INVESTMENT ADVISORY AGREEMENT
Agreement, dated as of ___________ ___, 1996 by and between XXXXXXXX
PARTNERS FUNDS, INC., a Maryland corporation (the "Company"), on behalf of
XXXXXXXX PARTNERS CAPITAL VALUE FUND (the "Fund"), and XXXXXXXX PARTNERS, INC.,
a Delaware corporation (the "Adviser").
The Fund and the Adviser hereby agree as follows:
1. INVESTMENT DESCRIPTION. The Company is an open-end investment
company which, as of the date hereof, consists of two series: the Xxxxxxxx
Partners Strategy Fund and the Fund. The Company desires to employ the Fund's
capital by investing and reinvesting in investments of the kind, and in
accordance with the limitations, specified in the Company's Articles of
Incorporation, as amended from time to time (the "Articles of Incorporation"),
and in the Fund's Prospectus and Statement of Additional Information contained
in the Company's Registration Statement on Form N-1A, as in effect from time to
time (the "Registration Statement"), filed by the Company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the Securities Act of
1933, as amended, and in such manner and to such extent as may from time to time
be approved by the Company's Board of Directors. Copies of the Articles of
Incorporation and the Registration Statement currently in effect have been
submitted to the Adviser. Any amendments to these documents shall be furnished
to the Adviser promptly.
2. APPOINTMENT. The Company, on behalf of the Fund, desires to
employ and hereby appoints the Adviser to act as the Fund's investment adviser.
The Adviser accepts the appointment and agrees to furnish the services set forth
below for the compensation set forth below.
3. DUTIES OF THE ADVISER. Subject to the supervision and direction
of the Company's Board of Directors, the Adviser shall (a) act in strict
conformity with the Articles of Incorporation, the 1940 Act and the Investment
Advisers Act of 1940, as amended, (b) manage the Fund's assets in accordance
with the Fund's investment objective and policies as stated in the Registration
Statement and in accordance with the provisions of the Internal Revenue Code of
1986, as amended, relating to regulated investment companies, (c) make all
investment decisions for the Fund and (d) place purchase and sale orders on
behalf of the Fund. In rendering such 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.
4. EXPENSES PAYABLE BY THE FUND. Except as otherwise provided in
Paragraphs 3 and 5 hereof, the Company, on behalf of the Fund, will pay all
expenses incurred in connection with its operation, including, among other
things, organizational costs, taxes, interest, loan commitment fees, interest
and distributions paid on securities sold short, brokerage fees and commissions,
if any, Securities and Exchange Commission fees and Blue Sky qualification fees,
fees and expenses of non-interested directors, officers' and employees' fees
(other than officers or employees of The Dreyfus Corporation, Xxxxxxxx Partners
or any affiliate thereof), investment and sub-investment advisory fees, charges
of custodians, transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal expenses, costs
of maintaining the Company's or the Fund's existence, payments to service
organizations, costs of independent pricing services, costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders, costs of shareholder
reports and meetings and any extraordinary expenses.
5. EXPENSES PAYABLE BY THE ADVISER. The Adviser shall, at its
expense, (a) provide the Fund with office space, equipment and personnel
reasonably necessary for the operation of the Fund, (b) employ or associate
itself with such persons as it believes appropriate to assist it in performing
its obligations under this Agreement and (c) provide the Company with persons
satisfactory to the Company's Board of Directors to serve as directors, officers
and employees of the Company or the Fund, including a Chairman, Vice Chairman,
President, Secretary and Treasurer. The Adviser shall also pay all expenses
which it may incur in performing its duties under Paragraph 3 hereof.
6. COMPENSATION OF THE ADVISER. As compensation for the services
provided by the Adviser pursuant to this Agreement, the Company, on behalf of
the Fund, shall pay to the Adviser on the first business day of each calendar
month a fee for the previous month at the following annual rate: .40 of 1% of
the first $300 million of the Fund's average daily net assets, .45 of 1% of the
Fund's average daily net assets between $300 million and $750 million, .50 of 1%
of the Fund's average daily net assets between $750 million and $1 billion and
.55 of 1% of the Fund's average daily net assets in excess of $1 billion. 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. Upon termination of this Agreement before the end of a
month, the fee for such part of that month shall be pro-rated according to the
proportion that such period bears to the full monthly period and shall be
payable within seven (7) days after the date of termination of this Agreement.
7. EXPENSE LIMITATIONS. If the aggregate expenses incurred by, or
allocated to, the Fund in any fiscal year shall
exceed the expense limitations applicable to the Fund imposed by state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time, the Company, on behalf of the Fund, may deduct from
the fees payable to the Adviser, or the Adviser shall bear, such excess expense;
provided, that, the Adviser's obligation hereunder will be limited to the amount
of fees it receives from the Company, on behalf of the Fund, during the period
in which such expense limitations were exceeded, unless otherwise required by
applicable laws or regulations. With respect to portions of a fiscal year in
which this contract shall be in effect, the foregoing limitations shall be
prorated according to the proportion which that portion of the fiscal year bears
to the full fiscal year.
8. BROKERAGE. In executing transactions for the Fund and selecting
brokers or dealers, the Adviser will use its best efforts to seek the best
combination of net price and execution for the Fund. In assessing the best
combination of net price and execution 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 size of the
transaction, 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 to
execute a particular transaction and in evaluating the best combination of net
price and execution available, the Adviser may consider "brokerage and research
services" (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended), statistical quotations, specifically the
quotations necessary to determine the Fund's net asset value, and other
information provided to the Fund and/or to the Adviser (or their affiliates).
The Adviser is authorized, to the fullest extent now or hereafter permitted by
law, to cause the Fund to pay to a broker who provides such brokerage and
research services a commission for executing a portfolio transaction in excess
of the amount of commission another broker would have charged for effecting that
transaction, if the Adviser determines in good faith that such commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker, viewed in terms of that particular transaction or in
terms of all other accounts over which the Adviser exercises investment
discretion. It is understood that certain of the services provided by such
broker may benefit one or more other accounts for which investment discretion is
exercised by the Adviser.
9. INFORMATION PROVIDED TO THE COMPANY. The Adviser will keep the
Company informed of developments materially affecting the Company, and will, on
its own initiative, furnish the Fund from time to time with whatever information
the Adviser believes is appropriate for this purpose.
10. LIMITATIONS ON THE EMPLOYMENT OF THE ADVISER. The services of
the Adviser to the Company, on behalf of the Fund, shall not be deemed
exclusive, and the Adviser may engage in any other business or render similar or
different services to others so long as its services to the Company, on behalf
of the Fund, hereunder are not impaired thereby, and provided that the Adviser
shall provide fair and equitable treatment to the Fund in the selection of
portfolio investments and the allocation of investment opportunities as between
the Fund and other investment management clients of the Adviser. Nothing in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Adviser to engage in any other business or to devote his time
and attention in part to any other business, whether of a similar or dissimilar
nature.
11. STANDARD OF CARE; PROTECTION OF THE ADVISER. The Adviser shall
exercise its best judgment in rendering the services described in paragraphs 3,
8 and 9 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 to 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 Company (including 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.
12. EFFECTIVENESS, DURATION AND TERMINATION OF AGREEMENT. This
Agreement shall remain in effect until __________ ___, 199__ and thereafter
shall continue automatically for successive annual periods ending on
____________ of each year, provided such continuance is specifically approved at
least annually by (a) the vote of the holders of a "majority" (as defined in the
0000 Xxx) of the Fund's outstanding voting securities or by the Board of
Directors of the Company and (b) the vote of a majority of the Company's
directors who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting on such approval. This Agreement may be terminated at
any time, without the payment of any penalty, on sixty (60) days written notice
by the vote of the holders of a majority of the outstanding voting securities of
the Fund, by the vote of the Company's Board of Directors 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).
13. NAME. The Company (including the Fund) may, so long as this
Agreement remains in effect, use "Xxxxxxxx" as part of its name. The Adviser
may, upon termination of this Agreement, require the Company (including the
Fund) to refrain from using the name "Xxxxxxxx" in any form or combination in
its
name or in its business, and the Company (including the Fund) shall, as soon as
practicable following its receipt of any such request from the Adviser, so
refrain from using such name.
14. NOTICES. Any notice under this Agreement shall be given in
writing, delivered against receipt or mailed, first class certified or
registered mail, return receipt requested, postage prepaid, addressed to the
other party at its then principal office.
15. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York applicable to contracts made and wholly to be performed in
such State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed the day and year first above written.
XXXXXXXX PARTNERS FUNDS, INC.,
on behalf of Xxxxxxxx Capital
Value Fund
By:
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Name:
Title:
XXXXXXXX PARTNERS, INC.
By
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Name:
Title:
