INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT (the "Agreement") made as of this 14th day
of June, 2005 by and between THE ADVISORS' INNER CIRCLE FUND II (the "Trust"), a
Massachusetts business trust registered as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and XXXXXXXX
CAPITAL MANAGEMENT L.P. (the "Adviser"), a Delaware partnership with its
principal place of business at 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx.
W I T N E S S E T H
WHEREAS, the Board of Trustees (the "Board") of the Trust has selected
the Adviser to act as investment adviser to the Trust on behalf of the series
set forth on Schedule A to this Agreement (each a "Fund" and collectively, the
"Funds"), as such Schedule may be amended from time to time upon mutual
agreement of the parties, 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 Trust and the Adviser do hereby agree as follows:
1. THE ADVISER'S SERVICES.
(a) DISCRETIONARY INVESTMENT MANAGEMENT SERVICES. The Adviser
shall act as investment adviser with respect to the Funds. In such
capacity, the Adviser shall, subject to the supervision of the Board,
regularly provide the Funds with investment research, advice and
supervision and shall furnish continuously an investment program for the
Funds, consistent with the respective investment objectives and policies
of each Fund. The Adviser shall determine, from time to time, what
securities shall be purchased for the Funds, what securities shall be
held or sold by the Funds and what portion of the Funds' assets shall be
held uninvested in cash, subject always to the provisions of the Trust's
Agreement and Declaration of Trust, By-Laws and its registration
statement on Form N-IA (the "Registration Statement") under the 1940 Act,
and under the Securities Act of 1933, as amended (the "1933 Act"),
covering Fund shares, as filed with the U.S. Securities and Exchange
Commission (the "Commission"), and to the investment objectives, policies
and restrictions of the Funds, as each of the same shall be from time to
time in effect. To carry out such obligations, the 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, 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. No
reference in this Agreement to the Adviser having full discretionary
authority over each Fund's investments shall in any way limit the right
of the Board, in its sole discretion, to establish or revise policies in
connection with the management of a Fund's assets or to otherwise
exercise its right to control the overall management of a Fund.
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(b) COMPLIANCE. The Adviser agrees to comply with the
requirements of the 1940 Act, the Investment Advisers Act of 1940 (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
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 and provided to the
Adviser. In selecting each Fund's portfolio securities and performing the
Adviser's obligations hereunder, the 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 Adviser
shall maintain compliance procedures that it reasonably believes are
adequate to ensure its compliance with the foregoing. No supervisory
activity undertaken by the Board shall limit the Adviser's full
responsibility for any of the foregoing.
(c) PROXY VOTING. The Board has the authority to determine how
proxies with respect to securities that are held by the Funds shall be
voted, and the Board has initially determined to delegate the authority
and responsibility to vote proxies for the Fund's securities to the
Adviser. So long as proxy voting authority for the Fund has been
delegated to the Adviser, the Adviser shall exercise its proxy voting
responsibilities. The Adviser shall carry out such responsibility in
accordance with any instructions that the Board 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
Adviser shall provide periodic reports and keep 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 Adviser may be revoked
or modified by the Board at any time.
(d) RECORDKEEPING. The 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 Adviser to supply to the Trust or its Board the information required
to be supplied under this Agreement.
The Adviser shall maintain separate books and detailed records
of all matters pertaining to Fund assets advised by the Adviser required
by Rule 31a-1 under the 1940 Act (other than those records being
maintained by any administrator, 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 Board at any time upon request, shall be delivered to
the Trust upon the termination of this Agreement and shall be available
without delay during any day the Trust is open for business.
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(e) HOLDINGS INFORMATION AND PRICING. The Adviser shall provide
regular reports regarding Fund holdings, and shall, on its own
initiative, furnish the Trust and its Board from time to time with
whatever information the Adviser believes is appropriate for this
purpose. The Adviser agrees to immediately notify the Trust if the
Adviser reasonably believes that the value of any security held by a Fund
may not reflect fair value. The Adviser agrees to provide any pricing
information of which the Adviser is aware to the Trust, its Board 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
Trust's valuation procedures for the purpose of calculating the Fund net
asset value in accordance with procedures and methods established by the
Board.
(f) COOPERATION WITH AGENTS OF THE TRUST. The Adviser agrees to
cooperate with and provide reasonable assistance to the Trust, any Trust
custodian or foreign subcustodians, any Trust pricing agents and all
other agents and representatives of the Trust, such information with
respect to the Funds as they 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. INFORMATION AND REPORTING. The Adviser shall provide the Trust and
its respective officers with such periodic reports concerning the
obligations the Adviser has assumed under this Agreement as the Trust
may from time to time reasonably request.
(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Adviser
shall notify the Funds 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 Adviser shall provide a quarterly report regarding each
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 policies, guidelines or procedures as applicable to
the Adviser's obligations under this Agreement. The Adviser agrees to
correct any such failure promptly and to take any action that the Board
may reasonably request in connection with any such breach. Upon request,
the 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 Adviser will promptly notify the Trust in the event (i) the 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 Adviser with the federal or state securities laws or
(ii) an actual change in control of the Adviser resulting in an
"assignment" (as defined in the 1940 Act) has occurred or is otherwise
proposed to occur.
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(b) BOARD AND FILINGS INFORMATION. The Adviser will also provide
the Trust 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 Trust with the Commission. The
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.
(c) TRANSACTION INFORMATION. The Adviser shall furnish to the
Trust such information concerning portfolio transactions as may be
necessary to enable the Trust or its designated agent to perform such
compliance testing on the Funds and the Adviser's services as the Trust
may, in its sole discretion, determine to be appropriate. The provision
of such information by the Adviser to the Trust or its designated agent
in no way relieves the Adviser of its own responsibilities under this
Agreement.
3. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales
of securities for the account of a Fund, neither the 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 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 Adviser. In the
selection of such brokers or dealers and the placing of such orders, the
Adviser is directed at all times to seek for the Fund the most favorable
execution and net price available under the circumstances. It is also
understood that it is desirable for the Fund that the 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 Adviser is authorized to place orders for the
purchase and sale of securities for a Fund with such brokers, subject to
review by 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 Adviser in connection with
its or its affiliates' services to other clients.
(c) AGGREGATED TRANSACTIONS. On occasions when the 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 Adviser, the Adviser may, to the extent
permitted by applicable law and regulations, aggregate the order for
securities to be sold or purchased. In such event, the Adviser will
allocate securities or futures contracts so purchased or sold, as well
as the expenses incurred in the transaction, in the manner the Adviser
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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 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
Adviser seek to obtain best execution and price within the policy
guidelines determined by the Board and set forth in the Fund's current
prospectus and Statement of Additional Information; (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
Adviser under this Agreement. Subject to the requirements of applicable
law and any procedures adopted by the Board, the Adviser or its
affiliates may receive brokerage commissions, fees or other remuneration
from a Fund for these services in addition to the Adviser's fees for
services under this Agreement.
4. CUSTODY. Nothing in this Agreement shall permit the Adviser to take
or receive physical possession of cash, securities or other investments
of a Fund.
5. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Adviser shall not be responsible for a Fund's expenses,
including brokerage and other expenses incurred in placing orders for
the purchase and sale of securities and other investment instruments.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) PROPERLY REGISTERED. The Adviser is registered as an
investment adviser under the Advisers Act, and will remain so registered
for the duration of this Agreement. The 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 Adviser, there is no
proceeding or investigation that is reasonably likely to result in the
Adviser being prohibited from performing the services contemplated by
this Agreement. The Adviser agrees to promptly notify the Trust of the
occurrence of any event that would disqualify the Adviser from serving
as an investment adviser to an investment company. The 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 Adviser has provided the Trust with a
copy of its Form ADV as most recently filed with the Commission and
will, promptly after filing any amendment to its Form ADV with the
Commission, 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 make the statements made, in light of the
circumstances under which they were made, not misleading.
(c) FUND DISCLOSURE DOCUMENTS. The Adviser has reviewed and will
in the future review, the Registration Statement, and any amendments or
supplements thereto,
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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 Adviser, the manner in which the Adviser
manages the Fund or information relating directly or indirectly to the
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 NAME "XXXXXXXX AND/OR "UCM". The Adviser has the
right to use the name "Xxxxxxxx" and/or "UCM" in connection with its
services to the Trust and that, subject to the terms set forth in
Section 7 of this Agreement, the Trust shall have the right to use the
name "Xxxxxxxx" and/or "UCM" in connection with the management and
operation of the Funds. The Adviser is not aware of any threatened or
existing actions, claims, litigation or proceedings that would adversely
effect or prejudice the rights of the Adviser or the Trust to use the
name "Xxxxxxxx" and/or "UCM."
(e) INSURANCE. The 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 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 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 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 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 Funds,
consistent with its fiduciary duties under applicable law.
(h) REPRESENTATIONS. The representations and warranties in this
Section 6 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 2(a), whether or not specifically referenced in such
report.
7. THE NAME "XXXXXXXX" AND/OR "UCM". The Adviser grants to the Trust a
license to use the name "Utndahl" and/or "UCM" (the "Names") as part of
the name of any Fund. The foregoing authorization by the Adviser to the
Trust to use the Names as part of the name of any Fund is not exclusive
of the right of the Adviser itself to use, or to authorize others to
use, the Names; the Trust acknowledges and agrees that, as between the
Trust and the Adviser, the Adviser has the right to use, or authorize
others to use, the
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Names. The Trust shall (1) only use the Names in a manner consistent with
uses approved by the Adviser; (2) use its best efforts to maintain the
quality of the services offered using the Names; (3) adhere to such other
specific quality control standards as the Adviser may from time to time
promulgate. At the request of the Adviser, the Trust will (a) submit to
the Adviser representative samples of any promotional materials using the
Names; and (b) change the name of any Fund within three months of its
receipt of the Adviser's request, or such other shorter time period as
may be required under the terms of a settlement agreement or court order,
so as to eliminate all reference to the Names and will not thereafter
transact any business using the Names in the name of any Fund; provided,
however, that the Trust may continue to use beyond such date any supplies
of prospectuses, marketing materials and similar documents that the Trust
had on had at the date of such name change in quantities not exceeding
those historically produced and used in connection with such Fund.
8. ADVISER'S COMPENSATION. The Funds shall pay to the Adviser, as
compensation for the 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 Funds.
The method for determining net assets of a Fund for purposes hereof shall
be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of 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.
9. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the 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 Trust or any Fund in
any way or otherwise be deemed to be an agent of the Trust or any Fund.
If any occasion should arise in which the Adviser gives any advice to
its clients concerning the shares of a Fund, the Adviser will act solely
as investment counsel for such clients and not in any way on behalf of
the Fund.
10. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its
assignment (as defined in section 2(a)(4) of the 1940 Act); provided
that such termination shall not relieve the 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.
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11. 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 11(d) and unless terminated automatically
as set forth in Section 10 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 any 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
Trust; 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 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 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 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
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 otherwise
required by any fiduciary duties of the Adviser under applicable law. In
addition, the Adviser shall deliver the Fund Books and Records to the
Trust by such means and in accordance with such schedule as the Trust
shall direct and shall otherwise cooperate, as reasonably directed by
the Trust, in the transition of portfolio asset management to any
successor of the Adviser.
12. 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
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granted by the Commission under the 1940 Act or any interpretations of
the Commission staff.
13. LIABILITY OF THE ADVISER. The 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 "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 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 Adviser's willful
misfeasance, bad faith or gross negligence generally in the performance
of its duties hereunder or its reckless disregard of its obligations and
duties under this Agreement.
14. 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.
15. 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. 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.
16. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of Commonwealth of Massachusetts
and the Adviser consents to the jurisdiction of courts, both state or
federal, in Massachusetts, with respect to any dispute under this
Agreement.
17. 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.
18. 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.
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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.
THE ADVISORS' INNER CIRCLE FUND II, on behalf
of each Fund listed on Schedule A
By: /s/ XXXXX X. XXXX
------------------------------------------
Name: Xxxxx X. Xxxx
Title: President
XXXXXXXX CAPITAL MANAGEMENT L.P.
By: /s/ illegible signature
------------------------------------------
Name:
Title:
10
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED JUNE 14, 2005 BETWEEN
THE ADVISORS' INNER CIRCLE FUND II
AND
XXXXXXXX CAPITAL MANAGEMENT LP.
The trust will pay to the Adviser as compensation for the Adviser's services
rendered, a fee, computed daily at an annual rate based on the average daily net
assets of the respective Fund in accordance the following fee schedule:
FUND RATE
UCM Institutional Money Market Fund ......................................0.25%
A-1