Exhibit 99.5(n)
XXX XXX FUNDS, INC.
INTERIM INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of January, 2002 by and among XXXX X. XXXXX &
CO., INC., a Corporation organized under the laws of the having its principal
place of business in New York, New York (the "Sub-Adviser") and 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
"Adviser") and VAN ECK FUNDS INC., a Maryland Corporation having its principal
place of business in New York, New York (the "Company").
WHEREAS, the Company is engaged in business as an open-end investment company
and is so registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Sub-Adviser is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940 ("Advisers Act"); and
WHEREAS, the Company is authorized to issue shares of common stock in separate
series with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Company has retained the Adviser to render management and advisory
services to the series of the Company known as the Xxx Xxx Growth and Income
Fund (the "Fund"); and
WHEREAS, the Adviser wishes to retain the Sub-Adviser to furnish investment
advisory services to the Fund and the Sub-Adviser is willing to furnish such
services; and
WHEREAS, the Sub-Adviser is willing to furnish services to the Fund under this
investment sub-advisory agreement until a new investment sub-advisory agreement
is approved by the Directors of the Company and the shareholders of the Fund as
required by Section 15 of the 1940 Act and the rules and regulations thereunder;
and
WHEREAS, this agreement is intended to serve as an "interim contract" within the
meaning of Rule 15a-4(b)(1) under the 1940 Act;
NOW, THEREFORE, WITNESSETH:
That it is hereby agreed among the parties hereto as follows:
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1. APPOINTMENT OF SUB-ADVISER.
The Adviser hereby appoints the Sub-Adviser to act as investment advisor to the
Fund for the period and on the terms set forth herein. The Sub-Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided. So long as the Sub-Adviser serves as investment
advisor to the Fund pursuant to this Agreement the obligation of the Adviser
under this Agreement with respect to the Fund shall be, subject in any event to
the control of the Directors of the Company, to determine and review with
Sub-Adviser investment policies of the Fund and the Sub-Adviser shall have the
obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund and such other services set forth in Section 2
hereof. The Adviser will compensate the Sub-Adviser of the Fund for its services
to the Fund. The Adviser or the Fund, subject to the terms of this Agreement,
may terminate the services of the Sub-Adviser at any time in their sole
discretion, and the Adviser shall at such time assume the responsibilities of
the Sub-Adviser unless and until a successor investment advisor is selected.
2. DUTIES OF SUB-ADVISER.
The Sub-Adviser, at its own expense, shall furnish the following services and
facilities to the Company:
(a) INVESTMENT PROGRAM. The Sub-Adviser will (i) furnish continuously an
investment program for the Fund, (ii) determine (subject to the overall
supervision and review of the Board of Directors of the Company and the Adviser)
what investments shall be purchased, held, sold or exchanged and what portion,
if any, of the assets of the Fund shall be held uninvested, and (iii) make
changes on behalf of the Fund in the investments. The Sub-Adviser will provide
the services hereunder in accordance with the Fund's investment objectives,
policies and restrictions as stated in the then-current prospectus and statement
of additional information which is part of the Company's Registration Statement
on From N-1A filed with the Securities and Exchange Commission, as amended from
time to time, copies of which shall be sent to the Sub-Adviser by the Adviser.
The Sub-Adviser also will manage, supervise and conduct such other affairs and
business of the Company and matters incidental thereto as the Sub-Adviser and
the Company agree, subject always to the control of the Board of Directors of
the Company and to the provisions of the Articles of Incorporation of the
Company, as may be amended from time to time (the "Articles of
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Incorporation"), and the Company's By-laws, as may be amended form time to time
(the "By-Laws") and the 1940 Act. The Sub-Adviser will manage the Fund so that
it will qualify as a regulated investment company under sub-chapter M of the
Internal Revenue Code of 1986, as it may be amended from time to time; and, with
respect to the services provided by the Sub-Adviser under this Agreement, it
shall be responsible for compliance with all applicable laws, rules and
regulations. Sub-Adviser will adopt procedures reasonably designed to ensure
compliance.
(b) OFFICE SPACE AND FACILITIES. The Sub-Adviser will arrange to furnish
office space, all necessary office facilities, simple business equipment,
supplies, utilities, and telephone services required for managing the
investments of the Fund.
(c) PERSONNEL. The Sub-Adviser shall provide executive and clerical personnel
for managing the investments of the Fund, and shall compensate officers and
Directors of the Fund for services provided to the Fund (but not any other
series of the Company) if such persons are also employees of the Sub-Adviser or
its affiliates, except as otherwise provided herein.
(d) PORTFOLIO TRANSACTIONS. The Sub-Adviser shall place all orders for the
purchase and sale of portfolio securities for the account of the Fund with
brokers or dealers selected by the Sub-Adviser, although the Fund will pay the
actual transaction costs, including without limitation brokerage commissions on
portfolio transactions in accordance with this Paragraph 2(d). In executing
portfolio transactions and selecting brokers or dealers, the Sub-Adviser will
use its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any transaction,
the Sub-Adviser 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 Sub-Adviser 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 Sub-Adviser or an affiliate of the Sub-Adviser in
respect of accounts over which it exercises investment discretion. The
Sub-Adviser 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 Sub-Adviser
determines in good faith that such commission was
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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 Sub-Adviser 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 Sub-Adviser or its
affiliates provided that the Sub-Adviser does not favor any account over any
other account and provided that any purchase or sale orders executed
contemporaneously shall be allocated in an equitable manner among the accounts
involved in accordance with procedures adopted by the Sub-Adviser.
In connection with the purchase and sale of securities for the Fund, the
Sub-Adviser will arrange for the transmission to the custodian and record
keeping agent for the Company on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not limited to,
Cusip, Sedol, or other numbers that identify securities to be purchased or sold
on behalf of the Fund, as may be reasonably necessary to enable the custodian
and record keeping agent to perform its administrative and record keeping
responsibilities with respect to the Fund. With respect to portfolio securities
to be purchased or sold through the Depository Trust Company, the Sub-Adviser
will arrange for the automatic transmission of the confirmation of such trades
to the Fund's custodian and record keeping agent.
The Sub-Adviser will monitor on a daily basis the determination by the custodian
and record keeping agent for the Fund of the valuation of portfolio securities
and other investments of the Fund. The Sub-Adviser will assist the custodian and
record keeping agent for the Fund in determining or confirming, consistent with
the procedures and policies stated in the Registration Statement for the
Company, the value of any portfolio securities or other assets of the Fund for
which the custodian and record keeping agent seeks assistance from, or
identifies for review by, the Sub-Adviser. The Sub-Adviser shall assist the
Board in determining fair value of such securities or assets for which market
quotations are not readily available.
The Sub-Adviser will provide the Company or the Adviser with copies of all of
the Fund's investment records and ledgers maintained by the Sub-Adviser (which
shall not include the records and ledgers maintained by the custodian and record
keeping agent for the Company) as are necessary to assist the Company and the
Adviser to comply with requirements of the 1940 Act and the Advisers Act as well
as other applicable laws. The Sub-Adviser will furnish to regulatory authorities
having the requisite authority any information, reports or investment records
and ledgers maintained by the Sub-Adviser in connection with
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such services which may be requested in order to ascertain whether the
operations of the Company are being conducted in a manner consistent with
applicable laws and regulations.
The Sub-Adviser will provide reports to the Company's Board of Directors for
consideration at meetings of the Board on the investment program for the Fund
and the issues and securities represented in the Fund's portfolio, and will
furnish the Company's Board of Directors with respect to the Fund such periodic
and special reports as the Directors or the Adviser may reasonably request.
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3. EXPENSES OF THE COMPANY
Except as provided in Paragraph 2(d) above, the Sub-Adviser shall assume and pay
all of its own costs and expenses related to providing an investment program for
the Fund.
4. COMPENSATION
(a) As compensation for the services provided and expenses assumed by the
Sub-Adviser under this Agreement, the Adviser will pay to the Sub-Adviser at the
end of each calendar month an advisory fee as set forth in Schedule A hereto.
Notwithstanding the foregoing sentence, the Sub-Adviser waives the right to
receive any advisory fees under the terms of this Agreement.
5. REPRESENTATIONS AND COVENANTS
The Adviser hereby represents and warrants as follows:
That it is registered in good standing with the Securities and Exchange
Commission as an investment adviser under the Advisers Act, and such
registration is current, complete and in full compliance with all applicable
provisions of the Advisers Act and the rules and regulations thereunder;
That it has all the requisite authority to enter into, execute, deliver and
perform its obligations under this Agreement; and
Its performance of its obligations under this Agreement does not conflict with
any law, regulation or order to which it is subject.
The Adviser hereby covenants and agrees that, so long as this Agreement shall
remain in effect:
It shall maintain its registration in good standing as an investment adviser
under the Advisers Act, and such registration shall at all times remain current,
complete and in full compliance with all applicable provisions of the Advisers
Act and the rules and regulations thereunder;
Its performance of its obligations under this Agreement does not conflict with
any law, regulation or order to which it is subject; and
It shall at all times fully comply with the Advisers Act, the 1940 Act, all
applicable rules and regulations under such Acts and all other applicable law;
and
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It shall promptly notify the Sub-Adviser upon occurrence of any event that might
disqualify or prevent it from performing its duties under this Agreement.
The Sub-Adviser hereby represents and warrants as follows:
That it is registered in good standing with the Securities and Exchange
Commission as an investment adviser under the Advisers Act, and such
registration is current, complete and in full compliance with all applicable
provisions of the Advisers Act and the Rules and regulations thereunder;
That is has all the requisite authority to enter into, execute, deliver and
perform its obligations under this Agreement; and
Its performance of its obligations under this Agreement does not conflict with
any law, regulation or order to which it is subject.
The Sub-Adviser hereby covenants and agrees that, so long as this Agreement
shall remain in effect:
It shall maintain its registration in good standing as an investment adviser
under the Advisers Act, and such registration shall at all times remain current,
complete and in full compliance with all applicable provisions of the Advisers
Act and the rules and regulations thereunder;
Its performance of its obligations under this Agreement does not conflict with
any law, regulation or order to which it is subject;
It shall at all times fully comply with the Advisers Act, the 1940 Act, all
applicable rules and regulations under such Acts and all other applicable law;
and
It shall promptly notify the Adviser upon occurrence of any event that might
disqualify or prevent it from performing its duties under this Agreement.
6. COMPANY TRANSACTIONS
The Adviser and Sub-Adviser each 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 Company; provided, however, that such prohibition shall not
prevent the purchase of shares of the Company 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 at the time of purchase or as part of the
initial capital of the Company.
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7. RELATIONS WITH COMPANY
Subject to and in accordance with the Articles of Incorporation and By-Laws and
the Articles of Incorporation and By-Laws of the Adviser and Sub-Adviser it is
understood (i) that Directors, officers, agents and shareholders of the Company
are or may be interested in the Sub-Adviser (or any successor thereof) as
directors, officers, or otherwise; (ii) that directors, officers, agents and
shareholders of the Sub-Adviser are or may be interested in the Company as
Directors, officers, shareholders or otherwise; and (iii) that the Sub-Adviser
(or any such successor) is or may be interested in the Company as a shareholder
or otherwise and that the effect of any such adverse interests shall be governed
by said Articles of Incorporation and By-laws.
8. LIABILITY OF ADVISER, SUB-ADVISER AND OFFICERS AND DIRECTORS OF THE COMPANY
Neither the Adviser, Sub-Adviser nor any of their officers, directors,
employees, agents or controlling persons or assigns or Directors or officers of
the Company shall be liable for any error of judgment or law, or for any loss
suffered by the Company 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 Adviser, Sub-Adviser or such persons against any
liability to the Company or its shareholders to which the Adviser or Sub-Adviser
might otherwise be subject by reason of any willful misconduct, negligence or
actions taken in bad faith in the discharge of its respective obligations and
performance of its respective duties under this Agreement.
9. INDEMNIFICATION
Notwithstanding Section 8 of the Agreement, the Adviser agrees to indemnify and
hold harmless the Sub-Adviser, any affiliated person of the Sub-Adviser (except
the Company), and each person, if any, who, within the meaning of Section 15 of
the Securities Act of 1933 ("1933 Act") controls ("controlling person") the
Sub-Adviser (all of such persons being referred to as "Sub-Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities (excluding
salary charges of employees, officers or partners of the Sub-Adviser), or
litigation (including legal and other) expenses to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, any other statute, common law or otherwise, arising out of the
Adviser's responsibilities to the Company which (1) may be based upon any untrue
statement or alleged untrue statement of a material fact supplied by, or which
is the responsibility of, the Adviser and contained
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in the Registration Statement or prospectus or statement of additional
information covering the shares of the Fund or any other series, or any
amendment thereof or any supplement thereto, or the omission or alleged omission
or failure to state therein a material fact known or which should have been
known to the Adviser and was required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or omission was
made in reliance upon information furnished to the Adviser or the Company or to
any affiliated person of the Adviser by a Sub-Adviser Indemnified Person in
writing for inclusion in the Registration Statement or prospectus or statement
of additional information; or (2) may be based upon a failure by the Adviser to
comply with, or a breach of, any provision of this Agreement or any other
agreement with the Fund; or (3) may be based upon misfeasance or negligence by
the Adviser in the discharge of its duties and performance of its obligations
under this Agreement or any other agreement with the Fund, provided however,
that in no case shall the indemnity in favor of the Sub-Adviser Indemnified
Person be deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of any misfeasance or negligence in
the discharge of its obligations and the performance of its duties under this
Agreement.
Notwithstanding Section 8 of this Agreement, the Sub-Adviser agrees to indemnify
and hold harmless the Adviser, any affiliated person of the Adviser (except the
Company), and each person, if any, who, within the meaning of Section 15 of the
1933 Act, controls ("controlling person") the Adviser (all of such persons being
referred to as "Adviser Indemnified Persons") against any and all losses,
claims, damages, liabilities (excluding salary charges of employees, officers or
partners of the Adviser), or litigation (including legal and other) expenses to
which an Adviser Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, any other statute, common law or otherwise, arising
out of the Sub-Adviser's responsibilities as investment sub-adviser to the Fund
which (1) may be based upon any untrue statement or alleged untrue statement of
a material fact supplied by the Sub-Adviser for inclusion in the Registration
Statement or prospectus or statement of additional information covering shares
of the Fund, or any amendment thereof, or any supplement thereto, or, with
respect to a material fact supplied by the Sub-Adviser for inclusion in the
Registration Statement or prospectus or statement of additional information, the
omission or alleged omission or failure to state therein a material fact known
or which should have been known to the Sub-Adviser and was required to be stated
therein or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to the
Sub-Adviser, the Company, or any affiliated person of the Sub-Adviser or Company
by an
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Adviser Indemnified Person; or (2) may be based upon a failure by the
Sub-Adviser to comply with, or a breach of, any provision of this Agreement or
any other agreement with the Fund; or (3) may be based upon misfeasance or
negligence by the Sub-Adviser in the discharge of its duties and performance of
its obligations under this Agreement or any other agreement with the Fund
provided however, that in no case shall the indemnity in favor of an Adviser
Indemnified Person be deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of misfeasance or
negligence in the discharge of its obligations and the performance of its duties
under this Agreement.
Neither the Adviser nor the Sub-Adviser shall be liable under this Section with
respect to any claim made against an Indemnified Person unless such Indemnified
Person shall have notified the indemnifying party in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Person (or such
Indemnified Person shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve the indemnifying party from any liability which it may have to the
Indemnified Person against whom such action is brought otherwise than on account
of this Section. In case any such action is brought against the Indemnified
Person, the indemnifying party will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Indemnified Person, to
assume the defense thereof, with counsel satisfactory to the Indemnified Person.
If the indemnifying party assumes the defense and the selection of counsel by
the indemnifying party to represent both the Indemnified Person and the
indemnifying party would result in a conflict of interests and would not, in the
reasonable judgment of the Indemnified Person, adequately represent the
interests of the Indemnified Person, the indemnifying party will at its own
expense, assume the defense with counsel to the indemnifying party and, also at
its own expense, with separate counsel to the Indemnified Person which counsel
shall be satisfactory to the indemnifying party and the Indemnified Person. The
Indemnified Person will bear the fees and expenses of any additional counsel
retained by it, and the indemnifying party shall not be liable to the
Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Indemnified Person independently in connection with
the defense thereof other than reasonable costs of investigation. The
indemnifying party shall not have the right to compromise or settle the
litigation without the prior written consent of the Indemnified Person if the
compromise or settlement results, or may result, in a finding of wrongdoing on
the part of the Indemnified Person.
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10. DURATION AND TERMINATION OF THE AGREEMENT
This Agreement shall commence on the date hereof and unless terminated as herein
provided, this agreement will remain in full force and effect until June 1, 2002
and shall continue in full force and effect until the earlier of (I) the
effective date of a sub-advisory agreement by and among the Company, the Adviser
and the Sub-Adviser that has been approved by a vote of the majority of the
outstanding voting securities of the Fund and (ii) the date is 150 days after
the date of this Agreement.
This Agreement may be terminated at any time without payment of any penalty by
the Company upon the vote of a majority of the Directors or by vote of the
majority of the Fund's outstanding voting securities, upon ten (10) days'
written notice to the Sub-Adviser or (b) by the Adviser or the Sub-Adviser at
any time upon sixty (60) days' written notice to the other parties.
This Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act).
11. MISCELLANEOUS
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York.
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.
12 USE OF NAME
It is understood that the name "Xxx Xxx" or any derivative thereof or logo
associated with that name is the valuable property of the Adviser and its
affiliates, and that the Company and Sub-Adviser have the right to use such name
(or derivative or logo) only with the approval of the Adviser and only so long
as the Adviser is Adviser to the Fund. Upon termination of the Investment
Advisory and Management Agreement between the Company and the Adviser, the
Company and the Sub-Adviser shall forthwith cease to use such name (or
derivative or logo).
It is understood that the name Xxxx X. Xxxxx & Co. any derivative thereof or
logo associated with that name is the valuable property of the Sub-Adviser and
its affiliates and that the Company and/or the Fund have the right to use such
name (or derivative or logo) in offering materials of the Company only with the
approval of the Sub-Adviser and only for so long as the Sub-Adviser is
investment sub-advisor to the Fund. Upon termination of this Agreement, the
Company and Adviser shall forthwith cease to use such name (or derivative or
logo).
13. BINDING AGREEMENT
This Agreement will become binding on the parties hereto upon their execution of
the attached Schedule to this Agreement.
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SCHEDULE A
XXX XXX FUNDS INC.,
For the services and facilities to be provided to the Fund by the
Sub-Adviser as provided in Paragraph 2 hereof, the Adviser shall pay the
Sub-Adviser a fee, payable monthly, at the annual rate of .20 of 1% of the
Fund's average daily net assets from the advisory fee it receives from the Fund,
as determined by the Company or its third party administrator in accordance with
procedures established, from time to time, by or under the direction of the
Board of Directors of the Company. The Company shall not be liable for the
obligation of the Adviser to make payment to the Sub-Adviser.
Witness the due execution hereof effective the 1st day of January,
2002.
Attest:
Xxxx X. Xxxxx & Co.
By:
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Name:
Title:
Attest: Xxx Xxx Funds Inc.,
By:
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Name:
Title:
Attest: Xxx Xxx Associates Corporation
By:
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Name:
Title:
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