INVESTMENT ADVISORY AGREEMENT BETWEEN THE ROYCE FUND AND ROYCE & ASSOCIATES, LLC
BETWEEN
THE ROYCE FUND
AND
ROYCE & ASSOCIATES, LLC
Agreement
made this 27th day of October, 2006, by and between THE ROYCE FUND, a Delaware business
trust (the “Fund”), and ROYCE & ASSOCIATES, LLC, a Delaware limited
liability company (the “Adviser”).
The Fund and
the Adviser hereby agree as follows in respect of Royce International Value Fund,
a series of the Fund (the “Series”):
1. Duties
of the Adviser. The Adviser shall, during the term and subject to the provisions
of this Agreement, (a) determine the composition of the portfolio of the Series,
the nature and timing of the changes therein and the manner of implementing such
changes, and (b) provide the Series with such investment advisory, research and
related services as the Series may, from time to time, reasonably require for the
investment of its funds. The Adviser shall perform such duties in accordance with
the applicable provisions of the Fund’s Declaration of Trust, By-Laws and current
prospectus and any directions it may receive from the Fund’s Trustees.
2. Fund Responsibilities
and Expenses Payable by the Series. Except as otherwise provided in Paragraphs 1
and 3 hereof, the Fund shall be responsible for effecting sales and redemptions
of the Series’ shares, for determining the net asset value thereof and for
all of the Series’ other operations and shall cause the Series to pay all administrative
and other costs and expenses attributable to its operations and transactions, including,
without limitation, transfer agent and custodian fees; legal, administrative and
clerical services; rent for office space and facilities; auditing; preparation,
printing and distribution of its prospectuses, proxy statements, shareholders’
reports and notices; supplies and postage; Federal and state registration fees;
Federal, state and local taxes; non-affiliated Trustees’ fees; and brokerage
commissions.
3. Expenses
Payable by the Adviser. The Adviser shall pay all expenses which it may incur in
performing its duties under Paragraph 1 hereof and shall reimburse the Fund for
any space leased by the Fund and occupied by the Adviser. In the event the Fund
shall qualify shares of the Series for sale in any jurisdiction, the applicable
statutes or regulations of which expressly limit the amount of the Series’
total annual expenses, the Adviser agrees to reduce its annual investment advisory
fee for the Series, to the extent that such total annual
expenses (other than brokerage
commissions and other capital items, interest, taxes, distribution fees, extraordinary
items and other excludable items, charges, costs and expenses) exceed the limitations
imposed on the Series by the most stringent regulations of any such jurisdiction.
4. Compensation
of the Adviser. The Fund agrees to cause the Series to pay to the Adviser, and the
Adviser agrees to accept as compensation for the services provided by the Adviser
hereunder, a fee equal to 1.25% per annum of the first $2,000,000,000 of the Series’ average net assets at the close of business on each day that the value of
its net assets is computed during the year, 1.20% per annum of the next $2,000,000,000
of the Series’ average net assets, 1.15% per annum of the next $2,000,000,000
of the Series’ average net assets and 1.10% per annum of the Series’ average
net assets in excess of $6,000,000,000. However, the Fund and the Adviser may agree
in writing to temporarily or permanently reduce such fee. Such compensation shall
be accrued on the Series’ books at the close of business on each day that the
value of its net assets is computed during each year and shall be payable to the
Adviser monthly, on the last day of each month, and adjusted as of year-end if required.
5. Excess
Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now
or hereafter permitted by law, to cause the Series to pay a member of a national
securities exchange, broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of such exchange,
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/or research services provided by such member,
broker or dealer, viewed in terms of either that particular transaction or its overall
responsibilities with respect to all portfolio series of the Fund and/or the Series.
6. Limitations
on the Employment of the Adviser. The services of the Adviser to the Series shall
not be deemed exclusive, and the Adviser may engage in any other business or render
similar or different services to others so long as its services to the Series hereunder
are not impaired thereby, and nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of the Adviser to engage in any other
business or to devote his time and attention in part to any other business, whether
of a similar or dissimilar nature. So long as this Agreement or any extension, renewal
or amendment remains in effect, the Adviser shall be the only investment adviser
for the Series, subject to the Adviser’s right to enter into sub-advisory agreements.
The Adviser assumes no responsibility under this Agreement other than to render
the services called for hereunder, and shall not be responsible for any action of
or directed by the Fund’s Trustees, or any committee thereof, unless such action
has been caused by the Adviser’s gross negligence, willful malfeasance, bad
faith or reckless disregard of its obligations and duties under this Agreement.
7. Responsibility
of Dual Directors, Officers and/or Employees. If any person who is a director, officer
or employee of the Adviser is or becomes a Trustee, officer and/or employee of the
Fund and acts as such in any business of the Fund pursuant to this Agreement, then
such director, officer and/or employee of the Adviser shall be deemed to be acting
in such capacity solely for the Fund, and not as a director, officer or employee
of the Adviser or under the control or direction of the Adviser, although paid by
the Adviser.
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8. Protection
of the Adviser. The Adviser shall not be liable to the Fund or to any portfolio
series thereof for any action taken or omitted to be taken by the Adviser in connection
with the performance of any of its duties or obligations under this Agreement or
otherwise as an investment adviser of the Fund or such series, and the Fund or each
portfolio series thereof involved, as the case may be, shall indemnify the Adviser
and hold it harmless from and against all damages, liabilities, costs and expenses
(including reasonable attorneys’ fees and amounts reasonably paid in settlement)
incurred by the Adviser in or by reason of any pending, threatened or completed
action, suit, investigation or other proceeding (including an action or suit by
or in the right of the Fund or any portfolio series thereof or its security holders)
arising out of or otherwise based upon any action actually or allegedly taken or
omitted to be taken by the Adviser in connection with the performance of any of
its duties or obligations under this Agreement or otherwise as an investment adviser
of the Fund or such series. Notwithstanding the preceding sentence of this Paragraph
8 to the contrary, nothing contained herein shall protect or be deemed to protect
the Adviser against or entitle or be deemed to entitle the Adviser to indemnification
in respect of, any liability to the Fund or to any portfolio series thereof or its
security holders to which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its duties and obligations under this Agreement.
Determinations
of whether and the extent to which the Adviser is entitled to indemnification hereunder
shall be made by reasonable and fair means, including (a) a final decision on the
merits by a court or other body before whom the action, suit or other proceeding
was brought that the Adviser was not liable by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties, or (b) in the absence
of such a decision, a reasonable determination, based upon a review of the facts,
that the Adviser was not liable by reason of such misconduct by (i) the vote of
a majority of a quorum of the Trustees of the Fund who are neither “interested
persons” of the Fund (as defined in Section 2(a)(19) of the Investment Company
Act of 1940) nor parties to the action, suit or other proceeding, or (ii) an independent
legal counsel in a written opinion.
9. Effectiveness,
Duration and Termination of Agreement. This Agreement shall become effective as
of the date above written. This Agreement shall remain in effect until June 30,
2007, and thereafter shall continue automatically for successive annual periods,
provided that such continuance is specifically approved at least annually by (a)
the vote of the Fund’s Trustees, including a majority of such Trustees who
are not parties to this Agreement or “interested persons” (as such term
is defined in Section 2(a)(19) of the Investment Company Act of 1940) of any such
party, cast in person at a meeting called for the purpose of voting on such approval,
or (b) the vote of a majority of the outstanding voting securities of the Series
and the vote of the Fund’s Trustees, including a majority of such Trustees
who are not parties to this Agreement or “interested persons” (as so defined)
of any such party. This Agreement may be terminated at any time, without the payment
of any penalty, on 60 days’ written notice by the vote of a majority of the
outstanding voting securities of the Series, or by the vote of a majority of the
Fund’s Trustees or by the Adviser, and will automatically terminate in the
event of its “assignment” (as such term is defined for purposes of Section
15(a)(4) of the Investment Company Act of 1940); provided, however, that the provisions
of Paragraph 8 of this Agreement shall remain in full force and effect, and the
Adviser shall remain entitled to the benefits thereof, notwithstanding any such
termination. The Adviser may, upon termination of this Agreement,
3
require the Fund
to refrain from using the name “Royce” in any form or combination in its
name or in its business, and the Fund shall, as soon as practicable following its
receipt of any such request from the Adviser, so refrain from using such name.
Any notice
under this Agreement shall be given in writing, addressed and delivered or mailed,
postage prepaid, to the other party at its principal office.
10. Shareholder
Liability. Notice is hereby given that this Agreement is entered into on the Fund’s behalf by an officer of the Fund in his capacity as an officer and not individually
and that the obligations of or arising out of this Agreement are not binding upon
any of the Fund’s Trustees, officers, employees, agents or shareholders individually,
but are binding only upon the assets and property of the Series.
IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed on the
date above written.
| THE ROYCE FUND |
||||
| By: | /s/ Xxxxxxx
X. Xxxxx |
|||
| Xxxxxxx X. Xxxxx, President | ||||
| ROYCE & ASSOCIATES, LLC |
||||
| By: | /s/ Xxxxxxx
X. Xxxxx |
|||
| Xxxxxxx X. Xxxxx, President | ||||
4
BETWEEN
THE ROYCE FUND
AND
ROYCE & ASSOCIATES, LLC
Agreement
made this 27th day of October, 2006, by and between THE ROYCE FUND, a Delaware business
trust (the “Fund”), and ROYCE & ASSOCIATES, LLC, a Delaware limited
liability company (the “Adviser”).
The Fund and
the Adviser hereby agree as follows in respect of Royce International Smaller-Companies
Fund, a series of the Fund (the “Series”):
11. Duties
of the Adviser. The Adviser shall, during the term and subject to the provisions
of this Agreement, (a) determine the composition of the portfolio of the Series,
the nature and timing of the changes therein and the manner of implementing such
changes, and (b) provide the Series with such investment advisory, research and
related services as the Series may, from time to time, reasonably require for the
investment of its funds. The Adviser shall perform such duties in accordance with
the applicable provisions of the Fund’s Declaration of Trust, By-Laws and current
prospectus and any directions it may receive from the Fund’s Trustees.
12. Fund Responsibilities
and Expenses Payable by the Series. Except as otherwise provided in Paragraphs 1
and 3 hereof, the Fund shall be responsible for effecting sales and redemptions
of the Series’ shares, for determining the net asset value thereof and for
all of the Series’ other operations and shall cause the Series to pay all administrative
and other costs and expenses attributable to its operations and transactions, including,
without limitation, transfer agent and custodian fees; legal, administrative and
clerical services; rent for office space and facilities; auditing; preparation,
printing and distribution of its prospectuses, proxy statements, shareholders’
reports and notices; supplies and postage; Federal and state registration fees;
Federal, state and local taxes; non-affiliated Trustees’ fees; and brokerage
commissions.
13. Expenses
Payable by the Adviser. The Adviser shall pay all expenses which it may incur in
performing its duties under Paragraph 1 hereof and shall reimburse the Fund for
any space leased by the Fund and occupied by the Adviser. In the event the Fund
shall qualify shares of the Series for sale in any jurisdiction, the applicable
statutes or regulations of which expressly limit the amount of the Series’
total annual expenses, the Adviser agrees to reduce its annual investment advisory
fee for the Series, to the extent that such total annual expenses (other than
5
brokerage
commissions and other capital items, interest, taxes, distribution fees, extraordinary
items and other excludable items, charges, costs and expenses) exceed the limitations
imposed on the Series by the most stringent regulations of any such jurisdiction.
14. Compensation
of the Adviser. The Fund agrees to cause the Series to pay to the Adviser, and the
Adviser agrees to accept as compensation for the services provided by the Adviser
hereunder, a fee equal to 1.25% per annum of the first $2,000,000,000 of the Series’ average net assets at the close of business on each day that the value of
its net assets is computed during the year, 1.20% per annum of the next $2,000,000,000
of the Series’ average net assets, 1.15% per annum of the next $2,000,000,000
of the Series’ average net assets and 1.10% per annum of the Series’ average
net assets in excess of $6,000,000,000. However, the Fund and the Adviser may agree
in writing to temporarily or permanently reduce such fee. Such compensation shall
be accrued on the Series’ books at the close of business on each day that the
value of its net assets is computed during each year and shall be payable to the
Adviser monthly, on the last day of each month, and adjusted as of year-end if required.
15. Excess
Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now
or hereafter permitted by law, to cause the Series to pay a member of a national
securities exchange, broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of such exchange,
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/or research services provided by such member,
broker or dealer, viewed in terms of either that particular transaction or its overall
responsibilities with respect to all portfolio series of the Fund and/or the Series.
16. Limitations
on the Employment of the Adviser. The services of the Adviser to the Series shall
not be deemed exclusive, and the Adviser may engage in any other business or render
similar or different services to others so long as its services to the Series hereunder
are not impaired thereby, and nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of the Adviser to engage in any other
business or to devote his time and attention in part to any other business, whether
of a similar or dissimilar nature. So long as this Agreement or any extension, renewal
or amendment remains in effect, the Adviser shall be the only investment adviser
for the Series, subject to the Adviser’s right to enter into sub-advisory agreements.
The Adviser assumes no responsibility under this Agreement other than to render
the services called for hereunder, and shall not be responsible for any action of
or directed by the Fund’s Trustees, or any committee thereof, unless such action
has been caused by the Adviser’s gross negligence, willful malfeasance, bad
faith or reckless disregard of its obligations and duties under this Agreement.
17. Responsibility
of Dual Directors, Officers and/or Employees. If any person who is a director, officer
or employee of the Adviser is or becomes a Trustee, officer and/or employee of the
Fund and acts as such in any business of the Fund pursuant to this Agreement, then
such director, officer and/or employee of the Adviser shall be deemed to be acting
in such capacity solely for the Fund, and not as a director, officer or employee
of the Adviser or under the control or direction of the Adviser, although paid by
the Adviser.
6
18. Protection
of the Adviser. The Adviser shall not be liable to the Fund or to any portfolio
series thereof for any action taken or omitted to be taken by the Adviser in connection
with the performance of any of its duties or obligations under this Agreement or
otherwise as an investment adviser of the Fund or such series, and the Fund or each
portfolio series thereof involved, as the case may be, shall indemnify the Adviser
and hold it harmless from and against all damages, liabilities, costs and expenses
(including reasonable attorneys’ fees and amounts reasonably paid in settlement)
incurred by the Adviser in or by reason of any pending, threatened or completed
action, suit, investigation or other proceeding (including an action or suit by
or in the right of the Fund or any portfolio series thereof or its security holders)
arising out of or otherwise based upon any action actually or allegedly taken or
omitted to be taken by the Adviser in connection with the performance of any of
its duties or obligations under this Agreement or otherwise as an investment adviser
of the Fund or such series. Notwithstanding the preceding sentence of this Paragraph
8 to the contrary, nothing contained herein shall protect or be deemed to protect
the Adviser against or entitle or be deemed to entitle the Adviser to indemnification
in respect of, any liability to the Fund or to any portfolio series thereof or its
security holders to which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its duties and obligations under this Agreement.
Determinations
of whether and the extent to which the Adviser is entitled to indemnification hereunder
shall be made by reasonable and fair means, including (a) a final decision on the
merits by a court or other body before whom the action, suit or other proceeding
was brought that the Adviser was not liable by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties, or (b) in the absence
of such a decision, a reasonable determination, based upon a review of the facts,
that the Adviser was not liable by reason of such misconduct by (i) the vote of
a majority of a quorum of the Trustees of the Fund who are neither “interested
persons” of the Fund (as defined in Section 2(a)(19) of the Investment Company
Act of 1940) nor parties to the action, suit or other proceeding, or (ii) an independent
legal counsel in a written opinion.
19. Effectiveness,
Duration and Termination of Agreement. This Agreement shall become effective as
of the date above written. This Agreement shall remain in effect until June 30,
2007, and thereafter shall continue automatically for successive annual periods,
provided that such continuance is specifically approved at least annually by (a)
the vote of the Fund’s Trustees, including a majority of such Trustees who
are not parties to this Agreement or “interested persons” (as such term
is defined in Section 2(a)(19) of the Investment Company Act of 1940) of any such
party, cast in person at a meeting called for the purpose of voting on such approval,
or (b) the vote of a majority of the outstanding voting securities of the Series
and the vote of the Fund’s Trustees, including a majority of such Trustees
who are not parties to this Agreement or “interested persons” (as so defined)
of any such party. This Agreement may be terminated at any time, without the payment
of any penalty, on 60 days’ written notice by the vote of a majority of the
outstanding voting securities of the Series, or by the vote of a majority of the
Fund’s Trustees or by the Adviser, and will automatically terminate in the
event of its “assignment” (as such term is defined for purposes of Section
15(a)(4) of the Investment Company Act of 1940); provided, however, that the provisions
of Paragraph 8 of this Agreement shall remain in full force and effect, and the
Adviser shall remain entitled to the benefits thereof, notwithstanding any such
termination. The Adviser may, upon termination of this Agreement, require the Fund
to refrain
7
from using the name “Royce” in any form or combination in its
name or in its business, and the Fund shall, as soon as practicable following its
receipt of any such request from the Adviser, so refrain from using such name.
Any notice
under this Agreement shall be given in writing, addressed and delivered or mailed,
postage prepaid, to the other party at its principal office.
20. Shareholder
Liability. Notice is hereby given that this Agreement is entered into on the Fund’s behalf by an officer of the Fund in his capacity as an officer and not individually
and that the obligations of or arising out of this Agreement are not binding upon
any of the Fund’s Trustees, officers, employees, agents or shareholders individually,
but are binding only upon the assets and property of the Series.
IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed on the
date above written.
| THE ROYCE FUND |
||||
| By: | /s/ Xxxxxxx
X. Xxxxx |
|||
| Xxxxxxx X. Xxxxx, President | ||||
| ROYCE & ASSOCIATES, LLC |
||||
| By: | /s/ Xxxxxxx
X. Xxxxx |
|||
| Xxxxxxx X. Xxxxx, President | ||||
8
