EXHIBIT 99.5
FORM OF INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
October 21, 1988
ND Money Management, Inc.
000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxx Xxxxxx 00000
Dear Sirs:
ND Tax-Free Fund, Inc. (the "Fund"), a corporation organized under the laws
of the State of North Dakota, herewith confirms its agreement with ND Money
Management, Inc. (the "Adviser"), as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Prospectus and Statement of
Additional Information, as from time to time in effect, and in
such manner and to such extent as may from time to time be
approved by the Board of Directors of the Fund. Copies of the
Fund's Prospectus and Statement of Additional Information have
been or will be submitted to the Adviser. The Fund desires to
employ and hereby appoints the Adviser to act as its investment
adviser. The Adviser accepts the compensation set forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of
Directors of the Fund, the Adviser will (a) act in conformity
with the Investment Company Act of 1940 and the Investment
Advisers Act of 1940, as the same may from time to time be
amended, (b) manage the Fund in accordance with the Fund's
investment objective(s) and policies as stated in the Fund's
Prospectus and Statement of Additional Information as from time
to time in effect, (c) make investment decisions for the Fund,
and (d) place purchase and sale orders on behalf of the Fund. In
providing those services, the Adviser will provide investment
research and supervision of the Fund's investments and conduct a
continual program of
investment, evaluation, and, if appropriate, sale and reinvestment of the Fund's
assets. In addition, the Adviser will furnish the Fund with whatever statistical
information the Fund may reasonably request with respect to the securities that
the Fund may hold or contemplate purchasing.
3. Brokerage
In executing transactions for the Fund and selecting brokers or dealers, the
Adviser will use its best efforts to seek the best overall terms available. In
assessing the best overall terms available for any Fund transaction, the Adviser
will consider all factors it deems relevant including, but not limited to,
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of any commission for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, the Adviser may
consider the brokerage and research services (as those terms are defined in
Section 28 (e) of the Securities Exchange Act of 1934) provided to the Fund
and/or other accounts over which the Adviser exercises investment discretion.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of developments materially
affecting the Fund and will, on its own initiative, furnish the Fund
from time to time with whatever information the Adviser believes is
appropriate for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2 and 3 above. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which this Agreement
relates, provided that nothing herein shall be deemed to protect or
purport to protect the Adviser against any liability to the Fund or to
shareholders of the Fund to which the Adviser would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence on its part in the performance of its duties or by reason
of the Adviser's reckless disregard of its obligations and duties
under this Agreement.
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6. Independent Contractor
The Adviser shall be deemed to be an independent contractor under this
Agreement and, unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund in any way or otherwise be deemed as
agent of the Fund.
7. Compensation
In consideration of the services rendered pursuant to this Agreement, the
Fund will pay the Adviser on the first business day of each month a fee for the
previous month at the annual rate of .60 of 1.00% of the Fund's average daily
net assets. The fee for the period from the date the Fund's initial registration
statement is declared effective by the Securities and Exchange Commission to the
end of the month during which the initial registration statement is declared
effective shall be prorated according to the proportion that such period bears
to the full monthly period. Upon any termination of this Agreement before the
end of a month, the fee for such part of that month shall be prorated according
to the proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to the Adviser, the value of the Fund's net assets
shall be computed at the times and in the manner specified in the Fund's
Prospectus or Statement of Additional Information as from time to time in
effect.
8. Expenses
The Adviser will bear all expenses in connection with the performance of its
services under this Agreement. The Fund will bear certain other expenses to be
incurred in its operation, including: organization expenses; taxes; interest;
brokerage fees and commissions, if any; fees and expenses of directors and
officers of the Fund who are not officers or directors of the Adviser;
Securities and Exchange Commission fees and state securities laws fees; charges
of custodians and transfer and dividend disbursing agents; insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Fund's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the shareholders of the Fund and of the officers and Board of
Directors of the Fund; and any extraordinary expenses. In addition, the Fund is
expected to pay distribution fees pursuant to the terms
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of a Distribution Plan adopted under Rule 12b-1 of the Investment Company Act of
1940.
9. Services to Other Companies or Accounts
The Fund understands that the Adviser may act in the future as investment
adviser to fiduciary and other managed accounts and as investment adviser
to one or more other investment companies, and the Fund has no objection to
the Adviser so acting, provided that whenever the Fund and one or more
other accounts or investment companies advised by the Adviser have
available funds for investment, investments suitable and appropriate for
each will be allocated in accordance with a formula believed to be
equitable to each entity. Similarly, opportunities to sell securities will
be allocated in an equitable manner. The Fund recognizes that in some
cases this procedure may adversely affect the size of the position that may
be acquired or disposed of for the Fund. In addition, the Fund understands
that the persons employed by the Adviser to assist in the performance of
the Adviser's duties hereunder will not devote their full time to such
service, and nothing contained herein shall be deemed to limit or restrict
the right of the Adviser or any affiliate of the Adviser to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
10. Term of Agreement
This Agreement shall continue until October 21, 1990, and thereafter shall
continue automatically for successive annual periods ending on October 21
of each year, provided such continuance is specifically approved at least
annually by (i) the Board of Directors of the Fund or (ii) a vote of a
"majority" (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Directors who
are not "interested persons" (as defined in said Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable, without penalty, on
60 days' written notice, by the Board of Directors of the Fund or by vote
of holders of a majority of the Fund's shares, or upon 90 days' written
notice, by the Adviser. This Agreement will also terminate automatically
in the event of its assignment (as defined in said Act).
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11. Limitation of Liability
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of
the Fund. The obligations of this Agreement shall be binding upon
the assets and property of the Fund only and shall not be binding
upon any director, officer, or shareholder of the Fund
individually.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
ND TAX-FREE FUND, INC.
By:
President
Accepted:
ND MONEY MANAGEMENT, INC.
By:
Authorized Officer
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