INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 30th day of June, 1999, by and between MIDAS
U.S. AND OVERSEAS FUND LTD., a Maryland corporation (the "Fund") and MIDAS
MANAGEMENT CORPORATION, a Delaware corporation (the "Investment Manager").
WHEREAS the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act") , as an open-end management investment company
and proposes to offer for public sale shares of common stock; and
WHEREAS the Fund desires to retain the Investment Manager to furnish
certain investment advisory and portfolio management services to the Fund, and
the Investment Manager desires to furnish such services;
NOW THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is hereby agreed between the parties
hereto as follows:
1. The Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the assets of the Fund, including the regular
furnishing of advice with respect to the Fund's portfolio transactions subject
at all times to the control and final direction of the Fund's Board of
Directors, for the period and on the terms set forth in this Agreement. The
Investment Manager hereby accepts such employment and agrees during such period
to render the services and to assume the obligations herein set forth, for the
compensation herein provided. The Investment Manager shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund or in any way, or otherwise be deemed an agent of the Fund.
2. The Fund assumes and shall pay all the expenses required for the
conduct of its business including, but not limited to, salaries of
administrative and clerical personnel, brokerage commissions, taxes, insurance,
fees of the transfer agent, custodian, legal counsel and auditors, association
fees, costs of filing, printing and mailing proxies, reports and notices to
shareholders, preparing, filing and printing the prospectus and statement of
additional information, payment of dividends, costs of stock certificates, costs
of shareholders meetings, fees of the independent directors, necessary office
space rental, all expenses relating to the registration or qualification of
shares of the Fund under applicable Blue Sky laws and reasonable fees and
expenses of counsel in connection with such registration and qualification
ication and such non-recurring expenses as may arise, including, without
limitation, actions, suits or proceedings affecting the corporation or the
Fund and the legal obligation which the Fund may have to indemnify its officers
and directors with respect thereto.
3. The Investment Manager may, but shall not be obligated to, pay or
provide for the payment of expenses which are primarily intended to result in
the sale of the Fund's shares or the servicing and maintenance of shareholder
accounts, including, without limitation, payments for: advertising, direct mail
and promotional expenses; compensation to and expenses, including overhead and
telephone and other communication expenses, of the Investment Manager and its
affiliates, the Fund, and selected dealers and their affiliates who engage in or
support the distribution of shares or who service shareholder accounts;
fulfillment expenses including the costs of printing and distributing
prospectuses, statements of additional information, and reports for other than
existing shareholders; the costs of preparing, printing and distributing sales
literature and advertising materials; and, internal costs incurred by the
Investment Manager and its affiliates and allocated to efforts to distribute
shares of the Fund such as office rent and equipment, employee salaries,
employee bonuses and other overhead expenses. Such payments may be for the
Investment Manager's own account or may be made on behalf of the Fund pursuant
to a written agreement relating to a plan of distribution adopted pursuant to
Rule 12b-1 under the 0000 Xxx.
4. If requested by the Fund's Board of Directors, the Investment
Manager may provide other services to the Fund such as, without limitation, the
functions of billing, accounting, certain shareholder communications and
services, administering state and Federal registrations, filings and controls
and other administrative services. Any services so requested and performed will
be for the account of the Fund and the costs of the Investment Manager in
rendering such services shall be reimbursed by the Fund, subject to examination
by those directors of the Fund who are not interested persons of the Investment
Manager or any affiliate thereof.
5. The services of the Investment Manager are not to be deemed
exclusive, and the Investment Manager shall be free to render similar services
to others in addition to the Fund so long as its services hereunder are not
impaired thereby.
6. The Investment Manager shall create and maintain all necessary
books and records in accordance with all applicable laws, rules and regulations,
including but not limited to records required by Section 31(a) of the 1940 Act
and the rules thereunder, as the same may be amended from time to time,
pertaining to the investment management services performed by it hereunder and
not otherwise created and maintained by another party pursuant to a written
contract with the Fund. Where applicable, such records shall be maintained by
the Investment Manager for the periods and in the places required by Rule 3la-2
under the 1940 Act. The books and records pertaining to the Fund
which are in the possession of the Investment Manager shall be the property of
the Fund. The Fund, or the Fund's authorized representatives, shall have access
to such books and records at all times during the Investment Manager's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by the Investment Manager to the Fund or the
Fund's authorized representatives.
7. As compensation for its services, the Investment Manager will be
paid by the Fund a fee payable monthly and computed at the annual rate of 1% of
the first $10 million of average daily net assets of the Fund, 7/8 of 1% of such
net assets over $10 million up to $30 million, 3/4 of 1% of such net assets over
$30 million up to $150 million, 5/8 of 1% of such net assets over $150 million
up to $500 million, and 1/2 of 1% of such net assets over $500 million;
provided, however, that no such fee shall be paid if the Fund has net assets of
less than $5 million. The aggregate net assets for each day shall be computed by
subtracting the liabilities of the Fund from the value of its assets, such
amount to be computed as of the calculation of the net asset value per share on
each business day.
8. The Investment Manager shall direct portfolio transactions to
broker/dealers for execution on terms and at rates which it believes, in good
faith, to be reasonable in view of the overall nature and quality of services
provided by a particular broker/dealer, including brokerage and research
services and sales of Fund shares and shares of the other Midas Funds. The
Investment Manager may also allocate portfolio transactions to broker/dealers
that remit a portion of their commissions as a credit against Fund expenses.
With respect to brokerage and research services, the Investment Manager may
consider in the selection of broker/dealers brokerage or research provided and
payment may be made of a fee higher than that charged by another broker/dealer
which does not furnish brokerage or research services or which furnishes
brokerage or research services deemed to be of lesser value, so long as the
criteria of Section 28(e) of the Securities Exchange Act of 1934, as amended, or
other applicable law are met. Although the Investment Manager may direct
portfolio transactions without necessarily obtaining the lowest price at which
such broker/dealer, or another, may be willing to do business, the Investment
Manager shall seek the best value for the Fund on each trade that circumstances
in the market place permit, including the value inherent in on-going
relationships with quality brokers. To the extent any such brokerage or research
services may be deemed to be additional compensation to the Investment Manager
from the Fund, it is authorized by this Agreement. The Investment Manager may
place Fund brokerage through an affiliate of the Investment Manager, provided
that: the Fund not deal with such affiliate in any transaction in which such
affiliate acts as principal; the commissions, fees or other remuneration
received by such affiliate be reasonable and fair compared to the commissions,
fees or other remuneration paid to other brokers in connection
with comparable transactions involving similar securities being purchased or
sold on a securities exchange during a comparable period of time; and such
brokerage be undertaken in compliance with applicable law. The Investment
Manager's fees under this Agreement shall not be reduced by reason of any
commissions, fees or other remuneration received by such affiliate from the
Fund.
9. The Investment Manager shall waive all or part of its fee or
reimburse the Fund monthly if and to the extent the aggregate operating expenses
of the Fund exceed the most restrictive limit imposed by any state in which
shares of the Fund are qualified for sale. In calculating the limit of operating
expenses, all expenses excludable under state regulation or otherwise shall be
excluded. If this Agreement is in effect for less than all of a fiscal year, any
such limit will be applied proportionately.
10. Subject to and in accordance with the Articles of Incorporation
and By-laws of the Fund and of the Investment Manager, it is understood that
directors, officers, agents and shareholders of the Fund are or may be
interested in the corporation as directors, officers, shareholders or otherwise,
that the Investment Manager is or may be interested in the corporation as a
shareholder or otherwise and that the effect and nature of any such interests
shall be governed by law and by the provisions, if any, of said Articles of
Incorporation or By-laws.
11. This Agreement shall become effective upon the date hereinabove
written and, unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (a) by the Board of Directors of the Fund or by the holders of
a majority of the outstanding voting securities of the Fund as defined in the
1940 Act and (b) by a vote of a majority of the Directors of the Fund who are
not parties to this Agreement, or interested persons of any such party. This
Agreement may be terminated without penalty at any time either by vote of the
Board of Directors of the Fund or by vote of the holders of a majority of the
outstanding voting securities of the Fund on 60 days' written notice to the
Investment Manager, or by the Investment Manager on 60 days, written notice to
the Fund. This Agreement shall immediately terminate in the event of its
assignment.
12. The Investment Manager shall not be liable to the Fund or any
shareholder of the Fund for any error of judgment or mistake of law or for any
loss suffered by the Fund or the Fund's shareholders in connection with the
matters to which this Agreement relates, but nothing herein contained shall be
construed to protect the Investment Manager against any liability to the Fund or
the Fund's shareholders by reason of willful misfeasance, bad faith, or gross
negligence in the performance of
its duties or by reason of its reckless disregard of obligations
and duties under this Agreement.
13. As used in this Agreement, the terms "interested person,"
"assignment," and "majority of the outstanding voting securities" shall have the
meanings provided therefore in the 1940 Act, and the rules and regulations
thereunder.
14. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
15. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, provided, however, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act or any rule
or regulation promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
