SUB-INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
XXXXXXXX PARTNERS FUNDS, INC.
00 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
April __, 1996
The Dreyfus Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxxxx Partners Funds, Inc. is an open-end, registered investment
company (the "Company") currently consisting of two separate portfolios, the
Xxxxxxxx Partners Capital Value Fund (the "Portfolio") and the Xxxxxxxx Partners
Strategy Fund (the "Strategy Portfolio"). The Company hereby confirms its
agreement, on behalf of the Portfolio, with The Dreyfus Corporation ("Dreyfus")
as follows:
The Company has entered or will enter an investment advisory agreement
with Xxxxxxxx Partners, Inc., a Delaware corporation ("Xxxxxxxx"), pursuant to
which it will employ Xxxxxxxx as investment adviser to the Portfolio in
accordance with the limitations specified for the Portfolio in the Company's
Registration Statement on Form N-1A from time to time in effect, copies of which
have been or will be submitted to Dreyfus, and in such manner and to such extent
as may from time to time be approved by the Company's Board of Directors. The
Company proposes to employ Xxxxxxx as sub-investment adviser and administrator
to the Portfolio as specified herein.
1. Sub-Investment Advisory Services
Subject to the supervision and approval of the Company's Board of
Directors, Xxxxxxx will provide sub-investment advisory services specified
herein in accordance with the Portfolio's investment objective and policies as
stated in its Prospectus and Statement of Additional Information as from time to
time in effect. Xxxxxxx will manage the short-term cash and cash equivalent
investments of the Portfolio and will provide investment research, statistical
information and advice regarding the Portfolio. Xxxxxxx will furnish to
Xxxxxxxx or the Portfolio such general advice regarding economic factors and
trends, including statistical information and other factual information, and
such statistical information with respect to the investments that the Portfolio
may hold or contemplate purchasing, as the Company, on behalf of the Portfolio,
may reasonably request. Dreyfus shall exercise its best judgment in rendering
these services.
2. Administrative Services
Subject to the supervision and approval of the Company's Board of
Directors, Xxxxxxx will supervise certain aspects of the Portfolio's operations
and provide certain administrative services, as specified herein. Except as
otherwise specified in this Agreement, Xxxxxxx shall not act and shall not be
required to act as an investment advisor or manager to the Portfolio, or have
any authority to supervise the investment or reinvestment of the securities or
other property comprising the Portfolio's assets or to determine which
securities or other property may be purchased or sold by a Portfolio.
With respect to the Portfolio, Xxxxxxx will supply office facilities
(which may be in Dreyfus' own offices), statistical and research data, data
processing services, clerical, accounting and bookkeeping services, internal
auditing services, legal services, internal executive and administrative
services, and stationery and office supplies; prepare reports to the Portfolio's
shareholders, tax return, reports to the filings with the Securities and
Exchange Commission and state Blue Sky authorities; calculate the net asset
value of the Portfolio on a daily basis; and, subject to the supervision of the
Company's Board of Directors, generally assist in all aspects of the Portfolio's
operations (except with respect to investment advisory services provided by
Xxxxxxxx). Net asset value shall be computed on such days and at such time or
times as described in the Portfolio's then current Prospectus and Statement of
Additional Information.
Xxxxxxx shall have the right at its expense to engage Princeton
Administrators, L.P. to assist it in performing certain of the obligations set
forth in this paragraph, provided that the Company, on behalf of the Portfolio,
is a party to such agreement.
3. Fees and Expenses
In consideration of the sub-investment advisory and administration
services rendered pursuant to this Agreement, the Company will pay Dreyfus, in
arrears, a monthly fee at an annual rate based on the Portfolio's average daily
net assets as follows:
Average Fee as a Percentage
Total Assets of Average Daily Net Assets
------------ ---------------------------
0 up to $300 million .35 of 1%
$300 million to $750 million .30 of 1%
$750 million to $1 billion .25 of 1%
More than $1 billion .20 of 1%
Such fee shall be computed daily and paid no later than the seventh (7th)
business day of each month
-2-
The fee for the period from the date of this Agreement to the end of
the month shall be pro-rated according to the proportion that such period bears
to the full monthly period, and upon any termination of this Agreement other
than at the end of any month, the fee for the month during which termination
shall occur shall be pro-rated according to the proportion that the period
thereof prior to termination bears to the full monthly period and shall be
payable within seven (7) days after the date of termination of this Agreement.
For purposes of determining the fees payable to Dreyfus, the value of
the Portfolio's net assets shall be computed in the same manner as computed for
the purpose of determining Xxxxxxxx'x fee from the Company for serving as
investment adviser to the Portfolio.
Xxxxxxx will bear all expenses in connection with the performance of
its services under this Agreement. All other expenses to be incurred in the
operation of the Portfolio will be borne by the Company, except to the extent
assumed by Dreyfus, Xxxxxxxx or the Company's other service providers. The
expenses to be borne by the Company include, without limitation, the following:
organizational costs; taxes; interest; loan commitment fees, interest and
distributions paid on securities sold short; brokerage fees and commissions, if
any; Securities and Exchange Commission fees and state Blue Sky qualification
fees; Directors' fees and expenses (other than those Directors who are holders
of 5% or more of the outstanding voting securities of Dreyfus or Xxxxxxxx, or of
any affiliate of Dreyfus or Xxxxxxxx); officers' and employees' fees and
expenses (other than officers or employees of Dreyfus, Xxxxxxxx or any
affiliate thereof); advisory and administration fees; charges of custodians;
transfer and dividend disbursing agents' fees; certain insurance premiums;
industry association fees; outside auditing and legal expenses; costs of
maintaining the Company's existence; payments to service organizations; costs of
independent pricing services; costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders; costs of shareholder reports and
meetings; and any extraordinary expenses.
If the aggregate expenses incurred by, or allocated to, the Portfolio
in any fiscal year shall exceed the expense limitations applicable to the
Portfolio imposed by state securities laws or regulations thereunder, as such
limitations may be revised from time to time, Xxxxxxxx, in its capacity as
investment adviser to the Portfolio, shall have waived, refunded or reduced (in
compliance with Section 7 of the Investment Advisory Agreement between the
Company, on behalf of the Portfolio, and Xxxxxxxx) some or all of such fees
Xxxxxxxx was entitled to receive during the period in which such expense
limitations were exceeded so as to cause the Portfolio to comply with such
expense limitations. If,
-3-
after giving effect to such waiver, refund or reduction by Xxxxxxxx, aggregate
expenses of the Portfolio continue to exceed such expense limitations, then
Xxxxxxx agrees to waive, refund or reduce the fees it was entitled to receive
pursuant to this Agreement if and to the extent required by applicable state
securities laws or regulations thereunder.
3. Limitation of Liability
Xxxxxxx shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Company in connection with the matters to
which this Agreement relates, except for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement. Any person, even though also an officer, director, employee or
agent of Xxxxxxx who may be or become an officer, director, employee or agent
of the Company shall be deemed, when rendering services to the Company or
acting on any business of the Company, to be rendering such services to or
acting solely for the Company and not as an officer, director, employee or
agent or one under the control or direction of Xxxxxxx even though paid by it.
4. Term
This Agreement shall continue until April __, 1998 and thereafter
shall continue automatically for successive annual periods ending on April 30
of each year, provided such continuance is specifically approved at least
annually by (i) the Company's Board of Directors or (ii) by a vote of a majority
(as defined in the Investment Company Act of 1940) of the Portfolio's
outstanding voting securities, provided that, in either event, the continuance
also is approved by a majority of the Directors who are not interested persons
of the Company (as defined in the Investment Company Act of 1940) by vote cast
in person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, on not less than 60 days' notice, by
either party hereto, by the Company's Board of Directors or by vote of the
holders of a majority of the Portfolio's shares and this Agreement will also
terminate automatically in the event of its assignment (as defined in the
Investment Company Act of 1940).
5. Miscellaneous
The Company understands that Xxxxxxx now acts and will continue to act
as investment adviser, sub-investment adviser and/or administrator to various
investment companies and fiduciary or other managed accounts, and the Company
has no objection to Xxxxxxx' so acting. In addition, it is understood that the
persons employed by Xxxxxxx to assist in the performance of its duties hereunder
will not devote their full time to such service and nothing herein contained
shall be deemed to limit or restrict the
-4-
right of Dreyfus or any affiliate of Dreyfus to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
Xxxxxxx will treat confidentially and as proprietary information of
the Company all records and other information relative to the Company and prior
or present shareholders or those persons or entities who respond to Xxxxxxx'
inquiries concerning investment in the Company, and will not use such records
and information for any purpose other than (i) in the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld when Xxxxxxx may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities; (ii) to the extent that other
entities have been engaged by Xxxxxxx to assist in performing its obligations
hereunder, and have executed an agreement to this effect that includes
provisions relating to the confidentiality of Company proprietary information
and that is otherwise suitable to the Company overall; or (iii) when so
requested by the Company. Nothing contained herein, however, shall prohibit
Dreyfus from advertising to or soliciting the public generally with respect to
other mutual funds, products or services, including but not limited to any
advertising or marketing via radio, television, newspapers, magazines or direct
mail solicitation, regardless of whether such advertisement or solicitation may
coincidentally include prior or present Fund shareholders or those persons or
entities who have responded to Dreyfus' inquiries concerning investment in the
Portfolio.
In compliance with the requirements of Rule 31a-3 under the Investment
Company Act of 1940, Xxxxxxx hereby agrees that all records that it maintains
for the Company are the property of the Company, that it will surrender promptly
to the Company any of such records upon the Company's request, and that it will
preserve such records for the periods prescribed by Rule 31a-2 under the
Investment Company Act of 1940.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
XXXXXXXX PARTNERS FUNDS, INC.
on behalf of its Xxxxxxxx Partners
Capital Value Fund
By:
------------------------------
Accepted:
THE DREYFUS CORPORATION
By:
-------------------------
-5-
