SUBADVISORY AGREEMENT
THIS SUBADVISORY AGREEMENT is made and entered into as of November 24, 2021, by and between Sterling Capital Management LLC (the “Adviser”), a limited liability company organized under the laws of North Carolina and registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and XXXXXXX Partners, LLC (the “Subadviser”), a limited liability company organized under the laws of Delaware and registered under the Advisers Act, with respect to the series set forth in Exhibit A of the Agreement (each a “Fund” and, collectively, the “Funds”), each of which are series of the Northern Lights Fund Trust IV, a Delaware statutory trust (the “Trust”).
Recitals
WHEREAS, the Trust is registered with the U.S. Securities and Exchange Commission (the “SEC”) as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);
WHEREAS, the Adviser has, pursuant to an Investment Advisory Agreement with the Trust dated as of the 14th day of July, 2020 (the “Advisory Agreement”), as amended October 13, 2020, been retained to act as investment adviser for the Funds;
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain of its duties under the Advisory Agreement to other investment advisers, subject to the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain the Subadviser to construct and maintain on a continuous basis one or more separate account model portfolios listed in Exhibit A hereto (each, a “Model Portfolio”) subject to the stated investment policies and restrictions of the Funds as set forth in each Fund’s prospectus (“Prospectus”) and statement of additional information (“SAI”) as currently in effect and, as supplemented or amended from time to time, each Model Portfolio to be utilized by Adviser in the investment of the assets of the Funds in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, the parties do mutually agree and promise as follows with respect to each Fund:
1. Engagement of Subadviser. Subject to the terms of this Agreement, the Adviser hereby engages the Subadviser to design, monitor on a continuous basis and, as may be necessary, advisable or desirable, update one or more Model Portfolios subject to the Subadviser’s policies and procedures as disclosed in its Form ADV and the stated investment policies and restrictions of the Funds as set forth in each Fund’s Prospectus and SAI as currently in effect and, as supplemented or amended from time to time, and subject to the supervision and directions of the Adviser and the oversight of the Board of Trustees of the Trust, which Model Portfolios will be used by the Adviser for the investment of certain assets of the Funds; and the Subadviser hereby accepts such engagement. It is recognized that the Subadviser and certain of its affiliates act as investment adviser and discretionary investment manager to other clients and that the Adviser and the Trust do not object to such activities. Subadviser may give advice and take action with respect to other clients that differs from advice given or action taken with respect to the Funds, so long as Subadviser attempts in good faith reasonably to allocate investment opportunities to the Funds over a period of time on a fair and equitable basis compared to investment opportunities extended to other clients.
| 2. | Duties of Subadviser and Adviser. |
(a) Recommendations and Investment Discretion. The Subadviser is hereby authorized and directed and hereby agrees to provide non-discretionary investment advisory services to the Adviser by providing the Adviser with investment recommendations for each Model Portfolio in accordance with the Prospectus and the SAI and Subadviser’s policies and procedures. The Subadviser agrees to maintain and effect all investment recommendations and/or positions and changes to such recommendations and/or positions with respect to each Model Portfolio and to communicate the same to the Adviser in accordance with Subadviser’s policies and procedures. The Subadviser shall update and/or change each Model Portfolio’s recommendations and/or positions in accordance with Subadviser’s policies and procedures by using the platform provider’s designated portal or other interface or methodology (e.g., Excel spreadsheet) and shall add, remove or adjust each Model Portfolio’s target positions. The Subadviser is also responsible for verifying each Model Portfolio’s accuracy and completeness. The Subadviser is responsible for confirming that all changes made to each Model Portfolio’s recommendations and/or positions have been timely and accurately communicated to the Adviser, and the Subadviser shall immediately report to the Adviser any errors made with respect any Model Portfolio it maintains in accordance with Subadviser’s policies and procedures pursuant to this Agreement. The Subadviser is responsible to the extent that any trade losses are incurred by the Funds and/or the Adviser solely as a result of the Subadviser’s failure to properly update and maintain each Model Portfolio’s recommendations and/or positions in accordance with Subadviser’s policies and procedures. The Adviser agrees to provide the Subadviser with such assistance as may be reasonably requested by the Subadviser in connection with the Subadviser’s activities under this Agreement, including, without limitation, providing information concerning the Funds, and generally as to the conditions of the Funds’ or the Trust’s affairs.
The Adviser will have sole responsibility for (i) implementing each Model Portfolio for the Funds and determining or recommending, as applicable, the securities to be purchased, held and sold for each Fund’s account and (ii) placing orders for the execution of all purchase and sale transactions for each Fund’s account. The Subadviser will not be deemed to have investment discretion with respect to securities that are purchased or sold for the Funds. The Adviser will exercise “investment discretion” over the Funds within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”), and the Adviser shall be responsible for all applicable filing requirements under the Exchange Act, including without limitation Sections 13(d), 13(g) and 13(f), and the rules and regulations thereunder.
(b) Compliance with Applicable Laws and Governing Documents. In the performance of its services under this Agreement, the Subadviser shall act in conformity with the Prospectus, SAI, and the Trust’s Agreement and Declaration of Trust and By-Laws (referred to hereinafter as the “Declaration of Trust” and “By-Laws,” respectively) in each case as currently in effect and, as soon as practical after the Trust, the Funds or the Adviser notifies the Subadviser thereof, as supplemented, amended and/or restated from time to time and with the instructions and directions received in writing from the Adviser or the Trustees of the Trust and will conform to, and comply with, the requirements of the 1940 Act, the Internal Revenue Code of 1986, as amended (the “Code”), and all other applicable federal and state laws and regulations. Without limiting the preceding sentence, the Adviser promptly shall notify the Subadviser as to any act or omission of the Subadviser hereunder that the Adviser reasonably deems to constitute or to be the basis of any noncompliance or nonconformance with any of the Trust’s Declaration of Trust and By- Laws, the Prospectus and the SAI, the instructions and directions received in writing from the Adviser or the Trustees of the Trust, the 1940 Act, the Code, and all other applicable federal and state laws and regulations. Notwithstanding the foregoing, the Adviser shall remain responsible for ensuring each Fund’s compliance with the 1940 Act, the Code and all other applicable federal and state laws and regulations and the Subadviser is only obligated to comply with this subsection (b) with respect to the Funds. The Adviser will provide the Subadviser with those portions of the minutes of the meetings of the Board of Trustees of the Trust to the extent they may materially affect the services of the Subadviser, copies of any financial statements or reports made by the Funds to their shareholders, and any further materials or information which the Subadviser may reasonably request to enable it to perform its functions under this Agreement. The Subadviser shall provide the Adviser notice in writing: (1) immediately upon becoming statutorily disqualified from performing its duties under this Agreement or otherwise is legally prohibited from operating as an investment adviser: and (2) immediately upon notice if the Subadviser is no longer majority diverse-owned (i.e., greater than 50 percent owned and/or controlled by persons of designated diverse backgrounds, including women, racial minorities, LGBTQ+ individuals, veterans, and disabled individuals, or as “majority diverse-owned” is otherwise defined in the Prospectus and the SAI) in conflict with the Prospectus and the SAI.
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The Adviser will provide the Subadviser with reasonable advance written notice of any change in either Fund’s investment objectives, policies and restrictions as stated in the Prospectus and SAI, and the Subadviser shall, in the performance of its duties and obligations under this Agreement, manage the Model Portfolio consistent with such changes, provided that the Subadviser has received prompt written notice of the effectiveness of such changes from the Trust or the Adviser. In addition to such notice, the Adviser shall provide to the Subadviser a copy of a modified Prospectus and SAI reflecting such changes. The Adviser warrants and represents that the Prospectus and SAI will at all times be in compliance with all disclosure requirements under all applicable federal and state laws and regulations relating to the Trust or the Funds, including, without limitation, the 1940 Act, and the rules and regulations thereunder, and that the Subadviser shall have no liability in connection therewith, except as to the accuracy of material information furnished in writing by the Subadviser to the Trust or to the Adviser specifically for inclusion in the Prospectus and SAI. The Subadviser hereby agrees to provide to the Adviser and the Trust in a timely manner following a request by the Adviser or the Trust such information relating to the Subadviser and its relationship to, and actions for, the Funds as may be required to be contained in the Prospectus, SAI or in the Trust’s Registration Statement on Form N-1A and any amendments thereto.
(c) Voting of Proxies. The Adviser retains authority to exercise voting rights with respect to the securities and other investments held by the Funds. The Subadviser shall not be required to vote any proxies or respond to any corporate actions on behalf of securities included in its Model Portfolios.
(d) Securities Transactions. The Subadviser and any affiliated person of the Subadviser will not purchase securities or other instruments from or sell securities or other instruments to the Funds; provided, however, the Subadviser or any affiliated person of the Subadviser may purchase securities or other instruments from or sell securities or other instruments to the Funds if such transaction is permissible under applicable laws and regulations, including, without limitation, the 1940 Act and the Advisers Act and the rules and regulations promulgated thereunder.
The Subadviser, on its own behalf and with respect to its Access Persons (as defined in subsection (e) of Rule 17j-1 under the 1940 Act), agrees to observe and comply with Rule 17j-1 and its Code of Ethics (which shall comply in all material respects with Rule 17j-1), as the same may be amended from time to time. On at least a quarterly basis, the Subadviser will comply with the reporting requirements of Rule 17j- 1, which include (i) certifying to the Adviser and the Trust that the Subadviser and its Access Persons have complied in all material respects with the Subadviser’s Code of Ethics with respect to the Funds and (ii) identifying any material violations which have occurred with respect to the Funds. The Subadviser will have also submitted its Code of Ethics for its initial approval by the Trust’s Board of Trustees no later than the date of execution of this agreement and subsequently within six months of any material change thereto. The Subadviser will adhere to its own internal trading policies, which shall be made available to the Adviser upon reasonable request, regarding restricted trading periods after communicating model portfolio changes to the Adviser.
(e) Books and Records. The Subadviser shall maintain book and records as are required by applicable laws and regulations of all matters hereunder pertaining to the Funds (the “Funds’ Records”) under the Advisers Act or other applicable law, and the Subadviser, at its own expense, is entitled to make and keep a copy of the Funds’ Records for its internal files. The Funds’ Records shall be available to the Adviser or the Trust (or their agents) within 48 hours upon reasonable request during normal business hours. Without limiting the foregoing, the Subadviser shall maintain records of all investment recommendations made for the Model Portfolios, which are required pursuant to Rule 204-2 under the Advisers Act.
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(f) Information Concerning the Funds and Subadviser. From time to time as the Adviser or the Trust reasonably may request in good faith, the Subadviser will furnish the requesting party reports on the Model Portfolios, all in such reasonable detail as the parties may reasonably agree in good faith. The Subadviser will also inform the Adviser in a timely manner (not less than 72 hours) of material changes in portfolio managers responsible for the Model Portfolios, any material changes in the ownership or management of the Subadviser, or of material changes in the control of the Subadviser; provided, that in the event that such change in ownership will result in Subadviser no longer being majority diverse-owned (i.e., greater than 50 percent owned and/or controlled by persons of designated diverse backgrounds, including women, racial minorities, LGBTQ+ individuals, veterans, and disabled individuals, or as “majority diverse-owned” is otherwise defined in the Prospectus and the SAI) in conflict with the Prospectus and the SAI, Subadviser shall inform Adviser as soon as possible of the effective date of such change in ownership (subject to Adviser’s requirement to maintain the confidentiality of such information). Upon the Trust’s or the Adviser’s reasonable request, the Subadviser will make available its officers and employees to meet with the Trust’s Board of Trustees to review the performance of the Model Portfolios via telephone on a quarterly basis and on a less frequent basis as agreed upon by the parties in person.
Subject to the other provisions of this Agreement, the Subadviser will also provide such information or perform such additional acts with respect to the Funds as are reasonably required for the Trust or the Adviser to comply with their respective obligations under applicable laws, including without limitation, the Code, the 1940 Act, the Advisers Act, and the Securities Act, and any rule or regulation thereunder.
(g) Custody Arrangements. The Subadviser shall not act as custodian for the assets of any Funds or take or have possession of any assets of the Funds.
3. Independent Contractor. In the performance of its services hereunder, the Subadviser is and shall be an independent contractor and unless otherwise expressly provided herein or otherwise authorized in writing, shall have no authority beyond the authority given in this Agreement to act for or represent the Funds, the Trust or the Adviser in any way or otherwise be deemed an agent of the Funds, the Trust or the Adviser.
4. Expenses. During the term of this Agreement, the Subadviser will pay all expenses incurred by it in connection with its activities under this Agreement. The Subadviser shall, at its sole expense, employ or associate itself with such persons as it believes to be particularly fitted to assist it in the execution of its duties under this Agreement. The Subadviser shall not be responsible for the Trust’s, the Funds’ or Adviser’s expenses, which shall include, but not be limited to, the cost of securities, commodities and other investments (including brokerage commissions and other transaction charges, if any) purchased for the Funds and any losses incurred in connection therewith, expenses of holding or carrying a Fund’s assets, including, without limitation, expenses of dividends on stock borrowed to cover a short sale and interest, fees or other charges incurred in connection with leverage and related borrowings with respect to a Fund’s assets, organizational and offering expenses (which include, but are not limited to, out-of-pocket expenses, but not overhead or employee costs of the Subadviser); expenses for legal, accounting and auditing services; taxes and governmental fees; dues and expenses incurred in connection with membership in investment company organizations; costs of printing and distributing shareholder reports, proxy materials, prospectuses, stock certificates and distribution of dividends; charges of the Funds’ custodians and sub- custodians, administrators and sub-administrators, registrars, transfer agents, dividend disbursing agents and dividend reinvestment plan agents; payment for portfolio pricing services to a pricing agent, if any; registration and filing fees of the SEC; expenses of registering or qualifying securities of the Funds for sale in the various states; freight and other charges in connection with the shipment of the Funds’ portfolio securities; fees and expenses of non-interested Trustees; salaries of shareholder relations personnel; costs of shareholders meetings; insurance; interest; brokerage costs; and litigation and other extraordinary or non-recurring expenses. The Trust or the Adviser, as the case may be, shall reimburse the Subadviser for any expenses of the Funds or the Adviser as may be reasonably incurred by the Subadviser on behalf of the Funds or the Adviser. The Subadviser shall keep and supply to the Trust and the Adviser reasonable records of all such expenses.
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5. Investment Analysis and Commentary. The Subadviser will provide Adviser with quarterly performance analysis and market commentary (the “Investment Report”) during the term of this Agreement. The Investment Reports are due within 10 days after the end of each quarter. In addition, interim Investment Reports shall be issued at such times as may be mutually agreed upon by the Adviser and the Subadviser; provided, however, that any such interim Investment Report will be due within 10 days of the end of the month in which such agreement is reached between the Adviser and the Subadviser. The subject of each Investment Report shall be mutually agreed upon. The Adviser is freely able to publicly distribute the Investment Report.
6. Compensation. For the services provided pursuant to this Agreement, the Subadviser is entitled to an annual fee under the terms set forth on Exhibit A hereto.
7. Limited Use of Model Portfolio; Subadvising Other Funds. The Adviser agrees that each Model Portfolio provided by the Subadviser pursuant to this Agreement may be used solely with respect to, and solely for the purposes of, the Fund with which it is associated and only as contemplated herein. Neither the Adviser nor the Trust shall use any Model Portfolio (or any portion thereof) for any purpose not related to the Fund with which it is associated. The Subadviser agrees that if it enters into a subadvisory agreement to provide subadvisory U.S. mid cap core services for another U.S. pooled investment vehicle registered under the Investment Company Act of 1940 (e.g., mutual fund, exchange-traded fund, etc.) with a diversity, equity and inclusion focus, then it will use reasonable efforts to provide written notice to the Adviser (subject to any confidentiality obligations). The parties acknowledge that the Subadviser currently acts as one of several subadvisers to the Northern Engage360™ Fund.
8. Representations and Warranties of Subadviser. The Subadviser represents and warrants to the Adviser and the Trust as follows:
| (a) | The Subadviser is registered as an investment adviser under the Advisers Act; |
(b) The Subadviser is a limited liability company duly organized and properly registered and operating under the laws of the State of Delaware with the power to own and possess its assets and carry on its business as it is now being conducted and as proposed to be conducted hereunder;
(c) The execution, delivery and performance by the Subadviser of this Agreement are within the Subadviser’s powers and have been duly authorized, and no action by, or in respect of, or filing with, any governmental body, agency or official is required on the part of the Subadviser for execution, delivery and performance by the Subadviser of this Agreement, and the execution, delivery and performance by the Subadviser of this Agreement do not contravene or constitute a violation of, or a material default under, (i) any provision of applicable law, rule or regulation, (ii) the Subadviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Subadviser; and
(d) The Form ADV of the Subadviser provided to the Adviser and the Trust is a true and complete copy of the form, as required under the Advisers Act and rules thereunder, and the information contained therein is accurate and complete in all material respects and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.
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9. Representations and Warranties of Adviser. The Adviser represents and warrants to the Subadviser as follows:
| (a) | The Adviser is registered as an investment adviser under the Advisers Act; |
(b) The Adviser is a limited liability company duly organized and validly existing under the laws of the State of North Carolina with the power to own and possess its assets and carry on its business as it is now being conducted and as proposed to be conducted hereunder;
(c) The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its directors, shareholders or managing unitholder, and no action by, or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a violation of, or a material default under, (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser;
(d) The Form ADV of the Adviser provided to the Subadviser and the Trust is a true and complete copy of the form, including that part or parts of the Form ADV filed with the SEC, that part or parts maintained in the records of the Adviser, and/or that part or parts provided or offered to clients, in each case as required under the Advisers Act and rules thereunder, and the information contained therein is accurate and complete in all material respects and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading;
(e) The Adviser acknowledges that it received a copy of the Subadviser’s Form ADV prior to the execution of this Agreement; and
(f) The Adviser and the Trust have duly entered into the Advisory Agreement pursuant to which the Trust authorized the Adviser to delegate certain of its duties under the Advisory Agreement to other investment advisers, including without limitation, the appointment of a subadviser with respect to assets of the Fund and the use of model portfolios provided by such subadviser, including without limitation the Adviser’s entering into and performing this Agreement.
10. Survival of Representations and Warranties; Duty to Update Information. All representations and warranties made by the Subadviser and the Adviser pursuant to the recitals above and Sections 8 and 9, respectively, shall survive for the duration of this Agreement and the parties hereto shall promptly notify each other in writing upon becoming aware that any of the foregoing representations and warranties are no longer true or accurate in all material effects.
| 11. | Liability and Indemnification. |
(a) Liability. The Subadviser shall exercise its best judgment in rendering its services in accordance with the terms of this Agreement, but otherwise, in the absence of willful misfeasance, bad faith or gross negligence on the part of the Subadviser or a reckless disregard of its duties hereunder, the Subadviser, each of its affiliates and all respective partners, officers, directors and employees (“Affiliates”)
and each person, if any, who within the meaning of the Securities Act controls the Subadviser (“Controlling Persons”), if any, shall not be subject to any expenses or liability to the Adviser, the Trust or the Funds or any of the Funds’ shareholders, in connection with the matters to which this Agreement relates, including without limitation for any act or omission in the case of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of assets of a Fund. The Adviser shall exercise its best judgment in rendering its obligations in accordance with the terms of this Agreement, but otherwise (except as set forth in Section 11(c) below), in the absence of willful misfeasance, bad faith, or gross negligence on the part of the Adviser or a reckless disregard of its duties hereunder, the Adviser, any of its Affiliates and each of the Adviser’s Controlling Persons, if any, shall not be subject to any liability to the Subadviser, for any act or omission in the case of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of assets if a Fund. Notwithstanding the foregoing, nothing herein shall relieve the Adviser and the Subadviser from any of their obligations under applicable law, including, without limitation, the federal and state securities laws.
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(b) Indemnification. The Subadviser shall indemnify the Adviser, the Trust and the Fund, and their respective Affiliates and Controlling Persons for any liability and expenses, including without limitation reasonable attorneys’ fees and expenses, which the Adviser, the Trust and/or the Funds and their respective Affiliates and Controlling Persons may sustain as a result of the Subadviser’s willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the federal and state securities laws. Unless otherwise obligated under applicable law, the Subadviser shall not be liable for indirect, punitive, special or consequential damages arising out of this Agreement.
The Adviser shall indemnify the Subadviser, its Affiliates and its Controlling Persons, for any liability and expenses, including without limitation reasonable attorneys’ fees and expenses, which may be sustained as a result of the Adviser’s willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the federal and state securities laws.
(c) The Subadviser shall not be liable to the Adviser for acts of the Subadviser which result from acts of the Adviser, including, but not limited to, a failure of the Adviser to provide accurate and current information with respect to any records maintained by the Adviser, which records are not also maintained by the Subadviser.
| 12. | Term; Duration and Termination. |
(a) Term. This Agreement shall be effective on the date upon which the Subadviser begins to provide sub-advisory services to a Fund.
(b) Duration. Unless sooner terminated, this Agreement shall continue for an initial period of no more than one (1) year following the date upon which the Subadviser begins to provide sub-advisory services to a Fund, and thereafter shall continue automatically for successive annual periods with respect to the Funds, provided such continuance is specifically approved at least annually by the Trust’s Board of Trustees or vote of the lesser of (a) 67% of the shares of the applicable Fund represented at a meeting if holders of more than 50% of the outstanding shares of the applicable Fund are present in person or by proxy or (b) more than 50% of the outstanding shares of the applicable Fund; provided, that in either event its continuance also is approved by a majority of the Trust’s Trustees who are not “interested persons” (as defined in the 0000 Xxx) of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval.
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(c) Termination. This Agreement shall automatically terminate in the event of the termination of the Advisory Agreement; provided that Adviser shall notify Subadviser of any such termination. Notwithstanding whatever may be provided herein to the contrary, this Agreement may also be terminated at any time with respect to either Fund, without payment of any penalty:
(i) By vote of a majority of the Trust’s Board of Trustees, or by “vote of a majority of the outstanding voting securities” of the Funds (as defined in the 1940 Act), or by the Adviser, in each case, upon not more than 60 days’ written notice to the Subadviser;
(ii) By any party hereto upon written notice to the other party in the event of a breach of any provision of this Agreement by the other party if the breach is not cured within 15 days of notice of the breach;
(iii) By the Adviser, (1) immediately upon notice if the Subadviser becomes statutorily disqualified from performing its duties under this Agreement or otherwise is legally prohibited from operating as an investment adviser, (2) immediately upon notice if Subadviser is no longer majority diverse- owned (i.e., greater than 50 percent owned and/or controlled by persons of designated diverse backgrounds, including women, racial minorities, LGBTQ+ individuals, veterans, and disabled individuals, or as “majority diverse-owned” is otherwise defined in the Prospectus and the SAI) in conflict with the Prospectus and the SAI, or (3) upon not less than 30 days’ prior written notice to the Subadviser and the Trust for any reason; or
(iv) By the Subadviser (1) immediately upon notice if the Adviser becomes statutorily disqualified from performing its duties under this Agreement or otherwise is legally prohibited from operating as an investment adviser, or (2) upon not less than 120 days’ prior written notice to the Adviser and the Trust for any reason.
This Agreement shall not be assigned (as such term is defined in the 0000 Xxx) and shall terminate automatically in the event of its assignment.
13. Duties of the Adviser. The Adviser shall continue to have responsibility for all services to be provided to the Funds pursuant to the Advisory Agreement and shall oversee and review the Subadviser’s performance of its duties under this Agreement. Nothing contained in this Agreement shall obligate the Adviser to provide any funding or other support for the purpose of directly or indirectly promoting investments in the Funds.
| 14. | Reference to Adviser and Subadviser. |
(a) The Subadviser grants, subject to the conditions below, the Adviser non-exclusive rights to use, display and promote trademarks of the Subadviser in conjunction with any activity associated with the Funds. In addition, the Adviser may promote the identity of and services provided by the Subadviser to the Adviser, which references shall not differ in substance from those included in the Prospectus, SAI and this Agreement, in any advertising or promotional materials. The Adviser shall protect the goodwill and reputation of the Subadviser in connection with marketing and promotion of the Funds. The Adviser shall submit to the Subadviser for its review and approval all such public informational materials relating to the Funds that refer to any recognizable variant or any registered xxxx or logo or other proprietary designation of the Subadviser. Approval shall not be unreasonably withheld by the Subadviser and notice of approval or disapproval will be provided in a timely manner. Subsequent advertising or promotional materials having very substantially the same form as previously approved by the Subadviser may be used by the Adviser without obtaining the Subadviser’s consent unless such consent is withdrawn in writing by the Subadviser.
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(b) Neither the Subadviser nor any Affiliate or agent of the Subadviser shall make reference to or use the name of the Adviser or any of its Affiliates, or any of their clients, except references concerning the identity of and services provided by the Adviser to the Funds or to the Subadviser, which references shall not differ in substance from those included in the Prospectus, SAI and this Agreement, in any advertising or promotional materials without the prior approval of Adviser, which approval shall not be unreasonably withheld or delayed. The Subadviser hereby agrees to make all reasonable efforts to cause any Affiliate of the Subadviser to satisfy the foregoing obligation.
15. Amendment. This Agreement may be amended in writing by mutual consent of the parties, provided that the terms of any material amendment shall be approved by: (a) the Trust’s Board of Trustees or by a vote of a majority of the outstanding voting securities of the Funds (as required by the 1940 Act), and (b) the vote of a majority of those 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.
16. Confidentiality. Subject to the duties of the Adviser, the Trust and the Subadviser to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential and shall not disclose any and all information pertaining to the Funds and the actions of the Subadviser, the Adviser and the Funds in respect thereof; except to the extent:
| (a) | Authorized. The disclosing party has authorized such disclosure; |
(b) Court or Regulatory Authority. Disclosure of such information is expressly required or requested by a court or other tribunal of competent jurisdiction or applicable federal or state regulatory authorities;
(c) Publicly Known Without Breach. Such information becomes known to the general public without a breach of this Agreement or a similar confidential disclosure agreement regarding such information;
| (d) | Already Known. Such information already was known by the party prior to the date hereof; |
(e) Received From Third Party. Such information was or is hereafter rightfully received by the party from a third party (expressly excluding the Funds’ custodian, prime broker and administrator) without restriction on its disclosure and without breach of this Agreement or of a similar confidential disclosure agreement regarding them; or
| (f) | Independently Developed. The party independently developed such information. |
By way of clarification, nothing will prevent or preclude either party from using or disclosing confidential information to its affiliates or to its representatives, consultants, advisers or other agents (or those of its affiliates) (“Representatives”) for the purposing of performing its duties under this Agreement or for other legal, regulatory and risk management purposes (including but not limited to internal or external audits, exams or reviews that may be conducted by such party, its affiliates or an applicable regulatory agency), provided that the disclosing party shall make any Representatives aware of the obligations of confidentiality under this Agreement and shall ensure compliance by such Representatives with the confidentiality obligations herein.
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In addition, the Subadviser agrees, consistent with its Code of Ethics that neither it nor its officers, directors or employees may engage in personal securities transactions based on non-public information about the Funds’ portfolio holdings.
17. Notice. Any notice that is required to be given by the parties to each other under the terms of this Agreement shall be in writing, delivered, or mailed postpaid to the other parties at the following addresses, which may from time to time be changed by the parties by notice to the other party:
| (a) | If to the Subadviser: |
XXXXXXX Partners, LLC
0000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Phone: (000) 000-0000
| (b) | If to the Adviser: |
Sterling Capital Management LLC
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Head of Fund Administration
Phone: (000) 000-0000
with a copy to Adviser’s Chief Operating Officer
18. Jurisdiction. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware without reference to choice of law principles thereof and in accordance with the 1940 Act. In the case of any conflict, the 1940 Act shall control.
19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, all of which shall together constitute one and the same instrument. The parties may transmit counterparty signature pages via email or facsimile in portable document format (.pdf) or other readily available format or in electronic signature format and such emailed or facsimile transmitted or electronically signed execution shall have the full force and effect of an original signature.
20. Certain Definitions. For the purposes of this Agreement and except as otherwise provided herein, “interested person,” “affiliated person,” and “assignment” shall have their respective meanings as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the SEC.
21. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.
22. Severability. If any provision of this Agreement shall be held or made invalid by a court decision or applicable law, the remainder of the Agreement shall not be affected adversely and shall remain in full force and effect.
23. Entire Agreement. This Agreement, together with all exhibits, attachments and appendices, contains the entire understanding and agreement of the parties with respect to the subject matter hereof.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first written above.
STERLING CAPITAL MANAGEMENT LLC
| By: | /s/ Xxxxx Xxxxxx |
Name: Xxxxx Xxxxxx
Title: Senior Managing Director & Chief Operating Officer
XXXXXXX PARTNERS, LLC
| By: | /s/ Xxxxxxx Xxxxx |
Name: Xxxxxxx Xxxxx
Title: General Counsel
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SUB-ADVISORY AGREEMENT
Between Sterling Capital Management LLC
and XXXXXXX Partners, LLC
EXHIBIT A
FUNDS OF THE TRUST
|
NAME OF FUND |
NAME OF MODEL PORTFOLIO |
ANNUAL SUB-ADVISORY FEE |
| Sterling Capital Diverse Multi-Manager Active ETF (DEI) | U.S. Mid-Cap Core | 0.37% (37 basis points) |
Pursuant to Section 6 of this Agreement, the Adviser shall pay the Subadviser a fee equal to the product of (x) the Annual Sub-Advisory Fee set forth in the table above divided by 12 and multiplied by (y) the average monthly balance of the Fund’s assets (i.e., securities and cash) invested in the Subadviser’s Model Portfolio during the prior calendar month. No later than the 15th day following the end of each month, the Adviser shall provide to the Subadviser the average monthly balance of the Fund’s assets invested in the Subadviser’s Model Portfolio for the prior month. The Adviser will compute the fee due to the Subadviser monthly and pay such fee to the Subadviser no later than the fifteenth (15th) day following the end of each month.
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