ASSET MANAGEMENT AGREEMENT
THIS AGREEMENT made as of this 1st day of February, 1995, between XXXXX
Insurance Company (hereinafter referred to as the "Client") and CONNING &
COMPANY, a Connecticut corporation (hereinafter referred to as "Conning").
WHEREAS, the Client wishes to engage Conning to provide the services
hereinafter specified; and
WHEREAS, Conning is an investment research, securities brokerage and
insurance advisory firm with special expertise in the areas of asset and
investment management, financial services and developing and implementing
business plans relating to the insurance industry.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. The Client appoints Conning as investment manager to
invest and reinvest the assets of the Investment Account (as defined in
Paragraph 4) as fully as the Client could do individually. Conning hereby
accepts this appointment, and in connection therewith, in its full discretion
and without obligation on its part to give prior notice to the Client, or the
custodians of the Client's assets in the Investment Account (the "Custodian")
Conning shall invest or reinvest the assets of the Investment Account in such
securities or other property or part interest therein as it, in its
discretion, shall select in accordance with the "Investment Guidelines." The
Investment Guidelines shall be separately communicated to Conning in writing.
The management of the Client shall be responsible to advise Conning promptly
in writing of any changes in the Investment Guidelines. This authorization
shall be a continuing one and shall remain in effect until Conning has
received written notice of revocation thereof or until Conning shall have
notified the Client in writing of its resignation.
2. DUTIES. Conning shall manage the Investment Account beginning March
1, 1995 subject to the Investment Guidelines, and shall perform and provide
such other investment advisory services to the Client as shall be reasonably
requested by the Client and as agreed to by Conning, which agreement will not
be unreasonably withheld. Conning shall supply the Client with a written
statement of the Investment Account at the end of each month, or at such
other reasonable times as shall be mutually agreed upon by Conning and the
Client, describing all transactions during the period covered by the
statement, and after each calendar quarter showing the profits and losses
therefrom. In addition, Conning shall confirm or cause to be confirmed in
writing to the Client each security transaction executed for the Investment
Account.
3. TERM. This Agreement will commence on the effective date specified on
the Execution Page of this Agreement and shall continue in force until
terminated by Conning or the Client upon 90 days prior written notice.
4. INVESTMENT ACCOUNT. The Investment Account will consist of the cash
and investments of the Client from time to time held by the Custodian(s) in a
segregated account for management by Conning in accordance with this
Agreement and the Investment Guidelines (said account being referred to for
purposes of this Agreement as the "Investment Account"). The Client may
withdraw any or all of the cash and investments in the Investment Account at
any time, but will notify, in advance, Conning of any additions to, or any
withdrawals from, the Investment Account.
5. CUSTODY OF ASSETS. Conning shall not act as Custodian of the assets
in the Investtment Account. The Client shall be responsible for all fees and
other costs associated with maintenance of a custodial account.
6. COMPENSATION. For services rendered hereunder, the fee will be
calculated based on the mean asset value of the total investable asset under
management by Conning with a minimum annual fee of $35,000. For the purpose
of calculating the value of the assets upon which such fee is to be based,
the market value of the assets shall be determined as Of the last day of each
calendar quarter during the term of this Agreement. Such fee will be set at
an annual rate as stated below, but paid quarterly, and will be calculated
based on the average of the last day of the two proceeding quarters. Conning
shall be responsible for determining the market value of the assets at the
times required for purposes of this Agreement and shall make such
determinations in accordance with its normal practices and procedures and
deliver reports of such determinations to the parties hereto. The valuations
so determined by Conning shall be final and binding upon the parties hereto
in the absence of bad faith or clear error. The fee determined as set forth
in this Section 6 plus any out-of-pocket expenses directly related to the
provision of investment services specifically requested by the Client (such
investment services as listed in Appendix A attached) will be billed
quarterly in arrears:
18 basis points on the first $100 million
15 basis points thereafter
7. INDEPENDENT CONTRACTOR. Conning is retained and employed as an
advisor by the Client under this Agreement only for the purposes and to the
extent set forth herein, and the relation of Conning to the Client is and
shall remain, during the term or terms hereof, that of an independent
contractor.
8. CONFIDENTIALITY. In furtherance of this Agreement, the Client and
Conning shall be providing the other with financial and other relevant
information reasonably necessary for the services contemplated herein. All
such information of a non-public or confidential nature furnished by one
party to this Agreement to the other and labeled as confidential shall be
treated as confidential by the recipient thereof.
9. ABSENCE OF OTHER CONSIDERATION. Except as provided herein neither
Conning nor any of its officers, affiliates, or employees shall act as
principal or receive any compensation
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from the Client in connection with the purchase or sale of investments for
the from the Client in connection with the purchase or sale of investments
for the Investment. Account, other than the fee referred to in Paragraph 6
hereof.
10. NON-EXCLUSIVITY. Conning and its officers may act and continue to act
as investment managers for others, and nothing in this Agreement will in any
way be deemed to restrict Conning's right to perform investment management or
other services for any other person or entity, and the performance of such
services for others shall not be deemed to violate or give rise to any duty
or obligation to the Client not specifically undertaken by Conning hereunder.
11. BROKERAGE. Conning shall use its reasonable efforts to seek to execute
Investment Account transactions at prices which are advantageous to the Client
and at commission rates that are reasonable for the industry. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected by Conning who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Act of
1934) to Conning, on behalf of its clients and/or accounts over which it
exercises investment discretion, including the account of the Client. Conning is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Client which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction, if Conning determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms o f either that particular transaction or
the overall responsibilities which Conning has with respect to accounts over
which it exercises investment discretion.
12. EXPENSES OF INVESTMENT ACCOUNT. All expenses incurred in connection
with investments of the Investment Account, including, without limitation,
any brokerage commissions or fees in connection with the acquisition or
disposition of investments of the Investment Account, interest on any
borrowings if any, and taxes, shall be the responsibility of the Client. In
addition, the Client shall reimburse Conning for reasonable incurred
out-of-pocket expenses directly related to the provision of investment
services specifically requested by the Client (such investment services as
listed in Appendix A attached) under this agreement.
13. LIMITATION OF LIABILITY: INDEMNIFICATION. Neither Conning nor any of
its shareholders, officers, directors or employees shall be liable to the
Client, or to the Board of Directors of the Client for (i) mistakes of
judgment, mistakes of law or any act or omission suffered or taken by any
such person, or for losses due to any such mistakes, act or omission
(including, without limitation, any losses that may be sustained in
connection with the purchase, holding, redemption or sale of any security on
behalf of the Client), except to the extent such liability or losses result
from the (A) willful misconduct, bad faith or negligence of such person or
(B) reckless disregard by Conning of its fiduciary obligations and duties
under this Agreement; or (ii) the willful misconduct, negligence or bad faith
of any independent representative, consultant, independent contractor,
broker, agent or other person who is selected, engaged or retained by Conning
on behalf of the Client in the performance of this Agreement or
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in connection herewith, unless such person was in a negligent manner
selected, engaged or retained by Conning This Agreement does not waive rights
of the Client under the Investment Advisors Act of 1940, as amended, or other
applicable federal and state securities laws and the lawful regulations in
effect from time to time thereunder.
14. NON-ASSIGNABILITY. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective successors
and assigns Neither party thereto shall assign (as that term is defined under
the Investment Advisors Act of 1940, as amended) its rights or obligations
under this Agreement without the prior written consent of the other. This
Agreement may be modified only by written amendment signed by both parties
hereto.
15. ACKNOWLEDGMENT OF DISCLOSURE. The Client acknowledges receipt from
Conning of a copy of its Form ADV, Part II, at least forty-eight hours prior
to entering into this Agreement.
l6. REGISTRATION AS INVESTMENT ADVISOR. Conning represents that it is a
registered investment advisor under the Investment Advisors Act of 1940, as
amended.
17. CLIENT AUTHORIZATION. The Client represents and warrants that the
appointment of Conning as investment manager-has been duly and properly
authorized by the Client in compliance with its charter, by-laws and other
documents relevant to such matters (the "Corporate Documents"). To the best
of the Client's knowledge, the investment guidelines relating to the
Investment Account do not violate any of the Corporate Documents or any legal
or regulatory restriction applicable to the Client's investment portfolio.
18. PRIOR PROPOSALS. This Agreement supersedes any prior agreement or
understanding between the Client and Conning with respect to the Investment
Account.
19. RELIANCE ON INFORMATION. Conning shall be entitled to rely, without
independent verification, on the accuracy and completeness of all information
furnished to it by the Client in furtherance of this Agreement, and on all
information obtained by Conning from third parties believed by Conning to be
reliable.
20. GOVERNING LAWS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
21. NOTICES. All notices and other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be
considered as property given or made if delivered personally or mailed,
postage prepaid or sent by overnight delivery or equivalent service or
telecopy, or prepaid telegram addressed to the respective address of such
party set forth on the execution page of this Agreement. All notices will be
deemed effective upon receipt if delivered personally or sent by overnight
delivery or equivalent service or telecopy or telegram and, if sent by
regular mail, effective five business days after mailing. Any party hereto
may.
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change its address for giving of notices by like notice stating the new
address to the other parties hereto.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
23. ATTORNEY FEES. In the event litigation is instituted for the
enforcement of this Agreement, the party prevailing in such litigation
shall be entitled to reasonable attorney's fee, in addition to other
costs otherwise allowable in such proceeding.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
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APPENDIX A
Out-of Pocket Expenses Directly Related to the Provision of Investment Services
1. NAIC Interfacing and Valuation
2. Mortgage Backed Factor Processing and Pricing
3. Market Pricing of Assets
4. Federal Express Charges
5. Travel and Lodging - effective with the fifth client visit in one
calendar year.
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EXECUTION PAGE
A. All notices are to be addressed:
(i) To the Client:
XXXXX Insurance Company
Attn: Xxxxx X. Xxxxxxxxx
Senior Vice President
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
(ii) To Conning:
Conning & Company
City Place II
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
B. Custodian: See Exhibit 1
C. Effective Date: March 1, 1995
D. EXECUTION
XXXXX INSURANCE COMPANY CONNING & COMPANY
/s/ Xxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxxx
---------------------- ----------------------
Xxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxx
Senior Vice President Senior Vice President
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