INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of February, 2006, by and between
Touchstone Advisors, Inc. (the "Adviser") and AXA Xxxxxxxxx Investment
Management LLC (the "Sub-Adviser").
WHEREAS, Constellation Funds, a Delaware business trust (the "Trust") is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated as of February 17th, 2006 (the "Advisory Agreement") with the Trust,
pursuant to which the Adviser will act as investment adviser to each series of
the Trust set forth on Schedule A of this Agreement (each a "Fund" and
collectively the "Funds"); and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of a Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage those assets of a
Fund that the Adviser determines to allocate to the Sub-Adviser (the
"Allocated Assets"), including the purchase, retention and disposition of
the Allocated Assets, in accordance with each Fund's investment
objectives, policies and restrictions as stated in the Fund's prospectus
and statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to the direction of the Adviser,
determine from time to time what Allocated Assets will be purchased,
retained or sold by the Fund, and what portion of the Allocated
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the Trust's
Declaration of Trust (as defined herein) and the Prospectus and with
the instructions and directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and regulations, as each
is amended from time to time.
(c) The Sub-Adviser shall determine the Allocated Assets to be purchased
or sold by the Fund as provided in subsection (a) and will place
orders with or through such persons, brokers or dealers to carry out
the policy with respect to brokerage set forth in each Fund's
registration statement or as the Board of Trustees or the Adviser
may direct from time to time, in conformity with federal securities
laws. In executing Fund transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf
of each Fund the best overall terms available. In assessing the best
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overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth
of the market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for
the specific transaction and on a continuing basis. In evaluating
the best overall terms available, and in selecting the broker-dealer
to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a fund transaction for a Fund which is in
excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer -- viewed in terms of
that particular transaction or in terms of the overall
responsibilities of the Sub-Adviser to the Fund and other accounts
as to which it exercises investment discretion. In addition, the
Sub-Adviser is authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that
are affiliated with the Adviser, Sub-Adviser or the Trust's
principal underwriter) to take into account the sale of shares of
the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will a Fund's
Allocated Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction,
except to the extent permitted by the Securities and Exchange
Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Allocated Assets required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f)
of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall provide to
the Adviser or the Board of Trustees such periodic and special
reports, balance sheets or financial information, and such other
information with regard to its affairs as the Adviser or Board of
Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the
Allocated Assets required to be maintained by the Sub-Adviser under
this Agreement and shall timely furnish to the Adviser all
information relating to the Sub-Adviser's services relating to the
Allocated Assets under this Agreement needed by the Adviser to keep
the other books and records of a Fund required by Rule 31a-1 under
the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any
other information relating to the Allocated Assets that is required
to be filed by the Adviser or the Trust with the SEC or sent to
shareholders under the 1940 Act (including the rules adopted
thereunder) or any exemptive or other relief that the Adviser or the
Trust obtains from the SEC. The Sub-Adviser agrees that all records
that it maintains on behalf of a Fund are property of the Fund and
the Sub-Adviser will surrender promptly to the Fund any of such
records upon the Fund's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such records
as are required to be maintained by it pursuant to this Agreement,
and shall transfer said records to any successor sub-adviser upon
the termination of this Agreement (or, if there is no successor
sub-adviser, to the Adviser).
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(e) The Sub-Adviser shall provide each Fund's custodian on each business
day with information relating to all transactions concerning the
Fund's Allocated Assets and shall provide the Adviser with such
information upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser
shall be free to render similar services to others, as long as such
services do not impair the services rendered to the Adviser or the
Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to
fulfill its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
Allocated Assets in accordance to the Sub-Adviser's Proxy Voting
Policy. The Adviser shall instruct the custodian and other parties
providing services to the Fund to promptly forward misdirected
proxies to the Sub-Adviser. The Sub-Adviser may retain third-party
service providers to assist it in fulfilling its proxy review and
voting duties hereunder but in no case will be relieved of its proxy
review and voting obligations hereunder.
(i) Except as specifically permitted in writing by the Adviser, or as
otherwise permitted or required to comply with the requirements of
the 1940 Act (including the rules adopted thereunder), the
Sub-Adviser shall not consult with any other sub-adviser to the
Trust or a Fund concerning the purchase, retention or disposition of
Fund Allocated Assets.
Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's
partners, officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to each Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of
its duties under this Agreement; provided, however, that in connection
with its management of the Allocated Assets, nothing herein shall be
construed to relieve the Sub-Adviser of responsibility for compliance with
the Trust's Declaration of Trust (as defined herein), the Prospectus, the
instructions and directions of the Board of Trustees of the Trust, the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and all
other applicable federal and state laws and regulations, as each is
amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
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(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the State of Delaware (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and
as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of each Fund.
The Adviser agrees to furnish to the Sub-Adviser properly certified or
authenticated copies of the aforementioned documents promptly after such
documents have been materially amended, restated or otherwise modified.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified on Schedule C of this
Agreement. The fee will be calculated based on the monthly average net
value of the Allocated Assets under the Sub-Adviser's management. Except
as may otherwise be prohibited by law or regulation (including any then
current SEC staff interpretation), the Sub-Adviser may, in its discretion
and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related expenses)
howsoever arising from or in connection with the performance of the
Sub-Adviser's obligations under this Agreement; provided, however, that
the Sub-Adviser's obligation under this Section 5 shall be reduced to the
extent that the claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is otherwise directly related
to the Adviser's own, or any other sub-adviser's, willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective as to a
Fund upon its approval by the Trust's Board of Trustees and by the vote of
a majority of the outstanding voting securities of each Fund, if required.
This Agreement shall continue in effect for a period of more than two
years from the date that the Sub-Adviser began providing services
hereunder only so long as continuance is specifically approved at least
annually in conformance with the 1940 Act; provided, however, that this
Agreement may be terminated with respect to a Fund (a) by the Fund at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Fund, (b) by the Adviser at any time, without the
payment of any penalty, on not less than 30 days' written notice to the
Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of
any penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
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7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the State of Delaware, without regard to conflict of law principles;
provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors.
9. ACKNOWLEDGEMENT. The Adviser acknowledges receipt of the Sub-Adviser's
Form ADV, Part 2 at least 48 hours in advance of entering this Agreement.
10. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other
party:
To the Adviser at : Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-Adviser at: AXA Xxxxxxxxx Investment Management LLC
0 Xxxxxx Xxx, Xxxxxxxx X
Xxxxxx, XX 00000
Attn: Chief Investment Officer
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the State of Delaware, and notice is hereby given that the obligations of
this instrument are not binding upon any of the Trustees, officers or
shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
TOUCHSTONE ADVISORS, INC.
By: /s/ Xxxxxxx Xxxx
----------------
Name: Xxxxxxx Xxxx
------------
Title: Senior Vice President
---------------------
AXA XXXXXXXXX INVESTMENT MANAGEMENT LLC
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
-------------
Title: CEO/CIO
-------
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SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
LISTING OF FUND(S)
Constellation International Equity Fund
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SCHEDULE C*
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
FOR FUNDS WITH NO PERFORMANCE ADJUSTMENT
----------------------------------------
This Schedule C shall apply to each of the Funds identified on Schedule C-1
hereto.
(a) The Adviser shall pay to the Sub-Adviser a fee for each Fund
calculated daily and payable monthly in arrears, computed as a percentage of the
net value of the Allocated Assets for such month at the rate set forth in
Schedule C-1 hereto.
* Schedule B intentionally omitted.
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SCHEDULE C-1
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
LISTING OF FUNDS AND FEE RATES
------------------------------
Name of Fund Fee Rate
------------ --------
Constellation International Equity Fund 0.50% on the first $200 million of
Allocated Assets; 0.40% on
Allocated Assets above $200 million
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