INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT (the "Agreement") made as of this 20th
day of November, 2013 by and between THE ADVISORS' INNER CIRCLE FUND (the
"Trust"), a Massachusetts voluntary association (commonly known as a business
trust) registered as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and R Squared Capital Management L.P. (the
"Adviser"), a Delaware limited partnership with its principal place of business
at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000.
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 (the "Fund"), 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 Fund. In such capacity, the Adviser
shall, subject to the supervision of the Board, regularly provide the Fund with
investment research, advice and supervision and shall furnish continuously an
investment program for the Fund, consistent with the investment objectives and
policies of the Fund, as provided to the Adviser in writing. The Adviser shall
determine, from time to time, what securities shall be purchased for the Fund,
what securities shall be held or sold by the Fund and what portion of the Fund's
assets shall be held uninvested in cash, subject always to the provisions of the
Trust's Agreement and Declaration of Trust, ByLaws and its registration
statement on Form N-1A (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 Securities and Exchange Commission (the "Commission"),
and to the investment objectives, policies and restrictions of the Fund, as each
of the same shall be from time to time in effect and provided to the Adviser in
writing. To carry out such obligations, the Adviser shall exercise full
discretion and act for the Fund in the same manner and with the same force and
effect as the Fund itself might or could do with respect to purchases, sales or
other transactions in securities, commodity interests, and other investment
instruments; 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 the 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 the Fund's assets or to otherwise exercise its
right to control the overall management of the Fund.
1
(b) COMPLIANCE. The 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 Adviser also agrees to comply with the
objectives, policies and restrictions set forth in the Registration Statement,
as amended or supplemented and provided to the Adviser in writing, of the Fund,
and with any policies, guidelines, instructions and procedures approved by the
Board and provided to the Adviser in writing. In selecting the 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 Fund 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 Fund. 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 Fund
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.
The Adviser is authorized to instruct the Fund's custodian and/or broker(s) to
forward promptly to the Adviser or to its designated service provider copies of
all proxies and shareholder communications relating to securities held in the
portfolio of a Fund (other than materials relating to legal proceedings against
the Fund). The Adviser may also instruct the Fund's custodian and/or broker(s)
to provide reports of holdings in the portfolio of the Fund. The Adviser has
the authority to engage a service provided to assist with administrative
functions related to voting Fund proxies. The Trust shall direct the Fund's
custodian and/or broker(s) to provide any assistance requested by the Adviser
in facilitating the use of a service provider. In no event shall the Adviser
have any responsibility to vote proxies that are not received on a timely
basis. The Trust acknowledges that the Adviser, consistent with the Adviser's
written proxy voting policies and procedures, may refrain from voting a proxy
if, in the Adviser's discretion, refraining from voting would be in the best
interests of the Fund and its shareholders.
2
(d) RECORDKEEPING. The Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the Fund,
except as specifically 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 pertaining to
Fund assets advised by the Adviser required by Rule 31a-1(f) under the 1940 Act
(other than those records being maintained by any administrator, custodian or
transfer agent appointed by the Fund) relating to its responsibilities provided
hereunder with respect to the Fund, and shall preserve such records for the
periods and in a manner prescribed therefore by Rule 31a-2 under the 1940 Act
(the "Fund Books and Records"). The Fund Books and Records, shall be delivered
to the Trust upon the termination of this Agreement and shall be available to
the Board during the Adviser's normal business hours.
(e) Holdings Information and Pricing. The Adviser shall provide regular
[quarterly/monthly] reports to the Trust regarding Fund holdings, and may, 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 notify the Trust promptly if the Adviser reasonably believes
that the value of any security held by the Fund may not reflect fair value. The
Adviser agrees to provide upon request 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's net asset value in accordance with procedures
and methods established by the Board, and provided to the Adviser in writing.
(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 sub-custodians, any Trust pricing agents and all other
agents and representatives of the Trust with respect to such information
regarding the Fund as such entities may reasonably request from time to time in
the performance of their obligations, provide prompt responses to reasonable
requests made by such persons and establish appropriate interfaces with each so
as to promote the efficient exchange of information and compliance with
applicable laws and regulations. The Adviser shall not be responsible for any
act or omission of any third party, including, without limitation, any
administrator, distributor, custodian, or transfer agent for the Fund, or the
Trust.
(g) Services Not Exclusive. The services of the Adviser rendered to the
Fund are not exclusive. The Adviser may now and in the future manage other
investment accounts, including accounts with investment objectives and/or
investment strategies identical or similar to those of the Fund ("Similar
Accounts"). Nothing in this Agreement restricts Adviser from managing Similar
Accounts, entering into other investment management, advisory, or similar
relationships, or otherwise dealing with any
3
securities for the account of any other client; provided that the Adviser
treats the Fund fairly and allocates investment opportunities in a manner
consistent with its fiduciary obligations to the Fund. The Trust acknowledges
and agrees that: (i) such activities may involve substantial time and/or
resources of the Adviser; (ii) the Adviser may charge fees which differ from
the fees to be paid to the Adviser hereunder; and (iii) the Adviser makes no
representations, warranties or guarantees that investment results will be the
same for all clients or accounts managed by the Adviser or that the investment
results of the Fund will be the same as, or better than, the investment results
of Similar Accounts or other accounts that are managed by the Adviser.
2. CODE OF ETHICS. The Adviser has adopted a written code of ethics that it
reasonably believes complies with the requirements of Rule 17j-1 under the 1940
Act, which it has provided to the Trust. The Adviser has implemented procedures
reasonably designed to ensure that its Access Persons (as defined in the
Adviser's Code of Ethics) comply in all material respects with the Adviser's
Code of Ethics, as in effect from time to time. Upon request, the Adviser shall
provide the Trust with a (i) copy of the Adviser's current Code of Ethics, as in
effect from time to time, and (ii) certification that it has adopted procedures
reasonably necessary to prevent Access Persons from engaging in any conduct
prohibited by the Adviser's Code of Ethics. Annually, the Adviser shall furnish
a written report, which complies with the requirements of Rule 17j-1, concerning
the Adviser's Code of Ethics to the Trust's Board. The Adviser shall respond to
requests for information from the Trust as to violations of the Code by Access
Persons and the sanctions imposed by the Adviser. The Adviser shall immediately
notify the Trust of any material violation of the Code, whether or not such
violation relates to a security held by the Fund.
3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and its
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 Trust's chief compliance officer promptly upon detection of (i) any material
failure to manage the Fund in accordance with its investment objectives and
policies provided to the Adviser in writing or any applicable law; or (ii) any
material breach of any of the Fund's or policies, guidelines or procedures
provided to the Adviser in writing, or the Adviser's policies, guidelines or
procedures as they relate to the management of the Fund. In addition, the
Adviser shall provide a quarterly report to the Trust regarding the Fund's
compliance with such investment objectives and policies, applicable law,
including, but not limited to the 1940 Act and Subchapter M of the Code. The
Adviser agrees to seek to correct any such failure promptly, subject to orderly
disposition of assets by the Adviser in its sole discretion, and to take such
further 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
4
notice of any action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, public board, or body, involving the affairs of
the Trust (excluding class action suits in which the Fund is a member of the
plaintiff class by reason of the Fund's ownership of shares in the defendant) or
the compliance by the 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.
(b) BOARD AND FILINGS INFORMATION. The Adviser will provide the Trust
with any information reasonably requested regarding its management of the Fund
required for any meeting of the Board, or for any shareholder report, Form
N-CSR, Form N-Q, Form N-PX, Form N-SAR, amended registration statement, proxy
statement, or prospectus supplement to be filed by the Trust with the
Commission. The Adviser will make its officers and employees available to meet
with the Board from time to time on due notice to review its investment
management services to the Fund in light of current and prospective economic
and market conditions and shall furnish to the Board such information as may
reasonably be necessary in order for the Board to evaluate this Agreement or
any proposed amendments thereto.
(c) TRANSACTION INFORMATION. The Adviser shall furnish to the Trust such
information concerning portfolio transactions of the Fund as may be necessary
to enable the Trust or its designated agent to perform such compliance testing
on the Fund 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.
4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales of
securities for the account of the 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 the 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 shall seek for the Fund the
most favorable execution 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 the Fund
with such brokers, subject to review by the Board from time to time to
determine whether such commissions, paid over representative periods of time,
were reasonable in relation to the services and benefits provided to the Fund.
It is understood that the services provided
5
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 the 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 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 the 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 Registration Statement; (b) the
provisions of the 1940 Act; (c) the provisions of the Advisers Act; (d) the
provisions of the 1934 Act; and (e) other provisions of applicable law. These
brokerage services are not within the scope of the duties of the 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 the Fund for these
services in addition to the Adviser's fees for services under this Agreement.
5. CUSTODY. Nothing in this Agreement shall permit the Adviser to take or
receive physical possession of cash, securities or other investments of the
Fund.
6. 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 the Fund'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 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 Part I 1 as most recently filed with the SEC and its current Part 2.A,
if
6
required to be filed with the SEC and will, promptly after filing any amendment
to its Form ADV with the SEC updating its Part 2.A, furnish a copy of such
amendments or updates 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, summary prospectus, prospectus,
statement of additional information, periodic reports to shareholders, reports
and schedules provided to the Adviser and filed with the Commission (including
any amendment, supplement or sticker to any of the foregoing) and advertising
and sales material relating to the Fund provided by the Adviser (collectively
the "Disclosure Documents") and represents and warrants, with respect to
disclosure regarding the Adviser and the investment strategy employed by the
Adviser in managing the Fund, that such Disclosure Documents contain or will
contain no untrue statement of any material fact and do not and will not omit
any statement of material fact required to be stated therein or necessary to
make the statements therein not misleading.
(d) USE OF THE NAME " ". The Adviser has the right to use the name
" _________________ " 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 name " ____________________ " in connection with
the management and operation of the Fund. The Adviser is not aware of any
threatened or existing actions, claims, litigation or proceedings that would
adversely affect or prejudice the rights of the Adviser or the Trust to use the
name " _______________ ."
(e) INSURANCE. The Adviser maintains errors and omissions insurance
coverage in an amount it deems appropriate 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) 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 Fund, consistent with its fiduciary duties under
applicable law and its Code of Ethics.
7
(g) 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.
8. THE NAME "R SQUARED" OR "______________________ ". The Adviser grants to
the Trust a license to use the name " " or " ________________ " (the "Name") as
part of the name of the Fund. The foregoing authorization by the Adviser to the
Trust to use the Name as part of the name of the Fund is not exclusive of the
right of the Adviser itself to use, or to authorize others to use, the Name; 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 Name. The Trust
shall (1) only use the Name 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 Name; (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 Adviser representative samples of any
promotional materials using the Name; and (b) change the name of the 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 Name and will not thereafter
transact any business using the Name in the name of the 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
the date of such name change in quantities not exceeding those historically
produced and used in connection with such Fund.
9. ADVISER'S COMPENSATION. The Fund 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
Fund.
The method for determining net assets of the Fund for purposes hereof
shall be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Fund's prospectus. In the event of termination of this Agreement, the fee
provided in this Section shall be computed on the basis of the period ending on
the last business day on which this Agreement is in effect subject to a pro
rata adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the 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 the Fund in any way or otherwise
be deemed to be an agent of the Trust or the Fund. If any occasion should arise
in which the Adviser gives any advice to its clients concerning the shares of
the Fund, the Adviser will act solely as investment counsel for such clients
and not in any way on behalf of the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in section 2(a)(4)
8
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.
12. DURATION AND TERMINATION.
This Agreement shall become effective as of the date executed and shall
remain in full force and effect continually thereafter, subject to renewal as
provided in Section 12(c) and unless terminated automatically as set forth in
Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by vote
of its Board or (ii) with respect to the Fund, upon the affirmative vote of a
majority of the outstanding voting securities of the Fund, in either case 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
(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 the Fund;
provided, however, that if the continuance of this Agreement is submitted to
the shareholders of the Fund for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Adviser may
continue to serve hereunder as to the Fund in a manner consistent with the 1940
Act and the rules and regulations thereunder; and
(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.
13. CERTAIN DEFINITIONS. For the purposes of this Agreement:
9
(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 ADVISER.
(a) Notwithstanding any other provision of this Agreement, Tthe
Adviser shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of statements in the
Fund's Disclosure Documents solely to the extent such statements relate to
disclosure regarding the Adviser and the investment strategy employed by the
Adviser in managing the Fund, and provided that any changes to such disclosure
are first acknowledged by the Adviser in writing.
(b) The Adviser shall be liable to the Fund for any loss (including
transaction costs) incurred by the Fund as a result of any investment made by
the Adviser in contravention of: (i) any investment policy, guideline or
restriction set forth in the Registration Statement or as approved by the Board
from time to time and provided to the Adviser; or (ii) applicable law,
including but not limited to the 1940 Act and the Code (including but not
limited to the Fund's failure to satisfy the diversification or source of
income requirements of Subchapter M of the Code) (the investments described in
this subsection (b) collectively are referred to as "Improper Investments").
(c) Subject to the provisions of Section 3(a) and 14(a) of this
Agreement, the Adviser shall indemnify and hold harmless the Trust, each
affiliated person of the Trust within the meaning of Section 2(a)(3) of the
1940 Act, and each person who controls the Trust within the meaning of Section
15 of the 1933 Act (any such person, an "Indemnified Party") against any and
all losses, claims, damages, expenses or liabilities (including the reasonable
cost of investigating and defending any alleged loss, claim, damage, expense or
liability and reasonable counsel fees incurred in connection therewith) to
which any such person may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages, expenses or liabilities
(or actions in respect thereof) that are a direct result of: (i) a breach by
the Adviser of this Agreement or of the representations and warranties made by
the Adviser herein; (ii) any Improper Investment; (iii) any untrue statement or
alleged untrue statement of a material fact related to the management of the
Fund's investment portfolio contained in any Disclosure Document or the
omission or alleged omission from a Disclosure Document of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (iv) the Adviser's performance or nonperformance of its duties
hereunder; provided, however, that nothing herein shall be
10
deemed to protect any Indemnified Party who is a Trustee or officer of the
Trust against any liability to the Trust or to its shareholders to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office with the Trust.
15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge
and agree that all litigation arising hereunder, whether direct or indirect,
and of any and every nature whatsoever shall be satisfied solely out of the
assets of the affected Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. 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 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.
18. 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.
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.
11
THE ADVISORS' INNER CIRCLE FUND, on behalf of the Fund(s) listed on Schedule A
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
R SQUARED CAPITAL MANAGEMENT, L.P.
By: /s/ Xxxxxxx Xxxx
-----------------------------
Name: Xxxxxxx Xxxx
Title: Co-Founder
12
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED NOVEMBER 20, 2013 BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
R SQUARED CAPITAL MANAGEMENT, L.P.
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 Fund in accordance the following fee schedule:
--------------------------------------------------------------------------------
FUND RATE
--------------------------------------------------------------------------------
RSQ International Equity Fund ........................................0.80%
--------------------------------------------------------------------------------
A-1
