EXHIBIT (D)(40)
FORM OF
SUB-INVESTMENT ADVISORY AGREEMENT
BETWEEN ASTON ASSET MANAGEMENT LLC
AND XXXXXX, XXXXXX & HABACHT, INC.
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this __ day of
_______, 2006 by and between ASTON ASSET MANAGEMENT LLC(hereinafter referred to
as the "Investment Adviser") and Xxxxxx, Xxxxxx & Habacht, Inc. (hereinafter
referred to as the "Sub-Adviser"), 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.
WITNESSETH:
WHEREAS, the Investment Adviser has been retained by Aston Funds, a
Delaware statutory trust (the "Trust"), a registered management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act") to
provide investment advisory services to the Trust with respect to certain series
of the Trust set forth in Schedule A hereto as may be amended from time to time
(hereinafter referred to as a "Fund" and collectively, the "Funds" of the
Trust);
WHEREAS, the Investment Adviser wishes to enter into a contract with the
Sub-Adviser to provide research, analysis, advice and recommendations with
respect to the purchase and sale of securities, and make investment commitments
with respect to such portion of the Funds' assets as shall be allocated to the
Sub-Adviser by the Investment Adviser from time to time (the "Allocated
Assets"), subject to oversight by the Trustees of the Trust and the supervision
of the Investment Adviser.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and intending to be bound, the parties agree as follows:
1. In accordance with the Investment Advisory Agreement between the Trust
and the Investment Adviser ("Investment Advisory Agreement") with respect to the
Funds, the Investment Adviser hereby appoints the Sub-Adviser to act as
Sub-Adviser with respect to the Allocated Assets for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to render the services set forth herein, for the compensation provided herein.
2. As compensation for the services enumerated herein, the Investment
Adviser will pay the Sub-Adviser a fee with respect to the Allocated Assets,
which shall be calculated and payable monthly in arrears based on the average
daily net assets of the Fund, at the annual rate as set forth in Schedule B
hereto. For the purposes of this Agreement, a Fund's "net assets" shall be
determined as provided in the Fund's then-current Prospectus (as used herein
this term includes the related Statement of Additional Information).
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-Adviser's
compensation for such fraction of the
month shall be prorated based on the number of calendar days of such month
during which the Agreement is effective.
3. This Agreement shall become effective with respect to a Fund as of the
date set forth opposite the Fund's name as set forth on Schedule A hereto (the
"Effective Date"), provided that it has been approved by the Trustees of the
Trust in accordance with the provisions of the 1940 Act and the rules thereunder
and, if so required by the 1940 Act and the rules thereunder, by the
shareholders of the Fund in accordance with the requirements of the 1940 Act and
the rules thereunder.
4. This Agreement shall continue in effect for the initial term set forth
in Schedule A. It shall be renewed automatically thereafter with respect to a
Fund by the Investment Adviser and the Sub-Adviser for successive periods not
exceeding one year, if and only if 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 1940 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 with respect to a Fund without the payment of any
penalty upon termination of the Investment Advisory Agreement relating to a Fund
(accompanied by simultaneous notice to the Sub-Adviser) or upon sixty days'
written notice to the Sub-Adviser that the Trustees of the Trust, the Investment
Adviser or the shareholders by vote of a majority of the outstanding voting
securities of the Fund, as provided by the 1940 Act, have terminated this
Agreement. This Agreement may also be terminated by the Sub-Adviser with respect
to a Fund without penalty upon sixty days' written notice to the Investment
Adviser and the Trust.
This Agreement shall terminate automatically with respect to a Fund in the
event of its assignment or, upon notice thereof to the Sub-Adviser, 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 if so required by the 1940 Act (in each case as the
term "assignment" is defined in Section 2(a)(4) of the 1940 Act, subject to such
exemptions as may be granted by the SEC by any rule, regulation, order or
interpretive guidance).
5. Subject to the oversight of the Board of Trustees of the Trust and the
Investment Adviser, the Sub-Adviser will provide an investment program for the
Allocated Assets, including investment research and management with respect to
securities and investments, including cash and cash equivalents, and will
determine from time to time what securities and other investments will be
purchased, retained or sold. The Sub-Adviser will provide the services under
this Agreement in accordance with each Fund's investment objective, policies and
restrictions as stated in the Prospectus, as provided to the Sub-Adviser by the
Investment Adviser. The Sub-Adviser further agrees that, in all matters relating
to the performance of this Agreement, it:
(a) shall act in conformity with the Trust's Declaration of Trust,
By-Laws and currently effective registration statements under the 1940 Act and
the Securities Act of 1933 and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of each Fund, and written instructions and directions of the
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Trustees of the Trust and shall comply with the requirements of the 1940 Act and
the Investment Advisers Act of 1940 and the rules thereunder, and all other
applicable federal and state laws and regulations. The Trust agrees to provide
Sub-Adviser with copies of the Trust's Declaration of Trust, By-Laws,
Registration Statements, written policies, procedures and guidelines, and
written instructions and directions of the Trustees, and any amendments or
supplements to any of them at, or, if practicable, before the time such
materials, instructions or directives become effective.
(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 each Fund, provided that the Sub-Adviser will not pay for or
provide a credit with respect to any research provided to it in accordance with
Section 5(c);
(c) will place orders pursuant to its investment determinations for
each Fund either directly with any broker or dealer, or with the issuer. In
placing orders with brokers or dealers, the Sub-Adviser will attempt to obtain
the best overall price and the most favorable execution of its orders. Subject
to policies established by the Trustees of the Trust and communicated to the
Sub-Adviser, it is understood that the Sub-Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Trust or in
respect of a Fund, or be in breach of any obligation owing to the Investment
Adviser or the Trust or in respect of a 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-Adviser determines
in good faith that the commission paid was reasonable in relation to the
brokerage or research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934 and interpretive guidance issued by the SEC
thereunder) provided by such member, broker or dealer, viewed in terms of that
particular transaction or the Sub-Adviser'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
Allocated Assets of each Fund as obtained on a daily basis by the Fund's
administrator and furnished by it to Sub-Adviser, and will promptly notify the
Trust and the Investment Adviser if the Sub-Adviser believes that any such
valuations may not properly reflect the market value of any securities owned by
the Fund, provided, however, that the Sub-Adviser 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) unless otherwise instructed, will be responsible for voting all
proxies of each Fund in accordance with the Proxy Voting Policies and Guidelines
of Sub-Adviser (the "Proxy Policy"), provided that such Proxy Policy and any
amendments thereto are furnished to the Trust.
(f) will attend regular business and investment-related meetings with
the Trust's Board of Trustees and the Investment Adviser if requested to do so
by the Trust and/or the Investment Adviser, and at its expense, shall supply the
Board, the officers of the Trust, and the Investment Adviser with all
information and reports reasonably required by them and
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reasonably available to the Sub-Adviser relating to the services provided by the
Sub-Adviser hereunder.
(g) will maintain books and records with respect to the securities
transactions for the Allocated Assets of each Fund and proxy voting record for
the Allocated Assets of the Fund, furnish to the Investment Adviser 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 Adviser all
of the Sub-Adviser's reports to the Trust's Board of Trustees for examination
and review within a reasonable time prior to the Trust's Board meetings.
6. The Investment Adviser or its affiliates may, from time to time, engage
other sub-advisers to advise other series of the Trust (or portions thereof) or
other registered investment companies (or series or portions thereof) that may
be deemed to be under common control (each a "Sub-Advised Fund"). The
Sub-Adviser agrees that it will not consult with any other sub-adviser engaged
by the Investment Adviser or its affiliates with respect to transactions in
securities or other assets concerning a Fund or another Sub-Advised Fund, except
to the extent permitted by the rules under the 1940 Act that permit certain
transactions with a sub-adviser or its affiliates.
7. Sub-Adviser agrees with respect to the services provided to each Fund
that it:
(a) will promptly communicate to the Investment Adviser such
information relating to Fund transactions as the officers and Trustees of the
Trust may reasonably request and as communicated to the Sub-Adviser; and
(b) will treat confidentially and as proprietary information of the
Trust all records and other information relative to each 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-Adviser is advised by
counsel that the Sub-Adviser may be exposed to civil or criminal contempt or
other proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust).
8. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Sub-Adviser 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-Adviser may retain
copies thereof at its own expense. Sub-Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act relating to transactions placed
by Sub-Adviser for the Fund. Sub-Adviser further agrees to maintain each Fund's
proxy voting record with respect to the Allocated Assets in a form mutually
agreeable between the parties and which contains the information required by
Form N-PX under the 0000 Xxx.
9. It is expressly understood and agreed that the services to be rendered
by the Sub-Adviser to the Investment Adviser under the provisions of this
Agreement are not to be deemed to be exclusive, and the Sub-Adviser shall be
free to provide similar or different services to
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others so long as its ability to provide the services provided for in this
Agreement shall not be materially impaired thereby. In addition, but without
limiting any separate agreement between the Sub-Adviser and the Investment
Adviser to the contrary, nothing in this Agreement shall limit or restrict the
right of any director, officer, or employee of the Sub-Adviser who may also be a
Trustee, officer, or employee of the Trust, 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 nature or a dissimilar
nature.
10. The Investment Adviser agrees that it will furnish currently to the
Sub-Adviser all information with reference to each Fund and the Trust that is
reasonably necessary to permit the Sub-Adviser 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
Adviser will furnish to Sub-Adviser procedures consistent with the Trust's
contract with each Fund's custodian from time to time (the "Custodian"), and
reasonably satisfactory to Sub-Adviser, for consummation of portfolio
transactions for each 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-Adviser 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-Adviser shall have no responsibility or liability with
respect to custodial arrangements or the acts, omissions or other conduct of the
Custodian.
11. The Sub-Adviser 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 Adviser 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-Adviser of its duties under this agreement except
that nothing herein contained shall be construed to protect the Sub-Adviser
against any liability by reason of the Sub-Adviser'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.
12. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby. Except to the extent governed by federal law including
the 1940 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.
13. 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 as
required by applicable law.
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14. 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 Adviser at:
Aston Asset Management LLC
___________________________
___________________________
Attn: _____________________
Facsimile: ________________
To the Sub-Adviser at:
___________________________
___________________________
Attn: _____________________
Facsimile: ________________
To a Fund or the Trust at:
_____________________ Funds
___________________________
Attn: _____________________
Facsimile: ________________
or addressed as such party may from time to time designate by notice to other
parties in accordance herewith.
15. The Sub-Adviser agrees that for any claim by it against a Fund in
connection with this Agreement or the services rendered under this Agreement, it
shall look only to assets of a Fund for satisfaction and that it shall have no
claim against the assets of any other portfolios of the Trust.
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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: ASTON ASSET MANAGEMENT LLC
By:
------------------------------------- ------------------------------------
ATTEST: XXXXXX, XXXXXX & HABACHT, INC.
By:
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SCHEDULE A
FUND EFFECTIVE DATE INITIAL TERM
---- -------------- ------------
Aston/TCH Investment Grade Bond Fund 2 Years
Aston/TCH Fixed Income Fund 2 Years
Aston Balanced Fund 2 Years
SCHEDULE B
FUND SUBADVISORY FEE RATE
---- --------------------
Aston/TCH Investment Grade Bond Fund
Aston/TCH Fixed Income Fund
Aston Balanced Fund