INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 20th day of April, 1994 between XXX XXX ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of
Delaware and having its principal place of business in New York, New York
(the "Advisor'), and VAN ECK FUNDS a Massachusetts Business trust having
its principal place of business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment company
and is so registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is registered under the Investment
Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
with each series; and in separate series representing interests in a
separate portfolio of securities and other assets:
WHEREAS, the Trust intends to initially offer its shares in one such
series, namely, Global Balanced Fund (the "Fund" or "Initial Series") and
invest the proceeds in securities, the Trust desires to retain the Advisor
to render investment advisory services hereunder and with respect to which
the Advisor is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF ADVISOR.
The Trust hereby appoints the Advisor to act as investment advisor to the
Fund for the period and on the terms herein set forth. The Advisor accepts
such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. DUTIES OF ADVISOR.
The Advisor, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program.
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The Advisor will (i) furnish continuously an investment program for the
Fund (ii) determine (subject to the overall supervision and review of the
Board of Trustees of the Trust) what investments shall be purchased, held,
sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested, and (iii) make changes on behalf of the Trust in
the investments. The Advisor also will manage,
supervise and conduct such other affairs and busines of the Trust and
matters incidental thereto, as the Advisor and the Trust agree, subject
always to the control of the Board of Trustees of the Trust and to the
provisions of the Master Trust Agreement of the Trust, the Trust's By-laws
and the 1940 Act.
(b) Office Space and Facilities.
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The Advisor will arrange to furnish the Trust office space in the offices
of the Advisor, or in such other place or places as may be agreed upon from
time to time, and all necessary office facilities, simple business
equipment, supplies, utilities, and telephone service required for managing
the investments of the Trust
(c) Personnel.
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The Advisor shall provide executive and clerical personnel for managing the
investments of the Trust, and shall compensate officers and Trustees of the
Trust if such persons are also employees of the Advisor or its affiliates,
except as otherwise provided herein.
(d) Portfolio Transactions.
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The Advisor shall place all orders for the purchase and sale of portfolio
securities for the account of the Trust with brokers or dealers selected by
the Advisor, although the Trust will pay the actual brokerage commissions
on portfolio transactions in accordance with Paragraph 3(d). In executing
portfolio transactions and selecting brokers or dealers, the Advisor will
use its best efforts to seek on behalf of the Trust the best overall terms
available. In assessing the best overall terms available for any
transaction, the Advisor shall consider all factors it deems relevant,
including, without limitation, 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
(for the specific transaction and on a continuing basis). In evaluating the
best overall terms available, and in selecting the broker or dealer to
execute a particular transaction, the Advisor may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Trust and/or
the other accounts over which the Advisor or an affiliate of the Advisor
exercises investment discretion. The Advisor is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Advisor 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 in terms of all of the accounts over which
investment discretion is so exercised by the Advisor or its affiliates.
Nothing in this Agreement shall preclude the combining of orders for the
sale or purchase of securities or other investments with other accounts
managed by the Advisor or its affiliates provided that the Advisor does not
favor any account over any other account and provided that any purchase or
sale orders executed contemporaneously shall be allocated
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in a manner the Advisor deems equitable among the accounts involved.
3. EXPENSES OF THE TRUST
The Advisor shall not bear the responsibility for or expenses associated
with operational, accounting or administrative services on behalf of the
Trust not directly related to providing an investment program for the
Trust. The expenses to be borne by the Trust include, without limitation:
(a) charges and expenses of any registrar, stock, transfer or
dividend disbursing agent, custodian, depository or other agent
appointed by the Trust for the safekeeping of its cash, portfolio
securities and other property;
(b) general operational, administrative and accounting costs, such as
the costs of calculating the Trust's net asset value, the
preparation of the Trust's tax filings with relevant authorities
and of compliance with any and all regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio
securities of the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other U.S. or
foreign governmental agencies;
(f) the cost of stock certificates representing shares of the Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and
ExchangeCommission and various states and other jurisdictions, if
applicable;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type,
printing and mailing proxy statements, quarterly reports, semi-
annual reports, annual reports and other communications to
shareholders;
(i) all expenses of preparing and setting in type offering documents,
and expenses of printing and mailing the same to shareholders
(but not expenses of printing and mailing of offering documents
and literature used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not
"interested persons" of the Advisor within the meaning of the
1940 Act;
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(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal
services rendered in connection with the Trust's corporate and
financial structure, day to day legal affairs of the Trust and
relations with its shareholders, issuance of Trust shares, and
registration and qualification or securities under Federal, state
and other laws;
(m) the expenses of attendance at professional meetings of
organizations such as the investment Company Institute by
officers and Trustees of the Trust, and the membership or
association dues of such organizations;
(n) the cost and expense of maintaining the books and records of the
Trust;
(o) the expense of obtaining and maintaining a fidelity bond as
required by Section 17(g) of the 1940 Act and the expense of
obtaining and maintaining an errors and omissions policy;
(p) interest payable on Trust borrowing;
(q) postage; and
(r) any other costs and expenses incurred by the Advisor for Trust
operations and activities, including but not limited to the
organizational costs of the Trust if initially paid by the
Advisor.
4. ADVISORY FEE.
For the services and facilities to be provided to the Trust by the Advisor
as provided in Paragraph 2 hereof, the Trust shall pay the Advisor a fee at
the annual rate set forth in Exhibit A ("Annual Fee"). The Trust shall pay
such amounts monthly, based on the Fund's average daily net assets, as
determined by the Trust or its third party administrator in accordance with
procedures established from time to time by or under the direction of the
Board of Trustees of the Trust.
5. SUB-INVESTMENT ADVISORS.
(a) Appointment of Sub-investment Advisors.
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Subject to the terms of the Agreement, the Master Trust Agreement and the
1940 Act, the Advisor, at its expense, may select and contract with
investment advisors ("Sub -Investment Advisors") to provide all or a
portion of the investment advisory
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services to be furnished by the Advisor hereunder. Any contract with a Sub-
Investment Advisor shall be subject to the written approval of the Trust.
(b) Responsibility of Advisor.
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So long as the Sub-Investment Advisor serves as Investment advisor to all
or a portion of the Funds assets, the obligation of the Advisor under this
Agreement shall be, subject in any event to the control of the Board of
Trustees of the Trust, to determine and review with the Sub-investment
Advisor investment policies of the Fund with respect to the assets managed
by the Sub-investment Advisor and the Sub-Investment Advisor shall have the
obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable policies and
restrictions and of placing all orders for the purchase and sale of
portfolio securities for the Fund with respect to such assets. The Advisor
shall compensate any Sub-Investment Advisor to the Fund for its services to
the Fund.
(c) Termination of Sub-Investment Advisory Agreement.
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The Trust or the Advisor may terminate the services of the Sub-investment
Advisor at any time in its sole discretion, and at such time the Advisor
shall assume the responsibilities of the Sub-Investment Advisor unless and
until a successor Sub-Investment Advisor is selected.
6. TRUST TRANSACTIONS.
The Advisor agrees that neither it nor any of its officers, directors,
employees or agents will take any long- or short-term position in the
shares of the Trust; provided, however, that such prohibition shall not
prevent the purchase of shares of the Trust by any of the persons above
described for their account and for investment at the price (net asset
value) at which such shares are available to the public at the time of
purchase or as part of the initial capital of the Trust.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Amended and Restated Master Trust
Agreement and By-Laws of the Trust and the Articles of Incorporation and
By-Laws of the Advisor, respectively, it is understood (i) that Trustees,
officers, agents and shareholders of the Trust are or may be interested in
the Advisor (or any successor thereof) as directors, officers, or
otherwise; (ii) that directors, officers, agents and shareholders of the
Advisor are or may be interested in the Trust as Trustees, officers,
shareholders or otherwise; and (iii) that the Advisor (or any such
successor) is or may be interested in the Trust as a shareholder or
otherwise and that the effect of any such adverse interests shall be
governed by said Master Trust Agreement and By-laws.
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8. LIABILITY OF ADVISOR AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or
law, or for any loss suffered by the Trust or its shareholders in
connection with the matters to which this Agreement relates, except that no
provision of this Agreement shall be deemed to protect the Advisor or such
persons against any liability to the Trust or its shareholders to which the
Advisor might otherwise be subject by reason of any willful misfeasance,
bad faith or gross negligence in the performance of its duties or the
reckless disregard of its obligations and duties under this Agreement.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration.
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This Agreement shall become effective on the date hereof for the Initial
Series. Unless terminated as herein provided, this Agreement shall remain
in full force and effect until May 1, 1995 and shall continue in full force
and effect for periods of one year thereafter so long as such continuance
is approved at least annually (i) by either the Trustees of the Trust or by
vote of a majority of the outstanding voting shares (as defined in the 0000
Xxx) of the Trust, and (ii) in either event by the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party, cast
in person at a meeting called for the purpose of voting on such approval.
(b) Additional Series.
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As additional series, other than the Initial Series, are established, the
Agreement shall become effective with respect to each such series listed in
Exhibit A at the Annual Fee set forth in such Exhibit upon the initial
public offering of such new series, provided that the Agreement has
previously been approved for continuation as provided in subsection (a)
above.
(c) Termination.
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This Agreement may be terminated at any time, without payment of any
penalty, by vote of the Trustees of the Trust or by vote of a majority of
the outstanding shares (as defined in the 1940 Act), or by the Advisor, on
sixty (60) days written notice to the other party.
(d) Automatic Termination.
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This Agreement shall automatically and immediately terminate in the event
of its assignment.
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10. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties.
11. SERVICES NOT EXCLUSIVE.
The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to
others and to engage in other activities.
12 MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) 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.
13. LIMITATION OF LIABILITY.
The Term Xxx Xxx Funds means and refers to the Trustees from time to time
serving under the Amended and Restated Master Trust Agreement of the Trust
dated February 6, 1992, as the same may subsequently thereto have been, or
subsequently hereto be amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any Trustees,
shareholders, nominees, officers, agents or employees of the Trust,
personally, but bind only the assets and property of the Trust, as provided
in the Amended and Restated Master Trust Agreement of the Trust. The
execution and delivery of this Agreement have been authorized by the
Trustees and the Trust, acting as such, and neither such authorization by
such officer shall be deemed to have been made by any of them personally,
but shall bind only the assets and property of the Trust as provided in its
Amended and Restated Master Trust Agreement.
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In WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first set forth above.
[SEAL] XXX XXX FUNDS
Attest: /s/ Xxxxxxxxx Xxxxx By /s/ Xxxx X. xxx Xxx
[SEAL] XXX XXX ASSOCIATES CORPORATION
Attest: /s/ Xxxxxxxxx Xxxxx By /s/ Xxxx X. xxx Xxx
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EXHIBIT A
Annual Advisory Fee
Name of Series (as a % of average daily net assets)
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Global Balanced Fund .75 of 1%
