6
SUBADVISORY AGREEMENT
Xxxx Xxxxx Partners Investment Funds, Inc.
Xxxx Xxxxx Partners Xxxxxxxxxx Global Value Fund
August 1, 2006
Xxxxxxxxxx Global Investors, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
Xxxx Xxxxx Partners Investment Funds, Inc. (f/k/a Xxxxx
Xxxxxx Investment Funds Inc.) (the "Company"), a corporation
organized under the laws of the State of Maryland, on behalf of
the Xxxx Xxxxx Partners Xxxxxxxxxx Global Value Fund (f/k/a Xxxxx
Xxxxxx Xxxxxxxxxx Global Value Fund) (the "Fund") and Xxxx Xxxxx
Partners Fund Advisor, LLC, a Delaware limited liability company
(the "Manager"), each confirms its agreement with Xxxxxxxxxx
Global Investors, Inc. (the "Sub-Adviser"), as follows:
1. Investment Description; Appointment
The Company desires to employ its capital relating to the
Fund by investing and reinvesting in investments of the kind and
in accordance with the investment objective(s), policies and
limitations specified in the prospectus (the "Prospectus") and
the statement of additional information (the "Statement") filed
with the Securities and Exchange Commission as part of the
Company's Registration Statement on Form N-lA, as amended or
supplemented from time to time, and in the manner and to the
extent as may from time to time be approved by the Board of
Directors of the Company (the "Board"). Copies of the Prospectus,
the Statement, the Company's Bylaws- (the "Bylaws") and any
policies or procedures adopted by the Board and in effect from
time-to-time related to the Company and the Sub-Adviser (the
"Procedures") have been or will be submitted to the Sub-Adviser.
The Company agrees promptly to provide copies of all amendments
and supplements to the current Prospectus, the Statement, the
Bylaws and Procedures to the Sub-Adviser on an on-going basis.
Until the Company delivers any such amendment or supplement to
the Sub-Adviser, the Sub-Adviser shall be fully protected in
relying on the Prospectus, Statement, Bylaws and Procedures as
previously furnished to the Sub-Adviser. The Company employs the
Manager as the manager to the Portfolio pursuant to the
Management Agreement dated October 23, 1997 (the "Management
Agreement"), and the Company and the Manager desire to employ and
hereby appoint the Sub-Adviser to act as the sub-investment
adviser to the Fund. The Sub-Adviser accepts the appointment and
agrees to furnish the services for the compensation set forth
below.
2. Services as Sub-Adviser
Subject to the supervision, direction and approval of the
Board of the Company and the Manager, the Sub-Adviser shall
conduct a continual program of investment, evaluation and, if
appropriate in the view of the Sub-Adviser, sale and reinvestment
of the Fund's assets. The Sub-Adviser is authorized, in its sole
discretion and without prior consultation with the Manager, to:
(a) manage the Fund's assets in accordance with the Fund's
investment objective(s) and policies as stated in the Prospectus
and the Statement; (b) make investment decisions for the Fund;
(c) place purchase and sale orders for portfolio transactions on
behalf of the Fund; and (d) employ professional portfolio
managers and securities analysts who provide research services to
the Portfolio.
In addition, (i) the Sub-Adviser shall furnish the Manager
daily information concerning portfolio transactions and quarterly
and annual reports concerning transactions and performance of the
Fund in such form as may be mutually agreed upon, and the Sub-
Adviser agrees to review the Fund and discuss the management of
it with the Manager and the Board of Directors of the Company.
(ii) Unless the Manager gives the Sub-Adviser written
instructions to the contrary, the Sub-Adviser shall use its good
faith judgment in a manner which it reasonably believes best
serves the interests of the Fund's shareholders to vote or
abstain from voting all proxies solicited by or with respect to
the issuers of securities in which assets of the Fund may be
invested.
(iii) The Sub-Adviser shall maintain and preserve such
records related to the Fund's transactions as shall be required
under the Investment Company Act of 1940, as amended (the "1940
Act"). The Manager shall maintain and preserve all books and
other records not related to the Fund's transactions as required
under the 1940 Act and shall timely furnish to Sub-Adviser all
information and copies of books and records reasonably requested
by Sub-Adviser to comply with any request made in connection with
a regulatory inspection. The Sub-Adviser shall timely furnish to
the Manager all information relating to the Sub-Adviser's
services hereunder reasonably requested by the Manager to keep
and preserve, the books and records of the Portfolio. The Sub-
Adviser agrees that all records which it maintains for the
Portfolio are the property of the Company and the Sub-Adviser
will surrender promptly to the Company copies of any of such
records.
(iv) The Sub-Adviser shall maintain compliance procedures
for the Portfolio that it reasonably believes are adequate to
ensure the Fund's compliance with (A) the 1940 Act and the rules
and regulations promulgated thereunder and (B) the Fund's
investment objective(s) and policies as stated in the Prospectus
and Statement. The Sub-Adviser shall maintain compliance
procedures that it reasonably believes are adequate to ensure its
compliance with the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). When engaging in transactions in securities
or other assets for the Fund with any subadviser, including any
subadviser that is a principal underwriter or an "affiliated
person" (as defined in the 0000 Xxx) of a principal underwriter
in connection with such transaction, to any other fund or
portfolio under common control with the Company, the Sub-Adviser
or any of its "affiliated" persons will not consult (other than
for purposes of complying with Rule 12d3-1 (a) and (b)) with such
other subadviser.
(v) The Sub-Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of
Rule 17j-1 under the 1940 Act, which it will provide to the
Company. The Sub-Adviser has written policies and procedures
reasonably designed to prevent the misuse of material, nonpublic
information by the Sub-Adviser or any person associated with the
Sub-Adviser as required by Section 204A of the Advisers Act.
3. Brokerage
In selecting brokers or dealers (including, if permitted by
applicable law, Xxxxx Xxxxxx Inc. or any other broker or dealer
affiliated with the Manager or the Sub-Adviser) to execute
transactions on behalf of the Fund, the Sub-Adviser will seek the
best overall terms available. In assessing the best overall terms
available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, 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, for the
specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is
authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to the Fund and/or
other accounts over which the Sub-Adviser or its affiliates
exercise investment discretion. Nothing in this paragraph shall
be deemed to prohibit the Sub-Adviser from paying an amount of
commission for effecting a securities transaction in excess of
the amount of commission another member of an exchange, broker,
or dealer would have charged for effecting that transaction, if
the Sub-Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker,
or dealer, viewed in terms of either that particular transaction
or its overall responsibilities with respect to the Fund and/or
other accounts over which the Sub-Adviser or its affiliates
exercise investment discretion.
4. Information Provided to the Company and the Manager
The Sub-Adviser shall keep the Company and the Manager
informed of developments materially affecting the Fund's
holdings, and shall, on its own initiative, furnish the Company
and the Manager from time to time with whatever information the
Sub-Adviser believes is appropriate for this purpose.
5. Compensation
(i) In consideration of the services rendered pursuant to
this Agreement, the Manager will pay the Sub-Adviser an annual
fee calculated at the rate of 0.50% of the Fund's average daily
net assets; the fee is calculated daily and paid monthly. The Sub-
Adviser shall have no right to obtain compensation directly from
the Company for services provided hereunder and agrees to look
solely to the Manager for payment of fees due. The fee for the
period from the Effective Date (defined below) of the Agreement
to the end of the month during which the Effective Date occurs
shall be prorated according to the proportion that such period
bears to the full monthly period. Upon any termination of this
Agreement before the end of a month, the fee for such part of
that month shall be prorated according to the proportion that
such period bears to the full monthly period and shall be payable
upon the date of termination of this Agreement. For the purpose
of determining fees payable to the Sub-Adviser, the value of the
Fund's net assets shall be computed at the times and in the
manner specified in the Prospectus and/or the Statement.
(ii) The Sub-Adviser agrees that, to the extent that the fee
that is payable to the Manager by the Fund is reduced by action
of the Board, the fee payable to the Sub-Adviser shall be reduced
pro rata. Additionally, to the extent that any part of the fee
that is payable to the Manager is waived by the Manager, the Sub-
Adviser agrees to waive its fees proportionately. The Manager
agrees to consult with the Sub-Adviser prior to making a decision
as to whether to waive its fees.
6. Expenses
The Sub-Adviser shall bear all expenses (excluding brokerage
costs, custodian fees, auditors fees or other expenses to be
borne by the Fund or the Company) in connection with the
performance of its services under this Agreement. The Fund will
bear certain other expenses to be incurred in its operation,
including, but not limited to, investment advisory fees, sub-
advisory fees (other than sub-advisory fees paid pursuant to this
Agreement) and administration fees; fees for necessary
professional and brokerage services; costs relating to local
administration of securities; fees for any pricing service; the
costs of regulatory compliance; and pro rata costs associated
with maintaining the Company's legal existence and shareholder
relations. All other expenses not specifically assumed by the Sub-
Adviser hereunder or by the Manager under the Management
Agreement are borne by the Fund or the Company.
7. Standard of Care
The Sub-Adviser shall exercise its best judgment and shall
act in good faith in rendering the services listed in paragraphs
2 and 3 above. The Sub-Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the
Fund or the Manager in connection with the matters to which this
Agreement relates as well as in connection with the performance
of its obligations under this Agreement, provided that nothing in
this Agreement shall be deemed to protect or purport to protect
the Sub-Adviser against any liability to the Manager, the Company
or to the shareholders of the Fund to which the Sub-Adviser 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 Sub-Adviser's reckless disregard of its
obligations and duties under this Agreement.
8. Term of Agreement
This Agreement shall become effective August 1, 2006 (the
"Effective Date") and shall continue for an initial term ending
November 30, 2007. This Agreement shall continue thereafter so
long as such continuance is specifically approved at least
annually as required by the 1940 Act. This Agreement is
terminable, without penalty, on 60 days' written notice, by the
Board of the Company or by vote of holders of a majority (as
defined in the 1940 Act and the rules thereunder) of the
outstanding voting securities of the Fund, or upon 60 days'
written notice by the Sub-Adviser except as otherwise agreed by
the Manager and the Sub-Adviser. This Agreement will also
terminate automatically in the event of its assignment (as
defined in the 1940 Act and the rules thereunder).
9. Services to Other Companies or Accounts
The Company understands that the Sub-Adviser now acts, and
may act in the future, unless otherwise agreed to by the parties,
as investment manager, adviser, or sub-adviser to other
investment companies and/or managed accounts, including offshore
entities. The Sub-Adviser agrees that whenever the Portfolio and
one or more other accounts managed or advised by the Sub-Adviser
have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a
formula believed to be equitable to each company and account. The
Company recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the
Fund. In addition, the Company understands that the persons
employed by the Sub-Adviser to assist in the performance of the
Sub-Adviser's duties under this Agreement will not devote their
full time to such service.
10. Representations
The Company and Portfolio represent that (i) a copy of the
Company's Articles of Incorporation, dated September 29, 1981,
together with all amendments thereto, is on file with the
Secretary of the State of Maryland, (ii) the appointment of the
Manager has been duly authorized, (iii) the appointment of the
Sub-Adviser has been duly authorized, and (iv) they have acted,
and will continue to act, in conformity with the 1940 Act and
other applicable laws.
The Sub-Adviser represents that it is authorized to perform
the services described herein.
Each of the parties hereto represents that the Agreement has
been duly authorized, executed and delivered by all required
corporate action.
The Sub-Adviser confirms that neither it nor any of its
"affiliated persons" (as defined in the 0000 Xxx) are affiliated
persons of (i) the Manager; (ii) any subadviser to the Fund or
the Company or any affiliated person of that subadviser; or (iii)
the promoter, underwriter, officer, board member, member of an
advisory board, or employee of the Fund or the Company. The Sub-
Adviser agrees to promptly notify the Manager if it or any of its
affiliated persons becomes an affiliated person of any of the
entities set forth in (i) to (iii), above.
11. Materials
The Manager shall not publish or distribute or allow the
Company or the Fund to publish or distribute any information,
including but not limited to registration statements, advertising
or promotional materials, specifically describing the Sub-
Adviser, without prior written consent of the Sub-Adviser, which
consent shall not be unreasonably withheld or delayed. If the Sub-
Adviser has not notified the Manager of its disapproval of sample
materials within three (3) business days after its receipt
thereof, such materials shall be deemed approved. Materials
substantially similar to materials approved on an earlier
occasion shall also be deemed approved.
12. Governing Law
This Agreement shall be governed by the internal laws of the
State of Maryland, without regard to the conflict of law
principles thereof; provided, however, that to the extent that
anything herein is inconsistent with the 1940 Act, the 1940 Act
shall control.
13. 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 Company at:
Xxxx Xxxxx Partners Investment Funds, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To the Manager at:
Xxxx Xxxxx Partners Fund Advisor, LLC
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
To the Sub-Adviser at:
Xxxxxxxxxx Global Investors, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
14. Counterparts
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.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Agreement by signing and
returning the enclosed copy of this Agreement.
Very truly yours:
XXXX XXXXX PARTNERS FUND ADVISOR,
LLC
By
Name:
Title:
XXXX XXXXX PARTNERS INVESTMENT
FUNDS, INC., on behalf of Xxxx
Xxxxx Partners Xxxxxxxxxx Global
Value Fund
By
Name:
Title:
Accepted:
XXXXXXXXXX GLOBAL INVESTORS, INC.
By
Name:
Title:
