EXHIBIT (d)(iii)
----------------
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into as of this ______ day of
___________, 2003, by and between Tactical Allocation Services, LLC a Colorado
limited liability company (the "Adviser"), Agile Funds, Inc., a Maryland
corporation ("Agile") and Xxxxxx Xxxx, Registered Investment Advisor dba Denver
Money Manager, a Colorado Sole Proprietorship ("the Sub-Adviser") regarding the
Agile Multi-Strategy Fund, a series of Agile (the "Fund).
WHEREAS, the Company is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Adviser has been appointed investment adviser to the Fund
pursuant to an Investment Advisory Agreement dated September 30, 2003, which has
been approved by the Company's Board of Directors (the "Advisory Agreement");
and
WHEREAS, the Adviser and Agile desire to retain the Sub-Adviser to assist
the Adviser in providing a continuous investment program for one of the separate
accounts of the Fund's portfolio (the "Separate Account") and the Sub-Adviser is
willing to do so; and
WHEREAS, the Adviser may, in its sole discretion, allocate assets of the
Fund among the Sub-Adviser and the various other sub-advisers retained to assist
in the management of the Fund; and
WHEREAS, the Board of Directors of the Company has approved this Agreement,
and the Sub-Adviser is willing to furnish such services upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser and Agile hereby appoint the Sub-Adviser to
serve as a sub-adviser to the Adviser with respect to the Separate Account.
Intending to be legally bound, the Sub-Adviser accepts such appointment and
agrees to render the services set forth herein for the compensation herein
provided.
2. ADVISORY SERVICES. Subject to the supervision of the Adviser and Agile's
Board of Directors, the Sub-Adviser will assist the Adviser in providing a
continuous investment program for the Separate Account, including investment
research and management with respect to the securities and investments and cash
equivalents comprising the Separate Account. The Sub-Adviser will provide
services under this Agreement in accordance with the Fund's investment
objective, policies and restrictions as stated in the Fund's Prospectus and in
the Company's Articles of Incorporation, copies of which have been delivered to
the Sub-Adviser. Without limiting the generality of the foregoing, the
Sub-Adviser agrees that it will:
(a) Assist in determining from time to time what securities and other
investments will be purchased, retained or sold for the Separate Account;
(b) Manage in consultation with the Adviser the Separate Account's
temporary investments in securities, cash and cash equivalents;
(c) Place orders pursuant to its investment determinations for the
Separate Account either directly with the issuer or with any broker or dealer;
(d) Consult with the Adviser on a continuous basis as to the Fund's
total assets which shall be invested in the Separate Account;
(e) Attend business and investment-related meetings with Agile's Board
of Directors and the Adviser if requested to do so by Agile or the Adviser;
(f) Maintain books and records with respect to the securities
transactions for the Separate Account; and
(g) Furnish to the Adviser and Agile's Board of Directors such periodic
and special reports as they may request with respect to the Separate Account.
3. COVENANTS BY THE SUB-ADVISER. The Sub-Adviser agrees with respect to the
services provided to the Fund that it will:
(a) Maintain its status as a Registered Investment Advisor with the
Securities and Exchange Commission;
(b) Conform with all applicable provisions of the 1940 Act and all
other applicable rules and regulations promulgated by the Securities and
Exchange Commission;
(c) Telecopy trade information to the Fund's designated Fund Accountant
no later than the first business day following the day of the trade, cause
broker confirmations to be sent directly to the Fund's designated Fund
Accountant and adopt such other trade reporting, settlement and clearance
procedures with respect to the Fund as shall be mutually agreed by the parties
hereto; and
(d) Treat confidentially all records and other information relative to
the Fund and its prior, present or potential shareholders;
(e) Refrain from any use of any Fund information for any purpose other
than performance of its responsibilities and duties hereunder (except after
prior notification to and approval in writing by Agile, which approval shall not
be unreasonably withheld); and
(f) Maintain its own Code of Ethics, a copy of which shall be provided
to the Adviser (including any amendments thereto), and report to the Adviser's
Compliance Officer any violation of such Code as it relates in any way to the
Fund.
4. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are non-exclusive, and nothing in this Agreement shall (i) prevent the
Sub-Adviser or any affiliated person (as defined in the 0000 Xxx) of the
Sub-Adviser or any employee, agent, manager or affiliated person of such person
2
from acting as investment adviser or manager for any other person, including
other registered investment companies, pooled investment vehicles or accounts of
any type with investment objectives and policies the same as or similar to those
of the Fund or (ii) limit or restrict the Sub-Adviser or any such employee,
agent, manager or affiliated person from buying, selling or trading any
securities or other investments (including any securities or other investments
which the Fund is eligible to buy) for its or their own accounts or for the
accounts of others for whom it or they may be acting; provided, however, that
the Sub-Adviser agrees that it will not undertake any activities which, in its
reasonable judgment, will adversely affect the performance of its material
obligations under this Agreement.
5. SEPARATE ACCOUNT TRANSACTIONS. Investment decisions for the Separate
Account shall be made by the Sub-Adviser independently from those for any other
investment companies and accounts advised or managed by the Sub-Adviser. The
Separate Account and such investment companies and accounts may, however, invest
in the same securities. When a purchase or sale of the same security is made at
substantially the same time on behalf of the Separate Account and/or another
investment company or account, the transaction will be averaged as to price, and
available investments allocated as to amount, in a manner which the Sub-Adviser
believes to be equitable to the Fund and such other investment company or
account. In some instances, this investment procedure may adversely affect the
price paid or received by the Fund or the size of the position obtained or sold
by the Fund. To the extent permitted by law, the Sub-Adviser may aggregate the
securities to be sold or purchased for the Separate Account with those to be
sold or purchased for other investment companies or accounts in order to obtain
best execution.
The Sub-Adviser shall place orders for the purchase and sale of
portfolio securities for the Separate Account and will solicit broker-dealers to
execute transactions in accordance with the Fund's policies and restrictions
regarding brokerage allocations. If applicable, the Sub-Adviser shall place
orders pursuant to its investment determinations for the Separate Account either
directly with the issuer or with any broker or dealer. If it executes portfolio
transactions and selects brokers or dealers, the Sub-Adviser shall use its
reasonable best efforts to seek the most favorable execution of orders, after
taking into account all factors the Sub-Adviser deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. Consistent with this obligation, the Sub-Adviser may, to
the extent permitted by law, purchase and sell portfolio securities to and from
brokers and dealers who provide brokerage and/or research services (within the
meaning of Section 28(e) of the Securities Exchange Act of 1934) to or for the
benefit of the Separate Account and/or other accounts over which the Sub-Adviser
or any of its affiliates exercises investment discretion. The Sub-Adviser is
authorized to pay to a broker or dealer who provides such brokerage and/or
research services a commission for executing a portfolio transaction for the
Separate Account which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if the Sub-Adviser
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and/or research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
Sub-Adviser's overall responsibilities to the Fund. In no instance will
portfolio securities be purchased from or sold to the Adviser or the Sub-Adviser
or any affiliated person of either thereof, except as permitted under the 1940
Act and other applicable rules and regulations of the Securities and Exchange
Commission.
3
6. COVENANTS OF THE ADVISER. The Adviser agrees with respect to the
services provided hereunder that the Adviser will conform with applicable
provisions of the 1940 Act and all other applicable rules and regulations of the
Securities and Exchange Commission.
7. CERTAIN REPRESENTATIONS AND WARRANTIES. Each of the parties hereto
represents and warrants to the other that, as of the date hereof, this Agreement
has been duly and validly authorized by all necessary action (corporate, limited
liability company or otherwise) on the part of such party, has been duly
executed and delivered by such party and constitutes the valid and legally
binding obligation of such party, enforceable against such party in accordance
with its terms and conditions.
8. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund are the property of Agile and further agrees to surrender
promptly to Agile any of such records upon Agile's request. The 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.
9. 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, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased for the Fund. Nothing herein, however, shall be deemed to require the
Sub-Adviser to pay any expenses of the Fund or the Adviser.
10. COMPENSATION. In consideration of the services rendered pursuant to
this Agreement, the Adviser will pay to the Sub-Adviser, as compensation for the
services provided by the Sub-Adviser under this Agreement, a sub-advisory fee at
an annual rate of 1.00% of the average net assets of the Separate Account. This
fee shall is to be paid monthly in arrears. The Adviser shall pay the
Sub-Adviser no later than 15 business days after the end of each month. In case
of termination or expiration of this Agreement during any calendar month, the
fee with respect to such month shall be reduced proportionately based upon the
number of business days during which it is in effect as compared to the total
number of business days in the month. The average net assets of the Fund shall
be calculated in accordance with Agile's Articles of Incorporation.
11. STANDARD OF CARE: LIMITATION OF LIABILITY; LIMITED INDEMNITY. The
Sub-Adviser shall exercise due care and diligence and use the same skill and
care in providing its services hereunder as it uses in providing services to
other investment companies, accounts and customers, but shall not be liable for
any action taken or omitted by the Sub-Adviser in the absence of bad faith,
willful misconduct, gross negligence or reckless disregard of its duties. The
Adviser further agrees to indemnify, defend and hold the Sub-Adviser, and its
managers, officers, directors, equity holders, employees and agents ("Related
Persons"), harmless from and against all losses, claims, damages, liabilities,
costs and expenses arising by reason of being or having been Sub-Adviser to the
Adviser, or in connection with the past or present performance of services to
the Adviser in accordance with this Agreement, except to the extent that the
loss, claim, damage, liability, cost or expense was caused by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties on
the part of the Sub-Adviser in the performance of its duties and obligations
4
under this Agreement. These losses, claims, damages, liabilities, costs and
expenses include, but are not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and counsel fees and
expenses, incurred in connection with the defense or disposition of any action,
suit, investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which the indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter.
Federal and various state securities laws may afford the Adviser, the Company or
the Fund certain rights and remedies under certain circumstances, even in the
absence of bad faith, willful misconduct, gross negligence or reckless disregard
by the Sub-Adviser or its Related Persons, and nothing contained herein shall in
any way constitute a waiver or limitation of any such rights and remedies that
the Adviser and/or the Fund may have under any such federal or state securities
laws.
12. REFERENCE TO THE SUB-ADVISER. Neither the Adviser nor any affiliate or
agent of it shall make reference to this Agreement, or use the name of the
Sub-Adviser or any of its affiliates (except references in regulatory filings
and communications with shareholders concerning the identity of and services
provided by the Sub-Adviser to the Fund, which references shall not differ in
substance from those typically included in a registration statement, proxy
statement or annual report, provided that the Adviser shall give the Sub-Adviser
a reasonable opportunity to review such references in advance and to comment
thereon) in any advertising or promotional materials without the prior approval
of the Sub-Adviser, which approval shall not be unreasonably withheld or
delayed. The Adviser hereby agrees to make all reasonable efforts to cause the
Fund and any affiliate thereof to satisfy the foregoing obligation.
13. DURATION AND TERMINATION. Unless sooner terminated, this Agreement
shall be for an initial period of one year, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by the Company's Board of Directors and
by a majority of the Company's directors who are not "interested persons" (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
is terminable at any time without penalty, on sixty (60) days' notice, by the
Company's Board of Directors, by the Adviser or by the Sub-Adviser or by vote of
a majority of the outstanding voting securities of the Fund. This Agreement will
terminate automatically in the event of its assignment (as defined in the 1940
Act). Termination or expiration of this Agreement, however caused, shall be
without prejudice to any compensation accrued to the date of termination or
expiration and Sections 3(d), 3(e), 8, 9, 10, 11 and 12 shall survive any
termination or expiration.
14. AMENDMENT OF THIS AGREEMENT. A provision of this Agreement may be
changed, waived, discharged or terminated 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 Agreement shall be effective
until approved by the Company's Board of Directors, including a majority of the
directors who are not interested persons of the Adviser or the Sub-Adviser, cast
in person at a meeting called for the purpose of voting on such approval.
5
15. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To the Sub-Adviser at:
Denver Money Manager
00000 Xxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
To the Adviser at:
Tactical Allocation Services, LLC
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
To the Fund at:
Agile Multi-Strategy Fund
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxx Xxxxx LLP
Attention: Xxxxx X. Xxxx, Esq.
0000 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
16. MISCELLANEOUS. Neither the holders of shares of the Fund nor the
officers or directors of the Company in their capacities as such shall be
personally liable hereunder. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. GOVERNING LAW. This Agreement constitutes the entire agreement of the
parties, shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by Colorado law in
a manner not in conflict with the provisions of the 1940 Act.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6
Tactical Allocation Services, LLC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Agile Funds, Inc.
By: /s/ Xxxx Xxxxxxx
------------------------------------------------
Name: Xxxx Xxxxxxx
Title: President/CEO
Xxxxxx Xxxx, Registered Investment Advisor dba Denver Money
Manager
By:
------------------------------------------------
Name:
------------------------------------------------
Title:
------------------------------------------------
7
