SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this 28 (day of April, 2008
by and between Frost Investment Advisors, LLC a Delaware limited liability
company with its principal place of business at 000 Xxxx Xxxxxxx Street, 00xx
Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxx (the "Adviser"), and Kempner Capital Management,
Inc. a Texas company with its principal place of business at 0000 Xxxxxx Xxxxxx,
00xx Xxxxx XXX Xxxx., Xxxxxxxxx, Xxxxx (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 II (the "Trust") on
behalf of the series set forth on Schedule A to this agreement and pursuant to
the provisions of the Investment Advisory Agreement dated as of April___, 2008
between the Adviser and the Funds (the "Management Agreement"), the Adviser has
selected the Sub-Adviser to act as sub-investment adviser of the Funds 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 Funds. In such
capacity, the Sub-Adviser shall, subject to the supervision of the
Adviser and the Board, regularly provide the Funds with investment
research, advice and supervision and shall furnish continuously an
investment program for such Funds assets as may be allocated by the
Adviser to the Sub-Adviser for purposes of investing Fund assets in
emerging market debt securities and currency, 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 Funds and what such securities shall be held or sold by the Funds,
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 Funds, 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 Funds in the same manner and with the same force and effect as the
Funds themselves might or could do with respect to purchases, sales or
other transactions. Notwithstanding the foregoing, the Sub-Adviser
shall, upon written instructions from the Adviser, effect such
portfolio transactions for the Funds 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 upon written
instructions from
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the Adviser. No reference in this Agreement to the Sub-Adviser having
full discretionary authority over each 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 each
Fund's assets or to otherwise exercise its right to control the overall
management of each 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 Funds, and with any policies,
guidelines, instructions and procedures approved by the Board or the
Adviser and provided to the Sub-Adviser. In selecting each Fund's
portfolio securities and performing the Sub-Adviser's obligations
hereunder, the Sub-Adviser shall cause the Funds 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 has
adopted and implemented, and will maintain, written compliance policies
and procedures that it believes are reasonably designed to prevent
violations by the Sub-Adviser and its "supervised persons" (as defined
in the Adviser's Act) of the Advisers Act and the rules thereunder, and
that it reasonably believes are adequate to ensure compliance with the
other laws and regulations referred to in this paragraph (b). The
Sub-Adviser will review, no less frequently than annually, the adequacy
of its policies and procedures and the effectiveness of their
implementation. The Sub-Adviser has designated a Chief Compliance
Officer responsible for administering its policies and procedures. 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 and the Management
Agreement, the Adviser has the authority and responsibility to vote
proxies relating to securities held by the Funds and may delegate that
authority and responsibility to a third party. The Adviser hereby
delegates the authority and responsibility to vote proxies for each
Fund's securities to the Sub-Adviser. The Sub-Adviser represents that
it has adopted and implemented, and will maintain, written policies and
procedures that it believes are reasonably designed to ensure that it
votes the Fund' securities in the best interests of the Funds,
including procedures to address material conflicts that may arise
between the interests of the Sub-Adviser and those of the Funds. The
Sub-Adviser shall carry out the responsibility to vote proxies relating
to the securities held by the Funds in accordance with instructions, if
any, that the Board or the Adviser may provide from time to time and
shall provide such reports and keep such records relating to proxy
voting as the Board may reasonably request or as may be necessary for
the Funds to comply with the 1940
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Act and other applicable law. The delegation of proxy voting authority
and responsibility to the Sub-Adviser may be revoked or modified by the
Board or the Adviser at any time.
(d) RECORDKEEPING. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Funds, except as otherwise provided herein or as may be necessary for
the Sub-Adviser to supply to the Adviser, the Funds or their 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 each 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 Advisor, custodian or transfer agent
appointed by the Funds) relating to its responsibilities provided
hereunder with respect to the Funds, 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 Funds upon the termination of
this Agreement and shall be available for telecopying without delay
during any day the Funds are open for business.
(e) HOLDINGS INFORMATION AND PRICING. The Sub-Adviser shall provide
regular reports regarding each Fund's holdings, and shall, on its own
initiative, furnish the Funds and the Adviser from time to time with
whatever information the Sub-Adviser believes is appropriate for this
purpose. The Sub-Adviser agrees to immediately notify the Adviser if
the Sub-Adviser reasonably believes that the value of any security held
by the Funds may not reflect fair value. The Sub-Adviser agrees to
provide any pricing information of which the Sub-Adviser is aware to
the Adviser and/or the Funds pricing agent to assist in the
determination of the fair value of the Funds holdings for which market
quotations are not readily available or as otherwise required in
accordance with the 1940 Act or the Funds valuation procedures for the
purpose of calculating the Funds' net asset value in accordance with
procedures and methods established by the Board.
(f) COOPERATION WITH AGENTS OF THE ADVISER AND THE FUNDS. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance
to the Adviser, the Funds and the Funds' custodian and foreign
sub-custodians, the Funds' pricing agents and all other agents and
representatives of the Funds and the Adviser, such information with
respect to the Funds 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.
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 will provide to the Adviser and the Trust. The
Sub-Adviser shall monitor its Access Persons (as defined in the Sub-Adviser's
Code of Ethics) compliance in all material respects with the Sub-
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Adviser's Code of Ethics, as in effect from time to time. Upon request, the
Sub-Adviser shall provide the Funds 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 Trust and the Adviser. The Sub-Adviser shall respond to requests for
information from the Adviser 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 of any material violation of the Code, whether or not such
violation relates to a security held by the Funds.
3. INFORMATION AND REPORTING. The Sub-Adviser shall provide the Funds,
the Adviser, and their respective officers with such periodic reports concerning
the obligations the Sub-Adviser has assumed under this Agreement as the Funds
and the Adviser 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 the
Funds in accordance with its investment objectives and policies or any
applicable law; or (ii) any material breach of any of the Funds' or the
Adviser's policies, guidelines or procedures. In addition, the
Sub-Adviser shall provide a quarterly report regarding the Funds'
compliance with its investment objectives and policies and applicable
law, including, but not limited to the 1940 Act and Subchapter M of the
Code, and the Funds' 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. 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, 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 the Funds
are a member of the plaintiff class by reason of a Fund's ownership of
shares in the defendant) or the compliance by the Sub-Adviser with the
federal or state securities laws or (ii) the controlling stockholder of
the Sub-Adviser changes or an actual change in control 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 Funds or the Sub- Adviser's
conduct of its business as an investment adviser reasonably available
for compliance audits by the Adviser or the Funds' employees,
accountants or counsel; in
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this regard, the Funds and the Adviser acknowledge that the Sub-Adviser
shall have no obligations to make available proprietary information
unrelated to the services provided to the Funds 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 Funds.
(c) BOARD AND FILINGS INFORMATION. The Sub-Adviser will also
provide the Adviser with any information reasonably requested regarding
its management of the Funds required for any meeting of the Board, or
for any shareholder report, amended registration statement, proxy
statement, or prospectus supplement to be filed by the Funds 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 Funds 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 such information concerning portfolio transactions as may be
necessary to enable the Adviser to perform such compliance testing on
the Funds and the Sub-Adviser's services as the Adviser may, in its
sole discretion, determine to be appropriate. The provision of such
information by the Sub-Adviser 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 the Funds, 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 the
Funds' 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 on behalf of
the Funds the most favorable execution and net price available under
the circumstances. It is also understood that it is desirable for the
Funds 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 Funds 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 Funds 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.
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(c) AGGREGATED TRANSACTIONS. On occasions when the Sub-Adviser
deems the purchase or sale of a security to be in the best interest of
the Funds 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 the Funds 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 the Funds, 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 the Funds'
current prospectus and SAI; (b) the provisions of the 1940 Act; (c) the
provisions of the 1934 Act; and (d) 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 the Funds 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
the Funds.
6. ALLOCATION OF CHARGES AND EXPENSES. The Sub-Adviser will bear its
own costs of providing services hereunder. All other expenses not specifically
assumed by the Sub-Adviser herein including, but not limited to, brokerage and
other expenses incurred in placing orders for the purchase and sale of
securities and other investment instruments, shall be borne by either the Funds
or the Adviser.
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 SEC and
Part II as most recently
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updated and will, promptly after filing any amendment to its Form ADV
with the SEC or updating its Part II, furnish a copy of such amendments
and 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 the
Registration Statement, and any amendments or supplements thereto, the
annual or semi-annual reports to shareholders, other reports filed with
the Funds (collectively the "Disclosure Documents") and represents and
warrants that with respect to disclosure about the Sub-Adviser, the
manner in which the Sub-Adviser manages the Funds or information
relating directly or indirectly to the Sub-Adviser, such Disclosure
Documents contain or will contain, as of the date thereof, no untrue
statement of any material fact and does not omit any statement of
material fact which was required to be stated therein or necessary to
make the statements contained therein not misleading. The Sub-Adviser
agrees to review Disclosure Documents provided by the Adviser and/or
the Funds' service providers in the future and, upon reasonable request
of the Adviser and/or the Funds' service providers, will supplement or
correct such Disclosure Documents in order to ensure that such
information does not contain any untrue statement of material fact or
omit any statement of material fact which would be required to be
stated therein or necessary to make the statements contained therein
not misleading.
(d) USE OF THE NAME "KEMPNER". The Sub-Adviser has the right to use
the name "Kempner" in connection with its services to the Trust and
that, subject to the terms set forth in Section 8 of this Agreement,
the Trust shall have the right to use the name "Kempner" in connection
with the management and operation of the Funds. The Sub-Adviser is not
aware of any threatened or existing actions, claims, litigation or
proceedings that would adversely effect or prejudice the rights of the
Sub-Adviser or the Trust to use the name "Kempner."
(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.
(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 the Funds,
and that all selections shall be done in accordance with what is in the
best interest of the Funds.
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(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 Funds first, ahead of their own interests, in all personal trading
scenarios that may involve a conflict of interest with the Funds,
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 "KEMPNER". The Sub-Adviser grants to the Trust a license
to use the name "Kempner" as part of the name of the Funds. The Adviser and the
Funds shall be obligated to use the name Kempner in the name of the Funds during
the period in which this Agreement remains in effect or the Sub-Adviser
otherwise acts as sub-investment adviser for the Funds, except as agreed to by
Kempner. The foregoing authorization by the Sub-Adviser to the Funds to use said
name as part of the name of the Funds is not exclusive of the right of the
Sub-Adviser itself to use, or to authorize others to use, the same; the Funds
acknowledge and agrees that as between the Funds and the Sub-Adviser, the
Sub-Adviser has the exclusive right so to use, or authorize others to use, said
name and the Funds agree to take such action as may reasonably be requested by
the Sub-Adviser to give full effect to the provisions of this section. Without
limiting the generality of the foregoing, the Funds agree that, upon any
termination of this Agreement, the Funds will, at the request of the
Sub-Adviser, use their best efforts to change the name of the Funds within three
months of its receipt of the Sub-Adviser's request so as to eliminate all
reference, if any, to the name "Kempner" and will not thereafter transact any
business using the name "Kempner" in the name of the Funds; provided, however,
that the Funds and the Adviser may continue to use beyond such date any supplies
of prospectuses, marketing materials and similar documents that the Adviser or
its affiliates had on had at the date of such name change.
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 monthly in arrears by the
Adviser. The Funds shall have no responsibility for any fee payable to the
Sub-Adviser.
The Sub-Adviser will be compensated based on the portion of Funds
assets allocated to the Sub-Adviser by the Adviser. 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 herein or otherwise authorized in writing, shall have no
authority to act for or represent the
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Funds or the Adviser in any way or otherwise be deemed to be an agent of the
Funds or the Adviser. If any occasion should arise in which the Sub-Adviser
gives any advice to its clients concerning the shares of the Funds, the
Sub-Adviser will act solely as investment counsel for such clients and not in
any way on behalf of the Funds.
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.
(a) 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:
(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. In addition, the Funds may cause this Agreement to
terminate either (i) by vote of its Board or (ii) upon the affirmative
vote of a majority of the outstanding voting securities of the Funds;
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 Funds, 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 Funds; provided,
however, that if the continuance of this Agreement is submitted to the
shareholders of the Funds 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 Funds 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,
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cease all activity on behalf of the Trust and with respect to a Fund
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 Funds' 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 Funds" 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. INDEMNIFICATION.
(a) The Adviser shall indemnify and hold harmless the Sub-Adviser
and all affiliated persons thereof (within the meaning of Section
2(a)(3) of the 0000 Xxx) and all their respective controlling persons
(as described in Section 15 of the 1933 Act) (collectively, the
"Adviser Indemnitees") against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other
expenses) ("Losses") by reason of or arising out of this Agreement or
the performance by the Sub-Adviser of its duties hereunder; provided
that this indemnity shall not extend to any Losses by reason of or
arising out of: (i) the Sub-Adviser being in material violation of any
applicable federal or state law, rule or regulation or any investment
policy or restriction set forth in the Funds' Registration Statement or
any written guidelines or instruction provided in writing by the Board,
(ii) the Funds' failure to satisfy the diversification or source of
income requirements of Subchapter M of the Code, or (iii) the
Sub-Adviser's willful misfeasance, bad faith or gross negligence
generally in the performance of its duties hereunder or its reckless
disregard of its obligations and duties under this Agreement.
(b) The Sub-Adviser shall indemnify and hold harmless the Trust and
the Adviser and any and all of their affiliated persons thereof (within
the meaning of Section 2(a)(3) of the 0000 Xxx) and all their
respective controlling persons (as described in Section 15 of the 1933
Act) (collectively, the "Sub-Adviser Indemnitees") against any and all
Losses by reason of or arising out of: (i) the Sub-Adviser being in
material violation of any applicable federal or state law, rule or
regulation or any investment policy or restriction set forth in the
Funds' Registration Statement or any written guidelines or instruction
provided in writing by the Board, (ii) the Funds' failure to
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satisfy the diversification or source of income requirements of
Subchapter M of the Code, or (iii) the Sub-Adviser's willful
misfeasance, bad faith or gross negligence generally in the performance
of its duties hereunder or its reckless disregard of its obligations
and duties under this Agreement provided that this indemnity shall not
extend to any Losses by reason of or arising out of: (i) the Adviser's
material violation of any applicable federal or state law, rule or
regulation or any investment policy or restriction set forth in the
Funds' Registration Statement or any written guidelines or instruction
provided in writing by the Board, or (ii) any untrue statement or
alleged untrue statement of material fact contained in the Funds'
Registration Statement or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statement therein not misleading, unless such a statement or
omission was made in reliance upon information furnished in writing to
the Adviser by the Sub-Adviser.
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 resulting in any liability on the part of the
any Fund or the Trust shall be satisfied solely out of the assets of the
affected Funds and that no Trustee, officer or holder of shares of beneficial
interest of the Funds 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 and 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.
11
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.
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.
ATTEST: KEMPNER CAPITAL MANAGEMENT, INC.
/S/ ILLEGIBLE SIGNATURE By: /S/ XXXXXX X. XXXXXXX, XX.
----------------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
ATTEST: FROST INVESTMENT ADVISORS, LLC
/S/ ILLEGIBLE SIGNATURE By: /S/ XXX X. XXXXXXXXXXXX
----------------------------------- ---------------------------
Name: Xxx X. Xxxxxxxxxxxx
Title: President
Accepted and Agreed to as of the day and year first above written.
12
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
DATED APRIL 28, 2008 BETWEEN
KEMPNER CAPITAL MANAGEMENT, INC.
AND
FROST INVESTMENT ADVISORS, 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 Funds as may be allocated by the Adviser to
the Sub-Adviser from time to time under the following fee schedule:
FUND RATE
---- ----
Frost Kempner Treasury and Income Fund 0.25%
Frost Kempner Multi-Cap Deep Value Equity Fund 0.34%
A-1
