SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into effective the 7th day of
January, 2008, by and among NATIONWIDE MUTUAL FUNDS (the "Trust"), a Delaware
statutory trust, NATIONWIDE FUND ADVISORS (the "Adviser") a Delaware business
trust registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and SECURITY INVESTORS, LLC, a limited liability company
organized under the laws of the State of Kansas (the "Subadviser"), and also
registered under the Advisers Act.
W I T N E S S E T H:
WHEREAS, the Trust is registered with the U.S. Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser has, pursuant to an Investment Advisory Agreement
with the Trust dated of the 1st day of May, 2007 (the "Advisory Agreement"),
been retained to act as investment adviser for certain of the series of the
Trust that are listed on Exhibit A to this Agreement (each, a "Fund");
WHEREAS, the Adviser represents that it is willing and possesses legal
authority to render such services subject to the terms and conditions set forth
in this Agreement;
WHEREAS, the Trust and the Adviser each represent that the Advisory
Agreement permits the Adviser to delegate certain of its duties under the
Advisory Agreement to other investment advisers, subject to the requirements of
the 1940 Act; and
WHEREAS, the Adviser desires to retain Subadviser to assist it in the
provision of a continuous investment program for that portion of each Fund's
assets that the Adviser will assign to the Subadviser, and Subadviser is willing
to render such services subject to the terms and conditions set forth in this
Agreement,
NOW, THEREFORE, the parties do mutually agree and promise as follows
with respect to each Fund:
1. APPOINTMENT AS SUBADVISER. The Adviser hereby appoints the
Subadviser to act as investment adviser for and to manage that portion or all of
the assets of the Fund that the Adviser from time to time upon reasonable prior
notice allocates to, and puts under the control of, the Subadviser (the
"Subadviser Assets") subject to the supervision of the Adviser and the Board of
Trustees of the Trust and subject to the terms of this Agreement. The Subadviser
hereby accepts such appointment and, in such capacity, agrees to be responsible
for the investment management of the Subadviser Assets. It is recognized that
the Subadviser and certain of its affiliates now act, and that from time to time
hereafter may act, as investment adviser to one or more other investment
companies and to fiduciary or other managed accounts and that the Adviser and
the Trust cannot object to such activities.
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2. DUTIES OF SUBADVISER.
(a) INVESTMENTS. The Subadviser is hereby authorized and directed
and hereby agrees, subject to the stated investment policies and
restrictions of the Fund as set forth in the Fund's prospectus and
statement of additional information as currently in effect and, as soon
as practical after the Trust, the Fund or the Adviser notifies the
Subadviser thereof, as supplemented or amended from time to time
(collectively referred to hereinafter as the "Prospectus") and subject
to the directions of the Adviser and the Trust's Board of Trustees, to
monitor on a continuous basis the performance of the Subadviser Assets
and to conduct a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of the Subadviser Assets. The
Adviser agrees to provide the Subadviser with such assistance as may be
reasonably requested by the Subadviser in connection with the
Subadviser's activities under this Agreement, including, without
limitation, providing information concerning the Fund, its funds
available or to become available for investment, and generally as to
the conditions of the Fund's or the Trust's affairs.
(b) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In
the performance of its services under this Agreement, the Subadviser
shall act in conformity with the Prospectus and the Trust's Agreement
and Declaration of Trust and By-Laws as currently in effect and, as
soon as practical after the Trust, the Fund or the Adviser notifies the
Subadviser thereof, as supplemented, amended and/or restated from time
to time (referred to hereinafter as the "Declaration of Trust" and
"By-Laws," respectively) and with the instructions and directions
received in writing from the Adviser or the Trustees of the Trust and
will conform to, and comply with, the requirements of the 1940 Act, the
Internal Revenue Code of 1986, as amended (the "Code"), and all other
applicable federal and state laws and regulations. Without limiting the
preceding sentence, the Adviser promptly shall notify the Subadviser as
to any act or omission of the Subadviser hereunder that the Adviser
reasonably deems to constitute or to be the basis of any noncompliance
or nonconformance with any of the Trust's Declaration of Trust and
By-Laws and the Prospectus, the instructions and directions received in
writing from the Adviser or the Trustees of the Trust or the 1940 Act,
the Code, and all other applicable federal and state laws and
regulations. Notwithstanding the foregoing, the Adviser shall remain
responsible for ensuring the Fund's and the Trust's overall compliance
with the 1940 Act, the Code and all other applicable federal and state
laws and regulations and the Subadviser is only obligated to comply
with this subsection (b) with respect to the Subadviser Assets. The
Adviser timely will provide the Subadviser with a copy of the minutes
of the meetings of the Board of Trustees of the Trust to the extent
they may affect the Fund or the services of the Subadviser, copies of
any financial statements or reports made by the Fund to its
shareholders, and any further materials or information which the
Subadviser may reasonably request to enable it to perform its functions
under this Agreement.
The Adviser shall perform quarterly and annual tax compliance
tests to ensure that the Fund is in compliance with Subchapter M and,
if applicable, Section 817(h) of the Code. In connection with such
compliance tests, the Adviser shall inform the Subadviser at least ten
(10) business days prior to a calendar quarter end if
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the Subadviser Assets are out of compliance with the diversification
requirements under either Subchapter M or, if applicable, Section
817(h). If the Adviser notifies the Subadviser that the Subadviser
Assets are not in compliance with such requirements noted above, the
Subadviser will take prompt action to bring the Subadviser Assets back
into compliance within the time permitted under the Code thereunder.
The Adviser will provide the Subadviser with reasonable advance
notice of any change in the Fund's investment objectives, policies and
restrictions as stated in the Prospectus, and the Subadviser shall, in
the performance of its duties and obligations under this Agreement,
manage the Subadviser Assets consistent with such changes, provided
that the Subadviser has received prompt notice of the effectiveness of
such changes from the Trust or the Adviser. In addition to such notice,
the Adviser shall provide to the Subadviser a copy of a modified
Prospectus reflecting such changes. The Adviser acknowledges and will
ensure that the Prospectus will at all times be in compliance with all
disclosure requirements under all applicable federal and state laws and
regulations relating to the Trust or the Fund, including, without
limitation, the 1940 Act, and the rules and regulations thereunder, and
that the Subadviser shall have no liability in connection therewith,
except as to the accuracy of material information furnished in writing
by the Subadviser to the Trust or to the Adviser specifically for
inclusion in the Prospectus. The Subadviser hereby agrees to provide to
the Adviser in a timely manner such information relating to the
Subadviser and its relationship to, and actions for, the Trust as may
be required to be contained in the Prospectus or in the Trust's
Registration Statement on Form N-1A.
(c) VOTING OF PROXIES. The Adviser hereby delegates to the
Subadviser the Adviser's discretionary authority to exercise voting
rights with respect to the securities and other investments in the
Subadviser Assets and authorizes the Subadviser to delegate further
such discretionary authority to a designee identified in a notice given
to the Trust and the Adviser. The Subadviser, including without
limitation its designee (for which the Subadviser shall remain liable),
shall have the power to vote, either in person or by proxy, all
securities in which the Subadviser Assets may be invested from time to
time, and shall not be required to seek or take instructions from, the
Adviser, the Fund or the Trust or take any action with respect thereto.
If both the Subadviser and another entity managing assets of the Fund
have invested the Fund's assets in the same security, the Subadviser
and such other entity will each have the power to vote its pro rata
share of the Fund's security.
The Subadviser will establish a written procedure for proxy voting
in compliance with current applicable rules and regulations, including
but not limited to Rule 30b1-4 under the 1940 Act. The Subadviser will
provide the Adviser or its designee, a copy of such procedure and
establish a process for the timely distribution of the Subadviser's
voting record with respect to the Fund's securities and other
information necessary for the Fund to complete information required by
Form N-1A under the 1940 Act and the Securities Act of 1933, as amended
(the "Securities Act"), Form N-PX under the 1940 Act, and Form N-CSR
under the Xxxxxxxx-Xxxxx Act of 2002, as amended, respectively.
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(d) AGENT. Subject to any other written instructions of the
Adviser or the Trust, the Subadviser is hereby appointed the Adviser's
and the Trust's agent and attorney-in-fact for the limited purposes of
executing account documentation, agreements, contracts and other
documents as the Subadviser shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of
the Subadviser Assets. The Subadviser agrees to provide the Adviser and
the Trust with copies of any such agreements executed on behalf of the
Adviser or the Trust.
(e) BROKERAGE. The Subadviser is authorized, subject to the
supervision of the Adviser and the plenary authority of the Trust's
Board of Trustees, to establish and maintain accounts on behalf of the
Fund with, and place orders for the investment and reinvestment,
including without limitation purchase and sale of the Subadviser Assets
with or through, such persons, brokers (including, to the extent
permitted by applicable law, any broker affiliated with the Subadviser)
or dealers (collectively "Brokers") as Subadviser may elect and
negotiate commissions to be paid on such transactions. The Subadviser,
however, is not required to obtain the consent of the Adviser or the
Trust's Board of Trustees prior to establishing any such brokerage
account. The Subadviser shall place all orders for the purchase and
sale of portfolio investments for the Fund's account with Brokers
selected by the Subadviser. In the selection of such Brokers and the
placing of such orders, the Subadviser shall seek to obtain for each
Fund the most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for
brokerage and research services, as provided below. In using its
reasonable efforts to obtain for the Fund the most favorable price and
execution available, the Subadviser, bearing in mind the best interests
of the Fund at all times, shall consider all factors it deems relevant,
including price, the size of the transaction, the breadth and nature of
the market for the security, the difficulty of the execution, the
amount of the commission, if any, the timing of the transaction, market
prices and trends, the reputation, experience and financial stability
of the Broker involved, and the quality of service rendered by the
Broker in other transactions. Notwithstanding the foregoing, neither
the Trust, the Fund nor the Adviser shall instruct the Subadviser to
place orders with any particular Broker(s) with respect to the
Subadviser Assets. Subject to such policies as the Trustees may
determine, or as may be mutually agreed to by the Adviser and the
Subadviser, the Subadviser is authorized but not obligated to cause,
and shall not be deemed to have acted unlawfully or to have breached
any duty created by this Agreement or otherwise solely by reason of its
having caused, the Fund to pay a Broker that provides brokerage and
research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to the Subadviser an amount of
commission for effecting a Subadviser Assets' investment transaction
that is in excess of the amount of commission that another Broker would
have charged for effecting that transaction if, but only if, the
Subadviser determines in good faith that such commission was reasonable
in relation to the value of the brokerage and research services
provided by such Broker viewed in terms of either that particular
transaction or the overall responsibility of the Subadviser with
respect to the accounts as to which it exercises investment discretion.
It is recognized that the services provided by such Brokers may be
useful to the Subadviser in connection with the Subadviser's services
to other clients. On occasions when the Subadviser deems the purchase
or sale of a security to be in the
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best interests of the Fund with respect to the Subadviser Assets as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased in
order to obtain the most favorable price or lower brokerage commissions
and efficient execution. In such event, allocation of securities so
sold or purchased, as well as the expenses incurred in the transaction,
will be made by the Subadviser in the manner the Subadviser considers
to be the most equitable and consistent with its fiduciary obligations
to each Fund and to such other clients. It is recognized that in some
cases, this procedure may adversely affect the price paid or received
by the Fund or the size of the position obtainable for, or disposed of
by, the Fund with respect to the Subadviser Assets.
(f) SECURITIES TRANSACTIONS. The Subadviser and any affiliated
person of the Subadviser will not purchase securities or other
instruments from or sell securities or other instruments to the Fund;
provided, however, the Subadviser or any affiliated person of the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to the Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder.
The Subadviser, on its own behalf and with respect to its Access
Persons (as defined in subsection (e) of Rule 17j-1 under the 1940
Act), agrees to observe and comply with Rule 17j-1 and its Code of
Ethics (which shall comply in all material respects with Rule 17j-1),
as the same may be amended from time to time. On at least an annual
basis, the Subadviser will comply with the reporting requirements of
Rule 17j-1, which may include either (i) certifying to the Adviser that
the Subadviser and its Access Persons have complied with the
Subadviser's Code of Ethics with respect to the Subadviser Assets or
(ii) identifying any violations which have occurred with respect to the
Subadviser Assets. The Subadviser will have also submitted its Code of
Ethics for its initial approval by the Board of Trustees no later than
the date of execution of this agreement and subsequently within six
months of any material change thereto.
(g) BOOKS AND RECORDS. The Subadviser shall maintain separate
detailed records as are required by applicable laws and regulations of
all matters hereunder pertaining to the Subadviser Assets (the "Fund's
Records"), including, without limitation, brokerage and other records
of all securities transactions. The Subadviser acknowledges that the
Fund's Records are property of the Trust; except to the extent that the
Subadviser is required to maintain the Fund's Records under the
Advisers Act or other applicable law and except that the Subadviser, at
its own expense, is entitled to make and keep a copy of the Fund's
Records for its internal files. The Fund's Records shall be available
to the Adviser or the Trust at any time upon reasonable request during
normal business hours and shall be available for telecopying promptly
to the Adviser during any day that the Fund is open for business as set
forth in the Prospectus.
(h) INFORMATION CONCERNING SUBADVISER ASSETS AND SUBADVISER. From
time to time as the Adviser or the Trust reasonably may request in good
faith, the Subadviser will furnish the requesting party reports on
portfolio transactions and reports on the Subadviser Assets, all in
such reasonable detail as the parties may reasonably agree in good
November 2007
faith. The Subadviser will also inform the Adviser in a timely manner
of material changes in portfolio managers responsible for Subadviser
Assets, any changes in the ownership or management of the Subadviser,
or of material changes in the control of the Subadviser. Upon the
Trust's or the Adviser's reasonable request, the Subadviser will make
available its officers and employees to meet with the Trust's Board of
Trustees to review the Subadviser Assets via telephone on a quarterly
basis and in person on a less frequent basis as agreed upon by the
parties.
Subject to the other provisions of this Agreement, the Subadviser
will also provide such information or perform such additional acts with
respect to the Subadviser Assets as are reasonably required for the
Trust or the Adviser to comply with their respective obligations under
applicable laws, including without limitation, the Code, the 1940 Act,
the Advisers Act, and the Securities Act, and any rule or regulation
thereunder.
(i) CUSTODY ARRANGEMENTS. The Trust or the Adviser shall notify
the Subadviser of the identities of its custodian banks and the custody
arrangements therewith with respect to the Subadviser Assets and shall
give the Subadviser written notice of any changes in such custodian
banks or custody arrangements. The Subadviser shall on each business
day provide the Adviser and the Trust's custodian such information as
the Adviser and the Trust's custodian may reasonably request in good
faith relating to all transactions concerning the Subadviser Assets.
The Trust shall instruct its custodian banks to (A) carry out all
investment instructions as may be directed by the Subadviser with
respect to the Subadviser Assets (which instructions may be orally
given if confirmed in writing); and (B) provide the Subadviser with all
operational information necessary for the Subadviser to trade the
Subadviser Assets on behalf of the Fund. The Subadviser shall have no
liability for the acts or omissions of the authorized custodian(s),
unless such act or omission is required by and taken in reliance upon
instructions given to the authorized custodian(s) by a representative
of the Subadviser properly authorized (pursuant to written instruction
by the Adviser) to give such instructions.
3. INDEPENDENT CONTRACTOR. In the performance of its services
hereunder, the Subadviser is and shall be an independent contractor and unless
otherwise expressly provided herein or otherwise authorized in writing, shall
have no authority to act for or represent the Fund, the Trust or the Adviser in
any way or otherwise be deemed an agent of the Fund, the Trust or the Adviser.
4. EXPENSES. During the term of this Agreement, Subadviser will pay
all expenses incurred by it in connection with its activities under this
Agreement. The Subadviser shall, at its sole expense, employ or associate itself
with such persons as it believes to be particularly fitted to assist it in the
execution of its duties under this Agreement. The Subadviser shall not be
responsible for the Trust's, the Fund's or Adviser's expenses, which shall
include, but not be limited to, the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges, if
any) purchased for the Fund and any losses incurred in connection therewith,
expenses of holding or carrying Subadviser Assets, including, without
limitation, expenses of dividends on stock borrowed to cover a short sale and
interest, fees or other charges incurred in connection with leverage and related
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borrowings with respect to the Subadviser Assets, organizational and offering
expenses (which include, but are not limited to, out-of-pocket expenses, but not
overhead or employee costs of the Subadviser); expenses for legal, accounting
and auditing services; taxes and governmental fees; dues and expenses incurred
in connection with membership in investment company organizations; costs of
printing and distributing shareholder reports, proxy materials, prospectuses,
stock certificates and distribution of dividends; charges of the Fund's
custodians and sub-custodians, administrators and sub-administrators,
registrars, transfer agents, dividend disbursing agents and dividend
reinvestment plan agents; payment for portfolio pricing services to a pricing
agent, if any; registration and filing fees of the SEC; expenses of registering
or qualifying securities of the Fund for sale in the various states; freight and
other charges in connection with the shipment of the Fund's portfolio
securities; fees and expenses of non-interested Trustees; salaries of
shareholder relations personnel; costs of shareholders meetings; insurance;
interest; brokerage costs; and litigation and other extraordinary or
non-recurring expenses. The Trust or the Adviser, as the case may be, shall
reimburse the Subadviser for any expenses of the Fund or the Adviser as may be
reasonably incurred by such Subadviser on behalf of the Fund or the Adviser. The
Subadviser shall keep and supply to the Trust and the Adviser reasonable records
of all such expenses.
5. COMPENSATION. For the services provided pursuant to this
Agreement, the Subadviser is entitled to the fee listed for the Fund on Exhibit
A hereto. Such fees will be computed daily and paid no later than the seventh
(7th) business day following the end of each month, from the Adviser, calculated
at an annual rate based on the Subadviser Assets' average daily net assets.
The method of determining the net asset value of the Subadviser Assets
for purposes hereof shall be the same as the method of determining net asset
value for purposes of establishing the offering and redemption price of the
shares of the Trust as described in the Fund's Prospectus. If this Agreement
shall be effective for only a portion of a month with respect to the Fund, the
aforesaid fee shall be prorated for the portion of such month during which this
Agreement is in effect for the Fund.
6. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser
represents and warrants to the Adviser and the Trust as follows:
(a) The Subadviser is registered as an investment adviser under
the Advisers Act;
(b) The Subadviser is registered as a Commodity Trading Advisor
under the Commodity Exchange Act, as amended (the "CEA"), with the
Commodity Futures Trading Commission (the "CFTC"), or is not required
to file such registration;
(c) The Subadviser is a limited liability company duly organized
and properly registered and operating under the laws of the State of
Kansas with the power to own and possess its assets and carry on its
business as it is now being conducted and as proposed to be conducted
hereunder;
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(d) The execution, delivery and performance by the Subadviser of
this Agreement are within the Subadviser's powers and have been duly
authorized by all necessary actions of its directors or shareholders,
and no action by, or in respect of, or filing with, any governmental
body, agency or official is required on the part of the Subadviser for
execution, delivery and performance by the Subadviser of this
Agreement, and the execution, delivery and performance by the
Subadviser of this Agreement do not contravene or constitute a
violation of, or a material default under, (i) any provision of
applicable law, rule or regulation, (ii) the Subadviser's governing
instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Subadviser; and
(e) The Form ADV of the Subadviser previously provided to the
Adviser and the Trust is a true and complete copy of the form,
including that part or parts of the Form ADV filed with the SEC, that
part or parts maintained in the records of the Adviser, and/or that
part or parts provided or offered to clients, in each case as required
under the Advisers Act and rules thereunder, and the information
contained therein is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading.
7. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents
and warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the
Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule
4.14 under the CEA with the CFTC and the National Futures Association
or is not required to file such exemption;
(c) The Adviser is a business trust duly organized and validly
existing under the laws of the State of Delaware with the power to own
and possess its assets and carry on its business as it is now being
conducted and as proposed to be conducted hereunder;
(d) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized
by all necessary action on the part of its directors, shareholders or
managing unitholder, and no action by, or in respect of, or filing
with, any governmental body, agency or official is required on the part
of the Adviser for the execution, delivery and performance by the
Adviser of this Agreement, and the execution, delivery and performance
by the Adviser of this Agreement do not contravene or constitute a
violation of, or a material default under, (i) any provision of
applicable law, rule or regulation, (ii) the Adviser's governing
instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Adviser;
(e) The Form ADV of the Adviser previously provided to the
Subadviser and the Trust is a true and complete copy of the form,
including that part or parts of the Form ADV filed with the SEC, that
part or parts maintained in the records of the Adviser, and/or that
part or parts provided or offered to clients, in each case as required
under the Advisers Act and rules thereunder, and the information
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contained therein is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading;
(f) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(g) The Adviser and the Trust have duly entered into the Advisory
Agreement pursuant to which the Trust authorized the Adviser to
delegate certain of its duties under the Advisory Agreement to
other investment advisers, including without limitation, the
appointment of a subadviser with respect to assets of each of the
Trust's mutual fund series, including without limitation the
Adviser's entering into and performing this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust represents
and warrants to the Adviser and the Subadviser as follows:
(a) The Trust is a statutory trust duly formed and validly
existing under the laws of the State of Delaware with the power to own
and possess its assets and carry on its business as it is now being
conducted and as proposed to be conducted hereunder;
(b) The Trust is registered as an investment company under the
1940 Act and has elected to qualify and has qualified, together with
the Fund, as a regulated investment company under the Code, and the
Fund's shares are registered under the Securities Act;
(c) The execution, delivery and performance by the Trust of this
Agreement are within the Trust's powers and have been duly authorized
by all necessary action on the part of the Trust and its Board of
Trustees, and no action by, or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Trust for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Trust of this Agreement do not contravene or constitute a default under
(i) any provision of applicable law, rule or regulation, (ii) the
Trust's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Trust;
and
(d) The Trust acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE
INFORMATION. All representations and warranties made by the Subadviser, the
Adviser and the Trust pursuant to the recitals above and Sections 6, 7 and 8,
respectively, shall survive for the duration of this Agreement and the parties
hereto shall promptly notify each other in writing upon becoming aware that any
of the foregoing representations and warranties are no longer true or accurate
in all material effects.
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10 LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. The Subadviser shall exercise its best judgment in
rendering its services in accordance with the terms of this Agreement,
but otherwise, in the absence of willful misfeasance, bad faith or
gross negligence on the part of the Subadviser or a reckless disregard
of its duties hereunder, the Subadviser, each of its affiliates and all
respective partners, officers, directors and employees ("Affiliates")
and each person, if any, who within the meaning of the Securities Act
controls the Subadviser ("Controlling Persons"), if any, shall not be
subject to any expenses or liability to the Adviser, any other
subadviser to the Fund, the Trust or the Fund or any of the Fund's
shareholders, in connection with the matters to which this Agreement
relates, including without limitation for any losses that may be
sustained in the purchase, holding or sale of Subadviser Assets. The
Adviser shall exercise its best judgment in rendering its obligations
in accordance with the terms of this Agreement, but otherwise (except
as set forth in Section 10(c) below), in the absence of willful
misfeasance, bad faith or gross negligence on the part of the Adviser
or a reckless disregard of its duties hereunder, the Adviser, any of
its Affiliates and each of the Adviser's Controlling Persons, if any,
shall not be subject to any liability to the Subadviser, for any act or
omission in the case of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase,
holding or sale of Subadviser Assets. Notwithstanding the foregoing,
nothing herein shall relieve the Adviser and the Subadviser from any of
their obligations under applicable law, including, without limitation,
the federal and state securities laws and the CEA.
(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser,
the Trust and the Fund, and their respective Affiliates and Controlling
Persons for any liability and expenses, including without limitation
reasonable attorneys' fees and expenses, which the Adviser, the Trust
and/or the Fund and their respective Affiliates and Controlling Persons
may sustain as a result of the Subadviser's willful misfeasance, bad
faith, gross negligence, reckless disregard of its duties hereunder or
violation of applicable law, including, without limitation, the federal
and state securities laws or the CEA. The Adviser shall indemnify the
Subadviser, its Affiliates and its Controlling Persons, for any
liability and expenses, including without limitation reasonable
attorneys' fees and expenses, which may be sustained as a result of the
Adviser's willful misfeasance, bad faith, gross negligence, reckless
disregard of its duties hereunder or violation of applicable law,
including, without limitation, the federal and state securities laws or
the CEA.
The Trust shall indemnify the Subadviser, its Affiliates and its
Controlling Persons, for any liability and expenses, including without
limitation reasonable attorneys' fees and expenses, which may be
sustained as a result of the Trust's willful misfeasance, bad faith,
gross negligence, reckless disregard of its duties hereunder or
violation of applicable law, including, without limitation, the federal
and state securities laws or the CEA.
November 2007
(c) The Subadviser shall not be liable to the Adviser for (i) any
acts of the Adviser or any other subadviser to the Fund with respect to
the portion of the assets of the Fund not managed by Subadviser, or
(ii) acts of the Subadviser which result from acts of the Adviser,
including, but not limited to, a failure of the Adviser to provide
accurate and current information with respect to any records maintained
by the Adviser or any other subadviser to the Fund, which records are
not also maintained by or otherwise available to the Subadviser upon
reasonable request. The Adviser agrees that Subadviser shall manage the
Subadviser Assets as if they were a separate operating Fund as set
forth in Section 2(b) of this Agreement. The Adviser shall indemnify
the Subadviser, its Affiliates and Controlling Persons from any
liability arising from the conduct of the Adviser and any other
subadviser with respect to the portion of the Fund's assets not
allocated to the Subadviser.
11. DURATION AND TERMINATION.
(a) DURATION. Unless sooner terminated, this Agreement shall
continue until May 1, 2009 with respect to any Fund covered by this
Agreement initially and, for any Fund subsequently added to this
Agreement, an initial period of no more than two years that terminates
on the second May 1st that occurs following the effective date of this
Agreement with respect to such Fund, and thereafter shall continue
automatically for successive annual periods with respect to each such
Fund, provided such continuance is specifically approved at least
annually by the Trust's Board of Trustees or vote of the lesser of (a)
67% of the shares of the Fund represented at a meeting if holders of
more than 50% of the outstanding shares of the Fund are present in
person or by proxy or (b) more than 50% of the outstanding shares of
the Fund; provided that in either event its continuance also is
approved by a majority of the Trust's Trustees who are not "interested
persons" (as defined in the 0000 Xxx) of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of voting on
such approval.
(b) TERMINATION. Notwithstanding whatever may be provided herein
to the contrary, this Agreement may be terminated at any time with
respect to the Fund, without payment of any penalty:
(i) By vote of a majority of the Trust's Board of Trustees,
or by "vote of a majority of the outstanding voting securities" of the
Fund (as defined in the 1940 Act), or by the Adviser, in each case,
upon not more than 60 days' written notice to the Subadviser;
(ii) By any party hereto immediately upon written notice to
the other parties in the event of a breach of any provision of this
Agreement by either of the other parties; or
(iii) By the Subadviser upon not more than 60 days' written
notice to the Adviser and the Trust.
This Agreement shall not be assigned (as such term is defined in
the 0000 Xxx) and shall terminate automatically in the event of its
assignment or upon the termination of the Advisory Agreement.
November 2007
12. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Fund.
13. REFERENCE TO ADVISER AND SUBADVISER.
(a) Neither the Adviser nor any Affiliate or agent of the Adviser
shall make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients, except references concerning the
identity of and services provided by the Subadviser to the Fund, which
references shall not differ in substance from those included in the
Prospectus and this Agreement, in any advertising or promotional
materials without the prior approval of Subadviser, which approval
shall not be unreasonably withheld or delayed. The Adviser hereby
agrees to make all reasonable efforts to cause the Fund and any
Affiliate thereof to satisfy the foregoing obligation.
(b) Neither the Subadviser nor any Affiliate or agent of it shall make
reference to or use the name of the Adviser or any of its
Affiliates, or any of their clients, except references concerning
the identity of and services provided by the Adviser to the Fund
or to the Subadviser, which references shall not differ in
substance from those included in the Prospectus and this
Agreement, in any advertising or promotional materials without the
prior approval of Adviser, which approval shall not be
unreasonably withheld or delayed. The Subadviser hereby agrees to
make all reasonable efforts to cause any Affiliate of the
Subadviser to satisfy the foregoing obligation.
14. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of any material amendment shall be approved by:
(a) the Trust's Board of Trustees or by a vote of a majority of the outstanding
voting securities of the Fund (as required by the 1940 Act), and (b) the vote of
a majority of those Trustees of the Trust who are not "interested persons" of
any party to this Agreement cast in person at a meeting called for the purpose
of voting on such approval, if such approval is required by applicable law.
15. CONFIDENTIALITY. Subject to the duties of the Adviser, the Trust
and the Subadviser to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential and shall not disclose any and all information pertaining
to the Fund and the actions of the Subadviser, the Adviser and the Fund in
respect thereof; except to the extent:
(a) AUTHORIZED. The Adviser or the Trust has authorized such
disclosure;
(b) COURT OR REGULATORY AUTHORITY. Disclosure of such information
is expressly required or requested by a court or other tribunal of
competent jurisdiction or applicable federal or state regulatory
authorities;
(c) PUBLICLY KNOWN WITHOUT BREACH. Such information becomes known
to the general public without a breach of this Agreement or a similar
confidential disclosure agreement regarding such information;
November 2007
(d) ALREADY KNOWN. Such information already was known by the party
prior to the date hereof;
(e) RECEIVED FROM THIRD PARTY. Such information was or is
hereafter rightfully received by the party from a third party
(expressly excluding the Fund's custodian, prime broker and
administrator) without restriction on its disclosure and without breach
of this Agreement or of a similar confidential disclosure agreement
regarding them; or
(f) INDEPENDENTLY DEVELOPED. The party independently developed
such information.
16. NOTICE. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Security Investors, LLC
One Security Benefit Place
Topeka, Kansas 66636-0001
Attention: President
Facsimile: (000) 000-0000
(b) If to the Adviser:
Nationwide Fund Advisors
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(c) If to the Trust:
Nationwide Mutual Funds
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
17. JURISDICTION. This Agreement shall be governed by and construed
in accordance with substantive laws of the State of Delaware without reference
to choice of law principles thereof and in accordance with the 1940 Act. In the
case of any conflict, the 1940 Act shall control.
November 2007
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
19. CERTAIN DEFINITIONS. For the purposes of this Agreement and except
as otherwise provided herein, "interested person," "affiliated person," and
"assignment" shall have their respective meanings as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the SEC.
20. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
21. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
22. ENTIRE AGREEMENT. This Agreement, together with all exhibits,
attachments and appendices, contains the entire understanding and agreement of
the parties with respect to the subject matter hereof
23. NATIONWIDE MUTUAL FUNDS AND ITS TRUSTEES. The terms "Nationwide
Mutual Funds" and the "Trustees of Nationwide Mutual Funds" refer respectively
to the Trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under the Amended and Restated Agreement
and Declaration of Trust made and dated as of October 28, 2004, as has been or
may be amended and/or restated from time to time, and to which reference is
hereby made.
24. MULTI-MANAGER FUNDS. In connection with securities transactions
for the Fund, the Subadviser that is (or whose affiliated person is) entering
into the transaction, and any other investment manager that is advising an
affiliate of the Fund (or portion of the Fund) (collectively, the "Managers" for
the purposes of this section) entering into the transaction are prohibited from
consulting with each other concerning transactions for the Fund in securities or
other assets and, if both Managers are responsible for providing investment
advice to the Fund, the Manager's responsibility in providing advice is
expressly limited to a discrete portion of the Fund's portfolio that it manages.
This prohibition does not apply to communications by the Adviser in
connection with the Adviser's (i) overall supervisory responsibility for the
general management and investment of the Fund's assets; (ii) determination of
the allocation of assets among the Manager(s), if any; and (iii) investment
discretion with respect to the investment of Fund assets not otherwise assigned
to a Manager.
[The remainder of this page is intentionally left blank.]
November 2007
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
TRUST
NATIONWIDE MUTUAL FUNDS
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
--------------------------------
Title: President
-------------------------------
ADVISER
NATIONWIDE FUND ADVISORS
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
--------------------------------
Title: President
-------------------------------
SUBADVISER
SECURITY INVESTORS, LLC
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: Vice President
-------------------------------
NOVEMBER 2007
EXHIBIT A
SUBADVISORY AGREEMENT
AMONG
NATIONWIDE MUTUAL FUNDS,
NATIONWIDE FUND ADVISORS
AND SECURITY INVESTORS, LLC
Effective January 7, 2008*
FUNDS OF THE TRUST SUBADVISORY FEES
---------------------------------------- ----------------------------------------------------
Nationwide Mid Cap Growth Leaders Fund 0.40% on Subadviser Assets up to $250 million;
0.35% on Subadviser Assets of $250 million and
more.
*As approved at the Board of Trustees Meeting held on December 3, 2007.
NOVEMBER 2007
