FORM OF SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this ____th day of
____________________, 2008 by and between FROST INVESTMENT ADVISORS, LLC a
limited liability company with its principal place of business at 000 Xxxx
Xxxxxxx Street, 00xx Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxx 00000 (the "Adviser"), and
KEMPNER CAPITAL MANAGEMENT, INC. a Texas corporation with its principal place of
business at 0000 Xxxxxx Xxxxxx, 00xx Xxxxx XXX Xxxxxxxx, Xxxxxxxxx, Xxxxx,
00000-0000 (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, pursuant to authority granted to the Adviser by the Board of
Trustees (the "Board") of THE ADVISORS' INNER CIRCLE FUND II (the "Trust") on
behalf of the series set forth on Schedule A to this Agreement (each, a "Fund"
and, collectively, the "Funds") and pursuant to the provisions of the Investment
Advisory Agreement dated as of ___________________, 2008 between the Adviser and
the Funds (the "Management Agreement"), the Adviser has selected the Sub-Adviser
to act as sub-investment adviser of the Funds 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 Funds. In such
capacity, the Sub-Adviser shall, subject to the supervision of the Adviser
and the Board, regularly provide the Funds with investment research,
advice and supervision and shall furnish continuously an investment
program for such Fund assets as may be allocated by the Adviser to the
Sub-Adviser, consistent with the investment objectives and policies of the
Fund. The Sub-Adviser shall determine, from time to time, what investments
shall be purchased for the Funds and what such securities shall be held or
sold by the Fund, subject always to the provisions of the Trust's
Agreement and Declaration of Trust, By-Laws and its registration statement
on Form N-1A (the "Registration Statement") under the Investment Company
Act of 1940, as amended (the "1940 Act"), and under the Securities Act of
1933, as amended (the "1933 Act"), covering Fund shares, as filed with the
Securities and Exchange Commission (the "Commission"), and to the
investment objectives, policies and restrictions of the Fund, as each of
the same shall be from time to time in effect. To carry out such
obligations, the Sub-Adviser shall exercise full discretion and act for
the Funds in the same manner and with the same force and effect as the
Funds themselves might or could do with respect to purchases, sales or
other transactions. Notwithstanding the foregoing, the Sub-Adviser shall,
upon written instructions from the Adviser, effect such portfolio
transactions for the Funds 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
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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 Funds, and with any policies, guidelines,
instructions and procedures approved by the Board or the Adviser and
provided to the Sub-Adviser. In selecting each Fund's portfolio securities
and performing the Sub-Adviser's obligations hereunder, the Sub-Adviser
shall cause the Funds 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 Funds shall be voted, and the Adviser has determined to
delegate the authority and responsibility to vote proxies for each Fund's
securities to the Sub-Adviser. So long as proxy voting authority for the
Funds has been delegated to the Sub-Adviser, the Sub-Adviser shall provide
such assistance to the Adviser with respect to the voting of proxies for
the Funds as the Adviser may from time to time reasonably request, and the
Sub-Adviser shall promptly forward to the Adviser any information or
documents necessary for the Adviser to exercise its proxy voting
responsibilities. The Sub-Adviser shall not vote proxies with respect to
the securities held by the Funds unless and until the Board or the Adviser
delegates such authority and responsibility to the Sub-Adviser or
otherwise instructs the Sub-Adviser to do so in writing, whereupon the
Sub-Adviser shall carry out such responsibility in accordance with any
instructions that the Board or the Adviser shall provide from time to time
and shall provide such reports and keep such records relating to proxy
voting as the Board may reasonably request or as may be necessary for the
Funds 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.
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(d) RECORDKEEPING. The Sub-Adviser shall not be responsible for
the provision of administrative, bookkeeping or accounting services to the
Funds, except as otherwise provided herein or as may be necessary for the
Sub-Adviser to supply to the Adviser, the Funds 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 each Fund's assets advised by the Sub-Adviser
required by Rule 31a-1 under the 1940 Act (other than those records being
maintained by the Adviser, custodian or transfer agent appointed by the
Funds) relating to its responsibilities provided hereunder with respect to
the Funds, and shall preserve such records for the periods and in a manner
prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and
Records"). The Fund Books and Records shall be available to the Adviser
and the Board at any time upon request shall be delivered to the Funds
upon the termination of this Agreement and shall be available for
telecopying without delay during any day the Funds are open for business.
(e) HOLDINGS INFORMATION AND PRICING. The Sub-Adviser shall
provide regular reports regarding each Fund's holdings, and shall, on its
own initiative, furnish each Fund and the Adviser from time to time with
whatever information the Sub-Adviser believes is appropriate for this
purpose. The Sub-Adviser agrees to immediately notify the Adviser if the
Sub-Adviser reasonably believes that the value of any security held by a
Fund may not reflect fair value. The Sub-Adviser agrees to provide any
pricing information of which the Sub-Adviser is aware to the Adviser
and/or any Fund pricing agent to assist in the determination of the fair
value of any Fund holdings for which market quotations are not readily
available or as otherwise required in accordance with the 1940 Act or the
Funds valuation procedures for the purpose of calculating the Fund's net
asset value in accordance with procedures and methods established by the
Board.
(f) COOPERATION WITH AGENTS OF THE ADVISER AND THE FUNDS. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to
the Adviser, the Funds and the Funds' custodian and foreign
sub-custodians, the Funds' pricing agents and all other agents and
representatives of the Funds and the Adviser, such information with
respect to the Funds 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.
2. CODE OF ETHICS. The Sub-Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of Rule 17j-1 under
the 1940 Act, which it will provide to the Adviser and the Funds. 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 Funds 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
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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 Funds and the Adviser. The Sub-Adviser shall
respond to requests for information from the Adviser as to violations of the
Code by Access Persons and the sanctions imposed by the Sub-Adviser. The
Sub-Adviser shall immediately notify the Adviser of any material violation of
the Code, whether or not such violation relates to a security held by any Fund.
3. INFORMATION AND REPORTING. The Sub-Adviser shall provide the Funds,
the Adviser, and their respective officers with such periodic reports concerning
the obligations the Sub-Adviser has assumed under this Agreement as the Funds
and the Adviser may from time to time reasonably request.
(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Sub-Adviser
shall notify the Trust's Chief Compliance Officer and Adviser immediately
upon detection of (i) any material failure to manage any Fund in
accordance with its investment objectives and policies or any applicable
law; or (ii) any material breach of any of the Funds' or the Adviser's
policies, guidelines or procedures. In addition, the Sub-Adviser shall
provide a quarterly report regarding each Fund's compliance with its
investment objectives and policies and applicable law, including, but not
limited to the 1940 Act and Subchapter M of the Code, and the Funds' 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. The Sub-Adviser shall also provide the officers of the Trust
with supporting certifications in connection with such certifications of
Fund financial statements and disclosure controls pursuant to the
Xxxxxxxx-Xxxxx Act. The Sub-Adviser will promptly notify the Trust in the
event (i) the Sub-Adviser is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board, or body, involving the affairs of
the Trust (excluding class action suits in which a Fund is a member of the
plaintiff class by reason of the Fund's ownership of shares in the
defendant) or the compliance by the Sub-Adviser with the federal or state
securities laws or (ii) the controlling stockholder of the Sub-Adviser
changes or an actual change in control resulting in an "assignment" (as
defined in the 1940 Act) has occurred or is otherwise proposed to occur.
(b) INSPECTION. Upon reasonable request, the Sub-Adviser agrees to
make its records and premises (including the availability of the
Sub-Adviser's employees for interviews) to the extent that they relate to
the conduct of services provided to the Funds or the Sub-Adviser's
conduct of its business as an investment adviser reasonably available for
compliance audits by the Adviser or a Fund's employees, accountants or
counsel; in this regard, the Funds and the Adviser acknowledge that the
Sub-Adviser shall have no obligations to make available proprietary
information unrelated to the services provided to the Funds or any
information related to other clients of the Sub-Adviser, except to the
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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 Funds.
(c) BOARD AND FILINGS INFORMATION. The Sub-Adviser will also
provide the Adviser with any information reasonably requested regarding
its management of the Funds required for any meeting of the Board, or for
any shareholder report, amended registration statement, proxy statement,
or prospectus supplement to be filed by the Funds 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 Funds in light of current and prospective
economic and market conditions and shall furnish to the Board such
information as may reasonably be necessary in order for the Board to
evaluate this Agreement or any proposed amendments thereto.
(d) TRANSACTION INFORMATION. The Sub-Adviser shall furnish to the
Adviser such information concerning portfolio transactions as may be
necessary to enable the Adviser to perform such compliance testing on the
Funds and the Sub-Adviser's services as the Adviser may, in its sole
discretion, determine to be appropriate. The provision of such information
by the Sub-Adviser in no way relieves the Sub-Adviser of its own
responsibilities under this Agreement.
4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales
of securities for the account of a Fund, neither the Sub-Adviser nor any
of its directors, officers or employees will act as a principal or agent
or receive any commission except as permitted by the 1940 Act.
(b) PLACEMENT OF ORDERS. The Sub-Adviser shall arrange for the
placing of all orders for the purchase and sale of securities for a Fund's
account with brokers or dealers selected by the Sub-Adviser. In the
selection of such brokers or dealers and the placing of such orders, the
Sub-Adviser is directed at all times to seek for a Fund the most favorable
execution and net price available under the circumstances. It is also
understood that it is desirable for the Funds 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 Funds than may
result when allocating brokerage to other brokers, consistent with section
28(e) of the 1934 Act and any Commission staff interpretations thereof.
Therefore, the Sub-Adviser is authorized to place orders for the purchase
and sale of securities for the Funds with such brokers, subject to review
by the Adviser and the Board from time to time with respect to the extent
and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Sub-Adviser in connection
with its or its affiliates' services to other clients.
(c) AGGREGATED TRANSACTIONS. On occasions when the Sub-Adviser
deems the purchase or sale of a security to be in the best interest of a
Fund as well as other clients of the Sub-Adviser, the Sub-Adviser may, to
the extent permitted by applicable law and
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regulations, aggregate the order for securities to be sold or purchased.
In such event, the Sub-Adviser will allocate securities or futures
contracts so purchased or sold, as well as the expenses incurred in the
transaction, in the manner the Sub-Adviser reasonably considers to be
equitable and consistent with its fiduciary obligations to a Fund and to
such other clients under the circumstances.
(d) AFFILIATED BROKERS. The Sub-Adviser or any of its affiliates
may act as broker in connection with the purchase or sale of securities or
other investments for a Fund, subject to: (a) the requirement that the
Sub-Adviser seek to obtain best execution and price within the policy
guidelines determined by the Board and set forth in a Fund's current
prospectus and SAI; (b) the provisions of the 1940 Act; (c) the provisions
of the 1934 Act; and (d) other provisions of applicable law. These
brokerage services are not within the scope of the duties of the
Sub-Adviser under this Agreement. Subject to the requirements of
applicable law and any procedures adopted by the Board, the Sub-Adviser or
its affiliates may receive brokerage commissions, fees or other
remuneration from a Fund for these services in addition to the
Sub-Adviser's fees for services under this Agreement.
5. CUSTODY. Nothing in this Agreement shall permit the Sub-Adviser to
take or receive physical possession of cash, securities or other investments of
a Fund.
6. ALLOCATION OF CHARGES AND EXPENSES. The Sub-Adviser will bear its
own costs of providing services hereunder. Other than as herein specifically
indicated, the Sub-Adviser shall not be responsible for a Fund's or the
Adviser's expenses, including brokerage and other expenses incurred in placing
orders for the purchase and sale of securities and other investment instruments.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) PROPERLY REGISTERED. The Sub-Adviser is registered as an
investment adviser under the Advisers Act, and will remain so registered
for the duration of this Agreement. The Sub-Adviser is not prohibited by
the Advisers Act or the 1940 Act from performing the services contemplated
by this Agreement, and to the best knowledge of the Sub-Adviser, there is
no proceeding or investigation that is reasonably likely to result in the
Sub-Adviser being prohibited from performing the services contemplated by
this Agreement. The Sub-Adviser agrees to promptly notify the Trust of the
occurrence of any event that would disqualify the Sub-Adviser from serving
as an investment adviser to an investment company. The Sub-Adviser is in
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 its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendments to the Trust. The information contained in the
Adviser's Form ADV is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to
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make the statements made, in light of the circumstances under which they
were made, not misleading.
(c) FUND DISCLOSURE DOCUMENTS. The Sub-Adviser has reviewed and
will in the future review, the Registration Statement, and any amendments
or supplements thereto, the annual or semi-annual reports to shareholders,
other reports filed with the Commission and any marketing material of a
Fund (collectively the "Disclosure Documents") and represents and warrants
that with respect to disclosure about the Sub-Adviser, the manner in which
the Sub-Adviser manages the Funds or information relating directly or
indirectly to the Sub-Adviser, such Disclosure Documents contain or will
contain, as of the date thereof, no untrue statement of any material fact
and does not omit any statement of material fact which was required to be
stated therein or necessary to make the statements contained therein not
misleading.
(d) USE OF THE NAMES "KEMPNER" AND "FROST". The Sub-Adviser has
the right to use the names "Kempner" and "Frost" in connection with its
services to the Trust and that, subject to the terms set forth in Section
8 of this Agreement, the Trust shall have the right to use the names
"Kempner" and "Frost" in connection with the management and operation of
the Funds. The Sub-Adviser is not aware of any threatened or existing
actions, claims, litigation or proceedings that would adversely effect or
prejudice the rights of the Sub-Adviser or the Trust to use the names
"Kempner" and "Frost."
(e) INSURANCE. The Sub-Adviser maintains errors and omissions
insurance coverage in an appropriate amount and shall provide prior
written notice to the Trust (i) of any material changes in its insurance
policies or insurance coverage; or (ii) if any material claims will be
made on its insurance policies. Furthermore, the Sub-Adviser shall, upon
reasonable request, provide the Trust with any information it may
reasonably require concerning the amount of or scope of such insurance.
(f) NO DETRIMENTAL AGREEMENT. The Sub-Adviser represents and
warrants that it has no arrangement or understanding with any party, other
than the Trust, that would influence the decision of the Sub-Adviser with
respect to its selection of securities for a Fund, and that all selections
shall be done in accordance with what is in the best interest of the Fund.
(g) CONFLICTS. The Sub-Adviser shall act honestly, in good faith
and in the best interests of the Trust including requiring any of its
personnel with knowledge of Fund activities to place the interest of the
Funds first, ahead of their own interests, in all personal trading
scenarios that may involve a conflict of interest with the Funds,
consistent with its fiduciary duties under applicable law.
(h) REPRESENTATIONS. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is
executed and at the time of delivery of the quarterly compliance report
required by Section 3(a), whether or not specifically referenced in such
report.
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8. THE NAMES "FROST" AND "KEMPNER." The Adviser and Sub-Adviser grant
to the Trust a license to use the names "Frost" and "Kempner," respectively, as
part of the name of each Fund. The Adviser, Sub-Adviser and the Funds shall be
obligated to use the names "Frost" and "Kempner" in the name of each Fund during
the period in which this Agreement remains in effect or the Sub-Adviser
otherwise acts as sub-investment adviser for the Funds, except as agreed to by
"Frost" and "Kempner." The foregoing authorization by the Adviser and
Sub-Adviser to the Funds to use said names as part of the names of each Fund is
not exclusive of the right of the Adviser and Sub-Adviser themselves to use, or
to authorize others to use, the same; the Funds acknowledge and agree that as
between the Funds, the Adviser and the Sub-Adviser, the Adviser and the
Sub-Adviser have the exclusive right so to use, or authorize others to use, said
name and the Funds agree to take such action as may reasonably be requested by
the Adviser and Sub-Adviser to give full effect to the provisions of this
section. Without limiting the generality of the foregoing, the Funds agree that,
upon any termination of this Agreement, the Funds will, at the request of the
Adviser and/or Sub-Adviser, use their best efforts to change the name of the
Funds within three months of its receipt of the Adviser and/or Sub-Adviser's
request so as to eliminate all reference, if any, to the names "Frost" and
"Kempner" and will not thereafter transact any business using the names "Frost"
and "Kempner" in the name of the Funds; provided, however, that the Funds and
the Adviser and/or Sub-Adviser may continue to use beyond such date any supplies
of prospectuses, marketing materials and similar documents that the Adviser
and/or Sub-Adviser or their affiliates had on had at the date of such name
change.
9. SUB-ADVISER'S COMPENSATION. The Adviser shall pay to the
Sub-Adviser, as compensation for the Sub-Adviser's services hereunder, a fee,
determined as described in Schedule A that is attached hereto and made a part
hereof. Such fee shall be computed daily and paid monthly in arrears by the
Adviser. The Funds shall have no responsibility for any fee payable to the
Sub-Adviser.
The Sub-Adviser will be compensated based on the portion of Fund assets
allocated to the Sub-Adviser by the Adviser. In the event of termination of this
Agreement, the fee provided in this Section shall be computed on the basis of
the period ending on the last business day on which this Agreement is in effect
subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the Sub-Adviser is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Funds or the Adviser in any way or
otherwise be deemed to be an agent of the Funds or the Adviser. If any occasion
should arise in which the Sub-Adviser gives any advice to its clients concerning
the shares of a Fund, the Sub-Adviser will act solely as investment counsel for
such clients and not in any way on behalf of the Funds.
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;
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provided that such termination shall not relieve the Adviser or the Sub-Adviser
of any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
12. DURATION AND TERMINATION.
(a) This Agreement shall become effective as of the date executed
and shall remain in full force and effect continually thereafter, subject
to renewal as provided in Section 12(c) and unless terminated
automatically as set forth in Section 11 hereof or until terminated as
follows:
(a) The Adviser may at any time terminate this Agreement by not
more than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the
Sub-Adviser. In addition, the Funds may cause this Agreement to terminate
either (i) by vote of its Board or (ii) upon the affirmative vote of a
majority of the outstanding voting securities of the Funds; or
(b) The Sub-Adviser may at any time terminate this Agreement by
not more than sixty (60) days' nor less than thirty (30) days' written
notice delivered or mailed by registered mail, postage prepaid, to the
Adviser; or
(c) This Agreement shall automatically terminate two years from
the date of its execution unless its renewal is specifically approved at
least annually thereafter by (i) a majority vote of the Trustees,
including a majority vote of such Trustees who are not interested persons
of the Funds, 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 each Fund; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of the
Funds 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 Funds in a manner consistent with
the 1940 Act and the rules and regulations thereunder; and
(d) Termination of this Agreement pursuant to this Section shall
be without payment of any penalty.
In the event of termination of this Agreement for any reason, the
Sub-Adviser shall, immediately upon notice of termination or on such later
date as may be specified in such notice, cease all activity on behalf of
the Funds and with respect to any Fund assets, except as expressly
directed by the Adviser or as otherwise required by any fiduciary duties
of the Sub-Adviser under applicable law. In addition, the Sub-Adviser
shall deliver each 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
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successor of the Sub-Adviser, including the Adviser.
13. CERTAIN DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940
Act, subject, however, to such exemptions as may be granted by the
Commission under the 1940 Act or any interpretations of the Commission
staff.
(b) "Interested persons" and "Assignment" shall have their
respective meanings as set forth in the 1940 Act, subject, however, to
such exemptions as may be granted by the Commission under the 1940 Act or
any interpretations of the Commission staff.
14. LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall indemnify and
hold harmless the Trust and all affiliated persons thereof (within the meaning
of Section 2(a)(3) of the 0000 Xxx) and all controlling persons (as described in
Section 15 of the 1933 Act) (collectively, the "Sub-Adviser Indemnitees")
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) by reason of or arising out of:
(a) the Sub-Adviser being in material violation of any applicable federal or
state law, rule or regulation or any investment policy or restriction set forth
in the Funds' Registration Statement or any written guidelines or instruction
provided in writing by the Board, (b) a Fund's failure to satisfy the
diversification or source of income requirements of Subchapter M of the Code, or
(c) the Sub-Adviser's willful misfeasance, bad faith or negligence generally in
the performance of its duties hereunder or its reckless disregard of its
obligations and duties under this Agreement.
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 Funds shall be personally liable for any of the
foregoing liabilities. The Trust's Certificate of Trust, as amended from time to
time, is on file in the Office of the Secretary of State of the Commonwealth of
Massachusetts. Such Certificate of Trust and the Trust's Agreement and
Declaration of Trust describe in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
17. CHANGE IN THE ADVISER'S OWNERSHIP. The Sub-Adviser agrees that it
shall notify the Trust of any anticipated or otherwise reasonably foreseeable
change in the ownership of the Sub-Adviser within a reasonable time prior to
such change being effected.
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18. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of the Commonwealth of Massachusetts and
the Sub-Adviser consents to the jurisdiction of courts, both state or federal,
in Massachusetts, with respect to any dispute under this Agreement.
19. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
20. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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.
ATTEST: FROST INVESTMENT ADVISORS, LLC
____________________________________ By: ________________________________
Name: [ ]
Title: [ ]
ATTEST: KEMPNER CAPITAL MANAGEMENT, INC.
____________________________________ By: ________________________________
Name: [ ]
Title: [ ]
Accepted and Agreed to as of the day and year first above written.
11
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
DATED ____________, 2008 BETWEEN
FROST INVESTMENT ADVISORS, LLC
AND
KEMPNER CAPITAL 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 Funds as may be allocated by the Adviser to
the Sub-Adviser from time to time under the following fee schedule:
FUND RATE
---- ----
Frost Kempner Multi-Cap Deep Value Equity Fund ................ 0.34%
Frost Kempner Treasury and Income Fund ........................ 0.25%
A-1
