FORM OF
ASIAN SMALL COMPANIES PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this day of April, 1996 between Asian Small
Companies Portfolio, a New York trust (the "Trust"), and Xxxxx Xxxxxx
Investment Management (Bermuda) Limited, a Bermuda corporation (the
"Adviser").
1. Duties of the Adviser. The Trust hereby employs the
Adviser to act as investment adviser for and to manage the investment and
reinvestment of the assets of the Trust, subject to the supervision of the
Trustees of the Trust, for the period and on the terms set forth in this
Agreement.
The Adviser hereby accepts such employment, and undertakes to
afford to the Trust the advice and assistance of the Adviser's
organization in the choice of investments and in the purchase and sale of
securities for the Trust and to furnish for the use of the Trust office
space and all necessary office facilities, equipment and personnel for
servicing the investments of the Trust and to pay the salaries and fees of
all officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating
to research and investment activities. The Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except as
otherwise expressly provided or authorized, have no authority to act for
or represent the Trust in any way or otherwise be deemed an agent of the
Trust.
The Adviser shall provide the Trust with such investment
management and supervision as the Trust may from time to time consider
necessary for the proper supervision of the Trust's investments. As
investment adviser to the Trust, the Adviser shall furnish continuously an
investment program and shall determine from time to time what securities
shall be purchased, sold or exchanged and what portion of the Trust's
assets shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and registration
statement of the Trust under the Investment Company Act of 1940, all as
from time to time amended. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the
Trust and notify the Adviser thereof in writing, the Adviser shall be
bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination has been
revoked. The Adviser shall take, on behalf of the Trust, all actions
which it deems necessary or desirable to implement the investment policies
of the Trust.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the Trust with brokers or dealers
or banks or firms or other persons selected by the Adviser, and to that
end the Adviser is authorized as the agent of the Trust to give
instructions to the custodian of the Trust as to deliveries of securities
and payment of cash for the account of the Trust. In connection with the
selection of such brokers or dealers or banks or firms or other persons
and the placing of such orders, the Adviser shall use its best efforts to
seek to execute security transactions at prices which are advantageous to
the Trust and (when a disclosed commission is being charged) at reasonably
competitive commission rates. In selecting brokers or dealers qualified
to execute a particular transaction, brokers or dealers may be selected
who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Adviser and the Adviser is expressly authorized to pay any broker or
dealer who provides such brokerage and research services a commission for
executing a security 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 amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities which
the Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. Subject to the requirement set forth
in the second sentence of this paragraph, the Adviser is authorized to
consider, as a factor in the selection of any broker or dealer with whom
purchase or sale orders may be placed, the fact that such broker or dealer
has sold or is selling shares of any one or more investment companies
sponsored by the Adviser or its affiliates or shares of any other
investment company or series thereof that invests substantially all of its
assets in the Trust.
The Adviser shall not be responsible for providing certain
special administrative services to the Trust under this Agreement. Xxxxx
Xxxxx Management, in its capacity as Administrator of the Trust, shall be
responsible for providing such services to the Trust under the Trust's
separate Administration Agreement with the Administrator.
2. Compensation of the Adviser. For the services, payments
and facilities to be furnished hereunder by the Adviser, the Adviser shall
be entitled to receive from the Trust, a monthly advisory fee computed by
applying the annual asset rate applicable to that portion of the average
daily net assets of the Trust throughout the month in each Category as
indicated below:
Annual
Category Average Daily Net Assets Asset
Rate
1 less than $500 million 0.75%
2 $500 million but less than $1 billion 0.70%
3 $1 billion but less than $1.5 billion 0.65%
4 $1.5 billion but less than $2 billion 0.60%
5 $2 billion but less than $3 billion 0.55%
6 $3 billion and over 0.50%
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Such advisory fee shall be paid monthly in arrears on the last
business day of each month. The Trust's net asset value shall be computed
in accordance with the Declaration of Trust of the Trust and any
applicable votes and determinations of the Trustees of the Trust. In case
of initiation or termination of the Agreement during any month, the fee
for that month shall be based on the number of calendar days during which
it is in effect.
The Adviser may, from time to time, waive all or a part of the
above compensation.
3. Allocation of Charges and Expenses. It is understood
that the Trust will pay all its expenses other than those expressly stated
to be payable by the Adviser hereunder, which expenses payable by the
Trust shall include, without implied limitation, (i) expenses of
maintaining the Trust and continuing its existence, (ii) registration of
the Trust under the Investment Company Act of 1940, (iii) commissions,
fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting
and legal expenses, (v) taxes and interest, (vi) governmental fees, (vii)
expenses of issue, sale and redemption of Interests in the Trust, (viii)
expenses of registering and qualifying the Trust and Interests in the
Trust under federal and state securities laws and of preparing and
printing registration statements or other offering documents or memoranda
for such purposes and for distributing the same to Holders and investors,
and fees and expenses of registering and maintaining registrations of the
Trust and of the Trust's placement agent as broker-dealer or agent under
state securities laws, (ix) expenses of reports and notices to Holders and
of meetings of Holders and proxy solicitations therefor, (x) expenses of
reports to governmental officers and commissions, (xi) insurance expenses,
(xii) association membership dues, (xiii) fees, expenses and disbursements
of custodians and subcustodians for all services to the Trust (including
without limitation safekeeping of funds, securities and other investments,
keeping of books, accounts and records, and determination of net asset
values, book capital account balances and tax capital account balances),
(xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, Holder servicing agents and registrars for all services
to the Trust, (xv) expenses for servicing the accounts of Holders, (xvi)
any direct charges to Holders approved by the Trustees of the Trust,
(xvii) compensation and expenses of Trustees of the Trust who are not
members of the Adviser's organization, (xviii) the administration fees
payable by the Trust under any administration or similar agreement to
which the Trust is a party, and (xvix) such non-recurring items as may
arise, including expenses incurred in connection with litigation,
proceedings and claims and the obligation of the Trust to indemnify its
Trustees, officers and Holders with respect thereto.
4. Other Interests. It is understood that Trustees and
officers of the Trust and Holders of Interests in the Trust are or may be
or become interested in the Adviser as directors, officers, employees,
shareholders or otherwise and that directors, officers, employees and
shareholders of the Adviser are or may be or become similarly interested
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in the Trust, and that the Adviser may be or become interested in the
Trust as a shareholder or otherwise. It is also understood that
directors, officers, employees and shareholders of the Adviser may be or
become interested (as directors, trustees, officers, employees,
shareholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Adviser may
organize, sponsor or acquire, or with which it may merge or consolidate,
and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with
such other companies or entities.
5. Limitation of Liability of the Adviser. The services of
the Adviser to the Trust are not to be deemed to be exclusive, the Adviser
being free to render services to others and engage in other business
activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of the Adviser, the Adviser shall not be subject to liability to the
Trust or to any Holder for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses which may
be sustained in the acquisition, holding or disposition of any security or
other investment.
6. Duration and Termination of this Agreement. This
Agreement shall become effective upon the date of its execution, and,
unless terminated as herein provided, shall remain in full force and
effect through and including February 28, 1998 and shall continue in full
force and effect indefinitely thereafter, but only so long as such
continuance after February 28, 1998 is specifically approved at least
annually (i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested
persons of the Adviser or the Trust cast in person at a meeting called for
the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Agreement without the payment
of any penalty, by action of the Trustees of the Trust or the directors of
the Adviser, as the case may be, and the Trust may, at any time upon such
written notice to the Adviser, terminate this Agreement by vote of a
majority of the outstanding voting securities of the Trust. This
Agreement shall terminate automatically in the event of its assignment.
7. Amendments of the Agreement. This Agreement may be
amended by a writing signed by both parties hereto, provided that no
amendment to this Agreement shall be effective until approved (i) by the
vote of a majority of those Trustees of the Trust who are not interested
persons of the Adviser or the Trust cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by vote of a majority of
the outstanding voting securities of the Trust.
8. Limitation of Liability. The Adviser expressly
acknowledges the provision in the Declaration of Trust of the Trust
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(Sections 5.2 and 5.6) limiting the personal liability of the Trustees and
officers of the Trust, and the Adviser hereby agrees that it shall have
recourse to the Trust for payment of claims or obligations as between the
Trust and the Adviser arising out of this Agreement and shall not seek
satisfaction from any Trustee or officer of the Trust.
9. Certain Definitions. The terms "assignment" and
"interested persons" when used herein shall have the respective meanings
specified in the Investment Company Act of 1940 as now in effect or as
hereafter amended subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities"
shall mean the vote, at a meeting of Holders, of the lesser of (a) 67 per
centum or more of the Interests in the Trust present or represented by
proxy at the meeting if the Holders of more than 50 per centum of the
outstanding Interests in the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding Interests
in the Trust. The terms "Holders" and "Interests" when used herein shall
have the respective meanings specified in the Declaration of Trust of the
Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the day and year first above written.
ASIAN SMALL COMPANIES PORTFOLIO XXXXX XXXXXX INVESTMENT
MANAGEMENT (BERMUDA) LIMITED
By:______________________________ By:________________________
President Vice President
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