INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT (this "Agreement"), dated as of
________ __, 2000, is entered into by and between Everest Funds Management, LLC,
a Delaware limited liability company and registered investment adviser (the
"Adviser"), and Xxxxx Xxxxx, LLC, a Delaware limited liability corporation and
registered investment adviser (the "Sub-Adviser").
WITNESSETH THAT:
WHEREAS, Everest Funds (the "Fund"), is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), and is authorized to issue separate series of shares,
each series having its own investment objective or objectives, policies and
limitations;
WHEREAS, the Adviser is the investment adviser for the Fund pursuant to
an Investment Advisory Agreement, dated as of November 2, 2000 (the "Advisory
Agreement"), between the Adviser and the Fund;
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain
of its duties as investment adviser thereunder to a Sub-adviser; and
WHEREAS, the Adviser desires to retain the Sub-Adviser as the Adviser's
agent to furnish investment advisory services to the series of the Fund
represented by the series listed on Schedule A hereto (the "Series").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to provide
certain sub-investment advisory services to the Series for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided with respect to the Series listed on Schedule A attached hereto.
In the event that the Adviser designates one or more series other than
the Series with respect to which the Adviser wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the Sub-Adviser
in writing. If the Sub-Adviser is willing to render such services, it shall
notify the Adviser in writing, whereupon such series shall become a Series
hereunder and shall be subject to this agreement. Within a reasonable time after
the inclusion of an additional series under this Agreement, Schedule A shall be
amended to include the additional series.
2. DELIVERY OF DOCUMENTS.
(a) The Adviser has or will furnish the Sub-Adviser with copies
properly certified or authenticated of each of the following:
(i) the Fund's Certificate of Trust, as filed with the Secretary
of the State of Delaware on September 28, 2000, and all amendments
thereto or restatements thereof (the "Certificate of Trust");
(ii) the Fund's Declaration of Trust and amendments thereto (the
"Declaration of Trust");
(iii) resolutions of the Board of Trustees of the Fund (the
"Board") authorizing the appointment of the Sub-Adviser and
approving this Agreement;
(iv) the Fund's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission
(the "SEC") and all amendments thereto;
(v) the Fund's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ("1933 Act"), and under the
1940 Act as filed with the SEC and all amendments thereto insofar
as such Registration Statement and such amendments relate to the
Series; and
(vi) the Fund's most recent prospectus and Statement of Additional
Information relating to the Series (collectively, the
"Prospectus"). From time to time, the Adviser will furnish the
Sub-Adviser with copies of all amendments of or supplements to the
Prospectus.
(b) The Sub-Adviser will provide the Adviser and the Fund with copies
properly certified or authenticated of each of the following:
(i) the Form ADV most recently filed with the SEC by the
Sub-Adviser and will promptly furnish a copy of all amendments of
the Form ADV to the Adviser on an annual basis;
(ii) the written code of ethics of the Sub-Adviser (the "Code of
Ethics") adopted pursuant to the requirements of Rule 17j-1
promulgated under the 1940 Act ("Rule 17j-1");
(iii) evidence of adoption of the Code of Ethics in accordance
with Rule 17j-1; and
(iv) within 45 days of the end of the last calendar quarter of
each year that this Agreement is in effect, a certification from
the president or a vice-president of the Sub-Adviser that the
Sub-Adviser has complied with the requirements of Rule 17j-1
during the previous year and that there has been no violation of
the Sub-Adviser's Code of Ethics or that, if such a violation has
occurred, that appropriate action was taken in response to such
violation.
3. MANAGEMENT.
(a) Subject to the supervision of the Board and the Adviser, the
Sub-Adviser will furnish an investment program in respect of,
and make investment decisions for, all assets of the Series and
place all orders for the purchase and sale of securities, all on
behalf of the Series. In the performance of its duties, the
Sub-Adviser will satisfy its fiduciary duties to the Series
(as set forth in Section 3(b) below), and will monitor the Series'
investments, and will comply with the provisions of Fund's
Certificate of Trust and Declaration of Trust, as amended from
time to time, and the stated investment objectives, policies
and restrictions of the Series. The Sub-Adviser and the Adviser
will each make its officers and employees available to the other
from time to time at reasonable times to review investment policies
of the Series and to consult with each other regarding the
investment affairs of the Series. The Sub-Adviser will report to
the Board and to the Adviser with respect to the implementation
of such program. The Sub-Adviser is responsible for compliance
with the provisions of Section 817(h) of the Internal Revenue Code
of 1986, as amended, applicable to the Series.
(b) The Sub-Adviser further agrees that it will:
(i) use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it
has investment responsibilities;
(ii) conform with all applicable rules and regulations of the SEC
in all material respects and in addition will conduct its
activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to its
investment advisory activities;
(iii) place orders pursuant to its investment determinations for
the Series either directly with the issuer or with any broker or
dealer as permitted in accordance with guidelines established by
the Board. In placing orders with brokers and dealers, the
Sub-Adviser will attempt to obtain the best combination of
prompt execution of orders in an effective manner and at the most
favorable price. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are
comparable, the Sub-Adviser may, in its discretion, purchase
and sell portfolio securities to and from brokers and dealers who
provide the Sub-Adviser with research advice and other services.
In no instance will portfolio securities be purchased from or sold
to the Adviser, the Sub-Adviser or any affiliated person of
either the Fund, the Adviser, or the Sub-Adviser, except as may
be permitted under the 1940 Act;
(iv) report regularly to the Adviser and to the Board and will
make appropriate persons available for the purpose of reviewing
with representatives of the Adviser and the Board on a regular
basis at reasonable times the management of the Series, including,
without limitation, review of the general investment strategies of
the Series, the performance of the Series in relation to standard
industry indices, interest rate considerations and general
conditions affecting the marketplace and will provide various other
reports from time to time as reasonably requested by the Adviser;
(v) prepare and maintain such books and records with respect to
the Series' securities transactions and will furnish the Adviser
and Fund's such periodic and special reports as the Board or the
Adviser may request;
(vi) act upon instructions from the Adviser not inconsistent with
the fiduciary duties hereunder;
(vii) treat confidentially and as proprietary information of the
Fund all such records and other information relative to the Fund
maintained by the Sub-Adviser, 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 Fund, which approval
shall not be unreasonably withheld and may not be withheld where
the Sub-Adviser 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 Fund; and
(viii) vote proxies received in connection with securities held by
the Series consistent with its fiduciary duties hereunder.
4. EXPENSES. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commission, if
any) purchased for the Series.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
promulgated under the 1940 Act, the Sub-Adviser hereby agrees that, to the
extent that it may maintain records for the Fund, all such records are the
property of the Fund and further agrees to surrender promptly to the Fund any of
such records upon the Fund's request. The Sub-Adviser further agrees to preserve
for the periods prescribed by Rule 31a-2 promulgated under the 1940 Act any such
records required to be maintained by Rule 31a-1 promulgated under the 1940 Act.
6. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee,
accrued daily and payable monthly on the average daily net assets in the Series
in accordance with Schedule B hereto. From time to time, the Sub-Adviser may
agree to waive or reduce some or all of the compensation to which it is entitled
under this Agreement.
If this Agreement terminates before the end of any month, the fee for
the period from the effective date to the end of the month or from the beginning
of such month to the date of termination, as the case may be, shall be pro-rated
according to the proportion that such period bears to the full month in which
such effectiveness or termination occurs.
7. SERVICES TO OTHERS. The Adviser understands, and has advised the Board,
that the Sub-Adviser now acts, or may in the future act, as an investment
adviser to fiduciary and other managed accounts, and as investment adviser or
sub-investment adviser to other investment companies. The Adviser has no
objection to the Sub-Adviser acting in such capacities, provided that whenever
the Series and one or more other investment advisory clients of the Sub-Adviser
have available funds for investment, investments selected for each will be
allocated in a manner believed by the Sub-Adviser to be equitable to each. The
Adviser recognizes, and has advised the Board, that in some cases this procedure
may adversely affect the size of the position that the participating Series may
obtain in a particular security. In addition, the Adviser understands, and has
advised Fund's Board, that the persons employed by the Sub-Adviser to assist in
the Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement will be deemed to limit or
restrict the right of the Sub-Adviser or any of its affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
8. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the services
pursuant to this Agreement. The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund, its
shareholders or by the Advisor in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Nothing in this paragraph shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.
9. USE OF NAME. The adviser permits the Sub-Adviser to utilize the name
"Everest" without the consent of the Adviser, in connection with the
sub-advisory services provided to the Series pursuant to this Agreement.
10. EFFECTIVE DATE. This Agreement will become effective as to a Series
upon execution or, if later, the date that initial capital for such Series is
first provided to it (the "Effective Date").
11. DURATION AND TERMINATION. Whenever referred to in this Agreement, the
vote or approval of the holders of a majority of the outstanding voting
securities of the Fund shall mean (a) the vote of 67% or more of such securities
if the holders of more than 50% of such securities are present in person or by
proxy or (b) the vote of more than 50% of all outstanding securities, whichever
is lesser.
(a) Unless sooner terminated as hereinafter provided, this Agreement
will continue in effect for two years from the Effective Date.
Thereafter, if not terminated as to a Series, this Agreement will
continue in effect from year to year thereafter, but only so long as
such continuation is specifically approved at least annually by the
Board of Directors of the Fund or by vote of the holders of a majority
of the outstanding voting securities of such Series; provided that in
either event the continuance is also approved by a majority of the
members of the Fund's Board who are not "interested persons" of the
Fund, the Adviser, or of the Sub-Adviser, as defined by the provisions
of the 1940 Act.
(b) Notwithstanding the foregoing, this Agreement may be terminated as
to a Series at any time, without the payment of any penalty, on 60
days' written notice by the Fund or the Adviser, or on 90 days' written
notice by the Sub-Adviser. This Agreement will immediately terminate in
the event of its assignment as such term is defined by the 1940 Act.
12. AMENDMENT OF THIS AGREEMENT. No provision of this 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.
13. NOTICE. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
14. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will be binding upon
and shall inure to the benefit of the parties hereto.
The name "Everest Funds" and "Board of Trustees of the Fund" refer
respectively to the Fund created by, and the members of the Board, as board
members but not individually or personally, acting from time to time under, the
Declaration of Trust, to which reference is hereby made, and to any and all
amendments thereto. The obligations of the Everest Funds entered in the name or
on behalf thereof by any of the Members of the Board, representatives or agents
are made not individually but only in such capacities and are not binding upon
any of the Members, interest holders or representatives of the Fund personally,
but bind only the assets of the Fund, and persons dealing with the Series must
look solely to the assets of the Fund belonging to such Series for the
enforcement of any claims against Fund.
15. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER. The Sub-Adviser
hereby represents and warrants that:
(a) this Agreement does not violate any existing agreements between the
Sub-Adviser and any other party;
(b) it is a duly registered investment adviser under the Investment
Advisers Act of 1940, as amended and has provided to the Adviser a copy
of its most recent Form ADV as filed with the SEC;
(c) it has reviewed the post-effective amendment to the Registration
Statement for the Fund filed with the SEC that contains disclosure
about the Sub-Adviser, and represents and warrants that, with respect
to the disclosure about the Sub-Adviser or information relating,
directly or indirectly, to the Sub-Adviser, such Registration Statement
contains, as of the date hereof, no untrue statement of any material
fact and does not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements
contained therein not misleading;
(d) in no event shall the Sub-Adviser provide similar investment
advisory services to any client comparable to the Series being managed
under this Agreement at a composite rate of compensation less than that
provided for herein;
(e) it has adopted a Code of Ethics complying with the requirements of
Rule 17j-1; and
(f) it shall notify the Adviser of any change in control of the
Sub-Adviser, and any changes in the key personnel who are either the
portfolio manager(s) of the Series or senior management of the
Sub-Adviser, in each case prior to, or promptly after, such change.
16. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Nebraska.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this ___ day of ________, 2000
EVEREST FUNDS MANAGEMENT, LLC
________________________________
By:
Name: Xxxxx Xxxxx
Title: President
XXXXX XXXXX, LLC
________________________________
By:
Name: Xxxxxx Xxxxx
Title: President
