ADVISORY AGREEMENT
Xxxxxx Xxxx Investment Funds (the "Trust"), a business trust
organized under the law of The Commonwealth of Massachusetts, entered into an
investment advisory agreement with Bank Xxxxxx Xxxx & Co., Ltd., New York Branch
(the "Adviser"), a corporation organized under the laws of the state of
Delaware, as of July 1, 1998. The Trust herewith confirms its agreement with the
Adviser to amend and such agreement in its entirety regarding investment
advisory services to be provided by the Adviser in connection with the Trust's
Xxxxxx Xxxx Global Income Fund (the "Fund") as follows:
1. Investment Description; Appointment
The Trust desires to employ the Fund's capital by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in the Trust's Master Trust Agreement, as the same may from time to
time be amended, and in its Registration Statement as from time to time in
effect, and in such manner and to such extent as may from time to time be
approved by the Board of Trustees of the Trust. Copies of the Trust's
Registration Statement and Master Trust Agreement have been or will be submitted
to the Adviser. The Trust agrees to provide copies of all amendments to the
Trust's Registration Statement and Master Trust Agreement to the Adviser on an
on-going basis. The Trust desires to employ and hereby appoints the Adviser to
act as investment adviser to the Fund. The Adviser accepts the appointment and
agrees to furnish the services described herein for the compensation set forth
below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of Trustees of
the Trust, the Adviser will act in accordance with the Trust's Master Trust
Agreement, the Investment Company Act of 1940 and the Investment Advisors Act of
1940, as the same from time to time be amended, manage the Fund's assets in
accordance with its investment objective and policies as stated in the Trust's
Registration Statement as from time to time in effect, make investment decisions
and exercise voting rights in respect of portfolio securities for the Fund and
place purchase and sale orders on behalf of the Fund. In providing these
services, the Adviser will provide investment research and supervision of the
Fund's investments and conduct a continual program of investment, evaluation
and, if appropriate, sale and reinvestment of the Fund's assets. In addition,
the Adviser will furnish the Fund with whatever statistical information the Fund
may reasonably request with respect to the securities that the Fund may hold or
contemplate purchasing.
In addition, Subject to the supervision and direction of the Board of
Trustees of the Trust, the Adviser undertakes to perform the following
administrative and shareholder services to the extent that no other party is
obligated to perform them on behalf of the Fund: (1) furnishing certain internal
executive and administrative services; responding to shareholder inquiries; and
providing stationery and office supplies in connection with the foregoing; (2)
providing the Fund with office space (which may be the Adviser's own offices);
(3) furnishing certain corporate secretarial services, including assisting in
the preparation of materials for meetings of the Board of Trustees; (4)
coordinating and preparation of proxy statements and annual and semi-annual
reports to the Fund's shareholders; (5) assisting in the preparation of the
Fund's tax returns; (6) assisting in monitoring and developing compliance
procedures for the Fund which will include, among other matters, procedures for
monitoring compliance with the Fund's investment objective, policies,
restrictions, tax matters and applicable laws and regulations; (7) acting as
liaison between the Fund and the Fund's independent public accountants, counsel,
custodian or custodians, administrator and transfer and dividend-paying agent
and registrar, and taking all reasonable action in the performance of its
obligations under this Agreement to assure that all necessary information is
made available to each of them; and (8) furnishing to the Board of Trustees
quarterly written reports which set out the amounts expended under the
Distribution and Shareholder Services Plans and the purposes for which those
expenditures were made.
In performing all services under this Agreement, the Adviser shall act
in conformity with applicable law, the Trust's Master Trust Agreement and
By-Laws, and all amendments thereto, and the Trust's Registration Statement, as
amended from time to time.
3. Brokerage
In executing transactions for the Fund and selecting brokers
or dealers, the Adviser will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Fund
transaction, the Adviser will consider all factors it deems relevant including,
but not limited to, 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 any commission for the specific transaction on
a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, the Adviser may
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 other accounts over which the Adviser or an affiliate exercises
investment discretion.
4. Information Provided to the Trust
The Adviser will use its best efforts to keep the Trust informed of
developments materially affecting the Fund, and will, on its own initiative,
furnish the Trust from time to time whatever information the Adviser believes is
appropriate for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the services
described in paragraphs 2, 3 and 4 above. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Adviser
against any liability to the Fund or its shareholders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties from reckless disregard
by it of its obligations and duties under this Agreement ("disabling conduct").
The Fund will indemnify the Adviser against, and hold it harmless from, any and
all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit not
resulting from disabling conduct by the Adviser. Indemnification shall be made
only following: (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (ii) in the absence of such a decision,
a reasonable determination, based upon a review of the facts, that the person to
be indemnified was not liable by reason of disabling conduct by (a) the vote of
a majority of a quorum of non-party trustees who are not "interested persons" of
the Trust or (b) an independent legal counsel in a written opinion.
6. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Fund will pay the Adviser after the end of each calendar quarter a fee for
the previous quarter calculated at an annual rate of .65 of 1.00% of the Fund's
average daily net assets.
Upon any termination of this Agreement before the end of a quarter, the
fee for such part of that quarter shall be prorated according to the proportion
that such period bears to the full quarterly period and shall be payable upon
the date of termination of this Agreement. For the purpose of determining fees
payable to the Adviser, the value of the Fund's net assets shall be computed at
the times and in the manner specified in the Trust's Registration Statement as
from time to time in effect.
7. Expenses
The Adviser will bear all expenses in connection with the performance
of its services under this Agreement, including compensation of and office space
for its officers and employees connected with investment and economic research,
trading and investment management and administration of the Fund, as well as the
fees of all Trustees of the Trust who are affiliated with the Adviser or any of
its affiliates. The Fund will bear certain other expenses to be incurred in its
operation, including: organizational expenses; taxes, interest, brokerage costs
and commissions; fees of Trustees of the Trust who are not officers, directors,
or employees of the Adviser, the Fund's distributor or administrator or any of
their affiliates; Securities and Exchange Commission fees; state Blue Sky
qualification fees; charges of the custodian, any subcustodians, and transfer
and dividend-paying agents; insurance premiums; outside auditing, pricing and
legal expenses; costs of maintenance of the Trust's existence; costs
attributable to investor services, including without limitation, telephone and
personnel expenses; costs of printing stock certificates; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meeting of the shareholders of the Fund and of the officers or Board
of Trustees of the Trust, membership fees in trade associations; litigation and
other extraordinary or non-recurring expenses. In addition, the Fund will pay
distribution fees pursuant to a Distribution Plan adopted under Rule 12b-1 of
the Investment Company Act of 1940, as amended, and pursuant to a Shareholder
Services Plan.
8. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement and the Fund's sub-advisory agreement, but
excluding distribution fees, interest, taxes, brokerage and, if permitted by
state securities commissions, extraordinary expenses) exceed the expense
limitation of any state having jurisdiction over the Fund, the Adviser will
reimburse the Fund for such excess expenses in the same proportion as its fees
under this Agreement bear to the combined fees for investment advice and
sub-investment advice. The Adviser's expense reimbursement obligation will be
limited to the amount of its fees received pursuant to this Agreement. Such
expense reimbursement, if any, will be estimated, reconciled and paid on a
monthly basis.
9. Services to Other Companies or Accounts
The Trust understands that the Adviser now acts, will continue to act,
or may in the future act, as investment adviser to fiduciary and other managed
accounts or as investment adviser to one or more other investment companies, and
the Trust has no objection to the Adviser so acting, provided that whenever the
Fund and one or more other accounts or investment companies advised by the
Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with procedures believed to
be equitable to each entity. Similarly, opportunities to sell securities will be
allocated in an equitable manner. The Trust recognizes that in some cases this
procedure may adversely affect the size of the position that may be acquired or
disposed of for the Fund. In addition, the Trust understands that the persons
employed by the Adviser to assist in the performance of the Adviser's duties
hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of the Adviser or any
affiliate of the Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind of nature.
10. Term of Agreement
This Agreement shall become effective as of the date first written
above and shall continue for an initial two-year term and shall continue
thereafter so long as such continuance is specifically approved at least
annually by (i) the Board of Trustees of the Trust or (ii) a vote of a
"majority" (as defined in the Investment Company Act of 1940, as amended) of the
Fund's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Trustees who are not
"interested persons" (as defined in said Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable, without penalty, on 60 days' written
notice, by the Board of Trustees of the Trust or by vote of holders of a
majority of the Fund's shares, or upon 60 days' written notice, by the Adviser.
This Agreement will also terminate automatically in the event of its assignment
(as defined in said Act).
11. Representation by the Trust
The Trust represents that copy of its Master Trust Agreement, dated
April 30, 1992 together with all amendments thereto, is on file in the office of
the Secretary of The Commonwealth of Massachusetts.
12. Limitation of Liability
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Fund, as provided in the Master Trust Agreement of the Trust. The
execution and delivery of this Agreement have been authorized by the Trustees
and the sole shareholder of Fund shares and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such Trustees and
shareholder nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Fund as provided
in its Master Trust Agreement. The obligations of this Agreement shall be
binding only upon the assets and property of the Fund and not upon the assets
and property of any other sub-trust of the Trust.
13. Miscellaneous
If both the Adviser and the Sub-Adviser and Servicing Agent cease to
act as investment advisers to the Fund, the Trust agrees that, at the request of
either of them, the Trust's license to use "BJB" or any variation thereof
indicating a connection to either of those entities will terminate and that the
Trust will take all necessary action to change the names of the Trust and the
Fund to names that do not include "BJB" or any such variation.
14. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
15. Governing Law
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York without giving effect to the
conflicts of laws principles thereof.
* * * * *
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
XXXXXX XXXX INVESTMENT FUNDS
By:_____________________
__________
Name:
Title:
Accepted:
BANK XXXXXX XXXX & CO., LTD., NEW YORK BRANCH
By:_________________________________
Name:
Title:
