EXHIBIT (10)
INVESTMENT ADVISORY AGREEMENT
___________________, 1999
Gabelli Funds, LLC
Xxx Xxxxxxxxx Xxxxxx
Xxx, Xxx Xxxx 00000-0000
Dear Sir:
The Gabelli Utility Fund (the "Fund"), a business trust organized
under the laws of the state of Delaware, confirms its investment advisory
agreement with Gabelli Funds, LLC, (the "Adviser") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in
its Agreement and Declaration of Trust, as amended from time to time (the
"Declaration of Trust"), and in its Registration Statement on Form N-2
under the Investment Company Act of 1940, as amended (the "1940 Act") as
from time to time in effect (the "Registration Statement") and in such
manner and to such extent as may from time to time be approved by the
Fund's Board of Trustees. Copies of the Declaration of Trust and the
Registration Statement have been submitted to the Adviser. The Fund
desires to employ and hereby appoints the Adviser to act as its investment
Adviser and to oversee the administration of all aspects of the Fund's
business and affairs and provided, or arrange for others whom it believes
to be competent to provide, certain services as specified in subparagraph
(b) below. The Adviser accepts the appointment and agrees to furnish the
services set forth below for the compensation set forth below. Nothing
contained herein shall be construed to restrict the Fund's right to hire
its own employees or to contract for administrative services to be
performed by third parties, including but not limited to, the calculation
of the net asset value of the Fund's shares.
2. Services
(a) INVESTMENT ADVICE. Subject to the direction and control of the
Fund's Board of Trustees, the Adviser will (i) act in strict conformity
with the Declaration of Trust, the 1940 Act and the Investment Advisers Act
of 1940, as the same may from time to time be amended, (ii) manage the
Fund's assets in accordance with the Fund's investment objective and
policies as stated in the Registration Statement, (iii) make investment
decisions for the Fund and (iv) place purchase and sale orders on behalf of
the Fund. In rendering those services, the Adviser will provide investment
research and supervision of the Fund's investments and conduct a continual
program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition, the Adviser will furnish
the Fund with whatever statistical information the Fund may reasonably
request with respect to the securities that the Fund may hold or
contemplate purchasing.
(b) ADMINISTRATION. The specific services to be provided or arranged
for by the Adviser for the Fund are (i) maintaining the Fund's books and
records, such as journals, ledger accounts and other records in accordance
with application laws and regulations to the extent not maintained by the
Fund's custodian, transfer agent or dividend disbursing agent; (ii)
initiating all money transfers to the Fund's custodian and from the Fund's
custodian for the payment of the Fund's expenses, investments, and
dividends; (iii) reconciling account information and balances among the
Fund's custodian, transfer agent, dividend disbursing agent and the
Adviser; (iv) providing the Fund, upon request, with such office space and
facilities, utilities and office equipment as are adequate for the Fund's
needs; (v) preparing, but not paying for, all reports by the Fund to its
shareholders and all reports and filings required to maintain registration
and qualification of the Fund's shares under federal and state law
including the updating of the Fund's Registration Statement, when
necessary; (vi) supervising the calculation of net asset value of the
Fund's shares; and (vii) preparing notices and agendas for meetings of the
Fund's shareholders and the Fund's Board of Trustees as well as minutes of
such meetings in all matters required by applicable law to be acted upon by
the Board of Trustees.
3. Brokerage
In executing transactions for the Fund and selecting brokers or
dealers, the Adviser will use its best efforts to seek the best overall
terms available. In assessing the best overall terms available for any
transaction on behalf of the Fund, the Adviser will consider all factors it
deems relevant including, but not limited to, the breadth of the market in
the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Adviser may consider the
brokerage and research services provided to the Fund and/or other accounts
over which the Adviser or an affiliate of the Adviser exercises investment
discretion.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Fund from
time to time with whatever information the Adviser believes is appropriate
for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the services
described in paragraphs 2 and 3 above. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters of which this Agreement relates,
provided that nothing in this paragraph shall be deemed to protect or
purport to protect the Adviser against any liability to the Fund or to its
shareholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Adviser's reckless disregard
of its obligations and duties under this Agreement.
6. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Fund will pay the Adviser a monthly fee, on the first business day of
each month a fee for the previous month at the annual rate equal to 1.00%
of the Fund's average weekly net assets. Upon any termination of this
Agreement before the end of a month, the fee for such part of that month
shall be prorated according to the proportion that such period bears to the
full monthly period and shall be payable upon the date of termination of
this Agreement. For the purpose of determining fees payable to the
Adviser, the value of the Fund's net assets shall be computed at the times
and in the manner specified in the Registration Statement.
7. Expenses
The Adviser will bear all expenses in connection with the performance
of its services under this Agreement. The Fund will bear certain other
expenses to be incurred in its operation, including: expenses for legal
and independent accountants' services, costs of printing proxies, stock
certificates and shareholder reports, charges of the custodian, any sub-
custodian and transfer and dividend paying agent, expenses in connection
with the Automatic Dividend Reinvestment and Cash Purchase Plan, Securities
and Exchange Commission fees, fees and expenses of unaffiliated directors,
accounting and pricing costs, membership fees in trade associations,
fidelity bond coverage for the Fund's officers and employees, directors'
and officers' errors and omissions insurance coverage, interest, brokerage
costs, taxes, stock exchange listing fees and expenses, all expenses of
computing the Fund's net asset value per share, including any equipment or
services obtained solely for the purpose of pricing shares or valuing the
Fund's investment portfolios, expenses of qualifying the Fund's shares for
sale in various states, litigation and other extraordinary or non-recurring
expenses, and other expenses properly payable by the Fund.
8. Services to Other Companies or Accounts
The Fund understands that the Adviser now acts and will continue to
act as investment Adviser to other investment companies and may act in the
future as investment Adviser to other investment companies or portfolios,
and the Fund has no objection to the Adviser so acting, provided that
whenever the Fund and one or more other portfolios of or investment
companies advised by the Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in a manner
believed to be equitable to each entity. The Fund recognizes that in some
cases this procedure may adversely affect the size of the position
obtainable for the Fund. In addition, the Fund understands that the
Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained herein shall be deemed to limit or
restrict the right of the Adviser or any affiliate of the Adviser to engage
in and devote time and attention to other businesses or to render services
of whatever kind of nature.
9. Use of the Word "Gabelli"
It is understood and agreed that the word "Gabelli" is the Adviser's
property for copyright and other purposes. The Fund further agrees that
the word "Gabelli" in its name is derived from the name of Xxxxx X. Xxxxxxx
and such name may freely be used by the Adviser of other investment
companies, entities or products. The Fund further agrees that, in the
event that the Adviser shall cease to act as an investment Adviser to the
Fund, the Fund shall promptly take all necessary and appropriate action to
change its name to one that does not include the word "Gabelli"; provided,
however, that the Fund may continue to use such name if the Adviser
consents in writing to such use.
10. Term of Agreement
This Agreement shall become effective on the date it is approved by
the shareholders of the Fund and shall continue in effect for two years and
thereafter shall continue for successive annual periods, provided such
continuance is specifically approved at least annually in accordance with
the requirements of the 1940 Act. This Agreement is terminable, without
penalty, on 60 days' written notice by the Fund's Board of Trustees, by
vote of holders of a majority of the Fund's shares, or by the Adviser.
This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act and the rules thereunder).
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy.
Very truly yours,
THE GABELLI UTILITY FUND
By: ____________________________
Name:
Title:
Agreed to and Accepted:
GABELLI FUNDS, LLC
By: _____________________________
Name:
Title:
