Xxxx Xxxxx Partners Small Cap Core Fund Inc.
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT
("Agreement") is made this
1st day of August, 2006,
by and between Xxxx Xxxxx
Partners Fund Advisor, LLC,
a Delaware limited liability
company (the "Manager"),
and Batterymarch Financial
Management, Inc., a Maryland
corporation (the "Subadviser").
WHEREAS, the Manager has been
retained by Xxxx Xxxxx Partners
Small Cap Core Fund, Inc.
(the "Fund"), a registered
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 Fund; and
WHEREAS, the Manager wishes to
engage the Subadviser to provide
certain investment advisory services
to 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:
0.Xx accordance with and subject
to the Management Agreement
between the Fund 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. 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
Fund's Board of Directors (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, retained, sold
or exchanged by the Fund and what portion of the Allo
cated Assets will be held in the
various securities and other
investments in which the Fund
nvests, and shall implement those decisions (including the
execution of investment
documentation), all subject
to the provisions of the Fund's
Articles of Incorporation 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 Fund 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 the 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.
(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
Fund, 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 m
eetings 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.
0.Xx member of the Board, officer or
employee of the Fund shall receive
from the 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.
0.Xx 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 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 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
opposite the Fund's name on
Schedule A annexed hereto, provided that it shall have been
approved by the Fund's Board
and, if so required by the 1940
Act, by the 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 November 30, 2007.
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 Fund.
00.Xx 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:
BATTERYMARCH FINANCIAL MANAGEMENT, INC.
By: _______________________________
Name:
Title:
The foregoing is acknowledged:
The undersigned officer of the Fund has executed
this Agreement not individually but in his/her
capacity as an officer of the Fund. The Fund
does not hereby undertake, on behalf of the Fund or otherwise,
any obligation to the Subadviser.
XXXX XXXXX PARTNERS SMALL CAP CORE FUND, INC.
By: _______________________________
Name:
Title:
ANNEX I
Not applicable.
SCHEDULE A
Xxxx Xxxxx Partners Small Cap Core Fund, Inc.
Date:
August 1, 2006
Fee:
The sub-advisory fee will be 70% of the
management fee paid to Xxxx Xxxxx Partners
Fund Advisor, LLC, net of expense waivers
and reimbursements.
