EXHIBIT 5.2
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of _________, 1995, between
CONCORDE FUNDS, INC., a Texas corporation (the "Corporation") and CONCORDE
FINANCIAL CORPORATION, a Texas corporation (the "Advisor").
W I T N E S S E T H :
WHEREAS, the Corporation is registered with the Securities and
Exchange Commission as an open-end management investment company under the
Investment Company Act of 1940 (the "Act"). The Corporation's shares, par
value $1.00 per share, are initially divided into two separate investment
portfolios or funds ("Funds"), each with different investment objectives
and policies. Each share of a Fund represents an undivided interest in
the assets, subject to the liabilities, allocated to that portfolio; and
WHEREAS, the Corporation desires to retain the Advisor, which is
an investment advisor registered under the Investment Advisers Act of
1940, as the investment advisor for the Concorde Income Fund (the "Fund").
NOW, THEREFORE, the Corporation and the Advisor do mutually
promise and agree as follows:
1. Employment. The Corporation hereby employs the Advisor to
manage the investment and reinvestment of the assets of the Fund for the
period and on the terms set forth in this Agreement. The Advisor hereby
accepts such employment for the compensation herein provided and agrees
during such period to render the services and to assume the obligations
herein set forth.
2. Authority of the Advisor. The Advisor shall supervise and
manage the investment portfolio of the Fund, and, subject to such policies
as the board of directors of the Fund may determine, direct the purchase
and sale of investment securities in the day to day management of the
Fund. The Advisor shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Corporation or
the Fund in any way or otherwise be deemed an agent of the Fund. However,
one or more shareholders, officers, directors or employees of the Advisor
may serve as directors and/or officers of the Corporation, but without
compensation or reimbursement of expenses for such services from the
Corporation. Nothing herein contained shall be deemed to require the
Corporation to take any action contrary to its Articles of Incorporation
or any applicable statute or regulation, or to relieve or deprive the
board of directors of the Corporation of its responsibility for and
control of the affairs of the Fund.
3. Expenses. The Advisor, at its own expense and without
reimbursement from the Fund, shall furnish office space, and all necessary
office facilities, equipment and executive personnel for managing the
investments of the Fund and maintaining its organization. The Advisor
shall pay the salaries and fees of all officers and directors of the
Corporation (except the fees paid to those directors who are not
interested persons of the Fund, as defined in the Act, and who are not
officers or employees of the Corporation). The Advisor shall also bear
all sales and promotional expenses of the Fund, except for expenses
incurred in complying with laws regulating the issue or sale of
securities. The Advisor shall not be required to pay any other expenses
of the Fund except as provided herein if the total expenses borne by the
Fund, including the Advisor's fees, but excluding all federal, state and
local taxes, interest, brokerage commissions and extraordinary items, in
any year exceed that percentage of the average net assets of the Fund for
such year, as determined by valuations made as of the close of each
business day, which is the most restrictive percentage provided by the
state laws of the various states in which the Fund's common stock is
qualified for sale. If the states in which the Fund's common stock is
qualified for sale impose no such restrictions, the Advisor shall not be
obligated to pay any expenses of the Fund except those specifically
referred to herein. The expenses of the Fund's operations borne by the
Fund include by way of illustration and not limitation, directors fees
paid to those directors who are not interested persons of the Fund, as
defined in the Act, the costs of preparing and printing its registration
statements required under the Securities Act of 1933 and the Act (and
amendments thereto), the expense of registering its shares with the
Securities and Exchange Commission and in the various states, the printing
and distribution cost of prospectuses mailed to existing shareholders, the
cost of stock certificates, director and officer liability insurance,
reports to shareholders, reports to government authorities and proxy
statements, interest charges, taxes, legal expenses, compensation of
administrative and clerical personnel, association membership dues,
auditing and accounting services, insurance premiums, brokerage and other
expenses connected with the execution of portfolio securities
transactions, fees and expenses of the custodian of the Fund's assets,
expenses of calculating the net asset value and repurchasing and redeeming
shares, printing and mailing expenses, charges and expenses of dividend
disbursing agents, registrars and stock transfer agents and the cost of
keeping all necessary shareholder records and accounts.
The Fund shall monitor its expense ratio on a monthly basis. If
the accrued amount of the expenses of the Fund exceeds the expense
limitation established herein, the Fund shall create an account receivable
from the Advisor in the amount of such excess. In such a situation the
monthly payment of the Advisor's fee will be reduced by the amount of such
excess, subject to adjustment month by month during the balance of the
Fund's fiscal year if accrued expenses thereafter fall below the expense
limitation.
4. Compensation of the Advisor. For the services to be
rendered by the Advisor hereunder, the Fund shall pay to the Advisor an
advisory fee, paid monthly, based on the average net assets of the Fund,
as determined by valuations made as of the close of each business day of
the month. The annual advisory fee shall be 0.7 of 1% of such net assets.
For any month in which this Agreement is not in effect for the entire
month, such fee shall be reduced proportionately on the basis of the
number of calendar days during which it is in effect and the fee computed
upon the average net assets of the business days during which it is so in
effect.
5. Ownership of Shares of the Fund. The Advisor shall not
take an ownership position in the Fund, and shall not permit any of its
shareholders, officers, directors or employees to take a long or short
position in the shares of the Fund, except for the purchase of shares of
the Fund for investment purposes at the same price as that available to
the public at the time of purchase or in connection with the initial
capitalization of the Fund.
6. Exclusivity. The services of the Advisor to the Fund
hereunder are not to be deemed exclusive and the Advisor shall be free to
furnish similar services to others as long as the services hereunder are
not impaired thereby. Although the Advisor has permitted and is
permitting the Fund to use the name "Concorde," it is understood and
agreed that the Advisor reserves the right to use and to permit other
persons, firms or corporations, including investment companies, to use
such name, and that the Fund will not use such name if the Advisor ceases
to be the Fund's sole investment advisor. During the period that this
Agreement is in effect, the Advisor shall be the Fund's sole investment
advisor.
7. Liability. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be subject to
liability to the Corporation or the Fund or to any shareholder of the Fund
for any act or omission in the course of, or connected with, rendering
services hereunder, or for any losses that may be sustained in the
purchase, holding or sale of any security.
8. Brokerage Commissions. The Advisor may cause the Fund to
pay a broker-dealer which provides brokerage and research services, as
such services are defined in Section 28(e) of the Securities Exchange Act
of 1934 (the "Exchange Act"), to the Advisor a commission for effecting a
security transaction in excess of the amount another broker-dealer would
have charged for effecting such transaction, if the Advisor determines in
good faith that such amount of commission is reasonable in relation to the
value of brokerage and research services provided by the executing
broker-dealer viewed in terms of either that particular transaction or his
overall responsibilities with respect to the accounts as to which he
exercises investment discretion (as defined in Section 3(a)(35) of the
Exchange Act).
9. Amendments. This Agreement may be amended by the mutual
consent of the parties; provided, however, that in no event may it be
amended without the approval of the board of directors of the Corporation
in the manner required by the Act, and by the vote of the majority of the
outstanding voting securities of the Fund, as defined in the Act.
10. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the board of directors of the
Corporation or by a vote of the majority of the outstanding voting
securities of the Fund, as defined in the Act, upon giving sixty (60)
days' written notice to the Advisor. This Agreement may be terminated by
the Advisor at any time upon the giving of sixty (60) days' written notice
to the Fund. This Agreement shall terminate automatically in the event of
its assignment (as defined in Section 2(a)(4) of the Act). Subject to
prior termination as hereinbefore provided, this Agreement shall continue
in effect for two (2) years from the date hereof and indefinitely
thereafter, but only so long as the continuance after such two (2) year
period is specifically approved annually by (i) the board of directors of
the Corporation or by the vote of the majority of the outstanding voting
securities of the Fund, as defined in the Act; and (ii) the board of
directors of the Corporation in the manner required by the Act; provided
that any such approval may be made effective not more than sixty (60) days
thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day first above written.
CONCORDE FINANCIAL
CORPORATION
By: ______________________________ By:______________________________
Secretary President
CONCORDE FUNDS, INC.
By: ______________________________ By:______________________________
Secretary President
