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INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated August 13, 1985 between Xxxxxxx Value Fund, Inc., a
Maryland corporation (the "Fund"), and Xxxxxxx Capital Management, Inc. (the
"Adviser").
RECITALS
A. The Fund is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), and authorized to issue its shares of capital stock, $.10 par value
(the "Shares").
B. The Fund desires to retain the Adviser to render the services
described herein for the Fund and the Adviser is willing to so render such
services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Fund hereby appoints the Adviser to
act as investment adviser to the Fund for the periods and on the terms herein
set forth. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Duties of Adviser.
(a) Subject to the general supervision of the Board of Directors of
the Fund, the Adviser shall manage the operations of the Fund and provide the
additional services and facilities hereinafter described. In this regard, the
Adviser shall
(i) provide supervision of the Fund's assets, furnish a continuous
investment program, determine from time to time what investments or
securities will be purchased, retained or sold by it and what portion of
its assets will be invested or held uninvested as cash, and, subject to
paragraph 3, place orders for the purchase and sale of securities for the
account of the Fund with brokers or dealers selected by the Adviser; and
(ii) furnish office space, office facilities, equipment, personnel
(other than the services of directors of the Fund who are not interested
persons of the Adviser), and clerical, bookkeeping and administrative
services for managing the Fund, except such services as are provided by a
custodian or transfer, dividend disbursing or shareholder servicing agent
of the Fund.
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(b) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties hereunder, the
Adviser shall not be liable to the Fund or to any of its shareholders or to any
creditor of the Fund for any error of judgment, act or omission or for any loss
that may be sustained by the Fund.
(c) The Adviser agrees that all records which it maintains for the
Fund are the property of the Fund and it will surrender promptly to the Fund any
of such records upon the Fund's request.
3. Brokerage. In placing orders for the purchase or sale of
securities for the account of the Fund the Adviser is authorized, to the fullest
extent now and hereafter permitted by law, to cause the Fund to pay a member of
a securities exchange, broker, or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission another member of
an exchange, broker, or dealer would have charged for effecting that
transaction, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934) provided by such member, broker, or dealer, viewed in terms either of that
particular transaction or the overall responsibilities of the Adviser with
respect to the accounts as to which the Adviser exercises investment discretion
(within the meaning of Section 3(a)(35) of the Securities Exchange Act of 1934).
4. Expenses. The Adviser shall bear the expenses incurred by it in
the performance of its duties hereunder without reimbursement from the Fund. In
addition to the compensation payable to the Adviser hereunder, the Fund will pay
all other expenses of its operations including, without limitation, (i)
interest, taxes and any governmental filing fees; (ii) brokerage commissions and
other costs incurred in connection with the purchase or sale of securities;
(iii) compensation and expenses of its directors, other than those who are
interested persons of the Adviser; (iv) legal and audit expenses; (v) the fees
and expenses of the Fund's custodian and transfer, dividend disbursing and
shareholder servicing agents; (vi) expenses relating to the repurchase or
redemption of Shares; (vii) expenses of servicing shareholder accounts; (viii)
fees and expenses related to the registration and qualification of the Fund and
its Shares under Federal and state securities laws; (ix) expenses of printing
and mailing reports, notices and proxy material to shareholders and the expenses
incidental to meetings of shareholders; (x) insurance premiums for fidelity and
other insurance coverage; (xi) the expenses of preparing prospectuses and
statements of additional information and of printing and distributing them to
existing shareholders; (xii) expenses
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incurred pursuant to any plan adopted by the Fund pursuant to Rule 12b-1 under
the 1940 Act and (xiii) any nonrecurring expenses, including actions, suits or
proceedings to which the Fund is a party and any obligation which the Fund may
incur to indemnify others. Notwithstanding the foregoing provisions, the Adviser
agrees to reimburse the Fund in any amount necessary to prevent the annual
expenses of the Fund from exceeding in any year the most restrictive annual
expenses limitation imposed by any state in which the Shares of the Fund are
qualified for sale.
5. Compensation. For the services to be rendered and the charges and
expenses to be assumed by the Adviser hereunder, the Fund shall pay to the
Adviser a fee, payable in monthly installments, equal to 1% per annum of the
average daily net asset value of the Fund. For purposes of computing the fees
payable hereunder, the net asset value of the Fund shall be determined in the
same manner as for the purchase and redemption of Fund shares as described in
the current Prospectus. Such fee shall be prorated for any monthly period in
which this Agreement is not in effect for the entire period.
6. Status of Adviser; Services not Exclusive.
(a) 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 Fund in any way or
otherwise be deemed an agent of the Fund. However, one or more shareholders,
directors, officers or employees of the Adviser may serve as directors and/or
officers of the Fund, but without compensation or reimbursement of expenses for
such services from the Fund. Nothing herein contained shall be deemed to require
the Fund 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 Fund of its responsibility for and control of the conduct of
the affairs of the Fund.
(b) The services of the Adviser hereunder are not exclusive, and the
Adviser shall be free to render similar services to others (including other
investment companies) so long as its services under this Agreement are not
impaired thereby.
7. Duration and Termination. This Agreement shall become effective
on the date hereof and shall continue in effect, unless sooner terminated as
provided herein, until the second anniversary of its effective date. Thereafter,
this Agreement shall continue in effect automatically for periods of one year so
long as each such latter continuance is approved at least annually (a) 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, and (b) by the Board of
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Directors of the Fund or by vote of the holders of a majority of the outstanding
Shares of the Fund. Notwithstanding the foregoing provisions, (i) the
continuance of this Agreement for the two-year period referred to in the first
sentence of this paragraph 7 is, in addition to the requirements set forth
above, subject to the approval of this Agreement by the holders of a majority of
the outstanding Shares of the Fund on or before the first anniversary of the
effective date of this Agreement, and (ii) this Agreement may be terminated at
any time, without the payment of any penalty, (x) by the Fund's Board of
Directors or by vote of the holders of a majority of the outstanding Shares of
the Fund on 60 days' written notice to the Adviser, or (y) by the Adviser on 60
days' written notice to the Fund. This Agreement will terminate automatically in
the event of its assignment (as defined in the 1940 Act).
8. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those 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 amendment, and (b) by vote of the holders of a
majority of the outstanding Shares of the Fund.
9. Name of Fund. The parties agree that the Fund may use the name
"Xxxxxxx", and any logos or service marks which the Adviser may furnish, only so
long as this Agreement remains in effect, and that any such use shall be royalty
free. Upon termination of this Agreement, the Fund shall discontinue the use of
such name and any such logos or service marks at the request of the Adviser. The
Fund acknowledges that (i) it has no proprietary or exclusive rights in the name
"Xxxxxxx", or any logo or service xxxx furnished by the Adviser, and (ii) the
Adviser reserves to itself the right to grant the nonexclusive right to use such
name and any such logo or service xxxx to other persons (including other
investment companies).
10. 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. The term
"interested person" is used herein as defined in the 1940 Act, and the term
"majority of the outstanding Shares" is used herein as defined in the 1940 Act
with respect to voting securities. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall
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not be affected thereby. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of New York and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors (subject to the last sentence of paragraph 7).
XXXXXXX VALUE FUND, INC.
By /s/ XXXXX X. XXXXXXX
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XXXXXXX CAPITAL MANAGEMENT, INC.
By /s/ XXXXX X. XXXXXXX
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