SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement ("AGREEMENT") is made as of
July 17, 2014, between Rothschild Larch Lane Management Company, a Delaware
limited liability company located at 000 Xxxxxxxxxxx Xxx., X-000, Xxx Xxxxx, XX
00000 ("MANAGER"), and Mizuho Alternative Investments, LLC, a Delaware limited
liability company located at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000
("SUB-ADVISER").
WITNESSETH:
WHEREAS, The Advisors' Inner Circle Fund III, a Delaware statutory
trust ("TRUST") is registered under the Investment Company Act of 1940, as
amended ("1940 ACT"), as an open-end management investment company and has
established one or more separate series of shares ("SERIES") with each Series
having its own assets and investment policies; and
WHEREAS, Trust has retained Manager to provide investment advisory
and administrative services to certain of the Series of the Trust pursuant to
an Investment Advisory Agreement dated July 17, 2014, which agreement
specifically provides for the retention of a sub-adviser to provide the
investment advisory services described therein; and
WHEREAS, Manager desires to retain Sub-Adviser to furnish investment
advisory and portfolio management services to the portion of each Series listed
in Schedule A hereto that has been allocated to Sub-Adviser by the Manager and
to the portion of such other Series of Trust hereinafter established as agreed
to from time to time by the parties ("ALLOCATED PORTION"), evidenced by an
addendum to Schedule A (hereinafter "SERIES" shall refer to each Series which
is subject to this Agreement), and the Sub-Adviser is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES AND RESPONSIBILITIES OF THE SUB-ADVISER
INVESTMENT MANAGEMENT SERVICES. Subject to the general oversight of
the Manager, and in accordance with the Series' investment objectives, policies
and restrictions, the Sub-Adviser shall act as the investment sub-adviser to
the Series and, as such, shall (i) obtain and evaluate such information
relating to the economy, industries, businesses, securities markets and
securities as it may deem necessary or useful in discharging its
responsibilities hereunder, (ii) formulate a continuing program for the
investment of the assets of the Allocated Portion of each Series in a manner
consistent with the Series' investment objectives, policies and restrictions
and the investment guidelines as provided herein in Schedule B, and (iii)
determine from time to time securities or other assets/instruments to be
purchased, sold, retained, borrowed or lent by the Allocated Portion, and
implement those decisions, including the selection of entities with or through
which such purchases, sales or loans are to be effected; provided, that the
Sub-Adviser will place orders pursuant to its investment determinations either
directly with the issuer or with a broker or dealer. The Sub-Adviser shall
determine what portion of the Allocated Portion's assets will be invested or
held uninvested as cash. 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 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.
1.1
The Manager has the right at any time to reallocate the portion of a
Series' assets allocated to the Allocated Portion pursuant to this Agreement if
the Manager deems such reallocation appropriate upon prompt notice to
Sub-Adviser (to the extent reasonably practicable).
The Sub-Adviser will select brokers and dealers to effect all
portfolio transactions subject to the conditions set forth herein. The
Sub-Adviser will place all necessary orders with brokers, dealers, or issuers,
and will negotiate brokerage commissions, if applicable. The Sub-Adviser is
directed at all times to seek to execute transactions for the Allocated Portion
of each Series in accordance with any written policies, practices or procedures
that may be established by the Board of Trustees of the Trust (the "BOARD") or
the Manager from time to time and that have been provided to the Sub-Adviser,
consistent with those described in the Series' Prospectus and Statement of
Additional Information ("SAI"), as each may be amended from time to time, and
consistent with the investment guidelines in Schedule B, as may be amended by
the Manager upon notice to the Sub-Adviser. In placing any orders for the
purchase or sale of investments for the Series, in the name of the Allocated
Portion or its nominees, the Sub-Adviser shall seek to obtain for the Allocated
Portion "best execution", considering all of the circumstances, and shall
maintain records adequate to demonstrate compliance with this requirement. In
no instance will portfolio securities be purchased from or sold to the Manager
or the Sub-Adviser, or any of their affiliated persons, except in accordance
with the 1940 Act, the Investment Advisers Act of 1940, as amended ("ADVISERS
ACT"), and the rules under each, and all other federal and state laws or
regulations applicable to the Trust and the Series.
Unless specifically permitted by the 1940 Act (and the rules
thereunder) and procedures adopted by the Board, on behalf of the Series, the
Sub-Adviser agrees that it will not execute any portfolio transactions for the
Allocated Portion with a broker or dealer that is (i) an affiliated person of
the Series, including the Manager or any sub-adviser for the Series; (ii) a
principal underwriter of the Series' shares; or (iii) an affiliated person of
such an affiliated person or principal underwriter. The Manager agrees that it
will provide the Sub-Adviser with a written list of brokers and dealers that
are affiliates of the Manager or any sub-adviser (other than the Sub-Adviser)
and will, from time to time, update such list as necessary. The Sub-Adviser
agrees
- 2 -
that it will provide the Manager with a written list of brokers and dealers
that are affiliates of the Sub-Adviser and will, from time to time, update such
list as necessary.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Allocated Portion as well as other
clients of the Sub-Adviser, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be purchased or sold to attempt to obtain a more
favorable price or lower brokerage commissions and efficient execution.
Allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner
which the Sub-Adviser considers to be the most equitable and consistent with
its fiduciary obligations to the Allocated Portion and to its other clients
over time.
The Sub-Adviser shall provide reasonable assistance to the Manager,
the custodian or recordkeeping agent for the Trust in determining or
confirming, consistent with the procedures and policies stated in the Trust's
registration statement on Form N-1A with respect to the Series, as amended and
supplemented from time to time ("REGISTRATION STATEMENT"), the value of any
portfolio securities or other assets of the Allocated Portion for which the
Manager, custodian or recordkeeping agent seeks assistance from the Sub-Adviser
or identifies for review by the Sub-Adviser. This assistance includes (but is
not limited to): (i) designating and providing access to one or more employees
of the Sub-Adviser who are knowledgeable about the security/issuer, its
financial condition, trading and/or other relevant factors for valuation, which
employees shall be available for consultation when the Trust's Valuation
Committee convenes; (ii) assisting the Manager or the custodian in obtaining
bids and offers or quotes from broker/dealers or market-makers with respect to
securities held by the Allocated Portion, upon the reasonable request of the
Manager or custodian; (iii) upon the request of the Manager or the custodian,
providing recommendations for fair valuations; and (iv) maintaining adequate
records and written backup information with respect to the securities valuation
assistance provided hereunder, and providing such information to the Manager or
the Trust upon request, with such records being deemed Trust records. The
parties acknowledge that the Sub-Adviser and the custodian or recordkeeping
agent of the Series may use different pricing vendors, which may result in
valuation discrepancies.
The Trust, on behalf of each Series, hereby authorizes any entity or
person associated with the Sub-Adviser that is a member of a national
securities exchange to effect or execute any transaction on the exchange for
the account of the Series that is permitted by Section 11(a) of the Securities
Exchange Act of 1934, as amended, and Rule 11a2-2(T) thereunder, and each
Series hereby consents to the retention of compensation for such transactions
in accordance with Rule 11a2-2(T)(a)(2)(iv).
The Sub-Adviser shall discharge the foregoing responsibilities in
compliance with applicable laws and regulations and consistent with the
investment objectives, policies and restrictions of the Series as adopted by
the Board, consistent with the investment guidelines provided in Schedule B, as
may be amended from time to time by the Manager upon notice to the Sub-Adviser,
and subject to such further limitations as the Trust may from time to time
impose on the Series by written notice to the Sub-Adviser.
- 3 -
The Sub-Adviser will be an independent contractor and will have no
authority to act for or represent the Trust, any Series or the Manager in any
way or otherwise be deemed an agent of the Trust, any Series or the Manager
except as expressly authorized in this Agreement or another writing by the
Trust, the Manager and the Sub-Adviser.
1.2 ADMINISTRATIVE SERVICES. The Sub-Adviser shall:
1.2.1 BOOKS AND RECORDS. Assure that all records required to
be maintained and preserved by each Series with respect to securities
transactions effected by the Sub-Adviser with respect to the Allocated Portion
of such Series are maintained and preserved by it or on its behalf in accordance
with applicable laws and regulations.
1.2.2 REPORTS AND FILINGS. Provide reasonable assistance
as needed in the preparation of (but not pay for) all periodic reports by Trust
or any Series to shareholders of the Series and all reports and filings
required to maintain the registration and qualification of the Series, or to
meet other regulatory or tax requirements applicable to the Series, under
federal and state securities and tax laws. Sub-Adviser shall review draft
reports to shareholders, Registration Statements or portions thereof that
relate to the Series or the Sub-Adviser and other documents provided to the
Sub-Adviser, provide comments on such drafts on a timely basis, and provide
certifications or sub-certifications on a timely basis as to the accuracy of
the information contained in such reports or other documents. Sub-Adviser will
prepare and cause to be filed in a timely manner Form 13F and, if required,
Schedule 13G with respect to securities held in the Allocated Portion (but only
to the extent that the securities held in the Allocated Portion alone require a
Schedule 13G filing to be made).
1.2.3 REPORTS TO THE MANAGER AND THE BOARD OF TRUSTEES.
Prepare and furnish to Manager and/or the Board such reports, statistical data
and other information in such form and at such intervals as Manager and/or the
Board may reasonably request. Sub-Adviser shall also make available to the
Manager and the Board at reasonable times its portfolio managers and other
appropriate personnel as mutually agreed by the Manager and Sub-Adviser, either
in person or, at the mutual convenience of the Manager, the Board and the
Sub-Adviser, by telephone or other electronic media, in order to review the
investment policies, performance and other matters relating to the management
of the Series;
1.2.4 NOTIFICATIONS AND CERTIFICATIONS TO MANAGER. The Sub-
Adviser shall:
(i) Promptly notify the Manager in the event that
the Sub-Adviser becomes aware that the Sub-Adviser: (a) is, or will likely be,
subject to a statutory disqualification that prevents the Sub-Adviser from
serving as investment adviser pursuant to this Agreement; (b) fails to be
registered as an investment adviser under the Advisers Act or under the laws of
any jurisdiction in which the Sub-Adviser is required to be registered as an
investment adviser in order to perform its obligations under this Agreement;
(c) is the subject of an administrative proceeding or enforcement action by the
U.S. Securities and Exchange Commission (the "SEC") or other regulatory
authority; (d) is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, or governmental authority, involving the affairs
of the Trust, the
- 4 -
Sub-Adviser, or the Manager; or (e) is involved in any pending litigation or
administrative proceeding brought against the Sub-Adviser or any of its
management persons (as defined in Form ADV). The Sub-Adviser further agrees to
notify the Series and the Manager promptly of any material fact known to the
Sub-Adviser respecting or relating to the Sub-Adviser or the Series' investment
strategy or tactics that is not contained in the Registration Statement
regarding the Series, or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any statement contained therein that
becomes untrue in any material respect. The Sub-Adviser will promptly notify
the Trust, the Manager and the Board if its chief executive officer or any
member of the portfolio management team named in the Registration Statement for
the Series changes. The Sub-Adviser also will notify and obtain the consent of
the Trust, the Manager and the Board if there is expected to be an actual
change in control or management of the Sub-Adviser that would be deemed an
assignment of this Agreement within the meaning of Sections 2(a)(4) and
202(a)(1) of the 1940 Act and Advisers Act, respectively, and the rules
promulgated thereunder. The Sub-Adviser will promptly notify the Trust, the
Manager and the Board of any change in the Sub-Adviser's financial condition
which would materially adversely impact its abilities to perform its duties
hereunder and of any reduction in the amount of coverage under the
Sub-Adviser's errors and omissions insurance coverage;
(ii) Provide the Manager, the Trust or the Board
with such information and assurances (including certifications and
sub-certifications) as the Manager, the Trust or the Board may reasonably
request from time to time in order to assist it in complying with applicable
laws, rules and regulations, including requirements in connection with the
Manager's, the Sub-Adviser's or the Board's fulfillment of its responsibilities
under Section 15(c) of the 1940 Act and the preparation and/or filing of the
Registration Statement, Form N-CSRs and Form N-Qs;
(iii) As reasonably requested by the Trust on
behalf of the Trust's officers and in accordance with the scope of
Sub-Adviser's obligations and responsibilities contained in this Agreement
(i.e., with respect to the Allocated Portion and the Sub-Adviser's provision of
portfolio management services hereunder), Sub-Adviser will provide reasonable
assistance to the Trust in connection with the Trust's compliance with the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated by the SEC
thereunder, and Rule 38a-1 of the 1940 Act. Specifically, the Sub-Adviser
agrees to: (a) certify periodically, upon the reasonable request of the Trust,
that with respect to the Allocated Portion and the Sub-Adviser's provision of
portfolio management services hereunder, it is in compliance with all
applicable "federal securities laws", as required by Rule 38a-l under the 1940
Act, and Rule 206(4)-7 under the Advisers Act; (b) upon request and reasonable
prior notice, cooperate with third-party audits arranged by the Trust to
evaluate the effectiveness of the Trust's compliance and internal controls; (c)
upon request and reasonable prior notice, provide the Trust's chief compliance
officer with direct access to its chief compliance officer (or his/her
designee); (d) upon request, provide the Trust's chief compliance officer with
periodic reports; (e) promptly provide notice of any material compliance
matters; and (f) upon reasonable notice and reasonable request, provide the
Manager with access to the records relating to such compliance policies and
procedures of the Sub-Adviser as they relate to the Series; and
(iv) The Sub-Adviser has adopted a written code
of ethics that it reasonably believes complies 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
- 5 -
(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.
2. REPRESENTATIONS
2.1 REPRESENTATIONS OF THE SUB-ADVISER. The Sub-Adviser
represents, warrants and agrees that:
(i) It has all requisite power and authority to
enter into and perform its obligations under this Agreement, and has taken all
necessary corporate action to authorize its execution, delivery and performance
of this Agreement;
(ii) It is registered as an investment adviser
under the Advisers Act and will continue to be so registered during the term of
this Agreement;
(iii) It has adopted and implemented a written
code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act
(the "CODE OF ETHICS") and has provided the Manager and the Trust with a copy
of such Code of Ethics and will provide copies of any future amendments
thereto;
(iv) It has adopted and implemented written
policies and procedures, as required by Rule 206(4)-7 under the Advisers Act,
which are reasonably designed to prevent violations of federal securities laws
by the Sub-Adviser, its employees, officers, and agents ("COMPLIANCE
PROCEDURES"), and the Manager and the Trust have been provided a copy of a
summary of the Compliance Procedures and will be provided with any future
amendments thereto;
(v) It has delivered to the Manager copies of its
Form ADV, Part 2A as most recently filed with the SEC and its current Form ADV,
Part 2B. It also will provide the Manager and the Trust with a copy of any
future filings of Form ADV or any amendments thereto in accordance with the
delivery requirements of Rule 204-3(b) under the Advisers Act;
(vi) It is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement and
will promptly notify the Manager and the Trust of the occurrence of any event
that would likely disqualify the Sub-Adviser from serving as an investment
adviser to a Series pursuant to Section 9(a) of the 1940 Act or other
applicable law, rule or regulation;
- 6 -
(vii) It shall use no material, non-public
information concerning portfolio companies that may be in or come into its
possession or the possession of any of its affiliates or employees, nor will
the Sub-Adviser seek to obtain any such information, in providing investment
advice or investment management services to the Series; and
(viii) Prior to launch of the Series, it will
maintain an appropriate level of errors and omissions insurance coverage from
an insurance company that has a minimum credit rating of A- from at least one
national recognized credit rating agency.
2.2 REPRESENTATIONS OF THE MANAGER. The Manager represents,
warrants and agrees that:
(i) It has all requisite power and authority to
enter into and perform its obligations under this Agreement, and has taken all
necessary corporate action to authorize its execution, delivery and performance
of this Agreement;
(ii) It is registered as an investment adviser
under the Advisers Act and will continue to be so registered during the term of
this Agreement;
(iii) It is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement and
will promptly notify the Sub-Adviser of the occurrence of any event that would
disqualify the Manager from serving as an investment adviser to a Series
pursuant to Section 9(a) of the 1940 Act or other applicable law, rule or
regulation;
(iv) it has received a copy of Sub-Adviser's Form
ADV, Part 2A as most recently filed with the SEC and its current Form ADV, Part
2B; and
(v) it understands that the investments
recommended by the Sub-Adviser for the Allocated Portion of each Series may not
be profitable, and it is possible that losses incurred with respect to such
investments, individually or collectively, may be significant or complete.
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") as and when furnished to the Sub-Adviser by the
Fund or the Fund's service providers and represents and
warrants that, with respect to disclosure about the
Sub-Adviser, the manner in which the Sub-Adviser manages the
Fund and information relating directly or indirectly to the
Sub-Adviser (the "Sub-Adviser Disclosure"), 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.
- 7 -
3. SUB-ADVISORY FEE
The Adviser shall pay to the Sub-Adviser, as compensation for the Sub-Adviser's
services hereunder, a fee, determined as described in Schedule C that is
attached hereto and made a part hereof. Such fee shall be computed daily and
paid not less than monthly in arrears by the Adviser. A 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 a 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.
3.1 EXPENSES
During the term of this Agreement, Sub-Adviser will pay all expenses
directly incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Allocated Portion of each Series and investment-related
expenses reasonably incurred by the Sub-Adviser that are directly related to
portfolio transactions and positions for the Allocated Portion (including
direct expenses associated with the Allocated Portion's investments, transfer
taxes and premiums, taxes withheld on foreign dividends, investment-related
interest expense, borrowing charges on securities sold short, dividends on
securities sold but not yet purchased, filings or margin fees). The
Sub-Adviser shall be responsible for all the costs associated with any special
meetings of the Board or shareholders convened as a result of a change in
control of the Sub-Adviser resulting in an assignment of this Agreement under
the 1940 Act (including, but not limited to, the legal fees associated with
preparing a prospectus supplement or proxy statement and associated mailing and
solicitation costs).
4. OWNERSHIP AND HOLDING PERIOD OF RECORDS
All records required to be maintained and preserved by the Series
pursuant to the rules or regulations under Section 31(a) of the 1940 Act and
maintained and preserved by the Sub-Adviser on behalf of the Series are the
property of the Series and shall be surrendered by the Sub-Adviser promptly on
request by the Series or the Manager; provided, that the Sub-Adviser may at its
own expense make and retain copies of any such records. The Sub-Adviser agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
such records required to be maintained by Rule 31a-1 under the 1940 Act.
5. TRANSACTIONS AND CUSTODY
The Sub-Adviser shall have the authority to instruct the custodian
designated by the Trust (the "CUSTODIAN"): (i) to pay cash for securities and
other property delivered to the Custodian; (ii) to deliver securities and other
property against payment for the Series; and (iii) to transfer assets and funds
to such brokerage accounts as the Sub-Adviser may designate, all consistent
- 8 -
with the powers, authorities and limitations set forth herein. The Sub-Adviser
shall not have authority to cause the Custodian to deliver securities and other
property, or pay cash to the Sub-Adviser except as expressly provided herein.
All transactions will be consummated by payment to or delivery by the
Custodian, or such depositories or agents as may be designated by the Custodian
in writing, of all cash and/or securities due to or from the Allocated Portion,
and the Sub-Adviser shall not have possession or custody thereof. The
Sub-Adviser shall advise the Custodian and confirm in writing to the Trust, to
the Manager and any other designated agent of the Series, including the Series'
administrator, all investment orders for the Allocated Portion placed by it
with brokers and dealers in the manner set forth in Rule 31a-1 under the 1940
Act and as soon as practicable after the close of business each day but no
later than 11:00 a.m.
Eastern time the following business day. For purposes of the foregoing
sentence, communication via electronic means will be acceptable as agreed to in
writing from time to time by the Manager. The Trust shall issue to the
Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Sub-Adviser. The Sub-Adviser
will not serve as a custodian to the Trust, and the Sub-Adviser shall have no
liability for the acts or omissions of the Custodian, unless the liability was
directly caused by the Sub-Adviser's wilful misconduct, bad faith, gross
negligence or reckless disregard of its duties hereunder.
6. REPORTS TO SUB-ADVISER
Manager shall furnish or otherwise make available to the Sub-Adviser
such copies of the Registration Statement, financial statements, proxy
statements, reports, and other information relating to the Series' business and
affairs as the Sub-Adviser may, at any time or from time to time, reasonably
require in order to discharge its obligations under this Agreement. For
avoidance of doubt, this paragraph shall be construed to include, but not be
limited to, all written materials concerning Disabling Conduct as defined by
Section 10.ii. below of this Agreement.
7. CONFIDENTIALITY
Sub-Adviser will not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as
expressly authorized in this Agreement or as reasonably required to execute
transactions on behalf of the Series, and will keep confidential any non-public
information obtained directly as a result of this service relationship, and the
Sub-Adviser shall disclose such non-public information only if the Manager or
the Board have authorized such disclosure by prior written consent, or if such
information is or hereafter otherwise is known by the Sub-Adviser or has been
disclosed, directly or indirectly, by the Manager or the Trust to others, or
becomes ascertainable from public or published information or trade sources, or
if such disclosure is expressly required or requested by applicable federal or
state regulatory authorities, or to the extent such disclosure is reasonably
required by auditors or attorneys of the Sub-Adviser in connection with the
performance of their professional services or as may otherwise be contemplated
by this Agreement. Sub-Adviser shall not disclose information regarding
characteristics of the Series or Allocated Portion, trading history, portfolio
holdings, performance information or any other related information to any
third-party, except in compliance with the Trust's policies on disclosure of
portfolio holdings or as required by applicable law or regulation.
Notwithstanding the foregoing, the Sub-Adviser may, to the extent permitted by
law, disclose the total return earned by the Allocated Portion of each Series
and
- 9 -
may include such total return in the calculation of composite performance
information, without
any attribution to, or mention of, the Series.
Sub-Adviser may not consult with any other sub-adviser of the Series
concerning transactions in securities or other assets for any investment
portfolio of the Trust, including the Series, except that such consultations
are permitted between the current and successor sub-advisers of a Series in
order to effect an orderly transition of sub-advisory duties so long as such
consultations are not concerning transactions prohibited by Section 17(a) of
the 1940 Act.
8. PROXY VOTING
The Sub-Adviser shall: (i) vote all proxies solicited by or with
respect to the issuers of securities in which the assets of the Allocated
Portion of each Series may be invested in accordance with the Sub-Adviser's
proxy voting policies and procedures, as presented to the Trust, and in a
manner that the Sub-Adviser reasonably believes best serves the interests of
the Series' shareholders and that complies with applicable law; (ii) maintain
records of all proxies voted on behalf of the Series in respect of the
Allocated Portion; and (iii) provide information to the Trust, Manager or their
designated agent in a manner that is sufficiently complete and timely to ensure
the Trust's compliance with its filing obligations under Rule 30b1-4 under the
1940 Act.
9. USE OF NAMES AND LOGOS
9.1 USE OF TRADEMARKS BY SUB-ADVISER. Upon prior written consent from
the Manager, the Sub-Adviser may use with its marketing materials the name,
tradename, trademark, trade device, service xxxx, symbol or any abbreviation,
contraction or simulation thereof of the Manager, the Trust, the Series or any
of their affiliates.
9.2 USE OF TRADEMARKS BY TRUST. The Sub-Adviser hereby consents to
the use of its name, Mizuho Alternative Investments, LLC, in the Trust's
disclosure documents and shareholder communications and, subject to its prior
written consent, the Sub-Adviser consents to the use of its name and the use of
Mizuho Bank, Ltd. or any derivatives thereof or logo associated with those
names (collectively, the "TRADEMARKS") in the Trust's advertising, sales
literature and similar communications, which consent shall not be unreasonably
withheld.
9.3 TRADEMARK LICENSE. It is understood that the Trademarks or any
derivative thereof or logo associated with the Trademarks are the valuable
property of the Sub-Adviser and its affiliates, and that the Trust has the
right to use such Trademarks as described in Section 9.2 for so long as the
Sub-Adviser is a Sub-Adviser to the Trust and subject to the terms and
conditions of the following (the "TRADEMARK LICENSE"):
(i) Sub-Adviser grants to the Manager and the Trust a nonexclusive,
nontransferable trademark license to use the Trademarks subject to the terms
and conditions set forth in Section 9.3(i) through (vii) of this Agreement.
(ii) Manager, on behalf of itself and the Trust, acknowledges
Sub-Adviser's and its affiliates' ownership of the Trademarks and agrees that
it will do nothing inconsistent with the Sub-Adviser's and its affiliates'
ownership of the Trademarks and agrees that all use and
- 10 -
goodwill created by the use of the Trademarks by the Manager and the Trust
shall inure to the benefit of the Sub-Adviser and its affiliates. Manager, on
behalf of itself and the Trust, further acknowledges that nothing in this
Section 9 or any other section of this Agreement shall give the Manager and the
Trust the right to sublicense the use of the Trademarks, or entitle the Manager
and the Trust to any right, title or interest in the Trademarks other than the
right to use the Trademarks in accordance with this Section 9 or as otherwise
approved in writing by the Sub-Adviser.
(iii) The Manager, on behalf of itself and the Trust, shall not use,
purchase, apply, or register, anywhere in the world, or facilitate a third
party's purchase, application, or registration of a xxxx, domain name, key word
or trade name that is identical to or a translation/transliteration of, or
confusingly similar to any of the Trademarks. This sub-section shall survive
the termination of this Agreement.
(iv) The Manager, on behalf of itself and the Trust, agrees to
cooperate with the Sub-Adviser to facilitate the Sub-Adviser's control of the
nature and quality of all services and products associated with the Trademarks.
(v) The Manager, on behalf of itself and the Trust, shall ensure that
any use by the Manager and the Trust of the Trademarks shall not contain
material that: (a) infringes the intellectual property rights, or other
rights, of a third party; (b) is obscene, defamatory, unreasonably
objectionable or offensive; or (c) is likely to give rise to civil or criminal
liability.
(vi) Sub-Adviser shall have the right to terminate the Trademark
License upon thirty (30) days' written notice to the Manager or the Trust in
the event of any affirmative act of insolvency by the Manager or the Trust, or
upon the appointment of any receiver to take possession of the properties of
the Manager or the Trust, or upon the winding-up or any sequestration by
governmental authority of the Manager or the Trust, or upon breach of any of
the provisions of this Section 9 by the Manager or the Trust. Notice of any
such termination shall be provided to the Manager and the Trust in accordance
with Section 18 of this Agreement.
(vii) Upon termination of this Agreement, the Manager and the Trust
shall immediately discontinue all use of the Trademarks and destroy all printed
materials bearing the Trademarks (except to the extent that law or regulation
requires the Manager and the Trust not to destroy them). The Manager, on behalf
of itself and the Trust, agrees that upon termination all rights in the
Trademarks and the goodwill connected therewith shall remain the property of
the Sub-Adviser and its affiliates. The expiration of the Manager's and the
Trust's right to use the Trademarks upon termination of this Agreement shall
not entitle the Manager and the Trust to compensation or damages of any
description.
10. LIMITATION OF LIABILITY; INDEMNIFICATION
(a) The Sub-Adviser shall have responsibility for the accuracy and
completeness (and liability for the lack thereof) only of Disclosure Documents
with respect to Sub-Adviser disclsoure .
(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 Adviser in contravention - 11 -
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 with
respect to each Fund managed by the Sub-Adviser, each affiliated person of the
Trust within the meaning of Section 2(a)(3) of the 1940 Act, and each person
who controls the Trust within the meaning of Section 15 of the 1933 Act (any
such person, an "Indemnified Party") against any and all losses, claims,
damages, expenses or liabilities (including the reasonable cost of
investigating and defending any alleged loss, claim, damage, expense or
liability and reasonable counsel fees incurred in connection therewith) to
which any such person may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages, expenses or liabilities
(or actions in respect thereof) arise out of or are based upon: (i) a breach by
the Adviser of this Agreement or of the representations and warranties made by
the Adviser herein; (ii) any Improper Investment; (iii) the Adviser's
performance or non-performance of its duties hereunder othexent hatheAdviserhas
actedwithwilfulmisfeasance,badfaith,or neglignceorwithrckledisegardof
itsobligations andutieshreunder or (iv) any untrue statement or alleged untrue
statement of a material fact contained in any Disclosure Document or the
omission or alleged omission from a Disclosure Document of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, for purposes of this Section 14(c)(iv) solely with respect to the
Sub-Adviser Disclosure (it being understood, however, that this indemnification
and agreement to hold harmless shall not apply to the extent that any such
untrue statement, alleged untrue statement, omission or alleged omission is the
result of any change made to any applicable Disclosure Document without the
written consent or other acknowledgment of the Adviser from and after the time
that such Disclosure Document has been reviewed by the Adviser, as contemplated
in Section 7(c) hereof); provided, however, that nothing herein shall be deemed
to protect any Indemnified Party who is a Trustee or officer of the Trust
against any liability to the Trust or to its shareholders to which such
Indemnified Party would otherwise be subject by reason or willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office with the Trust.
(d) For purposes of clarification, and subject to the above
provisions of this Section 14, except with respect to Sub-Adviser Disclosure or
Improper Investments, the Sub-Adviser shall not be liable for any error of
judgment or mistake of law, or for any loss arising out of any investment or
for any act or omission in the execution of securities transactions for the
Fund, provided that nothing in this Agreement shall protect the Sub-Adviser
against any liability to the Fund to which the Sub-Adviser would otherwise be
subject by reason of willful misfeasance, bad faith, or negligence in the
performance of its duties hereunder or by reason of its reckless disregard of
its obligations and duties hereunder.
11. AMENDMENT OR ASSIGNMENT OF AGREEMENT
Any amendment to this Agreement shall be in writing signed by the
parties hereto; provided, that no such amendment shall be effective unless
authorized on behalf of any Series: (i) by resolution of the Board, including
the vote or written consent of a majority of the Board
- 12 -
who are not parties to this Agreement or interested persons of any such
parties; and (ii) as and to the extent required under the 1940 Act, by vote of
a majority of the outstanding voting securities of the applicable Series. This
Agreement shall terminate automatically and immediately in the event of its
assignment as defined under the 1940 Act and the rules promulgated thereunder.
12. TERM AND TERMINATION OF AGREEMENT
12.1 This Agreement shall become effective as of the date executed
and shall remain in full force and effect continually thereafter, subject to
renewal as provided in Section 12(c) and unless terminated automatically as set
forth in Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by
vote of its Board or (ii) with respect to the 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.
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 -
13. INTERPRETATION AND DEFINITION OF TERMS
Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act shall be resolved by reference to such term or provision of the
1940 Act and to interpretation thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC validly issued pursuant to the 1940 Act.
Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested person," "assignment" and "affiliated person," as used
in this Agreement shall have the meanings assigned to them by Section 2(a) of
the 1940 Act. In addition, when the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is modified, interpreted or
relaxed by a rule, regulation or order of the SEC, whether of special or of
general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
14. CHOICE OF LAW This Agreement is made and to be principally
performed in the State of New York and except insofar as the 1940 Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws
of the State of New York.
15. CHANGE IN THE SUB-ADVISER'S OWNERSHIP. The Sub-Adviser agrees
that it shall notify the Trust of any anticipated or otherwise reasonably
foreseeable change in the ownership of the Sub-Adviser within a reasonable time
prior to such change being effected.
16. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction
17. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
18. EXECUTION IN COUNTERPARTS; ELECTRONIC DELIVERY
This Agreement may be executed simultaneously in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Signatures on this Agreement may be
communicated by electronic transmission in accordance with Section 18 and shall
be binding upon the parties so transmitting their signatures.
19. NOTIFICATIONS
All reports, notices, demands or requests required to be
made or delivered hereunder shall be in writing and delivered by e-mail (except
for a notice of termination), by reputable courier service such as Federal
Express, or by registered or certified mail, return
- 14 -
receipt requested, to the addresses below or to such other address as may be
designated by a
party. Notices shall be effective upon receipt.
If to the Manager:
Rothschild Larch Lane Management Company
000 Xxxxxxxxxxx Xxx.
X-000
Xxx Xxxxx, XX 00000
E-Mail: [________]
Attn: [____________]
If to the Sub-Adviser:
Mizuho Alternative Investments, LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
E-mail: xxx.xxxxx@xxxxxxxxxx.xxx
Attn: Chief Operating Officer
Wire transfers of payments due to the Sub-Adviser hereunder should be made
to:
[REDACTED]
or to such other account as the Sub-Adviser may indicate to the Manager
from time to time.
- 15 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
ROTHSCHILD LARCH LANE MANAGEMENT
COMPANY
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Manager
MIZUHO ALTERNATIVE INVESTMENTS, LLC
By: /s/ Morikuni Shimoyamada
---------------------------------
Name: Morikuni Shimoyamada
Title: President and CEO
- 16 -
SUB-ADVISORY AGREEMENT
SCHEDULE A
SERIES OF THE ADVISORS' INNER CIRCLE FUND III
Rothschild Larch Lane Alternatives Fund
SUB-ADVISORY AGREEMENT
SCHEDULE C
RATE OF COMPENSATION
ANNUAL PERCENTAGE RATE OF
COMPENSATION BASED ON EACH SERIES'
AVERAGE DAILY NET ASSETS OF THE
FUND ALLOCATED PORTION
--------------------------------------------------------------------------------
Rothschild Larch Lane Alternatives Fund 1.00% of the Allocated Portion
