EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of November 25, 2014 by and between
Cinque Partners LLC (the "Sub-Adviser"), The Advisors' Inner Circle Fund II (the
"Trust"), on behalf of the series of the Trust set forth in Schedule A attached
hereto (the "Fund") and, solely for the purposes of Sections 1.3 and 3, Frost
Investment Advisors, LLC ("Frost") (the "Agreement").
WHEREAS, the Trust is a Massachusetts voluntary association (commonly known as a
business trust) organized under an Agreement and Declaration of Trust, dated
July 24, 1992, as amended and restated February 18, 2004 and August 10, 2004 and
amended May 15, 2012 (the "Declaration of Trust"), and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management company of the series type, and the Fund is a series of the Trust;
WHEREAS, the Trust and Frost have entered into an Investment Advisory Agreement
dated May 5, 2008 (the "Advisory Agreement"), pursuant to which Frost provides
investment advisory services to the Fund for compensation based on the value of
the average daily net assets of the Fund;
WHEREAS, Frost and the Sub-Adviser have entered into an Investment Sub-Advisory
Agreement dated November 14, 2012 (the "Sub-Advisory Agreement"), pursuant to
which the Sub-Adviser provides investment sub-advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund;
WHEREAS, the Trust, Frost and the Sub-Adviser have determined that it is
appropriate and in the best interests of the Fund and its shareholders to
maintain the expenses of the Fund at a level at or below the level to which the
Fund would normally be subject in order to maintain the Fund's expense ratio at
the Maximum Annual Operating Expense Limit (as hereinafter defined) specified
for such Fund in Schedule A hereto;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1. APPLICABLE EXPENSE LIMIT. To the extent that the aggregate expenses of
every character incurred by the Fund in any fiscal year in which the
Sub-Advisory Agreement is in effect, including but not limited to investment
advisory fees of Frost (but excluding interest, taxes, brokerage commissions and
other costs and expenses relating to the securities that are purchased and sold
by the Fund, acquired fund fees and expenses, other expenditures which are
capitalized in accordance with generally accepted accounting principles, and
other non-routine expenses not incurred in the ordinary course of such Fund's
business) and expenses for which payment has been made through the use of all or
a portion of brokerage commissions (or markups or markdowns) generated by that
Fund ("Fund Operating Expenses"), exceed the Maximum Annual Operating Expense
Limit, as defined in Section 1.2 below, such excess amount (the "Excess Amount")
shall be the liability of the Sub-Adviser.
1.2. MAXIMUM ANNUAL OPERATING EXPENSE LIMIT. The Maximum Annual Operating
Expense Limit with respect to the Fund shall be the amount specified in Schedule
A based on a percentage of the average daily net assets of the Fund. The Maximum
Annual Operating Expense Limit for the Fund contemplates that certain expenses
for the Fund may be paid through the use of all or a portion of brokerage
commissions (or markups or markdowns) generated by the Fund.
1.3. METHOD OF COMPUTATION. To determine the Sub-Adviser's liability with
respect to the Excess Amount, each month the Fund Operating Expenses for the
Fund shall be annualized as of the last day of the month. If the annualized Fund
Operating Expenses for any month of the Fund exceed the Maximum Annual Operating
Expense Limit of such Fund, Frost shall first waive or reduce its investment
advisory fee and the Sub-Adviser shall concurrently waive or reduce its
investment sub-advisory fee in the same amount, to the extent of the investment
sub-advisory fee, for such month by an amount sufficient to reduce the
annualized Fund Operating Expenses to an amount no higher than the Maximum
Annual Operating Expense Limit. If the amount of the waived or reduced
investment sub-advisory fee for any such month is insufficient to pay the Excess
Amount, the Sub-Adviser may also remit to the Fund an amount that, together with
the waived or reduced investment sub-advisory fee, is sufficient to pay such
Excess Amount. For the avoidance of doubt, Frost shall not be obligated to waive
or reduce its investment advisory fee in an amount greater than the amount of
the sub-advisory fee waived or reduced by the Sub-Adviser, and shall have no
obligation to remit any other amounts to the Fund.
1.4. YEAR-END ADJUSTMENT. If necessary, on or before the last day of the first
month of each fiscal year (or the termination of this Agreement if sooner), an
adjustment payment shall be made by the appropriate party in order that the
amount of the investment sub-advisory fees waived or reduced and other payments
remitted by the Sub-Adviser to the Fund with respect to the previous fiscal year
shall equal the Excess Amount for such fiscal year.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. REIMBURSEMENT. If in any year in which the Sub-Advisory Agreement is in
effect and the estimated aggregate Fund Operating Expenses of the Fund for the
fiscal year are less than the Maximum Annual Operating Expense Limit for that
year, the Sub-Adviser shall be entitled to reimbursement by the Fund, in whole
or in part as provided below, of the investment sub-advisory fees waived or
reduced and other payments remitted by the Sub-Adviser to the Fund pursuant to
Section 1 hereof. The total amount of reimbursement to which the Sub-Adviser may
be entitled ("Reimbursement Amount") shall equal, at any time, the sum of all
investment sub-advisory fees previously waived or reduced by the Sub-Adviser and
all other payments remitted by the Sub-Adviser to the Fund, pursuant to Section
1 hereof, during any of the previous three (3) fiscal years, less any
reimbursement previously paid by the Fund to the Sub-Adviser, pursuant to this
Section 2, with respect to such waivers, reductions, and payments. The
Reimbursement Amount shall not include any additional charges or fees
whatsoever, including, e.g., interest accruable on the Reimbursement Amount.
2.2. BOARD NOTIFICATION. The Fund shall provide to the Board a quarterly report
of any reimbursements paid to the Sub-Adviser pursuant to this Agreement.
2.3. METHOD OF COMPUTATION. To determine the Fund's accrual, if any, to
reimburse the Sub-Adviser for the Reimbursement Amount, each month the Fund
Operating Expenses of the Fund shall be annualized as of the last day of the
month. If the annualized Fund Operating Expenses of the Fund for any month are
less than the Maximum Annual Operating Expense Limit of such Fund, such Fund
shall accrue into its net asset value an amount payable to the Sub-Adviser
sufficient to increase the annualized Fund Operating Expenses of that Fund to an
amount no greater than the Maximum Annual Operating Expense Limit of that Fund,
provided that such amount paid to the Sub-Adviser will in no event exceed the
total Reimbursement Amount. For accounting purposes, amounts accrued pursuant to
this Section 2 shall be a liability of the Fund for purposes of determining the
Fund's net asset value.
2.4. PAYMENT AND YEAR-END ADJUSTMENT. Amounts accrued pursuant to this Agreement
shall be payable to the Sub-Adviser as of the last day of each month. If
necessary, on or before the last day of the first month of each fiscal year, an
adjustment payment shall be made by the appropriate party in order that the
actual Fund Operating Expenses of the Fund for the prior fiscal year (including
any reimbursement payments hereunder with respect to such fiscal year) do not
exceed the Maximum Annual Operating Expense Limit for such fiscal year.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect with respect to the Fund until the date
indicated on Schedule A ("Initial Term End Date") and shall thereafter continue
in effect from year to year for successive one-year periods, provided that this
Agreement may be terminated, without payment of any penalty, with respect to the
Fund:
(i) by the Trust, for any reason and at any time; and
(ii) by Frost or the Sub-Adviser, for any reason, upon ninety (90) days' prior
written notice to the Trust at its principal place of business, such termination
to be effective as of the close of business on the last day of the then-current
one-year period; or at such earlier time provided that such termination is
approved by majority vote of the Trustees and the Independent Trustees voting
separately.
4. MISCELLANEOUS.
4.1. CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
4.2. INTERPRETATION. Nothing herein contained shall be deemed to require the
Trust or the Fund to take any action contrary to the Trust's Declaration of
Trust or By-Laws, or any applicable statutory or regulatory requirement to which
it is subject or by which it is bound, or to relieve or deprive the Trust's
Board of Trustees of its responsibility for and control of the conduct of the
affairs of the Trust or the Fund. 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 Fund and that no Trustee, officer or holder of shares of beneficial interest
of the Fund shall be personally liable for any of the foregoing liabilities. The
Trust's Declaration of Trust, as amended from time to time, is on file in the
Office of the Secretary of State of the Commonwealth of Massachusetts. Such
Declaration of Trust describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
4.3. DEFINITIONS. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the investment sub-advisory fee,
the computations of net asset values, and the allocation of expenses, having a
counterpart in or otherwise derived from the terms and provisions of the
Sub-Advisory Agreement or the 1940 Act, shall have the same meaning as and be
resolved by reference to such Sub-Advisory Agreement or the 0000 Xxx.
4.4. 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.
4.5 JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of Commonwealth of Massachusetts and the
Sub-Adviser consents to the jurisdiction of courts, both state or federal, in
Massachusetts, with respect to any dispute under this Agreement.
4.6 AMENDMENT. This Agreement may not be added to or changed orally and may not
be modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective officers thereunto duly authorized, as of the day and year first
above written.
THE ADVISORS' INNER CIRCLE FUND II,
on behalf of each series of the Trust set forth in Schedule A
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President and Secretary
CINQUE PARTNERS LLC
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Managing Partner
Chief Investment Officer
FROST INVESTMENT ADVISORS, LLC
(solely for the purposes of Sections 1.3 and 3)
By: /s/ Xxx X. Xxxxxxxxxxxx
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Name: Xxx X. Xxxxxxxxxxxx
Title: President
Signature Page - Cinque Expense Limitation Agreement
SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Fund of the Trust:
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MAXIMUM ANNUAL
OPERATING EXPENSE INITIAL TERM
NAME OF FUND SHARE CLASS LIMIT END DATE
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Frost Cinque Large Cap Buy-Write Equity Fund Class A Shares 0.95% November 30, 2015
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Institutional Class Shares 0.70% November 30, 2015
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