EXHIBIT 99.5(B)
KEYSTONE MANAGEMENT, INC.
LAS VEGAS, NEVADA
Keystone Custodian Funds, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
August 19, 1993
Dear Sirs:
INVESTMENT ADVISORY AGREEMENT
KEYSTONE INTERNATIONAL FUND INC. (the "Fund") has been incorporated under the
laws of Massachusetts to engage in the business of investing in securities.
Keystone Management, Inc. (the "Manager") and the Fund's Board of Directors have
selected you to act as investment adviser of the Fund and to provide certain
other services (with the exception of certain managerial and administrative
services to be provided by the Manager), as more fully set forth below, and you
are willing to act as such investment adviser and to perform such services under
the terms and conditions hereinafter set forth. Accordingly, the Manager agrees
with you as follows:
1. Advisory Services -- You will regularly provide the Fund with investment
research, advice and supervision and will furnish continuously an investment
program for the Fund's portfolio. You will recommend what securities shall be
purchased for the portfolio of the Fund, what portfolio securities shall be sold
by the Fund, and what portion of the Fund's assets shall be held uninvested. You
shall advise and assist the officers of the Fund in taking such steps as are
necessary or appropriate to carry out the decisions of its Board of Directors;
the appropriate committees of such Board and the Manager regarding the foregoing
matters and the general conduct of the investment business of the Fund.
2. Expenses of Operation -- You will pay the ordinary office expenses of the
Fund including its rent and will provide investment advisory, research and
statistical facilities and all clerical services relating to research,
statistical and investment work. You will not be required to pay any expenses of
the Fund other than those enumerated in this paragraph 2 and in particular, but
without limiting the generality of the foregoing will not be required to pay
brokers' commissions; legal, auditing, and registrar's fees and expenses; taxes
and governmental fees; the cost of sale, underwriting, distribution, redemption,
transfer or repurchase of shares of the Fund; the expenses of registering or
qualifying securities for sale; the cost of preparing and distributing reports
and notices to shareholders; or the fees or disbursements of custodians of the
Fund's assets including expenses incurred in the performance of any obligations
enumerated in the Articles of Organization or Bylaws of the Fund, insofar as
they govern agreements with any such custodian.
3. Compensation to the Adviser -- For all services to be rendered and payments
made as provided in paragraphs 1 and 2 hereof, the Manager will pay you a
management fee at the annual rate of 85% of the management fee paid by the Fund
to the Manager.
A pro rata portion of the fee shall be payable in arrears at the end of each
day. If and when this Agreement terminates, any compensation payable hereunder
for the period ending with the date of such termination shall be payable upon
such termination. Amounts payable hereunder shall be promptly paid when due.
4. Avoidance of Inconsistent Position -- In connection with purchases or sales
of portfolio securities for the account of the Fund, neither you nor any of your
directors, officers or employees will act as principal or agent or receive any
commission.
5. Limitation of Liability of Adviser -- You 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 matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from reckless disregard by you of your obligations
and duties under this Agreement. Any person, even though also employed by you,
who may be or become an employee of and paid by the Fund shall be deemed when
acting within the scope of his employment by the Fund to be acting in such
employment solely for the Fund and not as your employee or agent. The Fund
agrees to indemnify and hold you harmless from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation, liabilities
arising under the Securities Act of 1933, the Securities Exchange Act of 1934,
the Investment Company Act of 1940, and any state and foreign securities and
blue sky laws, as amended from time to time) and expenses, including (without
limitation) attorneys' fees and disbursements, arising directly or indirectly
from any action or thing which you take or do or omit to take or do hereunder;
provided that you shall not be indemnified against any liability to the Fund or
to its shareholders (or any expenses incident to such liability) arising out of
a breach of fiduciary duty with respect to the receipt of compensation for
services, willful misfeasance, bad faith, or gross negligence on your part in
the performance of your duties, or from reckless disregard by you of your
obligations and duties under this Agreement.
6. Duration and Termination of this Agreement -- This Agreement shall go into
effect on the date hereof and, unless terminated as provided in this paragraph 6
or in paragraph 7 hereof shall continue in effect until July 1, 1994; thereafter
it shall continue in effect from year to year but only so long as such
continuance is approved at least annually by the Board of Directors of the Fund
or by the vote of a majority of the outstanding voting securities of the Fund.
In addition, this Agreement shall not be entered into, renewed or performed
unless the terms of this Agreement and any renewal thereof have been approved by
the vote of a majority of the Directors of the Fund, who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated either by the Board of Directors of the Fund or by the vote of a
majority of the outstanding voting securities of the Fund, by the Manager or by
you. Such termination shall be effective after 60-days' notice and shall be
without penalty. This Agreement shall automatically terminate in the event of
its assignment.
7. 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 and no amendment of this Agreement shall be
effective until approved by the vote of a majority of the Fund's outstanding
voting securities.
8. Miscellaneous -- The captions in this Agreement are included for
convenience or reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction of effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
As used in this Agreement, the terms "assignment" and "majority of the
outstanding voting securities" shall have the meanings given to them by Sections
2(a)(4) and 2(a)(42), respectively, of the Investment Company Act of 1940.
If you are in agreement with the foregoing, please sign the form of acceptance
on the accompanying counterpart of this letter and return such counterpart to
the Manager, whereupon this letter shall become a binding contract.
Yours very truly,
KEYSTONE MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxxxx
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Title: Treasurer
The foregoing Agreement is hereby accepted as of the date thereof.
KEYSTONE CUSTODIAN FUNDS, INC.
By: /s/ Xxxxxx Xxxxxxx
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Title: Sr. Vice President
