FORM OF SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this
___ day of ____, 201_, by and between Xxxx Xxxxx Partners Fund
Advisor, LLC (the "Manager"), and Western Asset Management
Company, a California corporation (the "Subadviser").
WHEREAS, the Manager has been retained by Xxxx Xxxxx
Partners Equity Trust (the "Trust"), a Maryland statutory trust
registered as a management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act") to
provide investment advisory, management, and administrative
services to the Trust with respect to certain series of the
Trust; and
WHEREAS, the Manager wishes to engage the Subadviser
to provide certain investment advisory services to the Trust
with respect to the series of the Trust designated in Schedule A
annexed hereto (the "Fund") and Subadviser is willing to furnish
such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and
mutual covenants herein contained, it is agreed as follows:
1. In accordance with and subject to the
Management Agreement between the Trust and the Manager with
respect to the Fund (the "Management Agreement"), the Manager
hereby appoints the Subadviser to act as Subadviser with respect
to the Fund for the period and on the terms set forth in this
Agreement. The Subadviser accepts such appointment and agrees to
render the services herein set forth, for the compensation
herein provided.
2. The Manager shall cause the Subadviser to
be kept fully informed at all times with regard to the
securities owned by the Fund, its funds available, or to become
available, for investment, and generally as to the condition of
the Fund's affairs. The Manager shall furnish the Subadviser
with such other documents and information with regard to the
Fund's affairs as the Subadviser may from time to time
reasonably request.
3. (a) Subject to the supervision
of the Trust's Board of Trustees (the "Board") and the Manager,
the Subadviser shall regularly provide the Fund with respect to
such portion of the Fund's assets as shall be allocated to the
Subadviser by the Manager from time to time (the "Allocated
Assets") with investment research, advice, management and
supervision and shall furnish a continuous investment program
for the Allocated Assets consistent with the Fund's investment
objectives, policies and restrictions, as stated in the Fund's
current Prospectus and Statement of Additional Information. The
Subadviser shall, with respect to the Allocated Assets,
determine from time to time what securities and other
investments will be purchased (including, as permitted in
accordance with this paragraph, swap agreements, options and
futures), retained, sold or exchanged by the Fund and what
portion of the Allocated Assets will be held in the various
securities and other investments in which the Fund invests, and
shall implement those decisions (including the execution of
investment documentation), all subject to the provisions of the
Trust's Declaration of Trust and By-Laws (collectively, the
"Governing Documents"), the 1940 Act, and the applicable rules
and regulations promulgated thereunder by the Securities and
Exchange Commission (the "SEC") and interpretive guidance issued
thereunder by the SEC staff and any other applicable federal and
state law, as well as the investment objectives, policies and
restrictions of the Fund referred to above, and any other
specific policies adopted by the Board and disclosed to the
Subadviser. The Subadviser is authorized as the agent of the
Trust to give instructions with respect to the Allocated Assets
to the custodian of the Fund as to deliveries of securities and
other investments and payments of cash for the account of the
Fund. Subject to applicable provisions of the 1940 Act, the
investment program to be provided hereunder may entail the
investment of all or substantially all of the assets of a Fund
in one or more investment companies. The Subadviser will place
orders pursuant to its investment determinations for the Fund
either directly with the issuer or with any broker or dealer,
foreign currency dealer, futures commission merchant or others
selected by it. In connection with the selection of such brokers
or dealers and the placing of such orders, subject to applicable
law, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) to the Fund and/or the other accounts over
which the Subadviser or its affiliates exercise investment
discretion. The Subadviser is authorized to pay a broker or
dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund
which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the
Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or
dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the
Subadviser and its affiliates have with respect to accounts over
which they exercise investment discretion. The Board may adopt
policies and procedures that modify and restrict the
Subadviser's authority regarding the execution of the Fund's
portfolio transactions provided herein. The Subadviser shall
exercise voting rights, rights to consent to corporate action
and any other rights pertaining to the Allocated Assets subject
to such direction as the Board may provide, and shall perform
such other functions of investment management and supervision as
may be directed by the Board. The Subadviser may execute on
behalf of the Fund certain agreements, instruments and documents
in connection with the services performed by it under this
Agreement. These may include, without limitation, brokerage
agreements, clearing agreements, account documentation, futures
and options agreements, swap agreements, other investment
related agreements, and any other agreements, documents or
instruments the Subadviser believes are appropriate or desirable
in performing its duties under this Agreement.
(b) The Fund hereby authorizes any entity or
person associated with the Subadviser which is a member of a
national securities exchange to effect any transaction on the
exchange for the account of the Fund which is permitted by
Section 11(a) of the Exchange Act and Rule 11a2-2(T) thereunder,
and the Fund hereby consents to the retention of compensation
for such transactions in accordance with Rule 11a2-
2(T)(a)(2)(iv). Notwithstanding the foregoing, the Subadviser
agrees that it will not deal with itself, or with members of the
Board or any principal underwriter of the Fund, as principals or
agents in making purchases or sales of securities or other
property for the account of the Fund, nor will it purchase any
securities from an underwriting or selling group in which the
Subadviser or its affiliates is participating, or arrange for
purchases and sales of securities between the Fund and another
account advised by the Subadviser or its affiliates, except in
each case as permitted by the 1940 Act and in accordance with
such policies and procedures as may be adopted by the Fund from
time to time, and will comply with all other provisions of the
Governing Documents and the Fund's then-current Prospectus and
Statement of Additional Information relative to the Subadviser
and its directors and officers.
4. The Subadviser may delegate to any other
one or more companies that the Subadviser controls, is
controlled by, or is under common control with, or to specified
employees of any such companies, certain of the Subadviser's
duties under this Agreement, provided in each case the
Subadviser will supervise the activities of each such entity or
employees thereof, that such delegation will not relieve the
Subadviser of any of its duties or obligations under this
Agreement and provided further that any such arrangements are
entered into in accordance with all applicable requirements of
the 1940 Act.
5. The Subadviser agrees that it will keep
records relating to its services hereunder in accordance with
all applicable laws, and in compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Subadviser hereby agrees that
any records that it maintains for the Fund are the property of
the Fund, and further agrees to surrender promptly to the Fund
any of such records upon the Fund's request. The Subadviser
further agrees to arrange for the preservation of the records
required to be maintained by Rule 31a-1 under the 1940 Act for
the periods prescribed by Rule 31a-2 under the 1940 Act.
6. (a) The Subadviser, at its
expense, shall supply the Board, the officers of the Trust, and
the Manager with all information and reports reasonably required
by them and reasonably available to the Subadviser relating to
the services provided by the Subadviser hereunder.
(b) The Subadviser shall bear all expenses,
and shall furnish all necessary services, facilities and
personnel, in connection with its responsibilities under this
Agreement. Other than as herein specifically indicated, the
Subadviser shall not be responsible for the Fund's expenses,
including, without limitation, advisory fees; distribution fees;
interest; taxes; governmental fees; voluntary assessments and
other expenses incurred in connection with membership in
investment company organizations; organization costs of the
Fund; the cost (including brokerage commissions, transaction
fees or charges, if any) in connection with the purchase or sale
of the Fund's securities and other investments and any losses in
connection therewith; fees and expenses of custodians, transfer
agents, registrars, independent pricing vendors or other agents;
legal expenses; loan commitment fees; expenses relating to share
certificates; expenses relating to the issuing and redemption or
repurchase of the Fund's shares and servicing shareholder
accounts; expenses of registering and qualifying the Fund's
shares for sale under applicable federal and state law; expenses
of preparing, setting in print, printing and distributing
prospectuses and statements of additional information and any
supplements thereto, reports, proxy statements, notices and
dividends to the Fund's shareholders; costs of stationery;
website costs; costs of meetings of the Board or any committee
thereof, meetings of shareholders and other meetings of the
Fund; Board fees; audit fees; travel expenses of officers,
members of the Board and employees of the Fund, if any; and the
Fund's pro rata portion of premiums on any fidelity bond and
other insurance covering the Fund and its officers, Board
members and employees; litigation expenses and any non-recurring
or extraordinary expenses as may arise, including, without
limitation, those relating to actions, suits or proceedings to
which the Fund is a party and the legal obligation which the
Fund may have to indemnify the Fund's Board members and officers
with respect thereto.
7. No member of the Board, officer or
employee of the Trust or Fund shall receive from the Trust or
Fund any salary or other compensation as such member of the
Board, officer or employee while he is at the same time a
director, officer, or employee of the Subadviser or any
affiliated company of the Subadviser, except as the Board may
decide. This paragraph shall not apply to Board members,
executive committee members, consultants and other persons who
are not regular members of the Subadviser's or any affiliated
company's staff.
8. As compensation for the services
performed by the Subadviser, including the services of any
consultants retained by the Subadviser, the Manager shall pay
the Subadviser out of the management fee it receives with
respect to the Fund, and only to the extent thereof, as promptly
as possible after the last day of each month, a fee, computed
daily at an annual rate set forth on Schedule A annexed hereto.
The first payment of the fee shall be made as promptly as
possible at the end of the month succeeding the effective date
of this Agreement, and shall constitute a full payment of the
fee due the Subadviser for all services prior to that date. If
this Agreement is terminated as of any date not the last day of
a month, such fee shall be paid as promptly as possible after
such date of termination, shall be based on the average daily
net assets of the Fund or, if less, the portion thereof
comprising the Allocated Assets in that period from the
beginning of such month to such date of termination, and shall
be that proportion of such average daily net assets as the
number of business days in such period bears to the number of
business days in such month. The average daily net assets of the
Fund or the portion thereof comprising the Allocated Assets
shall in all cases be based only on business days and be
computed as of the time of the regular close of business of the
New York Stock Exchange, or such other time as may be determined
by the Board.
9. The Subadviser assumes no responsibility
under this Agreement other than to render the services called
for hereunder, in good faith, and 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 in the execution of
securities transactions for the Fund, provided that nothing in
this Agreement shall protect the Subadviser against any
liability to the Manager or the Fund to which the Subadviser
would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and
duties hereunder. As used in this Section 9, the term
"Subadviser" shall include any affiliates of the Subadviser
performing services for the Trust or the Fund contemplated
hereby and the partners, shareholders, directors, officers and
employees of the Subadviser and such affiliates.
10. Nothing in this Agreement shall limit or
restrict the right of any director, officer, or employee of the
Subadviser who may also be a Board member, officer, or employee
of the Trust or the Fund, to engage in any other business or to
devote his time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature, nor to limit or restrict the right of the
Subadviser to engage in any other business or to render services
of any kind, including investment advisory and management
services, to any other fund, firm, individual or association. If
the purchase or sale of securities consistent with the
investment policies of the Fund or one or more other accounts of
the Subadviser is considered at or about the same time,
transactions in such securities will be allocated among the
accounts in a manner deemed equitable by the Subadviser. Such
transactions may be combined, in accordance with applicable laws
and regulations, and consistent with the Subadviser's policies
and procedures as presented to the Board from time to time.
11. For the purposes of this Agreement, the
Fund's "net assets" shall be determined as provided in the
Fund's then-current Prospectus and Statement of Additional
Information and the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a) of the 1940 Act, subject
to such exemptions as may be granted by the SEC by any rule,
regulation or order.
12. This Agreement will become effective with
respect to the Fund on the date set forth below the Fund's name
on Schedule A annexed hereto, provided that it shall have been
approved by the Trust's Board and, if so required by the 1940
Act, by shareholders of the Fund in accordance with the
requirements of the 1940 Act and, unless sooner terminated as
provided herein, will continue in effect through the second
anniversary of the date of effectiveness. Thereafter, if not
terminated, this Agreement shall continue in effect with respect
to the Fund, so long as such continuance is specifically
approved at least annually (i) by the Board or (ii) by a vote of
a majority of the outstanding voting securities of the Fund,
provided that in either event the continuance is also approved
by a majority of the Board members who are not interested
persons of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval.
13. This Agreement is terminable with respect
to the Fund without penalty by the Board or by vote of a
majority of the outstanding voting securities of the Fund, in
each case on not more than 60 days' nor less than 30 days'
written notice to the Subadviser, or by the Subadviser upon not
less than 90 days' written notice to the Fund and the Manager,
and will be terminated upon the mutual written consent of the
Manager and the Subadviser. This Agreement shall terminate
automatically in the event of its assignment by the Subadviser
and shall not be assignable by the Manager without the consent
of the Subadviser.
14. The Subadviser agrees that for any claim by it
against the Fund in connection with this Agreement or the
services rendered under this Agreement, it shall look only to
assets of the Fund for satisfaction and that it shall have no
claim against the assets of any other portfolios of the Trust.
15. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of the Agreement shall be
effective until approved, if so required by the 1940 Act, by
vote of the holders of a majority of the Fund's outstanding
voting securities.
16. This Agreement, and any supplemental terms
contained on Annex I hereto, if applicable, embodies the entire
agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings relating to
the subject matter hereof. Should any part of this Agreement 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 on and shall inure to
the benefit of the parties hereto and their respective
successors.
17. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the
laws of the State of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers thereunto duly
authorized.
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
WESTERN ASSET MANAGEMENT COMPANY
By:
Name:
Title:
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this
Agreement not individually but in his/her capacity as an officer
of the Trust. The Trust does not hereby undertake, on behalf of
the Fund or otherwise, any obligation to the Subadviser.
XXXX XXXXX PARTNERS EQUITY TRUST
By:
Name:
Title:
ANNEX I
Not applicable.
SCHEDULE A
[Name of Fund]
Date:
Fee:
The sub-advisory fee will be 0.02% of the portion of the Fund's
average daily net assets allocated to the Subadviser for the
management of cash and other short-term instruments, net of
expense waivers and reimbursements. Such fee shall be paid to
the Subadviser by the Manager out of the fee it receives from
the Fund.
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A/73374249.2
BUSDOCS/1556449.2
