(Real Estate Equity Fund)
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
XXXXXX XXXXXXX XXXX XXXXXX INVESTMENT MANAGEMENT INC.
AND
XXXX XXXXXXX LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the first day of November, 2000 by and among Xxxx
Xxxxxxx Variable Series Trust I, a Massachusetts business trust (the "Trust"),
Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment Management Inc., a Delaware corporation
("Xxxxxx Xxxxxxx"), and Xxxx Xxxxxxx Life Insurance Company, a Massachusetts
corporation ("JHLICO").
WHEREAS, the Trust is organized and is engaged in business as an open-end
management investment company and is so registered under the Investment Company
Act of 1940 (the "1940 Act"); and
WHEREAS, JHLICO and Xxxxxx Xxxxxxx are each engaged in the business of
rendering investment advice under the Investment Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of capital stock in
separate classes with each such class representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust offers shares in several series (collectively referred
to as the "Funds"), each of which pursues its investment objectives through
separate investment policies; and
WHEREAS, the Trust has retained JHLICO to render investment management
services to the Trust pursuant to an Investment Management Agreement dated as of
April 12, 1988 (the "Investment Management Agreement"), pursuant to which it may
contract with one or more sub-managers with respect to the assets of the Real
Estate Equity Fund (the "Subject Fund"), one of the Funds of the Trust.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-MANAGER
(a) Subject Fund. Xxxxxx Xxxxxxx is hereby appointed and Xxxxxx Xxxxxxx
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hereby accepts the appointment to act as an investment adviser and manager to
the Subject Fund for the period and on the terms herein set forth, for the
compensation herein provided.
(b) Incumbency Certificates. Xxxxxx Xxxxxxx shall furnish to JHLICO,
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immediately upon execution of this Agreement, a certificate of a senior officer
of Xxxxxx Xxxxxxx setting forth (by name and title, and including specimen
signatures) those officers of Xxxxxx Xxxxxxx who are authorized to make
investment decisions for the Subject Fund pursuant to the provisions of this
Agreement. Xxxxxx Xxxxxxx shall promptly provide supplemental certificates, as
needed, to reflect all changes with respect to such authorized officers for the
Subject Fund. On behalf of the Trust, JHLICO shall instruct the custodian for
the Subject Fund to accept instructions with respect to the Subject Fund from
the officers of Xxxxxx Xxxxxxx so named.
(c) Independent Contractor. Xxxxxx Xxxxxxx shall for all purposes herein
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be deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or be deemed an agent of
the Trust.
(d) Xxxxxx Xxxxxxx'x Representations. Xxxxxx Xxxxxxx represents, warrants
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and agrees (i) that it is registered as an investment adviser under the
Investment Advisers Act of 1940, and that it will remain so registered and will
comply with the requirements of said Act, and the rules and regulations
thereunder, at all times while this Agreement remains in effect, (ii) that it
will promptly notify JHLICO if the foregoing representation and agreement shall
cease to be true (in any material respect) at any time during the term of this
Agreement, (iii) that it will promptly notify JHLICO of any material change in
the senior management or ownership of Xxxxxx Xxxxxxx, or of any change in the
identity of the senior personnel of Xxxxxx Xxxxxxx who manage the Subject Fund,
(iv) that it has adopted a code of ethics complying with the requirements of
Rule 17j-1 of the Securities and Exchange Commission (the "SEC") under the 1940
Act and has provided true and complete copies of such code to the Trust and to
JHLICO, and has adopted procedures designed to prevent violations of such code,
and (v) that it has furnished the Trust and JHLICO each with a copy of Xxxxxx
Xxxxxxx'x Form ADV, as most recently filed with the SEC, and will promptly
furnish updated copies at least annually.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Xxxxxx Xxxxxxx will provide for the Subject Fund's assets as may be
designated to it by JHLICO from time to time (the "Subject Assets") a continuing
and suitable investment program consistent with the investment policies,
objectives and restrictions of said Fund, as set forth in the Subject Fund's
current Prospectus and Statement of Additional Information. From time to time,
JHLICO or the Trust may provide Xxxxxx Xxxxxxx in writing (including, without
limit, electronic communication) with additional or amended investment policies,
guidelines and restrictions. Xxxxxx Xxxxxxx, as a sub-manager, will manage the
investment and reinvestment of the Subject Assets, and perform the functions set
forth below, subject to the overall supervision, direction, control and review
of JHLICO and the Board of Trustees of the Trust, consistent with the applicable
investment policies, guidelines and restrictions, the provisions of the Trust's
Declaration of Trust, Bylaws, prospectus, statement of additional information
(each as in effect from time to time), the 1940 Act and all other applicable
laws and regulations (including any applicable investment restrictions imposed
by state insurance laws and regulations or any directions or instructions, each
as delivered to Xxxxxx Xxxxxxx in writing by JHLICO or the Trust from time to
time). In the event that, in addition to Xxxxxx Xxxxxxx, other investment
advisers or sub-managers are appointed by the Trust or JHLICO to render
investment advisory services to the Subject Fund, JHLICO and the Trust each
acknowledges and agrees that Xxxxxx Xxxxxxx will not be held responsible for
such other investment advisers' or sub-managers' compliance with policies and
limitations applicable to the Subject Fund. By its signature below, Xxxxxx
Xxxxxxx acknowledges receipt of a copy of the Trust's Declaration of Trust,
Bylaws, prospectus, and statement of additional information, each as in effect
on the date of this Agreement.
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Xxxxxx Xxxxxxx will, at its own expense:
(a) advise the Subject Fund in connection with investment policy decisions
regarding the Subject Assets and, upon request, furnish the Trust with research,
economic and statistical data in connection with investments and investment
policies for the Subject Assets;
(b) submit such reports and information as JHLICO or the Trust's Board of
Trustees may reasonably request, to assist the custodian in its determination of
the market value of securities held in the Subject Assets;
(c) place orders for purchases and sales of portfolio investments for the
Subject Assets;
(d) give instructions to the Subject Fund's custodian concerning the
delivery of securities and transfer of cash for the Subject Assets;
(e) maintain and preserve the records relating to its activities hereunder
required by the 1940 Act to be maintained and preserved by the Trust, to the
extent not maintained by the custodian, transfer agent or JHLICO;
(f) at the close of business each day, provide JHLICO and the custodian
with copies of trade tickets, and a daily summary sufficient to verify trade
data received by the custodian from third parties for each transaction effected
for the Subject Assets;
(g) as soon as practicable following the end of each calendar month,
provide JHLICO with written statements showing all transactions effected for the
Subject Assets during the month, a summary listing all investments held in the
Subject Assets as of the last day of the month, and such other information as
JHLICO may reasonably request in connection with the accounting services that
JHLICO provides for the Subject Fund; and
(h) absent specific instructions to the contrary provided to it by JHLICO
and subject to Xxxxxx Xxxxxxx'x receipt of all necessary voting materials, vote
all proxies with respect to investments of the Subject Assets in accordance with
Xxxxxx Xxxxxxx'x proxy voting policy as most recently provided to JHLICO.
On its own initiative, Xxxxxx Xxxxxxx will apprise JHLICO and the Trust of
important political and economic developments materially affecting the
marketplace or the Subject Assets, and will furnish JHLICO and the Trust's Board
of Trustees from time to time such information as is appropriate for this
purpose. Xxxxxx Xxxxxxx will also make its personnel available in Boston or
other reasonable locations as often as annually, and at reasonable times, to
discuss the Subject Assets and Xxxxxx Xxxxxxx'x management thereof, to educate
JHLICO sales personnel with respect thereto, and for such other purposes as the
Trust or JHLICO may reasonably request.
The Trust and JHLICO will provide timely information to Xxxxxx Xxxxxxx
regarding such matters as purchases and redemptions of shares in the Subject
Fund and the cash requirements of, and cash available for investment in, the
Subject Fund. JHLICO will timely provide Xxxxxx Xxxxxxx with copies of monthly
accounting statements for the Subject Fund, and such other information
(including, without limitation, reports concerning the classification of
portfolio securities for purposes of
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Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
Treasury Regulations Section 1.817) as may be reasonably necessary or
appropriate in order for Xxxxxx Xxxxxxx to perform its responsibilities
hereunder.
Xxxxxx Xxxxxxx may perform its services hereunder through its affiliates,
employees, officers or agents, and neither JHLICO nor the Trust shall be
entitled to the advice, recommendation or judgment of any specific person;
provided, however, that the persons identified in the prospectus relating to the
Subject Assets shall perform the portfolio management duties described therein
until Xxxxxx Xxxxxxx notifies JHLICO that one or more other affiliates,
employees, officers or agents identified in such notice shall assume such duties
as of a specific date.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of
performing its obligations hereunder. In this regard, the Trust specifically
agrees to assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Trust, including the Subject Assets, and similar fees and charges for the
acquisition, disposition, lending or borrowing of such portfolio investments;
(b) custodian fees and expenses;
(c) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Trust to federal, state or other governmental agencies;
(d) interest payable on the Trust's borrowings; and
(e) obtaining licenses and/or other forms of authorization to invest in
various countries.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Trust and JHLICO in the Investment Management Agreement
or any other agreement to which they are parties.
4. SUB-ADVISORY FEES.
For all of the services rendered with respect to the Subject Assets as
herein provided, JHLICO shall pay to Xxxxxx Xxxxxxx a fee (for the payment of
which the Trust shall have no obligation or liability), based on the Current Net
Assets (as defined below) of the Subject Assets, as set forth in Schedule I
attached hereto and made a part hereof. Such fee shall be accrued daily and
payable monthly, as soon as practicable after the last day of each calendar
month. In the case of termination of this Agreement with respect to the Subject
Assets during any calendar month, the fee with respect to the Subject Assets
accrued to but excluding the date of termination shall be paid promptly
following such termination. For purposes of computing the amount of advisory fee
accrued for any day, "Current Net Assets" shall mean the net assets of the
Subject Assets as of the most recent preceding day for which the Subject Fund's
net assets were computed.
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5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the Subject Assets,
Xxxxxx Xxxxxxx is authorized to select the brokers or dealers that will execute
purchase and sale transactions for the Subject Assets and to use its best
efforts to obtain the most favorable price and execution with respect to all
such purchases and sales of portfolio securities for said Subject Assets. Such
brokers or dealers may be affiliates of Xxxxxx Xxxxxxx, provided such
transactions comply with the 1940 Act and the procedures approved by the Trust's
Board of Trustees. Xxxxxx Xxxxxxx shall maintain records adequate to demonstrate
compliance with this requirement. Subject to this primary requirement, and
maintaining as its first consideration the benefits to the Subject Fund and its
shareholders, Xxxxxx Xxxxxxx shall have the right subject to the control of the
Board of Trustees, and to the extent authorized by the Securities Exchange Act
of 1934, to follow a policy of selecting brokers who furnish brokerage and
research services to the Subject Fund and Xxxxxx Xxxxxxx, and who may charge a
higher commission rate to the Subject Fund than may result when allocating
brokerage solely on the basis of seeking the most favorable price and execution.
Xxxxxx Xxxxxxx shall determine in good faith that any such higher cost was
reasonable in relation to the value of the brokerage and research services
provided to Xxxxxx Xxxxxxx with respect to the Subject Assets.
Xxxxxx Xxxxxxx will not retain, but shall pay over or credit to the
Subject Fund, any tender offer solicitation fees or similar payments received in
connection with the tender of investments of the Subject Fund. The foregoing
sentence, however, shall not prevent affiliates of Xxxxxx Xxxxxxx from receiving
fees or payments in connection with transactions in which such affiliates have
been retained to act as financial adviser, dealer, manager or other capacity.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Trust shall own and control all records maintained hereunder by Xxxxxx
Xxxxxxx on the Trust's behalf and, in the event of termination of this Agreement
with respect to the Subject Assets for any reason, all records relating to the
Subject Fund shall be promptly returned to the Trust, free from any claim or
retention of rights by Xxxxxx Xxxxxxx, provided that (subject to the last
paragraph of this Section 6) Xxxxxx Xxxxxxx may retain copies of such records.
Xxxxxx Xxxxxxx also agrees, upon request of the Trust, promptly to surrender
such books and records or, at its expense, copies thereof, to the Trust or make
such books and records available for audit or inspection, during normal business
hours, by representatives of regulatory authorities or other persons reasonably
designated by the Trust. Xxxxxx Xxxxxxx further agrees to maintain, prepare and
preserve such books and records in accordance with the 1940 Act and rules
thereunder, including but not limited to Rules 31a-1 and 31a-2, and to supply
all information requested by any insurance regulatory authorities to determine
whether applicable insurance laws and regulations are being complied with.
Xxxxxx Xxxxxxx shall supply the Board of Trustees and officers of the Trust and
JHLICO with all statistical information regarding investments made on behalf of
the Subject Assets which is reasonably required and requested by them and
reasonably available to Xxxxxx Xxxxxxx.
Xxxxxx Xxxxxxx shall not disclose or use any records or information
obtained pursuant hereto in any manner whatsoever except as expressly authorized
herein, and will keep confidential any information obtained pursuant hereto, and
disclose such information only if the Trust or JHLICO has authorized such
disclosure, if such disclosure is expressly required by applicable federal or
state
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regulatory authorities, or if such information otherwise becomes available to
the public through no fault of Xxxxxx Xxxxxxx.
7. LIABILITY; STANDARD OF CARE.
No provision of this Agreement shall be deemed to protect Xxxxxx Xxxxxxx
or JHLICO against any liability to the Trust or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement or the Investment Management
Agreement, as applicable. Nor shall any provision hereof be deemed to protect
any trustee or officer of the Trust against any such liability to which he might
otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance his duties or the reckless disregard of his
obligations and duties.
Xxxxxx Xxxxxxx shall employ only qualified personnel to manage the Subject
Assets; shall comply with all applicable laws and regulations in the discharge
of its duties under this Agreement; shall (as provided in Section 2 above)
comply with the investment policies, guidelines and restrictions of the Subject
Fund and with the provisions of the Trust's Declaration of Trust, Bylaws,
prospectus and statement of additional information; shall manage the Subject
Assets (subject to the receipt of, and based upon the information contained in,
periodic reports from JHLICO or the custodian concerning the classification of
portfolio securities for such purposes) as a regulated investment company in
accordance with Subchapter M of the Code and Treasury Regulations Section
1.817-5(b); shall act at all times in the best interests of the Subject Fund;
and shall discharge its duties with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of a similar
enterprise. However, Xxxxxx Xxxxxxx shall not be obligated to perform any
service not described in this Agreement, and shall not be deemed by virtue of
this Agreement to have made any representation or warranty that any level of
investment performance or level of investment results will be achieved by the
Subject Assets or the Subject Fund.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof.
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Unless terminated as herein provided, this Agreement shall remain in full force
and effect for two years from the date hereof and shall continue in full force
and effect thereafter so long as such continuance is approved at least annually
(a) by either the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting shares of the Subject Fund, and (b) in either event by the
vote of a majority of the trustees of the Trust who are not parties to this
Agreement or "interested persons" of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
Any approval of this Agreement by the holders of a majority of the outstanding
shares of the Subject Fund shall be effective to continue this Agreement
notwithstanding (a) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Fund affected hereby, and (b)
that this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be required by any
other applicable law or otherwise. The terms "assignment," "vote of a majority
of the outstanding shares" and "interested
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person," when used in this Agreement, shall have the respective meanings
specified in the 1940 Act and rules thereunder.
(b) Termination. This Agreement may be terminated at any time, without
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payment of any penalty, by the Trust pursuant to a vote of the trustees of the
Trust or a vote of a majority of the outstanding shares of the Subject Fund,
which termination shall be effective immediately upon delivery of notice thereof
to Xxxxxx Xxxxxxx and JHLICO. This Agreement may be terminated by Xxxxxx Xxxxxxx
on at least ninety days' prior written notice to the Trust and JHLICO, and may
be terminated by JHLICO on at least ninety days' prior written notice to the
Trust and Xxxxxx Xxxxxxx.
(c) Automatic Termination. This Agreement shall automatically and
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immediately terminate in the event of its assignment or if the Investment
Management Agreement is terminated.
9. SERVICES NOT EXCLUSIVE; USE OF XXXXXX XXXXXXX'X NAME AND LOGO.
The services of Xxxxxx Xxxxxxx to the Trust hereunder are not to be deemed
exclusive and it shall be free to render similar services to others so long as
its services hereunder are not impaired thereby. It is specifically understood
that directors, officers and employees of Xxxxxx Xxxxxxx and of its subsidiaries
and affiliates may continue to engage in providing portfolio management services
and advice to other investment companies, whether or not registered, and to
other investment advisory clients.
During the term of this Agreement, JHLICO and the Trust shall have the
non-exclusive and non-transferable right to use Xxxxxx Xxxxxxx'x name and logo
in all materials relating to the Subject Fund, including all prospectuses, proxy
statements, reports to shareholders, sales literature and other written
materials prepared for distribution to shareholders of the Trust or the public.
However, prior to distribution of any materials which refer to Xxxxxx Xxxxxxx,
JHLICO shall consult with Xxxxxx Xxxxxxx and shall furnish to Xxxxxx Xxxxxxx a
copy of such materials. Xxxxxx Xxxxxxx agrees to cooperate with JHLICO and to
review such materials promptly. JHLICO shall not distribute such materials if
Xxxxxx Xxxxxxx reasonably objects in writing, within five (5) business days of
its receipt of such copy (or such other time as may be mutually agreed), to the
manner in which its name and logo are used.
10. AVOIDANCE OF INCONSISTENT POSITION.
Except as permitted by the 1940 Act, the rules promulgated thereunder, and
the procedures adopted by the Trust's Board of Trustees (as provided in writing
to Xxxxxx Xxxxxxx), Xxxxxx Xxxxxxx and its directors, officers and employees
will not act as principal or agent or receive any commission in connection with
the purchase and sale of portfolio securities of the Subject Fund. Nothing in
this Agreement, however, shall preclude the combination of orders for the sale
or purchase of portfolio securities of the Subject Fund with those for other
registered investment companies and portfolios or accounts of other advisory
clients managed by Xxxxxx Xxxxxxx or its affiliates, if such orders are
allocated among the accounts in a manner deemed equitable by Xxxxxx Xxxxxxx.
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11. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective until approved specifically by (a) the Board of
Trustees of the Trust, or by vote of a majority of the outstanding shares of the
Subject Fund, and (b) by 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, unless otherwise
permitted by the SEC, the 1940 Act or the rules promulgated thereunder.
12. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the trustees, shareholders, officers, agents or
employees of the Trust personally, but only bind the trust property of the
Trust, as provided in the Trust's Declaration of Trust.
13. NOTICES.
Notices and other communications required or permitted under this
Agreement shall be in writing, shall be deemed to be effectively delivered when
actually received, and may be delivered by US mail (first class, postage
prepaid), by facsimile transmission, by hand or by commercial overnight delivery
service, addressed as follows:
SUB-MANAGER: Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax #: 000-000-0000
JHLICO: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
TRUST: Xxxx Xxxxxxx Variable Series Trust I
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
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14. GOVERNING LAW.
This agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act and
rules thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day first set forth above.
ATTEST: XXXX XXXXXXX VARIABLE SERIES
TRUST I
By:
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Title: Chairman
ATTEST: XXXX XXXXXXX LIFE
INSURANCE COMPANY
By:
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Title:
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ATTEST: XXXXXX XXXXXXX XXXX XXXXXX
INVESTMENT MANAGEMENT INC.
By:
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Title:
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SCHEDULE I
FEES
Current Net Assets Under Management Sub-Advisory Fee
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On the first $50 million of the Subject Assets 70 basis points (0.70%) per annum
On the next $50 million of the Subject Assets 60 basis points (0.60%) per annum
On the next $100 million of the Subject Assets 50 basis points (0.50%) per annum
On the Subject Assets over $200 million 40 basis points (0.40%) per annum
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