EXHIBIT (d)(17)
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this day of ____ , 2001, by and between Commonfund
Institutional Funds, a Delaware business trust (the "Company"), Commonfund Asset
Management Company, Inc., a Delaware Corporation (the "Investment Manager"), and
BlackRock Advisors, Inc. (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 series, each having its own investment
policies; and
WHEREAS, the Company has entered into an investment advisory 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
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supplemented from and delivered to the Sub-Adviser (the "Prospectus and
Statement of Additional Information"), (iii) the Declaration of Trust
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. If a conflict in policies or guidelines referenced herein
occurs, the Prospectus and Statement of Additional Information shall
control.
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 Internal Revenue
Code.
2. DUTIES OF INVESTMENT MANAGER. The Investment Manager shall continue to
have responsibility for all services to be provided to a Fund pursuant
to the Advisory 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 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 by
a Fund of cash or securities due to or from the Managed Assets.
Repurchase agreements including tri-party repurchase agreements and
other trading agreements may be entered into by a Fund acting through
designated officers or agents; custodians under tri-party repurchase
agreements will act as sub-custodians of the Fund.
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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, 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, Sub-Adviser, the
Company's principal underwriter, or any affiliated person of either the
Company, the Investment Manager, 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.
(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
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 Sub-Adviser may represent Sub-Adviser's evaluation that a
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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.
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(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
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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 Securities and Exchange Commission.
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 and by a vote of the majority of the
outstanding voting securities of each Fund; provided, however, that at
any time the Investment Manager and or the Company shall have obtained
exemptive relief from the Securities and Exchange Commission permitting
it 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, the Agreement shall become effective upon its
approval by the Company's Board of Directors. 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
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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: Xx. Xxxx X. Xxxxxx, President;
(ii) if to the Investment Manager, at the foregoing
address; and
(iii) if to the Sub-Adviser:
BlackRock Advisors, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
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.
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17. MISCELLANEOUS. 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. 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. 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.
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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, INC.
By:
------------------------------
Attest:
--------------------------
BLACKROCK Advisors, INC.
By:
------------------------------
Attest:
--------------------------
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SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
AMONG
COMMONFUND INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY, INC.
AND
BLACKROCK ADVISORS, INC.
FUND
----
CIF Core Plus Bond Fund
Date of this Schedule: ______
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SCHEDULE B
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
DATED , 2001
AMONG
COMMONFUND INSTITUTIONAL FUNDS
III. COMMONFUND ASSET MANAGEMENT COMPANY, INC.
AND
BLACKROCK ADVISORS, INC.
IV. FEES
Daily Accrual
-------------
Fees shall be accrued each day by applying to the Net Asset Value of the Managed
Assets at the end of that day, the daily rate, using a 365 day year, equivalent
to the following:
Fund Managed Assets($) Fee (% per annum)
---- ----------------- -----------------
CIF Core Plus Bond Fund First $300 million 0.172%
Next $200 million 0.15%
Next $500 million 0.10%
Thereafter 0.08%
Quarterly Payment
-----------------
Fees shall be paid within 30 days following the end of each calendar quarter.
COMMONFUND ASSET BLACKROCK ADVISORS, INC.
MANAGEMENT COMPANY, INC.
By: By:
---------------------------- -----------------------------
Name: Name:
Title: Title:
Date of this Schedule B: ______
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