SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this 20 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 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, whether directly or through the services of one or more
subadvisers; 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 and any and all subsidiaries of that series that
are currently, or may in the future be, formed for the purpose
of investing, reinvesting, holding, owning or trading assets of
that series (collectively, 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. 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 (including the assets of any subsidiary of the
Fund) 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 objective, 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 Section 4(a) of this
Agreement, 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, 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
staff of the Securities and Exchange Commission (the "SEC") and
any other applicable federal and state law, as well as the
investment objective, policies and restrictions of the Fund
referred to above, and any other specific policies adopted by
the Board and disclosed to the Subadviser. Subject to applicable
provisions of the 1940 Act, the investment program to be
provided hereunder entails the investment of all or
substantially all of the assets of the Fund in one or more
investment companies and may also include, from time to time,
the investment of some of the Fund's assets directly in
securities or other instruments. The Subadviser may execute on
behalf of the Fund, in connection with the services to be
performed by it under this Agreement, such documents or
instruments the Subadviser deems to be appropriate or desirable
in performing its duties under this Agreement. In addition, the
Subadviser retains the authority and discretion to perform such
other investment management functions as may be requested from
time to time by the Board.
4. (a) Subject to the supervision of the Board and the
Manager, the Subadviser shall regularly provide the Fund with
the following services with respect to the Allocated Assets:
(i) implementation of portfolio investment decisions (including
the execution of investment documentation); (ii) trade placement
services for the Fund, as set forth in this Section 4(a) below;
(iii) certain portfolio compliance monitoring services for the
Fund, as may be agreed to in writing by the Manager and the
Subadviser from time to time; and (iv) exercise of proxy voting
rights and rights to consent to corporate actions, as set forth
in this Section 4 (a) below. The Subadviser shall, with respect
to the Allocated Assets, purchase, sell, redeem or exchange
securities and other instruments on behalf of the Fund to
implement the portfolio investment decisions for the Fund,
subject to the provisions of the Governing Documents, the 1940
Act, and the applicable rules and regulations promulgated
thereunder by the SEC and interpretive guidance issued
thereunder by the SEC staff and any other applicable federal and
state law, as well as the investment objective, policies and
restrictions of the Fund as stated in the Fund's current
Prospectus and Statement of Additional Information, 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 and any sub-custodian or prime
broker as to deliveries of securities and other investments and
payments of cash in respect of securities transactions or cash
margin calls for the account of the Fund. Subject to applicable
provisions of the 1940 Act, the investment program to be
provided hereunder entails the investment of all or
substantially all of the assets of the Fund in one or more
investment companies and may also include, from time to time,
the investment of some of the Fund's assets directly in
securities or other instruments. 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
perform such other functions of investment management and
supervision as may be directed by the Board. The Subadviser
shall exercise voting rights and rights to consent to corporate
actions pertaining to the Allocated Assets, subject to such
direction as the Board may provide, as directed by the Manager
(or another subadviser(s) tasked with the responsibility of
providing investment research and advice for the Fund), which
party shall provide instructions to the Subadviser in accordance
with the proxy voting policies and procedures adopted by the
Board of Trustees of the Trust with respect to the Allocated
Assets. 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 the Subadviser purchase any
securities from an underwriting or selling group in which it 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 current Prospectus and Statement of
Additional Information relative to the Subadviser and its
directors and officers.
5. The Subadviser (i) 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 (collectively, the "Controlled Parties"), certain of
the Subadviser's duties under this Agreement, and (ii) may
delegate to parties that are not Controlled Parties only
services that are not investment advisory services under the
1940 Act; 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
and meet all applicable requirements of the 1940 Act, exemptive
relief thereunder or interpretive guidance of the SEC staff.
6. 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.
7. (a) The Subadviser, at its expense, shall supply the
Board, the officers of the Trust, the Manager and any other
subadviser to the Fund 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.
8. 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.
9. As compensation for the services performed by the
Subadviser, the Manager shall pay the Subadviser, as promptly as
possible after the last day of each month, a fee, computed daily
at an annual rates 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.
10. 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 10, the term
"Subadviser" shall include any affiliates of the Subadviser
performing services for the Trust or the Fund contemplated
pursuant to this Agreement and the partners, shareholders,
directors, officers and employees of the Subadviser and such
affiliates.
11. 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.
12. 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.
13. 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 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.
14. 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.
15. 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 series of the Trust.
16. 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.
17. 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.
18. 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:
ENTRUSTPERMAL MANAGEMENT
LLC
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
Permal Alternative Core Fund
Date:
May 20, 2016
For the services rendered under this Agreement, except the
services specified in Section 4 of this Agreement, the sub-
advisory fee is the following percentage of the Fund's average
daily net assets, net of an amount equal to 0.02% of the portion
of the Fund's average daily net assets allocated to the Western
Asset Management Company for the management of cash and other
short-term instruments:
Up to and including $250 million
0.450
Over $250 million and up to and
including $750 million
0.400
Over $750 million
0.350
For the services rendered under Section 4 of this Agreement,
including the services of any consultants retained by the
Subadviser with respect to these services, the fee is 0.05% of
the Fund's average daily net assets. Such fee shall be paid by
the Manager out of the management fee it receives with respect
to the Fund and only to the extent thereof.
16269882.5
- 12 -
