EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE XXXXXXXX GLOBAL EQUITY FUND
AND
XXXXXXXX & XXXXXXXX ASSET MANAGEMENT, INC.
INVESTMENT ADVISORY AGREEMENT, dated as of ________, 1998, by and
between THE XXXXXXXX GLOBAL EQUITY FUND, a Delaware business trust (the "Fund"),
and XXXXXXXX & XXXXXXXX ASSET MANAGEMENT, INC. ( "Xxxxxxxx & XxXxxxxx").
W I T N E S S E T H
WHEREAS, the Fund is engaged in business as a closed-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "Act"); and
WHEREAS, Xxxxxxxx & XxXxxxxx is an investment adviser under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment adviser; and
WHEREAS, the Fund wishes to engage Xxxxxxxx & XxXxxxxx to provide
certain investment advisory services for the Fund, and Xxxxxxxx & XxXxxxxx is
willing to provide such services for the Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed by and between the parties hereto as
follows:
I. Appointment.
Xxxxxxxx & XxXxxxxx agrees, all as more fully set forth herein, to act
as investment adviser to the Fund with respect to the investment of its assets
and to supervise and arrange the purchase of securities for and the sale of
securities held in the portfolio of the Fund.
II. Duties and Obligations of Xxxxxxxx & XxXxxxxx With Respect to the
Investment of Assets of the Fund.
(a) Subject to the succeeding provisions of this section and subject to
the direction and control of the Board of Trustees of the Fund, Xxxxxxxx &
XxXxxxxx shall:
(i) monitor continuously the investment program of the Fund and
the composition of its portfolio;
(ii) determine what securities shall be purchased or sold for the
portfolio of the Fund;
(iii)arrange for the purchase and the sale of securities held in
the portfolio of the Fund;
(iv) provide information to the Board of Trustees regarding the
portfolio of the Fund; and
(v) supervise, together with the Administrator, the operations
of the Fund.
(b) Any services furnished by Xxxxxxxx & XxXxxxxx under this section
shall at all times conform to, and be in accordance with, any requirements
imposed by:
(i) the provisions of the Act;
(ii) any other applicable provisions of state and Federal law;
(iii)the provisions of the Fund's Declaration of Trust and
By-Laws, as amended from time to time;
(iv) any policies and determinations of the Board of Trustees of
the Fund; and
(v) the fundamental policies of the Fund, as reflected in its
Registration Statement under the Act, as amended from time
to time.
(c) Xxxxxxxx & XxXxxxxx shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, and in connection therewith
Xxxxxxxx & XxXxxxxx shall not be liable to the Fund or its security holders 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 the execution of portfolio transactions
for the Fund, except for wilful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. As used in this subsection (c), the term
"Xxxxxxxx & XxXxxxxx" shall include board members, officers and employees of
Xxxxxxxx & XxXxxxxx as well as the entity referred to as "Xxxxxxxx & XxXxxxxx"
itself.
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(d) Nothing in this Agreement shall prevent Xxxxxxxx & XxXxxxxx or any
affiliated person (as defined in the Act) of Xxxxxxxx & XxXxxxxx from acting as
investment adviser or manager for any other person, firm or corporation
(including other investment companies) and shall not in any way limit or
restrict Xxxxxxxx & XxXxxxxx or any such affiliated person from buying, selling
or trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that Xxxxxxxx &
XxXxxxxx expressly represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations to the Fund
under this Agreement. Xxxxxxxx & XxXxxxxx agrees that it will not deal with
itself, or with the Trustees of the Fund or the Fund's principal underwriter or
distributor, as principals in making purchases or sales of securities or other
property for the account of the Fund, except as permitted by the Act, and will
comply with all other provisions of the Fund's Declaration of Trust and By-Laws
and the then-current prospectus and statement of additional information
applicable to the Fund relative to Xxxxxxxx & XxXxxxxx and its board members and
officers.
(e) The Fund will supply Xxxxxxxx & XxXxxxxx with certified copies of
the following documents: (i) the Fund's Declaration of Trust and By-Laws, as
amended; (ii) resolutions of the Fund's Board of Trustees and shareholders
authorizing the appointment of Xxxxxxxx & XxXxxxxx and approving this Agreement;
(iii) the Fund's Registration Statement, as filed with the Securities and
Exchange Commission; and (iv) the Fund's most recent prospectus and statement of
additional information. The Fund will furnish Xxxxxxxx & XxXxxxxx promptly with
copies of all amendments or supplements to the foregoing, if any, and all
documents, notices and reports filed with the Securities and Exchange
Commission.
(f) The Fund will supply, or cause its custodian bank to supply, to
Xxxxxxxx & XxXxxxxx such financial information as is necessary or desirable for
the functions of Xxxxxxxx & XxXxxxxx hereunder.
III. Broker-Dealer Relationships.
Xxxxxxxx & XxXxxxxx is responsible for decisions to buy and sell
securities for the portfolio of the Fund, broker-dealer selection and
negotiation of its brokerage commission rates. Xxxxxxxx & XxXxxxxx'x primary
consideration in effecting a security transaction will be execution at the most
favorable price. The Fund understands that many of the Fund's portfolio
transactions will be transacted with primary market makers acting as principal
on a net basis, with no brokerage commissions being paid by the Fund. Such
principal transactions may, however, result in a profit to the market makers. In
certain instances, Xxxxxxxx & XxXxxxxx may make purchases of underwritten issues
at prices which include underwriting fees. In selecting a broker or dealer to
execute each particular transaction, Xxxxxxxx & XxXxxxxx will take the following
into consideration: the best price available; the reliability, integrity and
financial condition of the broker or dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the broker or
dealer to the investment performance of the Fund on a continuing basis.
Accordingly, the price to the Fund in any transaction may be less favorable than
that available from another broker or dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered. Subject
to such policies as the Board of Trustees may determine, Xxxxxxxx & XxXxxxxx
shall not be deemed to have
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acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to Xxxxxxxx & XxXxxxxx an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction, if Xxxxxxxx & XxXxxxxx determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or Xxxxxxxx & XxXxxxxx'x overall
responsibilities with respect to the Fund. Xxxxxxxx & XxXxxxxx is further
authorized to allocate the orders placed by it on behalf of the Fund to an
affiliated broker-dealer, if any, or to such brokers and dealers who also
provide research or statistical material, or other services to the Fund (which
material or services may also assist Xxxxxxxx & XxXxxxxx in rendering services
to other clients). Such allocation shall be in such amounts and proportions as
Xxxxxxxx & XxXxxxxx shall determine and Xxxxxxxx & XxXxxxxx will report on said
allocations regularly to the Board of Trustees of the Fund indicating the
brokers to whom such allocations have been made and the basis therefor.
IV. Allocation of Expenses.
Xxxxxxxx & XxXxxxxx agrees that it will furnish the Fund, at its
expense, all office space and facilities, equipment and clerical personnel
necessary for carrying out its duties under this Agreement. Xxxxxxxx & XxXxxxxx
agrees that it will supply to the Administrator of the Fund all necessary
financial information in connection with the Administrator's duties under any
agreement between the Administrator and the Fund on behalf of the Fund. All
costs and expenses associated with any administrative functions delegated by
Xxxxxxxx & XxXxxxxx to the Administrator that are not pursuant to any agreement
between the Administrator and the Fund or Xxxxxxxx & XxXxxxxx and the Fund will
be paid by Xxxxxxxx & XxXxxxxx. All other costs and expenses not expressly
assumed by Xxxxxxxx & XxXxxxxx under this Agreement or by the Administrator
under the Administration Agreement between it and the Fund on behalf of the Fund
shall be paid by the Fund from the assets of the Fund, including, but not
limited to (i) fees paid to Xxxxxxxx & XxXxxxxx and the Administrator; (ii)
interest and taxes; (iii) brokerage commissions; (iv) insurance premiums; (v)
compensation and expenses of the trustees other than those affiliated with
Xxxxxxxx & XxXxxxxx or the Administrator; (vi) legal, accounting and audit
expenses; (vii) fees and expenses of any transfer agent, distributor, registrar,
dividend disbursing agent or shareholder servicing agent of the Fund; (viii)
expenses, including clerical expenses, incident to the issuance, redemption or
repurchase of shares of the Fund, including issuance on the payment of, or
reinvestment of, dividends; (ix) fees and expenses incident to the registration
under Federal or state securities laws of the Fund or its shares; (x) expenses
of preparing, setting in type, printing and mailing prospectuses, statements of
additional information, reports and notices and proxy material to shareholders
of the Fund; (xi) all other expenses incidental to holding meetings of the
Fund's trustees and shareholders; (xii) expenses connected with the execution,
recording and settlement of portfolio securities transactions; (xiii) fees and
expenses of the Fund's custodian for all services to the Fund, including
safekeeping of funds and securities and maintaining required books and accounts;
(xiv) expenses of calculating net asset value of the shares of the Fund; (xv)
industry membership fees allocable to the Fund; and (xvi) such extraordinary
expenses as may arise, including litigation affecting the Fund and the legal
obligations which the Fund may have to indemnify the officers and directors with
respect thereto.
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V. Compensation of Xxxxxxxx & XxXxxxxx.
For the services to be rendered, the Fund shall pay to Xxxxxxxx &
XxXxxxxx from the assets of the Fund an investment advisory fee paid monthly at
an annual rate equal to 0.75% of the Fund's average weekly net assets for the
Fund's then-current fiscal year. Except as hereinafter set forth, compensation
under this Agreement shall be calculated and accrued daily and the amounts of
the daily accruals shall be paid monthly. If the Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for that part of the month this Agreement is in effect
shall be pro rated in a manner consistent with the calculation of the fees as
set forth above. Payment of Xxxxxxxx & XxXxxxxx'x compensation for the preceding
month shall be made within five days after the end of that month.
VI. Duration, Amendment and Termination.
(a) This Agreement shall go into effect as to the Fund on the date set
forth above (the "Effective Date") and shall, unless terminated as hereinafter
provided, continue in effect for two years from the Effective Date and shall
continue from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of Trustees of the Fund,
including the vote of a majority of the trustees who are not parties to this
Agreement or "interested persons" (as defined in the Act) of any such party cast
in person at a meeting called for the purpose of voting on such approval, or by
the vote of the holders of a "majority" (as so defined) of the outstanding
voting securities of the Fund and by such a vote of the trustees.
(b) This Agreement may be amended only if such amendment is approved by
the vote of the holders of a "majority" (as defined in the Act) of the
outstanding voting securities of the Fund.
(c) This Agreement may be terminated by Xxxxxxxx & XxXxxxxx at any time
without penalty upon giving the Fund sixty (60) days' written notice (which
notice may be waived by the Fund) and may be terminated by the Fund at any time
without penalty upon giving Xxxxxxxx & XxXxxxxx sixty (60) days' written notice
(which notice may be waived by Xxxxxxxx & XxXxxxxx), provided that such
termination by the Fund shall be approved by the vote of a majority of all the
trustees in office at the time or by the vote of the holders of a "majority" (as
defined in the Act) of the voting securities of the Fund at the time outstanding
and entitled to vote. This Agreement shall automatically terminate in the event
of its "assignment" (as defined in the Act).
VII. Board of Trustees' Meeting.
The Fund agrees that notice of each meeting of the Board of Trustees of
the Fund will be sent to Xxxxxxxx & XxXxxxxx and that the Fund will make
appropriate arrangements for the attendance (as persons present by invitation)
of such person or persons as Xxxxxxxx & XxXxxxxx may designate.
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VIII. Name.
The Fund hereby acknowledges that any and all rights in or to the name
"Xxxxxxxx" which exist on the date of this Agreement or which may arise
hereafter are, and under any and all circumstances shall continue to be, the
sole property of Xxxxxxxx & XxXxxxxx; that Xxxxxxxx & XxXxxxxx may assign any or
all of such rights to another party or parties without the consent of the Fund;
and that Xxxxxxxx & XxXxxxxx may permit other parties, including other
investment companies, to use the word "Xxxxxxxx" in their names. If Xxxxxxxx &
XxXxxxxx, or its assignee as the case may be, ceases to serve as an adviser to
the Fund, the Fund hereby agrees to take promptly any and all actions which are
necessary or desirable to change its name and the name of the Fund so as to
delete the word "Xxxxxxxx".
IX. Notices.
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice.
X. Questions of Interpretation.
Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act, as amended, shall be resolved by reference to such term or provision
of the Act and to interpretations thereof, if any, by the United States Courts
or in the absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission issued pursuant
to said Act. In addition, where the effect of a requirement of the Act,
reflected in any provision of this Agreement, is revised by rule, regulation or
order of the Securities and Exchange Commission, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
12. This Agreement shall be construed in accordance with the laws of
the State of Delaware, without regard to the conflicts of law provisions
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on their behalf by the undersigned, thereunto duly
authorized, all as of the day and year first above written.
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THE XXXXXXXX GLOBAL EQUITY FUND
By_____________________________
Title:
XXXXXXXX & XXXXXXXX ASSET MANAGEMENT, INC.
By______________________________
Title:
