EX99.23(d)(1)
MANAGEMENT AGREEMENT
Between
XXXXX & XXXXXX, INC.
and
X. X. XXXXXX BOND TRUST
THIS AGREEMENT, made and entered into this 30th day of June, 1995,
by and between X. X. XXXXXX BOND TRUST, (a Missouri trust, hereinafter
referred to as the "Fund") and XXXXX & BABSON, INC. , a corporation
organized under the laws of the State of Missouri (hereinafter referred
to as the "Manager"), and which Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute but one instrument.
WHEREAS the Fund was founded and incorporated by the Manager for
the purpose of engaging in the business of investing and reinvesting its
property and assets and to operate as an open-end, diversified ,
management investment company, as defined in the Investment Company Act
of 1940 as amended (Act), under which it is registered with the
Securities and Exchange Commission, and
WHEREAS the Manager was formed for and is engaged in the business
of supplying investment advice and management service to the Fund, as an
independent contractor and,
WHEREAS the Manager desires to enter into a contractual
arrangement whereby the Manager provides investment advice and
management service to the Fund for a fee.
NOW THEREFORE, in consideration of the mutual promises herein
contained, and other good and valuable consideration, receipt of which
is hereby acknowledged, it is mutually agreed and contracted by and
between the parties hereto that:
1. The Fund hereby employs the Manager, for the period set forth
in Paragraph 5 hereof, and on the terms set forth herein, to render
investment advice and management service to the Fund, subject to the
supervision and direction of the Board of Trustees of the Fund. The
Manager hereby accepts such employment and agrees, during such period,
to render the services and assume the obligations herein set forth, for
the compensation herein provided. The Management shall, for all purposes
herein, be deemed to be an independent contractor, and shall, except as
provided in the Underwriting Agreement between the Manager and the Fund
or unless otherwise expressly provided and authorized, have no authority
to act for or represent the Fund in any way, or in any other way be
deemed an agent of the Fund.
The Manager shall furnish the Fund investment management and
administrative services. Investment management shall include analysis,
research and portfolio recommendations consistent with the Fund's
objectives and policies. Administrative services shall include the
services and compensation of such members of the manager's organization
as shall be duly elected officers and /or Trustees of the Fund and such
other personnel as shall be necessary to carry out its normal
operations; fees of the independent Trustees, the custodian, the
Page 1 of 5
independent public accountant, investment counsel and legal counsel (but
not legal and audit fees and other costs in contemplation of or arising
out of litigation or administrative actions to which the Fund, its
officers or Trustees are a party or incurred in anticipation of becoming
a party); rent; the cost of a transfer and dividend disbursing agent or
similar in-house services; bookkeeping; accounting; and all other
clerical and administrative functions as may be reasonable and necessary
to maintain the Fund's records and for it to operate as an open-end
management investment company. Exclusive of the management fee, the
Fund shall bear the cost of any interest, taxes, dues, fees and other
charges of governments and their agencies including the cost of
qualifying the Fund's shares for sale in any jurisdiction, brokerage
commissions, or any other expenses incurred by it which are not assumed
herein by the Manager.
All property, equipment and information used by the Manager in the
management and administration of the Fund shall belong to the manager.
Should the management and administrative relationship between the Fund
and the manager terminate, the Fund shall be entitled to, and the
manager shall provide the Fund, a copy of all information and records in
the Manager's file necessary for the Fund to continue its functions,
which shall include computer systems and programs in use as of the date
of such termination; but nothing herein shall prohibit thereafter the
use of such information, systems or programs by the manager, so long as
such does not unfairly interfere with the continued operation of the
Fund.
2. As compensation for the services to be rendered to the Fund by
the Manager under the provisions of this agreement, the Fund agrees to
pay semimonthly to the Manager an annual fee based on the average total
net assets of the Fund computed daily in accordance with its Declaration
of Trust and By-Laws as follows:
a. Ninety five one-hundredths of one percent (95/100 of 1%) of the
average total net assets of the Fund.
b. Should the Fund's normal operating expenses exclusive of taxes,
interest, brokerage commission and extraordinary costs exceed
limits established by any law, rule or regulation of any
jurisdiction in which the Fund's shares are registered for
sale, the Manager shall reimburse the Fund in the amount of the
excess.
3. It is understood and agreed that the services to be rendered
by the Manager to the Fund under the provisions of the Agreement are not
to be deemed exclusive, and the Manager shall be free to render similar
or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby.
4. It is understood and agreed that the Trustees, officers,
agents, employees, and shareholders of the Fund may be interested in the
Manager as owners, employees, agents or otherwise, and that owners,
employees and agents of the Manager may be interested in the Fund as
shareholders or otherwise. It is understood and agreed that
shareholders, officers, Trustees, and other personnel of the Manager are
and may continue to be officers and Trustees of the Fund, but that they
receive no remuneration from the Fund solely for acting in those
capacities.
5. This Agreement shall become effective pursuant to its approval
by the Fund's Board of Trustees and by the vote of a majority of the
outstanding shares of the Fund as prescribed by the Act. It shall remain
in force through the 31st day of October, 1996, and thereafter may be
renewed for successive periods not exceeding one year only so long as
such renewal and
Page 2 of 5
continuance is specifically approved at least annually
by the Board of Trustees or by vote of a majority of the outstanding
shares of the Fund as prescribed by the Act, and only if the terms and
the renewal of this Agreement have been approved by a vote of a majority
of the Trustees of the Fund including a majority of the Trustees who are
not parties to the Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such
approval. No amendment to this Agreement shall be effective unless the
terms thereof have been approved by the vote of a majority of
outstanding shares of the Fund as prescribed by the Act and by vote of a
majority of the Trustees of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. It shall be
the duty of the Trustees of the Fund to request and evaluate, and the
duty of the Manager to furnish, such information as may reasonably be
necessary to evaluate the terms of this Agreement and any amendment
thereto. This Agreement may be terminated at any time, without the
payment of any penalty, by the Trustees of the Fund, or by the vote of a
majority of the outstanding voting shares of the Fund as prescribed by
the Act on not more than sixty days written notice to the Manager, and
it may be terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically in the
event of its assignment by either party unless the parties hereby, by
agreement, obtain an exemption from the Securities and Exchange
Commission from the provisions of the Act pertaining to the subject
matter of this paragraph. Any notice, request or instruction provided
for herein, or for the giving of which, the occasion may arise
hereunder, shall be deemed duly given, if in writing and mailed by
registered mail, postage prepaid, addressed to the regular executive
office of the Fund or the Manager as the case may be. As used in this
Agreement, the terms "assignment", "a majority of the outstanding voting
shares", and "interested persons" shall have the same meaning as
similar terms contained in the Act.
6. It is specifically provided in this Agreement that the Manager
is to secure the services of XXXXX X. XXXXXX & CO. INC. of Cambridge,
Massachusetts (at the sole expense of the Manager), as its Investment
Counsel to furnish advice and recommendations with respect to the
purchase and sale of securities and the making of portfolio commitments;
to place at the disposal of the Manager such statistical information as
may reasonably be required and in general to superintend the investments
of the Fund, subject to the control and approval of the Board of
Trustees of the Manager and the Board of Trustees of the Fund.
7. As a condition of this agreement, the Manager will provide in
its Investment Counsel agreement with XXXXX X. XXXXXX & CO. INC. for the
exclusive right of the Fund to use the name "Babson" as part of its
name, so long as XXXXX & XXXXXX, INC., or any successor in interest,
continues as its manager and XXXXX X. XXXXXX & CO. INC., or any
successor in interest, continues as an Investment Counsel to the
manager. The term "exclusive right of the Fund" appearing in the
preceding sentence means that no other investment company, whether or
not registered under the Investment Company Act of 1940, as amended,
will be entitled to use the precise name "Babson" so long as the Fund
has the right to use it as a part of its name. However, nothing herein
shall prohibit the right of XXXXX & XXXXXX, INC., Xx. Xxxxxx, or XXXXX
X. XXXXXX & CO. INC. from granting to another investment company managed
by XXXXX & BABSON, INC. with XXXXX X. XXXXXX & CO. INC. as its
Investment Counsel, and which has investment objectives and policies
different from those of the Fund, to use in its name either the name
"Babson" or "X. X. Xxxxxx" or "Xxxxxx (X. X.)" or "Xxxxx & Xxxxxx" or
any combination of these names. Should the Fund terminate either XXXXX
& BABSON, INC. or its successor as Manager for the Fund, or XXXXX X.
XXXXXX & CO. INC., or its successor, as its Investment Counsel, either
XXXXX & BABSON, INC. or XXXXX X. XXXXXX & CO. INC.,
Page 3 of 5
or their respective
successors in interest, may elect to notify the Fund in writing that
permission to use the name "Xxxxx X. Xxxxxx" (or any part thereof) has
been withdrawn, whereupon the Fund, its officers, directors and
shareholders, expressly agree to take all necessary corporate action and
to proceed expeditiously to change the name of the Fund and not use any
other name or take any other action which would indicate the Fund's
continued association with XXXXX X. XXXXXX & CO. INC., Xx. Xxxxxx, or
XXXXX & XXXXXX, INC. If the use of the name "Xxxxx X. Xxxxxx" (or any
part thereof) is so withdrawn as aforesaid, the Fund, its officers,
directors and shareholders, understand and agree that there shall be no
limitation with respect to the future use of the name "Xxxxx X. Xxxxxx"
(or any part thereof) by XXXXX X. XXXXXX & CO. INC., or its successor in
interest, or with the permission of XXXXX X. XXXXXX & CO. INC., or its
successor, by XXXXX & BABSON, INC. or its successor.
8. The agreement between XXXXX & XXXXXX, INC. and XXXXX X. XXXXXX
& CO. INC. also shall provide that, although it is not anticipated,
there may occur some unforeseen reason which would prohibit XXXXX X.
XXXXXX & CO. INC., as a matter of reasonable business necessity,
continuing as an Investment Counsel to XXXXX & BABSON, INC. Should such
circumstances occur, XXXXX X. XXXXXX & CO. INC., or its successor may
elect to terminate its services, even though the Fund would want to
continue to use the name "Babson" and continue XXXXX & XXXXXX, INC., or
its successor, as manager. Upon receipt of such a written notice, the
Fund, its officers, directors and shareholders, agree to take all
necessary corporate action and proceed expeditiously to change the name
of the Fund not later than one year after the effective date of the
termination notice, and not use any other name or take any other action
which would indicate the Fund's continued association with XXXXX X.
XXXXXX & CO. INC., Xx. Xxxxxx or XXXXX & XXXXXX, INC. In consideration
for this right, XXXXX X. XXXXXX & CO. INC. and XXXXX & XXXXXX, INC.
agree that should the name "Babson" be withdrawn, they will not permit
another investment company, whether or not registered under the
Investment Company Act of 1940, to use the name "Babson" as part of its
name for a period of five years subsequent to the effective date of the
written withdrawal request, unless this prohibition is waived or
modified by a majority vote of the Fund's shareholders entitled to vote
at the next annual meeting of the Fund's shareholders following receipt
of the request, and if any such action is also approved by the majority
of shares entitled to vote at a duly constituted meeting of the
shareholders of XXXXX & XXXXXX, INC. For this right to withdraw the
name "Babson" from the use of the Fund, XXXXX X. XXXXXX & CO. INC. will
agree in its contract with XXXXX & BABSON, INC. that it will not compete
with XXXXX & XXXXXX, INC. for the management of the Fund during said
five-year period, unless this no-compete provision is waived by a
majority of the shares entitled to vote at a duly constituted meeting of
the shareholders of XXXXX & BABSON, INC.
9. It is further agreed that the provisions of Paragraphs 7 and 8
shall inure to the benefit of XXXXX X. XXXXXX & CO. INC. and may be
imposed by it or any successor in interest as if it or such successor in
interest were parties to this Agreement.
10. The Manager shall not be liable for any error in judgment or
mistake at law for any loss suffered by the Fund in connection with any
matters to which this Agreement relates, except that nothing herein
contained shall be construed to protect the Manager against any
liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reckless disregard of its
obligations or duties under this Agreement.
Page 4 of 5
11. This Agreement may not be amended, transferred, assigned,
sold or in any manner hypothecated or pledged nor may any new Agreement
become effective without affirmative vote or written consent of the
holders of a majority of the shares of the Fund.
X. X. XXXXXX BOND TRUST
By/s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
President
ATTEST:
/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Vice President and Secretary
XXXXX & BABSON, INC.
By/s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
ATTEST:
/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Vice President and Secretary
Page 5 of 5
