EXHIBIT (D)(15)
FORM OF SUB-ADVISORY AGREEMENT
ING MUTUAL FUNDS
AGREEMENT made this 7th day of December 2005 between ING Investments,
LLC, an Arizona limited liability company (the "Manager"), and Xxxxxxxxxx Global
Investors, Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, ING Mutual Funds (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company;
WHEREAS, the Fund is authorized to issue separate series, each series
having its own investment objective or objectives, policies, and limitations;
and
WHEREAS, the Fund may offer shares of additional series in the future;
and
WHEREAS, pursuant to an Amended and Restated Investment Management
Agreement, dated February 1, 2005 (the "Management Agreement"), a copy of which
has been provided to the Sub-Adviser, the Fund has retained the Manager to
render advisory and management services with respect to certain of the Fund's
series; 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. The Sub-Adviser will
provide investment research and conduct a continuous program of evaluation,
investment, sales, and reinvestment of each Series' assets by determining the
securities and other investments that shall be purchased, entered into, sold,
closed, or exchanged for the Series, when these transactions should be executed,
and what portion of the assets of the Series should be held in the various
securities and other investments in which it may invest. From time to time, at
the request of the Manager, the Sub-adviser will cooperate with and assist a
Transition Manager, hired by the Manager, when the Series' portfolio is part of
a larger transition of assets, provided that the Sub-Adviser will continue to
have full discretion with respect to the Series investment portfolio. To the
extent permitted by the investment policies of each Series, the Sub-Adviser
shall make decisions for the Series as to foreign currency matters and make
determinations as to and execute and perform foreign currency exchange contracts
on behalf of the Series. At the request of the Manager, the Sub-Adviser will
participate in standing instructions giving the Fund' custodian authority to
administer daily foreign currency exchange transactions.
The Sub-Adviser will provide the services under this Agreement in
accordance with each Series' investment objective or objectives, policies, and
restrictions as stated in the Fund's Registration Statement filed with the
Securities and Exchange Commission ("SEC"), as amended, copies of which shall be
sent to the Sub-Adviser by the Manager prior to the commencement of this
Agreement and promptly following any such amendment. The Sub-Adviser further
agrees as follows:
(a) The Sub-Adviser will conform with the 1940 Act and all
rules and regulations thereunder, all other applicable federal and
state laws and regulations, with any applicable procedures adopted by
the Fund's Board of Trustees of which the Sub-Adviser has been sent a
copy, and the provisions of the Registration Statement of the Fund
filed under the Securities Act of 1933, as amended (the "1933 Act") and
the 1940 Act, as supplemented or amended, of which the Sub-Adviser has
received a copy, and with the Manager's portfolio manager operating
policies and procedures as in effect on the date hereof, as such
policies and procedures may be revised or amended by the Manager. In
carrying out its duties under the Sub-Adviser Agreement, the
Sub-Adviser will comply with the following policies and procedures:
(i) The Sub-Adviser will manage each Series so that
it meets the income and asset diversification requirements of
Section 851 of the Internal Revenue Code.
(ii) The Sub-Adviser will have no duty to vote any
proxy solicited by or with respect to the issuers of
securities in which assets of the Series are invested unless
the Manager gives the Sub-Adviser written instructions to the
contrary. The Sub-Adviser will immediately forward any proxy
solicited by or with respect to the issuers of securities in
which assets of the Series are invested to the Manager or to
any agent of the Manager designated by the Manager in writing.
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The Sub-Adviser will make appropriate personnel
available for consultation for the purpose of reviewing with
representatives of the Manager and/or the Board any proxy
solicited by or with respect to the issuers of securities in
which assets of the Series are invested. Upon request, the
Sub-Adviser will submit a written voting recommendation to the
Manager for such proxies. In making such recommendations, the
Sub-Adviser shall use its good faith judgment to act in the
best interests of the Series. The Sub-Adviser shall disclose
to the best of its knowledge any conflict of interest with the
issuers of securities that are the subject of such
recommendation including whether such issuers are clients or
are being solicited as clients of the Sub-Adviser or of its
affiliates.
(iii) In connection with the purchase and sale of
securities for each Series, the Sub-Adviser will arrange for
the timely transmission, as determined by the portfolio
accounting agent to enable the agent to accurately calculate
the Series' daily net asset value, to the custodian and
portfolio accounting agent for the Series on a daily basis,
such confirmation, trade tickets, and other documents and
information, including, but not limited to, Cusip, Sedol, or
other numbers that identify securities to be purchased or sold
on behalf of the Series, as may be reasonably necessary to
enable the custodian and portfolio accounting agent to perform
its administrative and record keeping responsibilities with
respect to the Series. With respect to portfolio securities to
be settled through the Depository Trust Company, the
Sub-Adviser will arrange for the prompt transmission of the
confirmation of such trades to the Fund's custodian and
portfolio accounting agent.
(iv) The Sub-Adviser will assist the administrator
for the Fund in reviewing, determining or confirming
(including, if necessary, obtaining broker-quoted prices),
consistent with the procedures and policies stated in the
Registration Statement for the Fund or adopted by the Board of
Trustees, the value of any portfolio securities or other
assets of the Series for which the administrator seeks
assistance from or identifies for review by the Sub-Adviser.
The parties acknowledge that the Sub-Adviser is not a
custodian of the Series' assets and will not take possession
or custody of such assets.
(v) The Sub-Adviser will provide the Manager, no
later than the 10th business day following the end of each
Series' semi-annual period and fiscal year, a letter to
shareholders (to be subject to review and editing by the
Manager) containing a discussion of those factors referred to
in Item 5(a) of 1940 Act Form N-1A in respect of both the
prior quarter and the fiscal year to date.
(vi) The Sub-Adviser will complete and deliver to the
Manager a written compliance checklist, a certified compliance
acknowledgement report and the group of reports listed below
in a form provided by the Manager for each month by the 10th
business day of the following month:
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1) Report on Brokerage Commissions and Soft
Dollar Usage.
2) Trade Compliance reporting pertaining to
Rules 17a-7, 17e-1, 10f-3 under the 1940
Act.
3) Report on Illiquid and Restricted Securities
held in each portfolio.
4) Reports required on Issuers Credit Ratings
applicable to Rule 2a-7 under the 1940 Act.
(b) The Sub-Adviser will complete and deliver to the Manager
by the 10th business day of each month a written report on each Series
of the Fund that contains the following information as of the
immediately previous month's end.
(i) A performance comparison to the Series benchmark
listed in the prospectus as well as a comparison to other
mutual funds as provided to Sub-Adviser by the Manager;
(ii) Composition of the assets of each Series'
portfolio and the impact of key portfolio holdings and sector
concentrations on the Series; and
(iii) Confirmation of each Series' current investment
objective and Sub-Adviser's projected plan to realize the
Series' investment objectives.
(c) The Sub-Adviser will advise the Manager of any style box
conflicts with each Series' style.
(d) The Sub-Adviser will make available to the Fund and the
Manager, promptly upon request, any of the Series' investment records
and ledgers maintained by the Sub-Adviser (which shall not include the
records and ledgers maintained by the custodian or portfolio accounting
agent for the Fund) as are necessary to assist the Fund and the Manager
to comply with requirements of the 1940 Act and the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), as well as other
applicable laws. The Sub-Adviser will furnish to regulatory authorities
having the requisite authority any information or reports in connection
with such services in respect to the Series which may be requested in
order to ascertain whether the operations of the Fund are being
conducted in a manner consistent with applicable laws and regulations.
The Manager shall maintain and preserve all books and other records of
the Fund, as required under the 1940 Act except for all records related
to the Fund's transactions, which shall be preserved and maintained by
the Sub-Adviser, and any other records that the Sub-Adviser is required
to maintain under the 1940 Act, and the Manager shall timely furnish to
Sub-Adviser all information and copies of books and records reasonably
requested by Sub-Adviser to enable the Sub-Adviser to comply with a
request made with respect to the Fund in connection with a regulatory
inspection.
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(e) The Sub-Adviser will provide reports to the Fund's Board
of Trustees for consideration at meetings of the Board of Trustees on
the investment program for each Series and the issuers and securities
represented in each Series' portfolio, and will furnish the Fund's
Board of Trustees with respect to each Series such periodic and special
reports as the Trustees and the Manager may reasonably request.
(f) Obligations of the Manager.
(i) The Manager shall provide (or cause the Series'
Custodian to provide) timely information to the Sub-Adviser
regarding such information as may be reasonably necessary for
the Sub-Adviser to perform its responsibilities hereunder.
(ii) The Manager has furnished the Sub-Adviser a copy
of the prospectus and statement of additional information of
the Series and agrees during the continuance of this Agreement
to furnish the Sub-Adviser copies of any revisions or
supplements. The Manager agrees to furnish the Sub-Adviser
with copies of any financial statements or reports made by the
Series to its shareholders, and any further materials or
information which the Sub-Adviser may reasonably request to
enable it to perform its functions under this Agreement.
3. Broker-Dealer Selection. The Sub-Adviser is authorized to make
decisions to buy and sell securities and other investments for each Series'
portfolio, broker-dealer selection, and negotiation of brokerage commission
rates in effecting a security transaction. The Sub-Adviser's primary
consideration in effecting a security transaction will be to obtain the best
execution for the Series, taking into account the factors specified in the
prospectus and/or statement of additional information for the Fund, which
include price (including the applicable brokerage commission or dollar spread),
the size of the order, the nature of the market for the security, the timing of
the transaction, the reputation, the experience and financial stability of the
broker-dealer involved, the quality of the service, the difficulty of execution,
and the execution capabilities and operational facilities of the firm involved,
and the firm's risk in positioning a block of securities. Accordingly, the price
to a Series in any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified, in the judgment
of the Sub-Adviser in the exercise of its fiduciary obligations to the Fund, by
other aspects of the portfolio execution services offered. Subject to such
policies as the Fund's Board of Trustees or Manager may determine and consistent
with Section 28(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Sub-Adviser shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused a Series to pay a commission to a broker-dealer for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer, viewed in terms of either that
particular transaction or the Sub-Adviser's or the Manager's overall
responsibilities with respect to the Series and to their respective other
clients as to which they exercise investment discretion. The Sub-Adviser will
consult with the Manager to the end that portfolio transactions on behalf of a
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Series are directed to broker-dealers that participate in commission recapture
programs benefiting the Fund, provided that neither the Sub-Adviser nor the
Manager will direct brokerage in recognition of the sale of Fund shares. To the
extent consistent with these standards, the Sub-Adviser is further authorized to
allocate the orders placed by it on behalf of a Series to the Sub-Adviser if it
is registered as a broker-dealer with the SEC, to an affiliated broker-dealer,
or to such brokers and dealers who also provide research or statistical
material, or other services to the Series, the Sub-Adviser, or an affiliate of
the Sub-Adviser. Such allocation shall be in such amounts and proportions as the
Sub-Adviser shall determine consistent with the above standards, and the
Sub-Adviser will report on said allocation monthly to the Fund's Board of
Trustees indicating the broker-dealers to which such allocations have been made
and the basis therefor.
4. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the most
recent Post-Effective Amendment to the Registration Statement for the Fund filed
with the SEC that contains disclosure about the Sub-Adviser, and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
information relating, directly or indirectly, to the Sub-Adviser, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will maintain such
registration so long as this Agreement remains in effect. The Sub-Adviser will
provide the Manager with a copy of the Sub-Adviser's Form ADV, Part II at the
time the Form ADV is filed with the SEC.
5. Expenses. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement, including,
but not limited to, reimbursement of losses due to trade errors or compliance
breaches, which such errors or compliance breaches solely relate to
Sub-Adviser's activities with respect to the Series. The Manager or the Fund
shall be responsible for all the expenses of the Fund's operations.
6. Compensation. For the services provided to each Series, the Manager
will pay the Sub-Adviser an annual fee equal to the amount specified for such
Series in SCHEDULE A hereto, payable monthly in arrears. The fee will be
appropriately prorated to reflect any portion of a calendar month that this
Agreement is not in effect among the parties. In accordance with the provisions
of the Management Agreement, the Manager is solely responsible for the payment
of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of its
fees solely from the Manager; provided, however, that if the Fund fails to pay
the Manager all or a portion of the management fee under said Management
Agreement when due, and the amount that was paid is 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.
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7. Marketing Materials.
(a) During the term of this Agreement, the Sub-Adviser agrees
to furnish the Manager at its principal office for prior review and
approval by the Manager all written and/or printed materials, including
but not limited to, PowerPoint(R) or slide presentations, news
releases, advertisements, brochures, fact sheets and other promotional,
informational or marketing materials (the "Marketing Materials") for
public dissemination, that are produced or are for use or reference by
the Sub-Adviser, its affiliates or other designees, broker-dealers or
the public in connection with the Series, and Sub-Adviser shall not use
any such materials if the Manager reasonably objects in writing within
five business days (or such other period as may be mutually agreed)
after receipt thereof. Marketing Materials may be furnished to the
Manager by first class or overnight mail, facsimile transmission
equipment, electronic delivery or hand delivery.
(b) During the term of this Agreement, the Manager agrees to
furnish the Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to shareholders, or Marketing Materials prepared
for internal use or for distribution to shareholders of each Series, or
the public that refer to the Sub-Adviser in any way, prior to the use
thereof, and the Manager shall not use any such materials if the
Sub-Adviser reasonably objects in writing within five business days (or
such other period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser,
its services and its clients. The Manager agrees to use its reasonable
best efforts to ensure that materials prepared by its employees or
agents or its affiliates that refer to the Sub-Adviser or its clients
in any way are consistent with those materials previously approved by
the Sub-Adviser as referenced in the first sentence of this paragraph.
Marketing Materials may be furnished to the Sub-Adviser by first class
or overnight mail, facsimile transmission equipment, electronic
delivery or hand delivery.
(c) Proprietary Rights. The Manager agrees and acknowledges
that the Sub-Adviser is the sole owner of the name and marks
"Xxxxxxxxxx Global Investors, Inc." and that all use of any designation
consisting in whole or part of "Xxxxxxxxxx Global Investors, Inc."
under this Agreement shall inure to the benefit of the Sub-Adviser.
Upon termination of this Agreement for any reason, the Manager shall
cease, and the Manager shall use its best efforts to cause the Series
to cease, all use of any such designation as soon as reasonably
practicable.
8. Compliance.
(a) The Sub-Adviser agrees to use reasonable compliance
techniques and policies and procedures reasonably designed to prevent
violations of the federal securities laws as the Manager or the Board
of Trustees may adopt, including any written compliance procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the
Manager and the Fund in the event that the SEC has censured the
Sub-Adviser; placed limitations upon its
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activities, functions or operations; suspended or revoked its
registration as an investment adviser; or has commenced proceedings or
an investigation that may result in any of these actions. The
Sub-Adviser further agrees to notify the Manager and the Fund promptly
of any material fact known to the Sub-Adviser respecting or relating to
the Sub-Adviser that is not contained in the Registration Statement or
prospectus for the Fund (which describes the Series), or any amendment
or supplement thereto, or if any statement contained therein that
becomes untrue in any material respect.
(c) The Manager agrees that it shall promptly notify the
Sub-Adviser (i) in the event that the SEC has censured the Manager or
the Fund; placed limitations upon either of their activities,
functions, or operations; suspended or revoked the Manager's
registration as an investment adviser; or has commenced proceedings or
an investigation that may result in any of these actions, or (ii) upon
having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code.
9. Books and Records. The Sub-Adviser hereby agrees that all records
which it maintains for the Series are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's or
the Manager's request in compliance with the requirements of Rule 31a-3 under
the 1940 Act, although the Sub-Adviser may, at its own expense, make and retain
a copy of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
10. Cooperation; Confidentiality. Each party to this Agreement agrees
to cooperate with the other party and with all appropriate governmental
authorities having the requisite jurisdiction (including, but not limited to,
the SEC) in connection with any investigation or inquiry relating to this
Agreement or the Fund. Subject to the foregoing, the Sub-Adviser shall treat as
confidential all information pertaining to the Fund and actions of the Fund, the
Manager and the Sub-Adviser, and the Manager shall treat as confidential and use
only in connection with the Series all information furnished to the Fund or the
Manager by the Sub-Adviser, in connection with its duties under the Agreement
except that the aforesaid information need not be treated as confidential if
required to be disclosed under applicable law, if generally available to the
public through means other than by disclosure by the Sub-Adviser or the Manager,
or if available from a source other than the Manager, Sub-Adviser or the Fund.
11. Exclusivity.
(a) The services of the Sub-Adviser to the Series and the Fund
are deemed to be exclusive commencing on the effective date of this
Agreement and shall terminate upon the termination of this Agreement
unless terminated earlier by the mutual agreement of the Fund and the
Sub-Adviser (the "Exclusivity Period").
(b) The Sub-Adviser shall not provide advisory services to any
registered open-end investment company that is distributed in the
United States with a similar international growth investment strategy.
This restriction shall not apply to: (i) separate
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account assets, (ii) institutional account assets managed by the
Sub-Adviser, including the Institutional Share Class of the Xxxxxxxxxx
Institutional Series (HIS) International Growth Fund, (iii) the HIS
International Growth Fund Advisory Share Class insofar as those shares
are marketed by the Sub-Adviser to consultant driven defined
contribution plans, (iv) multi-manager mutual funds in which the
Sub-Adviser manages a portion of an entire fund, (v) international core
funds in which the Sub-Adviser manages one or both international growth
and international value portfolios and (vi) the use of the HIS
International Growth Fund - Institutional or Advisory Share Classes in
a variable annuity separate account.
(c) The Manager, for the duration of the Exclusivity Period,
agrees that it shall not retain any other unaffiliated international
growth advisory firm to advise or sub-advise a mutual fund in the
international growth style which is distributed in the United States.
(d) Subject to the Sub-Adviser's fiduciary duty to the Fund
under the Advisers Act and this Agreement, this Agreement shall not in
any way limit or restrict the Sub-Adviser or any of its directors,
officers, employees or agents from buying, selling or trading any
securities or other investment instruments for its or their own account
or for the account of others for whom it or they may be acting,
provided that such activities do not adversely affect or otherwise
impair the performance by the Sub-Adviser of its duties and obligations
under this Agreement and, provided further that the Sub-Adviser, its
directors, officer employees and agents comply with applicable
provisions under the Advisers Act, the 1940 Act and other applicable
law. The Manager and the Series recognize and agree that the
Sub-Adviser may provide advice to or take action with respect to other
clients, which advice or action, including the timing and nature of
such advice or action, may differ from or be identical to advice given
or action taken with respect to the Series. The Sub-Adviser shall for
all purposes hereof be deemed to be an independent contractor and
shall, unless otherwise provided or authorized, have no authority to
act for or represent the Series or the Manager in any way or otherwise
be deemed an agent of the Series or the Manager, other than in the
Sub-Adviser's capacity as Sub-Adviser to the Fund.
12. Prohibited Conduct. The Sub-Adviser may not consult with any other
sub-adviser of the Fund concerning transactions in securities or other assets
for any investment portfolio of the Fund, including the Series, except that such
consultations are permitted between the current and successor sub-advisers of
the Series in order to effect an orderly transition of sub-advisory duties so
long as such consultations are not concerning transactions prohibited by Section
17 (a) of the 1940 Act.
13. Representations Respecting Sub-Adviser. The Manager agrees that
neither the Manager, nor affiliated persons of the Manager, shall give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Sub-Adviser or the Series other than
the information or representations contained in the Registration Statement,
prospectus, or statement of additional information for the Fund's shares, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for
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the Fund, or in Marketing Materials 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 the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
15. Liability. Except as may otherwise be required by the 1940 Act or
the rules thereunder or other applicable law, the Manager agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls the Sub-Adviser
(a) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
hereunder, and (b) shall not be liable for, or subject to any damages, expenses,
or losses in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
16. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person,
if any, who, within the meaning of Section 15 of the 1933 Act controls
("controlling person") the Sub-Adviser (all of such persons being
referred to as "Sub-Adviser Indemnified Persons") against any and all
losses, claims, damages, liabilities, or litigation (including legal
and other expenses) to which a Sub-Adviser Indemnified Person may
become subject under the 1933 Act, the Exchange Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise,
arising out of the Manager's responsibilities to the Fund which (1) may
be based upon the Manager's negligence, willful misfeasance, or bad
faith in the performance of its duties (which could include a negligent
action or a negligent omission to act), or by reason of the Manager's
reckless disregard of its obligations and duties under this Agreement,
or (2) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
prospectus covering shares of the Fund or any Series, or any amendment
thereof or any supplement thereto, or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished
to the Manager or the Fund or to any affiliated person of the Manager
by a Sub-Adviser Indemnified Person; provided however, that in no case
shall the indemnity in favor of the Sub-Adviser Indemnified Person be
deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad
faith, or negligence in the performance of its duties, or by reason of
its reckless disregard of obligations and duties under this Agreement.
(b) Notwithstanding Section 15 of this Agreement, the
Sub-Adviser agrees to
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indemnify and hold harmless the Fund, the Manager, any affiliated
person of the Manager, and any controlling person of the Manager (the
Fund and all of such persons being referred to as "Manager Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Manager
Indemnified Person may become subject under the 1933 Act, 1940 Act, the
Exchange Act, the Advisers Act, under any other statute, at common law
or otherwise, arising out of the Sub-Adviser's responsibilities as
Sub-Adviser of the Series which (1) may be based upon the Sub-Adviser's
negligence, willful misfeasance, or bad faith in the performance of its
duties (which could include a negligent action or a negligent omission
to act), or by reason of the Sub-Adviser's reckless disregard of its
obligations and duties under this Agreement, or (2) may be based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or prospectus covering the
shares of the Fund or any Series, or any amendment or supplement
thereto, or the omission or alleged omission to state therein a
material fact known or which should have been known to the Sub-Adviser
and was required to be stated therein or necessary to make the
statements therein not misleading, if such a statement or omission was
made in reliance upon information furnished to the Manager, the Fund,
or any affiliated person of the Manager or Fund by the Sub-Adviser or
any affiliated person of the Sub-Adviser; provided, however, that in no
case shall the indemnity in favor of a Manager Indemnified Person be
deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad
faith, negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of
this Section 16 with respect to any claim made against a Sub-Adviser
Indemnified Person unless such Sub-Adviser Indemnified Person shall
have notified the Manager in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon such Sub-Adviser Indemnified
Person (or after such Sub-Adviser Indemnified Person shall have
received notice of such service on any designated agent), but failure
to notify the Manager of any such claim shall not relieve the Manager
from any liability which it may have to the Sub-Adviser Indemnified
Person against whom such action is brought except to the extent the
Manager is prejudiced by the failure or delay in giving such notice. In
case any such action is brought against the Sub-Adviser Indemnified
Person, the Manager will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Sub-Adviser
Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Sub-Adviser Indemnified Person. If the Manager
assumes the defense of any such action and the selection of counsel by
the Manager to represent the Manager and the Sub-Adviser Indemnified
Person would result in a conflict of interests and therefore, would
not, in the reasonable judgment of the Sub-Adviser Indemnified Person,
adequately represent the interests of the Sub-Adviser Indemnified
Person, the Manager will, at its own expense, assume the defense with
counsel to the Manager and, also at its own expense, with separate
counsel to the Sub-Adviser Indemnified Person, which counsel shall be
satisfactory to the Manager and to the Sub-Adviser Indemnified Person.
The Sub-Adviser Indemnified Person shall bear the fees and expenses of
any additional counsel
11
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.
17. Duration and Termination.
(a) This Agreement shall become effective on the date first
indicated above, subject to the condition that the Fund's Board of
Trustees, including a majority of those Trustees who are not interested
persons (as such term is defined in the 0000 Xxx) of the Manager or the
Sub-Adviser, and the shareholders of each Series, shall have approved
this Agreement. Unless terminated as provided herein, this Agreement
shall remain in full force and effect until NOVEMBER 30, 2007 and
continue on an annual basis thereafter
12
with respect to each Series covered by this Agreement; provided that
such annual continuance is specifically approved each year by (i) the
Board of Trustees of the Fund, or by the vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of each
Series, and (ii) the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons (as such term is
defined in the 0000 Xxx) of any such party to this Agreement cast in
person at a meeting called for the purpose of voting on such approval.
However, any approval of this Agreement by the holders of a majority of
the outstanding shares (as defined in the 0000 Xxx) of a Series shall
be effective to continue this Agreement with respect to such Series
notwithstanding (i) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Series or
(ii) that this Agreement has not been approved by the vote of a
majority of the outstanding shares of the Fund, unless such approval
shall be required by any other applicable law or otherwise.
Notwithstanding the foregoing, this Agreement may be
terminated with respect to any Series covered by this Agreement: (i) by
the Manager at any time, upon sixty (60) days' written notice to the
Sub-Adviser and the Fund, (ii) at any time without payment of any
penalty by the Fund, by the Fund's Board of Trustees or a majority of
the outstanding voting securities of each Series, upon sixty (60) days'
written notice to the Manager and the Sub-Adviser, or (iii) by the
Sub-Adviser upon three (3) months' written notice unless the Fund or
the Manager requests additional time to find a replacement for the
Sub-Adviser, in which case the Sub-Adviser shall allow the additional
time requested by the Fund or Manager not to exceed three (3)
additional months beyond the initial three-month notice period
(notwithstanding whether the Fund or the Manager requests such
additional time, the Exclusivity Period shall be deemed to have
terminated as of the expiration of the three (3) month notice provided
by the Sub-Adviser); provided, however, that the Sub-Adviser may
terminate this Agreement at any time without penalty, effective upon
written notice to the Manager and the Fund, in the event either the
Sub-Adviser (acting in good faith) or the Manager ceases to be
registered as an investment adviser under the Advisers Act or otherwise
becomes legally incapable of providing investment management services
pursuant to its respective contract with the Fund, or in the event the
Manager becomes bankrupt or otherwise incapable of carrying out its
obligations under this Agreement, or in the event that the Sub-Adviser
does not receive compensation for its services from the Manager or the
Fund as required by the terms of this Agreement.
In the event of termination for any reason, all records of
each Series for which the Agreement is terminated shall promptly be
returned to the Manager or the Fund, free from any claim or retention
of rights in such record by the Sub-Adviser, although the Sub-Adviser
may, at its own expense, make and retain a copy of such records. This
Agreement shall automatically terminate in the event of its assignment
(as such term is described in the 1940 Act). In the event this
Agreement is terminated or is not approved in the manner described
above, the Sections or Paragraphs numbered 9, 10, 13, 14, 15, 16 17(b)
and 19 of this Agreement shall remain in effect, as well as any
applicable provision of this Section numbered 17 and, to the extent
that only amounts are owed to the Sub-Adviser as compensation for
services rendered while the Agreement was in effect, Section 6.
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(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 Sub-Adviser:
Xxxxxxxxxx Global Investors, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
18. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved as required by applicable law.
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State
of Delaware, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act, the Advisers Act or rules or
orders of the SEC thereunder, and without regard for the conflicts of
laws principle thereof. The term "affiliate" or "affiliated person" as
used in this Agreement shall mean "affiliated person" as defined in
Section 2(a)(3) of the 0000 Xxx.
(b) The Manager and the Sub-Adviser acknowledge that the Fund
enjoys the rights of a third-party beneficiary under this Agreement,
and the Manager acknowledges that the Sub-Adviser enjoys the rights of
a third party beneficiary under the Management Agreement.
(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.
14
(d) To the extent permitted under Section 17 of this
Agreement, this Agreement may only be assigned by any party with the
prior written consent of the other parties.
(e) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby, and to this extent,
the provisions of this Agreement shall be deemed to be severable.
(f) Nothing herein shall be construed as constituting the
Sub-Adviser as an agent or co-partner of the Manager, or constituting
the Manager as an agent or co-partner of the Sub-Adviser.
(g) This Agreement may be executed in counterparts.
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:
-----------------------------
Xxxx Xxxxx
Senior Vice President
XXXXXXXXXX GLOBAL INVESTORS, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
ACKNOWLEDGED
ING MUTUAL FUNDS
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
16
