SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this 1st day
of December, 2005, by and between Xxxxx Xxxxxx Fund Management
LLC, a Delaware limited liability company (the "Manager") and
TIMCO Asset Management Inc., a Connecticut Corporation (the
"Subadviser").
WHEREAS, the Manager has been retained by Xxxxx Xxxxxx Investment
Funds Inc. (the "Corporation"), 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 Corporation with respect to a
series of the Corporation;
WHEREAS, the Manager wishes to engage the Subadviser to provide
certain investment advisory services to the Corporation with
respect to the series of the Corporation designated in Schedule
A annexed hereto (the "Fund") and Subadviser is willing to furnish
such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. In accordance with and subject to the Management Agreement
between the Corporation and the Manager with respect to the Fund
(the "Management Agreement"), the Manager hereby appoints the
Subadviser to act as Subadviser with respect to the Fund for the
period and on the terms set forth in this Agreement. The Subadviser
accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. The Manager shall cause the Subadviser to be kept fully informed
at all times with regard to the securities owned by the Fund, its
funds available, or to become available, for investment, and
generally as to the condition of the Fund's affairs. Manager shall
furnish the Subadviser with such other documents and information
with regard to the Fund's affairs as the Subadviser may from time
to time reasonably request.
3. (a) Subject to the supervision of the Corporation's Board of
Directors (the "Board") and the Manager, Subadviser shall regularly
provide the Fund with respect to such portion of the Fund's assets
as shall be allocated to the Subadviser by the Manager from time to
time (the "Allocated Assets") with investment research, advice,
management and supervision and shall furnish a continuous investment
program for the Allocated Assets consistent with the Fund's
investment objectives, policies and restrictions, as stated in the
Fund's current Prospectus and Statement of Additional Information.
The Subadviser shall, with respect to the Allocated Assets,
determine from time to time what securities and other investments
will be purchased, retained, sold or exchanged by the Fund and what
portion of the Allocated Assets will be held in the various
securities and other investments in which the Fund invests, and
shall implement those decisions, all subject to the provisions of
the Corporation's Corporation's Articles of Incorporation and
By-Laws (collectively, the "Governing Documents"), the 1940 Act,
and the applicable rules and regulations promulgated thereunder by
the Securities and Exchange Commission (the "SEC") and interpretive
guidance issued thereunder by the SEC staff and any other applicable
federal and state law, as well as the investment objectives, policies
and restrictions of the Fund referred to above, and any other
specific policies adopted by the Board and disclosed to the
Subadviser. The Subadviser is authorized as the agent of the
Corporation 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 a Fund in
one or more investment companies. The Subadviser will place orders
pursuant to its investment determinations for the Fund either
directly with the issuer or with any broker or dealer, foreign
currency dealer, futures commission merchant or others selected by
it. In connection with the selection of such brokers or dealers and
the placing of such orders, subject to applicable law, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Funds 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 a Fund which
is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if the Subadviser
determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the Subadviser and its affiliates have with
respect to accounts over which they exercise investment discretion.
The Board may adopt policies and procedures that modify and restrict
the Subadviser's authority regarding the execution of the Fund's
portfolio transactions provided herein. The Subadviser shall exercise
voting rights, rights to consent to corporate action and any other
rights pertaining to the Allocated Assets subject to such direction
as the Board may provide, and shall perform such other functions of
investment management and supervision as may be directed by the Board.
(b) The Fund hereby authorizes any entity or person associated
with the Subadviser which is a member of a national securities
exchange to effect any transaction on the exchange for the account
of the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934, as amended, and Rule 11a2-2(T) thereunder,
and the Fund hereby consents to the retention of compensation for
such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
Notwithstanding the foregoing, the Subadviser agrees that it will
not deal with itself, or with members of the Board or any principal
underwriter of the Fund, as principals or agents in making purchases
or sales of securities or other property for the account of a 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 a 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 a Fund from time to time,
and will comply with all other provisions of the Governing Documents
and the Fund's then-current Prospectus and Statement of Additional
Information relative to the Subadviser and its directors and officers.
4. The Subadviser may delegate to any other one or more companies
that the Subadviser controls, is controlled by, or is under common
control with, or to specified employees of any such companies,
certain of the Subadviser's duties under this Agreement, provided in
each case the Subadviser will supervise the activities of each such
entity or employees thereof, that such delegation will not relieve
the Subadviser of any of its duties or obligations under this Agreement
and provided further that any such arrangements are entered into in
accordance with all applicable requirements of the 1940 Act.
5. The Subadviser agrees that it will keep records relating to its
services hereunder in accordance with all applicable laws, and in
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Subadviser hereby agrees that any records that it maintains for the
Fund are the property of the Fund, and further agrees to surrender
promptly to the Fund any of such records upon the Fund's request. The
Subadviser further agrees to arrange for the preservation of the
records required to be maintained by Rule 31a-1 under the 1940 Act
for the periods prescribed by Rule 31a-2 under the 1940 Act.
6. (a) The Subadviser, at its expense, shall supply the Board, the
officers of the Corporation, and the Manager with all information and
reports reasonably required by them and reasonably available to the
Subadviser relating to the services provided by the Subadviser hereunder.
(b) The Subadviser shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein specifically
indicated, the Subadviser shall not be responsible for the Fund's
expenses, including, without limitation, advisory fees; distribution
fees; interest; taxes; governmental fees; voluntary assessments and
other expenses incurred in connection with membership in investment
company organizations; organization costs of the Fund; the cost
(including brokerage commissions, transaction fees or charges, if
any) in connection with the purchase or sale of the Fund's
securities and other investments and any losses in connection
therewith; fees and expenses of custodians, transfer agents,
registrars, independent pricing vendors or other agents; legal
expenses; loan commitment fees; expenses relating to share
certificates; expenses relating to the issuing and redemption or
repurchase of the Fund's shares and servicing shareholder accounts;
expenses of registering and qualifying the Fund's shares for sale under
applicable federal and state law; expenses of preparing, setting in
print, printing and distributing prospectuses and statements of
additional information and any supplements thereto, reports, proxy
statements, notices and dividends to the Fund's shareholders; costs of
stationery; website costs; costs of meetings of the Board or any
committee thereof, meetings of shareholders and other 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 Fund's Board members and
officers with respect thereto.
7. No member of the Board, officer or employee of the Corporation
or Fund shall receive from the Corporation or 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.
8. 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 daily at an annual rate set forth on Schedule A annexed
hereto. The first payment of the fee shall be made as promptly as
possible at the end of the month succeeding the effective date of
this Agreement, and shall constitute a full payment of the fee due
the Subadviser for all services prior to that date. If this
Agreement is terminated as of any date not the last day of a month,
such fee shall be paid as promptly as possible after such date of
termination, shall be based on the average daily net assets of the
Fund or, if less, the portion thereof comprising the Allocated
Assets in that period from the beginning of such month to such date
of termination, and shall be that proportion of such average daily
net assets as the number of business days in such period bears to
the number of business days in such month. The average daily net
assets of the Fund or the portion thereof comprising the Allocated
Assets shall in all cases be based only on business days and be
computed as of the time of the regular close of business of the
New York Stock Exchange, or such other time as may be determined
by the Board.
9. The Subadviser assumes no responsibility under this Agreement
other than to render the services called for hereunder, in good
faith, and shall not be liable for any error of judgment or mistake
of law, or for any loss arising out of any investment or for any
act or omission in the execution of securities transactions for a
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 Corporation or the Fund contemplated
hereby and the partners, shareholders, directors, officers and
employees of the Subadviser and such affiliates.
10. Nothing in this Agreement shall limit or restrict the right of
any director, officer, or employee of the Subadviser who may also
be a Board member, officer, or employee of the Corporation or 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 a Fund or one or more other accounts
of the Subadviser is considered at or about the same time,
transactions in such securities will be allocated among the accounts
in a manner deemed equitable by the Subadviser. Such transactions may
be combined, in accordance with applicable laws and regulations, and
consistent with the Subadviser's policies and procedures as presented
to the Board from time to time.
11. For the purposes of this Agreement, the Fund's "net assets"
shall be determined as provided in the Fund's then-current Prospectus
and Statement of Additional Information and the terms "assignment,
" "interested person," and "majority of the outstanding voting
securities" shall have the meanings given to them by Section 2(a)
of the 1940 Act, subject to such exemptions as may be granted by
the SEC by any rule, regulation or order.
12. This Agreement will become effective with respect to the Fund
on the date set forth opposite the Fund's name on Schedule A annexed
hereto, provided that it shall have been approved by the Corporation'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 for
two years from the above written date. Thereafter, if not terminated,
this Agreement shall continue in effect with respect to the Fund, so
long as such continuance is specifically approved at least annually
(i) by the Board or (ii) by a vote of a majority of the outstanding
voting securities of the Fund, provided that in either event the
continuance is also approved by a majority of the Board members who
are not interested persons of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such
approval.
13. This Agreement is terminable with respect to the Fund without
penalty by the Board or by vote of a majority of the outstanding
voting securities of the Fund, in each case on not more than 60 days'
nor less than 30 days' written notice to the Subadviser, or by the
Subadviser upon not less than 90 days' written notice to the Fund
and the Manager, and will be terminated upon the mutual written
consent of the Manager and the Subadviser. This Agreement shall
terminate automatically in the event of its assignment by the
Subadviser and shall not be assignable by the Manager without the
consent of the Subadviser.
14. The Subadviser agrees that for any claim by it against the
Fund in connection with this Agreement or the services rendered
under this Agreement, it shall look only to assets of the Fund for
satisfaction and that it shall have no claim against the assets of
any other portfolios of the Xxxxx Xxxxxx Investment Funds Inc.
Corporation.
15. 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.
16. This Agreement, and any supplemental terms contained on Annex
I hereto, if applicable, embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof.
Should any part of this Agreement be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding on
and shall inure to the benefit of the parties hereto and their
respective successors.
17. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
XXXXX XXXXXX FUND MANAGEMENT LLC
By:_______________________________
Name: Xxxxxx Xxxxxxx
Title: Director
TIMCO ASSET MANAGEMENT INC.
By:_______________________________
Name: Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
The foregoing is acknowledged:
The undersigned officer of the Corporation has executed this Agreement
not individually but in his/her capacity as an officer of the
Corporation. The Corporation does not hereby undertake, on behalf
of the Fund or otherwise, any obligation to the Subadviser.
XXXXX XXXXXX INVESTMENT FUNDS INC.
By:_______________________________
Name: R. Xxx Xxxxxx
Title: Chairman
ANNEX I
Not applicable.
SCHEDULE A
Xxxxx Xxxxxx Real Return Strategy Fund
Fee:
The following percentage of the Fund's average daily net assets:
0.45
