INTERIM INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT
made as of this 14th day
of July, 2009 by and among Old Mutual Capital, Inc. (the “Adviser”), Xxxxxx
Capital Partners LLC, on behalf of Xxxxxx Capital Partners, LP (the
“Sub-Adviser”), and Old Mutual Funds I, a Delaware statutory trust (the
“Trust”), on behalf of the Old Mutual China Fund (the “Portfolio”).
WHEREAS,
the Trust is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the “1940 Act”);
WHEREAS,
the Adviser currently provides investment advisory services to the Portfolio
pursuant to an Investment Advisory Agreement between the Adviser and the Trust,
on behalf of the Portfolio (the “Advisory Agreement”);
WHEREAS,
the Investment Sub-Advisory Agreement between the Adviser, Xxxx Xxxxxx LLC, and
the Trust, on behalf of the Portfolio (the “Prior Sub-Advisory Agreement”), will
be terminated as of the close of business on July 17, 2009;
WHEREAS,
the Board of Trustees of the Trust has approved, subject to shareholder
approval, an Agreement and Plan of Reorganization, pursuant to which the
Portfolio will transfer all of its assets to Xxxxxx/ALPS China Fund, a new fund
which is to be created for which the Sub-Adviser will serve as sub-adviser, in
exchange for shares of Xxxxxx/ALPS China Fund, to be distributed pro rata to
shareholders of the Portfolio (the “Reorganization”);
WHEREAS,
it is expected that the Reorganization would be completed on or about December
16, 2009;
WHEREAS,
the Board of Trustees of the Trust, including a majority of the independent
trustees, has appointed the Sub-Adviser as the new interim investment
sub-adviser to the Portfolio;
WHEREAS,
the Adviser and the Trust, on behalf of the Portfolio, each desire to retain the
Sub-Adviser to provide investment advisory services to the Trust in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services to the Portfolio under this Agreement until
the Reorganization is consummated;
WHEREAS,
the Fund, the Adviser and the Sub-Adviser desire to comply with the provisions
of Rule 15a-4 including subsection (b) thereof under the 1940 Act;
and
WHEREAS,
the Trustees of the Trust, including a majority of those Trustees who are not
interested persons of the Trust, have found that the scope and quality of
services to be provided to the Trust under this Agreement will be at least
equivalent to the scope and quality of services provided under the Prior
Sub-Advisory Agreement.
NOW,
THEREFORE, the parties hereto agree as follows:
1. (a) Subject
to supervision by the Adviser and the Trust’s Board of Trustees, the Sub-Adviser
shall manage the investment operations of the Portfolio and the composition of
the Portfolio’s investment portfolio, including the purchase, retention and
disposition thereof, in accordance with the Portfolio’s investment objectives,
policies and restrictions as stated in such Portfolio’s Prospectus (such
Prospectus and Statement of Additional Information as currently in effect and as
amended or supplemented from time to time, being herein called the
“Prospectus”), and subject to the following understandings:
(1) The
Sub-Adviser shall provide supervision of the Portfolio’s investments and
determine from time to time what investments and securities will be purchased,
retained or sold by the Portfolio and what portion of the assets will be
invested or held uninvested in cash.
(2) In the
performance of its duties and obligations under this Agreement, the Sub-Adviser
shall act in conformity with the Trust’s Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees and will conform and
comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986,
as amended, and all other applicable federal and state laws and regulations, as
each is amended from time to time.
(3) The
Sub-Adviser shall determine the securities to be purchased or sold by the
Portfolio and will place orders with or through such persons, brokers or dealers
to carryout the policy with respect to brokerage set forth in such Portfolio’s
Registration Statement (as defined herein) and Prospectus or as the Board of
Trustees or the Adviser may direct from time to time, in conformity with federal
securities laws. In providing the Portfolio with investment
supervision, the Sub-Adviser will give primary consideration to securing the
most favorable price and efficient execution. Within the framework of
this policy, the Sub-Adviser may consider the financial responsibility, research
and investment information and other services provided by brokers or dealers who
may effect or be a party to any such transaction or other transactions to which
the Sub-Adviser’s other clients may be a party. It is understood that
it is desirable for the Portfolio that the Sub-Advisor have access to (i)
supplemental investment and market research and (ii) security and economic
analysis provided by brokers who may execute brokerage transactions at a higher
cost to the Portfolio than may result when allocating brokerage to other brokers
on the basis of seeking the most favorable price and efficient
execution. Therefore, the Sub-Adviser is authorized to place orders
for the purchase and sale of securities for the Portfolio with brokers, subject
to review by the Trust’s Board of Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Sub-Adviser in connection
with the Sub-Adviser’s services to other clients.
On
occasions when the Sub-Adviser deems the purchase or sale of a security to be in
the best interest of the Portfolio as well as other clients of the Sub-Adviser,
the Sub-Adviser, to the extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the securities to be so
purchased or sold in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the
Portfolio and to such other clients.
(4) The
Sub-Adviser at its expense will make available to the Trust’s Board of Trustees
and the Adviser at reasonable times its portfolio managers and other appropriate
personnel, either in person or, at the mutual convenience of the Adviser and the
Sub-Adviser, by telephone, in order to review the investment policies,
performance and other investment related information regarding the Portfolio and
to consult with the Trustees and Adviser regarding the Portfolio’s investment
affairs, including economic, statistical and investment matters related to the
Sub-Adviser’s duties hereunder, and will provide periodic reports to the Adviser
relating to the investment strategies it employs. The Sub-Adviser and
its personnel shall also cooperate fully with counsel and auditors for, and the
Chief Compliance Officers of, the Adviser and the Trust.
(5) In
accordance with procedures adopted by the Trust’s Board of Trustees, as amended
from time to time, the Sub-Adviser is responsible for assisting in the fair
valuation of all Portfolio securities. The Sub-Adviser will use its
reasonable efforts to provide, based upon its own expertise, and to arrange with
parties independent of the Sub-Adviser such as broker-dealers, for the provision
of valuation information or prices for securities for which prices are deemed by
the Adviser or Trust’s administrator not to be readily available in the ordinary
course of business from an automated pricing service. In addition,
the Sub-Adviser will assist the Portfolio and its agents in determining whether
prices obtained for valuation purposes accurately reflect market price
information relating to the assets of the Portfolio at such times as the Adviser
shall reasonably request, including but not limited to, the hours after the
close of a securities market and prior to the daily determination of the
Portfolio’s net asset value per share.
(6) The
Sub-Adviser at its expense will provide the Adviser and/or the Trust’s Chief
Compliance Officer with such compliance reports relating to its duties under
this Agreement as may be requested from time to time. Notwithstanding
the foregoing, the Sub-Adviser will promptly report to the Adviser any material
violations of the federal securities laws (as defined in Rule 38a-1 of the 0000
Xxx) that it is or should be aware of or of any material violation of the
Sub-Adviser’s compliance policies and procedures that pertain to the Portfolio,
as well as any change in portfolio manager(s) of the Portfolio.
(7) Unless
otherwise directed by the Adviser or the Trust’s Board of Trustees, the
Sub-Adviser will vote all proxies received in accordance with the Trust’s proxy
voting policy or, if the Sub-Adviser has a proxy voting policy approved by the
Trust’s Board of Trustees, the Sub-Adviser’s proxy voting policy. The
Adviser shall instruct the Portfolio’s custodian to forward or cause to be
forwarded to the Sub-Adviser all relevant proxy solicitation
materials. The Sub-Adviser shall maintain and shall forward to the
Portfolio or its designated agent such proxy voting information as is necessary
for the Portfolio to timely file proxy voting results in accordance with Rule
30b1-4 of the 0000 Xxx.
(8) The
Sub-Adviser represents and warrants that it has adopted a code of ethics meeting
the requirements of Rule 17j-1 under the 1940 Act and the requirements of Rule
204A-1 under the Investment Advisers Act of 1940 and has provided the Adviser
and the Trustees of the Portfolio a copy of such code of ethics, together with
evidence of its adoption, and will promptly provide copies of any changes
thereto, together with evidence of their adoption. Upon request of
the Adviser, but in any event no less frequently than annually, the Sub-Adviser
will supply the Adviser a written report that (A) describes any issues arising
under the code of ethics or procedures since the Sub-Adviser’s last report,
including but not limited to material violations of the code of ethics or
procedures and sanctions imposed in response to the material violations; and (B)
certifies that the procedures contained in the Sub-Adviser’s code of ethics are
reasonably designed to prevent “access persons” from violating the code of
ethics.
(9) The
Sub-Adviser will review draft reports to shareholders and other documents
provided or available to it and provide comments on a timely
basis. In addition, the Sub-Adviser and each officer and portfolio
manager thereof designated by the Adviser will provide on a timely basis such
certifications or sub-certifications as the Adviser may reasonably request in
order to support and facilitate certifications required to be provided by the
Trust’s Principal Executive Officer and Principal Financial
Officer.
(10) The
Sub-Adviser shall maintain all books and records with respect to the Portfolio’s
portfolio transactions required by subparagraphs (b)(5), (6), (7), (9), (10) and
(11) and paragraph (f) of Rule 31a-1 under the 1940 Act and shall render to the
Trust’s Board of Trustees such periodic and special reports as the Trust’s Board
of Trustees may reasonably request.
(11) The
Sub-Adviser shall provide the Portfolio’s custodian on each business day with
information relating to all transactions concerning the Portfolio’s assets and
shall provide the Adviser with such information upon request of the
Adviser.
(12) (a) The
investment management services provided by the Sub-Adviser under this Agreement
are not to be deemed exclusive and the Sub-Adviser shall be free to render
similar services to others, as long as such services do not impair the services
rendered to the Adviser or the Trust.
(b) Services
to be furnished by the Sub-Adviser under this Agreement may be furnished through
the medium of any of the Sub-Adviser’s officers or employees.
(c) The
Sub-Adviser shall keep the Portfolio’s books and records required to be
maintained by the Sub-Adviser pursuant to paragraph 1(a) of this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser’s services under this Agreement needed by the Adviser to keep the
other books and records of the Portfolio required by Rule 31a-1 under the 1940
Act. The Sub-Adviser agrees that all records that it maintains on
behalf of the Portfolio are property of the Portfolio and the Sub-Adviser will
surrender promptly to the Portfolio any of such records upon the Portfolio’s
request; provided, however, that the Sub-Adviser may 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 any such records as are required to
be maintained by it pursuant to paragraph 1(a) of this Agreement.
2. The
Adviser shall continue to have responsibility for all services to be provided to
the Portfolio pursuant to the Advisory Agreement and shall oversee and review
the Sub-Adviser’s performance of its duties under this Agreement.
3. The
Adviser has delivered to the Sub-Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if
any:
(a) Certified
resolutions of the Trust’s Board of Trustees authorizing the appointment of the
Sub-Adviser and approving the form of this Agreement;
(b) Registration
Statement under the 1940 Act and the Securities Act of 1933, as amended on Form
N-1A (the “Registration Statement”) as filed with the Securities and Exchange
Commission (the “Commission”) relating to the Portfolio and shares of the
Portfolio’s beneficial shares, and all amendments thereto; and
(c) Prospectus
of the Portfolio.
4. For the
services to be provided by the Sub-Adviser pursuant to this Agreement for the
Portfolio, the Adviser will pay to the Sub-Adviser as full compensation
therefore a fee at an annual rate of the Portfolio’s average daily net assets,
net 50% of any waivers, reimbursement payments, supermarket fees and alliance
fees waived, reimbursed or paid by the Adviser and net of all breakpoints, as
follows:
|
Old
Mutual China Fund
|
1.00%
|
This fee
will be paid to the Sub-Adviser from the Adviser’s advisory fee from the
Portfolio. The fee will be computed daily and paid to the Sub-Adviser
monthly.
To the
extent that the Adviser is reimbursed by the Trust for any waived fees or
reimbursed expenses pursuant to the terms of a separate expense limitation
agreement between the Trust and the Adviser, the Adviser will pay to the
Sub-Adviser its pro-rata share of any such reimbursed amount.
5. The
Sub-Adviser shall not be liable for any error of judgment or for any loss
suffered by the Portfolio or the Adviser in connection with performance of its
obligations under this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or gross negligence on the Sub-Adviser’s part in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement, except as may otherwise be provided under
provisions of applicable state law which cannot be waived or modified
hereby.
6. This
Agreement shall commence on the date on which the Prior Investment Sub-Advisory
Agreement is terminated (the “Commencement Date”) and continue until, the sooner
of the date: (i) when the Reorganization is consummated; or (ii) one hundred
fifty (150) days from the Commencement Date. Upon the sooner to occur
of the conditions described in clauses (i) and (ii) above, the Portfolio will be
deemed to have terminated this Agreement. Notwithstanding the
foregoing, this Agreement may be terminated (a) at any time without penalty by
the Trust upon the vote of a majority of the Trustees or by vote of the majority
of the Portfolio’s outstanding voting securities, upon ten (10) days’ written
notice to the Adviser and the Sub-Adviser, (b) by the Adviser at any time
without penalty, upon sixty (60) days’ written notice to the Trust, or (c) by
the Sub-Adviser at any time without penalty on (90) days’ written notice to the
Trust and the Adviser. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940
Act).
7. Nothing
in this Agreement shall limit or restrict the right of any of the Sub-Adviser’s
partners, officers, or employees to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
business, whether of a similar or dissimilar nature, nor limit or restrict the
Sub-Adviser’s right to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
8. During
the term of this Agreement, the Adviser agrees to furnish the Sub-Adviser at its
principal office all prospectuses, proxy statements, reports to shareholders,
sales literature or other materials prepared for distribution to shareholders of
the Portfolio, the Trust or the public that refers to the Sub-Adviser or its
clients in any way prior to use thereof and not to use material if the
Sub-Adviser reasonably objects in writing within five business days (or such
other period as may be mutually agreed upon) 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 Adviser 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. Sales
literature may be furnished to the Sub-Adviser by first-class or overnight mail,
facsimile transmission equipment or hand delivery.
9. No
Trustee or Shareholder of the Trust shall be personally liable for any debts,
liabilities, obligations or expenses incurred by or contracted for under this
Agreement.
10. No
provisions 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 by the vote of the
majority of the outstanding voting securities of the Portfolio.
11. This
Agreement shall be governed by the laws of the state of Delaware; provided,
however, that nothing herein shall be construed as being inconsistent with the
1940 Act.
12. This
Agreement embodies the entire agreement and understanding among the parties
hereto, and supersedes all prior agreements and understandings relating to this
Agreement’s subject matter. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original; all
such counterparts shall together, constitute only one instrument.
13. Should
any part of this Agreement be held invalid by a court decision, statute, rule,
or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
Any
notice, advice or report to be given pursuant to this Agreement shall be
delivered or mailed:
To the
Adviser at:
Attention: President
0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
To the
Sub-Adviser at:
Attention: Xxxxx
Xxxxx, Partner (with a copy to Xxx Xxxxxx, Chief Compliance
Officer)
Xxx Xxxx
Xxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxx,
XX 00000
To the
Trust or the Portfolio at:
Attention: President
0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
14. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is altered by a rule, regulation or order of the Commission, whether
of special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their officers designated below as of the day and year first written
above.
|
OLD
MUTUAL CAPITAL, INC.
|
OLD
MUTUAL FUNDS I, on behalf of Old Mutual China Fund
|
|
By: /s/
Xxxx X. Xxxxx
|
By: /s/
Xxxxxx X. Sluyters
|
|
Name: Xxxx
X. Xxxxx
|
Name: Xxxxxx
X. Sluyters
|
|
Title: Senior
Vice President
|
Title: President
|
|
XXXXXX
CAPITAL PARTNERS, LLC, on behalf of Xxxxxx Capital Partners,
LP
|
|
|
By: /s/
Xxxxx X. Xxxxx
|
|
|
Name: Xxxxx
X. Xxxxx
|
|
|
Title: Chief
Financial Officer
|
