INVESTMENT SUB-ADVISORY AGREEMENT
between
RBC GLOBAL ASSET MANAGEMENT (U.S.) INC.
and
BLUEBAY ASSET MANAGEMENT LLP
INVESTMENT SUB-ADVISORY AGREEMENT (this
"Agreement"), effective as of the 2nd day of April, 2012,
between RBC Global Asset Management (U.S.) Inc. (the
"Adviser"), a corporation organised and existing under
the laws of the State of Minnesota, and BlueBay Asset
Management LLP (the "Subadviser"), a limited liability
partnership incorporated in England and Wales.
WHEREAS, the Adviser and Subadviser are affiliated
by virtue of common ultimate ownership by the Royal Bank
of Canada ("RBC");
WHEREAS, the Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940, as
amended (the "Advisers Act") and has entered into an
Investment Advisory Agreement dated as of the 1st day of
September 2011 ("Advisory Agreement") with RBC Funds
Trust, a Delaware statutory trust (the "Trust"), which is
engaged in business as an open-end management investment
company registered under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Trust issues its shares of beneficial
interest in separate series, with shares of each series
representing interests in a separate and distinct mutual
fund (each a "Fund"), each with its own assets,
investment objectives, policies and restrictions
(referred to herein as each Fund's "Investment
Guidelines") as described in the Trust's Prospectus and
Statement of Additional Information, as currently in
effect and as amended or supplemented from time to time
(hereinafter referred to as the "Prospectus");
WHEREAS, the Subadviser is engaged principally in
the business of investment management and rendering
investment advisory services and is registered as an
investment adviser under the Advisers Act and is
authorised and regulated by the Financial Services
Authority ("FSA"), and nothing in this Investment Sub-
Advisory Agreement shall exclude any liability of the
Subadviser to the Adviser arising under the United
Kingdom's Financial Services and Markets Act 2000 (as
amended from time to time), any rules or regulations made
under it or the FSA rules. All services provided by the
Subadviser under this agreement are provided on the basis
that the Adviser is a "professional client" (as defined
under FSA rules);
WHEREAS, the Adviser, which serves as the investment
adviser for the Funds under the Advisory Agreement,
previously entered into an Investment Subadvisory
Agreement dated as of the 1st day of September 2011 ("Old
Agreement") with BlueBay Asset Management Ltd. ("BlueBay
Ltd.") under which the Adviser retained BlueBay Ltd. as
subadviser to assist it in the provision of a continuous
investment program for the assets of the Funds listed on
Appendix A (the "Assets");
WHEREAS, in connection with an internal corporate
restructuring within the RBC organisation under which
BlueBay Ltd. transferred its investment advisory business
to the Subadviser effective April 2, 2012, the Board of
Trustees of the Trust has approved this Agreement to
replace the Old Agreement and the parties hereto desire
to enter into this Agreement so that the Subadviser can
provide the subadvisory services to the Funds described
herein.
NOW, THEREFORE, in consideration of the premises and
mutual promises herein set forth, the parties hereto
agree as follows:
1. Appointment. Adviser hereby retains the
Subadviser to act as investment adviser for and to manage
the Assets for the period and on the terms set forth in
this Agreement. The Subadviser accepts such employment
and agrees to render the services herein set forth, for
the compensation herein provided.
2. Duties of the Subadviser
A. Investment Subadvisory Services. Subject
to the supervision of the Board and the Adviser, the
Subadviser shall (a) manage the investment of the Assets
of each Fund in accordance with each Fund's Investment
Guidelines as provided in the Trust's Prospectus, and in
compliance with the requirements applicable to registered
investment companies under applicable laws and those
requirements applicable to regulated investment companies
under Subchapter M of the Internal Revenue Code of 1986,
as amended ("Code") and such other limitations as the
Adviser may institute. The Adviser will consult with the
Subadviser when an amendment to a Fund's Investment
Guidelines is contemplated, and the Adviser will provide
sufficient notification to the Subadviser for
implementation of any such change. The Subadviser shall
have full discretion to (a) make investment decisions
with regard to the Assets of each Fund; (b) place
purchase and sale orders for portfolio transactions for
the Assets of each Fund; and (c) employ professional
portfolio managers and securities analysts to provide
appropriate investment management and research services
with regard to the Assets of each Fund. The Subadviser
shall not have any responsibility for ensuring the
appropriateness of the Investment Guidelines for the Fund
or its shareholders. In providing these services for
each Fund, the Subadviser will conduct a continual
program of investment, evaluation and sale and
reinvestment of each Fund's Assets and will retain the
authority to perform the additional services outlined in
Appendix B.
B. Subadviser Undertakings. In all matters
relating to the performance of this Agreement, the
Subadviser shall act in conformity with the Trust's
Agreement and Declaration of Trust, By-Laws, and
Prospectus and with the written instructions and
directions of the Board and the Adviser. The Subadviser
hereby agrees to:
(i) regularly report to the Board and the
Adviser (in such form and frequency as the Adviser
and the Subadviser mutually agree) with respect to
the implementation of the investment program,
compliance of the Assets with the Prospectus, the
1940 Act and the Code, and on other topics as may
reasonably be requested by the Board or the Adviser,
including attendance at Board meetings, as
reasonably requested, to present such reports to the
Board;
(ii) comply with evaluation procedures adopted
by Board, including any amendments thereto, and use
its best efforts to consult with the Trust's
valuation committee and/or pricing agent to assist
in determining the daily valuation of securities
that are not registered for public sale, not traded
on any securities markets, or otherwise may require
fair valuation;
(iii) provide, subject to any obligations or
undertakings reasonably necessary to maintain the
confidentiality of the Subadviser's non-public
information, any and all information, records and
supporting documentation about the composite of
accounts and the funds the Subadviser manages that
have investment objectives, policies, and strategies
substantially similar to those employed by the
Subadviser in managing the Assets which may be
reasonably necessary, under applicable laws, to
allow the Trust or its agent to present historical
performance information concerning the Subadviser's
similarly managed accounts and funds, for inclusion
in the Trust's Prospectus and any other reports and
materials prepared by the Trust or its agent, in
accordance with regulatory requirements or as
requested by applicable federal or state regulatory
authorities.
C. Expenses. The Subadviser will bear all of
its expenses in connection with the performance of its
services under this Agreement. All other expenses to be
incurred in the operation of the Funds will be borne by
the respective Funds or the Adviser, except to the extent
specifically assumed in writing by the Subadviser. The
expenses to be borne by the Funds include, without
limitation, the following: organisational costs, taxes,
interest, brokerage fees and commissions, Trustees' fees,
Securities and Exchange Commission fees and state Blue
Sky qualification fees, advisory fees, charges of
custodians, charges of accounting agents, transfer and
dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and
legal expenses, costs of independent pricing services,
costs of maintaining existence, costs attributable to
investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional
information for regulatory purposes and for distribution
to existing stockholders, costs of stockholders' reports
and meetings, and any extraordinary expenses.
D. Brokerage. The Subadviser will select
brokers and dealers to effect all orders for the purchase
and sale of Assets. In selecting brokers or dealers to
execute transactions on behalf of the Assets of the
Funds, the Subadviser will seek best execution (i) in
accordance with its obligations under the Advisers Act,
(ii) as defined in the FSA rules, and (iii) in effecting
transactions with respect to a Fund the Subadviser will
comply with its Order Execution Policy as provided to the
Adviser. The Adviser acknowledges that specific
instructions from the Adviser in relation to the
execution of trades may prevent the Subadviser from
following its Order Execution Policy. In selecting
brokers or dealers to execute a particular transaction,
and in evaluating best execution, the Subadviser is
authorized to consider the brokerage and research
services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to
the Subadviser or Adviser for use in managing the Funds
and/or other accounts over which the Subadviser exercises
investment discretion; and the Subadviser may cause the
Fund to pay a broker or dealer that provides such
brokerage or research services an amount of commission
for effecting a Fund transaction in excess of the amount
of commission another broker or dealer would have charged
for effecting that transaction if the Subadviser
determines, in good faith, that such amount of commission
is reasonable in relation to the value of such brokerage
or research services provided viewed in terms of that
particular transaction or the Subadviser's overall
responsibilities to the Fund or other advisory clients
for which the Adviser or the Subadviser exercises
investment discretion. To the extent authorised by
Section 28(e) and the Board, the Subadviser shall not be
deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by
reason of such action. Except as permitted by Rule 17a-
10 under the 1940 Act, the Subadviser will not engage in
principal transactions with respect to the Assets with
any affiliate of the Adviser, and will engage in agency
transactions with respect to the Assets with such
affiliates only in accordance with all applicable rules
and regulations. The Subadviser will provide a list of
its affiliates to Adviser upon request, as such may be
amended from time to time. Adviser will provide to the
Subadviser a list of affiliated brokers and dealers of
the Adviser. The Subadviser shall not consult with any
other Subadviser of the Fund or of any fund that is an
"affiliated person" of the Fund concerning transactions
for the Fund in securities or other assets. In no
instance will any portfolio securities of the Fund be
purchased from, or sold to, the Adviser, the Subadviser,
the Trust's principal underwriter, or any affiliated
persons of the Trust, the Adviser, the Subadviser or the
Trust's principal underwriter, acting as principal in the
transaction, except to the extent permitted by the
Securities and Exchange Commission (the "SEC") and the
1940 Act, including Rule 17a 7 thereunder. The
Subadviser acknowledges that the Adviser and the Trust
may rely on Rule 17a 7, Rule 17a 10, Rule 10f 3, Rule
12d3 1 and Rule 17e 1 under the 1940 Act.
E. Aggregation of Orders. On occasions when
the Subadviser deems the purchase or sale of a security
to be in the best interest of the Assets as well as other
clients and funds of the Subadviser, the Subadviser may,
to the extent permitted by applicable laws and
regulations, but shall be under no obligation to,
aggregate the orders for securities to be purchased or
sold. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Subadviser in the
manner the Subadviser considers to be consistent with its
requirements of the FSA Rules and its fiduciary
obligations to each Fund and to its other clients. Where
this results in a number of transactions at different
prices, the Subadviser may average the prices obtained so
that all clients involved in the transaction pay or
receive the same average price. The Adviser and the
Trust recognize that aggregation of each individual
transaction may operate to the advantage or disadvantage
of the Funds and that some clients with specialist
investment mandates may be allocated more of a
transaction than clients with generalist investment
mandates. The Adviser recognizes that, in some cases,
the Subadviser's allocation procedure may limit the size
of the position that may be acquired or sold for the
Assets.
F. Custody.
i) The Subadviser shall not take or receive
physical possession of any of the Assets and the
Adviser confirms the appointment of the custodian
who shall have sole responsibility for safekeeping
of the assets and related documents of the Funds,
settlement of transactions effected by the
Subadviser, appropriate registration of assets and
receipt of sale proceeds, dividends and all other
monies.
ii) The Subadviser shall not have custody of
the Assets but shall have authority to issue to the
custodian such instructions as it may consider
appropriate in connection with the settlement of any
transaction relating to the Funds which it has
effected. The Adviser shall ensure that the
custodian enters into arrangements with regard to
the provision of custody services for the Funds
which are satisfactory to the Subadviser and that
the custodian is obliged to comply with any
instructions of the Subadviser given in accordance
with this Agreement. The Subadviser will not be
responsible for supervising the custodian.
iii) The Adviser confirms that, unless the
Adviser gives instructions to the contrary, all
dividend and interest income received in respect of
the Assets will be retained by the custodian for
reinvestment as part of the Funds.
iv) The Adviser will arrange for the custodian
to provide to the Subadviser daily cash account
statements and weekly asset position statements, and
any other report relating to the Funds that the
custodian sends to the Adviser.
G. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the
Subadviser hereby agrees that all records which it
maintains for the Assets of each Fund are the property of
the Trust and further agrees to surrender promptly to the
Trust copies of any of such records upon such Fund's or
the Adviser's request, provided, however, that the
Subadviser may retain copies of any records to the extent
required for it to comply with applicable laws. The
Subadviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records
relating to its activities hereunder required to be
maintained by Rule 31a-1 under the 1940 Act and to
preserve the records relating to its activities hereunder
required by Rule 204-2 under the Advisers Act for the
period specified in said Rule. Notwithstanding the
foregoing, Subadviser has no responsibility for the
maintenance of the records of the Funds, except for those
related to the Assets. The Adviser and the Trust agree
that in maintaining its records and providing such
information, the Subadviser does not assume
responsibility for the accuracy of any accounts, reports
or other information furnished by the custodian or any
other person, firm or company to the Adviser or the
Trust.
H. Subadviser Compliance Responsibilities. The
Subadviser and the Adviser acknowledge that the
Subadviser is not the compliance agent for the Funds or
the Adviser, and does not have access to all of the
Trust's books and records necessary to perform certain
compliance testing. However, to the extent that the
Subadviser has agreed to perform the services specified
in this Agreement, the Subadviser shall perform
compliance testing with respect to the Assets based upon
information in its possession and upon information and
written instructions received from the Adviser or the
Trust's Administrator and shall not be held in breach of
this Agreement so long as it performs in accordance with
such information and instructions. The Adviser or
Trust's Administrator shall promptly provide the
Subadviser with copies of the Trust's Declaration of
Trust, By-Laws, current Prospectus and any written
policies or procedures adopted by the Board applicable to
the Assets and any amendments or revisions thereto and
shall notify the Subadviser of any amendments to such
documents that would have a material impact on the
Subadviser's ability to perform in accordance with the
terms of this Agreement. The Subadviser shall supply
such reports or other documentation as reasonably
requested from time to time by the Adviser to evidence
the Subadviser's compliance with such Prospectus,
policies or procedures.
I. Proxy voting and Corporate Actions. The
Funds have retained RiskMetrics Group ("RMG"), for proxy
voting services and proxy voting analysis and research.
The Funds' custodian has been instructed to direct all
ballots, meeting notices and other proxy materials to
RMG. RMG votes the Funds' proxies in accordance with
RMG's International Proxy Voting Guidelines, which have
been reviewed and approved by the Board. To the extent
that the Subadviser seeks, in its good faith judgment in
a manner which it reasonably believes best serves the
interests of each Fund's shareholders, that a proxy
should be voted in a manner not consistent with RMG's
International Proxy Voting Guidelines, Subadviser shall
act in accordance with the Trust's proxy voting policies
and procedures as provided to Subadviser. Subadviser
shall not be required to take any action or render any
advice with respect to the preparation or filing of any
bankruptcy or class action claims. Except as otherwise
described herein, Subadviser will, in its good faith
judgment in a manner which it reasonably believes serves
the interests of the Fund, be responsible for corporate
actions with respect to the Assets.
J. Portfolio Holdings. The Subadviser will not
disclose to a third party, in any manner whatsoever, any
list of securities held by a Fund, except in accordance
with such Fund's portfolio holdings disclosure policy and
except as required by applicable law, regulation or rule
or as agreed otherwise.
K. Error Correction. The Subadviser shall
rectify any breach by the Subadviser of the Investment
Guidelines in accordance with Subadviser's error
correction policy as provided to the Advisor.
L. Taxes. The Adviser will cause the Trust to
pay all taxes and costs, due from time to time, in
respect of the making of all relevant claims (including,
without limitation, claims relating to withholding taxes
and claims for exemption), for the filing of tax returns,
and for providing tax authorities with information
relating to the Funds and transactions in the Funds. The
Subadviser shall have no obligations or responsibilities
with respect to the calculating, filing and the payment
of any taxes due on capital or income held or collected
for the Funds.
3. Compensation of Subadviser. The Adviser will
pay the Subadviser, with respect to each Fund on Appendix
A attached hereto, the compensation specified in Appendix
A. Such fees will be computed daily and paid monthly,
calculated at an annual rate based on each Fund's average
daily net assets as determined by the Trust's accounting
agent. Compensation for any partial period shall be pro-
rated based on the length of the period.
4. Standard of Care. The Subadviser shall exercise
its best judgment in rendering its services described in
this Agreement. Except as may otherwise be required by
the 1940 Act or the rules thereunder or other applicable
law, the Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by a
Fund or the Adviser in connection with the matters to
which this Agreement relates, except a loss resulting
from the Subadviser's willful misfeasance, bad faith or
gross negligence on its part in the performance of its
duties hereunder or from reckless disregard by it of its
obligations and duties under this Agreement. It is
acknowledged and agreed by the Adviser that achieving any
performance target stated in the Fund documents is a
target only and that the Subadviser shall not be liable
for any failure to meet or to outperform the performance
target. The purpose of any performance target is only to
act as a benchmark or measure of the success of each
Fund. Notwithstanding any provision to the contrary in
this Agreement, the Subadviser does not provide any
express or implied warranty as to the performance or
profitability of any of the Funds or any part thereof or
that the investment objectives will be successfully met.
The Adviser acknowledges that there are risks inherent in
the various investments that the Subadviser is permitted
to acquire on behalf of the Adviser and has reviewed and
understands such risks as described in the Prospectus.
5. Indemnification.
A. The Adviser agrees to indemnify and hold
harmless the Sub-Adviser from and against any and all
claims, losses, liabilities or damages (including
reasonable attorneys' fees and other related expenses)
("Losses"), resulting from the Adviser's willful
misfeasance, bad faith, or gross negligence in the
performance of, or from reckless disregard of, the
Adviser's obligations and duties under this Agreement;
provided however that the Adviser will not indemnify the
Subadviser for Losses resulting from the Subadviser's
willful misfeasance, bad faith or gross negligence in the
performance of its duties or from the Subadviser's
reckless disregard of its obligations and duties under
this Agreement
B. The Subadviser agrees to indemnify and hold
harmless the Adviser from and against any and all Losses
resulting from the Subadviser's willful misfeasance, bad
faith, or gross negligence in the performance of, or from
reckless disregard of, the Subadviser's obligations and
duties under this Agreement; provided however that the
Subadviser will not indemnify the Adviser for Losses
resulting from the Adviser's willful misfeasance, bad
faith or gross negligence in the performance of its
duties or from the Adviser's reckless disregard of its
obligations and duties under this Agreement.
C. The Subadviser will not be liable for any
Losses caused by the custodian or caused by brokers.
6. Non-Exclusivity. The services of the Subadviser
to the Adviser with respect to the Assets are not to be
deemed to be exclusive, and the Subadviser and its
affiliates shall be free to render investment advisory or
other services to others (including other investment
companies) and to engage in other activities. It is
understood and agreed that the directors, officers, and
employees of the Subadviser are not prohibited from
engaging in any other business activity or from rendering
services to any other person, or from serving as
partners, officers, directors, trustees, or employees of
any other firm or corporation, including other investment
companies. Adviser acknowledges that Subadviser or its
affiliates may give advice and take actions in the
performance of its duties to clients which differ from
the advice, or the timing and nature of actions taken,
with respect to other clients' accounts (including the
Assets) or employee accounts which may invest in some of
the same securities recommended to advisory clients. In
addition, advice provided by the Subadviser may differ
from advice given by its affiliates. Subject to the
Subadviser's Code of Ethics (as defined in Section 9.B.
herein), the Advisers Act, the 1940 Act or FSA rules,
nothing in this Agreement shall prevent the Subadviser or
any of its officers, employees or affiliates in any way
from purchasing or selling any securities for its or
their own accounts prior to, simultaneously with, or
subsequent to any recommendation or action taken with
respect to the Funds.
7. Confidentiality. Each party to this Agreement
shall keep confidential any nonpublic information
concerning the other party and will not use or disclose
such information for any purpose other than the
performance of its responsibilities and duties hereunder,
unless the non-disclosing party has authorised such
disclosure or if such disclosure is expressly required or
requested by applicable federal or state regulatory
authorities, law or regulation or information which is
reasonably necessary to disclose to their advisors,
delegates, counterparties, agents, and the custodian, to
the extent necessary for such persons to perform their
obligations and professional services. Nonpublic
information shall not include information a party to this
Agreement can clearly establish was (a) known to the
party prior to this Agreement; (b) rightfully acquired by
the party from third parties whom the party reasonably
believes are not under an obligation of confidentiality
to the other party to this Agreement; (c) placed in
public domain without fault of the party or its
affiliates; or (d) independently developed by the party
without reference or reliance upon the non-public
information.
8. Term of Agreement.
A. This Agreement shall become effective as to
any Fund after it has been executed and approved by the
Board and the Fund's shareholders, all as required under
the 1940 Act, and shall continue in effect for an initial
period of two years (or such shorter period as may be
approved by the Trust's board, as indicated on Appendix A
hereto). Thereafter, this Agreement shall continue
automatically for any Fund for successive annual periods,
provided such continuance is specifically approved at
least annually by (i) the Board or (ii) a vote of a
"majority" (as defined in the 0000 Xxx) of the Fund's
outstanding voting securities, provided that in either
event the continuance also is approved by a majority of
the Board who are not "interested persons" (as defined in
the 0000 Xxx) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable as
to any Fund, without penalty, on 60 days' written notice,
by the Adviser, by the Board, by vote of holders of a
majority of a Fund's shares or by the Subadviser, and
will terminate upon the termination of the Advisory
Agreement between the Trust and the Adviser. This
Agreement also will terminate automatically in the event
of its assignment (as defined in the 1940 Act).
B. Termination will not affect accrued rights,
indemnities, existing commitments or any contractual
provision intended to survive termination. The Adviser
will pay any outstanding fees accrued or due to the
Subadviser calculated pro rata to the termination date
within ten (10) business days of receiving the final
invoice for such fees.
9. Termination will be without prejudice to the
completion of any transaction already committed.
Following the termination date, the Subadviser shall
provide services with respect to any new transactions
only upon the mutual agreement of the Adviser and the
Subadviser.
10. Representations of Subadviser. The Subadviser
represents, warrants, and agrees as follows:
A. The Subadviser: (i) is registered as an
investment adviser under the Advisers Act and will
continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by
the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met,
and will continue to meet for so long as this Agreement
remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any
regulatory organisation, necessary to be met in order to
perform the services contemplated by this Agreement; (iv)
has the authority to enter into and perform the services
contemplated by this Agreement; and (v) will promptly
notify the Adviser of the occurrence of any event that
would disqualify the Subadviser from serving as an
investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
B. The Subadviser has adopted a written code
of ethics complying with the requirements of Rule 17j-1
under the 1940 Act (the "Code of Ethics") and, if it has
not already done so, will provide the Adviser and the
Trust with a copy of the Code of Ethics. On at least an
annual basis, the Subadviser will comply with the
reporting requirements of Rule 17j-1, which may include
(i) certifying to the Adviser upon request that the
Subadviser and its Access Persons have complied with the
Subadviser's Code of Ethics with respect to the Assets
and (ii) identifying any material violations which have
occurred with respect to the Subadviser Assets.
C. Upon the reasonable request of the Adviser,
the Subadviser shall permit the Adviser, its employees or
its agents to examine the reports required to be made by
the Subadviser pursuant to Rule 17j-1 and all other
records relevant to the Subadviser's Code of Ethics.
D. The Subadviser has adopted and implemented
written policies and procedures, as required by Rule
206(4)-7 under the Advisers Act, which are reasonably
designed to prevent violations of federal securities laws
by the Subadviser, its employees, officers and agents.
Upon reasonable request, the Subadviser shall provide the
Adviser with access to the records relating to such
policies and procedures as they relate to the Assets. The
Subadviser will also provide, at the reasonable request
of the Adviser, periodic certifications, in a form
reasonably acceptable to Adviser, attesting to such
written policies and procedures. The Subadviser has
provided the Adviser and the Trust with a copy of its
Form ADV as most recently filed with the SEC and
hereafter will furnish upon request a copy of its annual
amendment to the Adviser. The Adviser acknowledges
receipt of the Subadviser's Form ADV more than 48 hours
prior to the execution of this Agreement.
11. Provision of Certain Information by Subadviser.
The Subadviser will promptly notify the Adviser (1) in
the event the SEC or other governmental authority has
censured the Subadviser; placed limitations upon its
activities, functions or operations; suspended or revoked
its registration, if any, as an investment adviser; or
has commenced proceedings or an investigation that may
result in any of these actions or (2) upon having a
reasonable basis for believing that any Fund has ceased
to qualify or might not qualify as a regulated investment
company under Subchapter M of the Code. The Subadviser
further agrees to notify the Adviser promptly of any
material fact known to the Subadviser respecting or
relating to the Subadviser that is not contained in the
Prospectus, and is required to be stated therein or
necessary to make the statements therein not misleading,
or of any statement contained therein that becomes untrue
in any material respect. As reasonably requested by the
Trust on behalf of the Trust's officers and in accordance
with the scope of the Subadviser's obligations and
responsibilities contained in this Agreement, the
Subadviser will provide reasonable assistance to the
Trust in connection with the Trust's compliance with the
Xxxxxxxx-Xxxxx Act and the rules and regulations
promulgated by the SEC thereunder, and Rule 38(a)-1 of
the 1940 Act. Such assistance shall include, but not be
limited to, (i) certifying periodically, upon the
reasonable request of the Trust, that it is in compliance
with all applicable "federal securities laws", as
required by Rule 38a-1(e)(1) under the 1940 Act, and Rule
206(4)-7 under the Advisers Act; (ii) facilitating and
cooperating with third-party audits arranged by the Trust
to evaluate the effectiveness of its compliance controls;
(iii) providing the Trust's chief compliance officer with
direct access to its compliance personnel; (iv) providing
the Trust's chief compliance officer with periodic
reports upon request and (v) promptly providing special
reports in the event of compliance problems. Further,
Subadviser is aware that: (i) the Chief Executive Officer
(Principal Executive Officer) and Treasury/Chief
Financial Officer (Principal Financial Officer) of the
Trust (collectively, "Certifying Officers") are required
to certify the Trust's periodic reports on Form N-CSR
pursuant to Rule 30a-2 under the 1940 Act; and (ii) the
Certifying Officers must rely upon certain matters of
fact generated by the Subadviser of which they do not
have firsthand knowledge. Consequently, the Subadviser
has in place and has observed procedures and controls
that are reasonably designed to ensure the adequacy of
the services provided to the Trust under this Agreement
and the accuracy of the information prepared by it and
which is included in the Form N-CSR, and shall provide
certifications to the Trust to be relied upon by the
Certifying Officers in certifying the Trust's periodic
reports on Form N-CSR, in a form satisfactory to the
Trust.
12. Provision of Certain Information by the Adviser.
The Adviser will promptly notify the Subadviser (1) in
the event that the SEC has censured the Adviser or the
Trust; placed limitations upon either of their
activities, functions, or operations; suspended or
revoked the Adviser's registration as an investment
adviser; or has commenced proceedings or an investigation
that may result in any of these actions and (2) upon
having a reasonable basis for believing that any Fund has
ceased to qualify or might not qualify as a regulated
investment company under Subchapter M of the Code.
13. Material Interests and Conflicts of Interest.
The Adviser acknowledges receipt of Subadviser's Form ADV
Part II (the "Form ADV") that includes disclosure
relating to the material conflicts of interest that may
arise between the Subadviser or an affiliate or the
managers and employees of the Subadviser or affiliate and
the Adviser, or between the Adviser and other clients of
the Subadviser. The Subadviser will manage such conflicts
of interest in accordance with the Subadviser's Conflicts
of Interest Policy and its Form ADV. A copy of the
Subadviser's Conflicts of Interest Policy will be made
available upon request.
14. Force Majeure. Neither party to this Agreement
shall be deemed to be in breach of this Agreement or
otherwise liable to the other as a result of any delay,
failure or defective performance of its obligations under
this Agreement if and to the extent that such delay,
failure or defective performance arises out of causes
beyond the control and without the fault or negligence of
the party in question. Such causes may include, without
limitation, postal or other strikes, lock-outs or other
industrial disputes (whether involving the workforce of
the relevant party or of any other party), act of
terrorism or God, war, riot or civil commotion, any
change to the law, order or regulation of governmental,
supranational or regulatory body, currency restrictions,
devaluations and fluctuations, market conditions
affecting the execution or settlement of transactions or
the value of assets, any breakdown in communication,
computer facilities, machinery or software not reasonably
within the relevant party's control, fire, flood or
storm, or failure of any relevant market, exchange or
clearing house. This paragraph is without prejudice to
the Subadviser's liability to any counterparty or broker
for any transaction affected by the Sub-Advisor for the
Funds pursuant to this Agreement.
15. Complaints. Any formal complaint that the
Adviser may have relating to any services provided to it
by the Subadviser under this Agreement should be made
immediately upon receipt in writing to the Compliance
Officer of the Subadviser at the registered address or
via electronic communication.
16. Compensation. Under the FSA rules, the
Subadviser is required to provide the Adviser with
certain information about compensation schemes to which
the Subadviser is subject. FSA-regulated business
conducted by the Subadviser pursuant to this Agreement is
covered by the Financial Services Compensation Scheme to
the extent that the Fund is an "eligible claimant" (as
defined in the FSA rules). The Financial Services
Compensation Scheme compensates eligible claimants for
losses suffered as a result of the inability of an FSA-
regulated firm to pay monies due, or satisfy obligations
owed, to them (typically as a result of the firm's
insolvency). Most types of designated investment
business are covered for 100% of the first ?30,000 owed
and 90% of the next ?20,000 owed, so the maximum
compensation is ?48,000 per eligible claimant. As the
Adviser is not an eligible claimant, the Adviser has no
right to make a claim as an eligible claimant for
compensation under the Financial Services Compensation
Scheme in respect of any inability of the Subadviser to
satisfy a claim made against it by the Adviser. However,
even though the Adviser is not an eligible claimant, it
is possible that, depending on the specific services
provided to the Adviser, the Adviser might, in some
circumstances, have the right to make a claim for
compensation under the Financial Services Compensation
Scheme in respect of a inability of the Subadviser to
satisfy a claim made against it by the Adviser.
17. Money Laundering. The Adviser will provide the
Subadviser with information as reasonably requested, in
order for the Subadviser to comply with the FSA Rules and
Anti-Money Laundering Regulations, and the Adviser agrees
to promptly provide such information to the Subadviser.
18. Amendment of Agreement. No provision of this
Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing
signed by both parties.
19. Miscellaneous.
A. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of
Minnesota, without giving effect to the conflicts of laws
principles thereof, and with the 1940 Act. To the extent
that the applicable laws of the State of Minnesota
conflict with the applicable provisions of the 1940 Act,
the latter shall control.
B. Change in Control. The Subadviser will
notify the Adviser of any change of control of the
Subadviser, including any change of its 25% shareholders,
prior to or promptly after such change. In addition the
Subadviser will notify the Adviser of any changes in the
key personnel who are either the portfolio manager(s) of
the Assets or senior management (i.e. the Management
Committee) of the Subadviser as soon as practicable after
such change.
C. Captions. The Captions contained in this
Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
D. Entire Agreement. This Agreement
represents the entire agreement and understanding of the
parties hereto and shall supersede any prior agreements
between the parties relating to the subject matter
hereof.
E. Recordings. The parties may record
telephone conversations with each other and may produce
such recordings in evidence.
F. Definitions. Any question of
interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term
or provision of the 1940 Act shall be resolved by
reference to such term or provision of the 1940 Act and
to interpretations thereof, if any, by the United States
courts or, in the absence of any controlling decision of
any such court, by rules, releases or orders of the SEC
validly issued pursuant to the Act. As used in this
Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net
assets," "sale," "sell," and "security" shall have the
same meaning as such terms have in the 1940 Act, subject
to such exemptions as may be granted by the SEC by any
rule, release or order. Where the effect of a
requirement of the federal securities laws reflected in
any provision of this Agreement is made less restrictive
by a rule, release, or order of the SEC, whether of
special or general application, such provision shall be
deemed to incorporate the effect of such rule, release,
or order.
G. Notices. Any notice herein required is to
be in writing and is deemed to have been given to the
Subadviser or Adviser upon receipt of the same at their
respective addresses set forth below. All written
notices required or permitted to be given under this
Agreement will be delivered by personal service, by
postage mail return receipt requested or by facsimile
machine or similar means of delivery that provide
evidence of receipt. Instructions from the Adviser must
be given by a duly authorised person as evidenced by a
certified list provided to the Subadviser.
All notices to Adviser shall be sent to:
RBC Global Asset Management (U.S.) Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX, 00000-0000
Attention: President, RBC Funds
All notices to the Subadviser shall be sent to:
BlueBay Asset Management LLP
00 Xxxxxxxxx Xxxxxx
X0X 0XX Xxxxxx, Xxxxxx Xxxxxxx
Attention: Xxxxx Xxxxxx, Senior Client Relations
Manager
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their duly authorised
signatories as of the date and year first above written.
RBC Global Asset Management
(U.S.) Inc.
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Chief Operating Officer
BlueBay Asset Management LLP
By: /s/ Xxxxxxxxx Xxxxx
Name: Xxxxxxxxx Xxxxx
Title: Chief Operating Officer
Appendix A
Fund and Fee Schedule
For the services provided by the Subadviser to the
Funds, pursuant to this Investment Sub-Advisory
Agreement, the Adviser will pay the Subadviser a fee,
computed daily and payable monthly, based on the average
daily net assets of each Fund at the following annual
rate of the average daily net assets of each Fund as
determined by the Trust's accounting agent:
FUND RATE INITIAL TERM
RBC BlueBay YeaEmerging Market
Select Bond Fund 0.55% 9/1/2011 - 9/30/2012*
RBC BlueBay
Emerging Market
Corporate Bond Fund 0.70% 9/1/2011 - 9/30/2012*
RBC BlueBay Global
High Yield Bond
Fund 0.50% 9/1/2011 - 9/30/2012*
RBC BlueBay Global
Convertible Bond
Fund 0.55% 9/1/2011 - 9/30/2012*
*The period 9/1/2011 through 4/2/2011 was covered by the
predecessor Investment Sub - Advisory Agreement with BlueBay Asset Management
Ltd.
Appendix B
1. Authority and Limitations
1.1 Subject to the provisions and restrictions
contained in the Prospectus, Investment Guidelines and
the 1940 Act, the Subadviser, acting as agent, will have
complete discretion on behalf of the Adviser (without
prior reference to the Adviser) to:
a. buy, sell, retain, exchange, or otherwise deal
in investments (whether traded on an exchange or not) and
other assets of any nature, make deposits, subscribe to
issues and offers for sale and accept placings,
underwritings and sub-underwritings of any investments,
effect transactions on any markets, enter into spot or
forward foreign exchange contracts, cause the Custodian
to place and withdraw cash from deposit as and when the
Subadviser thinks fit, take all day to day decisions and
otherwise act as the Subadviser judges appropriate in
relation to the management of the Portfolio;
b. deal collectively as agent for the Funds and for
other clients including affiliates and in-house funds;
c. commit the Funds to underwriting or sub-
underwriting any issue or offer for sale of securities of
a type and to the extent permitted by the Guidelines;
d. borrow on behalf of the Funds to the extent set
out in the Guidelines;
e. buy, sell, hold and generally deal in
investments the prices of which may be subject to
stabilisation (stabilisation being the buying and selling
of securities in order to stabilise or maintain the
market price of the securities of a recent new issue);
f. buy, sell and generally deal in foreign exchange
as may be required for the management of the Funds,
including for the purpose of hedging currency risk on
holdings in investments in currencies other than the US
Dollar;
g. arrange deals in non-readily realisable
investments;
h. issue instructions to the custodian in respect
of the Funds;
i. subject to final approval and execution by a
Trust officer, initiate negotiation of counterparty and
account opening documentation on the Funds behalf,
whether or not on market standard terms, as the
Subadviser sees fit; and
j. buy, sell, hold and generally deal in Collective
Investment Schemes including Unregulated Collective
Investment Schemes as well as those regulated in the
United Kingdom or any other jurisdiction, including in-
house funds.
1.2. Subject to the requirements of the 1940 Act
and the Advisers Act, the Subadviser may deal on such
markets or exchanges and in relation to such
counterparties as it sees fit and effect, arrange or
clear transactions through or with any person, firm or
company that the Subadviser may select including an
affiliate or an in-house fund. In particular the Adviser
agrees that the Subadviser may trade outside of a
Regulated Market or Multilateral Trading Facility.
1.3. All transactions effected by the Subadviser on
a market or exchange will be effected in accordance with
the rules and regulations of the relevant market or
exchange. The Subadviser may take all such steps as may
be required or permitted by such rules and regulations
and/or by appropriate market practice, including
executing Master Agreements on behalf of the Funds on
such terms (which may or may not be on market standard)
as the Subadviser sees fit (all of which shall be binding
on the Adviser).
1.4. The Adviser will grant such powers of attorney
in favour of the Subadviser as may be required to enable
the Subadviser to perform its services under this
Agreement.
2. Delegation to Third Parties and Use of Agents
2.1 The Subadviser may, where reasonable, employ
agents (including Affiliates) to perform any accounting,
administrative, dealing, reporting or ancillary services
required to enable the Subadviser to perform its services
under the Agreement. The Subadviser will act in good
faith and with reasonable skill and care in the
selection, use and monitoring of agents and shall assume
all responsibility for the performance of such agents
(excluding brokers) pursuant to the terms of this
Agreement.
3. Transactions in Derivatives
3.1 Subject always to the provisions and
restrictions contained in the Investment Guidelines, the
Trust's Derivatives Instruments Procedures as provided to
the Subadviser and the 1940 Act and Section 1.1.i. of
this Appendix B, the Subadviser has authority and power
on behalf of the Adviser to purchase, sell, hold, effect,
settle, close-out and generally deal in and with domestic
or foreign Derivatives (which shall include Contingent
Liability Investments and "over the counter" Options or
other transactions in Derivatives (including, without
limitation, swaps, swaptions, credit default swaps, loan
credit default swaps, structured products, securitised
derivatives and strips) on contractual terms other than
those of investment exchanges recognised or designated by
the FSA) and the Adviser agrees that:
a. Consistent with the Trust's affiliated trading
policies and the 1940 Act, the Subadviser is authorised
to review and recommend the counterparties with which
Derivatives are traded and the brokerage firms (including
Affiliates) through which Derivatives are traded and
cleared for the Fund and to initiate the negotiation as
the Adviser's agent any account agreements, Master
Agreements or other documents required or deemed
appropriate by such brokers or by the Subadviser subject
to the final approval and execution of such agreements by
a Trust officer; and
b. to the extent required by any market or
exchange, the Subadviser is authorised to and may reveal
the Adviser's identity and address to any relevant party
through which Derivatives are traded or cleared.
3.2 The Adviser understands that markets and
exchanges require that anyone trading in Derivatives must
advance or segregate collateral to meet initial and
variation margin requirements. Subject to the Trust's
Derivatives Instruments Procedures and the 1940 Act, the
Subadviser is hereby authorised to instruct the Custodian
to advance cash or securities as collateral to an account
designated by the broker to meet margin payments as
required by the rules of exchanges or markets on which
Derivatives are dealt by the Subadviser as the Adviser's
agent. If, under the rules of such exchanges or markets,
adverse market movements occur such that margin calls are
increased and insufficient funds are available in the
Portfolio, to meet such margin calls the Subadviser may
request that the Adviser cause the Fund to make
additional funds temporarily available at short notice
(in some cases less than 24 hours) until assets can be
realised to cover the related margin call. The Adviser
understands and agrees that if it is unwilling or unable
to cause the Funds to make such funds available, the
Adviser's positions may be closed out, resulting in a
loss to the Fund for which the Subadviser shall not be
liable.
