FIRST EAGLE TRUST
INVESTMENT ADVISORY AGREEMENT
Agreement, made as of 27th day of February 1998, between FIRST
EAGLE TRUST, a Delaware business trust (the "Trust"), and XXXXXXX AND X.
XXXXXXXXXXXX ADVISERS, INC., a registered investment adviser organized under the
laws of the State of Delaware (the "Adviser"),
WITNESSETH:
WHEREAS, the Trust is a non-diversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), and its shares of beneficial interest ("Shares") are
registered under the Securities Act of 1933;
WHEREAS, the Trust is authorized to issue Shares in Series and
initially intends to offer two Series, the First Eagle Fund of America and the
First Eagle International Fund (individually the "Fund" and collectively with
any subsequently formed Series the "Funds"); and
WHEREAS, the Trust desires to retain the Adviser to render
investment advisory services to the Trust, and the Adviser is willing to render
such services;
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Adviser to act as investment
adviser to the Trust and the initial Funds, and any other Funds as agreed upon
by the Adviser and Trust, for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Trustees of the
Trust, the Adviser shall manage the investment operations of the Trust and the
Funds and the composition of the Funds' portfolios, including the purchase,
retention and disposition thereof, in accordance with the Funds' investment
objectives, policies and restrictions as stated in the Prospectus and Statement
of Additional Information of the Trust and subject to the following
understandings:
(a) The Adviser shall provide supervision of the Funds'
investments and determine from time to time what investments,
securities or commodity futures contracts and options thereon
("futures") will be purchased, retained, sold or loaned by the Funds,
and what portion of the assets will be invested or held uninvested as
cash.
(b) The Adviser shall use its best judgment in the performance
of its duties under this Agreement.
(c) The Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Agreement and Declaration of Trust, ByLaws, Prospectus and Statement of
Additional Information of the Trust and with the instructions and
directions of the Board of Trustees of the Trust and will conform to
and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations.
(d) The Adviser shall determine the securities and futures to
be purchased or sold by the Funds and will place orders pursuant to its
determinations with or through such persons, brokers, dealers or
futures commission merchants (including Xxxxxxx and S. Bleichroeder,
Inc., which owns the Adviser) in conformity with the policy with
respect to brokerage as set forth in the Trust's Prospectus and
Statement of Additional Information or as the Board of Trustees may
direct from time to time. In providing the Trust and the Funds with
investment management, it is recognized that the Adviser will give
primary consideration to securing most favorable prices and efficient
executions. Consistent with this policy, the Adviser may consider the
financial responsibility, research and investment information and other
services provided by brokers, dealers or futures commission merchants
who may effect or be a party to any such transaction or other
transactions to which other clients of the Adviser may be a party. It
is understood that neither the Trust nor the Adviser has adopted a
formula for allocation of the Funds' investment business. It is also
understood that it is desirable for the Trust and the Funds that the
Adviser have access to supplemental investment and market research and
security and economic analysis provided by brokers or futures
commission merchants who may execute brokerage transactions at a higher
cost to the Trust and the Funds than may result when allocating
brokerage to other brokers or futures commission merchants on the basis
of seeking the most favorable prices and efficient executions.
Therefore, the Adviser is authorized to place orders for the purchase
and sale of securities or futures for the Trust and the Funds with such
brokers or futures commission merchants, subject to review by the
Trust's Board of Trustees, from time to time, with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers or futures commission merchants may
be useful to the Adviser in connection with its services to other
clients.
On occasions when the Adviser deems the purchase or sale of a
security or a futures contract to be in the best interest of the Trust
and the Funds as well as other clients, the Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities or futures contract to be so
sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities or futures contract so purchased or sold,
as well as the expenses incurred in the transaction, will be made by
the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and the Funds
and to such other clients.
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(e) The Adviser shall maintain all books and records with
respect to the Trust and the Funds' portfolio transactions that the
Trust is required to keep under Rule 31a-1 under the 1940 Act.
(f) The Adviser shall provide the Trust's Custodian and the
Trust on each business day with information relating to all
transactions concerning the Funds' assets.
(g) The investment management services provided by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free
to render similar services to others.
3. The Trust has delivered to the Adviser copies of each of
the following documents and will deliver to it all future amendments
and supplements, if any:
(a) The Agreement and Declaration of Trust filed with the
State of Delaware (such Agreement and Declaration of Trust, as in
effect on the date hereof and as amended from time to time, is herein
called the "Agreement and Declaration of Trust");
(b) The By-Laws of the Trust (such By-Laws, as in effect on
the date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Board of Trustees of the
Trust authorizing the appointment of the Adviser and approving the form
of this Agreement;
(d) The Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission") relating to the Trust and the Trust's Shares and all
amendments thereto;
(e) The Trust's Notification of Registration of under the 1940
Act on Form N-8A as filed with the Commission and all amendments
thereto; and
(f) Prospectus and Statement of Additional Information of the
Trust (such Prospectus and Statement of Additional Information, as
currently in effect and as amended or supplemented, from time to time,
being herein called the "Prospectus").
4. The Adviser shall authorize and permit any of its
directors, officers and employees who may be elected as trustees or officers of
the Trust to serve in the capacities in which they are elected. Services to be
furnished by the Adviser under this Agreement may be furnished through the
medium of any of such directors, officers or employees.
5. The Adviser shall keep the Trust's books and records
required to be maintained by it pursuant to paragraph 2 hereof. The Adviser
agrees that all records which it maintains for the Trust are the property of the
Trust and it will surrender promptly to the Trust
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any of such records upon the Trust's request. The Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 of the Commission under the
1940 Act any such records as are required to be maintained by the Adviser
pursuant to paragraph 2 hereof.
6. For the services provided pursuant to this Agreement by the
Investment Adviser, the Trust will pay monthly an investment management fee at
the annual rate of 1.00% of the average daily net assets First Eagle Fund of
America and at the annual rate of 1.00% of the average daily net assets First
Eagle International Fund. Net assets of the Funds shall be computed on such days
and at such time or times as described in the Trust's then-current Prospectus
and Statement of Additional Information. Upon any termination of this Agreement
before the end of any month, the fee for such part of a month shall be prorated
and shall be payable upon the date of termination of this Agreement.
7. The Adviser shall not be liable for any error of judgment
or for any loss suffered by the Trust or the Funds in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 0000 Xxx) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for a period of
more than two years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by the
Trust at any time, without the payment of any penalty, by the Board of Trustees
of the Trust or by vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the Trust, or by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall terminate automatically
in the event of its assignment (as defined in the 0000 Xxx) by the Adviser.
9. Nothing in this Agreement shall limit or restrict the right
of any of the Adviser's directors, officers, or employees who may also be a
trustee, officer or employee of the Trust to engage in any other business or to
devote time and attention in part to the management or other aspects of any
business, whether of a similar or a dissimilar nature, nor limit or restrict the
Adviser's right to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
10. Except as otherwise provided herein or authorized by the
Board of Trustees of the Trust, from time to time, the Adviser shall for all
purposes herein be deemed to be an independent contractor and shall have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
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11. During the term of this Agreement, the Trust agrees to
furnish the Adviser at its principal office all prospectuses, proxy statements,
reports to Shareholders, sales literature, or other material prepared for
distribution to Shareholders of the Trust or the public, which refer to the
Adviser in any way, prior to use thereof and not to use such material if the
Adviser reasonably objects in writing within five business days (or such other
time as may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Trust will continue to furnish to the Adviser
copies of any of the above-mentioned materials which refer in any way to the
Adviser. Sales literature may be furnished to the Adviser hereunder by first
class or overnight mail, facsimile transmission equipment or hand delivery. The
Trust shall furnish or otherwise make available to the Adviser such other
information relating to the business affairs of the Trust as the Adviser at any
time, or from time to time, reasonably requests in order to discharge its
obligations hereunder.
12. This Agreement constitutes the entire Agreement between
the parties with respect to the subject matter hereof. This Agreement may be
amended by mutual consent, but the consent of the Trust must be approved in
conformity with the requirements of the 1940 Act.
13. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Adviser at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: President; or (2) to the Trust at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: President.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. The Trust may use the name "First Eagle" in connection
with the name of the Trust or any of the Funds or any name including Xxxxxxx and
X. Xxxxxxxxxxxx or any variant thereof, only for so long as this Agreement or
any extension, renewal or amendment hereof remain in effect, including any
similar agreement with any organization which shall have succeeded to the
Adviser's business as investment adviser, or the Distribution and Services
Agreement between the Trust and Xxxxxxx and S. Bleichroeder, Inc. (the
"Distributor") or any extension, renewal or amendment thereof, remains in
effect, including any similar agreement with any organization which shall have
succeeded to the Distributor's business as distributor. At such time as such
Agreement shall no longer be in effect, the Trust will (to the extent that it
lawfully can) cease to use such a name or any other name indicating that it is
advised by, managed by or otherwise connected with the Adviser, the Distributor
or any organization which shall have so succeeded to such businesses. In no
event shall the Trust use the name "Xxxxxxx and X. Xxxxxxxxxxxx" or any variant
thereof if the Adviser's or Distributor's functions are transferred or assigned
to a company of which Xxxxxxx and S. Bleichroeder, Inc. does not have control.
In the event that such Agreement shall no longer be in effect or the Adviser's
or Distributor's functions are transferred or assigned to a company of which
Xxxxxxx and X. Xxxxxxxxxxxx, Inc. does not have control, the Trust shall use its
best efforts to legally change its name by filing the required documentation
with appropriate state and federal agencies.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
FIRST EAGLE TRUST
By: /s/ Xxxxxx Xxxxx
________________________________________
By: /s/ Xxxxx X. Xxxxxxxx
________________________________________
XXXXXXX AND S. BLEICHROEDER ADVISERS, INC.
By: /s/ Xxxx X. Xxxxxxx
________________________________________
By:________________________________________
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