EXHIBIT (5)(D)
XXXXXXXX CAPITAL FUNDS (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated and effective as of January 9, 1996, between Xxxxxxxx
Capital Funds (Delaware), a Delaware business trust (herein referred to as the
"Trust") and Xxxxxxxx Capital Management International Inc., a New York
corporation (herein referred to as the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end investment company registered under
the Investment Company Act of 1940, as amended (the "Investment Company Act")
which currently has five separate investment portfolios, one of which is subject
to this agreement: Xxxxxxxx Emerging Markets Fund Institutional Portfolio (the
"Fund");
WHEREAS, the Investment 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 to retain the Investment Adviser to render
investment advisory services to or on behalf of the Fund in the manner and on
the terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to render such investment
advisory services to the Fund;
NOW, THEREFORE, in consideration of the promises and covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:
1. ENGAGEMENT OF THE INVESTMENT ADVISER. The Trust hereby employs the
Investment Adviser to act as the investment adviser to the Fund and to provide
the investment advisory services described below, subject to the supervision of
the Board of Trustees of the Trust, for the period and on the terms and
conditions set forth in this Agreement. The Investment Adviser hereby accepts
such employment and agrees during such period to render such services and to
assume the obligations herein set forth for the compensation provided for
herein. The Investment Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority hereunder to act for or represent the Fund in any
way or otherwise be deemed an agent of the Fund.
2. INVESTMENT ADVISORY SERVICES.
Subject always to the Trust's Trust Instrument and its registration
statement filed on Form N-2 with the SEC, the Investment Adviser shall:
(a) Furnish the Trust with advice and recommendations
consistent with the investment objective, policies, and restrictions of the
Fund, with respect to the purchase, holding and disposition of portfolio assets,
including advice on the allocation of investments among the countries in which
the Fund may invest and among equity and debt securities;
(b) Furnish the Trust with advice and recommendations with
respect to foreign currency matters, having regard to foreign exchange controls,
if any, and forward foreign exchange contracts;
(c) Advise the Trust in connection with policy decisions to be
made by its Board of Trustees or any committee thereof with respect to its
investments and, as requested, furnish the Fund with research, economic and
statistical data in connection with its investments and investment policies;
(d) Submit such reports relating to the valuation of the
Fund's securities as the Trust's Board of Trustees or the Trust's administrator
may reasonably request;
(e) Place orders for the purchase, sale or exchange of
portfolio assets for the Fund's accounts with brokers or dealers selected by the
Investment Adviser; provided, however, that in connection with the placing of
such orders and the selection of such brokers or dealers the Investment Adviser
shall seek to obtain execution and pricing within the policy guidelines
established by the Trust's Board of Trustees;
(f) Provide information in the possession of the Investment
Adviser to the Trust's administrator as the Trust's administrator may request to
maintain and preserve the records required by the Investment Company Act;
(g) Obtain and evaluate such information relating to
economics, industries, businesses, securities markets and securities as the
Investment Adviser may deem necessary or useful in the discharge of its duties
hereunder; and
(h) From time to time, or at any time requested by the Trust's
Board of Trustees, make reports to the Trust concerning its performance of the
foregoing services and furnish advice and recommendations with respect to other
aspects of the business and affairs of the Fund.
3. ALLOCATION OF CHARGES AND EXPENSES.
(a) The Investment Adviser shall pay for maintaining its staff
and personnel necessary to perform its obligations under this Agreement and
shall, at its own expense, maintain
the office space, facilities, equipment and personnel that are reasonably
necessary to carry out its obligations hereunder. In addition, the Investment
Adviser shall pay the reasonable salaries, fees and expenses of such of the
Trust's officers and employees (including the Trust's share of payroll taxes)
and any fees and expenses of such of the Trust's trustees as are trustees,
officers or employees of the Investment Adviser, provided, however, that the
Trust, and not the Investment Adviser, shall bear OUT-OF-POCKET travel expenses
of trustee and officers of the Trust who are trustees, officers or employees of
the Investment Adviser to the extent that such expenses relate to attendance at
meetings of the Board of Trustees of the Trust or any committees thereof.
(b) The Fund assumes and shall pay or cause to be paid fees to
the Investment Adviser and the Trust's administrator and all other expenses of
the Fund including, without limitation: (i) charges and expenses of any
custodian, subcustodian or depository appointed by the Trust for the safekeeping
of its cash, securities or property and fees and expenses of any transfer agent,
dividend paying agent and registrar for the Trust; (ii) charges and expenses of
accounting and auditing; (iii) expenses and fees associated with registering and
qualifying securities issued by the Fund for sale with the SEC and in various
states and foreign jurisdictions and expenses of preparing share certificates
and other expenses in connection with the issuance, offering or underwriting of
securities issued by the Fund, including stock exchange listing fees and freight
insurance and other charges in connection with the shipment of the Fund's
portfolio securities; (iv) expenses of stationary, preparing, printing and
distributing reports, notices and dividends and other documents to the Fund's
shareholders, including, without limitation, expenses of tender offers for and
repurchases of securities issued by the Fund, to the extent not borne by the
Trust's administrator; (v) interest on any indebtedness of the Fund; (vi)
governmental fees and taxes of the Fund, including any stock transfer tax
payable on a portfolio security of the Fund; (vii) brokerage commissions and
other expenses incurred in acquiring or disposing of the Fund's portfolio
securities; (viii) costs of trustees' and officers' insurance and fidelity
bonds; (ix) compensation and expenses of the trustees who are not interested
persons of the Investment Adviser, including out-of-pocket travel expenses; (x)
costs and expenses incidental to holding meetings of the Board of Trustees, or
any committees thereof, including out-of-pocket travel expenses of trustees and
officers of the Trust who are trustees, officers or employees of the Investment
Adviser to the extent that such expenses relate to attendance at such meetings
of the Board of Trustees, or any committee thereof; (xi) fees for legal,
auditing and consulting services and litigation expenses, including settlement
or arbitration costs; (xii) dues and expenses incurred in connection with
membership in investment company organizations and expenses relating to investor
and public relations; and (xiii) costs, expenses and fees incurred in connection
with obtaining, maintaining, refinancing or repaying indebtedness. It is
understood that the organizational, offering and marketing expenses, including
accounting, legal and printing expenses and registration fees incurred by the
Investment Adviser on behalf of the Fund in connection with the initial public
offering of the Fund's securities will be reimbursed to the Investment Adviser
by the Fund within the limitations set forth in the Prospectus.
4. COMPENSATION OF THE INVESTMENT ADVISER.
(a) For the services rendered, the equipment and facilities
furnished and expenses assumed by the Investment Adviser, the Fund shall pay in
arrears to the Investment
Adviser at the end of each calendar month a fee calculated by applying the
annual percentage rate of 1.00% to the Fund's month-end average of net assets
("net assets" being the value of the total assets of the Fund, minus the sum of
liabilities of the Fund), determined at the end of each month by dividing the
sum of the average net assets of the Fund at the end of each week during the
month by the number of weeks ended during the calendar month. The assets for
each weekly period are determined by averaging the net assets of the Fund at the
close of each business day for each business day in the week that this Agreement
is in effect. If this 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 subject to a pro rata
adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month. During any period when the
determination of net asset value is suspended by the Board of Trustees of the
Trust, the average net asset value of a share for the last week prior to such
suspension shall for this purpose be deemed to be the average net asset value at
the close of each succeeding week until it is again determined. No fee shall be
payable hereunder with respect to a Fund during any period in which the Fund
invests all (or substantially all) of its investment assets in a registered,
open-end management investment company, or separate series thereof, in
accordance with Section 12(d)(1)(E) under the Investment Company Act of 1940.
(b) EXPENSE LIMITATIONS. In the event the operating expenses
of the Fund, including amounts payable to the Investment Adviser pursuant to
subsection (a) hereof, for any fiscal year ending on a date on which this
Agreement is in effect, exceed the expense limitations applicable to the Fund
imposed by applicable state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Investment Adviser
shall reduce its management fee by the extent of such excess and, if required
pursuant to any such laws or regulations, will reimburse the Fund in the amount
of such excess; provided, however, to the extent permitted by law, there shall
be excluded from such expenses the amount of any interest, taxes, brokerage
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs, including settlement or arbitration
costs, and any indemnification related thereto) paid or payable by the Fund.
Whenever the expenses of the Fund exceed a pro rata portion of the applicable
annual expense limitations, the estimated amount of reimbursement under such
limitations shall be applicable as an offset against the monthly payment of the
management fee due to the Investment Adviser. Should two or more such expense
limitations be applicable as at the end of the last business day of the month,
that expense limitation which results in the largest reduction in the Investment
Adviser's fee shall be applicable.
5. LIMITATION OF LIABILITY OF THE INVESTMENT ADVISER.
(a) The Investment Adviser shall not be liable 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 and management of the Fund, except for
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard or its obligations and duties
hereunder. As used in this Article 5, the term "Investment Adviser" shall
include any
affiliates of the Investment Adviser performing services for the Fund
contemplated hereby and trustees, officers and employees of the Investment
Adviser as well as that corporation itself.
(b) The Investment Adviser shall not be liable for any losses
caused by disturbances of its operations by virtue of force majeure, riot, or
damage caused by nature or due to other events for which it 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).
(c) The presence of exculpatory language in this Agreement
shall not be deemed by the Trust, the Investment 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 either under common law
or statutory law principles applicable to fiduciary relationships or under the
federal securities laws.
6. OTHER ACTIVITIES OF THE INVESTMENT ADVISER AND ITS AFFILIATES.
(a) Nothing herein contained shall prevent the Investment
Adviser or any of its affiliates from engaging in any other business or from
acting as investment adviser or investment manager for any other person or
entity, whether or not having investment policies or portfolios similar to that
of the Fund; and it is specifically understood that officers, trustees and
employees of the Investment 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 Investment Adviser desire to purchase or sell a
security at the same time such security is purchased or sold for the Fund, such
purchases and sales will, to the extent feasible, be allocated among the Fund
and such clients in a manner believed by the Investment Adviser to be equitable
to the Fund and such clients.
(b) The Investment Adviser reserves the right to grant the use
of the name "XXXXXXXX", or any derivative thereof, to any other investment
company or business enterprise. The Investment Adviser reserves the right to
withdraw from the Fund the use of the name "XXXXXXXX", the Investment Adviser
agrees that the question of continuing this Agreement may be submitted to a vote
of the Fund's shareholders. In the event of such withdrawal or the termination
of this Agreement, for any reason, the Trust will, on the written request of the
Investment Adviser, take such action as may be necessary to change its name and
eliminate all reference to the words "XXXXXXXX" in any form, and will no longer
use such registered service xxxx.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
remain in force until the second anniversary of the effective date of this
Agreement first set forth above and from year to year thereafter, but only so
long as such continuance is approved at least annually by (a) the vote of a
majority of the trustees of the Trust who are not parties to the Agreement or
interested persons of the Investment Adviser or interested persons of any such
party (other than
as trustees of the Trust), cast in person at a meeting called for the purpose of
voting on such approval, and (b) the vote of either (i) the Board of Trustees of
the Trust or (ii) a majority of the outstanding voting securities of the Fund.
This Agreement may be terminated at any time, without payment of any penalty, by
the Trust either by the vote of Board of Trustees of the Trust or by the vote of
a majority of the outstanding voting securities of the Fund on sixty (60) days'
written notice to the Investment Adviser, and by the Investment Adviser on sixty
(60) days' written notice to the Trust. This Agreement shall automatically
terminate (i) in the event of its assignment by either party, or (ii) upon
termination of the Investment Advisory Agreement. In interpreting the provisions
of this Section 7, the definitions contained in Section 2(e) of the Investment
Company Act (particularly the definitions of "assignment," "interested person"
and "voting security") shall be applied.
8. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment, sale
hypothecation or pledge of this Agreement shall be effective until approved by
the vote of: (a) the Board of Trustees, including a majority of the trustees who
are not parties to the Agreement or interested persons of the Investment Adviser
or interested persons of any such party (other than as trustees of the Trust),
cast in person at a meeting called for the purpose of voting on such approval
and (b) a majority of the outstanding voting securities of the Fund.
9. 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: (a) to the
Trust at Xxxxxxxx Capital Funds (Delaware), Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 and (b) to the Investment Adviser at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxx.
10. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the
Investment Company Act. To the extent the applicable laws of the State of New
York, or any of the provisions herein, conflict with the applicable provisions
of the Investment Company Act, the latter shall control.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
The Investment Adviser confirms that the Trust is a "business customer"
as defined by IMRO.
The Trust confirms that it has been provided with independent legal
advice on this Agreement.
IN WITNESS WHEREOF, the parties hereof have caused this Agreement to be
executed as of the day and year first above written.
XXXXXXXX CAPITAL FUNDS, (DELAWARE)
By: /S/ XXXXX X. LUCKYN-XXXXXX
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Name: Xxxxx X. Luckyn-Xxxxxx
Title
XXXXXXXX CAPITAL MANAGEMENT
INTERNATIONAL INC.
By: /S/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title
