(d)(22)
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of April, 2006, between ING Life Insurance and
Annuity Company (the "Adviser"), an insurance corporation organized and existing
under the laws of the State of Connecticut, and Columbia Management Advisors,
LLC (the "Sub-Adviser"), a limited liability company organized under the laws of
the State of Delaware (the "Agreement").
WHEREAS, ING Partners, Inc. (the "Company") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company; and
WHEREAS, the Company is authorized to issue separate series, each of which
will offer a separate class of shares of beneficial interest, each series having
its own investment objective or objectives, policies, and limitations; and
WHEREAS, the Company 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, pursuant to an Investment Advisory Agreement, effective as of May
1, 2003, as amended, a copy of which has been provided to the Sub-Adviser, the
Company has retained the Adviser to render advisory, management, and
administrative services with respect to the Company's series; and
WHEREAS, the Company wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Company and the
Sub-Adviser is willing to furnish such services to the Company and the Adviser.
NOW THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Adviser and the Sub-Adviser
as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to act as the
sub-adviser to the series of the Company designated on SCHEDULE A of this
Agreement (each a "Series") for the periods and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
In the event the Company designates one or more series other than the
Series with respect to which the Adviser wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall promptly notify the
Sub-Adviser in writing. If the Sub-Adviser is willing to render such services,
it shall so notify the Adviser in writing, whereupon such series shall become a
Series hereunder, and be subject to this Agreement.
2. PORTFOLIO MANAGEMENT DUTIES AND AUTHORITY.
Subject to the supervision of the Company's Board of Directors (the
"Board") and the Adviser, the Sub-Adviser will provide a continuous investment
program for each Series' portfolio and determine the composition of the assets
of each Series' portfolio, including determination of the purchase, retention,
or sale of the securities, cash, and other investments contained in the
portfolio. The Sub-Adviser will provide investment research and conduct a
continuous program of evaluation, investment, sales, and reinvestment of each
Series' 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 assets of each Series
should be held in the various securities and other investments in which it may
invest, and the Sub-Adviser is hereby authorized to execute and perform such
services on behalf of each Series. From time to time, at the request of the
Adviser, the Sub-Adviser will cooperate with and assist a transition manager,
hired by the Adviser, when the Series' portfolio is part of a larger transition
of assets, provided that the Sub-Adviser will continue to have full discretion
with respect to the Series investment portfolio. To the extent permitted by the
investment policies of the Series, the Sub-Adviser shall make decisions for the
Series as to foreign currency matters. At the request of the Adviser, the
Sub-Adviser will participate in standing instructions giving the Company's
custodian authority to administer daily foreign currency exchange transactions
for settlement of pending securities transactions.
The Sub-Adviser will provide the services under this Agreement in
accordance with the Series' investment objective or objectives, policies, and
restrictions as stated in the Company's Registration Statement filed with the
Securities and Exchange Commission (the "SEC"), as from time to time amended
(the "Registration Statement"), copies of which shall be sent to the Sub-Adviser
by the Adviser upon filing with the SEC. The Sub-Adviser is authorized to
exercise tender offers and exchange offers on behalf of the Series, each as the
Sub-Adviser determines is in the best interest of the Series. The Sub-Adviser
and Adviser further agree as follows:
(A) The Sub-Adviser will (1) manage each Series so that no action or
omission on the part of the Sub-Adviser will cause a Series to fail to meet the
requirements to qualify as a regulated investment company specified in Section
851 of the Internal Revenue Code of 1986, as amended (the "Code") (other than
the requirements for the Company to register under the 1940 Act and to file with
its tax return an election to be a regulated investment company and to file with
its tax return an election to be a regulated investment company and satisfy the
distribution requirements under Section 852 (a) of the Internal Revenue Code,
all of which shall not be the responsibility of the Sub-Adviser), (2) manage
each Series so that no action or omission on the part of the Sub-Adviser shall
cause a Series to fail to comply with the diversification requirements of
Section 817(h) of the Code, and the regulations issued thereunder, and (3) use
reasonable efforts to manage the Series so that no action or omission on the
part of the Sub-Adviser shall cause a Series to fail to comply with any other
rules and regulations pertaining to investment vehicles underlying variable
annuity or variable life insurance policies. The Adviser will notify the
Sub-Adviser promptly if the Adviser believes that a Series is in violation of
any requirement specified in the first sentence of this paragraph.
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(B) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of a Series as well as of other investment
advisory clients of the Sub-Adviser or any of its affiliates, the Sub-Adviser
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 Sub-Adviser in a manner that is fair and
equitable in the judgment of the Sub-Adviser in the exercise of its fiduciary
obligations to the Company and to such other clients, provided, however that the
Adviser and the Board shall have the right to review and request changes to the
Sub-Adviser's manner of allocation, provided further that any requested changes
to such manner of allocation shall be implemented on a prospective basis only.
(C) In connection with the purchase and sale of securities for each
Series, the Sub-Adviser will arrange for the timely transmission, as determined
by the portfolio accounting agent to enable the agent to accurately calculate
the Series' daily net asset value, 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 Company, the
Sub-Adviser will arrange for the automatic transmission of the confirmation of
such trades to the Company's custodian and portfolio accounting agent.
(D) The Sub-Adviser will assist the administrator for the Company in
reviewing, determining or confirming (including, if necessary, obtaining
broker-quoted prices), consistent with the procedures and policies stated in the
Registration Statement, the value of any portfolio securities or other assets of
the Series for which the administrator seeks assistance from or identifies for
review by the Sub-Adviser.
(E) The Sub-Adviser will make best efforts to provide the Adviser,
following the end of each Series' semi-annual period and fiscal year, a letter
to shareholders (to be subject to review and editing by the Adviser) containing
a discussion of those factors referred to in Item 5(a)(1) and 5(a)(2) of 1940
Act Form N-1A in respect of both the prior period and the fiscal year to date.
(F) The Sub-Adviser will complete and deliver to the Sub-Adviser a
written compliance checklist, a certified compliance acknowledgement report and
the group of reports listed below in a form provided by the Adviser for each
quarter:
(I) Report on Brokerage Commissions and Soft Dollar Usage.
(II) Trade Compliance reporting pertaining to Rules 17a-7, 17e-1,
10f-3 under the 1940 Act; provided that for purposes of this section,
the Sub-Adviser shall effect compliance only in relation to its own
affiliates and to affiliated persons identified to it by the Adviser.
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(III) Report on Illiquid and Restricted Securities held in each
portfolio.
(IV) Reports required on Issuers Credit Ratings applicable to Rule
2a-7 under the 1940 Act.
(G) The Sub-Adviser will complete and deliver to the Adviser each
month a written report on each Series of the Company that contains the following
information as of the immediately previous month's end.
(I) A performance comparison to the Series benchmark listed in the
Registration Statement as well as a comparison to other mutual funds
as listed in the rankings prepared by Lipper Analytical Services,
Inc., Morningstar, Inc., or similar independent services that monitor
the performance of mutual funds or with other appropriate indexes of
investment securities;
(II) Composition of the assets of each Series' portfolio and the
impact of key portfolio holdings and sector concentrations on the
Series; and
(III) Confirmation of the Series' current investment objective and
Sub-Adviser's projected plan to realize the Series' investment
objectives.
(H) The Sub-Adviser will assist the Adviser and the Series in
negotiating with Morningstar clarification of any style box conflicts with the
Series' style and the anticipated timeframe in which Morningstar will remedy
such conflicts, if any.
(I) The Sub-Adviser will make available to the Company and the
Adviser, promptly upon reasonable request, all of the Series' investment records
and ledgers maintained by the Sub-Adviser (which shall not include the records
and ledgers maintained by the custodian and portfolio accounting agent for the
Company) as are necessary to assist the Company and the Adviser 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 Sub-Adviser will
furnish to regulatory authorities having the requisite authority any information
or reports in connection with such services which may be requested in order to
ascertain whether the operations of the Company are being conducted in a manner
consistent with applicable laws and regulations.
(J) The Sub-Adviser will provide reports to the Company'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' portfolio, and will
furnish the Company's Board with respect to the Series such periodic and special
reports as the Board and the Adviser may reasonably request.
(K) In rendering the services required under this Agreement, the
Sub-Adviser may, from time to time, employ, delegate or associate with itself
such affiliated or unaffiliated person or persons as it believes necessary to
assist it in carrying out its obligations under this Agreement. The Sub-Adviser
may not retain, employ or associate itself with any company that
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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 Company's Board and a majority 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 Company, the Adviser, or the Sub-Adviser, or any such
company, and is approved by the vote of a majority of the outstanding voting
securities of the applicable Series of the Company to the extent required by the
1940 Act. The Sub-Adviser shall be responsible for making reasonable inquiries
and for reasonably ensuring that no associated person of the Sub-Adviser, or of
any company that the Sub-Adviser has retained, employed, or with which it has
associated with respect to the investment management of the Series, to the best
of the Sub-Adviser's knowledge, had in any material connection with the handling
of assets:
(I) been convicted, in 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 Xxxxx 00, Xxxxxx Xxxxxx
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.
(L) In using spot and forward foreign exchange contracts for the
Series as an investment the parties represent the following:
(I) That the Adviser is properly and lawfully established with full
power and authority to enter into spot and forward foreign exchange
contracts, to perform its obligations under such foreign exchange
contracts and to procure the Sub-Adviser to enter into such foreign
exchange contracts on its behalf.
(II) That the Adviser may not, except for purposes of redemptions,
expenses, and other costs of doing business, encumber funds which the
Sub-Adviser has under the Sub-Adviser's management or which benefit
from the Sub-Adviser's investment advice. If the Adviser requires
funds for any redemptions, expenses, and other costs of doing
business, the Sub-Adviser will make funds available in a reasonably
timely manner for the Adviser to meet such obligations. The Adviser
reserves the right to segregate assets upon notice to the Sub-Adviser
and provide different arrangements for investment management with
respect to those assets.
(III) That the Sub-Adviser has been granted full power and authority
to enter into foreign exchange contracts as agent on the Adviser's
behalf and to give instructions for settlement for the same.
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(IV) That the Sub-Adviser has full authority to instruct Company's
custodian in conformity with its mandate.
(V) That in the event of the termination of this Agreement, the
Sub-Adviser, if legally and operationally possible, may offer the
Series' counterparty the option to leave open any existing foreign
exchange contracts or to close them out at prevailing market rates.
(M) The Sub-Adviser will have no duty to vote any proxy solicited by
or with respect to the issuers of securities in which assets of the Series are
invested unless the Adviser gives the Sub-Adviser written instructions to the
contrary. The Sub-Adviser will immediately forward any proxy solicited by or
with respect to the issuers of securities in which assets of the Series are
invested to the Adviser or to any agent of the Adviser designated by the Adviser
in writing.
The Sub-Adviser will make appropriate personnel available for
consultation for the purpose of reviewing with representatives of the Adviser
and/or the Board any non-routine proxy solicited by or with respect to the
issuers of securities in which assets of the Series are invested. Upon request,
the Sub-Adviser will submit a written voting recommendation to the Adviser for
such proxies. In making such recommendations, the Sub-Adviser shall use its good
faith judgment to act in the best interests of the Series. However, the Adviser
acknowledges that the Sub-Adviser will make such recommendations without regard
to any proxy voting policies or guidelines adopted by the Series' Board and that
the Sub-Adviser shall not be responsible for resolving any conflict between its
recommendation and such guidelines. The Sub-Adviser shall disclose to the best
of its knowledge any conflict of interest with the issuers of securities that
are the subject of such recommendation including whether such issuers are
clients or are being solicited as clients of the Sub-Adviser or of its
affiliates.
(N) The Sub-Adviser shall have no power, authority, responsibility, or
obligation hereunder to take any action with regard to any claim or potential
claim in any bankruptcy proceedings, class action securities litigation, or
other litigation or proceeding affecting securities held at any time in the
Series, including, without limitation, to file proofs of claim or other
documents related to such proceedings (the "Litigation"), or to investigate,
initiate, supervise, or monitor the Litigation involving Portfolio assets, and
the Adviser acknowledges and agrees that no such power, authority,
responsibility or obligation is delegated hereunder. Nevertheless, the
Sub-Adviser agrees that it shall provide the Adviser with documentation or
information relating to the Litigation as may reasonably be requested by the
Adviser.
3. BROKER-DEALER SELECTION. The Sub-Adviser is hereby authorized to place
orders for the purchase and sale of securities and other investments for each
Series' portfolio, with or through such persons, brokers or dealers and to
negotiate commissions to be paid on such transactions and to supervise the
execution thereof. The Sub-Adviser's primary consideration in effecting any such
transaction will be to obtain the best execution for the Series, taking into
account the factors specified in the Registration Statement, which include 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, the experience and financial stability
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of the broker-dealer involved, the quality of the service, the difficulty of
execution, and the execution capabilities and operational facilities of the
firms involved, and the firm's risk in positioning a block of securities.
Accordingly, the price to a 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 Sub-Adviser in the exercise of its fiduciary
obligations to the Company, 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, the
Sub-Adviser may effect a transaction on behalf of the Series with a
broker-dealer who provides brokerage and research services to the Sub-Adviser
notwithstanding the fact that the commissions payable with respect to any such
transaction may be greater than the amount of any commission another
broker-dealer might have charged for effecting that transaction, if the
Sub-Adviser 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 Sub-Adviser's or its affiliate's overall responsibilities
with respect to the Series and to their other clients as to which they exercise
investment discretion.
The Sub-Adviser will consult with the Adviser to the end that portfolio
transactions on behalf of a Series may be directed to broker-dealers that
participate in commission recapture programs benefiting the Series, provided
that neither the Sub-Adviser nor the Adviser will direct brokerage in
recognition of the sale of Series shares. To the extent consistent with this
Agreement, the Sub-Adviser is further authorized to allocate orders placed by it
on behalf of the Series to the Sub-Adviser as agent if it is registered as a
broker-dealer with the SEC, to any of its affiliated broker-dealers as agents,
or to such brokers and dealers who also provide research or statistical
material, or other services to the Series, the Sub-Adviser, or an affiliate of
the Sub-Adviser. Such allocation shall be in such amounts and proportions as the
Sub-Adviser shall determine consistent with the above standards, and the
Sub-Adviser will report on said allocation monthly to the Board indicating the
broker-dealers to which such allocations have been made and the basis therefor.
In accordance with Section 11(a) of the Securities Exchange Act of 1934 and
Rule 11a2-2(T) thereunder, and subject to any other applicable laws and
regulations including Section 17(e) of the 1940 Act and Rule 17e-1 thereunder,
the Sub-Adviser may engage its affiliates, the Adviser and its affiliates, or
any other sub-adviser to the Company and its respective affiliates, as
broker-dealers or futures commission merchants to effect Series transactions in
securities and other investments for a Series. The Sub-Adviser will communicate
to the Adviser such information relating to Series transactions as they may
reasonably request.
4. DISCLOSURE ABOUT SUB-ADVISER. The Sub-Adviser has reviewed the
post-effective amendment to the Registration Statement for the Company filed
with the SEC that contains disclosure about the Sub-Adviser, and represents and
warrants that, with respect to the disclosure about or information relating,
directly or indirectly, to the Sub-Adviser, to the Sub-Adviser's knowledge, 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 Sub-
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Adviser further represents and warrants that it is a duly registered
investment adviser under the Advisers Act, or alternatively that it is not
required to be a registered investment adviser under the Advisers Act to
perform the duties described in this Agreement, and that it is a duly
registered investment adviser in all states in which the Sub-Adviser is
required to be registered and will maintain such registration so long as this
Agreement remains in effect. The Sub-Adviser will provide the Adviser with a
copy of the Sub-Adviser's Form ADV, Part II at the time the Form ADV and any
amendment is filed with the SEC, and a copy of its written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act, together
with evidence of its adoption.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it and its staff and for their activities in connection
with the portfolio management duties specified in this Agreement, including, but
not limited to, reimbursement of losses due to trade errors or compliance
breaches directly resulting from the Sub-Adviser's acts or the acts of its
agents. In addition, if the Company is required, under applicable law, to
supplement the Registration Statement because of a change requested by the
Sub-Adviser, the Sub-Adviser will reimburse the Company and/or the Adviser for
the cost of preparing, printing and distributing such supplement, unless the
Sub-Adviser is requesting the change in order to comply with an applicable law,
rule or regulation. The Adviser or the Company shall be responsible for all the
expenses of the Company's operations including, but not limited to:
(A) Expenses of all audits by the Company's independent public
accountants;
(B) Expenses of the Series' transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
(C) Expenses of the Series' custodial services including recordkeeping
services provided by the custodian;
(D) Expenses of obtaining quotations for calculating the value of each
Series' net assets;
(E) Expenses of obtaining Portfolio Activity Reports and Analyses of
International Management Reports (as appropriate) for each Series;
(F) Expenses of maintaining the Company's tax records;
(G) Salaries and other compensation of any of the Company's executive
officers and employees, if any, who are not officers, directors, stockholders,
or employees of the Sub-Adviser or an affiliate of the Sub-Adviser;
(H) Taxes levied against the Company;
(I) Brokerage fees and commissions, transfer fees, registration fees,
taxes and similar liabilities and costs properly payable or incurred in
connection with placing orders for the purchase and sale of portfolio securities
and other investment instruments for the Series;
8
(J) Costs, including the interest expense, of borrowing money;
(K) Costs and/or fees incident to meetings of the Company's
shareholders, the preparation and mailings of prospectuses and reports of the
Company to its shareholders, the filing of reports with regulatory bodies, the
maintenance of the Company's existence, and the regulation of shares with
federal and state securities or insurance authorities;
(L) The Company's legal fees, including the legal fees related to the
registration and continued qualification of the Company's shares for sale;
(M) Directors' fees and expenses to directors who are not officers,
employees, or stockholders of the Sub-Adviser or any affiliate thereof;
(N) The Company's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(O) Association membership dues;
(P) Extraordinary expenses of the Company as may arise including
expenses incurred in connection with litigation, proceedings, and other claims
(unless the Sub-Adviser is responsible for such expenses under Section 13 of
this Agreement), and the legal obligations of the Company to indemnify its
Directors, officers, employees, shareholders, distributors, and agents with
respect thereto;
(Q) Organizational and offering expenses; and
(R) Any other expense that the Company, the Adviser or any other agent
of the Company may incur (i) as a result of a change in the law or regulations
applicable to the Company; (ii) as a result of a mandate from the Board with
associated costs of a character generally assumed by similarly structured
investment companies; or (iii) that is similar to the expenses listed above, and
that is approved by the Board (including a majority of those Directors who are
not interested persons (as such term is defined in the 1940 Act)) as being an
appropriate expense of the Company. .
6. COMPENSATION. For the services provided to each Series, the Adviser will
pay the Sub-Adviser a fee, payable as described in SCHEDULE A.
The fee will be prorated to reflect any portion of a calendar month that
this Agreement is not in effect among the parties. In accordance with the
provisions of the Management Agreement, the Adviser is solely responsible for
the payment of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek
payment of its fees solely from the Adviser.
7. SEED MONEY. The Adviser agrees that the Sub-Adviser shall not be
responsible for providing money for the initial capitalization of the Series.
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8. COMPLIANCE.
(A) The Sub-Adviser and the Adviser acknowledge that the Sub-Adviser
is not the compliance agent for any Series or for the Company, and does not have
access to all of each Series' books and records necessary to perform certain
compliance testing. To the extent that the Sub-Adviser has agreed to perform the
services specified in Section 2 in accordance with the Company's Registration
Statement, the Company's Articles of Incorporation and By-Laws, the Company's
Prospectus and any policies adopted by the Company's Board applicable to the
Series (collectively, the "Charter Requirements"), and in accordance with
applicable law (including Subchapters M and L of the Code, the 1940 Act and the
Advisers Act ("Applicable Law")), the Sub-Adviser shall perform such services
based upon its books and records with respect to each Series, which comprise a
portion of each Series' books and records, and upon information and written
instructions received from the Company, the Adviser or the Company's
administrator, and shall not be held responsible under this Agreement so long as
it performs such services in accordance with this Agreement, the Charter
Requirements and Applicable Law based upon such books and records and such
information and instructions provided by the Company, the Adviser, or the
Company's administrator. The Adviser shall promptly provide the Sub-Adviser with
copies of the Company's registration statement, the Company's Articles of
Incorporation and By-Laws, the Company's currently effective Registration
Statement and any written policies and procedures adopted by the Company's Board
applicable to the Series and any amendments or revisions thereto. The
Sub-Adviser agrees that it shall promptly notify the Adviser and the Company (1)
in the event that the SEC or other governmental authority has censured the
Sub-Adviser; placed material limitations upon its activities, functions or
operations; suspended or revoked its registration, if any, as an investment
adviser; or has commenced proceedings (i.e., routine SEC exams and exams for
cause) or an investigation that may result in any of these actions, (2) 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
Code, or (3) upon having a reasonable basis for believing that the Series has
ceased to comply with the diversification provisions of Section 817(h) of the
Code or the regulations thereunder. The Sub-Adviser further agrees to notify the
Adviser and the Company promptly of any material fact known to the Sub-Adviser
respecting or relating to the Sub-Adviser that is not contained in the
Registration Statement as then in effect, and is required to be stated therein
or necessary to make the statements therein not misleading, or of any statement
contained therein that becomes untrue in any material respect.
(B) The Adviser agrees that it shall immediately notify the
Sub-Adviser (1) in the event that the SEC has censured the Adviser or the
Company; placed limitations upon either of their activities, functions, or
operations; suspended or revoked the Adviser's registration as an investment
adviser; or has commenced proceedings or an investigation that may result in any
of these actions, (2) 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 Code, or (3) upon having a reasonable basis
for believing that the Series has ceased to comply with the diversification
provisions of Section 817(h) of the Code or the regulations thereunder.
9. BOOKS AND RECORDS. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the Company,
except (i) as provided
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herein, (ii) as may be reasonably necessary for the Sub-Adviser to supply to the
Adviser, the Company or the Board the information required to be supplied under
this Agreement, or (iii) as may be required by the provisions of Rule 31a-1
under the 1940 Act applicable to the services provided by the Sub-Adviser under
this Agreement. In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Sub-Adviser hereby agrees that all records which it maintains for the
Series are the property of the Company and further agrees to surrender promptly
to the Company any of such records upon the Company's or the Adviser's
reasonable request, although the Sub-Adviser may, at its own expense, make and
retain a copy of such records. The Sub-Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-l under the 1940 Act and to preserve the records
required by Rule 204-2 under the Advisers Act for the period specified in such
rules.
10. COOPERATION; CONFIDENTIALITY. 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 and state insurance regulators) in connection with any investigation or
inquiry relating to this Agreement or the Company.
Subject to the foregoing, the Sub-Adviser shall treat as confidential all
information pertaining to the Company and actions of the Company, the Adviser
and the Sub-Adviser, and the Adviser shall treat as confidential and use only in
connection with the Series all information furnished to the Company or the
Adviser by the Sub-Adviser, in connection with its duties under the Agreement
except that the aforesaid information need not be treated as confidential if
required to be disclosed under applicable law, if generally available to the
public through means other than by disclosure by the Sub-Adviser or the Adviser,
or if available from a source other than the Adviser, Sub-Adviser or the
Company.
11. REPRESENTATIONS RESPECTING SUB-ADVISER.
(A) During the term of this Agreement, the Adviser agrees to furnish
to the Sub-Adviser at its principal offices prior to use thereof copies of all
Registration Statements and amendments thereto, prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Company or any Series or to the public that
refer or relate in any way to the Sub-Adviser or any of its affiliates (other
than the Adviser), or that use any derivative of the name "Columbia Management
Advisors, LLC," or any derivative thereof or logos associated therewith. The
Adviser agrees that it will not use any such material without the prior consent
of the Sub-Adviser, which consent shall not be unreasonably withheld. In the
event of the termination of this Agreement, the Company and the Adviser will
furnish to the Sub-Adviser copies of any of the above-mentioned materials that
refer or relate in any way to the Sub-Adviser;
(B) The Company and the Adviser will furnish to the Sub-Adviser such
information relating to either of them or the business affairs of the Company as
the Sub-Adviser shall from time to time reasonably request in order to discharge
its obligations hereunder;
(C) The Adviser agrees that neither the Adviser nor affiliated persons
of the Adviser shall give any information or make any representations or
statements in connection with
11
the sale of shares of the Series concerning the Sub-Adviser or the Series other
than the information or representations contained in the Registration Statement,
prospectus, or statement of additional information for the Company, as they may
be amended or supplemented from time to time, or in reports or proxy statements
for the Company, or in sales literature or other promotional material approved
in advance by the Sub-Adviser, except with the prior permission of the
Sub-Adviser.
12. SERVICES NOT EXCLUSIVE. The services of the Sub-Adviser to the Series
and the Company are not to be deemed to be exclusive, and the Sub-Adviser shall
be free to render investment advisory or other services to others (including
other investment companies) and to engage in other activities.
13. PROHIBITED CONDUCT. The Sub-Adviser may not consult with any other
sub-adviser of the Company concerning transactions in securities or other assets
for any investment portfolio of the Company, including the Series, except that
such consultations are permitted between the current and successor sub-advisers
of the Series in order to effect an orderly transition of portfolio management
duties so long as such consultations are not concerning transactions prohibited
by Section 17(a) of the 1940 Act.
14. LIABILITY. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Adviser agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the Securities Act of 1933, as amended
("1933 Act"), controls the Sub-Adviser (1) shall bear no responsibility and
shall not be subject to any liability for any act or omission respecting any
series of the Company that is not a Series hereunder; and (2) shall not be
liable for any error of judgment, mistake of law, any diminution in value of the
investment portfolio of the Series, 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 by the
Sub-Adviser of its duties, or by reason of reckless disregard by the Sub-Adviser
of its obligations and duties under this Agreement.
15. INDEMNIFICATION.
(A) Notwithstanding Section 14 of this Agreement, the Adviser agrees
to indemnify and hold harmless the Sub-Adviser, any affiliated person of the
Sub-Adviser (other than the Adviser), and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling person") the
Sub-Adviser (all of such persons being referred to as "Sub-Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, the Code, under any other statute, at common law or otherwise,
arising out of the Adviser's responsibilities to the Company which (1) may be
based upon any violations of willful misconduct, malfeasance, bad faith or
negligence by the Adviser, any of its employees or representatives, or any
affiliate of or any person acting on behalf of the Adviser, or (2) may be based
upon any untrue statement or alleged untrue statement of a material fact
supplied by, or which is the responsibility of, the Adviser and
12
contained in the Registration Statement or prospectus covering shares of the
Company or any 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 Adviser 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 Adviser or
the Company or to any affiliated person of the Adviser by a Sub-Adviser
Indemnified Person; provided however, that in no case shall the indemnity in
favor of the Sub-Adviser 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 negligence in the performance of
its duties, or by reason of its reckless disregard of obligations and duties
under this Agreement.
(B) Notwithstanding Section 14 of this Agreement, the Sub-Adviser
agrees to indemnify and hold harmless the Company, the Adviser, any affiliated
person of the Adviser (other than the Sub-Adviser), and each person, if any,
who, is a controlling person of the Adviser (the Company and all of such persons
being referred to as "Adviser Indemnified Persons") against any and all losses,
claims, damages, liabilities, or litigation (including legal and other expenses)
to which an Adviser Indemnified Person may become subject under the 1933 Act,
1940 Act, the Advisers Act, the Code, under any other statute, at common law or
otherwise, arising out of the Sub-Adviser's responsibilities as Sub-Adviser of
the Series which (1) may be based upon any violations of willful misconduct,
malfeasance, bad faith or negligence by the Sub-Adviser, any of its employees or
representatives, or any affiliate of or any person acting on behalf of the
Sub-Adviser, including but not limited to its responsibilities under Section 2,
Paragraph (a) of this Agreement, or (2) any breach of any representations or
warranties contained in Section 4; provided, however, that in no case shall the
indemnity in favor of an Adviser 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, negligence in the performance of
its duties, or by reason of its reckless disregard of its obligations and duties
under this Agreement.
(C) The Adviser shall not be liable under Paragraph (a) of this
Section 15 with respect to any claim made against a Sub-Adviser Indemnified
Person unless such Sub-Adviser Indemnified Person shall have notified the
Adviser 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 Sub-Adviser Indemnified Person (or after such
Sub-Adviser Indemnified Person shall have received notice of such service on any
designated agent), but failure to notify the Adviser of any such claim shall not
relieve the Adviser from any liability which it may have to the Sub-Adviser
Indemnified Person against whom such action is brought except to the extent the
Adviser is prejudiced by the failure or delay in giving such notice. In case any
such action is brought against the Sub-Adviser Indemnified Person, the Adviser
will be entitled to participate, at its own expense, in the defense thereof or,
after notice to the Sub-Adviser Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Sub-Adviser Indemnified Person. If the
Adviser assumes the defense of any such action and the selection of counsel by
the Adviser to represent both the Adviser and the Sub-Adviser Indemnified Person
would result in a conflict of interests and therefore, would not, in the
reasonable judgment of the Sub-Adviser Indemnified Person, adequately represent
the interests
13
of the Sub-Adviser Indemnified Person, the Adviser will, at its own expense,
assume the defense with counsel to the Adviser and, also at its own expense,
with separate counsel to the Sub-Adviser Indemnified Person, which counsel shall
be satisfactory to the Adviser and to the Sub-Adviser Indemnified Person. The
Sub-Adviser Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Adviser shall not be liable to the
Sub-Adviser Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Sub-Adviser Indemnified Person
independently in connection with the defense thereof other than reasonable costs
of investigation. The Adviser shall not have the right to compromise on or
settle the litigation without the prior written consent of the Sub-Adviser
Indemnified Person if the compromise or settlement results, or may result in a
finding of wrongdoing on the part of the Sub-Adviser Indemnified Person.
(D) The Sub-Adviser shall not be liable under Paragraph (b) of this
Section 15 with respect to any claim made against an Adviser Indemnified Person
unless such Adviser Indemnified Person shall have notified the Sub-Adviser 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 Adviser Indemnified Person (or after such Adviser Indemnified
Person shall have received notice of such service on any designated agent), but
failure to notify the Sub-Adviser of any such claim shall not relieve the
Sub-Adviser from any liability which it may have to the Adviser Indemnified
Person against whom such action is brought except to the extent the Sub-Adviser
is prejudiced by the failure or delay in giving such notice. In case any such
action is brought against the Adviser Indemnified Person, the Sub-Adviser will
be entitled to participate, at its own expense, in the defense thereof or, after
notice to the Adviser Indemnified Person, to assume the defense thereof, with
counsel satisfactory to the Adviser Indemnified Person. If the Sub-Adviser
assumes the defense of any such action and the selection of counsel by the
Sub-Adviser to represent both the Sub-Adviser and the Adviser Indemnified Person
would result in a conflict of interests and therefore, would not, in the
reasonable judgment of the Adviser Indemnified Person, adequately represent the
interests of the Adviser Indemnified Person, the Sub-Adviser will, at its own
expense, assume the defense with counsel to the Sub-Adviser and, also at its own
expense, with separate counsel to the Adviser Indemnified Person, which counsel
shall be satisfactory to the Sub-Adviser and to the Adviser Indemnified Person.
The Adviser Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Sub-Adviser shall not be liable to
the Adviser Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Adviser Indemnified Person independently
in connection with the defense thereof other than reasonable costs of
investigation. The Sub-Adviser shall not have the right to compromise on or
settle the litigation without the prior written consent of the Adviser
Indemnified Person if the compromise or settlement results, or may result in a
finding of wrongdoing on the part of the Adviser Indemnified Person.
(E) The Adviser shall not be liable under this Section 15 to indemnify
and hold harmless the Sub-Adviser and the Sub-Adviser shall not be liable under
this Section 15 to indemnify and hold harmless the Adviser with respect to any
losses, claims, damages, liabilities, or litigation that first become known to
the party seeking indemnification during any period that the Sub-Adviser is,
within the meaning of Section 15 of the 1933 Act, a controlling person of the
Adviser.
14
16. DURATION AND TERMINATION. This Agreement shall become effective with
respect to each Series on the date first indicated above. Unless terminated as
provided herein, the Agreement shall remain in full force and effect until
NOVEMBER 30, 2007, and continue on an annual basis thereafter with respect to
each Series; provided that such annual continuance is specifically approved each
year by (a) the vote of a majority of the entire Board of the Company, or by the
vote of a majority of the outstanding voting securities (as defined in the 0000
Xxx) of each Series, and (b) the vote of a majority of those Directors who are
not parties to this Agreement or interested persons (as such term is defined in
the 0000 Xxx) of any such party to this Agreement cast in person at a meeting
called for the purpose of voting on such approval. The Sub-Adviser shall not
provide any services for such Series or receive any fees on account of such
Series with respect to which this Agreement is not approved as described in the
preceding sentence. However, any approval of this Agreement by the holders of a
majority of the outstanding shares (as defined in the 0000 Xxx) of a Series
shall be effective to continue this Agreement with respect to such 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 Company, 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 Adviser at any time without penalty, upon sixty
(60) days' written notice to the Sub-Adviser and the Company, (b) at any time
without payment of any penalty by the Company, upon the vote of a majority of
the Company's Board or a majority of the outstanding voting securities of each
Series, upon sixty (60) days' written notice to the Adviser and the Sub-Adviser,
or (c) by the Sub-Adviser at any time without penalty, upon three (3) months'
written notice to the Adviser and the Company, unless the Adviser or the Company
requests additional time to find a replacement for the Sub-Adviser, in which
case the Sub-Adviser shall allow the additional time requested by the Company or
the Adviser not to exceed three (3) months beyond the initial three-month notice
period; provided however, that the Sub-Adviser may terminate this Agreement at
any time without penalty effective upon written notice to the Adviser and the
Company, in the event either the Sub-Adviser (acting in good faith) or the
Adviser ceases to be registered as an investment adviser under the Advisers Act
or otherwise becomes legally incapable of providing investment management
services pursuant to its respective contract with the Company, or in the event
the Adviser becomes bankrupt or otherwise incapable of carrying out its
obligations under this Agreement, or in the event that the Sub-Adviser does not
receive compensation for its services from the Adviser or the Company as
required by the terms of this Agreement. In addition, this Agreement shall
terminate with respect to a Series in the event that it is not approved by the
vote of a majority of the outstanding voting securities of that Series at a
meeting of shareholders at which approval of the Agreement shall be considered
by shareholders of the Series.
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 Adviser or
the Company, free from any claim or retention of rights in such records by the
Sub-Adviser, although the Sub-Adviser 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).
15
In the event this Agreement is terminated or is not approved in the manner
described above, the Sections or Paragraphs numbered 2(e), 9, 10, 11, 14, 15,
and 19 of this Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 16.
17. NOTICES. Any notice must be in writing and shall be deemed to have been
given when (1) delivered in person, (2) dispatched by telegram or electric
facsimile transfer (confirmed in writing by postage prepaid first class mail
simultaneously dispatched), (3) sent by internationally recognized overnight
courier service (with receipt confirmed by such overnight courier service), or
(4) sent by registered or certified mail, to the other party at the address of
such party set forth below or at such other address as such party may from time
to time specify in writing to the other party.
If to the Adviser:
ING Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx, XX00
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
If to the Sub-Adviser:
Columbia Management Advisors, LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
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 amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the Directors of the Company,
including a majority of the Directors of the Company 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; and (ii) the holders of a majority of the outstanding voting
securities of the Series.
Notwithstanding the foregoing, this Agreement may be amended without the
approval of a majority of the Series' outstanding voting securities if the
amendment relates solely to a change that is permitted or not prohibited under
federal law, rule, regulation, SEC Order or SEC staff interpretation thereof to
be made without shareholder approval.
19. USE OF NAMES.
(A) It is understood that the name "ING Life Insurance and Annuity
Company" or any derivative thereof or logo associated with that name is the
valuable property of the Adviser and/or its affiliates, and that the Sub-Adviser
has the right to use such name (or derivative or logo) only with the approval of
the Adviser and only so long as the Adviser is Adviser to the
16
Company and/or the Series. Upon termination of the Management Agreement between
the Company and the Adviser, the Company or the Adviser shall notify the
Sub-Adviser of the termination of the Management Agreement and the Sub-Adviser
shall as soon as is reasonably possible cease to use such name (or derivative or
logo).
(B) It is understood that the name "Columbia Management Advisors, LLC"
or any derivative thereof, including "Columbia", or logos associated with those
names are the valuable property of the Sub-Adviser and its affiliates and that
the Company and/or the Series have the right to use such names (or derivatives
or logos) in offering materials of the Company with the approval of the
Sub-Adviser and for so long as the Sub-Adviser is a sub-adviser to the Company
and/or the Series. The Sub-Adviser consents to the use by a Series of the name
"Columbia" as part of the name of such Series. Without limiting the generality
of the foregoing, upon termination of this Agreement between the Adviser and the
Sub-Adviser, the Company shall within three months of the receipt of the
Sub-Adviser's request so as to cease to use such names (or derivatives or
logos), including within the name of any Series.
20. MISCELLANEOUS.
(A) This Agreement shall be governed by the laws of the state of
Delaware, without giving effect to the provisions, policies or principals
thereof relating to choice or conflict of laws, 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, subject, however, to such interpretations of
the staff of the SEC.
(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) 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.
(D) Nothing herein shall be construed as constituting the Sub-Adviser
as an agent of the Adviser, or constituting the Adviser as an agent of the
Sub-Adviser.
(E) The Adviser and the Sub-Adviser each affirm that it has procedures
in place reasonably designed to protect the privacy of non-public personal
consumer/customer financial information.
(F) The Adviser and the Sub-Adviser acknowledge that each may have
obligations under the laws and regulations of the United States to verify the
source of funds and identity of investors in accordance with the USA Patriot
Act, and any rules or regulations adopted thereunder (collectively the "Patriot
Act"). Each party agrees to assist the other parties in monitoring transactions
in accordance with the Patriot Act. If required by applicable law or regulation,
each party shall provide the other parties with documentation evidencing the
identity of a beneficial owner or owners of shares of the Series upon request
when a party is required by a
17
law, court order, of by administrative or regulatory entity to disclose the
identity of the beneficial owner(s).
(G) In the performance of its duties hereunder, the Sub-Adviser is and
shall be an independent contractor and, unless otherwise expressly provided
herein or otherwise authorized in writing, shall have no authority to act for or
represent the Company or the Adviser in any way or otherwise deemed to be an
agency of the Company or the Adviser.
(H) This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ING LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. Naka
------------------------------------
Name: Xxxxxx X. Naka
----------------------------------
Title: Vice President
---------------------------------
COLUMBIA MANAGEMENT ADVISORS, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: President
---------------------------------
18
SCHEDULE A
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Columbia Management Advisors, LLC (the
"Sub-Adviser") to the following Series of ING Partners, Inc., pursuant to the
attached Sub-Advisory Agreement, the Adviser will pay the Sub-Adviser a fee,
computed daily and payable monthly, based on the average daily net assets of the
Series at the following annual rates of the average daily net assets of the
Series:
SERIES RATE
------ ----
ING Columbia Small Cap Value II 0.60% on first $500 million of assets
Portfolio 0.55% on assets thereafter
If this Agreement becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion that such period bears to the full
month in which such effectiveness or termination occurs.
19
