FORM OF SUBADVISORY AGREEMENT BETWEEN LIBERTY STREET ADVISORS, INC. AND HORIZON ASSET MANAGEMENT, INC.
FORM
OF SUBADVISORY AGREEMENT
BETWEEN
LIBERTY
STREET ADVISORS, INC.
AND
HORIZON ASSET MANAGEMENT, INC.
AGREEMENT made as of the
_____________, 2009, by and between Liberty Street Advisors, Inc., a New York
corporation with its principal office and place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Adviser”) and Horizon Asset
Management, Inc., a New York corporation with its principal office and place of
business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ (the “Subadviser”).
WHEREAS, Adviser has entered
into an Investment Advisory Agreement dated the ______________, 2009 (“Advisory
Agreement”) with Investment Managers Series Trust, a Delaware statutory trust,
with its principal office and place of business at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (the “Trust”);
WHEREAS, the Trust is
registered under the Investment Company Act of 1940, as amended (the “1940
Act”), as an open-end, management investment company and may issue its shares of
beneficial interest, no par value, in separate series;
WHEREAS, pursuant to the
Advisory Agreement, and subject to the direction and control of the Board of
Trustees of the Trust (the “Board”), the Adviser acts as investment adviser for
the series of the Trust listed on Appendix A hereto (the “Fund”);
WHEREAS, the Advisory
Agreement permits the Adviser, subject to the supervision of the Board, to
delegate certain of its duties under the Advisory Agreement to other registered
investment advisers subject to the requirements of the 1940 Act;
WHEREAS, it is intended that
the Trust be a third-party beneficiary under this Agreement; and
WHEREAS, Adviser desires to
retain the Subadviser to furnish investment advisory services for the Fund and
Subadviser is willing to provide those services on the terms and conditions set
forth in this Agreement;
NOW THEREFORE, for and in
consideration of the mutual covenants and agreements contained herein, the
Adviser and the Subadviser hereby agree as follows:
SECTION
1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The
Adviser hereby appoints and employs Subadviser, subject to the direction and
control of the Board, to manage the investment and reinvestment of the assets in
the Fund and, without limiting the generality of the foregoing, to provide other
services as specified herein.
The
Subadviser accepts this employment and agrees to render its services for the
compensation set forth herein.
(b) In
connection therewith, the Adviser has delivered to the Subadviser copies of (i)
the Trust’s [Amended and Restated] Declaration of Trust and Bylaws
(collectively, as amended from time to time, “Charter Documents”), (ii) the
Trust’s current Prospectuses and Statements of Additional Information for the
Fund (collectively, as currently in effect and as amended or supplemented, the
“Prospectus” or “Registration Statement”) filed with the U.S. Securities and
Exchange Commission (“SEC”) pursuant to the Securities Act of 1933, as amended
(the “Securities Act”), or the 1940 Act, (iii) each plan of distribution or
similar document adopted by the Trust under Rule 12b-1 under the 1940 Act
(“Plan”) and each current shareholder service plan or similar document adopted
by the Trust for the Fund (“Service Plan”); and (iv) all procedures adopted by
the Trust with respect to the Fund (e.g., repurchase agreement procedures), and
shall promptly furnish the Subadviser with all amendments of or supplements to
the foregoing. The Adviser shall deliver to the Subadviser: (x) a
certified copy of the resolution of the Board appointing the Subadviser and
authorizing the execution and delivery of this Agreement; (y) a copy of all
proxy statements and related materials relating to the Fund; and (z) any other
documents, materials or information that the Subadviser shall reasonably request
to enable it to perform its duties pursuant to this Agreement.
(c) The
Subadviser has delivered to the Adviser and the Trust (i) a copy of its Form ADV
as most recently filed with the SEC; (ii) a copy of its code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act (the “Code”); and (iii) a
copy of its compliance manual pursuant to applicable regulations, including its
proxy voting policies and procedures, which will be included in the Trust’s
registration statement. The Subadviser shall promptly furnish the
Adviser and Trust with all amendments of or supplements to the foregoing at
least annually.
SECTION
2. DUTIES OF THE ADVISER
In order
for the Subadviser to perform the services required by this Agreement, the
Adviser (i) shall cause all service providers to the Trust to furnish
information to the Subadviser and assist the Subadviser as may be required and
(ii) shall ensure that the Subadviser has reasonable access to all records and
documents maintained by the Trust, the Adviser or any service provider to the
Trust and (iii) shall deliver to the Subadviser all material it provides to the
Board in accordance with the Advisory Agreement.
SECTION
3. DUTIES OF THE SUBADVISER
(a) The
Subadviser will make decisions with respect to all purchases and sales of
securities and other investment assets in the Fund to the extent such authority
is delegated by the Adviser. To carry out such decisions, the
Subadviser is hereby authorized, as agent and attorney-in-fact for the Trust,
for the account of, at the risk of and in the name of the Trust, to place orders
and issue instructions with respect to those transactions of the
Fund. In all purchases, sales and other transactions in securities
and other investments for the Fund, the Subadviser is authorized to exercise
full discretion and act for the Trust in the same manner and with the same force
and effect as the Trust might or could do with respect to such purchases, sales
or other transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions, including voting of proxies with respect to securities owned by
the Fund, subject to such proxy voting policies as approved by the
Board.
Consistent
with Section 28(e) of the Securities and Exchange Act of 1934, as amended, the
Subadviser may allocate brokerage on behalf of the Fund to broker-dealers who
provide brokerage or research services. The Subadviser may aggregate
sales and purchase orders of the assets of the Fund with similar orders being
made simultaneously for other accounts advised by the Subadviser or its
affiliates. Whenever the Subadviser simultaneously places orders to
purchase or sell the same asset on behalf of the Fund and one or more other
accounts advised by the Subadviser, the Subadviser will allocate the order as to
price and amount among all such accounts in a manner believed to be equitable
over time to each account.
(b) The
Subadviser will report to the Board at each meeting thereof as requested by the
Adviser or the Board all material changes in the Fund since the prior report,
and will also keep the Board and the Adviser informed of important developments
affecting the Trust, the Fund and the Subadviser, and on its own initiative,
will furnish the Board from time to time with such information as the Subadviser
may believe appropriate for this purpose, whether concerning the individual
companies whose securities are included in the Fund’s holdings, the industries
in which they engage, the economic, social or political conditions prevailing in
each country in which the Fund maintains investments, or
otherwise. The Subadviser will also furnish the Board and the Adviser
with such statistical and analytical information with respect to investments of
the Fund as the Subadviser may believe appropriate or as the Board reasonably
may request. In making purchases and sales of securities and other
investment assets for the Fund, the Subadviser will bear in mind the policies
and procedures set from time to time by the Board as well as the limitations
imposed by the Charter Documents and Registration Statement, the limitations in
the 1940 Act, the Securities Act, the Internal Revenue Code of 1986, as amended,
and other applicable laws and the investment objectives, policies and
restrictions of the Fund.
(c) The
Subadviser will from time to time employ or associate with such persons as the
Subadviser believes to be particularly fitted to assist in the execution of the
Subadviser's duties hereunder, the cost of performance of such duties to be
borne and paid by the Subadviser. No obligation may be incurred on
the Trust’s or Adviser’s behalf in any such respect.
(d) The
Subadviser will report to the Board and the Adviser all material matters related
to the Subadviser. On an annual basis, the Subadviser shall report on
its compliance with its Code and its compliance policies and procedures to the
Adviser and to the Board and upon the written request of the Adviser or the
Trust, the Subadviser shall permit the Adviser and the Trust, or their
respective representatives to examine the reports required to be made to the
Subadviser under the Code and its compliance policies and
procedures. The Subadviser will notify the Adviser and the Trust of
any change of control of the Subadviser at least 90 days prior to any such
changes and any changes in the key personnel who are either the portfolio
manager(s) of the Fund or senior management of the Subadviser, (prior to or
promptly after such change).
(e) The
Subadviser will maintain records relating to its portfolio transactions and
placing and allocation of brokerage orders as are required to be maintained by
the Trust under the 1940 Act. The Subadviser shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such periods
and in such locations as may be required by applicable law, all documents and
records relating to the services provided by the Subadviser pursuant to this
Agreement required to be prepared and maintained by the Subadviser or the Trust
pursuant to applicable law. To the extent required by law, the books
and records pertaining to the Trust, which are in possession of the Subadviser,
shall be the property of the Trust. The Adviser and the Trust, or
their respective representatives, shall have access to such books and records at
all times during the Subadviser's normal business hours. Upon the
reasonable request of the Adviser or the Trust, copies of any such books and
records shall be provided promptly by the Subadviser to the Adviser and the
Trust, or their respective representatives.
(f) The
Subadviser will cooperate with the Fund’s independent public accountants and
shall take reasonable action to make all necessary information available to the
accountants for the performance of the accountants’ duties.
(g) The
Subadviser will provide the Fund’s custodian and fund accountant on each
business day with such information relating to all transactions concerning the
Fund’s assets under the Subadviser’s control as the custodian and fund
accountant may reasonably require. In accordance with procedures
adopted by the Board, the Subadviser is responsible for assisting in the fair
valuation of all Fund assets and will use its reasonable efforts to arrange for
the provision of prices from a parties who are not affiliated persons of the
Subadviser for each asset for which the Fund’s fund accountant does not obtain
prices in the ordinary course of business.
(h) The
Subadviser shall authorize and permit any of its directors, officers and
employees who may be elected as Trustees or officers of the Trust to serve in
the capacities in which they are elected.
(i) The
Subadviser shall have no duties or obligations pursuant to this Agreement (other
than the continuation of its preexisting duties and obligations) during any
period in which the Fund invests all (or substantially all) of its investment
assets in a registered, open-end management investment company, or separate
series thereof, in accordance with Section 12(d)(1)(E) under the 1940 Act,
pursuant to the instruction of the Adviser and of the Trust’s Board of
Trustees.
The
Sub-Adviser shall not consult with any other sub-adviser of any other series of
the Trust concerning transactions of the Fund or any other series of the Trust
in which (a) the Sub-Adviser of any of its affiliated persons serves as
principal underwriter, or (b) such other sub-adviser or any of its affiliated
persons serves as principal underwriter.
SECTION
4. COMPENSATION; EXPENSES
(a) In
consideration of the foregoing, the Adviser shall pay the Subadviser, with
respect to the Fund, a fee at an annual rate as listed in Appendix B
hereto. Such fees shall be accrued by the Adviser daily and shall be
payable monthly in arrears on the first business day of each calendar month for
services performed hereunder during the prior calendar month. If fees
begin to accrue in the middle of a month or if this Agreement terminates before
the end of any month, all fees for the period from that date to the end of that
month or from the beginning of that month to the date of termination, as the
case may be, shall be prorated according to the proportion that the period bears
to the full month in which the effectiveness or termination
occurs. Upon the termination of this Agreement with respect to the
Fund, the Adviser shall pay to the Subadviser such compensation as shall be
payable prior to the effective date of termination.
(b) During
the term of this Agreement, Subadviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities and other investments (including brokerage commissions and other
transaction charges, if any) purchased for a Fund. The Subadviser
shall, at its sole expense, employ or associate itself with such persons as it
reasonably believe to be particularly fitted to assist it in the execution of
its duties under the Agreement. The Subadviser shall not be
responsible for the Trust’s, a Fund’s or the Adviser’s expenses, including any
extraordinary and non-recurring expenses.
(c) No
fee shall be payable hereunder with respect to the Fund during any period in
which the Fund invests all (or substantially all) of its investment assets in a
registered, open-end, management investment company, or separate series thereof,
in accordance with Section 12(d)(1)(E) under the 1940 Act, pursuant to the
instruction of the Adviser and of the Trust’s Board of Trustees.
SECTION
5. STANDARD OF CARE
(a) The
Adviser shall expect of the Subadviser, and the Subadviser will give the Adviser
the benefit of, the Subadviser's best judgment and efforts in rendering its
services hereunder. The Subadviser shall not be liable to the Adviser
or the Trust hereunder for any mistake of judgment or in any event whatsoever,
except for lack of good faith, provided that nothing herein shall be deemed to
protect, or purport to protect, the Subadviser against any liability to the
Adviser or the Trust to which the Subadviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of the Subadviser's duties hereunder, or by reason of the Subadviser's reckless
disregard of its obligations and duties hereunder.
(b) The
Subadviser shall not be liable to the Adviser or the Trust for any action taken
or failure to act in good faith reliance upon: (i) information, instructions or
requests, whether oral or written, with respect to the Fund made to the
Subadviser by a duly authorized officer of the Adviser or the Trust; (ii) the
advice of counsel to the Trust; and (iii) any written instruction or
certified copy of any resolution of the Board.
(c) The
Subadviser shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties (other than those related to the Subadviser’s
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
(d) The
parties hereto acknowledge and agree that the Trust is a third-party beneficiary
as to the covenants, obligations, representations and warranties undertaken by
the Subadviser under this Agreement and as to the rights and privileges to which
the Adviser is entitled pursuant to this Agreement, and that the Trust is
entitled to all of the rights and privileges associated with such
third-party-beneficiary status.
SECTION
6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This
Agreement shall become effective with respect to the Fund immediately upon the
later of approval by a majority of the Trust's Trustees who are not parties to
this Agreement or interested persons of any such party (other than as trustees
of the Trust) and, if required by applicable law, by a vote of a majority of the
outstanding voting securities of the Fund.
(b) This
Agreement shall remain in effect with respect to the Fund for a period of two
years from the date of its effectiveness and shall continue in effect for
successive annual periods with respect to the Fund; provided that such
continuance is specifically approved at least annually (i) by the Board or by
the vote of a majority of the outstanding voting securities of the Fund, and, in
either case, (ii) by a majority of the Trust's Trustees who are not parties to
this Agreement or interested persons of any such party (other than as trustees
of the Trust); provided further, however, that if the continuation of this
Agreement is not approved as to the Fund, the Subadviser may continue to render
to that Fund the services described herein in the manner and to the extent
permitted by the 1940 Act and the rules and regulations
thereunder.
(c) This
Agreement may be terminated with respect to the Fund at any time, without the
payment of any penalty, (i) by the Board, by a vote of a majority of the
outstanding voting securities of the Fund or by the Adviser on 60 days' written
notice to the Subadviser or (ii) by the Subadviser on 60 days' written notice to
the Trust. This Agreement shall terminate immediately (x) upon its
assignment or (y) upon termination of the Advisory Agreement.
SECTION
7. ACTIVITIES OF THE SUBADVISER
Except to
the extent necessary to perform its obligations hereunder, nothing herein shall
be deemed to limit or restrict the Subadviser's right, or the right of any of
the Subadviser's directors, officers or employees to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, trust, firm, individual or
association.
SECTION
8. REPRESENTATIONS OF SUBADVISER.
The
Subadviser represents and warrants to the Adviser that:
(a) It
is either registered as an investment adviser under the Investment Advisers Act
of 1940, as amended (“Advisers Act”) (and will continue to be so registered for
so long as this Agreement remains in effect) or exempt from registration under
the Advisers Act;
(b) It
is not prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement;
(c) It
has met, and will seek to continue to meet for so long as this Agreement remains
in effect, any other applicable federal or state requirements, or the applicable
requirements of any self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement and
(d) It
will promptly notify the Adviser and the Trust of the occurrence of any event
that would disqualify the Subadviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
SECTION
9. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The
Trustees of the Trust and the shareholders of the Fund shall not be liable for
any obligations of the Trust or of the Fund under this Agreement, and the
Subadviser agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
the Subadviser's rights or claims relate in settlement of such rights or claims,
and not to the Trustees of the Trust or the shareholders of the
Fund.
SECTION
10. MISCELLANEOUS
(a) No
provisions of this Agreement may be amended or modified in any manner except by
a written agreement properly authorized and executed by both parties hereto and
approved by the Trust in the manner set forth in Section 6(b)
hereof.
(b) Neither
party to this Agreement shall be liable to the other party for consequential
damages under any provision of this Agreement.
(c) This
Agreement shall be governed by, and the provisions of this Agreement shall be
construed and interpreted under and in accordance with, the laws of the State of
Delaware.
(d) This
Agreement constitutes the entire agreement between the parties hereto and
supersedes any prior agreement with respect to the subject matter hereof,
whether oral or written.
(e) This
Agreement may be executed by the parties hereto on any number of counterparts,
and all of the counterparts taken together shall be deemed to constitute one and
the same instrument.
(f) If
any part, term or provision of this Agreement is held to be illegal, in conflict
with any law or otherwise invalid, the remaining portion or portions shall be
considered severable and not be affected, and the rights and obligations of the
parties shall be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid. This Agreement
shall be construed as if drafted jointly by both the Adviser and Subadviser and
no presumptions shall arise favoring any party by virtue of authorship of any
provision of this Agreement.
(g) Section
headings in this Agreement are included for convenience only and are not to be
used to construe or interpret this Agreement.
(h) Notices,
requests, instructions and communications received by the parties at their
respective principal places of business, or at such other address as a party may
have designated in writing, shall be deemed to have been properly
given.
(i) No
affiliated person, employee, agent, director, officer or manager of the
Subadviser shall be liable at law or in equity for the Subadviser’s obligations
under this Agreement.
(j) The
terms "vote of a majority of the outstanding voting securities", "interested
person", "affiliated person," “control” and "assignment" shall have the meanings
ascribed thereto in the 1940 Act.
(k) Each
of the undersigned warrants and represents that they have full power and
authority to sign this Agreement on behalf of the party indicated and that their
signature will bind the party indicated to the terms hereof and each party
hereto warrants and represents that this Agreement, when executed and delivered,
will constitute a legal, valid and binding obligation of the party, enforceable
against the party in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed all as of the day
and year first above written.
LIBERTY
STREET ADVISORS, INC.
__________________________
Name:
Title:
HORIZON
ASSET MANAGEMENT, INC.
__________________________
Name:
Title:
Appendix
A
Series
of the Trust:
Liberty
Street Horizon Fund
Appendix
B
Fees
and Expenses: