SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT (Agreement) is
made this 19th day of December, 2005, by
and between Xxxxx Xxxxxx Fund Management LLC,
a Delaware limited liability company (the Manager)
and Citigroup Asset Management Limited, a
corporation organized under the laws of England
and Wales (the Subadviser).
WHEREAS, the Manager has been retained by Xxxxx
Xxxxxx Investment Series (the Trust), a registered
management investment company under the Investment
Company Act of 1940, as amended (the 0000 Xxx) to
provide investment advisory, management, and
administrative services to the Trust with respect
to a series of the Trust;
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. 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,
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 Trust's 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) 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 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 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 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 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 Trust'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 SeriesTrust.
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
CITIGROUP ASSET MANAGEMENT LIMITED
By:_______________________________
Name: Xxxxxxxx Xxxxxxx
Title: Director
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.
XXXXX XXXXXX INVESTMENT SERIES
By:_______________________________
Name: R. Xxx Xxxxxx
Title: Chairman
ANNEX I
This Annex I forms a part of the Subadvisory
Agreement dated as of December 19, 2005 by and
between Xxxxx Xxxxxx Fund Management LLC, a Delaware
limited liability company, and Citigroup Asset
Management Limited (the Subadviser), an entity
authorized and regulated in the United Kingdom by
the Financial Services Authority (the FSA).
1. The Subadviser represents, warrants and
covenants that it is authorized and regulated
by the FSA.
2. The Subadviser has classified the Trust as
an Intermediate Customer as defined by the
FSA Rules.
SCHEDULE A
Xxxxx Xxxxxx International Fund
Fee:
The following percentage of the Fund's
average daily net assets:
0.55
