EXHIBIT 5
MANAGEMENT AGREEMENT
Agreement, made as of February 12, 1996 by and between SPECTRA FUND, a
Massachusetts business trust (hereinafter sometimes called the "Trust"), and
XXXX XXXXX MANAGEMENT, INC., a New York corporation (hereinafter sometimes
called the "Manager").
WITNESSETH:
WHEREAS, the Trust and Manager wish to enter into an agreement setting
forth the terms on which the Manager will perform certain services for the
Trust;
NOW THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Manager agree as follows:
1. The Trust hereby employs the Manager to manage the
investment and reinvestment of the assets of the Trust in accordance
with the Trust's investment objectives and policies and to administer
its affairs, subject to the supervision of the Board of Trustees of the
Trust, for the period and on the terms in this Agreement set forth. The
Manager hereby accepts such employment and agrees during such period to
render the services and to assume the obligations herein set forth. The
Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided for or
authorized, have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust.
2. The Manager shall furnish to the Trust such office space in
the offices of the Manager or in such other place as may be agreed upon
from time to time, and such necessary office facilities, equipment and
personnel for managing the investments of the Trust as the Board of
Trustees shall request. In addition to its management of the assets of
the Trust, the Manager shall supply office facilities (which may be in
Xxxxx'x own
offices); statistical and research data; data processing services;
clerical, accounting and bookkeeping services; internal auditing
services; internal executive and administrative services; stationery
and office supplies; preparation of reports to shareholders of the
Trust; preparation of tax returns, reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky
authorities; daily calculation of the net asset value of shares of the
Trust to the extent required under the Investment Company Act of 1940;
maintenance of the Trust's financial accounts and records; and general
assistance in all aspects of the Trust's operations. In providing those
services, Xxxxx will supervise the Trust's investments generally and
conduct a continual program of evaluation of the Trust's assets.
3. The Manager will bear all expenses in connection with the
performance of its services under this Agreement. The Trust assumes and
shall pay all expenses of the Trust, including, without limitation: (1)
the charges and expenses of any custodian or depository appointed by
the Trust for the safekeeping of its cash, securities and other
property, (2) the charges and expenses of bookkeeping and of auditors,
(3) the charges and expenses of any transfer agents and registrars
appointed by the Trust, (4) brokers' commissions and issue and transfer
taxes chargeable to the Trust in connection with securities
transactions to which the Trust is a party, (5) all taxes and corporate
fees payable by the Trust to federal, state and other governmental
agencies, (6) the cost of stock certificates representing shares of the
Trust, (7) fees and expenses involved in registering and maintaining
registrations of the Trust and of its shares with the SEC and
qualifying its shares under state or other securities laws, including
the preparation and printing of prospectuses for filing with said
Commission and other authorities, (8) all expenses of shareholders' and
directors' meetings and of preparing and printing reports to
shareholders, (9) fees of Trustees of the Trust who are not officers,
directors or employees of the Manager or any of its affiliates, (10)
charges of any independent pricing service retained to assist in
valuing the assets of the Trust, (11) the Trust's proportionate share
of insurance premiums, (12) costs attributable to shareholder services,
including, without limitation, telephone and personnel expenses, and
(13) charges and expenses of legal counsel for the Trust in connection
with legal matters relating to the Trust, including, without
limitation, legal services rendered in connection with the Trust's
corporate existence, corporate and financial structure and relations
with its shareholders, registrations and qualifications of securities
under federal, state and other laws, issues of securities and expenses
which the Trust has herein assumed.
4. If in any fiscal year the aggregate expenses of the Trust
(including fees pursuant to this Agreement, but excluding interest,
taxes, brokerage expenses, distribution
fees, litigation expenses, and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation
imposed by any state having jurisdiction over the Trust, the Manager
will reimburse the Trust for such excess expense to the extent of its
fee. Such expense reimbursement, if any, will be estimated, reconciled
and paid on a monthly basis.
5. In consideration of the services rendered pursuant to this
Agreement, the Trust will pay the Manager on the first business day of
each month a fee for the previous month at the annual rate of 1.50% of
the Trust's average daily net assets. The fee for the period from the
date of this Agreement to the end of the month such date occurs shall
be prorated according to the proportion that such period bears to the
full monthly period. 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 Manager,
the value of the net assets shall be computed at the times and in the
manner specified in the Trust's Prospectus and Statement of Additional
Information as from time to time in effect.
6. The services of the Manager to the Trust hereunder are not
to be deemed exclusive, and the Manager shall be free to render similar
services to others so long as its services hereunder are not impaired
thereby.
7. The Trust shall cause its book and accounts to be audited
at least once each year by a reputable, independent public accountant
or organization of public accountants who shall render a report to the
Trust.
8. Subject to and in accordance with the governing instruments
of the Trust and the Certificate of Incorporation of the Manager, it is
understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Manager (or any successor
thereof) as directors, officers or stockholders, or otherwise, that
directors, officers, agents and stockholders of the Manager are or may
be interested in the Trust as trustees, officers, shareholders or
otherwise, that the Manager (or any successor) is or may be interested
in the Trust as shareholder or otherwise, and that the effect of any
such adverse interests shall be governed by said governing instruments
or Certificate of Incorporation.
9. This Agreement shall remain in effect until two years from
the date hereof and shall continue in effect from year to year
thereafter if its continuance is specifically approved at least
annually by (i) the Board of Trustees of the Trust or (ii) the vote of
a majority of the outstanding voting securities of the Trust; provided,
however, that in either event the continuance of this contract must
also be approved by a vote of a majority of the trustees of the Trust
who are not party to this contract cast in person at a meeting called
for the purpose of voting upon such approval. This contract may at any
time be terminated without the payment of any penalty either by vote of
the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Trust on sixty days' notice to the
Manager. This contract may be terminated by the Manager on ninety days'
written notice to the Trust and shall immediately terminate in the
event of its assignment. Any notice under this contract shall be given
in writing, addressed and delivered, or mailed postpaid, to the other
party at any office of such party.
10. In consideration for the Manager's entering into this
Agreement, the Trust agrees that the Manager, subject to the overall
control and supervision of the Board of Trustees of the Trust, and
subject to the primary obligation of the Trust and the Manager to
obtain the best price and the best execution of all orders, may select
in its discretion the brokers or dealers, which may when appropriate
include Xxxx Xxxxx & Company, Incorporated, that shall execute
portfolio transactions for the Trust and the brokers or dealers that
shall receive or share directly or indirectly in any commission or
similar fees.
11. This Agreement may be amended at any time by mutual
consent of the parties, provided that such consent on the part of the
Trust shall have been approved by vote of a majority of the outstanding
voting securities of the Trust. The terms "majority of the outstanding
voting securities of the Trust", "interested person" and "assignment"
shall have, for all purposes of this Agreement, the meaning provided
therefor in the federal Investment Company Act of 1940.
12. This Agreement has been executed on behalf of the Trust by
the undersigned officer of the Trust in his capacity as an officer of
the Trust. The obligations of this Agreement shall be binding on the
assets and property of the Trust only and shall not be binding on any
trustee, officer or shareholder of the Trust individually.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
SPECTRA FUND
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
XXXX XXXXX MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
