NORTHSTAR/NWNL TRUST
NORTHSTAR INCOME AND GROWTH FUND
SUBADVISORY AGREEMENT
AGREEMENT made this day of August, 1996 by and between Northstar Investment
Management Corporation, a Delaware Corporation (hereinafter the "Adviser"),
investment adviser for the Northstar Income and Growth Fund, a series of the
Northstar NWNL Trust (the "Trust") (hereinafter the "Fund") and Xxxxxx/Xxxxxxx
Capital Management, Inc., a Virginia corporation (hereinafter the "Subadviser").
WHEREAS, the Adviser has been retained by the Trust, an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), to provide investment advisory services to
the Fund pursuant to an Investment Advisory Agreement dated May 2, 1994 (the
"Investment Advisory Agreement"); and
WHEREAS, the Trustees of the Trust, including a majority of the Trustees who are
not "interested persons," as defined in the 1940 Act, and the Fund's
shareholders have approved the appointment of the Subadviser to perform certain
investment advisory services for the Fund pursuant to this Subadvisory Agreement
with the Adviser and the Subadviser is willing to perform such services for the
Fund;
WHEREAS, the Subadviser is or will be registered as an investment adviser under
the Investment Advisers Act of 1940, as amended ("Advisers Act") prior to
performing its services for the Fund under this Agreement;
NOW THEREFORE, in consideration of the promises and mutual convenants herein
contained, it is agreed between the Adviser and the Subadviser as follows:
1. Appointment. The Adviser hereby appoints the Subadviser to perform advisory
services to the Fund for the periods and on the terms set forth in this
Subadvisory Agreement. The Subadviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Duties of Subadviser. The Adviser hereby authorizes Subadviser to manage the
investment and reinvestment of cash and investments comprising those assets of
the Fund which are designated by the Adviser for investment in common stocks
(the "Assets"), with power on behalf of and in the name of the Fund at
Subadviser's discretion; subject at all time to the supervision of the Adviser
and the Trustees of the Trust:
(a) to direct the purchase, subscription or other acquisition of
investments and to direct the sale, redemption, and exchange of the Assets,
subject to the duty to render to the Trustees of the Trust, the Adviser and the
Custodian such written reports regarding the Assets as often as the Trustees or
the Adviser of the Fund shall reasonably require; provided however that all
investment decisions and orders shall be communicated to the Adviser, who shall
select brokers and dealers to execute such purchase and sell orders.
(b) to make all decisions relating to the timing of investment
transactions relating to the Assets, and to engage such consultants, analysts
and experts in connection therewith as may be considered necessary or
appropriate;
(c) to take all such other actions as may be considered necessary or
appropriate to discharge its duties thereunder;
PROVIDED THAT any specific or general directions which the Trustees of the Fund
or the Adviser may give to the Subadviser with regard to any of the foregoing
powers shall, unless the contrary is expressly stated herein, override the
general authority given by this provision.
The Adviser shall monitor and review the performance of the Subadviser under
this Agreement, including but not limited to the Subadviser's performance of the
duties delineated in subparagraphs (a)-(d) of this provision.
The Subadviser further agrees that, in performing its duties hereunder, it will
(a) coordinate with the Adviser to (i) comply with the 1940 Act and
all rules and regulations thereunder, the Advisers Act, the Internal Revenue
Code (the "Code") and all other applicable federal and state laws and
regulations, the Prospectus and Statement of Additional Information for the
Fund, and with any applicable procedures adopted by the Trustees in writing and
made available to Subadviser; (ii) manage the Assets in accordance with the
investment requirements for regulated investment companies under Subchapter M of
the Code and regulations issued thereunder; and (iii) review on a daily basis
and confirm as accurate the valuations of the securities comprising the Assets.
(b) furnish to the Trust whatever non-proprietary reports it may
reasonably request with respect to the Assets or contemplated investments. In
addition, the Subadviser will keep the Trust and the Trustees informed of
developments materially affecting the Assets and shall, on the Subadviser's own
initiative, furnish to the Trust from time to time whatever information the
Subadviser believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar
Administrators Corp. (the "Administrator"), the Adviser, and the Trust, promptly
upon their request, such copies of its investment records and ledgers with
respect to the Assets as may be required to assist the Adviser, the
Administrator and the Trust in their compliance with applicable laws and
regulations. The Subadviser will furnish the Trustees with such periodic and
special reports regarding the Fund as they may reasonably request;
(d) immediately notify the Adviser and the Trust in the event that the
Subadviser or any of its affiliates: (i) becomes aware that it is subject to a
statutory disqualification that prevents the Subadviser from serving as an
investment adviser pursuant to this Subadvisory Agreement; or (ii) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the Securities and Exchange Commission ("SEC") or other regulatory authority.
The Subadviser further agrees to notify the Trust and the Adviser immediately of
any material fact known to the Subadviser respecting or relating to the
Subadviser that is not contained in the Trust's Registration Statement, or any
amendment or supplement thereto, but that is required to be disclosed therein,
and of any statement contained therein that becomes untrue in any material
respect. The Trust, the Fund, Adviser, Administrator and their affiliates shall
likewise immediately notify the Subadviser if any of them become aware of any
regulatory action of the type described in this subparagraph 2(d).
3. Allocation of Charges and Expenses. The Subadviser shall pay all expenses
associated with the management of its business operations in performing its
responsibilities hereunder, including the cost of its own overhead, research,
compensation and expenses of its directors, officers and employees, and other
internal operating costs.
4. Compensation. The Subadvisor agrees to waive all compensation until the
Fund's net assets exceed $50 million. After the Fund's net assets exceed $50
million, the Adviser will pay the Subadviser at the end of each calendar month
an advisory fee computed daily at an annual rate equal to 0.20 of 1% of the
first $125 million of the average daily net asset value of the Assets; 0.25 of
1% of the net asset value of the Assets exceeding $125 million up to $250
million; and 0.30 of 1% of the average daily net asset value of the Assets
exceeding $250 million as compensation for the advisory services provided by the
Subadviser under this Agreement. The "average daily net assets" of the Fund
shall mean the average of the values placed on the Fund's net assets as of 4:00
p.m. (New York time) on each day on which the net asset value of the Fund is
determined consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Fund lawfully determines the value of its net assets as of some other
time on each business day, as of such other time. The value of net assets of the
Fund shall always be determined pursuant to the applicable provisions of the
Fund's Declaration of Trust and the Registration Statement. If, pursuant to such
provisions, the determination of net asset value is suspended for any particular
business day, then for the purposes of this Section 4, the value of the net
assets of the Fund as last determined shall be deemed to be
the value of its net assets as of the close of regular trading on the New York
Stock Exchange, or as of such other time as the value of the net assets of the
Fund's portfolio may lawfully be determined, on that day. If the determination
of the net asset value of the shares of the Fund has been so suspended for a
period including any month end when the Subadviser's compensation is payable
pursuant to this Section, the Subadviser's compensation payable at the end of
such month shall be computed on the basis of the value of the net assets of the
Fund as last determined (whether during or prior to such month). If the Fund
determines the value of the net assets of its portfolio more than once on any
day, then the last such determination thereof on that day shall be deemed to be
the sole determination thereof on that day for the purposes of this Section 4.
5. Books and Records. The Subadviser agrees to maintain such books and records
with respect to its services to the Trust and the Fund as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by other
applicable legal provisions, and to preserve such records for the periods and in
the manner required by applicable laws or regulations. The Subadviser also
agrees that records it maintains and preserves pursuant to Rules 31a-2 under the
1940 Act (excluding trade secrets or intellectual property rights) in connection
with its services hereunder are the property of the Trust and will be
surrendered promptly to the Trust upon its request and the Subadviser further
agrees that it will furnish to regulatory authorities having the requisite
authority any information or reports in connection with its services hereunder
which may be requested in order to determine whether the operations of the Fund
are being conducted in accordance with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Subadviser shall exercise
its best judgment and reasonable care in rendering the services provided by it
under this Subadvisory Agreement. The Subadviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust or the
Fund or the holders of the Fund's shares or by the Adviser in connection with
the matters to which this Subadvisory Agreement relates, provided that nothing
in this Subadvisory Agreement shall be deemed to protect or purport to protect
the Subadviser against liability to the Trust or the Fund or to holders of the
Fund's shares or to the Adviser to which the Subadviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of the Subadviser's reckless
disregard of its obligations and duties under this Subadvisory Agreement. As
used in this Section 6, the term "Subadviser" shall include any officers,
directors, employees or other affiliates of the Subadviser performing services
for the Fund.
7. Services Not Exclusive. It is understood that the services of the Subadviser
are not exclusive, and that nothing in this Subadvisory Agreement shall prevent
the Subadviser, its affiliates or its or their officers, directors and employees
from providing similar services to other clients or from engaging in other
investment advisory activities; provided however, that the Subadviser agrees
that it shall not provide investment advisory services to any other investment
company clients (whether or not the investment objective and policies are
similar to those of the Fund). The Subadviser is not required to recommend to
the Fund the same investments it recommends to its other clients. In connection
with purchases or sales of portfolio securities for the account of the Fund,
neither the Subadviser nor any of its directors, officers or employees shall act
as a principal or agent or receive any commission. If the Subadviser provides
any advice to its clients concerning the shares of the Fund, the Subadviser
shall act solely as investment counsel for such clients and not in any way on
behalf of the Fund.
8. Duration and Termination. This Subadvisory Agreement shall continue in effect
for a period of two years unless sooner terminated as provided herein.
Notwithstanding the foregoing, this Subadvisory Agreement may be terminated: (a)
at any time without penalty by the Fund or Adviser upon the vote of a majority
of the Trustees or by vote of the majority of the Fund's outstanding voting
securities, upon sixty (60) days' written notice to the Subadviser, or (b) by
the Subadviser without cause at any time without penalty, upon (60) days'
written notice to the Trust or Adviser. This Subadvisory Agreement will also
terminate automatically in the event of its assignment (as defined in the 0000
Xxx) or the assignment or termination of the Investment Advisory Agreement.
9. Amendments. No provision of this Subadvisory Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by both parties, and no material amendment of this Subadvisory Agreement
shall be effective until approved by an affirmative vote of (i) a majority of
the
outstanding voting securities of the Fund, and (ii) a majority of the Trustees
of the Trust, including a majority of Trustees who are not interested persons of
any party to this Subadvisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.
10. Indemnification. (a) The Adviser hereby agrees to indemnify the Subadviser
from and against all liabilities, losses, expenses, ,reasonable attorneys' fees
and costs (other than attorneys' fees and costs in relation to the preparation
of this Agreement; each party bearing responsibility for its own such costs and
fees) or damages (other than liabilities, losses, expenses, attorneys fees and
costs or damages arising from the Subadviser failing to meet the standard of
care required hereunder in the performance by the Subadviser of, or its failure
to perform, the services required hereunder), arising from the Adviser's (its
affiliates and their respective agents and employees) failure to perform its
duties or assume its obligations hereunder, or from its wrongful actions or
omissions, including but not limited to any claims for non-payment of advisory
fees; claims asserted or threatened by any shareholder of the Trust,
governmental or regulatory agency, or any other person; claims arising from any
wrongful act by the Trust or the Fund or any of their trustees, officers,
employees, or representatives, or by the Adviser, its officers, employees or
representatives, or from any actions by any representative of the Trust or the
Fund; any action or claim against the Subadviser based on any alleged untrue
statement or misstatement of material fact in any registration statement,
prospectus, shareholder report or other information or materials covering shares
filed or made public by the Trust on behalf of the Fund or any amendment thereof
or supplement thereto, or the failure or alleged failure to state therein a
material fact required to be stated in order that the statements therein are not
misleading, provided that such claim is not based upon information provided to
the Adviser by the Subadviser or approved by the Subadviser in the manner
provided in paragraph 12(b) of this Agreement, or which facts or information the
Subadviser failed to provide or disclose. With respect to any claim for which
the Subadviser shall be entitled to indemnity hereunder, the Adviser shall
assume the reasonable expenses and costs (including any reasonable attorneys'
fees and costs) of the Subadviser of investigating and/or defending any claim
asserted or threatened by any party, subject always to the Adviser first
receiving a written undertaking from the Subadviser to repay any amounts paid on
its behalf in the event and to the extent of any subsequent determination that
the Subadviser was not entitled to indemnification hereunder in respect of such
claim.
(b) The Subadviser hereby agrees to indemnify the Adviser, its
affiliates, the Trust and the Fund from and against all liabilities, losses,
expenses, reasonable attorneys' fees and costs (other than attorneys' fees and
costs in relation to the preparation of this Agreement; each party bearing
responsibility for its own such costs and fees) or damages (other than
liabilities, losses, expenses, attorneys' fees and costs or damages arising from
the Adviser's failure to perform its responsibilities hereunder or claims
arising from its acts or failure to act in performing this Agreement) arising
from Subadviser's (its affiliates, and their respective agents and employees)
failure to perform its duties and assume its obligations hereunder, or from any
wrongful act of Subadviser or its failure to act in performing this Agreement,
including any action or claim against the Adviser based on any alleged untrue
statement or misstatement of a material fact made or provided by and with the
consent of Subadviser contained in any registration statement, prospectus,
shareholder report or other information or materials relating to the Trust or
the Fund and shares issued by the Trust or the failure or alleged failure to
state a material fact therein required to be stated in order that the statement
therein is not misleading, which fact should have been made or provided by the
Subadviser to the Adviser. With respect to any claim for which the Adviser is
entitled to indemnity hereunder, the Subadviser shall assume the reasonable
expenses and costs (including any reasonable attorneys' fees and costs) of the
Adviser of investigating and/or defending any claim asserted or threatened by
any party, subject always to the Subadviser first receiving a written
undertaking from the Adviser to repay any amounts paid on its behalf in the
event and to the extent of any subsequent determination that the Adviser was not
entitled to indemnification hereunder in respect of such claim.
(c) In the event that the Subadviser or Adviser is or becomes a party
to any action or proceedings in respect of which indemnification may be sought
hereunder, the party seeking indemnification shall promptly notify the other
party thereof. After becoming notified of the same, the party from whom
indemnification is sought shall be entitled to participate in any such action or
proceeding and shall assume any payment for the full defense thereof with
counsel reasonably satisfactory to the party seeking indemnification. After
properly assuming the defense thereof, the party from whom indemnification is
sought shall not be liable hereunder to the
other party for any legal or other expenses subsequently incurred by such party
in connection with the defense thereof, other than damages, if any, by way of
judgment, settlement, or otherwise pursuant to this provision. The party from
whom indemnification is sought shall not be liable hereunder for any settlement
of any action or claim effected without its written consent, which consent shall
not be unreasonably withheld.
11. Independent Contractor. Subadviser shall for all purposes of this Agreement
be deemed to be an independent contractor and, except as otherwise expressly
provided herein, shall have no authority to act for, bind or represent the Trust
or the Fund in any way or otherwise be deemed to be an agent of the Trust or the
Fund. Likewise, the Trust, the Fund, the Adviser, and their respective
affiliates, agents and employees shall not be deemed agents of the Subadviser
and shall have not authority to bind Subadviser.
12. Use of Name. (a) The Trust, on behalf of the Fund, and the Fund may, subject
to sub-clause (b) below, use the name, "Xxxxxx/Xxxxxxx Capital Management, Inc."
or any component, abbreviation or other name derived therefrom for promotional
purposes only for so long as this Agreement (or any extension, renewal or
amendment thereof) continues in force, unless the Subadviser shall specifically
consent in writing to such continued use thereafter. Any permitted use by the
Trust or Fund during the term hereof of the name of the Subadviser or any of its
principals, or any derivative thereof, shall in no way prevent the Subadviser or
any of it shareholders or any of their successors, from using or permitting the
use of such name (whether singly or in any combination with any other words)
for, by or in connection with an entity or enterprise other than the Trust or
the Fund.. At the conclusion of this Agreement or in the event of any
termination of this Agreement or if the Subadviser's services are terminated for
any reason, each of the authorized parties and their respective employees,
representatives, affiliates, and associates agree that they shall immediately
cease using the name and/or any derivatives of said name for any purpose
whatsoever.
(b) The Adviser and its affiliates shall not publish or distribute, and
shall cause the Fund not to publish or distribute to Fund shareholders,
prospective investors, sales agents or members of the public any disclosure
document, offering literature (including any form of advertisement or other
solicitation materials calculated to lead investors to subscribe for and
purchase shares of the Fund) or other document referring by name to the
Subadviser, unless the Subadviser shall have consented in writing to such
references in the form and context in which they appear; provided however, that
where the Fund timely seeks to obtain approval of disclosure contained in any
documents required to be filed by the Fund, and such approval is not forthcoming
on or before the date on which such documents are required by law to be filed,
the Subadviser shall be deemed to have consented to such disclosure.
13. Miscellaneous. (a) This Subadvisory Agreement shall be governed by the laws
of the State of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, the Advisers Act, or rules or orders
of the SEC thereunder. In the event of any litigation in which the Adviser and
the Subadviser are adverse parties and there are no other parties to such
litigation, such action shall be brought in the United States District Court for
the State of Massachusetts located in Boston, Massachusetts.
(b) The captions of this Subadvisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) This Agreement may be executed in one or more counterparts, all of
which taken together shall be deemed to constitute one and the same instrument.
14. Notices. Any notice, instruction or other instrument required or permitted
to be given hereunder may be delivered in person to the offices of the parties
as set forth therein during normal business hours, or delivered or sent by
prepaid registered mail, express mail or by facsimile to the parties at such
offices or such other address as may be notified by either party from time to
time. Such notice, instruction or other instrument shall be deemed to have been
served, in the case of a registered letter at the expiration of seventy-two (72)
hours after posting; in the case of express mail, within twenty-four (24) hours
after dispatch; and in the case of facsimile, immediately on dispatch, and if
delivered outside normal business hours it shall be deemed to have been received
at the next time after
delivery or transmission when normal business hours commence. Evidence that the
notice, instruction or other instrument was properly addressed, stamped and put
into the post shall be conclusive evidence of posting. 15. Attorney's Fees. In
the event of a material breach of this Agreement by any party hereto, the
prevailing party, as determined by the trier of fact, shall be entitled to
reasonable attorneys' fees and costs as determined by the court in such action,
in addition to any other damages awarded.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the date and year set forth
above.
NORTHSTAR INVESTMENT MANAGEMENT XXXXXX/XXXXXXX CAPITAL MANAGEMENT, INC.
By:_______________________________ By:_______________________________
Xxxx X. Xxxxxx Xxxx X. Xxxxxx
Chairman and CEO President
