EXHIBIT 5(d)
REPUBLIC FUNDS
REPUBLIC EQUITY FUND
SUBADVISORY AGREEMENT
AGREEMENT, effective commencing on January 21, 1997, between Xxxxxxx
Partners, Inc. (the "Subadviser") and Republic National Bank of New York (the
"Manager").
WHEREAS, the Manager has been retained by Republic Funds, a Massachusetts
business trust (the "Trust") registered as an open-end diversified investment
management company under the Investment Company Act of 1940, as amended (the
"1940 Act"), to provide investment advisory services to Republic Equity Fund
(the "Fund") pursuant to an Investment Management Contract and Supplement
thereto dated April 7, 1995 (the "Management Agreement");
WHEREAS, the Trust's Board of Trustees, including a majority of the
trustees who are not "interested persons," as defined in the 1940 Act, and the
Fund's stockholders have approved the appointment of the Subadviser to perform
certain investment advisory services for the Fund pursuant to this Subadvisory
Agreement and the Subadviser is willing to perform such services for the Fund;
WHEREAS, the Subadviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Subadviser as
follows:
1. Appointment. The Manager 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. Investment Advisory Duties. Subject to the supervision of the Board of
Trustees of the Trust and the Manager, the Subadviser will, in coordination with
the Manager, (a) provide a program of continuous investment management for the
portion of the Fund allocated by the Manager to the Subadviser (the
"Subadviser's Portfolio") for management in accordance with the Fund's
investment objectives, policies and limitations as stated in the Fund's
Prospectus and Statement of Additional Information included as part of the
Trust's Registration Statement on behalf of the Fund filed with the Securities
and Exchange Commission, as they may be amended from time to time, copies of
which shall be provided to the Subadviser by the Manager; (b) make investment
decisions for the Subadviser's Portfolio; and (c) place orders to purchase and
sell securities for the Subadviser's Portfolio. In particular, the Subadviser
will be responsible for the market timing of purchases and sales and for all
yield enhancement strategies used in managing the Subadviser's Portfolio.
In performing its investment management services to the Fund hereunder,
the Subadviser will provide the Fund with ongoing investment guidance and policy
direction, including oral and written research, analysis, advice, statistical
and economic data and judgments regarding individual investments, general
economic conditions and trends and long-range investment policy, with respect,
in all cases, to the Subadviser's Portfolio. The Subadviser will determine the
securities, instruments, repurchase agreements, options and other investments
and techniques that the Subadviser's Portfolio will purchase, sell, enter into
or use, and will provide an ongoing evaluation of the Subadviser's Portfolio.
The Subadviser will determine what portion of the Subadviser's Portfolio shall
be invested in securities and other assets.
The Subadviser further agrees that, in performing its duties hereunder, it
will:
(a) 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, and with any
applicable procedures adopted by the Trustees;
(b) manage the Subadviser's Portfolio so that it will qualify, and
continue to qualify (except where extraordinary circumstances dictate
otherwise), as a regulated investment company under Subchapter M of the Code and
regulations issued thereunder, and conduct periodically such Subchapter M
compliance reviews as the Manager and Subadviser determine appropriate based on
reports prepared and issued by the Custodian;
(c) place orders pursuant to its investment determinations for the
Subadviser's Portfolio 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;
(d) furnish to the Trust whatever statistical information the Trust may
reasonably request with respect to the Subadviser's Portfolio's assets or
contemplated investments. In addition, the Subadviser will keep the Trust and
the Trustees informed of developments materially affecting the Subadviser's
Portfolio's and shall, on the Subadviser's own initiative, furnish to the Trust
from time to time whatever information the Subadviser believes appropriate for
this purpose;
(e) provide the Manager and the Board of Trustees of the Trust with a copy
of a written code of ethics complying with the requirements of Rule 17j-1 under
the 1940 Act, together with evidence of its adoption. Within fifteen days of the
end of the calendar quarter of each year that this Subadvisory Agreement is in
effect, the president or a vice-president of the Subadviser shall certify to the
Manager that the Subadviser has complied with the requirements of Rule 17j-1
during the previous year and that there has been no violation of the
Subadviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the written
request of the Manager, the Subadviser shall permit the Securities and Exchange
Commission, its employees or its agents to examine the reports required to be
made to the Subadviser by Rule 17j-l(c)(1) and all other records relevant to the
Subadviser's code of ethics;
(f) provide the Manager with a copy of its Form ADV as most recently filed
with the Securities and Exchange Commission ("SEC") and promptly will furnish a
copy of all amendments to the Manager at least annually;
(g) notify the Manager of any material change of control of the Subadviser
and any changes in the key personnel of the Subadviser, in each case prior to or
promptly after such change;
(h) make available to the Manager and the Trust, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Subadviser's Portfolio as may be required to assist the Manager and the Trust in
their compliance with applicable laws and regulations. The Subadviser will
furnish the Trustees with such periodic and special reports regarding the
Subadviser's Portfolio as they may reasonably request;
(i) immediately notify the Manager and the Trust in the event that the
Subadviser or any of its affiliates: (1) 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 (2) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the SEC or other regulatory authority. The Subadviser further agrees to notify
the Trust and the Manager immediately of any material fact known to the
Subadviser respecting or relating to the Subadviser that is not contained in the
Trust's Registration Statement with respect to the Fund, or any amendment or
supplement thereto, but that is required to be disclosed therein, and of any
statement contained therein that becomes untrue in any material respect.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this Section 3, the Subadviser shall pay the compensation and
expenses of all its directors, partners, officers and employees, if any, who
serve as officers and executive employees of the Trust (including the Fund's
share of payroll taxes), and the Subadviser shall make available, without
expense to the Fund, the service of its directors, partners, officers and
employees.
The Subadviser shall not be required to pay any expenses of the Fund other
than those specifically allocated to the Subadviser in this Section 3. In
particular, but without limiting the generality of the foregoing, the Subadviser
shall not be responsible, except to the extent of the reasonable compensation of
such of the Trust's employees as are officers or employees of the Subadviser
whose services may be involved, for the following expenses of the Fund:
organization and offering expenses of the Fund (including out-of-pocket
expenses); fees payable to the Manager and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Fund in connection with membership in investment company trade
organizations; cost of insurance relating to fidelity coverage for the Trust's
officers and employees; fees and expenses of any custodian, subcustodian,
transfer agent, registrar, or dividend disbursing agent of the Fund; payments
for maintaining the Fund's financial books and records and calculating the daily
net asset value of the Fund's shares; other payments for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates and other expenses
in connection with the issuance, offering, distribution or sale of securities
issued by the Fund; expenses relating to investor and public relations; expenses
of registering and qualifying shares of the Fund for sale; freight, insurance
and other charges in connection with the shipment of the portfolio securities of
the Fund; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities or other assets of the Fund, or of entering into other
transactions or engaging in any investment practices with respect to the Fund;
expenses of printing and distributing prospectuses, Statements of Additional
Information, reports, notices and dividends to stockholders; costs of
stationery; litigation expenses; costs of stockholders' and other meetings; the
compensation and all expenses (specifically including travel expenses relating
to the Fund's business) of officers, trustees and employees of the Trust who are
not interested persons of the Subadviser; and travel expenses (or an appropriate
portion thereof) of officers or trustees of the Trust who are officers,
directors or employees of the Subadviser to the extent that such expenses relate
to attendance at meetings of the Board of Trustees of the Trust or any
committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Subadviser under this Agreement, the Trust will pay the
Subadviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily on the basis of the Subadviser's Portfolio's average
daily net assets allocated to the Subadviser at an annual rate of 0.325% of net
assets up to $50 million, 0.25% of net assets over $50 million up to $100
million, 0.20% of net assets over $100 million up to $200 million, and 0.15% of
net assets over $200 million. The "average daily net assets" of the Subadviser's
Portfolio shall mean the average of the values placed on the Subadviser's
Portfolio's net assets as of 4:00 p.m. (New York time) on each day on which the
net asset value of the Fund is determined consistent with the provisions of Rule
22c-1 under the 1940 Act or, if the Fund lawfully determines the value of its
net assets as of some other time on each business day, as of such other time.
The value of net assets of the Fund shall always be determined pursuant to the
applicable provisions of the Trust's Declaration of Trust and Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
Section 4, the value of the net assets of the Fund as last determined shall be
deemed to be the value of its net assets as of the close of regular trading on
the New York Stock Exchange, or as of such other time as the value of the net
assets of the Fund's portfolio may lawfully be determined, on that day. If the
determination of the net asset value of the shares of the Fund has been so
suspended for a period including any quarter end when the Subadviser's
compensation is payable pursuant to this Section, then the Subadviser's
compensation payable at the end of such month shall be computed on the basis of
the value of the net assets of the Fund as last determined (whether during or
prior to such quarter). If the Fund determines the value of the net assets of
its portfolio more than once on any day, then the last such determination
thereof on that day shall be deemed to be the sole determination thereof on that
day for the purposes of this Section 4. In the event that this Agreement is
terminated pursuant to Section 10 hereof, the Subadviser shall be entitled to a
pro rata portion of the fee under this Section 4 through and including the date
upon which the Agreement is terminated and the Subadviser ceases to provide
investment advisory services to the Fund hereunder.
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 that Section, and those rules and legal provisions. The Subadviser
also agrees that records it maintains and preserves pursuant to Rules 31a-1 and
Rule 31a-2 under the 1940 Act and otherwise in connection with its services
hereunder are the property of the Fund and will be surrendered promptly to the
Fund upon its request. 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 judgment 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 the Fund's shares in connection with the matters to which this Subadvisory
Agreement relate, provided that nothing in this Subadvisory Agreement shall be
deemed to protect or purport to protect the Subadviser against any liability to
the Fund or to holders of the Fund's shares to which the Subadviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
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 this
Subadvisory Agreement. As used in this Section 6, the term "Subadviser" shall
include any officers, directors, partners, employees or other affiliates of the
Subadviser performing services for the Fund.
7. Indemnification.
(a) Subject in all cases to the provisions of Section 6 hereof, the
Subadviser hereby agrees to indemnify and hold harmless the Manager from any
controversies, claims, suits, losses, liabilities, judgments, awards or
settlements, and costs or expenses, including reasonable legal fees, caused by,
or in any way related to: the investment decisions rendered by the Subadviser
concerning the Subadviser's Portfolio; any failure of the Subadviser to fulfill
any of its other obligations under this Subadvisory Agreement; any material
misrepresentation, or omission to disclose material facts, by the Subadviser to
the Manager or any shareholder of the Fund; or any violation of applicable law
by the Subadviser. Subject to Section 6 hereof, the Subadviser also agrees to
indemnify and hold harmless the Manager with respect to any losses incurred as
the result of errors made by the Subadviser in transmitting orders to any broker
for execution.
(b) The Manager hereby agrees to indemnify and hold harmless the
Subadviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any related to, its failure to fulfill any of its
obligations under this Subadvisory Agreement.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.
8. Services Not Exclusive. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser from providing similar services to other
individuals, institutions or investment companies (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities, provided such other services and activities do
not, during the term of this Subadvisory Agreement, interfere in a material
manner with the Subadviser's ability to meet its obligations to the Trust and
the Fund hereunder. When the Subadviser recommends the purchase or sale of a
security for other investment companies and other clients, and at the same time
the Subadviser recommends the purchase or sale of the same security for the
Fund, the Subadviser may, but shall not be obligated to, aggregate the orders
for securities to be purchased or sold. It is understood that in light of its
fiduciary duty to the Fund, such transactions will be executed on a basis that
is fair and equitable to the Fund. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Subadviser nor any
of its directors, partners, officers or employees shall act as a principal or
agent or receive any commission.
9. Documentation. The Fund shall provide the Subadviser
with the following documents, as requested by the Subadviser:
(a) the Trust's registration statement relating to the
Fund, and any amendments thereto;
(b) the Declaration of Trust and By-laws (and any
amendments thereto) of the Trust;
(c) resolutions of the Board of Trustees of the Trust
authorizing the appointment of Xxxxxxx Partners, Inc.
to serve as Subadviser and approving this Subadvisory
Agreement;
(d) the Trust's Notification of Registration on Form N-8A;
(e) the Fund's current Prospectus and Statement of
Additional Information, and any supplements thereto;
and
(f) such information as the Subadviser reasonably may request in order
for the Subadviser to comply with Section 2 hereof.
10. Duration and Termination. This Subadvisory Agreement shall continue
for an initial term of two years from the date set forth above, unless sooner
terminated as provided herein. Notwithstanding the foregoing, this Subadvisory
Agreement may be terminated: (a) at any time without penalty upon thirty (30)
days' written notice to the Subadviser by (i) the Fund upon the vote of a
majority of the Trustees or upon the vote of a majority of the Fund's
outstanding voting securities, or (ii) the Manager, or (b) by the Subadviser
upon thirty (30) days' written notice to the Fund, provided that the Subadviser
shall continue to be responsible for managing the assets of the Fund for sixty
(60) business days after the end of the notice period unless the Fund shall
agree in writing to shorten the period. Anything to the contrary herein
notwithstanding, any termination carried out pursuant to this Section 10(b)
shall be without penalty and, further, the compensation schedule set forth in
Section 4 hereof shall apply to the service of the Subadviser beyond the end of
the notice period provided in this Section 10(b). 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 Management Agreement.
11. Amendments. No provision of this Subadvisory 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, and no 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.
12. Notices. Any notice or other communication required or
permitted to be given hereunder shall be given in writing and
mailed, faxed or delivered to the other party at its address as
follows:
If to the Manager:
Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
If to the Subadviser:
Xxxxxxx Partners, Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. Miscellaneous.
(a) This Subadvisory Agreement shall be governed by the laws of the State
of New York, 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. Exclusive original jurisdiction to any claim, action or dispute
between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.
(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) If any provision of this Subadvisory Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Subadvisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Subadvisory Agreement shall be deemed to be severable. Where
the effect of a requirement of the federal securities laws reflected in any
provision of this Subadvisory Agreement is made less restrictive by a rule,
regulation or order of the SEC, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. This Agreement may be signed in counterpart.
(d) Nothing herein shall be construed as constituting the Subadviser, or
any of its directors, officers or employees, an agent of the Manager or the
Fund, nor the Manager, or any of its directors, officers or employees, an agent
of the Subadviser.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of _______________, 199_.
XXXXXXX PARTNERS, INC.
By
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Name:
Title:
REPUBLIC NATIONAL BANK OF
NEW YORK
By
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Name:
Title:
