LPT VARIABLE INSURANCE SERIES TRUST
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT dated as of ______________, 1997, among Xxxxxx Associates L.P.
("HALP"), a Delaware limited partnership (the"Sub-Adviser"), LPIMC Insurance
Marketing Services, a California corporation (the "Adviser"), and LPT Variable
Insurance Series Trust, a Massachusetts business trust (the "Trust").
WHEREAS, Adviser has entered into an Investment Advisory Agreement
(referred to herein as the "Advisory Agreement"), dated January 9, 1996,
with the Trust, under which Adviser has agreed to act as investment adviser to
the Trust, which is registered as an open-end diversified management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Advisory Agreement provides that the Adviser may engage a
sub-adviser or sub-advisers for the purpose of managing the investments of the
Portfolios of the Trust; and
WHEREAS, the Adviser desires to retain Sub-Adviser, which is engaged in
the business of rendering investment management services, to provide certain
sub-investment advisory services for the investment portfolio(s) of the Trust
listed on EXHIBIT A hereto (the "Portfolio") of the Trust as more fully
described below; and
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided
by Sub-Adviser to Adviser with respect to the Portfolio and the terms and
conditions under which such services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF SUB-ADVISER. The Sub-Adviser shall act as investment
sub-adviser to the Adviser with respect to the Portfolio. In this capacity,
subject to the overall supervision of the Adviser, the Sub-Adviser shall have
the following responsibilities and authority:
(a) to manage the Portfolio on an ongoing basis, and with discretion to
make and implement decisions regarding the acquisition, holding or disposition
of any or all of the securities or other assets which the Portfolio may own or
contemplate acquiring from time to time;
(b) to cause its officers to attend meetings of the Adviser or the Trust
and furnish oral or written reports, as the Adviser may reasonably require, in
order to keep the Adviser and its officers and the Trustees of the Trust and
appropriate officers of the Trust fully informed as to the condition of the
investment securities of the Portfolio, the investment recommendations of the
Sub-Adviser, and the investment considerations which have given rise to those
recommendations;
(c) to furnish such statistical and analytical information and reports
regarding investment securities of the Portfolio as may reasonably be required
by the Adviser from time to time; and
(d) to supervise and place orders for the purchase, sale, exchange and
conversion of securities as directed by the appropriate officers of the Trust
or of the Adviser.
2. OBLIGATIONS OF THE ADVISER. The Adviser shall have the following
obligations under this Agreement:
(a) to keep the Sub-Adviser continuously and fully informed as to the
composition of the Portfolio's investment securities and the nature of the
Portfolio's assets and liabilities;
(b) to keep the Sub-Adviser continually and fully advised of the
Portfolio's investment objectives, and any modifications and changes thereto,
as well as any specific investment restrictions or limitations;
(c) to furnish the Sub-Adviser with a certified copy of any financial
statement or report prepared for the Trust with respect to the Portfolio by
certified or independent public accountants, and with copies of any financial
statements or reports made by the Trust to shareholders or to any governmental
body or securities exchange and to inform the Sub-Adviser of the results of
any audits or examinations by regulatory authorities pertaining to the
Portfolio, if these results affect the services provided by the Sub-Adviser
pursuant to this Agreement;
(d) to furnish the Sub-Adviser with any further materials or information
which the Sub-Adviser may reasonably request to enable it to perform its
functions under this Agreement; and
(e) to compensate the Sub-Adviser for its services under this Agreement
by the payment of fees as set forth in EXHIBIT B attached hereto.
3. PORTFOLIO TRANSACTIONS. The Sub-Adviser shall place all orders for
the purchase and sale of portfolio securities for the account of the Portfolio
with broker-dealers selected by the Sub-Adviser. In executing portfolio
transactions and selecting broker-dealers, the Sub-Adviser will use its best
efforts to seek best execution on behalf of the Portfolio. In assessing the
best execution available for any transaction, the Sub-Adviser shall consider
all factors 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-dealer, and the reasonableness of the commission, if
any (all for the specific transaction and on a continuing basis). In
evaluating the best execution available, and in selecting the broker/dealer to
execute a particular transaction, the Sub-Adviser may also consider the
brokerage and research services (as those terms are used in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-Adviser, an affiliate of the Sub-Adviser (to the
extent permitted by law) or another investment adviser of the Portfolio
exercises investment discretion. The Sub-Adviser is authorized to cause the
Portfolio to pay a broker-dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Portfolio
which is in excess of the amount of the commission another broker-dealer would
have charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such
broker-dealer viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised.
4. MARKETING SUPPORT. The Sub-Adviser shall provide marketing support
to the Adviser in connection with the sale of Trust shares and/or the sale of
variable annuity and variable life insurance contracts issued by London
Pacific Life & Annuity Company and its affiliates which may invest in the
Trust (collectively, the "Life Company"), as reasonably requested by the
Adviser. Such support shall include, but not necessarily be limited to,
presentations by representatives of the Sub-Adviser at investment seminars,
conferences and other industry meetings. Any materials utilized by the Adviser
which contain any information relating to the Sub-Adviser shall be submitted
to the Sub-Adviser for approval prior to use, not less than five (5) business
days before such approval is needed by the Adviser. Any materials utilized by
the Sub-Adviser which contain any information relating to the Adviser, the
Life Company (including any information relating to its separate accounts or
variable annuity or variable life insurance contracts) or the Trust shall be
submitted to the Adviser for approval prior to use, not less than five (5)
business days before such approval is needed by the Sub-Adviser.
5. SERVICE XXXX. HAIM, as the owner of the service xxxx "Oakmark", has
sublicensed the Portfolio to utilize the word "Oakmark" in reference to
comparable fund performance, subject to revocation by HAIM in the event that
the Portfolio ceases to engage HAIM or its affiliates as sub-adviser.
6. GOVERNING LAW. The Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
7. EXECUTION OF AGREEMENT. This Agreement will become binding on the
parties hereto upon their execution of the attached Exhibit B to this
Agreement.
8. COMPLIANCE WITH LAWS. The Sub-Adviser represents that it is, and
will continue to be throughout the term of this Agreement, an investment
adviser registered under all applicable federal and state laws. In all matters
relating to the performance of this Agreement, the Sub-Adviser will act in
conformity with the Trust's Declaration of Trust, Bylaws, and current
registration statement applicable to the Portfolio as may be furnished to the
Sub-Adviser from time to time and with the instructions and direction of the
Adviser and the Trust's Trustees, and will conform to and comply with the 1940
Act and all other applicable federal or state laws and regulations.
9. TERMINATION. This Agreement shall terminate automatically upon the
termination of the Advisory Agreement. This Agreement may be terminated at any
time, without penalty, by the Adviser or by the Trust by giving sixty (60)
days' written notice of such termination to the Sub-Adviser at its principal
place of business, provided that such termination is approved by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of
the Portfolio. This Agreement may be terminated at any time by the Sub-Adviser
by giving 60 days written notice of such termination to the Trust and the
Adviser at their respective principal places of business.
10. ASSIGNMENT. This Agreement shall terminate automatically in the
event of any assignment (as that term is defined in Section 2(a)(4) of the
0000 Xxx) of this Agreement.
11. TERM. This Agreement shall begin on the date of its execution and
unless sooner terminated in accordance with its terms shall continue in effect
for two years from that date and from year to year thereafter provided
continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties hereto or interested
persons (as the term is defined in Section 2(a)(19) of the 0000 Xxx) of any
such party, cast in person at a meeting called for the purpose of voting on
the approval of the terms of such renewal, and by either the Trustees of the
Trust or the affirmative vote of a majority of the outstanding voting
securities of the Portfolio (as that phrase is defined in Section 2(a)(42) of
the 1940 Act).
12. AMENDMENTS. This Agreement may be amended only with the approval by
the affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) and
the approval by the vote of a majority of the Trustees of the Trust who are
not parties hereto or interested persons (as that term is defined in Section
2(a)(19) of the 0000 Xxx) of any such party, cast in person at a meeting
called for the purpose of voting on the approval of such amendment, unless
otherwise permitted in accordance with the 1940 Act.
13. INDEMNIFICATION. The Adviser shall indemnify and hold harmless the
Sub-Adviser, its officers and directors and each person, if any, who controls
the Sub-Adviser within the meaning of Section 15 of the Securities Act of 1933
("1933 Act") (any and all such persons shall be referred to as "Indemnified
Party"), against any loss, liability, claim, damage or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any matter to which the Sub-Advisory
Agreement relates or the services performed by the Sub-Adviser in connection
herewith. However, in no case (i) is this indemnity to be deemed to protect
any particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Sub-Advisory
Agreement or (ii) is the Adviser to be liable under this indemnity with
respect to any claim made against any particular Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Sub-Adviser or such controlling persons.
The Sub-Adviser shall indemnify and hold harmless the Adviser and each of
its directors and officers and each person if any who controls the Adviser
within the meaning of Section 15 of the 1933 Act, against any loss, liability,
claim, damage, or expense described in the foregoing indemnity, but only with
respect to the Sub-Adviser's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Sub-Advisory Agreement.
In case any action shall be brought against the Adviser or any person so
indemnified, in respect of which indemnity may be sought against the
Sub-Adviser, (a) the Sub-Adviser shall have the rights and duties given to the
Adviser, and the Adviser and each person so indemnified shall have the rights
and duties given to the Sub-Adviser by the provisions of subsections (i) and
(ii) of this section and (b) the Sub-Adviser shall have the right to defend
any such claim with counsel selected by it.
The Sub-Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Sub-Adviser nor its officers, directors,
employees or agents shall be subject to any liability for any error of
judgment or mistake of law or for any loss arising out of any investment or
other act or omission in the performance by the Sub-Adviser of its duties
under this Agreement or for any loss or damage resulting from the imposition
by any government or exchange control restrictions which might affect the
liquidity of the Portfolio's assets, or from acts or omissions of custodians
or securities depositories, or from any war or political act of any foreign
government to which such assets might be exposed, provided that nothing herein
shall be deemed to protect, or purport to protect, the Sub-Adviser against any
liability to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder.
EXHIBIT A
LPT VARIABLE INSURANCE SERIES TRUST
The following Portfolios of LPT Variable Trust Insurance Series Trust are
subject to this Agreement:
Xxxxxx Associates Value Portfolio
EXHIBIT B
LPT VARIABLE INSURANCE SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Adviser hereunder, Adviser shall pay to
Sub-Adviser and Sub-Adviser agrees to accept as full compensation for all
services rendered hereunder, monthly a fee of:
Xxxxxx Associates Value Portfolio
.75% of first $25 million on an annualized basis of average
daily net assets under management.
.60% of next $75 million on an annualized basis of average
daily net assets under management.
.50% on an annualized basis of average daily net assets
under management over and above $100 million.
LPT VARIABLE INSURANCE SERIES TRUST
By:________________________________
Title:_____________________________
LPIMC INSURANCE MARKETING SERVICES
By:_______________________________
Title:____________________________
XXXXXX ASSOCIATES L.P.
By:_______________________________
Title:____________________________
A Copy of the document establishing the Trust is filed with the Secretary of
the Commonwealth of Massachusetts. This Agreement is executed by officers not
as individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of each
Portfolio.
