INVESTMENT SUB-ADVISORY AGREEMENT
AMONG XXXXX FARGO FUNDS TRUST,
XXXXX FARGO FUNDS MANAGEMENT, LLC, THE ROCK CREEK
GROUP, LP AND PINE RIVER CAPITAL MANAGEMENT L.P.
This AGREEMENT is made as of this 1st day of April
2014, by and among Xxxxx Fargo Funds Trust (the
"Trust"), a business trust organized under the laws of
the State of Delaware with its principal place of
business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxx 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 000
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, The Rock Creek Group, LP, a limited partnership
organized under the laws of the State of Delaware, with
its principal place of business at 0000 Xxxxxxxxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000 (the
"Sub-Adviser") and Pine River Capital Management L.P.,
a limited partnership organized under the laws of the
State of Delaware, with its principal place of business at
000 Xxxxxxx Xxxxxxx, Xxx. 000, Xxxxxxxxxx, Xxxxxxxxx
00000 (the "Manager").
WHEREAS, the Adviser, the Sub-Adviser and the
Manager are each registered investment advisers under
the U.S. Investment Advisers Act of 1940, as amended
(the "Advisers Act"); and
WHEREAS, the Trust is registered under the U.S.
Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end, series management
investment company; 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 and as amended and supplemented
from time to time, between the Adviser and the Trust
(the "Advisory Agreement"); and
WHEREAS, the Adviser, acting pursuant to the Advisory
Agreement and with the approval of the Trust's Board,
has retained the Sub-Adviser to provide specified
investment advisory services to each series of the Trust
listed in Appendix A hereto as it may be amended or
supplemented from time to time (the "Fund(s)") under
the terms of an investment sub-advisory agreement,
dated April 1, 2014 and as amended or supplemented
from time to time, among the Trust, the Adviser and the
Sub-Adviser (the "Sub-Advisory Agreement"); and
WHEREAS, the Adviser and the Sub-Adviser wish to
retain the Manager, and the Trust's Board has approved
the retention of the Manager, to assist the Adviser and
the Sub-Adviser in the provision of investment advisory
services to the Fund(s), and
WHEREAS, the Manager is willing to provide those
services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust, the Adviser, the
Sub-Adviser and the Manager agree as follows:
Section 1. The Trust. 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 U.S.
Securities and Exchange Commission (the
"Commission") under the 1940 Act and the U.S.
Securities Act of 1933 (the "Securities Act"), including
any representations made in the prospectus and
statement of additional information relating to the
Fund(s) contained therein and as may be supplemented
from time to time, all in such manner and to such
extent as may from time to time be authorized by the
Board.
Section 2. Appointment of Manager. Subject to
the direction and control of the Board, the Adviser has
been appointed to manage the investment and
reinvestment of the assets of the Fund(s) and to provide
certain management and related services specified in
the Advisory Agreement with respect to the Fund(s).
Subject to the direction and control of the
Board and the Adviser, the Sub-Adviser has been
appointed to manage the investment and reinvestment
of the assets of the Fund(s) and to provide the
management and related services specified in the Sub-
Advisory Agreement, all in such manner and to such
extent as may be directed from time to time by the
Board or the Adviser.
Subject to the direction and control of the
Board, the Adviser and the Sub-Adviser, and with the
oversight of the Adviser and the Sub-Adviser, the
Manager is hereby appointed and agrees to manage the
investment and reinvestment of that portion of the
assets of the Fund(s) allocated to it from time to time by
the Board, the Adviser or the Sub-Adviser and
communicated to the Manager, as described herein
(the "Manager Portion") and to provide the
management and related services specified herein, all in
such manner and to such extent as may be directed
from time to time by the Board, the Adviser or the Sub-
Adviser. Without limiting the generality of the
foregoing, the Board, the Adviser or the Sub-Adviser
may direct the Manager's provision of management
services with respect to the Manager Portion by
delivering written investment guidelines, investment
policies and investment restrictions (as amended from
time to time, the "Investment Guidelines"), provided
that no material changes to the Manager's relative
value investment strategy employed for the Manager
Portion with respect to the principal asset class and the
principal market capitalization(s) of securities in which
the strategy invests may be imposed without the
Manager's consent, which shall not be unreasonably
withheld. The Manager shall manage the investment
and reinvestment of the Manager Portion in accordance
with the Investment Guidelines.
The investment authority granted to the Manager with
respect to the Manager Portion shall include only the
authority to make investment decisions with regard to
the investment, reinvestment, and disposition of assets
held by the Fund(s) in the Manager Portion and to
exercise whatever powers the Trust may possess with
respect to any of the assets in the Manager Portion,
including, but not limited to, the power to exercise
rights, options, warrants, conversion privileges,
redemption privileges, to borrow securities, to sell
securities short and to tender securities pursuant to a
tender offer. The Manager shall not, however, be
responsible for voting proxies, for investigating,
initiating, supervising, monitoring or otherwise
participating in class actions and/or other litigation or
legal proceedings on behalf of the Fund(s), but will
provide such assistance as is reasonably requested by
the Adviser or Sub-Adviser. To the extent that any
communication directing the provision of management
services with respect to the Manager Portion are made
or delivered pursuant to this Agreement by either the
Adviser or the Sub-Adviser, such communications or
instruction, unless otherwise specified, shall be deemed
to have been made by both the Adviser and the Sub-
Adviser.
Section 3. Duties and Representations and
Warranties of the Manager.
(a) The Manager shall make all decisions
with respect to purchases and sales of securities and
any other investment assets and whether to convert,
borrow, lend or exchange, securities, instruments, and
property for the Manager Portion of the Fund(s). To
carry out such decisions, the Manager 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, issue instructions and execute
documentation with respect to those transactions of
the Fund(s) with respect to the Manager Portion
thereof. In all purchases, sales and other transactions in
securities and other investment assets for the Manager
Portion of the Fund(s), the Manager is authorized to
exercise full discretion and act for the Trust and instruct
the custodian of the Fund(s) (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.
(b) The Manager acknowledges that the
Fund(s) and other mutual funds advised by the Adviser
(collectively, the "fund complex") may engage in
transactions with certain sub-advisers or other
managers 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 Manager hereby agrees that
it will not consult with any other sub-adviser or
manager of a fund in the fund complex, or an affiliated
person of a sub-adviser or manager, concerning
transactions for a fund in securities or other fund
assets. With respect to a multi-managed Fund(s), the
Manager shall be limited to managing only the Manager
Portion and shall not consult with another manager as
to any other portion of the Fund(s)' portfolio concerning
transactions for the Fund(s) in securities or other Fund
assets. Notwithstanding the foregoing, nothing herein
shall be deemed to prohibit consultations between (i) a
Manager that is not an affiliated person of the Adviser
or the Sub-Adviser and a sub-adviser or manager that is
an affiliated person of the Adviser or the Sub-Adviser or
(ii) a Manager that is an affiliated person of the Adviser
or Sub-Adviser and any other sub-adviser or manager.
(c) The Manager will report to the Board at
each regular meeting thereof, which Manager is
requested to attend, all material changes in the
Manager Portion of the Fund(s) since the prior report,
and will also keep the Board informed of important
developments affecting the Manager Portion of the
Fund(s) and the Manager, and on its own initiative will
furnish the Board from time to time with such
information as the Manager may believe appropriate,
whether concerning the individual companies whose
securities are held by the Manager Portion of the
Fund(s), the industries in which they engage, or the
economic, social or political conditions prevailing in
each country in which the Manager Portion of the
Fund(s) maintains investments. At the request of the
Adviser or the Sub-Adviser, the Manager shall review
draft shareholder reports and annual updates to
prospectuses and other documents and provide timely
comments thereon with respect to the Manager and
the Manager Portion, provided, however, that the
Manager receives an appropriate advance written
request for such comments. The Manager will also
furnish the Board with such statistical and analytical
information with respect to securities or other assets in
the Manager Portion of the Fund(s) as the Manager may
believe appropriate or as the Board, the Adviser or the
Sub-Adviser reasonably may request. In making
purchases and sales of securities for the Manager
Portion of the Fund(s), the Manager will comply with
the provisions, policies, restrictions and other
requirements set forth in Section 7 of this Agreement,
and the investment objectives, policies and restrictions
of the Fund(s).
(d) The Manager shall promptly notify the
Adviser and the Sub-Adviser (i) of any changes regarding
the Manager that would impact disclosure in the Trust's
Registration Statement, including, without limitation,
any change in the personnel of the Manager responsible
for making investment decisions for the Fund(s), (ii) of
any violation of any requirement, provision, policy or
restriction that the Manager is required to comply with
under Section 7 of this Agreement, and (iii) upon
Manager becoming aware that it is, or likely will
become, subject to any statutory disqualification
pursuant to Section 9 of the 1940 Act or any other
event otherwise that prevents the Manager from
performing its duties pursuant to this Agreement. The
Manager shall notify the Adviser and the Sub-Adviser of
any change in "control" (as such term in defined in
Section 2(a)(9) of the 0000 Xxx) of the Manager
promptly after the reasonable likelihood of such event
becomes known to Manager, unless the Manager is
legally or contractually prohibited from doing so, in
which case the Manager shall so notify the Adviser and
the Sub-Adviser at the earlier of the date on which such
prohibition no longer applies and the occurrence of any
change in control. The Manager shall, within two
business days, notify the Adviser, the Sub-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 Sub-Adviser, the Fund(s) or the Trust. The Manager
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(s) with respect to the Manager
Portion.
(e) The Manager 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 Manager will be made available to
consult with the Adviser, the Sub-Adviser, the Trust and
the Board at reasonable times and upon reasonable
notice concerning the Manager's performance of
services hereunder or any other aspect of the business
of the Trust and the Fund(s). Without limiting the
generality of the foregoing, appropriate personnel of
the Manager will provide reasonable assistance to the
Adviser and/or the Board in the valuation of securities
or other investment assets held within the Manager
Portion of the Fund(s) in accordance with the Trust's
Procedures for the Valuation of Portfolio Securities.
The parties acknowledge that the Manager and a Fund
may use different pricing vendors, which may result in
valuation discrepancies.
(f) The Manager is not authorized to subcontract
or otherwise delegate any of the services
contemplated hereby to any other person who is not a
supervised person or access person of the Manager
without the prior written consent of the Trust, the
Adviser and the Sub-Adviser, which consent may be
withheld for any reason. Any attempt to sub-contract
or delegate any such services without such consent shall
be invalid. Further, Manager shall ensure that all
services to be performed by Manager pursuant to this
Agreement shall be conducted by "supervised persons"
of Manager, as that term is defined in the Advisers Act.
(g) The Manager represents and warrants
to the Adviser, the Sub-Adviser and the Trust that: (i)
the Manager is registered as an investment adviser
under the Advisers Act and is registered or licensed as
an investment adviser under the laws of all jurisdictions
in which its activities require it to be so registered or
licensed; (ii) the Manager is duly organized and validly
existing and has requisite power and authority to enter
into and perform its obligations under this Agreement;
and (iii) the execution, delivery and performance of this
Agreement by the Manager has been duly authorized by
appropriate action of the Manager.
(h) Each of the Adviser and Sub-Adviser represents
and warrants to the Manager that: it is registered as an
investment adviser under the Advisers Act and is
registered or licensed as an investment adviser under
the laws of all jurisdictions in which its activities require
it to be so registered or licensed.
(i) Each of the Adviser, Sub-Adviser and the Trust
represents and warrants to the Manager that: (i) it is
duly organized and validly existing and has requisite
power and authority to enter into and perform its
obligations under this Agreement; and (ii) the
execution, delivery and performance of this Agreement
by the Adviser, Sub-Adviser and the Trust has been duly
authorized by appropriate action of the Adviser, Sub-
Adviser and the Trust.
(j) The Trust represents that it will claim an
exclusion with respect to the Fund(s) from the
definition of a "commodity pool operator" pursuant to
Rule 4.5 of the Commodity Exchange Act of 1974, as
amended, with respect to the Fund(s) at the
commencement of its operations.
Section 4. Delivery of Documents to the Manager. The
Adviser or the Sub-Adviser has furnished the Manager
with true, correct and complete copies of the following
documents:
(a) The Declaration of Trust and By-Laws of the
Trust, if any, as in effect on the date hereof;
(b) The Registration Statement filed with the
Commission under the 1940 Act, including the
prospectuses related to the Fund(s) included therein;
(c) The Advisory Agreement and the Sub-Advisory
Agreement;
(d) Resolutions of the Board as may be adopted
from time to time that materialy affect the Manager's
services to the Manager Portion provided pursuant to
this Agreement; and
(e) Written guidelines, policies and procedures
adopted by the Trust that are applicable to the Fund(s)
and the Investment Guidelines.
The Adviser or the Sub-Adviser will furnish the Manager
with all future amendments and supplements to the
foregoing as soon as practicable after such documents
become available. The Adviser or the Sub-Adviser shall
furnish the Manager with any further documents,
materials or information that the Manager may
reasonably request in connection with the performance
of its duties hereunder. For the avoidance of doubt,
Manager shall not be responsible for compliance with
any future amendment or supplement to the foregoing
or any further documents, materials or information
until Manager has received and had a reasonable
opportunity to comply their requirements.
The Manager shall furnish the Adviser or the Sub-
Adviser with written certifications, in such form as the
Adviser or the Sub-Adviser shall reasonably request,
that it has received and reviewed the most recent
version of the foregoing documents provided by the
Adviser or the Sub-Adviser and that it will comply with
such documents in the performance of its obligations
under this Agreement.
Section 5. Delivery of Documents to the Adviser and
the Sub-Adviser. The Manager has furnished, and in the
future will furnish, the Adviser and the Sub-Adviser with
true, correct and complete copies of each of the
following documents:
(a) The Manager's most recent Form ADV;
(b) The current Code of Ethics of the Manager,
adopted pursuant to Rule 17j-1 under the 1940 Act, and
annual certifications regarding compliance with such
Code; and
(c) Copies of its policies and procedures adopted
pursuant to Rule 206(4)-7, under the Advisers Act, as
amended from time to time, and a copy of the report
memorializing the results of the annual review of the
adequacy of such policies and procedures which may be
redacted with respect to information regarding the
names of supervised persons, client names, specific
securities, matters subject to attorney client privilege
and the details of compliance matters (such report, the
"Annual Compliance Review Report"), provided the
Manager has furnished, and in the future will furnish,
true, correct and complete copies of the Annual
Compliance Review Report solely to the Adviser and the
Board, who may share such Annual Compliance Review
Report with with their professional advisers, auditors
and regulatory authorities only and not with the Sub-
Adviser or any other parties.
In addition, to the extent permitted by applicable law or
regulation, the Manager will furnish the Adviser and the
Sub-Adviser with a summary of the material results of
any examination of the Manager by the Commission or
other regulatory agency with appropriate jurisdiction
over the Manager and with respect to the Manager's
investment management activities.
The Manager will furnish the Adviser and the Sub-
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 Manager shall furnish the Adviser and the Sub-
Adviser with any further documents, materials or
information as the Adviser or the Sub-Adviser may
reasonably request in connection with the Manager's
performance of its duties under this Agreement,
including, but not limited to, information regarding the
Manager's financial condition similar to that provided
during the Adviser and Sub-Adviser's initial diligence of
Manager, level of insurance coverage, code of ethics
compliance, conflict mitigation practices, and any
certifications or sub-certifications which may
reasonably be requested in connection with Fund(s)
registration statements, Form N-CSR filings or other
regulatory filings, and in connection with the
consideration of the continuation of this Agreement for
approval as set forth in Section 15 hereof.
Section 6. Control by Board. As is the case
with respect to the Adviser under the Advisory
Agreement, and the Sub-Adviser under the Sub-
Advisory Agreement, any investment activities
undertaken by the Manager pursuant to this
Agreement, as well as any other activities undertaken
by the Manager on behalf of the Fund(s), shall at all
times be subject to the direction and control of the
Trust's Board.
Section 7. Compliance with Applicable
Requirements. In carrying out its obligations under this
Agreement, the Manager shall at all times comply with:
(a) all applicable provisions of the 1940 Act
and the Advisers Act, and any rules and regulations
adopted thereunder;
(b) the provisions of the registration
statement of the Trust, as it may be amended or
supplemented from time to time and filed with the
Commission under the Securities Act and the 1940 Act;
(c) the provisions of the Declaration of
Trust of the Trust, as it may be amended or
supplemented from time to time;
(d) the provisions of any By-laws of the
Trust, if adopted and as they may be amended from
time to time, resolutions of the Board provided to the
Manager pursuant to Section 4(d) above, the applicable
provisions of written guidelines, policies and procedures
adopted by the Trust or the Board, and the Investment
Guidelines;
(e) With respect to the Manager's Portion
only, the provisions of the U.S. Internal Revenue Code
of 1986, as amended, applicable to the Trust or the
Fund(s); and
(f) any other applicable provisions of state
or federal law.
For purposes of clarification and without
limiting the foregoing, the parties agree that the
obligations of the Manager with respect to the
foregoing will not require the Manager to comply with
such provisions of law that apply specifically to the
management of the Fund(s)' assets or operation of the
Fund(s) as a whole and not individually to the Manager
Portion. Additionally and for the avoidance of
doubt, the Manager shall not be responsible for
compliance with any future amendment or supplement
of the documents listed in Sections 7(b),(c) or (d) or any
further documents, materials or information, unless the
Manager has received such items and had a reasonable
opportunity to comply with their requirements.
In addition, without limiting the generality of
the foregoing, the Manager agrees that: (i) any code of
ethics adopted by the Manager must comply with Rule
17j-1 under the 1940 Act and Rule 204A-1 under the
Advisers Act, as they may be amended from time to
time, and, if requested by the Trust, the Adviser or the
Sub-Adviser, any practices regarding personal investing
as may be set out in any interpretive release or
guidance issued by the Commission or its staff, (ii) the
Adviser and the Trust may disclose Fund(s) portfolio
holdings information (including with respect to the
Manager Portion) in accordance with the Trust's policies
and procedures governing the disclosure of Fund(s)
portfolio holdings, as amended or supplemented from
time to time, and as required by applicable law or as
otherwise provided hereunder, and (iii) the Manager
will not use, nor will it seek to obtain without
appropriately restricting itself pursuant to Manager's
compliance policies and procedures, material nonpublic
information concerning portfolio companies in
connection with performing its duties hereunder.
Section 8. Proxies. The Adviser shall have
responsibility to vote proxies solicited with respect to
issuers of securities in which assets of the Manager
Portion of the Fund(s) are invested from time to time in
accordance with the Trust's policies on proxy voting.
The Manager will provide, when reasonably requested
by the Adviser, information on a particular issuer held in
the Manager Portion to assist the Adviser in the voting
of a proxy.
Section 9. Broker-Dealer Relationships. The
Manager is responsible for the purchase and sale of
securities for the Manager Portion of the Fund(s),
broker-dealer selection, and negotiation of brokerage
commission rates. Subject to the remainder of this
paragraph, the Manager's primary consideration in
effecting a security transaction will be to seek to obtain
the best price and execution under the circumstances.
In selecting a broker-dealer to execute each particular
transaction for the Manager Portion of the Fund(s), the
Manager will consider such factors it considers to be
relevant to the transaction, which are expected to
include, among other things: the best net price
available, the reliability, integrity and financial condition
of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected
contribution of the broker-dealer to the Fund(s) on a
continuing basis. Accordingly, the price to the Fund(s)
in any transaction may be less favorable than that
available from another broker-dealer if the Manager
determines in good faith that the difference is
reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies as
the Board may from time to time determine, the
Manager shall not be deemed to have acted unlawfully
or to have breached any duty created by this
Agreement or otherwise solely by reason of having
caused the Fund(s) with respect to the Manager Portion
to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of
commission for effecting a portfolio investment
transaction in excess of the amount of commission
another broker or dealer would have charged for
effecting that transaction, if the Manager 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 or dealer,
viewed in terms of either that particular transaction or
the overall responsibilities of the Manager with respect
to the Manager Portion of the Fund(s) and to other
clients of the Manager. The Manager is further
authorized to allocate the orders placed by it on behalf
of the Manager Portion of the Fund(s) to brokers and
dealers who provide brokerage and research services
within the meaning of Section 28(e) of the Securities
Exchange Act of 1934 and in compliance therewith.
Such allocation shall be in such amounts and
proportions as the Manager shall determine and the
Manager will report on said allocations regularly to the
Board, indicating the brokers to whom such allocations
have been made and the basis therefor.
Provided the investment objective of the Manager
Portion of the Fund(s) is adhered to, the Manager may
aggregate sales and purchase orders of securities for
the Manager Portion of the Fund(s) with similar orders
being made at approximately the same time for other
portfolios managed by the Manager, if, in the
Manager's reasonable judgment, such aggregation will
result in an overall economic benefit to the Fund(s). In
accounting for such aggregated order, price and
commission shall be averaged on a per bond or share
basis daily. The Trust and the Adviser acknowledge that
the Manager's determination of such economic benefit
to the Fund(s) may be based on an evaluation that the
Fund(s) is benefited by relatively better purchase or
sales price, lower commission expenses and beneficial
timing of transactions, the Manager's fiduciary duty to
fairly allocate trading opportunities among its clients, or
a combination of these and other factors. The
allocation of securities so purchased or sold shall be
made by the Manager in the manner that the Manager
considers to be most equitable and consistent with its
fiduciary obligations to the Fund(s) and other clients
over time. The Manager represents and acknowledges
that it is solely responsible for complying, and agrees
that it shall comply, with any and all applicable
pronouncements of the Commission or its staff with
respect to the requirements for aggregating trades as
may be set out in any interpretive release and/or noaction
letters issued by the Commission or its staff. The
Manager shall not be responsible for any acts or
omissions by any broker or dealer, provided that the
Manager did not act with gross negligence or willful
misconduct in the selection of such broker or dealer.
The Manager shall not engage in any transactions for
the Manager Portion of the Fund(s) with or through any
broker-dealer that is an affiliated person of the
Manager or that is described in writing to the Manager
as being an affiliated person of the Adviser or the Sub-
Adviser except in compliance with all applicable
regulations of the Commission and the applicable
policies and procedures of the Trust governing such
transactions.
Section 10. Expenses of the Fund(s). All of the
ordinary business expenses incurred in the operations
of the Fund(s) and the offering of their shares shall be
borne by the Fund(s) unless specifically provided
otherwise in this Agreement. These expenses borne by
the Fund(s) include, but are not limited to, brokerage
commissions, spreads, 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 trustee
and shareholder meetings of the Trust/Fund(s), the cost
of preparing and distributing reports and notices to
shareholders, the fees and other expenses incurred by
the Fund(s) 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 Manager shall pay its own expenses in
connection with the services to be provided by it
pursuant to this Agreement. In addition, the Manager
shall be responsible for reasonable out-of-pocket costs
and expenses incurred by the Adviser, the Sub-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)' prospectuses and/or statement of
additional information, and circulate the same, solely to
reflect a change in the personnel of the Manager
responsible for making investment decisions in relation
to the Fund(s); (b) to obtain shareholder approval, if
required, 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 0000 Xxx) of the Manager (which
may include, without limitation, the costs of preparing,
printing and mailing a proxy statement for the
shareholder meeting and proxy solicitation services,
among others), 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; or (c)
to obtain Board approval of a new sub-advisory
agreement as a result of a change of the type described
in clause (b) if the Manager requests that approval be
sought at a special, as opposed to a regularly scheduled,
Board meeting.
Section 11. Compensation. As compensation
for the sub-advisory services provided under this
Agreement, the Adviser shall pay the Manager fees,
payable monthly, at the annual rates indicated on
Schedule A hereto, as such Schedule may be amended
or supplemented from time to time. It is understood
that the Adviser shall be responsible for the Manager's
fee for its services hereunder, and the Manager agrees
that it shall have no claim against the Trust, the Fund(s)
or the Sub-Adviser with respect to compensation under
this Agreement.
Section 12. Standard of Care; Limitation of
Liability. The Trust, Adviser and Sub-Adviser shall
expect of the Manager, and the Manager will give the
Trust and the Adviser and Sub-Adviser the benefit of,
the Manager's best judgment and efforts in rendering
its services to the Trust, and the Manager 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 Manager or any of its
officers, partners, members, employees, agents,
affiliates or "supervised persons," as that term is
defined in the Advisers Act, the Manager and any of its
officers, partners, members, employees, agents,
affiliates or "supervised persons," as that term is
defined in the Advisers Act, shall not be subject to
liability to the Adviser, Sub-Adviser or 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.
Section 13. Non-Exclusivity. The services of the
Manager to the Sub-Adviser, the Adviser and the Trust
are not to be deemed to be exclusive, and the Manager
shall be free to render investment advisory and
administrative or other services to others (including
other investment companies) and to engage in other
activities. It is understood and agreed that officers,
directors, members, partners, employees or agents of
the Manager and its affiliates 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, trustees, members,
employees or agents of any other firm or trust,
including other investment advisory companies.
It is understood that the Manager performs
investment advisory services for various clients,
including accounts of clients in which the Manager or
supervised persons have a beneficial interest. Except to
the extent necessary to perform its obligations
hereunder, nothing herein shall be deemed to require
the Manager to devote any minimum amount of time or
attention to the management of the Manager Portion.
The Manager 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(s).
Section 14. Records. The Manager shall, with
respect to the placing and allocation of brokerage
orders placed by it for the purchase and sale of portfolio
securities or other investment assets and other
portfolio transactions of the Fund(s) in the Manager
Portion, maintain or arrange for the maintenance of the
documents and records required to be maintained by
the Trust pursuant to Rule 31a-1 under the 1940 Act
and other applicable law or regulation as well as trade
tickets and confirmations of portfolio trades and such
other records as the Adviser or the Fund(s)'
Administrator reasonably requests to be maintained.
All such records shall be maintained in a form
reasonably acceptable to the Fund(s) and in compliance
with the provisions of Rule 31a-1 or any successor rule
or other applicable law or regulation. The Manager
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, any and
all other documents and records relating to the services
provided by the Manager 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 appropriate
jurisdiction over the Trust, including the Commission
and the Internal Revenue Service of the U.S.
Department of Treasury. All such records will be the
property of the Trust, and will be available for
inspection and use by the Trust and its authorized
representatives (including the Adviser and the Sub-
Adviser) at all times during the Manager's normal
business hours. The Manager shall promptly, upon the
request of the Trust or the Trust's authorized
representatives (including the Adviser and the Sub-
Adviser), surrender and deliver to the Fund(s) those
records which are the property of the Trust or any
Fund(s), but may retain copies of such records. The
Manager will promptly notify the Fund(s)' Administrator
if it experiences any difficulty in maintaining the records
in an accurate and complete manner.
Section 15. Term and Approval. This
Agreement shall become effective with respect to the
Fund(s) after it is approved by the Board of Trustees of
the Trust, including by a majority of the Trustees who
are not interested persons of the Trust, and executed by
the Trust, Adviser, Sub-Adviser and Manager, and shall
continue in effect for more than two years from its
effective date, provided that the continuation of this
Agreement is approved in accordance with the
requirements of the 1940 Act, which currently requires
that the continuation be approved at least 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(s) (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
0000 Xxx) 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 16. Termination. As required under the
1940 Act, this Agreement may be terminated with
respect to the Fund(s) at any time, without the payment
of any penalty, by vote of the Trust's Board of Trustees
or by vote of a majority of the Fund(s)' outstanding
voting securities, or by the Adviser, Sub-Adviser or
Manager, on sixty (60) days' written notice to the other
party. The notice provided for herein may be waived by
the party 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 shall
automatically terminate in the event of the termination
of the Advisory Agreement. This Agreement may also
be terminated: (i) immediately by the Adviser, the Sub-
Adviser or the Trust in the event that the Manager
commits a material violation of any governing law or
regulation, and (ii) by the Manager on ten (10) business
days' written notice to the other parties in the event
that the Adviser, the Sub-Adviser or the Trust commits a
material violation of any governing law or regulation.
Section 17. Indemnification by the Manager. In
the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties
hereunder, or obligations or duties to the Trust or a
Fund(s) generally, on the part of the Trust, the Adviser,
or the Sub-Adviser, or any of their respective officers,
partners, members, managers, directors, employees,
affiliates or agents, the Manager agrees to indemnify
and hold the Trust, any Fund(s) of the Trust, the Adviser
and the Sub-Adviser and their respective officers,
partners, members, managers, directors, employees,
affiliates and agents (severally, but not jointly) harmless
from and 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 of the Manager or any of its officers, members,
partners, employees, agents, affiliates or "supervised
persons," as that term is defined in the Advisers Act.
The Manager shall not be liable hereunder for any
losses or damages resulting from the Manager's
adherence to the written instructions of the Adviser,
the Sub-Adviser or the Trust.
Section 18. Indemnification by the Trust, the
Adviser and the Sub-Adviser. In the absence of willful
misfeasance, bad faith, gross negligence or reckless
disregard of duties hereunder, or obligations or duties
to the Trust or a Fund(s) generally, on the part of the
Manager or any of its officers, members, partners,
employees, agents, affiliates or "supervised persons,"
as that term is defined in the Advisers Act, each of the
Trust, the Adviser and the Sub-Adviser hereby agrees to
indemnify and hold harmless the Manager and any of
its officers, members, partners, employees, agents,
affiliates and "supervised persons," as that term is
defined in the Advisers Act, 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 from: (i) the advertising, solicitation,
sale, purchase or pledge of securities, whether of the
Fund(s) or other securities, undertaken by the Fund(s),
their officers, directors, employees, affiliates or agents,
(ii) resulting from any violations of the securities laws,
rules, regulations, statutes and codes, whether federal
or of any state, by the Fund(s), the Adviser or the Sub-
Adviser, respectively, or their officers, directors,
employees, affiliates or agents, or (iii) the willful
misfeasance, bad faith, grossly negligent acts or reckless
disregard of obligations or duties hereunder, or
obligations or duties to the Trust or a Fund(s) generally,
on the part of the Fund(s), the Adviser or the Sub-
Adviser, or their respective officers, directors,
employees, affiliates or agents; provided, however, that
the Sub-Adviser shall have no obligation to indemnify
and hold harmless the Manager with respect to any of
the foregoing matters to the extent that the Sub-
Adviser did not commit such violations, take such
actions or act in such manner. Federal and state
securities laws impose liabilities under certain
circumstances on persons who act in good faith, and
nothing herein or in Section 17 shall constitute a waiver
or limitation of any rights which the Fund(s) may have
and which may not be waived under any applicable
federal and state securities laws.
Section 19. Notices. Any notices under this
Agreement shall be in writing, addressed and delivered
or mailed postage paid to the other parties at such
address as such other parties may designate for the
receipt of such notice. Until further notice to the other
parties, it is agreed that the address of the Trust shall be
000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxx Xxxxxxx, and that of the Adviser
shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: C. Xxxxx Xxxxxxx, and that
of the Sub-Adviser shall be 0000 Xxxxxxxxxxx Xxxxxx,
X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention:
Xxxxxx Xxxxxxx, and that of the Manager shall be 000
Xxxxxxx Xxxxxxx, Xxx. 000, Xxxxxxxxxx, Xxxxxxxxx
00000, Attention: Xxx X'Xxxxx.
Section 20. 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 21. 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 affected Fund(s). Otherwise,
a written amendment of this Agreement is effective
upon the approval of the Board, the Adviser, the Sub-
Adviser and the Manager.
Section 22. Xxxxx Fargo Name. The
Manager shall not, without prior written consent of the
Adviser: (i) use in advertising, publicity or otherwise the
name of "Xxxxx Fargo," including the name of Xxxxx
Fargo & Co. or any of its affiliates, nor any trade name,
trademark, trade device, service xxxx, symbol, logo or
any abbreviation, contraction or simulation thereof
owned by Xxxxx Fargo & Co. or any of its affiliates; or (ii)
represent, directly or indirectly, that any product or any
service provided by the Manager has been approved or
endorsed by Xxxxx Fargo & Co. or any of its affiliates.
The Manager may use the performance of the
Manager Portion in its performance information.
In the event that the Manager is no longer
acting as a sub-adviser to any Fund(s), then the Adviser
shall promptly update the prospectus and statement of
additional information relating to the Fund(s) to clearly
disclose that the Manager is no longer acting in such
capacity and shall update all other marketing materials
to remove references to the Manager at the next
periodic update thereof.
Section 23. Confidentiality. Subject to
the provisions of the last paragraph of Section 7 hereof
and this Section 23, the following shall be treated as
confidential ("Confidential Information"): (i) any
information or recommendations supplied by the
Manager in connection with the performance of its
obligations and duties hereunder, including without
limitation portfolio holdings in the Manager Portion,
financial information or other information relating to
the Manager; and (ii) any records and other information
relative to the Trust, the Fund(s), the Adviser and the
Sub-Adviser which the Manager receives or has access
to in the performance of its duties in connection with
the performance of its obligations and duties
hereunder, including without limitation, prior, present
or potential shareholders and clients, the list of Fund(s)
portfolio securities, instruments and assets and
liabilities of the Fund(s). Except as may be required by
applicable law or rule or as requested by regulatory or
self-regulatory authorities or judicial process,
Confidential Information may be disclosed to or used
only as necessary to carry out the purposes of this
Agreement (including, without limitation, the disclosure
of Confidential Information to, or the use of the same
by, the Fund(s)' Custodian and fund accountant and
other service providers supporting the operation of the
Fund(s), the Fund(s)' auditors, legal advisors to any
party, and such other persons as the Fund(s), the
Adviser and the Sub-Adviser may designate in
connection with the operation and management of the
Manager Portion). The Manager shall not use its
knowledge of Confidential Information regarding the
Fund(s)' portfolio as a basis to place or recommend any
securities or other transactions for its own benefit or
the benefit of others or to the detriment of the Fund(s).
The Manager hereby authorizes the
Fund(s), the Adviser and the Sub-Adviser to use all
related evaluation material, analyses and information
regarding the Manager (other than confidential
information related to the Manager's other funds and
accounts or the Manager's finances) and the investment
program of the Manager Portion of the Fund(s),
including information about portfolio holdings and
positions, in connection with: (i) marketing the Fund(s),
(ii) providing ongoing information to existing Fund(s)
shareholders, and (iii) providing any required regulatory
disclosures.
The confidentiality provisions of this
Section 23 will not apply to any information that: (i) is
or subsequently becomes publicly available without
breach of any obligation owed to another party; (ii)
became known to a party from a source other than
another party, and without breach of an obligation of
confidentiality owed to another party; (iii) is
independently developed by any party without
reference to the information required by this
Agreement to be treated confidentially; or (iv) is used
by any party in order to enforce any of its rights, claims
or defenses under, or as otherwise contemplated in,
this Agreement. Nothing in this Section 23 will be
deemed to prevent a party from disclosing any
information received hereunder pursuant to any
applicable law or in response to a request from a
regulatory, self-regulatory or judicial authority.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in duplicate by their
respective officers on the day and year first written
above.
XXXXX FARGO FUNDS TRUST
on behalf of the Fund(s)
By:
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
Xxxxxx Xxxx
Executive Vice President
THE ROCK CREEK GROUP, LP
By:
Name:
Title:
PINE RIVER CAPITAL MANAGEMENT L.P.
By:
Name:
Title:
APPENDIX A
PINE RIVER CAPITAL MANAGEMENT L.P.
SUB-ADVISORY AGREEMENT
XXXXX FARGO FUNDS TRUST
Xxxxx Fargo Advantage Alternative Strategies Fund
Approval by the Board of Trustees: February 20, 2014
SCHEDULE A
PINE RIVER CAPITAL MANAGEMENT L.P.
INVESTMENT SUB-ADVISORY AGREEMENT
FEE AGREEMENT
XXXXX FARGO FUNDS TRUST
This fee agreement is made as of the 1st day of April
2014, by and among Xxxxx Fargo Funds Trust (the
"Trust"), Xxxxx Fargo Funds Management, LLC (the
"Adviser"), and Pine River Capital Management L.P. (the
"Manager"); and
WHEREAS, the parties and The Rock Creek
Group LP have entered into an Investment Sub-Advisory
Agreement ("Manager Sub-Advisory Agreement")
whereby the Manager provides investment
management with respect to each series of the Trust
listed in Appendix A to the Manager Sub-Advisory
Agreement (the "Fund(s)").
WHEREAS, the Manager Sub-Advisory
Agreement provides that the fees to be paid by the
Adviser to the Manager are to be as agreed upon in
writing by the parties.
NOW THEREFORE, the parties agree that the
fees to be paid by the Adviser to the Manager under the
Manager Sub-Advisory Agreement shall be calculated as
follows on a monthly basis by applying the annual rates
indicated below to the average daily net assets of the
Manager Portion (as defined in the Manager Sub-
Advisory Agreement) of the Fund(s) throughout the
month:
SUB-ADVISORY FEE AS % OF AVG.
FUND NAME DAILY NET ASSETS
-----------------------------------------------------------------------
Xxxxx Fargo Advantage Alternative 1.00
Strategies Fund
-----------------------------------------------------------------------
If the Manager 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 Manager
provided management and other services to the
Fund(s).
No provision of this fee 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.
The foregoing fee schedule is agreed to as of this 1st
day of April 2014, and shall remain in effect until agreed
and changed in writing by the parties.
XXXXX FARGO FUNDS TRUST
on behalf of the Fund(s)
By:
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
Xxxxxx Xxxx
Executive Vice President
PINE RIVER CAPITAL MANAGEMENT L.P.
By:
Name:
Title:
