SUB-ADVISORY AGREEMENT
EXHIBIT 99.D7
SUB-ADVISORY AGREEMENT (the “Agreement”) made as of this 24th day of May, 2010 by and between
XXXXXX STREET CAPITAL MANAGEMENT, a Hawaii corporation with its principal place of business at 000
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx 00000 (the “Adviser”), and COLUMBIA MANAGEMENT
INVESTMENT ADVISERS, LLC, a Delaware limited liability company with its principal place of business
at 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000 (the “Sub-Adviser”). The Adviser is a direct subsidiary of
First Hawaiian Bank.
W I T N E S S E T H
WHEREAS, XXXXXX STREET FUNDS (the “Trust”) and First Hawaiian Bank entered into an Investment
Advisory Agreement dated March 31, 1999 (the “Management Agreement”);
WHEREAS, the Adviser and First Hawaiian Bank entered into Assignment and Assumption Agreement
dated February 22, 2000 whereby the Adviser assumed the Management Agreement and the obligations
contained therein;
WHEREAS, pursuant to authority granted to the Adviser by the Board of Trustees (the “Board”)
of the Trust on behalf of the series set forth on Schedule A to this Agreement (the “Fund”) and
pursuant to the provisions of the Management Agreement, the Adviser has selected the Sub-Adviser to
act as sub-investment adviser of the Fund and to provide certain related services, as more fully
set forth below, and to perform such services under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the
Adviser and the Sub-Adviser do hereby agree as follows:
1. The Sub-Adviser’s Services.
(a) Discretionary Investment Management Services. The Sub-Adviser
shall act as sub-investment adviser with respect to the Fund. In such capacity, the
Sub-Adviser shall, subject to the supervision of the Adviser and the Board, regularly
provide the Fund with investment research, advice and supervision and shall furnish
continuously an investment program for such Fund assets as may be allocated by the Adviser
to the Sub-Adviser for purposes of investing Fund assets, consistent with the investment
objectives and policies of the Fund. The Sub-Adviser shall determine, from time to time,
what investments shall be purchased for the Fund and what such securities shall be held or
sold by the Fund, subject always to the provisions of the Trust’s Agreement and Declaration
of Trust, By-Laws and its registration statement on Form N-1A (the “Registration Statement”)
under the Investment Company Act of 1940, as amended (the “1940 Act”), and under the
Securities Act of 1933, as amended (the “1933 Act”), covering Fund shares, as filed with the
Securities and Exchange Commission (the “Commission”), and to the investment objectives,
policies and restrictions of the Fund, as each of the same shall be from time to time in
effect and set forth in the Registration Statement. To carry out such obligations, the
Sub-Adviser shall exercise full discretion and act for the Fund in the same manner and with
the same force and effect as the Fund itself might or could do with respect to purchases,
sales or other transactions and is hereby appointed the Fund’s agent and attorney-in-fact
for the limited purposes of executing account documentation, agreements, contracts and other
documents as the Sub-Adviser shall be required by brokers, dealers, counterparties and other
persons in connection with the Sub-Adviser’s management of the Fund. Notwithstanding the
foregoing, the Adviser may, pursuant to the Management Agreement and upon prior written
instructions from the Adviser, effect such
portfolio transactions for the Fund as the Adviser may from time to time determine;
provided however, that the Sub-Adviser shall not be responsible for any such portfolio
transactions effected by the Adviser. No reference in this Agreement to the Sub-Adviser
having full discretionary authority over the Fund’s investments shall in any way limit the
right of the Adviser, in its sole discretion, to establish or revise policies in connection
with the management of the Fund’s assets or to otherwise exercise its right to control the
overall management of the Fund’s assets.
(b) Compliance. In the performance of its duties and obligations
under this Agreement, the Sub-Adviser agrees to comply in all material respects with the
requirements of the 1940 Act, the Investment Advisers Act of 1940, as amended (the “Advisers
Act”), the 1933 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”), the
Commodity Exchange Act and the respective rules and regulations thereunder, as applicable,
as well as with all other applicable federal and state laws, rules, regulations and case law
that relate to the services and relationships described hereunder and to the conduct of its
business as a registered investment adviser. The Sub-Adviser also agrees to comply with the
objectives, policies and restrictions set forth in the Registration Statement, as amended or
supplemented, of the Fund, and with any written policies, guidelines, instructions and
procedures approved by the Board or the Adviser and provided to the Sub-Adviser. In
selecting the Fund’s portfolio securities and performing the Sub-Adviser’s obligations
hereunder, the Sub-Adviser shall cause the Fund to comply with the diversification and
source of income requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the “Code”), for qualification as a regulated investment company. With respect to
compliance with the requirements of Subchapter M of the Code, the Adviser shall cause the
Fund to provide to the Sub-Adviser such records as the Sub-Adviser may reasonably request.
The Adviser has furnished the Sub-Adviser with the Trust’s current Declaration of Trust and
Bylaws, the Fund’s current prospectus and Statement of Additional Information and any other
policies, guidelines, instructions and procedures relevant to the Sub-Adviser’s services
under this Agreement and shall deliver, or cause to be delivered, to the Sub-Adviser all
changes to such documents and instruments a reasonable period of time prior to their
effectiveness. The Sub-Adviser has adopted and implemented, and will maintain, written
compliance policies and procedures that it believes are reasonably designed to prevent
violations by the Sub-Adviser and its “supervised persons” (as defined in the Advisers Act)
of the Advisers Act and the rules thereunder. The Sub-Adviser will review, no less
frequently than annually, the adequacy of its policies and procedures and the effectiveness
of their implementation. The Sub-Adviser has designated a Chief Compliance Officer
responsible for administering its policies and procedures. No supervisory activity
undertaken by the Adviser shall limit the Sub-Adviser’s full responsibility for any of the
foregoing.
(c) Proxy Voting. Pursuant to Board authority and the Management
Agreement, the Adviser has the authority and responsibility to vote proxies relating to
securities held by the Fund and may delegate that authority and responsibility to a third
party. The Adviser hereby delegates the authority and responsibility to vote proxies for the
Fund’s securities to the Sub-Adviser. The Sub-Adviser represents that it has adopted and
implemented, and will maintain, written policies and procedures that it believes are
reasonably designed to ensure that it votes the Fund’s securities in the best interests of
the Fund, including procedures to address material conflicts that may arise between the
interests of the Sub-Adviser and those of the Fund. The Sub-Adviser shall carry out the
responsibility to vote proxies relating to the securities held by the Fund in accordance
with written instructions, if any, that the Board or the Adviser may provide from time to
time and shall provide such reports and keep such records relating to proxy voting as the
Board may reasonably request or as may be necessary for the Fund to comply with the 1940 Act
and other applicable
law. The delegation of proxy voting authority and responsibility to the Sub-Adviser may
be revoked or modified by the Board or the Adviser at any time.
The Sub-Adviser is authorized to instruct the Custodian and/or broker(s) for the Fund
to forward promptly to the Sub-Adviser or designated service provider copies of all proxies
and shareholder communications relating to securities held in the portfolio of the Fund
(other than materials relating to legal proceedings against the Fund). The Sub-Adviser may
also instruct the Custodian and/or broker(s) to provide reports of holdings in the portfolio
of the Fund. The Sub-Adviser has the authority to engage a service provider to assist with
administrative functions related to voting Fund proxies. The Trust shall direct the
Custodian and/or broker(s) to provide assistance requested by the Sub-Adviser in
facilitating the use of a service provider. In no event shall the Sub-Adviser have any
responsibility to vote proxies that are not received on a timely basis. The Adviser
acknowledges that the Sub-Adviser, consistent with the Sub-Adviser’s written proxy voting
policies and procedures, may refrain from voting a proxy if, in the Sub-Adviser’s
discretion, refraining from voting would be in the best interests of the Fund and its
shareholders or as otherwise may be provided in the Sub-Adviser’s written proxy voting
policies and procedures.
(d) Recordkeeping. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the Fund, except as
otherwise provided herein or as may be necessary for the Sub-Adviser to supply to the
Adviser, the Fund or its Board the information required to be supplied under this Agreement.
The Sub-Adviser shall maintain separate books and detailed records of all matters
pertaining to the Fund’s assets advised by the Sub-Adviser required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than
those records being maintained by the Adviser, any administrator, custodian, transfer agent
or other service provider appointed by the Fund) relating to its responsibilities provided
hereunder with respect to the Fund, and shall preserve such records for the periods and in a
manner prescribed therefore by Rule 31a-2 under the 1940 Act (the “Fund Books and Records”).
The Fund Books and Records shall be available to the Adviser and the Board upon reasonable
request and shall be delivered to the Fund upon the termination of this Agreement and shall
be available for telecopying without unreasonable delay during any day the Fund is open for
business.
(e) Holdings Information and Pricing. The Sub-Adviser shall provide
regular reports regarding the Fund’s holdings, and may, on its own initiative, furnish the
Fund and the Adviser from time to time with whatever information the Sub-Adviser believes is
appropriate for this purpose. The Sub-Adviser agrees to notify the Adviser promptly if the
Sub-Adviser reasonably believes that the value of any security held by the Fund may not
reflect fair value. The Sub-Adviser agrees to provide upon request any pricing information
of which the Sub-Adviser is aware to the Adviser and/or the Fund pricing agent to assist in
the determination of the fair value of the Fund holdings for which market quotations are not
readily available or as otherwise required in accordance with the 1940 Act or the Fund
valuation procedures for the purpose of calculating the Fund’s net asset value in accordance
with procedures and methods established by the Board.
(f) Cooperation with Agents of the Adviser and the Fund. The
Sub-Adviser agrees to reasonably cooperate with and provide reasonable assistance to the
Adviser, the Fund and the Fund’s custodian and foreign sub-custodians, the Fund’s pricing
agents and all other agents and representatives of the Fund and the Adviser, such
information with respect to the Fund as such
entities may reasonably request from time to time in the performance of their
obligations, provide prompt responses to reasonable requests made by such persons and
establish appropriate interfaces with each so as to promote the efficient exchange of
information and compliance with applicable laws and regulations.
2. Code of Ethics. The Sub-Adviser has adopted a written code of ethics that it
reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act (the “Code of
Ethics”), which it will provide to the Adviser and the Fund. The Sub-Adviser shall ensure
that it has adopted procedures reasonably necessary to prevent its Access Persons (as
defined in Rule 17j-1) from violating the Sub-Adviser’s Code of Ethics, as in effect from time to
time. Upon request, the Sub-Adviser shall provide the Fund with (i) a copy of the Sub-Adviser’s
current Code of Ethics, as in effect from time to time, and (ii) a certification that it has
adopted procedures reasonably necessary to prevent Access Persons from engaging in any conduct
prohibited by the Sub-Adviser’s Code of Ethics. Annually, upon request, the Sub-Adviser shall
furnish a written report, which complies with the requirements of Rule 17j-1, concerning the
Sub-Adviser’s Code of Ethics to the Trust and the Adviser. The Sub-Adviser shall respond to
requests for information from the Adviser as to material violations of the Code of Ethics by Access
Persons and the sanctions imposed by the Sub-Adviser in response to such material violations.
3. Information and Reporting. The Sub-Adviser shall provide the Fund, the Adviser,
and their respective officers with such periodic reports concerning the obligations the Sub-Adviser
has assumed under this Agreement as the Fund and the Adviser may from time to time reasonably
request.
(a) Notification of Breach / Compliance Reports. The Sub-Adviser
shall notify the Trust’s Chief Compliance Officer and Adviser promptly upon detection of (i)
any material failure to manage the Fund in accordance with its investment objectives and
policies or any applicable law; or (ii) any material breach of any of the Fund’s written
policies, guidelines or procedures provided to the Sub-Adviser. In addition, the
Sub-Adviser shall provide a quarterly report regarding the Fund’s compliance with its
investment objectives and policies and applicable law and the Fund’s policies, guidelines or
procedures as applicable to the Sub-Adviser’s obligations under this Agreement. The
Sub-Adviser acknowledges and agrees that the Adviser may, in its discretion, provide such
quarterly compliance certifications to the Board. The Sub-Adviser shall also provide the
officers of the Trust with supporting certifications in connection with such certifications
of Fund financial statements and disclosure controls pursuant to the Xxxxxxxx-Xxxxx Act.
The Sub-Adviser will promptly notify the Trust in the event (i) the Sub-Adviser is served or
otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, public board, or body, involving the affairs of the
Trust (excluding class action suits in which the Fund is a member of the plaintiff class by
reason of the Fund’s ownership of shares in the defendant) or the compliance by the
Sub-Adviser with the federal or state securities laws if such actions, suits, proceedings,
inquiries or investigations would reasonably be expected to have a material adverse effect
on the Sub-Adviser’s ability to perform its services hereunder or (ii) the controlling
stockholder of the Sub-Adviser changes or an actual change in control resulting in an
“assignment” (as defined in the 0000 Xxx) has occurred or is otherwise proposed to occur.
(b) Inspection. Upon reasonable request, the Sub-Adviser agrees to
make its records and premises (including the availability of the Sub-Adviser’s employees for
interviews) to the extent that they relate to the conduct of services provided to the Fund
reasonably available for compliance audits by the Adviser’s or the Fund’s employees,
accountants or counsel; in this regard, the Fund and the Adviser acknowledge that the
Sub-Adviser shall have no obligations to make available proprietary information unrelated to
the services provided to the Fund or any
information related to other clients of the Sub-Adviser, except to the extent necessary
for the Adviser to confirm compliance with any laws, rules or regulations in the management
of the Fund.
(c) Board and Filings Information. The Sub-Adviser will also provide
the Adviser with any information reasonably requested regarding its management of the Fund
required for any meeting of the Board, or for any shareholder report, Form N-CSR, Form N-Q,
Form N-PX, Form N-SAR, amended registration statement, proxy statement, or prospectus
supplement to be filed by the Fund with the Commission. The Sub-Adviser will make its
officers and employees available to meet with the Board from time to time on due notice to
review its investment management services to the Fund in light of current and prospective
economic and market conditions and shall furnish to the Board such information as may
reasonably be necessary in order for the Board to evaluate this Agreement or any proposed
amendments thereto.
(d) Transaction Information. The Sub-Adviser shall furnish to the
Adviser such information concerning portfolio transactions as may be necessary to enable the
Adviser to perform such compliance testing on the Fund and the Sub-Adviser’s services as the
Adviser may, in its sole discretion, determine to be appropriate. The provision of such
information by the Sub-Adviser in no way relieves the Sub-Adviser of its own
responsibilities under this Agreement.
4. Brokerage.
(a) Principal Transactions. In connection with purchases or sales of
securities for the account of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent or receive any commission except as
permitted by the 1940 Act.
(b) Placement of Orders. The Sub-Adviser shall arrange for the
placing of all orders for the purchase and sale of securities for the Fund’s account with
brokers or dealers selected by the Sub-Adviser. In executing Fund transactions and
selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of
the Fund the best overall terms available. In assessing the best overall terms available for
any transaction, the Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the reasonableness
of the commission, if any, both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage and research
services provided (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board
of Trustees of the Trust and Section 28(e) of the Exchange Act, the Sub-Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that such commission
was reasonable in relation to the value of the brokerage and research services provided by
such broker or dealer — viewed in terms of that particular transaction or in terms of the
overall responsibilities of the Sub-Adviser to its discretionary clients, including the
Fund. It is understood that the services provided by such brokers may be useful to the
Sub-Adviser in connection with its or its affiliates’ services to other clients.
(c) Aggregated Transactions. On occasions when the Sub-Adviser deems
the purchase or sale of a security to be in the best interest of the Fund as well as other
clients of the
Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and
regulations, aggregate the order for securities to be sold or purchased. In such event, the
Sub-Adviser will allocate securities or futures contracts so purchased or sold, as well as
the expenses incurred in the transaction, in the manner the Sub-Adviser reasonably considers
to be equitable, over time, and consistent with its fiduciary obligations to the Fund and to
such other clients under the circumstances.
(d) Affiliated Brokers. The Sub-Adviser or any of its affiliates may
act as broker in connection with the purchase or sale of securities or other investments for
the Fund, subject to: (a) the requirement that the Sub-Adviser seek to obtain best
execution and price within the policy guidelines determined by the Board and set forth in
the Fund’s current prospectus and SAI; (b) the provisions of the 1940 Act; (c) the
provisions of the Advisers Act; (d) the provisions of the 1934 Act; and (d) other provisions
of applicable law. These brokerage services are not within the scope of the duties of the
Sub-Adviser under this Agreement. Subject to the requirements of applicable law and any
procedures adopted by the Board, the Sub-Adviser or its affiliates may receive brokerage
commissions, fees or other remuneration from the Fund for these services in addition to the
Sub-Adviser’s fees for services under this Agreement.
5. Custody. Nothing in this Agreement shall permit the Sub-Adviser to take or
receive physical possession of cash, securities or other investments of the Fund.
6. Allocation of Charges and Expenses. The Sub-Adviser will bear its own costs of
providing services hereunder. Other than as herein specifically indicated, the Sub-Adviser shall
not be responsible for the Fund’s or the Adviser’s expenses, including without limitation brokerage
and other expenses incurred in placing orders for the purchase and sale of securities and other
investment instruments.
7. Representations, Warranties and Covenants.
(a) Properly Registered. The Sub-Adviser is registered as an
investment adviser under the Advisers Act, and will remain so registered for the duration of
this Agreement. The Sub-Adviser is not prohibited by the Advisers Act or the 1940 Act from
performing the services contemplated by this Agreement, and to the best knowledge of the
Sub-Adviser, there is no proceeding or investigation regarding the Sub-Adviser that is
reasonably likely to result in the Sub-Adviser being prohibited from performing the services
contemplated by this Agreement. The Sub-Adviser agrees to promptly notify the Trust of the
occurrence of any event that would disqualify the Sub-Adviser from serving as an investment
adviser to an investment company. The Sub-Adviser is in compliance in all material respects
with all applicable federal and state law in connection with its investment management
operations.
(b) ADV Disclosure. The Sub-Adviser has provided the Trust with a
copy of its Form ADV Part I as most recently filed with the SEC and its current Part II and
will, promptly after filing any amendment to its Form ADV with the SEC or updating its Part
II, furnish a copy of such amendments or updates to the Trust and the Adviser. The
information contained in the Adviser’s Form ADV 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.
(c) Fund Disclosure Documents. The Sub-Adviser has reviewed the
current prospectus and Statement of Additional Information of the Fund and represents and
warrants that
with respect to disclosure about the Sub-Adviser, the manner in which the Sub-Adviser
will manage the Fund or information relating directly or indirectly to the Sub-Adviser, such
prospectus and Statement of Additional Information contain or will contain, as of the date
thereof, no untrue statement of any material fact and does not omit any statement of
material fact which was required to be stated therein or necessary to make the statements
contained therein not misleading. The Sub-Adviser, upon request, will in the future review
the Registration Statement, and any amendments or supplements thereto, the annual or
semi-annual reports to shareholders, other reports filed with the Commission and any
marketing material of the Fund (collectively the “Disclosure Documents”) and will certify
as to whether or not disclosure about the Sub-Adviser, the manner in which the Sub-Adviser
manages the Fund or information relating directly or indirectly to the Sub-Adviser, such
Disclosure Documents contain or will contain, as of the date thereof, no untrue statement of
any material fact and does not omit any statement of material fact which was required to be
stated therein or necessary to make the statements contained therein not misleading.
(d) Use Of Names. The Sub-Adviser has the right to use the names
“Xxxxxx Street Capital Management” and “Xxxxxx Street Funds” in connection with its services
to the Trust and that the Trust and the Adviser shall have the right to use the name
“Columbia Management” in connection with the management and operation of the Fund. The
Sub-Adviser is not aware of any threatened or existing actions, claims, litigation or
proceedings that would adversely affect or prejudice the rights of the Sub-Adviser or the
Trust to use the name “Columbia Management.”
(e) Insurance. The Sub-Adviser maintains errors and omissions
insurance coverage in an appropriate amount and shall provide prior written notice to the
Trust (i) of any material changes in its insurance policies or insurance coverage; or (ii)
if any material claims will be made on its insurance policies. Furthermore, the Sub-Adviser
shall, upon reasonable request, provide the Trust with any information it may reasonably
require concerning the amount of or scope of such insurance.
(f) No Detrimental Agreement. The Sub-Adviser represents and warrants
that it has no arrangement or understanding with any party, other than the Trust, that would
cause the Sub-Adviser to select securities for the Fund in a manner that is not in the best
interest of the Fund.
(g) Conflicts. The Sub-Adviser shall act honestly, in good faith and
in the best interests of the Trust including implementing procedures that require any of its
personnel responsible for management of the Fund to place the interest of the Fund ahead of
their own interests, in all personal trading scenarios that may involve a conflict of
interest with the Fund, consistent with its fiduciary duties under applicable law.
(h) Representations. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is executed and at the time
of delivery of the quarterly compliance report required by Section 3(a), whether or not
specifically referenced in such report.
(i) The Adviser (i) is registered as an investment adviser under the Advisers Act and
will remain so registered for the duration of this Agreement; (ii) is not prohibited by the
1940 Act or the Advisers Act from performing the services contemplated by this Agreement or
the Management Agreement; (iii) has met and will seek to continue to meet for so long as
this Agreement remains in effect, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory agency necessary to be
met in order to
perform the services contemplated by this Agreement or the Management Agreement; (iv)
has the authority to enter into and perform the services contemplated by this Agreement; (v)
will promptly notify Subadviser of the occurrence of any event that would disqualify the
Adviser from serving as an investment adviser of an investment company pursuant to Section
9(a) of the 1940 Act or otherwise; and (vi) the Adviser and the Trust have duly entered into
the Management Agreement pursuant to which the Trust authorized the Adviser to enter into
this Agreement. The Adviser shall provide services to the Fund pursuant to the Management
Agreement in compliance with the terms thereof and in accordance with applicable law.
8. Sub-Adviser’s Compensation. The Adviser shall pay to the Sub-Adviser, as compensation for
the Sub-Adviser’s services hereunder, a fee, determined as described in Schedule A that is attached
hereto and made a part hereof. Such fee shall be computed daily and paid monthly in arrears by the
Adviser. The Fund shall have no responsibility for any fee payable to the Sub-Adviser.
The Sub-Adviser will be compensated based on the portion of Fund assets allocated to the
Sub-Adviser by the Adviser. In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business day on which this
Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month.
9. Independent Contractor. 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 Fund or the Adviser in
any way or otherwise be deemed to be an agent of the Fund or the Adviser. If any occasion should
arise in which the Sub-Adviser gives any advice to its clients concerning the shares of the Fund,
the Sub-Adviser will act solely as investment counsel for such clients and not in any way on behalf
of the Fund. It is understood that the Sub-Adviser may give advice and take action for
its other clients that may differ from advice given, or the timing or nature of action taken, for
the Fund. The Sub-Adviser is not obligated to initiate transactions for the Fund in any security
that the Sub-Adviser, its principals, affiliates or employees may purchase or sell for its or their
own accounts or the accounts of other clients.
10. Assignment and Amendments. This Agreement shall automatically terminate, without the
payment of any penalty, (i) in the event of its assignment (as defined in section 2(a)(4) of the
0000 Xxx) or (ii) in the event of the termination of the Management Agreement; provided that such
termination shall not relieve the Adviser or the Sub-Adviser of any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940 Act, when
applicable.
11. Duration and Termination.
(a) This Agreement shall become effective as of the date executed and shall remain in
full force and effect continually thereafter, subject to renewal as provided in Section
11(c) and unless terminated automatically as set forth in Section 10 hereof or until
terminated as follows:
(b) The Adviser may at any time terminate this Agreement by not more than
sixty (60) days’ nor less than thirty (30) days’ written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser. In addition, the Fund may
cause this Agreement to terminate either (i) by vote of its Board upon not more than sixty
(60) days’ nor less than thirty
(30) days’ written notice or (ii) upon the affirmative vote of a majority of the
outstanding voting securities of the Fund; or
(c) The Sub-Adviser may at any time terminate this Agreement by not more than
sixty (60) days’ nor less than thirty (30) days’ written notice delivered or mailed by
registered mail, postage prepaid, to the Adviser; or
(d) This Agreement shall automatically terminate two years from the date of
its execution unless its renewal is specifically approved at least annually thereafter by
(i) a majority vote of the Trustees, including a majority vote of such Trustees who are not
interested persons of the Fund, the Adviser or the Sub-Adviser, at a meeting called for the
purpose of voting on such approval; or (ii) the vote of a majority of the outstanding voting
securities of the Fund; provided, however, that if the continuance of this Agreement is
submitted to the shareholders of the Fund for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Sub-Adviser may continue
to serve hereunder as to the Fund in a manner consistent with the 1940 Act and the rules and
regulations thereunder; or
(e) This Agreement shall terminate automatically and immediately in the event
of the termination of the Management Agreement; and
(f) Termination of this Agreement pursuant to this Section shall be without payment of
any penalty.
In the event of termination of this Agreement for any reason, the Sub-Adviser shall,
immediately upon notice of termination or on such later date as may be specified in such
notice, cease all activity on behalf of the Fund and with respect to any Fund assets, except
as expressly directed by the Adviser or as otherwise required by any fiduciary duties of the
Sub-Adviser under applicable law. In addition, the Sub-Adviser shall deliver the Fund’s
Books and Records to the Adviser by such means and in accordance with such schedule as the
Adviser shall direct and shall otherwise cooperate, as reasonably directed by the Adviser,
in the transition of portfolio asset management to any successor of the Sub-Adviser,
including the Adviser, provided, however, that the Sub-Adviser is not required hereunder to
provide investment advisory services in such a transition. The Sub-Adviser may retain
copies of the Fund’s Books and Records following termination of this Agreement to the extent
required by applicable law.
12. Certain Definitions. For the purposes of this Agreement:
(a) “Affirmative vote of a majority of the outstanding voting securities of the Fund”
shall have the meaning as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under the 1940 Act or any interpretations of the Commission
staff.
(b) “Interested persons” 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
Commission under the 1940 Act or any interpretations of the Commission staff.
13. Indemnification. The Sub-Adviser shall indemnify and hold harmless the Trust and all
affiliated persons thereof (within the meaning of Section 2(a)(3) of the 0000 Xxx) and all their
respective controlling persons (as described in Section 15 of the 1933 Act) (collectively, the
“Sub-Adviser Indemnitees”) against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) by reason of or arising out of: (a) the Sub-Adviser
being in material violation of
any applicable federal or state law, rule or regulation or any investment policy or restriction set
forth in the Fund’s Registration Statement or any written guidelines or instruction provided in
writing by the Board, (b) the Fund’s failure to satisfy the diversification or source of income
requirements of Subchapter M of the Code, or (c) the Sub-Adviser’s willful misfeasance, bad faith,
or gross negligence generally in the performance of its duties hereunder or its reckless disregard
of its obligations and duties under this Agreement; provided, however, that the Sub-Adviser
Indemnitees shall not be indemnified for any losses, claims, damages, liabilities or litigation
sustained as a result of the Adviser’s, the Trust’s, their officers’, partners’, employees’,
consultants’ or agents’ willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties under this Agreement or the Management Agreement or violation of applicable law. The
Adviser shall indemnify and hold harmless the Sub-Adviser and all affiliated persons thereof
(within the meaning of Section 2(a)(3) of the 0000 Xxx) and all their respective controlling
persons (as described in Section 15 of the 1933 Act) (collectively, the “Adviser Indemnitees”)
against any and all losses, claims, damages, liabilities or litigation (including reasonable legal
and other expenses) by reason of or arising out of: (a) the Adviser being in material violation of
any applicable federal or state law, rule or regulation or any investment policy or restriction set
forth in the Fund’s Registration Statement or any written guidelines or instruction provided in
writing by the Board, provided that such violation was not cause by the Sub-Adviser, or (b) the
Adviser’s willful misfeasance, bad faith, or gross negligence generally in the performance of its
duties hereunder or the Management Agreement or its reckless disregard of its obligations and
duties under this Agreement or the Management Agreement; provided, however, that the Adviser
Indemnitees shall not be indemnified for any losses, claims, damages, liabilities or litigation
sustained as a result of the Sub-Adviser’s, the Trust’s, their officers’, partners’, employees’,
consultants’ or agents’ willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties under this Agreement or violation of applicable law.
14. Enforceability. Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the remaining terms or provisions of
this Agreement or affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15. Limitation of Liability. The parties to this Agreement acknowledge and agree that all
litigation arising hereunder, whether direct or indirect, and of any and every nature whatsoever
shall be satisfied solely out of the assets of the affected Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. The Trust’s Certificate of Trust, as amended from time to time, is on file
in the Office of the Secretary of State of the Commonwealth of Massachusetts. Such Certificate of
Trust and the Trust’s Agreement and Declaration of Trust describe in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
16. Change in the Adviser’s Ownership. The Sub-Adviser agrees that it shall notify the Trust
of any anticipated or otherwise reasonably foreseeable change in the ownership of the Sub-Adviser
within a reasonable time prior to such change being effected.
17. Jurisdiction. This Agreement shall be governed by and construed in accordance with the
substantive laws of the Commonwealth of Massachusetts and the Sub-Adviser consents to the
jurisdiction of courts, both state and federal, in Massachusetts, with respect to any dispute under
this Agreement.
18. Paragraph Headings. The headings of paragraphs contained in this Agreement are provided
for convenience only, form no part of this Agreement and shall not affect its construction.
19. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
20. Confidentiality. The Sub-Adviser and the Adviser agree that they shall exercise the
same standard of care that they use to protect their own confidential and proprietary information,
but no less than reasonable care, to protect the confidentiality of information supplied by either
the Sub-Adviser or the Adviser that is not otherwise in the public domain or previously known to
the other party in connection with the performance of its obligations and duties hereunder,
including Portfolio Information. As used herein “Portfolio Information” means confidential and
proprietary information of the Fund, the Sub-Adviser or the Adviser that is received by the other
party in connection with this Agreement, including information with regard to the portfolio
holdings and characteristics of the portion of each of the Funds allocated to the Sub-Adviser that
the Sub-Adviser manages under the terms of this Agreement. Other than as set forth in this
Agreement or required by applicable law, the Sub-Adviser and the Adviser will restrict access to
the Portfolio Information to those persons who will use it only for the purpose of managing the
Fund or servicing the Fund. The foregoing shall not prevent the Sub-Adviser from disclosing
Portfolio Information that is (1) publicly known or becomes publicly known through no unauthorized
act of its own, (2) rightfully received from a third party without obligation of confidentiality,
(3) approved in writing by the Adviser for disclosure, or (4) required to be disclosed pursuant to
a requirement of a governmental agency or law so long as the Sub-Adviser provides the Adviser with
prompt written notice of such requirement prior to any such disclosure. Nothing in this Agreement
shall be construed to prevent the Sub-Adviser from giving other entities investment advice about,
or trading on their behalf, in the portfolio securities of the Fund. The Adviser and its employees
or agents shall not use Portfolio Information, directly or indirectly, for the purpose of
purchasing or selling any securities for personal or other accounts, and shall maintain policies
and procedures reasonably designed to prevent the use of the portfolio holdings information for
such prohibited securities trading purposes.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed on their
behalf by their duly authorized officers as of the date first above written.
| ATTEST: | XXXXXX STREET CAPITAL MANAGEMENT | |||||
| /s/ Illegible Signature | By: | /s/ Xxxxxxx X. Xxxxx | ||||
| Name: Xxxxxxx X. Xxxxx | ||||||
| Title: President and Chief Investment Officer | ||||||
| ATTEST: | COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC |
|||||
| /s/ Illegible Signature | By: | /s/ Illegible Signature | ||||
| Name: | ||||||
| Title: | ||||||
Accepted and Agreed to as of the day and year first above written.
SCHEDULE A
to the
SUB-ADVISORY AGREEMENT
dated May 24, 2010 between
XXXXXX STREET CAPITAL MANAGEMENT
and
COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC
to the
SUB-ADVISORY AGREEMENT
dated May 24, 2010 between
XXXXXX STREET CAPITAL MANAGEMENT
and
COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC
The Adviser will pay to the Sub-Adviser as compensation for the Sub-Adviser’s services rendered, a
fee, computed daily at an annual rate based on the average daily net assets of the Fund under the
following fee schedule:
| Fund | Rate | |
Xxxxxx Street Dividend Value Fund
|
0.36% on the first $75 million; | |
| 0.35% on the next $75 million; | ||
| 0.325% on the next $100 million; | ||
| 0.30% on the next $250 million; and | ||
| 0.25% on assets over $500 million |
A -1
