INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
OFFITBANK,
OFFITBANK VARIABLE INSURANCE FUND, INC.
AND
ROCKEFELLER & CO., INC.
AGREEMENT made as of the 3rd day of September, 1996, by and between
OFFITBANK, a New York State chartered trust company (the "Adviser"), Rockefeller
& Co., Inc., a New York corporation and a wholly-owned subsidiary of Rockefeller
Financial Services, Inc. (the "Sub-Adviser") and The OFFITBANK Variable
Insurance Fund, Inc. a Maryland corporation (the "Company"), an open-end,
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act").
WHEREAS, the Adviser provides investment advisory services to the VIF-
U.S. Small Cap Fund series of the Company which serves as the underlying
investment for certain variable annuity contracts issued by insurance company
separate accounts, pursuant to an Investment Advisory Agreement dated as of
March 1, 1995 (the "Advisory Agreement"); and
WHEREAS, the Sub-Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the VIF-U.S. Small Cap Fund
series of the Company (the "Fund"), and the Sub-Adviser represents that it is
willing and possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to
act as investment subadviser to the Fund for the period and on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser has delivered to the
Sub-Adviser copies of each of the following documents along with all amendments
thereto through the date hereof, and will promptly deliver to it all future
amendments and supplements thereto, if any:
(a) the Company's Articles of Incorporation;
(b) the By-Laws of the Company;
(c) resolutions of the Board of Directors of the Company
authorizing the execution and delivery of the Advisory
Agreement and this Agreement;
(d) the most recent Post-Effective Amendment to the Company's
Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act, on Form N-1A as
filed with the Securities and Exchange Commission (the
"Commission");
(e) Notification of Registration of the Company under the 1940 Act
on Form N-8A as filed with the Commission; and
(f) the currently effective Prospectus and Statement of Additional
Information of the Fund.
3. INVESTMENT ADVISORY SERVICES. The Sub-Adviser hereby undertakes to
act as investment subadviser to the Fund and, subject to the supervision of the
Company's Board of Directors and the Adviser, to (a) make investment strategy
decisions for the Fund, (b) manage the investing and reinvesting of the Fund's
assets, (c) place purchase and sale orders on behalf of the Fund and (d) provide
continuous supervision of the Fund's investment portfolio. The Sub-Adviser
shall, subject to review by the Board of Directors and the Adviser, furnish such
other services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement.
As manager of the Fund's assets, the Sub-Adviser shall make investments
for the Fund's account in accordance with the investment objective and
limitations set forth in the Articles, the Prospectus, the 1940 Act, the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
including Subchapters L and M, relating to variable contracts and regulated
investment companies, respectively, and policy decisions adopted by the
Company's Board of Directors and the Adviser from time to time. The Sub-Adviser
shall advise the Company's officers, Board of Directors and the Adviser, at such
times as the Company's Board of Directors or Adviser may specify, of investments
made for the Fund's account and shall, when requested by the Company's officers,
Board of Directors or Adviser, supply the reasons for making such investments.
The Sub-Adviser is authorized on behalf of the Company, from time to
time when deemed to be in the best interests of the Company and to the extent
permitted by applicable law, to purchase and/or sell securities in which the
Adviser, Sub-Adviser or any respective affiliates thereof underwrites, deals in
and/or makes a market and/or may perform or seek to perform investment banking
services for issuers of such securities. The Sub-Adviser is further authorized,
to the extent permitted by applicable law, to select brokers for the execution
of trades for the Company, which broker may be an affiliate of the Sub-Adviser
or Adviser, provided that the best competitive execution price is obtained at
the time of the trade execution.
Pursuant to applicable law, the Sub-Adviser shall keep the Fund's books
and records required to be maintained by, or on behalf of, the Fund with respect
to subadvisory services rendered hereunder. The Sub-Adviser agrees that all
records which it maintains for the Fund are the property of the Fund and it will
promptly surrender any of such records to the Fund upon the Fund's request. The
Sub-Adviser further agrees to preserve for the periods
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prescribed by Rule 31a-2 under the 1940 Act any such records of the Fund
required to be preserved by such Rule.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Sub-Adviser hereby represents and warrants to the Adviser
as follows:
(i) The Sub-Adviser is a corporation duly organized and in
good standing under the laws of the State of New York and is fully authorized to
enter into this Agreement and carry out its duties and obligations hereunder.
(ii) The Sub-Adviser is registered as an investment adviser
with the Commission under the Advisers Act. The Sub-Adviser shall maintain such
registration in effect at all times during the term of this Agreement.
(iii) The Sub-Adviser at all times shall provide its best
judgment and effort to the Adviser in carrying out the Sub-Adviser's obligations
hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser
as follows:
(i) The Adviser is a trust company duly organized and in good
standing under the laws of the State of New York and is fully authorized to
enter into this Agreement and carry out its duties and obligations hereunder.
(ii) The Company has been duly organized as a corporation
under the laws of the State of Maryland.
(iii) The Company is registered as an investment company with
the Commission under the 1940 Act, and shares of the Fund are registered for
offer and sale to the public under the 1933 Act and all applicable state
securities laws where currently sold. Such registrations will be kept in effect
during the term of this Agreement.
5. EXPENSES. (a) The Sub-Adviser shall, at its expense, provide
the Fund with office space, furnishings and equipment and personnel required by
it to perform the services to be provided by the Sub-Adviser pursuant to this
Agreement.
(b) Except as provided in subparagraph (a), the Company shall be
responsible for all of the Fund's expenses and liabilities, including, but not
limited to, taxes; interest; fees (including fees paid to its directors who are
not affiliated with the Adviser, Sub-Adviser or any of their respective
affiliates); fees payable to the Securities and Exchange Commission; state
securities qualification fees; costs of preparing and printing Prospectuses for
regulatory purposes and for distribution to existing shareholders; advisory and
administration fees; charges of the custodian and transfer agent; insurance
premiums; auditing and legal expenses; costs of shareholders' reports and
shareholders' meetings; any extraordinary expenses; and brokerage fees and
commissions, if any, in connection with the purchase or sale of portfolio
securities.
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6. COMPENSATION. In consideration of the services to be rendered by the
Sub-Adviser under this Agreement, the Adviser shall pay the Sub-Adviser (or
cause to be paid by the Company directly to the Sub-Adviser) monthly fees on the
first Business Day (as defined in the Prospectus) of each month based upon the
average daily net assets of the Fund during the preceding month (as determined
on the days and at the time set forth in the Prospectus for determining net
asset value per share) at the annual rate of 1.00%. If the fees payable to the
Sub-Adviser pursuant to this paragraph begin to accrue before the end of any
month or if this Agreement terminates before the end of any month, the fees for
the period from such date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs. For purposes of calculating each such
monthly fee, the value of the Fund's net assets shall be computed in the manner
specified in the Prospectus and the Articles for the computation of the value of
the Fund's net assets in connection with the determination of the net asset
value of shares of the Fund's capital stock.
If the aggregate expenses incurred by, or allocated to, the Fund in any
fiscal year shall exceed the lowest expense limitation, if applicable to the
Fund, imposed by state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Sub-Adviser shall
reimburse the Fund for such excess. The Sub-Adviser's reimbursement obligation
will be limited to the amount of fees it received under this Agreement during
the period in which such expense limitations were exceeded, unless otherwise
required by applicable laws or regulations. With respect to portions of a fiscal
year in which this Agreement shall be in effect, the foregoing limitations shall
be prorated according to the proportion which that portion of the fiscal year
bears to the full fiscal year. Any payments required to be made by this
paragraph shall be made once a year promptly after the end of the Company's
fiscal year.
7. STANDARD OF CARE.
The Sub-Adviser shall exercise its best judgment in rendering the
services described in this Agreement. The Sub-Adviser shall not be liable for
any error of judgment or mistake of law or for any act or omission or any loss
suffered by the Company or the Fund in connection with the matters to which this
Agreement relates, provided that nothing herein shall be deemed to protect or
purport to protect the Sub-Adviser against any liability to the Fund, the
Company or its shareholders to which the Sub-Adviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement ("disabling conduct").
The Adviser will indemnify the Sub-Adviser against, and hold it
harmless from, any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses), including any amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, relating to
the Fund, arising out of or resulting from any action or inaction on the part of
the Adviser which constitutes a breach of a covenant or representation
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contained in this Agreement or the Advisory Agreement and not resulting from
disabling conduct by the Sub-Adviser.
The Sub-Adviser will indemnify the Adviser against, and hold it
harmless from, any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses), including any amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, relating to
the Fund, arising out of or resulting from any action or inaction on the part of
the Sub-Adviser which constitutes a breach of a covenant or representation
contained in this Agreement and not resulting from disabling conduct by the
Adviser.
No party shall be liable under this indemnification provision unless
the indemnified party shall have notified the indemnifying party in writing
within a reasonable time after the summons or first legal process giving
information of the nature of the claim shall have been served upon the
indemnified party (or after the indemnified party shall have received notice of
such service on any designated agent), but failure to notify the indemnifying
party of any such claim shall not relieve the indemnifying party from any
liability it may have to the indemnified party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against an indemnified party, the indemnifying party
shall be entitled to participate, at its own expense, in the defense of such
action. The indemnifying party shall also be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the indemnifying party to such named party of the indemnifying
party's election to assume the defense thereof, the indemnified party shall bear
the fees and expenses of any additional counsel retained by it, and the
indemnifying party will not be liable to such named party under this
indemnification provision for any legal or other expenses subsequently incurred
by such named party independently in connection with the defense thereof other
than reasonable costs of investigation.
8. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall
become effective on the date hereof provided that it shall have been approved by
a majority of the outstanding voting securities of the Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval (the "Effective Date").
(a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph, this Agreement shall continue in force for two years from the
Effective Date and indefinitely thereafter, but only so long as the continuance
after such date shall be specifically approved at least annually by vote of the
Directors of the Company or by vote of a majority of the outstanding voting
securities of the Fund.
(b) This Agreement may be modified by mutual consent, such consent on
the part of the Company to be authorized by vote of a majority of the
outstanding voting securities of the Fund.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Directors of the
Company who are not parties to this
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Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Company, or the Sub-Adviser or the Fund may, at any time
on sixty (60) days prior written notice to the other, terminate this Agreement,
without payment of any penalty, by action of its Board of Directors or by action
of its authorized officers or, with respect to the Fund, by vote of a majority
of the outstanding voting securities of the Fund. This Agreement shall terminate
automatically in the event of its assignment or in the event of an assignment or
termination of the Advisory Agreement.
9. CERTAIN DEFINITIONS. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
10. INDEPENDENT CONTRACTOR. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Directors of the
Company, from time to time, have no authority to act for or represent the Fund
in any way or otherwise be deemed an agent of the Fund.
11. STRUCTURE OF AGREEMENT. The Adviser and Sub-Adviser hereby
recognize that the Fund is a separate series portfolio of the Company. The
Adviser and Sub-Adviser are entering into this Agreement with regard to the Fund
severally and not jointly with respect to other series portfolios of the
Company. The responsibilities and benefits set forth in this Agreement shall be
deemed to be effective as between the Adviser and Sub-Adviser in connection with
the Fund severally and not jointly and not jointly with respect to other series
portfolios of the Company. This Agreement is intended to govern only the
relationships between the Adviser, on the one hand, and the Sub-Adviser, on the
other hand, and is not intended to and shall not govern (i) the relationship
between the Adviser or Sub-Adviser and any other series portfolio, or (ii) the
relationships among the respective series portfolios.
12. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Maryland, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act or the Advisers Act.
13. 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 and, to this extent,
the provisions of this Agreement shall be deemed to be severable.
14. NOTICES. Notices of any kind to be given to the Adviser
hereunder by the Sub- Adviser shall be in writing and shall be duly given if
mailed or delivered to the Adviser at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 or at such other address or to such individual as shall be so
specified by the Adviser to the Sub-Adviser. Notices of any kind to
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be given to the Sub-Adviser hereunder by the Adviser shall be in writing and
shall be duly given if mailed or delivered to the Sub-Adviser at 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other address or to such individual
as shall be so specified by the Sub-Adviser to the Adviser. Notices shall be
effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
OFFITBANK ROCKEFELLER & CO., INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Managing Director Title: President, Chief Executive
Officer, Chief Investment
Officer
THE OFFITBANK VARIABLE INSURANCE
FUND, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Assistant Secretary
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