Exhibit - (D)(4)
SUB-ADVISORY AGREEMENT
ING MUTUAL FUNDS
AGREEMENT made this 28th day of July, 2005 between ING Investments, LLC, an
Arizona limited liability company (the "Manager"), and NWQ Investment Management
Company, LLC, a Delaware limited liability company (the "Sub-Adviser") (the
"Agreement").
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 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 as the
Fund's agent and attorney-in-fact with full power and authority in connection
with such assets without prior consultation with any of the Manager, the Fund or
the Fund's Board of Trustees. 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, cash and
other investments in which it may invest. 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. The
Sub-Adviser will provide the services under this Agreement in accordance with
each Series' respective investment objective or objectives, policies, and
restrictions as agreed upon by the Manager and the Sub-Adviser and as set forth
in the Fund's Registration Statement filed with the Securities and Exchange
Commission ("SEC"), as amended to reflect such agreement by the parties hereto,
copies of which shall be sent to the Sub-Adviser by the Manager prior to the
commencement of this Agreement and promptly following any such amendment. 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 been sent 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
and agreed to by the Sub-Adviser. If a procedure applicable to a Series is
to be revised, the Manager will provide reasonable prior notice to the
Sub-Adviser of the proposed revisions, including a copy of the procedure as
proposed to be revised.
(b) In carrying out its duties under the Sub-Advisory 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
immediately 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
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writing. The Manager will be solely responsible for making all
required filings of Form N-PX with the appropriate regulatory bodies.
The Sub-Adviser will make appropriate personnel reasonably
available for consultation for the purpose of reviewing with
representatives of the Manager and/or the Board any proxy solicited by
or with respect to the issuers of securities in which assets of the
Series are invested. Upon request, the Sub-Adviser will submit a
written voting recommendation to the 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 not be liable to the Manager, the Fund or any of the Fund's
shareholders as a result of any act, conduct or omission of the
Manager in connection with its voting of proxies associated with
securities contained in any 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.
(iii) In connection with the purchase and sale of securities for
each Series, the Sub-Adviser will arrange for the transmission to the
custodian and portfolio accounting agent for the Series, as needed,
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 custodian and portfolio
accounting agent for the Fund in determining or confirming, 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
custodian and portfolio accounting agent 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 nor a pricing agent or the
pricing agent for the Fund. The Sub-Adviser shall not be liable for
any valuation determined or adopted by the Fund, the Fund's custodian
and/or portfolio accounting agent, as contemplated in this Agreement,
unless such determination is made based upon information provided by
the Sub-Adviser that is materially incorrect or incomplete as a result
of the Sub-Adviser's gross negligence.
(v) The Sub-Adviser will provide the Manager, no later than the
10th 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)
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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.
(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist in a form provided by the Manager for
each month by the 10th business day of the following month.
(c) The Sub-Adviser will complete and deliver to the Manager by the
10th 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;
(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.
(d) The Sub-Adviser will assist the Manager, as reasonably requested,
in its discussions with Morningstar to clarify any style box conflicts with
each Series' style and the anticipated timeframe in which Morningstar will
remedy such conflicts, if any.
(e) 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.
(f) 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 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
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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 factors
specified in the prospectus and/or statement of additional information for the
Fund, the price of the security or other investment (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 overall responsibilities with
respect to the Series and to its other clients as to which it exercises
investment discretion. 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 managed by the Sub-Adviser to an affiliated broker-dealer of either
the Sub-Adviser or the Manager 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
regularly to the Fund's Board of Trustees indicating the broker-dealers to which
such allocations have been made and the basis therefor.
4. Representations.
(a) The Sub-Adviser agrees and represents that:
(i) the information it has provided for inclusion in the
Post-Effective Amendment to the Registration Statement for the Fund
filed with the SEC regarding the Series, including the prospectus and
statement of additional information (collectively, "Registration
Materials") is true and does not omit any statement of a material fact
which is required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under
which they were made, not misleading; and
(ii) the Sub-Adviser has reviewed such information, as included
in the Registration Materials, and, to the Sub-Adviser's knowledge,
with respect to the disclosure contained in the Registration Materials
based upon information provided by the Sub-Adviser, such disclosure
contains no untrue statement of a
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material fact and does not omit any statement of a material fact which
is required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
(b) 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, and will promptly provide to the Manager any updates or revisions to
the Sub-Adviser's Form ADV.
(c) The Manager agrees and represents that:
(i) the Manager and representatives of the Fund prepared the
Registration Materials and the Registration Materials (including the
prospectus for each Series) comply in all material respects with all
applicable laws, rules and regulations in each relevant jurisdiction;
(ii) the Registration Materials (including the prospectus for
each Series) do not contain any untrue statement of a material fact or
omit to state any material fact required by any applicable law to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading under
applicable law; and
(iii) the Manager and the Fund and all of their respective
officers, directors, partners, employees and agents will comply, in
all material respects, with all applicable laws and rules related to
the Manager, the Fund, the offering and sale of shares of the Series
and the business of the Fund and the Sub-Adviser shall not be liable
to the Manager, the Fund or any of the Fund's shareholders as a result
of any act, conduct or omission of the Manager or its officers,
employees, affiliates or agents.
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. 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 Materials because of a change requested by the Sub-Adviser, the
Sub-Adviser will reimburse the Fund and/or the Manager for the cost preparing
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
6
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") prepared for public
dissemination, that are produced by the Sub-Adviser or its affiliates 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. The Manager agrees that the Sub-Adviser may identify the
Fund and each Series on its client list for public distribution.
(b) During the term of this Agreement, the Manager agrees to furnish
the Sub-Adviser at its principal office all Registration Materials (and any
constituent components of the Registration Materials) and any amendments
thereto, proxy statements, reports to shareholders, Marketing Materials or
other 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,
performance and strategies. Marketing Materials may be furnished to the
Sub-Adviser by first class or overnight mail, facsimile transmission
equipment, electronic delivery or hand delivery.
(c) Neither the Manager nor the Fund, nor any affiliate of either,
will use the registered trademarks, service marks, logos, names or other
proprietary designations of NWQ, its subsidiaries and/or affiliates without
NWQ's prior written approval. The Manager and the Fund will submit to NWQ
for its prior written approval any advertising or promotional material
using NWQ's name or any name associated with an affiliate of NWQ, or any
trademarks, service marks, logos or proprietary designations related to any
of the foregoing.
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8. Compliance.
(a) The Sub-Adviser shall use reasonable compliance techniques 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
the Fund's registration under the 1940 Act; or has commenced proceedings or
an investigation against either the Manager or the Fund 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 the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's or the
Manager's 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
provide reasonable cooperation 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
pertaining to or furnished by the Sub-Adviser to the Fund or the Manager, 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, the
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Manager or the Fund, or if available from a source other than the Manager,
Sub-Adviser or the Fund.
11. Exclusivity.
(a) Until the second anniversary of the Effective Date of this
Agreement, the Sub-Adviser agrees that it will not enter into an investment
advisory agreement with respect to any open-end investment company
registered under Section 8 of the 1940 Act, or, alternatively, any
portfolio or series thereof, as the case may be, that (i) has an investment
strategy substantially similar to that of any Series identified at SCHEDULE
A to this Agreement; and (ii) has its shares offered primarily on a retail
basis in the United States through intermediaries (each such investment
company, or, alternatively, any portfolio or series thereof, as the case
may be, an "Excluded Fund"); except that, during such two year period,
Sub-Adviser may enter into an investment advisory agreement with an
Excluded Fund that: (1) is organized and/or offered by Nuveen Investments,
Inc. and/or any subsidiary or affiliate thereof ("Nuveen"); and (2) has a
gross management fee equal to or higher than the lesser of (x) the gross
management fee of the corresponding Series or (y) 1.00%. For purposes of
the foregoing clause (2), any breakpoint fees attributable to an Excluded
Fund organized and/or offered by Nuveen, whether fund-specific or
complex-wide, which would have the effect of reducing the otherwise stated
management fee level, shall not be taken into account.
(b) For purposes of clarification, it is understood and agreed by the
parties that this Section 11(a) shall have no force, effect on or
applicability to any fund, pool of assets, collective investment scheme or
any other client to which the Sub-Adviser provides advisory services as of
the Effective Date of this Agreement and that Section 11(a) shall never be
applicable to any client of Sub-Adviser that is not an Excluded Fund,
except as provided in the case of Nuveen above. Furthermore, for purpose of
clarity, it is understood and agreed by the parties hereto that Section
11(a) shall not apply to any institutional fund or share class providing
for minimum investments of $250,000 or more nor shall it apply to the sale
of any "R" class of shares associated with any fund organized and/or
offered by Nuveen. In addition, this Section 11 will not apply in the case
where the Sub-Adviser manages a "sleeve" of a fund or to any "fund of
funds," "manager of managers" or "multi-manager" arrangement or other
collective investment scheme(s). Lastly, it is understood and agreed by the
parties to this Agreement that this Section 11 shall immediately have no
further force, effect on or applicability to the parties to this Agreement
upon the second anniversary of the Effective Date of this Agreement or,
with respect to any Series identified at SCHEDULE A to this Agreement, if
the Agreement is terminated with respect to that Series prior to the second
anniversary of such Effective Date.
12. Prohibited Conduct. The Sub-Adviser may not engage in prior
consultation 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
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transactions prohibited by Section 17(a) of the 1940 Act. This Section 12 does
not apply to Sub-Adviser's disclosure of a Series' portfolio holdings in
accordance with the Fund's policies and procedures governing portfolio holdings
disclosure.
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 permission of the
Sub-Adviser.
14. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that day-to-day management of the Series will be delegated
to the Sub-Adviser, subject to the oversight of the Manager and the Fund's Board
of Trustees, which shall at all times retain the ultimate responsibility for and
control of all functions performed pursuant to this Agreement. The Fund 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,
bad faith or reckless disregard in the performance of its duties to the
Fund (which could include a negligent action or a negligent omission to
act), or by reason of the Manager's breach of its obligations and duties
under this Agreement, or (2) may be based upon any untrue statement of a
material fact contained in the Registration Statement or prospectus
covering shares of the Fund or
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any Series, or any amendment thereof or any supplement thereto, or the
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 Manager, any affiliated person of
the Manager, and any controlling person of the Manager (all of such persons
being referred to as "Manager Indemnified Persons") against any and all
losses, claims, damages, liabilities, or litigation (including legal and
other expenses) to which a Manager Indemnified Person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising as a result of the Sub-Adviser's
negligence, willful misfeasance, bad faith or reckless disregard in the
performance of its duties to the Fund (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser's
breach of its obligations and duties under this Agreement, or (2) may be
based upon any 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 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 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-
11
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 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.
12
17. Duration and Termination.
(a) This Agreement shall become effective on the date first indicated
above, 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 or the Sub-Adviser,
and the shareholders of each Series, shall have approved this Agreement.
Unless terminated as provided herein, this Agreement shall remain in full
force and effect until NOVEMBER 30, 2006 and continue on an annual basis
thereafter with respect to each Series covered by this Agreement; provided
that such annual continuance is specifically approved each year by (i) the
Board of Trustees of the Fund, or by the vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of each Series,
and (ii) the vote of a majority of those Trustees who are not parties to
this Agreement or interested persons (as such term is defined in the 0000
Xxx) of any such party to this Agreement cast in person at a meeting called
for the purpose of voting on such approval. However, any approval of this
Agreement by the holders of a majority of the outstanding shares (as
defined in the 0000 Xxx) of a Series shall be effective to continue this
Agreement with respect to such Series notwithstanding (i) that this
Agreement has not been approved by the holders of a majority of the
outstanding shares of any other Series or (ii) that this agreement has not
been approved by the vote of a majority of the outstanding shares of the
Fund, unless such approval shall be required by any other applicable law or
otherwise. 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 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 ninety (90) days' 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 thirty
(30) additional days beyond the initial ninety-day notice period; provided,
however, that the Sub-Adviser may terminate this Agreement at any time
without penalty, with respect to any Series immediately, effective upon
written notice to the Manager and the Fund, in the event (i) 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 under
applicable law or pursuant to its respective contract with the Fund; (ii)
the Manager becomes bankrupt or otherwise incapable of carrying out its
obligations under this Agreement or the Management Agreement; and/or (iii)
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
13
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: Xxxx X. Xxxxxxx, Xx.
If to the Manager:
ING Investments, LLC
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Xx.
If to the Sub-Adviser:
NWQ Investment Management Company, LLC
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
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
14
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) Except as otherwise contemplated in this Agreement, 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.
15
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
NWQ INVESTMENT MANAGEMENT COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
16
