`Xxxx Xxxxx Partners Small Cap Core Fund Inc.
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made
this 19th day of October, 2006, by and between
Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware
limited liability company (the "Manager"), and
Batterymarch Financial Management, Inc., a
Maryland corporation (the "Subadviser").
WHEREAS, the Manager has been retained by
Xxxx Xxxxx Partners Small Cap Core Fund, Inc.
(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 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:
0.Xx accordance with and subject to the
Management Agreement between the Fund 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. 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.
3.(a) Subject to the supervision of the
Fund's Board of Directors (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 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
(including the execution of investment
documentation), all subject to the provisions
of the Fund'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 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 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, 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.
(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 Exchange Act
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 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
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 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 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.
0.Xx 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.
0.Xx 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 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.
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
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 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 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
November 30, 2007. 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 Fund.
00.Xx 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.
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By: _______________________________
Name:
Title:
BATTERYMARCH FINANCIAL MANAGEMENT, INC.
By: _______________________________
Name:
Title:
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 otherwise, any
obligation to the Subadviser.
XXXX XXXXX PARTNERS SMALL CAP CORE FUND, INC.
By: _______________________________
Name:
Title:
ANNEX I
Not applicable.
SCHEDULE A
Xxxx Xxxxx Partners Small Cap Core Fund, Inc.
Date:
October 19, 2006
Fee:
The sub-advisory fee will be 70% of the management
fee paid to Xxxx Xxxxx Partners Fund Advisor, LLC,
net of expense waivers and reimbursements.
