Exhibit 99(d)(2)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this th day of , 2006 between XXX XXX ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of Delaware and
having its principal place of business in New York, New York (the "Adviser"),
and MARKET VECTORS ETF TRUST, a Delaware statutory business trust having its
principal place of business in New York, New York (the "Trust"), with respect to
certain series of the Trust.
WHEREAS, the Trust is engaged in business as an open-end investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Adviser is engaged principally in the business of
rendering investment management services and is registered under the Investment
Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
with each series; and in separate series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust offers its shares in multiple series, and the series
of the Trust to which this Agreement relates are set forth in EXHIBIT A hereto,
which may be amended from time to time to add or remove a series (each a
"Fund"), and invests the proceeds in securities, the Trust desires to retain the
Adviser to render investment advisory and accounting and administrative services
hereunder and with respect to which the Adviser is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties hereto
as follows:
1. APPOINTMENT OF ADVISER.
The Trust hereby appoints the Adviser to act as investment adviser and
administrator to the Fund for the period and on the terms herein set forth. The
Adviser accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DUTIES OF ADVISER.
The Adviser, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) INVESTMENT PROGRAM.
The Adviser will (i) furnish continuously an investment program for the Fund,
(ii) determine (subject to the overall supervision and review of the Board of
Trustees of the Trust) what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust shall be held
uninvested, and (iii) make changes on behalf of the Trust in the investments.
The Adviser also will manage, supervise and conduct such other affairs and
business of the Trust and matters incidental thereto, as the Adviser and the
Trust agree, subject always to the control of the Board of Trustees of the Trust
and to the provisions of the Agreement and Declaration of Trust, as amended, of
the Trust, the Trust's By-laws and the 1940 Act.
(b) ADMINISTRATIVE SERVICES.
The Adviser will, at the Fund's expense, provide or arrange for the
following services for each Fund:
(1) Prepare periodic audited financial statements;
(2) Supply various statistical data as requested by the Board of
Trustees of the Trust on an ongoing basis;
(3) Prepare for execution and file the Federal and state
tax returns;
(4) Prepare and file the semi-annual reports with the SEC on Form
N-SAR;
(5) Prepare and file with the SEC the Trust's annual, semi-annual
and quarterly shareholder reports;
(6) File registration statements on Form N-1A and other filings
relating to the registration of Shares;
(7) Monitor the Fund's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended;
(8) Maintain the Fund's fidelity bond as required by the 1940 Act;
(9) Prepare materials for and record the proceedings of, in
conjunction with the officers of the Trust, the meetings of
the Trust's Board of Trustees; and
(10) Prepare any other regulatory reports to and for any federal,
local or state agency as may be required.
In carrying out its duties hereunder, as well as any other activities undertaken
on behalf of the Fund pursuant to this Agreement, the Adviser shall at all times
be subject to the control and direction of the Board of Trustees of the Trust.
(c) OFFICE SPACE AND FACILITIES.
The Adviser will arrange to furnish the Trust office space in the offices of the
Adviser, or in such other place or places as may be agreed upon from time to
time, and all necessary office facilities, simple business equipment, supplies,
utilities and telephone service required for managing the investments of the
Trust.
(d) PERSONNEL.
The Adviser shall provide executive and clerical personnel for managing the
investments of the Trust, and shall compensate officers and Trustees of the
Trust if such persons are also employees of the Adviser or its affiliates,
except as otherwise provided herein.
(e) PORTFOLIO TRANSACTIONS.
The Adviser shall place all orders for the purchase and sale of portfolio
securities for the account of the Trust with brokers or dealers selected by the
Adviser, although the Trust will pay the actual brokerage
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commissions on portfolio transactions in accordance with Paragraph 3(d). In
executing portfolio transactions and selecting brokers or dealers, the Adviser
will use its best efforts to seek on behalf of the Trust the best overall terms
available. In assessing the best overall terms available for any transaction,
the Adviser shall consider all factors it deems relevant, including, without
limitation, 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 the commission, if any (for the specific
transaction and on a continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934) provided to the Trust and/or the other accounts over which the Adviser or
an affiliate of the Adviser exercises investment discretion. The Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction which is in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of all of the accounts over which investment discretion
is so exercised by the Adviser or its affiliates. Nothing in this Agreement
shall preclude the combining of orders for the sale or purchase of securities or
other investments with other accounts managed by the Adviser or its affiliates
provided that the Adviser does not favor any account over any other account and
provided that any purchase or sale orders executed contemporaneously shall be
allocated in a manner the Adviser deems equitable among the accounts involved.
(f) RIGHT TO RECEIVE ADVICE.
(i) ADVICE OF COUNSEL. If the Adviser or the Fund shall be in
doubt as to any question of law involved in any action to be
taken or omitted by the Adviser, it may request advice at the
Fund's cost from counsel of its own choosing (who may be
counsel for the Adviser or the Trust, at the option of the
Adviser).
(ii) PROTECTION OF THE ADVISER. The Adviser shall be protected in
any action or inaction which it takes in reliance on any
directions or advice received pursuant to subsection (i) of
this paragraph which the Adviser, after receipt of any such
directions or advice in good faith believes to be consistent
with such directions or advice as the case may be. However,
nothing in this paragraph shall be construed as imposing upon
the Adviser any obligation (a) to seek such directions or
advice or (b) to act in accordance with such directions or
advice when received. Nothing in this subsection shall excuse
the Adviser when an action or omission on the part of the
Adviser constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by the Adviser of its duties
under this Agreement.
3. EXPENSES OF THE TRUST.
The Adviser shall not bear the responsibility for or expenses associated with
operational or administrative services on behalf of the Trust not expressly
assumed by the Adviser hereunder. The expenses to be borne by the Trust include,
without limitation:
(a) charges and expenses of any registrar, stock, transfer or dividend
disbursing agent, custodian, depository or other agent appointed by the
Trust for the safekeeping of its cash, portfolio securities and other
property;
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(b) general operational and administrative costs, such as the costs of
calculating the Trust's net asset value, the preparation of the Trust's
tax filings with relevant authorities and of compliance with any and
all regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio securities of
the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other U.S. or foreign
governmental agencies;
(f) the cost of stock certificates representing shares of the Trust;
(g) expenses involved in registering and maintaining registrations of the
Trust and of its shares with the SEC and various states and other
jurisdictions, if applicable;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type, printing and
mailing proxy statements, quarterly reports, semi-annual reports,
annual reports and other communications to shareholders;
(i) all expenses of preparing and setting in type offering documents, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of offering documents and literature
used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not "interested
persons" of the Adviser within the meaning of the 1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure, day to day legal affairs of the Trust and relations with its
shareholders, issuance of Trust shares, and registration and
qualification of securities under Federal, state and other laws;
(m) the expenses of attendance at professional meetings of organizations
such as the Investment Company Institute by officers and Trustees of
the Trust, and the membership or association dues of such
organizations;
(n) the cost and expense of maintaining the books and records of the Trust;
(o) the expense of obtaining and maintaining a fidelity bond as required by
Section 17(g) of the 1940 Act and the expense of obtaining and
maintaining an errors and omissions policy;
(p) interest payable on Trust borrowing;
(q) postage; and
(r) any other costs and expenses incurred by the Adviser for Trust
operations and activities, including but not limited to the
organizational costs of the Trust if initially paid by the Adviser.
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4. COMPENSATION.
For the services and facilities to be provided to the Trust by the Adviser as
provided in Paragraph 2 hereof, the Trust shall pay the Adviser a fee at the
annual rate set forth in Exhibit A ("Annual Fee"). The Trust shall pay such
amounts monthly, based on the Fund's average daily net assets, as reflected in
the books and records of the Trust in accordance with procedures established
from time to time by or under the direction of the Board of Trustees of the
Trust.
5. BEST EFFORTS.
The Adviser hereby agrees to use its best judgment and efforts in rendering the
advice and services with respect to the Funds as contemplated by this Agreement.
The Adviser further agrees to use its best efforts in the furnishing of such
advice and recommendations with respect to the Funds, in the preparation of
reports and information, and in the management of the respective assets of each
Fund, all pursuant to this Agreement.
6. RELATIONS WITH TRUST.
Subject to and in accordance with the Declaration of Trust and By-Laws of the
Trust and the Articles of Incorporation and By-Laws of the Adviser,
respectively, it is understood (i) that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers or otherwise; (ii) that directors,
officers, agents and shareholders of the Adviser are or may be interested in the
Trust as Trustees, officers shareholders or otherwise; and (iii) that the
Adviser (or any such successor) is or may be interested in the Trust as a
shareholder or otherwise and that the effect of any such adverse interests shall
be governed by said Master Trust Agreement and By-laws.
7. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Adviser nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or law,
or for any loss suffered by the Trust or its shareholders in connection with the
matters to which this Agreement relates, except that no provision of this
Agreement shall be deemed to protect the Adviser or such persons against any
liability to the Trust or its shareholders to which the Adviser might otherwise
be subject by reason of any willful misfeasance, bad faith or gross negligence
in the performance of its duties or the reckless disregard of its obligations
and duties under this Agreement.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) DURATION.
This Agreement shall become effective with respect to each series on the date
set forth in Exhibit A and, unless terminated as herein provided, this Agreement
shall remain in full force and effect with respect to each series on the date
set forth in Exhibit A, and shall continue in full force and effect for periods
of one year thereafter so long as such continuance is approved at least annually
(i) by either the Trustees of the Trust or by vote of a majority of the
outstanding voting shares (as defined in the 0000 Xxx) of the Trust, and (ii) in
either event by the vote of a majority of the Trustees of the Trust 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.
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(b) TERMINATION.
This Agreement may be terminated at any time, without payment of any penalty, by
vote of the Trustees of the Trust or by vote of a majority of the outstanding
shares (as defined in the 1940 Act), or by the Adviser, on sixty (60) days
written notice to the other party.
(c) AUTOMATIC TERMINATION.
This Agreement shall automatically and immediately terminate in the event of its
assignment as defined in the 1940 Act and the rules thereunder.
9. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
10. SERVICES NOT EXCLUSIVE.
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others
and to engage in other activities.
11. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
It is expressly acknowledged and agreed that the obligations of the Trust
hereunder shall not be binding upon any of the shareholders, Trustees, officers,
employees or agents of the Trust, personally, but shall bind only the trust
property of the Trust, as provided in its Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees of the Trust
and signed by an officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in its Declaration of Trust.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. NAME OF TRUST
The Trust agrees and acknowledges that the Adviser is the owner of the name and
xxxx "Xxx Xxx" and that all use of any designation comprised in whole or part of
Xxx Xxx (a "Van Xxx Xxxx") under this Agreement shall inure to the benefit of
the Adviser. Upon termination of this Agreement for any reason, the Trust shall
cease all use of any Van Xxx Xxxx(s) as soon as reasonably practicable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above.
[SEAL] MARKET VECTORS ETF TRUST
Attest: By:
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[SEAL] XXX XXX ASSOCIATES CORPORATION
Attest: By:
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EXHIBIT A
Annual Management Fee Date of Date of
(as a % of average daily net Approval of Termination of
NAME OF SERIES assets) Agreement Agreement
-------------- ---------------------------- ----------- --------------
Market Vectors -- Steel ETF 0.50% 10/4/06 5/12/08
Market Vectors -- Environmental
Services ETF 0.50% 10/4/06 5/12/08
A-1
