--------------------------------------------------------------------------------
INVESTMENT SUB-ADVISORY AGREEMENT
by and between
EVEREST FUNDS MANAGEMENT, LLC,
as Advisor,
and
▇▇▇▇▇ INVESTMENT MANAGEMENT, INC.
as Sub-Advisor
Dated as of __________, 2000
--------------------------------------------------------------------------------
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT (this "Agreement"), dated as of
________ __, 2000, is entered into by and between Everest Funds Management, LLC,
a Delaware limited liability company and registered investment advisor (the
"Advisor"), and ▇▇▇▇▇ Investment Management, Inc., a Nebraska Sub-chapter S
corporation and registered investment advisor (the "Sub-Advisor").
WITNESSETH THAT:
WHEREAS, Everest Series Funds Trust (the "Trust"), is an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), authorized to issue separate series and
classes of shares, each series having its own investment objective or
objectives, policies and limitations;
WHEREAS, the Advisor is the investment advisor for the Trust pursuant
to an Investment Advisory Agreement, dated as of ________ __, 2000 (the
"Advisory Agreement"), between the Advisor and the Trust;
WHEREAS, the Advisory Agreement permits the Advisor to delegate certain
of its duties as investment advisor thereunder to a sub-advisor; and
WHEREAS, the Advisor desires to retain the Sub-Advisor as the Advisor's
agent to furnish investment advisory services to the series of the Trust
represented by the series listed on Exhibit A hereto (each, a "Series").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT. The Advisor hereby appoints the Sub-Advisor to provide certain
sub-investment advisory services to the Series for the period and on the terms
set forth in this Agreement. The Sub-Advisor accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided
with respect to the Series listed on Exhibit A attached hereto.
In the event that the Advisor designates one or more series other than
the Series with respect to which the Advisor wishes to retain the Sub-Advisor to
render investment advisory services hereunder, it shall notify the Sub-Advisor
in writing. If the Sub-Advisor is willing to render such services, it shall
notify the Advisor in writing, whereupon such series shall become a Series
hereunder and shall be subject to this agreement. Within a reasonable time after
the inclusion of an additional series under this Agreement, Exhibit A shall be
amended to include the additional series.
2. DELIVERY OF DOCUMENTS.
(a) The Advisor has or will furnish the Sub-Advisor with copies properly
certified or authenticated of each of the following:
(i) the Trust's Declaration of Trust dated __________ __, 2000, and all
amendments thereto or restatements thereof (the "Declaration of Trust");
(ii) the Trust's Bylaws and all amendments thereto (the "Bylaws");
(iii) resolutions of the Board of Trustees of the Trust authorizing the
appointment of the Sub-Advisor and approving this Agreement;
(iv) the Trust's Notification of Registration on Form N-8A under the 1940 Act as
filed with the Securities and Exchange Commission (the "SEC") and all amendments
thereto;
(v) the Trust's Registration Statement on Form N-1A under the Securities Act of
1933, as amended ("1933 Act") and under the 1940 Act as filed with the SEC and
all amendments thereto insofar as such Registration Statement and such
amendments relate to the Series; and
(vi) the Trust's most recent prospectus and Statement of Additional Information
relating to the Series (collectively, the "Prospectus"). From time to time, the
Advisor will furnish the Sub-Advisor with copies of all amendments of or
supplements to the Prospectus.
(b) The Sub-Advisor will provide the Advisor and the Trust with copies properly
certified or authenticated of each of the following:
(i) the Form ADV most recently filed with the SEC by the Sub-Advisor and will
promptly furnish a copy of all amendments of the Form ADV to the Advisor on an
annual basis;
(ii) the written code of ethics of the Sub-Advisor (the "Code of Ethics")
adopted pursuant to the requirements of Rule 17j-1 promulgated under the 1940
Act ("Rule 17j-1");
(iii) evidence of adoption of the Code of Ethics in accordance with Rule 17j-1;
and
(iv) within 45 days of the end of the last calendar quarter of each year that
this Agreement is in effect, a certification from the president or a
vice-president of the Sub-Advisor that the Sub-Advisor has complied with the
requirements of Rule 17j-1 during the previous year and that there has been no
violation of the Sub-Advisor's Code of Ethics or that, if such a violation has
occurred, that appropriate action was taken in response to such violation.
3. MANAGEMENT.
(a) Subject to the supervision of the Board of Trustees of the Trust and the
Advisor, the Sub-Advisor will furnish an investment program in respect of, and
make investment decisions for, all assets of the Series and place all orders for
the purchase and sale of securities, all on behalf of the Series. In the
performance of its duties, the Sub-Advisor will satisfy its fiduciary duties to
the Series (as set forth in Section 3(b) below), and will monitor the Series'
investments, and will comply with the provisions of Trust's Articles and Bylaws,
as amended from time to time, and the Statement of Additional Information and
Prospectus of the applicable Series (collectively, the "Prospectus") and the
stated investment objectives, policies and restrictions of the Series as set
forth in the Prospectus and as interpreted from time to time by the Board of
Trustees of the Trust. The Sub-Advisor and the Advisor will each make its
officers and employees available to the other from time to time at reasonable
times to review investment policies of the Series and to consult with each other
regarding the investment affairs of the Series. The Sub-Advisor will report to
the Board of Trustees of the Trust and to the Advisor with respect to the
implementation of such program. The Sub-Advisor is responsible for compliance
with the provisions of Section 817(h) of the Internal Revenue Code of 1986, as
amended, applicable to the Series.
(b) The Sub-Advisor further agrees that it will:
(i) use the same skill and care in providing such services as it uses in
providing services to fiduciary accounts for which it has investment
responsibilities;
(ii) conform with all applicable rules and regulations of the SEC in all
material respects and in addition will conduct its activities under this
Agreement in accordance with any applicable regulations of any governmental
authority pertaining to its investment advisory activities;
(iii) place orders pursuant to its investment determinations for the Series
either directly with the issuer or with any broker or dealer as permitted in
accordance with guidelines established by the Board of Trustees of the Trust. In
placing orders with brokers and dealers, the Sub-Advisor will attempt to obtain
the best combination of prompt execution of orders in an effective manner and at
the most favorable price. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are comparable, the
Sub-Advisor may, in its discretion, purchase and sell portfolio securities to
and from brokers and dealers who provide the Sub-Advisor with research advice
and other services. In no instance will portfolio securities be purchased from
or sold to the Advisor, the Sub-Advisor or any affiliated person of either the
Trust, the Advisor, or the Sub-Advisor, except as may be permitted under the
1940 Act;
(iv) report regularly to the Advisor and to the Board of Trustees of the Trust
and will make appropriate persons available for the purpose of reviewing with
representatives of the Advisor and the Board of Trustees of the Trust on a
regular basis at reasonable times the management of the Series, including,
without limitation, review of the general investment strategies of the Series,
the performance of the Series in relation to standard industry indices, interest
rate considerations and general conditions affecting the marketplace and will
provide various other reports from time to time as reasonably requested by the
Advisor;
(v) prepare and maintain such books and records with respect to the Series'
securities transactions and will furnish the Advisor and Trust's Board of
Trustees of the Trust such periodic and special reports as the Board of Trustees
of the Trust or the Advisor may request;
(vi) act upon instructions from the Advisor not inconsistent with the fiduciary
duties hereunder;
(vii) treat confidentially and as proprietary information of the Trust all such
records and other information relative to the Trust maintained by the
Sub-Advisor, and will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which approval shall
not be unreasonably withheld and may not be withheld where the Sub-Advisor may
be exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by Trust; and
(viii) vote proxies received in connection with securities held by the
Series consistent with its fiduciary duties hereunder.
4. EXPENSES. During the term of this Agreement, the Sub-Advisor will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commission, if any)
purchased for the Series.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
promulgated under the 1940 Act, the Sub-Advisor hereby agrees that, to the
extent that it may maintain records for the Trust, all such records are the
property of the Trust and further agrees to surrender promptly to the Trust any
of such records upon the Trust's request. The Sub-Advisor further agrees to
preserve for the periods prescribed by Rule 31a-2 promulgated under the 1940 Act
any such records required to be maintained by Rule 31a-1 promulgated under the
1940 Act.
6. COMPENSATION. For the services provided and the expenses assumed pursuant to
this Agreement, the Advisor will pay the Sub-Advisor, and the Sub-Advisor agrees
to accept as full compensation therefor, a sub-advisory fee, accrued daily and
payable monthly on the average daily net assets in the Series in accordance with
Exhibit B hereto. From time to time, the Sub-Advisor may agree to waive or
reduce some or all of the compensation to which it is entitled under this
Agreement.
If this Agreement terminates before the end of any month, the fee for
the period from the effective date to the end of the month or from the beginning
of such month to the date of termination, as the case may be, shall be pro-rated
according to the proportion that such period bears to the full month in which
such effectiveness or termination occurs.
7. SERVICES TO OTHERS. The Advisor understands, and has informed the Board of
Trustees of the Trust, that the Sub-Advisor shall be deemed to be an independent
contractor and shall have no authority to act for or represent the Advisor or
the Trust in any way or otherwise be deemed an agent for the Advisor or the
Trust. The Sub-Advisor now acts, or may in the future act, as an investment
advisor to fiduciary and other managed accounts, and as investment advisor or
sub-investment advisor to other investment companies. The Advisor has no
objection to the Sub-Advisor acting in such capacities, provided that whenever
the Series and one or more other investment advisory clients of the Sub-Advisor
have available funds for investment, investments selected for each will be
allocated in a manner believed by the Sub-Advisor to be equitable to each. The
Advisor recognizes, and has advised the Board of Trustees of the Trust, that in
some cases this procedure may adversely affect the size of the position that the
participating Series may obtain in a particular security. In addition, the
Advisor understands, and has advised Trust's Board of Trustees of the Trust,
that the persons employed by the Sub-Advisor to assist in the Sub-Advisor's
duties under this Agreement will not devote their full time to such service and
nothing contained in this Agreement will be deemed to limit or restrict the
right of the Sub-Advisor or any of its employees or affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
8. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Sub-Advisor shall exercise
its best judgment and shall act in good faith in rendering the services pursuant
to this Agreement. The Sub-Advisor shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust, its shareholders or by
the Advisor in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Nothing in this paragraph shall
be deemed a limitation or waiver of any obligation or duty that may not by law
be limited or waived.
9. USE OF NAME. The Advisor permits the Sub-Advisor to utilize the name
"Everest" without the consent of the Advisor, in connection with the
sub-advisory services provided to the Series pursuant to this Agreement but
only so long as this Agreement is in effect.
10. EFFECTIVE DATE. This Agreement will become effective as to a Series upon
execution or, if later, the date that initial capital for such Series is first
provided to the Trust (the "Effective Date").
11. DURATION AND TERMINATION. Whenever referred to in this Agreement, the vote
or approval of the holders of a majority of the outstanding voting securities of
the Trust shall mean (a) the vote of 67% or more of such securities of each
Series if the holders of more than 50% of such securities are present in person
or by proxy or (b) the vote of more than 50% of all outstanding securities,
whichever is lesser.
(a) Unless sooner terminated as hereinafter provided, this Agreement will
continue in effect for two years from the Effective Date. Thereafter, if not
terminated as to a Series, this Agreement will continue in effect from year to
year thereafter, but only so long as such continuation is specifically approved
at least annually by the Board of Trustees of the Trust or by vote of the
holders of a majority of the outstanding voting securities of such Series;
provided that in either event the continuance is also approved by a majority of
the members of the Trust's Board of Trustees who are not "interested persons"
of the Trust, the Advisor, or of the Sub-Advisor, as defined by the provisions
of the 1940 Act.
(b) Notwithstanding the foregoing, this Agreement may be terminated as to a
Series at any time, without the payment of any penalty, on 60 days' written
notice by the Trust, the Advisor or the Sub-Advisor. This Agreement will
immediately terminate in the event of its assignment as such term is defined by
the 1940 Act.
12. AMENDMENT OF THIS AGREEMENT. No provision of this 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.
13. NOTICE. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
14. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement is held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement will be binding upon and shall inure
to the benefit of the parties hereto.
The name "Everest Series Funds Trust" and "Board of Trustees of the
Trust" refer respectively to the Trust created by, and the members of the Board
of Trustees of the Trust, as board members but not individually or personally,
acting from time to time under, the Articles and Bylaws of the Trust, to which
reference is hereby made, and to any and all amendments thereto. The obligations
of the Everest Series Funds Trust entered in the name or on behalf thereof by
any of the Members of the Board of Trustees of the Trust, representatives or
agents are made not individually but only in such capacities and are not binding
upon any of the Members, interest holders or representatives of the Trust
personally, but bind only the assets of the Trust, and persons dealing with the
Series must look solely to the assets of the Trust belonging to such Series for
the enforcement of any claims against Trust.
15. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISOR. The Sub-Advisor hereby
represents and warrants that:
(a) this Agreement does not violate any existing agreements between the
Sub-Advisor and any other party;
(b) it is a duly registered investment advisor under the Investment Advisors
Act of 1940, as amended and has provided to the Advisor a copy of its most
recent Form ADV as filed with the SEC;
(c) it has reviewed the post-effective amendment to the Registration Statement
for the Trust filed with the SEC that contains disclosure about the Sub-Advisor,
and represents and warrants that, with respect to the disclosure about the
Sub-Advisor or information relating, directly or indirectly, to the Sub-Advisor,
such Registration Statement contains, as of the date hereof, no untrue statement
of any material fact and does not omit any statement of a material fact which
was required to be stated therein or necessary to make the statements contained
therein not misleading;
(d) in no event shall the Sub-Advisor provide similar investment advisory
services to any client comparable to the Series being managed under this
Agreement at a composite rate of compensation less than that provided for
herein;
(e) it has adopted a Code of Ethics complying with the requirements of Rule
17j-1; and
(f) it shall notify the Advisor of any change in control of the Sub-Advisor, and
any changes in the key personnel who are either the portfolio manager(s) of the
Series or senior management of the Sub-Advisor, in each case prior to, or
promptly after, such change.
16. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Nebraska.
IN WITNESS WHEREOF, the Advisor and the Sub-Advisor have caused this
Agreement to be executed as of this ___ day of ________, 2000
EVEREST FUNDS MANAGEMENT, LLC
By: ________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President, Secretary and Treasurer
▇▇▇▇▇ INVESTMENT MANAGEMENT, INC.
By: _________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President