INVESTMENT ADVISORY AGREEMENT
Agreement made this 11th day of February, 1998 between
Xxxxxx Value Fund, Inc., a Maryland corporation (the "Fund"),
and Xxxxxx Investment Advisors LLC a New Jersey Limited Liability Company
(the "Adviser").
W I T N E S S E T H:
WHEREAS, the Fund is in the process of registering with the
Securities and Exchange Commission under the Investment Company Act of
1940 (the "Act") as an open-end management investment company consisting
initially of one series Xxxxxx Value Fund; and
WHEREAS, the Fund desires to retain the Adviser, which is an
investment adviser registered under the Investment Advisers Act of 1940,
as the investment adviser for the Fund.
NOW, THEREFORE, the Fund and the Adviser do mutually promise
and agree as follows:
1. Employment. The Fund hereby employs the Adviser to
manage the investment and reinvestment of the assets of the Fund for the
period and on the terms set forth in this Agreement. The Adviser hereby
accepts such employment for the compensation herein provided and agrees
during such period to render the services and to assume the obligations
herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and
manage the investment portfolio of the Fund, and, subject to such policies
as the directors of the Fund may determine, direct the purchase and
sale of investment securities in the day-to-day management of the Fund.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized,
have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund. However, one or more
shareholders, officers, directors or employees of the Adviser
may serve as directors and/or officers of the Fund, but without
compensation or reimbursement of expenses for such services from the
Fund. Nothing herein contained shall be deemed to require the Fund
to take any action contrary to its Articles of Incorporation or By-Laws or
any applicable statute or regulation, or to relieve or deprive the
directors of the Fund of their responsibility for, and control of, the
affairs of the Fund.
3. Expenses to be paid by the Adviser. The Adviser, at its own
expense and without reimbursement from the Fund, shall furnish
office space, and all necessary office facilities, equipment and executive
personnel for managing the investments of the Fund.
4. Expenses to be paid by The Fund. The Fund shall pay
expenses incident to its operations and business including without
limitation: the costs of preparing and distributing prospectuses mailed to
shareholders, the expense of registering its shares with the Securities and
Exchange Commission and in various states, director and officer liability
insurance, reports to government authorities, reports to shareholders, proxy
statements, compensation of directors other than those affiliated with the
Adviser, interest charges, taxes, legal expenses, association membership
dues, auditing and accounting services, brokerage and other expenses
connected with the execution of portfolio securities transactions, custodial
fees, expenses of dividend disbursing agents, registrars and stock transfer
agents and the cost of keeping all necessary shareholder records and
accounts, bond insurance required by regulation, expenses of maintaining
registration of the Fund under the 1940 Act and 1933 Act and Adviser
fees pursuant to paragraph 6.
5. Limitation of expenses of the Fund. The total expenses of
the Fund, excluding taxes, interest and extraordinary litigation expenses,
during any of the Fund's fiscal years, shall not exceed the lesser of
(i) 1.50% of its average daily net asset value in such year or (ii) the most
restrictive limits prescribed by any state in which the Fund's shares are
then being offered for sale, or the Adviser agrees to reimburse the Fund
for any sums expended for such expenses in excess of that amount.
6. Compensation of the Adviser. For the services and
facilities to be rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Fund, shall pay to the Adviser an advisory fee,
paid monthly, based on the average net assets of the Fund, as determined by
valuations made as of the close of each business day of the month. The
advisory fee shall be 1/12 of 1% (1% per annum) of such average net assets.
For any month in which this Agreement is not in effect for the entire month,
such fee shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee computed upon the
average net assets of the business days during which it is so in effect.
7. Ownership of Shares of the Fund. Except in connection with
the initial capitalization of the Fund, the Adviser shall not take, and
shall not permit any of its shareholders, officers, directors or employees
to take, a long or short position in the shares of the Fund, except for
the purchase of shares of the Fund for investment purposes at the same
price as that available to the public at the time of purchase.
8. Exclusivity. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive and the Adviser shall be free to
furnish similar services to others as long as the services hereunder are
not impaired thereby. Although the Adviser has permitted and is
permitting the Fund to use the name "Xxxxxx," it is understood
and agreed that the Fund will not use such name if the Adviser ceases to be
the Fund's sole investment adviser. During the period that this Agreement is
in effect, the Adviser shall be the Fund's sole investment adviser.
9. Liability. 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 Fund or to any shareholder of the Fund for any act or
omission in the course of, or connected with, rendering services
hereunder, or for any losses that may be sustained in the purchase,
holding or sale of any security.
10. Brokerage Commissions. The Adviser may cause the Fund to
pay a broker-dealer which provides brokerage and research services, as
such services are defined in Section 28(e) of the Securities Exchange Act
of 1934 (the "Exchange Act"), to the Adviser a commission for effecting a
securities transaction in excess of the amount another broker-dealer would
have charged for effecting such transaction, if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the
value of brokerage and research services provided by the executing
broker-dealer viewed in terms of either that particular transaction or his
overall responsibilities with respect to the accounts as to which he
exercises investment discretion (as defined in Section 3(a)(35) of the
Exchange Act).
11. Amendments. This Agreement may be amended by the mutual
consent of the parties; provided, however, that in no event may it be
amended without the approval of the directors of the Fund in the manner
required by the Act, and, if required by the Act, by the vote of the
majority of the outstanding voting securities of the Fund, as defined in
the Act.
12. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the directors of the Fund or by
a vote of the majority of the outstanding voting securities of the Fund,
as defined in the Act, upon giving sixty (60) days' written notice to the
Adviser. This Agreement may be terminated by the Adviser at any time upon
the giving of sixty (60) days' written notice to the Fund. This
Agreement shall terminate automatically in the event of its assignment (as
defined in Section 2(a)(4) of the Act). Subject to prior termination as
hereinbefore provided, this Agreement shall continue in effect for two (2)
years from the date hereof and indefinitely thereafter, but only so long
as the continuance after such two (2) year period is specifically approved
annually by (i) the directors of the Fund or by the vote of the
majority of the outstanding voting securities of the Fund, as defined in
the Act, and (ii) the directors of the Fund in the manner required by
the Act, provided that any such approval may be made effective not more
than sixty (60) days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day first above written.
Xxxxxx Investment Advisors LLC Xxxxxx Value Fund, Inc.
(the "Adviser") (the "Fund")
By: /s/ Xxxxxxx X Xxxxxx By: /s/ Xxxxxxx X Xxxxxx
(President) (President)
Attest: /s/ Xxxxx X Xxxxxxx
(Secretary)
