Exhibit (d)(12)
SUB-ADVISORY AGREEMENT
ING MUTUAL FUNDS
AGREEMENT made this 1st day of March 2007 between ING Investments, LLC, an
Arizona limited liability company (the "Manager"), and Xxxxxxxxxx Global
Investors, Inc., a Delaware 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;
WHEREAS, the Fund may offer shares of additional series in the future;
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;
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager retained the Sub-Adviser pursuant to a Sub-Advisory
Agreement, dated as of December 7, 2005, as amended on December 15, 2006 (the
"Prior Agreement"), to furnish investment advisory services to one or more of
the series of the Fund, and the Sub-Adviser is furnishing such services to the
Fund and the Manager pursuant to the terms and conditions set forth in the Prior
Agreement;
WHEREAS, Xxxxxxxxxx Group, Inc. ("Xxxxxxxxxx"), the parent company of the
Sub-Adviser, is a party to a certain Stock Purchase Agreement, dated as of
November 15, 2006 (the "Stock Purchase Agreement"), by and between Xxxxxxxxxx,
certain stockholders of Xxxxxxxxxx and IXIS Asset Management US Group, L.P
("IXIS");
WHEREAS, pursuant to the Stock Purchase Agreement, IXIS, currently a
minority stockholder of Xxxxxxxxxx, will acquire a majority of the issued and
outstanding capital stock of Xxxxxxxxxx;
WHEREAS, the closing of the proposed transactions contemplated by the Stock
Purchase Agreement will result in an assignment of the Prior Agreement for
purposes of the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, pursuant to the terms of the Prior Agreement, the Prior Agreement
will terminate upon an assignment of the Prior Agreement for purposes of the
1940 Act; and
WHEREAS, effective upon the closing of the transactions contemplated by the
Stock Purchase Agreement, the Prior Agreement will terminate and be of no
further force and effect and this Agreement will become effective.
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' 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 ("SEC"), as amended, 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,
as amended (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
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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 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 writing.
The Sub-Adviser will make appropriate personnel 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 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.
(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. The Sub-Adviser
shall have no liability for the acts or omissions of the custodian, unless such
act or omission is taken in reliance upon instruction given to the custodian by
a representative of the Sub-Adviser properly authorized to
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give such instruction under the custody agreement. Any assets added to the
Series shall be delivered directly to the custodian.
(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) 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, 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.
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
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 provided to
Sub-Adviser by the Manager;
(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 advise the Manager of any style box conflicts
with each Series' style.
(d) 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, as amended (the "Advisers
Act"), as well as other applicable laws. The Sub-Adviser will furnish to
regulatory
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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. The Manager shall
maintain and preserve all books and other records of the Fund, as required under
the 1940 Act except for all records related to the Fund's transactions, which
shall be preserved and maintained by the Sub-Adviser, and any other records that
the Sub-Adviser is required to maintain under the 1940 Act, and the Manager
shall timely furnish to Sub-Adviser all information and copies of books and
records reasonably requested by Sub-Adviser to enable the Sub-Adviser to comply
with a request made with respect to the Fund in connection with a regulatory
inspection.
(e) 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.
(f) Obligations of the Manager.
(i) The Manager shall provide (or cause the Series' Custodian to
provide) timely information to the Sub-Adviser regarding such information as may
be reasonably necessary for the Sub-Adviser to perform its responsibilities
hereunder.
(ii) The Manager has furnished the Sub-Adviser a copy of the
prospectus and statement of additional information of the Series and agrees
during the continuance of this Agreement to furnish the Sub-Adviser copies of
any revisions or supplements. The Manager agrees to furnish the Sub-Adviser with
copies of any financial statements or reports made by the Series to its
shareholders, and any further materials or information which the Sub-Adviser may
reasonably request to enable it to perform its functions under this Agreement.
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, as amended (the "Exchange
Act"), the Sub-Adviser shall not be deemed
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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 commission
to 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 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.
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,
which such errors or compliance breaches solely relate to Sub-Adviser's
activities with respect to the Series. The Manager or the Fund shall be
responsible for all the expenses of the Fund's operations.
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
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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 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.
(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 internal use or 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.
(c) Proprietary Rights. The Manager agrees and acknowledges that the
Sub-Adviser is the sole owner of the name and marks "Xxxxxxxxxx Global
Investors, Inc." and that all use of any designation consisting in whole or part
of "Xxxxxxxxxx Global Investors, Inc." under this Agreement shall inure to the
benefit of the Sub-Adviser. Upon termination of this Agreement for any reason,
the Manager shall cease, and the Manager shall use its best efforts to cause the
Series to cease, all use of any such designation as soon as reasonably
practicable.
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.
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(b) The Sub-Adviser agrees that it shall promptly notify the Manager
and the Fund 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. 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 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-1 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) The services of the Sub-Adviser to the Series and the Fund are
deemed to be exclusive commencing on the effective date of this Agreement and
shall terminate upon the termination of this Agreement unless terminated earlier
by the mutual agreement of the Fund and the Sub-Adviser (the "Exclusivity
Period").
(b) The Sub-Adviser shall not provide advisory services to any
registered open-end investment company that is distributed in the United States
with a similar international
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growth investment strategy. This restriction shall not apply to: (i) separate
account assets, (ii) institutional account assets managed by the Sub-Adviser,
including the Institutional Share Class of the Xxxxxxxxxx Institutional Series
(HIS) International Growth Fund, (iii) the HIS International Growth Fund
Advisory Share Class insofar as those shares are marketed by the Sub-Adviser to
consultant driven defined contribution plans, (iv) multi-manager mutual funds in
which the Sub-Adviser manages a portion of an entire fund, (v) international
core funds in which the Sub-Adviser manages one or both international growth and
international value portfolios and (vi) the use of the HIS International Growth
Fund - Institutional or Advisory Share Classes in a variable annuity separate
account.
(c) The Manager, for the duration of the Exclusivity Period, agrees
that it shall not retain any other unaffiliated international growth advisory
firm to advise or sub-advise a mutual fund in the international growth style
which is distributed in the United States.
(d) Subject to the Sub-Adviser's fiduciary duty to the Fund under the
Advisers Act and this Agreement, this Agreement shall not in any way limit or
restrict the Sub-Adviser or any of its directors, officers, employees or agents
from buying, selling or trading any securities or other investment instruments
for its or their own account or for the account of others for whom it or they
may be acting, provided that such activities do not adversely affect or
otherwise impair the performance by the Sub-Adviser of its duties and
obligations under this Agreement and, provided further that the Sub-Adviser, its
directors, officer employees and agents comply with applicable provisions under
the Advisers Act, the 1940 Act and other applicable law. The Manager and the
Series recognize and agree that the Sub-Adviser may provide advice to or take
action with respect to other clients, which advice or action, including the
timing and nature of such advice or action, may differ from or be identical to
advice given or action taken with respect to the Series. The Sub-Adviser shall
for all purposes hereof be deemed to be an independent contractor and shall,
unless otherwise provided or authorized, have no authority to act for or
represent the Series or the Manager in any way or otherwise be deemed an agent
of the Series or the Manager, other than in the Sub-Adviser's capacity as
Sub-Adviser to the Fund.
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 Marketing Materials approved in advance by the
Sub-Adviser, except with the prior permission of the Sub-Adviser.
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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 Exchange 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 (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 Exchange Act, the Advisers Act, under any
other statute, at common law or otherwise, arising out of the Sub-Adviser's
responsibilities as
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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 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
11
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.
17. Duration and Termination.
(a) This Agreement and the terms and conditions contained herein shall
become effective on the closing of the transactions contemplated by the Stock
Purchase Agreement (the "Effective Date"). In the event that the Effective Date
shall not have occurred on or before June 1, 2007, this Agreement shall be void
ab initio and neither the Manager nor Sub-Adviser shall have any rights, duties
or obligations hereunder.
(b) With respect to each Series identified as a Series on SCHEDULE A
hereto as in effect on the Effective Date, unless earlier terminated with
respect to any Series, this Agreement shall continue in full force and effect
through NOVEMBER 30, 2007. 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 securities 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 is added to SCHEDULE A hereto as a Series
after the Effective Date, the Agreement shall become effective on the later of
(i) the date SCHEDULE A is
12
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 securities 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. 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 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 (notwithstanding whether the Fund or the Manager
requests such additional time, the Exclusivity Period shall be deemed to have
terminated as of the expiration of the three (3) month notice provided by the
Sub-Adviser); 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
13
this Agreement is terminated or is not approved in the manner described above,
the Sections or Paragraphs numbered 9, 10, 13, 14, 15, 16, 17(b) and 19 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.
(c) 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 Sub-Adviser:
Xxxxxxxxxx Global Investors, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
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
Delaware, 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.
14
(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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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
------------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
XXXXXXXXXX GLOBAL INVESTORS, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: President
ACKNOWLEDGED
ING MUTUAL FUNDS
By: /s/ Xxxxxx X. Naka
------------------------------------
Name: Xxxxxx X. Naka
Title: Executive Vice President
16
