GENWORTH VARIABLE INSURANCE TRUST SUB-ADVISORY AGREEMENT
EX-23.d.2.i
SUB-ADVISORY
AGREEMENT
AGREEMENT made as of the
7th day
of December, 2009, by and between Genworth Financial Wealth Management,
Inc., a California corporation (the “Advisor”), and Xxxxxxx Xxxxx Asset
Management, L.P., a Delaware limited partnership (the
“Sub-Advisor”).
WHEREAS, the Advisor and the
Sub-Advisor are registered investment advisers under the Investment Advisers Act
of 1940, as amended (the “Advisers Act”), and engage in the business of
providing investment management services; and
WHEREAS, the Advisor has been
retained to act as investment adviser pursuant to an Investment Advisory
Agreement dated August 15, 2008 (the “Advisory Agreement”) with Genworth
Variable Insurance Trust (the “Trust”), a Delaware statutory trust registered
with the U.S. Securities and Exchange Commission (the “SEC”) as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the “1940 Act”), currently consisting of several separate series of
shares, each having its own investment objectives and policies, and which is
authorized to create additional series in the future; and
WHEREAS, the Advisory
Agreement permits the Advisor, subject to the supervision and direction of the
Trust’s Board of Trustees, to delegate certain of its duties under the Advisory
Agreement to other investment advisers, subject to the requirements of the 1940
Act; and
WHEREAS, the Advisor desires
to retain the Sub-Advisor to assist the Advisor in the provision of a continuous
investment program for that portion of one or more of the Trust’s series’ (each
a “Fund”) assets which the Advisor will assign to the Sub-Advisor (the
“Sub-Advisor Assets”), and the Sub-Advisor is willing to render such services,
subject to the terms and conditions set forth in this Agreement;
and
WHEREAS, shares of the Fund
will not be sold directly to the general public, but will be sold exclusively to
(i) insurance company separate accounts for use with variable contracts, and
(ii) retirement plans.
NOW, THEREFORE, in
consideration of mutual covenants recited below, the parties agree and promise
as follows:
1. Appointment as
Sub-Advisor. The Advisor hereby appoints the Sub-Advisor to
act as investment adviser for and to manage the Sub-Advisor Assets, subject to
the supervision of the Advisor and the Board of Trustees of the Trust, and
subject to the terms of this Agreement; and the Sub-Advisor hereby accepts such
appointment. In such capacity, the Sub-Advisor shall be responsible
for the investment management of the Sub-Advisor Assets. The
Sub-Advisor shall be required to act with the care, skill, prudence, and
diligence under the circumstances then
1
prevailing
that a prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims.
In
rendering the services required under this Agreement, the Sub-Advisor may, from
time to time, employ, delegate or associate itself with such affiliated persons
as it believes necessary to assist it in carrying out its obligations under this
Agreement; provided
however, that (i) such assistance shall not involve such person serving
as an “investment adviser” to the Fund within the meaning of the 1940 Act, (ii)
the Sub-Advisor shall remain liable to the Advisor for the performance of the
Sub-Advisor’s obligations under this Agreement and for the acts and omissions of
such other persons, and (iii) the Advisor shall not be responsible for any fees
that any such person may charge to the Sub-Advisor in connection with such
services.
2. Duties of the
Sub-Advisor.
(a) Investments. The
Sub-Advisor is hereby authorized and directed and hereby agrees, subject to the
stated investment objectives, policies and restrictions of each Fund as set
forth in such Fund’s prospectus and statement of additional information as
currently in effect and as amended from time to time (collectively referred to
as the “Prospectus”) and subject to the directions of the Advisor and the
Trust’s Board of Trustees, to purchase, hold and sell investments for the
Sub-Advisor Assets and to monitor such investments on a continuous
basis. In providing these services, the Sub-Advisor will conduct an
ongoing program of investment, evaluation and, if appropriate, sale and
reinvestment of the Sub-Advisor Assets.
The Sub-Advisor gives no warranty as to the performance or
profitability of the Sub-Advisor Assets or any part thereof.
The
Sub-Advisor acknowledges that the Advisor is a wholly-owned subsidiary of
Genworth Financial, Inc., and the purchase, acquisition, or possession of
securities issued by Genworth and/or its affiliated entities (collectively
referred to as “Genworth Securities”) by the Fund is therefore prohibited by the
1940 Act. Accordingly, the Sub-Advisor is directed and hereby agrees
to refrain from the purchase, acquisition, or possession on behalf of the Fund
of any securities identified by the Advisor to the Sub-Advisor as being Genworth
Securities.
The
Advisor agrees to provide the Sub-Advisor information concerning: (i) a Fund;
(ii) its assets available or to become available for investment; and (iii) the
conditions of a Fund’s or the Trust’s affairs as relevant to the
Sub-Advisor.
(b) Compliance with Applicable
Laws, Governing Documents and Compliance Procedures. In the
performance of its duties and obligations under this Agreement, the Sub-Advisor
shall, with respect to Sub-Advisor Assets, (i) act in conformity with: (A) the
Trust’s Agreement and Declaration of Trust (the “Declaration of Trust”) and
By-Laws; (B) the Prospectus; (C) the policies and procedures for compliance by
the Trust with the Federal Securities Laws (as that term is defined in Rule
38a-1 under the 0000 Xxx) provided to the Sub-Advisor (together, the “Trust
Compliance Procedures”); and (D) the instructions and directions received in
writing from the Advisor or the Trustees of the Trust; and (ii) conform to, and
comply with, the requirements of the 1940 Act, the Advisers Act, and all other
federal laws applicable to registered investment companies and the Sub-Advisor’s
duties under this Agreement. The Advisor will provide the Sub-Advisor
with any materials or information that the Sub-Advisor may reasonably request to
enable it to perform its duties and obligations under this
Agreement.
2
The
Sub-Advisor agrees to invest the Fund’s assets so as to ensure that (i) the Fund
qualifies as a regulated investment company (“RIC”) under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury
Regulations promulgated thereunder; (ii) the Fund maintains such qualification
as a RIC in accordance with the provisions of Subchapter M of the Code; (iii)
the Fund complies with the diversification requirements set forth in Section
817(h) of the Code and Treasury Regulations promulgated thereunder (the
“Diversification Requirements”); and (iv) the Fund maintains compliance with the
Diversification Requirements. The Sub-Advisor agrees to notify the
Advisor immediately upon becoming aware that the Sub-Advisor has failed to
satisfy its obligations under this clause. The Advisor will notify
the Sub-Advisor in the event that any of the requirements discussed in this
paragraph cease to apply to the Trust and in such a case, the Sub-Advisor will
not be required to comply with the terms of this paragraph.
The
Advisor will provide the Sub-Advisor with reasonable (30 days) advance notice,
in writing, of: (i) any change in a Fund’s investment objectives, policies and
restrictions as stated in the Prospectus; (ii) any change to the Declaration of
Trust or By-Laws; and (iii) any material change in the Trust Compliance
Procedures; and the Sub-Advisor, in the performance of its duties and
obligations under this Agreement, shall manage the Sub-Advisor Assets consistent
with such changes, provided the Sub-Advisor has received such prior notice of
the effectiveness of such changes from the Trust or the Advisor. In
addition to such notice, the Advisor shall provide to the Sub-Advisor a copy of
a modified Prospectus and copies of the revised Trust Compliance Procedures, as
applicable, reflecting such changes. The Sub-Advisor hereby agrees to
provide to the Advisor in a timely manner, in writing, such information relating
to the Sub-Advisor and its relationship to, and actions for, a Fund as may be
required to be contained in materials provided to the Board of Trustees of the
Trust, the Prospectus or in the Trust’s registration statement on Form N-1A, or
otherwise as reasonably requested by the Advisor.
In order
to assist the Trust and the Trust’s Chief Compliance Officer (the “Trust CCO”)
to satisfy the requirements contained in Rule 38a-1 under the 1940 Act, the
Sub-Advisor shall provide to the Trust CCO: (i) direct access to the
Sub-Advisor’s chief compliance officer (the “Sub-Advisor CCO”), as reasonably
requested by the Trust CCO; (ii) a completed quarterly informational
questionnaire regarding the Sub-Advisor’s compliance program; (iii) quarterly
reports confirming that the Sub-Advisor has complied with the Trust Compliance
Procedures in managing the Sub-Advisor Assets; and (iv) quarterly certifications
indicating whether there were Material Compliance Matters (as that term is
defined by Rule 38a-1(e)(2)) that arose under the Trust Compliance Procedures
that related to the Sub-Advisor’s management of the Sub-Advisor
Assets.
(c) Sub-Advisor Compliance
Policies and Procedures. The Sub-Advisor shall promptly
provide the Trust CCO with summaries of: (i) the Sub-Advisor’s
policies and procedures for compliance by the Sub-Advisor with the Federal
Securities Laws (together, the “Sub-Advisor Compliance Procedures”), and (ii)
any material changes to the Sub-Advisor Compliance Procedures. The
Sub-Advisor shall cooperate fully with the Trust CCO so as to facilitate the
Trust CCO’s performance of the Trust CCO’s responsibilities under Rule 38a-1 to
review, evaluate and report to the Trust’s Board of Trustees on the operation of
the Sub-Advisor Compliance Procedures, and shall promptly report to the Trust
CCO any Material Compliance Matter arising under the Sub-Advisor Compliance
Procedures involving the Sub-Advisor Assets.
3
The
Sub-Advisor shall provide to the Trust CCO: (i) quarterly reports
confirming the Sub-Advisor’s compliance with the Sub-Advisor Compliance
Procedures in managing the Sub-Advisor Assets, and (ii) certifications
indicating whether there were Material Compliance Matters involving the
Sub-Advisor that arose under the Sub-Advisor Compliance Procedures that affected
the Sub-Advisor Assets. At least annually, the Sub-Advisor shall
provide a certification to the Trust CCO confirming that the Sub-Advisor has in
place and has implemented policies and procedures that are reasonably designed
to ensure compliance by the Sub-Advisor with the Federal Securities
Laws.
(d) Voting of
Proxies. Unless otherwise instructed by the Advisor or the
Trust, the Sub-Advisor shall have the power, discretion and responsibility to
vote (or refrain from voting), either in person or by proxy, all securities in
which the Sub-Advisor Assets may be invested from time to time, and shall not be
required to seek instructions from the Advisor, the Trust or a
Fund. The Sub-Advisor shall also provide its Proxy Voting Policy (the
“Proxy Policy”) and, if requested by the Advisor, a summary of such Proxy Policy
suitable for including in the Prospectus, and will provide the Advisor with any
material amendment to the Proxy Policy within a reasonable time after such
amendment has taken effect. If both the Sub-Advisor and another
entity managing assets of a Fund have invested in the same security, the
Sub-Advisor and such other entity will each have the power to vote its pro rata
share of the security.
(e) Agent. Subject
to any other written instructions of the Advisor or the Trust, the Sub-Advisor
is hereby appointed the Advisor’s and the Trust’s agent and attorney-in-fact for
the limited purposes of executing account documentation, agreements, contracts
and other documents as the Sub-Advisor shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of the
Sub-Advisor Assets, provided, that the Sub-Advisor’s actions in executing such
documents shall comply with federal regulations, all other federal laws
applicable to registered investment companies and the Sub-Advisor’s duties and
obligations under federal law, this Agreement and the Trust’s governing
documents.
(f) Brokerage. The
Sub-Advisor will place orders pursuant to the Sub-Advisor’s investment
determinations for a Fund either directly with an issuer or with any broker or
dealer selected by the Sub-Advisor, pursuant to this paragraph. In
executing portfolio transactions and selecting brokers or dealers, the
Sub-Advisor will use its best efforts to seek, on behalf of a Fund, the best
overall execution available. In assessing the best overall terms
available for any transaction, the Sub-Advisor shall consider all factors that
it 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.
In
evaluating the best overall terms available, and in selecting the broker or
dealer to execute a particular transaction, the Sub-Advisor may also consider
the brokerage and research services (as those terms are defined in Section 28(e)
of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) provided to
a Fund and/or other accounts over which the Sub-Advisor may exercise investment
discretion. The Sub-Advisor is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any of the Funds that is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Sub-Advisor
4
determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Sub-Advisor to a Fund. Such authorization is subject to
termination at any time by the Advisor or by the Board of Trustees of the Trust
for any reason.
Under no
circumstances will the Sub-Advisor compensate a broker or dealer for any
promotion or sale of Fund shares, or the promotion of Genworth variable annuity
products, by directing to the broker or dealer: (i) portfolio securities
transactions on behalf of the Fund; or (ii) any remuneration, including but not
limited to any commission, xxxx-up, xxxx-down, or other fee (or portion thereof)
received or to be received from such portfolio transactions effected through any
other broker (including a government securities broker) or dealer (including a
municipal securities dealer or a government securities dealer).
The
Sub-Advisor may only direct the Fund’s portfolio securities transactions to a
broker or dealer that promotes or sells Fund shares as permitted by the
provisions of the 1940 Act (and the rules thereunder) and the policies and
procedures adopted by the Trust, as amended from time to time. The
Advisor will provide the Sub-Advisor with a copy of such policies and procedures
and any amendments thereto.
The
Sub-Advisor, when selecting brokers and dealers to effect the Fund’s portfolio
securities transactions, shall not take into account the brokers’ and dealers’
promotion or sale of shares of the Fund or any other registered investment
company, or the promotion of Genworth variable annuity products. In
addition, the Sub-Advisor shall not enter into any agreement (whether oral or
written) or other understanding under which the Sub-Advisor directs, or is
expected to direct, the Fund’s portfolio securities transactions, or any
remuneration, including but not limited to any commission, xxxx-up, xxxx-down,
or other fee (or portion thereof) received or to be received from
such portfolio transactions effected through any other broker
(including a government securities broker) or dealer (including a municipal
securities dealer or a government securities dealer); and, to a broker
(including a government securities broker) or dealer (including a municipal
securities dealer or a government securities dealer) in consideration for the
promotion or sale of shares of the Fund or any other registered investment
company.
In
addition, the Sub-Advisor is authorized to allocate purchase and sale orders for
portfolio securities to brokers or dealers that are affiliated with the Advisor,
the Sub-Advisor, the Trust’s principal underwriter, or other sub-advisors (if
applicable) if the Sub-Advisor believes that the quality of the transaction and
the commission are comparable to what they would be with other qualified firms
and provided that the transactions are consistent with the Trust’s Rule 17e-1
and/or Rule 10f-3 procedures (as applicable). The Advisor will
identify all brokers and dealers affiliated with the Trust, the Advisor, the
Trust’s principal underwriter and the other Sub-Advisors of the Fund, to the
extent such information is necessary for the Sub-Advisor to comply with
applicable federal securities laws, other than those whose sole business is the
distribution of mutual fund shares, who effect securities transactions for
customers. The Advisor shall promptly furnish a written notice to the
Sub-Advisor if the information so provided is no longer accurate.
5
In
connection with its management of the Sub-Advisor Assets and consistent with its
fiduciary obligation to the Trust and other clients, the Sub-Advisor, to the
extent permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities or futures contracts to be sold or
purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the
securities or futures contracts so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Advisor in the manner the
Sub-Advisor considers to be, over time, the most equitable and consistent with
its fiduciary obligations to the Sub-Advisor Assets and to such other
clients.
(g) Securities
Transactions. In no instance will any Fund’s portfolio
securities be purchased from or sold to the Advisor, the Sub-Advisor, the
Trust’s principal underwriter, or any affiliated person of the Trust, the
Advisor, the Sub-Advisor or the Trust’s principal underwriter, acting as
principal in the transaction, except to the extent permitted by the SEC
and the 1940 Act, including Rule 17a-7 thereunder.
The
Sub-Advisor acknowledges that the Advisor and the Trust may rely on Rule 17a-7,
Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the
Sub-Advisor hereby agrees that it shall not consult with any other sub-advisor
to the Trust with respect to transactions in securities for the Sub-Advisor
Assets or any other transactions of Trust assets.
The
Sub-Advisor is authorized to engage in transactions in which the Sub-Advisor, or
an affiliate of the Sub-Advisor, acts as a broker for both the Fund and for
another party on the other side of the transaction (“agency cross
transactions”). The Sub-Advisor shall effect any such agency cross
transactions in compliance with Rule 206(3)-2 under the Advisers Act and any
other applicable provisions of the federal securities laws and shall provide the
Advisor with periodic reports describing such agency cross
transactions. By execution of this Agreement, the Advisor authorizes
the Sub-Advisor or its affiliates to engage in agency cross transactions, as
described above. The Advisor may revoke its consent at any time by
written notice to the Sub-Advisor.
The
Sub-Advisor hereby represents that it has implemented policies and procedures
that will prevent the disclosure by it, its employees or its agents of the
Trust’s portfolio holdings to any person or entity other than the Advisor, the
Trust’s custodian, or other persons expressly designated by the
Advisor.
(h) Code of
Ethics. The Sub-Advisor hereby represents that it has adopted
policies and procedures and a code of ethics that meet the requirements of Rule
17j-1 under the 1940 Act and Rule 204A-1 under the Advisers
Act. Copies of such policies and procedures and code of ethics and
any changes or supplements thereto shall be delivered to the Advisor and the
Trust, and any material violation of such policies, and procedures and code of
ethics by personnel of the Sub-Advisor, the sanctions imposed in response
thereto, and any issues arising under such policies, and procedures and code of
ethics shall be reported to the Advisor and the Trust at the times and in the
format reasonably requested by the Advisor or the Board of
Trustees.
6
(i) Books and
Records. The Sub-Advisor shall maintain separate detailed
records of all matters pertaining to the Sub-Advisor Assets, including, without
limitation, brokerage and other records of all securities transactions. Upon
request by the Trust or the Advisor, the Sub-Advisor agrees to immediately
provide to the Trust or the Advisor copies of any records required to be
maintained and preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2
promulgated under the 1940 Act that are prepared or maintained by the
Sub-Advisor on behalf of the Trust. The Sub-Advisor further agrees to
preserve for the periods prescribed in Rule 31a-2 under the 1940 Act the records
required to be maintained under Rule 31a-1 under the 1940 Act.
(j) Information Concerning
Sub-Advisor Assets and the Sub-Advisor. From time to time as
the Advisor, and any consultants designated by the Advisor, or the Trust may
reasonably request, the Sub-Advisor will furnish the requesting party reports on
portfolio transactions and reports on Sub-Advisor Assets held in the portfolio,
all in such detail as the Advisor, its consultant(s) or the Trust may reasonably
request. The Sub-Advisor will provide the Advisor with information
(including information that is required to be disclosed in the Prospectus) with
respect to the portfolio managers responsible for Sub-Advisor Assets, any
changes in the portfolio managers responsible for Sub-Advisor Assets, any
changes in the ownership or management of the Sub-Advisor, or of material
changes in the control of the Sub-Advisor. To the extent permitted by
law and as disclosed in the Form ADV of the Sub-Advisor, the Sub-Advisor will
notify the Advisor of any investigation, material litigation, administrative
proceeding or any other significant regulatory inquiry. Upon
reasonable request, the Sub-Advisor will make available its officers and
employees to meet with the Trust’s Board of Trustees to review the Sub-Advisor
Assets.
(k) Valuation of Sub-Advisor
Assets. Upon reasonable request from the Advisor, the
Sub-Advisor (through a qualified person) will reasonably assist the valuation
committee of the Trust or the Advisor in valuing securities of the Sub-Advisor
Assets as may be required from time to time, including making available
information of which the Sub-Advisor has knowledge related to the securities
being valued; however, Advisor acknowledges, that the Advisor and its pricing
agents shall assume all responsibility for valuation decisions.
The
Sub-Advisor also will provide such information or perform such additional acts
as are customarily performed by a Sub-Advisor and may be required for a Fund or
the Advisor to comply with their respective obligations under applicable federal
securities laws, including, without limitation, the 1940 Act, the Advisers Act,
the 1934 Act, the Securities Act of 1933, as amended (the “1933 Act”) and any
rule or regulation thereunder.
(l) Custody
Arrangements. The Sub-Advisor, on each business day, shall
provide the Advisor, its consultant(s) and the Trust’s custodian such
information as the Advisor and the Trust’s custodian may reasonably request
relating to all transactions concerning the Sub-Advisor Assets.
(m) Historical Performance
Information. To the extent agreed upon by the parties, the
Sub-Advisor will provide the Trust with historical performance information on
similarly managed investment companies or accounts.
7
(n) Regulatory
Examinations. The Sub-Advisor will provide reasonable
cooperation to the Advisor and/or the Trust in responding to any regulatory or
compliance examinations or inspections (including information requests) relating
to the Trust, the Fund or the Advisor brought by any governmental or regulatory
authorities having appropriate jurisdiction (including, but not limited to, the
SEC).
3. Independent
Contractor. In the performance of its duties hereunder, the
Sub-Advisor is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent a Fund, the Trust or the Advisor in any way or
otherwise be deemed an agent of a Fund, the Trust or the Advisor.
4. Services to Other
Clients. Nothing herein contained shall limit the freedom of
the Sub-Advisor or any affiliated person of the Sub-Advisor to render investment
advisory, supervisory and other services to other investment companies, to act
as investment adviser or investment counselor to other persons, firms or
corporations, or to engage in other business activities. It is
understood that the Sub-Advisor may give advice and take action for its other
clients that may differ from advice given, or the timing or nature of action
taken, for a Fund. Sub-Advisor is not obligated to initiate
transactions for the Fund in any security which Sub-Advisor, its principals,
affiliates or employees may purchase or sell for its or their own accounts or
other clients.
5. 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 costs of
securities, commodities and other investments (including brokerage commissions
and other transaction charges, if any) purchased or otherwise acquired, or sold
or otherwise disposed of for a Fund. The Sub-Advisor, at its sole
expense, shall employ or associate itself with such persons as it believes to be
particularly fitted to assist it in the execution of its duties under this
Agreement. The Trust or the Advisor, as the case may be, shall reimburse the
Sub-Advisor for any expenses as may be reasonably incurred by the Sub-Advisor,
at the request of and on behalf of a Fund or the Advisor. The Sub-Advisor shall
keep and supply to the Trust and the Advisor reasonable records of all such
expenses.
6. Compensation. For
the services provided and the expenses assumed with respect to a Fund pursuant
to this Agreement, the Sub-Advisor will be entitled to the fee(s) listed for the
Fund(s) on Exhibit A. Such fees will be computed daily and payable in
arrears no later than the thirtieth (30th) business day following the end of
each month, from the Advisor on behalf of the Fund(s), calculated at an annual
rate based on the Sub-Advisor Assets’ average daily net assets.
If this
Agreement is terminated prior to the end of any calendar month, the fee shall be
prorated for the portion of any month in which this Agreement is in effect
according to the proportion which the number of calendar days, during which this
Agreement is in effect, bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of
termination.
7. Representations and
Warranties of the Sub-Advisor. The Sub-Advisor represents and
warrants to the Advisor and the Trust as follows:
8
(a) The
Sub-Advisor is registered as an investment adviser under the Advisers
Act;
(b) The
Sub-Advisor is a limited partnership duly organized and
validly existing under the laws of the State of Delaware with the power to own
and possess its assets and carry on its business as it is now being
conducted;
(c) The
execution, delivery and performance by the Sub-Advisor of this Agreement are
within the Sub-Advisor’s powers and have been duly authorized by all necessary
action and no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Sub-Advisor for the execution,
delivery and performance by the Sub-Advisor of this Agreement, and the
execution, delivery and performance by the Sub-Advisor of this Agreement do not
contravene or constitute a default under: (i) any provision of applicable law,
rule or regulation; (ii) the Sub-Advisor’s governing instruments; or (iii) any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Sub-Advisor; and
(d) The
Form ADV of the Sub-Advisor previously provided to the Advisor is a true and
complete copy of the form as currently filed with the SEC and the information
contained therein is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they are made, not
misleading. The Sub-Advisor will promptly provide the Advisor and the
Trust with a complete copy of all subsequent amendments to its Form
ADV.
8. Representations and
Warranties of the Advisor. The Advisor represents and warrants
to the Sub-Advisor and the Trust as follows:
(a) The
Advisor is registered as an investment adviser under the Advisers
Act;
(b) The
Advisor is a corporation duly organized and validly existing under the laws of
the State of California with the power to own and possess its assets and carry
on its business as it is now being conducted;
(c) The
execution, delivery and performance by the Advisor of this Agreement are within
the Advisor’s powers and have been duly authorized by all necessary action on
the part of its Board of Directors, and no action by or in respect of, or filing
with, any governmental body, agency or official is required on the part of the
Advisor for the execution, delivery and performance by the Advisor of this
Agreement, and the execution, delivery and performance by the Advisor of this
Agreement do not contravene or constitute a default under: (i) any provision of
applicable law, rule or regulation; (ii) the Advisor’s governing instruments; or
(iii) any agreement, judgment, injunction, order, decree or other instrument
binding upon the Advisor;
(d) The
Advisor acknowledges that it received a copy of the Sub-Advisor’s Form ADV (a
copy of which is attached as Exhibit B) prior to the execution of this
Agreement; and
(e) The
Advisor and the Trust have duly entered into the Advisory Agreement pursuant to
which the Trust authorized the Advisor to enter into this
Agreement.
9
9. Survival of Representations
and Warranties; Duty to Update Information. All
representations and warranties made by the Sub-Advisor and the Advisor pursuant
to Sections 7 and 8, respectively, of this Agreement shall survive for the
duration of this Agreement and the parties hereto shall promptly notify each
other in writing upon becoming aware that any of the foregoing representations
and warranties are no longer true.
10. Liability and
Indemnification.
(a) Liability. The
duties of the Sub-Advisor shall be confined to those expressly set forth herein,
with respect to the Sub-Advisor Assets. The Sub-Advisor shall not be
liable for any loss arising out of any portfolio investment or disposition
hereunder, except a loss resulting from willful misfeasance, bad faith or
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder, except as may otherwise be provided
under provisions of applicable state law that cannot be waived or modified
hereby.
(b) Indemnification. The
Sub-Advisor shall indemnify the Advisor, the Trust and each Fund, and their
respective affiliates and controlling persons (the “Sub-Advisor Indemnified
Persons”) for any liability and expenses, including reasonable attorneys’ fees,
which the Advisor, the Trust or a Fund and their respective affiliates and
controlling persons may sustain as a direct result of the Sub-Advisor’s willful
misfeasance, bad faith, negligence, or reckless disregard of its duties
hereunder; provided, however, that the Sub-Advisor Indemnified
Persons shall not be indemnified for any liability or expenses which may be
sustained as a direct result of the Advisor’s willful misfeasance, bad faith,
negligence, or reckless disregard of its duties hereunder, or violation of
applicable law.
(c) Incidental or Consequential
Damages. Neither the Advisor nor the Sub-Advisor shall be
liable for any indirect, special, incidental or consequential damages or other
losses (regardless of whether such damages or other losses were reasonably
foreseeable).
The
Advisor shall indemnify the Sub-Advisor, its affiliates and its controlling
persons (the “Advisor Indemnified Persons”), for any liability and expenses,
including reasonable attorneys’ fees, howsoever arising from, or in connection
with, the Advisor’s breach of this Agreement, or its representations and
warranties herein, or as a direct result of the Advisor’s willful misfeasance,
bad faith, negligence, reckless disregard of its duties hereunder, or violation
of applicable law; provided, however, that the Advisor Indemnified Persons shall
not be indemnified for any liability or expenses which may be sustained as a
direct result of the Sub-Advisor’s willful misfeasance, bad faith, negligence,
or reckless disregard of its duties hereunder.
11. Duration and
Termination.
(a) Duration. This
Agreement, unless sooner terminated as provided herein, shall for the Fund(s)
listed on Exhibit A attached hereto remain in effect from the later of the date
of execution or Board approval as required under the 1940 Act (the “Effective
Date”), until two years from the Effective Date, and thereafter, for periods of
one year, so long as such continuance thereafter is specifically approved at
least annually: (i) by the vote of a majority of those Trustees of the Trust who
are not interested persons of any party to this Agreement, cast in
10
person at
a meeting called for the purpose of voting on such approval; and (ii) by the
Trustees of the Trust, or by the vote of a majority of the outstanding voting
securities of each Fund (except as such vote may be unnecessary pursuant to
relief granted by an exemptive order from the SEC). The foregoing
requirement that continuance of this Agreement be “specifically approved at
least annually” shall be construed in a manner consistent with the 1940 Act and
the rules and regulations thereunder.
(b) Termination. This
Agreement may be terminated as to any Fund at any time, without the payment of
any penalty by: (i) the vote of a majority of the Trustees of the
Trust, the vote of a majority of the outstanding voting securities of the Fund,
or the Advisor, on not less than 60 days written notice to the Sub-Advisor; or
(ii) the Sub-Advisor, on not less than 60 days written notice to the Advisor and
the Trust. This Agreement may also be terminated as to any Fund at
any time by any party hereto immediately upon written notice to the other
parties in the event of a breach of any material provision of this Agreement by
any of the parties.
This
Agreement shall not be assigned and shall terminate automatically in the event
of its assignment, except as provided otherwise by any rule, exemptive order
issued by the SEC, or No Action Letter provided or pursuant to the 1940 Act, or
upon the termination of the Advisory Agreement.
This
Agreement shall extend to and bind the heirs, executors, administrators and
successors of the parties hereto.
12. Amendment. This
Agreement may be amended by mutual consent of the parties, provided that the
terms of any material amendment shall be approved by: (a) the Trust’s Board of
Trustees, and (b) the vote of a majority of those Trustees of the Trust who are
not interested persons of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. In
addition, any such amendment shall be approved by a vote of the majority of the
Fund’s outstanding voting securities, unless shareholder approval is not
required by applicable law or regulation, by exemptive relief granted by the
SEC, or by a No-Action position of the SEC staff.
13. Confidentiality. Any
information or recommendations supplied by either the Advisor or the
Sub-Advisor, that are not otherwise in the public domain or previously known to
the other party in connection with the performance of its obligations and duties
hereunder, including portfolio holdings of the Trust, financial information or
other information relating to a party to this Agreement, are to be regarded as
confidential (“Confidential Information”) and held in the strictest
confidence. Except as may be required by applicable law or rule or as
requested by regulatory authorities having jurisdiction over a party to this
Agreement, Confidential Information may be used only by the party to which said
information has been communicated and such other persons as that party believes
are necessary to carry out the purposes of this Agreement, the custodian, and
such persons as the Advisor may designate in connection with the Sub-Advisor
Assets. Nothing in this Agreement shall be construed to prevent the
Sub-Advisor from giving other entities investment advice about, or trading on
their behalf, in the securities of a Fund or the Advisor.
14. Use of Sub-Advisor’s
Name. During the term of this Agreement, the Advisor shall
have permission to use the Sub-Advisor’s name as part of the Fund’s name and in
the marketing of the Fund, and agrees to furnish the Sub-Advisor at its
principal office all marketing materials, prospectuses, proxy statements and
reports to shareholders prepared for distribution to shareholders of the Fund or
the public, which refer to the Sub-Advisor in any way.
15. Use of Advisor’s and Fund’s
Names. The Advisor hereby consents to the disclosure by the
Sub-Advisor of the Advisor’s name and/or the Fund’s name to (i) brokers and
dealers (including any futures brokers and futures commission merchants if
investment in futures is permitted by the Prospectus and/or Investment Manager
Guidelines) whether executing or clearing to effectuate the Sub-Advisor’s
trading activities on behalf of the Advisor and/or the Fund, (ii) consultants in
connection with the completion of questionnaires and informational surveys, and
(iii) prospective clients of the Sub-Advisor as part of a representative client
list.
16. Notice. Any
notice, advice or report to be given pursuant to this Agreement shall be deemed
sufficient if delivered or mailed by registered, certified or overnight mail,
postage prepaid addressed by the party giving notice to the other party at the
last address furnished by the other party:
(a) If
to the Advisor:
Genworth
Financial Wealth Management, Inc.
0000
Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx
Xxxx, XX 00000-0000
Attn:
Xxxxxx X. Xxxxxx
(b) If
to the Sub-Advisor:
Xxxxx X. Xxxxxxxxx
Xxxxxxx
Xxxxx Asset Management, L.P.
000 Xxxx
Xxxxxx
Xxx Xxxx,
XX 00000-0000
17. Governing
Law. This Agreement shall be governed by the internal laws of
the State of Delaware, without regard to conflict of law principles; provided,
however that nothing herein shall be construed as being inconsistent with the
1940 Act. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Agreement is altered 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.
18. Entire
Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to this Agreement’s subject matter. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but such counterparts shall, together, constitute only
one instrument.
19. Severability. 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.
20. Certain
Definitions. For the purposes of this Agreement and except as
otherwise provided herein, “interested person,” “affiliated person,”
“affiliates,” “controlling persons” and “assignment” shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the SEC, and the term “Fund” or “Funds” shall refer to those
Fund(s) for which the Sub-Advisor provides investment management services and as
are listed on Exhibit A to this Agreement.
21. Captions. The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
ADVISOR:
Genworth
Financial Wealth Management, Inc.
By: /s/Xxxxxxxx Ahluwalia_
Name:
Xxxxxxxx Xxxxxxxxx
Title:
President and Chief Executive Officer
SUB-ADVISOR:
Xxxxxxx
Sachs Asset Management, L.P.
___________________________________
By: /s/Xxxxx X. Xxxxxxxxx
12/7/09
Name: Xxxxx
X. Xxxxxxxxx
Title: Managing
Director
11
EXHIBIT
A
SUBADVISORY
AGREEMENT
BETWEEN
GENWORTH FINANCIAL WEALTH MANAGEMENT, INC.
AND
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
Genworth
Xxxxxxx Sachs Enhanced Core Bond Index Fund
|
FEE
SCHEDULE
|
|
|
Average
of Daily
Net Assets
|
Annual
Fee
Rate
|
|
First
USD 250 million
|
20
bps, (0.20%)
|
|
Next
USD 750 million
|
15
bps, (0.15%)
|
|
Balance
above USD 1 billion
|
12
bps, (0.12%)
|
|
1.
|
Fee
will be calculated by the Advisor or its designated agent in arrears for
each month based on the average of daily net
assets.
|
|
2.
|
Monthly
Fee =: Average of Daily Net Assets * Annual Fee Rate * ( number of days in
the month / the number of days in the
year).
|
|
3.
|
Fee
will be rounded to the nearest US
dollar.
|
|
4.
|
Fee
will be prorated as appropriate for the initial calendar month and upon
termination.
|
EXHIBIT
B
FORM
ADV
of
Xxxxxxx
Xxxxx Asset Management, L.P.
