EXHIBIT 5(a)
MANAGEMENT AGREEMENT
BETWEEN
XXXXXXX XXXXX TRUST
ON BEHALF OF
XXXXXXX SACHS SHORT DURATION GOVERNMENT FUND
AND
XXXXXXX XXXXX FUNDS MANAGEMENT, L.P.
CONTENTS
PARAGRAPH PAGE
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1. Appointment of Manager..................... 1
2. Delivery of Documents...................... 1
3. Duties of Manager.......................... 2
4. Expenses................................... 5
5. Compensation............................... 5
6. Books and Records.......................... 6
7. Indemnification............................ 6
8. Duration and Termination................... 7
9. Status of Manager as Independent Contractor 8
10. Amendment of Agreement..................... 8
11. Shareholder Liability...................... 8
12. Miscellaneous.............................. 8
13. Limitation of Liability of Manager......... 8
MANAGEMENT AGREEMENT
AGREEMENT made this 30th day of April, 1997 between Xxxxxxx Sachs Trust, a
Delaware business trust (the "Trust") on behalf of Xxxxxxx Xxxxx Short Duration
Government Fund (the "Fund") and Xxxxxxx Sachs Funds Management, L.P. (the
"Manager")
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
("Shares") in separate series with each such series representing the interests
in a separate portfolio of securities and other assets; and
WHEREAS, the Trust presently offers shares of beneficial interest in
Xxxxxxx Xxxxx Short Duration Government Fund (the "Fund"); and
WHEREAS, the Trust on behalf of the Fund desires to retain the Manager to
render investment advisory and administrative services to the Fund and the
Manager is willing to so render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT OF MANAGER. The Trust on behalf of the Fund hereby
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appoints the Manager to act as investment adviser and to provide administrative
services to the Fund for the periods and on the terms herein set forth. The
Manager accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust on behalf of the Fund has delivered
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(or will deliver as soon as is possible) to the Manager copies of each of the
following documents:
(a) Declaration of Trust of the Trust dated January 28, 1997, together
with all amendments thereto (such Declaration of Trust, as presently
in effect and as amended from time to time, is herein called the
"Trust Agreement"). A copy of the Declaration of Trust is also on
file with the Secretary of State of Delaware);
(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time are herein called the "By-Laws");
(c) Certified resolutions of the sole Shareholder and the Trustees of
the Trust approving the terms of this Agreement;
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(d) Custodian Agreement (including related fee schedule) dated July
15, 1991 between the Fund and State Street Bank and Trust Company
(such Agreement, as presently in effect and as amended and/or
superseded from time to time is herein called the "Custodian
Agreement");
(e) Transfer Agency Agreement dated July 15, 1991 between the Fund and
the Manager (such Agreement, as presently in effect and as amended
and/or superseded from time to time is herein called the "Transfer
Agency Agreement");
(f) Prospectus and Statement of Additional Information of the Fund,
dated May 1, 1997, such Prospectus and Statement of Additional
Information, as presently in effect and as amended, supplemented
and/or superseded from time to time, are herein called the
"Prospectus" and "Additional Statement," respectively);
(g) Post-Effective Amendment No. 30 to the Trust s Registration
Statement on Form N-1A (No. 33-17619 under the Securities Act of 1933
(the "1933 Act") and Amendment No. 32 to the Trust's Registration
Statement on such Form (No. 811-5349) under the 1940 Act filed as a
single document with the Securities and Exchange Commission (the
"Commission") on February 25, 1997 (such Registration Statement, as
presently in effect and as amended from time to time, is herein called
the "Registration Statement").
The Trust on behalf of the Fund agrees to promptly furnish the manager
from time to time with copies of all amendments of or supplements to or
otherwise current versions of any of the foregoing documents not heretofore
furnished.
3. DUTIES OF MANAGER.
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(a) Subject to the general supervision of the Trustees of the Trust,
the Manager shall manage the investment operations of the Fund and the
composition of the Fund's assets, including the purchase, retention
and disposition thereof. In this regard, the Manager
(i) shall provide supervision of the Fund's assets, furnish a
continuous investment program for the Fund, determine from time
to time what investments or securities will be purchased,
retained or sold by the Fund, and what portion of the assets will
be invested or held uninvested as cash;
(ii) shall place orders pursuant to its determinations either
directly with the issuer or with any broker and/or dealer who
deals in the securities in which the Fund is active. In placing
orders with
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brokers or dealers, the Manager shall attempt to obtain the best
net price and the most favorable execution of its orders. When
the execution and price offered by two or more brokers or dealers
are comparable, the Manager may, in its discretion, purchase and
sell Fund securities to and from brokers or dealers who provide
the Fund with brokerage or research services;
(iii) may, on occasions when it deems the purchase or sale of a
security to be in the best interests of the Fund as well as its
other customers (including any other Portfolio or any other
investment company or advisory account for which the Manager acts
as adviser), aggregate, to the extent permitted by applicable
laws and regulations, the securities to be sold or purchased in
order to obtain the best net price and the most favorable
execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it
considers to be the most equitable and consistent with its
fiduciary obligations to the Fund and to such other customers
(b) In addition, the Manager shall, subject to the general supervision
of the Trustees of the Trust, provide for the administration of all
other affairs of the Fund. In this regard, the Manager
(i) giving due recognition to the fact that certain of such
operations are performed by others pursuant to the Custodian
Agreement (and the Transfer Agency Agreement to the extent that a
person other than the Manager is serving thereunder as the
Trust's transfer agent), shall provide supervision of all aspects
of the Fund's operations not referred to in paragraph 3(a) above;
(ii) shall, to the extent not provided pursuant to the Custodian
Agreement or the Transfer Agency Agreement, provide the Fund with
personnel to perform such executive, administrative and clerical
services as are reasonably necessary to provide effective
administration of the Fund;
(iii) shall, to the extent not provided pursuant to the
Custodian Agreement or the Transfer Agency Agreement, arrange for
(A) the preparation for the Fund of all required tax returns, (B)
the preparation
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and submission of reports to existing Shareholders, and (C) the
periodic updating of the Prospectus and Additional Statement and
the preparation of reports filed with the Commission and other
regulatory authorities;
(iv) shall, to the extent not provided pursuant to the Custodian
Agreement or the Transfer Agency Agreement, provide the Fund with
adequate office space and all necessary office equipment and
services including telephone service, heat, utilities, stationery
supplies and similar items, in Chicago, Illinois.
(c) The Manager, in the performance of its duties hereunder
(I) shall use the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims;
(ii) shall act in conformity with the Trust Agreement, By-Laws,
Prospectus, Additional Statement and Registration Statement and
with the instructions and directions of the Trustees of the
Trust, and will, subject to the standard set forth in paragraph
3(c)(i) above, comply with and conform to the requirements of the
1940 Act, the Investment Advisers Act of 1940 and all other
applicable federal and state laws, regulations and rulings.
(d) The Manager shall render to the Trustees of the Trust on behalf of
the Fund such periodic and special reports as the Trustees may
reasonably request.
(e) The Manager shall notify the Trust on behalf of the Fund of any
change in the membership of the Manager within a reasonable time after
such change.
(f) The services of the Manager hereunder are not deemed exclusive and
the Manager shall be free to render similar services to others so long
as its services under this Agreement are not impaired thereby.
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4. EXPENSES.
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(a) During the term of this Agreement, the Manager will pay all costs
incurred by it in connection with the performance of its duties under
paragraph 3 hereof, other than the cost (including taxes and brokerage
commissions, if any) of securities purchased for the Fund, the cost of
the preparations, submissions, updatings and filings referred to in
paragraph 3(b)(iii) and, at the option of the Manager (the exercise of
which and the extent of such exercise being subject to prior approval
by the Trustees of the Trust on behalf of the Fund and by 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),
telephone, personnel and other costs attributable to services for
existing Shareholders as well as costs attributable to clerical,
administrative, legal, accounting and other non-investment advisory
services to the Fund.
(b) If, in any fiscal year, the sum of the Fund's expenses (including
the fee payable pursuant to paragraph 5 hereof, but excluding taxes,
interest, brokerage commissions relating to the purchase or sale of
portfolio securities, and, where permitted, extraordinary expenses
such as for litigation) exceeds the expense limitations applicable to
the Fund imposed by state securities administrators, as such
limitations may be lowered or raised from time to time, the Manager
shall reimburse the Fund in the amount of such excess to the extent
required by such expense limitations.
(c) In addition to the foregoing, the Manager may from time to time at
its option (but shall be under no obligation to) voluntarily assume or
undertake to reimburse the Fund for all or a portion of its expenses
not otherwise required to be borne or reimbursed by the Manager. Any
such voluntary assumption or undertaking may be discontinued or
modified at any time by the Manager.
5. COMPENSATION
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(a) For the services provided and the expenses assumed by the Manager
pursuant to this Agreement, the Trust on behalf of the Fund will pay
to the Manager as full compensation therefor a fee at an annual rate
of .50 of 1% of the Fund's average net assets.
(b) The foregoing fee will be computed based on net assets on each day
and will be paid to the Manager monthly.
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6. BOOKS AND RECORDS. The Manager shall maintain all of the Fund's
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records (other than those maintained pursuant to the Custodian Agreement or the
Transfer Agency Agreement). The Manager agrees that all records which it
maintains for the Trust on behalf of the Fund are the property of the Trust on
behalf of the Fund and it will surrender promptly to the Trust any of such
records upon the Trust's request. The Manager further agrees to preserve for
the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act any
such records as are required to be maintained by Rule 31a-1 of the Commission
under the 1940 Act.
7. INDEMNIFICATION.
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(a) The Trust on behalf of the Fund hereby agrees to indemnify and
hold harmless the Manager, its officers, partners and employees and
each person, if any, who controls the Manager (collectively, the
"Indemnified Parties") against any and all losses, claims, damages or
liabilities, joint or several), to which any such Indemnified Party
may become subject under the 1933 Act, the Securities Exchange Act of
1934 (as amended), the 1940 Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon
(i) any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to state a
material fact required to be stated or necessary to make the
statements made not misleading in (x) the Prospectus, Additional
Statement or the Registration Statement, (y) any advertisement or
sales literature authorized by the Trust for use in the offer and
sale of Shares of the Fund, or (z) any application or other
document filed in connection with the qualification of the Fund
under the Blue Sky or securities laws of any jurisdiction, except
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any
such untrue statement or omission or alleged untrue statement or
omission either pertaining to a failure to disclose a breach of
the Manager's duties in connection with this Agreement, the
Transfer Agency Agreement or the Distribution Agreement of even
date herewith between the Trust on behalf of the Fund and the
Manager (the "Distribution Agreement") or made in reliance upon
and in conformity with information furnished to the Fund by or on
behalf of the Manager pertaining to or originating with the
Manager for use in connection with any document referred to in
clauses (x), (y), or (z) or
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(ii) subject in each case to clause (i) above, the Manager,
acting hereunder or under the Distribution Agreement;
and the Trust on behalf of the Fund will reimburse each Indemnified
Party for any legal or other expenses incurred by such Indemnified
Party in connection with investigating or defending any such loss,
claim, damages, liability or action.
(b) If the indemnification provided for in paragraph 7(a) is available
in accordance with the terms of such paragraph but is for any reason
held by a court to be unavailable from the Trust, then the Trust on
behalf of the Fund shall contribute to the aggregate amount paid or
payable by the Fund and the Indemnified Parties as a result of such
losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative
benefits received by the Fund and such Indemnified Parties in
connection with the operations of the Fund, (ii) the relative fault of
the Fund and such Indemnified Parties, and (iii) any other relevant
equitable considerations. The Trust on behalf of the Fund and the
Manager agree that it would not be just and equitable if contribution
pursuant to this subparagraph (b) were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above in this
subparagraph (b). The aggregate amount paid or payable as a result of
the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subparagraph (b) shall be deemed to
include any legal or other expenses incurred by the Trust on behalf of
the Fund and the Indemnified Parties in connection with investigating
or defending any such loss, claim, damage, liability or action. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(c) It is understood, however, that nothing in this paragraph 7 shall
protect any Indemnified Party against, or entitle any Indemnified
Party to indemnification against or contribution with respect to, any
liability to the Trust on behalf of the Fund or its Shareholders to
which such Indemnified party is subject, by reason of its willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of any reckless disregard of its obligations and
duties, under this Agreement or the Distribution Agreement, or
otherwise to an extent or in a manner inconsistent with Section 17(i)
of the 1940 Act.
8. DURATION AND TERMINATION. Insofar as the holders of Shares
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representing the interests of the Fund are affected by this Agreement, it shall
continue, unless sooner terminated as provided herein, until June 30, 1998 and
thereafter shall continue automatically for periods of one year so long as each
such continuance is approved at least annually (a) by the vote of a majority
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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, and (b) by the
Trustees of the Trust or by vote of a majority of the outstanding Shares (as
defined with respect to voting securities in the 1940 Act) representing the
interests in the Fund; provided, however, that (y) the continuance of this
Agreement insofar as the holders of Shares representing the interests of the
Fund are affected hereby until June 30, 1998 and (z) this Agreement may be
terminated by the Fund at any time, without the payment of any penalty, by vote
of a majority of the Trustees of the Trust on behalf of the Fund or by vote of a
majority of the outstanding Shares (as so defined) representing the interests in
the Fund on 60 days' written notice to the Manager, or by the Manager at any
time, without the payment of any penalty, on 60 days' written notice to the
Fund. This Agreement will automatically and immediately terminate in the event
of its assignment (as defined in the 1940 Act).
9. STATUS OF MANAGER AS INDEPENDENT CONTRACTOR. The Manager shall for
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all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Trustees of the Trust
on behalf of the Fund from time to time, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
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consent, but the consent of the Fund must be approved (a) by vote of a majority
of those Trustees of the Trust on behalf of the Fund 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 amendment,
and (b) by vote of a majority of the outstanding Shares (as defined with respect
to voting securities in the 1940 Act) representing the interests in the Fund
affected by such amendment.
11. SHAREHOLDER LIABILITY. This Agreement is executed by or on behalf of
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the Fund and the obligations hereunder are not binding upon any of the Trustees,
officers or Shareholders of the Fund individually but are binding only upon the
Fund and its assets and property.
12. MISCELLANEOUS. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be construed in accordance with
applicable federal law and (except as to paragraph 11 hereof which shall be
construed in accordance with the laws of the state of Delaware) the laws of the
state of Illinois and shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, subject to paragraph 7
hereof. 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.
13. LIMITATION OF LIABILITY OF MANAGER. The Manager shall not be liable
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for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by the Manager of its
obligations and duties under this Agreement. Any person, even though also
employed by the Manager, who may be or become an employee of and paid by the
Trust or the Fund shall be deemed, when acting within the scope of his
employment by the Trust, to be acting in such employment solely for the Trust
and not as the Manager's employee or agent.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
XXXXXXX XXXXX TRUST
(ON BEHALF OF XXXXXXX SACHS SHORT DURATION GOVERNMENT FUND)
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Grip
Attest:_________________________________ By:____________________________
Xxxxxxx X. Xxxxxxx Xxxxxxx X. Grip
Secretary of the Registrant President of the Trust
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX XXXXX FUNDS MANAGEMENT, L.P.
A SEPARATE OPERATING DIVISION OF XXXXXXX, SACHS & CO.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxx
Attest: _________________________________ By:______________________________
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxx
Counsel to the Funds Group Managing Director
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