INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of April 1, 1995 between BLUE CHIP VALUE FUND, INC.,
a Maryland corporation (the "Fund"), and Denver Investment Advisors LLC (the
"Investment Advisor") a Colorado limited liability company.
WHEREAS, the Fund is registered as a closed-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended ("1940 Act"); and
WHEREAS, the Fund desires to retain the Investment Advisor to furnish
investment advisory and certain administrative services to the Fund and the
Investment Advisor is willing to so furnish such services;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Investment Advisor to
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act as its investment adviser for the period and on the terms set forth in this
Agreement. The Investment Advisor accepts such appointment and agrees to furnish
the services herein set forth, for the compensation herein provided.
2. Management. Subject to the supervision of the Fund's Board of
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Directors, the Investment Advisor will perform the following services:
(i) Provide a continuous investment program and strategy for the
Fund, including investment research and management with respect to all
securities and investments and cash equivalents in the Fund,
determining from time to time what securities and other investments
will be invested, reinvested, owned, held or traded by the Fund. The
Investment Advisor will provide this service under this Agreement in
accordance with the Fund's investment objective, policies and
restrictions as stated in the Prospectus and resolutions of the Fund's
Board of Directors adopted from time to time;
(ii) Prepare or supervise the preparation of the Fund's Annual
and Semi-Annual Reports to the Securities and Exchange Commission and
any other report required by the securities, investment, tax or other
laws of the
United States and the various states in which the Fund does business;
(iii) The Investment Advisor shall, to the extent requested by
the Board of Directors, provide the personnel to act as officers of
the Fund and pay the salaries of such officers (except the Secretary),
and shall furnish office facilities and equipment, and stenographic
services necessary for the operation of the Fund.
(iv) Assist to the extent requested by the Fund with the Fund's
preparation of its Annual and Semi-Annual Reports to shareholders;
(v) Transmit information concerning purchases and sales of the
Fund's portfolio securities to the custodian for proper settlement;
(vi) Supply the Fund and its Board of Directors with reports and
statistical data as requested; and
(vii) Prepare a quarterly brokerage allocation summary and
monthly security transaction listing for the Fund.
3. Other Covenants.
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The Investment Advisor further agrees that:
(i) It will conform with all applicable Rules and Regulations
of the Securities and Exchange Commission;
(ii) It will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with
any broker or dealer. In executing portfolio transactions and
selecting brokers or dealers, the Investment Advisor will use its best
efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the wazzu Investment Advisor shall consider all factors
that it deems relevant, including the 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 the commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available, and
in selecting the broker dealer to execute a particular transaction,
the Investment Advisor may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act
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of 1934) provided to the Fund and/or other accounts over which the
Investment Advisor or an affiliate of the Investment Advisor exercises
investment discretion. The Investment Advisor is authorized, subject
to the prior approval of the Fund's Board of Directors, to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Investment Advisor determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that
particular transaction or in terms of the overall responsibilities of
the Investment Advisor to the Fund. The Investment Advisor will make
investment decisions for the Fund independently from those of other
clients of the Investment Advisor. However, the same security may be
held in the portfolio of more than one client when the same security
is believed suited for the investment objectives of more than one
client. Should two or more clients of the Investment Advisor
simultaneously be engaged in the purchase or sale of the same
security, to the extent possible, the transactions will be allocated
as to price and amount in a manner fair and equitable to each client;
and
(iii) Maintain or supervise the maintenance of all books and
records with respect to the securities transactions of the Fund, keep
its books of account and will furnish the Fund's Board of Directors
with such periodic and special reports as the Board may request.
4. Services Not Exclusive. The investment management services
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furnished by the Investment Advisor hereunder are deemed not to be exclusive,
and the Investment Advisor shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule
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31a-3 under the 1940 Act, the Investment Advisor hereby agrees that all records
which it maintains for the Fund are the property of the Fund and further agrees
to surrender promptly to the Fund any of such records upon the Fund's request.
The Investment Advisor further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-
1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment
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Advisor will pay all expenses incurred by it in connection with its activities
under this Agreement other than
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the cost of securities (including brokerage commissions, if any) purchased for
the Fund.
7. Compensation. For the services provided to the Fund pursuant to
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this Agreement, the Fund will pay to the Investment Advisor a fee, payable on or
before the tenth (10th) day of each calendar month, at the annual rates of
sixty-five one-hundredths of one percent (0.65%) of the average of the first
$100,000,000 of the net asset values of the Fund and fifty one-hundredths of one
percent (0.50%) of the average of the net asset values of the Fund in excess of
$100,000,000 as of the close of the last business day of the New York Stock
Exchange in each calendar week during the preceding calendar month. Such fees
shall be reduced as required by expense limitations imposed upon the Fund by any
state in which shares of the Fund are sold. Reductions shall be made at the time
of each monthly payment on an estimated basis, if appropriate, and an adjustment
to reflect the reduction on an annual basis shall be made, if necessary, in the
fee payable with respect to the last month in any calendar year of the Fund. The
Investment Advisor shall within ten (10) days after the end of each calendar
year refund any amount paid in excess of the fee determined to be due for such
year.
If this Agreement shall become effective subsequent to the first day
of a month, or shall terminate before the last day of a month, the Investment
Advisor's compensation for such fraction of the month shall be determined by
applying the foregoing percentages to the average of the weekly net asset values
of the Fund during such fraction of a month (or, if none, to the asset value of
the Fund as calculated on the last day of the preceding month on which the New
York Stock Exchange was open for trading) and in the proportion that such
fraction of a month bears to the entire month.
8. Limitation of Liability. The Investment Advisor shall not be
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liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on continue the part of the Investment Advisor in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
partner, employee, or agent of the Investment Advisor, who may be or become an
officer, director, employee or agent of the Fund, shall be deemed, when
rendering service to the Fund or acting on any business of the Fund (other than
services or business in connection with the Investment Advisor's duties as
investment adviser hereunder), to be rendering such services to or acting
solely, for, the Fund and not as an officer, partner, employee or
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agent or one under the control or direction of the Investment Advisor even
though paid by it.
9. Duration and Termination. This Agreement, unless sooner terminated
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as provided herein, shall in effect until April 7, 1996. Thereafter, if not
terminated, this Agreement shall continue in effect for successive annual
periods, provided such continuance is specifically approved at least annually
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(a) by the vote of a majority of those members of the Fund's Board of Directors
who are not interested persons of any party to this Agreement, cast in person at
a meeting called for the purpose of voting on such approval, and (b) by the
Fund's Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the Fund (by vote
of the Fund's Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund), or by the Investment Advisor on sixty days'
written notice. This Agreement will immediately and automatically terminate in
the event of its assignment. The Investment Advisor's obligations pursuant to
section 2 of this Agreement with respect to dates up to the time of termination
of this Agreement shall survive the termination of this Agreement. (As used in
this Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meaning of such terms
in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement may be
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changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. No amendment of this Agreement shall be effective
until approved by vote of a majority of the outstanding voting securities of the
Fund.
11. Miscellaneous. Any notice made pursuant to this Agreement shall
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be given in writing, addressed and delivered or mailed postage prepaid, return-
receipt requested, to the other party to this Agreement at its principal place
of business. Notice given by a party's attorney shall be deemed to be notice
given by the party. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provisions of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by Maryland law.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
BLUE CHIP VALUE FUND, INC.
/s/Xxxxxxx X. Xxxxxxx
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By: Xxxxxxx X. Xxxxxxx
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Title: Chairman
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DENVER INVESTMENT ADVISORS LLC
/s/ Todger Xxxxxxxx
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By: Todger Xxxxxxxx
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Title: President
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