XXXXXXXX FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT executed as of the 1st day of August, 1994, between The Xxxxxxxx
Funds, Inc. (the "Company"), a Maryland corporation registered under the
Investment Company Act of 1940 (the "1940 Act"), and Xxxxxxxx Capital
Management, Inc., a Delaware corporation (the "Investment Adviser").
WHEREAS, the Company is an open-end management investment company organized
as a series fund; and
WHEREAS, the Company has initially allocated 200 million shares of its
authorized common stock to a series named The Xxxxxxxx Growth Fund (the "Fund");
and
WHEREAS, the Fund engages in the business of investing its assets in the
manner and in accordance with its stated current investment objective and
restrictions;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties agree as follows:
1. Obligations.
1.1. The Investment Adviser will supervise and manage the investment
portfolio of the Fund in accordance with the Fund's stated investment objective,
policies and limitations and, subject to such other policies as the Board of
Directors of the Company may determine, direct the purchase or sale of
investment securities in the day-to-day management of the Fund's investment
portfolio. The Investment Adviser shall give the Fund the benefit of the
Investment Adviser's best judgment and efforts in rendering services under this
Agreement.
1.2. The Company will pay the Investment Adviser a fee at the annual
rate of 1.00% of the Fund's average daily net assets payable at the monthly rate
of 1/12 of 1% on the first business day of each calendar month. For the purpose
of determining the fees payable to the Investment Adviser hereunder, the value
of the Fund's net assets shall be computed initially at the times and in the
manner specified in the Fund's registration statement on Form N-1A, as such
times and manner may be amended from time to time by action of the Company's
Board.
1.3. In rendering the services required under this Agreement, the
Investment Adviser may, at its expense, employ, consult or associate with itself
such person or persons as it believes necessary to assist it in carrying out its
obligations under this Agreement. However, the Investment Adviser may not retain
any person or company that would be an "investment adviser," as that term is
defined in the 1940 Act, to the Fund unless (i) the Company is a party to the
contract with such person or company and (ii) such contract is approved by a
majority of the Company's Board of Directors and a majority of Directors who are
not parties to any agreement or contract with such company and who are not
"interested persons," as defined in the 1940 Act, of the Company, the Investment
Adviser, or any such person or company retained by the Investment Adviser, and
is approved by the vote of a majority of the outstanding voting securities of
the Fund to the extent required by the 1940 Act.
2. Expenses. The Investment Adviser shall bear all expenses of its
employees and overhead, including office space, office facilities and equipment
incurred in connection with its duties under this Agreement and shall pay all
salaries and fees of the Company's Directors and officers who are interested
persons (as defined in the 0000 Xxx) of the Investment Adviser. The Company will
bear all of its own expenses, including: expenses of organizing the Fund; fees
of the Company's Directors who are not interested persons (as defined in the
0000 Xxx) of any other party; out-of-pocket travel expenses for all Officers and
Directors and other expenses incurred by the Fund in connection with meetings of
directors; interest expense; taxes and governmental fees including any original
issue taxes or transfer taxes applicable to the sale or delivery of shares or
certificates therefor; brokerage commissions and other expenses incurred in
acquiring or disposing of the Fund's portfolio securities; expenses in
connection with the issuance, offering, distribution, sale or underwriting of
securities issued by the Fund; expenses of registering and qualifying the Fund's
shares for sale with the Securities and Exchange Commission and in various
states and foreign jurisdictions; auditing, accounting, insurance and legal
costs; custodian, dividend disbursing and transfer agent expenses; and the
expenses of shareholders' meetings and of the preparation and distribution of
proxies and reports to shareholders.
3. Liability. The Investment Adviser shall not be liable for any error of
judgment or for any loss suffered by the Fund or the Company in connection with
the matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to receipt of compensation for services
(in which case any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the 0000 Xxx) or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of, or from reckless disregard by it of its obligations and duties
under, this Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Adviser are not deemed to be exclusive, and nothing in this Agreement
shall prevent the Investment Adviser or any affiliate, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Adviser
desire to purchase or sell a security at the same time such security is
purchased or sold for the Fund, such purchases and sales will be allocated among
the Investment Adviser's clients, including the Fund, in a manner that is fair
and equitable in the judgment of the Investment Adviser in the exercise of its
fiduciary obligations to the Fund and to such other clients.
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5. Duration and Termination. This Agreement shall become effective upon
shareholder approval thereof as required under the 1940 Act and shall continue
in effect for two (2) years from the date of its execution. If not sooner
terminated, this Agreement shall continue in effect with respect to the Company
and the Fund for successive periods of twelve months thereafter, provided that
each such continuance shall be specifically approved annually by the vote of a
majority of the Company's Board of Directors who are not parties to this
Agreement or interested persons (as defined in the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on such approval
and either (a) the vote of a majority of the outstanding voting securities of
the Fund, or (b) the vote of a majority of the Company's entire Board of
Directors. Notwithstanding the foregoing, this Agreement may be terminated with
respect to the Company at any time, without the payment of any penalty, by a
vote of a majority of the Company's Board of Directors or a majority of the
outstanding voting securities of the Fund upon at least sixty (60) days' written
notice to the Investment Adviser or by the Investment Adviser upon at least
ninety (90) days' written notice to the Company. This Agreement shall
automatically terminate in the event of its assignment (as defined in the 1940
Act).
6. Miscellaneous.
6.1. This Agreement shall be construed in accordance with the laws of
the State of New York, provided that nothing herein shall be construed as being
inconsistent with the 1940 Act and any rules, regulations and orders thereunder.
6.2. The captions in this Agreement are included for convenience only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect.
6.3. If any provision 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 and, to that extent, the provisions of this
Agreement shall be deemed to be severable.
6.4. Nothing herein shall be construed as constituting the Investment
Adviser an agent of the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
THE XXXXXXXX FUNDS, INC.
By:
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Xxxxxxxxx X. Xxxxxxxx
President
XXXXXXXX CAPITAL MANAGEMENT, INC.
By:
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Xxxxxxxxx X. Xxxxxxxx
President
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