INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the 22nd day of November, 1995, by and between
XXXXXXXXXXX QUEST VALUE FUND, INC., a Maryland corporation
(hereinafter referred to as the "Company"), and XXXXXXXXXXX MANAGEMENT
CORPORATION (hereinafter referred to as "OMC").
WHEREAS, the Company is an open-end, diversified management
investment company registered as such with the Securities and Exchange
Commission (the "Commission") pursuant to the Investment Company Act of
1940 (the "Investment Company Act"), and OMC is an investment adviser
registered as such with the Commission under the Investment Advisers
Act of 1940;
WHEREAS, the Company desires that OMC shall act as its investment
adviser pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, it is agreed by and between the
parties, as follows:
1. General Provisions:
The Company hereby employs OMC and OMC hereby undertakes to
act as the investment adviser of the Company, and to perform for the
Company such other duties and functions for the period and on such
terms as set forth in this Agreement. OMC shall, in all matters, give
to the Company and its Board of Directors (the "Directors") the benefit
of its best judgement, effort, advice and recommendations and shall, at
all times conform to, and use its best efforts to enable the Company to
conform to (i) the provisions of the Investment Company Act and any
rules or regulations thereunder; (ii) any other applicable provisions
of state or Federal law; (iii) the provisions of the Certificate of
Incorporation and By-Laws of the Company as amended from time to time;
(iv) policies and determinations of the Directors; (v) the fundamental
policies and investment restrictions as reflected in the registration
statement of the Company under the Investment Company Act or as such
policies may, from time to time, be amended and (vi) the Prospectus and
Statement of Additional Information in effect from time to time. The
appropriate officers and employees of OMC shall be available upon
reasonable notice for consultation with any of the Directors and
officers of the Company with respect to any matters dealing with the
business and affairs of the Company including the valuation of
portfolio securities of the Company which are either not registered for
public sale or not traded on any securities market.
2. Investment Management:
(a) OMC shall, subject to the direction and control by the
Directors, (i) regularly provide investment advise and recommendations
to the Company with respect to the investments, investment policies and
the purchase and sale of securities; (ii) supervise continuously the
investment program of the Company and the composition of its portfolio
and determine what securities shall be purchased or sold by; and(iii)
arrange, subject to the provisions of paragraph 7 hereof, for the
purchase of securities of the Company and the sale of securities and
other investments held in the portfolio.
(b) Provided that the Company shall not be required to pay
any compensation for services under this Agreement other than as
provided by the terms of the Agreement and subject to the provisions of
paragraph 7 hereof, OMC may obtain investment information, research or
assistance from any other person, firm or corporation to supplement,
update or otherwise improve its investment management services
including entering into sub-advisory agreements with other affiliated
or unaffiliated registered investment advisors to obtain specialized
services.
(c) Provided that nothing herein shall be deemed to protect
OMC from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or reckless disregard of its obligations and
duties under this Agreement, OMC shall not be liable for any loss
sustained by reason of good faith errors or omissions in connection
with any matters to which this Agreement relates.
(d) Nothing in this Agreement shall prevent OMC or any
entity controlling, controlled by or under common control with OMC or
any officer thereof from acting as investment adviser for any other
person, firm or corporation or in any way limit or restrict OMC or any
of its directors, officers, stockholders or employees from buying,
selling or trading any securities for its or their own account or for
the account of others for whom it or they may be acting, provided that
such activities will not adversely affect or otherwise impair the
performance by OMC of its duties and obligations under this Agreement.
3. Other Duties of OMC:
OMC shall, at its own expense, provide and supervise the
activities of all administrative and clerical personnel as shall be
required to provide effective corporate administration for the Company,
including the compilation and maintenance of such records with respect
to its operations as may reasonably be required; the preparation and
filing of such reports with respect thereto as shall be required by the
Commission; composition of periodic reports with respect to operations
of the Company for its shareholders; composition of proxy materials for
meetings of the Company's shareholders; and the composition of such
registration statements as may be required by Federal and state
securities laws for continuous public sale of Shares of the Company.
OMC shall, at its own cost and expense, also provide the Company with
adequate office space, facilities and equipment. OMC shall, at its own
expenses, provide such officers for the Company as the Board of
Directors may request.
4. Allocation of Expenses:
All other costs and expenses (of the Company) not expressly
assumed by OMC under this Agreement, or to be paid by the Distributor
of the Shares of the Company, shall be paid by the Company, including,
but not limited to: (i) interest, taxes and governmental fees; (ii)
brokerage commissions and other expenses incurred in acquiring or
disposing of the portfolio securities and other investments; (iii)
insurance premiums for fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its Directors other than
those affiliated with OMC; (v) legal and audit expenses; (vi) custodian
and transfer agent fees and expenses; (vii) expenses incident to the
redemption of its Shares; (viii) expenses incident to the issuance of
its Shares against payment therefor by or on behalf of the subscribers
thereto; (ix) fees and expenses, other than as hereinabove provided,
incident to the registration under Federal and state securities laws of
Shares of the Company for public sale; (x) expenses of printing and
mailing reports, notices and proxy materials to shareholders of the
Company; (xi) except as noted above, all other expenses incidental to
holding meetings of the Company's shareholders; and (xii) such
extraordinary non-recurring expenses as may arise, including
litigation, affecting the Company thereof and any legal obligation
which the Company, may have to indemnify its officers and Directors
with respect thereto. Any officers or employees of OMC or any entity
controlling, controlled by, or under common control with OMC who also
serve as officers, Directors or employees of the Company shall not
receive any compensation from the Company thereof for their services.
5. Compensation of OMC:
The Company agrees to pay OMC and OMC agrees to accept as
full compensation for the performance of all functions and duties on
its part to be performed pursuant to the provisions hereof, a fee
computed on the total net asset value of the Company as of the close of
each business day and payable monthly at the annual rate set forth on
Schedule A hereto.
6. Use of Name "Xxxxxxxxxxx" or "Quest For Value":
OMC hereby grants to the Company a royalty-free, non-
exclusive license to use the name "Xxxxxxxxxxx" or "Quest For Value" in
the name of the Company for the duration of this Agreement and any
extensions or renewals thereof. To the extent necessary to protect
OMC's rights to the name "Xxxxxxxxxxx" or "Quest For Value" under
applicable law, such license shall allow OMC to inspect, subject to
control by the Company's Board, control the nature and quality of
services offered by the Company under such name and may, upon
termination of this Agreement, be terminated by OMC, in which event the
Company shall promptly take whatever action may be necessary to change
its name and discontinue any further use of the name "Xxxxxxxxxxx" or
"Quest For Value" in the name of the Company or otherwise. The name
"Xxxxxxxxxxx" and "Quest For Value" may be used or licensed by OMC in
connection with any of its activities, or licensed by OMC to any other
party.
7. Portfolio Transactions and Brokerage:
(a) OMC (and any Sub Advisor) is authorized, in arranging
the purchase and sale of the portfolio securities of the Company to
employ or deal with such members of securities or commodities
exchanges, brokers or dealers (hereinafter "broker-dealers"), including
"affiliated" broker-dealers (as that term is defined in the Investment
Company Act), as may, in its best judgment, implement the policy of the
Fund to obtain, at reasonable expense, the "best execution" (prompt and
reliable execution at the most favorable security price obtainable) of
the portfolio transactions of the Company as well as to obtain,
consistent with the provisions of subparagraph (c) of this paragraph 7,
the benefit of such investment information or research as will be of
significant assistance to the performance by OMC of its investment
management functions.
(b) OMC (and any Sub Advisor) shall select broker-dealers to
effect the portfolio transactions of the Company on the basis of its
estimate of their ability to obtain best execution of particular and
related portfolio transactions. The abilities of a broker-dealer to
obtain best execution of particular portfolio transaction(s) will be
judged by OMC (or any Sub Advisor) on the basis of all relevant factors
and considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the ability
and willingness of the broker-dealer to facilitate the portfolio
transactions of the Company by participating therein for its own
account; the importance to the Company of speed, efficiency or
confidentiality; the broker-dealer's apparent familiarity with sources
from or to whom particular securities might be purchased or sold; as
well as any other matters relevant to the selection of a broker-dealer
for particular and related transactions of the Company.
(c) OMC (and any Sub Advisor) shall have discretion, in the
interest of the Company, to allocate brokerage on the portfolio
transactions of the Company to broker-dealers, other than an affiliated
broker-dealers, qualified to obtain best execution of such transactions
who provide brokerage and/or research services (as such services are
defined in Section 28(e)(3) of the Securities Exchange Act of 1934) for
the Company and/or other accounts for which OMC or its affiliates (or
any Sub Advisor) exercise "investment discretion" (as that term is
defined in Section 3(a)(35) of the Securities Exchange Act of 1934) and
to cause the Company to pay such broker-dealers a commission for
effecting a portfolio transaction for the Company that is in excess of
the amount of commission another broker-dealer adequately qualified to
effect such transaction would have charged for effecting that
transaction, if OMC (or any Sub Advisor) determines, in good faith,
that such commission is reasonable in relation to the value of the
brokerage and/or research services provided by such broker-dealer
viewed in terms of either that particular transaction or the overall
responsibilities of OMC or its affiliates (or any Sub Advisor) with
respect to accounts as to which they exercise investment discretion. In
reaching such determination, OMC (or any Sub Advisor) will not be
required to place or attempt to place a specific dollar value on the
brokerage and/or research services provided or being provided by such
broker-dealer. In demonstrating that such determinations were made in
good faith, OMC (and any Sub Advisor) shall be prepared to show that
all commissions were allocated for purposes contemplated by this
Agreement and that the total commissions paid by the Company over a
representative period selected by the Company's Directors were
reasonable in relation to the benefits to the Company.
(d) OMC (or any Sub Advisor) shall have no duty or
obligation to seek advance competitive bidding for the most favorable
commission rate applicable to any particular portfolio transactions or
to select any broker-dealer on the basis of its purported or "posted"
commission rate but will, to the best of its ability, endeavor to be
aware of the current level of the charges of eligible broker-dealers
and to minimize the expense incurred by the Company for effecting its
portfolio transactions to the extent consistent with the interests and
policies of the Company as established by the determinations of the
Board of Directors of the Company and the provisions of this paragraph
7.
(e) The Company recognizes that an affiliated broker-dealer:
(i) may act as one of the Company's regular brokers for the Company or
a Series thereof so long as it is lawful for it so to act; (ii) may be
a major recipient of brokerage commissions paid by the Company; and
(iii) may effect portfolio transactions for the Company or a Series
thereof only if the commissions, fees or other renumeration received or
to be received by it are determined in accordance with procedures
contemplated by any rule, regulation or order adopted under the
Investment Company Act for determining the permissible level of such
commissions.
(f) Subject to the foregoing provisions of this paragraph 7,
OMC (and any Sub Advisor) may also consider sales of Shares of the
Company, and the other funds advised by OMC and its affiliates as a
factor in the selection of broker-dealers for its portfolio
transactions.
8. Duration:
This Agreement will take effect on the date first set forth
above. Unless earlier terminated pursuant to paragraph 10 hereof, this
Agreement shall remain in effect from year-to-year, so long as such
continuance shall be approved at least annually by the Company's Board
of Directors, including the vote of the majority of the Directors of
the Company who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
approval, or by the holders of a "majority" (as defined in the
Investment Company Act) of the outstanding voting securities of the
Company, and by such a vote of the Company's Board of Directors.
9. Termination.
This Agreement may be terminated (i) by OMC at any time
without penalty upon sixty days' written notice to the Company (which
notice may be waived by the Company); or (ii) by the Company at any
time without penalty upon sixty days' written notice to OMC (which
notice may be waived by OMC) provided that such termination by the
Company shall be directed or approved by the vote of a majority of all
of the Directors of the Company then in office or by the vote of the
holders of a "majority" of the outstanding voting securities of the
Company (as defined in the Investment Company Act).
10. Assignment or Amendment:
This Agreement may not be amended, or the rights of OMC
hereunder sold, transferred, pledged or otherwise in any manner
encumbered without the affirmative vote or written consent of the
holders of the "majority" of the outstanding voting securities of the
Company. This Agreement shall automatically and immediately terminate
in the event of its "assignment," as defined in the Investment Company
Act.
11. Definitions:
The terms and provisions of the Agreement shall be
interpreted and defined in a manner consistent with the provisions and
definitions contained in the Investment Company Act.
XXXXXXXXXXX QUEST VALUE FUND, INC.
Attest: ______________________ By: _______________________
Title: _______________________
XXXXXXXXXXX MANAGEMENT
CORPORATION
Attest: ______________________ By: _______________________
Xxxxxxxxx X. Xxxx Xxxxxx X. Xxxxxxx
Secretary Executive Vice President
Schedule A To
Investment Advisory Agreement
Between Xxxxxxxxxxx Quest Value Fund, Inc.
and
Xxxxxxxxxxx Management Corporation
Name of Series Annual Fee as a Percentage of Daily Total
Net Assets
Xxxxxxxxxxx Quest
Value Fund, Inc. 1.00% of first $400 million of all net
assets
0.90% of next $400 million of all net
assets
0.85% of net assets over $800 million
don/investad.ag3
