Exhibit No. EX-99.d.16
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 27th day of June, 2006 by and between Mercer
Global Investments, Inc., a Delaware corporation (the "Advisor"), and NWQ
Investment Management Company, LLC a Delaware limited liability company (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) monthly 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 Trust with respect to transactions in securities for the
Sub-Advisor Assets or any other transactions of Trust 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 daily
and payable in arrears no later than the seventh (7th) business day following
the end of each month, from the Trust on behalf of the Fund(s), calculated at an
annual rate based on the Sub-Advisor Assets' average daily net assets.
If this Agreement is terminated prior to the end of any calendar month, the
fee shall be prorated for the portion of any month 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
month, 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 limited liability company, 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 by
all necessary action on the part of its executive committee 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;
(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; and
(e) Information required to be provided in the Registration Materials
(defined below) as provided to the Advisor and the Trust by the Sub-Advisor
describing the Sub-Advisor, the investment techniques and strategies it will
utilize in managing the Sub-Advisor Assets as well as past performance (if
necessary) shall not contain any untrue statements of a material fact or omit to
state any material fact required by any applicable law to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading under applicable law.
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.
(g) The Advisor shall promptly advise the Sub-Adviser, to the extent that
it is permitted to do so, if and when it becomes aware that the Advisor and/or
the Trust are the subject of any investigation or enforcement action conducted
by any U.S. or other regulatory body or become a party in any litigation that
will result in having a material adverse effect on the Trust or the Adviser.
(h) the Advisor and representatives of the Trust prepared the prospectus
and statement of additional information for the Trust (the "Registration
Materials") and the Registration Materials comply in all material respects with
the 1940 Act; and
(i) to the best of the Advisor's knowledge and information, the
Registration Materials, other than information provided pursuant to Par. 7(e)
above, do not contain any untrue statement of a material fact or omit to state
any material fact required by any applicable law to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading under applicable law.
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 (i) 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; and (ii) any
error or omission contained in the Registration Materials or any other materials
used to advertise or promote the Trust and/or Advisor, except to the extent that
such error or omission resulted from or was caused by, directly or indirectly,
written information furnished to the Advisor, the Trust or any affiliated person
of the Advisor or the Trust by the Sub-Adviser expressly for use in the
Registration Materials or any other materials used to advertise or promote the
Trust and/or Advisor, or upon verbal information confirmed by the Sub-Adviser in
writing expressly for use in the Registration Materials or any other materials
used to advertise or promote the Trust and/or Advisor.
(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 Sub-Advisor's 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.
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:
NWQ Investment Management Company, LLC
0000 Xxxxxxx Xxxx Xxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
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/ Xxxx Xxxxxxxxxxx
Xxxx Xxxxxxxxxxxx
Chief Investment Officer
SUB-ADVISOR
NWQ INVESTMENT MANAGEMENT COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Vice President, Director of Institutional
Account Administration
EXHIBIT A
SUB-ADVISORY AGREEMENT
BETWEEN XXXXXX GLOBAL INVESTMENTS, INC.
AND
NWQ INVESTMENT MANAGEMENT COMPANY, LLC
June 27, 2006
MGI Small/Mid Cap Value Equity Fund
FEE SCHEDULE
ASSETS COMPENSATION
All assets .60%
EXHIBIT B
SUB-ADVISOR
FORM ADV
(Please attach)
