Exhibit (d)(7)
SUBADVISORY AGREEMENT
AGREEMENT made as of the 2nd day of November 2, 2006, between XXXXX
CAPITAL MANAGEMENT, INC., 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx Xxxxxxx,
Xxxxxxx 00000 (hereinafter called the "Manager"), and DELRAY FINANCIAL
CORPORATION, 0000 XXX Xxxx, Xxxxx 000, Xxxx Xxxxx Xxxxxxx, XX 00000 (hereinafter
called the "Sub-adviser").
WHEREAS, The Xxxxx Fund (the "Trust") is a Massachusetts business trust
organized with one or more series of shares, and is registered as an investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Manager has entered into Investment Advisory Agreement(s)
(the "Advisory Agreement") with the Trust, pursuant to which the Manager acts as
investment adviser to the portfolio assets of certain listed on Schedule A
hereto, as amended from time to time (each a "Fund" and, collectively, the
"Funds"); and
WHEREAS, the Manager desires to utilize the services of the Sub-adviser
as investment sub-adviser with respect to each Fund; and
WHEREAS, the Sub-adviser is willing to perform such services on the
terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
I. Duties of the Sub-adviser. The Sub-adviser will serve the Manager as
investment sub-adviser with respect to each Fund.
A. As investment sub-adviser to the Fund(s), the Sub-adviser is hereby
authorized and directed and hereby agrees, in accordance with the Sub-adviser's
best judgment and subject to the stated investment objectives, policies and
restrictions of the Fund(s) as set forth in the current prospectuses and
statements of additional information of the Trust (including amendments) and in
accordance with the Trust's Declaration of Trust, as amended, and By-laws
governing the offering of its shares (collectively, the "Trust Documents"), the
1940 Act and the provisions of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), relating to regulated investment companies, and
subject to such resolutions as from time to time may be adopted by the Trust's
Board of Trustees, to render continuous investment advice to the Manager as to
the investment of the Fund's assets, provide supervision of the Funds' assets,
and furnish a continuous investment program for the Funds, as may be most
appropriate to the achievement of the investment objectives of the Fund(s) as
stated in the aforesaid prospectuses, and to provide research and analysis
relative to the investment program and investments of the Fund(s) and to monitor
on a continuing basis the performance of the portfolio securities of the
Fund(s). The Sub-adviser shall have no discretion regarding nor responsibility
for the implementation or execution of transactions which it recommends to the
Manager for any Fund, such discretion and responsibility being solely with the
Manager in the exercise of its independent judgement regarding the
appropriateness of the Sub-adviser's investment recommendations for the Fund in
light of its investment objectives, policies and restrictions. The Manager will
make available to the Sub-adviser certain research services.
B. The Sub-adviser shall (i) comply with all reasonable requests of the
Trust, or the independent auditors of the Trust, for information, including
information required in connection with the Trust's annual audit and filings
with the Securities and Exchange Commission (the "SEC") and state securities
commissions, and (ii) provide such other services as the Sub-adviser shall from
time to time determine to be necessary or useful to the administration of the
Funds, including, but not limited to, cooperation with the Manager in connection
with any examination of the Trust by the SEC or any other regulatory agency.
C. The Sub-adviser shall furnish to the Trust's Board of Trustees periodic
reports on the performance of its obligations under this Agreement and shall
supply such additional reports and information as the Trust's officers or Board
of Trustees shall reasonably request.
D. The investment advisory services provided by the Sub-adviser under this
Agreement are not to be deemed exclusive and the Sub-adviser shall be free to
render similar services to others, as long as such services do not impair the
services rendered to the Manager or the Trust.
II. Delivery of Documents to the Manager. The Sub-adviser has furnished the
Manager with copies of each of the following documents:
A. The Sub-adviser's current Form ADV and any amendments thereto; and
B. The Code of Ethics of the Sub-adviser as currently in effect.
The Sub-adviser will furnish the Manager from time to time with copies,
properly certified or otherwise authenticated, of all material amendments of or
supplements to the foregoing, if any. Additionally, the Sub-adviser will provide
to the Manager such other documents relating to its services under this
Agreement as the Manager may reasonably request on a periodic basis. Such
amendments or supplements as to items A and B above will be provided within 30
days of the time such materials became available to the Sub-adviser.
III. Expenses.
The Sub-adviser shall pay all of its expenses arising from the performance
of its obligations under Section I.
IV. Compensation.
The Manager shall pay to the Sub-adviser for its services hereunder,
and the Sub-adviser agrees to accept as full compensation therefor, a fee with
respect to each Fund as set forth on Schedule B. If the Sub-adviser shall serve
hereunder for less than the whole of any payment period, the fee hereunder shall
be prorated accordingly.
V. Independent Contractor.
In the performance of its duties hereunder, the Sub-adviser is and shall be
an independent contractor and, except as expressly provided herein or otherwise
authorized in writing, shall have no authority to act for or represent the
Trust, the Funds, any other series of the Trust or the Manager in any way or
otherwise be deemed to be an agent of the Trust, the Fund(s), any other series
of the Trust or the Manager.
VI. Term of Agreement.
This Agreement shall continue in full force and effect for one year from
the date of execution, and from year to year thereafter if such continuance is
approved in the manner required by the 1940 Act if the Sub-adviser shall not
have notified the Manager in writing at least 60 days prior to such date or
prior to such date of any year thereafter that it does not desire such
continuance. This Agreement may be terminated at any time, without payment of
penalty by a Fund, by vote of the Trust's Board of Trustees or a majority of the
outstanding voting securities of the applicable Fund (as defined by the 1940
Act), or by the Manager or by the Sub-adviser upon 60 days' written notice. This
Agreement will automatically terminate in the event of its assignment (as
defined by the 0000 Xxx) or upon the termination of the Advisory Agreement.
VII. Amendments.
This Agreement may be amended by consent of the parties hereto provided
that the consent of the applicable Fund is obtained in accordance with the
requirements of the 1940 Act.
VIII. Confidential Treatment.
It is understood that any information or recommendation supplied by the
Sub-adviser in connection with the performance of its obligations hereunder is
to be regarded as confidential and for use only by the Manager, the Trust or
such persons as the Manager may designate in connection with the Fund(s). It is
also understood that any information supplied to the Sub-adviser in connection
with the performance of its obligations hereunder, particularly, but not limited
to, any list of securities which, on a temporary basis, may or may not be bought
or sold for the Fund(s), and any nonpublic personal information of Fund
shareholders, as such information is defined under Regulation S-P, or any list
derived from such information, is to be regarded as confidential and for use
only by the Sub-adviser in connection with its obligation to provide investment
advice and other services to the Fund(s), and may not be disclosed to any third
parties.
IX. Representations and Warranties. The Sub-adviser hereby represents and
warrants as follows:
A. The Sub-adviser is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
such registration is current, complete and in full compliance with all material
applicable provisions of the Advisers Act and the rules and regulations
thereunder;
B. The Sub-adviser has all requisite authority to enter into, execute,
deliver and perform the Sub-adviser's obligations under this Agreement;
C. The Sub-adviser's performance of its obligations under this Agreement
does not conflict with any law, regulation or order to which the Sub-adviser is
subject; and
D. The Sub-adviser has reviewed the portion of (i) the registration
statement filed with the SEC, as amended from time to time, for the Fund(s)
("Registration Statement"), and (ii) each Fund's prospectuses and statements of
additional information (including amendments) thereto, in each case in the form
received from the Manager with respect to the disclosure about the Sub-adviser
and the Fund(s) of which the Sub-adviser has knowledge ("Sub-adviser and Fund
Information") and except as advised in writing to the Manager such Registration
Statement, prospectuses and statements of additional information (including
amendments) contain, as of their respective dates, no untrue statement of any
material fact of which the Sub-adviser has knowledge and do not omit any
statement of a material fact of which the Sub-adviser has knowledge that was
required to be stated therein or necessary to make the statements contained
therein not misleading.
X. Covenants. The Sub-adviser hereby covenants and agrees that, so long as this
Agreement shall remain in effect:
A. The Sub-adviser shall maintain the Sub-adviser's registration as an
investment adviser under the Advisers Act, and such registration shall at all
times remain current, complete and in full compliance with all material
applicable provisions of the Advisers Act and the rules and regulations
thereunder;
B. The Sub-adviser's performance of its obligations under this Agreement
shall not conflict with any law, regulation or order to which the Sub-adviser is
then subject;
C. The Sub-adviser shall at all times comply with the Advisers Act and the
1940 Act, and all rules and regulations thereunder, and all other applicable
laws and regulations, and the Registration Statement, prospectuses and
statements of additional information (including amendments) and with any
applicable procedures adopted by the Trust's Board of Trustees, provided that
such procedures are identified in writing to the Sub-adviser;
D. The Sub-adviser shall promptly notify the Manager and the Fund(s) upon
the occurrence of any event that might disqualify or prevent the Sub-adviser
from performing its duties under this Agreement. The Sub-adviser shall promptly
notify the Manager and the Funds if there are any changes to its organizational
structure or the Sub-adviser has become the subject of any adverse regulatory
action imposed by any regulatory body or self-regulatory organization. The
Sub-adviser further agrees to notify the Manager of any changes relating to it
or the provision of services by it that would cause the Registration Statement,
prospectuses or statements of additional information (including amendments) for
the Funds to contain any untrue statement of a material fact or to omit to state
a material fact that is required to be stated therein or is necessary to make
the statements contained therein not misleading, in each case relating to
Sub-adviser and Fund Information; and
E. The Sub-adviser will render advice to the Manager regarding the
investment of each Fund's assets that is consistent with maintaining the Fund's
status as a regulated investment company under Subchapter M of the Internal
Revenue Code.
F. The Sub-adviser shall provide to the Trust's Board of Trustees a copy of
the Sub-adviser's Code of Ethics adopted pursuant to Rule 17j-1 under the 1940
Act and any amendments thereto, and all certifications required under that rule.
XI. Use of Names.
A. The Sub-adviser acknowledges and agrees that the names "The Xxxxx Fund"
and "Xxxxx Capital Management, Inc.," and abbreviations or logos associated with
those names, are the valuable property of the Manager and its affiliates; that
the Fund(s), the Manager and their affiliates have the right to use such names,
abbreviations and logos; and that the Sub-adviser shall use the names "The Xxxxx
Fund" and "Xxxxx Capital Management, Inc.," and associated abbreviations and
logos, only in connection with the Sub-adviser's performance of its duties
hereunder. Further, in any communication with the public and in any marketing
communications of any sort, Sub-adviser agrees to obtain prior written approval
from Manager before using or referring to "The Xxxxx Fund" and "Xxxxx Capital
Management, Inc.," or the Fund(s) or any abbreviations or logos associated with
those names.
B. The Manager acknowledges that "Delray" and "Delray Financial" and
abbreviations or logos associated with those names are valuable property of
Delray Financial Corporation and are distinctive in connection with investment
advisory and related services provided by the Sub-adviser, the "Delray" name is
a property right of the Sub-adviser, and the "Delray" and "Delray Financial"
names are understood to be used by each Fund upon the conditions hereinafter set
forth; provided that each Fund may use such names only so long as the
Sub-adviser shall be retained as the investment sub-adviser of the Fund pursuant
to the terms of this Agreement.
C. The Sub-adviser acknowledges that each Fund and its agents may use the
"Delray" and "Delray Financial" names in connection with accurately describing
the activities of the Fund, including use with marketing and other promotional
and informational material relating to the Fund with the prior written approval
always of the Sub-adviser. In the event that the Sub-adviser shall cease to be
the investment sub-adviser of a Fund, then the Fund at its own or the Manager's
expense, upon the Sub-adviser's written request: (i) shall cease to use the
Sub-adviser's name for any commercial purpose; and (ii) shall use its best
efforts to cause the Fund's officers and trustees to take any and all actions
that may be necessary or desirable to effect the foregoing and to reconvey to
the Sub-adviser all rights which a Fund may have to such name. The Manager
agrees to take any and all reasonable actions as may be necessary or desirable
to effect the foregoing and the Sub-adviser agrees to allow the Funds and their
agents a reasonable time to effectuate the foregoing.
D. The Sub-adviser hereby agrees and consents to the use of the
Sub-adviser's name upon the foregoing terms and conditions.
XII. Reports by the Sub-adviser and Records of the Funds.
The Sub-adviser shall furnish the Manager information and reports necessary
to the operation of the Fund(s), including information required to be disclosed
in the Trust's Registration Statement, in such form as may be mutually agreed.
The Sub-adviser shall immediately notify and forward to both the Manager and
legal counsel for the Trust any legal process served upon it on behalf of the
Manager or the Trust.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-adviser agrees that all records it maintains for the Trust are the property
of the Trust and further agrees to surrender promptly to the Trust or the
Manager any such records upon the Trust's or the Manager's request. The
Sub-adviser further agrees to maintain for the Trust the records the Trust is
required to maintain under Rule 31a-1(b) insofar as such records relate to the
investment affairs of each Fund. The Sub-adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records it maintains
for the Trust.
XIII. Indemnification.
The Sub-adviser agrees to indemnify and hold harmless the Manager, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act
("affiliated person") of the Manager and each person, if any, who, within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "1933
Act"), controls ("controlling person") the Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) to which the Manager, the Trust or such affiliated person or
controlling person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out
of Sub-adviser's responsibilities as sub-adviser of the Funds (1) to the extent
of and as a result of the willful misconduct, bad faith, or gross negligence of
the Sub-adviser, any of the Sub-adviser's employees or representatives or any
affiliate of or any person acting on behalf of the Sub-adviser, or (2) as a
result of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, prospectuses or statements of
additional information covering the Fund(s) or the Trust or any amendment
thereof or any supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading, if such a statement or omission was made in
reliance upon written information furnished by the Sub-adviser to the Manager,
the Trust or any affiliated person of the Manager or the Trust expressly for use
in the Trust's Registration Statement, or upon verbal information confirmed by
the Sub-adviser in writing expressly for use in the Trust's Registration
Statement; provided, however, that in no case is the Sub-adviser's indemnity in
favor of the Manager or any affiliated person or controlling person of the
Manager deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misconduct, bad faith or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
The Manager agrees to indemnify and hold harmless the Sub-adviser, any
affiliated person of the Sub-adviser and each controlling person of the
Sub-adviser, against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which the
Sub-adviser or such affiliated person or controlling person may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Manager's responsibilities as
investment manager of the Fund(s) (1) to the extent of and as a result of the
willful misconduct, bad faith, or gross negligence of the Manager, any of the
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Manager, or (2) as a result of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
prospectuses or statements of additional information covering the Fund(s) or the
Trust or any amendment thereof or any supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading, if such a statement
or omission was made by the Trust other than in reliance upon written
information furnished by the Sub-adviser, or any affiliated person of the
Sub-adviser, expressly for use in the Trust's Registration Statement or other
than upon verbal information confirmed by the Sub-adviser in writing expressly
for use in the Trust's Registration Statement; provided, however, that in no
case is the Manager's indemnity in favor of the Sub-adviser or any affiliated
person or controlling person of the Sub-adviser deemed to protect such person
against any liability to which any such person would otherwise be subject by
reason of willful misconduct, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
XIV. Notices.
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered or sent by pre-paid first
class letter post to the following addresses or to such other address as the
relevant addressee shall hereafter specify for such purpose to the others by
notice in writing and shall be deemed to have been given at the time of
delivery.
If to the Manager: XXXXX CAPITAL MANAGEMENT, INC.
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
If to the Trust: THE XXXXX FUND
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
If to the Sub-adviser: DELRAY FINANCIAL CORPORATION
0000 XXX Xxxx
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
XV. Limitation of Liability of the Trust, its Trustees, and Shareholders.
It is understood and expressly stipulated that none of the trustees,
officers, agents, or shareholders of any series of the Trust shall be personally
liable hereunder. It is understood and acknowledged that all persons dealing
with any series of the Trust must look solely to the property of such series for
the enforcement of any claims against that series as neither the trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of any series of the Trust. No series of the Trust shall
be liable for the obligations or liabilities of any other series of the Trust.
XVI. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of The Commonwealth of Massachusetts. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or to impose
any duty upon either of the parties, to do anything in violation of any
applicable laws or regulations.
XVII. Severability.
Should any part of this Agreement be held invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors.
XVIII. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and all such counterparts shall constitute a single
instrument.
IN WITNESS WHEREOF, XXXXX CAPITAL MANAGEMENT, INC. AND DELRAY FINANCIAL
CORPORATION have each caused this instrument to be signed in duplicate on its
behalf by the officer designated below thereunto duly authorized.
XXXXX CAPITAL MANAGEMENT, INC.
By:________________________
Title: President
DELRAY FINANCIAL CORPORATION
By:________________________
Title: President
SCHEDULE A
TO SUBADVISORY AGREEMENT BETWEEN
XXXXX CAPITAL MANAGEMENT, INC. AND DELRAY FINANCIAL CORPORATION
DATED AS OF NOVEMBER 2, 2006
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Fund(s):
Xxxxx Treasury Only Money Market Fund
SCHEDULE B
TO SUBADVISORY AGREEMENT BETWEEN
XXXXX CAPITAL MANAGEMENT, INC. AND DELRAY FINANCIAL CORPORATION
DATED AS OF NOVEMBER 2, 2006
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Fee schedule:
Xxxxx Treasury Only Money Market Fund: The Adviser shall pay the Sub-adviser as
compensation for the Sub-adviser's services to be rendered hereunder a quarterly
fee in arrears at the rate of 10% of all fees payable during the same quarter by
the Fund to the Adviser for investment advisory services provided pursuant to
the Advisory Agreement, net of any fee waivers or expense reimbursements made by
the Adviser with respect to the Fund relating to such quarter.
