SUB-ADVISORY AGREEMENT
TOUCHSTONE EMERGING MARKETS EQUITY FUND II
TOUCHSTONE FUNDS GROUP TRUST
This SUB-ADVISORY AGREEMENT is made as of April 18, 2011, by and between
TOUCHSTONE ADVISORS, INC., an Ohio corporation ("Advisor"), and AGF INVESTMENTS
AMERICA INC., an Ontario corporation ("Sub-Advisor").
WHEREAS, the Advisor is an investment adviser registered under the
Investment Advisers Act of 1940, as amended ("Advisers Act"), and has been
retained by Touchstone Funds Group Trust ("Trust"), a Delaware business trust
organized pursuant to an Agreement and Declaration of Trust dated October 25,
1993 (as amended) and registered as an open-end diversified management
investment company under the Investment Company Act of 1940 ("1940 Act"), to
provide investment advisory services with respect to certain assets of the
Touchstone Emerging Markets Equity Fund II (the "Fund"); and
WHEREAS, the Sub-Advisor also is an investment adviser registered under
the Advisers Act; and
WHEREAS, the Advisor desires to retain the Sub-Advisor to furnish it with
portfolio management services in connection with the Advisor's investment
advisory activities, duties and responsibilities on behalf of the Fund, and the
Sub-Advisor is willing to furnish such services to the Advisor in connection
with its activities, duties and responsibilities on behalf of the Fund;
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE SUB-ADVISOR.
a. In accordance with and subject to the Investment Advisory
Agreement between the Trust and the Advisor, attached hereto as Exhibit A
("Advisory Agreement"), the Advisor hereby appoints the Sub-Advisor and
delegates to the Sub-Advisor full authority and discretion to manage the
investment and reinvestment of that portion of the assets of the Fund
allocated to the Sub-Advisor by the Advisor ("Fund Assets"), in conformity
with the Fund's currently effective Registration Statement, including its
prospectus and Statement of Additional Information ("Registration
Statement") and subject to the control and direction of the Advisor and
the Trust's Board of Trustees ("Board"), for the period and on the terms
hereinafter set forth. The Advisor shall furnish to the Sub-Advisor the
currently effective Registration Statement and such other information with
regard to the affairs of the Fund that the Sub-Advisor may reasonably
request. The Advisor shall provide the Sub-Advisor with prompt notice of
any changes to the Registration Statement. For avoidance of doubt, the
Sub-Advisor will not be deemed to have knowledge of any changes to the
Registration Statement until the Sub-Advisor received actual notice of the
changes to the Registration Statement.
b. The Sub-Advisor hereby accepts such employment as a sub-adviser
to the Fund and agrees during such period to render the services and to
perform the duties called for by this Agreement for the compensation
herein provided. The Sub-Advisor shall at all times maintain its
registration as an investment advisor under the Advisers Act and shall
otherwise comply, in all material respects, with all applicable laws and
regulations, both state and federal, in connection with its duties and
responsibilities under this Agreement. The Sub-Advisor shall for all
purposes herein be deemed an independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Trust in any way or otherwise be
deemed an agent of the Trust or the Fund.
2. DUTIES OF THE SUB-ADVISOR. The Sub-Advisor will provide the following
services and undertake the following duties:
a. The Sub-Advisor will manage the investment and reinvestment of
the Fund Assets, subject to and in accordance with the investment
objectives, policies and restrictions of the Fund and in conformity with
the Fund's currently effective Registration Statement, including the
Fund's investment objective, principal investment strategies, policies and
restrictions as set forth in the Registration Statement (as it may be
amended or supplemented), and any written directions that the Advisor or
the Trust's Board may give, from time to time, with respect to the
management of the Fund Assets. In furtherance of the foregoing, the
Sub-Advisor will make all determinations with respect to the investment of
the Fund Assets, including placement of orders for the purchase, sale
and/or exchange of portfolio securities and other permissible investments
for the Fund Assets, and shall take such steps as may be necessary or
advisable to implement same. In this regard, in order to implement the
Sub-Advisor's investment program for the Fund (in accordance with the
Fund's currently effective Registration Statement), the Sub-Advisor may
enter into the contracts for or in connection with investments for the
Fund and set up accounts with broker-dealers and others to enter into and
execute trades for the Fund as reasonably required to effectuate the
foregoing.
b. In connection with these duties, the Sub-Advisor shall determine
the manner in which voting rights, rights to consent to corporate action
and any other rights pertaining to the portfolio securities in the Fund
Assets will be exercised.
c. The Sub-Advisor will render regular reports to the Trust's Board
and to the Advisor (or such other adviser or advisers as the Advisor shall
engage to assist it in the evaluation of the performance and activities of
the Sub-Advisor). Such reports shall be made in such form and manner and
with respect to such matters regarding the Fund Assets and the Sub-Advisor
as the Trust or the Advisor shall from time to time request. However, that
in the absence of extraordinary circumstances, the individual primarily
responsible for management of the Fund Assets for the Sub-Advisor will not
be required to attend in person more than one meeting per year with the
Board of the Trust.
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d. The Sub-Advisor shall immediately notify the Advisor if the
Sub-Advisor determines that the value of any security held by the Fund may
not reflect fair value. The Sub-Advisor agrees to provide any pricing
information of which the Sub-Advisor is aware to the Advisor and/or any
Fund pricing agent to assist in the determination of the fair value of any
Fund holdings for which market quotations are not readily available or as
otherwise required in accordance with the 1940 Act or the Fund's valuation
procedures for the purpose of calculating the Fund's net asset value in
accordance with procedures and methods established by the Board.
e. Regulatory Compliance.
(i) The Sub-Advisor agrees to comply with the requirements of
the 1940 Act, the Advisers Act, the 1933 Act, the Securities Exchange Act
of 1934, as amended ("1934 Act"), the Commodity Exchange Act and the
respective rules and regulations thereunder, as applicable in performance
of its duties and responsibilities under this Agreement, as well as with
all other applicable federal and state laws, rules, regulations and case
law that directly relate to the duties and responsibilities of the
Sub-Advisor as described in this Agreement and to the conduct of its
business as a registered investment adviser. In selecting the Fund's
portfolio securities and performing the Sub-Adviser's obligations
hereunder, the Sub-Advisor shall, at all times, seek to cause the Fund
Assets to comply with the diversification and source of income
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended ("Code"), for qualification as a regulated investment company. The
Sub-Advisor shall maintain compliance procedures that it reasonably
believes are adequate to assure compliance with the diversification and
source of income requirements of Subchapter M of the Code. No supervisory
activity undertaken by the Advisor shall limit the Sub-Advisor's full
responsibility for any of the foregoing.
(ii) The Sub-Advisor has adopted a written code of ethics that
it reasonably believes complies with the requirements of Rule 17j-1 under
the 1940 Act, which it will provide to the Advisor and the Fund. The
Sub-Advisor shall ensure that its Access Persons (as defined in the
Sub-Advisor's Code of Ethics) comply in all material respects with the
Sub-Advisor's Code of Ethics, as in effect from time to time. Upon
request, the Sub-Advisor shall provide the Fund with (i) a copy of the
Sub-Advisor's current Code of Ethics, as in effect from time to time, and
(ii) a certification that it has adopted procedures reasonably necessary
to prevent Access Persons from engaging in any conduct prohibited by the
Sub-Advisor's Code of Ethics. No less frequently than annually, the
Sub-Advisor shall furnish a written report, which complies with the
requirements of Rule 17j-1, concerning the Sub-Advisor's Code of Ethics to
the Fund and the Advisor. The Sub-Advisor shall respond to written
requests for information from the Advisor as to violations of the Code by
Access Persons and the sanctions imposed by the Sub-Advisor. The
Sub-Advisor shall promptly notify the Trust's Chief Compliance Officer
("CCO") and the Advisor of any material violation of the Code, whether or
not such violation relates to a security held by any Fund.
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(iii) The Sub-Advisor shall notify the Trust's CCO and Advisor
immediately upon detection of (i) any material failure to manage the Fund
Assets in accordance with its investment objectives, principal investment
strategies, policies and restrictions as set forth in the Registration
Statement or in compliance any applicable law; or (ii) any material breach
of any of the Fund's or the Adviser's policies, guidelines or procedures.
(iv) In addition, the Sub-Advisor shall provide a quarterly
report regarding compliance of the Fund Assets with its investment
objectives, principal investment strategies, policies and restrictions as
set forth in the Registration Statement and compliance with applicable
law, including, but not limited to the 1940 Act, the Code, and the Fund's
and the Advisor's written policies, guidelines or procedures as applicable
to the Sub-Advisor's obligations under this Agreement. The Sub-Advisor
acknowledges and agrees that the Advisor may, in its discretion, provide
such quarterly compliance certifications to the Board. The Sub-Advisor
agrees to correct any such failure promptly and to take any action that
the Board and/or the Advisor may reasonably request in connection with any
such compliance failure. The Sub-Advisor may also provide the officers of
the Trust, upon request, with information that may assist the Advisor with
the provision of certifications of the Fund's financial statements by the
Fund's officers and disclosure controls procedures adopted pursuant to the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. For avoidance of doubt, it is the Fund's sole
responsibility to ensure compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and to
provide the certifications necessary pursuant to same.
(v) The Sub-Advisor will promptly notify the Trust in the
event (a) the Sub-Advisor is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board, or body, involving the affairs of
the Fund (excluding class action suits in which a Fund is a member of the
plaintiff class by reason of the Fund's ownership of shares in the
defendant) or compliance by the Sub-Advisor with the federal or state
securities laws of the United States or (b) the controlling stockholder of
the Sub-Advisor changes or an actual change in control resulting in an
"assignment" (as defined in the 1940 Act) has occurred or is otherwise
proposed to occur.
(vii) The Sub-Advisor shall maintain separate books and
detailed records of all matters pertaining to the Fund Assets sub-advised
by the Sub-Advisor that are required by Rule 31a-1 under the 1940 Act
(other than those records being maintained by the Advisor, custodian or
transfer agent appointed by the Fund) relating to its responsibilities
provided hereunder with respect to the Fund Assets, and shall preserve
such records for the periods and in a manner prescribed therefore by Rule
31a-2 under the 1940 Act ("Fund Books and Records" ). The Fund Books and
Records shall be available to the Advisor and the Board at any time upon
request and shall be delivered to the Trust upon the termination of this
Agreement and shall be available for prompt transmission to the Trust or
the Advisor during any day the Fund is open for business.
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f. The Sub-Advisor shall provide support to the Advisor with respect
to the marketing of the Fund, including but not limited to: (i) permission
to use the Sub-Advisor's name as provided in Section 5, (ii) permission to
use the past performance and investment history of the Sub-Advisor with
respect to a composite of other funds or account managed by the
Sub-Advisor that are comparable, in investment objective and composition,
to the Fund Assets, provided that the Sub-Advisor is provided a reasonable
opportunity to review, comment on and approve the content and format of
such prior performance presentation, (iii) access to the individual(s)
responsible for day-to-day management of the Fund Assets for marketing
conferences, teleconferences and other activities involving the promotion
of the Fund, subject to the reasonable request of the Advisor, and in any
event no more than twice a year and upon at least 30 days prior written
notice, unless otherwise agreed to by the parties (iv) permission to use
biographical and historical data of the Sub-Advisor and individual
Advisor(s), provided that the Sub-Advisor is provided a reasonable
opportunity to review, comment on and approve the content and format of
such information, and (v) permission to use the names of those clients
pre-approved by the Sub-Advisor to which the Sub-Advisor provides
investment management services, subject to receipt of the consent of such
clients to the use of their names.
g. The Sub-Advisor shall, in the name of the Fund, place orders for
the execution of all portfolio transactions in accordance with the
policies with respect thereto set forth in the Trust's Registration
Statement under the 1940 Act and the 1933 Act, as such Registration
Statement may be in effect from time to time, and subject to any other
written instructions of the Board and/or the Advisor. Subject to those
limitations, the Sub-Advisor is hereby provided with authority to act in
regard to the investment, reinvestment and portfolio management of the
Fund Assets, including, but not limited to (i) the authority to place
orders for the execution of such securities transactions with or through
such brokers, dealers or issuers as the Sub-Advisor may reasonably select;
and (ii) the authority to execute and enter into brokerage contracts, and
other trading agreements on behalf of the Fund Assets and perform such
functions as it considers reasonable, necessary or convenient in order to
carry out the purposes of this Agreement; provided that, the Sub-Adviser's
actions in executing such documents shall comply with federal regulations,
all other federal laws applicable to registered investment advisers and
the Sub-Advisor's duties and obligations under this Agreement and the
Funds' governing documents. Notwithstanding anything to the contrary in
this Agreement, and subject to sub-paragraph f. below, except as otherwise
specified by written notice from the Advisor or the Board to the
Sub-Advisor, the Sub-Advisor may place orders for the execution of
transactions hereunder with or through any broker, dealer, futures
commission merchant, bank or any other agent or counterparty that the
Sub-Advisor may select in its own discretion.
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h. When placing orders with brokers and dealers, the Sub-Advisor's
primary objective shall be to obtain the most favorable overall terms
available for portfolio transactions for Fund Assets. In assessing the
most favorable overall terms available for any transaction, the
Sub-Advisor shall consider all factors that it deems relevant, including
but not limited to the ability to effect prompt and reliable executions at
favorable prices (including the applicable dealer spread or commission, if
any), the operational efficiency with which transactions are effected
(taking into account the size of order and difficulty of execution, the
financial strength, integrity and stability of the broker), the Fund's
risk in positioning a block of securities, the quality, comprehensiveness
and frequency of available research services considered to be of value,
the breadth in the market for the security, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In addition, in placing such orders the Sub-Advisor may consider a
number of additional factors, including, without limitation, the overall
direct net economic result to the Fund (including commissions, which may
not be the lowest available but ordinarily should not be higher than the
generally prevailing competitive range), and the availability of the
broker or dealer to stand ready to execute possibly difficult transactions
in the future. Consistent with the Conduct Rules of the Financial Industry
Regulatory Authority ("FINRA"), and subject to seeking the most favorable
terms for portfolio transactions and compliance with Rule 12b-1(h) under
the 1940 Act, the Sub-Advisor may select brokers and dealers to execute
portfolio transactions of the Fund that promote or sell shares of the
Fund. The Sub-Advisor is specifically authorized, to the extent authorized
by law (including, without limitation, Section 28(e) of the 1934 Act, to
pay a broker or dealer who provides research services to the Sub-Advisor
an amount of commission for effecting a portfolio transaction in excess of
the amount of commission another broker or dealer would have charged for
effecting such transaction, in recognition of such additional research
services rendered by the broker or dealer, but only if the Sub-Advisor
determines in good faith that the excess commission is reasonable in
relation to the value of the brokerage and research services provided by
such broker or dealer viewed in terms of the particular transaction or the
Sub-Advisor's overall responsibilities with respect to discretionary
accounts that it manages, and that the Fund derives or will derive a
reasonable benefit from such research services. The Sub-Advisor will
present a written report to the Board, at least quarterly, indicating
total brokerage expenses, actual or imputed, as well as the services
obtained in consideration for such brokerage expenses, broken down by
broker-dealer and containing such information as the Board may reasonably
request.
i. The Sub-Adviser shall maintain errors and omissions insurance
coverage in an appropriate amount and shall provide prior written notice
to the Trust (i) of any material changes in its insurance policies or
insurance coverage; or (ii) if any material claims will be made on its
insurance policies. Furthermore, the Sub-Advisor shall, upon reasonable
request, provide the Trust with any information it may reasonably request
concerning the amount of or scope of such insurance.
j. In the event of any reorganization or other change in the
Sub-Advisor, its investment principals, supervisors or members of its
investment (or comparable) committee, the Sub-Advisor shall give the
Advisor written notice of such reorganization or change within a
reasonable time (but not later than 30 days) after such reorganization or
change. It shall be the responsibility of the Advisor to promptly inform
the Board of such reorganization or change in the Sub-Advisor, its
investment principals, supervisors or members of its investment (or
comparable) committee.
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k. The Sub-Advisor will bear its expenses of providing services to
the Fund pursuant to this Agreement, including the compensation and
expenses of: (1) the executive, supervisory and clerical personnel
necessary to perform its obligations under this Agreement, as well as
related overhead, travel, preparation of Board materials relating to the
Sub-Advisor's management of the Fund, review of marketing materials and
marketing support; and (2) officers and executive employees of the Trust
(including the Trust's share of payroll taxes, if any) who are principals,
members, officers, or employees of the Sub-Adviser.
l. Except to the extent expressly assumed by the Sub-Advisor or
required under applicable laws, rules or regulations to be paid, assumed
or reimbursed by the Sub-Advisor, the Sub-Advisor shall have no duty to
pay any ordinary or extraordinary operating expenses incurred in the
organization and operation of the Fund.
(1) For this purpose, ordinary operating expenses include, but
are not limited to, brokerage commissions and other
transaction charges; taxes; legal, auditing, printing and
governmental fees; litigation and investigation expenses; the
costs of maintaining the Fund's financial books and records;
the cost of calculating the Fund's net asset value; the costs
of insurance relating to fidelity and directors and officers
errors and omissions coverage for the Trust's Trustees,
officers and employees; telephone, telex, facsimile, postage
and other communications expenses; fees and expenses of
service providers of the Trust (other than any Sub-Advisor);
expenses of issue, sale, redemption and repurchase of shares
of the Fund; expenses of registering and qualifying shares of
the Fund for sale; expenses relating to Board and shareholder
meetings (other than meetings relating to matters that are
determined to primarily benefit the Sub-Advisor); the cost of
preparing and distributing reports and notices to
shareholders; the costs of notices about and payment of
dividends to shareholders; payments for portfolio pricing or
valuation services to pricing agents; the compensation and all
expenses of Trustees, officers and employees of the Trust who
are not interested persons of the Sub-Advisor; and interest
payments and other fees or charges associated with any credit
facilities established by or on behalf of the Fund.
(2) For this purpose, extraordinary expenses of the Fund
include, but are not limited to taxes, transaction expenses
and expenses of or relating to litigation, investigation and
indemnification that are not otherwise considered to be
ordinary operating expenses of the Fund.
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3. COMPENSATION OF THE SUB-ADVISOR.
a. As compensation for the services to be rendered and duties and
responsibilities undertaken hereunder by the Sub-Advisor, the Advisor will
pay to the Sub-Advisor a monthly fee equal on an annual basis to
_______________ without regard to any total expense limitation of the
Trust or the Advisor. Such fee shall be computed and accrued daily. If the
Sub-Advisor serves in such capacity for less than the whole of any period
specified in this Section 3 a., the compensation to the Sub-Advisor shall
be prorated. For purposes of calculating the Sub-Advisor's fee, the daily
value of the Fund Assets shall be computed by the same method as the Trust
uses to compute the net asset value of the Fund for purposes of purchases
and redemptions of shares thereof.
b. Except as may otherwise be prohibited by law or regulation, the
Sub-Advisor may, in its discretion and from time to time, waive all or a
part of its fees hereunder.
4. ACTIVITIES OF THE SUB-ADVISOR. The Sub-Advisor will report to the Board
(at regular quarterly meetings and at such other times as the Board reasonably
shall request), subject to the limitation on personal attendance at such
meetings set forth in Section 2 c. hereof, (a) the financial condition and
prospects of the Sub-Advisor, (b) the nature and amount of transactions
affecting the Fund Assets that involve the Sub-Advisor and affiliates of the
Sub-Advisor (where applicable), (c) information regarding any potential
conflicts of interest arising by reason of its continuing provision of advisory
services to the Advisor (with respect to the Fund Assets) and to its other
accounts, and (d) such other information as the Board shall reasonably request
regarding the Fund, the performance of the Fund Assets, the services provided by
the Sub-Advisor and affiliates of the Sub-Advisor (where applicable) to the
Advisor (with respect to the Fund Assets) as compared to its other accounts and
the plans of, and the capability of, the Sub-Advisor with respect to providing
future services to the Advisor (with respect to the Fund Assets) and its other
accounts. The Sub-Advisor agrees to submit to the Trust a statement defining its
policies with respect to the allocation of business among the Fund Assets and
its other clients.
The Sub-Advisor has supplied to the Advisor and the Trust copies of its Form ADV
with all exhibits and attachments thereto (including the Sub-Advisor's statement
of financial condition) and will hereafter supply to the Advisor, promptly upon
the preparation thereof, copies of all amendments or restatements of such
document.
5. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Sub-Advisor in any Registration Statement, sales literature or other
material relating to the Advisor or the Trust in any manner not approved in
advance in writing by the Sub-Advisor; provided, however, that the Sub-Advisor
will approve all uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state securities
commission; and provided further, that in no event shall such approval be
unreasonably withheld. The Sub-Advisor shall not use the name of the Advisor or
the Trust in any material relating to the Sub-Advisor in any manner not approved
in advance in writing by the Advisor or the Trust, as the case may be; provided,
however, that the Advisor and the Trust shall each approve all uses of their
respective names which merely refer in accurate terms to the appointment of the
Sub-Advisor hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such approval be
unreasonably withheld.
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6. LIABILITY OF THE ADVISOR AND SUB-ADVISOR.
a. The Advisor agrees to indemnify and hold harmless the
Sub-Advisor, any affiliated person of the Sub-Advisor, and each person, if
any, who, within the meaning of Section 15 of the 1933 Act controls
("controlling person") the Sub-Advisor (all of such persons being referred
to as "Sub-Advisor Indemnified Persons") against any and all losses,
claims, damages, liabilities or litigation (including legal and other
expenses) to which a Sub-Advisor Indemnified Person may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, the Code, under any
other statute, at common law or otherwise, arising out of the Advisor's
responsibilities to the Fund, which: (i) may be based upon any willful
misfeasance, bad faith or gross negligence in the performance of the
Advisor's duties or reckless disregard of the Advisor's obligations and
duties under this Agreement, or by any of its employees or representatives
or any affiliate of or any person acting on behalf of the Advisor, or (ii)
may be based upon any untrue statement or alleged untrue statement of a
material fact supplied by, or which is the responsibility of, the Advisor
and contained in the Registration Statement covering shares of the Fund,
or any amendment thereof or any supplement thereto, or the omission or
alleged omission to state therein a material fact known or which should
have been known to the Advisor and was required to be stated therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to
the Advisor, the Fund or to any affiliated person of the Advisor by a
Sub-Advisor Indemnified Person; provided, however, that in no case shall
the indemnity in favor of the Sub-Advisor Indemnified Person be deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of obligations and duties under this Agreement.
b. Notwithstanding Section 7 of this Agreement, the Sub-Advisor
agrees to indemnify and hold harmless the Advisor, any affiliated person
of the Advisor, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act, controls ("controlling person") the Advisor
(all of such persons being referred to as "Advisor Indemnified Persons")
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which an Advisor Indemnified
Person may become subject under the 1933 Act, 1940 Act, the Advisers Act,
the Code, under any other statute, at common law or otherwise, arising out
of the Sub-Advisor's responsibilities as Sub-Advisor of the Fund Assets,
which: (i) may be based upon any willful misfeasance, bad faith or gross
negligence in the performance of the Sub-Advisor's duties, or by reason of
reckless disregard of the Sub-Advisor's obligations and duties under this
Agreement, or by any of its employees or representatives, or any affiliate
of or any person acting on behalf of the Sub-Advisor; (ii) may be based
upon a failure to comply with Section 2, Paragraph (a) of this Agreement;
or (iii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
covering the shares of the Fund, or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact known
or which should have been known to the Sub-Advisor and was required to be
stated therein or necessary to make the statements therein not misleading,
if such a statement or omission was made in reliance upon information
furnished to the Advisor, the Fund or any affiliated person of the Advisor
or Fund by the Sub-Advisor or any affiliated person of the Sub-Advisor;
provided, however, that in no case shall the indemnity in favor of a
Advisor Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of its reckless disregard of its obligations and
duties under this Agreement.
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c. The Advisor shall not be liable under Section 6.a. with respect
to any claim made against a Sub-Advisor Indemnified Person unless such
Sub-Advisor Indemnified Person shall have notified the Advisor in writing
within a reasonable time after the summons, notice or other first legal
process or notice giving information of the nature of the claim shall have
been served upon such Sub-Advisor Indemnified Person (or after such
Sub-Advisor Indemnified Person shall have received notice of such service
on any designated agent). But failure to notify the Advisor of any such
claim shall not relieve the Advisor from any liability that it may have to
the Sub-Advisor Indemnified Person against whom such action is brought
otherwise than on account of Section 6.a. In case any such action is
brought against the Sub-Advisor Indemnified Person, the Advisor will be
entitled to participate, at its own expense, in the defense thereof or,
after notice to the Sub-Advisor Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Sub-Advisor Indemnified Person.
If the Advisor assumes the defense of any such action and the selection of
counsel by the Advisor to represent both the Advisor and the Sub-Advisor
Indemnified Person would result in a conflict of interest and, therefore,
would not, in the reasonable judgment of the Sub-Advisor Indemnified
Person, adequately represent the interests of the Sub-Advisor Indemnified
Person, the Advisor will, at its own expense, assume the defense with
counsel to the Advisor and, also at its own expense, with separate counsel
to the Sub-Advisor Indemnified Person, which counsel shall be satisfactory
to the Advisor and to the Sub-Advisor Indemnified Person. The Sub-Advisor
Indemnified Person shall bear the fees and expenses of any additional
counsel retained by it, and the Advisor shall not be liable to the
Sub-Advisor Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Sub-Advisor Indemnified Person
independently in connection with the defense thereof other than reasonable
costs of investigation. The Advisor shall not have the right to compromise
on or settle the litigation without the prior written consent of the
Sub-Advisor Indemnified Person if the compromise or settlement results, or
may result, in a finding of wrongdoing on the part of the Sub-Advisor
Indemnified Person.
d. The Sub-Advisor shall not be liable under Section 6.b. with
respect to any claim made against an Advisor Indemnified Person unless
such Advisor Indemnified Person shall have notified the Sub-Advisor in
writing within a reasonable time after the summons, notice or other first
legal process or notice giving information of the nature of the claim
shall have been served upon such Advisor Indemnified Person (or after such
Advisor Indemnified Person shall have received notice of such service on
any designated agent). But failure to notify the Sub-Advisor of any such
claim shall not relieve the Sub-Advisor from any liability that it may
have to the Advisor Indemnified Person against whom such action is brought
otherwise than on account of Section 6.b. In case any such action is
brought against the Advisor Indemnified Person, the Sub-Advisor will be
entitled to participate, at its own expense, in the defense thereof or,
after notice to the Advisor Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Advisor Indemnified Person. If
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the Sub-Advisor assumes the defense of any such action and the selection
of counsel by the Sub-Advisor to represent both the Sub-Advisor and the
Advisor Indemnified Person would result in a conflict of interest and,
therefore, would not, in the reasonable judgment of the Advisor
Indemnified Person, adequately represent the interests of the Advisor
Indemnified Person, the Sub-Advisor will, at its own expense, assume the
defense with counsel to the Sub-Advisor and, also at its own expense, with
separate counsel to the Advisor Indemnified Person, which counsel shall be
satisfactory to the Sub-Advisor and to the Advisor Indemnified Person. The
Advisor Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Sub-Advisor shall not be liable
to the Advisor Indemnified Person under this Agreement for any legal or
other expenses subsequently incurred by the Advisor Indemnified Person
independently in connection with the defense thereof other than reasonable
costs of investigation. The Sub-Advisor shall not have the right to
compromise on or settle the litigation without the prior written consent
of the Advisor Indemnified Person if the compromise or settlement results,
or may result, in a finding of wrongdoing on the part of the Advisor
Indemnified Person.
7. STANDARD OF CARE AND LIMITATION ON LIABILITY. The Sub-Advisor shall
exercise its reasonable best judgment in rendering the services provided by it
under this Agreement. The Sub-Advisor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Advisor, the Fund or
the shareholders of the Fund in connection with the matters to which this
Agreement relates. Under no circumstances shall any party hereto be liable to
another for special, punitive or consequential damages, arising under or in
connection with this Agreement, even if previously informed of the possibility
of such damages. Notwithstanding any other provision in this Agreement, except
as may otherwise be required by the 1940 Act or the rules thereunder or other
applicable law, the Advisor agrees that the Sub-Advisor and any affiliated
person of the Sub-Advisor shall not be liable for, or subject to damages,
expenses or losses to the Advisor, the Fund or the Fund's shareholders in
connection with any act or omission connected with or arising out of any
services rendered under this Agreement, except by reason of the Sub-Advisor's
breach of this Agreement or its willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement.
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8. LIMITATION OF TRUST'S LIABILITY. The Sub-Advisor acknowledges that it
has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration of Trust. The Sub-Advisor agrees that (i) the
Trust's obligations to the Sub-Advisor under this Agreement (or indirectly under
the Advisory Agreement) shall be limited in any event to the Fund Assets and
applicable D&O/E&O insurance coverage obtained by the Trust on behalf of the
Fund and (ii) the Sub-Advisor shall not seek satisfaction of any such obligation
from the holders of shares of the Fund, other than the Advisor, nor from any
Trustee, officer, employee or agent of the Trust.
9. FORCE MAJEURE. Notwithstanding any other provision of this Agreement,
the Sub-Advisor shall not be liable for any loss to the Advisor or the Fund
caused directly or indirectly by circumstances beyond the Sub-Advisor's
reasonable control including, but not limited to, government restrictions,
exchange or market rulings, suspensions of trading, acts of civil or military
authority, national emergencies, earthquakes, floods or other catastrophes, acts
of God, wars or failures of communication or power supply, provided that: (a)
the Sub-Advisor has implemented and maintains a business continuity plan that is
deemed to be reasonable and appropriate by the Board, (b) the business
continuity plan complies with applicable laws, rules and regulations, and (c)
the Sub-Adviser takes all commercially reasonable steps to mitigate losses of
the Fund and the Adviser. In the event of equipment breakdowns beyond its
control, the Sub-Advisor shall take all reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
10. RENEWAL, TERMINATION AND AMENDMENT.
a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, until April 18, 2013; and it shall continue
thereafter provided that such continuance is specifically approved by the
parties and, in addition, at least annually by (i) the vote of the holders
of a majority of the outstanding voting securities (as herein defined) of
the Fund or by vote of a majority of the Trust's Board and (ii) by the
vote of a majority of the Board who are not parties to this Agreement or
interested persons of either the Advisor or the Sub-Advisor, cast in
person at a meeting called for the purpose of voting on such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor upon not more than sixty (60) days' nor
less than thirty (30) days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Advisor; (ii) by the
Sub-Advisor upon not less than sixty (60) days' written notice delivered
or mailed by registered mail, postage prepaid, to the Advisor; or (iii) by
the Trust upon either (y) the majority vote of its Board or (z) the
affirmative vote of a majority of the outstanding voting securities of the
Fund. This Agreement shall terminate automatically in the event of its
assignment.
c. This Agreement may be amended at any time by the parties hereto,
subject to approval by the Trust's Board and, if required by applicable
SEC rules and regulations, a vote of the majority of the outstanding
voting securities of the Fund affected by such change.
d. The terms "assignment," "interested persons" and "majority of the
outstanding voting securities" shall have the meaning set forth for such
terms in the 1940 Act.
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11. SEVERABILITY. If any provision of this Agreement shall become or shall
be found to be invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby and, to this extent,
the provisions of this Agreement shall be deemed to be severable.
12. NOTICE. Any notices under this Agreement shall be in writing addressed
and delivered personally (or by telecopy) or mailed postage-paid, to the other
party at such address as such other party may designate in accordance with this
paragraph for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Advisor for
this purpose shall be ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and that
the address of the Sub-Advisor shall be ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇., ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇.
13 CONFIDENTIAL INFORMATION. Each party agrees that it will treat
confidentially all information provided by the other party regarding such other
party's business and operations, including without limitation the investment
activities or holdings of the Fund. All confidential information provided by a
party hereto shall not be disclosed to any unaffiliated third party without the
prior consent of the providing party. The foregoing shall not apply to any
information that is public when provided or thereafter becomes public through no
wrongful act of the recipient or which is required to be disclosed by any
regulatory authority in the lawful and appropriate exercise of its jurisdiction
over a party, by any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable laws, rules or regulations.
The Sub-Advisor retains all rights in and to any proprietary investment models,
strategies and approaches used by or on behalf of the Fund and any proprietary
models, strategies or approaches based upon or derived from them.
14. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio and the Sub-Advisor consents to the
jurisdiction of courts, both state or federal, in Ohio, with respect to any
dispute under this Agreement. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
TOUCHSTONE ADVISORS, INC.
Attest:
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------- ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
Name:
----------------------------------
Title:
---------------------------------
AGF INVESTMENTS AMERICA INC.
Attest:
/s/ ▇▇▇▇ ▇▇▇▇▇ BY /s/ ▇.▇. ▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇.▇. ▇▇▇▇▇
--------------------------------- -----------------------------
Title: Legal Counsel Title: Corporate Secretary
-------------------------------- ----------------------------
Attest:
/s/ ▇. ▇▇▇▇▇▇▇▇ BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -----------------------------
Title: VP, General Counsel Title: Director
-------------------------------- ----------------------------
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