THE ADVISORS' INNER CIRCLE FUND
INTERIM INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 29th day of September, 2006, by and between The
Advisors' Inner Circle Fund, a Massachusetts business trust (the "Trust"), and
Fiduciary Management Associates, LLC., a Delaware corporation (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") consisting of several series of shares, each having its own
investment policies; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to such portfolio listed in Schedule A as the
Trust and the Adviser may agree upon (the "Portfolio"), and the Adviser is
willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to (a) manage the
investment and reinvestment of the assets, (b) to continuously review,
supervise, and administer the investment program of the Portfolio, (c)
to determine, in its discretion and without prior consultation, the
securities or investment instruments to be purchased, sold, lent or
otherwise traded, (d) to provide the Trust, and any other agent
designated by the Trust, with records concerning the Adviser's
activities which the Trust is required to maintain and (e) to provide
other reports reasonably requested by the Trust's administrator or the
Trust's Officers and Board of Trustees concerning the Adviser's
discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with (x) such policies as the Trustees may from time to time establish
and communicate in writing to the Adviser, (y) the objectives,
policies, and limitations for the Portfolio set forth in its prospectus
and statement of additional information, which may be amended from time
to time, and (z) applicable laws and regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser shall place all orders for the
purchase and sale of portfolio securities for the Portfolio with
brokers or dealers selected by the Adviser, which may include brokers
or dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Portfolio and/or the other accounts over
which the Adviser or its affiliates exercise investment discretion. The
Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if
the Adviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect
to the Portfolio and/or other accounts over which they exercise
investment discretion. The Adviser will promptly communicate to the
Trust, and any agent designated by the Trust such information relating
to portfolio transactions as they may reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, by reason of its having directed a securities transaction on
behalf of the Trust to a broker-dealer in compliance with the
provisions of Section 28(e) of the Securities Exchange Act of 1934 or
as described from time to time by the Portfolio's Prospectus and
Statement of Additional Information.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in Schedule
A, which is attached hereto and made a part of this Agreement. The
compensation earned under this Agreement will be held in an
interest-bearing escrow account with the Portfolio's custodian bank.
Upon approval by a vote of a majority of the outstanding voting
securities of the Portfolio of a new investment advisory agreement with
the Adviser during the term of this Agreement, the amount in the escrow
account (including any interest earned) will be paid to the Adviser. If
a new investment advisory agreement with the Adviser is not approved,
the Adviser will be paid out of the escrow account, the lesser of: (a)
any costs incurred by the Adviser in performing its obligations under
the Agreement (plus interest earned on that amount while in escrow); or
(b) the total amount in the escrow account (plus interest earned).
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
As used in this Section 3, the term "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
1940 Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the Commission under said Act.
4. OTHER EXPENSES. The Adviser shall pay all expenses, not otherwise paid
by third parties, of printing and mailing reports, prospectuses,
statements of additional information, and sales literature relating to
2
the solicitation of prospective clients. The Trust shall pay all
expenses relating to mailing to existing shareholders prospectus(es),
statement(s) of additional information, proxy solicitation material and
shareholder reports.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any fiscal year
(including fees and other amounts payable to the Adviser, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary
costs) as calculated every business day would exceed the expense
limitations imposed on investment companies by any applicable statute
or regulatory authority of any jurisdiction in which shares of a
Portfolio are qualified for offer and sale, the Adviser shall bear such
excess cost.
However, the Adviser will not bear expenses of any Portfolio which
would result in the Portfolio's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
Payment of expenses by the Adviser pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end reconciliation)
by a reduction in the fee payable to the Adviser for such month
pursuant to Section 3 and, if such reduction shall be insufficient to
offset such expenses, by reimbursing the Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request.
7. STATUS OF THE ADVISER. The services of the Adviser to the Trust are not
to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Trust are not, during
the term of this Agreement, materially impaired thereby. The Adviser
shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed an agent
of the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Adviser on
behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall
be confined to those expressly set forth herein, and no implied duties
are assumed by or may be asserted against the Adviser hereunder. The
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 carrying out its duties hereunder, except a loss resulting
from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder, except as may otherwise be provided
under provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this Paragraph
9, the term "Adviser" shall include directors, officers, employees and
other corporate agents of the Adviser as well as that corporation
itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the Trust
are or may be interested in the Adviser (or any successor thereof) as
3
directors, partners, officers, or shareholders, or otherwise;
directors, partners, officers, agents, and shareholders of the Adviser
are or may be interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor) is or may be interested
in the Trust as a shareholder or otherwise. In addition, brokerage
transactions for the Trust may be effected through affiliates of the
Adviser to the extent permitted by applicable law and any procedures
approved by the Board of Trustees of the Trust.
11. LICENSE OF THE ADVISER'S NAME. The Adviser hereby agrees to grant a
limited-purpose, non-exclusive, world-wide license to the Trust for use
of its name in the names of the Portfolio for the term of this
Agreement and such license shall terminate upon termination of this
Agreement.
12. DURATION, AMENDMENT AND TERMINATION. This Agreement shall become
effective as of the date executed and shall remain in full force and
effect for the lesser of (i) the period from the effective date through
the date of the approval of a new investment advisory agreement between
the Adviser and the Trust by vote of a majority of the outstanding
voting securities of the Portfolio, or (ii) 150 days; provided,
however, that if the shareholders of the Portfolio fail to approve a
new investment advisory agreement, the Adviser may continue to serve
hereunder as to the Portfolio in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
This Agreement may be modified by mutual consent subject to the
provisions of Section 15 of the 1940 Act, as modified by or interpreted
by any applicable order or orders of the U.S. Securities and Exchange
Commission (the "Commission") or any rules or regulations adopted by,
or interpretative releases of, the Commission.
Notwithstanding the foregoing, this Agreement may be terminated as to
the Portfolio at any time, without the payment of any penalty, on ten
(10) days written notice, by (i) the majority vote of the Trustees,
including a majority vote of such Trustees who are not interested
persons of the Trust or the 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 Portfolio. This Agreement will
automatically and immediately terminate in the event of its assignment.
Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of
such party.
As used in this Section 12, the terms "assignment," "interested
persons," and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the Commission under said Act.
13. CHANGE IN THE ADVISER'S OWNERSHIP. The Adviser agrees that it shall
notify the Trust of any anticipated or otherwise reasonably foreseeable
change in the ownership of the Adviser within a reasonable time prior
to such change being effected.
14. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the
4
other party at the last address furnished by the other party to the
party giving notice: if to the Trust, at Xxx Xxxxxxx Xxxxxx Xxxx, Xxxx,
XX 00000 and if to the Adviser, at 00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000.
15. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees, and is not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.
No portfolio of the Trust shall be liable for the obligations of any
other portfolio of the Trust. Without limiting the generality of the foregoing,
the Adviser shall look only to the assets of the Portfolio for payment of fees
for services rendered to the Portfolio.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE ADVISORS' INNER CIRCLE FUND,
on behalf of the Portfolio(s) listed on Schedule A to this Agreement
By: /S/ XXXXX XXXX
--------------------
Attest: /S/ XXXXXX XXXXXX
-----------------------
FIDUCIARY MANAGEMENT ASSOCIATES, LLC.
By: /S/ XXXXX XXXXXXX
-----------------------
Attest: /S/ XXXXX XXXXX
----------------------
5
SCHEDULE A
TO THE
INTERIM INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
FIDUCIARY MANAGEMENT ASSOCIATES, LLC.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
PORTFOLIO FEE
--------- ---
FMA Small Company Portfolio 0.75%
6
