Sub-Item 77Q1(e)
INVESTMENT SUB-ADVISORY AGREEMENT
By and Between RE Advisers Corporation
and
Mercator Asset Management, L.P.
INVESTMENT SUB-ADVISORY AGREEMENT, made as of the 12th day of June, 2006,
("Effective Date") by and among RE Advisers Corporation, a corporation
organized and existing under the laws of Virginia ("Adviser") and Mercator
Asset Management, L.P., a limited partnership organized and existing under
the laws of State of Delaware ("Sub-adviser").
WHEREAS, Adviser has entered into an Investment Management Agreement dated as
of the 12th day of June, 2006 ("Management Agreement") with Homestead Funds,
Inc. ("Company"), on behalf of its [International Value] Fund ("Fund"), which
is engaged in business as an open-end investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, Sub-adviser is engaged principally in the business of rendering
investment management services and is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act"); and
WHEREAS, Adviser desires to retain Sub-adviser to furnish certain investment
advisory services to the Fund and Sub-adviser is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein
set forth, the parties hereto agree as follows:
I. Appointment. (A) Adviser hereby appoints Sub-adviser to provide
certain investment advisory services to the Fund for the period and on the
terms set forth in this Agreement, and (B) Sub-adviser hereby accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
II Additional Series. In the event that the Company establishes one or
more series of shares other than the Fund with respect to which Adviser
desires to retain Sub-adviser to render investment advisory services
hereunder, Adviser shall so notify Sub-adviser in writing, indicating the
advisory fee to be payable with respect to the additional series of shares.
If Sub-adviser is willing to render such services on the terms provided for
herein, it shall so notify Adviser in writing, whereupon such series shall
become a Fund hereunder.
III. Duties of Sub-adviser.
A. Sub-adviser is hereby authorized and directed and hereby agrees to (i)
furnish continuously an investment program for the Fund, and (ii) determine
from time to time what investments shall be purchased, sold or exchanged and
what portion of the assets of the Fund shall be held uninvested. Sub-adviser
shall perform these duties subject always to (1) the overall supervision of
Adviser and the Board of Directors of the Company (the "Board"), (2) the
Company's Articles and By-laws (as defined below), as amended from time to
time, (3) the stated investment objectives, policies and restrictions of the
Fund as set forth in the Company's then current Registration Statement (as
defined below), (4) any additional policies or guidelines established by
Adviser or the Board that have been furnished in writing to Sub-adviser, (5)
applicable provisions of law, including, without limitation, all applicable
provisions of the 1940 Act and the rules and regulations thereunder, and (6)
the provisions of the Internal Revenue Code of 1986, as amended ("Code")
applicable to "regulated investment companies" (as defined in Section 851 of
the Code), as amended from time to time. In accordance with Section VII,
Sub-Adviser shall arrange for the execution of all orders for the purchase
and sale of securities and other investments for the Fund's account and will
exercise full discretion and act for the Company in the same manner and with
the same force and effect as the Company might or could do with respect to
such purchases, sales, or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance or conduct of such
purchases, sales, or other transactions, including without limitation,
management of cash balances in the Fund.
B. Sub-adviser shall have no responsibility with respect to maintaining
custody of the Fund's assets. Sub-adviser shall affirm security transactions
with central depositories and advise the custodian of the Fund ("Custodian"),
as identified in the Company's Registration Statement, or such depositories
or agents as may be designated by Custodian and Adviser promptly of each
purchase and sale of a Fund security, specifying the name of the issuer, the
description and amount or number of shares of the security purchased, the
market price, the commission and gross or net price, the trade date and
settlement date and the identity of the effecting broker or dealer. Sub-
adviser shall from time to time provide Custodian and Adviser with evidence
of authority of its personnel who are authorized to give instructions to
Custodian.
C. Unless Adviser advises Sub-adviser in writing that the right to vote
proxies has been expressly reserved to Adviser or the Company or otherwise
delegated to another party, Sub-adviser shall exercise voting rights incident
to any securities held in the Fund without consultation with Adviser or the
Company, provided that Sub-adviser will follow any written instructions
received from Adviser or the Company with respect to voting as to particular
issues. Sub-adviser shall further respond to all corporate action matters
incident to the securities held in the Fund including, without limitation,
proofs of claim in bankruptcy and class action cases and shelf registrations.
Sub-adviser shall provide to Adviser and the Company the Fund's proxy voting
record as may be required to comply with all applicable regulatory disclosure
and filing requirements.
D. Sub-adviser shall timely provide such information and data as may be
reasonably requested by Adviser or the Company regarding Sub-adviser's
management of the Fund's assets, including, but not limited to, semiannual
written portfolio manager commentary and analysis, portfolio holdings and
positions, and country and industry diversification tables.
E. Upon request of Custodian, Adviser and/or the Company, Sub-adviser
shall provide assistance in connection with the determination of the fair
value of securities in the Fund for which market quotations are not readily
available.
F. In the performance of its duties hereunder, Sub-adviser is and shall be
an independent contractor and except as expressly provided for herein or
otherwise expressly provided or authorized shall have no authority to act for
or represent the Fund or the Company in any way or otherwise be deemed to be
an agent of the Fund, the Company or of Adviser.
G. The Sub-adviser shall have no responsibility under this Agreement with
respect to the management of assets of the Fund other than the portion of the
Fund's assets with respect to which the Sub-Adviser provides investment
advice.
H. The Sub-adviser is prohibited from consulting with any other sub-
dviser of the Fund, if any, or the subadviser to any other investment company
(or separate series of an investment company) managed by the Adviser
concerning the Fund's transactions in securities or other assets, except for
the purpose of complying with the conditions of Rule 12d3-1 (a) and (b) under
the 1940 Act.
IV. Compensation. For the services provided pursuant to this Agreement,
Sub-adviser shall receive an investment management fee computed as set forth
in Schedule 1 attached hereto and incorporated herein by reference. The
management fee shall be payable monthly in arrears to Sub-adviser on or
before the 30th day of the next succeeding calendar month and shall be
calculated based on the average daily net assets of the Fund during the month
to which the payment relates. If this Agreement becomes effective or
terminates before the end of any month, the investment management fee for the
period from the effective date to the end of such month or from the beginning
of such month to the date of termination, as the case may be, shall be
prorated according to the proration which such period bears to the full month
in which such effectiveness or termination occurs.
V. Expenses. During the term of this Agreement, Sub-adviser will bear all
expenses incurred by it in the performance of its duties hereunder, other
than those expenses specifically assumed by the Company hereunder. The
Company shall assume and shall pay all brokers' and underwriting commissions
chargeable to the Company in connection with the securities transactions to
which the Fund is a party.
VI. Duties of Adviser. Adviser has furnished Sub-adviser with copies of
each of the following documents and will furnish to Sub-adviser at its
principal office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available:
(1) The Articles of Incorporation of the Company, as filed with the State
of Maryland, as in effect on the date hereof and as amended from time to time
("Articles");
(2) The by-laws of the Company as in effect on the date hereof and as
amended from time to time ("By-Laws");
(3) Certified resolutions of the Board authorizing the appointment of
Adviser and Sub-adviser and approving the form of the Management Agreement
and this Agreement;
(4) The Company's Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended (the "1933 Act") on Form N-1A, as filed
with the Securities and Exchange Commission ("SEC") relating to the Fund and
its shares and all amendments thereto ("Registration Statement");
(5) The Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
(6) The Fund's most recent prospectus (the "Prospectus"); and
(7) Copies of reports made by the Fund to its shareholders.
Adviser shall furnish Sub-adviser with any further documents, materials or
information that Sub-adviser may reasonably request to enable it to perform
its duties pursuant to this Agreement.
VII. Fund Transactions.
A. Sub-adviser agrees that, in executing Fund transactions and selecting
brokers or dealers, if any, it shall use its best efforts to seek on behalf
of the Fund the best overall terms available. In assessing the best overall
terms available for any transaction, Sub-adviser shall consider all factors
it deems relevant, including the breadth of the market in and the price of
the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any, with respect to
the specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker or dealer, if any, to
execute a particular transaction, Sub-adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended ("1934 Act")) provided to Sub-
adviser with respect to the Fund and/or other accounts over which Sub-adviser
exercises investment discretion. Sub-adviser may, in its discretion, agree
to pay a broker or dealer that furnishes such brokerage or research services
a higher commission than that which might have been charged by another
broker-dealer for effecting the same transactions, if Sub-adviser determines
in good faith that such commission is reasonable in relation to the brokerage
and research services provided by the broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities of Sub-
adviser with respect to the accounts as to which it exercises investment
discretion (as such term is defined under Section 3(a)(35) of the 1934 Act).
Sub-adviser shall, upon request from Adviser, provide such periodic and
special reports describing any such brokerage and research services received
and the incremental commissions, net price or other consideration to which
they relate.
B. In no instance will Fund securities be purchased from or sold to Sub-
adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder.
C. Sub-adviser may buy securities for the Fund at the same time it is
selling such securities for another client account and may sell securities
for the Fund at the time it is buying such securities for another client
account. In such cases, subject to applicable legal and regulatory
requirements, and in compliance with such procedures of the Company as may be
in effect from time to time, Sub-adviser may effectuate cross transactions
between the Fund and such other account if it deems this to be advantageous.
Adviser acknowledges that, in the event of any such cross transaction, Sub-
adviser may have a potentially conflicting division of loyalties and
responsibilities regarding the Fund and such other client account, and
Adviser consents to any such cross transaction. THE FOREGOING CONSENT TO
CROSS TRANSACTIONS EFFECTUATED BY SUB-ADVISER MAY BE REVOKED AT ANY TIME BY
ADVISER OR THE COMPANY BY WRITTEN NOTICE TO SUBADVISER.
D. On occasions when Sub-adviser deems the purchase or sale of a security
to be in the best interest of the Company as well as other clients of Sub-
adviser, Sub-adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be purchased or sold to attempt to obtain a more favorable
price or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by Sub-adviser in the manner Sub-
adviser considers to be the most equitable and consistent with its fiduciary
obligations to the Company and to its other clients.
VIII. Ownership of Records. Sub-adviser shall maintain all books and records
required to be maintained by Sub-adviser pursuant to the 1940 Act and the
rules and regulations promulgated thereunder with respect to transactions on
behalf of the Fund. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, Sub-adviser hereby agrees (A) that all records that it
maintains for the Fund are the property of the Company, (B) to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act any records that it
maintains for the Company and that are required to be maintained by Rule 31a-
1 under the 1940 Act, and (C) to surrender promptly to the Company or Adviser
any records that it maintains for the Company upon request by the Company or
Adviser; provided, however, Sub-adviser may retain copies of such records.
IX. Reports and Meetings.
A. Sub-adviser shall timely furnish to the Board or Adviser, or both, as
appropriate, such information, reports, evaluations, analyses and opinions as
are required by law or that the Board or Adviser, as appropriate, may
reasonably require, including, without limitation, compliance reporting and
certification with respect to:
1. Affiliated Brokerage Transactions
2. Affiliated Underwritings
3. Cross Transactions
4. Bunched Trades
5. Prospectus Compliance
6. Code of Ethics
7. Soft Dollar Usage
8. Price Overrides/Fair Valuation Determinations
9. Anti-Money Laundering
B. Sub-adviser shall make available in person to the Board and to Adviser
personnel of Sub-adviser as the Board or Adviser may reasonably request to
review the investments and the investment program of the Fund and the
services provided by Sub-adviser hereunder.
X. Services to Other Clients. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of Sub-adviser, or any affiliated person
thereof, to render investment management and corporate administrative
services to other investment companies, to act as investment manager or
investment counselor to other persons, firms, or corporations, or to engage
in any other business activities, or (ii) the right of any director, officer,
or employee of Sub-adviser, who may also be a director, officer, or employee
of the Company, to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
XI. Sub-adviser's Use of the Services of Others. Sub-adviser may, at its
cost, employ, retain, or otherwise avail itself of the services or facilities
of other persons or organizations for the purpose of providing Sub-adviser or
the Company or Fund, as appropriate, with such statistical and other factual
information, such advice regarding economic factors and trends, such advice
as to occasional transactions in specific securities, or such other
information, advice, or assistance as Sub-adviser may deem necessary,
appropriate, or convenient for the discharge of its obligations hereunder or
otherwise helpful to the Company or the Fund, as appropriate, or in the
discharge of Sub-adviser's overall responsibilities with respect to the other
accounts that it serves as investment manager or counselor.
XII. Liability of Sub-adviser; Indemnification. Neither Sub-adviser nor any
of its officers, partners, or employees, nor any person performing executive,
administrative, trading, or other functions for the Company, the Fund (at the
direction or request of Sub-adviser) or Sub-adviser in connection with Sub-
adviser's discharge of its obligations undertaken or reasonably assumed with
respect to this Agreement (collectively, "Related Persons"), shall be liable
for (i) any error of judgment or mistake of law or for any loss suffered by
the Company or Fund or (ii) any error of fact or mistake of law contained in
any report or data provided by Sub-adviser, except for any error, mistake or
loss resulting from willful misfeasance, bad faith, or gross negligence in
the performance by Sub-adviser or such Related Person of Sub-adviser's duties
on behalf of the Company or Fund or from reckless disregard by Sub-adviser or
any such Related Person of the duties of Sub-adviser pursuant to this
Agreement (each of which is referred to as a "Culpable Act").
Notwithstanding the foregoing, any stated limitations on liability
shall not constitute a waiver or limitation of any rights which the Adviser
or the Company may have under any applicable federal securities laws, and
shall not relieve Sub-adviser from any responsibility or liability for errors
committed by Sub-adviser in connection with the execution of trade orders.
Subadviser shall indemnify Adviser and its Related Persons and hold
them harmless from and against any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liabilities (collectively,
"Damages") arising directly or indirectly out of or in connection with the
performance of services by Subadviser or its Related Persons hereunder to the
extent such Damages result from a Culpable Act of Subadviser or its Related
Persons.
Adviser shall indemnify Subadviser and its Related Persons from and against
any Damages arising directly or indirectly out of or in connection with the
performance of services by Adviser or its Related Persons under this
Agreement or the Management Agreement, in each case, to the extent such
Damages result from any willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties by Adviser or any of its Related Persons.
XIII. Representations of Sub-adviser. Sub-adviser represents, warrants, and
agrees as follows:
A. Sub-adviser (i) is registered as an investment adviser under Advisers
Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met,
and will continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary
to be met in order to perform the services contemplated by this Agreement;
(iv) has the authority to enter into and perform the services contemplated by
this Agreement; and (v) will immediately notify Adviser of the occurrence of
any event that would disqualify Sub-adviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
B. Sub-adviser has adopted a written code of ethics (the "Sub-adviser
Code") complying with the requirements of Rule 17j-1 under the 1940 Act, as
may be amended from time to time, and, has provided the Adviser and the
Company with a copy of the Sub-adviser Code, together with evidence of its
adoption. The Sub-adviser certifies that it has adopted procedures
reasonably necessary to prevent "access persons" as defined in Rule 17j-1
("Access Persons") from violating the Sub-adviser Code. On a quarterly
basis, Sub-adviser will either: (i) certify to Adviser that Sub-adviser and
its Access Persons have complied with the Sub-adviser Code with respect to
the Fund, or (ii) identify any material violations of the Sub-adviser Code
which have occurred with respect to the Fund. In addition, Sub-adviser will
furnish at least annually to Adviser and the Board a written report that (a)
describes any issues arising under the Sub-adviser Code since the last report
to the Board, including, but not limited to, information about material
violations of the Sub-adviser Code with respect to the Fund and sanctions
imposed in response to the material violations and (b) certifies that the
Sub-adviser has adopted procedures reasonably necessary to prevent Access
Persons from violating the Sub-adviser Code.
C. Sub-adviser has provided Adviser and the Company, and Adviser and the
Company acknowledge having received, a copy of Sub-adviser's Form ADV as most
recently filed with the SEC and, if not so filed, the most recent Part 2 of
its Form ADV, and Sub-adviser will, promptly after filing any amendment to
its Form ADV with the SEC, and, if not so filed, any amendment to Part 2 of
its Form ADV, furnish a copy of such amendment to Adviser and the Company.
D. Sub-adviser has provided Adviser and the Company, and Adviser
acknowledges having received, a description or copy of Sub-adviser's policies
and procedures for voting proxies relating to client securities and
information concerning how they can obtain information concerning how Sub-
dviser has voted proxies relating to securities held by the Fund.
XIV. Compliance with Applicable Regulations. In anticipation of performing
its duties hereunder, Sub-adviser has established compliance procedures
(copies of which have been provided to Adviser, receipt of which is hereby
acknowledged by Adviser, and which are subject to review and approval by
Adviser and the Board) reasonably designed to ensure compliance at all times
with all applicable provisions of the 1940 Act and the Advisers Act, and any
rules and regulations adopted thereunder; Subchapter M of the Code; all
applicable anti-money laundering laws and regulations; the provisions of the
Registration Statement; the provisions of the Articles and the By-Laws of the
Company, as the same may be amended from time to time; and any other
applicable provisions of state, federal or foreign law.
XV. Term of Agreement. This Agreement shall become effective with respect
to the [International Value Fund] on the Effective Date and, with respect to
any additional Fund, on the date of receipt by the Adviser of notice from the
Sub-adviser in accordance with Section II hereof that the Subscriber is
willing to serve as Sub-adviser with respect to such Fund. Unless sooner
terminated as provided herein, this Agreement shall continue in effect for
two years from the Effective Date with respect to the [International Value
Fund] and, with respect to each additional Fund, for two years from the date
on which this Agreement becomes effective with respect to such Fund.
Thereafter, this Agreement shall continue in effect from year to year, with
respect to the Fund, subject to the termination provisions and all other
terms and conditions hereof, so long as (a) such continuation shall be
specifically approved at least annually (i) by either the Board or vote of a
majority of the outstanding voting securities of the Fund; (ii) in either
event, by the vote of a majority of the Directors of the Company who are not
interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval; and (b) Sub-
adviser shall not have notified Adviser and the Company, in writing, at least
60 days prior to such approval that it does not desire such continuation.
Sub-adviser shall furnish to the Company, promptly upon its request, such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment hereof.
XVI. Termination of Agreement. Notwithstanding the foregoing, this
Agreement may be terminated with respect to a Fund at any time, without the
payment of any penalty, by vote of the Board or by a vote of a majority of
the outstanding voting securities of such Fund on 60 days' prior written
notice to Sub-adviser. This Agreement may also be terminated by Adviser (i)
with respect to a Fund, on 60 days' prior written notice to Sub-adviser,
without the payment of any penalty; (ii) upon material breach by Sub-adviser
of any of the representations and warranties set forth in Section XIII of
this Agreement, if such breach shall not have been cured within a 20-day
period after notice of such breach; or (iii) if Sub-adviser becomes unable to
discharge its duties and obligations under this Agreement. Sub-adviser may
terminate this Agreement with respect to a Fund at any time, without the
payment of any penalty, on 60 days' prior notice to Adviser. This Agreement
shall terminate automatically in the event of its 'assignment', as such term
is defined in the 1940 Act, or upon termination of the Management Agreement.
Any approval, amendment, or termination of this Agreement with respect to a
Fund by the holders of a majority of the outstanding voting securities of
such Fund shall be effective to continue, amend or terminate this Agreement
with respect to any such Fund notwithstanding (i) that such action has not
been approved by the holders of a majority of the outstanding voting
securities of any other Fund affected thereby, and/or (ii) that such action
has not been approved by the vote of a majority of the outstanding voting
securities of the Company, unless such action shall be required by any
applicable law or otherwise.
XVII. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. This Agreement (including any exhibits hereto) may be
amended at any time by written mutual consent of the parties, subject to the
requirements of the 1940 Act and rules and regulations promulgated and orders
granted thereunder.
XVIII. Notification. Sub-adviser will notify Adviser promptly of any
change in the personnel of Sub-adviser with responsibility for making
investment decisions in relation to the Fund or who have been authorized to
give instructions to Custodian. To the extent required under applicable law,
Sub-adviser, a Delaware limited partnership, shall notify the Adviser and the
Company of any change in the membership of the partnership within a
reasonable time after such change occurs.
XIX. Miscellaneous.
A. Governing Law. This Agreement shall be construed in accordance with
the laws of [the State of Delaware] without giving effect to the conflicts of
laws principles thereof and the 1940 Act. To the extent that the applicable
laws of [the State of Delaware] conflict with the applicable provisions of
the 1940 Act, the latter shall control.
B. Insurance. Sub-adviser agrees to maintain errors and omissions or
professional liability insurance coverage in an amount that is reasonable in
light of the nature and scope of Sub-adviser's business activities.
C. Captions. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
D. Entire Agreement. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements shall be deemed terminated upon the effectiveness of this
Agreement.
E. Interpretation. Nothing herein contained shall be deemed to require
the Company to take any action contrary to its Articles or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of its responsibility
for and control of the conduct of the affairs of the Fund.
F. Definitions. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any
such court, by rules, regulations, or orders of the SEC validly issued
pursuant to the 1940 Act. As used in this Agreement, the terms "majority of
the outstanding voting securities," "affiliated person," "interested
person," "assignment," broker," "investment adviser," "net assets," "sale,"
"sell," and "security" shall have the same meaning as such terms have in the
1940 Act, subject to such exemption as may be granted by the SEC by any rule,
regulation, or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made less
restrictive 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 instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
RE ADVISERS CORPORATION
Attest: /s/ Xxxxxxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxxxxx Xxxxxxxxxx Name: Xxxxx X. Xxxxxx
Title: President
MERCATOR ASSET MANAGEMENT, L.P.
Attest: /s/ Xxxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx Xxxxxxxxxx Name: Xxxxx X. Xxxxxx
Title:President,JXC Corp.,General Partner
Schedule 1
to
Investment Sub-Advisory Agreement
By and Between
RE Advisers Corporation
and
Mercator Asset Management, L.P.
Dated as of June 12, 2006
Sub-Advisory Fees
Annual Rate of 0.50% of Average Daily Net Assets
