Exhibit 5(b)
NORTHSTAR INTERNATIONAL VALUE FUND
SUBADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997 by and between Northstar
Investment Management Corporation, Delaware Corporation (hereinafter the
"Adviser"), investment adviser for the Northstar International Value Fund
(hereinafter the "Fund") a series of the Northstar Trust (the "Trust") and
Xxxxxxx Investment Partners, L.P., a California limited partnership
(hereinafter the "Subadviser").
WHEREAS, the Adviser has been retained by the Trust on behalf of the Fund
to provide investment advisory services to the Fund pursuant to an Investment
Advisory Agreement made on November 8, 1993 as amended January 23, 1997
(the "Investment Advisory Agreement"); and
WHEREAS, the Fund's Trustees, including a majority of the Trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Fund's shareholders have approved the
appointment of the Subadviser to perform certain investment advisory services
for the Fund pursuant to this Subadvisory Agreement with the Adviser and the
Subadviser is willing to perform such services for the Fund;
WHEREAS, the Subadviser is a registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual convenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:
1. APPOINTMENT. The Adviser hereby appoints the Subadviser to perform
advisory services to the Fund for the periods and on the terms set forth
in this Subadvisory Agreement. The Subadviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein
provided.
2. DUTIES OF SUBADVISER. The Adviser hereby authorizes Subadviser to
manage the investment and reinvestment of cash and investments comprising
those assets of the Fund with power on behalf of and in the name of the Fund
at Subadviser's discretion, subject at all times to the supervision of the
Adviser and the Trustees of the Fund:
(a) to direct the purchase, subscription or other acquisition, and the
sale, redemption, and exchange of investments, subject to the duty to render to
the Trustees of the Fund and the Adviser written reports of the composition
of the portfolio of the Fund as often as the Adviser or the Trustees of the Fund
shall reasonably require;
(b) to make all decisions relating to the manner, method and timing of
investment transactions, to select brokers, dealers and other intermediaries
by or through whom such transactions will be effected, and to engage such
consultants, analysts and experts in connection therewith as may be considered
necessary or appropriate;
(c) to direct banks, brokers or custodians to disburse funds or assets
solely in order to execute investment transactions for the Fund, provided the
Subadviser have no authority to direct the transfer of the Fund's funds
or assets to itself or other affiliated persons and shall have no authority
over the disbursement (as opposed to investment decisions) of funds or assets
nor any custody of any of the Fund's funds or assets; and
(d) to take all other actions as may be considered necessary or
appropriate to discharge its duties hereunder; PROVIDED THAT any specific or
general directions which the Trustees of the Fund or the Adviser may give in
writing to the Subadviser with regard to any of the foregoing powers shall,
unless the contrary expressly stated herein, override the general authority
given by this provision to the extent that the Trustees of the Fund may, at any
time and from time to time, direct, either generally or to a limited extent and
either alone or in concert with the
Adviser or the Subadviser (provided that such directions would not cause the
Subadviser to violate any fiduciary duties or any laws with regard to the
Subadviser's duties and responsibilities), all or any of the same as they
shall think fit and, in particular, the Adviser shall have the right to direct
the Subadviser to place trades through brokers and other agents of the Adviser's
choice, subject to such brokers or agents executing such trades on a "best
execution basis", i.e. at the best price and/or with research or other services
which render the broker's services the most appropriate for the Subadviser's
needs, and further that the Subadviser is satisfied that the dealing and
execution quality of such brokers are satisfactory to the Subadviser; and
PROVIDED FURTHER that nothing herein shall be construed as giving the Subadviser
power to manage the aforesaid cash and investments in such a manner as would
cause the Fund to be considered a "dealer" in stocks, securities or commodities
for U.S. federal income tax purposes.
The Adviser shall monitor and review the performance of the Subadviser
under this Agreement, including but not limited to the Subadivser's performance
of the duties delineated in subparagraphs (a)-(b) above.
The Subadviser further agrees that, in performing its duties hereunder, it
will:
(a) (i) comply with the 1940 Act and all rules and regulations
thereunder, the Advisers Act, the Internal Revenue Code of 1986, as amended,
(the "Code") and all other applicable federal and state laws and regulations,
the Prospectus and Statement of Additional Information for the Fund, and with
any applicable procedures adopted by the Trustees in writing and made available
to Subadviser; (ii) manage the Fund in accordance with the investment
requirements for regulated investment companies under Subchapter M of the Code
and regulations issued thereunder, and (iii) direct the placement of orders
pursuant to its investment determinations for the Fund directly with the
issuer, or with any broker or dealer, in accordance with applicable policies
expressed in the Fund's Prospectus and/or Statement of Additional Information
and in accordance with applicable legal requirements;
(b) furnish to the Fund whatever non-proprietary reports the Fund may
reasonably request with respect to the Fund's assets or contemplated
investments. In addition the Subadviser will keep the Fund and the Trustees
informed of developments materially affecting the Fund's portfolio and shall,
on the Subadviser's own initiative, furnish to the Fund from time to time
whatever information the Subadviser believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar Administrators
Corporation (the "Administrator"), the Adviser, and the Fund, promptly upon
their request, such copies of its investment records and ledgers with respect
to the Fund as may be required to assist the Adviser, the Administrator and the
Fund in their compliance with applicable laws and regulations. The Subadviser
will furnish the Trustees with such periodic and special reports regarding the
Fund as they may reasonably request;
(d) immediately notify the Adviser and the Fund in the event that the
Subadviser or any of its affiliates (i) becomes aware that it is subject to
a statutory disqualification that prevents the Subadviser from serving as an
investment adviser pursuant to this Subadvisory Agreement; or (ii) becomes
aware that it is the subject of an administrative proceeding or enforcement
action by the Securities and Exchange Commission ("SEC") or other regulatory
authority. The Subadviser further agrees to notify the Fund and the Adviser
immediately of any material fact known to the Subadviser respecting or relating
to the Subadviser that is not contained in the Fund's Registration Statement,
or any amendment or supplement thereto, but that is required to be disclosed
therein, of any statement contained therein respecting or relating to the
Subadviser that becomes untrue in any material respect. The Adviser shall
likewise immediately notify the Subadviser if it becomes aware of any
regulatory action of the type described in this subparagraph 2(d) respecting
or relating to the Fund, the Adviser, or any Affiliates of the Adviser.
3. ALLOCATION OF CHARGES AND EXPENSES. The Subadviser shall pay all expenses
associated with the management of its business operations in performing its
responsibilities hereunder, including the cost of its own overhead, research,
compensation and expenses of its partners, officers and employees, and other
internal operating
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costs. The Fund shall bear its own overhead and other internal operating
costs (whether incurred directly or by the Adviser or the Subadviser)
including, without limitation:
(a) the costs incurred by the Fund in the preparation and printing of its
Prospectus or any offering literature (including any form of advertisement
or other solicitation materials calculated to lead to investors subscribing
for shares);
(b) all fees and expenses on behalf of the Fund to the Transfer Agent and
the Custodian;
(c) the reasonable fees and expenses of accountants, auditors, lawyers
and other professional advisors to the Fund;
(d) any interest, fee or charge payable on or on account of any borrowing
by the Fund;
(e) fiscal and governmental charges and duties relating to the purchase,
sale, issue or redemption of shares and increases in authorized share capital
of the Fund;
(f) the fees of any stock exchange or over-the-counter market on which
the shares may from time to time be listed, quoted or dealt in and the expenses
of obtaining any such listing, quotation or permission to deal;
(g) the fees and expenses (if any) payable to Trustees;
(h) brokerage, fiscal or governmental charges or duties in respect of or in
connection with the acquisition, holding or disposal of any of the assets of
the Fund or otherwise in connection with its business;
(i) the expenses of publishing details and prices of shares in newspapers
and other publications;
(j) all expenses incurred in the convening of meetings of shareholders or
in the preparation of agreements or other documents relating to the Fund or in
relation to the safe custody of the documents of title of any investments;
(k) all Trustees communication costs; and
(l) all premiums and costs for Fund insurance and blanket fidelity bonds.
4. COMPENSATION. The Subadviser agrees to waive all compensation until the
Fund's net assets exceed $50 million. After the Fund's net assets exceed $50
million, the Adviser will pay the Subadviser at the end of each calendar month
an advisory fee computed daily at an annual rate equal to fifty (50) percent
of the management fee that the Fund pays the Adviser.
5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable
legal provisions, and to preserve such records for the periods and in the
manner required by applicable laws or regulations. The Subadviser also agrees
that records it maintains and preserves pursuant to Rules 31a-2 under the
1940 Act (excluding trade secrets or intellectual property rights) in
connection with its services hereunder are the property of the Fund and will
be surrendered promptly to the Fund upon its request and the Subadviser further
agrees that it will furnish to regulatory authorities having the requisite
authority any information or reports in connection with its services hereunder
which may be requested in order to determine whether the operations of the Fund
are being conducted in accordance with applicable laws and regulations.
6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best business judgment and reasonable care in rendering the
services provided by it under this Subadvisory Agreement. The Subadviser shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund or the holders of
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the Fund's shares or by the Adviser in connection with the matters to which
this Subadvisory Agreement relates, provided that nothing in this Subadvisory
Agreement shall be deemed to protect or purport to protect the Subadviser
against liability to the Fund or to holders of the Fund's shares or to the
Adviser to which the Subadviser would otherwise be subject by reason of willful
misfeasance, bad faith or negligence on its part in the performance of its
duties or by reason of the Subadviser's reckless disregard of its obligations
and duties under the Subadvisory Agreement. As used in this Section 6, the
term "Subadviser" shall include any officers, directors, employees or other
affiliates of the Subadviser performing services for the Fund.
7. SERVICES NOT EXCLUSIVE. It is understood that, except as may be
otherwise be agreed by the Adviser and the Subadviser, the services of the
Subadviser are not exclusive. The Subadviser is not required to recommend to
the Fund the same investments it recommends to its other clients. In connection
with purchases or sales of portfolio securities for the account of the Fund,
neither the Subadviser nor any of its partners officers or employees shall act
as principal or agent or receive any commission. If the Subadviser provides any
advice to its clients concerning the shares of the Fund, the Subadviser shall
act solely as investment counsel for such clients and not in any way on behalf
of the Fund.
8. DURATION AND TERMINATION. This Subadvisory Agreement shall continue in
effect for a period of two years unless sooner terminated as provided herein
and shall continue automatically for successive annual periods provided that
such continuance is specifically approved at least annually by the affirmative
vote of (i) a majority of the Trustees of the Trust who are not interested
persons of the Trust (as defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on such approval, and (ii) a majority of the
Trustees of the Trust or the holders of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act). Notwithstanding the
foregoing, this Subadvisory Agreement may be terminated: (a) at any time
without penalty by the Fund or Adviser upon the vote of a majority of the
Trustees or by vote of the majority of the Fund's outstanding voting
securities (as defined in the 1940 Act), upon sixty (60) days' written notice
to the Subadviser, or (b) by the Subadviser at any time without penalty, upon
(60) days' written notice to the Fund or Adviser. This Subadvisory Agreement
will also terminate automatically in the event of its assignment (as defined
in the 0000 Xxx) or the assignment or termination of the Investment Advisory
Agreement.
9. AMENDMENTS. No provision of this Subadvisory Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by both parties, and no material amendment of this Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
majority of the outstanding voting securities of the Fund, and (ii) a majority
of the Trustees of the Fund, including a majority of Trustees who are not
interested persons of any party to this Subadvisory Agreement, cast in person
at a meeting called for the purpose of voting on such approval, if such
approval is required by applicable law.
10. INDEMNIFICATION. (a) The Adviser hereby agrees to indemnify the
Subadviser from and against all liabilities, losses, expenses, reasonable
attorneys' fees and costs or damages (other than liabilities, losses,
expenses, attorneys fees and costs or damages arising from the Subadviser
failing to meet the standard of care required hereunder in the performance
by the Subadviser of, or its failure to perform, the services required
hereunder), arising from: (i) the Adviser's (or its affiliates' an
their respective agents' and employees') failure to perform its duties or
assume its obligations hereunder, or from its wrongful actions or omissions,
including, but not limited to claims asserted or threatened by any shareholder
of the Fund, governmental or regulatory agency, or any other person;
(ii) claims arising from any wrongful act by the Fund or any of the Fund's
trustees, officers, employees, or representatives, or by the Adviser, its
officers, employees or representatives, or from any actions by the Fund's
distributors or any representative of the Fund; (iii) any action or claim
against the Subadviser based on any alleged untrue statement or misstatement
of material fact in any registration statement, prospectus, shareholder report
or other information or materials relating to the Fund or shares issued by
the Fund or any amendment thereof or supplement thereto, or the failure or
alleged failure to state therein a material fact required to be stated in
order that the statements therein are not misleading, providing that such claim
is not based upon information provided to the Adviser by the Subadviser or
approved by the Subadviser in the manner provided in paragraph 12(b) of this
Agreement, or which facts or information the Subadviser failed to provide or
disclose. With respect to any claim for which the Subadviser shall be entitled
to indemnity hereunder, the Adviser shall assume the reasonable expenses
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and costs (including any reasonable attorneys' fees and costs) of the Suba
of investigating and/or defending any claim asserted or threatened by any
party, subject always to the Adviser first receiving a written undertaking
from the Subadviser to repay any amounts paid on its behalf in the event
and to the extent of any subsequent final determination by a court that
the Subadviser was not entitled to indemnification hereunder in respect of
such claim.
(b) The Subadviser hereby agrees to indemnify the Adviser, its affiliates
and the Fund from and against all liabilities, losses, expenses, reasonable
attorneys' fees and costs or damages (other than liabilities, losses, expenses,
attorneys fees and costs or damages arising from the Adviser's failure to
perform its responsibilities hereunder or claims arising from its acts or
failure to act in performing this Agreement) arising from Subadviser's or
or its agents' and employees' failure to perform its duties and assume its
obligations hereunder, or from any failure of Subadviser to meet the standard
of care set forth in Section 6 of this Agreement, including any action or claim
against the Adviser based on any alleged untrue statement or misstatement of a
material fact made or provided by or with the consent of Subadviser contained
in any registration statement, prospectus, shareholder report or other
information or materials relating to the Fund or shares issued by the Fund, or
the failure or alleged failure to state a material fact therein required to be
stated in order that the statements therein are not misleading, which fact
should have been made or provided by the Subadviser to the Adviser. With
respect to any claim for which the Adviser is entitled to indemnity
hereunder, the Subadviser shall assume the reasonable expenses and costs
(including any reasonable attorneys' fees and costs) of the Adviser of
investigating and/or defending any claim asserted or threatened by any
party, subject always to the Subadviser first receiving a written
undertaking from the Adviser to repay any amounts paid on its behalf in
the event and to the extent of any subsequent final determination by a court
that the Adviser was not entitled to indemnification hereunder in respect
of such claim.
(c) In the event that the Subadviser or Adviser is or becomes a party to
any action or proceedings in respect of which indemnification may be sought
hereunder, the party seeking indemnification (the "Indemnitee") shall
promptly notify the other party thereof. After becoming notified of the same,
the party from whom indemnification is sought (the "Indemnitor") shall be
entitled to participate in any such action or proceeding and shall assume
any payment for the full defense of the Indemnitee therein with counsel
reasonably satisfactory to the party seeking indemnification. The Indemnitor
shall not, in connection with any action or proceeding or separate but similar
or related actions or proceedings in the same jurisdiction arising out of the
same general allegation or circumstances, be liable for the fees or expenses of
more than one separate firm of attorneys at any time for Indemnities. After
properly assuming the defense thereof, the Indemnitor shall not be liable
hereunder to the Indemnitee for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof, other than
damages, if any, by way of judgment, settlement, or otherwise pursuant to this
provisions. The Indemnitor shall not be liable hereunder for any settlement of
any action or claim effected without its written consent, which consent shall
not be unreasonably withheld. The Indemnitee shall fully cooperate with the
Indemnitor in the defense of any claim and any litigation or other legal
proceedings resulting from the claim. The Indemnitee may participate in the
defense of the claim and any litigation or other legal proceedings resulting
from the claim. The Indemnitee may employ separate counsel to participate
in such defense, and the fees and expenses of such counsel shall not be at the
expense of the Indemnitee, but only if the employment thereof (a) has been
specifically authorized in writing by the Indemnitor, which authorization
shall not be unreasonably withheld and (b) relates to the defense of any
claim or any litigation or other legal proceedings resulting from the claim
to the extent the claim or any litigation or other legal proceedings resulting
from the claim seeks injunctive, specific performance or other nonmonetary
relief involving or affecting the business, operations or assets of the
Indemnitee (or an Affiliate of the Indemnitee). The provisions of this
Section 10 shall survive the termination of this Agreement.
11. INDEPENDENT CONTRACTOR. Subadviser shall for all purposes of this
Agreement be deemed to be an independent contractor and, except as otherwise
expressly provided herein, shall have no authority to act for, bind or
represent the Fund in any way or otherwise be deemed to be an agent of the
Fund. Likewise, the Fund, the Adviser and their respective affiliates, agents
and employees shall not be deemed agents of the Subadviser and shall have no
authority to bind Subadviser.
12. USE OF NAMES. (a) The Fund may, subject to sub-clause (b) below, use
the name, "Xxxxxxx Investment Partners, L.P.," ("Brandes") or the name of any
principal of Brandes, or any component, abbreviation or other name
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derived therefrom for promotional purposes only for so long as this Subad
Agreement (or any extension, renewal or amendment thereof) continues in
force, unless the Subadviser or such principal shall specifically consent
in writing to such continued use thereafter. Any permitted use by the Fund
during the term hereof of the name of the Subadviser or any of its principals,
or any derivative thereof, shall in no way prevent the Subadviser or any of
its shareholders or any of their successors, from using or permitting the use
of such name (whether singly or in any combination with any other words) for,
by or in connection with an entity or enterprise other than the Fund. At the
conclusion of this Subadvisory Agreement or in the event of any termination of
this Subadvisory Agreement for any reason, each of the authorized parties and
their respective employees, representatives, affiliates, and associates agree
that they shall immediately cease using each such name and any derivatives
of said names for any purpose whatsoever.
(b) The Adviser and its affiliates on one hand, and the Subadviser on the
other, shall not publish or distribute, and the Adviser shall cause the Fund
not to publish or distribute to Fund shareholders, prospective investors,
sales agents or members of the public, any disclosure document, offering
literature (including any form of advertisement or other solicitation
materials calculated to lead investors to subscribe for and purchase shares of
the Fund) or other documents referring by name to the Subadviser or its
affiliates on one hand and the Adviser or its affiliates on the other, unless
the other party shall have consented in writing to such references in the form
and context in which they appear; provided however, that where the Adviser or
the Fund timely seeks to obtain approval of the Subadviser of disclosure
required to be contained in any documents required to be filed by the Fund with
any governmental agency, and such approval is not forthcoming on or before the
date on which such documents are required by law to be filed, the Subadviser
shall be deemed to have consented to such disclosure.
13. CHANGE IN IDENTITY. The Subadviser shall notify the Adviser of any
change in the identity or control of its general or limited partners
promptly after such change occurs.
14. MISCELLANEOUS.
(a) This Subadvisory Agreement shall be governed by the laws of the
State of Massachusetts (without regard to principles of conflicts of law),
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder.
(b) The captions of this Subadvisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof
or otherwise affect their construction or effect.
(c) This Agreement may be executed in one or more counterparts, all of
which taken together shall be deemed to constitute one and the same instrument.
15. NOTICES. Any notice, instruction or other instrument required or
permitted to be given hereunder may be delivered in person to the offices of
the parties as set forth therein during normal business hours, or delivered or
sent by prepaid registered mail, express mail or by facsimile to the parties
at such offices or such other address as may be notified by either party from
time to time addressed to its President. Such notice, instruction or other
instrument shall be deemed to have been served, in the case of a registered
letter at the expiration of seventy-two (72) hours after posting; in the case
of express mail, within twenty-four (24) hours after dispatch; and in the case
of facsimile, immediately on dispatch; and if delivered outside normal business
hours it shall be deemed to have been received at the next time after delivery
or transmission when normal business hours commence. Evidence that the notice,
instruction or other instrument was properly addressed, stamped and put into
the post shall be conclusive evidence of posting.
16. ATTORNEY'S FEES. In the event of a material breach of this Agreement by
any party hereto, the prevailing party, as determined by the trier of fact,
shall be entitled to reasonable attorneys' fees and costs as determined by the
court in such action, in addition to any other damages awarded.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the date and year set
forth above.
Northstar Investment Management Corporation
By: ______________________________________
Xxxx X. Xxxxxx
Chairman and CEO
Xxxxxxx Investment Partners, L.P.
By: _______________________________________
Xxxxxxx X. Xxxxxxx
Managing Director
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