SUBADVISORY AGREEMENT
Xxxx Xxxxx Partners Investment Funds, Inc.--
Xxxx Xxxxx Partners Multiple Discipline Funds All Cap and
International
Causeway Capital Management LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Dear Ladies and Gentlemen:
THIS AGREEMENT is made this 1st day of August, 2006 between
Xxxx Xxxxx Partners Fund Advisor, LLC (the "Manager"), a limited
liability company organized under the laws of the State of
Delaware, and Causeway Capital Management LLC (the "Subadviser"),
a limited liability company organized under the laws of the State
of Delaware.
WHEREAS, the Manager represents that it is registered under
the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), as an investment adviser and engages in the business of
acting as an investment adviser;
WHEREAS, the Manager has entered into an investment
management agreement dated as of August 1, 2006 (the "Investment
Management Agreement") with Xxxx Xxxxx Partners Investment Funds,
Inc. (f/k/a Xxxxx Xxxxxx Investment Funds Inc.) (the "Company"),
an open-end management investment company registered under the
Securities Act of 1933, as amended, and the Investment Company
Act of 1940, as amended (the "1940 Act"), pursuant to which the
Manager shall act as manager to the Xxxx Xxxxx Partners Multiple
Discipline Funds All Cap and International (f/k/a Xxxxx Xxxxxx
Multiple Discipline Funds-All Cap and International Fund) (the
"Fund") and is authorized to appoint subadvisers to provide
investment advisory services to the Fund in the manner set forth
herein;
WHEREAS, the Subadviser represents that it is registered
under the Advisers Act as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Board of Directors of the Company (the "Board")
and the Manager wish to engage the Subadviser to provide certain
investment advisory services for the Fund, and the Subadviser is
willing to provide such investment advisory services for the Fund
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Appointment
The Company and the Manager desire to employ and hereby
appoint the Subadviser to determine the securities and other
investments to be purchased, held or sold for that portion of the
Fund's assets allocated to the International Segment of the Fund
(hereinafter referred to as the "International Segment") subject
to (i) the oversight of the Board and the Manager, (ii) the
portfolio implementation and coordination services of the Manager
described in paragraph 2(xii) of this Agreement and (iii) the
other terms and conditions of this Agreement. The Subadviser will
be an independent contractor and will have no authority to act
for or represent the Company or the Manager in any way or
otherwise be deemed an agent of the Company or the Manager except
as expressly authorized in this Agreement or another writing by
the Company, the Manager and the Subadviser. The Subadviser
accepts the appointment and agrees to furnish the services for
the compensation set forth below.
The Subadviser may cease accepting additional assets in the
International Segment upon notice to the Company and the Manager
of at least six months, or such longer period as may be necessary
for the Manager and the Board to select, and recommend to Fund
shareholders, a new subadviser who will accept management
responsibility for additional assets in the International Segment
and for Fund shareholders to approve a new sub-advisory agreement
with such subadviser; provided, that such period may be reduced
if necessary in the best interests of shareholders of the Fund.
2. Services as Subadviser
(i) The Subadviser shall provide a model portfolio for the
International Segment, containing the securities, investments or
other assets to be purchased, held or sold and the weightings
thereof in the International Segment. The model portfolio
provided by the Subadviser will comply with the Fund's investment
objectives and policies as stated in the Fund's current
Prospectus and Statement of Additional Information (the
"Statement"). The Subadviser will be deemed to have instructed
the Manager to invest the Fund's assets in the International
Segment in accordance with the Subadviser's model.
The Subadviser employs professional portfolio managers and
securities analysts who will provide investment advisory and
research services to the International Segment. The Subadviser
shall make available certain of its personnel, including, but not
limited to, portfolio managers, investment analysts and research
staff, for periodic presentations to and/or consultations with
the Manager or its designees (e.g., quarterly conference calls)
and the Board regarding its investment instructions given
pursuant to this paragraph 2(i), advice and investment style as
well as discussions involving general market commentary and
extraordinary market events and such additional services as may
be agreed upon by the Manager and the Subadviser from time to
time. The Subadviser agrees to review the International Segment
and discuss the management of the International Segment with the
Manager and the Board at such times as may be reasonably
requested by the Manager or the Board. The Subadviser will meet
with third parties at the request of the Manager at such times as
the Subadviser and the Manager may agree in writing from time to
time.
The Manager shall furnish the Subadviser reports concerning
holdings and cash daily and transactions and performance of the
International Segment at such times and in such form as may be
mutually agreed upon.
(ii) Unless and until otherwise directed by the Manager or
the Board, the Subadviser shall not be obligated to and shall
have no authority to render any advice or take any action with
respect to legal proceedings with respect to portfolio securities
or other investments held by the International Segment. Unless
and until otherwise directed by the Manager or the Board, the
Subadviser will be responsible for directing the Manager to vote
proxies and to take action with respect to corporate action
elections for proxies and corporate action information
communicated by the Manager to the Subadviser with respect to the
securities held in the International Segment.
(iii) The Subadviser shall maintain and preserve such records
related to the International Segment's transactions as required
under the Advisers Act and the 1940 Act as applicable. The
Manager shall maintain and preserve all books and other records
relating to the Fund as required under the 1940 Act. The
Subadviser shall timely furnish to the Manager all information
relating to the Subadviser's services hereunder reasonably
requested by the Manager to keep and preserve the books and
records of the Fund. The Subadviser shall also furnish to the
Manager any other information relating to the assets of the Fund
that is required to be filed by the Manager or the Company with
the Securities and Exchange Commission ("SEC") or sent to
shareholders under the 1940 Act and the rules thereunder. The
Subadviser agrees to surrender promptly to the Company copies of
any records that it maintains for the Fund.
(iv) The Subadviser has adopted and implemented and shall
maintain written policies and procedures with respect to its
services pursuant to this Agreement that are reasonably designed
to prevent violation of the Federal Securities Laws (as defined
by Rule 38a-1 under the 0000 Xxx) and the Advisers Act and the
rules thereunder as required by Rule 206(4)-7 under the Advisers
Act.
(v) The Subadviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of
Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers
Act, which it has provided to the Company. The Subadviser has
provided a certification to the Board that it has adopted
procedures reasonably necessary to prevent Access Persons (as
such term is defined in Rule 17j-1) from violating the
Subadviser's Code of Ethics. The Subadviser has policies and
procedures regarding the detection and prevention and the misuse
of material, nonpublic information by the Subadviser and its
employees as required by the Xxxxxxx Xxxxxxx and Securities Fraud
Enforcement Act of 1988.
(vi) When providing investment instructions with respect to
securities or other assets for the International Segment with any
adviser to any other fund under common control with the Fund, the
Subadviser or any of its affiliated persons will not consult
(other than for purposes of complying with Rule 12d3-1(a) and (b)
under the 0000 Xxx) with such other adviser.
(vii) The Subadviser will provide reasonable assistance
to the Company's Pricing Committee and the Manager's Valuation
Committee in determining or confirming, consistent with the
procedures and policies stated in the Fund's Prospectus and
Statement, the value of any portfolio securities or other assets
of the Fund for which the Company's Pricing Committee or the
Manager's Valuation Committee seek assistance from or identify
for review by the Subadviser, and will use reasonable efforts to
arrange for the provision of valuation information or a price(s)
from a party(ies) independent of the Subadviser for each security
or other investment/asset in the International Segment for which
market prices are not readily available;
(viii) The Subadviser will cooperate with and provide
reasonable assistance to the Manager, the Fund's custodian and
foreign custodians, the Company's transfer agent and all other
agents and representatives of the Company and the Manager, keep
all such persons fully informed as to such matters as they may
reasonably deem necessary to the performance of their obligations
to the Company and the Manager, provide prompt responses to
reasonable requests made by such persons and maintain any
appropriate interfaces with each so as to promote the efficient
exchange of information.
(ix) The Subadviser will review written communications to
Fund shareholders relating to the International Segment and the
Subadviser's services hereunder, including shareholder reports.
(x) The Subadviser agrees that at least annually it shall
prepare and furnish to the Manager and the Board a dispersion
analysis, in a format acceptable to the Manager and the Board,
comparing the performance of the International Segment with the
performance of the other accounts managed by the Subadviser that
follow substantially similar investment objectives, restrictions
and strategies, including discretionary investment management
accounts.
(xi) In furnishing services hereunder, the Subadviser shall
be subject to, and shall perform in accordance with, the
following: (a) the Company's Charter, as the same may be
hereafter modified and/or amended from time to time (the
"Charter"); (b) the Company's By-Laws, as the same may be
hereafter modified and/or amended from time to time (the "By-
Laws"); (c) the currently effective Prospectus and Statement as
filed with the SEC and delivered to the Subadviser, as the same
may hereafter be modified, amended and/or supplemented; (d) the
1940 Act and the Advisers Act and the rules under each, and all
other federal and state laws or regulations applicable to the
Company and the Fund; (e) the Company's compliance procedures and
other policies and procedures adopted from time to time by the
Board; and (f) the written instructions of the Manager that do
not conflict with the terms hereof. Prior to the commencement of
the Subadviser's services hereunder, the Manager shall provide
the Subadviser with current copies of the Charter, By-Laws,
Prospectus and Statement, compliance procedures and other
relevant policies and procedures that are adopted by the Board.
The Manager undertakes to provide the Subadviser with copies or
other written notice of any amendments, modifications or
supplements to any such above-mentioned document. The Subadviser
agrees to review the Prospectus and the Statement as filed with
the SEC and at least annually thereafter to assure that the
description therein of the investment policies and strategies
followed by the Subadviser in providing services hereunder for
the International Segment is consistent with the policies and
strategies the Subadviser uses or intends to use upon the
Manager's request, which request shall be inferred by the
delivery of the Prospectus and Statement by the Manager to the
Subadviser, and the Manager agrees to provide a reasonable time
period for the Subadviser's review.
(xii) The Manager, and not the Subadviser, shall select
brokers and dealers and place all purchase and sale orders for
portfolio transactions on behalf of the Fund in its discretion.
In executing transactions for the Fund, selecting brokers or
dealers (including, if permitted by applicable law, Citigroup
Global Markets Inc.) and negotiating any brokerage commission
rates, the Manager will use its best efforts to seek the best
overall terms available. The Subadviser shall cooperate with the
Manager with respect to the Manager's provision of portfolio
implementation and coordination services for the International
Segment, including implementation by the Manager of instructions
furnished to the Manager by the Subadviser concerning the
securities to be purchased, held or sold for the International
Segment.
(xiii) The Company understands that the Subadviser now
acts, will continue to act and may act in the future as
investment manager or adviser to fiduciary and other managed
accounts, and as investment manager or adviser to other
investment companies, including any offshore entities, or
accounts, and the Company has no objection to the Subadviser's so
acting, provided that whenever the Fund and one or more other
investment companies or accounts managed or advised by the
Subadviser 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 or the prices
obtainable for the Fund. The Subadviser agrees that its trading
procedures will, in the good faith belief of the Subadviser, be
fair and equitable for the Fund and the Subadviser's other
clients; however, the Manager and the Company recognize that from
time to time the Subadviser may place trades with broker-dealers
for other clients that will be executed ahead of investment
instructions sent to the Manager. In addition, the Company
understands that the persons employed by the Subadviser to assist
in the performance of the Subadviser's duties under this
Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or
restrict the right of the Subadviser or any affiliated person of
the Subadviser to engage in and devote time and attention to
other businesses or to render services of whatever kind or
nature.
3. Information Provided to the Company and the Manager
The Subadviser shall supply all relevant information to the
Board as the Board may request to enable the Board to review this
Agreement consistent with Sections 15 and 36 of the 1940 Act,
including information about the profitability to the Subadviser
of providing services to the Fund pursuant to this Agreement.
4. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Manager shall pay to the Subadviser out of the
management fee it receives from the Fund, and only to the extent
thereof, an annual fee calculated according to the following
schedule, such fee to be calculated daily and paid monthly on the
average daily net assets of the International Segment:
Average Daily Net Assets of the Rate of
Fund Fee
Up to $1 billion 0.40 %
In excess of $1 billion up to 0.375 %
$2 billion
In excess of $2 billion up to 0.35 %
$5 billion
In excess of $5 billion up to 0.325 %
$10 billion
In excess of $10 billion 0.30 %
The Subadviser 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 Subadviser, 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. The
Manager shall pay fees monthly in arrears and shall provide to
the Subadviser documentation acceptable to the Subadviser
supporting its calculation.
5. Expenses
The Subadviser shall bear all expenses (excluding brokerage
costs, custodian fees, fees of independent registered public
accounting firms 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 and administration fees; sub-advisory
fees (other than sub-advisory fees paid pursuant to this
Agreement); 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 Subadviser hereunder or by the
Manager under the Investment Management Agreement are borne by
the Fund or the Company.
6. Standard of Care
The Subadviser shall exercise its best judgment and shall
act in good faith in rendering the services listed in paragraphs
2 and 3 above. The Subadviser shall not be liable for (i) any
breach by the Manager of any representation or warranty or
material provision of this Agreement, (ii) the Manager's or the
Fund's violation of any applicable law or regulation, unless such
violation was the result of actions taken or not taken by the
Subadviser or information provided by the Subadviser, (iii) any
actual or alleged material misstatement or omission in the
Prospectus, the Statement, proxy statements or other
communications to current or prospective investors, unless the
misstatement or omission relates to the Subadviser or services to
be provided by the Subadviser, including the investment
strategies and policies to be followed by the Subadviser, and is
based on information furnished by the Subadviser, (iv) the offer
and sale of shares of common stock of the Fund, including without
limitation actual or alleged noncompliance with customer
suitability, customer identification or anti-money laundering
laws or regulations, except that the foregoing shall not apply to
liability arising from statements made or documents delivered by
the Subadviser in its provision of assistance to the Fund or the
Fund's distributors in their efforts to sell shares of the Fund
or (v) any error of judgment or mistake of law or any loss
suffered by the Fund or the Manager in connection with the
matters to which this Agreement relates, provided that nothing in
this Agreement shall be deemed to protect or purport to protect
the Subadviser against any liability to the Manager, the Company
or to the shareholders of the Fund to which the Subadviser 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 Subadviser's reckless disregard of its
obligations and duties under this Agreement. The U.S. securities
laws impose liabilities under certain circumstances on persons
who act in good faith and, therefore, nothing herein shall in any
way constitute a waiver or limitation of any rights that the Fund
may have under any U.S. securities laws.
7. Term of Agreement
This Agreement shall become effective as of the day and year
first above written (the "Effective Date") and shall continue for
an initial term ending on November 30, 2007, and 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, (i) on 180 days' written notice by
the Manager, unless there has been a material breach of any of
the provisions of this Agreement by the Subadviser, in which case
this Agreement is terminable on 60 days' written notice by the
Manager, (ii) on 60 days' written notice by the Board or by vote
of holders of a majority of the outstanding voting securities of
the Fund, or (iii) upon 60 days' written notice by the
Subadviser. This Agreement will also terminate automatically in
the event of its assignment.
8. Representations
(i) Each of the parties hereto represents that the
Agreement has been duly authorized, executed and delivered by all
required corporate action.
(ii) The Subadviser has provided the Company and the Manager
with a copy of its Form ADV, which as of the date of this
Agreement is its Form ADV as most recently filed with the SEC and
will furnish a copy of all amendments to the Manager at least
annually.
(iii) The Subadviser agrees to maintain for the term of
this Agreement and provide evidence thereof to the Company or the
Manager a blanket bond and professional liability (error and
omissions) insurance in an amount reasonably acceptable to the
Manager.
(iv) The Subadviser agrees that neither it, nor any of its
affiliates, will knowingly in any way refer directly or
indirectly to its relationship with the Company, the Fund, the
Manager or any of their respective affiliated persons in
offering, marketing or other promotional materials without the
express written consent of the Manager, except as required by
rule, regulation or upon the request of a governmental authority.
The Subadviser agrees to give the Manager for its review, in
advance of use, the form of any marketing material in which the
Subadviser proposes to include the Manager's name in its list of
clients.
(v) The Subadviser agrees to promptly notify the Manager
and the Company in writing of the occurrence of any event which
could have a material impact on the performance of its duties
under this Agreement, including but not limited to (a) the
occurrence of any event that could disqualify the Subadviser from
serving as an investment adviser pursuant to Section 9 of the
1940 Act; (b) any material change in the Subadviser's business
activities that could have a material impact on the performance
of its duties under this Agreement; (c) any event that would
constitute a change in control of the Subadviser; (d) any change
in the portfolio manager or portfolio management team of the
International Segment; (e) the existence of any pending or
threatened audit, investigation, examination, complaint or other
inquiry (other than routine audits or regulatory examinations or
inspections) relating to the Subadviser's services to the Fund;
and (f) any material violation of the Subadviser's code of
ethics.
(vi) The Manager shall comply with all federal and state
laws and regulations regarding the offer and sale of shares of
common stock of the Fund, including without limitation customer
suitability, customer identification and anti-money laundering
rules, to which the Manager, the Fund and their agents are
subject.
9. Confidentiality of Portfolio Information.
The Subadviser may release portfolio holdings information
with respect to the Fund only (i) with the prior written consent
of the Manager; provided, that the Subadviser may, without such
prior written consent, disclose portfolio holdings information to
the Manager, the Board, officers, custodian, administrator,
accounting and pricing agents and portfolio analytics systems
providers, legal advisers, compliance personnel, auditors and
brokers (the "Interested Parties") solely in connection with the
performance of its advisory duties for the Fund, or if required
or requested by any regulatory authority with jurisdiction,
judicial or administrative process or otherwise by applicable law
or regulation; and (ii) if the release of the portfolio holdings
information is in conformity with the disclosures set forth in
the Fund's currently effective registration statement. The
Subadviser agrees that arrangements to release the Fund's
portfolio holdings information to persons or vendors other than
Interested Parties or governmental or regulatory authorities must
be in the form of a written agreement between the Subadviser and
such third party, which must represent that it will have policies
and procedures in place to protect the Fund's portfolio holdings
information.
The Manager agrees that it will treat confidentially all
information provided by the Subadviser hereunder regarding the
Subadviser's investment advice and recommendations and business
and operations. All confidential information provided by the
Subadviser shall be used only in accordance with applicable law
and shall not be disclosed to any third party without the prior
consent of the Subadviser except as it is relevant to the
services performed under this Agreement. The foregoing shall not
apply to any information that is public when provided or
thereafter becomes public or which is required or requested to be
disclosed by any regulatory authority with jurisdiction, by
judicial or administrative process or otherwise by applicable law
or regulation.
10. Notices
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other
parties at such address as such other parties may designate for
the receipt of such notice. Until further notice to the other
parties, it is agreed that the address of each party is as
follows:
(a) To the Manager:
Xxxx Xxxxx Partners Fund Advisor, LLC
000 Xxxx Xxxxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(b) To the Subadviser:
Causeway Capital Management LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Swan
11. Governing Law
This Agreement is being made pursuant to, and shall be
construed in accordance with, the laws of the State of New York,
without giving effect to principles of conflict of laws.
12. Interpretation and Definition of Terms
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
interpretation 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. Specifically, the terms "vote of a majority of
the outstanding voting securities," "assignment" and "affiliated
person," as used in this Agreement, shall have the meanings
assigned to them by Section 2(a) of the 1940 Act. In addition,
when the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is modified, interpreted or relaxed
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.
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:
Accepted:
CAUSEWAY CAPITAL MANAGEMENT LLC
By:
Name:
Title:
