(d)(14)
SUB-ADVISORY AGREEMENT
ING MUTUAL FUNDS
AGREEMENT made this 16th day of November, 2007 between ING Investments, LLC,
an Arizona limited liability company (the "Manager"), and Tradewinds Global
Investors, LLC, a Delaware limited liability company (the "Sub-Adviser" or
"Tradewinds") (the "Agreement").
WHEREAS, ING Mutual Funds (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end, management
investment company;
WHEREAS, the Fund is authorized to issue separate series, each series having
its own investment objective or objectives, policies, and limitations; and
WHEREAS, the Fund may offer shares of additional series in the future; and
WHEREAS, pursuant to an Investment Management Agreement, dated February 1,
2005 (the "Management Agreement"), a copy of which has been provided to the
Sub-Adviser, the Fund has retained the Manager to render advisory and
management services with respect to certain of the Fund's series; and
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser
is willing to furnish such services to the Fund and the Manager.
NOW, THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Manager and the
Sub-Adviser as follows:
1. Appointment. The Manager hereby appoints the Sub-Adviser to act as the
investment adviser and manager to the series of the Fund set forth on Schedule
A hereto (the "Series") for the periods and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
In the event the Fund designates one or more series (other than the Series)
with respect to which the Manager wishes to retain the Sub-Adviser to render
investment advisory services hereunder, it shall notify the Sub-Adviser in
writing. If the Sub-Adviser is willing to render such services, it shall notify
the Manager in writing, whereupon such series shall become a Series hereunder,
and be subject to this Agreement.
2. Sub-Adviser Duties. Subject to the supervision of the Fund's Board of
Trustees and the Manager, the Sub-Adviser will provide a continuous investment
program for each Series' portfolio and determine in its discretion the
composition of the assets of each Series' portfolio, including determination of
the purchase, retention, or sale of the securities, cash, and other investments
contained in the portfolio as the Fund's agent and attorney-in-fact with full
power and authority in connection with such assets without prior consultation
with any of the Manager, the Fund or the Fund's Board of Trustees. The
Sub-Adviser will provide investment research and conduct a continuous program
of evaluation, investment, sales, and reinvestment of each Series' assets by
determining the securities and other investments that shall be purchased,
entered into, sold, closed, or exchanged for the Series, when these
transactions should be executed, and what portion of the assets of the Series
should be held in the various securities, cash and other investments in which
it may invest. To the extent permitted by the investment policies of each
Series, the Sub-Adviser shall make decisions for the Series as to foreign
currency matters and make determinations as to and execute and perform foreign
currency exchange contracts on behalf of the Series. The Sub-Adviser will
provide the services under this Agreement in accordance with each Series'
respective investment objective or objectives, policies, and restrictions as
agreed upon by the Manager and the Sub-Adviser and as set forth in the Fund's
Registration Statement filed with the Securities and Exchange Commission
("SEC"), as amended to reflect such agreement by the parties hereto, copies of
which shall be sent to the Sub-Adviser by the Manager prior to the commencement
of this Agreement and promptly following any such amendment. The Sub-Adviser
further agrees as follows:
(a) The Sub-Adviser will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's Board of
Trustees of which the Sub-Adviser has been sent a copy, and the provisions
of the Registration Statement of the Fund filed under the Securities Act of
1933 (the "1933 Act") and the 1940 Act, as supplemented or amended, of which
the Sub-Adviser has received a copy, and with the Manager's portfolio
manager operating policies and procedures as in effect on the date hereof,
as such policies and procedures may be revised or amended by the Manager and
agreed to by the Sub-Adviser. If a procedure applicable to a Series is to be
revised, the Manager will provide reasonable prior notice to the Sub-Adviser
of the proposed revisions, including a copy of the procedure as proposed to
be revised.
(b) In carrying out its duties under the Sub-Advisory Agreement, the
Sub-Adviser will comply with the following policies and procedures:
(i) The Sub-Adviser will manage each Series so that it meets the
income and asset diversification requirements of Section 851 of the
Internal Revenue Code.
(ii) The Sub-Adviser will have no duty to vote any proxy solicited by
or with respect to the issuers of securities in which assets of the
Series are invested unless the Manager gives the Sub-Adviser written
instructions to the contrary. The Sub-Adviser will immediately forward
any proxy solicited by or with respect to the issuers of securities in
which assets of the Series are invested to the Manager or to any agent
of the Manager designated by the Manager in writing. The Manager will be
solely responsible for making all required filings of Form N-PX with the
appropriate regulatory bodies.
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The Sub-Adviser will make appropriate personnel reasonably available
for consultation for the purpose of reviewing with representatives of
the Manager and/or the Board any proxy solicited by or with respect to
the issuers of securities in which assets of the Series are invested.
Upon request, the Sub-Adviser will submit a written voting
recommendation to the Manager for such proxies. In making such
recommendations, the Sub-Adviser shall use its good faith judgment to
act in the best interests of the Series. The Sub-Adviser shall not be
liable to the Manager, the Fund or any of the Fund's shareholders as a
result of any act, conduct or omission of the Manager in connection with
its voting of proxies associated with securities contained in any of the
Series. The Sub-Adviser shall disclose to the best of its knowledge any
conflict of interest with the issuers of securities that are the subject
of such recommendation.
(iii) In connection with the purchase and sale of securities for each
Series, the Sub-Adviser will arrange for the transmission to the
custodian and portfolio accounting agent for the Series, as needed, such
confirmation, trade tickets, and other documents and information,
including, but not limited to, Cusip, Sedol, or other numbers that
identify securities to be purchased or sold on behalf of the Series, as
may be reasonably necessary to enable the custodian and portfolio
accounting agent to perform its administrative and record keeping
responsibilities with respect to the Series. With respect to portfolio
securities to be settled through the Depository Trust Company, the
Sub-Adviser will arrange for the prompt transmission of the confirmation
of such trades to the Fund's custodian and portfolio accounting agent.
(iv) The Sub-Adviser will assist the custodian and portfolio
accounting agent for the Fund in determining or confirming, consistent
with the procedures and policies stated in the Registration Statement
for the Fund or adopted by the Board of Trustees, the value of any
portfolio securities or other assets of the Series for which the
custodian and portfolio accounting agent seeks assistance from or
identifies for review by the Sub-Adviser. The parties acknowledge that
the Sub-Adviser is not a custodian of the Series' assets and will not
take possession or custody of such assets nor a pricing agent or the
pricing agent for the Fund. The Sub-Adviser shall not be liable for any
valuation determined or adopted by the Fund, the Fund's custodian and/or
portfolio accounting agent, as contemplated in this Agreement, unless
such determination is made based upon information provided by the
Sub-Adviser that is materially incorrect or incomplete as a result of
the Sub-Adviser's gross negligence.
(v) The Sub-Adviser will provide the Manager, no later than the 10th
business day following the end of each Series' semi-annual period and
fiscal year, a letter to shareholders (to be subject to review and
editing by the Manager) containing a discussion of those factors
referred to in Item 5(a) of 1940 Act Form N-1A in respect of both the
prior quarter and the fiscal year to date.
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(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist in a form provided by the Manager for each
month by the 10th business day of the following month.
(c) The Sub-Adviser will complete and deliver to the Manager by the 10th
business day of each month a written report on each Series of the Fund that
contains the following information as of the immediately previous month's
end.
(i) A performance comparison to the Series benchmark listed in the
prospectus as well as a comparison to other mutual funds as listed in
the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., or similar independent services that monitor the performance of
mutual funds or with other appropriate indexes of investment securities;
(ii) Composition of the assets of each Series' portfolio and the
impact of key portfolio holdings and sector concentrations on the
Series; and
(iii) Confirmation of each Series' current investment objective and
Sub-Adviser's projected plan to realize the Series' investment
objectives.
(d) The Sub-Adviser will assist the Manager, as reasonably requested, in
its discussions with Morningstar to clarify any style box conflicts with
each Series' style and the anticipated timeframe in which Morningstar will
remedy such conflicts, if any.
(e) The Sub-Adviser will make available to the Fund and the Manager,
promptly upon request, any of the Series' investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and
ledgers maintained by the custodian or portfolio accounting agent for the
Fund) as are necessary to assist the Fund and the Manager to comply with
requirements of the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act"), as well as other applicable laws. The Sub-Adviser will
furnish to regulatory authorities having the requisite authority any
information or reports in connection with such services in respect to the
Series which may be requested in order to ascertain whether the operations
of the Fund are being conducted in a manner consistent with applicable laws
and regulations.
(f) The Sub-Adviser will provide reports to the Fund's Board of Trustees
for consideration at meetings of the Board of Trustees on the investment
program for each Series and the issuers and securities represented in each
Series' portfolio, and will furnish the Fund's Board of Trustees with
respect to each Series such periodic and special reports as the Trustees and
the Manager may reasonably request.
(g) In rendering the services required under this Agreement, the
Sub-Adviser may, from time to time, employ or associate with itself such
person or persons as it
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believes necessary to assist it in carrying out its obligations under this
Agreement. However, the Sub-Adviser may not retain as sub-adviser any
company that would be an "investment adviser," as that term is defined in
the 1940 Act, to the Series unless the contract with such company is
approved by a majority of the Trust's Board of Trustees and a majority of
Trustees who are not parties to any agreement or contract with such company
and who are not "interested persons," as defined in the 1940 Act, of the
Trust, the Manager, or the Sub-Adviser, or any such company that is retained
as sub-adviser. The Sub-Adviser shall be responsible for making reasonable
inquiries and for reasonably ensuring that any employee of the Sub-Adviser,
any sub-adviser that the Sub-Adviser has employed or with which it has
associated with respect to the Series, or any employee thereof has not, to
the best of the Sub-Adviser's knowledge, in any material connection with the
handling of Trust assets:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, involving
violations of Sections 1341, 1342, or 1343 of Xxxxx 00, Xxxxxx Xxxxxx
Code, or involving the purchase or sale of any security; or
(ii) been found by any state regulatory authority, within the last
ten (10) years, to have violated or to have acknowledged violation of
any provision of any state insurance law involving fraud, deceit, or
knowing misrepresentation; or
(iii) been found by any federal or state regulatory authorities,
within the last ten (10) years, to have violated or to have acknowledged
violation of any provision of federal or state securities laws involving
fraud, deceit, or knowing misrepresentation.
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 factors specified in the prospectus and/or
statement of additional information for the Fund, the price of the security or
other investment (including the applicable brokerage commission or dollar
spread), the size of the order, the nature of the market for the security, the
timing of the transaction, the reputation, the experience and financial
stability of the broker-dealer involved, the quality of the service, the
difficulty of execution, and the execution capabilities and operational
facilities of the firm involved, and the firm's risk in positioning a block of
securities. Accordingly, the price to a Series in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified, in the judgment of the Sub-Adviser in the exercise of its
fiduciary obligations to the Fund, by other aspects of the portfolio execution
services offered. Subject to such policies as the Fund's Board of Trustees or
Manager may determine and consistent with Section 28(e) of the Securities
Exchange Act of 1934, the Sub-Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused a Series to pay a broker-dealer for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such amount of
commission was reasonable in
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relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or the
Sub-Adviser's overall responsibilities with respect to the Series and to its
other clients as to which it exercises investment discretion. To the extent
consistent with these standards, the Sub-Adviser is further authorized to
allocate the orders placed by it on behalf of a Series managed by the
Sub-Adviser to an affiliated broker-dealer of either the Sub-Adviser or the
Manager or to such brokers and dealers who also provide research or statistical
material, or other services to the Series, the Sub-Adviser, or an affiliate of
the Sub-Adviser. Such allocation shall be in such amounts and proportions as
the Sub-Adviser shall determine consistent with the above standards, and the
Sub-Adviser will report on said allocation regularly to the Fund's Board of
Trustees indicating the broker-dealers to which such allocations have been made
and the basis therefor.
4. Representations.
(a) The Sub-Adviser agrees and represents that:
(i) the information it has provided for inclusion in the
Post-Effective Amendment to the Registration Statement for the Fund
filed with the SEC regarding the Series, including the prospectus and
statement of additional information (collectively, "Registration
Materials") is true and does not omit any statement of a material fact
which is required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which
they were made, not misleading; and
(ii) the Sub-Adviser has reviewed such information, as included in
the Registration Materials, and, to the Sub-Adviser's knowledge, with
respect to the disclosure contained in the Registration Materials based
upon information provided by the Sub-Adviser, such disclosure contains
no untrue statement of a material fact and does not omit any statement
of a material fact which is required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.
(b) The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will maintain such
registration so long as this Agreement remains in effect. The Sub-Adviser
will provide the Manager with a copy of the Sub-Adviser's Form ADV, Part II,
and will promptly provide to the Manager any updates or revisions to the
Sub-Adviser's Form ADV.
(c) The Manager agrees and represents that:
(i) the Manager and representatives of the Fund prepared the
Registration Materials and the Registration Materials (including the
prospectus for each Series) comply in all material respects with all
applicable laws, rules and regulations in each relevant jurisdiction;
6
(ii) the Registration Materials (including the prospectus for each
Series) do not contain any untrue statement of a material fact or omit
to state any material fact required by any applicable law to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading under
applicable law; and
(iii) the Manager and the Fund and all of their respective officers,
directors, partners, employees and agents will comply, in all material
respects, with all applicable laws and rules related to the Manager, the
Fund, the offering and sale of shares of the Series and the business of
the Fund and the Sub-Adviser shall not be liable to the Manager, the
Fund or any of the Fund's shareholders as a result of any act, conduct
or omission of the Manager or its officers, employees, affiliates or
agents.
5. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it and its staff and for their activities in connection
with its portfolio management duties under this Agreement. The Manager or the
Fund shall be responsible for all the expenses of the Fund's operations. In
addition, if the Fund is required, under applicable law, to supplement the
Registration Materials because of a change requested by the Sub-Adviser, the
Sub-Adviser will reimburse the Fund and/or the Manager for the cost of
preparing and distributing such supplement, unless the Sub-Adviser is
requesting the change in order to comply with an applicable law, rule or
regulation.
6. Compensation. For the services provided to each Series, the Manager will
pay the Sub-Adviser an annual fee equal to the amount specified for such Series
in Schedule A hereto, payable monthly in arrears. The fee will be appropriately
prorated to reflect any portion of a calendar month that this Agreement is not
in effect among the parties. In accordance with the provisions of the
Management Agreement, the Manager is solely responsible for the payment of fees
to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of its fees
solely from the Manager; provided, however, that if the Fund fails to pay the
Manager all or a portion of the management fee under said Management Agreement
when due, and the amount that was paid is insufficient to cover the
Sub-Adviser's fee under this Agreement for the period in question, then the
Sub-Adviser may enforce against the Fund any rights it may have as a
third-party beneficiary under the Management Agreement and the Manager will
take all steps appropriate under the circumstances to collect the amount due
from the Fund.
7. Marketing Materials.
(a) During the term of this Agreement, the Sub-Adviser agrees to furnish
the Manager at its principal office for prior review and approval by the
Manager all written and/or printed materials, including but not limited to,
PowerPoint(R) or slide presentations, news releases, advertisements,
brochures, fact sheets and other promotional, informational or marketing
materials (the "Marketing Materials") prepared for public dissemination,
that are produced by the Sub-Adviser or its affiliates in connection with
the Series, and Sub-Adviser shall not use any such materials if the Manager
reasonably objects in writing within five business days (or such other
period as may be mutually
7
agreed) after receipt thereof. Marketing Materials may be furnished to the
Manager by first class or overnight mail, facsimile transmission equipment,
electronic delivery or hand delivery. The Manager agrees that the
Sub-Adviser may identify the Fund and each Series on its client list for
public distribution.
(b) During the term of this Agreement, the Manager agrees to furnish the
Sub-Adviser at its principal office all Registration Materials (and any
constituent components of the Registration Materials) and any amendments
thereto, proxy statements, reports to shareholders, Marketing Materials or
other materials prepared for distribution to shareholders of each Series or
the public that refer to the Sub-Adviser in any way, prior to the use
thereof, and the Manager shall not use any such materials if the Sub-Adviser
reasonably objects in writing within five business days (or such other
period as may be mutually agreed) after receipt thereof. The Sub-Adviser's
right to object to such materials is limited to the portions of such
materials that expressly relate to the Sub-Adviser, its services,
performance and strategies. Marketing Materials may be furnished to the
Sub-Adviser by first class or overnight mail, facsimile transmission
equipment, electronic delivery or hand delivery.
(c) Neither the Manager nor the Fund, nor any affiliate of either, will
use the registered trademarks, service marks, logos, names or other
proprietary designations of NWQ, its subsidiaries and/or affiliates without
Tradewinds prior written approval. The Manager and the Fund will submit to
Tradewinds for its prior written approval any advertising or promotional
material using Tradewinds name or any name associated with an affiliate of
Tradewinds, or any trademarks, service marks, logos or proprietary
designations related to any of the foregoing.
8. Compliance.
(a) The Sub-Adviser shall use reasonable compliance techniques as the
Manager or the Board of Trustees may adopt, including any written compliance
procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the Manager and
the Fund (i) in the event that the SEC has censured the Sub-Adviser; placed
limitations upon its activities, functions or operations; suspended or
revoked its registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, or
(ii) upon having a reasonable basis for believing that the Series has ceased
to qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. The Sub-Adviser further agrees to
notify the Manager and the Fund promptly of any material fact known to the
Sub-Adviser respecting or relating to the Sub-Adviser that is not contained
in the Registration Statement or prospectus for the Fund (which describes
the Series), or any amendment or supplement thereto, or if any statement
contained therein that becomes untrue in any material respect.
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(c) The Manager agrees that it shall promptly notify the Sub-Adviser
(i) in the event that the SEC has censured the Manager or the Fund; placed
limitations upon either of their activities, functions, or operations;
suspended or revoked the Manager's registration as an investment adviser or
the Fund's registration under the 1940 Act; or has commenced proceedings or
an investigation against either the Manager or the Fund that may result in
any of these actions, or (ii) upon having a reasonable basis for believing
that the Series has ceased to qualify or might not qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code.
9. Books and Records. The Sub-Adviser hereby agrees that all records which
it maintains for the Series are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's or the
Manager's request in compliance with the requirements of Rule 31a-3 under the
1940 Act, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
10. Cooperation; Confidentiality. Each party to this Agreement agrees to
provide reasonable cooperation with the other party and with all appropriate
governmental authorities having the requisite jurisdiction (including, but not
limited to, the SEC) in connection with any investigation or inquiry relating
to this Agreement or the Fund. Subject to the foregoing, the Sub-Adviser shall
treat as confidential all information pertaining to the Fund and actions of the
Fund, the Manager and the Sub-Adviser, and the Manager shall treat as
confidential and use only in connection with the Series all information
pertaining to or furnished by the Sub-Adviser to the Fund or the Manager, in
connection with its duties under the Agreement except that the aforesaid
information need not be treated as confidential if required to be disclosed
under applicable law, if generally available to the public through means other
than by disclosure by the Sub-Adviser, the Manager or the Fund, or if available
from a source other than the Manager, Sub-Adviser or the Fund.
11. Non-Exclusivity. The services of the Sub-Adviser to the Series and the
Fund are not deemed to be exclusive, and the Sub-Adviser shall be free to
render investment advisory or other services to others (including other
investment companies) and to engage in other activities.
12. Prohibited Conduct. The Sub-Adviser may not engage in prior consultation
with any other sub-adviser of the Fund concerning transactions in securities or
other assets for any investment portfolio of the Fund, including the Series,
except that such consultations are permitted between the current and successor
sub-advisers of the Series in order to effect an orderly transition of
sub-advisory duties so long as such consultations are not concerning
transactions prohibited by Section 17(a) of the 1940 Act. This Section 12 does
not apply to Sub-Adviser's disclosure of a Series' portfolio holdings in
accordance with the Fund's policies and procedures governing portfolio holdings
disclosure.
13. Representations Respecting Sub-Adviser. The Manager agrees that neither
the Manager, nor affiliated persons of the Manager, shall give any information
or make any
9
representations or statements in connection with the sale of shares of the
Series concerning the Sub-Adviser or the Series other than the information or
representations contained in the Registration Statement, prospectus, or
statement of additional information for the Fund's shares, as they may be
amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved in
advance by the Sub-Adviser, except with the prior permission of the Sub-Adviser.
14. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that day-to-day management of the Series will be
delegated to the Sub-Adviser, subject to the oversight of the Manager and the
Fund's Board of Trustees, which shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement. The Fund has reserved the right to reasonably direct any action
hereunder taken on its behalf by the Sub-Adviser.
15. Liability. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Manager agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls the Sub-Adviser
(a) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
hereunder, and (b) shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
16. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the Sub-Adviser,
any affiliated person of the Sub-Adviser, and each person, if any, who,
within the meaning of Section 15 of the 1933 Act controls ("controlling
person") the Sub-Adviser (all of such persons being referred to as
"Sub-Adviser Indemnified Persons") against any and all losses, claims,
damages, liabilities, or litigation (including legal and other expenses) to
which a Sub-Adviser Indemnified Person may become subject under the 1933
Act, the 1940 Act, the Advisers Act, under any other statute, at common law
or otherwise, arising out of the Manager's responsibilities to the Fund
which (1) may be based upon the Manager's negligence, willful misfeasance,
bad faith or reckless disregard in the performance of its duties to the Fund
(which could include a negligent action or a negligent omission to act), or
by reason of the Manager's breach of its obligations and duties under this
Agreement, or (2) may be based upon any untrue statement of a material fact
contained in the Registration Statement or prospectus covering shares of the
Fund or any Series, or any amendment thereof or any supplement thereto, or
the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to the
Manager or the Fund or to any affiliated person of the Manager by a
Sub-Adviser Indemnified Person; provided however, that in no case shall the
indemnity in favor of the Sub-Adviser Indemnified Person be deemed to
protect such
10
person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or negligence in the
performance of its duties, or by reason of its reckless disregard of
obligations and duties under this Agreement.
(b) Notwithstanding Section 15 of this Agreement, the Sub-Adviser agrees
to indemnify and hold harmless the Manager, any affiliated person of the
Manager, and any controlling person of the Manager (all of such persons
being referred to as "Manager Indemnified Persons") against any and all
losses, claims, damages, liabilities, or litigation (including legal and
other expenses) to which a Manager Indemnified Person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising as a result of the Sub-Adviser's
negligence, willful misfeasance, bad faith or reckless disregard in the
performance of its duties to the Fund (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser's
breach of its obligations and duties under this Agreement, or (2) may be
based upon any untrue statement of a material fact contained in the
Registration Statement or prospectus covering the shares of the Fund or any
Series, or any amendment or supplement thereto, or the omission to state
therein a material fact known or which should have been known to the
Sub-Adviser and was required to be stated therein or necessary to make the
statements therein not misleading, if such a statement or omission was made
in reliance upon information furnished to the Manager, the Fund, or any
affiliated person of the Manager or Fund by the Sub-Adviser or any
affiliated person of the Sub-Adviser; provided, however, that in no case
shall the indemnity in favor of a Manager Indemnified Person be deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, negligence
in the performance of its duties, or by reason of its reckless disregard of
its obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this
Section 16 with respect to any claim made against a Sub-Adviser Indemnified
Person unless such Sub-Adviser Indemnified Person shall have notified the
Manager in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Sub-Adviser Indemnified Person (or after such Sub-Adviser
Indemnified Person shall have received notice of such service on any
designated agent), but failure to notify the Manager of any such claim shall
not relieve the Manager from any liability which it may have to the
Sub-Adviser Indemnified Person against whom such action is brought except to
the extent the Manager is prejudiced by the failure or delay in giving such
notice. In case any such action is brought against the Sub-Adviser
Indemnified Person, the Manager will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Sub-Adviser
Indemnified Person, to assume the defense thereof, with counsel satisfactory
to the Sub-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
11
separate counsel to the Sub-Adviser Indemnified Person, which counsel shall
be satisfactory to the Manager and to the Sub-Adviser Indemnified Person.
The Sub-Adviser Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Manager shall not be liable to
the Sub-Adviser Indemnified Person under this Agreement for any legal or
other expenses subsequently incurred by the Sub-Adviser Indemnified Person
independently in connection with the defense thereof other than reasonable
costs of investigation. The Manager shall not have the right to compromise
on or settle the litigation without the prior written consent of the
Sub-Adviser Indemnified Person if the compromise or settlement results, or
may result, in a finding of wrongdoing on the part of the Sub-Adviser
Indemnified Person.
(d) The Sub-Adviser shall not be liable under Paragraph (b) of this
Section 16 with respect to any claim made against a Manager Indemnified
Person unless such Manager Indemnified Person shall have notified the
Sub-Adviser in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Manager Indemnified Person (or after such Manager
Indemnified Person shall have received notice of such service on any
designated agent), but failure to notify the Sub-Adviser of any such claim
shall not relieve the Sub-Adviser from any liability which it may have to
the Manager Indemnified Person against whom such action is brought except to
the extent the Sub-Adviser is prejudiced by the failure or delay in giving
such notice. In case any such action is brought against the Manager
Indemnified Person, the Sub-Adviser will be entitled to participate, at its
own expense, in the defense thereof or, after notice to the Manager
Indemnified Person, to assume the defense thereof, with counsel satisfactory
to the Manager Indemnified Person. If the Sub-Adviser assumes the defense of
any such action and the selection of counsel by the Sub-Adviser to represent
both the Sub-Adviser and the Manager Indemnified Person would result in a
conflict of interests and therefore, would not, in the reasonable judgment
of the Manager Indemnified Person, adequately represent the interests of the
Manager Indemnified Person, the Sub-Adviser will, at its own expense, assume
the defense with counsel to the Sub-Adviser and, also at its own expense,
with separate counsel to the Manager Indemnified Person, which counsel shall
be satisfactory to the Sub-Adviser and to the Manager Indemnified Person.
The Manager Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Sub-Adviser shall not be liable
to the Manager Indemnified Person under this Agreement for any legal or
other expenses subsequently incurred by the Manager Indemnified Person
independently in connection with the defense thereof other than reasonable
costs of investigation. The Sub-Adviser shall not have the right to
compromise on or settle the litigation without the prior written consent of
the Manager Indemnified Person if the compromise or settlement results, or
may result in a finding of wrongdoing on the part of the Manager Indemnified
Person.
12
17. Duration and Termination.
(a) With respect to each Series identified as a Series on Schedule A
hereto as in effect on the date of this Agreement, unless earlier terminated
with respect to any Series this Agreement shall continue in full force and
effect through November 30, 2008. Thereafter, unless earlier terminated with
respect to a Series, the Agreement shall continue in full force and effect
with respect to each such Series for periods of one year, provided that such
continuance is specifically approved at least annually by (i) the vote of a
majority of the Board of Trustees of the Fund, or (ii) the vote of a
majority of the outstanding voting shares of the Series (as defined in the
1940 Act), and provided that such continuance is also approved by the vote
of a majority of the Board of Trustees of the Fund who are not parties to
this Agreement or "interested persons" (as defined in the 0000 Xxx) of the
Fund or the Manager, cast in person at a meeting called for the purpose of
voting on such approval.
With respect to any Series that was added to Schedule A hereto as a
Series after the date of this Agreement, the Agreement shall become
effective on the later of (i) the date Schedule A is amended to reflect the
addition of such Series as a Series under the Agreement or (ii) the date
upon which the shares of the Series are first sold to the public, subject to
the condition that the Fund's Board of Trustees, including a majority of
those Trustees who are not interested persons (as such term is defined in
the 0000 Xxx) of the Manager, and the shareholders of such Series, shall
have approved this Agreement. Unless terminated earlier as provided herein
with respect to any such Series, the Agreement shall continue in full force
and effect for a period of two years from the date of its effectiveness (as
identified above) with respect to that Series. Thereafter, unless earlier
terminated with respect to a Series, the Agreement shall continue in full
force and effect with respect to each such Series for periods of one year,
provided that such continuance is specifically approved at least annually by
(i) the vote of a majority of the Board of Trustees of the Fund, or
(ii) vote of a majority of the outstanding voting shares of such Series (as
defined in the 1940 Act), and provided that such continuance is also
approved by the vote of a majority of the Board of Trustees of the Fund who
are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of the Fund or the Manager, cast in person at a meeting called for
the purpose of voting on such approval. However, any approval of this
Agreement by the holders of a majority of the outstanding shares (as defined
in the 0000 Xxx) of a Series shall be effective to continue this Agreement
with respect to such Series notwithstanding (i) that this Agreement has not
been approved by the holders of a majority of the outstanding shares of any
other Series or (ii) that this agreement has not been approved by the vote
of a majority of the outstanding shares of the Fund, unless such approval
shall be required by any other applicable law or otherwise. Notwithstanding
the foregoing, this Agreement may be terminated with respect to any Series
covered by this Agreement: (i) by the Manager at any time, upon sixty
(60) days' written notice to the Sub-Adviser and the Fund, (ii) at any time
without payment of any penalty by the Fund, by the Fund's Board of Trustees
or a majority of the outstanding voting securities of each Series, upon
sixty (60) days' written notice to the Manager and the Sub-Adviser, or
(iii) by the Sub-Adviser upon ninety (90)
13
days' written notice unless the Fund or the Manager requests additional time
to find a replacement for the Sub-Adviser, in which case the Sub-Adviser
shall allow the additional time requested by the Fund or Manager not to
exceed thirty (30) additional days beyond the initial ninety-day notice
period; provided, however, that the Sub-Adviser may terminate this Agreement
at any time without penalty, with respect to any Series immediately,
effective upon written notice to the Manager and the Fund, in the event
(i) either the Sub-Adviser (acting in good faith) or the Manager ceases to
be registered as an investment adviser under the Advisers Act or otherwise
becomes legally incapable of providing investment management services under
applicable law or pursuant to its respective contract with the Fund;
(ii) the Manager becomes bankrupt or otherwise incapable of carrying out its
obligations under this Agreement or the Management Agreement; and/or
(iii) the Sub-Adviser does not receive compensation for its services from
the Manager or the Fund as required by the terms of this agreement.
In the event of termination for any reason, all records of each Series
for which the Agreement is terminated shall promptly be returned to the
Manager or the Fund, free from any claim or retention of rights in such
record by the Sub-Adviser, although the Sub-Adviser may, at its own expense,
make and retain a copy of such records. This Agreement shall automatically
terminate in the event of its assignment (as such term is described in the
1940 Act). In the event this Agreement is terminated or is not approved in
the manner described above, the Sections or Paragraphs numbered 9, 10, 13,
14, 15 and 16 of this Agreement shall remain in effect, as well as any
applicable provision of this Section numbered 17 and, to the extent that
only amounts are owed to the Sub-Adviser as compensation for services
rendered while the agreement was in effect, Section 6.
(b) Notices. Any notice must be in writing and shall be sufficiently
given (1) when delivered in person, (2) when dispatched by telegram or
electronic facsimile transfer (confirmed in writing by postage prepaid first
class air mail simultaneously dispatched), (3) when sent by internationally
recognized overnight courier service (with receipt confirmed by such
overnight courier service), or (4) when sent by registered or certified
mail, to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing to
the other party.
If to the Fund:
ING Mutual Funds
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Xx.
If to the Manager:
ING Investments, LLC
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Xx.
14
If to the Sub-Adviser:
Tradewinds Global Investors, LLC
0000 Xxxxxxx Xxxx Xxxx 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
18. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved as required by applicable law.
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of Arizona,
provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder, and without regard for the conflicts of laws principle thereof.
The term "affiliate" or "affiliated person" as used in this Agreement shall
mean "affiliated person" as defined in Section 2(a)(3) of the 0000 Xxx.
(b) The Manager and the Sub-Adviser acknowledge that the Fund enjoys the
rights of a third-party beneficiary under this Agreement, and the Manager
acknowledges that the Sub-Adviser enjoys the rights of a third party
beneficiary under the Management Agreement.
(c) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(d) To the extent permitted under Section 17 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent
of the other parties.
(e) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
(f) Except as otherwise contemplated in this Agreement, nothing herein
shall be construed as constituting the Sub-Adviser as an agent or co-partner
of the Manager, or constituting the Manager as an agent or co-partner of the
Sub-Adviser.
(g) This Agreement may be executed in counterparts.
15
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ING INVESTMENTS, LLC
By: /s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
Senior Vice President
TRADEWINDS GLOBAL INVESTORS, LLC
By: /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
16
