INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made on December 20, 2005, by and between Foxby Corp., a Maryland
corporation (the "Fund") and CEF Advisers, Inc., a Delaware corporation (the
"Investment Manager").
WHEREAS the Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end management investment company; and
WHEREAS, the Fund desires to retain the Investment Manager to furnish
certain investment advisory and portfolio management services to the Fund, and
the Investment Manager desires to furnish such services;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed between the parties hereto as
follows:
1. The Fund hereby employs the Investment Manager to manage the investment
and reinvestment of its assets, including the regular furnishing of advice with
respect to the Fund's portfolio transactions subject at all times to the control
and oversight of the Fund's Board of Directors, for the period and on the terms
set forth in this Agreement. The Investment Manager hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth, for the compensation herein provided. The
Investment Manager 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 Fund in any way, or otherwise be deemed an
agent of the Fund. The Investment Manager may enter into a contract
("Subadvisory Agreement") with an investment adviser in which the Investment
Manager delegates to such investment adviser any or all of its duties specified
in this Paragraph 1, provided that such Subadvisory Agreement meets all
requirements of the 1940 Act and rules thereunder.
2. The Fund assumes and shall pay all the expenses required for the conduct
of its business including, but not limited to, salaries of administrative and
clerical personnel, brokerage commissions, taxes, insurance, fees of the
transfer agent, custodian, legal counsel and auditors, association fees, costs
of filing, printing and mailing proxies, reports and notices to shareholders,
preparing, filing and printing the prospectus and statement of additional
information, payment of dividends, costs of stock certificates, costs of
shareholders meetings, fees of the independent directors, necessary office space
rental, all expenses relating to the registration or qualification of shares of
the Fund under applicable Blue Sky laws and reasonable fees and expenses of
counsel in connection with such registration and qualification and such
non-recurring expenses as may arise, including, without limitation, actions,
suits or proceedings affecting the Fund and the legal obligation which the Fund
may have to indemnify its officers and directors with respect thereto.
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3. If requested by the Fund's Board of Directors, the Investment Manager
may provide other services to the Fund such as, without limitation, the
functions of billing, accounting, certain shareholder communications and
services, administering state and Federal registrations, filings and controls
and other administrative services. Any services so requested and performed will
be for the account of the Fund and the costs of the Investment Manager in
rendering such services shall be reimbursed by the Fund, subject to examination
by those directors of the Fund who are not interested persons of the Investment
Manager or any affiliate thereof.
4. The services of the Investment Manager are not to be deemed exclusive,
and the Investment Manager shall be free to render similar services to others in
addition to the Fund so long as its services hereunder are not impaired thereby.
5. The Investment Manager shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act and the
rules thereunder, as the same may be amended from time to time, pertaining to
the investment management services performed by it hereunder and not otherwise
created and maintained by another party pursuant to a written contract with the
Fund. Where applicable, such records shall be maintained by the Investment
Manager for the periods and in the places required by Rule 31a-2 under the 1940
Act. The books and records pertaining to the Fund which are in the possession of
the Investment Manager shall be the property of the Fund. The Fund, or the
Fund's authorized representatives, shall have access to such books and records
at all times during the Investment Manager's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by the Investment Manager to the Fund or the Fund's authorized
representatives.
6. The Fund will pay the Investment Manager a fee for its services (the
"Advisory Fee") at the annual rate of 0.50% of the Fund's average daily net
assets. The Advisory Fee shall be accrued each calendar day during the term of
this Agreement and the sum of the daily fee accruals shall be paid monthly as
soon as practicable following the last day of each month. The daily fee accruals
will be computed by multiplying 1/365 by the annual rate and multiplying the
product by the net asset value of the Fund as determined in accordance with the
Fund's registration statement as of the close of business on the previous day on
which the American Stock Exchange (or such other exchange on which the Fund's
shares are principally traded) was open for business, or in such other manner as
the parties agree. The Investment Manager may from time to time and for such
periods as it deems appropriate reduce its compensation and/or assume expenses
of the Fund. If this Agreement becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be pro-rated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
7. The Investment Manager shall direct portfolio transactions to
broker/dealers for execution on terms and at rates which it believes, in good
faith, to be reasonable in view of the overall nature
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and quality of services provided by a particular broker/dealer, including
brokerage and research services and sales of shares of the Fund and shares of
other investment companies or series thereof for which the Investment Manager or
an affiliate thereof serves as investment adviser. The Investment Manager may
also allocate portfolio transactions to broker/dealers that remit a portion of
their commissions as a credit against Fund expenses. With respect to brokerage
and research services, the Investment Manager may consider in the selection of
broker/dealers brokerage or research provided and payment may be made of a fee
higher than that charged by another broker/dealer which does not furnish
brokerage or research services or which furnishes brokerage or research services
deemed to be of lesser value, so long as the criteria of Section 28(e) of the
Securities Exchange Act of 1934, as amended, or other applicable laws are met.
Although the Investment Manager may direct portfolio transactions without
necessarily obtaining the lowest price at which such broker/dealer, or another,
may be willing to do business, the Investment Manager shall seek the best value
for the Fund on each trade that circumstances in the market place permit,
including the value inherent in on-going relationships with quality brokers. To
the extent any such brokerage or research services may be deemed to be
additional compensation to the Investment Manager from the Fund, it is
authorized by this Agreement. The Investment Manager may place brokerage for the
Fund through an affiliate of the Investment Manager, provided that: the Fund not
deal with such affiliate in any transaction in which such affiliate acts as
principal; the commissions, fees or other remuneration received by such
affiliate be reasonable and fair compared to the commissions, fees or other
remuneration paid to other brokers in connection with comparable transactions
involving similar securities being purchased or sold on a securities exchange
during a comparable period of time; and such brokerage be undertaken in
compliance with applicable law. The Investment Manager's fees under this
Agreement shall not be reduced by reason of any commissions, fees or other
remuneration received by such affiliate from the Fund.
8. A. This Agreement shall become effective upon the date hereinabove
written provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of the Directors of the Fund who are
not parties to this Agreement, or interested persons of any such party and (ii)
by vote of a majority of the Fund's outstanding voting securities.
B. Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (i) by a vote of a majority of the Directors of the Fund who
are not parties to this Agreement, or interested persons of any such party and
(ii) by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund.
C. This Agreement may be terminated without penalty at any time either by
vote of the Board of Directors of the Fund or by vote of a majority of the
Fund's outstanding voting securities on 60 days' written notice to the
Investment Manager, or by the Investment Manager on 60 days' written notice to
the Fund. This Agreement shall immediately terminate in the event of its
assignment.
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9. The Investment Manager shall not be liable to the Fund or any
shareholder of the Fund for any error of judgment or mistake of law or for any
loss suffered by the Fund or the Fund's shareholders in connection with the
matters to which this Agreement relates, but nothing herein contained shall be
construed to protect the Investment Manager against any liability to the Fund or
the Fund's shareholders by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of obligations and duties under this Agreement.
10. As used in this Agreement, the terms "interested person," "assignment,"
and "majority of the outstanding voting securities" shall have the meanings
provided therefor in the 1940 Act, and the rules and regulations thereunder.
11. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement, with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held or
made invalid by a court or regulatory agency, decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
12. This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, provided, however, that nothing herein shall
be construed in a manner inconsistent with the 1940 Act or any rule or
regulation promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
ATTEST: FOXBY CORP.
__________________________________ By: ____________________________________
ATTEST: CEF ADVISERS, INC.
__________________________________ By: ____________________________________
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