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EXHIBIT d(10)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 11th day of December, 2000, by and between
Commonfund Institutional Funds, a Delaware business trust (the "Company"),
Commonfund Asset Management Company, Inc., a Delaware Corporation (the
"Investment Manager"), and High Rock Capital, LLC (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-advisery 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-
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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
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.
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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.
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
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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 that 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 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,
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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-
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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 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
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voting securities of each Fund; provided, however, that at any
time the Adviser 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 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,
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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
Attention: Xx. Xxxx X. Xxxxxx, President;
(ii) if to the Investment Manager, at the foregoing
address; and
(iii) if to the Sub-adviser:
High Rock Capital, LLC
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Vice President
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 or as may be expressly permitted by the Company.
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: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------------------------------
Attest: /s/ Xxxxxx Xxxxxxx
-----------------------------------------------------
COMMONFUND ASSET MANAGEMENT COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------------------------
Attest: /s/ Xxxxxx Xxxxxxx
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HIGH ROCK CAPITAL LLC
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------------------------
Attest:
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SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
AMONG
COMMONFUND INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY
AND
HIGH ROCK CAPITAL LLC
FUND
CIF Small Cap Value Fund
Date of this Schedule: December 11, 2000
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SCHEDULE B
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
DATED DECEMBER 11, 0000
XXXXX
XXXXXXXXXX INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY
AND
HIGH ROCK CAPITAL LLC
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($) (% Per Annum)
---- ----------------- -------------
CIF Small Cap
Value Fund
Quarterly Payment
Fees shall be paid within 30 days following the end of each calendar quarter.
COMMONFUND ASSET MANAGEMENT COMPANY HIGH ROCK CAPITAL LLC
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxx
___________________________ ___________________________
Name: Xxxx X. Xxxxxx Name: Xxxxx Xxxxxxx
Title: President Title: President
Date of this Schedule B: December 11, 2000
