MANAGEMENT AGREEMENT
December 18, 1995
Xxxxx Xxxxxx Mutual Funds Management Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Xxxxxx Natural Resources Fund Inc. (the
"Company"), a corporation organized under the laws of the
State of Maryland, confirms its agreement with Xxxxx Xxxxxx
Mutual Funds Management Inc. (the "Manager"), as follows:
1. Investment Description; Appointment
The Company desires to employ its capital by investing
and reinvesting in investments of the kind and in accordance
with the investment objective(s), policies and limitations
specified in its Articles of Incorporation, as amended from
time to time (the "Articles of Incorporation"), in the
prospectus (the "Prospectus") and the statement of
additional information (the "Statement") filed with the
Securities and Exchange Commission as part of the Company's
Registration Statement on Form N-1A, as amended from time to
time, and in the manner and to the extent as may from time
to time be approved by the Board of Directors of the Company
(the "Board"). Copies of the Prospectus, the Statement and
the Articles of Incorporation have been or will be submitted
to the Manager. The Company agrees to provide copies of all
amendments to the Prospectus, the Statement and the Articles
of Incorporation to the Manager on an on-going basis. The
Company desires to employ and hereby appoints the Manager to
act as the Company's investment Managermanager of the
Company. The Manager accepts the appointment and agrees to
furnish the services for the compensation set forth below.
2. Services as Investment Manager
Subject to the supervision, direction and approval of
the Board of the Company, the Manager wishall: (a) maintain
compliance procedures for the Company that it reasonably
believes are ad manage the Company's holdings in accordance
with the Company's investment objective(s) and policies as
stated in the Articles ofequate to ensure the Company's
compliance with (i) the Investment Company Act of 1940, as
amended (the "1940 Act") and the rules and Incorporation,
the Prospectus and theregulations promulgated thereunder and
(ii) the Company's investment objective(s), policies and
restrictions as stated in the Prospectus and Statement; (b)
make investment decisions for the Company; (c) place
purchase and sale orders for portfolio transactions for the
Company; and (d) employ professional portfolio managers and
securities analysts who provide research services to the
Company. ; and (e) administer the Company's corporate
affairs and, in connection therewith, furnish the Company
with office facilities and with clerical, bookkeeping and
recordkeeping services at such office facilities. In
providing those services, the Manager will conduct a
continual program of investment, evaluation and, if
appropriate, sale and reinvestment of the Company's assets.
The Manager may, with the approval of the Board and the
shareholders of the Company (to the extent required by
applicable law), from time to time, sub-contract with one or
more sub-investment
3. Brokerage
In selecting brokers or dealers to execute transactions
on behalf of the Company, the Manager will seek the best
overall terms available. In assessing the best overall
terms available for any transaction, the Manager will
consider factors it deems relevant, including, but not
limited to, 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 selecting brokers or dealers to
execute a particular transaction, and in evaluating the best
overall terms available, the Manager is authorized to
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 Company and/or other accounts over
which the Manager or its affiliates exercise investment
discretion. Nothing in this paragraph shall be deemed to
prohibit the Manager from paying an amount of commission for
effecting a securities transaction in excess of the amount
of commission another member of an exchange, broker, or
dealer would have charged for effecting the transaction, if
the Manager determined in good faith that such amount of
commission was reasonable in relation to the value of the
brokerage and research services provided by such member,
broker, or dealer, viewed in terms of either that particular
transaction or its overall responsibilities with respect to
the Company and/or other accounts over which the Manager or
its affiliates exercise investment discretion.
4. Information Provided to the Company
The Manager wishall keep the Company informed of
developments materially affecting the Company's holdings,
and wishall, on its own initiative, furnish the Company from
time to time with whatever information the Manager believes
is appropriate for this purpose.
5. Standard of Care
The Manager shall exercise its best judgment and act in
good faith 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 Company in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement
shall be deemed to protect or purport to protect the Manager
against any liability to the Company or its shareholders 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.
6. Compensation
In consideration of the services rendered pursuant to
this Agreement, the Company will pay the Manager on the
first business day of each month a fee for the previous
month at the annual rate of .75 of 1.000.75% of the
Company's average daily net assets. The fee for the period
from the Effective Date (defined below) of the Agreement to
the end of the month during which the Effective 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 Company's net assets shall
be computed at the times and in the manner specified in the
Prospectus and/or the Statement.
7. Expenses
The Manager will bear all expenses (excluding brokerage
costs, custodian fees, auditors fees) Company in connection
with the performance of its services under this Agreement
and will pay to any sub-investment Manager or Managers
retained by the Manager to provide advisory services to the
Company (each a "Sub-Manager"), the fees required to be paid
to each Sub-Manager. . The Fund will bear certain other
expenses to be incurred in its operation, including, but not
limited to, investment advisory and administration fees,
other than those payable to a Sub-Manager or any additional
or substitute investment Manager, any sub-advisory and any
administration fees; fees for necessary professional and
brokerage services; fees for any pricing service; the costs
of regulatory compliance; and pro rata costs associated with
maintaining the Company's legal existence and shareholder
relations. All other expenses not specifically assumed by
the Manager hereunder shall be borne by the Company.
8. Reduction of Fee
If in any fiscal year the aggregate expenses of the
Company (including fees pursuant to this Agreement and the
Company's sub-investment advisory and administration
agreements, if any, but excluding interest, taxes, brokerage
and extraordinary expenses) exceed the expense limitation of
any state having jurisdiction over the Company, the Manager
will reduce its fee to the Company by the proportion of such
excess expense equal to the proportion that its fee
thereunder bears to the aggregate of fees paid by the
Company for investment management, advice and administration
in that year, to the extent required by state law. A fee
reduction pursuant to this paragraph 8, if any, will be
estimated, reconciled and paid on a monthly basis. The
Company confirms that, as of the date of this Agreement, no
such expense limitation is applicable to the Company.
9. Services to Other Companies or Accounts
The Company understands that the Manager now acts, will
continue to act and may act in the future as investment
Mmanager to fiduciary and other managed accounts, and as
investment Managmanager or adviser to other investment
companies, and the Company has no objection to the Manager's
so acting, provided that whenever the Company and one or
more other investment companies or accounts managed or
advised 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 company and account. The Company
recognizes that in some cases this procedure may adversely
affect the size of the position obtainable for the Company.
In addition, the Company understands that the persons
employed by the Manager to assist in the performance of the
Manager's duties under this Agreement will not devote their
full time to such service and nothing contained in this
Agreement 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.
10. Term of Agreement
This Agreement shall become effective December 18, 1995
(the "Effective Date") and shall continue for an initial two-
year term and shall continue thereafter so long as such
continuance is specifically approved at least annually by
(i) the Board of the Company or (ii) a vote of a "majority"
(as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act")) of the Company's
outstanding voting securities, provided that in either event
the continuance is also approved by a majority of the Board
who are not "interested persons" (as defined in the 0000
Xxx) 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 the Company or by
vote of holders of a majority of the Company's shares, or
upon 90 days' written notice, by the Manager. This
Agreement will also terminate automatically in the event of
its assignment (as defined in the 1940 Act and the rules
thereunder).
If the foregoing is in accordance with your
understanding, kindly indicate your acceptance of this
Agreement by signing and returning the enclosed copy of this
Agreement.
Very truly yours,
XXXXX XXXXXX NATURAL RESOURCES
FUND INC.
By:___________________________________
Name: Xxxxx X. XxXxxxxx
Title: Chairman of the Board
Accepted:
XXXXX XXXXXX MUTUAL FUNDS MANAGEMENT INC.
By:______________________________
Name: Xxxxxxx Xxxxxxxxxx
Title: Chief Executive Officer
