SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this ____th day
of , 2011 by and between WESTWOOD MANAGEMENT CORP. a New York Corporation with
its principal place of business at 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000 (the "Adviser"), and SKY HARBOR CAPITAL MANAGEMENT, LLC a Delaware
limited liability company with its principal place of business at 00 Xxxxxxxxx
Xxxx, Xxxxxxxxx, 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
_________ __, 201_ 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, 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 responsible for any such
portfolio transactions effected
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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.
(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 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 may 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
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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 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
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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 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 immediately 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 immediately 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
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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, 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 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.
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(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 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.
(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.
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.
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(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 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.
(d) USE OF THE NAME "WESTWOOD" OR THE ACRONYM "WHG." The Sub-Adviser
has the right to use the name "Westwood" or the acronym "WHG" 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
"Westwood" or the acronym "WHG."
(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
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.
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(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 "WESTWOOD" OR THE ACRONYM "WHG." The Adviser has granted
to the Trust a license to use the name "Westwood" or the acronym "WHG"
(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 "Westwood"
or the acronym "WHG."
9. SUB-ADVISER'S COMPENSATION. The Adviser 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 Adviser. The Fund shall have no responsibility for any fee
payable to the Sub-Adviser.
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 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 authorized in writing, doc shall have no authority to act for
or represent the Fund,
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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 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.
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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 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
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 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-
10
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 within a reasonable time prior to
such change being effected.
18. 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.
19. 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.
20. 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.
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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.
WESTWOOD MANAGEMENT CORP.
By:______________________________________
Name:[ ]
Title:[ ]
SKY HARBOR CAPITAL MANAGEMENT, LLC
By:______________________________________
Name:[ ]
Title:[ ]
12
SCHEDULE A
TO THE SUB-ADVISORY AGREEMENT
DATED , 201_ BETWEEN
WESTWOOD MANAGEMENT CORP.
AND
SKY HARBOR CAPITAL MANAGEMENT, LLC
The Adviser 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
WHG Short Duration High Yield Fund 0.35%
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