FORM OF SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this ___
day of ____, 201_, by and between Xxxx Xxxxx Partners Fund Advisor,
LLC (the "Manager"), and Western Asset Management Company, a
California corporation (the "Subadviser").
WHEREAS, the Manager has been retained by Xxxx Xxxxx
Partners Equity Trust (the "Trust"), a Maryland statutory trust
registered as a 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
Trust with respect to certain series of the Trust; and
WHEREAS, the Manager wishes to engage the Subadviser to
provide certain investment advisory services to the Trust with
respect to the series of the Trust 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 Trust 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 Trust'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 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 (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 Trust'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 Trust 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, 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. The Subadviser may execute on behalf of the Fund certain
agreements, instruments and documents in connection with the services
performed by it under this Agreement. These may include, without
limitation, brokerage agreements, clearing agreements, account
documentation, futures and options agreements, swap agreements, other
investment related agreements, and any other agreements, documents or
instruments the Subadviser believes are appropriate or desirable in
performing its duties under this Agreement.
(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 Trust, 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 Trust or Fund shall receive from the Trust 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 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 Trust 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 Trust 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 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 below the Fund's name on
Schedule A annexed hereto, provided that it shall have been approved
by the Trust's Board and, if so required by the 1940 Act, by
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 the second anniversary of the date of
effectiveness. 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 Trust.
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.
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
WESTERN ASSET MANAGEMENT COMPANY
By:
Name:
Title:
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this
Agreement not individually but in his/her capacity as an officer of
the Trust. The Trust does not hereby undertake, on behalf of the Fund
or otherwise, any obligation to the Subadviser.
XXXX XXXXX PARTNERS EQUITY TRUST
By:
Name:
Title:
ANNEX I
Not applicable.
SCHEDULE A
[Name of Fund]
Date:
Fee:
The sub-advisory fee will be 0.02% of the portion of the Fund's
average daily net assets allocated to the Subadviser for the
management of cash and other short-term instruments, net of expense
waivers and reimbursements. Such fee shall be paid to the Subadviser
by the Manager out of the fee it receives from the Fund.
