INTERIM INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of March, 2005, by and between The
Advisors' Inner Circle Fund, a Massachusetts business trust (the "Trust"), and
Sterling Capital Management, LLC, a North Carolina limited liability company
(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 portfolios (each a "Portfolio", and
collectively, the "Portfolios") as the Trust and the Adviser may agree upon and
are listed in the Schedule attached hereto, 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 manage the
investment and reinvestment of the assets, and to continuously review,
supervise, and administer the investment program of the Portfolio, to
determine in its discretion the securities to be purchased or sold, to
provide the Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain, and to
render regular reports to the Administrator and to the Trust's Officers
and 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 such policies as the Trustees may from time to time establish, and
in compliance with the objectives, policies, and limitations set forth
in the Portfolio's prospectus and statement of additional information
as amended from time to time, and 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 is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio
securities for the Portfolio and is directed to use its best efforts to
obtain the best net results as described from time to time in the
Portfolio's prospectus and statement of additional information. The
Adviser will promptly communicate to the Administrator, the officers
and the Trustees of 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 prospectuses 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 the
Schedule(s) which are attached hereto and made a part of this
Agreement. Such compensation shall be paid to the Adviser not less than
monthly in arrears by the Trust, and calculated by applying a daily
rate, based on the annual percentage rates as specified in the attached
Schedule(s), to the assets. The fee shall be based on the average daily
net assets for the month involved.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
The compensation earned under this Agreement will be held in an
interest bearing escrow account with the Portfolios' custodian bank or
a bank mutually agreed upon by the Adviser and the Trust. With respect
to each Portfolio, if a majority of the Portfolio's outstanding voting
securities approves a new investment advisory agreement with the
Adviser by the end of the 150 day period following the effective date
of this Agreement, the amount in the escrow account attributable to
that Portfolio (including any interest earned) will be paid to the
Adviser. If a majority of a Portfolio's outstanding voting securities
does not approve a new investment advisory agreement with the Adviser,
the Adviser will be paid out of the escrow account, with respect to
that Portfolio, the lesser of: (a) any costs incurred by the Adviser in
performing its obligations under the Agreement, with respect to that
Portfolio, (plus interest earned on that amount while in escrow); or
(b) the total amount in the escrow account attributable to that
Portfolio (plus any interest earned).
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
the solicitation of prospective clients. The Trust shall pay all
expenses relating to mailing to existing shareholders prospectuses,
statements of additional information, proxy solicitation material and
shareholder reports.
5. Excess Expenses. If the expenses for the 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 the
Portfolio are qualified for offer and sale, the Adviser shall bear such
excess cost.
However, the Adviser will not bear Portfolio expenses 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
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
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 if approved by the Board of Trustees, subject to the rules and
regulations of the Securities and Exchange Commission.
11. License of the Adviser's Name. The Adviser hereby agrees to grant a
license to the Trust for use of its name in the name of the Portfolio
and such other portfolios as the Trust and Adviser may agree upon for
the term of this Agreement and such license shall terminate upon
termination of this Agreement.
12. Duration and Termination.
(a) This Agreement shall become effective immediately upon the
completion of the contemplated acquisition by BB&T Corporation of a
controlling ownership interest in Adviser that results in an assignment
of the current advisory agreement between the Trust and the Adviser.
This Agreement shall remain in full force and effect for a period not
to exceed 150 days thereafter.
(b) The Agreement will automatically terminate upon 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 a Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be terminated by
the Trust or by the Adviser at any time on ten (10) days written
notice, by the majority vote of the Trustees.
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 Portfolios 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 Portfolios'
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.
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 their respective meanings set forth in the 1940
Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
13. Change in the Adviser's Ownership. The Adviser agrees that it shall
notify the Trust of any change in the ownership of the Adviser within a
reasonable time after such change.
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
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,
Xxxxxxxxxxxx 00000 and if to the Adviser, at Two Morrocroft Centre,
0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 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
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, PRESIDENT
Attest: /s/ Xxxxxxx X. Xxxx
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STERLING CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Attest: /s/ Xxxxx Xxxxx
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SCHEDULE TO THE
INTERIM INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
STERLING CAPITAL MANAGEMENT, LLC
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Portfolio Fee:
--------- ----
Sterling Capital Balanced Portfolio 0.75%
Sterling Capital Small Cap Value Portfolio 1.00%
