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EX-99.5
MANAGEMENT AGREEMENT
AGREEMENT made this 5th day of August, 1985, by and between
XXXXXXX XXXXX CALIFORNIA MUNICIPAL SERIES TRUST, a Massachusetts business trust
(hereinafter referred to as the "Trust'), and FUND ASSET MANAGEMENT, INC., a
Delaware corporation (hereinafter referred to as the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as a diversified open-end
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Trustees of the Trust (the "Trustees") are authorized to
establish separate series relating to separate portfolios of securities, each
of which will offer a separate class of shares; and
WHEREAS, the Trustees have established and designated the XXXXXXX XXXXX
CALIFORNIA TAX-EXEMPT FUND (the "Fund") as the initial series of the Trust; and
WHEREAS, the Manager is engaged principally in rendering management and
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940; and
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WHEREAS, the Trust desires to retain the Manager to render
management and investment advisory services to the Trust and Fund in the
manner and on the terms hereinafter set forth; and
WHEREAS, the Manager is willing to provide management and investment
advisory services to the Trust and the Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Manager hereby agree as follows:
ARTICLE I
Duties of the Manager
The Trust hereby employs the Manager to act as an investment
manager and investment adviser of the Fund and to furnish, or
arrange for affiliates to furnish, the management and investment
advisory services described below, subject to policies of, review
by and overall control of the Trustees, for the period and on the
terms and conditions set forth in this Agreement. The Manager
hereby accepts such employment and agrees during such period, at
its own expense, to render, or arrange for the rendering of, such
services and to assume the obligations herein set forth for the
compensation provided for herein. The Manager and its affiliates
shall for all purposes herein be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized,
have no authority to act for or represent the Trust or the
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Fund in any way or otherwise be deemed an agent of the Trust or
the Fund.
(a) Management Services. The Manager shall perform (or
arrange for the performance by affiliates of) the management and
administrative services necessary for the operation of the Trust
and the Fund including administering shareholder accounts and
handling shareholder relations. The Manager shall provide the
Trust and the Fund with office space, equipment and facilities and
such other services as the Manager, subject to review by the
Trustees, shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement. The
Manager shall also, on behalf of the Trust, and the Fund, conduct
relations with custodians, depositories, transfer agents, dividend
disbursing agents, other shareholder service agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries,
insurers, banks and such other persons in any such other
capacity deemed to be necessary or desirable. The Manager shall
generally monitor the Trust's and the Fund's compliance with
investment policies and restrictions as set forth in the currently
effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of
1933, as amended (the "Prospectus" and the "Statement of
Additional Information," respectively). The Manager shall make
reports to the Trustees of its performance of obligations
hereunder and furnish advice and recommendations with respect to
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such other aspects of the business and affairs of the Trust and
the Fund as it shall determine to be desirable.
(b) Investment Advisory Services. The Manager shall provide
the Trust with such investment research, advice and supervision as.
the latter may from time to time consider necessary for the proper
supervision of the assets of the Fund, shall furnish continuously
an investment program for the Fund and shall determine from time
to time which securities shall be purchased, sold or exchanged and
what portion of the assets of the Fund shall be held in the
various money market securities or cash, subject always to the
restrictions of the Declaration of Trust and By-Laws of the Trust,
as amended from time to time, the provisions of the Investment
Company Act and the statements relating to the Trust's investment
objectives, investment policies and investment restrictions as the
same are set forth in the Prospectus and Statement of Additional
Information. The Manager shall also make decisions for the Trust
as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Trust's
portfolio securities shall be exercised. Should the Trustees at
any time, however, make any definite determination as to investment
policy and notify the Manager thereof in writing, the Manager
shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such
determination has been revoked. The Manager shall take, on behalf
of the Fund, all actions which it deems necessary to implement the
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investment policies determined as provided above, and in particular
to place all orders for the purchase or sale of portfolio
securities for the Fund's account with brokers or dealers selected
by it, and to that end, the Manager is authorized as the agent of
the Trust to give instructions to the Custodian of the Fund as to
deliveries of securities and payments of cash for the account of
the Fund. In connection with the selection of such brokers or
dealers and the placing of such orders with respect to assets of
the Fund, the Manager is directed at all times to seek to obtain
execution and price within the policy guidelines determined by the
Trustees as set forth in the Prospectus and Statement of Additional
Information. Subject to this requirement and the provisions
of the Investment Company Act, the Securities Exchange Act
of 1934, as amended, and other applicable provisions of law, the
Manager may select brokers or dealers with which it or the Trust
is affiliated.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes and shall pay for
maintaining the staff and personnel necessary to perform its
obligations under this Agreement, and shall at its own expense,
provide the office space, equipment and facilities which it is
obligated to provide under Article I hereof, and shall pay all
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compensation of officers of the Trust and all Trustees who are
affiliated persons of the Manager.
(b) The Trust. The Trust assumes and shall pay or cause to
be paid all other expenses of the Trust and the Fund (except for
the expenses incurred by the Distributor), including, without
limitation: redemption expenses, expenses of portfolio transactions,
expenses of registering shares under Federal and state
securities laws, pricing costs (including the daily calculation of
net asset value), expenses of printing shareholder reports,
prospectuses and statements of additional information, Securities
and Exchange Commission fees, interest, taxes, fees and actual
out-of-pocket expenses of Trustees who are not affiliated persons
of the Manager, fees for legal and auditing services, litigation
expenses, costs of printing proxies and other expenses related to
shareholder meetings, and other expenses properly payable by the
Trust and the Fund. It is also understood that the Trust will
reimburse the Manager for its costs in providing accounting
services to the Trust and the Fund. The Distributor will pay
certain of the expenses of the Fund incurred in connection with
the continuous offering of Fund shares.
ARTICLE III
Compensation of the Manager
(a) Investment Management Fee. For the services rendered,
the facilities furnished and expenses assumed by the Manager, the
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Trust shall pay to the Manager at the end of each calendar month a
fee based upon the average daily value of the net assets of the
Fund, as determined and computed in accordance with the description
of the determination of net asset value contained in the
Prospectus and Statement of Additional Information, at the annual
rate of 0.55 of 1.0% (.55%) of the average daily net assets of the
Fund, commencing on the day following effectiveness hereof. If
this Agreement becomes effective subsequent to the first day of a
month or shall terminate before the last day of a month, compensation
for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation
of the fee as set forth above. Subject to the provisions of
subsection (b) hereof, payment of the Manager's compensation for
the preceding month shall be made as promptly as possible after
completion of the computations contemplated by subsection (b)
hereof. During any period when the determination of net asset
value is suspended by the Trustees, the net asset value of a share
as of the last business day prior to such suspension shall for
this purpose be deemed to be the net asset value at the close of,
each succeeding business day until it is again determined.
(b) Expense Limitations. In the event the operating
expenses of the Fund, including amounts payable to the Manager
pursuant to subsection (a) hereof, for any fiscal year ending on a
date on which this Agreement is in effect exceed the expense
limitations applicable to the Fund imposed by applicable state
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securities laws or regulations thereunder, as such limitations may
be raised or lowered from time to time, the Manager shall reduce
its management fee by the extent of such excess and, if required
pursuant to any such laws or regulations, will reimburse the Fund
in the amount of such excess, provided, however, to the extent
permitted by law, there shall be excluded from such expenses the
amount of any interest. taxes, brokerage commissions, and extraordinary
expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Fund. Whenever the expenses of
the Fund exceed a pro rata portion of the applicable annual
expense limitations, the estimated amount of reimbursement under
such limitations shall be applicable as an offset against the
monthly payment of the fee due to the Manager. Should two or more
such expense limitations be applicable as at the end of the last
business day of the month, that expense limitation which results
in the largest reduction in the Manager's fee shall be applicable.
ARTICLE IV
Limitation of Liability of the Manager
The Manager shall not be liable 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 Trust and the
Fund, except for willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless
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disregard of its obligations and duties hereunder. As used in
this Article IV, the term "Manager" shall include any affiliates
of the Manager performing services for the Trust or the Fund
contemplated hereby and directors, officers and employees of the
Manager and such affiliates.
ARTICLE V
Activities of the Manager
The services of the Manager to the Trust and the Fund are not
to be deemed to be exclusive, and the Manager and any person
controlled by or under common control with the Manager (for
purposes of Article V referred to as "affiliates") is free to
render services to others. It is understood that Trustees,
officers, employees and shareholders of the Trust and the Fund are
or may become interested in the Manager and its affiliates, as
directors, officers, employees and shareholders or otherwise and
that directors, officers, employees and shareholders of the
Manager and its affiliates are or may become similarly interested
in the Trust and the Fund, and that the Manager may become interested
in the Trust and the Fund as shareholder or otherwise.
ARTICLE VI
Duration and Termination of this Contract
This Agreement shall become effective at of the date first
above written and shall remain in force until May 31, 1987 and
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thereafter, but only so long as such continuance is specifically
approved at least annually by (i) the Trustees, or by the vote of
a majority of the outstanding voting securities of the Fund, and
(ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the
payment of any penalty, by the Trustees or by vote of a majority
of the outstanding voting securities of the Fund, or by the
Manager, on sixty days written notice to the other party. This
Agreement shall automatically terminate in the event of its
assignment.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by (i) the vote of a majority
of outstanding voting securities of the Fund, and (ii) a majority
of those Trustees who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
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ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting
securities", "assignment", "affiliated person" and "interested
person", when used in this Agreement, shall have the respective.
meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission under the
Investment Company Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with laws of
the State of New York and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the
State of New York, or any of the provisions herein, conflict with
the applicable provisions of the Investment Company Act, the
latter shall control.
ARTICLE X
Personal Liability
The Declaration of Trust establishing Xxxxxxx Xxxxx California
Municipal Series Trust, dated March 20, 1985, a copy of
which, together with all amendments thereto (the "Declaration"),
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is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Xxxxxxx Xxxxx California
Municipal Series Trust," refers to the trustees under the Declaration
collectively as Trustees, but not as individuals or personally;
and no Trustee, shareholder, officer, employee or agent
of Xxxxxxx Xxxxx California Municipal Series Trust, shall be held
to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim
or otherwise in connection with the affairs of said Xxxxxxx Xxxxx
California Municipal Series Trust, but the Trust Property only
shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
XXXXXXX XXXXX CALIFORNIA MUNICIPAL SERIES TRUST
By /S/ XXXXXX XXXXXX
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FUND ASSET MANAGEMENT, INC.
By XXXXXX X. XXXXXXXX
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