SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this 20th day of
May, 2016, by
and between Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware limited
liability
company (the "Manager"), and EnTrustPermal Management LLC, a Delaware
Limited
Liability Company (the "Subadviser").
WHEREAS, the Manager has been retained by EnTrustPermal Hedge
Strategies
Portfolio (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 the 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:
In accordance with and subject to the Management Agreement between
the Fund and
the Manager (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.
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. The 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.
(a) Subject to the supervision of the Fund's Board of Trustees (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
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 (including, as permitted in accordance
with this
paragraph, swap agreements, options and futures), retained, sold or
exchanged by
the Fund and what portion of the Allocated Assets will be held in the
various
securities and other investments in which the Fund invests, and shall
implement
those decisions (including the execution of investment
documentation), all
subject to the provisions of
the Fund's Declaration of Trust 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 Jaw,
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.
Subject to the supervision of the Board and the Manager, the
Subadviser also
shall provide management services to EnTrustPermal Hedge Strategies
Fund Ltd., a
wholly-owned subsidiary of the Fund.
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 l l(a) of
the Exchange Act and Rule l la2-2(T) thereunder, and the Fund hereby
consents to
the retention of compensation for such transactions in accordance
with Rule l l
a2-2(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 Prospectus and Statement of Additional Information
relative to the
Subadviser and its directors and officers.
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.
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 3l a-2 under the 1940 Act.
(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,
tax
reporting services 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 ofregistering 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
meetings 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 Fu nd's Board members and officers
with
respect thereto.
No 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.
As 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 monthly 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 monthly
managed
assets of the Fund or, if Jess, 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 monthly managed assets as
the number of
business days in such period bears to the number of business days in
such month.
The average monthly managed 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.
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.
I 0. 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 its
total assets minus its liabilities 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.
I 2. 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 , 2018. 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.
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.
No 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.
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.
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 ha\'e caused this Agreement
to be executed
by their officers thereunto duly authorized .
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
Name: Xxxx Trust
Title: President and Chief Executive Officer
ENTRUSTPERMAL MANAGEMENT LLC
Name: Xxxxxxxxx Xxxxxxxxxxx
Title:Senior Managing Director
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 othenvise, any obligation to
the Subadviser.
ENTRUSTPERMAL HEDGE STRATEGIES PORTFOLIO
Name: Xxxx Trust
Title: President and Chief Executive Officer
ANNEX I
Not applicable.
SCHEDULE A
EnTrustPermal Hedge Strategies Portfolio Date: May 20, 2016
Fee:
The following percentage of the Fund's managed assets: 1.00%
