EXHIBIT 5(B)
FORM OF SUBADVISORY AGREEMENT
NORTHSTAR/NWNL TRUST
NORTHSTAR GROWTH FUND
SUBADVISORY AGREEMENT
AGREEMENT made this 1st day of February, 1996 by and between Northstar
Investment Management Corporation, a Delaware Corporation (hereinafter the
"Adviser"), investment adviser for the Northstar Growth Fund, a series
of the Northstar NWNL Trust (the "Trust") (hereinafter the "Fund") and
Navellier Fund Management, Inc., a Delaware corporation (hereinafter the
"Subadviser").
WHEREAS, the Adviser has been retained by the Trust, an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), to provide investment advisory services to
the Fund pursuant to an Investment Advisory Agreement dated May 2, 1994 (the
"Investment Advisory Agreement"); and
WHEREAS, the Trustees of the Trust, including a majority of the Trustees who are
not "interested persons," as defined in the 1940 Act, and the Fund's
shareholders have approved the appointment of the Subadviser to perform certain
investment advisory services for the Fund pursuant to this Subadvisory Agreement
with the Adviser and the Subadviser is willing to perform such services for the
Fund;
WHEREAS, the Subadviser is or will be registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act") prior to
performing its services for the Fund under this Agreement;
NOW THEREFORE, in consideration of the promises and mutual convenants herein
contained, it is agreed between the Adviser and the Subadviser as follows:
1. APPOINTMENT. The Adviser hereby appoints the Subadviser to perform
advisory services to the Fund for the periods and on the terms set forth
in this Subadvisory Agreement. The Subadviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein
provided.
2. DUTIES OF SUBADVISER. The Adviser hereby authorizes Subadviser to
manage the investment and reinvestment of cash and investments comprising
the assets of the Fund with power on behalf of and in the name of the Fund
at Subadviser's discretion; subject at all time to the supervision of the
Adviser and the Trustees of the Trust:
(a) to direct the purchase, subscription or other acquisition of
investments and to direct the sale, redemption, and exchange of investments,
subject to the duty to render to the Trustees of the Trust, the Adviser and the
Custodian written reports of the composition of the portfolio of the Fund as
often as the Trustees shall reasonably require;
(b) to make all decisions relating to the manner, method and timing of
investment transactions, to select brokers, dealers and other intermediaries by
or through whom such transactions will be effected, and to engage such
consultants, analysts and experts in connection therewith as may be
considered necessary or appropriate;
(c) to direct banks, brokers or custodians to disburse funds or assets
solely in order to execute investment transactions for the Fund, provided that
the Subadviser shall have no authority to direct the transfer of the Fund's
funds or assets to itself or other persons and shall have no authority
over the disbursement (as opposed to investment decisions) of funds or
assets nor any custody of any of the Fund's funds or assets; and
(d) to take all such other actions as may be considered necessary or
appropriate to discharge its duties hereunder;
PROVIDED THAT any specific or general directions which the Trustees of the
Trust, or the Adviser may give to the Subadviser with regard to any of the
foregoing powers shall, unless the contrary is expressly stated therein,
override the general authority given by this provision to the extent that
the Trustees may, at any time and from time to time, direct, either
generally or to a limited extent and either alone or in concert with the
Adviser or the Subadviser (provided that such directions would not cause
the Subadviser to violate any fiduciary duties or any laws with regard to
the Subadviser's duties and responsibilities), all or any of the same as
they shall think fit and, in particular, the Adviser shall have the right to
direct the Subadviser to place trades through brokers and other agents of
the Adviser's choice, subject to such brokers or agents executing such
trades on a "best execution basis", i.e. at the best price and/or with
research or other services which render that broker's services the most
appropriate for the Subadviser's needs, and further that the Subadviser is
satisfied that the dealing and execution quality of such brokers are
satisfactory to the Subadviser; and PROVIDED FURTHER that nothing herein
shall be construed as giving the Subadviser power to manage the aforesaid
cash and investments in such a manner as would cause the Fund to be
considered a "dealer" in stocks, securities or commodities for U.S. federal
income tax purposes.
The Adviser shall monitor and review the performance of the Subadviser under
this Agreement, including but not limited to the Subadviser's performance of the
duties delineated in subparagraphs (a)-(d) of this provision.
The Subadviser further agrees that, in performing its duties hereunder, it
will
(a) (i) comply with the 1940 Act and all rules and regulations
thereunder, the Advisers Act, the Internal Revenue Code (the "Code")
and all other applicable federal and state laws and regulations, the
Prospectus and Statement of Additional Information for the Fund, and with
any applicable procedures adopted by the Trustees in writing and made
available to Subadviser; (ii) manage the Fund in accordance with the
investment requirements for regulated investment companies under Subchapter
M of the Code and regulations issued thereunder; (iii) direct the placement
of orders pursuant to its investment determinations for the Fund directly
with the issuer, or with any broker or dealer, in accordance with
applicable policies expressed in the Fund's Prospectus and/or Statement of
Additional Information and in accordance with applicable legal requirements.
(b) furnish to the Trust whatever non-proprietary reports it may
reasonably request with respect to the Fund's assets or contemplated
investments. In addition, the Subadviser will keep the Trust and the Trustees
informed of developments materially affecting the Fund's portfolio and shall, on
the Subadviser's own initiative, furnish to the Trust from time to time whatever
information the Subadviser believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar
Administrators Corp. (the "Administrator"), the Adviser, and the Trust,
promptly upon their request, such copies of its investment records and ledgers
with respect to the Fund as may be required to assist the Adviser, the
Administrator and the Trust in their compliance with applicable laws and
regulations. The Subadviser will furnish the Trustees with such periodic and
special reports regarding the Fund as they may reasonably request;
(d) immediately notify the Adviser and the Trust in the event that
the Subadviser or any of its affiliates: (i) becomes aware that it is subject
to a statutory disqualification that prevents the Subadviser from serving
as an investment adviser pursuant to this Subadvisory Agreement; or (ii) becomes
aware that it is the subject of an administrative proceeding or enforcement
action by the Securities and Exchange Commission ("SEC") or other regulatory
authority. The Subadviser further agrees to notify the Trust and the Adviser
immediately of any material fact known to the Subadviser respecting or relating
to the Subadviser that is not contained in the Trust's Registration Statement,
or any amendment or supplement thereto, but that is required to be disclosed
therein, and of any statement contained therein that becomes untrue in any
material respect. The Trust, the Fund, Adviser, Administrator and their
affiliates shall likewise immediately notify the Subadviser if any of them
become aware of any regulatory action of the type described in this
subparagraph 2(d).
3. ALLOCATION OF CHARGES AND EXPENSES. The Subadviser shall pay all
expenses associated with the management of its business operations in performing
its responsibilities hereunder, including the cost of its own overhead,
research, compensation and expenses of its directors, officers and employees,
and other internal operating costs; provided, however, that the Subadviser
shall be entitled to reimbursement on a monthly basis by the Adviser of all
reasonable out-of-pocket expenses properly incurred by it in connection with
serving as subadviser to the Fund. For the avoidance of doubt, the Fund shall
bear its own overhead and other internal operating costs (whether incurred
directly or by the Adviser or the Subadviser) including, without
limitation:
a. the costs incurred by the Fund in the preparation and printing of the
Prospectus or any offering literature (including any form of
advertisement or other solicitation materials calculated to lead
to investors subscribing for shares);
b. all fees and expenses on behalf of the Fund to the Transfer Agent and
the Custodian;
c. the reasonable fees and expenses of accountants, auditors, lawyers
and other professional advisors to the Fund;
d. any interest, fee or charge payable on or on account of any
borrowing by the Fund;
e. fiscal and governmental charges and duties relating to the purchase,
sale, issue or redemption of shares and increases in authorized share
capital of the Fund;
f. the fees of any stock exchange or over-the-counter market on which the
shares may from time to time be listed, quoted or dealt in and the
expenses of obtaining any such listing, quotation or permission to
deal;
g. the fees and expenses (if any) payable to Trustees;
h. brokerage, fiscal or governmental charges or duties in respect of or in
connection with the acquisition, holding or disposal of any of the assets of the
Fund or otherwise in connection with its business;
i. the expenses of publishing details and prices of shares in
newspapers and other publications;
j. all expenses incurred in the convening of meetings of shareholders or
in the preparation of agreements or other documents relating to the Fund or in
relation to the safe custody of the documents of title of any
investments;
k. all Trustees communication costs; and
l. all premiums and costs for Fund insurance and blanket fidelity
bonds.
4. COMPENSATION. As compensation for the advisory services provided by the
Subadviser under this Agreement, the Adviser will pay the Subadviser at the
end of each calendar month an advisory fee computed daily at an annual rate
equal to 0.48 of 1% of the Fund's average daily net assets. The "average daily
net assets" of the Fund shall mean the average of the values placed on the
Fund's net assets as of 4:00 p.m. (New York time) on each day on which the
net asset value of the Fund is determined consistent with the provisions of
Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines the value
of its net assets as of some other time on each business day, as of such other
time. The value of net assets of the Fund shall always be determined pursuant
to the applicable provisions of the Fund's Declaration of Trust and the
Registration Statement. If, pursuant to such provisions, the determination of
net asset value is suspended for any particular business day, then for the
purposes of this Section 4, the value of the net assets of the Fund as last
determined shall be deemed to be the value of its net
assets as of the close of regular trading on the New York Stock Exchange, or as
of such other time as the value of the net assets of the Fund's portfolio may
lawfully be determined, on that day. If the determination of the net asset value
of the shares of the Fund has been so suspended for a period including any month
end when the Subadviser's compensation is payable pursuant to this Section, the
Subadviser's compensation payable at the end of such month shall be computed on
the basis of the value of the net assets of the Fund as last determined (whether
during or prior to such month). If the Fund determines the value of the net
assets of its portfolio more than once on any day, then the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this Section 4.
5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and
records with respect to its services to the Trust and the Fund as are required
by Section 31 under the 1940 Act, and rules adopted thereunder, and by other
applicable legal provisions, and to preserve such records for the periods and
in the manner required by applicable laws or regulations. The Subadviser
also agrees that records it maintains and preserves pursuant to
Rules 31a-2 under the 1940 Act (excluding trade secrets or intellectual
property rights) in connection with its services hereunder are the property of
the Trust and will be surrendered promptly to the Trust upon its request and
the Subadviser further agrees that it will furnish to regulatory authorities
having the requisite authority any information or reports in connection
with its services hereunder which may be requested in order to determine
whether the operations of the Fund are being conducted in accordance with
applicable laws and regulations.
6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best judgment in rendering the services provided by it under
this Subadvisory Agreement. The Subadviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust or the Fund
or the holders of the Fund's shares or by the Adviser in connection with the
matters to which this Subadvisory Agreement relates, provided that nothing
in this Subadvisory Agreement shall be deemed to protect or purport to protect
the Subadviser against liability to the Trust or the Fund or to holders of
the Fund's shares or to the Adviser to which the Subadviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or by reason of the Subadviser's
reckless disregard of its obligations and duties under this Subadvisory
Agreement. As used in this Section 6, the term "Subadviser" shall include
any officers, directors, employees or other affiliates of the
Subadviser performing services for the Fund.
7. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser, its affiliates or its or their officers,
directors and employees from providing similar services to other investment
companies (whether or not their investment objectives and policies are similar
to those of the Fund) or from engaging in other investment advisory
activities. When the Subadviser recommends the purchase or sale of a
security for other investment companies and other clients, and at the same time
the Subadviser recommends the purchase or sale of the same security for the
Fund, it is understood that in light of its fiduciary duty to the Fund, such
transactions will be executed on a basis that is fair and equitable to
the Fund, provided, however, that the Subadviser is not required to recommend
to the Fund the same investments it recommends to its other clients. In
connection with purchases or sales of portfolio securities for the account of
the Fund, neither the Subadviser nor any of its directors, officers or employees
shall act as a principal or agent or receive any commission. If the
Subadviser provides any advice to its clients concerning the shares of the
Fund, the Subadviser shall act solely as investment counsel for such clients
and not in any way on behalf of the Fund.
8. DURATION AND TERMINATION. This Subadvisory Agreement shall continue in
effect for a period of two years unless sooner terminated as provided herein.
Notwithstanding the foregoing, this Subadvisory Agreement may be terminated: (a)
at any time without penalty by the Fund or Adviser upon the vote of a
majority of the Trustees or by vote of the majority of the Fund's outstanding
voting securities, upon sixty (60) days' written notice to the Subadviser,
or (b) by the Subadviser without cause at any time without penalty, upon (60)
days' written notice to the Trust or Adviser. This Subadvisory Agreement will
also terminate automatically in the event of its assignment (as defined in the
▇▇▇▇ ▇▇▇) or the assignment or termination of the Investment Advisory Agreement.
9. AMENDMENTS. No provision of this Subadvisory Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties, and no material amendment of this Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i)
a majority of the outstanding voting securities of the Fund, and (ii) a
majority of the Trustees of the Trust, including a majority of Trustees who are
not interested persons of any party to this Subadvisory Agreement, cast in
person at a meeting called for the purpose of voting on such approval, if
such approval is required by applicable law.
10. Indemnification. (a) The Adviser hereby agrees to indemnify the
Subadviser from and against all liabilities, losses, expenses, ,reasonable
attorneys' fees and costs (other than attorneys' fees and costs in relation to
the preparation of this Agreement; each party bearing responsibility for its
own such costs and fees) or damages (other than liabilities, losses, expenses,
attorneys fees and costs or damages arising from the Subadviser failing to
meet the standard of care required hereunder in the performance by the
Subadviser of, or its failure to perform, the services required hereunder),
arising from the Adviser's (its affiliates and their respective agents and
employees) failure to perform its duties or assume its obligations hereunder, or
from its wrongful actions or omissions, including but not limited to any
claims for non-payment of advisory fees; claims asserted or threatened by
any shareholder of the Trust, governmental or regulatory agency, or any
other person; claims arising from any wrongful act by the Trust or the Fund
or any of their trustees, officers, employees, or representatives, or by
the Adviser, its officers, employees or representatives, or from any actions by
any representative of the Trust or the Fund; any action or claim against the
Subadviser based on any alleged untrue statement or misstatement of material
fact in any registration statement, prospectus, shareholder report or other
information or materials covering shares filed or made public by the Trust on
behalf of the Fund or any amendment thereof or supplement thereto, or the
failure or alleged failure to state therein a material fact required to be
stated in order that the statements therein are not misleading, provided that
such claim is not based upon information provided to the Adviser by the
Subadviser or approved by the Subadviser in the manner provided in paragraph
12(b) of this Agreement, or which facts or information the Subadviser failed to
provide or disclose. With respect to any claim for which the Subadviser shall
be entitled to indemnity hereunder, the Adviser shall assume the
reasonable expenses and costs (including any reasonable attorneys' fees and
costs) of the Subadviser of investigating and/or defending any claim asserted
or threatened by any party, subject always to the Adviser first receiving a
written undertaking from the Subadviser to repay any amounts paid on its
behalf in the event and to the extent of any subsequent determination that
the Subadviser was not entitled to indemnification hereunder in respect of such
claim.
(b) The Subadviser hereby agrees to indemnify the Adviser, its affiliates, the
Trust and the Fund from and against all liabilities, losses, expenses,
reasonable attorneys' fees and costs (other than attorneys' fees and costs in
relation to the preparation of this Agreement; each party bearing responsibility
for its own such costs and fees) or damages (other than liabilities, losses,
expenses, attorneys' fees and costs or damages arising from the Adviser's
failure to perform its responsibilities hereunder or claims arising from its
acts or failure to act in performing this Agreement) arising from Subadviser's
(its affiliates, and their respective agents and employees) failure to perform
its duties and assume its obligations hereunder, or from any wrongful act
of Subadviser or its failure to act in performing this Agreement, including any
action or claim against the Adviser based on any alleged
untrue statement or misstatement of a material fact made or provided by and
with the consent of Subadviser contained in any registration statement,
prospectus, shareholder report or other information or materials relating to
the Trust or the Fund and shares issued by the Trust or the failure or alleged
failure to state a material fact therein required to be stated in order that the
statement therein is not misleading, which fact should have been made or
provided by the Subadviser to the Adviser. With respect to any claim for which
the Adviser is entitled to indemnity hereunder, the Subadviser shall assume
the reasonable expenses and costs (including any reasonable attorneys' fees
and costs) of the Adviser of investigating and/or defending any claim
asserted or threatened by any party, subject always to the Subadviser first
receiving a written undertaking from the Adviser to repay any amounts paid on
its behalf in the event and to the extent of any subsequent determination that
the Adviser was not entitled to indemnification hereunder in respect of such
claim.
(c) In the event that the Subadviser or Adviser is or becomes a party to any
action or proceedings in respect of which indemnification may be sought
hereunder, the party seeking indemnification shall promptly notify the other
party thereof. After becoming notified of the same, the party from whom
indemnification is sought shall
be entitled to participate in any such action or proceeding and shall assume
any payment for the full defense thereof with counsel reasonably
satisfactory to the party seeking indemnification. After properly assuming
the defense thereof, the party from whom indemnification is sought shall not be
liable hereunder to the other party for any legal or other expenses
subsequently incurred by such party in connection with the defense thereof,
other than damages, if any, by way of judgment, settlement, or
otherwise pursuant to this provision. The party from whom indemnification is
sought shall not be liable hereunder for any settlement of any action or claim
effected without its written consent, which consent shall not be unreasonably
withheld.
11. INDEPENDENT CONTRACTOR. Subadviser shall for all purposes of this
Agreement be deemed to be an independent contractor and, except as otherwise
expressly provided herein, shall have no authority to act for, bind or represent
the Trust or the Fund in any way or otherwise be deemed to be an agent of the
Trust or the Fund. Likewise, the Trust, the Fund, the Adviser, and their
respective affiliates, agents and employees shall not be deemed agents of the
Subadviser and shall have not
authority to bind Subadviser.
12. USE OF NAME. (a) The Trust, on behalf of the Fund, and the Fund may,
subject to sub-clause (b) below, use the name, "Navellier Fund Management, Inc."
or any component, abbreviation or other name derived therefrom for promotional
purposes only for so long as this Agreement (or any extension, renewal or
amendment thereof) continues in force, unless the Subadviser shall specifically
consent in writing to such continued use thereafter. Any permitted use by the
Trust or Fund during the term hereof of the name of the Subadviser, Navellier or
any derivative thereof, shall in no way prevent the Subadviser or any of it
shareholders or any of their successors, from using or permitting the use of
such name (whether singly or in any combination with any other words) for, by or
in connection with an entity or enterprise other than the Trust or the Fund. The
name and right to the name Navellier Fund Management, Inc. or any derivation of
the name Navellier shall at all times be owned and be the sole and exclusive
property of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and his affiliated entities. Navellier Fund
Management Inc., by entering into this Agreement, is allowing the Trust and the
Fund to use the name Navellier and/or derivatives thereof solely by or on behalf
of this Fund. At the conclusion of this Agreement or in the event of any
termination of this Agreement or if the Subadviser's services are terminated for
any reason, each of the authorized parties and their respective employees,
representatives, affiliates, and associates agree that they shall immediately
cease using the name Navellier and/or any derivatives of said name for any
purpose whatsoever.
(b) The Adviser and its affiliates shall not publish or distribute, and shall
cause the Fund not to publish or distribute to Fund shareholders, prospective
investors, sales agents or members of the public any disclosure document,
offering literature (including any form of advertisement or other solicitation
materials calculated to lead investors to subscribe for and purchase shares of
the Fund) or other document referring by name to the Subadviser, unless the
Subadviser shall have consented in writing to such references in the form and
context in which they appear; provided however, that where the Fund timely seeks
to obtain approval of disclosure contained in any documents required to be filed
by the Fund, and such approval is not forthcoming on or before the date on which
such documents are required by law to be filed, the Subadviser shall be deemed
to have consented to such disclosure.
13. MISCELLANEOUS. (a) This Subadvisory Agreement shall be governed by the
laws of the State of Nevada, provided that nothing herein shall be construed in
a manner inconsistent with the 1940 Act, the Advisers Act, or rules or orders of
the SEC thereunder. In the event of any litigation in which the Adviser and the
Subadviser are adverse parties and there are no other parties to such
litigation, such action shall be brought in the United States District Court for
the State of Nevada, located in Reno, Nevada.
(b) The captions of this Subadvisory Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) This Agreement may be executed in one or more counterparts, all of which
taken together shall be deemed to constitute one and the same instrument.
14. NOTICES. Any notice, instruction or other instrument required or
permitted to be given hereunder may be delivered in person to the offices of the
parties as set forth therein during normal business hours, or delivered or sent
by prepaid registered mail, express mail or by facsimile to the parties at such
offices or such other address as may be notified by either party from time to
time. Such notice, instruction or other instrument shall be deemed to have been
served, in the case of a registered letter at the expiration of seventy-two (72)
hours after posting; in the case of express mail, within twenty-four (24) hours
after dispatch; and in the case of facsimile, immediately on dispatch, and if
delivered outside normal business hours it shall be deemed to have been received
at the next time after delivery or transmission when normal business hours
commence. Evidence that the notice, instruction or other instrument was properly
addressed, stamped and put into the post shall be conclusive evidence of
posting.
15. ATTORNEY'S FEES. In the event of a material breach of this Agreement by
any party hereto, the prevailing party, as determined by the trier of fact,
shall be entitled to reasonable attorneys' fees and costs as determined by the
court in such action, in addition to any other damages awarded.
16. NON-SOLICITATION. The Adviser, its affiliates and their respective agents
(including brokers engaged in marketing and selling shares of the Fund), and
each of their employees and affiliates agree not to knowingly solicit to invest,
or accept or retain as investors, in the Fund directly or indirectly any persons
or entities who are clients of or investors in any fund or investment vehicle
managed by any entity owned by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the 1st day of February,
1996.
NORTHSTAR INVESTMENT MANAGEMENT NAVELLIER FUND MANAGEMENT, INC.
By: By:
--------------------------------- --------------------------------
Chairman and CEO President