EX-99.(d)(17)
SUB-ADVISORY AGREEMENT
AMONG ▇▇▇▇▇ FARGO FUNDS TRUST,
▇▇▇▇▇ FARGO FUNDS MANAGEMENT, LLC AND
PHOCAS FINANCIAL CORPORATION
This AGREEMENT is made as of this 21st day of March, 2008, among ▇▇▇▇▇
Fargo Funds Trust (the "Trust"), a statutory trust organized under the laws of
the State of Delaware with its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Fargo Funds Management, LLC
(the "Adviser"), a limited liability company organized under the laws of the
State of Delaware with its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Phocas Financial Corporation
(the "Sub-Adviser"), a corporation organized under the laws of the State of
California, with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Adviser and the Sub-Adviser are registered investment
advisers under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"); and
WHEREAS, the Trust is engaged in business as an open-end investment
company with one or more series of shares and is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust's Board of Trustees (the "Board") has engaged the
Adviser to perform investment advisory services for each series of the Trust
under the terms of an investment advisory agreement, dated August 6, 2003,
between the Adviser and the Trust (the "Advisory Agreement"); and
WHEREAS, the Adviser, acting pursuant to the Advisory Agreement,
wishes to retain the Sub-Adviser, and the Trust's Board has approved the
retention of the Sub-Adviser, to provide investment advisory services to each
series of the Trust listed in Appendix A hereto as it may be amended from time
to time (each a "Fund" and collectively the "Funds"), and the Sub-Adviser is
willing to provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust, the Adviser and Sub-Adviser agree as
follows:
Section 1. Appointment of Sub-Adviser. The Trust is engaged in the
business of investing and reinvesting its assets in securities of the type and
in accordance with the limitations specified in its Declaration of Trust, as
amended or supplemented from time to time, By-Laws (if any) and Registration
Statement filed with the Securities and Exchange Commission (the "Commission")
under the 1940 Act and the Securities Act of 1933 (the "Securities Act"),
including any representations made in the prospectus and statement of additional
information relating to the Fund contained therein and as may be amended or
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Board.
Subject to the direction and control of the Board, the Adviser manages
the investment and reinvestment of the assets of the Fund and provides for
certain management and other services as specified in the Advisory Agreement.
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Subject to the direction and control of the Board and the Adviser, the
Sub-Adviser shall manage the investment and reinvestment of the assets of the
Fund as contemplated in this Agreement, and without limiting the generality of
the foregoing, shall provide the management and other services specified below
in Section 2(a), all in such manner and to such extent as may be directed from
time to time by the Adviser. Notwithstanding anything in this Agreement to the
contrary, the Adviser shall be responsible for compliance with any statute,
rule, regulation, guideline or investment restriction that applies to the Fund's
investment portfolio as a whole and the Sub-Adviser's responsibility shall be
limited to following any instruction the Sub-Adviser might receive from the
Adviser.
The investment authority granted to the Sub-Adviser shall include the
authority to exercise whatever powers the Trust may possess with respect to any
of its assets held by the Fund, including, but not limited to, the power to
exercise rights, options, warrants, conversion privileges, redemption
privileges, and to tender securities pursuant to a tender offer. The Sub-Adviser
shall not, however, be responsible for voting proxies, for participating in
class actions and/or other legal proceedings on behalf of the Fund, but will
provide such assistance as is reasonably requested by the Adviser.
Section 2. Duties and Representations and Warranties of the
Sub-Adviser.
(a) The Sub-Adviser shall make decisions with respect to all purchases
and sales of securities and other investment assets for the Fund. To carry out
such decisions, the Sub-Adviser is hereby authorized, as agent and
attorney-in-fact for the Trust, for the account of, at the risk of and in the
name of the Trust, to place orders and issue instructions with respect to those
transactions of the Fund. In all purchases, sales and other transactions in
securities and other assets for the Fund, the Sub-Adviser is authorized to
exercise full discretion and act for the Trust and instruct the Fund's custodian
(the "Custodian") in the same manner and with the same force and effect as the
Trust might or could do with respect to such purchases, sales or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
The Sub-Adviser acknowledges that the Fund and other mutual funds
advised by the Adviser (collectively, the "fund complex") may engage in
transactions with certain sub-advisers in the fund complex (and their affiliated
persons) in reliance on exemptions under Rule 10f-3, Rule 12d3-1, Rule 17a-10
and Rule 17e-1 under the 1940 Act. Accordingly, the Sub-Adviser hereby agrees
that it will not consult with any other sub-adviser of a fund in the fund
complex, or an affiliated person of a sub-adviser, concerning transactions for a
fund in securities or other fund assets. With respect to a multi-managed Fund,
the Sub-Adviser shall be limited to managing only the discrete portion of the
Fund's portfolio as may be determined from time-to-time by the Board or the
Adviser, and shall not consult with the sub-adviser as to any other portion of
the Fund's portfolio concerning transactions for the Fund in securities or other
Fund assets.
(b) Following the close of each calendar quarter, the Sub-Adviser will
report to the Board regarding the investment performance of the Fund since the
prior report, and will also keep the Board informed of important developments
known by it to affect the Trust, the Fund and the Sub-
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Adviser, and on its own initiative will furnish the Board and the Adviser from
time to time with such information as the Sub-Adviser may believe appropriate,
whether concerning the individual companies whose securities are held by a Fund,
the industries in which they engage, or the economic, social or political
conditions prevailing in each country in which the Fund maintains investments.
The Sub-Adviser will also furnish the Board and the Adviser with such
statistical and analytical information with respect to securities held by the
Fund as the Sub-Adviser may believe appropriate or as the Board or the Adviser
reasonably request.
The Sub-Adviser shall promptly notify the Adviser of (i) any changes
regarding the Sub-Adviser that would impact disclosure in the Trust's
Registration Statement, or (ii) any violation of any requirement, provision,
policy or restriction that the Sub-Adviser is required to comply with under
Section 6 of this Agreement. The Sub-Adviser shall, within two business days,
notify both the Adviser and the Trust of any legal process served upon it in
connection with its activities hereunder, including any legal process served
upon it on behalf of the Adviser, the Fund or the Trust. The Sub-Adviser shall
reasonably cooperate with the Custodian in the Custodian's processing of class
actions or other legal proceedings relating to the holdings (historical and/or
current) of the Fund.
(c) The Sub-Adviser may from time to time employ or sub-contract the
services of certain persons as the Sub-Adviser believes to be appropriate or
necessary to assist in the execution of the Sub-Adviser's duties hereunder;
provided, however, that the employment of or sub-contracting to any such person
shall not relieve the Sub-Adviser of its responsibilities or liabilities
hereunder. The cost of performance of such duties shall be borne and paid by the
Sub-Adviser. No obligation may be imposed on the Trust in any such respect.
The Sub-Adviser shall supervise and monitor the activities of its
representatives, personnel and agents in connection with the execution of its
duties and obligations hereunder. The appropriate personnel of the Sub-Adviser
will be made available to consult with the Adviser, the Trust and the Board at
reasonable times and upon reasonable notice concerning the business of the
Trust.
(d) The Sub-Adviser shall maintain records relating to portfolio
transactions and the placing and allocation of brokerage orders as are required
to be maintained by the Trust under the 1940 Act. The Sub-Adviser shall prepare
and maintain, or cause to be prepared and maintained, in such form, for such
periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Sub-Adviser
pursuant to this Agreement required to be prepared and maintained by the Trust
pursuant to the rules and regulations of any national, state, or local
government entity with jurisdiction over the Trust, including the Commission and
the Internal Revenue Service. The books and records pertaining to the Trust
which are in possession of the Sub-Adviser shall be the property of the Trust.
The Trust, or the Trust's authorized representatives (including the Adviser),
shall have access to such books and records at all times during the
Sub-Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the
Sub-Adviser to the Trust or the Trust's authorized representatives.
(e) The Sub-Adviser represents and warrants to the Adviser and the
Trust that: (i) the retention of the Sub-Adviser as contemplated by this
Agreement is authorized by the Sub-
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Adviser's governing documents; (ii) the execution, delivery and performance of
this Agreement does not violate any obligation by which the Sub-Adviser or its
property is bound, whether arising by contract, operation of law or otherwise;
(iii) this Agreement has been duly authorized by appropriate action of the Sub-
Adviser and when executed and delivered by the Sub-Adviser will be the legal,
valid and binding obligation of the Sub-Adviser, enforceable against the
Sub-Adviser in accordance with the terms hereof, subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or law); (iv) the composite performance
record of the Sub-Adviser's executive officers furnished to the Adviser and the
Trust in writing prior to the date hereof (the "Data") is true and correct, and
has been prepared in accordance with applicable laws, rules, regulations,
interpretations and in accordance with industry guidelines and standards with
respect to standardized performance information; (v) there is no information
material to an understanding of the Data which the Sub-Adviser has not provided
in writing to the Adviser prior to the date hereof; (vi) the accounts included
in the Data include all fully discretionary accounts managed by the Sub-
Adviser's executive officers designated to act as portfolio managers of the Fund
over the period covered that have investment objectives, policies and strategies
that are substantially similar to those that will be followed by the Fund, as
described in the public disclosure or marketing materials of the Fund, including
the prospectus and the statement of additional information and proxy statements
(the "Public Disclosure"); (vii) the Sub-Adviser has the right, free from any
legal or contractual restrictions thereon, to the use, reproduction, and
incorporation of the Data in the Public Disclosure; and (viii) the Sub-Adviser
is legally entitled to grant, and hereby grants, such rights to the Adviser
and/or the Trust with respect to the use of the Data in the Public Disclosure,
including with respect to any Public Disclosure filed with the Commission prior
to the date hereof.
Section 3. Delivery of Documents to the Sub-Adviser. The Adviser has
furnished the Sub-Adviser with true, correct and complete copies of the
following documents:
a) The Declaration of Trust, as in effect on the date hereof;
b) The Registration Statement filed with the Commission under the 1940
Act, including the form of prospectus related to the Fund included
therein;
c) The Advisory Agreement; and
d) Written guidelines, policies and procedures adopted by the Trust.
The Adviser will furnish the Sub-Adviser with all future amendments
and supplements to the foregoing as soon as practicable after such documents
become available. The Adviser shall furnish the Sub-Adviser with any further
documents, materials or information that the Sub-Adviser may reasonably request
in connection with the performance of its duties hereunder.
Sub-Adviser shall not be responsible for compliance with any document,
materials, instruction or other information not provided to Sub-Adviser until a
reasonable time after receipt of same by Sub-Adviser.
The Sub-Adviser shall furnish the Adviser with written certifications,
in such form as the Adviser shall reasonably request, that it has received and
reviewed the most recent version of the
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foregoing documents provided by the Adviser and that it will comply with such
documents in the performance of its obligations under this Agreement.
Section 4. Delivery of Documents to the Adviser. The Sub-Adviser has
furnished, and in the future will furnish, the Adviser with true, correct and
complete copies of each of the following documents:
a) The Sub-Adviser's most recent Form ADV;
b) The Sub-Adviser's most recent balance sheet; and
c) The current Code of Ethics of the Sub-Adviser, adopted pursuant to
Rule 17j-1 under the 1940 Act, and annual certifications regarding
compliance with such Code.
In addition, the Sub-Adviser will furnish the Adviser with (i) a
summary of the results of any future examination of the Sub-Adviser by the
Commission or other regulatory agency with respect to the Sub-Adviser's
activities hereunder; and (ii) copies of its policies and procedures adopted
pursuant to Rule 206(4)-7 under the Advisers Act.
The Sub-Adviser will furnish the Adviser with all such documents as
soon as practicable after such documents become available, to the extent that
such documents have been changed materially. The Sub-Adviser shall furnish the
Adviser with any further documents, materials or information as the Adviser may
reasonably request in connection with Sub-Adviser's performance of its duties
under this Agreement, including, but not limited to, information regarding the
Sub-Adviser's financial condition, level of insurance coverage and any
certifications or sub-certifications which may reasonably be requested in
connection with Fund registration statements, Form N-CSR filings or other
regulatory filings, and which are appropriately limited to Sub-Adviser's
responsibilities under this Agreement.
Section 5. Control by Board. As is the case with respect to the
Adviser under the Advisory Agreement, any investment activities undertaken by
the Sub-Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser on behalf of the Fund, shall at all times be
subject to the direction and control of the Trust's Board.
Section 6. Compliance with Applicable Requirements. In carrying out
its obligations under this Agreement, the Sub-Adviser shall at all times comply
with:
(a) investment guidelines, policies and restrictions established by
the Board that have been communicated in writing to the
Sub-Adviser;
(b) all applicable provisions of the 1940 Act and the Advisers Act,
and any rules and regulations adopted thereunder;
(c) the Registration Statement of the Trust, as it may be amended
from time to time, filed with the Commission under the Securities
Act and the 1940 Act and delivered to the Sub-Adviser;
(d) the provisions of the Declaration of Trust of the Trust, as it may
be amended or supplemented from time to time and delivered to the Sub-Adviser;
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(e) the provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Trust or the Fund, and any rules and
regulations adopted thereunder; and
(f) any other applicable provisions of state or federal law, and any
rules and regulations adopted thereunder.
Section 7. Proxies. The Adviser shall have responsibility to vote
proxies solicited with respect to issuers of securities in which assets of the
Fund are invested from time to time in accordance with the Trust's policies on
proxy voting. The Sub-Adviser will provide, when requested by the Adviser,
information on a particular issuer to assist the Adviser in the voting of a
proxy.
Section 8. Expenses. All of the ordinary business expenses incurred in
the operations of the Fund and the offering of its shares shall be borne by the
Fund unless specifically provided otherwise in this Agreement. The expenses
borne by the Fund include, but are not limited to, brokerage commissions, taxes,
legal, auditing or governmental fees, the cost of preparing share certificates,
custodian, transfer agent and shareholder service agent costs, expense of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to Board and shareholder meetings,
the cost of preparing and distributing reports and notices to shareholders, the
fees and other expenses incurred by the Fund in connection with membership in
investment company organizations and the cost of printing copies of prospectuses
and statements of additional information distributed to the Fund's shareholders.
The Sub-Adviser shall pay its own expenses in connection with the
services to be provided by it pursuant to this Agreement. In addition, the
Sub-Adviser shall be responsible for reasonable out-of-pocket costs and expenses
incurred by the Adviser or the Trust: (a) to amend the Trust's registration
statement (other than as part of a normal annual updating of the registration
statement) or supplement the Fund's prospectus, and circulate the same, solely
to reflect a change in the personnel of the Sub-Adviser responsible for making
investment decisions in relation to the Fund; or (b) to obtain shareholder
approval of a new sub-advisory agreement as a result of a "change in control"
(as such term in defined in Section 2(a)(9) of the ▇▇▇▇ ▇▇▇) of the Sub-Adviser,
or to otherwise comply with the 1940 Act, the Securities Act, or any other
applicable statute, law, rule or regulation, as a result of such change.
Section 9. Compensation. As compensation for the sub-advisory services
provided under this Agreement, the Adviser shall pay the Sub-Adviser fees,
payable monthly, at the annual rates indicated on Appendix B hereto, as such
Schedule may be amended or supplemented as agreed to in writing by the parties
from time to time. It is understood that the Adviser shall be responsible for
the Sub-Adviser's fee for its services hereunder, and the Sub-Adviser agrees
that it shall have no claim against the Trust or the Fund with respect to
compensation under this Agreement.
Section 10. Standard of Care. The Trust and the Adviser will expect of
the Sub-Adviser, and the Sub-Adviser will give the Trust and the Adviser the
benefit of, the Sub-
6
Adviser's best judgment and efforts in rendering its services to the Trust, and
the Sub-Adviser shall not be liable hereunder for any mistake in judgment. In
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Sub-Adviser or
any of its officers, directors, employees or agents, the Sub-Adviser shall not
be subject to liability to the Adviser, to the Trust or to any shareholders in
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security. Notwithstanding the foregoing, the Sub-Adviser
shall be responsible for the accuracy and completeness (and liability for the
lack thereof) of the statements and Data furnished by the Sub-Adviser for use by
the Adviser in the Fund's offering materials (including the prospectus, the
statement of additional information, advertising and sales materials) and proxy
statements that pertain to the Sub-Adviser, the portfolio managers of the Fund
and the investment of the Fund's assets.
Nothing in this Agreement (including Sections 10, 15 or 16) shall be
construed to relieve either the Sub-Adviser or the Adviser of any claims or
liability arising under federal securities laws or any non-waivable provisions
of any other federal or state laws.
Section 11. Exclusivity. The Sub-Adviser hereby agrees that, for the
duration of this Agreement between it and the Adviser, it shall not provide
investment advisory, subadvisory or similar services to any Comparable
Registered Investment Company utilizing the Sub-Adviser's Large Cap Value Equity
investment style and processes benchmarked to the ▇▇▇▇▇▇▇ 1000 Value Index, or
any other substantially similar U.S. large capitalization value index,
substantially as presented to the Board on November 7, 2007 (the "Large Cap
Value Equity Style"). For purposes of this Section 11, a "Comparable Registered
Investment Company" means any investment company registered under the 1940 Act
other than any such company that is engaged in a multi-manager investment
program.
The provisions of the foregoing paragraph shall not prevent the
Sub-Adviser from providing investment advisory, sub-advisory or similar services
to: (a) privately managed institutional accounts or any other type of investment
account that is not a Comparable Registered Investment Company; or (b) any type
of client or account, including any Comparable Registered Investment Company,
using an investment strategy other than the Large Cap Value Equity Style
(collectively, the "Non-Exclusive Services"). Solely with respect to any
Non-Exclusive Services, it is understood and agreed that officers or directors
of the Sub-Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust, including
other investment advisory companies.
It is understood that in compliance with the requirements of this
Section 11 the Sub-Adviser performs investment advisory services for various
clients, including accounts of clients in which the Sub-Adviser or associated
persons have a beneficial interest. In that regard, and subject to the
exclusivity provisions of this Section 11, the Sub-Adviser may give advice and
take action in the performance of its duties with respect to any of its other
clients, which may differ from the advice given, or the timing or nature of
action taken, with respect to the assets of the Fund. Nothing in this Agreement
shall be deemed to impose upon the Sub-Adviser any
7
obligation to purchase or sell for the Fund any security or other property that
the Sub-Adviser purchases or sells for its own accounts or for the account of
any other client.
Any information or recommendations supplied by the Sub-Adviser to the
Adviser or the Trust in connection with the performance of its obligations
hereunder shall be treated as confidential and for use by the Adviser, the Trust
or such persons as they may designate, solely in connection with the Fund,
except as required by applicable law or as otherwise provided hereunder, it
being understood and agreed that the Adviser and the Trust may disclose Fund
portfolio holdings information in accordance with the Trust's policies and
procedures governing the disclosure of Fund portfolio holdings, as amended or
supplemented from time to time. Information supplied by the Adviser or the Trust
to the Sub-Adviser in connection with performing its obligations under this
Agreement shall be treated by the Sub-Adviser as confidential and for use by the
Sub-Adviser solely in connection with the Fund and the performance of the
Sub-Adviser's obligations hereunder.
Section 12. Records. The Sub-Adviser shall, with respect to orders the
Sub-Adviser places for the purchase and sale of portfolio securities of the
Fund, maintain or arrange for the maintenance of the documents and records
required pursuant to Rule 31a-1 under the 1940 Act, as well as trade tickets and
confirmations of portfolio trades, and such other records as the Adviser
reasonably requests to be maintained. All such records shall be maintained in a
form reasonably acceptable to the Adviser and the Trust and in compliance with
the provisions of Rule 31a-1 or any successor rule. All such records will be the
property of the Trust, and will be made available for inspection by the Trust
and its authorized representatives (including the Adviser). The Sub-Adviser
shall promptly, upon the Trust's request, surrender to the Trust those records
that are the property of the Trust or the Fund; provided, however, that the
Sub-Adviser may make and retain copies of any and all such records.
Section 13. Term and Approval. This Agreement shall become effective
with respect to the Fund after it is approved in accordance with the express
requirements of the 1940 Act, and executed by the Trust, Adviser and
Sub-Adviser, for an initial two-year term, and shall thereafter continue from
year to year, provided that the continuation of the Agreement is approved in
accordance with the requirements of the 1940 Act, which currently requires that
the continuation be approved at least once annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as
defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trust's Trustees who
are not parties to this Agreement or "interested persons" (as
defined in the ▇▇▇▇ ▇▇▇) of a party to this Agreement (other than
as Trustees of the Trust), by votes cast in person at a meeting
specifically called for such purpose.
Section 14. Termination. This Agreement may be terminated with respect
to the Fund at any time, without the payment of any penalty, by vote of the
Board or by vote of a majority of the Fund's outstanding voting securities, or
by the Adviser or Sub-Adviser upon sixty (60) days' written notice to the other
party. The notice provided for herein may be waived by the party
8
entitled to receipt thereof. This Agreement shall automatically terminate in the
event of its assignment, the term "assignment" for purposes of this paragraph
having the meaning defined in Section 2(a)(4) of the 1940 Act, as it may be
interpreted by the Commission or its staff in interpretive releases, or applied
by the Commission staff in no-action letters, issued under the 1940 Act.
This Agreement may also be terminated immediately by the Adviser, the
Sub-Adviser or the Trust in the event that a respective party: (i) breaches a
material term of this Agreement; or (ii) commits a material violation of any
governing law or regulation; or (iii) engages in conduct that would have a
material adverse effect upon the reputation or business prospects of a
respective party.
Section 15. Indemnification by the Sub-Adviser. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Trust or the Adviser, or any
of their respective officers, directors, employees, affiliates or agents, the
Trust and the Adviser, respectively, shall not be responsible for, and the
Sub-Adviser hereby agrees to indemnify and hold harmless the Trust and the
Adviser and their respective officers, directors, employees, affiliates and
agents (severally, but not jointly) against any and all losses, damages, costs,
charges, reasonable counsel fees, payments, expenses, liability, claims,
actions, suits or proceedings at law or in equity whether brought by a private
party or a governmental department, commission, board, bureau, agency or
instrumentality of any kind, arising out of or attributable to the willful
misfeasance, bad faith, grossly negligent acts or reckless disregard of
obligations or duties hereunder or the breach of representation and warranty
hereunder on the part of the Sub-Adviser or any of its officers, directors,
employees affiliates or agents. Notwithstanding the foregoing, the Sub-Adviser
shall not be liable hereunder for any losses or damages resulting from the
Sub-Adviser's adherence to the Adviser's written instructions, or for any action
or inaction by the Sub-Adviser consistent with the Standard of Care described in
Section 10 of this Agreement.
Section 16. Indemnification by the Trust and the Adviser. Provided
that the conduct of the Sub-Adviser, its partners, employees, affiliates and
agents is consistent with the Standard of Care described in Section 10 of this
Agreement, the Sub-Adviser shall not be responsible for, and the Trust and the
Adviser (severally, but not jointly) hereby agree to indemnify and hold harmless
the Sub-Adviser, its partners, employees, affiliates and agents against any and
all losses, damages, costs, charges, reasonable counsel fees, payments,
expenses, liability, claims, actions, suits or proceedings at law or in equity
whether brought by a private party or a governmental department, commission,
board, bureau, agency or instrumentality of any kind, arising out of or
attributable to conduct of the party from whom such indemnification is sought
and relating to: (i) the advertising, solicitation, sale, purchase or pledge of
securities, whether of the Fund or other securities, undertaken by the Fund, its
officers, directors, employees, affiliates or agents; (ii) any violations of the
securities laws, rules, regulations, statutes and codes, whether federal or of
any state, by the Fund or the Adviser, respectively, or their respective
officers, directors, employees, affiliates or agents; or (iii) the willful
misfeasance, bad faith, grossly negligent acts or reckless disregard of
obligations or duties hereunder on the part of the Fund or the Adviser,
respectively, or their respective officers, directors, employees, affiliates or
agents.
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Section 17. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
Trust shall be ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and that of the Adviser shall be ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇, and
that of the Sub-Adviser shall be ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
Section 18. Questions of Interpretation. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such terms or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Commission, or interpretations of the Commission or its staff, or
Commission staff no-action letters, issued pursuant to the 1940 Act. In
addition, where the effect of a requirement of the 1940 Act or the Advisers Act
reflected in any provision of this Agreement is revised by rule, regulation or
order of the Commission, such provision shall be deemed to incorporate the
effect of such rule, regulation or order. The duties and obligations of the
parties under this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware to the extent that state law is not
preempted by the provisions of any law of the United States heretofore or
hereafter enacted.
Section 19. Amendment. 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. If shareholder approval of an amendment is required
under the 1940 Act, no such amendment shall become effective until approved by a
vote of the majority of the outstanding shares of the Fund. Otherwise, a written
amendment of this Agreement is effective upon the approval of the Board, the
Adviser and the Sub-Adviser.
Section 20. ▇▇▇▇▇ Fargo Name. The Sub-Adviser and the Trust each agree
that the name "▇▇▇▇▇ Fargo," which comprises a component of the Trust's name, is
a property right of the parent of the Adviser. The Trust agrees and consents
that: (i) it will use the words "▇▇▇▇▇ Fargo" as a component of its corporate
name, the name of any series or class, or all of the above, and for no other
purpose; (ii) it will not grant to any third party the right to use the name
"▇▇▇▇▇ Fargo" for any purpose; (iii) the Adviser or any corporate affiliate of
the Adviser may use or grant to others the right to use the words "▇▇▇▇▇ Fargo,"
or any combination or abbreviation thereof, as all or a portion of a corporate
or business name or for any commercial purpose, other than a grant of such right
to another registered investment company not advised by the Adviser or one of
its affiliates; and (iv) in the event that the Adviser or an affiliate thereof
is no longer acting as investment adviser to the Fund, the Trust shall, upon
request by the Adviser, promptly take such action as may be necessary to change
its corporate name to one not containing the words "▇▇▇▇▇ Fargo" and following
such change, shall not use the words "▇▇▇▇▇ Fargo," or any combination thereof,
as a part of its corporate name or for any other commercial purpose, and shall
use its best efforts to cause its trustees, officers and shareholders to take
any and all actions that the Adviser may request to effect the foregoing and to
reconvey to the Adviser any and all rights to such words. The Sub-Adviser may
include the ▇▇▇▇▇ Fargo Funds in its representative client list.
10
Section 21. Risk Acknowledgement. The Sub-Adviser does not guarantee
the future performance of the Fund, 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 Fund. Each of the Trust and the Adviser understand
that investment decisions made for the Fund by the Sub-Adviser are subject to
various market, currency, economic and business risks, and that those investment
decisions will not always be profitable. The Sub-Adviser will only be
responsible for providing the advisory services specified in Section 2(a) above.
Section 22. Authority to Execute Agreement. Each of the individuals
whose signature appears below represents and warrants that he or she has full
authority to execute this Agreement on behalf of the party on whose behalf he or
she has affixed his or her signature to this Agreement. The Trust and the
Adviser will deliver to the Sub-Adviser such evidence of its authority with
respect to this Agreement as Sub-Adviser may reasonably require. The Sub-Adviser
will deliver to the Trust and the Adviser such evidence of its authority with
respect to this Agreement as the Trust or the Adviser may reasonably require.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in triplicate by their respective officers on the day and year first
written above.
▇▇▇▇▇ FARGO FUNDS TRUST
on behalf of the Fund
By:
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
Assistant Secretary
▇▇▇▇▇ FARGO FUNDS MANAGEMENT, LLC
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
PHOCAS FINANCIAL CORPORATION
By:
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
CEO and President
12
APPENDIX A
PHOCAS FINANCIAL CORPORATION
SUB-ADVISORY AGREEMENT
▇▇▇▇▇ FARGO FUNDS TRUST
Funds Trust Funds
Large Company Value Fund
(formerly, Dividend Income Fund)
Approved by the Board of Trustees: November 7, ▇▇▇▇
▇-▇
▇▇▇▇▇▇▇▇ ▇
PHOCAS FINANCIAL CORPORATION
SUB-ADVISORY AGREEMENT
FEE AGREEMENT
▇▇▇▇▇ FARGO FUNDS TRUST
This fee agreement is effective as of the 21st day of March, 2008, by
and among ▇▇▇▇▇ Fargo Funds Trust (the "Trust"), ▇▇▇▇▇ Fargo Funds Management,
LLC (the "Adviser") and Phocas Financial Corporation (the "Sub-Adviser").
WHEREAS, the parties have entered into an Investment Sub-Advisory
Agreement ("Sub-Advisory Agreement") whereby the Sub-Adviser provides management
and other services to the series of the Trust listed in Appendix A to the
Sub-Advisory Agreement (the "Fund"); and
WHEREAS, the Sub-Advisory Agreement provides that the fees to be paid
to the Sub-Adviser are to be as indicated on this Appendix B;
NOW THEREFORE, the parties agree that the fees to be paid to the
Sub-Adviser under the Sub-Advisory Agreement shall be calculated and paid on a
monthly basis by applying the annual rates indicated below to the average daily
net assets of the Fund throughout the month:
Fund Name Sub-Advisory Rate
-------------------------------- -------------------
Large Company Value Fund First $100M 0.29%
(formerly, Dividend Income Fund) Next $150M 0.26%
Next $750M 0.23%
Over $1B 0.20%
If the Sub-Adviser shall provide management and other services for
less than the whole of a month, the foregoing compensation shall be prorated
based on the number of days in the month that such Sub-Adviser provided
management and other services to the Fund.
A-2
The foregoing fee schedule is agreed to as of this 21st day of March,
2008, and shall remain in effect until agreed and changed in writing by the
parties.
▇▇▇▇▇ FARGO FUNDS TRUST
on behalf of the Fund
By:
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
Assistant Secretary
▇▇▇▇▇ FARGO FUNDS MANAGEMENT, LLC
By: ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
PHOCAS FINANCIAL CORPORATION
By:
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
CEO and President
A-3
