Exhibit 5/99.B5
INVESTMENT ADVISORY AGREEMENT
Xxxxxxxx Fund, Inc., a Maryland corporation (the "Fund"), and Xxxxxxxx
Company, Inc., an Illinois corporation (the "Adviser"), agree that:
1. ENGAGEMENT OF THE ADVISER. The Adviser shall manage the
investment and reinvestment of the assets of the Fund, subject to the
supervision of the board of directors of the Fund, for the period and on the
terms set forth in this Agreement. The adviser shall give due consideration to
the investment policies and restrictions and the other statements concerning the
Fund in the Fund's restated articles of incorporation, bylaws, and registration
statements under the Investment Company Act of 1940 ("1940 Act") and the
Securities Act of 1933, and to the provisions of the Internal Revenue Code
applicable to the fund as a regulated investment company. The Adviser shall be
deemed for all purposes to be an independent contractor and not an agent of the
Fund, and unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund in any way.
The Adviser is authorized to make the decisions to buy and sell
securities of the Fund, to place the Fund's portfolio transactions with
securities broker-dealers, and to negotiate the terms of such transactions,
including brokerage commissions on brokerage transactions, on behalf of the
Fund. The Adviser is authorized to exercise discretion within the Fund's policy
concerning allocation of its portfolio brokerage, as permitted by law, including
but not limited to section 28(e) of the Securities Exchange Act of 1934, and in
so doing shall not be required to make any reduction in its investment advisory
fees.
2. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish,
at its own expense, office space to the Fund and all necessary office
facilities, equipment and personnel for managing the assets of the Fund. The
Adviser shall also assume and pay all other expenses incurred by it in
connection with managing the assets of the Fund, including all expenses of
marketing shares of the Fund.
3. EXPENSES TO BE PAID BY THE FUND. The Fund shall pay all charges
of depositories, custodians and other agencies for the safekeeping and servicing
of its cash, securities and other property and of its transfer agents,
registrars and its dividend disbursing and redemption agents, if any; all
charges of legal counsel and of independent auditors; organizational expenses of
the Fund (which will be amortized over a five-year period); all expenses in
determination of price computations, placement of securities orders and related
bookkeeping; all compensation of directors other than those affiliated with the
Adviser and all expenses incurred in connection with their services to the Fund;
all expenses of publication of notices and reports to its shareholders; all
expenses of proxy solicitations of the Fund or its board of directors; all taxes
and corporate fees payable to federal, state or other governmental agencies,
domestic or foreign; all stamp or other transfer taxes; all expenses of printing
and mailing certificates for shares of the Fund; and all expenses of bond and
insurance coverage required by law or deemed advisable by the Fund's board of
directors. In addition to the payment of expenses, the Fund shall also pay all
brokers' commissions and other charges relative to the
purchase and sale of portfolio securities, interest charges and litigation and
other extraordinary expenses, if any.
4. COMPENSATION OF THE ADVISER. For the services to be rendered and
the charges and expenses to be assumed and to be paid by the Adviser hereunder,
the Fund shall pay to the Adviser a monthly fee of 1/12 of 1% of the average
daily net asset value of the Fund, as determined by the average of valuations
made as of the close of business on each day that the Fund calculates its net
asset value, which fee shall be payable monthly on or before the 15th day of the
succeeding month.
5. LIMITATION OF EXPENSES OF THE FUND. During the term of this
Agreement, the total operating expenses of the Fund, including fees paid to the
Adviser, shall not in any fiscal year exceed 2% of the average net asset value
of the Fund as determined by valuations made as of the last business day of each
month, and the Adviser agrees to pay any excess operating expenses or to
reimburse the Fund for any sums expended for such expenses in excess of that
amount. For this purpose, brokers' commissions and other charges relative to
the purchase and sale of portfolio securities, interest charges, taxes and
litigation and other extraordinary expenses shall not be regarded as operating
expenses.
6. SERVICES OF THE ADVISER NOT EXCLUSIVE. The services of the
Adviser to the Fund hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others so long as its services under
this Agreement are not impaired by such other activities.
7. SERVICES OTHER THAN AS THE ADVISER. The Adviser or its
affiliates may act as broker for the Fund in connection with the purchase or
sale of securities by or to the Fund if and to the extent permitted by
procedures adopted from time to time by the board of directors of the Fund.
Such brokerage services are not within the scope of the duties of the Adviser
under this Agreement, and, within the limits permitted by law and the board of
directors of the Fund, the Adviser may receive brokerage commissions, fees or
other remuneration from the Fund for such services in addition to its fee for
services as the Adviser. Within the limits permitted by law the Adviser may
receive compensation from the Fund for other services performed by it for the
Fund which are not within the scope of the duties of the Adviser under this
Agreement.
8. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be
liable to the Fund or its shareholders for any loss suffered by the Fund or its
shareholders from or as a consequence of any act or omission of the Adviser, or
of any of the directors, officers, employees or agents of the Adviser, in
connection with or pursuant to this Agreement, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or by reason of reckless disregard by the Adviser of
its obligations and duties under this Agreement.
9. DURATION AND RENEWAL. This Agreement shall continue in effect
until two years from the date of its execution, and thereafter from year to year
only so long as such continuance is specifically approved at least annually by
the board of directors of the Adviser and by (a) a majority of those directors
of the Fund who are not "interested persons" (as defined in
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section 2(a)(19) of the 0000 Xxx) of the Fund or the Adviser, voting in person
at a meeting called for the purpose of voting on such approval, and (b) either
the board of directors of the Fund or by vote of the holders of a "majority of
the outstanding shares of the Fund" (which term as used throughout this
Agreement shall be construed in accordance with the definition of "vote of a
majority of the outstanding voting securities of a company" in section 2(a)(42)
of the 1940 Act).
10. TERMINATION. This Agreement may be terminated at any time,
without payment of any penalty, by the board of directors of the Fund, or by a
vote of the holders of a majority of the outstanding shares of the Fund, upon 60
days' written notice to the Adviser. This Agreement may be terminated by the
Adviser at any time upon 60 days' written notice to the Fund. This Agreement
shall terminate automatically in the event of its assignment (as defined in
section 2(a)(4) of the 1940 Act).
11. AMENDMENT. This Agreement may not be amended without the
affirmative vote of (a) a majority of those directors of the Fund who are not
"interested persons" (as defined in section 2(a)(19) of the 0000 Xxx) of the
Fund or the Adviser, voting in person at a meeting called for the purpose of
voting on such approval, and (b) the holders of a majority of the outstanding
shares of the Fund.
Dated November 1, 1988
XXXXXXXX FUND, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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President
XXXXXXXX COMPANY, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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President
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