EXHIBIT EX-99.(d)(2)
INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement (the "Agreement") dated this of 9th day of
November, 2007 by and between THE WORLD FUNDS, INC., a Maryland corporation
(herein called the "Fund"), and THIRD MILLENNIUM INVESTMENT ADVISORS LLC, a
Delaware Limited Liability Company (the "Advisor") a registered investment
adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares, each having its own investment policies;
and;
WHEREAS, the Fund desires to retain the Advisor to furnish investment
advisory and management services to certain portfolios of the Fund, subject to
the control of the Fund's Board of Directors, and the Advisor is willing to so
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be bound, it is agreed between the parties
hereto as follows:
1. Appointment. The Fund hereby appoints the Advisor to act as the adviser
to the THIRD MILLENNIUM RUSSIA FUND series of the Fund (the "Portfolio") for the
period and on the terms set forth in this Agreement. The Advisor accepts such
appointment and agrees to furnish the services herein set forth, for the
compensation herein provided.
2. Duties of the Advisor. The Fund employs the Advisor to manage the
investments and reinvestment of the assets of the Portfolio, and to continuously
review, supervise, and administer the investment program of the Portfolio, to
determine in its discretion the securities to be purchased or sold, to provide
the Fund and Commonwealth Shareholder Services, Inc. (the "Administrator") with
records concerning the Advisor's activities which the Fund is required to
maintain, and to render regular reports to the Fund's Officers and Board of
Directors and to the Administrator concerning the Advisor's discharge of the
foregoing responsibilities.
The Advisor shall discharge the foregoing responsibilities subject to the
control of the Fund's Board of Directors and in compliance with such policies as
the Board may from time to time establish, and in compliance with the
objectives, policies, and limitations for the Portfolio as set forth in its
Prospectus and Statement of Additional Information, as amended from time to
time, and applicable laws and regulations. The Fund will instruct each of its
agents and contractors to co-operate in the conduct of the business of the
Portfolio.
The Advisor accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings, and equipment
and the personnel required by it to perform the services on the terms and for
the compensation provided herein.
3. Portfolio Transactions. The Advisor is authorized to select the brokers
and dealers that will execute the purchases and sales of portfolio securities
for the Portfolio and is directed to use its best efforts to obtain the best
price and execution for the Portfolio's transactions in accordance with the
policies of the Fund as set forth from time to time in the Portfolio's
Prospectus and Statement of Additional Information. The Advisor will promptly
communicate to the Fund and to the Administrator such information relating to
portfolio transactions as they may reasonably request.
It is understood that the Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in breach of
any obligation owing to the Fund under this Agreement, or otherwise, by reason
of its having directed a securities transaction on behalf of the Fund to an
unaffiliated broker-dealer in compliance with the provisions of Section 28(e) of
the Securities Exchange Act of 1934 or as described from time to time by the
Portfolio's Prospectus and Statement of Additional Information. Subject to the
foregoing, the Advisor may direct any transaction of the Portfolio to a broker
which is affiliated with the Advisor in accordance with, and subject to, the
policies and procedures approved by the Board of Directors of the Fund pursuant
to Rule 17e-1 under the 1940 Act. Such brokerage services are not deemed to be
provided under this Agreement.
4. Compensation of the Advisor. For the services to be rendered by the
Advisor under this Agreement, the Portfolio shall pay to the Advisor, and the
Advisor will accept as full compensation a fee, accrued daily and payable as
accrued, at an annual rate of 1.75% on the first $125 million of assets; 1.50%
on assets in excess of $125 million and not more than $250 million; and 1.25% on
assets over $250 million.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
5. Expenses. During the term of this Agreement, the Advisor will pay all
expenses incurred by it in connection with the management of the Fund.
Notwithstanding the foregoing, the Portfolio shall pay the expenses and costs of
the Portfolio for the following:
a) Taxes;
b) Brokerage fees and commissions with regard to portfolio transactions;
c) Interest charges, fees and expenses of the custodian of the securities;
d) Fees and expenses of the Fund's transfer agent and the Administrator;
e) Its proportionate share of auditing and legal expenses;
f) Its proportionate share of the cost of maintenance of corporate
existence;
g) Its proportionate share of compensation of directors of the
Fund who are not interested persons of the Advisor
as that
term is defined by law;
h) Its proportionate share of the costs of corporate meetings;
i) Federal and State registration fees and expenses incident to the sale
of shares of the Portfolio;
j) Costs of printing and mailing Prospectuses for the Portfolio's
shares, reports and notices to existing shareholders;
k) The Advisory fee payable to the Advisor, as provided in paragraph 4
herein;
l) Costs of recordkeeping (other than investment records required to be
maintained by the Advisor), and daily pricing;
m) Distribution expenses in accordance with any Distribution Plan as and
if approved by the shareholders of the Portfolio; and
n) Expenses and taxes incident to the failure of the Portfolio to
qualify as a regulated investment company under the
provisions of the
Internal Revenue Code of 1986, as amended, unless
such expenses
and/or taxes arise from the negligence of another party.
6. Reports. The Fund and the Advisor agree to
furnish to each other, if applicable, current
information required for the preparation by such
parties of prospectuses, statements of additional
information, proxy statements, reports to
shareholders, certified copies of their financial
statements, and to furnish to each other such
other information and documents with regard to
their affairs as each may reasonably request.
7. Status of the Advisor. The services of the
Advisor to the Fund are not to be deemed
exclusive, and the Advisor shall be free to
render similar services to others so long as its
services to the Fund are not impaired thereby.
Pursuant to comparable agreements, the Fund may
also retain the services of the Advisor to serve
as the investment advisor of other series of the
Fund.
8. Books and Records. In compliance with the
requirements of the 1940 Act, the Advisor hereby
agrees that all records which it maintains for
the Fund are the property of the Fund, and
further agrees to surrender promptly to the Fund
any of such records upon the Fund's request. The
Advisor further agrees to preserve for the
periods prescribed by the 1940 Act, and the rules
or orders thereunder, the records required to be
maintained by the 1940 Act.
9. Limitation of Liability of Advisor. The duties of
the Advisor shall be confined to those expressly
set forth herein, and no implied duties are
assumed by or may be asserted against the Advisor
hereunder. The Advisor shall not be liable for
any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with
the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with
respect to the receipt of compensation for
services or a loss resulting from willful
misfeasance, bad faith or negligence on the part
of the Advisor in the performance of its duties
or from reckless disregard by it of its
obligations and duties under this Agreement. (As
used in this Paragraph 9, the term "Advisor"
shall include directors, officers, employees and
other corporate agents of the Advisor as well as
that corporation itself).
10. Permissible Interests. Directors, agents, and
shareholders of the Fund are or may be interested
in the Advisor (or any successor thereof) as
directors, officers, or shareholders, or
otherwise; directors, officers, agents, and
shareholders of the Advisor are or may be
interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or
any successor) is or may be interested in the
Fund as a shareholder or otherwise. In addition,
brokerage transactions for the Fund may be
effected through affiliates of the Advisor if
approved by the Fund's Board of Directors,
subject to the rules and regulations of the
Securities and Exchange Commission, and the
policies and procedures adopted by the Fund.
11. License of Advisor's Name. The Advisor hereby
authorizes the Fund to use the name "Third
Millennium Russia Fund" for the Portfolio. The
Fund agrees that if this Agreement is terminated
it will promptly redesignate the name of the
Portfolio to eliminate any reference to the name
"Third Millennium Russia Fund" or any derivation
thereof unless the Advisor waives this
requirement in writing.
12. Duration and Termination.This Agreement shall
become effective on the date first above written
subject to its approval by the shareholders of
the Portfolio and unless sooner terminated as
provided herein, shall continue in effect for two
(2) years from that date. Thereafter, this
Agreement shall be renewable for successive
periods of one year each, provided such
continuance is specifically approved annually (a)
by the vote of a majority of those members of the
Fund's Board of Directors who are not parties to
this Agreement or interested persons of any such
party (as that term is defined in the 1940 Act),
cast in person at a meeting called for the
purpose of voting on such approval, and (b) by
vote of either the Board of Directors or of a
majority of the outstanding voting securities (as
that term is defined in the 0000 Xxx) of the
Portfolio. Notwithstanding the foregoing, this
Agreement may be terminated by the Portfolio or
by the Fund at any time on sixty (60) days
written notice, without the payment of any
penalty, provided that termination must be
authorized either by vote of the Fund's Board of
Directors or by vote of a majority of the
outstanding voting securities of the Portfolio or
by the Advisor on sixty (60) days written notice.
This Agreement will automatically terminate in
the event of its assignment (as that term is
defined in the 1940 Act).
13. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in
writing signed by the party against which
enforcement of the change, waiver, discharge or
termination is sought. No material amendment of
this Agreement shall be effective until approved
by vote of the holders of a majority of the
Portfolio's outstanding voting securities (as
defined in the 1940 Act).
14. Notice. Any notice required or permitted to be
given by either party to the other shall be
deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the
party giving notice to the other party at the
address stated below, or at such other address as
either party may advise in writing:
a) To the Fund at: 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
b) To the Advisor at: 0000 Xxxxx Xxxxx Xxxx, Xxxxx
000 Xxxxxxxx, XX 00000
15. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in
no way define or limit any of the provisions
hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall
be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the
benefit of the parties hereto and their
respective successors.
16. Applicable Law.This Agreement shall be construed
in accordance with, and governed by, the laws of
the State of Maryland, and the applicable
provisions of the 1940 Act. To the extent that
the applicable laws of the State of Maryland, or
any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter
shall control.
17. This Agreement may be executed in two or more
counterparts, each of which, when so executed,
shall be deemed to be an original, but such
counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THIRD MILLENNIUM INVESTMENT ADVISORS, LLC
BY: /s/ Xxxx Xxxxx, III
__________________________
Xxxx Xxxxx, III
Managing Member
THE WORLD FUNDS, INC.
BY: /s/ Xxxx Xxxxx, III
____________________________
Xxxx Xxxxx, III
Chairman
