SUB-ADVISORY AGREEMENT
AGREEMENT
made as of the 17th day of April, 2009 by and between Mercer Global Investments,
Inc., a Delaware corporation (the “Advisor”), and Robeco Investment Management,
Inc. a Delaware
Corporation (the “Sub-Advisor”).
WHEREAS,
the Advisor and the Sub-Advisor
are registered investment advisers under the Investment Advisers Act of 1940,
as
amended (the “Advisers Act”), and engage in the business of providing investment
management services; and
WHEREAS,
the Advisor has been retained
to act as investment adviser pursuant to an Investment Advisory Agreement,
dated
July 1, 2005 (the “Advisory Agreement”), with MGI Funds (the “Trust”), a
Delaware statutory trust 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”), which consists of
several separate series of shares, each having its own investment objectives
and
policies, and which is authorized to create additional series in the future;
and
WHEREAS,
the Advisory Agreement permits
the Advisor, subject to the supervision and direction of the Trust’s Board of
Trustees, 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 Advisor desires to retain
the Sub-Advisor to assist the Advisor in the provision of a continuous
investment program for that portion of one or more of the Trust’s series’ (each
a “Fund”) assets which the Advisor will assign to the Sub-Advisor (the
“Sub-Advisor Assets”), and the Sub-Advisor is willing to render such services,
subject to the terms and conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of
mutual covenants recited below, the parties agree and promise as follows:
1.
Appointment
as
Sub-Advisor. The Advisor hereby appoints the Sub-Advisor to act as
investment adviser for and to manage the Sub-Advisor Assets, subject to the
supervision of the Advisor and the Board of Trustees of the Trust, and subject
to the terms of this Agreement; and the Sub-Advisor hereby accepts such
appointment. In such capacity, the Sub-Advisor shall be responsible
for the investment management of the Sub-Advisor Assets. The
Sub-Advisor agrees to exercise the same degree of skill, care and diligence
in
performing its services under this Agreement as the Sub-Advisor exercises in
performing similar services with respect to other fiduciary accounts for which
the Sub-Advisor has investment responsibilities, and that a prudent manager
would exercise under the circumstances.
2.
Duties
of the Sub-Advisor.
(a)
Investments. The
Sub-Advisor
is hereby authorized and directed, and hereby agrees, subject to the stated
investment objectives, policies and restrictions of each Fund as set forth
in
such Fund’s prospectus and statement of additional information as currently in
effect and as amended from time to time (collectively referred to as the
“Prospectus”) and subject to the directions of the Advisor and the Trust’s Board
of Trustees, to purchase, hold and sell investments for the Sub-Advisor Assets
and to monitor such investments on an ongoing basis. In providing
these services, the Sub-Advisor will conduct an ongoing program of investment,
evaluation and, if appropriate, sale and reinvestment of the Sub-Advisor
Assets. The Advisor agrees to provide the Sub-Advisor information
concerning (i) a Fund; (ii) its assets available or to become available for
investment; and (iii) the conditions of a Fund’s or the Trust’s affairs as
relevant to the Sub-Advisor.
(b)
Compliance
with Applicable Laws,
Governing Documents and Trust Compliance Procedures. In the
performance of its duties and obligations under this Agreement, the Sub-Advisor
shall, with respect to Sub-Advisor Assets, (i) act in conformity
with: (A) the Trust’s Agreement and Declaration of Trust (the
“Declaration of Trust”) and By-Laws; (B) the Prospectus; (C) the policies and
procedures for compliance by the Trust with the Federal Securities Laws (as
that
term is defined in Rule 38a-1 under the 0000 Xxx) provided to the Sub-Advisor
(together, the “Trust Compliance Procedures”); and (D) the instructions and
directions received in writing from the Advisor or the Trustees of the Trust;
and (ii) conform to and comply with the requirements of the 1940 Act, the
Advisers Act, and all other federal laws applicable to registered investment
companies’ and Sub-Advisors’ duties under this Agreement. The Advisor
will provide the Sub-Advisor with any materials or information that the
Sub-Advisor may reasonably request to enable it to perform its duties and
obligations under this Agreement.
The
Advisor will provide the Sub-Advisor
with reasonable advance notice, in writing, of: (i) any change in a
Fund’s investment objectives, policies and restrictions as stated in the
Prospectus; (ii) any change to the Trust’s Declaration of Trust or By-Laws; or
(iii) any material change in the Trust Compliance Procedures; and the
Sub-Advisor, in the performance of its duties and obligations under this
Agreement, shall manage the Sub-Advisor Assets consistently with such changes,
provided the Sub-Advisor has received such prior notice of the effectiveness
of
such changes from the Trust or the Advisor. In addition to such
notice, the Advisor shall provide to the Sub-Advisor a copy of a modified
Prospectus and copies of the revised Trust Compliance Procedures, as applicable,
reflecting such changes. The Sub-Advisor hereby agrees to provide to
the Advisor in a timely manner, in writing, such information relating to the
Sub-Advisor and its relationship to, and actions for, a Fund as may be required
to be contained in the Prospectus or in the Trust’s registration statement on
Form N-1A, or otherwise as reasonably requested by the Advisor.
In
order to assist the Trust and the
Trust’s Chief Compliance Officer (the “Trust CCO”) to satisfy the requirements
contained in Rule 38a-1 under the 1940 Act, the Sub-Advisor shall provide to
the
Trust CCO: (i) direct access to the Sub-Advisor’s chief compliance
officer (the “Sub-Advisor CCO”), as reasonably requested by the Trust CCO; (ii)
quarterly reports confirming that the Sub-Advisor has complied with the Trust
Compliance Procedures in managing the Sub-Advisor Assets; and (iii) quarterly
certifications that there were no Material Compliance Matters (as that term
is
defined by Rule 38a-1(e)(2)) that arose under the Trust Compliance Procedures
that related to the Sub-Advisor’s management of the Sub-Advisor Assets.
(c)
Sub-Advisor
Compliance Policies and
Procedures. The Sub-Advisor shall promptly provide the Trust CCO with
copies of: (i) the Sub-Advisor’s policies and procedures for
compliance by the Sub-Advisor with the Federal Securities Laws (together, the
“Sub-Advisor Compliance Procedures”), and (ii) any material changes to the
Sub-Advisor Compliance Procedures. The Sub-Advisor shall cooperate
fully with the Trust CCO so as to facilitate the Trust CCO’s performance of the
Trust CCO’s responsibilities under Rule 38a-1 to review, evaluate and report to
the Trust’s Board of Trustees on the operation of the Sub-Advisor Compliance
Procedures, and shall promptly report to the Trust CCO any Material Compliance
Matter arising under the Sub-Advisor Compliance Procedures involving the
Sub-Advisor Assets. The Sub-Advisor shall provide to the Trust
CCO: (i) quarterly reports confirming the Sub-Advisor’s compliance
with the Sub-Advisor Compliance Procedures in managing the Sub-Advisor Assets,
and (ii) certifications that there were no Material Compliance Matters involving
the Sub-Advisor that arose under the Sub-Advisor Compliance Procedures that
affected the Sub-Advisor Assets. At least annually, the Sub-Advisor
shall provide a certification to the Trust CCO to the effect that the
Sub-Advisor has in place and has implemented policies and procedures that are
reasonably designed to ensure compliance by the Sub-Advisor with the Federal
Securities Laws.
(d)
Voting
of Proxies. Unless
otherwise instructed by the Advisor or the Trust, the Sub-Advisor shall have
the
power, discretion and responsibility to vote, either in person or by proxy,
all
securities in which the Sub-Advisor Assets may be invested from time to time,
and shall not be required to seek instructions from the Advisor, the Trust
or a
Fund. The Sub-Advisor shall also provide its Proxy Voting Policy (the
“Proxy Policy”), and, if requested by the Advisor, a summary of such Proxy
Policy suitable for including in the Prospectus, and will provide the Advisor
with any material amendment to the Proxy Policy within a reasonable time after
such amendment has taken effect. If both the Sub-Advisor and another
person managing assets of a Fund have invested in the same security, the
Sub-Advisor and such other entity will each have the power to vote its pro
rata
share of the security.
(e)
Agent. Subject
to any other
written instructions of the Advisor or the Trust, the Sub-Advisor is hereby
appointed the Advisor’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 Sub-Advisor shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of the
Sub-Advisor Assets, provided that, the Sub-Advisor’s actions in executing such
documents shall comply with federal regulations, all other federal laws
applicable to registered investment companies and the Sub-Advisor’s duties and
obligations under this Agreement and the Trust’s governing documents.
(f)
Brokerage. The
Sub-Advisor
will place orders pursuant to the Sub-Advisor’s investment determinations for a
Fund either directly with an issuer or with any broker or dealer selected by
the
Sub-Advisor, pursuant to this paragraph. In executing portfolio
transactions and selecting brokers or dealers, the Sub-Advisor will use its
best
efforts to seek, on behalf of a Fund, the best overall execution
available. In assessing the best overall terms available for any
transaction, the Sub-Advisor 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 or dealer to execute a particular
transaction, the Sub-Advisor may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”)) provided to a Fund and/or other
accounts over which the Sub-Advisor may exercise investment
discretion. The Sub-Advisor is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any of the Funds that 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-Advisor 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-Advisor to a Fund. Such authorization is subject to termination
at any time by the Board of Trustees of the Trust for any reason. In
addition, the Sub-Advisor is authorized to allocate purchase and sale orders
for
portfolio securities to brokers or dealers that are affiliated with the Advisor,
the Sub-Advisor, the Trust’s principal underwriter, or other sub-advisors (if
applicable) if the Sub-Advisor believes that the quality of the transaction
and
the commission are comparable to what they would be with other qualified firms,
and provided that the transactions are consistent with the Trust’s Rule 17e-1
and Rule 10f-3 procedures. The Advisor will identify all brokers and
dealers affiliated with the Trust, the Advisor, and the Trust’s principal
underwriter (and the other Sub-Advisors of the Fund, to the extent such
information is necessary for the Sub-Advisor to comply with applicable federal
securities laws), other than those whose sole business is the distribution
of
mutual fund shares, who effect securities transactions for
customers. The Advisor shall promptly furnish a written notice to the
Sub-Advisor if the information so provided is no longer accurate.
In
connection with its management of the
Sub-Advisor Assets and consistent with its fiduciary obligation to the
Sub-Advisor Assets and other clients, the Sub-Advisor, to the extent permitted
by applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities or futures contracts 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 the securities or futures
contracts so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Advisor in the manner the Sub-Advisor
considers to be, over time, the most equitable and consistent with its fiduciary
obligations to the Sub-Advisor’s Assets and to such other clients.
(g)
Securities
Transactions. In
no instance will any Fund’s portfolio securities be purchased from or sold to
the Advisor, the Sub-Advisor, the Trust’s principal underwriter, or any
affiliated person the Trust, the Advisor, the Sub-Advisor or the Trust’s
principal underwriter, acting as principal in the transaction, except to the
extent permitted by the SEC and the 1940 Act, including Rule 17a-7
thereunder.
The
Sub-Advisor acknowledges that the
Advisor and the Trust may rely on Rule 17a-7, Rule 17a-10, Rule 10f-3, Rule
12d3-1 and Rule 17e-1 under the 1940 Act, and the Sub-Advisor hereby agrees
that
it shall not consult with any other sub-advisor to the Fund with respect to
transactions in securities for the Sub-Advisor Assets or any other transactions
of Fund assets.
The
Sub-Advisor is authorized to engage
in transactions in which the Sub-Advisor, or an affiliate of the Sub-Advisor,
acts as a broker for both the Fund and for another party on the other side
of
the transaction (“agency cross transactions”). The Sub-Advisor shall
effect any such agency cross transactions in compliance with Rule 206(3)-2
under
the Advisers Act and any other applicable provisions of the federal securities
laws and shall provide the Advisor with periodic reports describing such agency
cross transactions. By execution of this Agreement, the Advisor
authorizes the Sub-Advisor or its affiliates to engage in agency cross
transactions, as described above. The Advisor may revoke its consent
at any time by written notice to the Sub-Advisor.
The
Sub-Advisor hereby represents that
it has implemented policies and procedures that will prevent the disclosure
by
it, its employees or its agents of the Trust’s portfolio holdings to any person
or entity other than the Advisor, the Trust’s custodian, or other persons
expressly designated by the Advisor.
(h)
Code
of Ethics. The
Sub-Advisor hereby represents that it has adopted policies and procedures and
a
code of ethics that meet the requirements of Rule 17j-1 under the 1940 Act
and
Rule 204A-1 under the Advisers Act. Copies of such policies and
procedures and code of ethics and any changes or supplements thereto shall
be
delivered to the Advisor and the Trust, and any material violation of such
policies, and procedures and code of ethics by personnel of the Sub-Advisor,
the
sanctions imposed in response thereto, and any issues arising under such
policies, and procedures and code of ethics shall be reported to the Advisor
and
the Trust at the times and in the format reasonably requested by the Advisor
and
the Board of Trustees.
(i)
Books
and Records. The
Sub-Advisor shall maintain separate detailed records of all matters pertaining
to the Sub-Advisor Assets, including, without limitation, brokerage and other
records of all securities transactions. Any records required to be
maintained and preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2
promulgated under the 1940 Act that are prepared or maintained by the
Sub-Advisor on behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust upon request. The Sub-Advisor
further agrees to preserve for the periods prescribed in Rule 31a-2 under the
1940 Act the records required to be maintained under Rule 31a-1 under the 1940
Act.
(j)
Information
Concerning Sub-Advisor
Assets and the Sub-Advisor. From time to time as the Advisor, and any
consultants designated by the Advisor, or the Trust may request, the Sub-Advisor
will furnish the requesting party reports on portfolio transactions and reports
on Sub-Advisor Assets held in the portfolio, all in such detail as the Advisor,
its consultant(s) or the Trust may reasonably request. The
Sub-Advisor will provide the Advisor with information (including information
that is required to be disclosed in the Prospectus) with respect to the
portfolio managers responsible for Sub-Advisor Assets, any changes in the
portfolio managers responsible for Sub-Advisor Assets, any changes in the
ownership or management of the Sub-Advisor, or of material changes in the
control of the Sub-Advisor. The Sub-Advisor will promptly notify the
Advisor of any pending investigation, material litigation, administrative
proceeding or any other significant regulatory inquiry. Upon
reasonable request, the Sub-Advisor will make available its officers and
employees to meet with the Trust’s Board of Trustees to review the Sub-Advisor
Assets.
(k)
Valuation
of Sub-Advisor
Assets. The Sub-Advisor agrees to monitor the Sub-Advisor Assets and
to notify the Advisor or its designee on any day that the Sub-Advisor determines
that a significant event has occurred with respect to one or more securities
held in the Sub-Advisor Assets. As requested by the Advisor or the
Trust’s Valuation Committee, the Sub-Advisor hereby agrees to provide additional
assistance to the Valuation Committee of the Trust, the Advisor and the Trust’s
pricing agents in valuing Sub-Advisor Assets held in the
portfolio. Such assistance may include fair value pricing of
portfolio securities, as requested by the Advisor. The Sub-Advisor
agrees that it will act, at all times, in accordance with the Trust’s Valuation
Procedures, and will provide such certifications or sub-certifications relating
to its compliance with the Trust’s Valuation Procedures as reasonably may be
requested, from time to time, by the Advisor or the Trust.
The
Sub-Advisor also will provide such
information or perform such additional acts as are customarily performed by
a
Sub-Advisor and may be required for a Fund or the Advisor to comply with their
respective obligations under applicable federal securities laws, including,
without limitation, the 1940 Act, the Advisers Act, the 1934 Act, the Securities
Act of 1933, as amended (the “Securities Act”), and any rule or regulation
thereunder.
(l)
Custody
Arrangements. The
Sub-Advisor, on each business day, shall provide the Advisor, its consultant(s)
and the Trust’s custodian such information as the Advisor and the Trust’s
custodian may reasonably request relating to all transactions concerning the
Sub-Advisor Assets.
(m)
Historical
Performance
Information. To the extent agreed upon by the parties, the
Sub-Advisor will provide the Trust with historical performance information
on
similarly managed investment companies or for other accounts to be included
in
the Prospectus or for any other uses permitted by applicable law.
(n)
Regulatory
Examinations. The
Sub-Advisor will cooperate promptly and fully with the Advisor and/or the Trust
in responding to any regulatory or compliance examinations or inspections
(including information requests) relating to the Trust, the Fund or the Advisor
brought by any governmental or regulatory authorities having appropriate
jurisdiction (including, but not limited to, the SEC).
3.
Independent
Contractor. In
the performance of its duties hereunder, the Sub-Advisor 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
a Fund, the Trust or the Advisor in any way or otherwise be deemed an agent
of a
Fund, the Trust or the Advisor.
4.
Services
to Other
Clients. Nothing herein contained shall limit the freedom of the
Sub-Advisor or any affiliated person of the Sub-Advisor to render investment
advisory, supervisory and other services to other investment companies, to
act
as investment adviser or investment counselor to other persons, firms or
corporations, or to engage in other business activities. It is
understood that the Sub-Advisor may give advice and take action for its other
clients that may differ from advice given, or the timing or nature of action
taken, for a Fund. The Sub-Advisor is not obligated to initiate
transactions for a Fund in any security that the Sub-Advisor, its principals,
affiliates or employees may purchase or sell for its or their own accounts
or
other clients.
5.
Expenses. During
the term of
this Agreement, the Sub-Advisor will pay all expenses incurred by it in
connection with its activities under this Agreement, other than the costs of
securities, commodities and other investments (including brokerage commissions
and other transaction charges, if any) purchased or otherwise acquired, or
sold
or otherwise disposed of, for a Fund. The Sub-Advisor, at its sole
expense, shall 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 Trust or the Advisor, as the case may be, shall
reimburse the Sub-Advisor for any expenses as may be reasonably incurred by
the
Sub-Advisor, at the request of and on behalf of a Fund or the
Advisor. The Sub-Advisor shall keep and supply to the Trust and the
Advisor reasonable records of all such expenses.
6.
Compensation. For
the
services provided and the expenses assumed with respect to a Fund pursuant
to
this Agreement, the Sub-Advisor will be entitled to the fee listed for the
Fund(s) on Exhibit A. Such fees will be computed and accrued daily
and payable in arrears no later than the seventh (7th) business day following
the end of each quarter, from the Trust on behalf of the Fund(s), calculated
at
an annual rate based on the daily net assets of the Sub-Advisor Assets.
If
this Agreement is terminated prior to
the end of any calendar quarter, the fee shall be prorated for the portion
of
any quarter in which this Agreement is in effect according to the proportion
which the number of calendar days, during which this Agreement is in effect,
bears to the number of calendar days in the quarter, and shall be payable within
ten (10) days after the date of termination.
7.
Representations
and Warranties of the
Sub-Advisor. The Sub-Advisor represents and warrants to the Advisor
and the Trust as follows:
(a)
The
Sub-Advisor is registered as an
investment adviser under the Advisers Act;
(b)
The
Sub-Advisor is a Delaware corporation,
duly organized and validly existing
under the laws of Delaware, with the power to own and possess its assets and
carry on its business as it is now being conducted;
(c)
The
execution, delivery and performance
by the Sub-Advisor of this Agreement are within the Sub-Advisor’s powers and
have been duly authorized and no action by or in respect of, or filing with,
any
governmental body, agency or official is required on the part of the Sub-Advisor
for the execution, delivery and performance by the Sub-Advisor of this
Agreement, and the execution, delivery and performance by the Sub-Advisor of
this Agreement do not contravene or constitute a default under (i) any provision
of applicable law, rule or regulation; (ii) the Sub-Advisor’s governing
instruments; or (iii) any agreement, judgment, injunction, order, decree or
other instrument binding upon the Sub-Advisor; and
(d)
The
Form ADV of the Sub-Advisor
previously provided to the Advisor (a copy of which is attached as Exhibit
B to
this Agreement) is a true and complete copy of the form as currently filed
with
the SEC 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 are made, not misleading. The Sub-Advisor will promptly provide
the Advisor and the Trust with a complete copy of all subsequent amendments
to
its Form ADV.
8.
Representations
and Warranties of the
Advisor. The Advisor represents and warrants to the Sub-Advisor and
the Trust as follows:
(a)
The
Advisor is registered as an
investment adviser under the Advisers Act;
(b)
The
Advisor is a corporation 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;
(c)
The
execution, delivery and performance
by the Advisor of this Agreement are within the Advisor’s powers and have been
duly authorized by all necessary action on the part of its Board of Directors,
and no action by or in respect of, or filing with, any governmental body, agency
or official is required on the part of the Advisor for the execution, delivery
and performance by the Advisor of this Agreement, and the execution, delivery
and performance by the Advisor of this Agreement do not contravene or constitute
a default under (i) any provision of applicable law, rule or regulation; (ii)
the Advisor’s governing instruments; or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Advisor;
(d)
The
Advisor acknowledges that it
received a copy of the Sub-Advisor’s Form ADV (a copy of which is attached as
Exhibit B) prior to the execution of this Agreement;
(e)
The
Advisor and the Trust have duly
entered into the Advisory Agreement pursuant to which the Trust authorized
the
Advisor to enter into this Agreement; and
(f)
The
Advisor and the Trust have policies
and procedures designed to detect and deter disruptive trading practices,
including “market timing,” and the Advisor and the Trust each agree that they
will continue to enforce and abide by such policies and procedures, as amended
from time to time, and comply with all existing and future laws relating to
such
matters or to the purchase and sale of interests in the Funds generally.
9.
Survival
of Representations and
Warranties; Duty to Update Information. All representations and
warranties made by the Sub-Advisor and the Advisor pursuant to Sections 7 and
8
of this Agreement, 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.
10.
Liability
and Indemnification.
(a)
Liability. The
duties of the
Sub-Advisor shall be confined to those expressly set forth herein, with respect
to the Sub-Advisor Assets. The Sub-Advisor shall not be liable for
any loss arising out of any portfolio investment or disposition hereunder,
except a loss resulting from willful misfeasance, bad faith or 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 that cannot be waived or modified hereby. Under
no circumstances shall the Sub-Advisor be liable for any loss arising out of
any
act or omission taken by another sub-advisor, or any other third party, in
respect of any portion of the Trust’s assets not managed by the Sub-Advisor
pursuant to this Agreement. Under no circumstances shall
either party hereto be liable to the other for special, punitive or
consequential damages, arising under or in connection with this Agreement,
even
if previously informed of the possibility of such damages.
(b)
Indemnification. The
Sub-Advisor shall indemnify the Advisor, the Trust and each Fund, and their
respective affiliates and controlling persons (the “Sub-Advisor Indemnified
Persons”) for any liability and expenses, including reasonable attorneys’ fees,
which the Advisor, the Trust or a Fund and their respective affiliates and
controlling persons may sustain as a result of the Sub-Advisor’s willful
misfeasance, bad faith, negligence, or reckless disregard of its duties
hereunder; provided, however, that the Sub-Advisor Indemnified Persons shall
not
be indemnified for any liability or expenses which may be sustained as a result
of the Advisor’s willful misfeasance, bad faith, negligence, or reckless
disregard of its duties hereunder.
The
Advisor shall indemnify the
Sub-Advisor, its affiliates and its controlling persons (the “Advisor
Indemnified Persons”) for any liability and expenses, including reasonable
attorneys’ fees, howsoever arising from, or in connection with, the Advisor’s
breach of this Agreement or its representations and warranties herein or as
a
result of the Advisor’s willful misfeasance, bad faith, negligence, reckless
disregard of its duties hereunder or violation of applicable law; provided,
however, that the Advisor Indemnified Persons shall not be indemnified for
any
liability or expenses which may be sustained as a result of the Sub-Advisor’s
willful misfeasance, bad faith, negligence, or reckless disregard of its duties
hereunder.
11.
Duration
and Termination.
(a)
Duration. This
Agreement,
unless sooner terminated as provided herein, shall for the Fund(s) listed on
Exhibit A attached hereto remain in effect from the date of execution (the
“Effective Date”), until two years from the Effective Date, and thereafter, for
periods of one year, so long as such continuance thereafter is specifically
approved at least annually (i) by 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, and
(ii)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of each Fund (except as such vote may be unnecessary pursuant
to relief granted by an exemptive order from the SEC). 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.
(b)
Termination. This
Agreement
may be terminated as to any Fund at any time, without the payment of any penalty
by: (i) the vote of a majority of the Trustees of the Trust, the vote
of a majority of the outstanding voting securities of the Fund, or the Advisor,
or (ii) the Sub-Advisor on not less than 90 days written notice to the Advisor
and the Trust. This Agreement may also be terminated as to any Fund
at any time by any party hereto immediately upon written notice to the other
parties in the event of a breach of any provision to this Agreement by any
of
the parties.
This
Agreement shall not be assigned and
shall terminate automatically in the event of its assignment, except as provided
otherwise by any rule, exemptive order issued by the SEC, or No Action Letter
provided or pursuant to the 1940 Act, or upon the termination of the Advisory
Agreement. In the event that there is a proposed change in control of
the Sub-Advisor that would act to terminate this Agreement, if a vote of
shareholders to approve continuation of this Agreement is at that time deemed
by
counsel to the Trust to be required by the 1940 Act or any rule or regulation
thereunder, the Sub-Advisor agrees to assume all reasonable costs associated
with soliciting shareholders of the appropriate Fund(s) of the Trust to approve
continuation of this Agreement. Such expenses include the costs of
preparation and mailing of a proxy statement, and of soliciting
proxies. In the event that such proposed change in control of the
Sub-Advisor shall occur following either: (i) receipt by the Advisor
and the Trust of an exemptive order issued by the SEC with respect to the
appointment of sub-advisors absent shareholder approval, or (ii) the adoption
of
proposed Rule 15a-5 under the 1940 Act, the Sub-Advisor agrees to assume all
reasonable costs and expenses (including the costs of mailing) associated with
the preparation of a statement, required by the exemptive order or Rule 15a-5,
containing all information that would be included in a proxy statement (an
“Information Statement”). In addition, if the Sub-Advisor shall
resign, the Sub-Advisor agrees to assume all reasonable costs and expenses
(including the costs of mailing) associated with the preparation of an
Information Statement.
This
Agreement shall extend to and bind
the heirs, executors, administrators and successors of the parties
hereto.
12.
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, 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, and unless otherwise permitted pursuant to exemptive
relief granted by the SEC or No Action position granted by the SEC or its staff,
by a vote of the majority of a Fund’s outstanding securities.
13.
Confidentiality. Any
information or recommendations supplied by either the Advisor or the
Sub-Advisor, that are not otherwise in the public domain or previously known
to
the other party in connection with the performance of its obligations and duties
hereunder, including portfolio holdings of the Trust, financial information
or
other information relating to a party to this Agreement, are to be regarded
as
confidential (“Confidential Information”) and held in the strictest
confidence. Except as may be required by applicable law or rule or as
requested by regulatory authorities having jurisdiction over a party to this
Agreement, Confidential Information may be used only by the party to which
said
information has been communicated and such other persons as that party believes
are necessary to carry out the purposes of this Agreement, the custodian, and
such persons as the Advisor may designate in connection with the Sub-Advisor
Assets. Nothing in this Agreement shall be construed to prevent the
Sub-Advisor from giving other entities investment advice about, or trading
on
their behalf, in the securities of a Fund or the Advisor.
14.
Use
of Name. During the term of this
Agreement, the Advisor shall have permission to use the Sub-Advisor’s name in
the marketing of the Fund, and agrees to furnish the Sub-Advisor at its
principal office all prospectuses, proxy statements and reports to shareholders
prepared for distribution to shareholders of the Fund or the public, which
refer
to the Sub-Advisor in any way. The Subadvisor may
include the name of
the Fund on its representative client list .
15.
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:
(a)
If
to the Advisor:
Xxxxxx
Global Investments, Inc.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, XX 00000
Attention: Chief
Counsel
(b)
If
to the Sub-Advisor:
Robeco Investment Management,
Inc.
000 Xxxxx Xxxxxx 00xxXxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxxxx X.
Xxxxxxxx III
16.
Governing
Law. This Agreement
shall be governed by the internal laws of the State of New York without regard
to conflict of law principles; provided, however that nothing herein shall
be
construed as being inconsistent with the 1940 Act. 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.
17.
Entire
Agreement. This
Agreement embodies the entire agreement and understanding between 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, but
such counterparts shall, together, constitute only one instrument.
18.
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.
19.
Certain
Definitions. For the
purposes of this Agreement and except as otherwise provided herein, “interested
person,” “affiliated person,” “affiliates,” “controlling persons” 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, and the
term
“Fund” or “Funds” shall refer to those Fund(s) for which the Sub-Advisor
provides investment management services and as are listed on Exhibit A to this
Agreement.
20.
Captions. The
captions herein
are included for convenience of reference only and shall be ignored in the
construction or interpretation hereof.
IN
WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first written above.
ADVISOR
XXXXXX
GLOBAL INVESTMENTS, INC.
By: /s/
Xxxxx Xxxxxx
Xxxxx
Xxxxxx
Chief
Investment officer
SUB-ADVISOR
ROBECO
INVESTMENT MANAGEMENT,
INC.
By: /s/
Xxxxxxx X.
Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx
Chief
Operating Officer, Senior Managing Director
EXHIBIT
A
BETWEEN
XXXXXX GLOBAL INVESTMENTS,
INC.
AND
ROBECO
INVESTMENT MANAGEMENT,
INC..
APRIL
17, 2009
MGI
US LARGE CAP VALUE EQUITY
FUND
FEE
SCHEDULE
ASSETS
COMPENSATION
On
the first $500 million
.30%
On
assets over $500 million
.20%
Computation
As
soon as practicable after the end of
each calendar quarter, the Sub-Advisor shall
send to the Advisor a calculation
(the “Calculation”) in reasonable detail of the fee for the calendar quarter
then ended as of the close of business on the last day of such calendar
quarter. The Advisor may approve or disapprove the Calculation within
ten (10) business days of its receipt. In the event that the
Calculation has been accurately prepared in accordance with the terms of this
Agreement, the Advisor shall pay the fee to the Sub-Advisor. In
the event of a dispute
between the parties regarding the accuracy of the Calculation, it is hereby
agreed that all discussions in resolution of such dispute will be conducted
promptly and in good faith.
The
foregoing fee shall be accrued for
each calendar day and the sum of the daily fee accruals shall be paid quarterly
in arrears by the Advisor to the Sub-Advisoras
described herein. The
daily fee accruals will be computed by multiplying the fraction of one over
the
number of calendar days in the year by the applicable annual rate set forth
in
the schedule above and multiplying this product by the net assets of the
Sub-Advisors Assets, as determined in accordance with the Prospectus as of
the
close of business on the previous business day on which the Trust was open
for
business. If this Agreement is terminated prior to the end of any
calendar quarter, the fee shall be prorated for the portion of any quarter
in
which this Agreement is in effect according to the proportion which the number
of calendar days, during which this Agreement is in effect, bears to the number
of calendar days in the quarter.
EXHIBIT
B
SUB-ADVISOR
FORM
ADV
(Please
attach)
