EXHIBIT 99B.23(d)-13
SUB-ADVISORY AGREEMENT
(XXXXXX FINANCIAL GROUP LLC/BAY ISLE FINANCIAL LLC)
XXXXXX LARGE CAP VALUE FUND
(A SERIES OF XXXXXX INVESTMENT PORTFOLIO TRUST)
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective
as of the 1st day of April, 2002, by and between XXXXXX FINANCIAL GROUP LLC, a
Nevada limited liability company ("Xxxxxx"), and BAY ISLE FINANCIAL LLC, a
Delaware limited liability company ("Bay Isle").
RECITALS
X. Xxxxxx has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Xxxxxx Investment Portfolio Trust, a Delaware
business trust (the "Trust") and an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), with respect to the Xxxxxx Large Cap Value Fund, a series of the Trust
(the "Fund"), pursuant to which Xxxxxx has agreed to provide investment advisory
services with respect to the Fund.
B. Bay Isle is engaged in the business of rendering investment advisory
services and is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act").
X. Xxxxxx desires to retain Bay Isle to furnish investment advisory
services with respect to the Fund, and Bay Isle is willing to furnish such
services.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Duties of Bay Isle. Xxxxxx hereby engages the services of Bay Isle
as sub-adviser for the Fund in furtherance of the Advisory Agreement. Bay Isle
agrees to perform the following duties, subject to the oversight of Xxxxxx and
to the overall control of the officers and the Trustees of the Trust:
(a) Bay Isle shall manage the investment operations of the
Fund and the composition of its investment portfolio, and determine without
prior consultation with Xxxxxx or the Trust, what securities and other assets of
the Fund will be acquired, held, disposed of or loaned, and shall direct Xxxxxx
with respect to the execution of trades in connection with such determinations,
in conformity with the investment objective, policies and restrictions and the
other statements concerning the Fund in the Trust's trust instrument, as amended
from time to time (the "Trust Instrument"), bylaws and registration statements
under the 1940 Act and the Securities Act of 1933,
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as amended (the "1933 Act"), the 1940 Act and the Advisers Act, the rules and
regulations thereunder, and all other applicable federal and state laws and
regulations, and the provisions of the Internal Revenue Code of 1986, as
amended, applicable to the Fund as a regulated investment company;
(b) Bay Isle shall cause its officers to attend meetings and
furnish oral or written reports, as the Trust or Xxxxxx may reasonably require,
in order to keep Xxxxxx, the Trustees and appropriate officers of the Trust
fully informed as to the condition of the investment portfolio of the Fund, the
investment decisions of Bay Isle, and the investment considerations which have
given rise to those decisions;
(c) Bay Isle shall maintain all books and records required to
be maintained by Bay Isle pursuant to the 1940 Act, the Advisers Act, and the
rules and regulations promulgated thereunder, as the same may be amended from
time to time, with respect to transactions on behalf of the Fund, and shall
furnish the Trustees and Xxxxxx with such periodic and special reports as the
Trustees or Xxxxxx reasonably may request. Bay Isle hereby agrees that all
records which it maintains for the Fund or the Trust are the property of the
Trust, agrees to permit the reasonable inspection thereof by the Trust or its
designees and agrees to preserve for the periods prescribed under the 1940 Act
and the Advisers Act any records which it maintains for the Trust and which are
required to be maintained under the 1940 Act and the Advisers Act, and further
agrees to surrender promptly to the Trust or its designees any records which it
maintains for the Trust upon request by the Trust;
(d) Bay Isle shall submit such reports relating to the
valuation of the Fund's assets and to otherwise assist in the calculation of the
net asset value of shares of the Fund as may reasonably be requested;
(e) Bay Isle shall, on behalf of the Fund, exercise such
voting rights, subscription rights, rights to consent to corporate action and
any other rights pertaining to the Fund's assets that may be exercised, in
accordance with any policy pertaining to the same that may be adopted or agreed
to by the Trustees of the Trust, or, in the event that the Trust retains the
right to exercise such voting and other rights, to furnish the Trust with advice
as may reasonably be requested as to the manner in which such rights should be
exercised;
(f) At such times as shall be reasonably requested by the
Trustees or Xxxxxx, Bay Isle shall provide the Trustees and Xxxxxx with
economic, operational and investment data and reports, including without
limitation all information and materials reasonably requested by or requested to
be delivered to the Trustees of the Trust pursuant to Section 15(c) of the 1940
Act, and shall make available to the Trustees and Xxxxxx any economic,
statistical and investment services normally available to similar investment
company clients of Bay Isle; and
(g) Bay Isle will provide to Xxxxxx for regulatory filings and
other appropriate uses materially accurate and complete information relating to
Bay Isle as may reasonably be requested by Xxxxxx from time to time and,
notwithstanding anything herein to the contrary, Bay Isle shall be liable to
Xxxxxx for all damages, costs and expenses, including without limitation
reasonable
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attorneys' fees (hereinafter referred to collectively as "Damages"), incurred by
Xxxxxx as a result of any material inaccuracies or omissions in such information
provided by Bay Isle to Xxxxxx; provided, however, that Bay Isle shall not be
liable to the extent that any Damages are based upon inaccuracies or omissions
made in reliance upon information furnished to Bay Isle by Xxxxxx.
2. Further Obligations. In all matters relating to the performance of
this Agreement, Bay Isle shall act in conformity with the Trust's Trust
Instrument, bylaws and currently effective registration statements under the
1940 Act and the 1933 Act and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees
and Xxxxxx and shall comply with the requirements of the 1940 Act, the Advisers
Act, the rules and regulations thereunder, and all other applicable federal and
state laws and regulations. Xxxxxx agrees to provide to Bay Isle copies of the
Trust's Trust Instrument, bylaws, Registration Statement, written policies,
procedures and guidelines and written instructions and directions of the
Trustees and Xxxxxx and any amendments or supplements to any of them at, or, if
practicable, before the time such materials become effective. Bay Isle shall
maintain errors and omissions insurance in an amount at least equal to that
disclosed to the Trustees in connection with their approval of this Agreement.
3. Obligations of Xxxxxx. Xxxxxx shall have the following obligations
under this Agreement:
(a) To keep Bay Isle continuously and fully informed (or cause
the custodian of the Fund's assets to keep Bay Isle so informed) as to the
composition of the investment portfolio of the Fund and the nature of all of the
Fund's assets and liabilities from time to time;
(b) To furnish Bay Isle with a certified copy of any financial
statement or report prepared for the Fund by certified or independent public
accountants and with copies of any financial statements or reports made to the
Fund's shareholders or to any governmental body or securities exchange;
(c) To furnish Bay Isle with any further materials or
information which Bay Isle may reasonably request to enable it to perform its
function under this Agreement; and
(d) To compensate Bay Isle for its services in accordance with
the provisions of Section 4 hereof.
4. Compensation. Xxxxxx shall pay to Bay Isle for its services under
this Agreement a fee, payable in United States dollars, at an annual rate of
0.75% of the first $500 million of average daily net assets of the Fund, 0.70%
of the next $500 million of average daily net assets of the Fund, and 0.65% on
any part of the average daily net assets of the Fund in excess of $1 billion
provided, however, that such fee shall be net of any reimbursement of expenses
paid by Xxxxxx to the Fund. This fee shall be computed and accrued daily and
payable monthly as of the last day of each month during which or part of which
this Agreement is in effect. For the month during which this Agreement becomes
effective and the month during which it terminates, however, there shall be an
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appropriate proration of the fee payable for such month based on the number of
calendar days of such month during which this Agreement is effective.
5. Expenses and Excluded Expenses. Bay Isle shall pay all its own costs
and expenses incurred in fulfilling its obligations under this Agreement.
6. Term. This Agreement shall become effective as of the date first set
forth above and shall continue in effect until April 30, 2003, unless sooner
terminated in accordance with its terms, and shall continue in effect from year
to year thereafter only so long as such 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 of the Trust, Xxxxxx or Bay Isle, 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 Fund.
7. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Fund acting by vote of at
least a majority of its outstanding voting securities, provided in any such case
that 60 days' advance written notice of termination be given to Bay Isle at its
principal place of business. This Agreement may be terminated by Xxxxxx or by
Bay Isle at any time, without penalty: (i) by giving 60 days' advance written
notice of termination to the other party, and with respect to Bay Isle to the
Trust, or (ii) by Xxxxxx if Bay Isle becomes unable to discharge its duties and
obligations under this Agreement. In addition, this Agreement shall terminate,
without penalty, upon the termination of the Advisory Agreement.
8. Assignment. This Agreement shall automatically terminate in the
event of its assignment.
9. Amendments. This Agreement may be amended by the parties only in a
written instrument signed by the parties to this Agreement and only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of the Trust or
Xxxxxx, Bay Isle or their affiliates, and (ii) if required by applicable law, by
the affirmative vote of a majority of the outstanding voting securities of the
Fund.
10. Limitation on Personal Liability. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of State
of the State of Delaware. All parties to this Agreement acknowledge and agree
that the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect to
such series only, and not against the assets of the Trust generally or against
the assets held with respect to any other series and further that no Trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
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11. Limitation of Liability of Bay Isle. Xxxxxx will not seek to hold
Bay Isle, and Bay Isle shall not be, liable for any error of judgment or mistake
of law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder and except to the extent
otherwise provided by law. As used in this section, "Bay Isle" shall include any
affiliate of Bay Isle performing services for the Fund contemplated hereunder
and directors, officers, members, owners and employees of Bay Isle and such
affiliates.
12. Activities of Bay Isle. The services of Bay Isle hereunder are not
to be deemed to be exclusive, and Bay Isle is free to render services to other
parties, so long as its services under this Agreement are not materially
adversely affected or otherwise impaired thereby. Nothing in this Agreement
shall limit or restrict the right of any director, officer or employee of Bay
Isle to engage in any other business or to devote his or her time and attention
in part to the management or other aspects of any other business, whether of a
similar or a dissimilar nature. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in Bay Isle as directors,
officers and shareholders of Bay Isle, that directors, officers, members,
owners, employees and shareholders of Bay Isle are or may become similarly
interested in the Trust, and that Bay Isle may become interested in the Trust as
a shareholder or otherwise.
13. Third Party Beneficiaries. The parties expressly acknowledge and
agree that the Trust and the Fund are third party beneficiaries of this
Agreement and that the Trust and the Fund shall have the full right to xxx upon
and enforce this Agreement in accordance with its terms as if they were
signatories hereto. Any oversight, monitoring or evaluation of the activities of
Bay Isle by Xxxxxx, the Trust or the Fund shall not diminish or relieve in any
way the liability of Bay Isle for any of its duties and responsibilities under
this Agreement.
14. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered personally or
by overnight delivery service or mailed by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile and followed by copy
in first class postal mail, addressed to the parties at their respective
addresses set forth below, or at such other address as shall be designated by
any party in a written notice to the other party.
(a) To Xxxxxx at:
Xxxxxx Financial Group LLC
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, President
Phone: (000) 000-0000
Fax: (000) 000-0000
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with a copy at the same address to:
Xxxxxxx X. Xxxxx, Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) To Bay Isle at:
Bay Isle Financial LLC
000 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
(c) To the Trust at:
Xxxxxx Investment Portfolio Trust
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: President
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx Xxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
15. Certain Definitions. As used in this Agreement, the terms "vote of
a majority of the outstanding voting securities," "assignment," "approved at
least annually" and "interested persons" shall have the respective meanings
specified in the 1940 Act, as now in effect or hereafter amended, and the rules
and regulations thereunder, subject to such orders, exemptions and
interpretations as may be issued by the SEC under the 1940 Act and as may be
then in effect. Where the effect of a requirement of the federal securities laws
reflected in any provision of this Agreement is made less restrictive by a rule,
regulation, order, interpretation or other authority of the SEC, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation, order, interpretation or other authority.
16. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
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17. Miscellaneous. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers designated below as of the day and
year first above written.
XXXXXX FINANCIAL GROUP LLC
By:
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Name: Xxxx X. Xxxxxxxx
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Title: President
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BAY ISLE FINANCIAL LLC
By:
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Name: Xxxxxxx X.X. Xxxxxx
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Title: President
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