MANAGEMENT XXXXXXXXX
Xxxxx 00, 0000
Xxxxxxxxx Xxxxxxxx Fund Management Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Value Fund, Inc. (the "Fund"), a corporation organized and
existing under the laws of the State of Maryland, herewith confirms its
agreement with Ladenburg Xxxxxxxx Fund Management Inc., the Fund's manager (the
"Manager") as follows:
1. Investment Description; Appointment
The Fund desires to employ the capital of the Fund by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Articles of Incorporation, as may be amended from time to time,
and in its Prospectus and Statement of Additional Information, as from time to
time in effect, and in such manner and to such extent as may from time to time
be approved by the Board of Directors of the Fund. Copies of the Fund's
Prospectus and Statement of Additional Information, as each may be amended from
time to time, have been submitted to the Manager. The Fund desires to employ and
hereby appoints the Manager to act as manager to the Fund. The Manager accepts
the appointment and agrees to furnish the services described in Section 2 of
this Agreement for the compensation set forth in Section 5 of this Agreement.
2. Services as Investment Adviser
(a) Subject to the supervision and direction of the Board of
Directors of the Fund, the Manager is generally responsible for furnishing, or
causing to be furnished to the Fund, investment management services. Included
among the specific services to be provided by the Manager are: the selection of
an investment adviser to the Fund; the selection and supervision of an
administrator; the review of all purchases and sales of portfolio instruments
made by the Fund to assess compliance with its stated investment objective and
policies; the monitoring of the selection of brokers and dealers effecting
transactions on behalf of the Fund; the maintenance and furnishing of all
required records or reports pertaining to the Fund to the extent those records
or reports are not maintained or furnished by the Fund's transfer agent,
custodian or other agents employed by the Fund; and, the providing of general
administrative services to the Fund not otherwise provided by the Fund's
transfer agent, custodian or other agents employed by the Fund.
(b) The Fund acknowledges that the Manager has selected Xxxxx Asset
Management, Inc., a corporation formed under the laws of the State of New York
("the Adviser"), as the Fund's investment adviser and the Fund approves of the
selection of the Adviser.
(c) The Manager will, at its own expense, maintain sufficient staff,
and employ or retain sufficient personnel and consult with any other persons
that it determines may be necessary or useful to the performance of its
obligations under this Agreement.
3. Information Provided to the Fund
The Manager 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 Manager believes is appropriate for this
purpose.
4. Standard of Care
The Manager shall exercise its best judgment in rendering the
services listed in paragraphs 2 and 3 above. The Manager 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 herein shall be deemed to protect or purport to protect the Manager
against any liability to the Fund or to shareholders of the Fund to which the
Manager 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 Manager's reckless disregard of its obligations and duties under this
Agreement.
5. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Manager a monthly fee calculated at an annual
rate of .50% of the Fund's average daily net assets. The fee for the period from
the date the Fund's initial registration statement is declared effective by the
Securities and Exchange Commission to the end of the month during which the
initial registration statement is declared effective 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 Fund's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus and/or Statement of
Additional Information as from time to time in effect.
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6. Expenses
The Manager will bear all expenses in connection with the
performance of its services under this Agreement. The Fund will bear its
proportionate share of certain other expenses to be incurred in its operation,
including: investment advisory and administration fees; taxes, interest,
brokerage fees and commissions, if any; fees of Directors of the Fund who are
not officers, directors, or employees of the Adviser, the Manager or any of
their affiliates; fees of any pricing service employed to value shares of the
Fund; Securities and Exchange Commission fees and state blue sky notification
fees; charges of custodians and transfer and dividend disbursing agents; the
Fund's proportionate share of insurance premiums; outside auditing and legal
expenses; costs of maintenance of the Fund's existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Fund and of the officers or Board of Directors of the Fund; and any
extraordinary expenses.
The Fund will be responsible for nonrecurring expenses which may
arise, including costs of litigation to which the Fund is a party and of
indemnifying officers and Directors of the Fund with respect to such litigation
and other expenses as determined by the Directors.
7. Services to Other Companies or Accounts
The Fund understands that the Manager may act in the future as
investment manager, adviser or administrator to various fiduciary or other
managed accounts or to one or more other investment companies or series of
investment companies, and the Fund has no objection to the Manager so acting,
provided that whenever the Fund and one or more other accounts or investment
companies or portfolios served by the Manager have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each entity. The Fund and
the Manager recognize 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 persons employed by the Manager to assist in the performance of the
Manager's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of the
Manager or any affiliate of the Manager to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
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8. Term of Agreement
This Agreement shall continue for an initial two-year term and
thereafter shall continue automatically, provided such continuance is
specifically approved at least annually by (a) the Board of Directors of the
Fund or (b) a vote of a "majority" (as defined in the Investment Company Act of
1940, as amended) of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the Board of
Directors who are not "interested persons" (as defined in said Act) of any party
to this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable, without penalty, on 60
days' written notice by the Board of Directors of the Fund, by a vote of the
holders of a majority of the Fund's shares, or by the Manager. This Agreement
will also terminate automatically in the event of its assignment (as defined in
said Act).
9. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to conflicts of laws
principles.
10. Miscellaneous
The Fund recognizes that directors, officers and employees of the
Manager may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that the Manager or its affiliates may enter into Management or
other agreements with such other corporations and trusts.
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
XXXXX VALUE FUND, INC.
By: /s/ Xxxx X. Xxxxx
Name:Xxxx X. Xxxxx
Title: Chairman and CEO
Accepted:
LADENBURG XXXXXXXX FUND
MANAGEMENT INC.
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: President
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