AMENDED AND RESTATED
SUB-ADVISORY AGREEMENT
This Amended and Restated Sub-Advisory Agreement (this "AGREEMENT") is made
as of December 7, 2016, between Fiera Capital Inc., a Delaware corporation
located at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 (the "MANAGER"), and
Karya Capital Management LP, a Delaware, limited partnership located at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 (the "SUB-ADVISER").
WITNESSETH:
WHEREAS, The Advisors' Inner Circle Fund III, a Delaware statutory trust
(the "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 (the "SERIES") with each Series having its
own assets and investment policies; and
WHEREAS, Trust has retained the Manager to provide investment advisory and
administrative services to certain of the Series of the Trust pursuant to an
investment advisory agreement dated December 5, 2016 ("INVESTMENT ADVISORY
AGREEMENT"), which agreement specifically provides for the retention of one or
more sub-advisers to provide the investment advisory services described therein;
and
WHEREAS, the Manager and the Sub-Adviser previously entered into a
Sub-Advisory Agreement dated August 31, 2016 (the "Prior Sub-Advisory
Agreement"); and
WHEREAS, the Manager and the Sub-Adviser wish to amend and restate the
Prior Sub-Advisory Agreement; and
WHEREAS, the Manager desires, and the Board of Trustees of the Trust (the
"BOARD") has granted the Manager the authority, to retain the Sub-Adviser to
furnish investment advisory and portfolio management services to the portion of
each Series listed on Schedule A hereto that has been allocated to the
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, in accordance with the
provisions of this Agreement;
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
1.1 INVESTMENT MANAGEMENT SERVICES. Subject to the general oversight
of the Manager, and in accordance with the Series' investment objectives,
policies and restrictions as provided herein on Schedule B, as may be amended by
the Manager from time to time, the Sub-Adviser shall act as the investment
subadviser 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 in a manner consistent with the Series' investment
objectives, policies and restrictions and the investment guidelines, 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, a broker or dealer, or with a futures commission
merchant ("FCM"). The Sub-Adviser shall determine what portion of the Allocated
Portion's assets will be invested or held uninvested as cash.
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.
The Sub-Adviser will select brokers, dealers and FCMs to effect all
portfolio transactions subject to the conditions set forth herein. The
Sub-Adviser will place all necessary orders with brokers, dealers, FCMs or
issuers, and will negotiate commissions, if applicable. The Sub-Adviser is
directed at all times to seek to execute transactions for the Allocated Portion
in accordance with any written policies, practice or procedures that may be
established by the Board or the Manager from time to time and which 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. 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 use commercially reasonable efforts 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, dealer or FCM 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 Sub-Adviser agrees that
it will provide the Manager with a written list of brokers, dealers and FCMs
that are affiliates of the Sub-Adviser and will, from time to time, update such
list as necessary.
Subject to the appropriate policies and procedures approved by the Board,
the Sub-Adviser may, to the extent authorized by Section 28(e) of the Securities
Exchange Act of 1934, as amended ("EXCHANGE ACT") cause the Allocated Portion to
pay a broker or dealer that provides brokerage or research services to the
Manager, the Sub-Adviser and the Allocated Portion an amount of commission for
effecting a Series transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Sub-Adviser determines, in good faith, that such amount of commission is
reasonable in
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relationship to the value of such brokerage or research services provided
viewed in terms of that particular transaction or the Sub-Adviser's overall
responsibilities to the Series or its other advisory clients. Subject to
seeking best execution, the Board or the Manager may direct the Sub-Adviser to
effect transactions in portfolio securities through broker-dealers in a manner
that will help generate resources to pay the cost of certain expenses that the
Trust is required to pay or for which the Trust is required to arrange payment.
To the extent applicable, 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 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), to
the extent applicable: (i) designating and providing reasonable access to one or
more employees of the Sub-Adviser who are knowledgeable about the security,
issuer or asset, its financial condition, trading and/or other relevant factors
for valuation, which employees shall be reasonably 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 or other assets held by the Allocated
Portion, upon the reasonable request of the Manager or custodian; (iii) upon the
request of the Manager or the custodian, confirming pricing and 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 the Series, hereby authorizes any entity or person
associated with the Sub-Adviser which is a member of a national securities
exchange to effect or execute any transaction on the exchange for the account of
the Series which is permitted by Section 11(a) of the Exchange Act and Rule
11a2-2(T) thereunder, and the 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, the
investment guidelines set forth in Schedule
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B hereto 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.
The Sub-Adviser will be an independent contractor and will have no
authority to act for or represent the Trust, Series or the Manager in any way or
otherwise be deemed an agent of the Trust, Series or the Manager except as
expressly authorized in this Agreement or another writing by the Trust, the
Manager and the Sub-Adviser. The services of the Sub-Adviser to the Manager and
the Trust are not to be deemed to be exclusive, and the Sub-Adviser shall be
free to render investment advisory or other services to others and to engage in
other activities. It is understood and agreed that, except as otherwise
prohibited by this Agreement, the directors, officers, and employees of the
Sub-Adviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors, trustees, or employees of any other firm or corporation.
Upon notice to the Sub-Adviser, the Manager may temporarily allocate any
uninvested portion of a Series' assets allocated to the Sub-Adviser to another
sub-adviser of the Series. For the purposes of this Agreement, such other
sub-adviser of the Series is referred to herein as the "Receiving Sub-Adviser",
such uninvested portion of the assets allocated to the Sub-Adviser that is
allocated to the Receiving Sub-Adviser hereunder is referred to herein as
"Excess Cash", such allocation of Excess Cash to the Receiving Sub-Adviser is
referred to herein as an "Excess Cash Allocation", each date on which an Excess
Cash Allocation occurs is referred to herein as an "Excess Cash Allocation Date"
and the value of Excess Cash Allocated with respect to a particular Excess Cash
Allocation Date is referred to herein as an "Excess Cash Allocation Amount". For
the avoidance of doubt, the Manager shall have the sole authority to allocate
and reallocate Excess Cash to and from the Sub-Adviser, and the Sub-Adviser
expressly agrees that it has no authority to allocate or reallocate Excess Cash.
Upon the effective date of an Excess Cash Allocation, the Excess Cash shall
no longer be deemed to be part of the Sub-Adviser's Allocated Portion, and the
Sub-Adviser shall not have the authority to manage the Excess Cash pursuant to
the terms and conditions of this Agreement. However, notwithstanding the
foregoing, the Excess Cash shall be considered part of the Allocated Portion for
purposes of calculating the Sub-Adviser's compensation under this Agreement.
Upon notice to the Sub-Adviser, the Manager may reallocate all or a portion
of the Excess Cash from the Receiving Sub-Adviser to the Sub-Adviser. Effective
upon the date that the Sub-Adviser receives the Excess Cash reallocated to it,
such reallocated Excess Cash shall be deemed to be part of the Sub-Adviser's
Allocated Portion for all purposes of this Agreement.
The Manager agrees to reallocate Excess Cash to the Sub-Adviser in the
exact value of each Excess Cash Allocation Amount. The Manager may reallocate
such Excess Cash to the Sub-Adviser in one reallocation or a series of
reallocations. If at any point the Manager determines to reallocate Excess Cash
from the Receiving Sub-Adviser to the Sub-Adviser, and the value of the Excess
Cash managed by the Receiving Sub-Adviser is less than the Excess Cash
Allocation Amount to which such Excess Cash is being applied, the Manager may
allocate to the Sub-Adviser a portion of the Receiving Sub-Adviser's Allocated
Portion in excess of the Excess Cash ("Additional Allocated Assets") in an
amount sufficient to equal the Excess Cash
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Allocation Amount. The Manager may apply Excess Cash reallocated to the
Sub-Adviser to a particular Excess Cash Allocation Amount in its sole
discretion.
Notwithstanding any other provision of this Agreement, the value of the
Excess Cash shall equal the sum of the values of each Excess Cash Allocation
Amount minus the sum of values of the Excess Cash reallocated and Additional
Allocated Assets allocated to the Sub-Adviser. The value of the Excess Cash
shall be determined by reference to the books and records maintained by the
Series' administrator. The Manager agrees to cooperate with the Series'
administrator and take such actions as the administrator deems reasonably
necessary or appropriate to ensure that the value of the Excess Cash is
appropriately recorded on the books and records maintained by the Series'
administrator.
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 Trust and/or the Series with respect to transactions in respect
of the Allocated Portion are maintained and preserved by it or on its behalf in
accordance with applicable laws and regulations.
1.2.2 REPORTS AND FILINGS. As they relate to the Allocated Portion, provide
reasonable assistance as needed in the preparation of (but not pay for) all
periodic reports by Trust or the 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. The Sub-Adviser shall
review draft reports to shareholders, Registration Statements or portions
thereof that relate to the Allocated Portion 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. To the extent applicable, with respect to the Allocated Portion, the
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.
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. The 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 the 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 or any of its
affiliates 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
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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, or to
the Sub-Adviser's actual knowledge will likely be, 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 Sub-Adviser, the Manager or
any of their affiliates; 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 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, or if there is, or there is expected to be, an actual change in
control or management of the Sub-Adviser within the meaning of Rules 2a-6 and
202(a)(1)-1 under the 1940 Act and Advisers Act, respectively. The Sub-Adviser
will promptly notify the Trust, the Manager and the Board of any change in the
Sub-Adviser's financial condition which could 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 or professional liability 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 Manager's or the Board's
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 the
Sub-Adviser's obligations and responsibilities contained in this Agreement, the
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 to and reasonable
request, provide the Manager with access to the
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records relating to such compliance policies and procedures of the Sub-Adviser
as they relate to the Series. The Sub-Adviser has adopted a written code of
ethics that it reasonably believes complies with the requirements of Rule 17j-1
under the 1940 Act, which it has provided to the Adviser and the Trust. The
Sub-Adviser shall ensure that its Access Persons (as defined in the
Sub-Adviser's Code of Ethics) comply in all material respects with the
Sub-Adviser's Code of Ethics, as in effect from time to time. Upon request, the
Sub-Adviser shall provide the Trust with (i) a copy of the Sub-Adviser's
current Code of Ethics, as in effect from time to time, and (ii) a
certification that it has adopted procedures reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by the Sub-Adviser's
Code of Ethics. Annually, the Sub-Adviser shall furnish a written report, which
complies with the requirements of Rule 17j-1, concerning the Sub-Adviser's Code
of Ethics to the Adviser and the Trust's Board. The Sub-Adviser shall respond
to requests for information from the Adviser and the Trust as to violations of
the Code by Access Persons and the sanctions imposed by the Sub-Adviser. The
Sub-Adviser shall immediately notify the Adviser and the Trust of any material
violation of the Code, whether or not such violation relates to a security held
by any Series.
1.2.5 OTHER SERVICES. The Sub-Adviser shall perform such other functions of
management and supervision as may be reasonably requested by the Manager or the
Trust, and agreed to by the Sub-Adviser.
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
(a "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 or 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 as most recently filed with the SEC and will provide the Manager and
the Trust with a copy of any future filings of Form ADV or any amendments
thereto;
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(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 could 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;
(vii) It shall not violate any applicable laws or
regulations regarding xxxxxxx xxxxxxx;
(viii) It maintains an appropriate level of errors
and omissions or professional liability insurance coverage from an insurance
company that has a minimum credit rating of A- from at least one national
recognized credit rating agency; and
(ix) It (a) is a member of the National Futures
Association ("NFA") and is registered with the U.S. Commodity Futures Trading
Commission ("CFTC") as a commodity pool operator and commodity trading advisor,
(b) will comply in all material respects with applicable NFA and CFTC rules and
regulations with respect to its obligations under this Agreement, and (c) will
notify the Adviser of any change in its status with respect to the foregoing
sub-section (a) or failure to comply with respect to the foregoing sub-section
(b).
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 has been duly authorized by the Board to
enter into sub-advisory agreements, including this Agreement, and to delegate
to the Sub-Adviser the provision of investment services to the Allocated
Portion as contemplated hereby;
(iii) It is registered as an investment adviser
under the Advisers Act and will continue to be so registered during the term of
this Agreement and will promptly notify the Sub-Adviser of the occurrence of
any event that would disqualify it from serving as investment manager of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise;
(iv) The Investment Advisory Agreement contains a
representation to the Trust that the Manager will comply, and cause the Series
to comply, in all material respects with the 1940 Act, the Advisers Act and all
other applicable laws and regulation to which it or the Series may be subject,
including, without limitation, Subchapter M of the Internal Revenue Code of
1986, as amended, subject in each case to the obligations of SEI Investments
Global Funds Services ("SEI") as set forth in one or more agreements by and
among SEI and the Trust and/or SEI and the Manager; and
(v) It has adopted and implemented a Code of
Ethics and has provided the Trust with a copy of such Code of Ethics and will
provide copies of any future amendments thereto;
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(vi) 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 Manager, its employees, officers, and agents, and the Trust has been
provided a copy or a summary of such policies and procedures and will be
provided with any future amendments thereto; and
(vii) It (a) is a member of the NFA and is
registered with the CFTC as a commodity pool operator, (b) will comply in all
material respects with applicable NFA and CFTC rules and regulations with
respect to its management of each Series, and (c) will notify the Sub-Adviser
of any change in its status with respect to the foregoing sub-section (a) or
failure to comply with respect to the foregoing sub-section (b).
3. SUB-ADVISORY FEE
3.1 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 Series shall
have no responsibility for any fee payable to the Sub-Adviser.
The Sub-Adviser will be compensated based on the portion of Series 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 Series shares as described in the Series' prospectus. Notwithstanding
the foregoing, and for the avoidance of doubt, Excess Cash allocated to a
Receiving Sub-Adviser shall be deemed to be part of the Sub-Adviser's Allocated
Portion for purposes of determining the Sub-Adviser's compensation under this
Agreement. In addition, Excess Cash shall be valued for purposes of this Section
in accordance with the Excess Cash valuation methodology provided in Section 1.1
of this Agreement. 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.
3.2 EXPENSES
During the term of this Agreement, the Sub-Adviser will pay all expenses
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 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 and
margin fees).
The Sub-Adviser shall be responsible for all the costs associated with any
special meetings of the Board or shareholders convened for the primary benefit
of the Sub-Adviser
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(including, but not limited to, the legal fees associated with preparing a
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 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 issuers, brokers,
dealers and/or FCMs 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.
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.
7. CONFIDENTIALITY
7.1 SUB-ADVISER CONFIDENTIALITY. Subject to Section 7.2 hereunder,
the 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-
- 10 -
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 may include such total return in the calculation of composite performance
information, without any attribution to, or mention of, the Series.
7.2 OTHER SUB-ADVISERS. The 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
To the extent applicable, the Manager hereby delegates to the Sub-Adviser
authority, and Sub-Adviser hereby agrees, to: (i) vote all proxies solicited by
or with respect to the issuers of securities in which the assets of the
Allocated Portion 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 of the 1940 Act.
9. USE OF NAMES AND LOGOS
The Sub-Adviser hereby consents to the use of its name and the names of its
affiliates in the Trust's disclosure documents and shareholder communications
and, subject to the prior written consent of the Sub-Adviser, in advertising,
sales literature and similar communications, which consent shall not be
unreasonably withheld. The Sub-Adviser shall not use the name or any 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 in its marketing materials unless it first receives prior written
approval of the Manager, except as required by law or regulation. It is
understood that the name of each party to this Agreement, and any derivatives
thereof or logos associated with that name, is the valuable property of the
party in question and its affiliates, and that each other party has the right to
use such names pursuant to the relationship
- 11 -
created by, and in accordance with the terms of, this Agreement only so long as
this Agreement shall continue in effect. Upon termination of this Agreement,
the parties shall forthwith cease to use the names of the other parties (or any
derivative or logo) as appropriate and to the extent that continued use is not
required by applicable laws, rules and regulations.
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 statements in 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 Series (the
Series' "Disclosure Documents") with respect to disclosure about the
Sub-Adviser, the manner in which the Sub-Adviser manages the Series and
information relating directly or indirectly to the Sub-Adviser (the "Sub-Adviser
Disclosure").
(b) The Sub-Adviser shall be liable to the Series for any loss (including
transaction costs) incurred by the Series as a result of any investment made by
the Adviser in contravention of: (i) any investment policy, guideline or
restriction set forth in the Registration Statement or as approved by the Board
from time to time and provided to the Sub-Adviser; or (ii) applicable law,
including but not limited to the 1940 Act and the Code (including but not
limited to the Series' 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 Series 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 to the extent that the Adviser has acted with willful
misfeasance, bad faith, or negligence or with reckless disregard of its
obligations and duties hereunder 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 10(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
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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 10, 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 Series, provided
that nothing in this Agreement shall protect the Sub-Adviser against any
liability to the Series 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 who are not parties to this Agreement
or interested persons of either party hereto, 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.
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 Series, upon the affirmative vote
of a majority of the outstanding voting securities of the Series; 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
- 13 -
the purpose of voting on such approval; or (ii) the vote of a majority of the
outstanding voting securities of the Series; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of the Series
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 Series 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 Series 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 Series' 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. 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 without
reference or giving effect to the principles of conflict of laws other than
Section 5-1401 of the General Obligations Law of the State of New York.
15. FORCE MAJEURE
Notwithstanding any other term or condition of this Agreement, neither
party shall be obligated to perform or observe its obligations undertaken in
this Agreement (except for obligations to make payments hereunder) if prevented
or hindered from doing so by any circumstances found to be beyond its control,
including, without limitation: nationalization, expropriation, devaluation,
seizure, or similar action by any governmental authority, de facto or
- 14 -
de jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, levies or
other charges affecting the Trust's property; or the breakdown, failure or
malfunction of any utilities or telecommunications systems; or any order or
regulation of any banking or securities industry including changes in market
rules and market conditions affecting the execution or settlement of
transactions; or acts of war, terrorism, insurrection or revolution; or acts of
God, or any other similar event.
16. CHANGE IN 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.
17. 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.
18. AUTHORITY TO EXECUTE TRANSACTION DOCUMENTS
Subject to any other written instructions of the Manager or the Trust, the
Sub-Adviser is hereby appointed agent and attorney-in-fact for the limited
purposes of executing on behalf of each Series specified on Schedule A hereto
(with respect to the Allocated Portion): account documentation, transaction term
sheets and confirmations, certifications regarding the Series' status as an
accredited investor, qualified institutional buyer, qualified purchaser or
qualified eligible person and certifications regarding other factual matters as
may be requested by FCMs or counterparties in connection with the Sub-Adviser's
management of the Series' assets pursuant to this Agreement.
19. 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.
20. 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 (which shall include facsimile or email) and shall be
binding upon the parties so transmitting their signatures.
21. CFTC DISCLOSURE
PURSUANT TO AN EXEMPTION UNDER CFTC RULES IN CONNECTION WITH ACCOUNTS OF
QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO
BE, AND HAS NOT BEEN, FILED WITH THE CFTC. THE CFTC DOES NOT PASS UPON THE
MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR
- 15 -
ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE CFTC HAS
NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT
DOCUMENT.
[SIGNATURE PAGE FOLLOWS]
- 16 -
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.
FIERA CAPITAL INC.
By: /s/ Xxxxxxx XxXxxx
------------------
Name: Xxxxxxx XxXxxx
Title: General Counsel
KARYA CAPITAL MANAGEMENT LP
By: Karya Capital Inc., its general partner
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
- 17 -
SUB-ADVISORY AGREEMENT
SCHEDULE A
Fiera Capital Diversified Alternatives Fund
SUB-ADVISORY AGREEMENT
SCHEDULE B
INVESTMENT GUIDELINES
1. The Sub-Adviser will manage the Allocated Portion using a discretionary
global macro investment strategy implemented primarily via the futures
markets.
2. In implementing its investment strategy, the Sub-Adviser will not allow
the Allocated Portion to have a gross exposure exceeding 2,000% of its net
assets.
3. The Sub-Adviser will not allow the margin to equity ratio of the Allocated
Portion to exceed 30%.
4. The Sub-Adviser is prohibited from trading commodity futures or
commodity-linked derivatives in the Allocated Portion.
5. In implementing its investment strategy, the Sub-Adviser must abide by
liquidity limits that require that no single contract purchased for the
Allocated Portion can exceed 5% of the total open interest of the market
for such contract.
6. The Sub-Adviser's investment strategy for the Allocated Portion will
target an annualized standard deviation of 15%.
7. While managing the Allocated Portion, the Sub-Adviser hold a minimum of
five (5) positions at all times.
SUB-ADVISORY AGREEMENT
SCHEDULE C
RATE OF COMPENSATION
FUND ANNUAL PERCENTAGE RATE OF
COMPENSATION (1)BASED ON EACH SERIES'
AVERAGE DAILY NET ASSETS OF THE
ALLOCATED PORTION
--------------------------------------------------------------------------------
Fiera Capital Diversified [Redacted]
Alternatives Fund
--------------------------------------------------------------------------------
(1) The Allocated Portion for purposes of this Schedule C includes the value
of any Excess Cash determined in accordance with the provisions of Section
1.1 of this Agreement.
