ECLIPSE FUNDS SUBADVISORY AGREEMENT
This
Subadvisory Agreement, made as of the 31st day of January, 2009 (the
"Agreement"), between New York Life Investment Management LLC, a Delaware
limited liability company (the "Manager") and MacKay ▇▇▇▇▇▇▇ LLC, a Delaware
limited liability company (the "Subadvisor").
WHEREAS,
Eclipse Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, management investment
company; and
WHEREAS,
the Trust is authorized to issue separate series, each of which may offer a
separate class of shares of beneficial interest, each series having its own
investment objective or objectives, policies and limitations;
and
WHEREAS,
the Trust currently offers shares in multiple series, may offer shares of
additional series in the future, and intends to offer shares of additional
series in the future; and
WHEREAS,
the Manager entered into an Amended and Restated Management Agreement dated
August 1, 2008 with the Trust, on behalf of its series, as amended (the
"Management Agreement"); and
WHEREAS,
under the Management Agreement, the Manager has agreed to provide certain
investment advisory and related administrative services to the Trust;
and
WHEREAS,
the Management Agreement permits the Manager to delegate certain of its
investment advisory duties under the Management Agreement to one or more
subadvisors; and
WHEREAS,
the Manager wishes to retain the Subadvisor to furnish certain investment
advisory services to one or more of the series of the Trust and manage such
portion of the Trust as the Manager shall from time to time direct, and the
Subadvisor is willing to furnish such services;
NOW,
THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Manager and the Subadvisor
as follows:
1. Appointment. The
Manager hereby appoints MacKay ▇▇▇▇▇▇▇ LLC to act as Subadvisor to the series
designated on Schedule A of this Agreement (the "Series") with respect to all or
a portion of the assets of the Series designated by the Manager as allocated to
the Subadvisor ("Allocated Assets") subject to such written instructions,
including any redesignation of Allocated Assets and supervision as the Manager
may from time to time furnish for the periods and on the terms set forth in this
Agreement. The Subadvisor accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein
provided.
In the
event the Trust designates one or more series other than the Series with respect
to which the Manager wishes to retain the Subadvisor to render investment
advisory services hereunder, it shall notify the Subadvisor in writing. If the
Subadvisor is willing to render such services, it shall notify the Manager in
writing, whereupon such series shall become a Series hereunder, and be subject
to this Agreement, and Schedule A shall be revised
accordingly.
2. Portfolio Management
Duties. Subject to the supervision of the Trust's Board of Trustees
("Board") and the Manager, the Subadvisor will provide a continuous investment
program for the Series' Allocated Assets and determine the composition of the
assets of the Series' Allocated Assets, including determination of the purchase,
retention or sale of the securities, cash and other investments contained in the
portfolio. The Subadvisor will conduct investment research and conduct a
continuous program of evaluation, investment, sales and reinvestment of the
Series' Allocated Assets by determining the securities and other investments
that shall be purchased, entered into, sold, closed or exchanged for the Series,
when these transactions should be executed, and what portion of the Allocated
Assets of the Series should be held in the various securities and other
investments in which it may invest, and the Subadvisor is hereby authorized to
execute and perform such services on behalf of the Series. The Subadvisor will
provide the services under this Agreement in accordance with the Series'
investment objective or objectives, policies and restrictions as stated in the
Trust's Registration Statement filed with the Securities and Exchange Commission
(the "SEC"), as amended, copies of which shall be delivered to the Subadvisor by
the Manager. The Subadvisor further agrees as follows:
(a) The
Subadvisor understands that the Allocated Assets of the Series need to be
managed so as to permit the Series to qualify or continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code,
and will coordinate efforts with the Manager with that objective.
(b) The
Subadvisor will conform with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and regulations, any
applicable procedures adopted by the Trust's Board of which a copy has been
delivered to the Subadvisor, and the provisions of the Registration Statement of
the Trust under the Securities Act of 1933, as amended (the "1933 Act"), and the
1940 Act, as supplemented or amended, copies of which shall be delivered to the
Subadvisor by the Manager.
(c) On
occasions when the Subadvisor deems the purchase or sale of a security to be in
the best interest of the Series as well as of other investment advisory clients
of the Subadvisor or any of its affiliates, the Subadvisor may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be so sold or purchased with those of its other
clients where such aggregation is not inconsistent with the policies set forth
in the Registration Statement. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by the Subadvisor in a manner that, over time, is fair and equitable in the
judgment of the Subadvisor in the exercise of its fiduciary obligations to the
Trust and to such other clients, subject to review by the Manager and the Board.
The Manager recognizes that in some cases this procedure may adversely affect
the results obtained for the Series or Trust.
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(d) In
connection with the purchase and sale of securities for the Series, the
Subadvisor will arrange for the transmission to the custodian and portfolio
accounting agent for the Series, on a daily basis, such confirmation, trade
tickets and other documents and information, including, but not limited to,
CUSIP, Sedol or other numbers that identify securities to be purchased or sold
on behalf of the Series, as may be reasonably necessary to enable the custodian
and portfolio accounting agent to perform their administrative and recordkeeping
responsibilities with respect to the Series. With respect to portfolio
securities to be purchased or sold through the Depository Trust and Clearing
Corporation, the Subadvisor will arrange for the automatic transmission of the
confirmation of such trades to the Trust's custodian and portfolio accounting
agent.
(e) The
Subadvisor will assist the custodian and portfolio accounting agent for the
Trust in determining or confirming, consistent with the procedures and policies
stated in the Registration Statement for the Trust, the value of any portfolio
securities or other Allocated Assets of the Series for which the custodian and
portfolio accounting agent seek assistance from, or which they identify for
review by, the Subadvisor.
(f) The
Subadvisor will make available to the Trust and the Manager, promptly upon
request, all of the Series' investment records and ledgers maintained by the
Subadvisor (which shall not include the records and ledgers maintained by the
custodian or portfolio accounting agent for the Trust) as are necessary to
assist the Trust and the Manager to comply with requirements of the 1940 Act and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as well as
other applicable laws. The Subadvisor will furnish to regulatory agencies having
the requisite authority any information or reports in connection with such
services that may be requested in order to ascertain whether the operations of
the Trust are being conducted in a manner consistent with applicable laws and
regulations.
(g) The
Subadvisor will provide reports to the Trust's Board, for consideration at
meetings of the Board, on the investment program for the Series and the issuers
and securities represented in the Series' Allocated Assets, and will furnish the
Trust's Board with respect to the Series such periodic and special reports as
the Trustees and the Manager may reasonably request.
(h) In
rendering the services required under this Agreement, the Subadvisor may, from
time to time, employ or associate with itself such entity, entities, person or
persons as it believes necessary to assist it in carrying out its obligations
under this Agreement. The Subadvisor may not, however, retain as subadvisor any
company that would be an "investment adviser" as that term is defined in the
1940 Act, to the Series unless the contract with such company is approved by a
majority of the Trust's Board and by a majority of Trustees who are not parties
to any agreement or contract with such company and who are not "interested
persons" as defined in the 1940 Act, of the Trust, the Manager, the Subadvisor
or any such company that is retained as subadvisor, and also is approved by the
vote of a majority of the outstanding voting securities of the applicable Series
of the Trust to the extent required by the 1940 Act. The Subadvisor shall be
responsible for making reasonable inquiries and for reasonably ensuring that any
employee of the Subadvisor, any subadvisor that the Subadvisor has employed or
with which it has associated with respect to the Series, or any employee thereof
has not, to the best of the Subadvisor's knowledge, in any material connection
with the handling of Trust assets:
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(i) been
convicted, within the last ten (10) years, of any felony or misdemeanor arising
out of conduct involving embezzlement, fraudulent conversion or misappropriation
of funds or securities, involving violations of Sections 1341, 1342, or 1343 of
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or involving the purchase or sale of any security;
or
(ii) been
found by any state regulatory authority, within the last ten (10) years, to have
violated or to have acknowledged violation of any provision of any state
insurance law involving fraud, deceit or knowing misrepresentation;
or
(iii) been
found by any federal or state regulatory authorities, within the last ten (10)
years, to have violated or to have acknowledged violation of any provision of
federal or state securities laws involving fraud, deceit or knowing
misrepresentation.
(i) The
Subadvisor is authorized to retain legal counsel and financial advisors and to
negotiate and execute documentation relating to investments in the Allocated
Assets or Series, at the expense of the Allocated Assets or Series. Such
documentation may relate to investments to be made or sold, currently held or
previously held. The authority shall include, without limitation: (i)
documentation relating to private placements and bank debt; (ii) waivers,
consents, amendments or other modifications relating to investments; and (iii)
purchase agreements, sales agreements, commitment letters, pricing letters,
registration rights agreements, indemnities and contributions, escrow agreements
and other investment related agreements. Manager represents that the Allocated
Assets or Series can settle such private placements.
3. Compensation. For the
services provided and the expenses assumed pursuant to this Agreement, the
Manager shall pay the Subadvisor as full compensation therefor, a fee equal to
the percentage of the Allocated Assets constituting the respective Series'
average daily net assets as described in the attached Schedule A. Liability for
payment of compensation by the Manager to the Subadvisor under this Agreement is
contingent upon the Manager's receipt of payment from the Trust for management
services described under the Management Agreement between the Trust and the
Manager. Expense caps or fee waivers for the Series that may be agreed to by the
Manager, but not agreed to in writing by the Subadvisor, shall not cause a
reduction in the amount of the payment to the Subadvisor.
4. Broker-Dealer
Selection. The Subadvisor is responsible for decisions to buy and sell
securities and other investments for the Series' Allocated Assets, for
broker-dealer selection and for negotiation of brokerage commission rates. The
Subadvisor's primary consideration in effecting a security transaction will be
to obtain the best execution for the Series, taking into account the factors
specified in the Prospectus and/or Statement of Additional Information for the
Trust, which include the following: price (including the applicable brokerage
commission or dollar spread); the size of the order; the nature of the market
for the security; the timing of the transaction; the reputation, experience and
financial stability of the broker-dealer involved; the quality of the service;
the difficulty of execution, and the execution capabilities and operational
facilities of the firm involved; and the firm's risk in positioning a block of
securities. Accordingly, the price to the Series in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified, in the judgment of the Subadvisor in the exercise of its
fiduciary obligations to the Trust, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board may determine, and
consistent with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and the rules and interpretations of the SEC thereunder, the Subadvisor
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of its having caused the
Series to pay a broker-dealer for effecting a portfolio investment transaction
in excess of the amount of commission another broker-dealer would have charged
for effecting that transaction, if the Subadvisor or its affiliate determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the Subadvisor's or its
affiliate's overall responsibilities with respect to the Series and to their
other clients as to which they exercise investment discretion. To the extent
consistent with these standards and the Trust's Procedures for Securities
Transactions with Affiliated Brokers pursuant to Rule 17e-l, the Subadvisor is
further authorized to allocate the orders placed by it on behalf of the Series
to the Subadvisor if it is registered as a broker-dealer with the SEC, to its
affiliated broker-dealer, or to such brokers and dealers who also provide
research, statistical material or other services to the Series, the Subadvisor
or an affiliate of the Subadvisor. Such allocation shall be in such amounts and
proportions as the Subadvisor shall determine consistent with the above
standards and the Subadvisor will report on said allocation regularly to the
Board, indicating the broker-dealers to which such allocations have been made
and the basis therefor.
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5. Disclosure about
Subadvisor. The Subadvisor has reviewed the post-effective amendment to
the Registration Statement for the Trust filed with the SEC that contains
disclosure about the Subadvisor and represents and warrants that, with respect
to the disclosure about the Subadvisor or information relating directly or
indirectly to the Subadvisor, such Registration Statement contains, as of the
date hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading. The
Subadvisor further represents and warrants that it is a duly registered
investment adviser under the Advisers Act and has notice filed in all states in
which the Subadvisor is required to make such filings.
6. Expenses. During the
term of this Agreement, the Subadvisor will pay all expenses incurred by it and
its staff and for their activities in connection with its portfolio management
duties under this Agreement. The Manager or the Trust shall be responsible for
all the expenses of the Trust's operations, including, but not limited
to:
(a) the
fees and expenses of Trustees who are not interested persons of the Manager or
of the Trust;
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(b) the
fees and expenses of each Series which relate to: (i) the custodial function and
recordkeeping connected therewith; (ii) the maintenance of the required
accounting records of the Series not being maintained by the Manager; (iii) the
pricing of the Series' shares, including the cost of any pricing service or
services that may be retained pursuant to the authorization of the Trustees of
the Trust; and (iv) for both mail and wire orders, the cashiering function in
connection with the issuance and redemption of the Series' shares;
(c) the
fees and expenses of the Trust's transfer and dividend disbursing agent, that
may be the custodian, which relate to the maintenance of each shareholder
account;
(d) the
charges and expenses of legal counsel and independent accountants for the
Trust;
(e) brokers'
commissions and any issue or transfer taxes chargeable to the Trust in
connection with its securities transactions on behalf of the
Series;
(f) all
taxes and business fees payable by the Trust or the Series to federal, state or
other governmental agencies;
(g) the
fees of any trade association of which the Trust may be a member;
(h) the
cost of share certificates representing the Series' shares;
(i) the
fees and expenses involved in registering and maintaining registrations of the
Trust and of its Series with the SEC, registering the Trust as a broker or
dealer and qualifying its shares under state securities laws, including the
preparation and printing of the Trust's registration statements and prospectuses
for filing under federal and state securities laws for such
purposes;
(j) allocable
communications expenses with respect to investor services and all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
reports to shareholders in the amount necessary for distribution to the
shareholders;
(k) litigation
and indemnification expenses and other extraordinary expenses not incurred in
the ordinary course of the Trust's business; and
(1) any
expenses assumed by the Series pursuant to a Plan of Distribution adopted in
conformity with Rule 12b-l under the 1940 Act.
7.
Compliance.
(a) The
Subadvisor agrees to assist the Manager and the Trust in complying with the
Trust's obligations under Rule 38a-l under the 1940 Act, including but not
limited to: (i) periodically providing the Trust's Chief Compliance Officer with
information about and independent third-party reports (if available) in
connection with the Subadvisor's compliance program adopted pursuant to Rule
206(4)-7 under the Advisers Act ("Subadvisor's Compliance Program"); (ii)
reporting any material deficiencies in the Subadvisor's Compliance Program to
the Trust's Chief Compliance Officer within a reasonable time; and (iii)
reporting any material changes to the Subadvisor's Compliance Program to the
Trust's Chief Compliance Officer within a reasonable time. The Subadvisor
understands that the Board is required to approve the Subadvisor's Compliance
Program on at least an annual basis, and acloiowledges that this Agreement is
conditioned upon the Board' approval of the Subadvisor's Compliance
Program.
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(b) The
Subadvisor agrees that it shall immediately notify the Manager and the Trust's
Chief Compliance Officer: (i) in the event that the SEC has censured the
Subadvisor, placed limitations upon its activities, functions or operations,
suspended or revoked its registration as an investment adviser or commenced
proceedings or an investigation that may result in any of these actions; or (ii)
upon having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code. The Subadvisor further agrees to notify the
Manager immediately of any material fact known to the Subadvisor respecting or
relating to the Subadvisor that is not contained in the Registration Statement
or prospectus for the Trust, or any amendment or supplement thereto, or of any
statement contained therein that becomes untrue in any material
respect.
(c) The
Manager agrees that it shall immediately notify the Subadvisor: (i) in the event
that the SEC has censured the Manager or the Trust, placed limitations upon
either of their activities, functions or operations, suspended or revoked the
Manager's registration as an investment adviser or commenced proceedings or an
investigation that may result in any of these actions; or (ii) upon having a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code.
8. Documents. The
Manager has delivered to the Subadvisor copies of each of the following
documents and will deliver to it all future amendments and supplements, if
any:
(a) Declaration
of Trust of the Trust, as amended from time to time, as filed with the Secretary
of the Commonwealth of the Commonwealth of Massachusetts (such Declaration of
Trust, as in effect on the date hereof and as amended from time to time, are
herein called the "Declaration of Trust");
(b) By-Laws
of the Trust, as amended from time to time (such By-Laws, as in effect on the
date hereof and as amended from time to time, are herein called the
"By-Laws");
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(c) Certified
Resolutions of the Trustees of the Trust authorizing the appointment of the
Subadvisor and approving the form of this Agreement;
(d) Registration
Statement under the 1940 Act and the Securities Act of 1933, as amended, on Form
N-1A, as filed with the SEC relating to the Series and the Series' shares, and
all amendments thereto;
(e) Notification
of Registration of the Trust under the 1940 Act on Form N-8A, as filed with the
SEC, and all amendments thereto; and
(f) Prospectus
and Statement of Additional Information of the Series.
9. Books and Records. In
compliance with the requirements of Rule 31 a-3 under the 1940 Act, the
Subadvisor hereby agrees that all records that it maintains for the Series are
the property of the Trust and further agrees to surrender promptly to the Trust
any of such records upon the Trust's or the Manager's request; provided,
however, that the Subadvisor may, at its own expense, make and retain a copy of
such records. The Subadvisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31 a-1 under the 1940 Act and to preserve the records
required by Rule 204-2 under the Advisers Act for the period specified in the
Rule.
10. Cooperation. Each
party to this Agreement agrees to cooperate with each other party and with all
appropriate governmental authorities having the requisite jurisdiction
(including, but not limited to, the SEC) in connection with any investigation or
inquiry relating to this Agreement or the Trust.
11. Representations Respecting
Subadvisor. The Manager and the Trust agree that neither the Trust, the
Manager, nor affiliated persons of the Trust or the Manager shall, except with
the prior permission of the Subadvisor, give any information or make any
representations or statements in connection with the sale of shares of the
Series concerning the Subadvisor or the Series other than the information or
representations contained in the Registration Statement, Prospectus or Statement
of Additional Information for the Trust shares, as they may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved in advance by the
Subadvisor. The parties agree that, in the event that the Manager or an
affiliated person of the Manager sends sales literature or other promotional
material to the Subadvisor for its approval and the Subadvisor has not commented
within five (5) business days, the Manager and its affiliated persons may use
and distribute such sales literature or other promotional material, although, in
such event, the Subadvisor shall not be deemed to have approved of the contents
of such sales literature or other promotional material.
12. Confidentiality. The
Subadvisor will treat as proprietary and confidential any information obtained
in connection with its duties hereunder, including all records and information
pertaining to the Series and its prior, present or potential shareholders. The
Subadvisor will not use such information for any purpose other than the
performance of its responsibilities and duties hereunder. Such information may
not be disclosed except after prior notification to and approval in writing by
the Series or if such disclosure is expressly required or requested by
applicable federal or state regulatory authorities.
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13. Control.
Notwithstanding any other provision of the Agreement, it is understood and
agreed that the Manager shall at all times retain the ultimate responsibility
for and control of all functions performed pursuant to this Agreement, and
reserves the right to direct, approve or disapprove any action hereunder taken
on its behalf by the Subadvisor.
14. Liability. Except as
may otherwise be required by the 1940 Act or the rules thereunder or other
applicable law, the Trust and the Manager agree that the Subadvisor, any
affiliated person of the Subadvisor, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls the Subadvisor, shall not be
liable for, or subject to any damages, expenses or losses in connection with,
any act or omission connected with or arising out of any services rendered under
this Agreement, except by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Subadvisor's duties, or by reason of
reckless disregard of the Subadvisor's obligations and duties under this
Agreement.
Nothing
in this section shall be deemed a limitation or waiver of any obligation or duty
that may not by law be limited or waived.
15. Indemnification.
(a) The
Manager agrees to indemnify and hold harmless the Subadvisor, any affiliated
person of the Subadvisor, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls ("controlling person") the Subadvisor (all
of such persons being referred to as "Subadvisor Indemnified Persons") against
any and all losses, claims, damages, liabilities or litigation (including legal
and other expenses) to which a Subadvisor Indemnified Person may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, the Internal Revenue Code,
under any other statute, at common law or otherwise, arising out of the
Manager's responsibilities to the Trust, which: (i) may be based upon any
willful misfeasance, bad faith or gross negligence in the performance of the
Manager's duties or reckless disregard of the Manager's obligations and duties
under this Agreement, or by any of its employees or representatives or any
affiliate of or any person acting on behalf of the Manager, or (ii) may be based
upon any untrue statement or alleged untrue statement of a material fact
supplied by, or which is the responsibility of, the Manager and contained in the
Registration Statement or Prospectus covering shares of the Trust or a Series,
or any amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should have been known
to the Manager and was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon information furnished to the Manager, the Trust or to any
affiliated person of the Manager by a Subadvisor Indemnified Person; provided,
however, that in no case shall the indemnity in favor of the Subadvisor
Indemnified Person be deemed to protect such person against any liability to
which any such person 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 obligations and duties under this
Agreement.
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(b) Notwithstanding
Section 14 of this Agreement, the Subadvisor agrees to indemnify and hold
harmless the Manager, any affiliated person of the Manager, and each person, if
any, who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Manager (all of such persons being referred to as
"Manager Indemnified Persons") against any and all losses, claims, damages,
liabilities or litigation (including legal and other expenses) to which a
Manager Indemnified Person may become subject under the 1933 Act, 1940 Act, the
Advisers Act, the Internal Revenue Code, under any other statute, at common law
or otherwise, arising out of the Subadvisor's responsibilities as Subadvisor of
the Series, which: (i) may be based upon any willful misfeasance, bad faith or
gross negligence in the performance of the Subadvisor's duties, or by reason of
reckless disregard of the Subadvisor's obligations and duties under this
Agreement, or by any of its employees or representatives, or any affiliate of or
any person acting on behalf of the Subadvisor; (ii) may be based upon a failure
to comply with Section 2, Paragraph (a) of this Agreement; or (iii) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus covering the shares of the
Trust or a Series, or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact known or which should have
been known to the Subadvisor and was required to be stated therein or necessary
to make the statements therein not misleading, if such a statement or omission
was made in reliance upon information furnished to the Manager, the Trust or any
affiliated person of the Manager or Trust by the Subadvisor or any affiliated
person of the Subadvisor; provided, however, that in no case shall the indemnity
in favor of a Manager Indemnified Person be deemed to protect such person
against any liability to which any such person 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 under this Agreement.
(c) The
Manager shall not be liable under Paragraph (a) of this Section 15 with respect
to any claim made against a Subadvisor Indemnified Person unless such Subadvisor
Indemnified Person shall have notified the Manager in writing within a
reasonable time after the summons, notice or other first legal process or notice
giving information of the nature of the claim shall have been served upon such
Subadvisor Indemnified Person (or after such Subadvisor Indemnified Person shall
have received notice of such service on any designated agent), but failure to
notify the Manager of any such claim shall not relieve the Manager from any
liability that it may have to the Subadvisor Indemnified Person against whom
such action is brought otherwise than on account of this Section 15. In case any
such action is brought against the Subadvisor Indemnified Person, the Manager
will be entitled to participate, at its own expense, in the defense thereof or,
after notice to the Subadvisor Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Subadvisor Indemnified Person. If the
Manager assumes the defense of any such action and the selection of counsel by
the Manager to represent both the Manager and the Subadvisor Indemnified Person
would result in a conflict of interest and, therefore, would not, in the
reasonable judgment of the Subadvisor Indemnified Person, adequately represent
the interests of the Subadvisor Indemnified Person, the Manager will, at its own
expense, assume the defense with counsel to the Manager and, also at its own
expense, with separate counsel to the Subadvisor Indemnified Person, which
counsel shall be satisfactory to the Manager and to the Subadvisor Indemnified
Person. The Subadvisor Indemnified Person shall bear the fees and expenses of
any additional counsel retained by it, and the Manager shall not be liable to
the Subadvisor Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Subadvisor Indemnified Person
independently in connection with the defense thereof other than reasonable costs
of investigation. The Manager shall not have the right to compromise on or
settle the litigation without the prior written consent of the Subadvisor
Indemnified Person if the compromise or settlement results, or may result, in a
finding of wrongdoing on the part of the Subadvisor Indemnified
Person.
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(d) The
Subadvisor shall not be liable under Paragraph (b) of this Section 15 with
respect to any claim made against a Manager Indemnified Person unless such
Manager Indemnified Person shall have notified the Subadvisor in writing within
a reasonable time after the summons, notice or other first legal process or
notice giving information of the nature of the claim shall have been served upon
such Manager Indemnified Person (or after such Manager Indemnified Person shall
have received notice of such service on any designated agent), but failure to
notify the Subadvisor of any such claim shall not relieve the Subadvisor from
any liability that it may have to the Manager Indemnified Person against whom
such action is brought otherwise than on account of this Section 15. In case any
such action is brought against the Manager Indemnified Person, the Subadvisor
will be entitled to participate, at its own expense, in the defense thereof or,
after notice to the Manager Indemnified Person, to assume the defense thereof,
with counsel satisfactory to the Manager Indemnified Person. If the Subadvisor
assumes the defense of any such action and the selection of counsel by the
Subadvisor to represent both the Subadvisor and the Manager Indemnified Person
would result in a conflict of interest and, therefore, would not, in the
reasonable judgment of the Manager Indemnified Person, adequately represent the
interests of the Manager Indemnified Person, the Subadvisor will, at its own
expense, assume the defense with counsel to the Subadvisor and, also at its own
expense, with separate counsel to the Manager Indemnified Person, which counsel
shall be satisfactory to the Subadvisor and to the Manager Indemnified Person.
The Manager Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Subadvisor shall not be liable to the
Manager Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Manager Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The Subadvisor shall not have the right to compromise on or
settle the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may result, in a
finding of wrongdoing on the part of the Manager Indemnified
Person.
16. Services Not
Exclusive. The services furnished by the Subadvisor hereunder are not to
be deemed exclusive, and except as the Subadvisor may otherwise agree in
writing, the Subadvisor shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired thereby. Nothing in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Subadvisor, who may also be a trustee, officer or employee of
the Trust, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
11
17. Duration and
Termination. This Agreement shall become effective on the date first
indicated above. Unless terminated as provided herein, the Agreement shall
remain in full force and effect for an initial period of two (2) years from the
date first indicated above when following a shareholder approval, and otherwise
a period of one (1) year, and continue on an annual basis thereafter with
respect to the Series, provided that such continuance is specifically approved
each year by: (a) the vote of a majority of the entire Board or by the vote of a
majority of the outstanding voting securities (as defined in the ▇▇▇▇ ▇▇▇) of
the Series; and (b) the vote of a majority of those Trustees who are not parties
to this Agreement or interested persons (as such term is defined in the ▇▇▇▇
▇▇▇) of any such party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval. Any approval of this Agreement by the
holders of a majority of the outstanding shares (as defined in the ▇▇▇▇ ▇▇▇) of
a Series shall be effective to continue this Agreement with respect to the
Series notwithstanding: (i) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Series; or (ii)
that this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be required by any
other applicable law or otherwise. Notwithstanding the foregoing, this Agreement
may be terminated for each or any Series hereunder: (A) by the Manager at any
time without penalty, upon sixty (60) days' written notice to the Subadvisor and
the Trust; (B) at any time without payment of any penalty by the Trust, upon the
vote of a majority of the Trust's Board or a majority of the outstanding voting
securities of each Series, upon sixty (60) days' written notice to the Manager
and the Subadvisor; or (C) by the Subadvisor at any time without penalty, upon
sixty (60) days' written notice to the Manager and the Trust. In the event of
termination for any reason, all records of each Series for which the Agreement
is terminated shall promptly be returned to the Manager or the Trust, free from
any claim or retention of rights in such record by the Subadvisor; provided,
however, that the Subadvisor may, at its own expense, make and retain a copy of
such records. The Agreement shall automatically terminate in the event of its
assignment (as such term is described in the 1940 Act) or in the event the
Management Agreement between the Manager and the Trust is assigned or terminates
for any other reason. In the event this Agreement is terminated or is not
approved in the manner described above, the Sections numbered 2(f), 8, 9, 10,
12, 14, 15 and 19 of this Agreement shall remain in effect, as well as any
applicable provision of this Section 17.
18. Amendments. 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 this Agreement shall be effective until approved by an
affirmative vote of: (i) the holders of a majority of the outstanding voting
securities of the Series; and (ii) the Trustees of the Trust, including a
majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, if such approval is required by applicable
law.
12
19. Use of
Name,
(a) It
is understood that the name MainStay, Eclipse or any derivative thereof or logo
associated with that name is the valuable property of the Manager and/or its
affiliates, and that the Subadvisor has the right to use such name (or
derivative or logo) only with the approval of the Manager and only so long as
the Manager is Manager to the Trust and/or the Series. Upon termination of the
Management Agreement between the Trust and the Manager, the Subadvisor shall
forthwith cease to use such name (or derivative or logo).
(b) It
is understood that the name MacKay ▇▇▇▇▇▇▇ LLC or any derivative thereof or logo
associated with that name is the valuable property of the Subadvisor and its
affiliates and that the Trust and/or the Series have the right to use such name
(or derivative or logo) in offering materials of the Trust or sales materials
with respect to the Trust with the approval of the Subadvisor and for so long as
the Subadvisor is a Subadvisor to the Trust and/or the Series. Upon termination
of this Agreement, the Trust shall forthwith cease to use such name (or
derivative or logo).
20. Proxies; Class
Actions.
(a) The
Manager has provided the Subadvisor a copy of the Manager's Proxy Voting Policy,
setting forth the policy that proxies be voted for the exclusive benefit and in
the best interests of the Trust. Absent contrary instructions received in
writing from the Trust, the Subadvisor will vote all proxies solicited by or
with respect to the issuers of securities held by the Series in accordance with
applicable fiduciary obligations. The Subadvisor shall maintain records
concerning how it has voted proxies on behalf of the Trust, and these records
shall be available to the Trust upon request.
(b) Manager
acknowledges and agrees that the Subadvisor shall not be responsible for taking
any action or rendering advice with respect to any class action claim relating
to any assets held in the Allocated Assets or Series. Manager will instruct the
applicable service providers not to forward to the Subadvisor any information
concerning such actions. The Subadvisor will, however, forward to Manager any
information it receives regarding any legal matters involving any asset held in
the Allocated Assets or Series.
21. Notice. Any notice or
other communication required to be given pursuant to this Agreement shall be
deemed duly given if delivered or mailed by registered mail, postage prepaid,
(1) to the Manager at NYLIM Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; or (2) to the Subadvisor at MacKay ▇▇▇▇▇▇▇
LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Chairman.
13
22. Miscellaneous.
(a) This
Agreement shall be governed by the laws of the State of New York, provided that
nothing herein shall be construed in a manner inconsistent with the 1940 Act,
the Advisers Act or rules or orders of the SEC thereunder. The term "affiliate"
or "affiliated person" as used in this Agreement shall mean "affiliated person"
as defined in Section 2(a)(3) of the 1940 Act;
(b) The
captions of this Agreement are included for convenience only and in no way
define or limit any of the provisions hereof or otherwise affect their
construction or effect;
(c) To
the extent permitted under Section 16 of this Agreement, this Agreement may only
be assigned by any party with the prior written consent of the other
parties;
(d) If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby, and to this extent, the provisions of this Agreement shall
be deemed to be severable;
(e) Nothing
herein shall be construed as constituting the Subadvisor as an agent of the
Manager, or constituting the Manager as an agent of the
Subadvisor.
* * *
14
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
by their officers designated below as of the 31 st day of January, 2009. This
Agreement may be signed in counterparts.
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
| Attest: |
/s/
▇▇▇▇▇▇ ▇▇▇▇▇
|
By: |
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇▇ |
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
Title:
|
Vice President and
Assistant General Counsel
|
Title:
|
Executive Vice President |
MACKAY
▇▇▇▇▇▇▇ LLC
| Attest: |
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
By: |
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Name:
|
▇▇▇▇▇ ▇▇▇▇▇▇▇ |
Name:
|
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
|
Title:
|
Senior Managing Director &
General Counsel
|
Title:
|
Chief Operating Officer |
15
SCHEDULE
A
As
compensation for services provided by Subadvisor the Manager will pay the
Subadvisor and Subadvisor agrees to accept as full compensation for all services
rendered hereunder, at an annual subadvisory fee equal to the
following:
|
FUND
|
ANNUAL
RATE
|
|
Effective as of
January 31, 2009
|
|
|
Small
Cap Opportunity Fund *
|
0.500%
|
|
Effective as of
February 13, 2009
|
|
|
Small
Company Value Fund *
|
0.425%
up to $ 1 billion; and
|
|
0.400%
in excess of $1 billion
|
The
portion of the fee based upon the average daily net assets of the respective
Fund shall be accrued daily at the rate of 1/(number of days in calendar year)
of the annual rate applied to the daily net assets of the
Fund.
Payment
will be made to the Subadvisor on a monthly basis.
* For the
Funds listed above, NYLIM has agreed to waive a portion of each Fund's
management fee or reimburse the expenses of the appropriate class of the Fund so
that the class' total ordinary operating expenses do not exceed certain amounts.
These waivers or expense limitations may be changed with Board approval. To the
extent NYLIM has agreed to waive its management fee or reimburse expenses,
MacKay ▇▇▇▇▇▇▇ LLC, as Subadvisor for these Funds, has voluntarily agreed to
waive or reimburse its fee proportionately.
A-1