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