MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of June 24,1999, between XXXXXXXX NEW
TECHNOLOGIES FUND, INC., a Maryland corporation (the "Corporation") and J. & X.
XXXXXXXX & CO. INCORPORATED, a Delaware corporation (the "Manager").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. DUTIES OF THE MANAGER. The Manager shall manage the affairs of the
Corporation including, but not limited to, continuously providing the
Corporation with investment management services, including investment research,
advice and supervision, determining which securities shall be purchased or sold
by the Corporation, making purchases and sales of securities on behalf of the
Corporation and determining how voting and other rights with respect to
securities of the Corporation shall be exercised, subject in each case to the
control of the Board of Directors of the Corporation and in accordance with the
objectives, policies and principles set forth in the Registration Statement and
Prospectus of the Corporation and the requirements of the Investment Company Act
of 1940 (the "1940 Act") and other applicable law. In performing such duties,
the Manager shall provide such office space, such bookkeeping, accounting,
internal legal, clerical, secretarial and administrative services (exclusive of,
and in addition to, any such services provided by any others retained by the
Corporation) and such executive and other personnel as shall be necessary for
the operations of the Corporation. The Corporation understands that the Manager
also acts as the manager of all of the investment companies in the Xxxxxxxx
Group.
Subject to Section 36 of the 1940 Act, the Manager shall not be liable
to the Corporation for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the management of
the Corporation and the performance of its duties under this Agreement except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement.
2. EXPENSES. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1 and shall pay any salaries, fees
and expenses of the directors of the Corporation who are employees of the
Manager or its affiliates. The Manager shall not be required to pay any other
expenses of the Corporation, including, but not limited to, direct charges
relating to the purchase and sale of portfolio securities, interest charges,
fees and expenses of independent attorneys and auditors, taxes and governmental
fees, cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares, expenses of
registering and qualifying shares for sale, expenses of printing and
distributing reports, notices and proxy materials to shareholders, expense of
corporate data processing and related services, shareholder recordkeeping and
shareholder account services, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses, expenses of annual and special shareholders'
meetings, fees and disbursements of transfer agents and custodians, expenses of
disbursing dividends and distributions, fees and expenses of directors of the
Corporation who are not employees of the Manager or its affiliates, membership
dues in the Investment Company Institute, insurance premiums and extraordinary
expenses such as litigation expenses.
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3. COMPENSATION. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section 1, the
Corporation will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month at the annual rate of 2.00% of the
Corporation's average daily net assets.
(b) If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. PURCHASE AND SALE OF SECURITIES. The Manager shall purchase
securities from or through and sell securities to or through such persons,
brokers or dealers (including the Manager or an affiliate of the Manager) as the
Manager shall deem appropriate in order to carry out the policy with respect to
portfolio transactions as set forth in the Registration Statement and Prospectus
of the Corporation or as the Board of Directors of the Corporation may direct
from time to time. In providing the Corporation with investment management and
supervision, it is recognized that the Manager will seek the most favorable
price and execution, and, consistent with such policy, may give consideration to
the research, statistical and other services furnished by brokers or dealers to
the Manager for its use, to the general attitude of brokers or dealers toward
investment companies and their support of them, and to such other considerations
as the Board of Directors of the Corporation may direct or authorize from time
to time.
Notwithstanding the above, it is understood that it is desirable for
the Corporation that it have access to supplemental investment and market
research and security and economic analysis provided by brokers who execute
brokerage transactions at a higher cost to the Corporation than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Corporation with such brokers,
subject to review by the Corporation's Board of Directors from time to time with
respect to the extent and continuation of this practice. It is understood that
the services provided by such brokers may be useful to the Manager in connection
with its services to other clients as well as the Corporation.
The placing of purchase and sale orders may be carried out by the
Manager or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the
Corporation, the Manager or any subsidiary of the Manager may, without material
risk, arrange to receive a soliciting dealer's fee or other underwriter's or
dealer's discount or commission, the Manager shall, unless otherwise directed by
the Board of Directors of the Corporation, obtain such fee, discount or
commission and the amount thereof shall be applied to reduce the compensation to
be received by the Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Corporation of additional compensation to
others for consulting services, supplemental research and security and economic
analysis.
5. TERM OF AGREEMENT. This Agreement shall continue in full force and
effect until December 31, 2000, and from year to year thereafter if such
continuance is approved in the manner required by the 1940 Act if the Manager
shall not have notified the Corporation in writing at least 60 days prior to
such December 31 or prior to December 31 of any year thereafter that it does not
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desire such continuance. This Agreement may be terminated at any time without
payment of penalty by the Corporation, on 60 days' written notice to the
Manager, by vote of the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities of the Corporation (as defined by
the 1940 Act). This Agreement shall automatically terminate in the event of its
assignment (as defined by the 1940 Act).
6. RIGHT OF MANAGER IN CORPORATE NAME. The Manager and the Corporation
each agree that the word "Xxxxxxxx", which comprises a component of the
Corporation's name, is a property right of the Manager. The Corporation agrees
and consents that (i) it will only use the word "Xxxxxxxx" as a component of its
corporate name and for no other purpose, (ii) it will not purport to grant to
any third party the right to use the word "Xxxxxxxx" for any purpose, (iii) the
Manager or any corporate affiliate of the Manager may use or grant to others the
right to use the word "Xxxxxxxx", or any combination or abbreviation thereof, as
all or a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, and at the
request of the Manager, the Corporation will take such action as may be required
to provide its consent to the use of the word "Xxxxxxxx", or any combination or
abbreviation thereof, by the Manager or any corporate affiliate of the Manager,
or by any person to whom the Manager or an affiliate of the Manager shall have
granted the right to such use; and (iv) upon the termination of any management
agreement into which the Manager and the Corporation may enter, the Corporation
shall, upon request by the Manager, promptly take such action, at its own
expense, as may be necessary to change its corporate name to one not containing
the word "Xxxxxxxx" and following such change, shall not use the word
"Xxxxxxxx", or any combination thereof, as a part of its corporate name or for
any other commercial purpose, and shall use its best efforts to cause its
officers, directors and stockholders to take any and all actions which the
Manager may request to effect the foregoing and to reconvey to the Manager any
and all rights to such word.
7. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Corporation and the Manager have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
XXXXXXXX NEW TECHNOLOGIES FUND, INC.
By /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
J. & X. XXXXXXXX & CO. INCORPORATED
By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Chief
Executive Officer
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