SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this 24th day of
August 2016 by and between Cornerstone Advisors Inc., a Washington corporation
with its principal place of business at 225 -- 000xx Xxxxxx XX, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000-0000 (the "Adviser"), and Xxxxxx, Xxxxxx & Company,
L.P., a Delaware Limited Partnership, with its principal place of business at
Xxx Xxxxxxxxx Xxxxxx, Xxxxxx XX 00000 (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, pursuant to authority granted to the Adviser by the Board of
Trustees (the "Board") of THE ADVISORS' INNER CIRCLE FUND (the "Trust") on
behalf of the series set forth on Schedule A to this Agreement (the "Fund") and
pursuant to the provisions of the Investment Advisory Agreement dated as of May
1, 2014 between the Adviser and the Fund (the "Management Agreement"), the
Adviser has selected the Sub-Adviser to act as sub-investment adviser of the
Fund and to provide certain related services, as more fully set forth below,
and to perform such services under the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Adviser and the Sub-Adviser do hereby agree as follows:
1. THE SUB-ADVISER'S SERVICES.
(a) DISCRETIONARY INVESTMENT MANAGEMENT SERVICES. The Sub-Adviser
shall act as sub-investment adviser with respect to the Fund. In such capacity,
the Sub-Adviser shall, subject to the supervision of the Adviser and the Board,
regularly provide the Fund with investment research, advice and supervision and
shall furnish continuously an investment program for such Fund assets as may be
allocated by the Adviser to the Sub- Adviser (the "Assets"), consistent with the
investment objectives and policies of the Fund. The Sub-Adviser shall determine,
from time to time, what investments shall be purchased for the Fund and what
such securities shall be held or sold by the Fund, subject always to the
provisions of the Trust's Agreement and Declaration of Trust, By-Laws and its
registration statement on Form N-1A (the "Registration Statement") under the
Investment Company Act of 1940, as amended (the "1940 Act"), and under the
Securities Act of 1933, as amended (the "1933 Act"), covering Fund shares, as
filed with the Securities and Exchange Commission (the "Commission"), and to the
investment objectives, policies and restrictions of the Fund, as each of the
same shall be from time to time in effect. To carry out such obligations, the
Sub-Adviser shall exercise full discretion and act for the Fund in the same
manner and with the same force and effect as the Fund 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 Adviser, effect such
portfolio transactions for the Fund as the Adviser may from time to time direct;
provided however, that the Sub-Adviser shall not be
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responsible for any such portfolio transactions effected upon written
instructions from the Adviser. No reference in this Agreement to the Sub-
Adviser having full discretionary authority over the Fund's investments shall
in any way limit the right of the Adviser, in its sole discretion, to establish
or revise policies in connection with the management of the Fund's assets or to
otherwise exercise its right to control the overall management of the Fund's
assets.
Sub-Adviser will issue such instructions to the custodian or trustee
of the Assets as may be appropriate in connection with the settlement of
portfolio transactions. Sub-Adviser's instructions shall be made in writing
sent by first-class mail, electronically through SWIFT or other industry
standard means or, at Sub-Adviser's option, orally and confirmed in writing as
soon as practical thereafter.
Sub-Adviser is hereby appointed as the Fund's attorney-in-fact to
execute all documentation to facilitate investment in investments for the
Assets, including without limitation, broker dealer agreements, counterparty
agreements, and futures commission agreements and any other documentation
deemed necessary to effect the Investments to the extent permitted by this
Agreement and any investment guidelines ("Trading Agreements"). Sub-Adviser is
authorized to execute amendments to the Trading Agreements, including without
limitation "protocols" or similar agreements entered into to reflect the
adoption of industry-wide standard terms and terms deemed applicable for
meeting any regulatory compliance requirements.
The Adviser acknowledges that the Trading Agreements and the
"protocols" referred to in the previous paragraph typically contain provisions
under which, for matters arising in connection with those agreements, the Fund
will agree to waive all immunities (including sovereign immunity), and to
submit to service of process and jurisdiction and to waive any claim based upon
improper venue. Sub-Adviser is hereby appointed as the Fund's attorney-in-fact
to consent to these provisions.
Sub-Adviser is authorized, in its sole discretion, to exercise all
voting rights, to execute consents and to exercise or sell stock subscription
and conversion rights and to join in or oppose (jointly or with others)
reorganizations, recapitalizations and liquidations and, in connection
therewith, Sub-Adviser is hereby appointed as the Fund's attorney-in-fact to
execute all documentation to facilitate any reorganization, recapitalization or
liquidation, unless the Adviser otherwise specifies in writing.
(b) COMPLIANCE. The Sub-Adviser agrees to comply with the requirements
of the 1940 Act, the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Commodity Exchange Act and the respective rules and regulations
thereunder, as applicable, as well as with all other applicable federal and
state laws, rules, regulations and case law that relate to the services and
relationships described hereunder and to the conduct of its business as a
registered investment adviser. The Sub-Adviser also agrees to comply with the
objectives, policies and restrictions set forth in the Registration Statement,
as amended or
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supplemented, of the Fund, and with any policies, guidelines, instructions and
procedures approved by the Board or the Adviser and provided to the
Sub-Adviser. In selecting the Fund's portfolio securities and performing the
Sub- Adviser's obligations hereunder, the Sub-Adviser shall cause the Fund to
comply with the diversification and source of income requirements of Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"), for
qualification as a regulated investment company. The Sub-Adviser shall
maintain compliance procedures that it reasonably believes are adequate to
ensure the compliance with the foregoing. No supervisory activity undertaken by
the Adviser shall limit the Sub-Adviser's full responsibility for any of the
foregoing.
(c) PROXY VOTING. Pursuant to Board authority, the Adviser has the
authority to determine how proxies with respect to securities that are held by
the Fund shall be voted, and the Adviser has initially determined to delegate
the authority and responsibility to vote proxies for the Fund's securities to
the Sub-Adviser. So long as proxy voting authority for the Fund has been
delegated to the Sub-Adviser, the Adviser shall provide such assistance to the
Sub-Adviser with respect to the voting of proxies for the Fund as the
Sub-Adviser may from time to time reasonably request, and the Adviser shall
promptly forward to the Sub- Adviser any information or documents necessary for
the Sub-Adviser to exercise its proxy voting responsibilities. The Sub-Adviser
shall carry out such responsibility in accordance with any instructions that
the Board or the Adviser shall provide from time to time, and at all times in a
manner consistent with Rule 206(4)-6 under the Advisers Act and its fiduciary
responsibilities to the Trust. The Sub-Adviser shall provide periodic reports
and keep such records relating to proxy voting as the Board may reasonably
request or as may be necessary for the Fund to comply with the 1940 Act and
other applicable law. Any such delegation of proxy voting responsibility to the
Sub-Adviser may be revoked or modified by the Board or the Adviser at any
time.
The Sub-Adviser is authorized to instruct the Fund's custodian and/or broker(s)
to forward promptly to the Sub-Adviser or designated service provider copies of
all proxies and shareholder communications relating to securities held in the
portfolio of a Fund (other than materials relating to legal proceedings against
the Fund). The Sub-Adviser may also instruct the Fund's custodian and/or
broker(s) to provide reports of holdings in the portfolio of the Fund. The
Sub-Adviser has the authority to engage a service provider to assist with
administrative functions related to voting Fund proxies. The Trust shall direct
the Fund's custodian and/or broker(s) to provide any assistance requested by
the Sub-Adviser in facilitating the use of a service provider. In no event
shall the Sub- Adviser have any responsibility to vote proxies that are not
received on a timely basis. The Trust acknowledges that the Sub-Adviser,
consistent with the Sub-Adviser's written proxy voting policies and procedures,
may refrain from voting a proxy if, in the Sub- Adviser's discretion,
refraining from voting would be in the best interests of the Fund and its
shareholders.
(d) RECORDKEEPING. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the Fund,
except as otherwise
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provided herein or as may be necessary for the Sub-Adviser to supply to the
Adviser, the Trust or its Board the information required to be supplied under
this Agreement.
The Sub-Adviser shall maintain separate books and detailed records of
all matters pertaining to the Fund's assets advised by the Sub-Adviser required
by Rule 31a-1 under the 1940 Act (other than those records being maintained by
the Adviser, or any administrator custodian or transfer agent appointed by the
Fund) relating to its responsibilities provided hereunder with respect to the
Fund, and shall preserve such records for the periods and in a manner
prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and
Records"). The Fund Books and Records shall be available to the Adviser and the
Board at any time upon request shall be delivered to the Trust upon the
termination of this Agreement and shall be available without delay during any
day the Trust is open for business.
(e) HOLDINGS INFORMATION AND PRICING. The Sub-Adviser shall provide
regular reports regarding the Fund's holdings, and may, on its own initiative,
furnish the Adviser, the Trust and its Board from time to time with whatever
information the Sub-Adviser believes is appropriate for this purpose. The
Sub-Adviser agrees to notify the Adviser and the Board promptly if the
Sub-Adviser reasonably believes that the value of any security held by a Fund
may not reflect fair value. The Sub-Adviser agrees to provide upon request any
pricing information of which the Sub-Adviser is aware to the Adviser, Trust,
its Board and/or any Fund pricing agent to assist in the determination of the
fair value of any Fund holdings for which market quotations are not readily
available or as otherwise required in accordance with the 1940 Act or the Fund
valuation procedures for the purpose of calculating the Trust's net asset value
in accordance with procedures and methods established by the Board.
(f) COOPERATION WITH AGENTS OF THE ADVISER AND THE TRUST. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to the
Adviser, the Trust and any Trust custodian or foreign sub-custodians, any Trust
pricing agents and all other agents and representatives of the Adviser and the
Trust with respect to such information regarding the Fund as such entities may
reasonably request from time to time in the performance of their obligations,
provide prompt responses to reasonable requests made by such persons and
establish appropriate interfaces with each so as to promote the efficient
exchange of information and compliance with applicable laws and regulations.
(g) CONSULTATION WITH OTHER SUB-ADVISERS. In performance of its duties
and obligations under this Agreement, the Sub-Adviser shall not consult with any
other sub- adviser to the Fund or a sub-adviser to a portfolio that is under
common control with the Fund concerning transactions for the Fund, except as
permitted by the policies and procedures of the Fund. The Sub-Adviser shall not
provide investment advice to any assets of the Fund other than the assets
managed by the Sub-Adviser.
2. CODE OF ETHICS. The Sub-Adviser has adopted a written code of
ethics that it reasonably believes complies with the requirements of Rule 17j-1
under the 1940 Act, which it has
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provided to the Adviser and the Trust. The Sub-Adviser shall 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 Adviser and the
Trust of any material violation of the Code, whether or not such violation
relates to a security held by any Fund.
3. INFORMATION AND REPORTING. The Sub-Adviser shall provide the
Adviser, the Trust, and their respective officers with such periodic reports
concerning the obligations the Sub-Adviser has assumed under this Agreement as
the Adviser and the Trust may from time to time reasonably request.
(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Sub-Adviser
shall notify the Trust's Chief Compliance Officer and Adviser promptly upon
detection of (i) any material failure to manage any Fund in accordance with its
investment objectives and policies or any applicable law; or (ii) any material
breach of any of the Fund's or the Adviser's policies, guidelines or
procedures. In addition, the Sub-Adviser shall provide a quarterly report
regarding the Fund's compliance with its investment objectives and policies,
applicable law, including, but not limited to the 1940 Act and Subchapter M of
the Code, and the Fund's and the Adviser's policies, guidelines or procedures
as applicable to the Sub-Adviser's obligations under this Agreement. The
Sub-Adviser acknowledges and agrees that the Adviser may, in its discretion,
provide such quarterly compliance certifications to the Board. The Sub-Adviser
agrees to correct any such failure promptly and to take any action that the
Board and/or the Adviser may reasonably request in connection with any such
breach. Upon request, the Sub-Adviser shall also provide the officers of the
Trust with supporting certifications in connection with such certifications of
Fund financial statements and disclosure controls pursuant to the
Xxxxxxxx-Xxxxx Act. The Sub-Adviser will promptly notify the Trust in the event
(i) the Sub-Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation that has the potential to materially
affect the Sub-Adviser's performance of its obligations under this agreement,
at law or in equity, before or by any court, public board, or body, involving
the affairs of the Trust (excluding class action suits in which a Fund is a
member of the plaintiff class by reason of the Fund's ownership of shares in
the defendant) or the compliance by the Sub-Adviser with the federal or state
securities laws or (ii) an actual change in control of the Sub-Adviser
resulting in an "assignment" (as defined in the 1940 Act) has occurred or is
otherwise proposed to occur.
(b) INSPECTION. Upon reasonable request, the Sub-Adviser agrees to
make its records and premises (including the availability of the Sub-Adviser's
employees for interviews) to the
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extent that they relate to the conduct of services provided to the Fund or the
Sub-Adviser's conduct of its business as an investment adviser reasonably
available for compliance audits by the Adviser or the Trust's officers,
employees, accountants or counsel; in this regard, the Trust and the Adviser
acknowledge that the Sub-Adviser shall have no obligation to make available
proprietary information unrelated to the services provided to the Fund or any
information related to other clients of the Sub- Adviser, except to the extent
necessary for the Adviser to confirm the absence of any conflict of interest
and compliance with any laws, rules or regulations in the management of the
Fund.
(c) BOARD AND FILINGS INFORMATION. The Sub-Adviser will also provide
the Adviser and Trust with any information reasonably requested regarding its
management of the Fund required for any meeting of the Board, or for any
shareholder report, Form N- CSR, Form N-Q, Form N-PX, Form N-SAR, amended
registration statement, proxy statement, or prospectus supplement to be filed by
the Trust with the Commission. The Sub-Adviser will make its officers and
employees available to meet with the Board from time to time on due notice to
review its investment management services to the Fund in light of current and
prospective economic and market conditions and shall furnish to the Board such
information as may reasonably be necessary in order for the Board to evaluate
this Agreement or any proposed amendments thereto.
(d) TRANSACTION INFORMATION. The Sub-Adviser shall furnish to the
Adviser and the Trust such information concerning portfolio transactions as may
be necessary to enable the Adviser, Trust or their designated agents to perform
such compliance testing on the Fund and the Sub-Adviser's services as the
Adviser and the Trust may, in their sole discretion, determine to be
appropriate. The provision of such information by the Sub-Adviser to the
Adviser, Trust or their designated agents in no way relieves the Sub- Adviser of
its own responsibilities under this Agreement.
4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales of
securities for the account of a Fund, neither the Sub-Adviser nor any of its
directors, officers or employees will act as a principal or agent or receive any
commission except as permitted by the 1940 Act.
(b) PLACEMENT OF ORDERS. The Sub-Adviser shall arrange for the
placing of all orders for the purchase and sale of securities for a Fund's
account with brokers or dealers selected by the Sub-Adviser. In the selection
of such brokers or dealers and the placing of such orders, the Sub-Adviser is
directed at all times to seek for a Fund the most favorable execution and net
price available under the circumstances. It is also understood that it is
desirable for the Fund that the Sub-Adviser have access to brokerage and
research services provided by brokers who may execute brokerage transactions at
a higher cost to the Fund than may result when allocating brokerage to other
brokers, consistent with section 28(e) of the 1934 Act and any Commission staff
interpretations thereof. Therefore, the Sub-Adviser is authorized to place
orders for the purchase and sale of securities for the
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Fund with such brokers, subject to review by the Adviser and the Board from
time to time with respect to the extent and continuation of this practice. It
is understood that the services provided by such brokers may be useful to the
Sub-Adviser in connection with its or its affiliates' services to other
clients.
The Adviser understands that Sub-Adviser performs investment advisory
services for various clients, including investment companies, and may give
advice and take action with respect to any of those clients that differs from
the advice given or the timing or nature of action taken with respect to the
Fund. Sub-Adviser shall have no obligation to purchase or sell for the Fund, or
to recommend for purchase or sale by the Fund, any investment which
Sub-Adviser, its principals, affiliates or employees may purchase or sell for
themselves or for any other clients. Sub-Adviser shall not be liable for any
failure to purchase or sell for the Fund, or to recommend for purchase or sale
by the Fund, any Investment on the basis of any material non-public information
that may come into Sub-Adviser's possession or if, in Sub-Adviser's opinion, a
transaction in any investment might constitute a violation of any law or
regulation, breach of any fiduciary obligation or confidential relationship
Sub-Adviser may have to or with another person or entity or be unadvisable
because of the percentage of the outstanding investments of the issuer of such
investment acquired by Sub-Adviser on behalf of all Sub-Adviser's clients in
the aggregate. The Adviser understands that transactions in a specific
investment may not be accomplished for all of Sub-Adviser's client accounts at
the same time or at the same price.
(c) AGGREGATED TRANSACTIONS. On occasions when the Sub-Adviser deems
the purchase or sale of a security to be in the best interest of a Fund as well
as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent
permitted by applicable law and regulations, aggregate the order for securities
to be sold or purchased. In such event, the Sub-Adviser will allocate
securities or futures contracts so purchased or sold, as well as the expenses
incurred in the transaction, in the manner the Sub-Adviser reasonably considers
to be equitable and consistent with its fiduciary obligations to a Fund and to
such other clients under the circumstances.
(d) AFFILIATED BROKERS. The Sub-Adviser or any of its affiliates may
act as broker in connection with the purchase or sale of securities or other
investments for a Fund, subject to: (a) the requirement that the Sub-Adviser
seek to obtain best execution and price within the policy guidelines determined
by the Board and set forth in a Fund's current Registration Statement; (b) the
provisions of the 1940 Act; (c) the provisions of the Advisers Act; (d) the
provisions of the 1934 Act; and (e) other provisions of applicable law. These
brokerage services are not within the scope of the duties of the Sub-Adviser
under this Agreement. Subject to the requirements of applicable law and any
procedures adopted by the Board, the Sub-Adviser or its affiliates may receive
brokerage commissions, fees or other remuneration from a Fund for these
services in addition to the Sub-Adviser's fees for services under this
Agreement.
5. CUSTODY. Nothing in this Agreement shall permit the Sub-Adviser
to take or receive physical possession of cash, securities or other investments
of a Fund.
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6. ALLOCATION OF CHARGES AND EXPENSES. The Sub-Adviser will bear its
own costs of providing services hereunder. Other than as herein specifically
indicated, the Sub-Adviser shall not be responsible for a Fund's or the
Adviser's expenses, including brokerage and other expenses incurred in placing
orders for the purchase and sale of securities and other investment
instruments.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) PROPERLY REGISTERED. The Sub-Adviser is registered as an
investment adviser under the Advisers Act, and will remain so registered for the
duration of this Agreement. The Sub-Adviser is not prohibited by the Advisers
Act or the 1940 Act from performing the services contemplated by this Agreement,
and to the best knowledge of the Sub-Adviser, there is no proceeding or
investigation that is reasonably likely to result in the Sub-Adviser being
prohibited from performing the services contemplated by this Agreement. The
Sub-Adviser agrees to promptly notify the Trust of the occurrence of any event
that would disqualify the Sub-Adviser from serving as an investment adviser to
an investment company. The Sub-Adviser is in compliance in all material respects
with all applicable federal and state law in connection with its investment
management operations.
(b) ADV DISCLOSURE. The Sub-Adviser has provided the Trust with a
copy of Part I of its Form ADV as most recently filed with the Commission and
its Part II as most recently updated and will, promptly after filing any
amendment to its Form ADV with the Commission or updating its Part II, furnish
a copy of such amendments or updates to the Trust. The information contained in
the Adviser's Form ADV is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
(c) FUND DISCLOSURE DOCUMENTS. The Sub-Adviser has reviewed and will
in the future review, 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 Fund (collectively the "Disclosure Documents")
and represents and warrants that such Disclosure Documents contain or will
contain no untrue statement of any material fact related to the Sub-Adviser and
its investment strategy and do not and will not omit any statement of material
fact related to the Sub-Adviser and its investment strategy required to be
stated therein or necessary to make the statements therein not misleading.
(d) USE OF THE NAME "CORNERSTONE ADVISORS." The Sub-Adviser has the
right to use the name "Cornerstone Advisors" in connection with its services to
the Trust. The Sub-Adviser is not aware of any threatened or existing actions,
claims, litigation or proceedings that would adversely affect or prejudice the
rights of the Sub-Adviser or the Trust to use the name "Cornerstone Advisors."
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(e) INSURANCE. The Sub-Adviser maintains errors and omissions
insurance coverage in an appropriate amount and shall provide prior written
notice to the Trust (i) of any material changes in its insurance policies or
reduction in its insurance coverage; or (ii) if any material claims will be
made on its insurance policies. Furthermore, the Sub-Adviser shall, upon
reasonable request, provide the Trust with any information it may reasonably
require concerning the amount of or scope of such insurance.
(f) NO DETRIMENTAL AGREEMENT. The Sub-Adviser represents and warrants
that it has no arrangement or understanding with any party, other than the
Trust, that would influence the decision of the Sub-Adviser with respect to its
selection of securities for a Fund, and that all selections shall be done in
accordance with what is in the best interest of the Fund.
(g) CONFLICTS. The Sub-Adviser shall act honestly, in good faith and
in the best interests of the Trust including requiring any of its personnel
with knowledge of Fund activities to place the interest of the Fund first,
ahead of their own interests, in all personal trading scenarios that may
involve a conflict of interest with the Fund, consistent with its fiduciary
duties under applicable law.
(h) REPRESENTATIONS. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is executed and
at the time of delivery of the quarterly compliance report required by Section
3(a), whether or not specifically referenced in such report.
8. THE NAME "CORNERSTONE ADVISORS." The Adviser has granted to the
Trust a license to use the name "Cornerstone Advisors" (collectively, the
"Name") as part of the name of the Fund. The foregoing authorization by the
Adviser to the Trust to use the Name as part of the name of the Fund is not
exclusive of the right of the Adviser itself to use, or to authorize others to
use, the Name; the Sub-Adviser acknowledges and agrees that as between the
Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize
others to use, the Name and the Sub-Adviser agrees to take such action as may
reasonably be requested by the Adviser to give full effect to the provisions of
this section. Without limiting the generality of the foregoing, the
Sub-Adviser agrees that, upon any termination of this Agreement, the
Sub-Adviser will not thereafter transact any business using the name
"Cornerstone Advisors."
9. SUB-ADVISER'S COMPENSATION. The Fund shall pay to the
Sub-Adviser, as compensation for the Sub-Adviser's services hereunder, a fee,
determined as described in Schedule A that is attached hereto and made a part
hereof. Such fee shall be computed daily and paid not less than monthly in
arrears by the Fund.
The Sub-Adviser will be compensated based on the portion of Fund
assets allocated to the Sub-Adviser by the Adviser. The method for determining
net assets of the Fund for purposes hereof shall be the same as the method for
determining net assets for purposes of establishing the offering and redemption
prices of Fund shares as described in the Fund's 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
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adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties
hereunder, the Sub-Adviser is and shall be an independent contractor and,
unless otherwise expressly provided herein or otherwise authorized in writing,
shall have no authority to act for or represent the Fund, the Trust or the
Adviser in any way or otherwise be deemed to be an agent of the Fund, the Trust
or the Adviser. If any occasion should arise in which the Sub-Adviser gives any
advice to its clients concerning the shares of a Fund, the Sub-Adviser will act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, (i) in the event of its
assignment (as defined in section 2(a)(4) of the 0000 Xxx) or (ii) in the event
of the termination of the Management Agreement; provided that such termination
shall not relieve the Adviser or the Sub-Adviser of any liability incurred
hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
12. DURATION AND TERMINATION.
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 Fund, upon the affirmative vote
of a majority of the outstanding voting securities of the Fund; or
(b) The 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 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 Adviser; 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
Adviser 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 Fund; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for their approval and
such shareholders fail to
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approve such continuance of this Agreement as provided herein, the Sub-Adviser
may continue to serve hereunder as to the Fund 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 Fund and with
respect to any of its assets, except as expressly directed by the Adviser or as
otherwise required by any fiduciary duties of the Sub-Adviser under applicable
law. In addition, the Sub-Adviser shall deliver the Fund's Books and Records to
the Adviser by such means and in accordance with such schedule as the Adviser
shall direct and shall otherwise cooperate, as reasonably directed by the
Adviser, in the transition of portfolio asset management to any successor of
the Sub-Adviser, including the Adviser.
13. CERTAIN DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the Commission under
the 1940 Act or any interpretations of the Commission staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under the 1940 Act or any interpretations of
the Commission staff.
14. LIABILITY OF THE SUB-ADVISER.
(a) The Sub-Adviser shall have responsibility for the accuracy and
completeness (and liability for the lack thereof) of statements related to the
Sub-Adviser and its investment strategy in the Fund's Disclosure Documents.
(b) The Sub-Adviser shall be liable to the Fund for any loss
(including transaction costs) incurred by the Fund as a result of any trade
error by the Sub-Adviser as well as 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, including but not limited
to the 1940 Act and the Code (including but not limited to the Fund's failure
to satisfy the diversification or source of income requirements of Subchapter M
of the Code) (the investments described in this subsection (b) collectively are
referred to as "Improper Investments").
(c) The Sub-Adviser shall indemnify and hold harmless the Trust, each
affiliated person of the Trust within the meaning of Section 2(a)(3) of the
1940 Act, and each
11
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 breach by
the Sub- Adviser of this Agreement or of the representations and warranties
made by the Sub- Adviser herein; (ii) any Improper Investment; (iii) 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; or (iv) the Sub- Adviser's performance
or non-performance of its duties hereunder; 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.
15. 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.
16. LIMITATION OF LIABILITY. The parties to this Agreement
acknowledge and agree that all litigation arising hereunder, whether direct or
indirect, and of any and every nature whatsoever shall be satisfied solely out
of the assets of the affected Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Fund shall be personally liable for any of
the foregoing liabilities. The Trust's Certificate of Trust, as amended from
time to time, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts. Such Certificate of Trust and the Trust's
Agreement and Declaration of Trust describe in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of shares of beneficial interest.
17. CHANGE IN THE 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, or in the membership of
Sub-Adviser's partnership, within a reasonable time prior to such change being
effected.
18. CONFIDENTIALITY. All information and advice furnished by either
party to the other hereunder shall be treated as confidential and shall not be
disclosed to third parties except as required by law or requested by regulators
or necessary in the performance of this Agreement.
12
19. NOTICES. Any notices and other communications between the parties
contemplated by this Agreement shall be sent by registered letter, overnight
express or facsimile with confirmation of receipt to the addresses indicated in
Schedule B hereto.
20. JURISDICTION. This Agreement shall be governed by and construed
in accordance with the substantive laws of the Commonwealth of Massachusetts
and the Sub-Adviser consents to the jurisdiction of courts, both state or
federal, in Massachusetts, with respect to any dispute under this Agreement.
21. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
22. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
23. FUTURES CONTRACTS. In connection with Sub-Adviser's services
hereunder related to the Fund's use of futures contracts, the Adviser hereby
expressly agrees and acknowledges that the risks of futures transactions have
been separately disclosed to it and that the Fund will be treated by
Sub-Adviser as an "exempt account" for purposes of its compliance with Rule 4.7
under the Commodity Exchange Act, as amended (the "Exchange Act") (which
provides an exemption from certain recordkeeping and disclosure obligations
under the Exchange Act and the rules thereunder to entities registered as
commodity trading advisers with the Commodity Futures Trading Commission). In
addition, the Adviser hereby expressly acknowledges and agrees as follows:
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING
COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, A
BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED
WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS
UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR
ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY
FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR
ANY BROCHURE OR ACCOUNT DOCUMENT.
13
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their duly authorized officers as of the date first above
written.
CORNERSTONE ADVISORS INC.
By: /s/ Xxxxx Xxxx
---------------
Name: Xxxxx Xxxx
Title: COO
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Director of Client Intake
14
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
DATED AUGUST 24TH, 2016 BETWEEN
CORNERSTONE ADVISORS INC.
AND
XXXXXX, XXXXXX & COMPANY, L.P.
Each Fund will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered, a fee, computed daily at an annual rate based on the average
daily net assets of the respective Fund as may be allocated by the Adviser to
the Sub-Adviser from time to time under the following fee schedule:
FUND RATE
Cornerstone Advisors Core Plus Bond Fund [Redacted]
15
SCHEDULE B
TO THE
SUB-ADVISORY AGREEMENT
DATED AUGUST 24, 2016 BETWEEN
CORNERSTONE ADVISORS INC.
AND
XXXXXX, XXXXXX & COMPANY, L.P.
NOTICES
CORNERSTONE ADVISORS INC.:
Any notice to the Cornerstone Advisors shall be sent to:
NAME: Xxxxx Xxxxx
E-MAIL: xxxxxx@xxxxxxxxxxx.xxx
STREET ADDRESS:
Cornerstone Advisors, Inc.
000 000xx Xxx XX,
Xxxxx 000
Xxxxxxxx, XX 00000
XXXXXX, XXXXXX & COMPANY, L.P.:
NOTICES OF CAPITAL ADDITIONS AND WITHDRAWALS MUST BE SENT TO
XXXXX@XXXXXXXXXXXX.XXX AND XXXX@XXXXXXXXXXXX.XXX.
Any notice to Xxxxxx Xxxxxx shall be sent to:
Xxxxxx, Xxxxxx & Company, L.P.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Vice President
T: 000-000-0000
F: 000-000-0000
With copies to:
Xxxxxx, Xxxxxx & Company, L.P.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
T: 000-000-0000 F: 000-000-0000
16
