INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the _____ day of ______________, 2002, between VALUE
LINE VALUE FUND, INC., a Maryland corporation (hereinafter called "the Fund"),
and VALUE LINE, INC., a New York corporation (hereinafter called "the Company");
WITNESSETH:
WHEREAS, the Fund desires to have the Company act as its investment adviser
and provide it with investment research, advice, supervision and management; and
WHEREAS, the Company is willing to undertake the same upon the terms and
conditions set forth herein.
NOW THEREFORE, it is hereby agreed by and between the parties hereto as
follows:
1. Duties. The Company shall provide the Fund with such investment
research, data advice and supervision as the latter may from time to time
consider necessary for proper supervision of its funds. The Company shall act as
manager and investment adviser of the Fund and, as such, shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased or sold by the Fund, and what portion of the
assets of the Fund shall be held uninvested, subject always to the provisions of
the Fund's Articles of Incorporation and By-Laws, to the Fund's fundamental
investment policies as in effect from time to time, and to the control and
review by the Fund's Board of Directors. The Company shall take, on behalf of
the Fund, all actions which it deems necessary to carry into effect the
investment policies determined as provided above, and to that end the Company
may designate a person or persons who are to be authorized by the Fund as the
representative or representatives of the Fund, to give instructions to the
Custodian of the assets of the Fund as to deliveries of securities and payments
of cash for the account of the Fund. The Company may delegate some or all of its
duties hereunder to a third party ("Sub-Adviser") pursuant to an agreement among
the Fund, the Company and such Sub-Adviser (the "Sub-Advisory Agreement"). To
the extent that the Company has so delegated its duties hereunder to a
Sub-Adviser, the Sub-Adviser, and not the Company, shall perform such duties for
the Fund, and the Company, not the Fund, shall be responsible for paying the
fees of the Sub-Adviser.
2. Allocation of Charges and Expenses; Brokerage. The Company shall furnish
at its own expense all administrative services, office space, equipment and
administrative and clerical personnel necessary for managing the affairs of the
Fund except for office space utilized by and personnel of any Sub-Adviser. The
Company shall also provide persons satisfactory to the Fund's Board of Directors
to act as officers and employees of the Fund and shall pay the salaries and
wages of all officers and employees of the Fund who are also officers and
employees of the Company or of an affiliated person (as defined in the
Investment Company Act of 1940) other than the Fund. All other costs and
expenses not expressly assumed by the Company under this Agreement, or to be
paid by the Distributor or Distributors of the shares of the Fund or by any
Sub-Adviser, shall be paid by the Fund, including (i) interest and taxes; (ii)
brokerage commissions and other costs in connection with the purchase or sale of
securities; (iii) insurance premiums for fidelity and other coverage requisite
to its operations; (iv) compensation and expenses of its directors; (v) legal,
audit and fund
accounting expenses; (vi) custodian and shareholder servicing agent fees and
expenses; (viii) expenses incident to the issuance of its shares against payment
therefor by or on behalf of the subscribers thereto, including printing of stock
certificates; (ix) fees and expenses incident to the registration under the
Securities Act of 1933 or under any state securities laws of shares of the Fund
for public sale and fees imposed on the Fund under the Investment Company Act of
1940; (x) expenses of printing and mailing prospectuses, reports and notices and
proxy material to shareholders of the Fund; (xi) all other expenses incidental
to holding meetings of the Fund's shareholders; (xii) a pro rata share, based on
relative net asset value of the Fund and other investment companies for which
the Company also acts as manager and investment adviser, of 50% of the fees or
dues of the Investment Company Institute; (xiii) fees and expenses in connection
with registration of the Fund or qualification of its shares under the
securities laws of states and foreign jurisdictions; and (xiv) such
non-recurring expenses as may arise, including actions, suits or proceedings to
which the Fund is a party and the legal obligation which the Fund may have to
indemnify its officers and directors with respect thereto.
The Company shall place purchase and sale orders for portfolio transactions
of the Fund with brokers and/or dealers including, where permitted by law, the
Fund's Distributor or affiliates thereof or of the Company, which, in the
judgment of the Company, are able to execute such orders as expeditiously as
possible and at the best obtainable price. Purchases and sales of securities
which are not listed or traded on a securities exchange shall ordinarily be
executed with primary market makers acting as principal except when it is
determined that better prices and executions may otherwise be obtained,
provided, that, subject to the penultimate sentence of this paragraph, the
Company may cause the Fund to pay a member of a securities exchange, broker or
dealer an amount of commission another member of an exchange, broker or dealer
would have charged for effecting that transaction if the Company determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of that particular transaction or the Company's overall
responsibilities. As used herein, "brokerage and research services" shall have
the same meaning as in Section 28(e)(3) of the Securities Exchange Act of 1934,
as such Section may be amended from time to time, and any rules or regulations
promulgated thereunder by the Securities and Exchange Commission. It is
understood that, consistent with the Company's fiduciary duty to the Fund, it is
the intent of this Agreement to allow the Company the widest discretion
permitted by law in determining the manner and means by which portfolio
securities' transactions can be affected in the best interests of the Fund. If
the Company has entered into a Sub-Advisory Agreement, the Sub-Adviser shall
place purchase and sale orders for portfolio transactions of the Fund in
accordance with the provisions of the Sub-Advisory Agreement and the duties and
responsibilities of the Company expressed in this paragraph shall be the duties
and responsibilities of the Sub-Adviser and not the Company.
3. Compensation.
(a) For its services and for the facilities to be furnished as provided
herein, the Fund shall pay to the Company an advisory fee payable monthly,
computed at the annual rate of .90% of the Fund's average daily net assets
during the year, pro rated for any portion of a year during which the Agreement
is in effect. For this purpose, the value of the Fund's net assets shall be
determined in the same manner as for the purchase and redemption of Fund shares
as described in the Fund's current Prospectus.
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4. Duration and Termination of Agreement. This Agreement shall become
effective on the date set forth above and shall continue in effect for a period
of more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually in accordance with the
Investment Company Act of 1940. This Agreement may be terminated on sixty days
written notice by either party. This Agreement shall terminate automatically in
the event of its assignment as defined in the Investment Company Act of 1940.
5. Name of Fund. The Company consents to the use by the Fund of the name
Value Line Value Fund, Inc. so long, and only so long, as this Agreement (or any
agreement with any organization which has succeeded to the business of the
Company) or any extension, renewal or amendment thereof, remains in effect. The
Fund agrees that if and when no such agreement is in effect, (a) it will cease
to use said name or any name indicating or suggesting that the Fund is advised
by or otherwise connected with the Company and (b) it will not thereafter refer
to the former association between the Company and the Fund.
6. Company May Act for Others. Nothing herein contained shall limit the
freedom of the Company or any affiliated person of the Company to render
investment supervisory or corporate administrative services to other investment
companies, to act as investment adviser or investment counselor to other
persons, firms or corporations, and to engage in other business activities.
7. Amendment of Agreement. This Agreement may not be amended except
pursuant to a direction given by the vote of the holders of a majority (as
defined in the Investment Company Act of 1940) of the outstanding shares of the
Fund.
8. Liability. The Company shall not be liable for any error of judgment, or
mistake of law, or any loss suffered by the Fund, in connection with the matters
to which this Agreement relates, except for loss resulting from willful
malfeasance, bad faith or gross negligence of the Company in the performance of
its duties or from reckless disregard by the Company of its obligations and
duties hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date and year first above
written.
VALUE LINE VALUE FUND, INC.
By:
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VALUE LINE, INC.
By:
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