Exhibit 77(q)(1)(e)(2)
SUB-ADVISORY AGREEMENT
ING VP EMERGING MARKETS FUND, INC.
AGREEMENT made this 29th day of April 2005 between ING Investments,
LLC, an Arizona limited liability company (the "Manager"), and ▇.▇. ▇▇▇▇▇▇
Investment Management Inc., a corporation organized under the laws of the State
of Delaware (the "Sub-Adviser").
WHEREAS, ING VP Emerging Markets Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end, management investment company; and
WHEREAS, the Fund is authorized to issue separate series, each series
having its own investment objective or objectives, policies, and limitations;
and
WHEREAS, the Fund may offer shares of additional series in the future;
and
WHEREAS, pursuant to a Management Agreement, dated September 1, 2000,
as amended (the "Management Agreement"), a copy of which has been provided to
the Sub-Adviser, the Fund has retained the Manager to render advisory and
management services with respect to certain of the Fund's series; and
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser
is willing to furnish such services to the Fund and the Manager.
NOW, THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Manager and the
Sub-Adviser as follows:
1. Appointment. The Manager hereby appoints the Sub-Adviser to act as
the investment adviser and manager to the series of the Fund set forth on
Schedule A hereto (the "Series") for the periods and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
In the event the Fund designates one or more series (other than the
Series) with respect to which the Manager wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the Sub-Adviser
in writing. If the Sub-Adviser is willing to render such services, it shall
notify the Manager in writing, whereupon such series shall become a Series
hereunder, and be subject to this Agreement.
2. Sub-Adviser Duties. Subject to the supervision of the Fund's Board
of Directors and the Manager, the Sub-Adviser will provide a continuous
investment program for each Series' portfolio and determine in its discretion
the composition of the assets of each Series' portfolio, including determination
of the purchase, retention, or sale of the securities, cash, and other
investments contained in the portfolio. The Sub-Adviser will provide investment
research and conduct a continuous program of evaluation, investment, sales, and
reinvestment of each Series' assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed, or exchanged
for the Series, when these transactions should be executed, and what portion of
the assets of the Series should be held in the various securities and other
investments in which it may invest. To the extent permitted by the investment
policies of each Series, the Sub-Adviser shall make decisions for the Series as
to foreign currency matters and make determinations as to and execute and
perform foreign currency exchange contracts on behalf of the Series. The
Sub-Adviser will provide the services under this Agreement in accordance with
each Series' investment objective or objectives, policies, and restrictions as
stated in the Fund's Registration Statement filed with the Securities and
Exchange Commission ("SEC"), as amended, copies of which shall be sent to the
Sub-Adviser by the Manager prior to the commencement of this Agreement and
promptly following any such amendment. The Sub-Adviser further agrees as
follows:
(a) The Sub-Adviser will conform with the 1940 Act and all
rules and regulations thereunder, all other applicable federal and
state laws and regulations, with any written policies and procedures
adopted by the Fund's Board of Directors or by the Manager applicable
to the Fund of which the Sub-Adviser has been sent a copy (the "Fund
Procedures"), and the provisions of the Registration Statement of the
Fund filed under the Securities Act of 1933 (the "1933 Act") and the
1940 Act, as supplemented or amended, of which the Sub-Adviser has
received a copy, and with the Manager's portfolio manager operating
policies and procedures as in effect on the date hereof, as such
policies and procedures may be revised or amended by the Manager and
agreed to by the Sub-Adviser. In carrying out its duties under the
Sub-Advisory Agreement, the Sub-Adviser will comply with the following
policies and procedures:
(i) The Sub-Adviser will manage each Series so that
it meets the income and asset diversification requirements of
Section 851 of the Internal Revenue Code.
(ii) The Sub-Adviser will have no duty to vote any
proxy solicited by or with respect to the issuers of
securities in which assets of the Series are invested. If the
Sub-Adviser receives any proxy solicited by or with respect to
the issuers of securities in which assets of the Series are
invested, the Sub-Adviser will immediately forward any such
proxy materials to the Manager or to any agent of the Manager
designated by the Manager in writing.
The Sub-Adviser will make appropriate personnel
available for consultation for the purpose of reviewing with
representatives of the Manager and/or the Board proxy voting
issues. However, the Sub-Adviser will not make any proxy
recommendations.
(iii) In connection with the purchase and sale of
securities for each Series, the Sub-Adviser will arrange for
the transmission to the custodian and portfolio accounting
agent for the Series on a daily basis, such confirmation,
trade
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tickets, and other documents and information, including, but not limited to,
Cusip, Sedol, or other numbers that identify securities to be purchased or sold
on behalf of the Series, as may be reasonably necessary to enable the custodian
and portfolio accounting agent to perform its administrative and record keeping
responsibilities with respect to the Series. With respect to portfolio
securities to be settled through the Depository Trust Company, the Sub-Adviser
will arrange for the prompt transmission of the confirmation of such trades to
the Fund's custodian and portfolio accounting agent.
(iv) The Sub-Adviser will assist the custodian and
portfolio accounting agent for the Fund in determining or
confirming, consistent with the procedures and policies stated
in the Registration Statement for the Fund or adopted by the
Board of Directors, the value of any portfolio securities or
other assets of the Series for which the custodian and
portfolio accounting agent seeks assistance from or identifies
for review by the Sub-Adviser. The parties acknowledge that
the Sub-Adviser is not a custodian of the Series' assets and
will not take possession or custody of such assets.
(v) The Sub-Adviser will provide the Manager, no
later than the 10th business day following the end of each
Series' semi-annual period and fiscal year, a letter to
shareholders (to be subject to review and editing by the
Manager) containing a discussion of those factors referred to
in Item 5(a) of 1940 Act Form N-1A in respect of both the
prior quarter and the fiscal year to date.
(vi) The Sub-Adviser will complete and deliver to the
Manager a written compliance checklist in a form provided by
the Manager for each month by the 10th business day of the
following month.
(b) The Sub-Adviser will complete and deliver to the Manager
by the 10th business day of each month a written report on each Series
of the Fund that contains the following information as of the
immediately previous month's end.
(i) A performance comparison to the Series benchmark
listed in the prospectus as well as a comparison to other
mutual funds as listed in the rankings prepared by Lipper
Analytical Services, Inc., Morningstar, Inc., or similar
independent services that monitor the performance of mutual
funds or with other appropriate indexes of investment
securities;
(ii) Composition of the assets of each Series'
portfolio and the impact of key portfolio holdings and sector
concentrations on the Series; and
(iii) Confirmation of each Series' current investment
objective and Sub-Adviser's projected plan to realize the
Series' investment objectives.
(c) The Sub-Adviser will contact Morningstar to clarify any
style box conflicts with each Series' style and the anticipated
timeframe in which Morningstar will
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remedy such conflicts, if any.
(d) The Sub-Adviser will make available to the Fund and the
Manager, promptly upon request, any of the Series' investment records
and ledgers maintained by the Sub-Adviser (which shall not include the
records and ledgers maintained by the custodian or portfolio accounting
agent for the Fund) as are necessary to assist the Fund and the Manager
to comply with requirements of the 1940 Act and the Investment Advisers
Act of 1940 (the "Advisers Act"), as well as other applicable laws. The
Sub-Adviser will furnish to regulatory authorities having the requisite
authority any information or reports in connection with such services
in respect to the Series which may be requested in order to ascertain
whether the operations of the Fund are being conducted in a manner
consistent with applicable laws and regulations.
(e) The Sub-Adviser will provide reports to the Fund's Board
of Directors for consideration at meetings of the Board of Directors on
the investment program for each Series and the issuers and securities
represented in each Series' portfolio, and will furnish the Fund's
Board of Directors with respect to each Series such periodic and
special reports as the Directors and the Manager may reasonably
request.
(f) The requirements under Section 2(a)(v) and (vi), 2(b) and
2(c) may be modified from time to time by written agreement between the
Manager and the Sub-Adviser.
3. Broker-Dealer Selection. The Sub-Adviser is authorized to make
decisions to buy and sell securities and other investments for each Series'
portfolio, select broker-dealers to effect securities transactions and negotiate
brokerage commission rates to effect securities transactions. The Sub-Adviser's
primary consideration in choosing a broker to effect a security transaction will
be to obtain the best execution for the Series, taking into account the factors
specified in the prospectus and/or statement of additional information for the
Fund, and determined in consultation with the Manager, which include price
(including the applicable brokerage commission or dollar spread), the size of
the order, the nature of the market for the security, the timing of the
transaction, the reputation, the experience and financial stability of the
broker-dealer involved, the quality of the service, the difficulty of execution,
and the execution capabilities and operational facilities of the firm involved,
and the firm's risk in positioning a block of securities. Accordingly, the price
to a Series in any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified, in the judgment
of the Sub-Adviser in the exercise of its fiduciary obligations to the Fund, by
other aspects of the portfolio execution services offered. Subject to such
policies as the Fund's Board of Directors or Manager may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, the
Sub-Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused a Series to pay a broker-dealer for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the Sub-Adviser determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the Sub-Adviser's or
the Manager's
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overall responsibilities with respect to the Series and to their respective
other clients as to which they exercise investment discretion. The Sub-Adviser
may, in consultation with the Manager and consistent with best execution, direct
portfolio transactions to broker-dealers that participate in commission
recapture programs that benefit the Fund, but not the Manager or the
Sub-Adviser. To the extent consistent with these standards, the Sub-Adviser is
further authorized to allocate the orders placed by it on behalf of a Series to
the Sub-Adviser if it is registered as a broker-dealer with the SEC, to an
affiliated broker-dealer, or to such brokers and dealers who also provide
research or statistical material, or other services to the Series, the
Sub-Adviser, or an affiliate of the Sub-Adviser. Such allocation shall be in
such amounts and proportions as the Sub-Adviser shall determine consistent with
the above standards, and the Sub-Adviser will report on said allocation
regularly to the Fund's Board of Directors indicating the broker-dealers to
which such allocations have been made and the basis therefor.
4. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the most
recent Post-Effective Amendment to the Registration Statement for the Fund filed
with the SEC that contains disclosure about the Sub-Adviser, and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
information relating, directly or indirectly, to the Sub-Adviser, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will maintain such
registration so long as this Agreement remains in effect. The Sub-Adviser will
provide the Manager with a copy of the Sub-Adviser's Form ADV, Part II at the
time the Form ADV is filed with the SEC.
5. Expenses. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement. The
Manager or the Fund shall be responsible for all the expenses of the Fund's
operations. In addition, if the Fund is required, under applicable law, to
supplement the Registration Statement because of a change requested by the
Sub-Adviser, the Sub-Adviser will reimburse the Fund and/or the Manager for the
cost of preparing, printing and distributing such supplement, unless the
Sub-Adviser is requesting the change in order to comply with an applicable law,
rule or regulation.
6. Compensation. For the services provided to each Series, the Manager
will pay the Sub-Adviser an annual fee equal to the amount specified for such
Series in Schedule A hereto, payable monthly in arrears. The fee will be
appropriately prorated to reflect any portion of a calendar month that this
Agreement is not in effect among the parties. In accordance with the provisions
of the Management Agreement, the Manager is solely responsible for the payment
of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of its
fees solely from the Manager; provided, however, that if the Fund fails to pay
the Manager all or a portion of the management fee under said Management
Agreement when due, and the amount that was paid is insufficient to cover the
Sub-Adviser's fee under this Agreement for the period in question, then the
Sub-Adviser may enforce against the Fund any rights it may have as a third-party
beneficiary under the Management Agreement and the Manager will take all steps
appropriate under the circumstances to collect the amount due from the Fund.
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7. Marketing Materials.
(a) During the term of this Agreement, the Sub-Adviser agrees
to furnish the Manager at its principal office for prior review and
approval by the Manager all written and/or printed materials, including
but not limited to, PowerPoint(R) or slide presentations, news
releases, advertisements, brochures, fact sheets and other promotional,
informational or marketing materials (the "Marketing Materials")
produced by or for the Sub-Adviser, for distribution to the public in
connection with the Series, and Sub-Adviser shall not use any such
materials if the Manager reasonably objects in writing within five
business days (or such other period as may be mutually agreed) after
receipt thereof. Marketing Materials may be furnished to the Manager by
first class or overnight mail, facsimile transmission equipment,
electronic delivery or hand delivery.
(b) During the term of this Agreement, the Manager agrees to
furnish the Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to shareholders, or Marketing Materials prepared
for distribution to shareholders of each Series, or the public that
refer to the Sub-Adviser in any way, prior to the use thereof, and the
Manager shall not use any such materials if the Sub-Adviser reasonably
objects in writing within five business days (or such other period as
may be mutually agreed) after receipt thereof. The Sub-Adviser's right
to object to such materials is limited to the portions of such
materials that expressly relate to the Sub-Adviser, its services and
its clients. The Manager agrees to use its reasonable best efforts to
ensure that materials prepared by its employees or agents or its
affiliates that refer to the Sub-Adviser or its clients in any way are
consistent with those materials previously approved by the Sub-Adviser
as referenced in the first sentence of this paragraph. Marketing
Materials may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment, electronic delivery
or hand delivery.
8. Compliance.
(a) The Sub-Adviser agrees to use reasonable compliancemethods
in accordance with the Fund Procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the
Manager and the Fund (i) in the event that the SEC has censured the
Sub-Adviser; placed limitations upon its activities, functions or
operations; suspended or revoked its registration as an investment
adviser; or has commenced proceedings or an investigation that may
result in any of these actions, or (ii) upon having a reasonable basis
for believing that the Series has ceased to meet the income and asset
diversification requirements of Section 851 of the Internal Revenue
Code. The Sub-Adviser further agrees to notify the Manager and the Fund
promptly of any material fact known to the Sub-Adviser respecting or
relating to the Sub-Adviser that is relevant to the Fund that is not
contained in the Registration Statement or prospectus for the Fund
(which describes the Series), or any amendment or supplement thereto,
or if any statement contained therein that becomes untrue in any
material respect.
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(c) The Manager agrees that it shall promptly notify the
Sub-Adviser (i) in the event that the SEC has censured the Manager or
the Fund; placed limitations upon either of their activities,
functions, or operations; suspended or revoked the Manager's
registration as an investment adviser; or has commenced proceedings or
an investigation that may result in any of these actions, or (ii) upon
having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code.
9. Books and Records. The Sub-Adviser hereby agrees that all records
which it maintains for the Series are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's or
the Manager's request in compliance with the requirements of Rule 31a-3 under
the 1940 Act, although the Sub-Adviser may, at its own expense, make and retain
a copy of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
10. Cooperation; Confidentiality.
(a) Each party to this Agreement agrees to cooperate with the
other party and with all appropriate governmental authorities having
the requisite jurisdiction (including, but not limited to, the SEC) in
connection with any investigation or inquiry relating to this Agreement
or the Fund.
(b) Subject to paragraphs (a), (c) and (d) of this Section 10,
the Sub-Adviser will treat confidentially and as proprietary
information of the Fund all such records and other information related
to the Fund maintained by the Sub-Adviser, and will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Fund, which approval shall not be
unreasonably withheld, provided, however, that notwithstanding the
foregoing, the Sub-Adviser may disclose such information as required by
applicable law, regulation or upon request by a regulator or auditor of
the Sub-Adviser.
(c) To the extent that any market counterparty with whom the
Sub-Adviser deals requires information relating to the Series
(including, but not limited to, the identity of the Series and market
value of the Series), the Sub-Adviser shall be permitted to disclose
such information to the extent necessary to effect transactions on
behalf of the Series in accordance with the terms of this Agreement.
(d) The Fund and the Manager acknowledge that any information
or recommendation supplied by, or produced by, the Sub-Adviser in
connection with the performance of its obligations hereunder is to be
regarded by the Fund and the Manager as confidential and for use only
by the Manager and the Fund. Furthermore, except as required by law
(including, but not limited to semi-annual, annual or other filings
made under the ▇▇▇▇ ▇▇▇) or as agreed to by the Manager and the
Sub-Adviser, the Manager
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and the Fund will not disclose, in any manner whatsoever except as
expressly authorized in this Agreement, any list of securities held by
the Series until such list of securities is filed with the SEC, mailed
out to shareholders or posted on the Fund's Web site, which filing,
mailing or posting shall not be made sooner than 30 days after
calendar quarter end, except that the Series' top 10 holdings may be
disclosed 16 days after month end. In addition, at the end of each
calendar quarter, the Manager may disclose, earlier than 30 days after
calendar quarter end, a list of the securities purchased or sold by
the Series during the calendar quarter to certain third party data or
service providers who have entered into a confidentiality agreement
with the Manager.
11. Non-Exclusivity.
(a) The Manager understands, and has advised the Fund's Board
of Directors, that the Sub-Adviser now acts, or may in the future act,
as an investment adviser to fiduciary and other managed accounts, and
as investment adviser or sub-investment adviser to other investment
companies or accounts, including other investment companies and
accounts following the same investment strategy as the Fund. The
Manager has no objection to the Sub-Adviser acting in such capacities,
provided that whenever the Series and one or more other investment
advisory clients of the Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be
allocated in a manner believed by the Sub-Adviser to be equitable to
each, provided that such allocation is not inconsistent with the
policies and procedures of the Fund governing trade allocation set
forth in the Registration Statement as of the date of this Agreement or
any such procedures adopted subsequently and accepted by the
Sub-Adviser (which acceptance will not be unreasonably withheld).
(b) The Sub-Adviser may group orders for a Series with orders
for other funds and accounts to obtain the efficiencies that may be
available on larger transactions when it determines that investment
decisions are appropriate for each participating account, provided that
such aggregation is not inconsistent with the policies and procedures
of the Fund governing aggregated trades set forth in the Registration
Statement as of the date of this Agreement or any such procedures
adopted subsequently and accepted by the Sub-Adviser (which acceptance
will not be unreasonably withheld). The Sub-Adviser cannot assure that
such policy will not adversely affect the price paid or received by a
Series. The Manager recognizes, and has advised the Fund's Board of
Directors, that in some cases this procedure may adversely affect the
size and the opportunities of the position that the participating
Series may obtain in a particular security.
(c) The Manager understands, and has advised the Fund's Board
of Directors, that the persons employed by the Sub-Adviser to assist in
the Sub-Adviser's duties under this Agreement will not devote their
full time to such service and nothing contained in this Agreement will
be deemed to limit or restrict the right of the Sub-Adviser or any of
its affiliates to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
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12. Prohibited Conduct. The Sub-Adviser may not consult with any other
sub-adviser of the Fund concerning transactions in securities or other assets
for any investment portfolio of the Fund, including the Series, except that such
consultations are permitted between the current and successor sub-advisers of
the Series in order to effect an orderly transition of sub-advisory duties so
long as such consultations are not concerning transactions prohibited by Section
17(a) of the 1940 Act.
13. Representations Respecting Sub-Adviser. The Manager agrees that
neither the Manager, nor affiliated persons of the Manager, shall give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Sub-Adviser or the Series other than
the information or representations contained in the Registration Statement,
prospectus, or statement of additional information for the Fund's shares, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved in advance by the Sub-Adviser, except with the prior permission of the
Sub-Adviser.
14. Control. Notwithstanding any other provision of the Agreement, it
is understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser; provided, however, that the Sub-Adviser
may refuse to follow any direction from the Fund that the Sub-Adviser deems
inconsistent with applicable law, recognized industry practice or its internal
policies.
15. Liability. Except as may otherwise be required by the 1940 Act or
the rules thereunder or other applicable law, the Manager agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls the Sub-Adviser
(a) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
hereunder, and (b) shall not be liable for, or subject to any damages, expenses,
or losses in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
The Sub-Adviser does not guarantee the future performance of the Series
or any specific level of performance, the success of any investment decision or
strategy that the Sub-Adviser may use, or the success of the Sub-Adviser's
overall management of the Series. The Fund and the Manager understand that
investment decisions made for the Series by the Sub-Adviser are subject to
various market, currency, economic, political and business risks, and that those
investment decisions will not always be profitable. The Sub-Adviser will manage
only the assets of the Series allocated to its management by the Manager and in
making investment decisions for the Series.
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16. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person,
if any, who, within the meaning of Section 15 of the 1933 Act controls
("controlling person") the Sub-Adviser (all of such persons being
referred to as "Sub-Adviser Indemnified Persons") against any and all
losses, claims, damages, liabilities, or litigation (including legal
and other expenses) to which a Sub-Adviser Indemnified Person may
become subject under the 1933 Act, the 1940 Act, the Advisers Act,
under any other statute, at common law or otherwise, (1) arising from
or in connection with this Agreement or the performance by the
Sub-Adviser of its duties under this Agreement, provided, however, the
Sub-Adviser Indemnified Persons shall not be indemnified against
losses, claims, damages, liabilities or litigation (including legal and
other expenses) arising out of the Sub-Adviser's negligence, willful
misfeasance, or bad faith in the performance of its duties (which could
include a negligent action or a negligent omission to act), or by
reason of the Sub-Adviser's reckless disregard of its obligations and
duties under this Agreement, or (2) based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering shares of the Fund or any
Series, or any amendment thereof or any supplement thereto, or the
omission or alleged omission to state therein a material fact 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 Manager or the Fund or to any affiliated
person of the Manager by a Sub-Adviser Indemnified Person; provided
however, that in no case shall the indemnity in favor of the
Sub-Adviser 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 negligence in the
performance of its duties, or by reason of its reckless disregard of
obligations and duties under this Agreement.
(b) Notwithstanding Section 15 of this Agreement, the
Sub-Adviser agrees to indemnify and hold harmless the Manager, any
affiliated person of the Manager, and any controlling person of the
Manager (all of such persons being referred to as "Manager Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Manager
Indemnified Person may become subject under the 1933 Act, 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise,
arising out of the Sub-Adviser's responsibilities as Sub-Adviser of the
Series which (1) may be based upon the Sub-Adviser's negligence,
willful misfeasance, or bad faith in the performance of its duties
(which could include a negligent action or a negligent omission to
act), or by reason of the Sub-Adviser's reckless disregard of its
obligations and duties under this Agreement, or (2) may be based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or prospectus covering the
shares of the Fund or any Series, 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-Adviser
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 Manager, the Fund,
or any affiliated person of the Manager or Fund by the Sub-Adviser
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or any affiliated person of the Sub-Adviser; provided, however, that
in no case shall the indemnity in favor of a Manager 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, negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
under this Agreement.
(c) None of the Fund, the Manager or the Sub-Adviser shall be
liable for any special, consequential or incidental damages.
(c) The Manager shall not be liable under Paragraph (a) of
this Section 16 with respect to any claim made against a Sub-Adviser
Indemnified Person unless such Sub-Adviser Indemnified Person shall
have notified the Manager in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon such Sub-Adviser Indemnified
Person (or after such Sub-Adviser Indemnified Person shall have
received notice of such service on any designated agent), but failure
to notify the Manager of any such claim shall not relieve the Manager
from any liability which it may have to the Sub-Adviser Indemnified
Person against whom such action is brought except to the extent the
Manager is prejudiced by the failure or delay in giving such notice. In
case any such action is brought against the Sub-Adviser Indemnified
Person, the Manager will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Sub-Adviser
Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Sub-Adviser Indemnified Person. If the Manager
assumes the defense of any such action and the selection of counsel by
the Manager to represent the Manager and the Sub-Adviser Indemnified
Person would result in a conflict of interests and therefore, would
not, in the reasonable judgment of the Sub-Adviser Indemnified Person,
adequately represent the interests of the Sub-Adviser Indemnified
Person, the Manager will, at its own expense, assume the defense with
counsel to the Manager and, also at its own expense, with separate
counsel to the Sub-Adviser Indemnified Person, which counsel shall be
satisfactory to the Manager and to the Sub-Adviser Indemnified Person.
The Sub-Adviser Indemnified Person shall bear the fees and expenses of
any additional counsel retained by it, and the Manager shall not be
liable to the Sub-Adviser Indemnified Person under this Agreement for
any legal or other expenses subsequently incurred by the Sub-Adviser
Indemnified Person independently in connection with the defense thereof
other than reasonable costs of investigation. The Manager shall not
have the right to compromise on or settle the litigation without the
prior written consent of the Sub-Adviser Indemnified Person if the
compromise or settlement results, or may result, in a finding of
wrongdoing on the part of the Sub-Adviser Indemnified Person.
(d) The Sub-Adviser shall not be liable under Paragraph (b) of
this Section 16 with respect to any claim made against a Manager
Indemnified Person unless such Manager Indemnified Person shall have
notified the Sub-Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon such Manager Indemnified
Person (or after such Manager Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify
the Sub-Adviser of any such claim shall not relieve
11
the Sub-Adviser from any liability which it may have to the Manager
Indemnified Person against whom such action is brought except to the
extent the Sub-Adviser is prejudiced by the failure or delay in giving
such notice. In case any such action is brought against the Manager
Indemnified Person, the Sub-Adviser will be entitled to participate,
at its own expense, in the defense thereof or, after notice to the
Manager Indemnified Person, to assume the defense thereof, with
counsel satisfactory to the Manager Indemnified Person. If the
Sub-Adviser assumes the defense of any such action and the selection
of counsel by the Sub-Adviser to represent both the Sub-Adviser and
the Manager Indemnified Person would result in a conflict of interests
and therefore, would not, in the reasonable judgment of the Manager
Indemnified Person, adequately represent the interests of the Manager
Indemnified Person, the Sub-Adviser will, at its own expense, assume
the defense with counsel to the Sub-Adviser and, also at its own
expense, with separate counsel to the Manager Indemnified Person,
which counsel shall be satisfactory to the Sub-Adviser and to the
Manager Indemnified Person. The Manager Indemnified Person shall bear
the fees and expenses of any additional counsel retained by it, and
the Sub-Adviser shall not be liable to the Manager Indemnified Person
under this Agreement for any legal or other expenses subsequently
incurred by the Manager Indemnified Person independently in connection
with the defense thereof other than reasonable costs of investigation.
The Sub-Adviser shall not have the right to compromise on or settle
the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may
result in a finding of wrongdoing on the part of the Manager
Indemnified Person.
17. Duration and Termination.
(a) This Agreement shall become effective on the date first
indicated above, subject to the condition that the Fund's Board of
Directors, including a majority of those Directors who are not
interested persons (as such term is defined in the ▇▇▇▇ ▇▇▇) of the
Manager or the Sub-Adviser, and the shareholders of each Series, shall
have approved this Agreement. Unless terminated as provided herein,
this Agreement shall remain in full force and effect until November 30,
2006 and continue on an annual basis thereafter with respect to each
Series covered by this Agreement; provided that such annual continuance
is specifically approved each year by (i) the Board of Directors of the
Fund, or by the vote of a majority of the outstanding voting securities
(as defined in the ▇▇▇▇ ▇▇▇) of each Series, and (ii) the vote of a
majority of those Directors who are not parties to this Agreement or
interested persons (as such term is defined in the ▇▇▇▇ ▇▇▇) of any
such party to this Agreement cast in person at a meeting called for the
purpose of voting on such approval. However, any approval of this
Agreement by the holders of a majority of the outstanding shares (as
defined in the ▇▇▇▇ ▇▇▇) of a Series shall be effective to continue
this Agreement with respect to such Series notwithstanding (i) that
this Agreement has not been approved by the holders of a majority of
the outstanding shares of any other Series or (ii) that this agreement
has not been approved by the vote of a majority of the outstanding
shares of the Fund, unless such approval shall be required by any other
applicable law or otherwise.
12
Notwithstanding the foregoing, this Agreement may be
terminated with respect to any Series covered by this Agreement: (i) by
the Manager at any time, upon sixty (60) days' written notice to the
Sub-Adviser and the Fund, (ii) at any time without payment of any
penalty by the Fund, by the Fund's Board of Directors or a majority of
the outstanding voting securities of each Series, upon sixty (60) days'
written notice to the Manager and the Sub-Adviser, or (iii) by the
Sub-Adviser upon three (3) months' written notice unless the Fund or
the Manager requests additional time to find a replacement for the
Sub-Adviser, in which case the Sub-Adviser shall allow the additional
time requested by the Fund or Manager not to exceed three (3)
additional months beyond the initial three-month notice period;
provided, however, that the Sub-Adviser may terminate this Agreement at
any time without penalty, effective upon written notice to the Manager
and the Fund, in the event either the Sub-Adviser (acting in good
faith) or the Manager ceases to be registered as an investment adviser
under the Advisers Act or otherwise becomes legally incapable of
providing investment management services pursuant to its respective
contract with the Fund, or in the event the Manager becomes bankrupt or
otherwise incapable of carrying out its obligations under this
Agreement, or in the event that the Sub-Adviser does not receive
compensation for its services from the Manager or the Fund as required
by the terms of this Agreement.
In the event of termination for any reason, all records of
each Series for which the Agreement is terminated shall promptly be
returned to the Manager or the Fund, free from any claim or retention
of rights in such record by the Sub-Adviser, although the Sub-Adviser
may, at its own expense, make and retain a copy of such records. This
Agreement shall automatically terminate in the event of its assignment
(as such term is described in the 1940 Act). In the event this
Agreement is terminated or is not approved in the manner described
above, the Sections or Paragraphs numbered 9, 10, 13, 14, 15 and 16 of
this Agreement shall remain in effect, as well as any applicable
provision of this Section numbered 17 and, to the extent that only
amounts are owed to the Sub-Adviser as compensation for services
rendered while the agreement was in effect, Section 6.
(b) Notices. Any notice must be in writing and shall be
sufficiently given (1) when delivered in person, (2) when dispatched by
telegram or electronic facsimile transfer (confirmed in writing by
postage prepaid first class air mail simultaneously dispatched), (3)
when sent by internationally recognized overnight courier service (with
receipt confirmed by such overnight courier service), or (4) when sent
by registered or certified mail, to the other party at the address of
such party set forth below or at such other address as such party may
from time to time specify in writing to the other party.
If to the Fund:
ING VP Emerging Markets Fund, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
13
If to the Sub-Adviser:
▇.▇. ▇▇▇▇▇▇ Investment Management Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Funds - Legal
18. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved as required by applicable law.
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State
of New York, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act, the Advisers Act or rules or
orders of the SEC thereunder, and without regard for the conflicts of
laws principle thereof. The term "affiliate" or "affiliated person" as
used in this Agreement shall mean "affiliated person" as defined in
Section 2(a)(3) of the ▇▇▇▇ ▇▇▇.
(b) The Manager and the Sub-Adviser acknowledge that the Fund
enjoys the rights of a third-party beneficiary under this Agreement,
and the Manager acknowledges that the Sub-Adviser enjoys the rights of
a third party beneficiary under the Management Agreement.
(c) The captions of this Agreement are included for
convenience only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
(d) To the extent permitted under Section 17 of this
Agreement, this Agreement may only be assigned by any party with the
prior written consent of the other parties.
(e) 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, and to this extent,
the provisions of this Agreement shall be deemed to be severable.
(f) Nothing herein shall be construed as constituting the
Sub-Adviser as an agent or co-partner of the Manager, or constituting
the Manager as an agent or co-partner of the Sub-Adviser.
(g) This Agreement may be executed in counterparts.
14
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
ING INVESTMENTS, LLC
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
▇.▇. ▇▇▇▇▇▇ INVESTMENT MANAGEMENT INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
15
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
ING INVESTMENTS, LLC
By:
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
▇.▇. ▇▇▇▇▇▇ INVESTMENT MANAGEMENT INC.
By: /s/ ▇▇▇▇▇ Worsoff
---------------------------------------
Name: ▇▇▇▇▇ Worsoff
-------------------------------------
Title: Vice President
-------------------------------------
15
SCHEDULE A
with respect to the
SUB-ADVISORY AGREEMENT
between
ING INVESTMENTS, LLC
and
▇.▇. ▇▇▇▇▇▇ INVESTMENT MANAGEMENT INC.
Annual Sub-Adviser Fee
----------------------
Series (as a percentage of average daily net assets)
------
ING VP Emerging Markets Fund 0.60% on first $75 million
0.50% on next $75 million
0.40% on next $350 million
0.35% on assets over $500 million(1)
------------------------------
(1) For purposes of calculating fees under this Agreement, the assets of the
Series shall be aggregated with the assets of ING JPMorgan Emerging Markets
Equity Portfolio, a series of ING Investors Trust, which is not a party to
this Agreement.
