INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this ___ 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").
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 intends to offer its shares in one or more such
series, as listed in Exhibit A hereto, which may be amended from time to time to
add or remove a series (each a "Fund"), and invest 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) ACCOUNTING AND ADMINISTRATIVE SERVICES.
(i) The Fund and the Adviser will engage the Adviser or a third
party to perform the following accounting functions on an
ongoing basis:
(1) On a daily basis, the following records shall be
maintained:
A) Report of priced portfolio securities
B) Statement of net asset value per share
(2) On a monthly basis, the following records shall be
maintained:
A) General Ledger
B) General Journal
C) Cash Receipts Journal
D) Cash Disbursements Journal
E) Subscriptions Journal
F) Redemptions Journal
G) Accounts Receivable Reports
H) Accounts Payable Reports
I) Open Subscriptions/Redemption Reports
J) Transaction (Securities) Journal
K) Broker Net Trades Reports
(3) On a quarterly basis, a Holdings Ledger and a Buy-Sell
Ledger (Broker's Ledger) shall be prepared on a
semi-annual basis for each Series.
(4) On an annual basis, a SCHEDULE D shall be produced.
The above reports may be printed according to any other required frequency to
meet the requirements of the Internal Revenue Service, the Securities and
Exchange Commission (the "SEC") and each Fund's Auditors.
All portfolio purchases for the Fund are recorded to reflect expected maturity
value and total cost including any prepaid interest.
(ii) In addition to the accounting services described in the
foregoing Paragraph 2(b)(i), 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 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 THE FUND. If the Adviser shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall
receive, from the Fund directions or advice.
(ii) 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).
(iii) 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 subsections (i) or (ii) 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 (i) to seek such directions or advice
or (ii) 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, accounting 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;
(b) general operational, administrative and accounting 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.
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 on the date hereof for the initial series.
Unless terminated as herein provided, this Agreement shall remain in full force
and effect until _______, 2008 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.
(b) ADDITIONAL SERIES.
As additional series, other than the Fund, are established, the Agreement shall
become effective with respect to each such series listed in Exhibit A at the
Annual Fee set forth in such Exhibit upon the initial public offering of such
new series, provided that the Agreement has previously been approved for
continuation as provided in subsection (a) above.
(c) 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.
(d) AUTOMATIC TERMINATION.
This Agreement shall automatically and immediately terminate in the event of its
assignment.
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. 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.
12. 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.
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:
--------------------------------- -----------------------------------
[SEAL] XXX XXX ASSOCIATES CORPORATION
Attest: By:
--------------------------------- -----------------------------------
EXHIBIT A
Annual Management Fee
NAME OF SERIES (as a % of average daily net assets)
-------------- ------------------------------------
Market Vectors -- Gold Miners ETF 0.50%
