AEGIS VALUE FUND, INC.
INVESTMENT ADVISORY AGREEMENT
For the period from March 31, 1998 to March 31, 2000
THIS AGREEMENT is made March 11, 1998 by and between Aegis Value Fund,
Inc., a Maryland corporation (the "Fund") and Berno, Gambal & Xxxxxx, Inc., a
Delaware corporation (the "Advisor"). In consideration of the mutual
covenants hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Fund hereby employs and authorizes the Advisor to act as the
investment advisor for and to manage at its sole discretion the investment and
reinvestment of the assets of the Fund in accordance with the Fund's
investment objective and policies and limitations; to place orders for
execution and make purchases, sales and other changes in the investments of
the Fund; and to administer its affairs to the extent requested by and subject
to the supervision of the Board of Directors of the Fund for the period and
upon the terms herein set forth. The investment of funds shall be subject to
all applicable restrictions of the Articles of Incorporation and By-Laws of
the Fund as may from time to time be in force.
The Advisor accepts such employment and agrees during such period to
render such services, to furnish office facilities and equipment, to provide
clerical, bookkeeping and administrative services for the Fund, to permit any
of its officers or employees to serve without compensation as directors or
officers of the Fund if elected to such positions and to assume the
obligations herein set forth for the compensation herein provided. The
Advisor shall for all purposes herein provided be deemed to be an independent
contractor, and, unless otherwise expressly provided or authorized, shall have
no authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund. All information and advice furnished by either
party to the other shall be treated as confidential, except for information
required to be disclosed by applicable securities laws and regulations.
The Fund represents that the terms of this Agreement and the Fund's
investment policies and limitations do not violate any obligation or
restriction by which the Fund is bound, whether arising by contract, operation
of law or otherwise, that all information that the Fund has provided to the
Advisor is accurate, and that the Fund agrees to indemnify and hold the
Advisor and its agents harmless from any liability, loss and expense arising
out of any breach of any of the foregoing representations provided the
Advisor or its agents have not acted with negligence or willful misconduct in
respect thereof. The Advisor represents that the terms of this Agreement do
not violate any obligation or restriction by which the Advisor is bound,
whether arising by contract, operation of law or otherwise, that all
information that the Advisor has provided to the Fund is accurate to the best
of its knowledge.
2. For the services and facilities described in Section 1, the Fund will
pay to the Advisor at the end of each calendar month an investment management
fee computed at the annual rate of 1.20% of the average daily net assets of
the Fund.
If expenses borne by the Fund in its fiscal years ending up to August 31,
2000 (including the Advisor's fee, but excluding interest, taxes, fees
incurred in acquiring or disposing of portfolio securities and, as determined
by the Board of Directors, extraordinary expenses) exceed 1.50% of average
daily net assets, the Advisor will reimburse the Fund for any excess. If for
any month the expenses of the Fund properly chargeable to the income account
shall exceed 1/12 of the percentage of average daily net assets allowable as
expenses (one twelfth of 1.50%, or 0.125%), the Advisor shall make a refund
payment to the Fund so that the total net expense will not exceed such
percentage. As of the end of the Fund's fiscal year, however, the foregoing
computations and payments shall be readjusted so that the aggregate
compensation payable to the Advisor for the year is equal to the percentage
set forth herein of the average daily net assets as determined as described
herein throughout the fiscal year, diminished to the extent necessary so that
the total of said expense item shall not exceed the expense limitation. The
aggregate of repayments, if any, by the Advisor to the Fund for the year shall
be the amount necessary to limit the said net expense to said percentage.
The net asset value of the Fund shall be calculated at the close of the
New York Stock Exchange on each day the Exchange is open for trading or as of
such other time or times as the directors may determine in accordance with the
provisions of the Investment Company Act of 1940. On each day when net asset
value is not calculated, the net asset value of a share of common stock of the
Fund shall be deemed to be the net asset value of such a share as of the close
of business on the last day on which such calculation was made for the purpose
of the foregoing computations.
For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during the month and year,
respectively. The services of the Advisor to the Fund under this Agreement
are not to be deemed exclusive, and the Advisor shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.
3. In addition to the fee of the Advisor, the Fund shall assume and pay
any expenses for services rendered by a custodian for the safekeeping of the
Fund's securities or other property, for keeping its books of account, for any
other charges of the custodian and for calculating the net asset value of the
Fund as provided in the Articles of Incorporation of the Fund. The Advisor
shall not be required to pay and the Fund shall assume and pay the charges
and expenses of its operations, including compensation of the directors (other
than those affiliated with the Advisor), charges and expenses of independent
auditors, of legal counsel, of shareholder services and information, of any
transfer or dividend disbursing agent or any registrar of the Fund, costs of
acquiring and disposing of portfolio securities, interest, if any, on
obligations incurred by the Fund, costs of share certificates and of reports,
membership dues in the Investment Company Institute or any similar
organization, costs of reports and notices to shareholders, other like
miscellaneous expenses and all taxes and fees payable to federal, state or
other governmental agencies on account of the registration of securities
issued by the Fund, filing of corporate documents or otherwise.
The Fund shall not pay or incur any obligation for any management or
administrative expenses for which the Fund intends to seek reimbursement from
the Advisor as herein provided without first obtaining the written approval
of the Advisor. The Advisor shall arrange, if desired by the Fund, for
officers or employees of the Advisor to serve, without compensation from the
Fund, as directors, officers or agents of the Fund if duly elected or
appointed to such positions and subject to their individual consent and to any
limitations imposed by law.
4. Subject to applicable statutes and regulations, it is understood that
directors, officers or agents of the Fund are or may be interested in the
Advisor as officers, directors, agents, shareholders or otherwise, and that
the officers, directors, shareholders and agents of the Advisor may be
interested in the Fund otherwise than as a director, officer or agent.
5. The Advisor shall not be liable for any error of judgment or of law,
or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates, except loss resulting from willful malfeasance, bad
faith or negligence on the part of the Advisor in the performance of its
obligations and duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement. It is understood that Advisor's
investment advice, while based on information believed to be correct, is not
guaranteed. The Advisor will not be responsible for the acts, omissions, or
solvency of any broker, dealer or agent selected by the Advisor in good faith
to effect any transaction for the Fund.
6. This Agreement shall become effective on the date hereof and shall
remain in full force for a period of two years from the effective date, unless
sooner terminated as hereinafter provided. This Agreement shall continue in
force for periods of two (2) years thereafter, but only as long as such
continuance is specifically approved in such manner as is required in Section
15 of The Investment Company Act of 1940 and any regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment, and may be terminated at any time, without the payment of any
penalty by the Fund or by the Advisor on sixty (60) days written notice to the
other party. The Fund may effect termination by action of the Board of
Directors or by vote of a majority of the outstanding shares of common stock
of the Fund, accompanied by appropriate notice.
This Agreement may be terminated at any time without the payment of any
penalty by the Board of Directors or by vote of a majority of the outstanding
shares of common stock of the Fund in the event that it shall have been
established by a court of competent jurisdiction that the Advisor or any
officer or director of the Advisor has taken any action which results in a
breach of covenants of the Advisor set forth herein.
Termination of this Agreement shall not affect the right of the Advisor
to receive payment on any unpaid balance of the compensation described in
Section 2 earned prior to such termination.
7. In the event any provision or provisions of this Agreement shall be
held to be illegal or invalid for any reason (including, without limitation,
not conforming to applicable federal and state securities laws), the
illegality or invalidity shall not effect the remaining provisions of this
Agreement, but shall be fully severable and the Agreement shall be construed
in force as if the illegal or invalid provisions had never been included
herein. Furthermore, in lieu of such illegal or invalid provision, there
shall be added automatically as part of the Agreement a provision as similar
in terms to such illegal or such invalid provision as may be possible and be
legal and valid.
8. This Agreement contains the entire Agreement of the parties hereto
with respect to the subject matter contained herein and supersedes all prior
agreements and understandings, oral or written, if any, between the parties
hereto. No modification or amendment of any of the terms, conditions, or
provisions herein may be made otherwise than by written agreement signed by
the parties hereto.
9. This Agreement may be executed in a number of identical counterparts,
each of which for all purposes is to be deemed an original, and all of which
constitute, collectively, one Agreement; but in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
counterpart.
10. Except to the extent preempted by federal securities laws, the laws
of the State of Delaware shall govern the validity, construction, enforcement
and interpretation of this Agreement.
11. Any notice under this Agreement shall be in writing addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
12. No waiver by any party hereto of any breach of any covenant,
condition or agreement hereof on the part of the parties hereto to be kept and
performed shall be considered to constitute a waiver of any such covenant,
condition or provision, or of any subsequent breach thereof.
IN WITNESS WHEREOF, the Fund and the Advisor have caused this Agreement
to be executed on the day and year first above written.
Date: Xxxxx 00, 0000
Xxxxx Value Fund, Inc. Berno, Gambal & Xxxxxx, Inc.
By: Xxxxxxx X. Xxxxx, By: Xxxxxxx X. Xxxxx,
President, Director Managing Director
Xxxxxx X. Xxxxxxxx, Director Xxxx Xxxxxx, Managing Director
Xxxxxxx X. Xxxxxx, III, Director Xxxxx X. Xxxxxx,
Managing Director
