SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this 1(st) day
of October, 2014 by and between NOMURA ASSET MANAGEMENT U.S.A. INC., a New York
corporation with its principal place of business at Worldwide Plaza, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Adviser"), and NOMURA CORPORATE
RESEARCH AND ASSET MANAGEMENT INC., a Delaware corporation with its principal
place of business at Worldwide Plaza, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Sub-Adviser").
WITNESSETH
WHEREAS, pursuant to authority granted to the Adviser by the Board
of Trustees (the "Board") of The Advisors' Inner Circle Fund III (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
October 1, 2014 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 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 (the "Assets"), consistent with the investment
objectives and policies of the Fund and any investment guidelines established
and modified from time to time by the Adviser and communicated in writing to the
Sub-Adviser. The Sub-Adviser shall determine, from time to time, what
investments shall be purchased for the Fund and what such investment instruments
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, and to any investment guidelines established by the
Adviser as referred to above. 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.
1
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, 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 investment instruments
and performing the Sub-Adviser's obligations hereunder, the Sub-Adviser shall
cause the Fund to comply with the diversification and source of income
requirements of Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company. The
Sub-Adviser shall maintain compliance procedures that it reasonably believes
are adequate to ensure the compliance with the foregoing. No supervisory
activity undertaken by the Adviser shall limit the Sub-Adviser's full
responsibility for any of the foregoing.
(c) PROXY VOTING. Pursuant to Board authority, the Adviser has the
authority to determine how proxies with respect to securities that are held by
the Fund shall be voted, and the Adviser may delegate the authority and
responsibility to vote proxies for the Fund's securities to the Sub-Adviser. So
long as proxy voting authority for the Fund has been delegated to the
Sub-Adviser, the Adviser shall provide such assistance to the Sub-Adviser with
respect to the voting of proxies for the Fund as the Sub-Adviser may from time
to time reasonably request, and the Adviser shall promptly forward to the
Sub-Adviser any information or documents necessary for the Sub-Adviser to
exercise its proxy voting responsibilities. The Sub-Adviser shall carry out
such responsibility in accordance with any instructions that the Board or the
Adviser shall provide from time to time, and at all times in a manner
consistent with Rule 206(4)-6 under the Advisers Act and its fiduciary
responsibilities to the Trust. The Sub-Adviser shall provide the Adviser with a
copy of its written proxy voting policies and procedures and as such may be
amended from time to time. The Sub-Adviser shall provide periodic reports and
keep such records relating to proxy voting as the Adviser and 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.
2
Unless and until otherwise directed by the Adviser or the Board the Sub-Adviser
shall be responsible for voting the Fund's proxies and exercising all other
applicable rights of the Fund as a security holder in connection with corporate
actions or other transactions relating to the Fund's portfolio holdings. The
Sub-Adviser is authorized to instruct the Fund's custodian and/or broker(s) to
forward promptly to the Sub-Adviser or designated service provider copies of
all proxies and shareholder communications relating to investment instruments
held in the portfolio of the Fund (other than materials relating to legal
proceedings against the Fund). The Sub-Adviser may also instruct the Fund's
custodian and/or broker(s) to provide reports of holdings in the portfolio of
the Fund. The Sub-Adviser has the authority to engage a service provider to
assist with administrative functions related to voting Fund proxies. The Trust
shall direct the Fund's custodian and/or broker(s) to provide any assistance
requested by the Sub-Adviser in facilitating the use of a service provider. In
no event shall the Sub-Adviser have any responsibility to vote proxies that are
not received on a timely basis. The Trust acknowledges that the Sub-Adviser,
consistent with the Sub-Adviser's written proxy voting policies and procedures,
may refrain from voting a proxy if, in the Sub-Adviser's discretion, refraining
from voting would be in the best interests of the Fund and its shareholders.
Unless the Sub-Adviser otherwise agrees in writing, the Sub-Adviser will not
advise or take any action on behalf of the Fund in any contemplated or actual
legal proceedings, including but not limited to bankruptcies, tax reclaims or
class actions (including the filing of proofs of claim), and the Sub-Adviser
will not be responsible for determining the Fund's eligibility to participate
in any such proceeding with respect to any securities or other instruments held
or formerly held in the Fund, or for taking any action in connection with such
proceeding.
(d) RECORDKEEPING. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the Fund,
except as otherwise provided herein or as may be necessary for the Sub-Adviser
to supply to the Adviser, the Trust or its Board the information required to be
supplied under this Agreement.
The Sub-Adviser shall maintain separate books and detailed records of
all matters pertaining to the Fund's assets advised by the Sub-Adviser required
by Rule 31a-1 under the 1940 Act (other than those records being maintained by
the Adviser, or any administrator custodian or transfer agent appointed by the
Fund) relating to its responsibilities provided hereunder with respect to the
Fund, and shall preserve such records for the periods and in a manner
prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and
Records"). The Fund Books and Records shall be available to the Adviser and the
Board during regular business hours upon request shall be delivered to the
Trust upon the termination of this Agreement and shall be available without
undue delay during any day the Trust is open for business.
3
(e) HOLDINGS INFORMATION AND PRICING. The Sub-Adviser shall provide
regular reports regarding the Fund's holdings, and may, on its own initiative,
furnish the Adviser, the Trust and its Board from time to time with whatever
information the Sub-Adviser believes is appropriate for this purpose. The
Sub-Adviser agrees to notify the Adviser and the Adviser agrees to notify the
Board promptly if the Sub-Adviser reasonably believes that the value of any
security held by the Fund may not reflect fair value. The Sub-Adviser agrees to
provide upon request any pricing information of which the Sub-Adviser is aware
to the Adviser, and/or any Fund pricing agent to assist in the determination of
the fair value of any Fund holdings for which market quotations are not readily
available or as otherwise required in accordance with the 1940 Act or the Fund
valuation procedures for the purpose of calculating the Trust's net asset value
in accordance with procedures and methods established by the Board.
(f) COOPERATION WITH AGENTS OF THE ADVISER AND THE TRUST. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to the
Adviser, the Trust and any Trust custodian or foreign sub-custodians, any Trust
pricing agents and all other agents and representatives of the Adviser and the
Trust with respect to such information regarding the Fund as such entities may
reasonably request from time to time in the 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.
The Sub-Adviser shall make its officers and employees available to the Adviser
from time to time to review any current or proposed investment guidelines for
the Fund and to consult with the Adviser with respect to the Fund's investment
matters.
(g) CONSULTATION WITH OTHER SUB-ADVISERS. In performance of its
duties and obligations under this Agreement, the Sub-Adviser shall not consult
with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is
under common control with the Fund concerning transactions for the Fund, except
as permitted by the policies and procedures of the Fund. The Sub-Adviser shall
not provide investment advice to any assets of the Fund other than the assets
managed by the Sub-Adviser.
2. Code of Ethics. The Sub-Adviser has adopted a written code of
ethics that it reasonably believes complies with the requirements of Rule 17j-1
under the 1940 Act, which it has provided to the Adviser and the Trust. The
Sub-Adviser shall ensure that its Access Persons (as defined in the
Sub-Adviser's Code of Ethics) comply in all material respects with the
Sub-Adviser's Code of Ethics, as in effect from time to time. Upon request, the
Sub-Adviser shall provide the Trust with (i) a copy of the Sub-Adviser's
current Code of Ethics, as in effect from time to time, and (ii) a
certification that it has adopted procedures reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by the Sub-Adviser's
Code of Ethics. Annually, the Sub-Adviser shall furnish a written report, which
complies with the requirements of Rule 17j-1, concerning the Sub-Adviser's Code
of Ethics to the Adviser and the Trust's Board. The Sub-Adviser shall respond
to requests for information from the Adviser and the Trust as to violations of
the Code by Access Persons and the sanctions imposed by the Sub-Adviser. The
Sub-Adviser shall immediately notify the Adviser and the Trust of any material
violation of the Code, whether or not such violation relates to a security held
by any Fund.
4
3. INFORMATION AND REPORTING. The Sub-Adviser shall provide the
Adviser, the Trust, and their respective officers with such periodic reports
concerning the obligations the Sub-Adviser has assumed under this Agreement as
the Adviser and the Trust may from time to time reasonably request.
(a) NOTIFICATION OF BREACH OR SIGNIFICANT CHANGES / COMPLIANCE
REPORTS. The Sub-Adviser shall notify the Adviser promptly 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. The
Sub-Adviser shall notify the Adviser as soon as possible of (i) any significant
changes in its investment strategy, asset allocation or other matters affecting
its management of the Fund's assets; or (ii) any changes to the senior
investment management personnel primarily responsible for the investment or
servicing of the Fund's assets which include portfolio managers and
relationship managers. In addition, the Sub-Adviser shall provide a quarterly
report regarding the Fund's compliance with its investment objectives and
policies, applicable law, including, but not limited to the 1940 Act and
Subchapter M of the Code, and the Fund's and the Adviser's policies, guidelines
or procedures as applicable to the Sub-Adviser's obligations under this
Agreement. The Sub-Adviser acknowledges and agrees that the Adviser may, in its
discretion, provide such quarterly compliance certifications to the Board. The
Sub-Adviser agrees to correct any such failure promptly and to take any action
that the Board and/or the Adviser may reasonably request in connection with any
such breach. Upon request, the Sub-Adviser shall also provide the officers of
the Trust with supporting certifications in connection with such certifications
of Fund financial statements and disclosure controls pursuant to the
Xxxxxxxx-Xxxxx Act. The Sub-Adviser will promptly notify the Trust in the event
(i) the Sub-Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board, or body, involving the affairs of the Trust (excluding
class action suits in which the Fund is a member of the plaintiff class by
reason of the Fund's ownership of shares in the defendant) or the compliance by
the Sub-Adviser with the federal or state securities laws or (ii) an actual
change in control of the Sub-Adviser resulting in an "assignment" (as defined
in the 1940 Act) has occurred or is otherwise proposed to occur.
(b) INSPECTION. Upon reasonable request, the Sub-Adviser agrees to
make its records and premises (including the availability of the Sub-Adviser's
employees for interviews) to the extent that they relate to the conduct of
services provided to the Fund or the Sub-Adviser's conduct of its business as
an investment adviser reasonably available for compliance audits by the Adviser
or the Trust's officers, employees, accountants or counsel; in this regard, the
Trust and the Adviser acknowledge that the Sub-Adviser shall have no obligation
to make available proprietary information unrelated to the services provided to
the Fund or any information related to other clients of the Sub-Adviser, except
to the extent necessary for the Adviser to confirm the absence of any conflict
of interest and compliance with any laws, rules or regulations in the
management of the Fund.
5
(c) BOARD AND FILINGS INFORMATION. The Sub-Adviser will also provide
the Adviser and Trust with any information reasonably requested regarding its
management of the Fund required for any meeting of the Board, or for any
shareholder report, Form N-CSR, Form N-Q, Form N-PX, Form N-SAR, amended
registration statement, proxy statement, or prospectus supplement to be filed
by the Trust with the Commission. The Sub-Adviser will make its officers and
employees available to meet with the Board from time to time on due notice to
review its investment management services to the Fund in light of current and
prospective economic and market conditions and shall furnish to the Board such
information as may reasonably be necessary in order for the Board to evaluate
this Agreement or any proposed amendments thereto.
(d) TRANSACTION INFORMATION. The Sub-Adviser shall furnish to the
Adviser and the Trust such information concerning portfolio transactions as may
be necessary to enable the Adviser, Trust or their designated agents to perform
such compliance testing on the Fund and the Sub-Adviser's services as the
Adviser and the Trust may, in their sole discretion, determine to be
appropriate. The provision of such information by the Sub-Adviser to the
Adviser, Trust or their designated agents in no way relieves the Sub-Adviser of
its own responsibilities under this Agreement.
4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales of
investment instruments for the account of the 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 or other investments for
the Fund's account with brokers or dealers selected by the Sub-Adviser. In the
selection of such brokers or dealers and the placing of such orders, subject to
the other provisions of this paragraph, the Sub-Adviser is directed at all
times to seek for the Fund the best price and most favorable execution
available under the circumstances. It is also understood that it may be
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 or other investments for the
Fund with such brokers if the Sub-Adviser determines, in good faith, that such
amount of commissions is reasonable in relation to the value of such brokerage
or research services provided in terms of a particular Fund transaction or the
Sub-Adviser's overall responsibilities to the Fund and its other clients, and
that the total commissions paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long-term. This practice is 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.
6
(c) AGGREGATED TRANSACTIONS. On occasions when the Sub-Adviser deems
the purchase or sale of a security to be in the best interest of the 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 investment
instruments to be sold or purchased. In such event, the Sub-Adviser will
allocate securities or futures contracts so purchased or sold, as well as the
expenses incurred in the transaction, in the manner the Sub-Adviser reasonably
considers to be equitable and consistent with its fiduciary obligations to the
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 the Fund, subject to: (a) the requirement that the Sub-Adviser
seek to obtain best execution and price within the policy guidelines determined
by the Board and set forth in a Fund's current Registration Statement; (b) the
provisions of the 1940 Act; (c) the provisions of the Advisers Act; (d) the
provisions of the 1934 Act; and (e) other provisions of applicable law. These
brokerage services are not within the scope of the duties of the Sub-Adviser
under this Agreement. Subject to the requirements of applicable law and any
procedures adopted by the Board, the Sub-Adviser or its affiliates may receive
brokerage commissions, fees or other remuneration from a Fund for these services
in addition to the Sub-Adviser's fees for services under this Agreement. The
Sub-Adviser may purchase investments (including Rule 144A securities) for the
Fund from a third party unaffiliated with Nomura Securities International, Inc.
or any of its affiliates (collectively, "NSI") where NSI is a member or manager
of the underwriting syndicate. The Adviser will not purchase investments for
Fund directly from NSI.
5. CUSTODY. Nothing in this Agreement shall permit the Sub-Adviser to
take or receive physical possession of cash, securities or other investments of
the 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 the Fund's or the
Adviser's expenses relating to the investment of the assets of the Fund,
including brokerage and other expenses incurred in placing orders for the
purchase and sale of securities and other investment instruments and the legal
expenses involved in out-of-court debt restructuring.
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
7
Agreement. The Sub-Adviser agrees to promptly notify the Trust of the
occurrence of any event that would disqualify the Sub-Adviser from serving as
an investment adviser to an investment company. The Sub-Adviser is in
compliance in all material respects with all applicable federal and state law
in connection with its investment management operations.
(b) ADV DISCLOSURE. The Sub-Adviser has provided the Trust with a copy
of Part I of its Form ADV as most recently filed with the Commission and its
Part II as most recently updated and will, promptly after filing any amendment
to its Form ADV with the Commission or updating its Part II, furnish a copy of
such amendments or updates to the Trust. The information contained in the
Sub-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 Fund's Registration Statement, summary prospectus,
prospectus, statement of additional information, periodic reports to
shareholders, reports and schedules filed with the Commission (including any
amendment, supplement or sticker to any of the foregoing) and advertising and
sales material relating to the Fund (collectively the "Disclosure Documents")
and represents and warrants that such Disclosure Documents contain or will
contain no untrue statement of any material fact and do not and will not omit
any statement of material fact required to be stated therein or necessary to
make the statements therein not misleading.
(e) INSURANCE. The Sub-Adviser maintains errors and omissions
insurance coverage in an appropriate amount and shall provide prior written
notice to the Advisor (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 Advisor 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 investment instruments for the 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) Binding and Enforceable. Each party hereto represents and warrants
that this Agreement is binding upon it and enforceable in accordance with its
terms except insofar
8
as enforcement may be limited by bankruptcy, insolvency or other laws relating
to or affecting enforcement of creditors' rights or general principles of
equity.
(i) Each party hereto represents and warrants that it has complied
with and will continue to comply with all laws, rules and regulations or court
and governmental orders by which it is bound or to which it is subject in
connection with the execution and performance of this Agreement.
(j) Each party hereto represents and warrants has and will continue
to have all governmental, regulatory, self-regulatory and exchange licences,
registrations, memberships, and approvals required to discharge its obligations
under this Agreement.
(k) 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.
9. SUB-ADVISER'S COMPENSATION. The Adviser shall pay to the
Sub-Adviser, as compensation for the Sub-Adviser's services hereunder, a fee,
determined as described in Schedule A that is attached hereto and made a part
hereof. Such fee shall be computed daily and paid not less than monthly in
arrears by the Adviser. The Fund shall have no responsibility for any fee
payable to the Sub-Adviser.
The Sub-Adviser will be compensated based on the portion of Fund
assets allocated to the Sub-Adviser by the Adviser. The method for determining
net assets of the Fund for purposes hereof shall be the same as the method for
determining net assets for purposes of establishing the offering and redemption
prices of Fund shares as described in the Fund's prospectus. In the event of
termination of this Agreement, the fee provided in this Section shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the total number
of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties
hereunder, the Sub-Adviser is and shall be an independent contractor and,
unless otherwise expressly provided herein or otherwise authorized in writing,
shall have no authority to act for or represent the Fund, the Trust or the
Adviser in any way or otherwise be deemed to be an agent of the Fund, the Trust
or the Adviser. If any occasion should arise in which the Sub-Adviser gives any
advice to its clients concerning the shares of the 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
9
rescinded except by a writing signed by the parties hereto and in accordance
with the 1940 Act, when applicable.
12. DURATION AND TERMINATION.
This Agreement shall become effective as of the date executed and
shall remain in full force and effect continually thereafter, subject to renewal
as provided in Section 12(c) and unless terminated automatically as set forth in
Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by vote
of its Board or (ii) with respect to the Fund, upon the affirmative vote of a
majority of the outstanding voting securities of the Fund; or
(b) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice delivered
or mailed by registered mail, postage prepaid, to the Sub-Adviser; or
(c) The Sub-Adviser may at any time terminate this Agreement by not
more than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser; or
(d) This Agreement shall automatically terminate two years from the
date of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not interested persons of the Trust, the
Adviser or the Sub-Adviser, at a meeting called for the purpose of voting on
such approval; or (ii) the vote of a majority of the outstanding voting
securities of the Fund; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for their approval and
such shareholders fail to approve such continuance of this Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder as to the Fund
in a manner consistent with the 1940 Act and the rules and regulations
thereunder; and
(e) Termination of this Agreement pursuant to this Section shall be
without payment of any penalty.
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. CLIENT LIST. The Adviser permits the Sub-Adviser to (i) market the
Fund; and (ii)
10
include the Fund's performance in a composite performance presentation of
similar accounts.
14. CERTAIN DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the Commission under
the 1940 Act or any interpretations of the Commission staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under the 1940 Act or any interpretations of
the Commission staff.
14. LIABILITY OF THE SUB-ADVISER.
(a) The Sub-Adviser shall have responsibility for the accuracy and
completeness (and liability for the lack thereof) of statements in the Fund's
Disclosure Documents.
(b) The Sub-Adviser shall be liable to the Fund for any loss
(including transaction costs) incurred by the Fund as a result of any
investment made by the Sub-Adviser in contravention of: (i) any investment
policy, guideline or restriction set forth in the Registration Statement or as
approved by the Board from time to time and provided to the Sub-Adviser; or
(ii) applicable law, including but not limited to the 1940 Act and the Code
(including but not limited to the Fund's failure to satisfy the diversification
or source of income requirements of Subchapter M of the Code) (the investments
described in this subsection (b) collectively are referred to as "Improper
Investments").
(c) The Sub-Adviser shall indemnify and hold harmless the Trust, each
affiliated person of the Trust within the meaning of Section 2(a)(3) of the
1940 Act, and each person who controls the Trust within the meaning of Section
15 of the 1933 Act (any such person, an "Indemnified Party") against any and
all losses, claims, damages, expenses or liabilities (including the reasonable
cost of investigating and defending any alleged loss, claim, damage, expense or
liability and reasonable counsel fees incurred in connection therewith) to
which any such person may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages, expenses or liabilities
(or actions in respect thereof) arise out of or are based upon: (i) a breach by
the Sub-Adviser of this Agreement or of the representations and warranties made
by the Sub-Adviser herein; (ii) any Improper Investment; (iii) any untrue
statement or alleged untrue statement of a material fact contained in any
Disclosure Document or the omission or alleged omission from a Disclosure
Document of a material fact required to be stated therein or necessary to make
the statements therein not misleading; or (iv) the Sub-Adviser's performance
or non-performance of its duties hereunder; provided, however, that nothing
herein shall be deemed to protect any Indemnified Party who is a Trustee or
officer of the Trust against any liability to the Trust or to its shareholders
to which such
11
Indemnified Party would otherwise be subject by reason or willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office with the Trust.
15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge
and agree that all litigation arising hereunder, whether direct or indirect,
and of any and every nature whatsoever shall be satisfied solely out of the
assets of the affected Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities.
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 State of Delaware and the
Sub-Adviser consents to the jurisdiction of courts, both state and federal, in
Delaware, 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.
21. SUB-SERVICES AGREEMENTS. The Sub-Adviser may enter into agreements
with one or more of its affiliates to provide non-discretionary services for
the Fund without notice to or consent from the Fund or Adviser. The Sub-Adviser
shall be responsible for all activities carried out by such affiliates with
respect to the Fund under such sub-services agreement.
12
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.
NOMURA ASSET MANAGEMENT U.S.A. INC.
By: /s/ Xxxxxxxxx Xxxx
------------------------
Name: Xxxxxxxxx Xxxx
Title: Managing Director & Chief Administrative Officer
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC.
By: /s/ Xxxxx Xxxxx
-----------------------
Name: Xxxxx Xxxxx
Title: Chief Investment Officer
13
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
DATED OCTOBER 1, 2014 BETWEEN
NOMURA ASSET MANAGEMENT U.S.A. INC.
AND
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC.
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
Nomura High Yield Fund 0.325%
14
