EXHIBIT 5.2
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 30th day of January, 1991, between XXXXXXXX
BLUE CHIP GROWTH FUND, INC., a Maryland corporation (the "Company"), and
XXXXXXXX CAPITAL MANAGEMENT (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Company is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 (the "Act")
as an open-end management investment company comprising a series of two
mutual funds, the Xxxxxxxx Blue Chip Growth Fund and the Xxxxxxxx Money
Market Fund; and
WHEREAS, the Company desires to retain the Adviser, which is an
investment adviser registered under the Investment Advisers Act of 1940
and which is engaged principally in the business of rendering investment
supervisory services within the meaning of Section 202(a)(13) of the
Investment Advisers Act of 1940, as the investment adviser for the
Xxxxxxxx Money Market Fund.
NOW, THEREFORE, the Company and the Adviser do mutually promise
and agree as follows:
1. Employment. The Company hereby employs the Adviser to
manage the investment and reinvestment of the assets of the Xxxxxxxx Money
Market Fund for the period and on the terms set forth in this Agreement.
The Adviser hereby accepts such employment for the compensation herein
provided and agrees during such period to render the services and to
assume the obligations herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and
manage the investment portfolio of the Xxxxxxxx Money Market Fund, and,
subject to such policies as the board of directors of the Company may
determine, direct the purchase and sale of investment securities in the
day to day management of the Xxxxxxxx Money Market Fund. The Adviser
shall for all purposes herein be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Company in any way or otherwise be
deemed an agent of the Company. However, one or more shareholders,
officers, directors or employees of the Adviser may serve as directors
and/or officers of the Company, but without compensation or reimbursement
of expenses for such services from the Company. Nothing herein contained
shall be deemed to require the Company to take any action contrary to its
Articles of Incorporation or any applicable statute or regulation, or to
relieve or deprive the board of directors of the Company of its
responsibility for and control of the affairs of the Company.
3. Expenses. The Adviser, at its own expense and without
reimbursement from the Company, shall furnish office space, and all
necessary office facilities, equipment and executive personnel for
managing the investments of the Xxxxxxxx Money Market Fund. The Adviser
shall not be required to pay any expenses of the Xxxxxxxx Money Market
Fund except as provided herein if the total expenses borne by the Xxxxxxxx
Money Market Fund, including the Adviser's fee and the fees paid to the
Xxxxxxxx Money Market Fund's Administrator but excluding all federal,
state and local taxes, interest, brokerage commissions and extraordinary
items, in any year exceed that percentage of the average net asset value
of the Xxxxxxxx Money Market Fund for such year, as determined by
valuations made as of the close of each business day, which is the most
restrictive percentage provided by the state laws of the various states in
which the Xxxxxxxx Money Market Fund's shares are qualified for sale or,
if the states in which the Xxxxxxxx Money Market Fund's shares are
qualified for sale impose no such restrictions, 2%. The expenses of the
Xxxxxxxx Money Market Fund's operations borne by the Xxxxxxxx Money Market
Fund include by way of illustration and not limitation, directors fees
paid to those directors who are not officers of the Xxxxxxxx Money Market
Fund, the costs of preparing and printing registration statements required
under the Securities Act of 1933 and the Act (and amendments thereto), the
expense of registering its shares with the Securities and Exchange
Commission and in the various states, the printing and distribution cost
of prospectuses mailed to existing shareholders, the cost of stock
certificates (if any), director and officer liability insurance, reports
to shareholders, reports to government authorities and proxy statements,
interest charges, taxes, legal expenses, salaries of administrative and
clerical personnel, association membership dues, auditing and accounting
services, insurance premiums, brokerage and other expenses connected with
the execution of portfolio securities transactions, fees and expenses of
the custodian of the Xxxxxxxx Money Market Fund's assets, expenses of
calculating the net asset value and repurchasing and redeeming shares,
printing and mailing expenses, charges and expenses of dividend disbursing
agents, registrars and stock transfer agents and the cost of keeping all
necessary shareholder records and accounts.
The Xxxxxxxx Money Market Fund shall monitor its expense ratio
on a monthly basis. If the accrued amount of the expenses of the Xxxxxxxx
Money Market Fund exceeds the expense limitation established herein, the
Xxxxxxxx Money Market Fund shall create an account receivable from the
Adviser in the amount of such excess. In such a situation the monthly
payment of the Adviser's fee will be reduced by the amount of such excess,
subject to adjustment month by month during the balance of the Xxxxxxxx
Money Market Fund's fiscal year if accrued expenses thereafter fall below
the expense limitation.
4. Compensation of the Adviser. For the services to be
rendered by the Adviser hereunder, the Company through the Xxxxxxxx Money
Market Fund shall pay to the Adviser an advisory fee, paid monthly, based
on the average net asset value of the Xxxxxxxx Money Market Fund, as
determined by valuations made as of the close of each business day of the
month. The advisory fee shall be 1/12 of 0.50% of such net asset value.
For any month in which this Agreement is not in effect for the entire
month, such fee shall be reduced proportionately on the basis of the
number of calendar days during which it is in effect and the fee computed
upon the average net asset value of the business days during which it is
so in effect.
5. Ownership of Shares of the Xxxxxxxx Money Market Fund. The
Adviser shall not take an ownership position in the Xxxxxxxx Money Market
Fund, and shall not permit any of its shareholders, officers, directors or
employees to take a long or short position in the shares of the Xxxxxxxx
Money Market Fund, except for the purchase of shares of the Xxxxxxxx Money
Market Fund for investment purposes at the same price as that available to
the public at the time of purchase or in connection with the initial
capitalization of the Company.
6. Exclusivity. The services of the Adviser to the Xxxxxxxx
Money Market Fund hereunder are not to be deemed exclusive and the Adviser
shall be free to furnish similar services to others as long as the
services hereunder are not impaired thereby. Although the Adviser has
agreed to permit the Company to use the name "Xxxxxxxx", if it so desires,
it is understood and agreed that the Adviser reserves the right to use and
permit other persons, firms or corporations, including investment
companies, to use such name. During the period that this Agreement is in
effect, the Adviser shall be the Xxxxxxxx Money Market Fund's sole
investment adviser.
7. Liability. 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 Xxxxxxxx Money Market Fund or to any shareholder of the
Xxxxxxxx Money Market Fund for any act or omission in the course of, or
connected with, rendering services hereunder, or for any losses that may
be sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions. The Adviser may cause the Xxxxxxxx
Money Market Fund to pay a broker-dealer which provides brokerage and
research services, as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934 (the "Exchange Act"), to the Adviser a
commission for effecting a securities transaction in excess of the amount
another broker-dealer would have charged for effecting such transaction,
if 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 the executing broker-dealer viewed in terms of either that
particular transaction or his overall responsibilities with respect to the
accounts as to which he exercises investment discretion (as defined in
Section 3(a)(35) of the Exchange Act).
9. Amendments. This Agreement may be amended by the mutual
consent of the parties; provided, however, that in no event may it be
amended without the approval of the board of directors of the Company in
the manner required by the Act, and by the vote of the majority of the
outstanding voting securities of the Xxxxxxxx Money Market Fund, as
defined in the Act.
10. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the board of directors of the
Company or by a vote of the majority of the outstanding voting securities
of the Xxxxxxxx Money Market Fund, as defined in the Act, upon giving
sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of sixty (60) days'
written notice to the Company. This Agreement shall terminate
automatically in the event of its assignment (as defined in
Section 2(a)(4) of the Act). Subject to prior termination as hereinbefore
provided, this Agreement shall continue in effect for an initial period
beginning as of the date hereof and ending January 15, 1992 and
indefinitely thereafter, but only so long as the continuance after such
initial period is specifically approved annually by (i) the board of
directors of the Company or by the vote of the majority of the outstanding
voting securities of the Xxxxxxxx Money Market Fund, as defined in the
Act, and (ii) the board of directors of the Company in the manner required
by the Act, provided that any such approval may be made effective not more
than sixty (60) days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day first above written.
XXXXXXXX CAPITAL MANAGEMENT
(the "Adviser")
By: _________________________________
Xxxxxxxxx X. Xxxxxxxx, Sole
Proprietor
XXXXXXXX BLUE CHIP GROWTH
FUND, INC.
(the "Company")
By: __________________________ By: _______________________________
Secretary President
