AMENDMENT NUMBER ONE
TO THE
INVESTMENT ADVISORY AGREEMENT
This Amendment Number One, dated November 1, 2004, to the Investment
Advisory Agreement dated October 31, 1996 (the "Agreement") by and
between Xxx Xxxxxx Bond Fund, a Delaware statutory trust (the "Fund"),
and Xxx Xxxxxx Asset Management (the "Adviser," successor in interest
of Xxx Xxxxxx Asset Management, Inc.), a Delaware statutory trust,
hereby amends the terms and conditions of the Agreement in the manner
specified herein.
W I T N E S S E T H
WHEREAS, the Board of Trustees of the Fund at a meeting held on
September 23, 2004 has approved a reduction in the investment advisory
fee payable by the Fund to the Adviser; and
WHEREAS, the parties desire to amend and restate Section 3 of the
Agreement relating to the investment advisory fee.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby
agree to amend the Agreement, as follows:
Section 3 of the Agreement is hereby deleted in its entirety and
replaced with the following:
3. Compensation Payable to the Adviser.
The Fund shall pay to the Adviser, as compensation for the services
rendered, facilities furnished and expenses paid by the Adviser, a
monthly fee computed at the following annual rates:
AVERAGE WEEKLY FEE AS A PERCENT PER ANNUM
NET ASSETS OF AVERAGE WEEKLY NET ASSETS
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First $500 million 0.42%
Over $500 million 0.35%
Such average weekly net asset shall be determined by taking the average
of the net assets made in the manner provided in the Fund's Declaration
of Trust for each week during a given calendar month. Such fee shall
be payable for each calendar month as soon as practicable after the end
of the month.
The fees payable to the Adviser by the Fund pursuant to this Section 3
shall be reduced by any commissions, tender solicitation and other
fees, brokerage or similar payments received by the Adviser or any
other direct or indirect majority owned subsidiary of Xxx Xxxxxx
Investments Inc., or its successor, in connection with the purchase and
sale of portfolio investments of the Fund, less any direct expenses
incurred by such person, in connection with obtaining such commissions,
fees, brokerage or similar payments. The Adviser shall use its best
efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's portfolio
transactions and shall advise the Trustees of any other commissions,
fees, brokerage or similar payments which may be possible for the
Adviser or any other direct or indirect majority owned subsidiary of
Xxx Xxxxxx Investments Inc. or its successor, to receive in connection
with the Fund's portfolio transactions or other arrangements which may
benefit the Fund.
In the event that the ordinary business expenses of the Fund for any
fiscal year should exceed 1 1/2% of the first $30 million of the Fund's
average weekly net assets determined in the manner described in this
Section 3, plus 1% of any excess over $30 million of such average
weekly net assets so taken, the compensation due the Adviser for such
fiscal year shall be reduced by the amount of such excess. The
Adviser's compensation shall be so reduced by a reduction or a refund
thereof, at the time such compensation is payable after the end of each
calendar month during such fiscal year of the Fund, and if such amount
should exceed such monthly compensation, the Adviser shall pay the Fund
an amount sufficient to make up the deficiency, subject to readjustment
during the Fund's fiscal year. For purposes of this paragraph, all
ordinary business expenses of the Fund shall exclude expenses incurred
by the Fund (i) for interest and taxes; (ii) brokerage commissions;
(iii) as a result of litigation in connection with a suit involving a
claim for recovery by the Fund; (iv) as a result of litigation
involving a defense against a liability asserted against the Fund,
provided that, if the Adviser made the decision or took the actions
which resulted in such claim, it acted in good faith without negligence
or misconduct; and (v) any indemnification paid by the Fund to its
officers and trustees and the Adviser in accordance with applicable
state and federal laws as a result of such litigation.
If the Adviser shall serve for less than the whole of any month, the
foregoing compensation shall be prorated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
XXX XXXXXX BOND FUND XXX XXXXXX ASSET MANAGEMENT
By:
By:
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Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx, III
Executive Vice President
Managing Director
and Principal Executive Officer
