SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement ("AGREEMENT") is made as of
July 17, 2014, between Rothschild Larch Lane Management Company, a Delaware
limited liability company located at 000 Xxxxxxxxxxx Xxx., X-000, Xxx Xxxxx, XX
00000 ("MANAGER"), and Xxxxxxxxx Management Group, L.L.C., a Delaware limited
liability company located at 00 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000
("SUB-ADVISER").
WITNESSETH:
WHEREAS, The Advisors' Inner Circle Fund III, a Delaware statutory
trust ("TRUST"), is registered under the Investment Company Act of 1940, as
amended ("1940 ACT"), as an open-end management investment company and has
established one or more separate series of shares ("SERIES") with each Series
having its own assets and investment policies; and
WHEREAS, Trust has retained Manager to provide investment advisory
and administrative services to certain of the Series of the Trust pursuant to
an investment advisory agreement dated July 17, 2014 ("INVESTMENT ADVISORY
AGREEMENT"), which agreement specifically provides for the retention of a
sub-adviser to provide the investment advisory services described therein; and
WHEREAS, Manager desires to retain Sub-Adviser to furnish investment
advisory and portfolio management services to the portion of each Series listed
in Schedule A hereto that has been allocated to Sub-Adviser by the Manager and
to the portion of such other Series of Trust hereinafter established as agreed
to from time to time by the parties ("ALLOCATED PORTION"), evidenced by an
addendum to Schedule A (hereinafter "SERIES" shall refer to each Series which
is subject to this Agreement), and the Sub-Adviser is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES AND RESPONSIBILITIES OF THE SUB-ADVISER
INVESTMENT MANAGEMENT SERVICES. Subject to the general oversight of
the Manager, and in accordance with the Series' investment objectives, policies
and restrictions, the Sub-Adviser shall act as the investment subadviser to the
Series and, as such, shall (i) formulate a continuing program for the
investment of the assets of the Allocated Portion in a manner consistent with
the Series' investment objectives, policies and restrictions and the investment
guidelines as provided herein in Schedule B, as it may be amended from time to
time by the mutual agreement of the parties hereto, and (ii) determine from
time to time securities or other assets/instruments to be purchased, sold,
retained, borrowed or lent by the Allocated Portion, and implement those
decisions, including the selection of entities with or through which such
purchases, sales or loans are to be effected; provided, that the Sub-Adviser
will place orders pursuant to its investment determinations either directly
with the issuer or with a broker or dealer. The Sub-Adviser shall determine
what portion of the Allocated Portion's assets will be invested or held
uninvested as cash or cash equivalents. To carry out such obligations, the
Sub-Adviser shall exercise full discretion and act for the Series with respect
to the
Allocated Portion in the same manner and with the same force and effect as the
Series itself might or could do with respect to purchases, sales or other
transactions, as well as with respect to all other such things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions. Notwithstanding the foregoing, the Sub-Adviser shall, upon
written instructions from the Manager, effect such portfolio transactions for
the Allocated Portion as the Manager may from time to time direct; provided
however, that the Sub-Adviser shall not be responsible for any such portfolio
transactions effected upon written instructions from the Manager. No reference
in this Agreement to the Sub-Adviser having full discretionary authority over
the Allocated Portion's investments shall in any way limit the right of the
Manager, in its sole discretion, to establish or revise policies in connection
with the management of the Allocated Portion's assets or to otherwise exercise
its right to control the overall management of the Allocated Portion's assets.
Upon written notice to the Sub-Adviser, the Manager has the right at
any time to reallocate the portion of a Series' assets allocated to the
Allocated Portion pursuant to this Agreement if the Manager deems such
reallocation appropriate.
The Sub-Adviser will select brokers and dealers to effect all
portfolio transactions subject to the conditions set forth herein. The
Sub-Adviser will place all necessary orders with brokers, dealers, or issuers,
and will negotiate brokerage commissions, if applicable. Subject to seeking
best execution, the Sub-Adviser is authorized to enter into executing broker
agreements on behalf of the Series solely with respect to its management of the
Allocated Portion, provided that the Sub-Adviser shall coordinate all such
brokerage execution with the Series' prime broker and custodian. The
Sub-Adviser is directed at all times to seek to execute transactions for the
Allocated Portion in accordance with any written policies, practice or
procedures that may be established by the Board of Trustees of the Trust (the
"BOARD") or the Manager from time to time, consistent with those described in
the Series' prospectus ("PROSPECTUS") and Statement of Additional Information
("SAI"), as each may be amended from time to time, provided such policies,
practice or procedures have been delivered to the Sub-Adviser with reasonably
sufficient time to allow personnel of the Sub-Adviser to process prior to
effecting portfolio transactions. In placing any orders for the purchase or
sale of investments for the Series, in the name of the Allocated Portion or its
nominees, the Sub-Adviser shall use its best efforts to obtain for the
Allocated Portion "best execution", considering all of the circumstances, and
shall maintain records adequate to demonstrate compliance with this
requirement. In no instance will portfolio securities be purchased from or sold
to the Manager or the Sub-Adviser, or any of their affiliated persons, except
in accordance with the 1940 Act, the Investment Advisers Act of 1940, as
amended ("ADVISERS ACT"), and the rules under each, and all other federal and
state laws or regulations applicable to the Trust and the Series.
Unless specifically permitted by the 1940 Act (and the rules
thereunder) and procedures adopted by the Board, on behalf of the Series, the
Sub-Adviser agrees that it will not execute any portfolio transactions for the
Allocated Portion with a broker or dealer which is (i) an affiliated person of
the Series, including the Manager or any sub-adviser for the Series; (ii) a
principal underwriter of the Series' shares; or (iii) an affiliated person of
such an affiliated person or principal underwriter. Each party hereto agrees
that it will provide the other party with a written list of affiliated brokers
and dealers and will, from time to time, update such list as necessary.
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Subject to the appropriate policies and procedures approved by the
Board, the Sub-Adviser may, to the extent authorized by Section 28(e) of the
Securities Exchange Act of 1934, as amended ("EXCHANGE ACT"), cause the
Allocated Portion to pay a broker or dealer that provides brokerage or research
services to the Manager, the Sub-Adviser and the Allocated Portion an amount of
commission for effecting a Series transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines, in good faith, that such amount of
commission is reasonable in relationship to the value of such brokerage or
research services provided viewed in terms of that particular transaction or
the Sub-Adviser's overall responsibilities to the Series or its other advisory
clients.
On occasions when the Sub-Adviser deems the purchase or sale of a
security or other asset/instrument to be in the best interest of the Allocated
Portion as well as other clients of the Sub-Adviser, the Sub-Adviser, to the
extent permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be purchased or sold to attempt to
obtain a more favorable price or lower brokerage commissions and efficient
execution. Allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser in the
manner which the Sub-Adviser considers to be the most equitable and consistent
with its fiduciary obligations to the Allocated Portion and to its other
clients over time.
Upon the Manager's reasonable request, the Sub-Adviser shall provide,
or procure the provision of, reasonable assistance to the Manager, the
custodian or recordkeeping agent for the Trust in order to help such party
determine the value of any assets of the Allocated Portion, consistent with the
procedures and policies stated in the Trust's registration statement on Form
N-1A with respect to the Series, as amended and supplemented from time to time
("REGISTRATION STATEMENT"), and the Trust's Valuation Procedures, as may be
amended and supplemented from time to time. This assistance includes (but is
not limited to): (i) designating and providing access to one or more employees
of the Sub-Adviser or its affiliates who are knowledgeable about the
security/issuer, its financial condition, trading and/or other relevant factors
for valuation, which employees, upon reasonable notice from the Manager, shall
be available for consultation when the Trust's Valuation Committee convenes;
(ii) assisting the Manager or the custodian in obtaining bids and offers or
quotes from broker/dealers or market-makers with respect to securities held by
the Allocated Portion, upon the reasonable request of the Manager or custodian;
(iii) upon the reasonable request of the Manager or the custodian, providing
information related to the pricing of portfolio securities; and (iv)
maintaining records with respect to each instance of securities valuation
assistance provided hereunder, and providing such information to the Manager or
the Trust upon reasonable request, with such records being deemed Trust
records. The parties acknowledge that the Sub-Adviser and the custodian or
recordkeeping agent of the Series may use different pricing vendors, which may
result in valuation discrepancies. Notwithstanding the foregoing, the Manager
understands and agrees that the Board, and not the Sub-Adviser or any of its
affiliates, is ultimately responsible for the valuation of all portfolio
securities or other assets held by the Trust on behalf of the Series.
The Trust, on behalf of the Series, hereby authorizes any entity or
person associated with the Sub-Adviser which is a member of a national
securities exchange to effect or execute any transaction on the exchange for
the account of the Series which is permitted by Section 11(a) of
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the Exchange Act and Rule 11a2-2(T) thereunder, and the Series hereby consents
to the retention of compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
The Sub-Adviser shall discharge the foregoing responsibilities in
compliance with applicable laws and regulations and consistent with the
investment objectives, policies and restrictions of the Series as adopted by
the Board, the investment guidelines set forth in Schedule B hereto, and
subject to such further limitations as the Trust may from time to time impose
on the Series, in each case as provided to the Sub-Adviser with sufficient
prior written notice so as to allow reasonably sufficient time to allow
personnel of the Sub-Adviser to comply.
The Sub-Adviser will be an independent contractor and will have no
authority to act for or represent the Trust, Series or the Manager in any way
or otherwise be deemed an agent of the Trust, Series or the Manager except as
expressly authorized in this Agreement or another writing by the Trust, the
Manager and the Sub-Adviser.
The Manager and the Trust recognize that the Sub-Adviser and its
affiliates have investments of their own and may act as investment managers for
other third parties. The Manager and the Trust also recognize that the
Sub-Adviser may be or become associated with other investment entities and
engage in investment management for other third parties. Except to the extent
necessary to perform its obligations hereunder, nothing herein shall be deemed
to limit or restrict the right of the Sub-Adviser to engage in, or to devote
time and attention to the management of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association. The Sub-Adviser may on occasion
give advice or take action with respect to other investment entities that it
manages that differs from the advice given with respect to the Series. The
Sub-Adviser acknowledges that it has policies and procedures in place to
address any conflicts of interest that may arise from managing the Allocated
Portion and its other investment entities.
1.1 ADMINISTRATIVE SERVICES. The Sub-Adviser shall:
1.1.1 BOOKS AND RECORDS. Assure that all records required to
be maintained and preserved by Trust and/or the Series with respect to
securities transactions of the Allocated Portion are maintained and preserved by
it or on its behalf in accordance with applicable laws and regulations.
1.1.2 REPORTS AND FILINGS. Provide reasonable assistance as
requested in the preparation of (but not pay for) all periodic reports by Trust
or the Series to shareholders of the Series and all reports and filings
required to maintain the registration and qualification of the Series, or to
meet other regulatory or tax requirements applicable to the Series, under
federal and state securities and tax laws. The Sub-Adviser shall review draft
reports to shareholders, Registration Statements and other documents provided
to the Sub-Adviser (or portions thereof), in each case that relate to either
the Sub-Adviser or the Series managed by the Sub-Adviser, provide comments on
such drafts on a timely basis, and provide certifications or sub-certifications
on a timely basis as to the accuracy of the information contained in such
reports or other documents as it relates to the Allocated Portion or the
Sub-Adviser. Sub-Adviser will prepare and cause to be filed in a timely
manner, if required, Form 13F and/or Schedule 13G with respect to securities
held in the Allocated Portion.
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1.1.3 REPORTS TO THE MANAGER AND THE BOARD OF TRUSTEES.
Prepare and furnish to Manager and/or the Board such reports, statistical data
and other information in such form and at such intervals as Manager and/or the
Board may reasonably request; provided that the Sub-Adviser is provided with
such notice of any new report, statistical data or other information as is
reasonably sufficient to allow the Sub-Adviser to respond to such request.
Sub-Adviser shall also make available to the Manager and the Board at
reasonable times the portfolio managers of the Series and other appropriate
personnel as mutually agreed by the Manager and Sub-Adviser, either in person
or, at the mutual convenience of the Manager, the Board and the Sub-Adviser, by
telephone or other electronic media, in order to review the investment
policies, performance and other matters relating to the management of the
Series in respect of the Allocated Portion.
1.1.4 NOTIFICATIONS AND CERTIFICATIONS TO MANAGER. The Sub-
Adviser shall:
(i) Promptly notify the Manager in the event that
the Sub-Adviser or any of its affiliates becomes aware that the Sub-Adviser:
(a) is, or will likely be, subject to a statutory disqualification that
prevents the Sub-Adviser from serving as investment adviser pursuant to this
Agreement; (b) fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which the Sub-Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement; (c) is the subject of an administrative
proceeding or enforcement action by the U.S. Securities and Exchange Commission
(the "SEC") or other regulatory authority; (d) is served or otherwise receives
notice of any action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, public board or body, or governmental authority
(i) involving the affairs of the Trust or the Manager or any of their
affiliates or (ii) which involves the affairs of the Sub-Adviser or its
affiliates; or (e) is involved in any pending litigation or administrative
proceeding brought against the Sub-Adviser or any of its management persons (as
defined in Form ADV), in the case of each of clauses (d)(ii) and (e) that
involves potential wrongdoing on the part of the Sub-Adviser or its affiliates
in providing asset management or investment advisory services or is likely to
have a material adverse effect on the Sub-Adviser's ability to perform its
duties under this Agreement. The Sub-Adviser further agrees to notify the
Series and the Manager promptly of any material fact known to the Sub-Adviser
respecting or relating to the Sub-Adviser or the Series' investment strategy or
tactics that is not contained in the Registration Statement regarding the
Series, or any amendment or supplement thereto, but that is required to be
disclosed therein, and of any statement contained therein that becomes untrue
in any material respect. The Sub-Adviser will notify the Trust, the Manager and
the Board if its chief executive officer or any member of the portfolio
management team named in the Registration Statement for the Series changes, or
if there is, or there is expected to be, an actual change in control or
management of the Sub-Adviser within the meaning of Sections 2(a)(4) and
202(a)(1)-1 under the 1940 Act and Advisers Act, respectively. The Sub-Adviser
will promptly notify the Trust, the Manager and the Board of any change in the
Sub-Adviser's financial condition which could materially impact its abilities
to perform its duties hereunder and of any reduction in the amount of coverage
under the Sub-Adviser's errors and omissions or professional liability
insurance coverage below $10 million per claim and in the aggregate;
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(ii) Provide the Manager, the Trust or the Board
with such information and assurances (including certifications and
sub-certifications) as the Manager, the Trust or the Board may reasonably
request from time to time in order to assist it in complying with applicable
laws, rules and regulations, including requirements in connection with the
Manager's, the Sub-Adviser's or the Board's fulfillment of its responsibilities
under Section 15(c) of the 1940 Act and the preparation and/or filing of the
Registration Statement, Form N-CSRs and Form N-Qs;
(iii) As reasonably requested by the Trust on
behalf of the Trust's officers and in accordance with the scope of
Sub-Adviser's obligations and responsibilities contained in this Agreement,
provide reasonable assistance to the Trust in connection with the Trust's
compliance with the Xxxxxxxx-Xxxxx Act and the rules and regulations
promulgated by the SEC thereunder, and Rule 38a-1 of the 1940 Act.
Specifically, the Sub-Adviser agrees to (a) certify periodically, upon the
reasonable request of the Trust, that with respect to the Allocated Portion and
the Sub-Adviser's provision of portfolio management services hereunder, it is
in material compliance with all applicable "federal securities laws", as
required by Rule 38a-l under the 1940 Act, and Rule 206(4)-7 under the Advisers
Act; (b) upon request and reasonable prior notice, cooperate with third-party
audits arranged by the Trust to evaluate the effectiveness of the Trust's
compliance and internal controls; (c) upon request and reasonable prior notice,
provide the Trust's chief compliance officer with direct access to its chief
compliance officer (or his/her designee); (d) upon request and reasonable prior
notice, provide the Trust's chief compliance officer with periodic reports
related to the Series; (e) promptly provide notice of any material compliance
matters related to the Series; and (f) upon reasonable notice to and reasonable
request, provide the Manager with access to the records relating to such
compliance policies and procedures of the Sub-Adviser as they relate to the
Series; and
(iv) The Sub-Adviser has adopted a written code
of ethics that it reasonably believes complies in all material respects with
the requirements of Rule 17j-1 under the 1940 Act, which it has provided to the
Manager and the Trust. The Sub-Adviser shall take reasonable steps to ensure
that its Access Persons (as defined in the Sub-Adviser's Code of Ethics) comply
in all material respects with the Sub-Adviser's Code of Ethics, as in effect
from time to time. Upon request, the Sub-Adviser shall provide the Trust with
(i) a copy of the Sub-Adviser's current Code of Ethics, as in effect from time
to time, and (ii) a certification that it has adopted procedures reasonably
necessary to prevent Access Persons from engaging in any conduct prohibited by
the Sub-Adviser's Code of Ethics. Annually, the Sub-Adviser shall furnish a
written report, which complies with the requirements of Rule 17j-1, concerning
the Sub-Adviser's Code of Ethics to the Adviser and the Trust's Board. The
Sub-Adviser shall respond to requests for information from the Adviser and the
Trust as to violations of the Code by Access Persons and the sanctions imposed
by the Sub-Adviser. The Sub-Adviser shall promptly notify the Manager and the
Trust of any material violation of the Code, whether or not such violation
relates to a security held by the Allocated Portion.
1.1.5 OTHER SERVICES. The Sub-Adviser shall perform such
other functions of management and supervision as may be reasonably requested by
the Manager or the Trust, and agreed to by the Sub-Adviser.
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2. REPRESENTATIONS
2.1 REPRESENTATIONS OF THE SUB-ADVISER. The Sub-Adviser represents
warrants and agrees that:
(i) It has all requisite power and authority to
enter into and perform its obligations under this Agreement, and has taken all
necessary corporate action to authorize its execution, delivery and performance
of this Agreement;
(ii) It is registered as an investment adviser
under the Advisers Act and will continue to be so registered during the term of
this Agreement;
(iii) It has adopted and implemented a written
code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act
(a "CODE OF ETHICS") and has provided the Manager and the Trust with a copy of
such Code of Ethics and will provide copies of any future material amendments
thereto;
(iv) It has adopted and implemented written
policies and procedures, as required by Rule 206(4)-7 under the Advisers Act,
which are reasonably designed to prevent violations of federal securities laws
by the Sub-Adviser, its employees, officers, and agents, and the Manager and
the Trust have been provided or have had the opportunity to inspect a copy or a
summary of such policies and procedures and will be provided or will have the
opportunity to inspect with any future amendments thereto;
(v) It has delivered to the Manager copies of its
Form ADV as most recently filed with the SEC and will provide the Manager and
the Trust with a copy of any future filings of Form ADV or any amendments
thereto;
(vi) It is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement and
will promptly notify the Manager and the Trust of the occurrence of any event
that could disqualify the Sub-Adviser from serving as an investment adviser to
a Series pursuant to Section 9(a) of the 1940 Act or other applicable law, rule
or regulation;
(vii) It shall comply with the laws and
regulations regarding xxxxxxx xxxxxxx;
(viii) It maintains an appropriate level of
errors and omissions or professional liability insurance coverage from an
insurance company that has a minimum credit rating of A- from at least one
national recognized credit rating agency; and
(ix) The Sub-Adviser has reviewed, and will in
the future review, any Sub-Adviser Disclosure (as defined below) contained in
the Registration Statement, summary prospectus, prospectus, statement of
additional information, periodic reports to shareholders, reports and schedules
filed with the Commission (including any amendment, supplement or sticker to
any of the foregoing) and advertising and sales material relating to the Series
(collectively the "DISCLOSURE DOCUMENTS") within a reasonable time following
any such material being furnished to the Sub-Adviser by the Series or the
Series' service providers and represents
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and warrants that, with respect to disclosure about the Sub-Adviser, the manner
in which the Sub-Adviser manages the Allocated Potion and information relating
to the Sub-Adviser (the "SUB-ADVISER DISCLOSURE"), either (a) such Disclosure
Documents contain or will contain, no untrue statement of any material fact and
do not and will not omit any statement of material fact required to be stated
therein or necessary to make the statements therein not misleading, or (b) the
Sub-Adviser will provide such information to the Series or the Manager which,
if incorporated into the Disclosure Documents, would result in the Disclosure
Documents not containing any untrue statement of any material fact or omitting
any statement of material fact required to be stated therein or necessary to
make the statements therein not misleading.
2.2 REPRESENTATIONS OF THE MANAGER: The Manager represents warrants
and agrees that:
(i) It has all requisite power and authority to
enter into and perform its obligations under this Agreement, and has taken all
necessary corporate action to authorize its execution, delivery and performance
of this Agreement; and
(ii) It is registered as an investment adviser
under the Advisers Act and will continue to be so registered during the term of
this Agreement;
(iii) It has adopted and implemented a Code of
Ethics and has provided the Trust with a copy of such Code of Ethics and will
provide copies of any future amendments thereto;
(iv) It has adopted and implemented written
policies and procedures, as required by Rule 206(4)-7 under the Advisers Act,
which are reasonably designed to prevent violations of federal securities laws
by the Manager, its employees, officers, and agents, and the Trust has been
provided a copy or a summary of such policies and procedures and will be
provided with any future amendments thereto;
(v) It is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by the Investment
Advisory Agreement it has entered into with the Trust and will promptly notify
the Sub-adviser of the occurrence of any event that is likely to disqualify the
Manager from serving as an investment adviser to a Series pursuant to Section
9(a) of the 1940 Act or other applicable law, rule or regulation; and
(vi) The Investment Advisory Agreement contains a
representation to the Trust that the Manager will comply, and cause the Series
to comply, in all material respects with the 1940 Act, the Advisers Act and all
other applicable laws and regulation to which it or the Series may be subject,
including, without limitation, Subchapter M of the Internal Revenue Code of
1986, as amended, subject in each case to the obligations of SEI Investments
Global Funds Services ("SEI") as set forth in one or more agreements by and
among SEI and the Trust and/or SEI and the Manager.
3. SUB-ADVISORY FEE
The Manager shall pay to the Sub-Adviser, as compensation for the
Sub-Adviser's services hereunder, a fee, determined as described in Schedule C
that is attached hereto and
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made a part hereof. Such fee shall be computed daily and paid not less than
monthly in arrears by the Manager within 30 days following the month to which
such fee relates. A Series shall have no responsibility for any fee payable to
the Sub-Adviser.
The Sub-Adviser will be compensated based on the Allocated Portion of
Series assets allocated to the Sub-Adviser by the Manager. The method for
determining net assets of an Allocated Portion for purposes hereof shall be the
same as the method for determining net assets for purposes of establishing the
offering and redemption prices of Series shares as described in the Series'
prospectus. In the event of termination of this Agreement, the fee provided in
this Section shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
3.1 EXPENSES
During the term of this Agreement, Sub-Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement other
than (x) the cost of securities (including brokerage commissions, if any)
purchased for the Allocated Portion and (y) investment-related expenses
reasonably incurred by the Sub-Adviser that are directly related to portfolio
transactions and positions for the Allocated Portion (including direct expenses
associated with the Allocated Portion's investments, transfer taxes and
premiums, taxes withheld on foreign dividends, Foreign Account Tax Compliance
Act (FATCA) withholding, investment-related interest expense, borrowing charges
on securities sold short, dividends on securities sold but not yet purchased
and margin fees). Sub-Adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Manager or the Trust to obtain shareholder
approval of a new sub-advisory agreement with the Sub-Adviser as a result of a
change in "control" (as such term is defined in Section 2(a)(9) of the 0000
Xxx) of the Sub-Adviser (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 of 1933, as amended, or any other applicable
statute, law, rule or regulation, as a result of such change.
4. OWNERSHIP AND HOLDING PERIOD OF RECORDS
All records required to be maintained and preserved by the Series
pursuant to the rules or regulations under Section 31(a) of the 1940 Act and
maintained and preserved by the Sub-Adviser on behalf of the Series are the
property of the Series and shall be surrendered by the Sub-Adviser promptly on
request by the Series or the Manager; provided, that the Sub-Adviser may at its
own expense make and retain copies of any such records. The Sub-Adviser agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
such records required to be maintained by Rule 31a-1 under the 1940 Act.
Notwithstanding anything to the contrary, the Sub-Adviser shall be permitted to
retain copies of the Series' books and records at its own cost and expense (and
may retain originals and provide the Series or the Manager with copies to the
extent necessary to comply with Rule 204-2 under the Advisers Act or Rule 31a-1
under the 1940 Act).
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5. TRANSACTIONS AND CUSTODY
The Sub-Adviser shall have the authority to instruct the custodian
designated by the Trust (the "CUSTODIAN"): (i) to pay cash for securities and
other property delivered to the Custodian, (ii) to deliver securities and other
property against payment for the Series, and (iii) to transfer assets and funds
to such brokerage accounts as the Sub-Adviser may designate, all consistent
with the powers, authorities and limitations set forth herein. The Sub-Adviser
shall not have authority to cause the Custodian to deliver securities and other
property or pay cash to the Sub-Adviser except as expressly provided herein.
All transactions will be consummated by payment to or delivery by the
Custodian, or such depositories or agents as may be designated by the Custodian
in writing, of all cash and/or securities due to or from the Allocated Portion,
and the Sub-Adviser shall not have possession or custody thereof. The
Sub-Adviser shall advise the Custodian and confirm in writing to the Trust, to
the Manager and any other designated agent of the Series, including the Series'
administrator, all investment orders for the Allocated Portion placed by it
with brokers and dealers in the manner set forth in Rule 31a-1 under the 1940
Act and as soon as practicable after the close of business each day but no
later than 11:00 a.m. Eastern time the following business day. For purposes of
the foregoing sentence, communication via electronic means will be acceptable
as agreed to in writing from time to time by the Manager. The Trust shall issue
to the Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Sub-Adviser.
6. REPORTS TO SUB-ADVISER
Manager shall furnish or otherwise make available to the Sub-Adviser
such copies of the Registration Statement, financial statements, proxy
statements, reports, and other information relating to the Series' business and
affairs as the Sub-Adviser may, at any time or from time to time, reasonably
require in order to discharge its obligations under this Agreement or under
applicable law or regulation.
7. CONFIDENTIALITY
Sub-Adviser will not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as
expressly authorized in this Agreement or as reasonably required to execute
transactions on behalf of the Series, and will keep confidential any non-public
information obtained directly as a result of this service relationship, and the
Sub-Adviser shall disclose such non-public information only if the Manager or
the Board have authorized such disclosure by prior written consent, or if such
information is or hereafter otherwise is known by the Sub-Adviser or has been
disclosed, directly or indirectly, by the Manager or the Trust to others, or
becomes ascertainable from public or published information or trade sources, or
if such disclosure is expressly required or requested by applicable federal,
state or other governmental regulatory authorities or self-regulatory
organizations, or to the extent such disclosure is reasonably required by
auditors or attorneys of the Sub-Adviser in connection with the performance of
their professional services or as may otherwise be contemplated by this
Agreement. Sub-Adviser shall not disclose information regarding characteristics
of the Series or Allocated Portion, trading history, portfolio holdings,
performance information or any other related information to any third-party,
except in compliance with the Trust's policies on disclosure of portfolio
holdings or as required by applicable law or regulation. Notwithstanding
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the foregoing, subject to applicable law, the Sub-Adviser may disclose
composite performance information or aggregated risk metrics information that
includes information in respect of the Allocated Portion without any
attribution to, or mention of, the Series (and which will not include
information about the Series other than the Allocated Portion) without the
prior written consent of the Manager. The Manager may file a form of this
Agreement publicly provided that such form does not include fee terms,
investment restrictions or limitations or other material terms negotiated by
the Manager and the Sub-Adviser, unless expressly required by law, regulation
or the staff of the SEC. The Manager will not publicly disclose any version of
this Agreement containing matters prohibited for public disclosure by the
preceding sentence without first obtaining prior written consent of the
Sub-Adviser, unless otherwise required by applicable law, rule or regulation.
Sub-Adviser may not consult with any other sub-adviser of the Series
concerning transactions in securities or other assets for any investment
portfolio of the Trust, including the Series managed by the Sub-Adviser, except
that such consultations are permitted between the current and successor
sub-advisers of a 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 0000 Xxx.
The Manager shall not use, nor will it allow any investor in the
Series to use, the information provided by the Sub-Adviser to trade for their
own account or for the account of any other person or try to "reverse engineer"
the investment and trading methodologies and strategies of the Sub-Adviser. In
addition, the Manager will not disclose information regarding portfolio
holdings of the Allocated Portion to any other sub-adviser of the Trust or any
other person, except to the extent that such disclosure (i) is already publicly
known, (ii) is required or requested by applicable federal, state or other
governmental regulatory authorities or any self-regulatory organizations or
(iii) is to a service provider to the Trust (not including any other
sub-adviser) that has a need to know such information in order to perform its
duties for, or related to, the Trust. Sub-Adviser shall not use its knowledge
of nonpublic information regarding the Series' portfolio(s) 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 Series, it being understood and
agreed that the foregoing shall not prohibit the Sub-Adviser's use of such
information in the course of the Sub-Adviser's management of the Allocated
Portion and any of its other client accounts following similar strategies in
accordance with the terms of this Agreement.
Except as otherwise publicly known or ascertainable from public
sources or is permitted under the Trust's policies on disclosure of portfolio
holdings, the Manager will keep confidential and will not disclose to any
person the specific portfolio holdings of the Allocated Portion, the amount and
rate of the sub-advisory fee payable with respect to each Series' Allocated
Portion and any other non-public information regarding the Sub-Adviser and its
affiliated persons, except to the extent that such disclosure is required or
requested by applicable federal, state or other governmental regulatory
authorities or any self-regulatory organizations.
8. PROXY VOTING
The Sub-Adviser shall: (i) vote (or elect not to vote) all proxies
solicited by or with respect to the issuers of securities in which the assets of
the Allocated Portion may be invested in
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accordance with the Sub-Adviser's proxy voting policies and procedures, as
presented to the Trust, and applicable law; (ii) maintain records of all
proxies voted on behalf of the Series in respect of the Allocated Portion; and
(iii) provide information to the Trust, Manager or their designated agent in a
manner that is sufficiently complete and timely to ensure the Trust's
compliance with its filing obligations under Rule 30b1-4 of the 1940 Act.
9. USE OF NAMES AND LOGOS
The Series and the Manager shall have permission to use the
Sub-Adviser's name and information about the Sub-Adviser as required by
applicable law and in the marketing of the Series in written materials relating
to the Series that refer to the Sub-Adviser and/or the Sub-Adviser's investment
strategy, including without limitation the Series' registration statement,
shareholder reports and other offering documents and marketing materials
prepared for distribution to shareholders of the Series or the public (such
materials, the "MARKETING MATERIALS"). The Series and the Manager agree to
furnish such Marketing Materials to the Sub-Adviser (via email at an address
designated by the Sub-Adviser from time to time), for its prior review and
approval (which approval shall not be withheld or withdrawn as to information
required by applicable law or in response to comments of regulatory or
self-regulatory agencies and their staff and shall not in other respects be
otherwise unreasonably withheld or withdrawn), provided the requirement for
prior approval shall apply solely with respect to the use of the Sub-Adviser's
name and information specifically concerning the Sub-Adviser and its investment
strategy (the "SUB-ADVISER INFORMATION") and not to any other content of the
Marketing Materials. If, following the furnishing of Marketing Materials, the
Series or the Manager do not receive a written response from the Sub-Adviser
with respect to such materials within five business days of its submission for
approval, the content of such materials subject to the Sub-Adviser's approval
shall be deemed accepted by the Sub-Adviser. The Sub-Adviser agrees that the
Series and the Manager may request that the Sub-Adviser approve the use of a
type of Marketing Material, and if approved by the Sub-Adviser, that the Series
and the Manager need not obtain approval for each additional piece of Marketing
Material that is of substantially the same type or form provided that the
Sub-Adviser Information contained in such Marketing Material is substantially
the same as previously approved by the Sub-Adviser, unless such consent is
withdrawn in writing by the Sub-Adviser.
Except for the Marketing Materials, the Manager will not display or
use any logo, trade name, trademark, service xxxx, design or abbreviation,
contraction or simulation thereof of the Sub-Adviser or any of its affiliates
without the prior written consent of the Sub-Adviser.
The Sub-Adviser shall not use the name or any trade name, trademark,
trade device, service xxxx, symbol or any abbreviation, contraction or
simulation thereof of the Manager, the Trust, the Series or any of their
affiliates in its marketing materials unless it first receives prior written
approval of the Manager. It is understood that the name of each party to this
Agreement, and any derivatives thereof or logos associated with that name, is
the valuable property of the party in question and its affiliates, and that
each other party has the right to use such names pursuant to the relationship
created by, and in accordance with the terms of, this Agreement only so long as
this Agreement shall continue in effect. Upon termination of this Agreement,
the parties shall forthwith cease to use the names of the other parties (or any
derivative or logo) as
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appropriate and to the extent that continued use is not required by applicable
laws, rules and regulations.
10. LIMITATION OF LIABILITY; INDEMNIFICATION
(a) The Sub-Adviser shall have responsibility for the accuracy and
completeness (and liability for the lack thereof) of the Disclosure Documents
only with respect to Sub-Adviser Disclosure.
(b) The Sub-Adviser shall be liable to the Series for any loss
(including transaction costs) incurred by the Series as a result of any
investment made by the Sub-Adviser in contravention of: (i) any investment
policy, guideline or restriction set forth in the Registration Statement or as
approved by the Board from time to time and provided to the Sub-Adviser; or
(ii) applicable law (the investments described in this subsection (b)
collectively are referred to as "IMPROPER INVESTMENTS") if such loss arises
from the Sub-Adviser's willful misfeasance, bad faith, or gross negligence or
reckless disregard of its obligations and duties hereunder.
(c) The Sub-Adviser shall indemnify and hold harmless the Trust with
respect to each Series managed by the Sub-Adviser, each affiliated person of
the Trust within the meaning of Section 2(a)(3) of the 1940 Act, and each
person who controls the Trust within the meaning of Section 15 of the 1933 Act
(any such person, an "INDEMNIFIED PARTY") against any and all losses, claims,
damages, expenses or liabilities (including the reasonable cost of
investigating and defending any alleged loss, claim, damage, expense or
liability and reasonable counsel fees incurred in connection therewith) to
which any such person may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages, expenses or liabilities
(or actions in respect thereof) arise out of or are based upon: (i) a material
breach by the Sub-Adviser of this Agreement; (ii) any Improper Investment (if
the loss arising from the Improper Investment is a result of the Sub-Adviser's
willful misfeasance, bad faith, or gross negligence or reckless disregard of
its obligations and duties hereunder); (iii) the Sub-Adviser's performance or
non-performance of its duties hereunder to the extent that the Sub-Adviser has
acted with willful misfeasance, bad faith, or gross negligence or with reckless
disregard of its obligations and duties hereunder or (iv) any untrue statement
or alleged untrue statement of a material fact contained in any Disclosure
Document or the omission or alleged omission from a Disclosure Document of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, for purposes of this Section 10(c) solely with respect
to the Sub-Adviser Disclosure (it being understood, however, that this
indemnification and agreement to hold harmless shall not apply to the extent
that any such untrue statement, alleged untrue statement, omission or alleged
omission is the result of any change made to any applicable Disclosure Document
without the written consent or other acknowledgment of the Sub- Adviser from
and after the time that such Disclosure Document has been reviewed and approved
by the Sub-Adviser, as contemplated in Section 2.1(ix) hereof); provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
who is a Trustee or officer of the Trust against any liability to the Trust or
to its shareholders to which such Indemnified Party would otherwise be subject
by reason or willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such person's office with
the Trust.
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(d) For purposes of clarification, except with respect to Sub-Adviser
Disclosure, the Sub-Adviser shall not be liable for any error of judgment or
mistake of law, or for any loss arising out of any investment or for any act or
omission in the execution of securities transactions for the Series, provided
that nothing in this Agreement shall protect the Sub-Adviser against any
liability to the Series to which the Sub-Adviser would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder or by reason of its reckless disregard of
its obligations and duties hereunder.
(e) Neither the Sub-Adviser nor any director, officer or employee of
the Sub-Adviser performing services for the Series in connection with the
Sub-Adviser's discharge of its obligations hereunder shall be liable to the
Manager, its officers, directors, agents, employees, controlling persons or
shareholders or to the Trust or its shareholders for (i) any acts of the
Manager or any other sub-adviser to the Series with respect to the portion of
the assets of the Series not managed by the Sub-Adviser and (ii) acts of the
Sub-Adviser which result from or are based upon acts of the Manager, including,
but not limited to, a failure of the Manager to provide accurate and current
information with respect to any records maintained by the Manager or any other
sub-adviser to the Series, which records are not (x) also maintained by the
Sub-Adviser or (y) to the extent such records relate to the Allocated Portion,
otherwise available to the Sub-Adviser upon reasonable request, provided, in
all cases, that the liability was not attributable to the willful misfeasance,
bad faith, or gross negligence of the Sub-Adviser or the reckless disregard of
the Sub-Adviser's obligations and duties hereunder.
(f) The Manager agrees to indemnify and hold harmless the Sub-Adviser
and its affiliates and each of their respective members, partners,
shareholders, managers, directors, officers, agents and employees against any
and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which the Sub-Adviser or its
affiliates or such members, partners, shareholders, managers, directors,
officers, agents or employees are subject, which are caused by (i) the
Manager's willful misfeasance, bad faith, or gross negligence in the
performance of the Manager's obligations and duties under this Agreement or
obligations and duties to the Trust or a Series under the Investment Advisory
Agreement, or by reason of the Manager's reckless disregard of such obligations
and duties, or (ii) any untrue statement of a material fact contained in the
Series' Prospectus and SAI, Registration Statement, proxy materials, reports,
advertisements, sales literature, or other materials or the omission to state
therein a material fact which was required to be stated therein or necessary to
make the statements therein not misleading, unless and to the extent such
statement or omission was made in reliance upon, and is consistent with, the
information furnished to the Manager or the Trust by the Sub-Adviser or any
director, officer, agent or employee of the Sub-Adviser for use therein;
provided, however, that in no case is the Manager's indemnity in favor of any
person deemed to protect such other persons against any liability to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his, her or its duties or by reason
of his, her or its reckless disregard of obligations and duties under this
Agreement.
11. AMENDMENT OR ASSIGNMENT OF AGREEMENT
Any amendment to this Agreement shall be in writing signed by the
parties hereto; provided, that no such amendment shall be effective unless
authorized on behalf of any Series (i)
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by resolution of the Board, including the vote or written consent of a majority
of the Board who are not parties to this Agreement or interested persons of
either party hereto, and (ii) as and to the extent required under the 1940 Act,
by vote of a majority of the outstanding voting securities of the applicable
Series. This Agreement shall terminate automatically and immediately in the
event of its assignment.
12. TERM AND TERMINATION OF AGREEMENT
12.1 This Agreement shall become effective as of the date executed
and shall remain in full force and effect continually thereafter, subject to
renewal as provided in Section 12(c) and unless terminated automatically as set
forth in Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by
vote of its Board or (ii) with respect to the Series, upon the affirmative vote
of a majority of the outstanding voting securities of the Series; or
(b) The Manager may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice delivered
or mailed by registered mail, postage prepaid, to the Sub-Adviser; or
(c) The Sub-Adviser may at any time terminate this Agreement by not
more than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Manager; or
(d) This Agreement shall automatically terminate two years from the
date of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not interested persons of the Trust, the
Manager or the Sub-Adviser, at a meeting called for the purpose of voting on
such approval; or (ii) the vote of a majority of the outstanding voting
securities of the Series; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Series for their approval and
such shareholders fail to approve such continuance of this Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder as to the
Series in a manner consistent with the 1940 Act and the rules and regulations
thereunder; and
(e) Termination of this Agreement pursuant to this Section shall be
without payment of any penalty.
In the event of termination of this Agreement for any reason, the
Sub-Adviser shall, immediately upon notice of termination or on such later date
as may be specified in such notice, cease all activity on behalf of the Series
and with respect to any of its assets, except as expressly directed by the
Manager or as otherwise required by any fiduciary duties of the Sub-Adviser
under applicable law; provided, however, that in no event shall the obligations
of the Sub-Adviser with respect to managing the Allocated Portion extend beyond
the effective date of termination of the Agreement. In addition, the
Sub-Adviser shall deliver the Series' Books and Records to the Manager by such
means and in accordance with such schedule as the Manager shall direct and
shall otherwise cooperate, as reasonably directed by the Manager, in the
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transition of portfolio asset management to any successor of the Sub-Adviser,
including the Manager.
13. INTERPRETATION AND DEFINITION OF TERMS
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 term or provision of the
1940 Act and to interpretation 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 SEC validly issued pursuant to the 1940 Act.
Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested person," "assignment" and "affiliated person," as used
in this Agreement shall have the meanings assigned to them by Section 2(a) of
the 1940 Act. In addition, when the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is modified, interpreted or
relaxed by a rule, regulation or order of the SEC, whether of special or of
general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
14. CHOICE OF LAW
This Agreement is made and to be principally performed in the State
of New York and except insofar as the 1940 Act or other federal laws and
regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
New York.
15. CHANGE IN THE SUB-ADVISER'S OWNERSHIP
The Sub-Adviser agrees that it shall notify the Trust of any
anticipated or otherwise reasonably foreseeable change in the ownership of the
Sub-Adviser which would constitute an assignment of this Agreement within a
reasonable time prior to such change being effected.
16. ENFORCEABILITY
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
17. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
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18. EXECUTION IN COUNTERPARTS; ELECTRONIC DELIVERY
This Agreement may be executed simultaneously in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Signatures on this Agreement may be
communicated by electronic transmission (which shall include facsimile or
email) and shall be binding upon the parties so transmitting their signatures.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
ROTHSCHILD LARCH LANE MANAGEMENT
COMPANY
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Manager
XXXXXXXXX MANAGEMENT GROUP, L.L.C.
By: /s/ Xxxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Vice Chairman
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SUB-ADVISORY AGREEMENT
SCHEDULE A
SERIES OF THE ADVISORS' INNER CIRCLE FUND III
Rothschild Larch Lane Alternatives Fund
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