ADVISORY AGREEMENT
AGREEMENT made as of the 15 day of March, 1996 between BZW
Barclays Global Fund Advisors, a corporation organized under the laws of the
State of California (the "Adviser"), and Foreign Fund, Inc., a Maryland
corporation (the "Company").
WHEREAS, the Adviser is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company proposes to engage in the business of an open-end
management investment company and is registered as such under the 1940 Act; and
WHEREAS, the Company is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Company intends initially to offer shares representing
interests in each of the separate portfolios identified on Schedule A hereto
(each, an "Initial Fund" and collectively, the "Initial Funds"); and
WHEREAS, the Company desires to appoint the Adviser to serve as the
investment adviser with respect to each of the Initial Funds; and
WHEREAS, the Company may, from time to time, offer shares representing
interests in one or more additional portfolios (each, an "Additional Fund" and
collectively, the "Additional Funds"); and
WHEREAS, the Company may desire to appoint the Adviser as the investment
adviser with respect to one or more of the "Additional Funds" (each such
Additional Fund and Initial Fund being referred to herein individually as a
"Fund" and collectively as the "Funds");
NOW THEREFORE, the parties hereto hereby agree as follows:
1. APPOINTMENT OF ADVISER
a. INITIAL FUNDS. The Company hereby appoints the Adviser to act as
investment adviser for the Initial Funds 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.
b. ADDITIONAL FUNDS. In the event the Company desires to retain the
Adviser to render investment advisory services hereunder with respect
to any Additional Fund, it shall so notify the Adviser in writing,
indicating the
advisory fee to be payable with respect to the Additional Fund. If the
Adviser is willing to render such services for such fee and on the terms
provided for herein, it shall so notify the Company in writing, whereupon
such Additional Fund shall become a Fund hereunder.
2. DUTIES OF THE ADVISER
The Adviser, at its own expense (subject to the overall supervision and
review of the Board of Directors of the Company), shall (i) furnish
continuously an investment program for each Fund in compliance with that
Fund's investment objective and policies, as set forth in the then current
prospectus and statement of additional information for such Fund contained
in the Company's Registration Statement on Form N-1A, as such prospectus
and statement of additional information is amended or supplemented from
time to time, (ii) determine what investments shall be purchased, held,
sold or exchanged for each Fund and what portion, if any, of the assets of
each Fund shall be held uninvested, (iii) make changes on behalf of the
Company in the investments for each Fund and (iv) provide the Company with
records concerning the Adviser's activities that the Company is required to
maintain and render reports to the Company's officers and Board of
Directors concerning the Adviser's discharge of the foregoing
responsibilities. The Adviser shall furnish to the Company all office
facilities, equipment, services and executive and administrative personnel
necessary for managing the investment program of the Company for each Fund.
3. ALLOCATION OF EXPENSES
Except for expenses incurred by the Adviser in providing the services set
forth in Paragraph 2 above, the Company assumes and shall pay all expenses
for all other Company operations and activities. The expenses to be borne
by the Company shall include, without limitation:
(1) all expenses of organizing the Company or forming any series
thereof;
(2) all expenses (including information, materials and services other
than services of the Adviser) of preparing, printing and mailing
all annual, semiannual and periodic reports, proxy materials and
other communications (including registration statements,
prospectuses and amendments and revisions thereto) furnished to
existing shareholders of the Company and/or regulatory
authorities;
(3) fees involved in registering and maintaining registration of the
Company and its shares with the Securities and Exchange
Commission and state regulatory authorities;
(4) any other registration, filing or other fees in connection with
requirements of regulatory authorities;
(5) expenses, including the cost of printing of certificates relating
to the issuance of shares of the Company;
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(6) to the extent not paid by the Company's distributor, the expenses
of maintaining a shareholder account and furnishing, or causing
to be furnished, to each shareholder a statement of account,
including the expense of mailing such statements;
(7) taxes and similar fees payable by the Company;
(8) expenses related to the redemption of its shares;
(9) all issue and transfer taxes, brokers' commissions and other
costs chargeable to the Company in connection with securities
transactions to which the Company is a party, including any
portion of such commissions attributable to research and
brokerage services as defined by Section 28(e) of the Securities
Exchange Act of 1934, as amended from time to time (the "1934
Act");
(10) the charges and expenses of the custodian appointed by the
Company, or any depository utilized by such custodian, for the
safekeeping of its property;
(11) the charges and expenses of any lending agent appointed by the
Company and all borrowers' rebates and similar fees payable by
the Company in connection with any loan transaction;
(12) charges and expenses of any administrator and/or accounting and
recordkeeping agent appointed by the Company;
(13) charges and expenses of any shareholder servicing agent, transfer
agent and registrar appointed by the Company, including costs of
servicing shareholder investment accounts;
(14) charges and expenses of independent accountants retained by the
Company;
(15) legal fees and expenses in connection with the affairs of the
Company, including legal fees and expenses in connection with
registering and qualifying its shares with federal and state
regulatory authorities;
(16) compensation and expenses of Directors of the Company who are not
"affiliated persons" (as defined in the 0000 Xxx) of the Adviser;
(17) expenses of shareholders' and Directors' meetings;
(18) membership dues in, and assessments of, the Investment Company
Institute or similar organizations;
(19) insurance premiums on fidelity, errors and omissions and other
coverages;
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(20) expenses incurred in connection with any distribution plan
adopted by the Company in compliance with Rule 12b-1 of the 1940
Act; and
(21) such other non-recurring expenses of the Company as may arise,
including expenses of actions, suits, or proceedings to which the
Company is a party and the legal obligation which the Company may
have to indemnify its Directors or shareholders with respect
thereto.
4. ADVISORY FEE
For the services to be provided by the Adviser hereunder with respect to
each Fund, the Company shall pay to the Adviser an annual gross investment
advisory fee equal to the amount set forth on Schedule A attached hereto.
Schedule A shall be amended from time to time to reflect the addition
and/or termination of any Fund as a Fund hereunder and to reflect any
change in the advisory fees payable with respect to any Fund duly approved
in accordance with Section 7(b) hereunder. All fees payable hereunder
shall be accrued daily and paid as soon as practical after the last day of
each calendar quarter.
In the case of commencement or termination of this Agreement with respect
to any Fund during any calendar quarter, the fee with respect to such Fund
for that quarter shall be reduced proportionately based upon the number of
calendar days during which it is in effect, and the fee shall be computed
upon the average daily net assets of such Fund for the days during which it
is in effect.
5. PORTFOLIO TRANSACTIONS
In connection with the management of the investment and reinvestment of the
assets of the Company, the Adviser, acting by its own officers, directors
or employees, is authorized to select the brokers or dealers that will
execute purchase and sale transactions for the Company. In executing
portfolio transactions and selecting brokers or dealers, if any, the
Adviser will use its best efforts to seek on behalf of a 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 the breadth of the market in and 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, if any, 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 0000
Xxx) provided to any Fund of the Company. The Adviser may 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, but only if, the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided. The Company acknowledges that any such
research may be useful to the Adviser in connection with other accounts
managed by it.
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6. LIABILITY OF ADVISER
a. Neither the Adviser nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of
judgment or mistake of law or for any loss suffered by the Company or
its shareholders in connection with the matters to which this
Agreement relates; provided that no provision of this Agreement shall
be deemed to protect the Adviser against any liability to the Company
or its shareholders to which it 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.
b. The Company, on behalf of each Fund, hereby agrees to indemnify and
hold harmless the Adviser, its directors, officers and employees and
each person, if any, who controls the Adviser (collectively, the
"Indemnified Parties") against any and all losses, claims, damages or
liabilities (including reasonable attorneys fees and expenses), joint
or several, relating to a Fund, to which any such Indemnified Party
may become subject under the Securities Act of 1933, as amended (the
1933 Act ), the 1934 Act, the Investment Advisers Act of 1940, as
amended, the 1940 Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission to
state a material fact required to be stated or necessary to make the
statements made not misleading in (x) the Registration Statement or
the prospectus, (y) any advertisement or sales literature authorized
by the Company for use in the offer and sale of shares of the Fund, or
(z) any application or other document filed in connection with the
qualification of the Company or shares of the Fund under the Blue Sky
or securities laws of any jurisdiction, except insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission (1) in a document prepared by the
Adviser, or (2) made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Adviser
pertaining to or originating with the Adviser for use in connection
with any document referred to in clauses (x), (y) or (z), or (ii)
subject in each case to clause (i) above, the Adviser acting as
investment adviser to the Company with respect to the Fund;
c. It is understood, however, that nothing in this paragraph 6 shall
protect any Indemnified Party against, or entitle any Indemnified
Party to, indemnification against any liability to the Company or its
shareholders to which such Indemnified Party is subject, by reason of
its willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of any reckless disregard of
its obligations and duties, under this Agreement or otherwise to an
extent or in a manner inconsistent with Section 17(i) of the 1940 Act.
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7. DURATION AND TERMINATION OF THIS AGREEMENT
a. DURATION. This Agreement shall become effective with respect to
each Initial Fund on the date hereof and, with respect to any
Additional Fund, on the date specified in the written notice
received by the Company from the Adviser in accordance with
paragraph 1(b) hereof that the Adviser is willing to serve as
Adviser with respect to such Fund. Unless terminated as herein
provided, this Agreement shall remain in full force and effect
for two years from the date hereof with respect to each Initial
Fund and, with respect to each Additional Fund, for two years
from the date on which such Fund becomes a Fund hereunder.
Subsequent to such initial periods of effectiveness, this
Agreement shall continue in full force and effect for periods of
one year thereafter with respect to each Fund so long as such
continuance with respect to such Fund is approved at least
annually (i) by either the Directors of the Company or by vote of
a majority of the outstanding voting securities (as defined in
the 0000 Xxx) of such Fund, and (ii), in either event, by the
vote of a majority of the Directors of the Company 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. AMENDMENT. Any amendment to this Agreement shall become
effective with respect to a Fund upon approval of the Adviser and
of a majority of directors 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 such approval and a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that Fund.
c. TERMINATION. This Agreement may be terminated with respect to
any Fund at any time, without payment of any penalty, by vote of
the Directors or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that Fund, or by the
Adviser, in each case on sixty (60) days' prior written notice to
the other party; provided, that a shorter notice period shall be
permitted for a Fund in the event its shares are no longer listed
on a national securities exchange.
d. AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its "assignment" (as
defined in the 1940 Act).
e. APPROVAL, AMENDMENT OR TERMINATION BY A FUND. Any approval,
amendment or termination of this Agreement by the holders of a
"majority of the outstanding voting securities" (as defined in
the 0000 Xxx) of any Fund shall be effective to continue, amend
or terminate this Agreement with respect to any such Fund
notwithstanding (i) that such action has not been approved by the
holders of a majority of the outstanding voting securities of any
other Fund affected thereby, and (ii) that such action has not
been approved by the vote of a majority of the outstanding voting
securities of the Company, unless such action shall be required
by any applicable law or otherwise.
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8. SERVICES NOT EXCLUSIVE
The services of the Adviser to the Company hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to
others so long as its services hereunder are not impaired thereby.
9. MISCELLANEOUS
a. NOTICE. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate in
writing for the receipt of such notices.
b. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder shall not be thereby affected.
c. APPLICABLE LAW. This Agreement shall be construed in accordance
with and governed by the laws of New York.
d. EXECUTION BY COUNTERPART. This Agreement may be executed in any
number of counterparts, all of which together shall constitute
one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
FOREIGN FUND, INC.
By: /s/ Xxxxxx Most
--------------------------------
Name: Xxxxxx Most
Title: President
BZW BARCLAYS GLOBAL FUND ADVISORS
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Fiduciary,
Compliance Officer
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
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SCHEDULE A
ADVISORY FEE FOR THE INITIAL FUNDS:
.27% per annum of the aggregate net assets of the Initial Funds less than or
equal to $1.7 billion, plus .15% per annum of the aggregate net assets of the
Initial Funds between $1.7 billion and $7 billion, plus .12% per annum of the
aggregate net assets of the Initial Funds between $7 billion and $10 billion
plus .08% per annum of the aggregate net assets of the Initial Funds in excess
of $10 billion.
INITIAL FUNDS:
Australia Index Series
Austria Index Series
Belgium Index Series
Canada Index Series
France Index Series
Germany Index Series
Hong Kong Index Series
Italy Index Series
Japan Index Series
Malaysia Index Series
Mexico (Free) Index Series
Netherlands Index Series
Singapore (Free) Index Series
Spain Index Series
Sweden Index Series
Switzerland Index Series
United Kingdom Index Series
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