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Exhibit 5
INVESTMENT ADVISORY AGREEMENT
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INVESTMENT ADVISORY AGREEMENT, dated June 28, 1995, between Gabelli
International Growth Fund, Inc. (the "Company"), a Maryland corporation, and
Gabelli Funds, Inc. (the "Adviser"), a Delaware corporation.
In consideration of the mutual promises and agreements herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed by and between the parties hereto as follows:
1. In General
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The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Company with respect to the investment of the assets
of the Company and to supervise and arrange the purchase and sale of assets held
in the Company's investment portfolio.
2. Duties and obligations of the Adviser with respect
to investments of assets of the Company
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(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and control of the Company's Board of Directors, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Company's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Company and in voting, exercising consents and exercising all other
rights appertaining to such securities and other assets on behalf of the
Company; (ii) arrange for the purchase and sale of securities and other assets
held in the investment portfolio of the Company and (iii) oversee the
administration of all aspects of the Company's business and affairs and provide,
or arrange for others whom it believes to be competent to provide, certain
services as specified in subparagraph (b) below. Nothing contained herein shall
be construed to restrict the Company's right to hire its own employees or to
contract for administrative services to be performed by third parties, including
but not limited to, the calculation of the net asset value of the Company's
shares.
(b) The specific services to be provided or arranged for by the
Adviser for the Company are (i) maintaining the Company's books and records,
such as journals, ledger accounts and other records in accordance with
applicable laws and regulations to the extent not maintained by the Company's
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custodian, transfer agent and dividend disbursing agent; (ii) transmitting
purchase and redemption orders for the Company's shares to the extent not
transmitted by the Company's distributor or others who purchase and redeem
shares; (iii) initiating all money transfers to the Company's custodian and from
the Company's custodian for the payment of the Company's expenses, investments,
dividends and share redemptions; (iv) reconciling account information and
balances among the Company's custodian, transfer agent, distributor, dividend
disbursing agent and the Adviser; (v) providing the Company, upon request, with
such office space and facilities, utilities and office equipment as are adequate
for the Company's needs; (vi) preparing, but not paying for, all reports by the
Company to its shareholders and all reports and filings required to maintain the
registration and qualification of the Company's shares under federal and state
law including periodic updating of the Company's registration statement and
Prospectus (including its Statement of Additional Information); (vii)
supervising the calculation of the net asset value of the Company's shares; and
(viii) preparing notices and agendas for meetings of the Company's shareholders
and the Company's Board of Directors as well as minutes of such meetings in all
matters required by applicable law to be acted upon by the Board of Directors.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940 (the "Act"), and of any rules or regulations in
force thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Articles of Incorporation and By-Laws of the Company, as such
documents are amended from time to time; (iv) the investment objectives,
policies and restrictions applicable to the Company as set forth in the
Company's Registration Statement on Form N-1A and (v) any policies and
determinations of the Board of Directors of the Company.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses (including any
overhead and personnel costs) incurred in connection with its duties hereunder
and shall bear the costs of any salaries or directors' fees of any officers or
directors of the Company who are affiliated persons (as defined in the Act) of
the Adviser. If in any fiscal year the Company's aggregate expenses (excluding
interest, taxes, distribution expenses, brokerage commissions and extraordinary
expenses) exceed the most restrictive expense limitation imposed by the
securities law of any state in which the shares of the Company are registered or
qualified for sale, the Adviser will reimburse the Company for the amount of
such excess up to the amount of fees accrued for such fiscal year hereunder. The
amount of such reimbursement shall be calculated monthly and an appropriate
amount shall be held back or released to the Adviser each month so that the
aggregate amount held back at any particular time
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shall equal the net amount of the reimbursement on a cumulative year-to-date
basis. As of the end of the year the final amount of the total reimbursement
shall be calculated and the appropriate amount released to the Company or the
Adviser or paid to the Company by the Adviser. Subject to the foregoing, the
Company shall be responsible for the payment of all the Company's other
expenses, including (i) payment of the fees payable to the Adviser under
paragraph 4 hereof; (ii) organizational expenses; (iii) brokerage fees and
commissions; (iv) taxes; (v) interest charges on borrowings; (vi) the cost of
liability insurance or fidelity bond coverage for the Company's officers and
employees, and directors' and officers, errors and omissions insurance coverage;
(vii) legal, auditing and accounting fees and expenses; (viii) charges of the
Company's custodian, transfer agent and dividend disbursing agent; (ix) the
dues, fees and charges of any trade association of which the Company is a
member; (x) the expenses of printing, preparing and mailing proxies, stock
certificates and reports, including the Company's prospectuses and statements of
additional information, and notices to shareholders; (xi) filing fees for the
registration or qualification of the Company and its shares under federal or
state securities laws; (xii) the fees and expenses involved in registering and
maintaining registration of the Company's shares with the Securities and
Exchange Commission; (xiii) the expenses of holding shareholder meetings; (xiv)
the compensation, including fees, of any of the Company's directors, officers or
employees who are not affiliated persons of the Adviser; (xv) all expenses of
computing the Company's net asset value per share, including any equipment or
services obtained solely for the purpose of pricing shares or valuing the
Company's investment portfolio; (xvi) expenses of personnel performing
shareholder servicing functions and all other distribution expenses payable by
the Company; and (xvii) litigation and other extraordinary or non-recurring
expenses and other expenses properly payable by the Company.
(e) The Adviser shall give the Company the benefit of its best
judgment and effort in rendering services hereunder, but neither the Adviser nor
any of its officers, directors, employees, agents or controlling persons shall
be liable for any act or omission or for any loss sustained by the Company in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement; provided, however, that the
foregoing shall not constitute a waiver of any rights which the Company may have
which may not be waived under applicable law.
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(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Adviser or any
of its directors, officers, employees or agents from buying, selling or trading
any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting.
3. Portfolio Transactions
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In the course of the Adviser's execution of portfolio transactions for
the Company, it is agreed that the Adviser shall employ securities brokers and
dealers which, in its judgment, will be able to satisfy the policy of the
Company to seek the best execution of its portfolio transactions at reasonable
expenses. For purposes of this Agreement, "best execution" shall mean prompt,
efficient and reliable execution at the most favorable price obtainable. Under
such conditions as may be specified by the Company's Board of Directors in the
interest of its shareholders and to ensure compliance with applicable law and
regulations, the Adviser may (a) place orders for the purchase or sale of the
Company's portfolio securities with its affiliate, Gabelli & Company, Inc.; (b)
pay commissions to brokers other than its affiliate which are higher than might
be charged by another qualified broker to obtain brokerage and/or research
services considered by the Adviser to be useful or desirable in the performance
of its duties hereunder and for the investment management of other advisory
accounts over which it or its affiliates exercise investment discretion; and (c)
consider sales by brokers (other than its affiliate distributor) of shares of
the Company and any other mutual fund for which it or its affiliates act as
investment adviser, as a factor in its selection of brokers and dealers for the
Company's portfolio transactions.
4. Compensation of the Adviser
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(a) Subject to paragraph 2(b), the Company agrees to pay to the
Adviser out of the Company's assets and the Adviser agrees to accept as full
compensation for all services rendered by or through the Adviser (other than any
amounts payable to the Adviser pursuant to paragraph 4(b)) a fee computed daily
and payable monthly in an amount equal on an annualized basis to 1.0% of the
Company's daily average net asset value. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated according to the
proportion which such
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period bears to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) The Company will pay the Adviser separately for any costs and
expenses incurred by the Adviser in connection with distribution of the
Company's shares in accordance with the terms (including proration or nonpayment
as a result of allocations of payments) of a Plan of Distribution (the "Plan")
adopted for the Company pursuant to Rule 12b-1 under the Act as such Plan may be
in effect from time to time; provided, however, that no payments shall be due or
paid to the Adviser hereunder unless and until this Agreement shall have been
approved by Director Approval and Disinterested Director Approval (as such terms
are defined in such Plan). The Company reserves the right to modify or terminate
such Plan at any time as specified in the Plan and Rule 12b-1, and this
subparagraph shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of the funds pursuant to this Agreement and the Plan shall provide to
the Company's Board of Directors, and the Directors shall review, at least
quarterly a written report of the amount so paid and the purposes for which such
expenditures were made.
(c) For purposes of this Agreement, the net asset value of the
Company shall be calculated pursuant to the procedures adopted by resolutions of
the Directors of the Company for calculating the net asset value of the
Company's shares.
5. Indemnity
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(a) The Company hereby agrees to indemnify the Adviser and each
of the Adviser's directors, officers, employees, and agents (including any
individual who serves at the Adviser's request as director, officer, partner,
trustee or the like of another corporation) and controlling persons (each such
person being an "indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable
corporate law) reasonably incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which he
may be or may have been involved as a party or otherwise or with which he may be
or may have been threatened, while acting in any capacity set forth above in
this paragraph or thereafter by reason of his having acted in any such capacity,
except with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in the
best interests of
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the Company and furthermore, in the case of any criminal proceeding, so long as
he had no reasonable cause to believe that the conduct was unlawful, provided,
however, that (1) no indemnitee shall be indemnified hereunder against any
liability to the Company or its shareholders or any expense of such indemnitee
arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross
negligence or (iv) reckless disregard of the duties involved in the conduct of
his position (the conduct referred to in such clauses (i) through (iv) being
sometimes referred to herein as "disabling conduct"), (2) as to any matter
disposed of by settlement or a compromise payment by such indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a determination
that such settlement or compromise is in the best interests of the Company and
that such indemnitee appears to have acted in good faith in the reasonable
belief that his action was in the best interests of the Company and did not
involve disabling conduct by such indemnitee and (3) with respect to any action,
suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such indemnitee was authorized by a majority of the full
Board of the Company. Notwithstanding the foregoing, the Company shall not be
obligated to provide any such indemnification to the extent such provision would
waive any right which the Company cannot lawfully waive.
(b) The Company shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
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(c) All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct, or (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-Party Directors of the
Company, or (ii) if such a quorum is not obtainable or even, if obtainable, if a
majority vote of such quorum so directs, independent legal counsel in a written
opinion.
The rights accruing to any indemnitee under these provisions
shall not exclude any other right to which he may be lawfully entitled.
6. Duration and Termination
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This Agreement shall become effective on the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Company sixty days written notice (which notice may be
waived by the Company) and may be terminated by the Company at any time without
penalty upon giving the Adviser sixty days notice (which notice may be waived by
the Adviser), provided that such termination by the Company shall be directed or
approved by the vote of a majority of the Directors of the Company in office at
the time or by the vote of the holders of a "majority of the voting securities"
(as defined in the Act) of the Company at the time outstanding and entitled to
vote or, with respect to paragraph 4(b), by a majority of the Directors of the
Company who are not "interested persons" of the Company and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to the Plan. This Agreement shall terminate automatically in the event
of its assignment (as "assignment" is defined in the Act and the rules
thereunder.)
It is understood and hereby agreed that the word "Gabelli" is the
property of the Adviser for copyright and other purposes. The Company further
agrees that the word "Gabelli" in its name is derived from the name of Xxxxx X.
Xxxxxxx and such name may freely be used by the Adviser for other investment
companies, entities or products. The Company further agrees that, in the event
that the Adviser shall cease to act as investment adviser to the Company with
respect to the investment
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of assets of the Company, the Company shall promptly take all necessary and
appropriate action to change its name to a name which does not include the word
"Gabelli"; provided, however, that the Company may continue to use the word
"Gabelli" if the Adviser consents in writing to such use.
7. Notices
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Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. Governing Law
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This Agreement shall be construed in accordance with the laws of the
State of New York for contracts to be performed entirely therein and in
accordance with the applicable provisions of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
GABELLI INTERNATIONAL GROWTH FUND, INC.
By /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: Vice President
GABELLI FUNDS, INC.
By /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Vice President-Finance
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