INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 2002, between Xxxxxx
Investment Partners, Inc. (the "Adviser") and Xxxxxx Investment Management, LLC
(the "Sub-Adviser").
WHEREAS, Westlakes Institutional Portfolios, a Delaware business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into a Management Agreement dated
August 23, 2002, as amended December 20, 2002 (the "Management Agreement") with
the Trust, pursuant to which the Adviser will act as manager and investment
adviser to the separate series of the Trust set forth on Schedule A of the
Management Agreement (each a "Portfolio"); and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio(s) set forth on Schedule A of
this Investment Sub-Advisory Agreement, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolios entrusted to it hereunder
(the "Assets"), including the purchase, retention and disposition of
the Assets, in accordance with each Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as
the "Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject
to the direction of the Adviser, determine from time to
time what Assets will be purchased, retained or sold by
the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under
this Agreement, the Sub-Adviser shall act in conformity
with the Trust's Declaration of Trust (as defined herein)
and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of
the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code
of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be
purchased or sold by the Portfolio as provided in
subparagraph (a) and will place orders with or through
such persons, brokers or dealers to carry out the policy
with respect to brokerage set forth in each Portfolio's
registration statement on Form N-1A filed with the
Securities and Exchange Commission or as the Board of
Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing
Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on
behalf of each Portfolio the best overall terms
available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all
factors that 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 or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall
1
terms available, and in selecting the broker-dealer to
execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services
provided (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research
services a commission for executing a fund transaction
for a Portfolio which is in excess of the amount of
commission another broker or 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 or dealer -
- viewed in terms of that particular transaction or terms
of the overall responsibilities of the Sub-Adviser to the
Portfolio. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to
brokers or dealers (including brokers and dealers that
are affiliated with the Adviser, Sub-Adviser or the
Trust's principal underwriter) to take into account the
sale of shares of the Trust if the Sub-Adviser believes
that the quality of the transaction and the commission
are comparable to what they would be with other qualified
firms. In no instance, however, will a Portfolio's Assets
be purchased from or sold to the Adviser, Sub-Adviser,
the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or
the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the
Securities and Exchange Commission ("SEC") and the 1940
Act.
(d) The Sub-Adviser shall maintain all books and records with
respect to transactions involving the Assets required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and
paragraph (f) of Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance
sheets or financial information, and such other
information with regard to its affairs as the Adviser or
Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating
to the Assets required to be maintained by the
Sub-Adviser under this Agreement and shall timely furnish
to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the
Adviser to keep the other books and records of a
Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other
information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to
shareholders under the 1940 Act (including the rules
adopted thereunder) or any exemptive or other relief that
the Adviser or the Trust obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on
behalf of a Portfolio are property of the Portfolio and
the Sub-Adviser will surrender promptly to the Portfolio
any of such records upon the Portfolio's request;
provided, however, that the Sub-Adviser may retain a copy
of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such
records as are required to be maintained by it pursuant
to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this
Agreement (or, if there is no successor sub-adviser, to
the Adviser).
(e) The Sub-Adviser shall provide each Portfolio's custodian
on each business day with information relating to all
transactions concerning the Portfolio's Assets and shall
provide the Adviser with such information upon request of
the Adviser.
2
(f) The investment management services provided by the
Sub-Adviser under this Agreement are not to be deemed
exclusive and the Sub-Adviser shall be free to render
similar services to others, as long as such services do
not impair the services rendered to the Adviser or the
Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any
financial condition that is likely to impair the
Sub-Adviser's ability to fulfill its commitment under
this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation
materials and be responsible for voting and handling all
proxies in relation to the Assets in accordance with such
proxy voting guidelines or other direction that may be
provided by the Adviser or a Portfolio from time to time.
The Adviser shall instruct the custodian and other
parties providing services to the Portfolio to promptly
forward all proxies to the Sub-Adviser.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to each Portfolio
pursuant to the Management Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement; provided,
however, that in connection with its management of the Assets, nothing
herein shall be construed to relieve the Sub-Adviser of responsibility
for compliance with the Trust's Declaration of Trust (as defined
herein), the Prospectus, the instructions and directions of the Board
of Trustees of the Trust, the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed
with the Secretary of State of the State of Delaware
(such Agreement and Declaration of Trust, as in effect on
the date of this Agreement and as amended from time to
time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the
date of this Agreement and as amended from time to time,
are herein called the "By-Laws");
(c) Prospectus(es) of each Portfolio.
4. COMPENSATION TO THE SUB-ADVISER; EXPENSES. For the services to be
provided by the Sub-Adviser pursuant to this Agreement, the Adviser
will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full
compensation herefor, a sub-advisory fee at the rate specified on
Schedule A, which is attached hereto and made part of this Agreement.
The fee will be calculated based on the average daily net asset value
of the Assets under the Sub-Adviser s management and will be paid to
the Sub-Adviser monthly. Except as may otherwise be prohibited by law
or regulation (including any then current SEC staff interpretation),
the Sub-Adviser may, in its discretion and from time to time, waive a
portion of its fee. Sub-Adviser shall not be responsible for expenses
and costs of a Portfolio's operations payable by a Portfolio or the
Adviser.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) caused by or otherwise directly related to the Sub-Adviser's
own willful misfeasance, bad faith or gross negligence, or to the
reckless disregard of its duties under this Agreement.
3
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of each Portfolio. This
Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to a
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written
notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately
in the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 6, the
terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Pennsylvania, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY; Amendment. Should any part of this Agreement be held
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. No provision of this Agreement may be
changed, waived, discharged or terminated orally unless an instrument
in wrting signed by the party against which enforcement is sought, and
no material amendment of this Agreement shall be effective with respect
to a Portfolio unless approved by a vote of a majority of the
outstanding voting securities of such Portfolio.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: Xxxxxx Investment Partners, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: General Counsel
To the Sub-Adviser at: Xxxxxx Investment Management, LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Operating Officer
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
4
A copy of the Declaration of Trust is on file with the
Secretary of State of the State of Delaware, and notice is hereby given
that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust. Where
the effect of a requirement of the 1940 Act reflected in any provision
of this Agreement is altered by a rule, regulation or order of the SEC,
whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
XXXXXX INVESTMENT PARTNERS, INC. XXXXXX INVESTMENT MANAGEMENT, LLC
By:/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. XxXxxxx
--------------------- -------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxx X. XxXxxxx
-------------------- -----------------------
Title: Chief Operating Title: Managing Member
Officer & Chief Legal ----------------------
Officer
---------------------
5
SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXX INVESTMENT PARTNERS, INC.
AND
XXXXXX INVESTMENT MANAGEMENT, LLC
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Core Portfolio: 0.80%
Mid-Cap Core Portfolio 0.75%
6
