KIRR, MARBACH PARTNERS FUNDS, INC. INVESTMENT ADVISORY AGREEMENT
KIRR, XXXXXXX PARTNERS FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 10th day of June, 2005 between Kirr,
Xxxxxxx Partners Funds, Inc., a Maryland corporation (the “Corporation”) and Kirr, Xxxxxxx &
Company, LLC, an Indiana limited liability company (the “Adviser”).
W I T N E S S E T H
WHEREAS, the Corporation is an open-end investment company registered under the Investment
Company Act of 1940, as amended (the “1940 Act”). The Corporation is authorized to create separate
series, each with its own separate investment portfolio (the “Funds”), and the beneficial interest
in each such series will be represented by a separate series of shares (the “Shares”).
WHEREAS, the Adviser is a registered investment adviser, engaged in the business of rendering
investment advisory services.
WHEREAS, in managing the Corporation’s assets, as well as in the conduct of certain of its
affairs, the Corporation seeks the benefit of the Adviser’s services and its assistance in
performing certain managerial functions. The Adviser desires to furnish such services and to
perform the functions assigned to it under this Agreement for the consideration provided for
herein.
NOW THEREFORE, the parties mutually agree as follows:
1. Appointment of the Adviser. The Corporation hereby appoints the Adviser as investment
adviser for each of the Funds of the Corporation on whose behalf the Corporation executes an
Exhibit to this Agreement, and the Adviser, by execution of each such Exhibit, accepts the
appointments. Subject to the direction of the Board of Directors (the “Directors”) of the
Corporation, the Adviser shall manage the investment and reinvestment of the assets of each Fund in
accordance with the Fund’s investment objective and policies and limitations, for the period and
upon the terms herein set forth. The investment of funds shall also be subject to all applicable
restrictions of the Articles of Incorporation and By-Laws of the Corporation as may from time to
time be in force.
2. Expenses Paid by the Adviser. In addition to the expenses which the Adviser may incur in
the performance of its responsibilities under this Agreement, and the expenses which it may
expressly undertake to incur and pay, the Adviser shall incur and pay all reasonable compensation,
fees and related expenses of the Corporation’s officers and its Directors, except for such
Directors who are not interested persons (as that term is defined in Section 2(a)(l9) of the 0000
Xxx) of the Adviser, and all expenses related to the rental and maintenance of the principal
offices of the Corporation.
3. Investment Advisory Functions. In its capacity as investment adviser, the Adviser shall
have the following responsibilities:
(a) To furnish continuous advice and recommendations to the Funds, as to the acquisition,
holding or disposition of any or all of the securities or other assets which the Funds may own or
contemplate acquiring from time to time;
(b) To cause its officers to attend meetings and furnish oral or written reports as the
Corporation may reasonably require, in order to keep the Directors and appropriate officers of the
Corporation fully informed as to the condition of the investments of the Funds, the investment
recommendations of the Adviser, and the investment considerations which have given rise to those
recommendations; and
(c) To supervise the purchase and sale of securities or other assets as directed by the
appropriate officers of the Corporation.
The services of the Adviser are not to be deemed exclusive and the Adviser shall be free to render
similar services to others as long as its services for others does not in any way hinder, preclude
or prevent the Adviser from performing its duties and obligations under this Agreement. 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
Corporation, the Funds, or to any shareholder for any act or omission in the course of, or in
connection with, rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
4. Obligations of the Corporation. The Corporation shall have the following obligations under
this Agreement:
(a) To keep the Adviser continuously and fully informed as to the composition of the Funds’
investments and the nature of all of their respective assets and liabilities;
(b) To furnish the Adviser with a copy of any financial statement or report prepared for it by
certified or independent public accountants, and with copies of any financial statements or reports
made to the Funds’ shareholders or to any governmental body or securities exchange;
(c) To furnish the Adviser with any further materials or information which the Adviser may
reasonably request to enable it to perform its functions under this Agreement; and
(d) To compensate the Adviser for its services in accordance with the provisions of paragraph
5 hereof.
5. Compensation. The Corporation will pay the Adviser a fee for its services with respect to
each Fund (the “Advisory Fee”) at the annual rate set forth on the Exhibit(s) hereto. The
Advisory Fee shall be accrued each calendar day during the term of this Agreement and the sum of
the daily fee accruals shall be paid monthly as soon as practicable following the last day of each
month. The daily fee accruals will be computed by multiplying 1/365 by the annual rate and
multiplying the product by the net asset value of the Fund as determined in accordance with the
Corporation’s registration statement as of the close of business on the previous day on which the
Fund was open for business, or in such other manner as the parties agree. The Adviser may
2
from time to time and for such periods as it deems appropriate or for such time and to the
extent agreed on Exhibit A for a Fund reduce its compensation and/or assume expenses for one or
more of the Funds (including initial organization costs); provided, however, that with respect to
any agreement set forth on Exhibit A the Adviser shall be entitled to recoup such amounts for a
period of up to three (3) years from the date such amount was reduced or assumed.
6. Expenses Paid by Corporation.
(a) Except as provided in this paragraph, nothing in this Agreement shall be construed to
impose upon the Adviser the obligation to incur, pay, or reimburse the Corporation for any expenses
not specifically assumed by the Adviser under paragraph 2 above. Each Fund shall pay or cause to
be paid all of its expenses and the Fund’s allocable share of the Corporation’s expenses,
including, but not limited to, investment adviser fees; any compensation, fees, or reimbursements
which the Corporation pays to its Directors who are not interested persons (as that phrase is
defined in Section 2(a)(l9) of the 0000 Xxx) of the Adviser; fees and expenses of the custodian,
transfer agent, registrar or dividend disbursing agent; current legal, accounting and printing
expenses; administrative, clerical, recordkeeping and bookkeeping expenses; brokerage commissions
and all other expenses in connection with the execution of Fund transactions; interest; all
federal, state and local taxes (including stamp, excise, income and franchise taxes); expenses of
shareholders’ meetings and of preparing, printing and distributing proxy statements, notices and
reports to shareholders; expenses of preparing and filing reports and tax returns with federal and
state regulatory authorities; and all expenses incurred in complying with all federal and state
laws and the laws of any foreign country applicable to the issue, offer, or sale of Shares of the
Funds, including but not limited to, all costs involved in the registration or qualification of
Shares of the Funds for sale in any jurisdiction and all costs involved in preparing, printing and
distributing prospectuses and statements of additional information to existing shareholders of the
Funds.
(b) If expenses borne by a Fund in any fiscal year (including the Adviser’s fee, but excluding
taxes, interest, brokerage commissions, Rule 12b-1 expenses and similar fees) exceed those set
forth in any statutory or regulatory formula applicable to a Fund, the Adviser will reimburse the
Fund for any excess.
7. Brokerage Commissions. For purposes of this Agreement, brokerage commissions paid by a
Fund upon the purchase or sale of securities shall be considered a cost of the securities of the
Fund and shall be paid by the respective Fund. The Adviser is authorized and directed to place
Fund transactions only with brokers and dealers who render satisfactory service in the execution of
orders at the most favorable prices and at reasonable commission rates; provided, however, that the
Adviser may pay a broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services provided by such broker
or dealer viewed in terms of either that particular transaction or the overall responsibilities of
the Adviser. In placing Fund business with such broker or dealers, the Adviser shall seek the best
execution of each transaction, and all such brokerage placement shall be made in compliance with
Section 28(e) of the Securities Exchange Act of 1934, as amended, and other applicable state and
federal laws. Notwithstanding the
3
foregoing, the Corporation shall retain the right to direct the placement of all Fund
transactions, and the Directors may establish policies or guidelines to be followed by the Adviser
in placing Fund transactions for the Funds pursuant to the foregoing provisions.
8. Proprietary Rights. The Adviser has proprietary rights in each Fund’s name and the
Corporation’s name. The Corporation acknowledges and agrees that the Adviser may withdraw the use
of such names from the Funds or the Corporation should it cease to act as the investment adviser to
any Fund.
9. Termination. This Agreement may be terminated at any time, without penalty, by the
Directors of the Corporation or by the shareholders of a Fund acting by the vote of at least a
majority of its outstanding voting securities (as that phrase is defined in Section 2(a)(42) of the
1940 Act), provided in either case that 60 days’ written notice of termination be given to the
Adviser at its principal place of business. This Agreement may also be terminated by the Adviser
at any time by giving 60 days’ written notice of termination to the Corporation, addressed to its
principal place of business.
10. Assignment. This Agreement shall terminate automatically in the event of any assignment
(within the meaning of Section 2(a)(4) of the 0000 Xxx) of this Agreement.
11. Term. This Agreement shall begin for each Fund as of the date of execution of the
applicable Exhibit and shall continue in effect with respect to each Fund (and any subsequent Funds
added pursuant to an Exhibit during the initial term of this Agreement) for two years from the date
of the applicable Exhibit (or such shorter period indicated therein) and thereafter for successive
periods of one year, subject to the provisions for termination and all of the other terms and
conditions hereof if such continuation shall be specifically approved at least annually (i) by the
vote of a majority of the Directors of the Corporation, including a majority of the Directors who
are not parties to this Agreement or “interested persons” of any such party (as defined in the 1940
Act), cast in person at a meeting called for that purpose or (ii) by the vote of a majority of the
outstanding voting securities (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of
each Fund.
12. Amendments. This Agreement may be amended by the mutual consent of the parties, provided
that the terms of each such amendment shall be approved by the Directors or by the affirmative vote
of a majority of the outstanding voting securities (as that phrase is defined in Section 2(a)(42)
of the 0000 Xxx) of each Fund.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Indiana, provided, however that nothing herein shall be construed in
a manner that is inconsistent with the 1940 Act, the Investment Advisers Act of 1940, as amended,
or the rules and regulations promulgated with respect to such respective Acts.
This Agreement will become binding on the parties hereto upon their execution of the
Exhibit(s) to this Agreement.
4
KIRR, XXXXXXX PARTNERS VALUE FUND
For all services rendered by the Adviser hereunder, the Corporation shall pay the Adviser, on
behalf of the above-named Fund, and the Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to 1.00% of the average daily
net assets of the Fund.
The Adviser hereby agrees that until February 28, 2006, the Adviser will waive its fees and/or
reimburse the Fund’s operating expenses to the extent necessary to ensure that the Fund’s total
operating expenses (on an annual basis) do not exceed 1.45% of its average daily net assets,
subject to possible later recoupment as provided in Section 5.
The annual investment advisory fee shall be accrued daily at the rate of 1/365th of 1.00%
applied to the daily net assets of the Fund. The advisory fee so accrued shall be paid by the
Corporation to the Adviser monthly.
Executed as of this 10th day of June, 2005.
| The Adviser: KIRR, XXXXXXX & COMPANY, LLC |
||||
| By: | /s/ Xxxxxx Xxx | |||
| Xxxxxx Xxx, Chief Operating Officer | ||||
| The Corporation: KIRR, XXXXXXX PARTNERS FUNDS, INC. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx, President | ||||
