EXHIBIT (5)
XXXXXXXX CAPITAL FUNDS II
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 27th day of December, 1996, between Xxxxxxxx
Capital Funds II (the "Trust"), a business trust organized under the laws of the
State of Delaware with its principal place of business at Two Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx 00000, and Xxxxxxxx Capital Management International Inc. (the
"Adviser"), a corporation organized under the laws of the State of New York with
its principal place of business at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended, (the "Act") as an open-end management investment company and
is authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series;
WHEREAS, the Adviser provides investment advice and is registered with
the Securities and Exchange Commission (the "SEC") as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
is registered with the United Kingdom Investment Management Regulatory
Organization ("IMRO");
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for the series listed in Appendix A, (the "Portfolio") and the Adviser
is willing to provide those services on the terms and conditions set forth in
this Agreement; and
WHEREAS, the Adviser is willing to render suc investment advisory
services to the Portfolio;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue two series of interests, and the
Trust is authorized to issue interests in any number of additional series upon
approval of the Board. The Trust has delivered to the Adviser copies of the
Trust's Trust Instrument and Registration Statement and will from time to time
furnish Adviser with any amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Adviser, subject to the direction and control
of the Board, to manage the investment and reinvestment of the assets in the
Portfolio and, without limiting the generality of the foregoing, to provide
other services specified in Section 3 hereof.
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in the Portfolio. To carry out
such decisions, the Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Portfolio. In all purchases, sales and other transactions in securities for the
Portfolio, the Adviser is authorized to exercise full discretion and act for the
Trust in the same manner and with the same force and effect as the Trust might
or could do with respect to such purchases, sales or
other transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
(b) The Adviser will report to the Board at each meeting thereof all
changes in the Portfolio since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolio and the
Adviser, and on its own initiative, will furnish the Board from time to time
with such information as the Adviser may believe appropriate for this purpose,
whether concerning the individual companies whose securities are included in the
Portfolio's holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the Portfolio
maintains investments. The Adviser will also furnish the Board with such
statistical and analytical information with respect to securities in the
Portfolio as the Adviser may believe appropriate or as the Board reasonably may
request. In making purchases and sales of securities for the Portfolio, the
Adviser will bear in mind the policies set from time to time by the Board as
well as the limitations imposed by the Trust's Trust Instrument and Registration
Statement under the Act, the limitations in the Act and in the Internal Revenue
Code of 1986, as amended, in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Portfolio.
(c) The Adviser will from time to time employ or associate with such
persons as the Adviser believes to be particularly fitted to assist in the
execution of the Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Adviser. No obligation may be incurred on the
Trust's behalf in any such respect.
(d) The Adviser shall maintain records for the Portfolio relating to
portfolio transactions and the placing and allocation of brokerage orders as are
required to be maintained by the Trust under the Act. The Adviser shall prepare
and maintain, or cause to be prepared and maintained, in such form, for such
periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser pursuant
to this Agreement required to be prepared and maintained by the Trust pursuant
to the rules and regulations of any national, state, or local government entity
with jurisdiction over the Trust, including the Commission and the Internal
Revenue Service. The books and records pertaining to the Trust that are in
possession of the Adviser shall be the property of the Trust. The Trust, or the
Trust's authorized representatives, shall have access to such books and records
at all times during the Adviser's normal business hours. Upon the reasonable
request of the Trust, copies of any such books and records shall be provided
promptly by the Adviser to the Trust or the Trust's authorized representatives.
SECTION 4. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and costs
of other personnel performing services for the Trust who are not officers of the
Adviser or of Xxxxxxxx Fund Advisors Inc. or affiliated persons of either; costs
of Trust meetings; registration fees and related expenses for registration with
the Commission and the securities regulatory authorities of other countries in
which the Trust's interests are sold; state securities law registration fees and
related expenses; and fees and out-of-pocket expenses payable to Xxxxxxxx Fund
Advisors Inc. under any placement agent, management or similar agreement.
SECTION 5. STANDARD OF CARE
(a) The Trust shall expect of the Adviser, and the Adviser will give
the Trust the benefit of, the Adviser's best judgment and efforts in rendering
its services to the Trust, and as an inducement to the Adviser's undertaking
these services the Adviser shall not be liable hereunder for any mistake of
judgment or in any event
whatsoever, except for lack of good faith, provided that nothing herein shall be
deemed to protect, or purport to protect, the Adviser against any liability to
the Trust or to the Trust's interestholders to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of the Adviser's duties hereunder, or by reason of the Adviser's
reckless disregard of its obligations and duties hereunder. As used in this
Section 5, the term "Adviser" shall include any affiliates of the Adviser
performing services for the Portfolio contemplated hereby and directors,
officers and employees of the Adviser as well as the Adviser itself.
(b) The Adviser shall not be liable for any losses caused by
disturbances of its operations by virtue of force majeure, war, riot, or damage
caused by nature or due to other events for which the Adviser is not responsible
(e.g., strike, lock-out or losses caused by the imposition of foreign exchange
controls, expropriation of assets or other acts of domestic or foreign
authorities) except under the circumstances provided for in Section 5(a).
The presence of exculpatory language in this Agreement shall not in any
way limit or be deemed by anyone to limit the Trust, the Trustees of the Trust,
the Portfolio, the Adviser, or any other party appointed pursuant to this
Agreement, including without limitation any custodian, as in any way limiting
causes of action and remedies which may, notwithstanding such language, be
available to the Trust, the Trustees of the Trust, the Portfolio or any other
party appointed pursuant to this Agreement, either under common law or statutory
law principles applicable to fiduciary relationships or under the Federal
securities laws.
SECTION 6. COMPENSATION
In consideration of the foregoing, the Trust shall pay the Adviser,
with respect to the average daily net assets of the Portfolio, a fee at an
annual rate as listed in Appendix A hereto. Such fees shall be accrued by the
Trust daily and shall be payable monthly in arrears on the first day of each
calendar month for services performed hereunder during the prior calendar month.
SECTION 7. EFFECTIVENESS, DURATION, AND TERMINATION
(a) This Agreement shall become effective with respect to the Portfolio
immediately upon approval by a majority of the outstanding voting interests of
the Portfolio.
(b) This Agreement shall remain in effect with respect to the Portfolio
for a period of two years from the date of its effectiveness and shall continue
in effect for successive twelve-month periods (computed from each anniversary
date of the approval) with respect to the Portfolio; provided that such
continuance is specifically approved at least annually (i) by the Board or by
the vote of a majority of the outstanding voting interests of the Portfolio,
and, in either case, (ii) by a majority of the Trust's trustees who are not
parties to this Agreement or interested persons of any such party (other than as
trustees of the Trust); provided further, however, that if this Agreement or the
continuation of this Agreement is not approved as to the Portfolio, the Adviser
may continue to render to the Portfolio the services described herein in the
manner and to the extent permitted by the Act and the rules and regulations
thereunder.
(c) This Agreement may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio on 60 days'
written notice to the Adviser or (ii) by the Adviser on 60 days' written notice
to the Trust. This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, trust, firm, individual or association. It is specifically
understood that officers, directors and employees of the Adviser and its
affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, and to other investment
advisory clients. When other clients of the Adviser desire to purchase or sell a
security at the same time such security is purchased or sold for the Portfolio,
such purchases and sales will, to the extent feasible, be allocated among the
Portfolios and such clients in a manner believed by the Adviser to be equitable
to the Portfolio and such clients.
SECTION 9. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees or officers of the Trust and the interestholders of the
Portfolio shall not be liable for any obligations of the Trust or of the
Portfolio under this Agreement, and the Adviser agrees that, in asserting any
rights or claims under this Agreement, it shall look only to the assets and
property of the Trust or the Portfolio to which the Adviser's rights or claims
relate in settlement of such rights or claims, and not to the Trustees or
officers of the Trust or the interestholders of the Portfolio.
SECTION 10. NOTICE
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to the Trust, at:
Xxxxxxxx Capital Funds XX
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
and if to the Adviser, at:
Xxxxxxxx Capital Management International Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Luckyn-Xxxxxx
SECTION 11. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolio thereby affected. No amendment to
this Agreement or the termination of this Agreement with respect to the
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The Adviser confirms that the Portfolio is a "Non-private Customer"
as defined in the rules of IMRO.
(g) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
XXXXXXXX CAPITAL FUNDS II
/S/ Xxxxxxxxx Xxx
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Xxxxxxxxx Xxx
Vice President
XXXXXXXX CAPITAL MANAGEMENT
INTERNATIONAL INC.
/S/ Xxxxxxxxx X. Xxxxx
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Xxxxxxxxx X. Xxxxx
First Vice President
XXXXXXXX CAPITAL FUNDS II
INVESTMENT ADVISORY AGREEMENT
Appendix A
Annual Fee as a % of
the Average Daily
Portfolios Of The Trust Net Assets Of The Portfolio
----------------------- ---------------------------
Xxxxxxxx International Bond Portfolio 0.50%
