SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this 16th day of
June, 2010 by and between FROST INVESTMENT ADVISORS, LLC a Delaware limited
liability company with its principal place of business at 000 Xxxx Xxxxxxx
Street, 15th Floor, San Antonio, Texas 78205 (the "Adviser"), and ARTIO GLOBAL
MANAGEMENT LLC a Delaware limited liability company with its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, 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 II (the "Trust") on
behalf of the series set forth on Schedule A to this Agreement (the "Fund") and
pursuant to the provisions of the Investment Advisory Agreement dated as of May
5, 2008 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. 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.
(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,
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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 has determined to delegate the
authority and responsibility to vote proxies for the Fund's securities to the
Sub-Adviser. So long as proxy voting authority for the Fund has been delegated
to the Sub-Adviser, the Sub-Adviser shall provide such assistance to the
Adviser with respect to the voting of proxies for the Fund as the Adviser may
from time to time reasonably request, and the Sub-Adviser shall promptly
forward to the Adviser any information or documents necessary for the Adviser
to exercise its proxy voting responsibilities. The Sub-Adviser shall not vote
proxies with respect to the securities held by the Fund unless and until the
Board or the Adviser delegates such authority and responsibility to the
Sub-Adviser or otherwise instructs the Sub-Adviser to do so in writing,
whereupon 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 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 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.
(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 Fund 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, 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 Fund upon the termination of this Agreement
and shall be available for telecopying without delay during any day the Fund is
open for business.
(e) HOLDINGS INFORMATION AND PRICING. The Sub-Adviser shall provide
regular reports regarding the Fund's holdings, and shall, on its own
initiative, furnish the Fund and the Adviser from time to time with whatever
information the Sub-Adviser believes is appropriate for this
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purpose. The Sub-Adviser agrees to immediately notify the Adviser 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 any pricing
information of which the Sub-Adviser is aware to the Adviser 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 Fund's net asset value in accordance with
procedures and methods established by the Board.
(f) COOPERATION WITH AGENTS OF THE ADVISER AND THE FUND. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to the
Adviser, the Fund and the Fund's custodian and foreign sub-custodians, the
Fund's pricing agents and all other agents and representatives of the Fund and
the Adviser, such information with respect to the Fund as such entities may
reasonably request from time to time in the performance of their obligations,
provide prompt responses to reasonable requests made by such persons and
establish appropriate interfaces with each so as to promote the efficient
exchange of information and compliance with applicable laws and regulations.
(g) CONSULTATION WITH OTHER SUB-ADVISERS. In performance
of its duties and obligations under this Agreement, the Sub-Adviser shall not
consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio
that is under common control with the Fund concerning transactions for the
Fund, except as permitted by the policies and procedures of the Fund. The
Sub-Adviser shall not provide investment advice to any assets of the Fund other
than the assets managed by the Sub-Adviser.
2. CODE OF ETHICS. The Sub-Adviser has adopted a written code of
ethics that it reasonably believes complies with the requirements of Rule 17j-1
under the 1940 Act, which it will provide to the Adviser and the Fund. 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 Fund 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 Fund 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 any Fund.
3. INFORMATION AND REPORTING. The Sub-Adviser shall provide the Fund,
the Adviser, and their respective officers with such periodic reports
concerning the obligations the Sub-Adviser has assumed under this Agreement as
the Fund 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 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 and
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
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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 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) 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 Fund or the Sub-Adviser's conduct of its business as
an investment adviser reasonably available for compliance audits by the Adviser
or a Fund's employees, accountants or counsel; in this regard, the Fund and the
Adviser acknowledge that the Sub-Adviser shall have no obligations 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 with any information reasonably requested regarding its management
of the Fundrequired for any meeting of the Board, or for any shareholder
report, amended registration statement, proxy statement, or prospectus
supplement to be filed by the Fund 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 such information concerning portfolio transactions as may be necessary
to enable the Adviser to perform such compliance testing on the Fund 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 a Fund, neither the Sub-Adviser nor any of its
directors, officers or employees will act as a principal or agent or receive
any commission except as permitted by the 1940 Act.
(b) PLACEMENT OF ORDERS. The Sub-Adviser shall arrange for the
placing of all orders for the purchase and sale of securities for a Fund's
account with brokers or dealers selected by the
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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 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 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.
(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
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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, and any amendments or
supplements thereto, the annual or semi-annual reports to shareholders, other
reports filed with the Commission and any marketing material of a Fund
(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 Fund 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.
(d) USE OF THE NAME "FROST". The Sub-Adviser has the right to use
the name "Frost" 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 "Frost " in connection with the management and operation
of the Fund. 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 "Frost."
(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 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.
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8. THE NAME "FROST". The Adviser has granted to the Trust a license
to use the name "Frost" as part of the name of the Fund. The Sub-Adviser and
the Fund shall be obligated to use the name "Frost" in the name of the Fund
during the period in which this Agreement remains in effect or the Sub-Adviser
otherwise acts as sub-investment adviser for the Fund, except as agreed to by
the Adviser. The foregoing authorization by the Adviser to the Trust to use
said 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 same; the Sub-Adviser
acknowledges and agrees that as between the Sub-Adviser and the Adviser, the
Adviser has the exclusive right so to use, or authorize others to use, said
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 "Frost."
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 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. 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 Fund or the Adviser in any
way or otherwise be deemed to be an agent of the Fund 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 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 Fund 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 Fund; or
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(b) 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
(c) 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 Fund, 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
(d) 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 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 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. The Sub-Adviser shall indemnify and
hold harmless the Trust 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
"Sub-Adviser Indemnitees") against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses) by
reason of or arising out of: (a) 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 Fund's Registration Statement or any
written guidelines or instruction provided in writing by the Board, (b) a
Fund's failure to satisfy the diversification or source of income requirements
of Subchapter M of the Code generally in the performance of its duties or
obligations as specifically stated in this Agreement, or (c) 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 such losses, claims, damages, liabilities
or litigation (including reasonable legal and other expenses) are not the
result of any act of or breach of duty by the Fund, the Trust, and/or the
Adviser.
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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.
9
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.
FROST INVESTMENT ADVISORS, LLC
By: /s/ illegible signature
----------------------------
Name: [ ]
Title:[ ]
ARTIO GLOBAL MANAGEMENT LLC
By: /s/ illegible signature
----------------------------
Name: [ ]
Title:[ ]
10
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
DATED JUNE 16, 2010 BETWEEN
FROST INVESTMENT ADVISORS, LLC
AND
ARTIO GLOBAL 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
--------------------------- ------
Frost Small Cap Equity Fund 0.70%
11
