FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this thirtieth day of December, 1998 by and between
Xxxxxxxx International Funds, a Delaware Business Trust (the "Trust")
and Xxxxxxxx International Capital Management, LLC, a Delaware limited
liability company (the "Adviser").
1. Duties of Adviser. The Trust hereby appoints the Adviser to act as
investment adviser to the Xxxxxxxx Japan Fund (the "Series") for the period
and on such terms set forth in this Agreement. The Trust employs the
Adviser to manage the investment and reinvestment of the assets of the Series,
to determine in its discretion the assets to be held uninvested, to provide
the Trust with records concerning the Adviser's activities which the Trust is
required to maintain, and to render regular reports to the Trust's officers
and Board of Trustees concerning the Adviser's discharge of the foregoing
responsibilities. The Adviser shall discharge the foregoing responsibilities
subject to the control of the officers and the Board of Trustees of the Trust,
and in compliance with the objectives, policies and limitations set forth
in the Trust's Prospectus and Statement of Additional Information.
The Adviser accepts such employment and agrees to render the services and
to provide, at its own expense, the office space, furnishings, equipment and
the personnel required by it to perform the services on the terms and for
the compensation provided herein.
2. Portfolio Transactions. The Adviser shall provide the Series with a
trading department. The Adviser shall select the brokers or dealers that
will execute the purchases and sales of securities for the Series and is
directed to use its best efforts to ensure that the best available price and
most favorable execution of securities transactions for the Series are
obtained. The Series will bear all expenses associated with its investment
activities, including, without limitation, brokerage commissions and custody
expenses. Subject to policies established by the Board of Trustees of the
Trust and communicated to the Adviser, it is understood that the Adviser
will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Trust or in respect of the Series, or be in breach
of any obligation owing to the Trust or in respect of the Series under this
Agreement, or otherwise, solely by reason of its having caused the Series
to pay a member of a securities exchange, a broker or a dealer a commission
for effecting a securities transaction for the Series in excess of the
amount of commission another member of an exchange, broker or dealer would
have charged if the Adviser determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such member, broker or dealer, viewed in terms of the particular transaction
or the Adviser's overall responsibilities with respect to the accounts,
including the Series, as to which it exercises investment discretion. The
Adviser will promptly communicate to the officers and directors of the Trust
such information relating to Series transactions as they may reasonably
request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 and 2 of this Agreement, the Series shall
pay to the Adviser within five business days after the end of each calendar
month, a monthly fee of one twelfth of 1.00% of the Series' average daily
net assets for the month. The net asset value shall be calculated in the
manner provided in the Series' prospectus and statement of additional
information then in effect. The Adviser may reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this
Agreement. Any fee withheld pursuant to this paragraph from the Adviser shall
be reimbursed by the Series to the Adviser in the first, second or third
(or any combination thereof) fiscal year next succeeding the fiscal year of
the withholding if the aggregate expenses for the next succeeding fiscal year
or second succeeding fiscal year or third succeeding fiscal year do not
exceed any more restrictive limitation to which the Adviser has agreed. The
Adviser generally may request and receive reimbursement for the oldest
reductions and waivers before payment for fees and expenses for the current
year.
4. In the event of termination of this Agreement, the fee provided in this
Section 3 shall be paid on a pro rate basis, based on the number of days
when this Agreement was in effect.
5. Reports. The Series and the Adviser agree to finish to each other such
information regarding their operations with regard to their affairs as each
may reasonably request.
6. Status of Adviser. The services of the Adviser to the Series are not to
be deemed exclusive, and the Adviser shall be free to render similar services
to others so long as its services to the Series are not impaired thereby.
7. Liability of Adviser. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard by the Adviser of its obligations and
duties hereunder, the Adviser shall not be subject to any liability whatsoever
to the Series, or to any shareholder of the Series, for any error of judgment,
mistake of law or any other act or omission in the course of, or connected
with, rendering services hereunder including, without limitation, for any
losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Series.
8. Duration and Termination. This Agreement shall become effective on
December 30, 1998 provided that first it is approved by the Board of Trustees
of the Trust, including a majority of those trustees who are not parties to
this Agreement or interested persons of any party hereto, in the manner
provided in section 15(c) of the Investment Company Act of 1940, and by the
holders of a majority of the outstanding voting securities of the Series;
and shall continue in effect until December 30, 2000. Thereafter, this
Agreement may continue in effect only if such continuance is approved at
least annually by: (i) the Trust's Board of Trustees or, (ii) by the vote
of a majority of the outstanding voting securities of the Series; and in
either event by a vote of a majority of those trustees of the Trust who are
not parties to this Agreement or interested persons of any such party in the
manner provided in section 15(c) of the Investment Company Act of 1940.
This Agreement may be terminated by the Trust at any time, without the
payment of any penalty, by the Board of Trustees of the Trust at any time,
without the payment of any penalty, by the Board of Trustees of the Trust
or by vote of the holders of a majority of the outstanding voting securities
of the Series on 60 days' written notice to the Adviser. This Agreement
may be terminated by the Adviser at any time, without the payment of any
penalty, upon 60 days' written notice to the Trust. This Agreement will
automatically terminate in the event of its assignment. Any notice under
this Agreement shall be given in writing, addressed and delivered or mailed
postpaid, to the other party at the principal office of such party.
As used in this Section 8, the terms "assignment" "interested person", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the 1940 Act and Rule 18f-2 thereunder.
9. Name of Adviser. The parties agree that the Adviser has a proprietary
interest in the name "Xxxxxxxx," and the Trust agrees to promptly take such
action as may be necessary to delete from its corporate name and/or the name
of the Series any reference to the name of the Adviser or the name
"Xxxxxxxx," promptly after receipt from the Adviser of a written request
therefore.
10. Severability. If any provisions 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.
11. Governing Law. This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the thirtieth day of December, 1998.
ATTEST: XXXXXXXX INTERNATIONAL FUNDS
_________________________ ___________________________________
Xxxxx Xxxxxxxxxx, Secretary G. Xxxx Xxxxxxxx, President
ATTEST: XXXXXXXX INTERNATIONAL
CAPITAL MANAGEMENT, LLC
_________________________ ___________________________________
Xxxxx Xxxxxxxxxx, Secretary Xxxx X. Xxxxxxx, Vice President
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