EXHIBIT 24(2)(g)(ii)
WILMINGTON LOW VOLATILITY FUND OF FUNDS
SUBADVISORY AGREEMENT
THIS AGREEMENT is made as of the 17 day of December, 2003,
by and among Guidance Capital LLC, an Illinois limited liability company (the
"Sub-Adviser"), Xxxxxx Square Management Corporation, a Delaware corporation
(the "Adviser"), and Wilmington Low Volatility Fund of Funds, a Delaware
statutory trust (the "Fund").
WHEREAS, the Fund has been established under the laws of the
State of Delaware to invest in a portfolio of Portfolio Funds (as defined
below), which invest and trade in a broad range of securities, currencies,
commodities and other financial instruments;
WHEREAS, (i) pursuant to Section 8(a) of the Investment
Company Act of 1940, as amended (the "1940 Act"), the Fund registered as a
non-diversified, closed-end management investment company under the 1940 Act by
filing a Form N-8A Notification of Registration with the Securities and Exchange
Commission ("SEC") on August 18, 2003, and (ii) pursuant to Section 8(b) of the
1940 Act, the Fund filed its registration statement on Form N-2 (the
"Registration Statement") with the SEC on August 18, 2003;
WHEREAS, the Fund will have been declared effective by the SEC
on or after the time this Agreement will become effective;
WHEREAS, the Fund's Board of Trustees (the "Board") has
appointed Adviser as investment adviser to the Fund, pursuant to that certain
Investment Advisory Agreement (the "Advisory Agreement") dated as of December 1,
2003 by and between the Fund and Adviser, to provide discretionary investment
management services to the Fund;
WHEREAS, the Adviser desires to appoint the Sub-Adviser to
provide investment advice and certain related services to the Adviser in respect
of the Fund, and the Sub-Adviser wishes to accept such appointment on the terms
and subject to the conditions set forth in this Agreement; and
WHEREAS, Sub-Adviser is registered and in good standing as a
registered investment adviser under the Investment Advisers Act of 1940, as
amended ("Advisers Act");
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto, intending to be legally bound hereby, agree as follows:
1. APPOINTMENT OF SUB-ADVISER
(a) Subject always to the supervision and control of the Board, any
duly constituted committee thereof or any officer of the Fund acting pursuant to
like authority and to such policies as the Board may determine, the Adviser
hereby appoints the Sub-Adviser to provide, at Sub-Adviser's expense (except as
otherwise provided in Section 3), Portfolio Management Services (as defined in
Section 2) with respect to those assets belonging to the Fund that the Adviser
designates. For purposes of this Agreement, the Adviser designates all of the
assets of the Fund as designated assets ("Designated Assets"), and the
Sub-Adviser hereby accepts such appointment, on the terms and subject to the
conditions set forth in this Agreement. It is understood that Adviser may itself
provide Portfolio Management Services or other services with respect to the
Fund.
(b) Copies of the Registration Statement shall be sent to the
Sub-Adviser by the Adviser prior to the commencement of this Agreement and
promptly upon filing any such amendment with the SEC.
2. RESPONSIBILITIES OF SUB-ADVISER
(a) Sub-Adviser acknowledges that the Fund will seek to achieve its
investment objective(s) ("Fund Objective(s)") by investing and reinvesting its
assets primarily in a portfolio of equity interests issued by limited
partnerships, limited liability companies, business trusts and similar business
vehicles (with respect to Designated Assets, limited partnerships, limited
liability companies, business trusts and similar business vehicles selected by
Sub-Adviser) whose primary business is investing in securities and other
financial instruments but that are not registered currently or required to
register currently as investment companies under the 1940 Act by virtue of the
exclusion from the definition of "investment company" provided by Section
3(c)(1) or Section 3(c)(7) of the 1940 Act ("Portfolio Funds"). From time to
time assets may be invested in registered investment companies (limited to money
market funds) as allowable under the 1940 Act and provided that appropriate fee
adjustments are made as required under the 1940 Act. Accordingly, in providing
sub-advisory services to the Adviser and the Fund hereunder, the Sub-Adviser
shall perform the following duties on a continuous and ongoing basis ("Portfolio
Management Services"), in each case based upon its professional skill,
experience and judgment:
(i) obtaining and evaluating such economic, statistical
and financial data and information and undertaking such additional investment
research as shall be necessary or advisable in the judgment of Sub-Adviser for
the management of the investment and reinvestment of Designated Assets in
accordance with the Fund Objective(s);
(ii) managing the Fund so that no action or omission on
the part of the Sub-Adviser shall cause the Fund to fail to comply with the 1940
Act, the rules and regulations promulgated thereunder, and any other rules and
regulations pertaining to the investment strategy of the Fund. The Adviser will
notify the Sub-Adviser promptly if the Adviser believes that the Fund is in
violation of any requirement specified in the first sentence of this paragraph;
(iii) identifying Portfolio Funds which the Sub-Adviser
believes appropriate for the Fund in light of the Fund Objective(s);
(iv) allocating Designated Assets among Portfolio Funds in
light of the Fund Objective(s);
(v) purchasing, selling and redeeming securities of
Portfolio Funds and other issuers on behalf of the Fund, including the
completion and execution of subscription agreements or similar contracts on
behalf of the Fund with respect to, and placing orders for, such purchases and
sales;
(vi) monitoring the performance of the Portfolio Funds in
which the Fund has invested Designated Assets with a view to determining whether
continued investment by the Fund in such Portfolio Funds is appropriate in light
of the Fund Objective(s);
(vii) evaluating and recommending appropriate changes to
the Fund Objective(s) from time to time;
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(viii) providing such other advice and services as Adviser
or the Board may from time to time reasonably request in connection with the
investment operations of the Fund with respect to Designated Assets;
(ix) regularly reporting to the Adviser and the Board with
respect to the implementation of the investment policies of the Fund;
(x) assisting the administrator for the Fund in
determining or confirming, consistent with the procedures and policies stated in
the Registration Statement, the value of any portfolio securities or other
assets of the Fund for which the fund accounting agent seeks assistance from or
identifies for review by the Sub-Adviser;
(xi) the Sub-Adviser will make available to the Fund and
the Adviser, promptly upon reasonable request, all of the Fund's investment
records and ledgers maintained by the Sub-Adviser (which shall not include the
records and ledgers maintained by the custodian and fund accounting agent for
the Fund) as are necessary to assist the Fund and the Adviser to comply with
requirements of the 1940 Act and the Advisers Act, as well as other applicable
laws. The Sub-Adviser will furnish to regulatory authorities having the
requisite authority any information or reports in connection with such services
which may be requested in order to ascertain whether the operations of the Fund
are being conducted in a manner consistent with applicable laws and regulations;
and
(xii) providing reports to the Fund's Board for
consideration at meetings of the Board on the investment program for the Fund
and the issuers and securities represented in the Fund's portfolio, and will
furnish the Board with respect to the Fund such periodic and special reports as
the Trustees and the Adviser may reasonably request.
For the avoidance of doubt, the Sub-Adviser's responsibility to
provide Portfolio Management Services hereunder relates only to Designated
Assets and not to any other assets (if any) of the Fund.
(b) In rendering the services required under this Agreement, the
Sub-Adviser may, from time to time, employ or associate with itself such
affiliated or unaffiliated person or persons as it believes necessary to assist
it in carrying out its obligations under this Agreement. The Sub-Adviser may not
retain, employ or associate itself with any company that would be an "investment
adviser," as that term is defined in the 1940 Act that that would act as a
sub-adviser to the Fund unless the contract with such company is approved by a
majority of the Board and a majority of Trustees who are not parties to any
agreement or contract with such company and who are not "interested persons," as
defined in the 1940 Act, of the Fund, the Adviser, or the Sub-Adviser, or any
such company, and is approved by the vote of a majority of the outstanding
voting securities of the Fund to the extent required by the 1940 Act. The
Sub-Adviser shall be responsible for making reasonable inquiries and for
reasonably ensuring that no associated person of the Sub-Adviser, or of any
company that the Sub-Adviser has retained, employed, or with which it has
associated with respect to the investment management of the Fund, to the best of
the Sub-Adviser's knowledge, had in any material connection with the handling of
assets:
(i) been convicted, in the last ten (10) years, of any
felony or misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, involving violations of
Sections 1341, 1342, or 1343 of Xxxxx 00, Xxxxxx Xxxxxx Code, or involving the
purchase or sale of any security; or
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(ii) been found by any state regulatory authority, within
the last ten (10) years, to have violated or to have acknowledged violation of
any provision of any state insurance law involving fraud, deceit, or knowing
misrepresentation; or
(iii) been found by any federal or state regulatory
authorities, within the last ten (10) years, to have violated or to have
acknowledged violation of any provision of federal or state securities laws
involving fraud, deceit, or knowing misrepresentation.
3. COMPENSATION
As compensation for its services hereunder, the Fund shall pay the
Sub-Adviser compensation calculated and payable in the manner set out in
Schedule A hereto (or such lesser amount as Sub-Adviser may from time to time
agree to receive and after taking into account the fee waivers the Adviser and
Sub-Adviser have agreed to as described in the Fund's prospectus in order to
meet the Fund's applicable expense caps).
4. STANDARD OF CARE AND REPRESENTATIONS
(a) The Sub-Adviser shall have no obligations to the Fund or the
Adviser other than those expressly set forth in this Agreement and any other
obligations arising under applicable law.
(b) The Sub-Adviser must maintain errors and omissions insurance in the
amount of $2 million per occurrence and $2 million in the aggregate. In the
event the policy is written on a "claims made basis," and such coverage is
terminated either (y) by the insurance carrier or Sub-Adviser during the term of
this Agreement or (z) coterminously with the cancellation or expiration of this
Agreement, regardless of which party caused termination of the coverage, the
Sub-Adviser must arrange for the purchase of a retrospective reporting
endorsement ("tail policy") at the Sub-Adviser's sole cost to cover all risks
incurred during the term of this or any predecessor or successor agreement among
the Fund, the Adviser or Sub-Adviser. The standard of care applicable for claims
under such policy must be ordinary negligence; the Fund agrees not to pursue
deminimis, non-material claims against the Subadvisor, as determined in the sole
discretion of the Board of Trustee of the Fund.
(c) Except as set forth in Section (b.), above, the Sub-Adviser shall
not be liable for any error in judgment or mistake of law or for any damage or
loss in excess of available insurance suffered by the Fund in connection with
the subject matter of this Agreement, including but not limited to any damage or
loss incurred by reason of any act or omission of the Board, Adviser, the Fund's
custodian or administrator, any bank, broker, dealer, investment manager of any
Portfolio Fund, or any agent, member, partner, director, officer or employee of
any of them, except to the extent such damage or loss arises from willful
misfeasance, bad faith or gross negligence on the part of the Sub-Adviser, or
reckless disregard of the Sub-Adviser's obligations and duties hereunder.
(d) The Sub-Adviser's responsibility under this Agreement is to manage
the Fund so it, at all times, is in compliance with the 1940 Act and to furnish
the Adviser and the Fund with investment advisory services based upon the
Sub-Adviser's professional skill, experience and judgment, and the Sub-Adviser
makes no representation or warranty (i) as to the accomplishment of any
particular investment results by any Portfolio Fund or the Fund's portfolio as a
whole, or (ii) as to the accuracy or completeness of any information supplied by
the Sub-Adviser to the Adviser, the Fund or the Fund's custodian or
administrator which is provided by a Portfolio Fund (or the investment manager
thereof) or other third-party to the Sub-Adviser and conveyed by the Sub-Adviser
(either in its entirety or in excerpts accurately and fairly derived from
material sent to the Sub-Adviser) to any or all of them. Notwithstanding the
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foregoing, the Sub-Adviser shall only provide to the Adviser, the Fund and the
Fund's custodian or administrator information the Sub-Adviser reasonably
believes to be accurate and fair and with respect to which the Sub-Adviser has
no reason to doubt its accuracy and completeness.
(e) The Sub-Adviser shall not: (i) be obligated hereunder to provide
advice with respect to the effect of the tax laws and regulations of any
jurisdiction or commodities and securities laws and regulations of any
jurisdiction (including, for the avoidance of doubt, any law, rules or
regulations applicable to the operation of registered investment companies); or
(ii) at any time have custody of the assets of the Fund.
(f) Each of the Adviser and the Fund acknowledges that certain
Portfolio Funds will employ speculative trading strategies, that there is a risk
that investments in any Portfolio Fund may be lost in whole or in part, that the
Sub-Adviser has never previously advised a registered investment company, that
Sub-Adviser's past results are not necessarily indicative of future performance
and that there is no assurance that the Fund will realize profits, avoid losses
or achieve the Fund Objective(s).
(g) The Sub-Adviser represents, warrants and agrees that:
(i) it is a limited liability company duly organized and
validly existing under the laws of Illinois;
(ii) it has full limited liability power and authority to
perform its obligations under this Agreement;
(iii) this Agreement has been duly and validly authorized,
executed and delivered on behalf of the Sub-Adviser and is a valid and binding
agreement of the Sub-Adviser enforceable against the Sub-Adviser in accordance
with its terms;
(iv) the execution and delivery of this Agreement by the
Sub-Adviser, the incurrence by the Sub-Adviser of the obligations set forth in
this Agreement and the performance by the Sub-Adviser of such obligations will
not violate, or constitute a breach of or a default under, the constituent
documents of the Sub-Adviser or any agreement or instrument by which it is
bound, or, to the best of the Sub-Adviser's knowledge, any order, rule, law or
regulation applicable to the Sub-Adviser of any court, governmental body,
administrative agency or self-regulatory authority having jurisdiction over the
Sub-Adviser;
(v) there is not pending or, to the best of the
Sub-Adviser's knowledge, threatened, any action, suit or proceeding before or by
any court or other governmental or self-regulatory authority to which the
Sub-Adviser is a party, which might reasonably be expected to result in any
material adverse change in the financial condition or regulatory qualifications
of the Sub-Adviser;
(vi) it, and each of its principals and employees, has all
United States state and federal governmental, regulatory and exchange licenses
and approvals required to perform its obligations hereunder, including, without
limitation and to the extent required, registration by the Sub-Adviser as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and as a commodity pool operator and a commodity trading
advisor under the Commodity Exchange Act;
(vii) that it will manage the Fund so that, at all times,
the Fund is in compliance with the 1940 Act;
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(viii) it currently maintains and will continue to maintain
insurance (in addition to errors and omissions insurance policies specified
above) in amounts reasonably necessary for its operations or as otherwise
required by law;
(ix) it has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and Section 204A of the
Advisers Act and has provided the Fund with a copy of the code of ethics and
evidence of its adoption. Within forty-five (45) days of the end of the last
calendar quarter of each year while this Agreement is in effect, a duly
authorized officer of the Sub-Adviser shall certify to the Fund that the
Sub-Adviser has complied with the requirements of Rule 17j-1 and Section 204A
during the previous year and that there has been no material violation of the
Sub-Adviser's code of ethics or, if such material violation has occurred, that
appropriate action was taken in response to such violation. Upon written request
of the Fund, the Sub-Adviser shall permit the Fund, its employees or its agents
to examine the reports to be made to the Sub-Adviser by Rule 17j-1(d)(1);
(x) it will promptly, after filing with the Securities
and Exchange Commission an amendment to its Form ADV, furnish a copy of such
amendment to the Fund and the Adviser;
(xi) it will not and will not permit its affiliate to
engage in any activity that would cause the Fund to be a publicly traded
partnership under the Internal Revenue Code of 1986, as amended;
(xii) it has reviewed the Fund's Registration Statement
that will be or has been filed with the SEC that contains disclosure about the
Sub-Adviser, and represents and warrants that, with respect to the disclosure
about or information relating, directly or indirectly, to the Sub-Adviser, to
the Sub-Adviser's knowledge, such Registration Statement contains, as of the
date hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading;
(xiii) it shall promptly notify the Adviser:
(1) in the event that the SEC or other governmental
authority has censured the Sub-Adviser; placed limitations upon its activities,
functions or operations; suspended or revoked its registration, if any, as an
investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions,
(2) upon having a reasonable basis for believing that
the Fund is not in compliance with Applicable Law; and
(xiv) it will notify the Adviser and the Fund promptly of
any material fact known to the Sub-Adviser respecting or relating to the
Sub-Adviser that is not contained in the Registration Statement as then in
effect, and is required to be stated therein or necessary to make the statements
therein not misleading, or of any statement contained therein that becomes
untrue in any material respect.
(h) The Adviser and the Fund (each with respect only to itself) hereby
represent and warrant to the Sub-Adviser that:
(i) in the case of the Adviser, it is a corporation duly
organized and validly existing under the laws of the State of Delaware, and in
the case of the Fund, it is a statutory trust duly formed and validly existing
under the laws of the State of Delaware;
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(ii) it has full corporate or statutory trust, as the case
may be, power and authority to perform its obligations under this Agreement and
the Advisory Agreement;
(iii) this Agreement and the Advisory Agreement have been
duly and validly authorized, executed and delivered on its behalf and are its
valid and binding agreements, enforceable against it in accordance with their
respective terms;
(iv) the execution and delivery of this Agreement and the
Advisory Agreement by it, the incurrence of the obligations by it set forth
herein and the performance by it of such obligations will not violate, or
constitute a breach of or default under, its constituent documents or any
agreement or instrument by which it is bound or, to the best of its knowledge,
any order, rule, law or regulation applicable to it of any court, governmental
body, administrative agency or self-regulatory authority having jurisdiction
over it;
(v) there is not pending or, to the best of its
knowledge, threatened, any action, suit or proceeding before or by any court or
other governmental or self-regulatory authority to which it is a party, which
might reasonably be expected to result in any material adverse change in its
financial condition or regulatory qualifications; and
(vi) it, and each of its trustees, directors, officers
and/or employees, has all governmental, regulatory and exchange licenses and
approvals required to conduct its business and perform its obligations hereunder
and under the Advisory Agreement.
5. TERM AND TERMINATION
This Agreement shall become effective upon its execution, and:
(a) This Agreement may be terminated at any time, without payment of
any penalty,
(i) (x) by Adviser, (y) by the Board or (z) by vote of a
majority of the outstanding voting securities of the Fund, in each case, on
sixty days' written notice delivered or mailed by registered mail, postage
prepaid, to the Sub-Adviser, or
(ii) immediately in the event that (t) key senior
investment personnel (namely, for these purposes, Xxxxx Xxx and/or X. Xxxxxxxxxx
Elliman, III), leave the Sub-Adviser and the Adviser reasonably concludes that
the loss of the services of such personnel would materially adversely affect the
Sub-Adviser's performance hereunder, (u) Sub-Adviser or key investment personnel
of Sub-Adviser are indicted for a felony involving moral turpitude or that could
cause material harm to Sub-Adviser or its reputation, (v) key investment
personnel of the Sub-Adviser are or become ineligible to serve in the capacity
of employee, officer, director, member of an advisory board or principal
underwriter for any registered investment company under Section 9 of the 1940
Act, or any successor provision, or the rules or regulations promulgated
thereunder, (w) the commencement of enforcement proceedings against Sub-Adviser
or any employee of Sub-Adviser by the SEC, the Commodity Futures Trading
Commission or any state securities regulator, (x) actions or omissions shall
have resulted in the imposition of sanctions against Sub-Adviser or any employee
of Sub-Adviser under the Advisers Act, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the 1940 Act, the Commodity
Exchange Act or any state securities law, or the rules or regulations
promulgated thereunder, (y) failure of Sub-Adviser or its employees to maintain
required licenses and registrations to perform duties hereunder, or (z)
Sub-Adviser commits a material breach of this Agreement or there is a material
failure by Sub-Adviser to perform its duties hereunder and, if such breach or
failure to perform is susceptible to cure, such breach
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or failure to perform is not cured within ten business days of Guidance's
knowledge of such breach or failure to perform.
(b) This Agreement may be terminated by the Sub-Adviser at any time by
not less than 180 days' written notice delivered or mailed by registered mail,
postage prepaid, to the Adviser.
(c) Unless otherwise terminated, this Agreement shall continue in
effect for two years from the date of execution, and from year to year
thereafter so long as such continuance is specifically approved at least
annually (i) by the Board or by vote of a majority of the outstanding voting
securities of the Fund, and (ii) by vote of a majority of the members of the
Board who are not interested persons of the Fund, the Adviser or the
Sub-Adviser, cast in person at a meeting called for the purpose of voting on
such approval.
(d) This Agreement shall terminate automatically, without the payment
of any penalty, in the event of its assignment or in the event that the Advisory
Agreement shall have been terminated for any reason.
In the event that this Agreement is terminated, the Sub-Adviser agrees
to cooperate with the Adviser and any successor Sub-Adviser to the Sub-Adviser
and provide such information or take such other action as may be reasonably
requested by the Adviser in order to ensure continuous, high quality services
are provided to the Fund; provided, however, that it is understood that the
Sub-Adviser shall not be responsible for any act or omission of the Adviser or
any successor Sub-Adviser.
6. CERTAIN INFORMATION
Sub-Adviser shall promptly notify the Adviser in writing of the
occurrence of any of the following events:
(a) the Sub-Adviser shall fail to be registered as an investment
adviser under the Advisers Act and under the laws of any jurisdiction in which
Sub-Adviser is required to be registered as an investment adviser in order to
perform its obligations under this Agreement or any other agreement concerning
the provision of investment advisory services to the Fund;
(b) the Sub-Adviser shall fail to be registered as a commodity pool
operator or commodity trading advisor under the Commodity Exchange Act and under
the laws of any jurisdiction in which Sub-Adviser is required to be registered
as a commodity pool operator or commodity trading advisor in order to perform
its obligations under this Agreement or any other agreement concerning the
provision of investment advisory services to the Fund;
(c) the Sub-Adviser shall have been served or otherwise have notice of
any action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board or body, involving the affairs of the Fund;
(d) there is a material adverse change in the business or financial
condition of the Sub-Adviser (provided that the Sub-Adviser shall not be liable
for damages to the extent due to the Sub-Adviser's failure to provide notice of
such a material adverse change); or
(e) any event the occurrence of which may permit the Adviser
immediately to terminate this Agreement pursuant to Section 5(a); or
(f) the Sub-Adviser is no longer eligible for insurance coverage as
required under the agreement.
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7. EXERCISE OF VOTING RIGHTS
Except with the agreement or on the specific instructions of the Board
or Adviser, Sub-Adviser shall exercise or procure the exercise of any voting
right attaching to investments of the Fund made with Designated Assets
consistent with the economic interest of the Fund.
8. STATUS OF SUB-ADVISER; POWER OF ATTORNEY
(a) The parties hereto agree that the Sub-Adviser shall be deemed to be
an independent contractor and that, except as otherwise provided herein, the
Sub-Adviser shall not have authority to act for, represent or bind in any way,
and shall not otherwise be deemed to be an agent of, the Fund or the Adviser.
Nothing contained herein (other than the Adviser's or the Sub-Adviser's
ownership of a membership interest in the Fund) shall create or constitute the
Sub-Adviser, any Portfolio Fund, the Fund or the Adviser as members of any
partnership, limited liability company, joint venture, association, syndicate,
unincorporated business or other separate entity, and nothing contained herein
shall be deemed to confer on any of them any express, implied or apparent
authority to incur any obligation or liability on behalf of any other such
entity (other than as set forth in this Section 8).
(b) The Fund hereby constitutes and appoints the Sub-Adviser as the
Fund's true and lawful representative and attorney-in-fact, in the Fund's name,
place and stead, to make, execute, sign and acknowledge all subscription
agreements and similar contracts on behalf of the Fund as in the Sub-Adviser's
judgment are necessary or desirable for the Sub-Adviser to implement the
investment policies of the Fund by purchasing, selling and redeeming securities
of Portfolio Funds and other issuers and placing orders for such purchasers and
sales. The foregoing power of attorney is revocable, and will terminate in any
event upon the termination of this Agreement.
9. AUTHORIZED PERSONS
Each party hereto will provide the other parties with a schedule of the
persons authorized to give or receive instructions on behalf of such party
hereunder, and shall amend such schedule as may be necessary from time to time.
Each party hereto may rely on the authority of any person identified in such
schedule and shall not be liable for any actions taken or not taken hereunder in
good faith reliance upon the authority of any such person.
10. AMENDMENTS; WAIVERS
(a) This Agreement may be amended at any time by mutual written consent
of the parties, provided that, if required by law, such amendment shall also
have been approved by vote of a majority of the outstanding voting securities of
the Fund and by vote of a majority of the members of the Board who are not
interested persons of the Fund or Adviser or Sub-Adviser, cast in person at a
meeting called for the purpose of voting on such approval.
(b) No waiver shall be deemed by any course of conduct or acquiescence
and no waiver shall be enforceable against any party hereto unless in writing
and signed by the party against whom such waiver is claimed.
11. CERTAIN DEFINITIONS
For the purpose of this Agreement, the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have their respective meanings
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defined in the 1940 Act, subject, however, to such exemptions or no-action
positions as may be granted by the SEC or its staff under the 1940 Act.
12. SURVIVAL OF OBLIGATIONS
Provisions of this Agreement that by their terms or by their context
are to be performed in whole or in part after termination of this Agreement
shall survive any termination of this Agreement, including obligations under
Section 3 with respect to compensation earned by the Sub-Adviser prior to such
termination but unpaid at the time of termination.
13. MISCELLANEOUS
(a) The headings in this Agreement are included for the convenience or
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(b) This Agreement shall be governed by the laws of the State of
Delaware and the laws applicable therein.
(c) Any notice required or permitted to be given hereunder shall be
deemed to be sufficiently given if such notice is delivered or sent by facsimile
as hereinafter set forth. Any notice delivered shall be deemed to have been
given on the date of delivery. Any notice sent by facsimile shall be deemed to
be delivered on the day it is sent unless it is sent on a day that is not a
business day or is sent after 4:00 p.m. (Eastern time) on a business day, in
which case it shall be deemed to be delivered on the next business day. A
"business day" is a day on which the New York Stock Exchange is open for
business. Notice shall be effectively given, if delivered or sent by facsimile
to the following addresses:
(i) if to Sub-Adviser, to it at:
Guidance Capital, LLC
X.X. Xxx 000
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: X. Xxxxxxxxxx Elliman, III
Facsimile: (000) 000-0000
(ii) if to Adviser, to it at:
Xxxxxx Square Management Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
Copy to:
Office of General Counsel
Wilmington Trust Company
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0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(iii) if to the Fund, to it at:
Wilmington Low Volatility Fund of Funds
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Any party may change its address for receiving notices by giving notice
in the manner set out above to the other parties.
(d) If any term or provision of this Agreement or the application
thereof to any person or circumstances is held to be invalid, illegal or
otherwise unenforceable to any extent, then, to the fullest extent permitted by
law: (i) such invalidity, illegality or unenforceability shall not affect any
other term or provision of this Agreement; (ii) all other terms and provisions
of this Agreement shall remain in full force and effect and shall be liberally
construed in order to carry out the intent of the parties hereto as nearly as
may be possible; and (iii) the parties hereto shall use all reasonable efforts
to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the purposes and intent of this Agreement.
(e) This Agreement may be executed in one or more counterparts, which
shall together constitute one and the same document.
(f) The parties hereto acknowledge and agree that the Fund shall in no
event have any liability to any party hereto or any other person for the
obligations, representations and warranties of the Adviser or Sub-Adviser
hereunder.
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IN WITNESS WHEREOF the parties hereto have entered into this
Agreement as of the date first above written.
GUIDANCE CAPITAL LLC (SUB-ADVISER)
By: /s/ X. Xxxxxxxxxx Elliman III
------------------------------------
Name: X. Xxxxxxxxxx Elliman III
---------------------------------
Title: Member
--------------------------------
XXXXXX SQUARE MANAGEMENT CORPORATION
(ADVISER)
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: President
--------------------------------
WILMINGTON LOW VOLATILITY FUND OF
FUNDS (THE FUND)
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
---------------------------------
Title: Vice President & CFO
--------------------------------
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SCHEDULE A
COMPENSATION
Capitalized terms used in this Schedule A but not defined
herein or elsewhere in this Agreement shall have the meanings given them in the
Fund's Operating Agreement, as in effect from time to time.
The compensation payable by the Fund to the Sub-Adviser under
this Agreement shall consist of the following:
1. MANAGEMENT FEE
The Fund will pay to the Sub-Adviser a management fee (the "Management
Fee"), monthly in arrears. The Management Fee is payable at the annual rate of
0.50% of the average net assets of the Fund that are Designated Assets. On or
before the tenth business day of each month, the Fund will calculate an amount
(the "Monthly Management Fee") equal to 0.04167% of the net asset value of the
Designated Assets as of the last business day of the previous month, determined
before giving effect to the payment of the accrued Monthly Management Fee being
calculated or to any repurchases or distributions (including any distributions
made to Special Members in payment of the Incentive Allocation) as of such date
or any capital contributions made on such date (such capital contributions being
deemed to be made as of the next day). Adviser will pay the Monthly Management
Fee for each month to Sub-Adviser on or before the thirtieth day of the
following month. The Monthly Management Fee shall be calculated on a pro rata
basis in the case of any partial months.
Within 60 days after the Fund's fiscal year end, the Fund will cause
its (and the Designated Assets') net asset value as of the last business day of
each month in such fiscal year to be reviewed. Based on the review, the Monthly
Management Fee for each month in such fiscal year shall be recalculated. If the
sum of the Monthly Management Fees (as recalculated) for such fiscal year
exceeds the amounts paid already by Adviser to Sub-Adviser in respect of such
Monthly Management Fees, then Adviser shall pay the amount of such excess to
Sub-Adviser within 45 days after the completion of the review. If the sum of the
Monthly Management Fees (as recalculated) for such fiscal year is less than the
amounts paid already by Adviser in respect of such Monthly Management Fees, then
Adviser shall reduce the amount of the next Monthly Management Fee paid by it to
Sub-Adviser by the amount of such deficit (and, if necessary to fully account
for such deficit, subsequent Monthly Management Fees).
2. INCENTIVE ALLOCATION
In accordance with the terms of the Fund's Declaration of Trust, the
Sub-Adviser will receive 50% of the Incentive Allocation, which shall be
credited to its special advisory account, so long as it remains a Sub-Adviser of
the Fund, is active and is in good standing with the Fund.
3. REIMBURSEMENT OF CERTAIN EXPENSES
Within 30 days of the Fund's receipt of reasonably detailed documentary
evidence of its reasonably allocated portion of the Sub-Adviser's out-of-pocket
expenses incurred (the "Reimbursement Request") on behalf of or for the benefit
of the Fund for computer software licensing, purchasing, programming and
operating costs and research, due diligence costs and other expenses all only as
deemed appropriate by the Board of the Fund (in each case, whether internal
costs reasonably allocated or external costs), the Fund shall pay to the
Sub-Adviser the amount of such expenses.
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Notwithstanding the foregoing, in no event shall (i) the Sub-Adviser
seek reimbursement of any expenses from the Fund for which it does not seek
reimbursement from all of its other clients, and (ii) Sub-Adviser seek
reimbursement of any expenses from the Fund on a basis less favorable to the
Fund than the most favorable basis on which the Sub-Adviser seeks reimbursement
for such expenses from all of its other clients. In determining the amount of
expenses for which the Sub-Adviser shall seek reimbursement from the Fund, the
Sub-Adviser shall fairly and consistently apply an allocation methodology that
it applies to all of its clients and pursuant to which it allocates such
expenses among the Fund and its other clients for purposes of such
reimbursement, and shall not apply such methodology in a manner that differs in
its approach to the Fund relative to such other clients.
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