INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February, 2006, by and between Touchstone Advisors,
Inc. (the Adviser) and Xxxxxx Investment Partners,
Inc. (the Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware
business trust (the Trust) is registered as an open-
end management investment company under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Adviser has entered into an
Investment Advisory Agreement dated as of February
17th, 2006 (the Advisory Agreement) with the Trust,
pursuant to which the Adviser will act as investment
adviser to each series of the Trust set forth on
Schedule A of this Agreement (each a Fund and
collectively the Funds); and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and the Trusts
Board of Trustees, the Sub-Adviser shall
manage those assets of a Fund that the Adviser
determines to allocate to the Sub-Adviser (the
Allocated Assets), including the purchase,
retention and disposition of the Allocated
Assets, in accordance with each Funds
investment objectives, policies and
restrictions as stated in the Funds prospectus
and statement of additional information, as
currently in effect and as amended or
supplemented from time to time (referred to
collectively as the Prospectus), and subject
to the following:
(a) The Sub-Adviser shall, in
consultation
with and subject to the direction of the
Adviser,
determine from time to time what
Allocated Assets will be purchased,
retained or sold by the Fund, and what
portion of the Allocated Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties
and
obligations under this Agreement, the
Sub-Adviser shall act in conformity with
the Trusts Declaration of Trust (as
defined herein) and the Prospectus and
with the instructions and directions of
the Adviser and of the Board of Trustees
of the Trust and will conform to and
comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986,
and all other applicable federal and
state laws and regulations, as each is
amended from time to time.
(c) The Sub-Adviser shall determine
the
Allocated Assets to be purchased or sold
by the Fund as provided in subparagraph
(a) and will place orders with or
through such persons, brokers or dealers
to carry out the policy with respect to
brokerage set forth in each Funds
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 executing
Fund transactions and selecting brokers
or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of each
Fund the best overall terms available.
In assessing the best overall terms
available for any transaction, the Sub-
Adviser shall consider all factors that
it deems relevant, including the breadth
of the market in the security, the price
of the security, the financial condition
and execution capability of the broker
or dealer, and the reasonableness of the
commission, if any, both for the
specific transaction and on a continuing
basis. In evaluating the best overall
terms available, and in selecting the
broker-dealer to execute a particular
transaction, the Sub-Adviser may also
consider the brokerage and research
services provided (as those terms are
defined in Section 28(e) of the
Securities Exchange Act of 1934).
Consistent with any guidelines
established by the Board of Trustees of
the Trust, the Sub-Adviser is authorized
to pay to a broker or dealer who
provides such brokerage and research
services a commission for executing a
fund transaction for a Fund which is in
excess of the amount of commission
another broker or dealer would have
charged for effecting that transaction
if, but only if, the Sub-Adviser
determines in good faith that such
commission was reasonable in relation to
the value of the brokerage and research
services provided by such broker or
dealer viewed in terms of that
particular transaction or terms of the
overall responsibilities of the Sub-
Adviser to the Fund. In addition, the
Sub-Adviser is authorized to allocate
purchase and sale orders for securities
to brokers or dealers (including brokers
and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trusts
principal underwriter) to take into
account the sale of shares of the Trust
if the Sub-Adviser believes that the
quality of the transaction and the
commission are comparable to what they
would be with other qualified firms. In
no instance, however, will a Funds
Allocated Assets be purchased from or
sold to the Adviser, Sub-Adviser, the
Trusts principal underwriter, or any
affiliated person of either the Trust,
Adviser, the Sub-Adviser or the
principal underwriter, acting as
principal in the transaction, except to
the extent permitted by the Securities
and Exchange Commission (SEC) and the
1940 Act.
(d) The Sub-Adviser shall maintain all
books
and records with respect to transactions
involving the Allocated Assets required
by subparagraphs (b)(5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act. The Sub-
Adviser shall provide to the Adviser or
the Board of Trustees such periodic and
special reports, balance sheets or
financial information, and such other
information with regard to its affairs
as the Adviser or Board of Trustees may
reasonably request.
The Sub-Adviser shall keep the books and
records relating to the Allocated Assets
required to be maintained by the Sub-
Adviser under this Agreement and shall
timely furnish to the Adviser all
information relating to the Sub-Advisers
services under this Agreement needed by
the Adviser to keep the other books and
records of a Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any
other information relating to the
Allocated Assets that is required to be
filed by the Adviser or the Trust with
the SEC or sent to shareholders under
the 1940 Act (including the rules
adopted thereunder) or any exemptive or
other relief that the Adviser or the
Trust obtains from the SEC. The Sub-
Adviser agrees that all records that it
maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser
will surrender promptly to the Fund any
of such records upon the Funds request;
provided, however, that the Sub-Adviser
may retain a copy of such records. In
addition, for the duration of this
Agreement, the Sub-Adviser shall
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 this Agreement, and
shall transfer said records to any
successor sub-adviser upon the
termination of this Agreement (or, if
there is no successor sub-adviser, to
the Adviser).
(e) The Sub-Adviser shall provide each
Funds
custodian on each business day with
information relating to all transactions
concerning the Funds Allocated Assets
and shall provide the Adviser with such
information upon request of the Adviser.
(f) 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.
(g) The Sub-Adviser shall promptly
notify
the Adviser of any financial condition
that is likely to impair the Sub-
Advisers ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all
proxy
solicitation materials and be
responsible for voting and handling all
proxies in relation to the Allocated
Assets. The Adviser shall instruct the
custodian and other parties providing
services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) Except as specifically permitted in
writing by the Adviser, or as otherwise
permitted or required to comply with the
requirements of the 1940 Act (including
the rules adopted thereunder), the Sub-
Adviser shall not consult with any other
sub-adviser to the Trust or a Fund
concerning the purchase, retention or
disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser
under this Agreement may be furnished through
the medium of any of the Sub-Advisers
partners, officers or employees.
2. Duties of the Adviser. The Adviser shall
continue to have responsibility for all
services to be provided to each Fund pursuant
to the Advisory Agreement and shall oversee
and review the Sub-Advisers performance of its
duties under this Agreement; provided,
however, that in connection with its
management of the Allocated Assets, nothing
herein shall be construed to relieve the Sub-
Adviser of responsibility for compliance with
the Trusts Declaration of Trust (as defined
herein), the Prospectus, the instructions and
directions of the Board of Trustees of the
Trust, the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other
applicable federal and state laws and
regulations, as each is amended from time to
time.
3. Delivery of Documents. The Adviser has
furnished the Sub-Adviser with copies properly
certified or authenticated of each of the
following documents:
(a) The Trusts Agreement and
Declaration of
Trust, as filed with the Secretary of
State of the State of Delaware (such
Agreement and Declaration of Trust, as
in effect on the date of this Agreement
and as amended from time to time, herein
called the Declaration of Trust);
(b) By-Laws of the Trust (such By-
Laws, as
in effect on the date of this Agreement
and as amended from time to time, are
herein called the By-Laws);
(c) Prospectus(es) of each Fund.
4. Compensation to the Sub-Adviser. For the
services to be provided by the Sub-Adviser
pursuant to this Agreement, the Adviser will
pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation
therefor, a sub-advisory fee at the rate
specified on Schedule B or Schedule C, of this
Agreement. The fee will be calculated based
on the monthly average net value of the
Allocated Assets under the Sub-Advisers
management. Except as may otherwise be
prohibited by law or regulation (including any
then current SEC staff interpretation), the
Sub-Adviser may, in its discretion and from
time to time, waive a portion of its fee.
5. Indemnification. The Sub-Adviser shall
indemnify and hold harmless the Adviser from
and against any and all claims, losses,
liabilities or damages (including reasonable
attorneys fees and other related expenses)
howsoever arising from or in connection with
the performance of the Sub-Adviser s
obligations under this Agreement; provided,
however, that the Sub-Adviser s obligation
under this Section 5 shall be reduced to the
extent that the claim against, or the loss,
liability or damage experienced by the
Adviser, is caused by or is otherwise directly
related to the Advisers own, or any other sub-
advisers, willful misfeasance, bad faith or
negligence, or to the reckless disregard of
its duties under this Agreement.
6. Duration and Termination. This Agreement
shall become effective as to a Fund upon its
approval by the Trusts Board of Trustees and
by the vote of a majority of the outstanding
voting securities of each Fund, if required.
This Agreement shall continue in effect for a
period of more than two years from the date
that the Sub-Adviser began providing services
hereunder only so long as continuance is
specifically approved at least annually in
conformance with the 1940 Act; provided,
however, that this Agreement may be terminated
with respect to a Fund (a) by the Fund at any
time, without the payment of any penalty, by
the vote of a majority of Trustees of the
Trust or by the vote of a majority of the
outstanding voting securities of the Fund, (b)
by the Adviser at any time, without the
payment of any penalty, on not less than 30
days written notice to the Sub-Adviser, or (c)
by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days written
notice to the Adviser. This Agreement shall
terminate automatically and immediately in the
event of its assignment, or in the event of a
termination of the Advisers agreement with the
Trust. As used in this Section 6, the terms
assignment and vote of a majority of the
outstanding voting securities shall have the
respective meanings set forth in the 1940 Act
and the rules and regulations thereunder,
subject to such exceptions as may be granted
by the SEC under the 1940 Act.
7. Governing Law. This Agreement shall be
governed by the internal laws of the State of
Delaware, without regard to conflict of law
principles; provided, however, that nothing
herein shall be construed as being
inconsistent with the 1940 Act.
8. Severability. 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.
9. Notice. Any notice, advice or report to be
given pursuant to this Agreement shall be
deemed sufficient if delivered or mailed by
registered, certified or overnight mail,
postage prepaid addressed by the party giving
notice to the other party at the last address
furnished by the other party:
To the Adviser at:
Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-Adviser at:
Xxxxxx Investment Partners, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxx Xxxxx
10. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior
agreements and understandings relating to this
Agreements subject matter. This Agreement may
be executed in any number of counterparts,
each of which shall be deemed to be an
original, but such counterparts shall,
together, constitute only one instrument.
A copy of the Declaration of Trust is on file
with the Secretary of State of the State of
Delaware, and notice is hereby given that the
obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders of the
Fund or the Trust.
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 SEC,
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.
Touchstone Advisors, Inc.
Xxxxxx Investment Partners, Inc.
By: _William Dent
By: _Brian F XxXxxxx
Name: _William Dent
Name: _Brian F XxXxxxx
Title: _Senior Vice President
Title: General Counsel & Chief
Compliance Officer
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Funds
Name of Fund
Constellation Small Cap Value Opportunities Fund
Constellation TIP Healthcare & Biotechnology Fund
Constellation TIP Mid Cap Fund
Schedule C*
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1 hereto.
(a) The Adviser shall pay to the Sub-Adviser
a fee for each Fund calculated daily and payable
monthly in arrears, computed as a percentage of the
net value of the Allocated Assets for such month at
the rate set forth in Schedule C-1 hereto.
* Schedule B intentionally omitted.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund
Fee Rate
Constellation Small Cap Value Opportunities
Fund
0.50%
Constellation TIP Healthcare and Biotechnology
Fund
0.50%
Constellation TIP Mid Cap Fund
0.45%
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February, 2006, by and between Touchstone Advisors,
Inc. (the Adviser) and AXA Xxxxxxxxx Investment
Management LLC (the Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware
business trust (the Trust) is registered as an open-
end management investment company under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Adviser has entered into an
Investment Advisory Agreement dated as of February
17th, 2006 (the Advisory Agreement) with the Trust,
pursuant to which the Adviser will act as investment
adviser to each series of the Trust set forth on
Schedule A of this Agreement (each a Fund and
collectively the Funds); and
WHEREAS, the Adviser, with the approval of
the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and the Trusts
Board of Trustees, the Sub-Adviser shall
manage those assets of a Fund that the Adviser
determines to allocate to the Sub-Adviser (the
Allocated Assets), including the purchase,
retention and disposition of the Allocated
Assets, in accordance with each Funds
investment objectives, policies and
restrictions as stated in the Funds prospectus
and statement of additional information, as
currently in effect and as amended or
supplemented from time to time (referred to
collectively as the Prospectus), and subject
to the following:
(a) The Sub-Adviser shall, subject to
the direction of the Adviser, determine
from time to time what Allocated Assets
will be purchased, retained or sold by
the Fund, and what portion of the
Allocated Assets will be invested or
held uninvested in cash.
(b) In the performance of its duties
and obligations under this Agreement,
the Sub-Adviser shall act in conformity
with the Trusts Declaration of Trust (as
defined herein) and the Prospectus and
with the instructions and directions of
the Adviser and of the Board of Trustees
of the Trust and will conform to and
comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986,
and all other applicable federal and
state laws and regulations, as each is
amended from time to time.
(c) The Sub-Adviser shall determine
the Allocated Assets to be purchased or
sold by the Fund as provided in
subsection (a) and will place orders
with or through such persons, brokers or
dealers to carry out the policy with
respect to brokerage set forth in each
Funds registration statement or as the
Board of Trustees or the Adviser may
direct from time to time, in conformity
with federal securities laws. In
executing Fund transactions and
selecting brokers or dealers, the Sub-
Adviser will use its best efforts to
seek on behalf of each Fund the best
overall terms available. In assessing
the best overall terms available for any
transaction, the Sub-Adviser shall
consider all factors that it deems
relevant, including the breadth of the
market in the security, the price of the
security, the financial condition and
execution capability of the broker or
dealer, and the reasonableness of the
commission, if any, both for the
specific transaction and on a continuing
basis. In evaluating the best overall
terms available, and in selecting the
broker-dealer to execute a particular
transaction, the Sub-Adviser may also
consider the brokerage and research
services provided (as those terms are
defined in Section 28(e) of the
Securities Exchange Act of 1934).
Consistent with any guidelines
established by the Board of Trustees of
the Trust, the Sub-Adviser is authorized
to pay to a broker or dealer who
provides such brokerage and research
services a commission for executing a
fund transaction for a Fund which is in
excess of the amount of commission
another broker or dealer would have
charged for effecting that transaction
if, but only if, the Sub-Adviser
determines in good faith that such
commission was reasonable in relation to
the value of the brokerage and research
services provided by such broker or
dealer viewed in terms of that
particular transaction or in terms of
the overall responsibilities of the Sub-
Adviser to the Fund and other accounts
as to which it exercises investment
discretion. In addition, the Sub-Adviser
is authorized to allocate purchase and
sale orders for securities to brokers or
dealers (including brokers and dealers
that are affiliated with the Adviser,
Sub-Adviser or the Trusts principal
underwriter) to take into account the
sale of shares of the Trust if the Sub-
Adviser believes that the quality of the
transaction and the commission are
comparable to what they would be with
other qualified firms. In no instance,
however, will a Funds Allocated Assets
be purchased from or sold to the
Adviser, Sub-Adviser, the Trusts
principal underwriter, or any affiliated
person of either the Trust, Adviser, the
Sub-Adviser or the principal
underwriter, acting as principal in the
transaction, except to the extent
permitted by the Securities and Exchange
Commission (SEC) and the 1940 Act.
(d) The Sub-Adviser shall maintain all
books and records with respect to
transactions involving the Allocated
Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and
paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide
to the Adviser or the Board of Trustees
such periodic and special reports,
balance sheets or financial information,
and such other information with regard
to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and
records relating to the Allocated Assets
required to be maintained by the Sub-
Adviser under this Agreement and shall
timely furnish to the Adviser all
information relating to the Sub-Advisers
services relating to the Allocated
Assets under this Agreement needed by
the Adviser to keep the other books and
records of a Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any
other information relating to the
Allocated Assets that is required to be
filed by the Adviser or the Trust with
the SEC or sent to shareholders under
the 1940 Act (including the rules
adopted thereunder) or any exemptive or
other relief that the Adviser or the
Trust obtains from the SEC. The Sub-
Adviser agrees that all records that it
maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser
will surrender promptly to the Fund any
of such records upon the Funds request;
provided, however, that the Sub-Adviser
may retain a copy of such records. In
addition, for the duration of this
Agreement, the Sub-Adviser shall
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 this Agreement, and
shall transfer said records to any
successor sub-adviser upon the
termination of this Agreement (or, if
there is no successor sub-adviser, to
the Adviser).
(e) The Sub-Adviser shall provide each
Funds custodian on each business day
with information relating to all
transactions concerning the Funds
Allocated Assets and shall provide the
Adviser with such information upon
request of the Adviser.
(f) 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.
(g) The Sub-Adviser shall promptly
notify the Adviser of any financial
condition that is likely to impair the
Sub-Advisers ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all
proxy solicitation materials and be
responsible for voting and handling all
proxies in relation to the Allocated
Assets in accordance to the Sub-Advisers
Proxy Voting Policy. The Adviser shall
instruct the custodian and other parties
providing services to the Fund to
promptly forward misdirected proxies to
the Sub-Adviser. The Sub-Adviser may
retain third-party service providers to
assist it in fulfilling its proxy review
and voting duties hereunder but in no
case will be relieved of its proxy
review and voting obligations hereunder.
(i) Except as specifically permitted
in writing by the Adviser, or as
otherwise permitted or required to
comply with the requirements of the 1940
Act (including the rules adopted
thereunder), the Sub-Adviser shall not
consult with any other sub-adviser to
the Trust or a Fund concerning the
purchase, retention or disposition of
Fund Allocated Assets.
Services to be furnished by the Sub-
Adviser under this Agreement may be
furnished through the medium of any of
the Sub-Advisers partners, officers or
employees.
2. Duties of the Adviser. The Adviser shall
continue to have responsibility for all
services to be provided to each Fund pursuant
to the Advisory Agreement and shall oversee
and review the Sub-Advisers performance of its
duties under this Agreement; provided,
however, that in connection with its
management of the Allocated Assets, nothing
herein shall be construed to relieve the Sub-
Adviser of responsibility for compliance with
the Trusts Declaration of Trust (as defined
herein), the Prospectus, the instructions and
directions of the Board of Trustees of the
Trust, the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other
applicable federal and state laws and
regulations, as each is amended from time to
time.
3. Delivery of Documents. The Adviser has
furnished the Sub-Adviser with copies properly
certified or authenticated of each of the
following documents:
(a) The Trusts Agreement and
Declaration of Trust, as filed with the
Secretary of State of the State of
Delaware (such Agreement and Declaration
of Trust, as in effect on the date of
this Agreement and as amended from time
to time, herein called the Declaration
of Trust);
(b) By-Laws of the Trust (such By-
Laws, as in effect on the date of this
Agreement and as amended from time to
time, are herein called the By-Laws);
(c) Prospectus(es) of each Fund.
The Adviser agrees to furnish to the Sub-Adviser
properly certified or authenticated copies of the
aforementioned documents promptly after such
documents have been materially amended, restated
or otherwise modified.
4. Compensation to the Sub-Adviser. For the
services to be provided by the Sub-Adviser
pursuant to this Agreement, the Adviser will
pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation
therefor, a sub-advisory fee at the rate
specified on Schedule C of this Agreement. The
fee will be calculated based on the monthly
average net value of the Allocated Assets
under the Sub-Advisers management. Except as
may otherwise be prohibited by law or
regulation (including any then current SEC
staff interpretation), the Sub-Adviser may, in
its discretion and from time to time, waive a
portion of its fee.
5. Indemnification. The Sub-Adviser shall
indemnify and hold harmless the Adviser from
and against any and all claims, losses,
liabilities or damages (including reasonable
attorneys fees and other related expenses)
howsoever arising from or in connection with
the performance of the Sub-Advisers
obligations under this Agreement; provided,
however, that the Sub-Advisers obligation
under this Section 5 shall be reduced to the
extent that the claim against, or the loss,
liability or damage experienced by the
Adviser, is caused by or is otherwise directly
related to the Advisers own, or any other sub-
advisers, willful misfeasance, bad faith or
negligence, or to the reckless disregard of
its duties under this Agreement.
6. Duration and Termination. This Agreement
shall become effective as to a Fund upon its
approval by the Trusts Board of Trustees and
by the vote of a majority of the outstanding
voting securities of each Fund, if required.
This Agreement shall continue in effect for a
period of more than two years from the date
that the Sub-Adviser began providing services
hereunder only so long as continuance is
specifically approved at least annually in
conformance with the 1940 Act; provided,
however, that this Agreement may be terminated
with respect to a Fund (a) by the Fund at any
time, without the payment of any penalty, by
the vote of a majority of Trustees of the
Trust or by the vote of a majority of the
outstanding voting securities of the Fund, (b)
by the Adviser at any time, without the
payment of any penalty, on not less than 30
days written notice to the Sub-Adviser, or (c)
by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days written
notice to the Adviser. This Agreement shall
terminate automatically and immediately in the
event of its assignment, or in the event of a
termination of the Advisers agreement with the
Trust. As used in this Section 6, the terms
assignment and vote of a majority of the
outstanding voting securities shall have the
respective meanings set forth in the 1940 Act
and the rules and regulations thereunder,
subject to such exceptions as may be granted
by the SEC under the 1940 Act.
7. Governing Law. This Agreement shall be
governed by the internal laws of the State of
Delaware, without regard to conflict of law
principles; provided, however, that nothing
herein shall be construed as being
inconsistent with the 1940 Act.
8. Severability. 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.
9. Acknowledgement. The Adviser acknowledges
receipt of the Sub-Advisers Form ADV, Part 2
at least 48 hours in advance of entering this
Agreement.
10. Notice. Any notice, advice or report to
be given pursuant to this Agreement shall be
deemed sufficient if delivered or mailed by
registered, certified or overnight mail,
postage prepaid addressed by the party giving
notice to the other party at the last address
furnished by the other party:
To the Adviser at : Touchstone Advisors,
Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-Adviser at: AXA Xxxxxxxxx
Investment Management LLC
0 Xxxxxx Xxx, Xxxxxxxx X
Xxxxxx, XX 00000
Attn: Chief Investment
Officer
11. Entire Agreement. This Agreement
embodies the entire agreement and
understanding between the parties hereto, and
supersedes all prior agreements and
understandings relating to this Agreements
subject matter. This Agreement may be executed
in any number of counterparts, each of which
shall be deemed to be an original, but such
counterparts shall, together, constitute only
one instrument.
A copy of the Declaration of Trust is on
file
with the Secretary of State of the State of
Delaware, and notice is hereby given that the
obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders of the
Fund or the Trust.
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 SEC,
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.
Touchstone Advisors, Inc.
By: _William Dent
Name: _William Dent
Title: __Senior Vice President
AXA Xxxxxxxxx Investment Management LLC
By:__William Xxxxx
Name: _William Xxxxx
Title: ___CEO/CIO
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Fund(s)
Constellation International Equity Fund
Schedule C*
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1 hereto.
(a) The Adviser shall pay to the Sub-Adviser
a fee for each Fund calculated daily and payable
monthly in arrears, computed as a percentage of the
net value of the Allocated Assets for such month at
the rate set forth in Schedule C-1 hereto.
* Schedule B intentionally omitted.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund Fee Rate
Constellation
International Equity
Fund
0.50% on the first $200
million of Allocated Assets;
0.40% on Allocated Assets
above $200 million
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February,
2006, by and between Touchstone Advisors, Inc. (the
Adviser) and Chartwell Investment Partners, Inc.
(the Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware
business trust (the Trust) is registered as an open-
end management investment company under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Adviser has entered into an
Investment Advisory Agreement dated as of February
17th, 2006 (the Advisory Agreement) with the Trust,
pursuant to which the Adviser will act as investment
adviser to each series of the Trust set forth on
Schedule A of this Agreement (each a Fund and
collectively the Funds); and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and the Trusts
Board of Trustees, the Sub-Adviser shall
manage those assets of a Fund that the Adviser
determines to allocate to the Sub-Adviser (the
Allocated Assets), including the purchase,
retention and disposition of the Allocated
Assets, in accordance with each Funds
investment objectives, policies and
restrictions as stated in the Funds prospectus
and statement of additional information, as
currently in effect and as amended or
supplemented from time to time (referred to
collectively as the Prospectus), and subject
to the following:
(a) The Sub-Adviser shall, in
consultation
with and subject to the direction of the
Adviser,
determine from time to time what
Allocated Assets will be purchased,
retained or sold by the Fund, and what
portion of the Allocated Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties
and
obligations under this Agreement, the
Sub-Adviser shall act in conformity with
the Trusts Declaration of Trust (as
defined herein) and the Prospectus and
with the instructions and directions of
the Adviser and of the Board of Trustees
of the Trust and will conform to and
comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986,
and all other applicable federal and
state laws and regulations, as each is
amended from time to time.
(c) The Sub-Adviser shall determine
the
Allocated Assets to be purchased or sold
by the Fund as provided in subparagraph
(a) and will place orders with or
through such persons, brokers or dealers
to carry out the policy with respect to
brokerage set forth in each Funds
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 executing
Fund transactions and selecting brokers
or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of each
Fund the best overall terms available.
In assessing the best overall terms
available for any transaction, the Sub-
Adviser shall consider all factors that
it deems relevant, including the breadth
of the market in the security, the price
of the security, the financial condition
and execution capability of the broker
or dealer, and the reasonableness of the
commission, if any, both for the
specific transaction and on a continuing
basis. In evaluating the best overall
terms available, and in selecting the
broker-dealer to execute a particular
transaction, the Sub-Adviser may also
consider the brokerage and research
services provided (as those terms are
defined in Section 28(e) of the
Securities Exchange Act of 1934).
Consistent with any guidelines
established by the Board of Trustees of
the Trust, the Sub-Adviser is authorized
to pay to a broker or dealer who
provides such brokerage and research
services a commission for executing a
fund transaction for a Fund which is in
excess of the amount of commission
another broker or dealer would have
charged for effecting that transaction
if, but only if, the Sub-Adviser
determines in good faith that such
commission was reasonable in relation to
the value of the brokerage and research
services provided by such broker or
dealer viewed in terms of that
particular transaction or terms of the
overall responsibilities of the Sub-
Adviser to the Fund. In addition, the
Sub-Adviser is authorized to allocate
purchase and sale orders for securities
to brokers or dealers (including brokers
and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trusts
principal underwriter) to take into
account the sale of shares of the Trust
if the Sub-Adviser believes that the
quality of the transaction and the
commission are comparable to what they
would be with other qualified firms. In
no instance, however, will a Funds
Allocated Assets be purchased from or
sold to the Adviser, Sub-Adviser, the
Trusts principal underwriter, or any
affiliated person of either the Trust,
Adviser, the Sub-Adviser or the
principal underwriter, acting as
principal in the transaction, except to
the extent permitted by the Securities
and Exchange Commission (SEC) and the
1940 Act.
(d) The Sub-Adviser shall maintain all
books
and records with respect to transactions
involving the Allocated Assets required
by subparagraphs (b)(5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act. The Sub-
Adviser shall provide to the Adviser or
the Board of Trustees such periodic and
special reports, balance sheets or
financial information, and such other
information with regard to its affairs
as the Adviser or Board of Trustees may
reasonably request.
The Sub-Adviser shall keep the books and
records relating to the Allocated Assets
required to be maintained by the Sub-
Adviser under this Agreement and shall
timely furnish to the Adviser all
information relating to the Sub-Advisers
services under this Agreement needed by
the Adviser to keep the other books and
records of a Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any
other information relating to the
Allocated Assets that is required to be
filed by the Adviser or the Trust with
the SEC or sent to shareholders under
the 1940 Act (including the rules
adopted thereunder) or any exemptive or
other relief that the Adviser or the
Trust obtains from the SEC. The Sub-
Adviser agrees that all records that it
maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser
will surrender promptly to the Fund any
of such records upon the Funds request;
provided, however, that the Sub-Adviser
may retain a copy of such records. In
addition, for the duration of this
Agreement, the Sub-Adviser shall
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 this Agreement, and
shall transfer said records to any
successor sub-adviser upon the
termination of this Agreement (or, if
there is no successor sub-adviser, to
the Adviser).
(e) The Sub-Adviser shall provide each Funds
custodian on each business day with
information relating to all transactions
concerning the Funds Allocated Assets
and shall provide the Adviser with such
information upon request of the Adviser.
(f) 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.
(g) The Sub-Adviser shall promptly
notify
the Adviser of any financial condition
that is likely to impair the Sub-
Advisers ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all
proxy
solicitation materials and be
responsible for voting and handling all
proxies in relation to the Allocated
Assets. The Adviser shall instruct the
custodian and other parties providing
services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) Except as specifically permitted in
writing by the Adviser, or as otherwise
permitted or required to comply with the
requirements of the 1940 Act (including
the rules adopted thereunder), the Sub-
Adviser shall not consult with any other
sub-adviser to the Trust or a Fund
concerning the purchase, retention or
disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser
under this Agreement may be furnished through
the medium of any of the Sub-Advisers
partners, officers or employees.
2. Duties of the Adviser. The Adviser shall
continue to have responsibility for all
services to be provided to each Fund pursuant
to the Advisory Agreement and shall oversee
and review the Sub-Advisers performance of its
duties under this Agreement; provided,
however, that in connection with its
management of the Allocated Assets, nothing
herein shall be construed to relieve the Sub-
Adviser of responsibility for compliance with
the Trusts Declaration of Trust (as defined
herein), the Prospectus, the instructions and
directions of the Board of Trustees of the
Trust, the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other
applicable federal and state laws and
regulations, as each is amended from time to
time.
3. Delivery of Documents. The Adviser has
furnished the Sub-Adviser with copies properly
certified or authenticated of each of the
following documents:
(a) The Trusts Agreement and
Declaration of
Trust, as filed with the Secretary of
State of the State of Delaware (such
Agreement and Declaration of Trust, as
in effect on the date of this Agreement
and as amended from time to time, herein
called the Declaration of Trust);
(b) By-Laws of the Trust (such By-
Laws, as
in effect on the date of this Agreement
and as amended from time to time, are
herein called the By-Laws);
(c) Prospectus(es) of each Fund.
4. Compensation to the Sub-Adviser. For the
services to be provided by the Sub-Adviser
pursuant to this Agreement, the Adviser will
pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation
therefor, a sub-advisory fee at the rate
specified on Schedule B or Schedule C, of this
Agreement. The fee will be calculated based
on the monthly average net value of the
Allocated Assets under the Sub-Advisers
management. Except as may otherwise be
prohibited by law or regulation (including any
then current SEC staff interpretation), the
Sub-Adviser may, in its discretion and from
time to time, waive a portion of its fee.
5. Indemnification. The Sub-Adviser shall
indemnify and hold harmless the Adviser from
and against any and all claims, losses,
liabilities or damages (including reasonable
attorneys fees and other related expenses)
howsoever arising from or in connection with
the performance of the Sub-Adviser s
obligations under this Agreement; provided,
however, that the Sub-Adviser s obligation
under this Section 5 shall be reduced to the
extent that the claim against, or the loss,
liability or damage experienced by the
Adviser, is caused by or is otherwise directly
related to the Advisers own, or any other sub-
advisers, willful misfeasance, bad faith or
negligence, or to the reckless disregard of
its duties under this Agreement.
6. Duration and Termination. This Agreement
shall become effective as to a Fund upon its
approval by the Trusts Board of Trustees and
by the vote of a majority of the outstanding
voting securities of each Fund, if required.
This Agreement shall continue in effect for a
period of more than two years from the date
that the Sub-Adviser began providing services
hereunder only so long as continuance is
specifically approved at least annually in
conformance with the 1940 Act; provided,
however, that this Agreement may be terminated
with respect to a Fund (a) by the Fund at any
time, without the payment of any penalty, by
the vote of a majority of Trustees of the
Trust or by the vote of a majority of the
outstanding voting securities of the Fund, (b)
by the Adviser at any time, without the
payment of any penalty, on not less than 30
days written notice to the Sub-Adviser, or (c)
by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days written
notice to the Adviser. This Agreement shall
terminate automatically and immediately in the
event of its assignment, or in the event of a
termination of the Advisers agreement with the
Trust. As used in this Section 6, the terms
assignment and vote of a majority of the
outstanding voting securities shall have the
respective meanings set forth in the 1940 Act
and the rules and regulations thereunder,
subject to such exceptions as may be granted
by the SEC under the 1940 Act.
7. Governing Law. This Agreement shall be
governed by the internal laws of the State of
Delaware, without regard to conflict of law
principles; provided, however, that nothing
herein shall be construed as being
inconsistent with the 1940 Act.
8. Severability. 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.
9. Notice. Any notice, advice or report to be
given pursuant to this Agreement shall be
deemed sufficient if delivered or mailed by
registered, certified or overnight mail,
postage prepaid addressed by the party giving
notice to the other party at the last address
furnished by the other party:
To the Adviser at:
Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attn: President
To the Sub-Adviser at:
Chartwell Investment Partners
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Chief Counsel
10. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior
agreements and understandings relating to this
Agreements subject matter. This Agreement may
be executed in any number of counterparts,
each of which shall be deemed to be an
original, but such counterparts shall,
together, constitute only one instrument.
A copy of the Declaration of Trust is on file
with the Secretary of State of the State of
Delaware, and notice is hereby given that the
obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders of the
Fund or the Trust.
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 SEC,
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.
Touchstone Advisors, Inc.
Chartwell Investment Partners
By: _William Dent
By: _G. Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxx
Name: _G. Xxxxxxx Xxxxx
Title: __Senior Vice President
Title: __Partner, CFO
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Funds
Name of Fund
Constellation Chartwell Ultra Short Duration Fixed
Income
Fund
Constellation Chartwell Short Duration Fixed Income
Fund
Schedule C*
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1 hereto.
(a) The Adviser shall pay to the Sub-Adviser
a fee for each Fund calculated daily and payable
monthly in arrears, computed as a percentage of the
net value of the Allocated Assets for such month at
the rate set forth in Schedule C-1 hereto.
* Schedule B intentionally omitted.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund
Annual Basic Fee
Rate
Constellation Chartwell Ultra Short Duration
Fixed Income Fund
0.125%
Constellation Chartwell Short Duration Fixed
Income Fund
0.125%
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February, 2006, between Touchstone Advisors, Inc.
(the Adviser) and Clover Capital Management, Inc.
(the Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware
business trust (the Trust) is registered as an open-
end management investment company under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Adviser has entered into an
Investment Advisory Agreement dated as of February
17, 2006 (the Advisory Agreement) with the Trust,
pursuant to which the Adviser will act as investment
adviser to each series of the Trust set forth on
Schedule A of this Agreement (each a Fund and
collectively the Funds); and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of the Funds, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and the Trusts
Board of Trustees, the Sub-Adviser shall
manage those assets of a Fund that the Adviser
determines to allocate to the Sub-Adviser (the
Allocated Assets), including the purchase,
retention and disposition of the Allocated
Assets, in accordance with each Funds
investment objectives, policies and
restrictions as stated in the Funds prospectus
and statement of additional information, as
currently in effect and as amended or
supplemented from time to time (referred to
collectively as the Prospectus), and subject
to the following:
(a) The Sub-Adviser shall, in
consultation
with and subject to the direction of the
Adviser,
determine from time to time what
Allocated Assets will be purchased,
retained or sold by the Fund, and what
portion of the Allocated Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties
and
obligations under this Agreement, the
Sub-Adviser shall act in conformity with
the Trusts Declaration of Trust (as
defined herein) and the Prospectus and
with the instructions and directions of
the Adviser and of the Board of Trustees
of the Trust and will conform to and
comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986,
and all other applicable federal and
state laws and regulations, as each is
amended from time to time.
(c) The Sub-Adviser shall determine
the
Allocated Assets to be purchased or sold
by the Fund as provided in subparagraph
(a) and will place orders with or
through such persons, brokers or dealers
to carry out the policy with respect to
brokerage set forth in each Funds
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 executing
Fund transactions and selecting brokers
or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of each
Fund the best overall terms available.
In assessing the best overall terms
available for any transaction, the Sub-
Adviser shall consider all factors that
it deems relevant, including the breadth
of the market in the security, the price
of the security, the financial condition
and execution capability of the broker
or dealer, and the reasonableness of the
commission, if any, both for the
specific transaction and on a continuing
basis. In evaluating the best overall
terms available, and in selecting the
broker-dealer to execute a particular
transaction, the Sub-Adviser may also
consider the brokerage and research
services provided (as those terms are
defined in Section 28(e) of the
Securities Exchange Act of 1934).
Consistent with any guidelines
established by the Board of Trustees of
the Trust, the Sub-Adviser is authorized
to pay to a broker or dealer who
provides such brokerage and research
services a commission for executing a
fund transaction for a Fund which is in
excess of the amount of commission
another broker or dealer would have
charged for effecting that transaction
if, but only if, the Sub-Adviser
determines in good faith that such
commission was reasonable in relation to
the value of the brokerage and research
services provided by such broker or
dealer viewed in terms of that
particular transaction or terms of the
overall responsibilities of the Sub-
Adviser to the Fund. In addition, the
Sub-Adviser is authorized to allocate
purchase and sale orders for securities
to brokers or dealers (including brokers
and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trusts
principal underwriter) to take into
account the sale of shares of the Trust
if the Sub-Adviser believes that the
quality of the transaction and the
commission are comparable to what they
would be with other qualified firms. In
no instance, however, will a Funds
Allocated Assets be purchased from or
sold to the Adviser, Sub-Adviser, the
Trusts principal underwriter, or any
affiliated person of either the Trust,
Adviser, the Sub-Adviser or the
principal underwriter, acting as
principal in the transaction, except to
the extent permitted by the Securities
and Exchange Commission (SEC) and the
1940 Act.
(d) The Sub-Adviser shall maintain all
books
and records with respect to transactions
involving the Allocated Assets required
by subparagraphs (b)(5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act. The Sub-
Adviser shall provide to the Adviser or
the Board of Trustees such periodic and
special reports, balance sheets or
financial information, and such other
information with regard to its affairs
as the Adviser or Board of Trustees may
reasonably request.
The Sub-Adviser shall keep the books and
records relating to the Allocated Assets
required to be maintained by the Sub-
Adviser under this Agreement and shall
timely furnish to the Adviser all
information relating to the Sub-Advisers
services under this Agreement needed by
the Adviser to keep the other books and
records of a Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any
other information relating to the
Allocated Assets that is required to be
filed by the Adviser or the Trust with
the SEC or sent to shareholders under
the 1940 Act (including the rules
adopted thereunder) or any exemptive or
other relief that the Adviser or the
Trust obtains from the SEC. The Sub-
Adviser agrees that all records that it
maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser
will surrender promptly to the Fund any
of such records upon the Funds request;
provided, however, that the Sub-Adviser
may retain a copy of such records. In
addition, for the duration of this
Agreement, the Sub-Adviser shall
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 this Agreement, and
shall transfer said records to any
successor sub-adviser upon the
termination of this Agreement (or, if
there is no successor sub-adviser, to
the Adviser).
(e) The Sub-Adviser shall provide each
Funds
custodian on each business day with
information relating to all transactions
concerning the Funds Allocated Assets
and shall provide the Adviser with such
information upon request of the Adviser.
(f) 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.
(g) The Sub-Adviser shall promptly
notify
the Adviser of any financial condition
that is likely to impair the Sub-
Advisers ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all
proxy
solicitation materials and be
responsible for voting and handling all
proxies in relation to the Allocated
Assets. The Adviser shall instruct the
custodian and other parties providing
services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) Except as specifically permitted in
writing by the Adviser, or as otherwise
permitted or required to comply with the
requirements of the 1940 Act (including
the rules adopted thereunder), the Sub-
Adviser shall not consult with any other
sub-adviser to the Trust or a Fund
concerning the purchase, retention or
disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser
under this Agreement may be furnished through
the medium of any of the Sub-Advisers
partners, officers or employees.
2. Duties of the Adviser. The Adviser shall
continue to have responsibility for all
services to be provided to each Fund pursuant
to the Advisory Agreement and shall oversee
and review the Sub-Advisers performance of its
duties under this Agreement; provided,
however, that in connection with its
management of the Allocated Assets, nothing
herein shall be construed to relieve the Sub-
Adviser of responsibility for compliance with
the Trusts Declaration of Trust (as defined
herein), the Prospectus, the instructions and
directions of the Board of Trustees of the
Trust, the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other
applicable federal and state laws and
regulations, as each is amended from time to
time.
3. Delivery of Documents. The Adviser has
furnished the Sub-Adviser with copies properly
certified or authenticated of each of the
following documents:
(a) The Trusts Agreement and
Declaration of
Trust, as filed with the Secretary of
State of the State of Delaware (such
Agreement and Declaration of Trust, as
in effect on the date of this Agreement
and as amended from time to time, herein
called the Declaration of Trust);
(b) By-Laws of the Trust (such By-
Laws, as
in effect on the date of this Agreement
and as amended from time to time, are
herein called the By-Laws);
(c) Prospectus(es) of each Fund.
4. Compensation to the Sub-Adviser. For the
services to be provided by the Sub-Adviser
pursuant to this Agreement, the Adviser will
pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation
therefor, a sub-advisory fee at the rate
specified on Schedule B or Schedule C, of this
Agreement. The fee will be calculated based
on the monthly average net value of the
Allocated Assets under the Sub-Advisers
management. Except as may otherwise be
prohibited by law or regulation (including any
then current SEC staff interpretation), the
Sub-Adviser may, in its discretion and from
time to time, waive a portion of its fee.
5. Indemnification. The Sub-Adviser shall
indemnify and hold harmless the Adviser from
and against any and all claims, losses,
liabilities or damages (including reasonable
attorneys fees and other related expenses)
howsoever arising from or in connection with
the performance of the Sub-Adviser s
obligations under this Agreement; provided,
however, that the Sub-Adviser s obligation
under this Section 5 shall be reduced to the
extent that the claim against, or the loss,
liability or damage experienced by the
Adviser, is caused by or is otherwise directly
related to the Advisers own, or any other sub-
advisers, willful misfeasance, bad faith or
negligence, or to the reckless disregard of
its duties under this Agreement.
6. Duration and Termination. This Agreement
shall become effective as to a Fund upon its
approval by the Trusts Board of Trustees and
by the vote of a majority of the outstanding
voting securities of each Fund, if required.
This Agreement shall continue in effect for a
period of more than two years from the date
that the Sub-Adviser began providing services
hereunder only so long as continuance is
specifically approved at least annually in
conformance with the 1940 Act; provided,
however, that this Agreement may be terminated
with respect to a Fund (a) by the Fund at any
time, without the payment of any penalty, by
the vote of a majority of Trustees of the
Trust or by the vote of a majority of the
outstanding voting securities of the Fund, (b)
by the Adviser at any time, without the
payment of any penalty, on not less than 30
days written notice to the Sub-Adviser, or (c)
by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days written
notice to the Adviser. This Agreement shall
terminate automatically and immediately in the
event of its assignment, or in the event of a
termination of the Advisers agreement with the
Trust. As used in this Section 6, the terms
assignment and vote of a majority of the
outstanding voting securities shall have the
respective meanings set forth in the 1940 Act
and the rules and regulations thereunder,
subject to such exceptions as may be granted
by the SEC under the 1940 Act.
7. Governing Law. This Agreement shall be
governed by the internal laws of the State of
Delaware, without regard to conflict of law
principles; provided, however, that nothing
herein shall be construed as being
inconsistent with the 1940 Act.
8. Severability. 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.
9. Notice. Any notice, advice or report to be
given pursuant to this Agreement shall be
deemed sufficient if delivered or mailed by
registered, certified or overnight mail,
postage prepaid addressed by the party giving
notice to the other party at the last address
furnished by the other party:
To the Adviser at:
Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
To the Sub-Adviser at:
Clover Capital Management, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Counsel
10. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior
agreements and understandings relating to this
Agreements subject matter. This Agreement may
be executed in any number of counterparts,
each of which shall be deemed to be an
original, but such counterparts shall,
together, constitute only one instrument.
A copy of the Declaration of Trust is on file
with the Secretary of State of the State of
Delaware, and notice is hereby given that the
obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders of the
Fund or the Trust.
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 SEC,
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.
Clover Capital Management, Inc.
Touchstone Advisors, Inc.
By: _Stephen J Xxxx
By: __William Dent
Name: _Stephen J Xxxx
Name: _William Dent
Title: _Chief Operating Officer
Title: _Senior Vice President
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Funds
Name of Fund
Constellation Clover Core Value Fund
Constellation Clover Small Cap Value Fund
Constellation Clover Core Fixed Income Fund
Schedule C*
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1 hereto.
(a) The Adviser shall pay to the Sub-Adviser
a fee for each Fund calculated daily and payable
monthly in arrears, computed as a percentage of the
net value of the Allocated Assets for such month at
the rate set forth in Schedule C-1 hereto.
* Schedule B intentionally omitted.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund
Annual Basic Fee
Rate
Constellation Clover Core Value Fund
0.37%
Constellation Clover Small Cap Value Fund
0.45%
Constellation Clover Core Fixed Income Fund
0.225%
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February, 2006, by and between Touchstone Advisors,
Inc. (the Adviser) and Diamond Hill Capital
Management, Inc. (the Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware
business trust (the Trust) is registered as an open-
end management investment company under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Adviser has entered into an
Investment Advisory Agreement dated as of February
17th, 2006 (the Advisory Agreement) with the Trust,
pursuant to which the Adviser will act as investment
adviser to each series of the Trust set forth on
Schedule A of this Agreement (each a Fund and
collectively the Funds); and
WHEREAS, the Adviser, with the approval of
the Trust, desires to retain the Sub-Adviser to
provide investment advisory services to the Adviser
in connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to supervision
by the Adviser and the Trusts Board of Trustees, the
Sub-Adviser shall manage those assets of a Fund that
the Adviser determines to allocate to the Sub-
Adviser (the Allocated Assets), including the
purchase, retention and disposition of the Allocated
Assets, in accordance with each Funds investment
objectives, policies and restrictions as stated in
the Funds prospectus and statement of additional
information, as currently in effect and as amended
or supplemented from time to time (referred to
collectively as the Prospectus), and subject to the
following:
(a) The Sub-Adviser shall, subject to the direction
of the Adviser, determine from time to time what
Allocated Assets will be purchased, retained or sold
by the Fund, and what portion of the Allocated
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations
under this Agreement, the Sub-Adviser shall act in
conformity with the Trusts Declaration of Trust (as
defined herein) and the Prospectus and with the
instructions and directions of the Adviser and of
the Board of Trustees of the Trust and will conform
to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other
applicable federal and state laws and regulations,
as each is amended from time to time.
(c) The Sub-Adviser shall determine the Allocated
Assets to be purchased or sold by the Fund as
provided in subsection (a) and will place orders
with or through such persons, brokers or dealers to
carry out the policy with respect to brokerage set
forth in each Funds 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
executing Fund transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts
to seek on behalf of each Fund the best overall
terms available. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant,
including the breadth of the market in the security,
the price of the security, the financial condition
and execution capability of the broker or dealer,
and the reasonableness of the commission, if any,
both for the specific transaction and on a
continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer
to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research
services provided (as those terms are defined in
Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by
the Board of Trustees of the Trust, the Sub-Adviser
is authorized to pay to a broker or dealer who
provides such brokerage and research services a
commission for executing a fund transaction for a
Fund which is in excess of the amount of commission
another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-
Adviser determines in good faith that such
commission was reasonable in relation to the value
of the brokerage and research services provided by
such broker or dealer viewed in terms of that
particular transaction or in terms of the overall
responsibilities of the Sub-Adviser to the Fund and
other accounts as to which it exercises investment
discretion. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers
and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trusts principal underwriter) to
take into account the sale of shares of the Trust if
the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to
what they would be with other qualified firms. In no
instance, however, will a Funds Allocated Assets be
purchased from or sold to the Adviser, Sub-Adviser,
the Trusts principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser
or the principal underwriter, acting as principal in
the transaction, except to the extent permitted by
the Securities and Exchange Commission (SEC) and the
1940 Act.
(d) The Sub-Adviser shall maintain all books and
records with respect to transactions involving the
Allocated Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of
Rule 31a-1 under the 1940 Act. The Sub-Adviser shall
provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or
financial information, and such other information
with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records
relating to the Allocated Assets required to be
maintained by the Sub-Adviser under this Agreement
and shall timely furnish to the Adviser all
information relating to the Sub-Advisers services
under this Agreement needed by the Adviser to keep
the other books and records of a Fund required by
Rule 31a-1 under the 1940 Act. The Sub-Adviser shall
also furnish to the Adviser any other information
relating to the Allocated Assets that is required to
be filed by the Adviser or the Trust with the SEC or
sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or
other relief that the Adviser or the Trust obtains
from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records
upon the Funds request; provided, however, that the
Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the
Sub-Adviser shall 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 this Agreement, and shall transfer said
records to any successor sub-adviser upon the
termination of this Agreement (or, if there is no
successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide each Funds
custodian on each business day with information
relating to all transactions concerning the Funds
Allocated Assets and shall provide the Adviser with
such information upon request of the Adviser.
(f) 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.
(g) The Sub-Adviser shall promptly notify the
Adviser of any financial condition that is likely to
impair the Sub-Advisers ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy
solicitation materials and be responsible for voting
and handling all proxies in relation to the
Allocated Assets. The Adviser shall instruct the
custodian and other parties providing services to
the Fund to promptly forward misdirected proxies to
the Sub-Adviser.
(i) Except as specifically permitted in writing by
the Adviser, or as otherwise permitted or required
to comply with the requirements of the 1940 Act
(including the rules adopted thereunder), the Sub-
Adviser shall not consult with any other sub-adviser
to the Trust or a Fund concerning the purchase,
retention or disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser under
this Agreement may be furnished through the medium
of any of the Sub-Advisers partners, officers or
employees.
2. Duties of the Adviser. The Adviser shall continue
to have responsibility for all services to be
provided to each Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-
Advisers performance of its duties under this
Agreement; provided, however, that in connection
with its management of the Allocated Assets, nothing
herein shall be construed to relieve the Sub-Adviser
of responsibility for compliance with the Trusts
Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the
Board of Trustees of the Trust, the requirements of
the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. Delivery of Documents. The Adviser has furnished
the Sub-Adviser with copies properly certified or
authenticated of each of the following documents:
(a) The Trusts Agreement and Declaration of Trust,
as filed with the Secretary of State of the State of
Delaware (such Agreement and Declaration of Trust,
as in effect on the date of this Agreement and as
amended from time to time, herein called the
Declaration of Trust);
(b) By-Laws of the Trust (such By-Laws, as in effect
on the date of this Agreement and as amended from
time to time, are herein called the By-Laws);
(c) Prospectus(es) of each Fund.
4. Compensation to the Sub-Adviser. For the services
to be provided by the Sub-Adviser pursuant to this
Agreement, the Adviser will pay the Sub-Adviser, and
the Sub-Adviser agrees to accept as full
compensation therefor, a sub-advisory fee at the
rate specified on Schedule C of this Agreement. The
fee will be calculated based on the monthly average
net value of the Allocated Assets under the Sub-
Advisers management. Except as may otherwise be
prohibited by law or regulation (including any then
current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive
a portion of its fee.
5. Indemnification. The Sub-Adviser shall indemnify
and hold harmless the Adviser from and against any
and all claims, losses, liabilities or damages
(including reasonable attorneys fees and other
related expenses) howsoever arising from or in
connection with the performance of the Sub-Advisers
obligations under this Agreement; provided, however,
that the Sub-Advisers obligation under this Section
5 shall be reduced to the extent that the claim
against, or the loss, liability or damage
experienced by the Adviser, is caused by or is
otherwise directly related to the Advisers own, or
any other sub-advisers, willful misfeasance, bad
faith or negligence, or to the reckless disregard of
its duties under this Agreement.
6. Duration and Termination. This Agreement shall
become effective as to a Fund upon its approval by
the Trusts Board of Trustees and by the vote of a
majority of the outstanding voting securities of
each Fund, if required. This Agreement shall
continue in effect as to a Fund for a period of more
than two years from the date that the Sub-Adviser
began providing services hereunder only so long as
continuance is specifically approved at least
annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with
respect to a Fund (a) by the Fund at any time,
without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of
a majority of the outstanding voting securities of
the Fund, (b) by the Adviser at any time, without
the payment of any penalty, on not less than 30 days
written notice to the Sub-Adviser, or (c) by the
Sub-Adviser at any time, without the payment of any
penalty, on 90 days written notice to the Adviser.
This Agreement shall terminate automatically and
immediately in the event of its assignment, or in
the event of a termination of the Advisers agreement
with the Trust. As used in this Section 6, the terms
assignment and vote of a majority of the outstanding
voting securities shall have the respective meanings
set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions
as may be granted by the SEC under the 1940 Act.
7. Governing Law. This Agreement shall be governed
by the internal laws of the State of Delaware,
without regard to conflict of law principles;
provided, however, that nothing herein shall be
construed as being inconsistent with the 1940 Act.
8. Severability. 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.
9. Acknowledgement. The Advisor acknowledges
receipt of Form ADV, Part 2 at least 48 hours in
advance of entering this Agreement.
10. Notice. Any notice, advice or report to be given
pursuant to this Agreement shall be deemed
sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid
addressed by the party giving notice to the other
party at the last address furnished by the other
party:
To the Adviser at : Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-Adviser at: Diamond Hill Capital
Management, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
11. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior agreements
and understandings relating to this Agreements
subject matter. This Agreement may be executed in
any number of counterparts, each of which shall be
deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on
file with the Secretary of State of the State of
Delaware, and notice is hereby given that the
obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders of the
Fund or the Trust.
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 SEC, 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.
Touchstone Advisors, Inc.
By:__William Dent
Name: _William Dent
Title: Senior Vice President
Diamond Hill Capital Management, Inc.
By:__James X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Fund(s)
Constellation Small Cap Value Opportunities Fund
Schedule C
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1 hereto.
(a) The Adviser shall pay to the Sub-Adviser a fee
for each Fund calculated daily and payable monthly
in arrears, computed as a percentage of the net
value of the Allocated Assets for such month at the
rate set forth in Schedule C-1 hereto.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund Fee Rate
Constellation Small Cap Value Opportunities
Fund0.55% on the first $50 million of Allocated
Assets; 0.50% on Allocated Assets above $50 million
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February, 2006, by and between Touchstone Advisors,
Inc. (the Adviser) and Xxxxxxxx Xxxxx Asset
Management (the Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware
business trust (the Trust) is registered as an open-
end management investment company under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Adviser has entered into an
Investment Advisory Agreement dated as of February
17th, 2006 (the Advisory Agreement) with the Trust,
pursuant to which the Adviser will act as investment
adviser to each series of the Trust set forth on
Schedule A of this Agreement (each a Fund and
collectively the Funds); and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and the Trusts Board of
Trustees, the Sub-Adviser shall manage those assets
of a Fund that the Adviser determines to allocate to
the Sub-Adviser (the Allocated Assets), including
the purchase, retention and disposition of the
Allocated Assets, in accordance with each Funds
investment objectives, policies and restrictions as
stated in the Funds prospectus and statement of
additional information, as currently in effect and
as amended or supplemented from time to time
(referred to collectively as the Prospectus), and
subject to the following:
(a) The Sub-Adviser shall, in
consultation with and subject to the direction of
the Adviser,
determine from time to time what
Allocated Assets will be purchased, retained or sold
by the Fund, and what portion of the Allocated
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties
and obligations under this Agreement, the Sub-
Adviser shall act in conformity with the Trusts
Declaration of Trust (as defined herein) and the
Prospectus and with the instructions and directions
of the Adviser and of the Board of Trustees of the
Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue
Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from
time to time.
(c) The Sub-Adviser shall determine
the Allocated Assets to be purchased or sold by the
Fund as provided in subparagraph (a) and will place
orders with or through such persons, brokers or
dealers to carry out the policy with respect to
brokerage set forth in each Funds 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 executing Fund transactions and selecting
brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of each Fund the best
overall terms available. In assessing the best
overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the
security, the price of the security, the financial
condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a
continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer
to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research
services provided (as those terms are defined in
Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established
by the Board of Trustees of the Trust, the Sub-
Adviser is authorized to pay to a broker or dealer
who provides such brokerage and research services a
commission for executing a fund transaction for a
Fund which is in excess of the amount of commission
another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-
Adviser determines in good faith that such
commission was reasonable in relation to the value
of the brokerage and research services provided by
such broker or dealer viewed in terms of that
particular transaction or terms of the overall
responsibilities of the Sub-Adviser to the Fund. In
addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are
affiliated with the Adviser, Sub-Adviser or the
Trusts principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser
believes that the quality of the transaction and the
commission are comparable to what they would be with
other qualified firms. In no instance, however,
will a Funds Allocated Assets be purchased from or
sold to the Adviser, Sub-Adviser, the Trusts
principal underwriter, or any affiliated person of
either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the
transaction, except to the extent permitted by the
Securities and Exchange Commission (SEC) and the
1940 Act.
(d) The Sub-Adviser shall maintain all
books and records with respect to transactions
involving the Allocated Assets required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11)
and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the
Board of Trustees such periodic and special reports,
balance sheets or financial information, and such
other information with regard to its affairs as the
Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and
records relating to the Allocated Assets required to
be maintained by the Sub-Adviser under this
Agreement and shall timely furnish to the Adviser
all information relating to the Sub-Advisers
services under this Agreement needed by the Adviser
to keep the other books and records of a Fund
required by Rule 31a-1 under the 1940 Act. The Sub-
Adviser shall also furnish to the Adviser any other
information relating to the Allocated Assets that is
required to be filed by the Adviser or the Trust
with the SEC or sent to shareholders under the 1940
Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the
Trust obtains from the SEC. The Sub-Adviser agrees
that all records that it maintains on behalf of a
Fund are property of the Fund and the Sub-Adviser
will surrender promptly to the Fund any of such
records upon the Funds request; provided, however,
that the Sub-Adviser may retain a copy of such
records. In addition, for the duration of this
Agreement, the Sub-Adviser shall 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 this Agreement, and shall transfer
said records to any successor sub-adviser upon the
termination of this Agreement (or, if there is no
successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide each
Funds custodian on each business day with
information relating to all transactions concerning
the Funds Allocated Assets and shall provide the
Adviser with such information upon request of the
Adviser.
(f) 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.
(g) The Sub-Adviser shall promptly
notify the Adviser of any financial condition that
is likely to impair the Sub-Advisers ability to
fulfill its commitment under this Agreement.
(h) The Sub-Adviser shall review all
proxy solicitation materials and be responsible for
voting and handling all proxies in relation to the
Allocated Assets. The Adviser shall instruct the
custodian and other parties providing services to
the Fund to promptly forward misdirected proxies to
the Sub-Adviser.
(i) Except as specifically permitted in writing by
the Adviser, or as otherwise permitted or required
to comply with the requirements of the 1940 Act
(including the rules adopted thereunder), the Sub-
Adviser shall not consult with any other sub-adviser
to the Trust or a Fund concerning the purchase,
retention or disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser under
this Agreement may be furnished through the medium
of any of the Sub-Advisers partners, officers or
employees.
2. Duties of the Adviser. The Adviser shall
continue to have responsibility for all services to
be provided to each Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-
Advisers performance of its duties under this
Agreement; provided, however, that in connection
with its management of the Allocated Assets, nothing
herein shall be construed to relieve the Sub-Adviser
of responsibility for compliance with the Trusts
Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the
Board of Trustees of the Trust, the requirements of
the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. Delivery of Documents. The Adviser has
furnished the Sub-Adviser with copies properly
certified or authenticated of each of the following
documents:
(a) The Trusts Agreement and
Declaration of Trust, as filed with the Secretary of
State of the State of Delaware (such Agreement and
Declaration of Trust, as in effect on the date of
this Agreement and as amended from time to time,
herein called the Declaration of Trust);
(b) By-Laws of the Trust (such By-
Laws, as in effect on the date of this Agreement and
as amended from time to time, are herein called the
By-Laws);
(c) Prospectus(es) of each Fund.
4. Compensation to the Sub-Adviser. For the
services to be provided by the Sub-Adviser pursuant
to this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as
full compensation therefor, a sub-advisory fee at
the rate specified on Schedule B or Schedule C, of
this Agreement. The fee will be calculated based on
the monthly average net value of the Allocated
Assets under the Sub-Advisers management. Except as
may otherwise be prohibited by law or regulation
(including any then current SEC staff
interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of
its fee.
5. Indemnification. The Sub-Adviser shall
indemnify and hold harmless the Adviser from and
against any and all claims, losses, liabilities or
damages (including reasonable attorneys fees and
other related expenses) howsoever arising from or in
connection with the performance of the Sub-Adviser s
obligations under this Agreement; provided, however,
that the Sub-Adviser s obligation under this Section
5 shall be reduced to the extent that the claim
against, or the loss, liability or damage
experienced by the Adviser, is caused by or is
otherwise directly related to the Advisers own, or
any other sub-advisers, willful misfeasance, bad
faith or negligence, or to the reckless disregard of
its duties under this Agreement.
6. Duration and Termination. This Agreement
shall become effective as to a Fund upon its
approval by the Trusts Board of Trustees and by the
vote of a majority of the outstanding voting
securities of each Fund, if required. This
Agreement shall continue in effect for a period of
more than two years from the date that the Sub-
Adviser began providing services hereunder only so
long as continuance is specifically approved at
least annually in conformance with the 1940 Act;
provided, however, that this Agreement may be
terminated with respect to a Fund (a) by the Fund at
any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by
the vote of a majority of the outstanding voting
securities of the Fund, (b) by the Adviser at any
time, without the payment of any penalty, on not
less than 30 days written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days written notice to
the Adviser. This Agreement shall terminate
automatically and immediately in the event of its
assignment, or in the event of a termination of the
Advisers agreement with the Trust. As used in this
Section 6, the terms assignment and vote of a
majority of the outstanding voting securities shall
have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder,
subject to such exceptions as may be granted by the
SEC under the 1940 Act.
7. Governing Law. This Agreement shall be
governed by the internal laws of the State of
Delaware, without regard to conflict of law
principles; provided, however, that nothing herein
shall be construed as being inconsistent with the
1940 Act.
8. Severability. 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.
9. Notice. Any notice, advice or report to be
given pursuant to this Agreement shall be deemed
sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid
addressed by the party giving notice to the other
party at the last address furnished by the other
party:
To the Adviser at: Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-Adviser at: Xxxxxxxx Xxxxx Asset
Management
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Counsel
10. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior agreements
and understandings relating to this Agreements
subject matter. This Agreement may be executed in
any number of counterparts, each of which shall be
deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file
with the Secretary of State of the State of
Delaware, and notice is hereby given that the
obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders of the
Fund or the Trust.
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 SEC,
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.
Touchstone Advisors, Inc.
Xxxxxxxx Xxxxx Asset Management
By: _William Dent
By: Xxx X Xxxxxx
Name: Xxxxxxx Xxxx
Name: Xxx X Xxxxxx
Title: Senior Vice President
Title: Senior Vice President
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Funds
Name of Fund
Constellation HLAM Large Cap Quality Stock Fund
Schedule C*
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1 hereto.
(a) The Adviser shall pay to the Sub-Adviser
a fee for each Fund calculated daily and payable
monthly in arrears, computed as a percentage of the
net value of the Allocated Assets for such month at
the rate set forth in Schedule C-1 hereto.
* Schedule B intentionally omitted.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund Annual Basic Fee Rate
Constellation HLAM Large Cap Quality Stock Fund
0.35%
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of February,
2006, by and between Touchstone
Advisors, Inc. (the Adviser) and Pitcairn Investment
Management, a separately
identifiable division of Pitcairn Trust Company (the
Sub-Adviser).
WHEREAS, Constellation Funds, a Delaware business
trust (the Trust) is
registered as an open-end management investment
company under the Investment
Company Act of 1940, as amended (the 1940 Act); and
WHEREAS, the Adviser has entered into an Investment
Advisory Agreement dated as
of February 17th, 2006 (the Advisory Agreement) with
the Trust, pursuant to
which the Adviser will act as investment adviser to
each series of the Trust set
forth on Schedule A of this Agreement (each a Fund
and collectively the Funds);
and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-
Adviser to provide investment advisory services to
the Adviser in connection
with the management of a Fund, and the Sub-Adviser
is willing to render such
investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and
the Trusts Board of Trustees, the Sub-Adviser shall
manage those assets of a
Fund that the Adviser determines to allocate to the
Sub-Adviser (the Allocated
Assets), including the purchase, retention and
disposition of the Allocated
Assets, in accordance with each Funds investment
objectives, policies and
restrictions as stated in the Funds prospectus and
statement of additional
information, as currently in effect and as amended
or supplemented from time to
time (referred to collectively as the Prospectus),
and subject to the following:
(a)
The Sub-Adviser shall, subject to the direction
of the Adviser, determine from time to time
what Allocated Assets will be purchased,
retained or sold by the Fund, and what portion
of the Allocated Assets will be invested or
held uninvested in cash.
(b)
In the performance of its duties and
obligations under this Agreement, the Sub-
Adviser shall act in conformity with the Trusts
Declaration of Trust (as defined herein) and
the Prospectus and with the instructions and
directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and
comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all
other applicable federal and state laws and
regulations, as each is amended from time to
time.
c
The Sub-Adviser shall determine the Allocated
Assets to be purchased or sold by the Fund as
provided in subsection (a) and will place
orders with or through such persons, brokers or
dealers to carry out the policy with respect to
brokerage set forth in each Funds 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 executing Fund
transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to
seek on behalf of each Fund the best overall
terms available. In assessing the best overall
terms available for any transaction, the Sub-
Adviser shall consider all factors that it
deems relevant, including the breadth of the
market in the security, the price of the
security, the financial condition and execution
capability of the broker or dealer, and the
reasonableness of the commission, if any, both
for the specific transaction and on a
continuing basis. In evaluating the best
overall terms available, and in selecting the
broker-dealer to execute a particular
transaction, the Sub-Adviser may also consider
the brokerage and research services provided
(as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934).
Consistent with any guidelines established by
the Board of Trustees of the Trust, the Sub-
Adviser is authorized to pay to a broker or
dealer who provides such brokerage and research
services a commission for executing a fund
transaction for a Fund which is in excess of
the amount of commission another broker or
dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser
determines in good faith that such commission
was reasonable in relation to the value of the
brokerage and research services provided by
such broker or dealer viewed in terms of that
particular transaction or in terms of the
overall responsibilities of the Sub-Adviser to
the Fund and other accounts as to which it
exercises investment discretion. In addition,
the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to
brokers or dealers (including brokers and
dealers that are affiliated with the Adviser,
Sub-Adviser or the Trusts principal
underwriter) to take into account the sale of
shares of the Trust if the Sub-Adviser believes
that the quality of the transaction and the
commission are comparable to what they would be
with other qualified firms. In no instance,
however, will a Funds Allocated Assets be
purchased from or sold to the Adviser, Sub-
Adviser, the Trusts principal underwriter, or
any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the
transaction, except to the extent permitted by
the Securities and Exchange Commission (SEC)
and the 1940 Act.
(d)
The Sub-Adviser shall maintain all books and
records with respect to transactions involving
the Allocated Assets required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and
paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or
the Board of Trustees such periodic and special
reports, balance sheets or financial
information, and such other information with
regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and
records relating to the Allocated Assets
required to be maintained by the Sub-Adviser
under this Agreement and shall timely furnish
to the Adviser all information relating to the
Sub-Advisers services under this Agreement
needed by the Adviser to keep the other books
and records of a Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also
furnish to the Adviser any other information
relating to the Allocated Assets that is
required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted
thereunder) or any exemptive or other relief
that the Adviser or the Trust obtains from the
SEC. The Sub-Adviser agrees that all records
that it maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such
records upon the Funds request; provided,
however, that the Sub-Adviser may retain a copy
of such records. In addition, for the duration
of this Agreement, the Sub-Adviser shall
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 this Agreement, and shall transfer said
records to any successor sub-adviser upon the
termination of this Agreement (or, if there is
no successor sub-adviser, to the Adviser).
(e)
The Sub-Adviser shall provide each Funds
custodian on each business day with information
relating to all transactions concerning the
Funds Allocated Assets and shall provide the
Adviser with such information upon request of
the Adviser.
(f)
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.
(g)
The Sub-Adviser shall promptly notify the
Adviser of any financial condition that is
likely to impair the Sub-Advisers ability to
fulfill its commitment under this Agreement.
(h)
The Sub-Adviser shall review all proxy
solicitation materials and be responsible for
voting and handling all proxies in relation to
the Allocated Assets. The Adviser shall
instruct the custodian and other parties
providing services to the Fund to promptly
forward misdirected proxies to the Sub-Adviser.
(i)
Except as specifically permitted in writing by
the Adviser, or as otherwise permitted or
required to comply with the requirements of the
1940 Act (including the rules adopted
thereunder), the Sub-Adviser shall not consult
with any other sub-adviser to the Trust or a
Fund concerning the purchase, retention or
disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser under
this Agreement may be furnished through the
medium of any of the Sub-Advisers partners,
officers or employees.
2.
Duties of the Adviser. The Adviser shall continue
to have responsibility for all services to be
provided to each Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-
Advisers performance of its duties under this
Agreement; provided, however, that in connection
with its management of the Allocated Assets,
nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with
the Trusts Declaration of Trust (as defined
herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust,
the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each
is amended from time to time.
3.
Delivery of Documents. The Adviser has furnished
the Sub-Adviser with copies properly certified or
authenticated of each of the following documents:
(a)
The Trusts Agreement and Declaration of Trust,
as filed with the Secretary of State of the
State of Delaware (such Agreement and
Declaration of Trust, as in effect on the date
of this Agreement and as amended from time to
time, herein called the Declaration of Trust);
(b)
By-Laws of the Trust (such By-Laws, as in
effect on the date of this Agreement and as
amended from time to time, are herein called
the By-Laws);
c
Prospectus(es) of each Fund.
4.
Compensation to the Sub-Adviser. For the services
to be provided by the Sub-Adviser pursuant to
this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as
full compensation therefor, a sub-advisory fee at
the rate specified on Schedule C of this
Agreement. The fee will be calculated based on
the monthly average net value of the Allocated
Assets under the Sub-Advisers management. Except
as may otherwise be prohibited by law or
regulation (including any then current SEC staff
interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion
of its fee.
5.
Indemnification. The Sub-Adviser shall indemnify
and hold harmless the Adviser from and against
any and all claims, losses, liabilities or
damages (including reasonable attorneys fees and
other related expenses) howsoever arising from or
in connection with the performance of the Sub-
Advisers obligations under this Agreement;
provided, however, that the Sub-Adviser s
obligation under this Section 5 shall be reduced
to the extent that the claim against, or the
loss, liability or damage experienced by the
Adviser, is caused by or is otherwise directly
related to the Advisers own, or any other sub-
advisers, willful misfeasance, bad faith or
negligence, or to the reckless disregard of its
duties under this Agreement.
6.
Duration and Termination. This Agreement shall
become effective as to a Fund upon its approval
by the Trusts Board of Trustees and by the vote
of a majority of the outstanding voting
securities of each Fund, if required. This
Agreement shall continue in effect for a period
of more than two years from the date that the
Sub-Adviser began providing services hereunder
only so long as continuance is specifically
approved at least annually in conformance with
the 1940 Act; provided, however, that this
Agreement may be terminated with respect to a
Fund (a) by the Fund at any time, without the
payment of any penalty, by the vote of a majority
of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of
the Fund, (b) by the Adviser at any time, without
the payment of any penalty, on not less than 30
days written notice to the Sub-Adviser, or (c) by
the Sub-Adviser at any time, without the payment
of any penalty, on 90 days written notice to the
Adviser. This Agreement shall terminate
automatically and immediately in the event of its
assignment, or in the event of a termination of
the Advisers agreement with the Trust. As used in
this Section 6, the terms assignment and vote of
a majority of the outstanding voting securities
shall have the respective meanings set forth in
the 1940 Act and the rules and regulations
thereunder, subject to such exceptions as may be
granted by the SEC under the 1940 Act.
7.
Governing Law. This Agreement shall be governed
by the internal laws of the State of Delaware,
without regard to conflict of law principles;
provided, however, that nothing herein shall be
construed as being inconsistent with the 1940
Act.
8.
Severability. 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.
9.
Notice. Any notice, advice or report to be given
pursuant to this Agreement shall be deemed
sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid
addressed by the party giving notice to the other
party at the last address furnished by the other
party:
To the Adviser
at:
Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-
Adviser at:
Pitcairn Investment Management
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx III
10.
Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior
agreements and understandings relating to this
Agreements subject matter. This Agreement may be
executed in any number of counterparts, each of
which shall be deemed to be an original, but
such counterparts shall, together, constitute
only one instrument
11
License of Names. The Sub-Adviser hereby agrees
to grant a non-exclusive, non-assignable license
to the Trust for use of the names Pitcairn and
Family Heritage in the name of each series of
the Trust for which the Sub-Adviser provides
investment management services pursuant to this
Agreement for so long as the Sub-Adviser
continues to provide such services to such
series, and such license shall terminate upon
termination of this Agreement.
A copy of the Declaration of Trust is on file with
the Secretary of State of the
State of Delaware, and notice is hereby given that
the obligations of this
instrument are not binding upon any of the
Trustees, officers or shareholders of
the Fund or the Trust.
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 SEC, 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.
Touchstone Advisors,
Inc.
Pitcairn Investment
Management, a division of
Pitcairn Trust Company
By: Xxxxxxx Xxxx
By: Xxxxx X Xxxx III
Name: Xxxxxxx Xxxx
Name: Xxxxx X Xxxx III
Title: Senior Vice
President
Title: President & Chief
Executive Officer
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Fund(s)
Name of Fund
Constellation Pitcairn Diversified Value Fund
Constellation Pitcairn Diversified Growth Fund
Constellation Pitcairn Select Value Fund
Constellation Pitcairn Small Cap Fund
Constellation Pitcairn Family Heritage Fund
Constellation Pitcairn Taxable Bond Fund
Constellation Pitcairn Tax-Exempt Bond Fund
Schedule C*
to the
Investment Sub-Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C-1
hereto.
(a) The Adviser shall pay to the Sub-Adviser a fee
for each Fund
calculated daily and payable monthly in arrears,
computed as a percentage
of the net value of the Allocated Assets for such
month at the rate set
forth in Schedule C-1 hereto.
* Schedule B intentionally omitted.
Schedule C-1
to the
Investment Sub-Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund
Fee Rate
Constellation Pitcairn Diversified Value Fund
0.55% on the first $150 million, and
0.40% on the value of assets above that amount
Constellation Pitcairn Diversified Growth Fund
0.55% on the first $102 million, and
0.40% on the value of assets above that amount
Constellation Pitcairn Select Value Fund
0.55% on the first $61 million, and
0.40% on the value of assets above that amount
Constellation Pitcairn Small Cap Fund
0.55% on the first $90 million, and
0.45% on the value of the assets above that amount
Constellation Pitcairn Family Heritage Fund
0.70% on the first $127 million, and
0.45% on the value of the assets above that amount
Constellation Pitcairn Taxable Bond Fund
0.30% on the first $43 million, and
0.25% on the value of the assets above that amount
Constellation Pitcairn Tax-Exempt Bond Fund
0.25% on the value of assets in the Fund
INVESTMENT SUB-ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of February,
2006,
by and between Touchstone Advisors, Inc. (the
Adviser) and Sands Capital Management, LLC (the Sub-
Adviser).
WHEREAS, Constellation Funds, a Delaware business
trust (the Trust) is registered as an open-end
management investment company under the Investment
Company Act of 1940, as amended (the 1940 Act); and
WHEREAS, the Adviser has entered into an Investment
Advisory Agreement dated as of February 17th, 2006
(the Advisory Agreement) with the Trust, pursuant to
which the Adviser will act as investment adviser to
each series of the Trust set forth on Schedule A of
this Agreement (each a Fund and collectively the
Funds); and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1.
Duties of the Sub-Adviser. Subject to supervision by
the Adviser and the Trusts Board of Trustees, the
Sub-Adviser shall manage those assets of a Fund that
the Adviser determines to allocate to the Sub-
Adviser (the Allocated Assets), including the
purchase, retention and disposition of the Allocated
Assets, in accordance with each Funds investment
objectives, policies and restrictions as stated in
the Funds prospectus and statement of additional
information, as currently in effect and as amended
or supplemented from time to time (referred to
collectively as the Prospectus), and subject to the
following:
(a)
The Sub-Adviser shall, subject to the direction of
the Adviser, determine from time to time what
Allocated Assets will be purchased, retained or sold
by the Fund, and what portion of the Allocated
Assets will be invested or held uninvested in cash.
(b)
In the performance of its duties and obligations
under this Agreement, the Sub-Adviser shall act in
conformity with the Trusts Declaration of Trust (as
defined herein) and the Prospectus and with the
instructions and directions of the Adviser and of
the Board of Trustees of the Trust and will conform
to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other
applicable federal and state laws and regulations,
as each is amended from time to time.
c
The Sub-Adviser shall determine the Allocated Assets
to be purchased or sold by the Fund as provided in
subsection (a) and will place orders with or through
such persons, brokers or dealers to carry out the
policy with respect to brokerage set forth in each
Funds 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 executing Fund
transactions and selecting brokers or dealers, the
Sub-Adviser will use its best efforts to seek on
behalf of each Fund the best overall terms
available. In assessing the best overall terms
available for any transaction, the Sub-
Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the
security, the price of the security, the financial
condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a
continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer
to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research
services provided (as those terms are defined in
Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by
the Board of Trustees of the Trust, the Sub-Adviser
is authorized to pay to a broker or dealer who
provides such brokerage and research services a
commission for executing a fund transaction for a
Fund which is in excess of the amount of commission
another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-
Adviser determines in good faith that such
commission was reasonable in relation to the value
of the brokerage and research services provided by
such broker or dealer viewed in terms of that
particular transaction or in terms of the overall
responsibilities of the Sub-Adviser to the Fund and
other accounts as to which it exercises investment
discretion. In addition, to the extent permitted by
applicable law, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to
brokers or dealers (including brokers and dealers
that are affiliated with the Adviser, Sub-Adviser or
the Trusts principal underwriter) to take into
account the sale of shares of the Trust if the Sub-
Adviser believes that the quality of the transaction
and the commission are comparable to what they would
be with other qualified firms. In no instance,
however, will a Funds Allocated Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trusts
principal underwriter, or any affiliated person of
either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the
transaction, except to the extent permitted by the
Securities and Exchange Commission (SEC) and the
1940 Act.
(d)
The Sub-Adviser shall maintain all books and records
with respect to transactions involving the Allocated
Assets required by subparagraphs (b)(5), (6), (7),
(9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act. The Sub-Adviser shall provide to
the Adviser or the Board of Trustees such periodic
and special reports and such other information
relating to the Fund as the Adviser or Board of
Trustees may reasonably request.
The Sub-Adviser shall keep the books and records
relating to the Allocated Assets required to be
maintained by the Sub-Adviser under this Agreement
and shall timely furnish to the Adviser all
information relating to the Sub-Advisers services
under this Agreement needed by the Adviser to keep
the other books and records of a Fund required by
Rule 31a-1 under the 1940 Act. The Sub-Adviser shall
also furnish to the Adviser any other information
relating to the Allocated Assets that is required to
be filed by the Adviser or the Trust with the SEC or
sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or
other relief that the Adviser or the Trust obtains
from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records
upon the Funds request; provided, however, that the
Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the
Sub-Adviser shall 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 this Agreement, and shall transfer said
records to any successor sub-adviser upon the
termination of this Agreement (or, if there is no
successor sub-adviser, to the Adviser).
(e)
The Sub-Adviser shall provide each Funds custodian
on each business day with information relating to
all transactions concerning the Funds Allocated
Assets and shall provide the Adviser with such
information upon request of the Adviser.
(f)
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.
(g)
The Sub-Adviser shall promptly notify the Adviser of
any financial condition that is likely to impair the
Sub-Advisers ability to fulfill its commitment under
this Agreement.
(h)
The Sub-Adviser shall be responsible for voting all
proxies that it receives in relation to the
Allocated Assets. The Adviser shall instruct the
custodian and other parties providing services to
the Fund to promptly forward misdirected proxies to
the Sub-Adviser.
(i)
Except as specifically permitted in writing by the
Adviser, or as otherwise permitted or required to
comply with the requirements of the 1940 Act
(including the rules adopted thereunder), the Sub-
Adviser shall not consult with any other sub-adviser
to the Trust or a Fund concerning the purchase,
retention or disposition of Fund Allocated Assets.
Services to be furnished by the Sub-Adviser under
this Agreement may be furnished through the medium
of any of the Sub-Advisers partners, officers or
employees.
2.
Duties of the Adviser. The Adviser shall continue to
have responsibility for all services to be provided
to each Fund pursuant to the Advisory Agreement and
shall oversee and review the Sub-Advisers
performance of its duties under this Agreement;
provided, however, that in connection with its
management of the Allocated Assets, nothing herein
shall be construed to relieve the Sub-Adviser of
responsibility for compliance with the Trusts
Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the
Board of Trustees of the Trust, the requirements of
the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and
regulations, as each is amended from time to time.
3.
Delivery of Documents. The Adviser has furnished the
Sub-Adviser with copies properly certified or
authenticated of each of the following documents:
(a)
The Trusts Agreement and Declaration of Trust, as
filed with the Secretary of State of the State of
Delaware (such Agreement and Declaration of Trust,
as in effect on the date of this Agreement and as
amended from time to time, herein called the
Declaration of Trust);
(b)
By-Laws of the Trust (such By-Laws, as in effect on
the date of this Agreement and as amended from time
to time, are herein called the By-Laws);
c
Prospectus(es) of each Fund.
4.
Compensation to the Sub-Adviser. For the services to
be provided by the Sub-Adviser pursuant to this
Agreement, the Adviser will pay the Sub-Adviser, and
the Sub-Adviser agrees to accept as full
compensation therefor, a sub-advisory fee at the
rate specified on Schedule B of this Agreement. The
fee will be calculated based on the monthly average
net value of the Allocated Assets under the Sub-
Advisers management. Except as may otherwise be
prohibited by law or regulation (including any then
current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive
a portion of its fee.
5.
Indemnification. The Sub-Adviser shall indemnify and
hold harmless the Adviser from and against any and
all claims, losses, liabilities or damages
(including reasonable attorneys fees and other
related expenses) howsoever arising from or in
connection with the performance of the Sub-Advisers
obligations under this Agreement; provided, however,
that the Sub-Adviser s obligation under this
Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is
otherwise directly related to the Advisers own, or
any other sub-advisers, willful misfeasance, bad
faith or negligence, or to the reckless disregard of
its duties under this Agreement.
6.
Duration and Termination. This Agreement shall
become effective as to a Fund upon its approval by
the Trusts Board of Trustees and by the vote of a
majority of the outstanding voting securities of
each Fund, if required. This Agreement shall
continue in effect for a period of more than two
years from the date that the Sub-Adviser began
providing services hereunder only so long as
continuance is specifically approved at least
annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with
respect to a Fund (a) by the Fund at any time,
without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of
a majority of the outstanding voting securities of
the Fund, (b) by the Adviser at any time, without
the payment of any penalty, on not less than 30 days
written notice to the Sub-Adviser, or (c) by the
Sub-Adviser at any time, without the payment of any
penalty, on 90 days written notice to the Adviser.
This Agreement shall terminate automatically and
immediately in the event of its assignment, or in
the event of a termination of the Advisers agreement
with the Trust. As used in this Section 6, the terms
assignment and vote of a majority of the outstanding
voting securities shall have the respective meanings
set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions
as may be granted by the SEC under the 1940 Act.
7.
Governing Law. This Agreement shall be governed by
the internal laws of the State of Delaware, without
regard to conflict of law principles; provided,
however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8.
Severability. 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.
9.
Notice. Any notice, advice or report to be given
pursuant to this Agreement shall be deemed
sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid
addressed by the party giving notice to the other
party at the last address furnished by the other
party:
To the Adviser at:
Touchstone Advisors, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
To the Sub-Adviser at:
Sands Capital Management, LLC
0000 Xxxxxx Xxxxxxxxx, Xxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx, Xx.
10.
Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties
hereto, and supersedes all prior agreements and
understandings relating to this Agreements subject
matter. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be
an original, but such counterparts shall, together,
constitute only one instrument.
11
Use of Names.
(a) The Sub-Adviser hereby agrees to grant a non-
exclusive, non-assignable license to the Trust for
use of the names Sands, Sands Capital or Sands
Capital Management in the name of each series of the
Trust for which the Sub-Adviser provides investment
management services pursuant to this Agreement for
so long as the Sub-Adviser continues to provide such
services to such series, and such license shall
terminate upon termination of this Agreement.
(b) The Adviser shall not permit the use of the
Sub-Advisers name, investment performance
information or other pertinent information regarding
the Sub-Adviser in marketing or advertising
materials relating to the Fund, the Trust or the
Adviser, without the prior written consent of the
Sub-Adviser, which consent shall not be unreasonably
withheld.
A copy of the Declaration of Trust is on file with
the Secretary of State of the State of Delaware, and
notice is hereby given that the obligations of this
instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
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 SEC,
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. Touchstone Advisors, Inc.
Sands Capital Management, LLC
By: Xxxxxxx Xxxx
By: Xxxxxx X Xxxxxxx
Name: Xxxxxxx Xxxx
Name: Xxxxxx X Xxxxxxx
Title: Senior Vice President
Title: Chief Operating Officer
Schedule A
to the
Investment Sub-Advisory Agreement
Listing of Fund(s)
Name of Fund
Constellation Sands Capital Select Growth Fund
Schedule B
to the
Investment Sub-Advisory Agreement
For Funds with Performance Adjustments
This Schedule B shall apply to each of the Funds
identified on Schedule B-1 hereto.
(a) General. The Adviser shall pay to the Sub-
Adviser, as compensation for the Sub-Advisers
services and expenses assumed hereunder, a fee
determined with respect to each Fund, which shall be
composed of the Basic Fee (defined below) and a
Performance Adjustment (defined below) to the Basic
Fee based upon the investment performance of a class
of shares of the Fund in relation to the investment
record of a securities index determined by the
Trustees of the Trust to be appropriate over the
same period.
(b) Index, Class and Changes to the Class. The
Trustees have initially designated for each Fund the
index and class of shares of the Fund identified on
Schedule B-1 as the index and class to be used for
purposes of determining the Performance Adjustment
(referred to herein as the Index and the Class,
respectively). From time to time, the Trustees may,
by a vote of the Trustees of the Trust voting in
person, including a majority of the Trustees who are
not parties to this Agreement or interested persons
(as defined in the 0000 Xxx) of any such parties,
determine that a different class of shares of the
Trust representing interests in a Fund other than
the Class is most appropriate for use in calculating
the Performance Adjustment. If a different class of
shares (the Successor Class) is substituted in
calculating the Performance Adjustment the use of a
Successor Class of shares for purposes of
calculating the Performance Adjustment shall apply
to the entire performance period so long as such
Successor Class was outstanding at the beginning of
such period. In the event that such Successor Class
of shares was not outstanding for all or a portion
of the Performance Period, it may only be used in
calculating that portion of the Performance
Adjustment attributable to the period during which
such Successor Class was outstanding and any prior
portion of the Performance Period shall be
calculated using the Successor Class of shares
previously designated.
(c) Basic Fee. The basic fee for a Fund (the Basic
Fee) for any period shall equal: (i) the average net
asset value of the Funds assets allocated to the
Sub-Adviser, multiplied by (ii) the annual rate
identified for such Fund on Schedule B-1 hereto,
multiplied by (iii) a fraction, the numerator of
which is the number of calendar days in the payment
period and the denominator of which is 365 (366 in
leap years).
(d) Performance Adjustment. The amount of the
performance adjustment (the Performance Adjustment)
shall equal: (i) the average net assets of the Fund
over the Performance Period (as defined below),
multiplied by (ii) the Adjustment Rate (as defined
below), multiplied by (iii) a fraction, the
numerator of which shall be the number of days in
the last month of the Performance Period and the
denominator of which shall be 365 (366 in leap
years). The resulting dollar figure will be added to
or subtracted from the Basic Fee depending on
whether the Fund experienced better or worse
performance than the Index.
(e) Adjustment Rate. The adjustment rate (the
Adjustment Rate) shall be as set forth in
Schedule B-2 for each Fund, provided, however, that
the Performance Adjustment may be further
adjusted to the extent necessary to insure that the
total adjustment to the Basic Fee on an annualized
basis does not exceed the maximum Performance
Adjustment identified for such Fund in Schedule B-2.
(f) Performance Period. The performance
period (the Performance Period) shall commence
on the first day of the month next occurring
after this Agreement becomes effective with
respect to the Fund (the Commencement Date),
provided, however, that if this Agreement
should become effective on the first day of a
month with respect to a Fund, then the
Commencement Date shall be the first day of
such month. The Performance Period shall
consist of a rolling 12-month period that
includes the most current month for which
performance is available plus the previous 11
months (which eleven-month period may include
performance achieved by such Fund prior to the
effective date of this Agreement).
(g) Measurement Calculation. The Funds investment
performance will be measured by comparing the
(i) opening net asset value of one share of the
Class of the Fund on the first business day of the
Performance Period with (ii) the closing net asset
value of one share of the Class of the Fund as of
the last business day of such period. In computing
the investment performance of the Fund and the
investment record of the Index, distributions of
realized capital gains, the value of capital gains
taxes per share paid or payable undistributed
realized long-term capital gains accumulated to the
end of such period and dividends paid out of
investment income on the part of the Fund, and all
cash distributions of the companies whose securities
comprise the Index, will be treated as reinvested in
accordance with Rule 205-1 or any other applicable
rule under the Investment Advisers Act of 1940, as
the same from time to time may be amended.
(h) Payment of Fees. The sub-advisory fee payable
hereunder shall be computed daily and paid monthly
in arrears, on the first business day of the
following month.
(i) Average Net Assets. The term average net assets
of a Fund as used herein for any period shall mean
the quotient produced by dividing (i) the sum of the
net assets of the Fund, as determined in accordance
with procedures established from time to time under
the direction of the Board of Trustees of the Trust,
for each calendar day of such period, by (ii) the
number of such days.
(j) Termination. In the event this Agreement with
respect to any Fund is terminated as of a date other
than the last day of any month, the Basic Fee shall
be computed on the basis of the period ending on the
last day on which this Agreement is in effect for
such Fund, subject to a pro rata adjustment based on
the number of days elapsed in the current month as a
percentage of the total number of days in such
month. The amount of any Performance Adjustment to
the Basic Fee will be computed on the basis of and
applied to the average net assets over the
Performance Period ending on the last day on which
this Agreement is in effect for such Fund.
Schedule B-1
to the
Investment Sub-Advisory Agreement
Listing of Fund(s) with Performance Adjustments
Annual Basic
Name of Fund / Applicable Class
Performance Index
Fee Rate
Constellation Sands Capital Select Growth Fund
Xxxxxxx 1000 Growth Index
0.50 % on first $100 million of Allocated Assets
0.45% on Allocated Assets above that amount
thereafter
Schedule B-2
to the
Investment Sub-Advisory Agreement
Performance Adjustment Rate
Name of Fund / Class
Rate
Adjustment
Methodology
Constellation Sands
Capital Select Growth Fund
+/- 0.15%
Adjustment
to Basic Fee
Rate if
exceed or
lag the
benchmark by
at least
2.50%
(measured on
an absolute
basis)
INVESTMENT ADVISORY AGREEMENT
CONSTELLATION FUNDS
AGREEMENT made as of this 17th day of
February, 2006, by and between Constellation Funds,
a Delaware business trust (the Trust), and
Touchstone Advisors, Inc. (the Adviser).
WHEREAS, the Trust is an openend, diversified
management investment company registered under the
Investment Company Act of 1940, as amended (the 1940
Act); and
WHEREAS, the Trust desires to retain the
Adviser to render investment management services
with respect to each series of the Trust set forth
on Schedule A of this Agreement (each a Fund and
collectively the Funds), and the Adviser is willing
to render such services:
NOW, THEREFORE, in consideration of mutual
covenants herein contained, the parties hereto agree
as follows:
1. Duties of Adviser. The Trust employs
the Adviser to manage the investment and
reinvestment of the assets of the Funds,
and to hire (subject to the approval of
the Trusts Board of Trustees and,
except as otherwise permitted under the
terms of any applicable exemptive relief
obtained from the Securities and
Exchange Commission, or by rule or
regulation, a majority of the
outstanding voting securities of each
Fund) and thereafter supervise the
investment activities of one or more
subadvisers deemed necessary to carry
out the investment program of each Fund,
and to continuously review, supervise
and (where appropriate) administer the
investment program of each Fund, to
determine in its discretion (where
appropriate) the securities to be
purchased or sold, to provide the Trust
with records concerning the Advisers
activities which the Trust is required
to maintain, and to render regular
reports to the Trusts officers and
Trustees concerning the Advisers
discharge of the foregoing
responsibilities. The retention of a
subadviser by the Adviser shall not
relieve the Adviser of its
responsibilities under this Agreement.
The Adviser shall discharge the
foregoing responsibilities subject to
the control of the Board of Trustees of
the Trust and in compliance with such
policies as the Trustees may from time
to time establish, and in compliance
with the objectives, policies, and
limitations for each such Fund set forth
in the Funds prospectus and statement
of additional information as amended
from time to time, and applicable laws
and regulations.
The Adviser accepts such employment and
agrees, at its own expense, to render
the services and to provide the office
space, furnishings and equipment and the
personnel (including any subadvisers)
required by it to perform the services
on the terms and for the compensation
provided herein. The Adviser will not,
however, pay for the cost of securities,
commodities, and other investments
(including brokerage commissions and
other transaction charges, if any)
purchased or sold for any Fund.
2. Fund Transactions. The Adviser is
authorized to select the brokers or
dealers that will execute the purchases
and sales of portfolio securities for
the Funds and is directed to use its
best efforts to obtain the best net
results as described from time to time
in the Funds Prospectus(es) and
Statement(s) of Additional Information.
The Adviser will promptly communicate to
the officers and the Trustees of the
Trust such information relating to
portfolio transactions as they may
reasonably request.
It is understood that the Adviser will
not be deemed to have acted unlawfully,
or to have breached a fiduciary duty to
the Trust or be in breach of any
obligation owing to the Trust under this
Agreement, or otherwise, by reason of
its having directed a securities
transaction on behalf of the Trust to a
brokerdealer in compliance with the
provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as
described from time to time by the
Funds Prospectuses and Statement of
Additional Information.
3. Compensation of the Adviser. For the
services to be rendered by the Adviser
as provided in Sections 1 and 2 of this
Agreement, the Trust shall pay to the
Adviser compensation at the rate
specified on Schedule B or Schedule C,
as applicable, of this Agreement. Such
compensation shall be paid to the
Adviser at the end of each month, and
calculated by applying a daily rate,
based on the annual percentage rates as
specified in the appropriate Schedule,
to the assets. The fee shall be based
on the average daily net assets for the
month involved (less any assets of such
Funds held in noninterest bearing
special deposits with a Federal Reserve
Bank). The Adviser may, in its
discretion and from time to time, waive
a portion of its fee.
All rights of compensation under this
Agreement for services performed as of
the termination date shall survive the
termination of this Agreement.
4. Other Expenses. The Adviser shall pay
all expenses of printing and mailing
reports, prospectuses, statements of
additional information, and sales
literature relating to the solicitation
of prospective clients. The Trust shall
pay all expenses relating to mailing to
existing shareholders prospectuses,
statements of additional information,
proxy solicitation material and
shareholder reports.
5. Excess Expenses. If the expenses for
any Fund for any fiscal year (including
fees and other amounts payable to the
Adviser, but excluding interest, taxes,
brokerage costs, litigation, and other
extraordinary costs) as calculated every
business day would exceed the expense
limitations imposed on investment
companies by any applicable statute or
regulatory authority of any jurisdiction
in which shares of a Fund are qualified
for offer and sale, the Adviser shall
bear such excess cost.
However, the Adviser will not bear
expenses of any Fund which would result
in the Funds inability to qualify as a
regulated investment company under
provisions of the Internal Revenue Code.
Payment of expenses by the Adviser
pursuant to this Section 5 shall be
settled on a monthly basis (subject to
fiscal year end reconciliation) by a
reduction in the fee payable to the
Adviser for such month pursuant to
Section 3(a) or 3(b) and, if such
reduction shall be insufficient to
offset such expenses, by reimbursing the
Trust.
6. Reports. The Trust and the Adviser
agree to furnish to each other, if
applicable, current prospectuses, proxy
statements, reports to shareholders,
certified copies of their financial
statements, and such other information
with regard to their affairs as each may
reasonably request.
7. Status of Adviser. The services of the
Adviser to the Trust are not to be
deemed exclusive, and the Adviser shall
be free to render similar services to
others so long as its services to the
Trust are not impaired thereby. The
Adviser shall be deemed to be an
independent contractor and shall, unless
otherwise expressly provided or
authorized, have no authority to act for
or represent the Trust in any way or
otherwise be deemed an agent of the
Trust.
8. Certain Records. Any records required
to be maintained and preserved pursuant
to the provisions of Rule 31a1 and Rule
31a2 promulgated under the 1940 Act
which are prepared or maintained by the
Adviser on behalf of the Trust are the
property of the Trust and will be
surrendered promptly to the Trust on
request.
9. Limitation of Liability of Adviser. The
duties of the Adviser shall be confined
to those expressly set forth herein, and
no implied duties are assumed by or may
be asserted against the Adviser
hereunder. The Adviser shall not be
liable for any error of judgment or
mistake of law or for any loss arising
out of any investment or for any act or
omission in carrying out its duties
hereunder, except a loss resulting from
willful misfeasance, bad faith or gross
negligence in the performance of its
duties, or by reason of reckless
disregard of its obligations and duties
hereunder, except as may otherwise be
provided under provisions of applicable
state law or Federal securities law
which cannot be waived or modified
hereby. (As used in this Paragraph 9,
the term Adviser shall include
directors, officers, employees and other
corporate agents of the Adviser as well
as that corporation itself).
10. Permissible Interests. Trustees,
agents, and shareholders of the Trust
are or may be interested in the Adviser
(or any successor thereof) as directors,
partners, officers, or shareholders, or
otherwise; directors, partners,
officers, agents, and shareholders of
the Adviser are or may be interested in
the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any
successor) is or may be interested in
the Trust as a shareholder or otherwise.
In addition, brokerage transactions for
the Trust may be effected through
affiliates of the Adviser if approved by
the Board of Trustees, subject to the
rules and regulations of the Securities
and Exchange Commission.
11. License of Advisers Name. The Adviser
hereby agrees to grant a license to the
Trust for use of its name in the names
of the Funds for the term of this
Agreement and such license shall
terminate upon termination of this
Agreement.
12. Duration and Termination. This
Agreement shall become effective as to a
Fund upon its approval by the Trusts
Board of Trustees and by the vote of a
majority of the outstanding voting
securities of each Fund. This Agreement
shall continue in effect for a period of
more than two years from the date that
the Adviser began providing services
hereunder only so long as continuance is
specifically approved at least annually
in conformance with the 1940 Act,
however, that if the shareholders of any
Fund fail to approve the Agreement as
provided herein, the Adviser may
continue to serve hereunder in the
manner and to the extent permitted by
the 1940 Act and rules and regulations
thereunder. The foregoing requirement
that continuance of this Agreement be
specifically approved at least annually
shall be construed in a manner
consistent with the 1940 Act and the
rules and regulations thereunder.
This Agreement may be terminated as to
any Fund at any time, without the
payment of any penalty by vote of a
majority of the Trustees of the Trust or
by vote of a majority of the outstanding
voting securities of the Fund on not
less than 30 days nor more than 60 days
written notice to the Adviser, or by the
Adviser at any time without the payment
of any penalty, on 90 days written
notice to the Trust. This Agreement
will automatically and immediately
terminate in the event of its
assignment. Any notice under this
Agreement shall be given in writing,
addressed and delivered, or mailed
postpaid, to the other party at any
office of such party.
As used in this Section 11, the terms
assignment, interested persons, and a
vote of a majority of the outstanding
voting securities shall have the
respective meanings set forth in the
1940 Act and the rules and regulations
thereunder; subject to such exemptions
as may be granted by the Securities and
Exchange Commission under said Act.
13. Notice. Any notice required or
permitted to be given by either party to
the other shall be deemed sufficient if
sent by registered or certified mail,
postage prepaid, addressed by the party
giving notice to the other party at the
last address furnished by the other
party to the party giving notice: if to
the Trust, at 000 Xxxxxxxx, Xxxxx 0000,
Xxxxxxxxxx, XX 00000, Attn: President,
and if to the Adviser at 000 Xxxxxxxx,
Xxxxx 0000, Xxxxxxxxxx, XX 00000, Attn:
President.
14. Severability. 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.
15. Governing Law. This Agreement shall be
construed in accordance with the laws of
the State of Delaware and the applicable
provisions of the 1940 Act. To the
extent that the applicable laws of the
State of Delaware, or any of the
provisions herein, conflict with the
applicable provisions of the 1940 Act,
the latter shall control.
A copy of the Declaration of Trust of the Trust is
on file with the Secretary of the State of Delaware,
and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Trust as
Trustees, and are not binding upon any of the
Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and
property of the Trust. Further, the obligations of
the Trust with respect to any one Fund shall not be
binding upon any other Fund.
IN WITNESS WHEREOF, the Parties hereto have caused
this Agreement to be executed as of the day and year
first written above.
CONSTELLATION FUNDS
By: Xxxx Xxxxx
Attest: Xxxxx Xxxxxx
TOUCHSTONE ADVISORS, INC.
By: Xxxxx X Xxxxx
Attest: Xxxxxxx Xxxx
Schedule A
to the
Investment Advisory Agreement
Listing of Funds
Name of Fund
Constellation Clover Core Value Fund
Constellation Clover Small Cap Value Fund
Constellation Clover Core Fixed Income Fund
Constellation Chartwell Ultra Short Duration
Fixed Income Fund
Constellation Chartwell Short Duration Fixed
Income Fund
Constellation HLAM Large Cap Quality Stock Fund
Constellation Pitcairn Diversified Value Fund
Constellation Pitcairn Select Value Fund
Constellation Pitcairn Diversified Growth Fund
Constellation Pitcairn Small Cap Fund
Constellation Pitcairn Family Heritage Fund
Constellation Pitcairn Taxable Bond Fund
Constellation Pitcairn TaxExempt Bond Fund
Constellation Sands Capital Select Growth Fund
Constellation TIP Mid Cap Fund
Constellation TIP Healthcare & Biotechnology Fund
Constellation International Equity Fund
Constellation Small Cap Value Opportunities Fund
Constellation Strategic Value and High Income Fund
Schedule B
to the
Investment Advisory Agreement
For Funds with Performance Adjustments
This Schedule B shall apply to each of the Funds
identified on Schedule B1 hereto.
(a) General. The Trust shall pay to the
Adviser, as compensation for the Advisers services
and expenses assumed hereunder, a fee determined
with respect to each Fund, which shall be composed
of the Basic Fee (defined below) and a Performance
Adjustment (defined below) to the Basic Fee based
upon the investment performance of a class of shares
of the Fund in relation to the investment record of
a securities index determined by the Trustees of the
Trust to be appropriate over the same period.
(b) Index, Class and Changes to the Class.
The Trustees have initially designated for each Fund
the index and class of shares of the Fund identified
on Schedule B1 as the index and class to be used for
purposes of determining the Performance Adjustment
(referred to herein as the Index and the Class,
respectively). From time to time, the Trustees may,
by a vote of the Trustees of the Trust voting in
person, including a majority of the Trustees who are
not parties to this Agreement or interested persons
(as defined in the 0000 Xxx) of any such parties,
determine that a different class of shares of the
Trust representing interests in a Fund other than
the Class is most appropriate for use in calculating
the Performance Adjustment. If a different class of
shares (the Successor Class) is substituted in
calculating the Performance Adjustment the use of a
Successor Class of shares for purposes of
calculating the Performance Adjustment shall apply
to the entire performance period so long as such
Successor Class was outstanding at the beginning of
such period. In the event that such Successor Class
of shares was not outstanding for all or a portion
of the Performance Period, it may only be used in
calculating that portion of the Performance
Adjustment attributable to the period during which
such Successor Class was outstanding and any prior
portion of the Performance Period shall be
calculated using the Successor Class of shares
previously designated.
(c) Basic Fee. The basic fee for a Fund
(the Basic Fee) for any period shall equal: (i) the
Funds average net assets during such period,
multiplied by (ii) the annual rate identified for
such Fund on Schedule B1 hereto, multiplied by (iii)
a fraction, the numerator of which is the number of
calendar days in the payment period and the
denominator of which is 365 (366 in leap years).
(d) Performance Adjustment. The amount of
the performance adjustment (the Performance
Adjustment) shall equal: (i) the average net assets
of the Fund over the Performance Period (as defined
below), multiplied by (ii) the Adjustment Rate (as
defined below), multiplied by (iii) a fraction, the
numerator of which shall be the number of days in
the last month of the Performance Period and the
denominator of which shall be 365 (366 in leap
years). The resulting dollar figure will be added
to or subtracted from the Basic Fee depending on
whether the Fund experienced better or worse
performance than the Index.
(e) Adjustment Rate. The adjustment rate
(the Adjustment Rate) shall be as set forth in
Schedule B2 for each Fund, provided, however, that
the Performance Adjustment may be further adjusted
to the extent necessary to insure that the total
adjustment to the Basic Fee on an annualized basis
does not exceed the maximum Performance Adjustment
identified for such Fund in Schedule B2.
(f) Performance Period. The performance
period (the Performance Period) shall commence on
the first day of the month next occurring after this
Agreement becomes effective with respect to the Fund
(the Commencement Date), provided, however, that if
this Agreement should become effective on the first
day of a month with respect to a Fund, then the
Commencement Date shall be the first day of such
month. The Performance Period shall consist of a
rolling 12month period that includes the most
current month for which performance is available
plus the previous 11 months.
(g) Measurement Calculation. The Funds
investment performance will be measured by comparing
the (i) opening net asset value of one share of the
Class of the Fund on the first business day of the
Performance Period with (ii) the closing net asset
value of one share of the Class of the Fund as of
the last business day of such period. In computing
the investment performance of the Fund and the
investment record of the Index, distributions of
realized capital gains, the value of capital gains
taxes per share paid or payable undistributed
realized longterm capital gains accumulated to the
end of such period and dividends paid out of
investment income on the part of the Fund, and all
cash distributions of the companies whose
securities comprise the Index, will be treated as
reinvested in accordance with Rule 2051 or any other
applicable rule under the Investment Advisers Act of
1940, as the same from time to time may be amended.
(h) Payment of Fees. The Management Fee
payable hereunder shall be computed daily and paid
monthly in arrears.
(i) Average Net Assets. The term average
net assets of a Fund as used herein for any period
shall mean the quotient produced by dividing (i) the
sum of the net assets of the Fund, as determined in
accordance with procedures established from time to
time under the direction of the Board of Trustees of
the Trust, for each calendar day of such period, by
(ii) the number of such days.
(j) Termination. In the event this
Agreement with respect to any Fund is terminated as
of a date other than the last day of any month, the
Basic Fee shall be computed on the basis of the
period ending on the last day on which this
Agreement is in effect for such Fund, subject to a
pro rata adjustment based on the number of days
elapsed in the current month as a percentage of the
total number of days in such month. The amount of
any Performance Adjustment to the Basic Fee will be
computed on the basis of and applied to the average
net assets over the Performance Period ending on the
last day on which this Agreement is in effect for
such Fund.
Schedule B1
to the
Investment Advisory Agreement
Listing of Funds with Performance Adjustments
Name of Fund
Performance Index
Annual Basic
Fee Rate
Constellation Sands Capital
Select Growth Fund
Xxxxxxx 1000 Growth Index
0.85%
Schedule B2
to the
Investment Advisory Agreement
Performance Adjustment Rate
Name of Fund / Class
Maximum Rate
Adjustment
Methodology
Constellation Sands
Capital Select Growth
Fund
+/ 0.15%
As detailed in Schedule B3
Schedule B3
to the
Investment Advisory Agreement
Methodology for Performance Adjustment Rate
The tables below describes the applicable advisory
fees that the Adviser would receive based on each
Funds performance as compared to its benchmark
index over a given performance period:
1. Constellation Sands Capital Select Growth Fund.
If the Fund:
The Base
Fee
Increase
s by:
If the Fund:
The Base
Fee
Decrease
s by:
Outperforms the Index by
2.50% or more
+ 0.15%
Underperforms the Index by
2.50% or more
0.15%
Outperforms the Index by
2.49% or less
0.00%
Underperforms the Index by
2.49% or less
0.00%
Schedule C
to the
Investment Advisory Agreement
For Funds With No Performance Adjustment
This Schedule C shall apply to each of the Funds
identified on Schedule C1 hereto.
(a) The Trust shall pay to the Adviser a fee
for each Fund calculated daily and payable monthly
in arrears, computed as a percentage of the average
net assets of the Fund for such month at the rate
set forth in Schedule C1 hereto.
(b) The average net assets of the Fund for
any month shall be equal to the quotient produced by
dividing (i) the sum of the net assets of such Fund,
determined in accordance with procedures established
from time to time by or under the direction of the
Board of Trustees of the Trust, for each calendar
day of such month, by (ii) the number of such days.
Schedule C1
to the
Investment Advisory Agreement
Listing of Funds and Fee Rates
Name of Fund
Annual Basic Fee
Rate
Constellation Clover Core Value Fund
0.74%
Constellation Clover Small Cap Value Fund
0.85%
Constellation Clover Core Fixed Income Fund
0.45%
Constellation Chartwell Ultra Short Duration
Fixed Income Fund
0.25%
Constellation Chartwell Short Duration Fixed
Income Fund
0.25%
Constellation HLAM Large Cap Quality Stock Fund
0.75%
Constellation Pitcairn Diversified Value Fund
0.70%
Constellation Pitcairn Diversified Growth Fund
0.70%
Constellation Pitcairn Select Value Fund
0.70%
Constellation Pitcairn Small Cap Fund
0.70%
Constellation Pitcairn Family Heritage Fund
0.90%
Constellation Pitcairn Taxable Bond Fund
0.40%
Constellation Pitcairn TaxExempt Bond Fund
0.30%
Constellation TIP Mid Cap Fund
0.80%
Constellation TIP Healthcare & Biotechnology Fund
1.00%
Constellation International Equity Fund
0.95%
Constellation Small Cap Value Opportunities Fund
0.95%
Constellation Strategic Value and High Income
Fund
0.10%
