(d)(19)
SUB-ADVISORY AGREEMENT
ING MUTUAL FUNDS
AGREEMENT made this 1st day of November 2006 between ING Investments, LLC,
an Arizona limited liability company (the "Manager"), and Batterymarch Financial
Management, Inc., a Maryland corporation (the "Sub-Adviser").
WHEREAS, ING Mutual Funds (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end, management
investment company;
WHEREAS, the Fund is authorized to issue separate series, each series
having its own investment objective or objectives, policies, and limitations;
and
WHEREAS, the Fund may offer shares of additional series in the future; and
WHEREAS, pursuant to an Amended and Restated Investment Management
Agreement, dated February 1, 2005 (the "Management Agreement"), a copy of which
has been provided to the Sub-Adviser, the Fund has retained the Manager to
render advisory and management services with respect to certain of the Fund's
series; and
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser
is willing to furnish such services to the Fund and the Manager.
NOW, THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Manager and the
Sub-Adviser as follows:
1. Appointment. The Manager hereby appoints the Sub-Adviser to act as the
investment adviser and manager to the series of the Fund set forth on SCHEDULE A
hereto (the "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 Fund designates one or more series (other than the Series)
with respect to which the Manager wishes to retain the Sub-Adviser to render
investment advisory services hereunder, it shall notify the Sub-Adviser in
writing. If the Sub-Adviser is willing to render such services, it shall notify
the Manager in writing, whereupon such series shall become a Series hereunder,
and be subject to this Agreement.
2. Sub-Adviser Duties. Subject to the supervision of the Fund's Board of
Trustees and the Manager, the Sub-Adviser will provide a continuous investment
program for each Series' portfolio and determine in its discretion 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 the Series should be held in the various securities and other
investments in which it may invest. From time to time, at the request of the
Manager, the Sub-Adviser will cooperate with and assist a Transition Manager,
hired by the Manager, 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 each Series, the Sub-Adviser shall make decisions for the
Series as to foreign currency matters and make determinations as to and execute
and perform foreign currency exchange contracts on behalf of the Series. At the
request of the Manager, the Sub-Adviser will participate in standing
instructions giving the Fund's custodian authority to administer daily foreign
currency exchange transactions.
The Sub-Adviser will provide the services under this Agreement in
accordance with each Series' investment objective or objectives, policies, and
restrictions as stated in the Fund's Registration Statement filed with the
Securities and Exchange Commission (the "SEC"), as amended, copies of which
shall be sent to the Sub-Adviser by the Manager prior to the commencement of
this Agreement and before or at the time any such amendment becomes effective.
Until the Manager delivers any such amendment or supplement to the Sub-Adviser,
the Sub-Adviser shall be fully protected in relying on the Prospectus and
Statement of Additional Information and any supplements thereto previously
furnished to the Sub-Adviser. The Sub-Adviser further agrees as follows:
(a) The Sub-Adviser will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's Board of
Trustees of which the Sub-Adviser has received a copy, and the provisions
of the Registration Statement of the Fund filed under the Securities Act of
1933 (the "1933 Act") and the 1940 Act, as supplemented or amended, of
which the Sub-Adviser has received a copy, and with the Manager's portfolio
manager operating policies and procedures as in effect on the date hereof,
as such policies and procedures may be revised or amended by the Manager.
In carrying out its duties under the Sub-Adviser Agreement, the Sub-Adviser
will comply with the following policies and procedures:
(i) The Sub-Adviser will manage each Series so that it meets the
income and asset diversification requirements of Section 851 of the
Internal Revenue Code.
(ii) 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 Manager gives the
Sub-Adviser written instructions to the contrary. The Sub-Adviser will
timely forward any proxy solicited by or with respect to the issuers
of securities in which assets of the Series are invested to the
Manager or to any agent of the Manager designated by the Manager in
writing.
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Provided the Sub-Adviser wishes to supply proxy voting input with
respect to a proxy solicited by or with respect to the issuers of
securities in which assets of the Series are invested, the Sub-Adviser
will make appropriate personnel available for consultation for the
purpose of reviewing such input with representatives of the Manager
and/or the Board. Upon request, the Sub-Adviser will submit a written
voting recommendation to the Manager 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. 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.
The Sub-Adviser will not be responsible for taking any action or
rendering any advice with respect to any legal proceedings or
bankruptcies involving the issuers of securities held by the Fund.
(iii) 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 its administrative and record
keeping responsibilities with respect to the Series. With respect to
portfolio securities to be settled through the Depository Trust
Company, the Sub-Adviser will arrange for the prompt transmission of
the confirmation of such trades to the Fund's custodian and portfolio
accounting agent.
(iv) The Sub-Adviser will assist the administrator for the Fund
in reviewing, determining or confirming (including, if necessary,
obtaining broker-quoted prices), consistent with the procedures and
policies stated in the Registration Statement for the Fund or adopted
by the Board of Trustees, 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. The
parties acknowledge that the Sub-Adviser is not a custodian of the
Series' assets and will not take possession or custody of such assets.
(v) The Sub-Adviser will provide the Manager, no later than the
15th business day 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 Manager) containing a discussion of those factors
referred to in Item 5(a) of 1940 Act Form N-1A in respect of both the
prior quarter and the fiscal year to date.
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(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist, a certified compliance acknowledgement
report and the group of reports listed below in a form provided by the
Manager for each month by the 10th business day of the following
month.
1) Report on Brokerage Commissions and Soft Dollar Usage;
2) Trade Compliance reporting pertaining to Rules 17a-7, 17e-1,
10f-3 under the 1940 Act;
3) Report on Illiquid and Restricted Securities held in each
portfolio; and
4) Reports required on Issuers Credit Ratings applicable to
Rule 2a-7 under the 1940 Act.
(b) The Sub-Adviser will complete and deliver to the Manager by the
15th business day of each month a written report on each Series of the Fund
that contains the following information as of the immediately previous
month's end.
(i) A performance comparison to the Series benchmark listed in
the prospectus 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 (provided that information from such independent
services is provided by the Manager to the Sub-Adviser);
(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 each Series' current investment objective
and Sub-Adviser's projected plan to realize the Series' investment
objectives.
(c) The Sub-Adviser will make available to the Fund and the Manager,
promptly upon request, any of the Series' investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and
ledgers maintained by the custodian or portfolio accounting agent for the
Fund) as are necessary to assist the Fund and the Manager to comply with
requirements of the 1940 Act and the Investment Advisers Act of 1940 (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 in respect to the
Series which may be requested in order to ascertain whether the operations
of the Fund are being conducted in a manner consistent with applicable laws
and regulations.
(d) The Sub-Adviser will provide reports to the Fund's Board of
Trustees for consideration at meetings of the Board of Trustees on the
investment program for each
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Series and the issuers and securities represented in each Series'
portfolio, and will furnish the Fund's Board of Trustees with respect to
each Series such periodic and special reports as the Trustees and the
Manager may reasonably request.
3. Broker-Dealer Selection. The Sub-Adviser is authorized to make decisions
to buy and sell securities and other investments for each Series' portfolio,
broker-dealer selection, and negotiation of brokerage commission rates in
effecting a security transaction. The Sub-Adviser's primary consideration in
effecting a security transaction will be to obtain the best execution for the
Series, taking into account the factors specified in the prospectus and/or
statement of additional information for the Fund, 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 of the broker-dealer
involved, the quality of the service, the difficulty of execution, and the
execution capabilities and operational facilities of the firm involved, and the
firm's risk in positioning a block of securities. Accordingly, the price to 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 Fund, by other
aspects of the portfolio execution services offered. Subject to such policies as
the Fund's Board of Trustees or Manager may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, the Sub-Adviser shall not
be deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused a Series to pay a
broker-dealer for effecting a portfolio investment transaction in excess of the
amount of commission another broker-dealer would have charged for effecting that
transaction, if the 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 the Manager's overall
responsibilities with respect to the Series and to their respective other
clients as to which they exercise investment discretion. The Sub-Adviser will
consult with the Manager to the end that portfolio transactions on behalf of a
Series are directed to broker-dealers that participate in commission recapture
programs benefiting the Fund, provided that neither the Sub-Adviser nor the
Manager will direct brokerage in recognition of the sale of Fund shares. To the
extent consistent with these standards, the Sub-Adviser is further authorized to
allocate the orders placed by it on behalf of a Series to the Sub-Adviser if it
is registered as a broker-dealer with the SEC, to an affiliated broker-dealer,
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 Fund's Board of
Trustees indicating the broker-dealers to which such allocations have been made
and the basis therefor.
4. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the most
recent Post-Effective Amendment to the Registration Statement for the Fund filed
with the SEC that contains disclosure about the Sub-Adviser, and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
information relating, directly or indirectly, to the Sub-Adviser, 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
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necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The Sub-Adviser
further represents and warrants that it is a duly registered investment adviser
under the Advisers Act and will maintain such registration so long as this
Agreement remains in effect. The Sub-Adviser will provide the Manager with a
copy of the Sub-Adviser's Form ADV, Part II at the time the Form ADV is filed
with the SEC. The Manager acknowledges that it has received a copy of the
Sub-Adviser's Form ADV, Part II prior to execution of this Agreement.
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 its portfolio management duties under this Agreement, including, but not
limited to, reimbursement of losses due to trade errors or compliance breaches
caused by the negligence of the Sub-Adviser. The Manager or the Fund shall be
responsible for all the expenses of the Fund's operations. In addition, if the
Fund 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 Fund and/or the Manager 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.
6. Compensation. For the services provided to each Series, the Manager will
pay the Sub-Adviser an annual fee equal to the amount specified for such Series
in SCHEDULE A hereto, payable monthly in arrears. The fee will be appropriately
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 Manager 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 Manager; provided, however, that if the Fund fails to pay the Manager all or
a portion of the management fee under said Management Agreement when due, and
the amount that was paid is insufficient to cover the Sub-Adviser's fee under
this Agreement for the period in question, then the Sub-Adviser may enforce
against the Fund any rights it may have as a third-party beneficiary under the
Management Agreement and the Manager will take all steps appropriate under the
circumstances to collect the amount due from the Fund.
7. Marketing Materials.
(a) During the term of this Agreement, the Sub-Adviser agrees to
furnish the Manager at its principal office for prior review and approval
by the Manager all written and/or printed materials, including but not
limited to, PowerPoint(R) or slide presentations, news releases,
advertisements, brochures, fact sheets and other promotional, informational
or marketing materials (the "Marketing Materials") for internal use or
public dissemination, that are produced or are for use or reference by the
Sub-Adviser, its affiliates or other designees, broker-dealers or the
public in connection with the Series, and Sub-Adviser shall not use any
such materials if the Manager reasonably objects in writing within five
business days (or such other period as may be mutually agreed) after
receipt thereof. Marketing Materials may be furnished to the Manager by
first class or overnight mail, facsimile transmission equipment, electronic
delivery or hand delivery.
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(b) During the term of this Agreement, the Manager agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, or Marketing Materials prepared for distribution
to shareholders of each Series, or the public that refer to the Sub-Adviser
in any way, prior to the use thereof, and the Manager shall not use any
such materials if the Sub-Adviser reasonably objects in writing within five
business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the
Sub-Adviser, its services and its clients. The Manager agrees to use its
reasonable best efforts to ensure that materials prepared by its employees
or agents or its affiliates that refer to the Sub-Adviser or its clients in
any way are consistent with those materials previously approved by the
Sub-Adviser as referenced in the first sentence of this paragraph.
Marketing Materials may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment, electronic delivery or
hand delivery.
8. Compliance.
(a) The Sub-Adviser agrees to use reasonable compliance techniques and
policies and procedures reasonably designed to prevent violations of the
federal securities laws as the Manager or the Board of Trustees may adopt,
including any written compliance procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the Manager
and the Fund (i) in the event that the SEC has censured the Sub-Adviser;
placed limitations upon its activities, functions or operations; suspended
or revoked its registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, or
(ii) upon having a reasonable basis for believing that the Series has
ceased to qualify or might not qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. The Sub-Adviser further
agrees to notify the Manager and the Fund 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 or prospectus for the Fund
(which describes the Series), or any amendment or supplement thereto, or if
any statement contained therein that becomes untrue in any material
respect.
(c) The Manager agrees that it shall promptly notify the Sub-Adviser
(i) in the event that the SEC has censured the Manager or the Fund; placed
limitations upon either of their activities, functions, or operations;
suspended or revoked the Manager's registration as an investment adviser;
or has commenced proceedings or an investigation that may result in any of
these actions, or (ii) upon having a reasonable basis for believing that
the Series has ceased to qualify or might not qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code.
9. Books and Records. The Sub-Adviser hereby agrees that all records which
it maintains for the Series are the property of Sub-Adviser and the Fund. The
Sub-Adviser shall provide or make available such records (or copies thereof)
upon the Fund's or the Manager's
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request in compliance with the requirements of Rule 31a-3 under the 1940 Act,
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.
10. Cooperation; Confidentiality. Each party to this Agreement agrees to
cooperate with the other party and with all appropriate governmental authorities
having the requisite jurisdiction (including, but not limited to, the SEC) in
connection with any investigation or inquiry relating to this Agreement or the
Fund. Subject to the foregoing, the Sub-Adviser shall treat as confidential all
information pertaining to the Fund and actions of the Fund, the Manager and the
Sub-Adviser, and the Manager shall treat as confidential and use only in
connection with the Series all information furnished to the Fund or the Manager
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 Manager, or if
available from a source other than the Manager, Sub-Adviser or the Fund.
11. Exclusivity.
(a) Beginning on the effective date of this Agreement, the Sub-Adviser
agrees that it will not provide advisory, sub-advisory or similar services
to any investment company that has an investment strategy substantially
similar to that of any Series identified at SCHEDULE A to this Agreement
unless sixty (60) days' written notice is provided to the Manager and the
Fund, provided, however, that a shorter notice period will be permitted if
the Sub-Adviser enters into a sub-advisory agreement with a counterparty
that requires, as a condition of entering into that agreement, that the
Sub-Adviser begin providing services on a date that precludes providing to
the Manager the full sixty (60) days' prior notice otherwise required under
this Section 11(a). In the event that the Sub-Adviser is permitted to
provide a notice period of less than sixty (60) days under this Section
11(a), the Sub-Adviser will provide notice immediately after it determines
to enter into a new sub-advisory agreement.
(b) It is understood and agreed by the parties to this Agreement that
this Section 11 will not apply to mutual funds to which the Sub-Adviser
already provides advisory services as of the date of this Agreement.
(c) The Manager and the Fund understand that the Sub-Adviser now acts,
and will continue to act and may act in the future as investment manager or
adviser to fiduciary and other managed accounts, and as investment manager
or adviser to other investment companies not employing an investment
strategy substantially similar to that of any Series identified at SCHEDULE
A to this Agreement, including any offshore entities, or accounts, and the
Manager and the Fund have no objection to the Sub-Adviser's so acting. In
addition, the Manager and the Fund understand that the persons employed by
the Sub-Adviser to assist in the performance of the Sub-Adviser's duties
under this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict
the right of the Sub-Adviser or any
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affiliate of the Sub-Adviser to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
12. Prohibited Conduct. The Sub-Adviser may not consult with any other
sub-adviser of the Fund concerning transactions in securities or other assets
for any investment portfolio of the Fund, 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 sub-advisory duties so
long as such consultations are not concerning transactions prohibited by Section
17 (a) of the 1940 Act.
13. Representations Respecting Sub-Adviser. The Manager agrees that neither
the Manager, nor affiliated persons of the Manager, shall give any information
or make any representations or statements in connection with 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 Fund's shares, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved in advance by the Sub-Adviser, except with the prior written permission
of the Sub-Adviser.
14. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
15. Liability. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Manager 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 1933 Act controls the Sub-Adviser
(a) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
hereunder, and (b) shall not be liable for, or subject to any damages, expenses,
or losses in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
16. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the Sub-Adviser,
any affiliated person of the Sub-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, under any other statute, at common law
or otherwise, arising out of the Manager's responsibilities to the Fund
which (1) may be based upon the Manager's negligence, willful misfeasance,
or bad faith in the performance of its duties
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(which could include a negligent action or a negligent omission to act), or
by reason of the Manager's reckless disregard of its obligations and duties
under this Agreement, or (2) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or prospectus covering shares of the Fund or any Series, or any
amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to
the Manager or the Fund or to any affiliated person of the Manager 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 15 of this Agreement, the Sub-Adviser
agrees to indemnify and hold harmless the Fund, the Manager, any affiliated
person of the Manager, and any controlling person of the Manager (the Fund
and all of such persons being referred to as "Manager Indemnified Persons")
against any and all losses, claims, damages, liabilities, or litigation
(including legal and other expenses) to which a Manager Indemnified Person
may become subject under the 1933 Act, 1940 Act, the Advisers Act, 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 the Sub-Adviser's negligence, willful misfeasance, or bad
faith in the performance of its duties (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement, or
(2) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or prospectus
covering the shares of the Fund or any Series, or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact known or which should have been known to the Sub-Adviser and
was required to be stated therein or necessary to make the statements
therein not misleading, if such a statement or omission was made in
reliance upon information furnished to the Manager, the Fund, or any
affiliated person of the Manager or Fund by the Sub-Adviser or any
affiliated person of the Sub-Adviser; provided, however, that in no case
shall the indemnity in favor of a Manager Indemnified Person be deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith,
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this
Section 16 with respect to any claim made against a Sub-Adviser Indemnified
Person unless such Sub-Adviser Indemnified Person shall have notified the
Manager in writing within a reasonable time after the summons or other
first legal process 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
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any designated agent), but failure to notify the Manager of any such claim
shall not relieve the Manager from any liability which it may have to the
Sub-Adviser Indemnified Person against whom such action is brought except
to the extent the Manager 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 Manager 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 Manager assumes
the defense of any such action and the selection of counsel by the Manager
to represent the Manager 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 of the Sub-Adviser Indemnified Person, the Manager
will, at its own expense, assume the defense with counsel to the Manager
and, also at its own expense, with separate counsel to the Sub-Adviser
Indemnified Person, which counsel shall be satisfactory to the Manager 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 Manager 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 Manager
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 16 with respect to any claim made against a Manager Indemnified
Person unless such Manager Indemnified Person shall have notified the
Sub-Adviser in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall
have been served upon such Manager Indemnified Person (or after such
Manager Indemnified Person shall have received notice of such service on
any designated agent), but failure to notify the Sub-Adviser of any such
claim shall not relieve the Sub-Adviser from any liability which it may
have to the Manager 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
Manager Indemnified Person, the Sub-Adviser will be entitled to
participate, at its own expense, in the defense thereof or, after notice to
the Manager Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Manager Indemnified Person. If the 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 Manager Indemnified
Person would result in a conflict of interests and therefore, would not, in
the reasonable judgment of the Manager Indemnified Person, adequately
represent the interests of the Manager 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
Manager Indemnified Person, which counsel shall be satisfactory to the
Sub-Adviser and to the Manager Indemnified Person. The Manager Indemnified
Person shall bear the fees and expenses of any additional counsel retained
by
11
it, and the Sub-Adviser shall not be liable to the Manager Indemnified
Person under this Agreement for any legal or other expenses subsequently
incurred by the Manager Indemnified Person independently in connection with
the defense thereof other than reasonable costs of investigation. The
Sub-Adviser shall not have the right to compromise on or settle the
litigation without the prior written consent of the Manager Indemnified
Person if the compromise or settlement results, or may result in a finding
of wrongdoing on the part of the Manager Indemnified Person.
17. Duration and Termination.
(a) With respect to each Series identified as a Series on SCHEDULE A
hereto as in effect on the date of this Amendment, unless earlier
terminated with respect to any Series this Agreement shall continue in full
force and effect through NOVEMBER 30, 2006. Thereafter, unless earlier
terminated with respect to a Series, the Agreement shall continue in full
force and effect with respect to each such Series for periods of one year,
provided that such continuance is specifically approved at least annually
by (i) the vote of a majority of the Board of Trustees of the Fund, or (ii)
the vote of a majority of the outstanding voting shares of the Series (as
defined in the 1940 Act), and provided that such continuance is also
approved by the vote of a majority of the Board of Trustees of the Fund who
are not parties to this Agreement or "interested persons" (as defined in
the 0000 Xxx) of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.
With respect to any Series that was added to SCHEDULE A hereto as a
Series after the date of this Amendment, the Agreement shall become
effective on the later of (i) the date SCHEDULE A is amended to reflect the
addition of such Series as a Series under the Agreement or (ii) the date
upon which the shares of the Series are first sold to the public, subject
to the condition that the Fund's Board of Trustees, including a majority of
those Trustees who are not interested persons (as such term is defined in
the 0000 Xxx) of the Manager, and the shareholders of such Series, shall
have approved this Agreement. Unless terminated earlier as provided herein
with respect to any such Series, the Agreement shall continue in full force
and effect for a period of two years from the date of its effectiveness (as
identified above) with respect to that Series. Thereafter, unless earlier
terminated with respect to a Series, the Agreement shall continue in full
force and effect with respect to each such Series for periods of one year,
provided that such continuance is specifically approved at least annually
by (i) the vote of a majority of the Board of Trustees of the Fund, or (ii)
vote of a majority of the outstanding voting shares of such Series (as
defined in the 1940 Act), and provided that such continuance is also
approved by the vote of a majority of the Board of Trustees of the Fund who
are not parties to this Agreement or "interested persons" (as defined in
the 0000 Xxx) of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated with
respect to any Series covered by this Agreement: (i) by the Manager at any
time, upon sixty (60) days' written notice to the Sub-Adviser and the Fund,
(ii) at any time without payment of
12
any penalty by the Fund, by the Fund's Board of Trustees or a majority of
the outstanding voting securities of each Series, upon sixty (60) days'
written notice to the Manager and the Sub-Adviser, or (iii) by the
Sub-Adviser upon three (3) months' written notice unless the Fund or the
Manager 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 Fund or Manager not to exceed three (3) additional 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 Manager and the Fund, in the event either the
Sub-Adviser (acting in good faith) or the Manager 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 Fund, or in the event the Manager 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 Manager or the Fund as required by
the terms of this Agreement.
In the event of termination for any reason, all records of each Series
for which the Agreement is terminated shall promptly be returned to the
Manager or the Fund, free from any claim or retention of rights in such
record by the Sub-Adviser, although the Sub-Adviser may, at its own
expense, make and retain a copy of such records. This Agreement shall
automatically terminate in the event of its assignment (as such term is
described in the 1940 Act). In the event this Agreement is terminated or is
not approved in the manner described above, the Sections or Paragraphs
numbered 9, 10, 13, 14, 15 and 16 of this Agreement shall remain in effect,
as well as any applicable provision of this Section numbered 17 and, to the
extent that only amounts are owed to the Sub-Adviser as compensation for
services rendered while the Agreement was in effect, Section 6.
(b) Notices. Any notice must be in writing and shall be sufficiently
given (1) when delivered in person, (2) when dispatched by telegram or
electronic facsimile transfer (confirmed in writing by postage prepaid
first class air mail simultaneously dispatched), (3) when sent by
internationally recognized overnight courier service (with receipt
confirmed by such overnight courier service), or (4) when 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 Fund:
ING Mutual Funds
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Counsel
13
If to the Sub-Adviser:
Batterymarch Financial Management, Inc.
Xxxx Xxxxxxx Tower
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
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 as required by applicable law.
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of
Arizona, 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, and without regard for the conflicts of laws principle
thereof. The term "affiliate" or "affiliated person" as used in this
Agreement shall mean "affiliated person" as defined in Section 2(a)(3) of
the 0000 Xxx.
(b) The Manager and the Sub-Adviser acknowledge that the Fund enjoys
the rights of a third-party beneficiary under this Agreement, and the
Manager acknowledges that the Sub-Adviser enjoys the rights of a third
party beneficiary under the Management Agreement.
(c) 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.
(d) To the extent permitted under Section 17 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent
of the other parties.
(e) 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.
(f) Nothing herein shall be construed as constituting the Sub-Adviser
as an agent or co-partner of the Manager, or constituting the Manager as an
agent or co-partner of the Sub-Adviser.
(g) This Agreement may be executed in counterparts.
14
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ING INVESTMENTS, LLC
By: /s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx
Senior Vice President
BATTERYMARCH FINANCIAL MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
----------------------------------
Title: President, CFO
---------------------------------
15
SCHEDULE A
WITH RESPECT TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
ING INVESTMENTS, LLC
AND
BATTERYMARCH FINANCIAL MANAGEMENT, INC.
ANNUAL SUB-ADVISER FEE
SERIES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
------ ---------------------------------------------------
ING International
SmallCap Fund 0.75% on the first $100 million
Once assets reach $100 million, schedule resets to:
0.85% on the first $25 million;
0.70% on the next $75 million;
0.60% on the next $100 million;
0.50% on assets thereafter
16
