Exhibit (d) 26
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
XXXXXXXXXX ASSET MANAGEMENT, LLC
AND
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 27th day of April, 1998 by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Series"),
Xxxxxxxxxx Asset Management, LLC, a Delaware limited liability company
("Xxxxxxxxxx"), and Xxxx Xxxxxxx Mutual Life Insurance Company, a Massachusetts
corporation ("JHMLICO").
WHEREAS, the Series 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, JHMLICO and Xxxxxxxxxx are each engaged in the business of rendering
investment advice under the Investment Advisers Act of 1940; and
WHEREAS, the Series 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 Series offers shares in several classes, one of which is
designated as the Emerging Markets Equity Portfolio (together with all other
classes established by the Series, collectively referred to as the
"Portfolios"), each of which pursues its investment objectives through separate
investment policies; and
WHEREAS, the Series has retained JHMLICO to render investment management
services to the Series pursuant to an Investment Management Agreement dated as
of April 14, 1998 (the "Investment Management Agreement"), pursuant to which it
may contract with Xxxxxxxxxx as a sub-manager as provided for herein;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-MANAGER
(a) Subject Portfolio. Xxxxxxxxxx is hereby appointed and Xxxxxxxxxx hereby
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accepts the appointment to act as investment adviser and manager to the Emerging
Markets Equity Portfolio (the "Subject Portfolio") for the period and on the
terms herein set forth, for the compensation herein provided. As of the date of
this Agreement, Xxxxxxxxxx is the sole sub-manager of the Subject Portfolio.
Although it is not contemplated that additional sub-managers will be employed
for any portion of the Subject Portfolio, if additional sub-managers are
employed by JHMLICO and the Series for the Subject Portfolio, Xxxxxxxxxx'x
responsibility hereunder shall be limited to that portion of the Subject
Portfolio over which it retains investment discretion.
(b) Additional Subject Portfolios. In the event that the Series and JHMLICO
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desire to retain Xxxxxxxxxx to render investment advisory services hereunder for
any other Portfolio, they shall so notify Xxxxxxxxxx in writing. If it is
willing to render such services, Xxxxxxxxxx shall notify the Series in writing,
whereupon such Portfolio shall become a Subject Portfolio hereunder.
(c) Incumbency Certificates. Xxxxxxxxxx shall furnish to JHMLICO,
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immediately upon execution of this Agreement, a certificate of a senior officer
of Xxxxxxxxxx setting forth (by name and title, and including specimen
signatures) those officers of Xxxxxxxxxx who are authorized to make investment
decisions for the Subject Portfolio pursuant to the provisions of this
Agreement. Xxxxxxxxxx shall promptly provide supplemental certificates in
connection with each additional Subject Portfolio (if any) and further
supplemental certificates, as needed, to reflect all changes with respect to
such authorized officers for any Subject Portfolio. On behalf of the Series,
JHMLICO shall instruct the custodian for the Subject Portfolio to accept
instructions with respect to the Subject Portfolio from the officers of
Xxxxxxxxxx so named.
(d) Independent Contractor. Xxxxxxxxxx shall for all purposes herein be
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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 Series.
(e) Xxxxxxxxxx'x Representations. Xxxxxxxxxx represents, warrants and
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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
JHMLICO 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 JHMLICO of any material change in the senior management
or ownership of Xxxxxxxxxx, or of any change in the identity of the senior
personnel who manage the Subject Portfolio, (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 Series and to JHMLICO, and has adopted
procedures designed to prevent violations of such code, and (v) that it has
furnished the Series and JHMLICO each with a copy of Xxxxxxxxxx' Form ADV, as
most recently filed with the SEC, and will promptly furnish copies of each
future material amendment thereto.
(f) JHMLICO's Representations. JHMLICO represents that the Series is an
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"accredited investor" as defined in Rule 501(a)(3) of Regulation D under the
Securities Act of 1933 (the "1933 Act"), and a "qualified institutional buyer"
as defined in Rule 144A(a)(1) under the 1933 Act.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Xxxxxxxxxx will provide for the Subject Portfolio a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of said Portfolio, as established by the Series and JHMLICO. From
time to time, JHMLICO or the Series may provide Xxxxxxxxxx with additional or
amended investment policies, guidelines and restrictions. Xxxxxxxxxx, as sub-
manager, will manage the investment and reinvestment of the assets in the
Subject Portfolio, and perform the functions set forth below, subject to the
overall supervision, direction, control and review of JHMLICO and the Board of
Trustees of the Series, consistent with the applicable investment policies,
guidelines and restrictions, the provisions of the Series' 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
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state insurance laws and regulations or any directions or instructions delivered
to Xxxxxxxxxx in writing by JHMLICO or the Series from time to time). By its
signature below, Xxxxxxxxxx acknowledges receipt of a copy of the Series'
Declaration of Trust, Bylaws, prospectus, and statement of additional
information, each as in effect on the date of this Agreement.
Xxxxxxxxxx will, at its own expense:
(a) advise the Series in connection with investment policy decisions to be
made by its Board of Trustees or any committee thereof regarding the Subject
Portfolio and, upon request, furnish the Series with research, economic and
statistical data in connection with said Portfolio's investments and investment
policies;
(b) submit such reports and information as JHMLICO or the Series' Board of
Trustees may reasonably request, to assist the custodian in its determination of
the market value of securities held in the Subject Portfolio;
(c) place orders for purchases and sales of portfolio investments for the
Subject Portfolio;
(d) give instructions to the Subject Portfolio's custodian concerning the
delivery of securities and transfer of cash for the Subject Portfolio;
(e) maintain and preserve the records relating to its activities hereunder
required by the 1940 Act to be maintained and preserved by the Series, to the
extent not maintained by the custodian, transfer agent or JHMLICO;
(f) at the close of business each day, provide JHMLICO 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 Portfolio, and promptly forward (or cause to be forwarded) to
the custodian copies of all brokerage or dealer confirmations;
(g) as soon as practicable following the end of each calendar month, provide
JHMLICO with written statements showing all transactions effected for the
Subject Portfolio during the month, a summary listing all investments held in
such Portfolio as of the last day of the month, and such other information as
JHMLICO may reasonably request in connection with the accounting services that
JHMLICO provides for the Subject Portfolio; and
(h) absent specific instructions to the contrary provided to it by JHMLICO
and subject to its receipt of all necessary voting materials, vote all proxies
with respect to investments of the Subject Portfolio in accordance with
Xxxxxxxxxx'x proxy voting policy as most recently provided to JHMLICO.
On its own initiative, Xxxxxxxxxx will apprise JHMLICO and the Series of
important political and economic developments materially affecting the
marketplace or the Subject Portfolio, and will furnish JHMLICO and the Series'
Board of Trustees from time to time such information as is
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appropriate for this purpose. Xxxxxxxxxx will also make its personnel available
in Boston or other reasonable locations as often as annually to discuss the
Subject Portfolio and Xxxxxxxxxx'x management thereof, to educate JHMLICO sales
personnel with respect thereto, and for such other purposes as the Series or
JHMLICO may reasonably request.
The Series and JHMLICO will provide timely information to Xxxxxxxxxx
regarding such matters as purchases and redemptions of shares in the Subject
Portfolio and the cash requirements of, and cash available for investment in,
the Portfolio. JHMLICO will timely provide Xxxxxxxxxx with copies of monthly
accounting statements for the Subject Portfolio, and such other information
(including, without limitation, reports concerning the classification of
Portfolio securities for purposes of Subchapter M of the Internal Revenue Code
and Treasury Regulations Section 1.817) as may be reasonably necessary or
appropriate in order for Xxxxxxxxxx to perform its responsibilities hereunder.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of performing
its obligations hereunder. In this regard, the Series specifically agrees to
assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Series 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 Series to federal, state or other governmental agencies;
and
(d) interest payable on the Series' borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Series and JHMLICO 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 Portfolio as
herein provided, JHMLICO shall pay to Xxxxxxxxxx a fee (for the payment of which
the Series shall have no obligation or liability), based on the Current Net
Assets of the Subject Portfolio, 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 Portfolio during any
calendar month, the fee with respect to such Portfolio 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 Subject Portfolio's net assets as of the most recent
preceding day for which the Subject Portfolio's net assets were computed.
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5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Portfolio, Xxxxxxxxxx is authorized to select the brokers or dealers
that will execute purchase and sale transactions for the Portfolio and to use
its best efforts to obtain the best available price and most favorable execution
with respect to all such purchases and sales of portfolio securities for said
Portfolio. Xxxxxxxxxx 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 Portfolio and its
shareholders, Xxxxxxxxxx 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 Portfolio or to Xxxxxxxxxx, and who charge a
higher commission rate to the Subject Portfolio than may result when allocating
brokerage solely on the basis of seeking the most favorable price and execution.
Xxxxxxxxxx shall determine in good faith that such higher cost was reasonable in
relation to the value of the brokerage and research services provided.
Xxxxxxxxxx will not receive any tender offer solicitation fees or similar
payments in connection with the tender of investments of any Portfolio.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by
Xxxxxxxxxx on the Series' behalf and, in the event of termination of this
Agreement with respect to any Portfolio for any reason, all records relating to
that Portfolio shall be promptly returned to the Series, free from any claim or
retention of rights by Xxxxxxxxxx, provided that (subject to the last paragraph
of this Section 6) Xxxxxxxxxx may retain copies of such records. Xxxxxxxxxx
also agrees, upon request of the Series, promptly to surrender such books and
records or, at its expense, copies thereof, to the Series or make such books and
records available for audit or inspection by representatives of regulatory
authorities or other persons reasonably designated by the Series. Xxxxxxxxxx
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 all insurance laws and regulations
are being complied with. Xxxxxxxxxx shall supply the Board of Trustees and
officers of the Series and JHMLICO with all statistical information regarding
investments which is reasonably required by them and reasonably available to
Xxxxxxxxxx.
Xxxxxxxxxx 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 Series has authorized such disclosure, or
if such disclosure is expressly required by applicable federal or state
regulatory authorities.
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7. LIABILITY; STANDARD OF CARE.
No provision of this Agreement shall be deemed to protect Xxxxxxxxxx or
JHMLICO against any liability to the Series 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. Nor shall any provision hereof be deemed to protect any trustee or
officer of the Series 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.
Adviser shall employ only qualified personnel to manage the Subject Portfolio;
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 Portfolio
and with the provisions of the Series' Declaration of Trust, Bylaws, prospectus
and statement of additional information; shall manage the Subject Portfolio
(subject to the receipt of, and based upon the information contained in,
periodic reports from JHMLICO or the custodian concerning the classification of
Portfolio securities for such purposes) as a regulated investment company in
accordance with subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and Treasury Regulations Section 1.817-5(b); shall act at all
times in the best interests of the Series; 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, Xxxxxxxxxx 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.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
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Subject Portfolio on the date hereof and, with respect to any additional Subject
Portfolio, on the date of receipt by the Series of notice from Xxxxxxxxxx in
accordance with Paragraph 1(b) hereof that it is willing to serve with respect
to such Portfolio. Unless terminated as herein provided, this Agreement shall
remain in full force and effect for two years from the date hereof with respect
to the initial Subject Portfolio and, with respect to each additional Subject
Portfolio, until two years following the date on which such Portfolio becomes a
Subject Portfolio hereunder, and shall continue in full force and effect
thereafter with respect to each Subject Portfolio so long as such continuance
with respect to any such Portfolio is approved at least annually (a) by either
the Board of Trustees of the Series or by vote of a majority of the outstanding
voting shares of such Portfolio, and (b) in either event by the vote of a
majority of the trustees of the Series 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 any Subject Portfolio shall be effective to continue this
Agreement with respect to any such Portfolio notwithstanding (A) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Portfolio affected hereby, and (B) that this Agreement has
not been
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approved by the vote of a majority of the outstanding shares of the Series,
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 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 with respect to any
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Subject Portfolio at any time, without payment of any penalty, by the Series
pursuant to a vote of the trustees of the Series or a vote of a majority of the
outstanding shares of such Portfolio, which termination shall be effective
immediately upon delivery of notice thereof to Xxxxxxxxxx and JHMLICO. This
Agreement may be terminated by Xxxxxxxxxx on at least ninety days' prior written
notice to the Series and JHMLICO, and may be terminated by JHMLICO on at least
ninety days' prior written notice to the Series and Xxxxxxxxxx.
(c) Automatic Termination. This Agreement shall automatically and
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immediately terminate in the event of its assignment (other than as permitted
pursuant to Section 15 below) or if the Investment Management Agreement is
terminated.
9. SERVICES NOT EXCLUSIVE; USE OF XXXXXXXXXX'X NAME AND LOGO.
The services of Xxxxxxxxxx to the Series 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 Xxxxxxxxxx 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 other
investment advisory clients.
During the term of this Agreement, JHMLICO and the Series shall have the
non-exclusive and non-transferrable right to use Xxxxxxxxxx'x name and logo in
all materials relating to the Subject Portfolio, including all prospectuses,
proxy statements, reports to shareholders, sales literature and other written
materials prepared for distribution to shareholders of the Series or the public.
However, prior to distribution of any materials which refer to Xxxxxxxxxx,
JHMLICO shall consult with Xxxxxxxxxx and shall furnish to Xxxxxxxxxx a copy of
such materials. Xxxxxxxxxx agrees to cooperate with JHMLICO and to review such
materials promptly. JHMLICO shall not distribute such materials if Xxxxxxxxxx
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.
In connection with the purchase and sale of portfolio securities of the
Subject Portfolio, Xxxxxxxxxx and its directors, officers and employees will not
act as principal or agent or receive any commission. Nothing in this Agreement,
however, shall preclude the combination of orders for the sale or purchase of
portfolio securities of the Subject Portfolio with those for other registered
investment companies and portfolios or accounts of other advisory clients
managed by Xxxxxxxxxx or its affiliates, if orders are allocated in a manner
deemed equitable by Xxxxxxxxxx among the accounts and at a price approximately
averaged.
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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 with respect to any Portfolio until approved
specifically by (a) the Board of Trustees of the Series, or by vote of a
majority of the outstanding shares of that Portfolio, and (b) by vote of a
majority of those trustees of the Series 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.
12. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Series hereunder shall
not be binding upon any of the trustees, shareholders, officers, agents or
employees of Series personally, but only bind the trust property of the Series,
as provided in the Series' 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: Xxxxxxxxxx Asset Management, LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Fax #: 000-000-0000
JHMLICO: Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax #: 000-000-0000
SERIES: Xxxx Xxxxxxx Variable Series Trust I
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx 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.
15. ASSIGNMENT.
This Agreement may not be assigned by any party, either in whole or in part,
without the prior written consent of each other party.
16. CLIENT INFORMATION.
JHMLICO and the Series hereby consent to the disclosure to third parties by
Xxxxxxxxxx of (i) the identity of JHMLICO or the Series as a part of any
representative list of other clients of Xxxxxxxxxx, (ii) investment results and
other data of the Subject Portfolio (other than the identity of JHMLICO or the
Series) in connection with providing composite investment results of clients of
Xxxxxxxxxx, and (iii) investments and transactions of the Subject Portfolio
(other than the identity of JHMLICO or the Series) in connection with providing
composite information of clients of Xxxxxxxxxx.
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
/s/ Xxxxxx X. XxXxxx By: /s/ Xxxxx X. Xxxx
Assistant Secretary -------------------------------
Title: Chairman and CEO
ATTEST: XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
/s/ Xxxxxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
Assistant Secretary -------------------------------
Title: Vice President
ATTEST: XXXXXXXXXX ASSET MANAGEMENT, LLC
/s/ Xxxx Xxxxxxx By: /s/ Xxxx Xxxxx
Vice President -------------------------------
Title: Vice President
SCHEDULE I
FEES
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Current Net Assets Under Management Sub-Advisory Fee
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On the first $10,000,000 110 basis points (1.10%) per annum
On the next $140,000,000 90 basis points (0.90%) per annum
On amounts over $150,000,000 80 basis points (0.80%) per annum
