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Exhibit 5a
INVESTMENT ADVISORY AGREEMENT
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INVESTMENT ADVISORY AGREEMENT, dated September 23, 1993, between
Gabelli Global Series Funds, 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 allocated to The Gabelli Global Telecommunications Fund Stock,
The Gabelli Global Entertainment and Media Fund Stock and The Gabelli Global
Growth Fund Stock (the "Funds") and to supervise and arrange the purchase and
sale of assets held in the investment portfolios of the Funds.
2. Duties and obligations of the Adviser with
respect to investments of assets of the Funds
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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 each Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Funds and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Funds; (ii)
arrange for the purchase and sale of securities and other assets held in the
investment portfolio of each Fund and (iii) oversee the administration of all
aspects of each Fund'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 each Fund's shares.
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(b) The specific services to be provided or arranged for by
the Adviser for the Funds are (i) maintaining each Fund'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 each Fund's
custodian, transfer agent and dividend disbursing agent; (ii) transmitting
purchase and redemption orders for each Fund's shares to the extent not
transmitted by each Fund's distributor or others who purchase and redeem shares;
(iii) initiating all money transfers to each Fund's custodian and from each
Fund's custodian for the payment of each Fund's expenses, investments, dividends
and share redemptions; (iv) reconciling account information and balances among
each Fund's custodian, transfer agent, distributor, dividend disbursing agent
and the Adviser; (v) providing the Funds, upon request, with such office space
and facilities, utilities and office equipment as are adequate for each Fund's
needs; (vi) preparing, but not paying for, all reports by the Company, on behalf
of each Fund, to their shareholders and all reports and filings required to
maintain the registration and qualification of each Fund'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 each Fund's shares;
and (viii) preparing notices and agendas for meetings of each Fund'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 Funds as set forth in the Company's
Registration Statement on Form N-lA and (v) any policies and determinations of
the Board of Directors of the Company with respect to the Funds.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses (including any
overhead
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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 any Fund'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 that Fund 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 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 Funds or the Adviser or paid to the Funds by
the Adviser. Subject to the foregoing, the Company shall be responsible for the
payment of all the Funds' 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 officers and employees, and directors' and officers' errors and
omissions insurance coverage; (vii) legal, auditing and accounting fees and
expenses; (viii) charges of the Funds' custodian, transfer agent and dividend
disbursing agent; (ix) the Funds' pro rata portion of 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 each Fund's prospectuses and statements of additional information, and
notices to shareholders; (xi) filing fees for the registration or qualification
of each Fund and its shares under federal or state securities laws; (xii) the
fees and expenses involved in registering and maintaining registration of each
Fund'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 each Fund's net asset value per
share, including any equipment or services obtained solely for the purpose of
pricing shares or valuing each Fund's invest-
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ment 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 Funds.
(e) The Adviser shall give the Funds 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 Funds 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.
(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 Funds, 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 Funds
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 each
Fund'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
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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 Funds 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 each Fund'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 each Fund'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 each
Fund'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 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 each
Fund'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 each Fund 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
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net asset of the Fund shall be calculated pursuant to the procedures adopted by
resolutions of the Directors of the Company for calculating the net asset value
of each Fund'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 interest of 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 (iv) reckless disregard of the duties involved
in the conduct of his position (the conduct referred to in such clauses (i)
through (v) 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 interest 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
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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.
(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.
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6. Duration and Termination
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This Agreement shall become effective upon 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 Funds 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 of assets allocated to the Funds, both the Company and
the Fund shall promptly take all necessary and appropriate action to change
their names to names which do not include the word "Gabelli"; provided, however,
that the Company and the Funds 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
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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.
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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 GLOBAL SERIES FUNDS, INC.
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
GABELLI FUNDS, INC.
By /s/ X. Xxxxxxxx Xxxxxxxx, Jr.
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Name: X. Xxxxxxxx Xxxxxxxx, Jr.
Title: SVP and General Counsel
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