Xxxxxxxxx Capital Corporation
Form N-SAR
For Period Ending 12/31/98
File Number (c) 811-1641
Attachment Per Item 77Q1
Sub-Item 77Q1(e) New Registrant Investment Advisory Contract
INVESTMENT MANAGEMENT AND ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 9th day of
November, 1998 by and between Dresdner RCM Global
Investors LLC, a Delaware limited liability company
(the "Adviser"), and Xxxxxxxxx Capital Corporation, a
Delaware corporation (the "Client"):
1. Subject to the supervision of the Board of Directors
of the Client (the "Board of Directors"), the Client
hereby grants to the Adviser full authority, and the
Adviser hereby agrees, to manage the investment and
reinvestment of the cash and securities in the account of
the Client (the "Account") presently held by State Street
Bank and Trust Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Custodian"), the proceeds
thereof, and any additions thereto, in the Adviser's
discretion but consistent with the investment objectives,
policies and restrictions of the Client as they may be
amended from time to time. In this connection, the
Adviser shall not be required to take any action with
respect to the voting of proxies solicited by or with
respect to the issuers of securities in which Account
assets may be invested.
2. In consideration of the services performed by the
Adviser hereunder, the Client will pay to the Adviser, as
they become due and payable, management fees determined
in accordance with the attached Schedule of Fees.
3. Nothing contained herein shall be deemed to authorize
the Adviser to take or receive physical possession of any
cash or securities held in the Account by the Custodian,
it being intended that sole responsibility for safekeeping
thereof (in such investments as the Adviser may direct),
and the consummation of all such purchases, sales,
deliveries and investments made pursuant to the Adviser's
direction, shall rest upon the Custodian.
4. (a) Unless otherwise specified in writing to the
Adviser by the Client, all orders for the purchase and
sale of securities for the Account shall be placed in
such markets and through such brokers as in the Adviser's
best judgment shall offer the most favorable price and
market for the execution of each transaction. The Client
understands and agrees that the Adviser may effect
securities transactions which cause the account to pay an
amount of commission in excess of the amount of commission
another broker or dealer would have charged. Provided,
however, that 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 such
broker or dealer, viewed in terms of either the specific
transaction or the Adviser's overall responsibilities to
the accounts for which the Adviser exercises investment
discretion. The Client also understands that the receipt
and use of such services will not reduce the Adviser's
customary and normal research activities.
(b) The Client agrees that the Adviser may aggregate
sales and purchase orders of securities held in the
Account with similar orders being made simultaneously for
other portfolios managed by the Adviser if, in the
Adviser's reasonable judgment, such aggregation shall
result in an overall economic benefit to the Account,
taking into consideration the advantageous selling or
purchase price and brokerage commission. In accounting
for such aggregated order, price and commission shall be
averaged on a per bond or share basis daily. The Client
acknowledges that the Adviser's determination of such
economic benefit to the Account is based on an evaluation
that the Account is benefited by relatively better
purchase or sales prices, lower commission expenses and
beneficial timing of transactions, or a combination of
these and other factors.
5. The Adviser represents that it is duly registered as an
investment adviser under the Investment Advisers Act of
1940, as amended. The Adviser represents that its systems
are Year 2000 compliant or will be Year 2000 compliant
prior to January 1, 2000, insofar as such systems are
material to the Client. The Adviser agrees to indemnify
the Client against any losses, claims, damages,
liabilities or expenses incurred by the Client as a result
of any failure by the Adviser's systems to be Year 2000
compliant.
6. The Adviser agrees:
(a) to give the Client the benefit of the Adviser's best
judgment and efforts in rendering services to the Client
as provided in this Agreement;
(b) to furnish the Client with monthly statements of the
Account, valued, for each security listed on any national
securities exchange at the last quoted sale price on the
valuation date reported on the composite tape or, in the
case of securities not so reported, by the principal
exchange on which the security is traded, and for any
other security or asset in a manner determined in good
faith by the Adviser to reflect its fair market value;
(c) to furnish the Client with statements evidencing any
purchases and sales for the Account as soon as practicable
after such transaction has taken place;
(d) to maintain books and records with respect to the
Client's portfolio transactions and to surrender promptly
to the Client any of such records upon the Client's request;
(e) to render to the Board of Directors such periodic and
special reports as the Board may reasonably request from
time to time;
(f) to perform its duties under this Agreement in
conformity with the Client's Certificate of Incorporation,
By-Laws and Form N-2 Registration Statement, with the
requirements of applicable federal and state laws and
regulations, with the requirements of the Internal Revenue
Code affecting the Client's status as a regulated
investment company, and with the instructions of the Board
of Directors, all as may be amended from time to time;
(g) to bear all expenses related to compensation of its
employees and to its overhead in connection with its
duties under this Agreement;
(h) to maintain strict confidence in regard to the
Account;
(i) to notify the Client of any change in ownership of
the Adviser in advance, if reasonable, and otherwise as
soon as practicable after such change occurs; and
(j) to indemnify the Client against any losses, claims,
damages, liabilities or expenses arising out of or based
upon any untrue statement of any material fact contained
in any registration statement, prospectus, proxy
statement, report or other document, or any amendment
or supplement thereto, or arising out of or based upon
any omission to state therein any material fact required
to be stated therein or necessary to make the statements
therein not misleading, to the extent that such untrue
statement or omission was made in reliance upon and in
conformity with information furnished to the Client by the
Adviser specifically for use in the preparation thereof.
7. The Client agrees:
(a) to advise the Adviser of the investment objectives,
policies and restrictions of the Client as they apply to
the Account and of any changes or modifications therein
and to notify the Adviser of any other changes in the
Account, including any amendments to the Client's
Certificate of Incorporation or By-Laws, of which the
Adviser would not otherwise have knowledge and which would
be material to the Adviser;
(b) to give the Adviser written notice of any investments
made for the Account that the Client deems to be in
violation of the investment objectives, policies or
restrictions of the Client;
(c) to maintain in strict confidence and for use only with
respect to the Client all investment advice given by
the Adviser; and
(d) not to hold the Adviser, or any of its managers,
officers or employees, liable under any circumstances for
any error of judgment or other action taken or omitted by
the Adviser in the good faith exercise of its powers
hereunder, or arising out of an act or omission of the
Custodian or of any broker or agent selected by the
Adviser in good faith and in a commercially reasonable
manner, excepting matters as to which the Adviser shall
be finally adjudged to have been guilty of willful
misfeasance, bad faith, gross negligence, reckless
disregard of duty or breach of fiduciary duty involving
personal misconduct (all as used in the Investment
Company Act of 1940, as amended (the "1940 Act")).
8. The Client understands and agrees:
(a) that the Adviser performs investment management
services for various clients and that the Adviser may
take action with respect to any of its other clients
which may differ from action taken or from the timing
or nature of action taken with respect to the Account, so
long as it is the Adviser's policy, to the extent
practical, to allocate investment opportunities to the
Account over a period of time on a fair and equitable
basis relative to other clients; and
(b) that the Adviser shall have no obligation to purchase
or sell for the Account any security which the Adviser, or
its directors, officers or employees, may purchase or sell
for its or their own accounts or the account of any other
client, if in the opinion of the Adviser such transaction
or investment appears unsuitable, impractical or
undesirable for the Account.
9. This Agreement shall remain in effect until November 9,
2000 and thereafter shall continue automatically for
successive annual periods, provided that such continuance
is specifically approved at least annually by vote of a
majority of outstanding voting securities (as used in the
1940 Act) of the Client or by the Board of Directors,
together with, in each instance, the vote of a majority of
those directors of the Client who are not interested
persons (as used in the 1940 Act) of the Client or the
Adviser cast in person at a meeting called for the purpose
of voting on such continuance. The Client may, at any
time and without the payment of any penalty, terminate
this Agreement upon sixty days' written notice to the
Adviser either by majority vote of the Board of Directors
or by the vote of a majority of the outstanding voting
securities (as used in the 1940 Act) of the Client. The
Adviser may at any time terminate this Agreement without
payment of penalty on sixty days' written notice to the
Client. This Agreement shall immediately terminate in
the event of its assignment (as used in the 1940 Act).
10. This Agreement shall be construed in accordance with
the laws of the State of California and the applicable
provisions of the 1940 Act. To the extent applicable law
of the State of California, or any of the provisions
herein, conflict with applicable provisions of the 1940
Act, the latter shall control.
11. Each of the individuals whose signature appears below
warrants that he has full authority to execute this
Agreement on behalf of the party on whose behalf he has
affixed his signature to this Agreement.
Dated: November 9, 1998.
DRESDNER RCM GLOBAL INVESTORS LLC
XXXXXXXXX CAPITAL CORPORATION
By:
By:
Name:
Name:
Title:
Title:
SCHEDULE OF FEES
Effective Date: November 9, 1998.
(a) The fee for the period from the effective date
referred to above to the end of the calendar quarter shall
be obtained by multiplying the market value of cash and
securities in the Account as of the close of business on
the last day of the calendar quarter by one-fourth of the
applicable annual fee rate(s) indicated below, prorated
for the percentage of the calendar quarter which the Account
is under management.
(b) The fee for subsequent calendar quarters shall be
obtained by multiplying the market value of cash and
securities in the Account as of the close of business on
the last day of the calendar quarter by one-fourth of the
applicable annual fee rate(s) indicated below.
(c) If the Investment Management and Advisory Agreement
terminates prior to the end of a calendar quarter, the
fee for the period from the beginning of such calendar
quarter to the date of termination shall be obtained by
multiplying the market value of cash and securities in
the Account as of the close of business on the date of
termination by one-fourth of the applicable annual fee
rate(s) indicated below, prorated for the percentage of
the calendar quarter which the Account is under management.
(d) Shares of any investment company advised by the
Adviser or any affiliate of the Adviser shall not be
considered securities in the Account for purposes of the
foregoing calculations.
(e) All fees shall be payable upon receipt of a fee
statement.
VALUE OF SECURITIES AND CASH FEE
On the first $10,000,000 or fraction thereof .70% annually
On the next $10,000,000 or fraction thereof .60% annually
On the next $20,000,000 or fraction thereof .50% annually
On the next $20,000,000 or fraction thereof .35% annually
On the next $40,000,000 or fraction thereof .30% annually
On sums exceeding $100,000,000 .25% annually
Dated: November 9, 1998.
DRESDNER RCM GLOBAL INVESTORS LLC
XXXXXXXXX CAPITAL CORPORATION
By:
By:
Name:
Name:
Title:
Title:
