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EXHIBIT 6.1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of April, 1998, between XXX-XXXXXX FUNDS,
INC. (hereinafter referred to as the "Fund") and AMERICAN DIVERSIFIED ASSET
MANAGEMENT, INC., a corporation organized under the laws of the State of Nevada
(hereinafter referred to as the "Investment Adviser").
1. The Investment Adviser agrees, during the life of this Agreement, to
furnish the Fund with investment research, advice and supervision
and will continuously furnish the Fund with an investment program
for the assets of the Fund consistent with the provisions of the
Articles of Incorporation of the Fund and the investment policies
adopted and declared by its Board of Directors.
2. The Investment Adviser is not required to furnish any overhead items
or facilities for the Fund including trading desk facilities or
daily pricing. In rendering such advisory services to the Fund
pursuant to this Agreement, the Investment Adviser may employ,
retain or otherwise avail itself of the services or facilities of
other persons or organizations for the purpose of providing itself
or the Fund with such statistical and other factual information,
such advice regarding economic factors and trends, such advice as to
occasional transactions in specific securities and other properties
and assets, or such other information, advice or assistance as the
Adviser may deem necessary, appropriate or convenient for the
discharge of its overall responsibilities with respect to the Fund
and the other accounts which it or its affiliates serve as
investment adviser.
3. In addition to being responsible for supplying recommendations
regarding the purchase and sale of securities by the Fund, the
Adviser shall recommend brokers and dealers for execution of the
Fund's portfolio transactions. The foremost consideration in making
such recommendations will be the Fund's obtaining best price and
execution. Secondarily, the Adviser may take into account certain
additional services provided by broker-dealers to the Fund. The
Adviser and any person performing executive, administrative or
trading functions for the Fund, whose services are made available to
the Fund by the Adviser, are specifically authorized to recommend to
the Fund that it allocate brokerage and principal business to firms
that provide such services or facilities which, if accepted, might
cause the Fund to pay a member of a securities exchange or any other
securities broker or dealer an amount of commission or "xxxx-up" for
effecting the securities transaction in excess of the amount of
commission, or at a less advantageous price another member of the
exchange, broker or dealer would have charged for effecting that
transaction, if the Adviser or such person determine in good faith
that such amount of commission, or "xxxx-up", as the case may be, is
reasonable in relation to the value of the brokerage and research
(as such services
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are defined in Section 28(e) of the securities and Exchange Act of
1934) provided by ouch member, broker or dealer, viewed in terms of
either that particular transaction or the Adviser's evaluation of
such person's overall responsibilities with respect to accounts as
to which the Adviser or such person exercise investment discretion
(as that term is defined in Section 3(a)(35) of the Securities
Exchange Act of 1934).
4. The Fund may purchase and/or sell many securities which are also
purchased or sold by the Investment Adviser, or its affiliates or
other investment advisory clients. The orders for all such
securities transactions will be placed for execution by methods so
as to be impartial and fair for all parties.
5. In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Investment Adviser, or of reckless disregard of
its obligations hereunder, the Investment Adviser shall have no
liability to the Fund or any shareholder of the Fund for any error
of judgment, mistake of law, or any loss arising out of any
investment or for any other act or omission in the performance by
the Investment Adviser of its duties under this Agreement.
6. The Fund agrees, during the life of this Agreement, to pay to the
investment Adviser as compensation for such services a fee of 1/12th
of 1% monthly (equivalent to 1% annually) on the first $20,000,000
of the net assets of the Fund as of the close of business on the
last business day of each calendar month during the Fund's fiscal
year, reduced to 1/12th of .75% monthly (equivalent to .75%
annually) of such net assets in excess of $20,000,000 up to
$100,000,000, reduced to 1/12th of .5% monthly (equivalent to .5%
annually) of such net assets in excess of $100,000,000 up to
$200,000,000, and reduced to 1/12th of .45% monthly (equivalent to
.45% annually) of all such net assets in excess of $200,000,000.
7. This Agreement shall remain in full force and effect until two years
from the date hereof and thereafter from year to year to the extent
such continuance is approved annually by the Board of Directors of
the Fund or by vote of a majority of the outstanding voting
securities of the Fund (as defined by the Investment Company Act of
1940) and also, in either event, approval by a majority of those
Directors who are not parties to the Contract or interested persons
of any such party.
8. This Agreement may be terminated by the Fund at any time on sixty
(60) day's written notice without payment of penalty, provided that
such termination by the Fund shall be directed or approved by the
vote of a majority of the Directors of the Fund in office at the
time or by the vote of a majority of the outstanding voting
securities of the Fund (as defined by the Investment Company Act of
1940).
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9. This Agreement shall automatically and immediately terminate in the
event of its assignment.
10. The Investment Adviser will maintain its books and records or
duplicate copies thereof relating to the Fund and will comply with
Section 31 of the Investment Company Act of 1940 and the rules
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their respective corporate
seals to be hereunto duly affixed and attested.
(Seal) XXX-XXXXXX FUNDS, INC., on behalf of
ATTEST: Xxx-Xxxxxx Balanced Fund
By:
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Assistant Secretary Xxxxx X. Xxx, Xx., President
(Seal) AMERICAN DIVERSIFIED ASSET
ATTEST: MANAGEMENT, INC.
By:
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Secretary Xxxxx X. Xxx, Xx., President
