the
Sub-Adviser shall determine. The Sub-Adviser shall be solely responsible for
ensuring that appropriate due diligence (including legal due diligence) and
analyses have been performed with respect to each investment by the Series, and
shall be solely responsible for the adequacy of such due diligence and analyses.
Notwithstanding the foregoing provisions of this Section 1.a., however, the
Sub-Adviser shall, upon written instructions from the Manager, effect such
portfolio transactions for the Series as the Manager shall determine are
necessary in order for the Series to comply with the Policies.
b. The Sub-Adviser shall furnish the Manager and the Administrator
monthly, quarterly and annual reports concerning portfolio transactions and
performance of the Series in such form as may be mutually agreed upon, and
agrees to assist the Manager from time to time in estimating the amount of any
distributions that are required to be made by the Series under the Code and to
review the Series and discuss the management of the Series with representatives
or agents of the Manager, the Administrator or the Trust at their reasonable
request. The Sub-Adviser shall permit all books and records with respect to the
Series to be inspected and audited by the Manager and the Administrator at all
reasonable times during normal business hours, upon reasonable notice. The
Sub-Adviser shall also provide the Manager, the Administrator or the Trust with
such other information and reports as may reasonably be requested by the
Manager, the Administrator or the Trust from time to time, including without
limitation all material as reasonably may be requested by the trustees of the
Trust pursuant to Section 15(c) of the 1940 Act.
c. The Sub-Adviser shall provide to the Manager a current copy of the
Sub-Adviser's Form ADV and all amendments thereto from time to time and a list
of the persons whom the Sub-Adviser wishes to have authorized to give written
and/or oral instructions to custodians of assets of the Series.
d. The Sub-Adviser shall maintain and be bound by a Code of Ethics
satisfying the requirements of Rule 17j-1 under the 1940 Act, and shall provide
to the Trust a current copy of such Code of Ethics, as amended from time to time
(the "Code of Ethics").
2. OBLIGATIONS OF THE MANAGER.
a. The Manager shall provide (or cause the Trust's custodian to
provide) timely information to the Sub-Adviser regarding such matters as the
composition of assets in the Series, cash requirements and cash available for
investment in the Series, and all other information as may be reasonably
necessary for the Sub-Adviser to perform its responsibilities hereunder.
b. The Manager has furnished the Sub-Adviser a copy of the offering
memorandum of the Series and agrees during the continuance of this Agreement to
furnish the Sub-Adviser copies of any revisions or supplements thereto at, or,
if practicable, before the time the revisions or supplements become effective.
The Manager agrees to furnish the Sub-Adviser with minutes of meetings of the
trustees of the Trust applicable to the Series to the extent they may affect the
duties of the Sub-Adviser, and with copies of any financial statements or
reports
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made by the Series to its shareholders, and any further materials or information
which the Sub-Adviser may reasonably request to enable it to perform its
functions under this Agreement.
3. CUSTODIAN. The Manager shall provide the Sub-Adviser with a copy of
the Series' agreement with the custodian designated to hold the assets of the
Series (the "Custodian") and any modifications thereto (the "Custody
Agreement"), copies of such modifications to be provided to the Sub-Adviser a
reasonable time in advance of the effectiveness of such modifications. The
assets of the Series shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement (or any sub-custodian properly appointed as provided in the Custody
Agreement). The Sub-Adviser shall have no liability for the acts or omissions of
the Custodian, unless such act or omission is required by and taken in reliance
upon instructions given to the Custodian by a representative of the Sub-Adviser
properly authorized to give such instructions under the Custody Agreement. Any
assets added to the Series shall be delivered directly to the Custodian.
4. EXPENSES. Except for expenses specifically assumed or agreed to be
paid by the Sub-Adviser pursuant hereto, the Sub-Adviser shall not be liable for
any expenses of the Manager or the Trust including, without limitation, (a)
interest and taxes, (b) brokerage commissions and other costs in connection with
the purchase or sale of securities or other investment instruments with respect
to the Series and (c) custodian fees and expenses. The Sub-Adviser will pay its
own expenses incurred in furnishing the services to be provided by it pursuant
to this Agreement.
5. COMPENSATION OF THE SUB-ADVISER. As full compensation for all services
rendered, facilities furnished and expenses borne by the Sub-Adviser hereunder,
the Manager shall pay the Sub-Adviser compensation at the annual rate of 0.75%
of the average monthly net assets of the Series. Such compensation shall be
payable monthly in arrears or at such other intervals, not less frequently than
quarterly, as the Manager is paid by the Series pursuant to the Management
Agreement. With respect to any month, the average net assets of the Series for
such month shall be determined by averaging the value of the Series' net assets
on the last business day of such month with the value of the Series' net assets
on the last business day of the month immediately prior to such month. The
Manager may from time to time waive the compensation it is entitled to receive
from the Trust; however, any such waiver will have no effect on the Manager's
obligation to pay the Sub-Adviser the compensation provided for herein.
6. NON-EXCLUSIVITY. The Manager and the Series agree that the services of
the Sub-Adviser are not to be deemed exclusive and that the Sub-Adviser and its
affiliates are free to act as investment manager and provide other services to
various investment companies and other managed accounts, except as the
Sub-Adviser and the Manager may otherwise agree from time to time in writing
before or after the date hereof. Except as the Sub-Adviser and the Manager may
otherwise agree from time to time in writing before or after the date hereof,
this Agreement shall not in any way limit or restrict the Sub-Adviser or any of
its directors, officers, employees or agents from buying, selling or trading any
securities or other investment instruments for its or their own account or for
the account of others for whom it or they may be acting, provided that such
activities do not violate any applicable laws, rules or regulations or the Code
of Ethics or adversely affect or otherwise impair the performance by the
Sub-Adviser of its duties and obligations under this Agreement. The Manager and
the Series recognize and agree that the Sub-
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Adviser may provide advice to or take action with respect to other clients,
which advice or action, including the timing and nature of such action, may
differ from or be identical to advice given or action taken with respect to the
Series. The Sub-Adviser shall for all purposes hereof be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent the Trust or the Manager in any way or
otherwise be deemed an agent of the Trust or the Manager.
7. LIABILITY. Except as may otherwise be provided by the 1940 Act or
other federal securities laws, neither the Sub-Adviser nor any of its officers,
management committee members, directors, members, employees or agents shall be
subject to any liability to the Manager, the Trust, the Series or any
shareholder of the Series for any error of judgment, any mistake of law or any
loss arising out of any investment or other act or omission in the course of,
connected with, or arising out of any service to be rendered under this
Agreement, except by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Sub-Adviser's duties or by reason of
reckless disregard by the Sub-Adviser of its obligations and duties, including
the Sub-Adviser's duties relating to the diligence and analyses undertaken in
connection with investments made by the Series.
8. EFFECTIVE DATE AND TERMINATION. This Agreement shall become
effective as of the date of its execution, and
a. unless otherwise terminated, this Agreement shall continue in
effect for two years from the date of execution, and from year to year
thereafter so long as such continuance is specifically approved at least
annually (i) by the Board of Trustees of the Trust or by vote of a majority of
the outstanding voting securities of the Series, and (ii) by vote of a majority
of the trustees of the Trust who are not interested persons of the Trust, the
Manager or the Sub-Adviser, cast in person at a meeting called for the purpose
of voting on such approval;
b. this Agreement may at any time be terminated on sixty days' written
notice to the Sub-Adviser by the Manager, by vote of the Board of Trustees of
the Trust or by vote of a majority of the outstanding voting securities of the
Series;
c. this Agreement may at any time be terminated by the Sub-Adviser
on one hundred twenty days' written notice to the Manager and the Trust in the
event that, and only in the event that, the Manager consents in writing to such
termination;
d. this Agreement shall automatically terminate in the event of its
assignment; and
e. this Agreement shall automatically terminate upon the termination
of the Management Agreement.
Termination of this Agreement pursuant to this Section 8 shall be without
the payment of any penalty.
9. AMENDMENT. This Agreement may be amended at any time by mutual consent
of the Manager and the Sub-Adviser, provided that such amendment shall also have
been approved
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by vote of a majority of the outstanding voting securities of the Series
(provided that such shareholder approval is required by the 1940 Act and the
rules and regulations thereunder, giving effect to any interpretations or orders
of the Securities and Exchange Commission and its staff) and by vote of a
majority of the trustees of the Trust who are not interested persons of the
Trust, the Manager or the Sub-Adviser, cast in person at a meeting called for
the purpose of voting on such approval.
10. CERTAIN DEFINITIONS. For the purpose of this Agreement, the terms
"vote of a majority of the outstanding voting securities," "interested person,"
"affiliated person" and "assignment" shall have their respective meanings
defined in the 1940 Act, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under the 1940 Act.
11. GENERAL.
a. If any term or provision of this Agreement or the application
thereof to any person or circumstances is held to be invalid, illegal or
otherwise unenforceable to any extent, then, to the fullest extent permitted by
law: (i) such invalidity, illegality or unenforceability shall not affect any
other term or provision of this Agreement; (ii) all other terms and provisions
of this Agreement shall remain in full force and effect and shall be liberally
construed in order to carry out the intent of the parties hereto as nearly as
may be possible; and (iii) the parties hereto shall use all reasonable efforts
to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the purpose and intents of this Agreement.
b. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York.
X.X. XXXXXX INVESTMENT
MANAGEMENT INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Managing Director
TRAIL RIDGE CAPITAL LLC
By: /s/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
Title: CEO
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