EXHIBIT d.(vii)
SUB-ADVISORY AGREEMENT WITH
FEDERATED INVESTMENT MANAGEMENT
SUBADVISORY AGREEMENT
This Subadvisory Agreement (this "Agreement") is entered into as of the
30th day of April, 2002, by and between HL Investment Advisors, LLC, a
Connecticut limited liability company (the "Adviser") and Federated Investment
Management Company, a Delaware business trust ("FIM").
RECITALS:
A. The Adviser has entered into an advisory agreement dated April 30, 2002,
(the "Advisory Agreement") with Hartford HLS Series Fund II, Inc., a
Maryland corporation (the "Company"), pursuant to which the Adviser
provides portfolio management services to the series of the Company set
forth on Schedule 1 to this Agreement (each a "Fund" and collectively
the "Funds");
B. The Advisory Agreement provides that the Adviser may delegate any or all
of its portfolio management responsibilities under the Advisory
Agreement to one or more subadvisers, and
C. The Adviser and the Board of Directors (the "Board") of the Company
desire to retain FIM to render portfolio management services in the
manner and on the terms set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Adviser and FIM agree as follows:
APPOINTMENT OF SUBADVISER.
The Adviser hereby appoints FIM as subadviser for each Fund and
authorizes FIM, in its discretion and without prior consultation with the
Adviser, to invest and manage each Fund's portfolio of Securities in accordance
with such Fund's stated investment objective to the fullest extent permitted by:
the Fund's investment policies, limitations, procedures and guidelines set forth
in the documents listed on Schedules 2 and 3 to this Agreement;
any additional objectives, policies or guidelines established by the Adviser or
by the Board that have been furnished in writing to FIM;
the provisions of the Investment Company Act of 1940 (the "1940 Act") and the
rules and regulations thereunder applicable to the Fund; and
the provisions of Subchapter M of the Internal Revenue Code ("IRC") applicable
to "regulated investment companies."
For purposes of this Agreement, "Securities" include any investment
permitted under the foregoing policies, limitations, procedures, guidelines,
laws or regulations. Subject to the supervision of the Adviser and the Board,
the Adviser authorizes FIM to determine the structure and composition of the
Fund's portfolio, including the purchase, retention and disposition of, and
exercise of all rights pertaining to, the Securities comprising the portfolio.
REPRESENTATIONS AND WARRANTIES OF FIM
FIM represents and warrants to Adviser as follows:
FIM is a business trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
This Agreement constitutes the legal, valid, and binding obligation of FIM,
enforceable against FIM in accordance with its terms. FIM has the absolute and
unrestricted right, power, and authority to execute and deliver this and to
perform its obligations under this Agreement.
Neither the execution and delivery of this Agreement by FIM nor the performance
of any of its obligations hereunder will give any person the right to prevent,
delay, or otherwise interfere with the performance of such obligations pursuant
to:
ANY PROVISION OF FIM'S DECLARATION OF TRUST OR BY-LAWS;
ANY RESOLUTION ADOPTED BY THE BOARD OF TRUSTEES OR THE SHAREHOLDERS OF FIM;
ANY LAW, REGULATION OR ADMINISTRATIVE OR COURT ORDER TO WHICH FIM MAY BE
SUBJECT; OR
ANY CONTRACT TO WHICH FIM IS A PARTY OR BY WHICH FIM MAY BE BOUND.
FIM is not and will not be required to obtain any consent from any person in
connection with the execution and delivery of this Agreement or the performance
of any obligations hereunder.
FIM is registered with the Securities and Exchange Commission ("SEC") as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act") and is registered or licensed as an investment adviser under the laws of
all jurisdictions in which its activities require it to be so registered or
licensed, except where the failure to be so licensed would not have a material
adverse effect on its business.
FIM has furnished to the Adviser true and complete copies of all the documents
listed on Schedule 3 to this Agreement.
REPRESENTATIONS AND WARRANTIES OF THE ADVISER
The Adviser represents and warrants to FIM as follows:
The Adviser is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Connecticut.
This Agreement constitutes the legal, valid, and binding obligation of the
Adviser, enforceable against the Adviser in accordance with its terms. The
Adviser has the absolute and unrestricted right, power, and authority to execute
and deliver this and to perform its obligations under this Agreement.
Neither the execution and delivery of this Agreement by the Adviser nor the
performance of any of its obligations hereunder will give any person the right
to prevent, delay, or otherwise interfere with the performance of such
obligations pursuant to:
any provision of the Adviser's Articles of Incorporation or By-Laws;
any resolution adopted by the board of directors or the shareholders of the
Adviser;
any law, regulation or administrative or court order to which the Adviser may be
subject; or
any contract to which the Adviser is a party or by which the Adviser may be
bound.
Except for the approval of the Board and of each Fund's shareholders as required
by Section 15 of the 1940 Act, the Adviser is not and will not be required to
obtain any consent from any person in connection with the execution and delivery
of this Agreement or the performance of any obligations hereunder.
The Adviser is registered with the SEC as an investment adviser under the
Advisers Act and is registered or licensed as an investment adviser under the
laws of all jurisdictions in which its activities require it to be so registered
or licensed, except where the failure to be so licensed would not have a
material adverse effect on its business.
The Adviser has furnished to FIM true and complete copies of all the documents
listed on Schedule 2 to this Agreement.
CONDITIONS TO AGREEMENT.
FIM's and the Adviser's obligations under this Agreement are subject to
the satisfaction of the following conditions precedent:
Receipt by FIM of a certificate of an officer of Company stating that (i) this
Agreement and the Advisory Agreement have been approved by the vote of a
majority of the directors, who are not interested persons of FIM or the Adviser,
cast in person at a meeting of the Board call for the purpose of voting on such
approval, and (ii) this Agreement and the Advisory Agreement have been approved
by the vote of a majority of the outstanding voting securities of the Company;
Receipt by FIM of certified copies of instructions from the Fund to its
custodian designating the persons specified by FIM as "Authorized Persons" under
the Fund's custody agreement;
The Fund's execution and delivery of a limited power of attorney in favor of
FIM, in a form mutually agreeable to FIM, the Adviser and the Board;
Receipt by FIM of Board resolutions, certified by an officer of the Company,
adopting all procedures and guidelines listed on Schedule 3 to this Agreement
and identified as required by Rule 2a-7 or any other exemptive rule or order
that is or will become applicable to any Fund;
Receipt by FIM of complete copies, certified by an officer of the Company, of
all other policies procedures, guidelines, and codes listed on Schedule 2 to
this Agreement; and
Any other documents, certificates or other instruments that FIM or the Adviser
may reasonable request from the Fund.
COMPENSATION.
For the services provided under this Agreement, the Adviser will pay to
FIM a fee at the annual rate set forth opposite each Fund's name on Schedule 1
multiplied times such Fund's average daily net assets. Such fee will accrue
daily and will be paid monthly to FIM on or before the last business day of the
next succeeding calendar month. If this Agreement is effective for only a
portion of a month, the fee will be prorated for the portion of such month
during which this Agreement is in effect.
INFORMATION AND REPORTS.
The Adviser will promptly notify FIM of any material change in any of the
documents listed on Schedule 2 to this Agreement and will provide FIM with
copies of any such modified document. The Adviser will also provide FIM with a
list, to the best of the Adviser's knowledge, of all affiliated persons of
Adviser (and any affiliated person of such an affiliated person) and will
promptly update the list whenever the Adviser becomes aware of any additional
affiliated persons.
FIM will maintain books and records relating to its management of the Fund under
its customary procedures and in compliance with applicable regulations under the
1940 Act and the Advisers Act. FIM will permit the Adviser to inspect such books
and records at all reasonable times during normal business hours, upon
reasonable notice. Prior to each Board meeting, FIM will provide the Adviser and
the Board with reports regarding its management of the Fund during the interim
period, in such form as may be mutually
agreed upon by FIM and the Adviser. FIM will also provide the Adviser with any
information regarding its management of the Fund required for any shareholder
report, amended registration statement or prospectus supplement filed by the
Fund with the SEC.
The Adviser and the Company agree not to refer to any designation comprised in
whole or in part of the names or marks of FIM or any other trademark relating to
FIM in any advertisement or other document without the prior consent of FIM.
Similarly, FIM and its affiliates shall not refer to the Adviser, the Company,
the Fund, or any affiliate of the Manager in any advertisement or other document
without the Adviser's prior consent. Upon termination of this Agreement, each
party shall cease all use of any such name or xxxx as soon as reasonably
practicable.
NONEXCLUSIVE AGREEMENT; ALLOCATION OF TRANSACTIONS.
The investment management services provided by FIM hereunder are not to be
deemed to be exclusive, and FIM shall be free to render similar services to
other advisers, investment companies, and other types of clients.
To the extent consistent with applicable law, FIM may aggregate purchase or sell
orders for the Fund with contemporaneous purchase or sell orders of other
clients of FIM or its affiliated persons. In such event, allocation of the
Securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by FIM in the manner FIM considers to be the most
equitable and consistent with its and its affiliates' fiduciary obligations to
the Fund and to such other clients. The Adviser hereby acknowledges that such
aggregation of orders may not result in a more favorable price or lower
brokerage commissions in all instances.
FIM will place purchase and sell orders for the Fund with or through such banks,
brokers, dealers, futures commission merchants or other firms dealing in
Securities ("Brokers") as it determines, which may include Brokers that are
affiliated persons of FIM, provided such orders are exempt from the provisions
of Section 17(a), (d) and (e) of the 1940 Act. FIM will use its best efforts to
obtain execution of transactions for the Fund at prices which are advantageous
to the Fund and at commission rates that are reasonable in relation to the
services received. FIM may, however, select Brokers on the basis that they
provide brokerage, research or other services or products to the Fund and/or
other clients of FIM and its affiliated persons. In selecting Brokers in such a
manner, FIM will comply with the provisions of Section 28(e) of the Securities
and Exchange Act of 1934, as amended, and may also consider the reliability,
integrity and financial condition of the Broker, and the size of and difficulty
in executing the order.
FUND EXPENSES.
Each Fund shall pay or cause to be paid all of its own expenses and its
allocable share of Corporation expenses incurred in managing its portfolio of
Securities, including all commissions, xxxx-ups, transfer fees, registration
fees, ticket charges, transfer taxes, custodian fees and similar expenses. Each
Fund will also pay its allocable share of such extraordinary expenses as may
arise including expenses incurred in connection with litigation, proceedings,
and claims and the legal obligations of the Corporation to indemnify its
officers and Directors and agents with respect thereto. Each Fund will promptly
reimburse FIM for any such expense to the extent advanced by FIM. In no
event will FIM have any obligation to pay any of the Funds' expenses, including
without limitation, the expenses of organizing the Corporation and continuing
its existence; fees and expenses of Directors and officers of the Corporation;
fees for administrative personnel and services; expenses incurred in the
distribution of its shares ("Shares"), including expenses of administrative
support services; fees and expenses of preparing and printing its Registration
Statements under the Securities Act of 1933 and the 1940 Act; expenses of
registering and qualifying the Corporation, the Funds, and Shares of the Funds
under federal and state laws and regulations; expenses of preparing, printing,
and distributing prospectuses (and any amendments thereto) to shareholders;
interest expense, taxes, fees, and commissions of every kind; expenses of issue
(including cost of Share certificates), purchase, repurchase, and redemption of
Shares; charges and expenses of custodians, transfer agents, dividend disbursing
agents, shareholder servicing agents, and registrars; printing and mailing
costs, auditing, accounting, and legal expenses; reports to shareholders and
governmental officers and commissions; expenses of meetings of Directors and
shareholders and proxy solicitations therefor; insurance expenses; association
membership dues and such nonrecurring items as may arise, including all losses
and liabilities incurred in administering the Corporation and the Funds.
LIMITATION OF LIABILITY.
In the absence of willful misfeasance, bad faith or gross negligence on the part
of FIM, or of reckless disregard by FIM of its obligations and duties hereunder,
FIM shall not be subject to any liability to the Adviser, the Fund, the Company,
any shareholder of the Fund, or to any person, firm or organization. Without
limiting the foregoing, FIM shall not have any liability whatsoever for any
investment losses incurred by a Fund, or arising from transactions by a Fund,
prior to the date on which FIM assumes responsibility for the management of the
Fund's portfolio.
The Adviser, the Company, and the Fund are hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust of FIM and
agree that the obligations assumed by FIM pursuant to this Agreement will be
limited in any case to FIM and its assets and the Adviser, the Company, and the
Fund shall not seek satisfaction of any such obligation from the shareholders of
FIM, the trustees of FIM, officers, employees or agents of FIM, or any of them.
PRICING.
The Adviser, the Company and the Fund hereby acknowledge that FIM is not
responsible for pricing portfolio Securities, and that the Adviser, the Company,
the Fund, and FIM will rely on the pricing agent chosen by the Board of the
Company for prices of Securities, for any purposes. However, in any instance
where the pricing services utilized by the Fund do not provide an appropriate
price for a security held by the Fund, FIM will provide the Adviser with
reasonable assistance in determining a price for such security.
TERM.
This Agreement shall begin as of the date of its execution and shall
continue in effect for a period of two years from the date hereof and thereafter
for successive periods of one year, subject to the provisions for termination
and all of the other terms and conditions hereof if such continuance is
specifically approved at least annually in
conformity with the requirements of the 1940 Act; provided, however, that this
Agreement may be terminated by the Fund at any time, without the payment of any
penalty, by the Board or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund, or by the Adviser or FIM at
any time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement will terminate
automatically in the event of its assignment (as defined in the 0000 Xxx) or
upon the termination of the Adviser's management agreement with the Fund.
LIMITED POWER OF ATTORNEY.
Subject to any other written instructions of the Adviser or the Company,
FIM is hereby appointed the Fund's agent and attorney-in-fact for the limited
purposes of executing account documentation, agreements, contracts and other
documents as FIM shall be requested by brokers, dealers, counter parties and
other persons in connection with its management of the Fund's assets. The
Adviser and the Company hereby ratify and confirm as good and effectual, at law
or in equity, all that FIM and its officers and employees, may do in its
capacity as attorney-in-fact. However, nothing herein shall be construed as
imposing a duty on FIM to act or assume responsibility for any matters in its
capacity as attorney-in-fact for the Fund. Any person, partnership, corporation
or other legal entity dealing with FIM in its capacity as attorney-in-fact
hereunder for the Fund is hereby expressly put on notice that FIM is acting
solely in the capacity as an agent of the Fund and that any such person,
partnership, corporation or other legal entity must look solely to the Fund for
enforcement of any claim against Fund, as FIM assumes no personal liability
whatsoever for obligations of the Fund entered into by FIM in its capacity as
attorney-in-fact for the Fund.
GENERAL PROVISIONS
Notices
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
FIM: Federated Investment Management Company
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Adviser: HL Investment Advisors, LLC
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Legal Department
Facsimile No.: (000) 000-0000
Further Assurances
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.
Waiver
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
Entire Agreement and Modification
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
Assignments, Successors, and No Third-Party Rights
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
Severability
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
Section Headings, Construction
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
Governing Law
To the extent that state law is not preempted by the provisions of any
law of the United States, heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement will be governed by the laws of the
State of Pennsylvania without regard to conflicts of laws principles.
Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their duly authorized officers as of the date first
above written.
FEDERATED INVESTMENT
MANAGEMENT COMPANY
By: /s/ J. Xxxxxxxxxxx Xxxxxxx
--------------------------
Name: J. Xxxxxxxxxxx Xxxxxxx
Title: Chairman
HL INVESTMENT ADVISORS, LLC
By: /s/ Xxxxx X. Xxxxxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: Senior Vice President
SCHEDULE 1 - FUNDS AND SUBADVISORY FEES
NAME OF SERIES SUBADVISORY FEE
-------------------------------------------------------------------------------
Hartford American Leaders HLS Fund For the first $35 million .50%
$35 million - $100 million .35%
For assets over $100 million .25%
SCHEDULE 2 - FUND DOCUMENTATION
Company's Articles of Incorporation and Bylaws.
Currently effective registration statement for each class of each Fund's shares
and any pending amendments to such registration statement.
Any supplements to any prospectus or statement of additional information for any
class of any Fund's shares.
Custody Agreement between the Trust and U.S. Bank National Association, as
Custodian for the Portfolio's securities, including information as to:
- the Portfolio's nominee,
- the Federal tax identification numbers of the Portfolio and its
nominee,
- all routing, bank, participant and account numbers and other
information necessary to provide proper instructions for
transfer and delivery of Securities to the Portfolio's accounts
at the Custodian,
- the name, address, phone and fax number of the Custodian's
employees responsible for the Portfolio's accounts, and
- the Portfolio's pricing service and contact persons.
All policies, procedures, guidelines and codes adopted by the Board under the
1940 Act or any regulation thereunder, including:
- Rule 2a-7 (if the Portfolio holds itself out as a "money market
fund"),
- Rule 10f-3 (relating to affiliated underwriting syndicates),
- Rule 17a-7 (relating to interfund transactions),
- Rule 17e-1 (relating to transactions with affiliated Brokers),
- Rule 17f-4 (relating to securities held in securities
depositories),
- Rule 17j-1 (relating to a code of ethics), and
- Rule 17f-5 (relating to foreign custody).
All SEC exemptive orders applicable to the Portfolio, and all procedures and
guidelines adopted by the Board under the terms of such orders.
All procedures and guidelines adopted by the Board or the Manager regarding:
- Repurchase agreements,
- Evaluating the liquidity of securities, include restricted
securities, municipal leases and stripped U.S. government
securities,
- Segregation of liquid assets in connection with reverse
repurchase agreements, firm commitments, standby commitments,
short sales, options and futures agreements,
- Derivative contracts and securities, and
- Affiliated bank procedures.
Any master agreements that the Trust has entered into on behalf of the
Portfolio, including:
- Master Repurchase Agreement,
- Master Futures and Options Agreements,
- Master Foreign Exchange Netting Agreements, and
- Master Swap Agreements.
Blue Sky undertakings.
CFTC Rule 4.5 letter.
Schedule of the current year's Board meetings, and the reports needed by the
Board.
Pricing and performance calculation entities and contact persons.
SCHEDULE 3 - SUBADVISER DOCUMENTATION
1. Part II of FIM's Form ADV most recently filed with the SEC.
Procedures and checklists required by the following exemptive rules and orders
under the 1940 Act:
- Rule 10f-3 (relating to affiliated underwriting syndicates),
- Rule 17a-7 (relating to interfund transactions),
- Rule 17e-1 (relating to transactions with affiliated Brokers),
- Rule 17f-4 (relating to securities held in securities
depositories),
- Rule 17j-1 (relating to a code of ethics),
- Release No. IC-22903 (granting an exemption for the use of "core
funds"),
- Release No. IC-22313 (granting an exemption for the purchase of
affiliated money market funds)
- Release Nos. IC-16602 and IC-19816 (granting an exemption for
certain transactions with affiliated banks), and
- Release No. IC-15243 (granting an exemption permitting the
purchase of insurance from an affiliate and the settlement of
claims therefrom).
Procedures and checklist required
All exemptive orders granted by the SEC that will become applicable to the
Portfolio, and the procedures and guidelines followed by FIM in accordance
therewith.
