LPT VARIABLE INSURANCE SERIES TRUST
SUB-ADVISORY AGREEMENT
AGREEMENT dated as of April 8, 1999, among Select Advisors, Inc., a
California corporation (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 June 30, 1995, 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
investment management services for the investment portfolios of the Trust listed
on Exhibit A hereto (each a "Portfolio" and collectively the "Portfolios"); 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 Portfolios 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. Sub-Adviser shall have the following
responsibilities:
(a) to furnish continuous investment information, advice and
recommendations to the Portfolios as to the acquisition, holding or
disposition of any or all of the securities or other assets, including
cash, which the Portfolios 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 Portfolios, 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
as may reasonably be required by the Adviser from time to time;
(d) to determine the investment securities to be purchased or sold by
the Portfolios and, as agent for the Portfolios to: (i) execute any and all
necessary agreements with brokers and/or dealers and (ii) purchase, hold,
sell and effect transactions for the Portfolios pursuant to its
determinations either directly with an issuer or with any broker and/or
dealer in such securities;
(e) at all times to invest money from London Pacific Life & Annuity
Company's (the "Company") segregated asset account in such a manner as to
satisfy the requirements for variable contracts under the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Sub-Adviser
will at all times comply with Section 817(h) of the Code and Treasury
Regulations 1.817-5, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments
or other modifications to such Section or Regulations. In the event of a
breach of this provision by the Sub-Adviser, it will take all reasonable
steps (a) to notify the Adviser of such breach and (b) to adequately
diversify the Portfolios so as to achieve compliance with the grace period
afforded by Treasury Regulations 1.817-5;
(f) to maintain all books and records required to be maintained
pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions made by it on behalf of the
Portfolios including, without limitation, the books and records required by
Subsections (b)(1), (5), (6), (7), (9), (10) and (11) and Subsection (f) of
Rule 31a-1 under the 1940 Act and shall timely furnish to the Adviser all
information relating to the Sub-Adviser's services hereunder needed by the
Adviser to keep such other books and records of the Portfolios required by
Rule 31a-1 under the 1940 Act. The Sub-Adviser will also preserve all such
books and records for the periods prescribed in Rule 31a-2 under the 1940
Act, and agrees that such books and records shall remain the sole property
of the Trust and shall be immediately surrendered to the Trust upon
request. The Sub-Adviser further agrees that all books and records
maintained hereunder shall be made available to the Trust or the Adviser at
any time upon request, including telecopy, without unreasonable delay,
during any business day. From time to time as the Adviser or the Trustees
of the Trust may reasonably request, the Sub-Adviser will furnish the
requesting party reports on Portfolio transactions and reports on
investments held in a Portfolio, all in such detail as the Adviser or
Trustees of the Trust may reasonably request; and
(g) to comply with the Sub-Adviser's Code of Ethics, adopted pursuant
to Rule 17j-1 under the 1940 Act.
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 each Portfolio's investment securities and the nature of
each Portfolio's assets and liabilities;
(b) to provide to the Sub-Adviser any amendments, supplements or other
changes to the Trust's Declaration of Trust, By-Laws, currently effective
registration statement under the 1940 Act, including any amendments or
supplements thereto, and Notice of Eligibility under Rule 4.5 of the
Commodity Exchange Act, if applicable, (collectively, "Governing
Instruments and Regulatory Filings") as soon as practicable after such
materials become available and, upon receipt by the Sub-Adviser, the
Sub-Adviser will act in accordance with such amended, supplemented or
otherwise changed Governing Instruments and Regulatory Filings;
(c) to furnish the Sub-Adviser with a certified copy of any financial
statement or report prepared for the Trust with respect to the Portfolios
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 Portfolios, if these results affect the services provided
by the Sub-Adviser pursuant to this Agreement;
(d) to comply with the Adviser's Code of Ethics, adopted pursuant to
Rule 17j-1 under the 1940 Act;
(e) 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
(f) to compensate the Sub-Adviser for its services under this
Agreement by the payment of fees as set forth in Exhibit C 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 Portfolios 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 Portfolios. 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 Portfolios 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 Portfolios exercises investment discretion.
The Sub-Adviser is authorized to cause the Portfolios to pay a broker-dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolios which is in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction if, (i) the Sub-Adviser determines in good faith that the amount is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker in terms of the particular transaction or in
terms of the Sub-Adviser's overall responsibilities with respect to the
Portfolios and the accounts as to which the Sub-Adviser exercises investment
discretion, (ii) such payment is made in compliance with Section 28(e) of the
Securities Exchange Act of 1934, and any other applicable laws and regulations,
and (iii) in the opinion of the Sub-Adviser, the total commissions paid by a
Portfolio will be reasonable in relation to the benefits to the Portfolio over
the long term. It is recognized that the services provided by such brokers may
be useful to the Sub-Adviser in connection with the Sub-Adviser's service to
other clients. On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interests of a Portfolio as well as other clients of
the Sub-Adviser, the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of
securities so sold or purchased, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner the Sub-Adviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to such other clients.
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 contracts issued by the 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 as may be mutually agreed upon between
Adviser and Sub-Adviser. Notwithstanding the foregoing, nothing contained in
this Agreement shall obligate the Sub-Adviser to provide any funding or
financial support for the purpose of directly or indirectly promoting
investments in the Trust. 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 Company
(including any information relating to its separate accounts or variable annuity
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. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of California.
6. Execution of Agreement. This Agreement will become binding on the
parties hereto upon their execution.
7. 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, By-Laws, and current registration
statement applicable to the Portfolios 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.
8. Termination. 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 shall have been authorized (i) by
resolution of the Trust's Board of Trustees, including the vote or written
consent of Trustees of the Trust who are not parties to the Agreement or
interested persons of any party hereto, or (ii) by vote of a majority of the
outstanding voting securities of the Portfolio. This Agreement may be terminated
at any time by the Sub-Adviser by giving sixty (60) days' written notice of such
termination to the Trust and the Adviser at their respective principal places of
business.
9. Assignment. This Agreement may not be assigned by the Adviser or
Sub-Adviser without the prior written consent of the parties hereto and shall
automatically terminate in the event of any assignment without such consent.
10. 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 a
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act), and
provided that the Sub-Adviser shall not have notified the Trust in writing at
least sixty (60) days prior to the termination date of this Agreement or at
least sixty (60) days prior to each renewal thereafter that it does not desire
such continuation.
11. Amendments. This Agreement may be amended only in accordance with the
1940 Act.
12. 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 this Agreement relates.
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 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, 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.
13. Non-Exclusivity. The investment advisory services of the Sub-Adviser to
the Portfolios under this Agreement are not exclusive, and the Sub-Adviser shall
be free to render similar services to others.
14. Independent Contractor. The Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and shall not, unless otherwise
expressly provided herein or authorized by the Trustees of the Trust from time
to time, have any authority to act for or represent the Portfolios or Trust in
any way or otherwise be deemed to be an agent of the Portfolios or the Trust.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
16. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Sub-Adviser:
Select Advisors, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
(b) If to the Adviser:
LPIMC Insurance Marketing Services
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
(c) If to the Trust:
LPT Variable Insurance Series Trust
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
LPT VARIABLE INSURANCE SERIES TRUST
By:________________________________
Title:
LPIMC INSURANCE MARKETING SERVICES
By:________________________________
Title:
SELECT ADVISORS, INC.
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.
EXHIBIT A
LPT VARIABLE INSURANCE SERIES TRUST
The following Portfolios of LPT Variable Insurance Series Trust are subject
to this Agreement:
SAI Global Leaders
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 with respect to each of the Strong International
Stock Portfolio and the Strong Growth Portfolio, monthly a fee of:
SAI Global Leaders Portfolio
.50% of first $25 million of average daily net assets
.45% of the next $75 million of average daily net assets
.40% of average daily net assets over and above $100 million.
