$$/(8U$$/(s10h3T MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of December 29, l988, between XXXXXXXX
TAX-EXEMPT FUND SERIES, 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 with respect to each Series as hereinafter defined including, but
not limited to, continuously providing the Corporation with investment
management, 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 each Series 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 as of the Corporation relating to the
Series and the requirements of the Investment Company Act of l940 (the "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 the investment companies in the Xxxxxxxx Group. As used herein a
"Series" means the assets and liabilities of the Corporation attributable to any
of the following classes of its common stock: the National Tax-Exempt Class, the
New York Tax-Exempt Class, the Massachusetts Tax-Exempt Class, Michigan
Tax-Exempt Class, the Minnesota Tax-Exempt Class, the Ohio Tax-Exempt Class and
any other class of the Corporation's Common Stock to which the Corporation and
the Manager agree this Agreement shall apply.
Subject to Section 36 of the 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 l and shall pay any salaries, fees
and expenses of the directors of the Corporaton 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
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shares, expenses of registering and qualifying shares for sale, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of corporate data processing and related services, shareholder
recordkeeping and shareholder account sevices, 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.
3. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section l, the
Corporation will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month, at an annual rate of 0.50% of the
Corporation's average daily net assets attributable to the Series.
(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
allocation of portfolio transactions as set forth in the Registration Statement
and Prospectus(es) of the Corporation relating to the Series 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 the Manager have access to supplemental investment and market
research and security and econonic 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 Series of the Corporaton 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.
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If, in connection with purchases and sales of securities for the Series of
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 with respect to a Series of the Corporation until December 29, 1989, and
from year to year thereafter if such continuance is approved in the manner
required by the Act and if the Manager shall not have notified the Corporation
in writing at least 60 days prior to such December 29 or prior to December 29 of
any year thereafter if it does not desire such continuance; provided, however,
that with respect to a Series of the Corporation which first offers its shares
to the public subsequent to the first meeting of shareholders of the Series
after the date hereof, this Agreement shall continue in full force and effect
until the earlier of (a) two years from the date such shares are first so
offered and (b) the first meeting of shareholders of such Series after such
date. If approved at such meeting by the affirmative vote of a majority of the
outstanding voting securities (as defined by the Act) of such Series, this
Agreement shall continue in full force and effect with respect to such Series,
from year to year thereafter if such continuance is approved in the manner
required by the Act and the Manager shall not have notified the Corporation in
writing at least 60 days prior to the anniversary date of the previous
continuance that it does not desire such continuance with respect to such
Series. This Agreement may be terminated at any time with respect to any or all
Series, without payment of penalty by the Corporation, or 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 affected Series
of the Corporation (as defined by the Act). This Agreement shall automatically
terminate in the event of its assignment (as defined by the Act). The failure of
any Series of the Corporation to approve the continuance of this Agreement, or
the termination of this Agreement with respect to any Series shall be without
prejudice to the effectiveness of this Agreement with respect to any other
Series.
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
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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 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 shareholders
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 TAX-EXEMPT FUND SERIES, INC.
By
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J. & X. XXXXXXXX & CO. INCORPORATED
By
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