INVESTMENT ADVISER CONTRACT
AGREEMENT, made by and between SCM Portfolio Fund Inc., a Georgia
Corporation, (hereinafter called "Fund") and SCM Associates, Inc., a Georgia
Corporation, (hereinafter called "Investment Adviser").
WITNESSETH:
WHEREAS, Fund engages in the business of investing and reinvesting its
assets and property in various stocks and securities and Investment Adviser
engages in the business of providing investment advisory services.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Fund hereby employs the Investment Adviser, for the period set forth
in Paragraph 8 hereof, and on the terms set forth herein, to render investment
advisory services to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund. The Investment Adviser hereby accepts such
employment and agrees, during such periods, to render the services and assume
the obligations herein set forth, for the compensation provided. The Investment
Adviser shall, for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized, have
no authority to act for or represent the Fund in any way, or in any way be
deemed an agent of the Fund.
2. As a compensation for the services to be rendered to the Fund by the
Investment Adviser under the provisions of this Agreement, the Fund shall pay to
the Investment Adviser a monthly fee equal to one-twelfth of seventy-four one
hundredths of one per cent per month (the equivalent of .74 of one per cent per
annum), of the daily average net assets of the Fund during the month, less all
amounts paid as compensation to interested members of the Board of Directors of
the Fund in respect to the same period. The first payment of fee hereunder shall
be prorated on a daily basis from the date this Agreement takes effect.
3. It is expressly understood and agreed that the services to be rendered
by the Investment Adviser to the Fund under the provisions of this Agreement are
not to be deemed to be exclusive, and the Investment Adviser shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be impaired thereby.
4. It is understood and agreed that directors, officers, employees, agents
and shareholders of the Fund may be interested
in the Investment Adviser as directors, officers, employees, agents and
shareholders, and that directors, officers, employees, agents and shareholders
of the Investment Adviser may be interested in the Fund, as directors, officers,
employees, agents and shareholders or otherwise, and that the Investment
Adviser, itself, may be interested in the Fund as a shareholder or otherwise.
Specifically, it is understood and agreed that directors, officers, employees,
agents and shareholders of the Investment Adviser may continue as directors,
officers, employees, agents and shareholders of the Fund; that the Investment
Adviser, its directors, officers, employees, agents and shareholders may engage
in other business, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual, may
render underwriting services to the Fund, or to any other investment company,
corporation, association, firm or individual.
5. The Fund shall bear expenses and salaries necessary and incidental to
the conduct of its business, including but not in limitation of the foregoing,
the costs incurred in the maintenance of its own books, records, and procedures;
dealing with its own shareholders; the payment of dividends; transfers of stock
(including issuance and redemption of shares); reports and notices to
shareholders; expenses of annual stockholders' meetings; miscellaneous office
expenses; and brokerage commissions, custodian fees, legal and accounting fees,
including preparation of tax returns; local, state and federal taxes; local,
state and federal registration fees and licenses. Officers, employees and agents
of the Investment Adviser who are, or may in the future be, directors and/or
senior officers of the Fund shall receive no salaries from the Fund for acting
in such capacities for the Fund.
6. In the conduct of the respective businesses of the parties hereto and in
the performance of this agreement, the Fund and Investment Adviser may share
common facilities and personnel common to each, with appropriate proration of
expenses.
7. The Investment Adviser shall give the Fund the benefit of its best
judgment and efforts in rendering these services, and except for negligence,
malfeasance, or violations of applicable laws, the Investment Adviser shall not
be liable hereunder for any action performed, any errors of judgment in managing
the Fund or any losses that may be sustained in the purchase, holding or sale of
any security, provided that nothing herein shall constitute a waiver or
limitation of any right which a shareholder may have under any federal
securities laws.
8. This agreement shall continued in effect until the 23nd day of January,
1998, and thereafter, only so long as such continuance is approved at least
annually by votes of the Fund's Board of Directors cast in person at a meeting
called for the purpose of voting on such approval, including the votes of a
majority of the Directors who are not parties to such agreement or interested
persons of any such party, or by a resolution of consent signed by all Directors
and otherwise in compliance with the laws of the State of Georgia.
This agreement may be terminated at any time upon 60 days' prior written
notice, without the payment of any penalty, by the Fund's Board of Directors or
by vote of a majority of the outstanding voting securities of the Fund. The
contract will automatically terminate in the event of its assignment by the
Investment Adviser (within the meaning of the Investment Company Act of 1940),
which shall be deemed to include a transfer of control of the Investment
Adviser. Upon the termination of this agreement, the obligations of all the
parties hereunder shall cease and terminate as of the date of such termination,
except for any obligation to respond for a breach of this Agreement committed
prior to such termination and except for the obligation of the Fund to pay to
the Investment Adviser the fee provided in Paragraph 2 hereof, prorated to the
date of termination.
9. This Agreement shall not be assigned by the Fund without prior written
consent thereto of the Investment Adviser. This Agreement shall terminate
automatically in the event of its assignment by the Investment Adviser unless an
exemption from such automatic termination is granted by order or rule of the
Securities and Exchange Commission.
10. In the event that the total expenses to the Fund exceed two percent
(2%) of the daily average net assets of the Fund for one fiscal year then in
that event the Adviser shall refund to the Fund an amount equal to the amount by
which the total expenses exceed such two percent (2%).
IN WITNESS WHEREOF, this 15th day of January, 1997.
SCM PORTFOLIO FUND, INC.
Attest: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. XxXxxxxxxx
President
SCM ASSOCIATES, INC.
Attest: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. XxXxxxxxxx
President
