INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 1st day of October, 2003, by and between Commonfund
Institutional Funds, a Delaware business trust (the "Company"), Commonfund Asset
Management Company, Inc., a Delaware Corporation (the "Investment Manager"), and
Philadelphia International Advisors (the "Sub-Adviser").
WHEREAS, the Company is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), which consists of several portfolios, each having its own investment
policies; and
WHEREAS, the Company has entered into an investment advisory agreement
(the "Investment Management Agreement") with the Investment Manager pursuant to
which the Investment Manager will act as investment manager to the Company; and
WHEREAS, the Investment Manager, acting with the approval of the
Company, wishes to retain the Sub-Adviser to render discretionary investment
advisory services with respect to that portion of each portfolio identified on
the attached Schedule A to this Investment Sub-Advisory Agreement, as it may be
amended from time to time, (each a "Fund") that may be allocated by the
Investment Manager for management by the Sub-Adviser from time to time together
with all income earned on those assets and all realized and unrealized capital
appreciation related to those assets (with respect to a Fund, the "Managed
Assets"), and the Sub-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 SUB-ADVISER. The Sub-Adviser shall manage the
investment and reinvestment of the Managed Assets and determine
in its discretion, the securities and other property to be
purchased or sold and the portion of the Managed Assets to retain
in cash. The Sub-Adviser shall review all proxy solicitation
materials and shall exercise any voting rights associated with
securities comprising the Managed Assets in the best interests of
the Fund and its shareholders. The Sub-Adviser shall provide the
Investment Manager and the Company with records concerning the
Sub-Adviser's activities that the Company is required to
maintain, and to render regular reports to the Investment Manager
and to the Company concerning the Sub-Adviser's discharge of the
foregoing responsibilities.
The Sub-Adviser shall discharge the foregoing responsibilities
subject to the written instructions and directions of the Company
and its Board of Directors and their agents, including the
officers of the Company and the Investment Manager, and in
compliance with (i) such policies as the Company may from time to
time establish and communicate to the Sub-Adviser, (ii) the
objectives, policies, and limitations for each Fund set forth
in the Prospectus and Statement of Additional Information as
those documents may from time to time be amended or supplemented
from and delivered to the Sub-Adviser (the "Prospectus and
Statement of Additional Information"), (iii) the Agreement and
Declaration of Trust and the By-Laws of the Company, and (iv)
applicable laws and regulations, including the 1940 Act, the
Investment Advisers Act of 1940, and the Internal Revenue Code of
1986 (the "Code"), as each may be amended from time to time. If a
conflict in policies or guidelines referenced herein occurs, the
Prospectus and Statement of Additional Information shall control.
In performance of its duties and obligations under this
Agreement, the Sub-Adviser shall not consult with any other
sub-adviser to a Fund or a sub-adviser to a portfolio that is
under common control with a Fund concerning the Managed Assets,
except as permitted by the policies and procedures of the
Company. The Sub-Adviser shall not provide investment advice with
respect to any assets of a Fund other than the Managed Assets.
The Sub-Adviser agrees to perform such duties at its own expense
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. The Sub-Adviser will
not, however, pay for the cost of securities, commodities, and
other investments (including brokerage commissions and other
transaction charges, if any) purchased or sold for a Fund, nor
will the Sub-Adviser bear any expenses that would result in the
Company's inability to qualify as a regulated investment company
under provisions of the Code.
2. DUTIES OF INVESTMENT MANAGER The Investment Manager shall
continue to have responsibility for all services to be provided
pursuant to the Investment Management Agreement between it and
the Company and shall oversee and review the Sub-Adviser's
performance under this Agreement.
The Investment Manager shall furnish to the Sub-Adviser current
and complete copies of the Agreement, Declaration of Trust and
By-laws of the Company, and the current Prospectus and Statement
of Additional Information as those documents may be amended from
time to time.
3. CUSTODY, DELIVERY AND RECEIPT OF SECURITIES. The Company shall
designate one or more custodians to hold the Managed Assets. The
custodians, as so designated, will be responsible for the
custody, receipt and delivery of securities and other assets of a
Fund including the Managed Assets, and the Sub-Adviser shall have
no authority, responsibility or obligation with respect to the
custody, receipt or delivery of securities or other assets of a
Fund, including the Managed Assets. In
the event that any cash or securities of a Fund are delivered to
the Sub-Adviser, it will promptly deliver the same over to the
custodian for the benefit of and in the name of the Fund.
Unless otherwise required by local custom, all securities
transactions for the Managed Assets will be consummated by
payment to or delivery of cash or securities due to or from the
Managed Assets.
4. PORTFOLIO TRANSACTIONS.
(a) Selection of Brokers. The Sub-Adviser is authorized to select
the brokers or dealers that will execute the purchases and sales
of portfolio securities and other property for a Fund in a manner
that implements the policy with respect to brokerage set forth in
the Prospectus and Statement of Additional Information for the
Fund or as the Board of Directors or the Investment Manager may
direct from time to time and in conformity with federal
securities laws.
In executing Fund transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of
the Fund the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the
Sub-Adviser may also consider the brokerage and research services
provided (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934). Consistent with any guidelines
established by the Board of Directors and communicated to the
Sub-Adviser, the Sub-Adviser is authorized to pay to a broker or
dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for a Fund that
is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only
if, the Sub-Adviser determines in good faith that such commission
was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer viewed in
terms of that particular transaction or terms of the overall
responsibilities of the Sub-Adviser to the Fund. In addition, the
Sub-Adviser is authorized to allocate purchase and sale orders
for securities to brokers or dealers (including brokers and
dealers that are affiliated with the Investment Manager, the
Sub-Adviser or the Company's principal underwriter) to take into
account the sale of shares of the Company if the Sub-Adviser
believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified
firms. In no instance, however, will Fund assets be purchased
from or sold to the Investment Manager, the Sub-Adviser, the
Company's principal underwriter, or any affiliated person of
either the Company, the Investment Manager, the Sub-Adviser or
the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act or any rule,
regulation or an order thereunder.
(b) Aggregating Orders. The Sub-Adviser may aggregate orders for
purchase or sale of Managed Assets with similar orders being made
concurrently for other accounts managed by Sub-Adviser, if, in
the Sub-Adviser's reasonable judgment, such aggregation shall
result in an overall economic benefit to the Fund, taking into
consideration the transaction price, brokerage commission and
other expenses. The Company acknowledges that the determination
of such economic benefit to a Fund by the Sub-Adviser may
represent Sub-Adviser's evaluation that a Fund is benefited by
relatively better purchase or sales prices, lower commission
expenses and beneficial timing of transactions or a combination
of these and other factors. In any single transaction in which
purchases and or sales of securities of any issuer for the
account of a Fund are aggregated with other accounts managed by
Sub-Adviser, the actual prices applicable to the transaction will
be averaged among the accounts for which the transaction is
effected, including the account of a Fund.
5. COMPENSATION OF THE SUB-ADVISER. For the services to be rendered
by the Sub-Adviser under this Agreement, the Investment Manager
shall pay to the Sub-Adviser compensation at the rate specified
in Schedule B, as it may be amended from time to time. Such
compensation shall be paid at the times and on the terms set
forth in Schedule B. All rights of compensation under this
Agreement for services performed as of the termination date shall
survive the termination of this Agreement. Except as may
otherwise be prohibited by law or regulation (including any then
current SEC staff interpretations), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
6. OTHER EXPENSES. The Company shall pay all expenses relating to
mailing prospectuses, statements of additional information, proxy
solicitation material and shareholder reports to shareholders.
7. REPORTS.
(a) The Company and the Sub-Adviser agree to furnish to each
other, current prospectuses, proxy statements, reports to
shareholders, certified copies of financial statements, and such
other information with regard to their affairs as each may
reasonably request. The Investment Manager will furnish to the
Sub-Adviser advertising and sales literature or other
material prepared for distribution to Fund shareholders or the
public, which refer to the Sub-Adviser or its clients in any way,
prior to the use thereof, and the Investment Manager shall not
use any such materials if the Sub-Adviser reasonably objects in
writing within ten (10) business days (or such other time as may
be mutually agreed) after receipt thereof.
(b) The Sub-Adviser shall provide to each Fund's custodian, on
each business day, information relating to all transactions in
the Managed Assets and shall provide such information to the
Investment Manager upon request. The Sub-Adviser will make all
reasonable efforts to notify the custodian of all orders to
brokers for the Managed Assets by 9:00 am EST on the day
following the trade date and will affirm the trade to the
custodian before the close of business one business day after the
trade date.
(c) The Sub-Adviser will promptly communicate to the Investment
Manager and to the Company such information relating to portfolio
transactions on behalf of a Fund as they may reasonably request.
(d) The Sub-Adviser shall promptly notify the Company and the
Investment Manager of any financial condition likely to impair
the ability of the Sub-Adviser to fulfill its commitments under
this Agreement.
8. STATUS OF SUB-ADVISER. The Sub-Adviser is and will continue to be
registered as such under the federal Investment Advisers Act of
1940. The services of the Sub-Adviser to the Company for each
Fund are not to be deemed exclusive, and the Sub-Adviser shall be
free to render similar services to others so long as its services
to the Fund are not impaired thereby. The Sub-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 Company in any way or otherwise be
deemed an agent of the Company.
9. CERTAIN RECORDS. The Sub-Adviser shall maintain all books and
records with respect to transactions involving the Managed Assets
required by subparagraphs (b)(5), (6), (7), (9), (10) and (11)
and paragraph (f) of Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall provide to the Investment Manager or the Board
of Directors such periodic and special reports, balance sheets or
financial information, and such other information with regard to
its affairs as the Investment Manager or the Board of Directors
may reasonably request.
The Sub-Adviser shall keep the books and records relating to the
Managed Assets required to be maintained by the Sub-Adviser under
this Agreement and shall timely furnish to the Investment Manager
all information relating to the Sub-Adviser's services under this
Agreement
needed by the Investment Manager to keep the other books and
records of the Company required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Investment Manager any
other information relating to the Managed Assets that is required
to be filed by the Investment Manager or the Company with the SEC
or sent to shareholders under the 1940 Act (including the rules
adopted thereunder) or any exemptive or other relief that the
Investment Manager or the Company obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on behalf
of the Company are property of the Company and the Sub-Adviser
will surrender promptly to the Company any of such records upon
the Company's request; provided, however, that the Sub-Adviser
may retain a copy of such records. In addition, for the duration
of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as
are required to be maintained by it pursuant to this Agreement,
and shall transfer said records to any successor sub-adviser upon
the termination of this Agreement (or, if there is no successor
sub-adviser, to the Investment Manager).
10. LIMITATION OF LIABILITY OF SUB-ADVISER. The duties of the
Sub-Adviser shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted
against the Sub-Adviser hereunder, except as may be imposed by
law. The Sub-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 10, the
term "Sub-Adviser" shall include directors, officers, employees
and other corporate agents of the Sub-Adviser as well as that
entity itself).
11. PERMISSIBLE INTERESTS. Agents and shareholders of the Company may
be interested in the Sub-Adviser (or any successor thereof) as
directors, partners, officers, or shareholders, or otherwise;
directors, partners, officers, agents, and shareholders of the
Sub-Adviser are or may be interested in the Company as
shareholders or otherwise; and the Sub-Adviser (or any successor)
is or may be interested in the Company as a shareholder or
otherwise. In addition, brokerage transactions for the Company
may be effected through affiliates of the Sub-Adviser if approved
by the Board of Directors of the Company subject to the rules and
regulations of the SEC.
12. DURATION AND TERMINATION. This Agreement shall become effective
for each Fund set forth in Schedule A upon its approval by the
Board of Directors of the Company in accordance with an SEC
exemptive order (Investment Company Act Release No. 25160), which
permits the Investment Manager and/or the Company to engage a
Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the
Fund(s) involved. This Agreement shall remain in effect until two
years from date of execution, and thereafter, for periods of one
year so long as such continuance thereafter is specifically
approved at least annually by the vote of a (a) majority of those
Directors of the Company who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Directors of the Company, or by the vote of a majority of the
outstanding voting securities of the Fund; provided, however,
that if the shareholders of a Fund fail to approve the Agreement
as provided herein, the Sub-Adviser may continue to serve
hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules and regulations
thereunder. The foregoing requirement that continuance of this
Agreement be "specifically approved at least annually" shall be
construed in a manner consistent with the Investment Company Act
of 1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment
of any penalty, by vote of a majority of the Directors of the
Company or by vote of a majority of the outstanding voting
securities of a Fund on not less than 30 days nor more than 60
days written notice to the Sub-Adviser, by the Investment Manager
at any time without the payment of a penalty upon 90 days written
notice to the Sub-Adviser, or by the Sub-Adviser at any time
without the payment of any penalty on 90 days written notice to
the Investment Manager. This Agreement will automatically and
immediately terminate in the event of its assignment or in the
event of the termination of the Investment Manager's advisory
agreement with the Company. Any termination of this Agreement in
accordance with the terms hereof will not affect the obligations
or liabilities accrued prior to termination. 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 exceptions as may be granted by the SEC under said Act.
13. 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, or by express courier, 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. At the outset, such notices shall be delivered to
the following addresses:
(i) if to the Company, then care of:
Commonfund Asset Management Company, Inc.
00 Xxx Xxxxxxx Xx, X.X. Xxx 000
Xxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxxxx, Chief Operating Officer;
(ii) if to the Investment Manager, at the foregoing
address; and
(iii) if to the Sub-Adviser:
Philadelphia International Advisors
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxx, Managing Director
14. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York and the applicable
provisions of the 1940 Act. To the extent that the applicable
laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the
latter shall control. With respect to any suit, action, or
proceeding relating to this Agreement or transactions
contemplated hereby, each party irrevocably submits to the
non-exclusive jurisdiction of the United States District Court
for the Southern District of New York.
16. CONFIDENTIAL INFORMATION. Sub-Adviser shall not identify the
Company or the Fund as a client, or disclose any information
about the Company or the Fund to any third party except as may be
required by law, regulatory proceeding or as may be expressly
permitted by the Company.
17. MISCELLANEOUS.
(A) This instrument constitutes the sole and only agreement of
the parties to it relating to its object; any prior agreements,
promises or representations not expressly set forth in this
Agreement are of no force and effect. No waiver or modification
of this Agreement shall be effective unless reduced to writing
and signed by the party to be charged. No failure
to exercise and no delay in exercising on the part of any party
hereto of any right, remedy, power or privilege hereunder shall
operate as a waiver thereof. Except as set forth in Section 12,
this Agreement binds and inures to the benefit of parties, their
successors and assigns. This Agreement may be executed in more
than one counterpart each of which shall be deemed an original
and both of which, taken together, shall be deemed to constitute
one and the same instrument.
In the event the terms of this Agreement are applicable to more
than one Fund, the Investment Manager is entering into this
Agreement with the Sub-Adviser on behalf of the respective Funds
severally and not jointly, with the express intention that the
provisions contained in each numbered paragraph hereof shall be
understood as applying separately with respect to each Fund as if
contained in separate agreements between the Investment Manager
and the Sub-Adviser for each such Fund. In the event that this
Agreement is made applicable to any additional Fund by way of a
Schedule executed subsequent to the date first indicated above,
provisions of such Schedule shall be deemed to be incorporated
into this Agreement as it relates to such Fund so that, for
example, the effective date for purposes of Paragraph 12 of this
Agreement with respect to such Fundshall be the execution date of
the relevant Schedule.
(b) A copy of the Certificate of Trust of the Company is on file
with the Secretary of State of the State of Delaware and notice
is hereby given that the obligations under this instrument are
not binding on any of the Directors, officers or shareholders of
the Company.
(c) Where the effect of a requirement of the 1940 Act reflected
in any provision of this Agreement is altered by rule, regulation
or order of the SEC, whether of special or general application,
such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
COMMONFUND INSTITUTIONAL FUNDS
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Attest: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
COMMONFUND ASSET MANAGEMENT COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Attest: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Philadelphia International Advisors
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Attest: /s/ Xxxx Xxxxxxxx
-------------------------------
SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
AMONG
COMMONFUND INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY, INC.
AND
PHILADELPHIA INTERNATIONAL ADVISORS
FUND
----
CIF International Equity Fund
Date of this Schedule: October 1, 2003
SCHEDULE B
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
DATED OCTOBER 1, 2003
AMONG
COMMONFUND INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY, INC.
AND
PHILADELPHIA INTERNATIONAL ADVISORS
FEES
----
COMMONFUND ASSET MANAGEMENT COMPANY, INC. Philadelphia International Advisors
By: /s/ Xxxxxxx X. Xxxxxxx By: /s Xxxxx X. Xxxx
-------------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxx
Title: Chief Operating Officer Title: Managing Director
Date of this Schedule B: October 1, 2003
