INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 12 day of October, 1999, by and between Commonfund
Institutional Funds, a Delaware business trust (the "Company"), and Commonfund
Asset Management Company (the "Investment Manager").
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended, which may
consist of several series, each having its own investment objective and policies
(each, a "Fund"); and
WHEREAS, the Company desires to retain the Investment Manager to render
investment management services with respect to each Fund as the Company and the
Investment Manager may agree upon and as are set forth in the attached Schedule
A, and the Investment Manager is willing to render such services.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. Duties of Investment Manager. The Company employs the Investment
Manager to manage the investment and reinvestment of the assets of
each Fund, and, to that end, to retain (subject to the approval of
the Company's Board of Directors and, except as otherwise permitted
under rule or regulation or the terms of any exemptive relief
obtained in the future from the Securities and Exchange Commission,
a majority of the outstanding voting securities of such Fund) one or
more sub-advisers for each Fund, to supervise the investment
activities of such sub-advisers, to allocate assets among such
sub-advisers, to monitor the performance of such sub-advisers and of
each Fund, to determine in its discretion, when appropriate,
securities to be purchased and sold for each Fund, and to render
regular reports to the Company's officers and Directors concerning
its discharge of the foregoing responsibilities.
The Investment Manager shall discharge the foregoing responsibilities
subject to the control of the Board of Directors of the Company and
in compliance with (i) such standing instructions and other policies
as the Directors may from time to time establish,(ii) the objectives,
policies, and limitations for each such Fund set forth in the
prospectus and statement of additional information pertaining to such
Fund as amended from time to time, and (iii) applicable laws and
regulations.
The Investment Manager 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.
The Investment Manager 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 the Company.
2. Fund Transactions. The Investment Manager, and each sub-adviser
retained by the Investment Manager, is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for each Fund and is directed to use its best
efforts to obtain the best net results as described from time to time
in the Fund's prospectuses and statement of additional information.
The Investment Manager will promptly communicate, or cause
sub-advisers retained by it to promptly communicate, to the officers
and the Board of Directors of the Company such information relating
to portfolio transactions as they may reasonably request.
It is understood that neither the Investment Manager nor any
sub-adviser retained by the Investment Manager, will be deemed to
have acted unlawfully, or to have breached a fiduciary duty to the
Company or be in breach of any obligation owing to the Company under
this Agreement, or otherwise, by reason of its having directed a
securities transaction on behalf of a Fund 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 Fund's
prospectuses and statement of additional information.
3. Compensation of the Investment Manager. For the services to be
rendered by the Investment Manager as provided in Sections 1 and 2 of
this Agreement, the Company shall pay to the Investment Manager
compensation at the rate specified in the Schedule A which is
attached hereto and made a part of this Agreement. Such compensation
shall be paid to the Investment Manager at the end of each month, and
shall be accrued daily (using a 365 day year) at the annual
percentage rate as specified in the attached Schedule A. The fee
shall be based on the average daily net assets (less any assets held
in non-interest bearing special deposits with a Federal Reserve Bank)
The Investment Manager may, in its discretion and from time to time,
waive a portion of its fee.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the termination of
this Agreement.
4. Other Expenses. The Company 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 any Fund for any fiscal year
(including fees and other amounts payable to the Investment Manager,
but excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed
the expense limitations imposed on investment companies by any
applicable statute or regulatory authority of any jurisdiction in
which shares of a Fund are qualified for offer and sale, the
Investment Manager shall bear such excess cost.
However, the Investment Manager will not bear expenses of any Fund
that would result in the Fund's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
6. Reports. The Company and the Investment Manager agree to furnish to
each other, to the extent such documents are otherwise prepared,
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 Investment Manager. The services of the Investment Manager
to the Company are not to be deemed exclusive, and the Investment
Manager shall be free to render similar services to others so long as
its services to the Company are not impaired thereby. The Investment
Manager shall be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority
to act for or represent the Company in any way or otherwise be
deemed an agent of the Company.
8. Certain Records. Any records required to be maintained and preserved
pursuant to the provisions of Rule 3la-i and Rule 3la-2 promulgated
under the Investment Company Act of 1940 which are prepared or
maintained by the Investment Manager on behalf of the Company are the
property of the Company and will be surrendered promptly to the
Company on request.
9. Limitation of Liability of Investment Manager. The duties of the
Investment Manager shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted
against the Investment Manager hereunder. The Investment Manager
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 "Investment Manager" shall include directors, officers,
employees and other corporate agents of the Investment Manager,
including any sub-adviser retained by the Investment Manager to
provide services to the Company and its directors, officers,
employees and agents, as well as that entity itself).
10.Permissible Interests. Directors, partners, officers, agents, and
shareholders of the Company are or may be interested in the
Investment Manager (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, partners,
officers, agents, and shareholders of the Investment Manager are or
may be interested in the Company as Directors, officers, shareholders
or otherwise; and the Investment Manager (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 Investment Manager if approved by the Board
of Directors, subject to the rules and regulations of the Securities
and Exchange Commission.
11.License of Investment Manager's Name and Goodwill. The Company has
granted to the Investment Manager a license to use the trade names
"Commonfund" and "Common Fund" (together, the "Trade Name") together
with the business reputation and goodwill associated with the Trade
Name for a period ending on August 1, 2009. The Investment Manager
hereby grants a license to the Company to use the Trade name and the
name of the Investment Manager in the name of the Company, in the
names of the Funds, and in advertising and other promotional
literature relating to the Funds, for the term of this Agreement, as
it may be renewed, up to August 1, 2009. The Company acknowledges
that, in the absence of such license, it has no right to use or
promote its products using the Trade Name or the name of the
Investment Manager. The license granted herein may be revoked at any
time and for any reason upon 90 days notice from the Investment
Manager to the Company. In the event of such revocation, the Company
shall, as soon as reasonably practicable, cease using the Trade Name
and the name of the Investment Manager and the business reputation
and goodwill associated with the Trade Name in connection with the
business of the Company and acknowledges that failure to comply with
this requirement would be a breach of contract for which there is no
adequate remedy at law.
12.Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall remain in effect with respect to a Fund 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 (a) by the vote of 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 vote of a majority of the outstanding voting
securities of such Fund; provided, however, that if the shareholders
of any Fund fail to approve the Agreement as provided herein, the
Investment Manager 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 as to any Fund 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 such Fund on not less than 30 days nor more than 60
days written notice to the Investment Manager, or by the Investment
Manager at any time without the payment of any penalty, on 90 days
written notice to the Company. This Agreement will automatically and
immediately terminate in the event of its assignment. Any notice
under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of
such party.
As used in this Section 12, the terms "assignment," "interested
persons," and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder; subject to such exemptions as may be granted by the
Securities and Exchange Commission 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, 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 commencement of this Agreement,
addresses for notice shall be as follows: if to the Company, at
Commonfund Institutional Funds, 000 Xxxx Xxxx Xxxx, Xxxxxxxx, XX,
00000, and if to the Investment Manager at Commonfund Asset
Management Company, 000 Xxxx Xxxx Xxxx, Xxxxxxxx, XX 00000.
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.
[This blank space intentional]
00.Xx Individual Liability. 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 of this
instrument are not binding on any of the Directors, officers or
shareholders of the Company or any Fund.
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:
Attest:
COMMONFUND ASSET MANAGEMENT COMPANY
By:
Attest:
Schedule A
to the
Investment Advisory Agreement
dated October 12, 1999
between
Commonfund Institutional Funds
and
Commonfund Asset Management Company
Pursuant to Section 3, the Company shall pay the Investment Manager compensation
with respect to the following Fund(s) at an annual rate commencing on the date
as specified:
Fund Annual Fee Date
Commonfund Short Duration Fund 0.19% Commencement of distribution
of Fund shares
Commonfund Institutional Funds
Commonfund Short Duration Fund
Standing Instructions From Board of Directors
to
Commonfund Asset Management Company
Commonfund Asset Management Company (the "Investment Manager"), acting as
Investment Manager under its agreement with Commonfund Institutional Funds (the
"Company") for management of the Commonfund Short Duration Fund (the "Fund"),
shall perform services under the agreement in accordance with the following
standing instructions:
The Investment Manager shall:
(a) Recommend criteria that the Company should adopt for identification
and selection of sub-advisers for the Fund;
(b) Identify, screen and interview sub-advisers for the Fund, analyze
the capabilities of such sub-advisers, and, subject to the final
approval of the Board, retain one or more sub-advisers to invest
assets of one or more Fund taking into consideration the comparative
capabilities of available advisers and expectations as to the way in
which the investment programs and styles of each will contribute, in
tandem, to the overall performance of the Fund;
(c) On behalf of the Company, negotiate and, subject to the final
approval of the Board of Directors of the Company, enter into
discretionary investment management agreements with sub-advisers on
suitable terms with particular attention to performance benchmarks
and fees (it being understood that the agreements will vest with the
sub-advisers, and not with the Investment Manager, the discretion to
select particular investments within the investment program,
performance criteria, investment policies, and restrictions set
forth in such agreements), and consult with the Company, which has
final responsibility for the investment and perating policies
reflected in such agreements, as to terms thereof that involve
questions of interpretation of such investment and operating
policies;
(d) Review fee and other terms of agreements with sub-advisers as it may
from time to time consider appropriate and negotiate and agree to
adjustments in such fees and terms in its discretion;
(e) Review periodically the performance of each sub-adviser against the
sub-adviser's performance benchmark and the sub-adviser's overall
contribution to the Fund's performance, and make such
recommendations to the Company as the Investment Manager deems
appropriate with respect to the continuation, modification, or
termination of the agreement with each sub-adviser;
(f) Consult with the Company on policies with respect to allocation of
assets among sub-advisers and, within parameters established by the
Company as a result of such consultations, allocate and reallocate
assets to and among sub-advisers in light of changing market
conditions, sub-adviser performance, and other factors that the
Investment Manager deems relevant with the objective of maximizing
investment performance of each Fund;
(g) Review the investment objectives, policies and restrictions
applicable to each Fund in light of the Fund's performance and make
such recommendations as the Investment Manager deems appropriate
with respect to any changes in such objectives, policies and
restrictions.
(h) If requested by the Company, manage on a discretionary basis assets
allocated to it for that purpose, and in such cases determine in its
discretion the securities to be purchased or sold,
(i) Provide the Company with records concerning the Investment Manager's
activities which the Company which the Company is required to
maintain, and to render regular reports to the Company's officers
and Trustees concerning the Investment Manager's discharge of the
foregoing responsibilities.
