Exhibit 5(l)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 1st day of MAY, 2000 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 "Adviser"),
and VAN ECK FUNDS, a Massachusetts business trust (the "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, as amended (the
"1940 Act"); and
WHEREAS, the Adviser is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940, as amended; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series, each representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Trust intends to offer shares ("Shares") in one of those
series, Emerging Markets Vision Fund (the "Fund"), and invest the proceeds in
securities, the Trust desires to retain the Adviser to render investment
advisory and accounting and administrative services hereunder and with respect
to which the Adviser is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints the Adviser to act as investment adviser and
administrator to the Fund for the period and on the terms herein set forth. The
Adviser accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DUTIES OF ADVISER
The Adviser, at its own expense, shall be responsible for furnishing the
following services and facilities to the Trust:
(a) INVESTMENT PROGRAM
The Adviser 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 Fund shall be held uninvested, and (iii) make changes on
behalf of the Fund in the investments. The Adviser also will manage,
supervise and conduct such other affairs and business of the Fund and
matters incidental thereto, as the Adviser 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.
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(b) ACCOUNTING AND ADMINISTRATIVE SERVICES
(i) The Adviser, at its own expense, will provide or arrange for the
performance of the following accounting functions on an ongoing basis:
(1) Journalize the Fund's investment, capital share and income and expense
activities;
(2) Verify investment buy/sell trade tickets when received from the Fund
and transmit trades to the Trust's custodian for proper settlement;
(3) Maintain individual ledgers for investment securities;
(4) Reconcile cash and investment balances with the Trust's custodian, and
provide the Fund with the beginning cash balance available for
investment purposes;
(5) Update the cash availability throughout the day as required by the
Fund;
(6) Post to and prepare the Fund's Statement of Assets and Liabilities and
the Statement of Operations;
(7) Calculate various contractual expenses (e.g., transfer agency fees);
(8) Control all disbursements and authorize such disbursements upon
written instructions from authorized officers and agents;
(9) Calculate capital gains and losses;
(10) Determine the net income;
(11) Obtain security market quotes, at the Fund's expense, or if such
quotes are unavailable, obtain such prices from the investment
adviser, and in either case calculate the market value of the Fund's
investments;
(12) Deliver a copy of the daily portfolio valuation to the Fund;
(13) Compute the net asset value;
(14) Compute the Fund's yields, total return, expense ratios, portfolio
turnover rate;
(15) Monitor the expense accruals and notify the Fund of any proposed
adjustments; and
(16) Prepare periodic unaudited financial statements.
(ii) In addition to the accounting services described in the foregoing Paragraph
2(b)(i), the Adviser will provide or arrange for the provision of the
following services for the Fund:
(1) Prepare periodic audited financial statements;
(2) Supply various statistical data as requested by the Board of Trustees
of the Trust on an ongoing basis;
(3) Prepare for execution and file the Federal and state tax returns;
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(4) Prepare and file the Semi-Annual Reports with the Securities and
Exchange Commission on Form N-SAR;
(5) Prepare and file with the Securities and Exchange Commission the
Fund's annual, semi-annual and quarterly shareholder reports;
(6) Prepare and file registration statements on Form N-1A and other
filings relating to the registration of Shares;
(7) Monitor the Fund's status as a regulated investment company under Sub-
Chapter M of the Internal Revenue Code of 1986, as amended;
(8) Maintain the Fund's fidelity bond as required by the 1940 Act;
(9) Prepare materials for and record the proceedings of, in conjunction
with the officers of the Trust, the meetings of the Trust's Board of
Trustees; and
(10) Prepare any other regulatory reports to and for any Federal, state or
local agency as may be required.
In carrying out its duties hereunder, as well as any other activities
undertaken on behalf of the Fund pursuant to this Agreement, the Adviser
shall at all times be subject to the control and direction of the Board of
Trustees of the Trust.
(c) OFFICE SPACE AND FACILITIES
The Adviser will arrange to furnish the Trust office space in the offices
of the Adviser, 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.
(d) PERSONNEL
The Adviser shall provide executive and clerical personnel for managing the
investments of the Fund, and shall compensate officers and Trustees of the
Trust if such persons are also employees of the Adviser or its affiliates,
except as otherwise provided herein.
(e) PORTFOLIO TRANSACTIONS
The 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 Adviser, although the Fund 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 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 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 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 the Fund and/or
the other accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. The
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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 Adviser
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 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 Adviser
or its affiliates provided that the Adviser does not favor any account
over any other account and provided that any purchase or sale orders
executed contemporaneously shall be allocated in a manner the Adviser
deems equitable among the accounts involved.
(f) RIGHT TO RECEIVE ADVICE
(i) ADVICE OF FUND If the Adviser shall be in doubt as to any action to be
taken or omitted by it, it may request, and shall receive, from the Fund
directions or advice.
(ii) ADVICE OF COUNSEL If the Adviser or the Fund shall be in doubt as to any
question of law involved in any action to be taken or omitted by the
Adviser, it may request advice at the Fund's cost from counsel of its own
choosing (which may be counsel for the Adviser or the Fund, at the option
of the Adviser).
(iii) PROTECTION OF THE ADVISER The Adviser shall be protected in any action or
inaction which it takes in reliance on any directions or advice received
pursuant to subsections (i) or (ii) of this paragraph which the Adviser,
after receipt of any such directions or advice in, good faith believes to
be consistent with such directions or advice as the case may be. However,
nothing in this paragraph shall be construed as imposing upon the Adviser
any obligation (i) to seek such directions or advice or (ii) to act in
accordance with such directions or advice when received. Nothing in this
subsection shall excuse the Adviser when an action or omission on the part
of the Adviser constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by the Adviser of its duties under this
Agreement.
3. EXPENSES OF TRUST
The Adviser shall not bear the responsibility for or expenses associated with
operational, accounting or administrative services on behalf of the Fund not
expressly assumed by the Adviser hereunder. 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 the Fund's cash, portfolio securities and
other property;
(b) general operational, administrative and accounting costs, such as the
costs of calculating the Fund's net asset value, the preparation of the
Fund'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
Fund;
(e) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Fund to Federal, state or other U.S. or foreign
governmental agencies;
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(f) the cost of stock certificates representing shares of the Fund;
(g) expenses involved in registering and maintaining registrations of the Fund
and of its shares with the Securities and Exchange Commission 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 required 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 offering documents and literature used for any
promotional purposes);
(j) compensation and travel expenses of Trustees who are not "interested
persons" of the Adviser within the meaning of the 1940 Act;
(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 Fund, 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
Fund shares, and registration and qualification of securities under
Federal, state and other laws;
(m) the expenses of attendance at professional and other meetings of
organizations such as the Investment Company Institute and other trade
groups 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 Fund;
(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 Fund borrowing;
(q) postage; and
(r) any other costs and expenses incurred by the Adviser for Fund operations
and activities, including but not limited to the organizational costs of
the Fund if initially paid by the Adviser.
4. COMPENSATION
For the services and facilities to be provided to the Trust by the Adviser as
provided in Paragraph 2 hereof, the Trust shall pay the Adviser 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 reflected in
the books and records of the Trust in accordance with procedures established
from time to time by or under the direction of the Board of Trustees of the
Trust.
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5. TRUST TRANSACTIONS
The Adviser 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
Fund.
6. RELATIONS WITH TRUST
Subject to and in accordance with the Master Trust Agreement and By-Laws of the
Trust and the Articles of Incorporation and By-Laws of the Adviser,
respectively, it is understood (i) that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers or otherwise; (ii) that directors,
officers, agents and shareholders of the Adviser are or may be interested in the
Trust as Trustees, officers, shareholders or otherwise; and (iii) that the
Adviser (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.
7. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF TRUST
Neither the Adviser 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 Adviser or such persons against any
liability to the Trust or its shareholders to which the Adviser 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.
8. DURATION AND TERMINATION OF AGREEMENT
(a) DURATION
This Agreement shall become effective on the date hereof for the Fund.
Unless terminated as herein provided, this Agreement shall remain in full
force and effect until April 30, 1999 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 Fund, 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) TERMINATION
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 0000 Xxx) of the Fund, or by the
Adviser, on sixty (60) days written notice to the other party.
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(c) AUTOMATIC TERMINATION
This Agreement shall automatically and immediately terminate in the event
of its assignment.
9. PRIOR AGREEMENT SUPERSEDED
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
10. SERVICES NOT EXCLUSIVE
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others
and to engage in other activities.
11. 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.
12. LIMITATION OF LIABILITY
The term Xxx Xxx Funds means and refers to the Trustees from time to time
serving under the Master Trust Agreement of the Trust dated February 6, 1992
(amending the Master Trust Agreement dated April 3, 1985), as the same may
subsequently thereto have been, or subsequently hereto may 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 Master Trust Agreement of the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the Trust, acting as
such, and no 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 Master Trust Agreement.
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:_________________ By:___________________
Secretary Vice President
[SEAL] XXX XXX ASSOCIATES CORPORATION
Attest:_________________ By:___________________
Secretary President
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EXHIBIT A
Annual Advisory Fee
Name of Fund (as a % of average daily net assets)
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Emerging Market Vision Fund 1 % of average daily net assets
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