Xxxxxxxxx Capital Corporation
Form N-SAR
For Period Ending 12/31/01
File Number (c) 811-1641
Attachment Per Item 77Q1
Sub-Item 77Q1(e) New Investment Management and Advisory Contract of Registrant
INVESTMENT MANAGEMENT AND ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 5th day of November, 2001
by and between Dresdner RCM Global Investors LLC, a Delaware
limited liability company (the "Adviser"), and Xxxxxxxxx Capital
Corporation, a Delaware corporation (the "Client"):
1. Subject to the supervision of the Board of Directors of the
Client (the "Board of Directors"), the Client hereby grants to
the Adviser full authority, and the Adviser hereby agrees, to
manage the investment and reinvestment of the cash and securities
in the account of the Client (the "Account") presently held by State
Street Bank and Trust Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Custodian"), the proceeds thereof, and any
additions thereto, in the Adviser's discretion but consistent with
the investment objectives, policies and restrictions of the Client as
they may be amended from time to time. In this connection, the
Adviser shall not be required to take any action with respect to the
voting of proxies solicited by or with respect to the issuers of
securities in which Account assets may be invested.
2. In consideration of the services performed by the Adviser
hereunder, the Client will pay to the Adviser, as they become due
and payable, management fees determined in accordance with the
attached Schedule of Fees.
3. Nothing contained herein shall be deemed to authorize the Adviser
to take or receive physical possession of any cash or securities
held in the Account by the Custodian, it being intended that sole
responsibility for safekeeping thereof (in such investments as the
Adviser may direct), and the consummation of all such purchases,
sales, deliveries and investments made pursuant to the Adviser's
direction, shall rest upon the Custodian.
4. (a) Unless otherwise specified in writing to the Adviser by the
Client, all orders for the purchase and sale of securities for the
Account shall be placed in such markets and through such brokers as
in the Adviser's best judgment shall offer the most favorable price
and market for the execution of each transaction. The Client
understands and agrees that the Adviser may effect securities
transactions which cause the account to pay an amount of commission
in excess of the amount of commission another broker or dealer would
have charged. Provided, however, that 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 such broker or
dealer, viewed in terms of either the specific transaction or the
Adviser's overall responsibilities to the accounts for which the
Adviser exercises investment discretion. The Client also understands
that the receipt and use of such services will not reduce the
Adviser's customary and normal research activities.
(b) The Client agrees that the Adviser may aggregate sales and
purchase orders of securities held in the Account with similar orders
being made simultaneously for other portfolios managed by the
Adviser if, in the Adviser's reasonable judgment, such aggregation
shall result in an overall economic benefit to the Account, taking
into consideration the advantageous selling or purchase price and
brokerage commission. In accounting for such aggregated order,
price and commission shall be average on a per bond or share basis
daily. The Client acknowledges that the Adviser's determination
of such economic benefit to the Account is based on an evaluation
that the Account is benefited by relatively better purchase or
sales prices, lower commission expenses and beneficial timing of
transactions, or a combination of these and other factors.
5. The Adviser represents that it is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended.
6. The Adviser agrees:
(a) to give the Client the benefit of the Adviser's best judgment
and efforts in rendering services to the Client as provided in
this Agreement;
(b) to furnish the Client with monthly statements of the Account,
valued, for each security listed on any national securities
exchange at the last quoted sale price on the valuation date
reported on the composite tape or, in the case of securities not
so reported, by the principal exchange on which the security is
traded, and for any other security or asset in a manner
determined in good faith by the Adviser to reflect its fair
market value;
(c) to furnish the Client with statements evidencing any purchases
and sales for the Account as soon as practicable after such
transaction has taken place;
(d) to maintain books and records with respect to the Client's
portfolio transactions and to surrender promptly to the Client
any of such records upon the Client's request;
(e) to render to the Board of Directors such periodic and special
reports as the Board may reasonably request from time to time;
(f) to perform its duties under this Agreement in conformity with
the Client's Certificate of Incorporation, By-Laws and Form N-2
Registration Statement, with the requirements of applicable
federal and state laws and regulations, with the requirements of
the Internal Revenue Code affecting the Client's status as a
regulated investment company, and with the instructions of the
Board of Directors, all as may be amended from time to time;
(g) to bear all expenses related to compensation of its
employees and to its overhead in connection with its duties
under this Agreement;
(h) to maintain strict confidence in regard to the Account;
(i) to notify the Client of any change in ownership of the Adviser
in advance, if reasonable, and otherwise as soon as practicable
after such change occurs, and
(j) to indemnify the Client against any losses, claims, damages,
liabilities or expenses arising out of or based upon any untrue
statement of any material fact contained in any registration
statement, prospectus, proxy statement, report or other document,
or any amendment or supplement thereto, or arising out of or
based upon any omission to state therein any material fact
required to be stated therein or necessary to make the statements
therein not misleading, to the extent that such untrue statement
or omission was made in reliance upon and in conformity with
information furnished to the Client by the Adviser specifically
for use in the preparation thereof.
7. The Client agrees:
(a) to advise the Adviser of the investment objectives, policies
and restrictions of the Client as they apply to the Account and
of any changes or modifications therein and to notify the Adviser
of any other changes in the Account, including any amendments to
the Client's Certificate of Incorporation or By-Laws, of which
the Adviser would not otherwise have knowledge and which would be
material to the Adviser;
(b) to give the Adviser written notice of any investments made for
the Account that the Client deems to be in violation of the
investment objectives, policies or restrictions of the Client;
(c) to maintain in strict confidence and for use only with respect
to the Client all investment advice given by the Adviser; and
(d) not to hold the Adviser, or any of its managers, officers or
employees, liable under any circumstances for any error of
judgment or other action taken or omitted by the Adviser in the
good faith exercise of its powers hereunder, or arising out of an
act or omission of the Custodian or of any broker or agent
selected by the Adviser in good faith and in a commercially
reasonable manner, excepting matters as to which the Adviser
shall be finally adjudged to have been guilty of willful
misfeasance, bad faith, gross negligence, reckless disregard of
duty or breach of fiduciary duty involving personal misconduct
(all as used in the Investment Company Act of 1940, as amended
(the "1940 Act")).
8. The Client understands and agrees:
(a) that the Adviser performs investment management services for
various clients and that the Adviser may take action with respect
to any of its other clients which may differ from action taken or
from the timing or nature of action taken with respect to the
Account, so long as it is the Adviser's policy, to the extent
practical, to allocate investment opportunities to the Account
over a period of time on a fair and equitable basis relative to
other clients; and
(b) that the Adviser shall have no obligation to purchase or sell
for the Account any security which the Adviser, or its directors,
officers or employees, may purchase or sell for its or their own
accounts or the account of any other client, if in the opinion of
the Adviser such transaction or investment appears unsuitable,
impractical or undesirable for the Account.
9. This Agreement shall remain in effect for two years from the
date hereof and thereafter shall continue automatically for
successive annual periods, provided that such continuance is
specifically approved at least annually by vote of a majority of
outstanding voting securities (as used in the 1940 Act) of the
Client or by the Board of Directors, together with, in each
instance, the vote of a majority of those directors of the
Client who are not interested persons (as used in the 1940 Act)
of the Client or the Adviser cast in person at a meeting called
for the purpose of voting on such continuance. The Client may,
at any time and without the payment of any penalty, terminate
this Agreement upon sixty days' written notice to the Adviser
either by majority vote of the Board of Directors or by the
vote of a majority of the outstanding voting securities (as
used in the 1940 Act) of the Client. The Adviser may at any
time terminate this Agreement without payment of penalty on
sixty days' written notice to the Client. This Agreement
shall immediately terminate in the event of its assignment
(as used in the 1940 Act).
10. This Agreement shall be construed in accordance with the
laws of the State of California and the applicable provisions
of the 1940 Act. To the extent applicable law of the State of
California, or any of the provisions herein, conflict with
applicable provisions of the 1940 Act, the latter shall
control.
11. Each of the individuals whose signature appears below
warrants that he has full authority to execute this Agreement
on behalf of the party on whose behalf he has affixed his
signature to the Agreement.
Dated: November 5, 2001.
DRESDNER RCM GLOBAL INVESTORS LLC XXXXXXXXX CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. XxXxxxx
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. XxXxxxx
Title: General Counsel Title: President
SCHEDULE OF FEES
Effective Date: November 5, 2001.
(a) The fee for the period from the effective date referred to
above to the end of the calendar quarter shall be obtained by
multiplying the market value of cash and securities in the Account
as of the close of business on the last day of the calendar
quarter by one-fourth of the applicable annual fee rate(s)
indicated below, prorated for the percentage of the calendar
quarter which the Account is under management.
(b) The fee for subsequent calendar quarters shall be obtained
by multiplying the market value of cash and securities in the
Account as of the close of business on the last day of the
calendar quarter by one-fourth of the applicable annual fee
rate(s) indicated below.
(c) If the Investment Management and Advisory Agreement
terminates prior to the end of a calendar quarter, the fee for
the period from the beginning of such calendar quarter to the
date of termination shall be obtained by multiplying the market
value of cash and securities in the Account as of the close of
business on the date of termination by one-fourth of the applicable
annual fee rate(s) indicated below, prorated for the percentage of
the calendar quarter which the Account is under management.
(d) Shares of any investment company advised by the Adviser or any
affiliate of the Adviser shall not be considered securities in the
Account for purposes of the foregoing calculations.
(e) All fees shall be payable upon receipt of a fee statement.
VALUE OF SECURITIES AND CASH FEE
On the first $10,000,000 or fraction thereof... . 70% annually
On the next $10,000,000 or fraction thereof... . 60% annually
On the next $20,000,000 or fraction thereof... . 50% annually
On the next $20,000,000 or fraction thereof... . 35% annually
On the next $40,000,000 or fraction thereof... . 30% annually
On sums exceeding $100,000,000... . 25% annually
Dated: November 5, 2001.
DRESDNER RCM GLOBAL INVESTORS LLC XXXXXXXXX CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. XxXxxxx
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. XxXxxxx
Title: General Counsel Title: President
