AMENDMENT NUMBER ONE
TO THE
INVESTMENT ADVISORY AGREEMENT
This Amendment Number One,
dated November 1, 2004, to the
Investment Advisory
Agreement dated May 31, 1997
(the Agreement) by and between Xxx Xxxxxx
Corporate Bond Fund, a Delaware
statutory trust (the Fund, and Xxx Xxxxxx Asset
Management (the Adviser, successor
in interest of Xxx Xxxxxx Asset Management,
Inc.), a Delaware statutory trust,
hereby amends the terms and conditions of the
Agreement in the manner specified herein.
W I T N E S S E T H
WHEREAS, the Board of Trustees of the
Fund at a meeting held on September 23, 2004
has approved a change in the investment
advisory fee payable by the Fund to the
Adviser; and
WHEREAS, the parties desire to amend
and restate Section 3 of the Agreement relating
to the investment advisory fee.
NOW THEREFORE, in consideration of the
foregoing and the mutual covenants and
agreements hereinafter contained, the
parties hereby agree to amend the Agreement, as
follows: Section 3 of the Agreement is hereby
deleted in its entirety and replaced with the
following:
3. Compensation Payable to the Adviser.
The Fund shall pay to the Adviser, as
compensation for the services rendered, facilities
furnished and expenses paid by the Adviser,
a monthly fee computed at the following
annual rate:
AVERAGE DAILY FEE AS A PERCENT PER ANNUM
NET ASSETS OF AVERAGE DAILY NET ASSETS
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First $500 million 0.42%
Next $750 million 0.35%
Over $1.25 billion 0.22%
Average daily net assets shall be
determined by taking the average of the net assets for
each business day during a given calendar
month calculated in the manner provided in the
Fund's Declaration of Trust. Such fee
shall be payable for each calendar month as soon
as practicable after the end of that month.
The fees payable to the Adviser by the
Fund pursuant to this Section 3 shall be reduced
by any commissions, tender solicitation
and other fees, brokerage or similar payments
received by the Adviser, or any other
direct or indirect majority owned subsidiary of Xxx
Xxxxxx Investments Inc., in connection
with the purchase and sale of portfolio
investments of the Fund, less any direct
expenses incurred by such person, in connection
with obtaining such commissions, fees,
brokerage or similar payments. The Adviser
shall use its best efforts to recapture
all available tender offer solicitation fees and
exchange offer fees in connection with the
Funds portfolio transactions and shall advise
the Trustees of any other commissions,
fees, brokerage or similar payments which may
be possible for the Adviser or any other
direct or indirect majority owned subsidiary of
Xxx Xxxxxx Investments Inc. to receive in
connection with Funds portfolio transactions
or other arrangements which may benefit the Fund.
In the event that the ordinary business
expenses of the Fund for any fiscal year should
exceed 1.5% of the first $30 million of the
Funds average daily net assets plus 1% of any
excess over $30 million, the compensation due the
Adviser for such fiscal year shall be
reduced by the amount of such excess. The
Advisers compensation shall be so reduced
by a reduction or a refund thereof, at the
time such compensation is payable after the end
of each calendar month during such fiscal
year of the Fund, and if such amount should
exceed such monthly compensation, the Adviser
shall pay the Fund an amount sufficient
to make up the deficiency, subject to
readjustment during the Fund's fiscal year. For
purposes of this paragraph, all ordinary
business expenses of the Fund shall include the
investment advisory fee and other operating
expenses paid by the Fund except (i) for
interest and taxes; (ii) brokerage commissions;
(iii) as a result of litigation in connection
with a suit involving a claim for recovery by
the Fund; (iv) as a result of litigation
involving a defense against a liability asserted
against the Fund, provided that, if the
Adviser made the decision or took the actions
which resulted in such claim, it acted in
good faith without negligence or misconduct;
(v) any indemnification paid by the Fund to
its officers and trustees and the Adviser in
accordance with applicable state and federal
laws as a result of such litigation; and (vi)
amounts paid to Xxx Xxxxxx Funds Inc., the
distributor of the Funds shares, in connection
with a distribution plan adopted by the
Fund's Trustees pursuant to Rule 12b-1 under
the Investment Company Act of 1940.
If the Adviser shall serve for less than
the whole of any month, the foregoing
compensation shall be prorated.
IN WITNESS WHEREOF, the parties have caused
this Agreement to be executed as of
the day and year first above written.
XXX XXXXXX CORPORATE BOND FUND
By:
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Xxxxxx X. Xxxxxxx
Executive Vice President
and Principal Executive Officer
XXX XXXXXX ASSET MANAGEMENT
By:
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Xxxxxx X. Xxxx, III
Managing Director
