March 30, 1999
Westcap Investors, LLC
00000 Xxxxx Xxxxxx Xxxx., Xxx. 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
INVESTMENT ADVISORY AGREEMENT
Investors Research Fund, Inc. (the "Fund") is an open-ended, diversified
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"). The Fund is engaged in the business of investing
and reinvesting its assets in securities of the type, and in accordance with the
limitations, specified in the Prospectus, Application and Statement of
Additional Information dated March 1, 1999, which is part of its effective
Registration Statement filed with the U.S. Securities and Exchange Commission,
all in such manner and to such extent as may from time-to-time be authorized by
the board of directors of the Fund. The Fund hereby retains you as investment
adviser for the consideration and upon the terms and conditions hereinafter set
forth:
1. The Fund employs you to manage the investment and reinvestment
of its assets and, without limiting the generality of the foregoing,
to supervise the investment affairs of the Fund, to make reviews of
its investments, and to effect investment changes whenever such
changes appear to be desirable. In addition, you are to perform all
statistical, research and analysis services necessary to the
performance of you duties as investment adviser. Such services shall
be rendered directly to the Fund.
2. It is understood that you will from time-to-time employ or
associate with yourself such persons as you believe to be particularly
fitted to assist you in the execution of your duties hereunder, the
cost of performance of such duties to be borne and paid by you. You
will provide adequate and suitable office space for the performance of
your duties hereunder. You will provide to the Fund in writing,
promptly following request, such information regarding itself and the
Fund's investments as shall be necessary for the preparation of
periodic reports to the Fund's stockholders and such other documents
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
and papers as may be required to comply with applicable laws and the
rules, regulations and other requirements of the Securities and
Exchange Commission or other federal, state or local governmental
agencies. In compliance with Rule 31a-3 under the Act, you agree that
all records which you maintain for the Fund are the property of the
Fund. You agree to permit inspection by officers and directors of the
Fund, upon reasonable notice and at reasonable times, of all records,
books, correspondence, stockholder lists, and other papers and
documents maintained or prepared by you in connection with the Fund's
business and affairs. Furthermore, you agree to maintain, preserve and
make available all such records in accordance and compliance with
Section 31 of the Act, Section 204 of the Investment Advisers Act of
1940 (as amended) and all governmental regulations and requirements,
as applicable to you in your capacity as investment adviser to the
Fund.
3. You will make decisions with respect to all purchases and
sales of securities for or on account of the Fund. To carry out such
decisions, you are hereby authorized, as the Fund's agent and
attorney-in-fact, for the Fund's account, at the Fund's investment
risk, and in the Fund's name, to place orders for the investment and
reinvestment of its assets. In all purchases, sales and other
transactions in securities for the Fund, you are authorized to
exercise full discretion and act for the Fund in the same manner and
with the same force and effect as the officers and directors might or
could do with respect to such purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to
the futherance or conduct of such purchases, sales or other
transactions. In this regard, however, it is understood that you will
not be making purchases and sales of securities on behalf of the Fund
in the capacity of a broker-dealer. Notwithstanding the foregoing, all
procedures for the making changes in the Fund's portfolio of
securities, including procedures for the placing and confirmation of
orders with brokers and dealers, shall at all times be and remain
subject to the direction and control of the Fund's board of directors
and officers. You will, however, maintain such records and perform
such duties in connection with the Fund's portfolio of securities as
may be reasonably requested by the Fund, and as may be required by
applicable governmental laws and regulations.
4. The Fund shall provide you with all information under its
control which may be reasonably required for the performance of your
duties hereunder, and agrees to advise you promptly of any changes in
the Fund's policies which may affect any of your obligations
hereunder. Except as otherwise specifically provided hereinabove, you
shall have no obligation to provide supervisory or administrative
services in connection with the general business and affairs of the
Fund, it being expressly agreed and understood that the Fund shall
employ other persons to maintain its own books and records, prepare
and file with the Securities and Exchange Commission and applicable
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
governmental and quasi-governmental authorities periodic reports and
amendments to the Fund's Registration Statement, prepare notices of
stockholders' meetings, declarations of dividends and other
communications from the Fund to its stockholders, and to operate and
conduct the general business and administrative affairs of the Fund.
If, however, you or your affiliates shall render any such services at
the request of the officers or directors of the Fund, the Fund will
pay to you or such of your affiliates the fully burdened cost of such
personnel for rendering such services to the Fund at such rates as
shall from time-to-time be agreed upon between you and the Fund.
5. You will report to the board of directors of the Fund at each
regularly scheduled meeting thereof all changes in the Fund's
portfolio since the prior report, and will furnish to the Fund from
time-to-time such information as you may believe appropriate
concerning the Fund's portfolio, whether concerning the individual
companies whose securities are included in the Fund's portfolio, the
industries in which they are engaged, or the conditions prevailing in
the economy generally. You will also furnish to the Fund such
statistical and analytical information with respect to securities in
its portfolio as you may believe appropriate concerning the Fund's
portfolio, whether concerning the individual companies whose
securities are included in the Fund's portfolio, the industries in
which they are engaged, or the conditions prevailing in the economy
generally. You will also furnish to the Fund such statistical and
analytical information with respect to the securities in its portfolio
as you may believe appropriate or as the board of directors may
reasonably request. In making purchases and sales of securities, you
will bear in mind the policies set from time-to-time by the board of
directors of the Fund as well as the limitations imposed in the Fund's
Registration Statement, the Act, and the Internal Revenue Code of
1986, as amended, in respect of regulated investment companies.
Westcap will communicate with the Board of Directors of the Fund (the
"Board") on the items set forth below. As the Board becomes
comfortable with the progress and success of Westcap's involvement,
the Board may request less information and/or longer reporting periods
from Westcap. Westcap will provide the following information:
A) Performance of the Fund versus appropriate benchmarks will be communicated
every two weeks. We anticipate that the appropriate benchmarks will include
the S&P 500 Index, the Nasdaq Index, and other comparative data as agreed
upon with the Board.
B) Westcap will provide monthly statements to the Board which will show the
size of the portfolio, the transactions, receipts of dividend and interest,
and performance reporting.
C) Quarterly, Westcap will provide a summary of its views on the economic and
market environment, along with specific comments on portfolio holdings.
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
D) Westcap will meet with the Board not less than quarterly to review the
entire scope of its relationship with the Fund--including, but not limited
to marketing, personnel and performance.
E) Westcap encourages members of the Board to call with any questions they may
have concerning any part of the relationship.
6. All expenses and charges incident to the operation of the
Fund, including, but not limited to, (a) payment of the fees payable
to you under Paragraph 7, (b) custody, transfer and dividend
disbursing expenses, (c) directors' fees and officers' compensation,
(d) legal and auditing expenses, (e) clerical, accounting and other
office costs of the Fund, (f) the cost of personnel providing services
to the Fund, as provided in Paragraph 4, (g) costs of printing the
Fund's prospectus and reports to the stockholders, (h) costs of
maintenance of the Fund's corporate existence and qualifications to do
business, (i) interest and bank charges, taxes, brokerage fees and
commissions, (j) costs of stationery and supplies, (k) expenses and
fees relating to registration and filing with the Securities and
Exchange Commission and state regulatory authorities, and (l) such
promotional expenses as may be contemplated by an effective plan
pursuant to Rule 12b-1 under the Act, providing, however, that payment
by the Fund of such promotional expenses shall be in an amount, and in
accordance with the procedures set forth in such plan, and excepting
those expenses to be paid by you as an incidence of the investment
advisory services to be performed by you hereunder, shall be borne and
paid by the Fund either directly or by way of reimbursement to you for
any such expenses you have advanced pursuant to agreement with the
Fund.
7. In consideration of the services to be rendered by you, the
Fund agrees to pay to you a quarterly fee equal to 0.125% of the net
assets of the Fund calculated as an average of the net assets of the
Fund as of the close of each month of the Fund's fiscal year; said fee
not to exceed 0.5% annually of the average net assets of the Fund
calculated as at the close of each month of the Fund's fiscal year.
The value of the Fund's assets shall be determined in accordance with
Section 2(a) (41) of the Act as of the last business day of each
month.
8. We shall expect of you, and you will give us the benefit of
your best professional judgment and effort in rendering services to
the Fund. The Fund agrees as an inducement to your undertaking, these
services that neither you, nor your officers, members, employees or
agents, or any affiliates of the foregoing shall be liable for any
mistake of judgment or opinion in connection with the matters to which
this Agreement relates, except for lack of good faith, provided that
nothing herein shall be deemed to protect, or purport to protect, you
against any liability to the Fund or its stockholders to which you
would otherwise be subject by reason of willful misfeasance, bad faith
or negligence in the performance of your obligations and duties
hereunder, or by reason of your reckless disregard of your obligations
and duties hereunder.
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
The Fund agrees to indemnify, defend and hold you, and your officers,
members, employees and agents, harmless from and against any and all loss, cost,
damage, liability and expense (including, without limitation, reasonable
attorneys' fees and costs) which you or any of them may suffer, sustain or incur
as a result of (a) the Fund's breach of its representations in Section 9 hereof,
or (b) any matter resulting from or arising out of the operations of the Fund
prior to the date of this Agreement.
9. The Fund hereby continuously represents to you that (a) the
shares of the Fund have been and will continue to be offered and sold
in compliance with all applicable federal and state securities laws,
including without limitation the Act, Securities Act of 1933, as
amended and the Securities Exchange Act of 1934, as amended, (b) the
Fund is, and at all times during the term of this Agreement will be,
an open-end diversified management investment company duly registered
in good standing under all applicable federal and state laws,
including, without limitation, the Act, (c) the Registration Statement
and prospectus to which the shares of the Fund have been and will be
offered and sold do not, and at all times during the term of this
Agreement will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements make therein not misleading,
provided, however, that this clause (c) shall not apply to statements
in or omissions from such Registration Statement or prospectus made in
reliance upon and in conformity with information furnished to the Fund
in writing by you which is incorporated accurately into such
Registration Statement or prospectus, (d) no litigation or
administrative proceeding or investigation of or before any court or
governmental body is currently pending against the Fund and, to the
best of its knowledge, none is threatened against it, and (e) this
Agreement has been approved by the board of directors of the Fund,
including a majority of the directors who are not interested persons
thereof.
10. This Agreement shall become effective as of March 30, 1999
and shall continue in effect until the first anniversary of such date,
and thereafter for successive twelve-month periods (computed from each
anniversary date), provided that such continuance is specifically
approved at least annually by the board of directors of the Fund or by
vote of a majority of the outstanding voting securities (as defined in
Section 2(a) (42) of the Act) of the Fund, and, in either case, by a
majority of the board of directors who are not parties to this
Agreement or interested persons (as defined in section 2(a) (19) of
the Act) of any such party (other than as an officer or director of
the Fund); provided, further, however, that if the continuation of the
Agreement is not approved, you may continue to render to the Fund the
services described herein in a manner and to the extent permitted by
the Act and the rules and regulations thereunder. This Agreement may
be terminate, without the payment of any penalty, by vote of a
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
majority of the outstanding voting securities (as defined in the Act)
of the Fund, or by a vote of a majority of the board of directors on
sixty (60) days' written notice to you, or by you on sixty (60) days'
written notice to the Fund. The Fund hereby agrees to call a meeting
of the stockholders of the Fund to consider and vote upon the approval
of the Agreement within a reasonable time period; and the prepare and
prosecute any amendments to the Registration Statement necessitated by
this Agreement. If, within the one hundred twenty (120) day period
specified in Section 11, this Agreement shall not have been approved
by the holders of the majority of the shares of the Fund, this
Agreement shall terminate and you will be entitled to any fees earned
by you as provided in Paragraph 7.
11. The Fund represents that it has given notice of termination
of its current investment advisory contract. You shall not commence
providing services hereunder, or be entitled to any compensation
hereunder, until the effective date of such termination. It is
recognized that this contract must be approved by the Fund's
shareholders pursuant to Section 15 of the Investment Company Act of
1940 within 120 days after the effective date of such termination to
remain effective. The Fund will proceed promptly to solicit such
approval upon signature of this agreement by you.
12. This Agreement may not be transferred, assigned, sold, or in
any manner hypothecated or pledged by you, and this Agreement shall
terminate automatically in the event of any such transfer, assignment,
sale, hypothecation or a pledge by you. The terms, "transfer",
"assignment" and "sale" as used in this paragraph shall have the
meanings ascribed to them by governing law and interpretations thereof
contained in rules or regulations promulgated by the Securities and
Exchange Commission thereunder. You may assign this Agreement in a
transaction in which you rely bona fide upon Rule 2a-6 under the Act
upon notice to the Fund.
13. In the event this Agreement is terminated for any reason and
no subsequent agreement is entered into between you and the Fund, all
fees and all other monies due to you hereunder shall be prorated as of
the effective date of termination and paid within twenty (20) business
days thereafter. Upon such termination, or within a reasonable time
thereafter, you shall make available to the Fund all books, records,
correspondence, stockholders' lists and other papers and documents
pertaining to the Fund which are in your possession or control. In the
event that the Fund shall request that copies of any relevant records
by delivered to it, the Fund shall pay for the copying of those
records. In this regard, it is understood that it is your present
practice to retain all of your records without any destruction of such
records for the period required by the Act. You agree to notify the
Fund immediately of any change in that policy.
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
14. Except to the extent necessary to enable you to perform your
obligations hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your officers, members or
employees, or any affiliates thereof, to engage in any other business
or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm,
individual, trust or association.
15. In selecting brokers or dealers to execute purchases and
sales of portfolio securities for the Fund, you shall use your best
efforts to obtain best execution, which includes most favorable net
results and execution of your orders, taking into account all
appropriate factors, including price, dealer spread or commission,
size and difficulty of transaction, and research services provided.
The Fund acknowledges and agrees that you may obtain from
broker-dealers supplemental research, market and statistical
information for use with respect to the Fund in accordance with
Section 28(e) under the Securities Exchange Act of 1934. The term
"research, market and statistical information" includes, without
limitation, advice as to the value of securities, and the availability
of securities or purchasers or sellers of securities, and furnishing
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of
accounts. The Fund understands that such information will be in
addition to and not in lieu of the services required to be performed
by you under this Agreement and that your expenses will not
necessarily by reduced as a result of the receipt of such information.
The Fund also acknowledges that such information may be useful to you
and your affiliates in providing services to clients other than the
Fund and that not all such information will at all times be used by
you in connection with the Fund. Finally, the Fund acknowledges that
information provided to you and your affiliates by brokers and dealers
through whom other clients of yours effect securities transactions may
be useful to you in providing services to the Fund. The Fund
understands that investment decisions for the Fund may not, at all
times, be made independently from those of other accounts managed by
you and your affiliates. In furtherance of the foregoing, the Fund
agrees that, when the same securities are purchased for or sold by the
fund and any such other accounts you may aggregate such orders, and
you will allocate such purchases and sales in a manner deemed by you
to be fair and equitable to all of the accounts, including the Fund.
16. You make the following representations on both a present and
continuing basis:
A. You currently have a Code of Ethics meeting the requirements of
17CFR ss.270.17j-1. You are currently enforcing that code and will continue to
maintain and enforce the code in accordance with both its letter and spirit.
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
B. You will be in compliance with all requirements to have your
record-keeping and administrative systems capable of handling the Year 2000
demands at the time such capability is required; provided, however, that you
make no representation regarding the compliance of any unaffiliated person
providing services to you. Upon meeting such requirements, you will provide
written certification to the Fund that you have the requisite capability in
place.
C. You have competent emergency procedures in place to assure your
continuing competent performance of your services hereunder in the event of an
emergency.
D. You will provide an prompt report to the Fund of any development
which does or might affect your ability to service the Fund in accordance with
this agreement, including any developments which may be covered under Section 9
of the Investment Company Act, as amended, or Rule 206(4)-4 under the Investment
Adviser Act.
5. All notices and communications to be made hereunder shall be
in writing and shall be delivered to the Fund or to you, as the case
may be, by U.S. certified mail, return receipt requested, postage
prepaid, by commercial courier or by personal delivery, in each case
to the address set forth in this Agreement or to such other person or
address as shall be identified by written notice as provided herein.
Any notice or communication sent by mail as aforesaid, shall be deemed
delivered three (3) business days after deposit in the U.S. mail; any
notice sent personally or by commercial courier shall be deemed
delivered upon confirmation of receipt of such address.
6. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, and may be amended
only by the written consent of both parties. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California; provided, however, that nothing herein shall be construed
in a manner inconsistent with the Act, the Investment Advisers Act, or
any rule or regulation thereunder. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder shall not be thereby affected.
If the foregoing is satisfactory to you, please indicate your acceptance by
signing below,
Very truly yours,
INVESTORS RESEARCH FUND, INC.
By:
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Title:
ACCEPTED THIS ____ DAY OF MARCH, 1999
WESTCAP INVESTORS, LLC
By:
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Title:
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