MANAGEMENT AGREEMENT
XXXX XXXXX INVESTMENT GRADE INCOME PORTFOLIO
This MANAGEMENT AGREEMENT, made this 19th day of June, 1987, by and
between Xxxx Xxxxx Income Trust, Inc. (the "Corporation"), a Maryland
corporation, on behalf of the Xxxx Xxxxx Investment Grade Income Portfolio
("Fund"), and Xxxx Xxxxx Fund Adviser, Inc. (the "Manager"), a Maryland
corporation, having its principal place of business at 0 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Corporation has filed a Registration Statement with the
Securities and Exchange Commission for the purpose of registering as a series
type, open-end diversified investment company under the Investment Company Act
of 1940 (the "1940 Act") and for the purpose of registering the shares of common
stock of the Corporation for sale to the public under the Securities Act of
1933; and
WHEREAS, the Corporation wishes to retain the Manager to provide
investment advisory, management, and administrative services to the Fund; and
WHEREAS, the Manager is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Corporation hereby appoints Xxxx Xxxxx Fund Adviser, Inc. as
Manager of the Fund for the period and on the terms set forth in this Agreement.
The Manager accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. The Fund shall at all times keep the Manager fully informed with
regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs. It
shall furnish the Manager with such other documents and information with regard
to its affairs as the Manager may from time to time reasonably request.
3. (a) Subject to the supervision of the Corporation's Board of
Directors, the Manager shall regularly provide the Fund with investment
research, advice, management and supervision and shall furnish a continuous
investment program for the Fund's portfolio of securities consistent with the
Fund's investment objective, policies, and limitations as stated in the Fund's
current Prospectus and Statement of Additional Information. The Manager shall
determine from time to time what securities will be purchased, retained or
sold by the Fund, and shall implement those decisions, all subject to the
provisions of the Corporation's Articles of Incorporation and By-laws, the 1940
Act, the applicable rules and regulations of the Securities and Exchange
Commission, and other applicable federal and state law, as well as the
investment objective, policies, and limitations of the Fund. The Manager will
place orders pursuant to its investment determinations for the Fund either
directly with the issuer or with any broker or dealer. In placing orders with
brokers and dealers, the Manager will attempt to obtain the best net price and
the most favorable execution of its orders; however, the Manager may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers, who provide the Fund with research, analysis, advice and similar
services, and the Manager may pay to these brokers, in return for research and
analysis, a higher commission than may be charged by other brokers. In no
instance will portfolio securities be purchased from or sold to the Manager, or
any affiliated person thereof promulgated by the Securities and Exchange
Commission pursuant to the 1940 Act. The Manager shall also provide advice and
recommendations with respect to other aspects of the business and affairs of the
Fund, and shall perform such other functions of management and supervision as
may be directed by the Corporation's Board of Directors.
(b) The Manager will oversee the maintenance of all books and records
with respect to the securities transactions of the Fund and the Fund's books of
account in accordance with all applicable federal and state laws and
regulations, and will furnish the Board of Directors of the Corporation with
such periodic and special reports as the Board reasonably may request.
(c) The Fund authorizes the Manager and any entity or person associated
with the Manager which is a member of a national securities exchange to effect
any transaction on the exchange for the account of the Fund which is permitted
by Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention of compensation by
such entity for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
4. The Manager may enter into a contract ("Investment Advisory
Agreement") with an investment adviser in which the Manager delegates to such
investment adviser any or all its duties specified in Paragraph 3 hereunder,
provided that such Investment Advisory Agreement imposes on the investment
adviser bound thereby all duties and conditions to which the Manager is subject
hereunder, and further provided that such Investment Advisory Agreement meets
all requirements of the 1940 Act and rules thereunder.
5. (a) The Manager, at its expense, shall supply the Board of Directors
and officers of the Corporation with all statistical information and reports
reasonably required by them and reasonably available to the Manager and shall
furnish the Fund with office facilities, including space, furniture and
equipment and all personnel reasonably necessary for the operation of the Fund.
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(b) In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Manager hereby agrees that all books and records which it
maintains for the Fund are the property of the Fund, and further agrees to
surrender promptly to the Fund or its agents any of such records upon the Fund's
request. The Manager further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act and any such records required to be maintained by
Rule 31a-1 under the 1940 Act.
(c) Other than as herein specifically indicated, the Manager
shall not be responsible for the Fund's expenses. Specifically, the Manager will
not be responsible, except to the extent of the reasonable compensation of
employees of the Fund whose services may be used by the Manager hereunder, for
any of the following expenses of the Fund, which expenses shall be borne by the
Fund: legal expenses; interest; taxes; governmental fees; fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; the cost (including brokerage commissions or
charges, if any) of securities purchased or sold by the Fund and any losses
incurred in connection therewith; fees of custodians, transfer agents,
registrars or other agents; expenses of preparing share certificates; expenses
relating to the redemption or repurchase of the Fund's shares; expenses of
registering and qualifying Fund shares for sale under applicable federal and
state law and maintaining such registrations and qualifications; expenses of
preparing, setting in print, printing and distributing prospectuses, proxy
statements, reports, notices and dividends to Fund shareholders; cost of
stationery; costs of shareholders' and other meetings of the Fund; traveling
expenses of officers, directors and employees of the Corporation, if any;
expenses for fidelity bonds and other insurance covering the Corporation and its
officers and directors; distribution expenses; costs of indemnification and any
extraordinary expenses.
(d) The Manager shall authorize and permit any of its
directors, officers and employees, who may be elected as directors or officers
of the Corporation, to serve in the capacities in which they are elected, and
shall bear their salary or other compensation and expenses, if any.
6. No director, officer or employee of the Corporation shall receive
from the Corporation any salary or other compensation as such director, officer
or employee while he is at the same time a director, officer, or employee of the
Manager or any affiliated company of the Manager.
7. As compensation for the services performed and the facilities
furnished and expenses assumed by the Manager, including the services of any
sub-advisers or agents retained by the Manager, the Fund shall pay the Manager
monthly, as promptly as possible after the last day of each month, a fee,
computed daily of 0.60% annually of the average daily net assets of the Fund. If
this Agreement is terminated as of any date not the last day of a month, such
fee shall be paid as promptly as possible after such date of termination, shall
be based on the average daily net assets of the Fund in that period from the
beginning
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of such month to such date of termination, and shall be that proportion of such
average daily net assets as the number of business days in such period bears to
the number of business days in such month. The average daily net assets of the
Fund shall in all cases be based only on business days and be computed as of the
time of the regular close of business of the New York Stock Exchange, or such
other time as may be determined by the Board of Directors of the Corporation.
Each such payment shall be accompanied by a report of the prepared either by the
Fund or by a reputable firm of independent accountants, which shall show the
amount properly payable to the Manager under this Agreement and the detailed
computation thereof.
8. The Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the performance
of this Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or losses resulting from
willful misfeasance, bad faith, or gross negligence in the performance of its
duties or from reckless disregard of its obligations and duties hereunder.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Manager who may also be a director,
officer, or employee of the Corporation, to engage in any other business or to
devote his time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature, or limit or
restrict the right of the Manager to engage in any other business or to render
services of any kind, including investment advisory and management services, to
any other corporation, firm, individual or association.
10. As used in this Agreement, the terms "securities" and "net assets"
shall have the meanings ascribed to them in the Articles of Incorporation of the
Corporation; and the terms "assignment", "interested persons", and "majority of
the outstanding voting securities" shall have the meanings given to them by
Section 2(a) of the 1940 Act, subject to such exemptions and interpretations as
may be granted by the Securities and Exchange Commission by any rule, regulation
or order.
11. This Agreement will become effective June 19, 1987, provided that
it shall have been approved by the Corporation's Board of Directors and by the
shareholders of the Fund in accordance with the requirements of the 1940 Act
and, unless sooner terminated as provided herein, will continue in effect until
June 19, 1989. Thereafter, if not terminated, this Agreement shall continue in
effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by the Corporation's Board of
Directors or (ii) by a vote of a majority (as defined in the 0000 Xxx) of the
outstanding voting securities of the Fund , provided that in either event the
continuance is also approved by a majority of the Corporation's Directors who
are not interested persons (as defined in the 0000 Xxx) of the Corporation or of
the Manager, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable
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without penalty, by vote of the Corporation's Board of Directors, by vote of a
majority (as defined in the 0000 Xxx) of the outstanding voting securities of
the Fund , or by the Manager, on not less than 60 days' notice to the other
party and may be terminated immediately upon the mutual written consent of the
Manager and the Fund. Termination of this Agreement with respect to the Fund
shall in no way affect continued performance with regard to any other portfolio
of the Corporation. This Agreement will automatically and immediately terminate
in the event of its assignment.
12. In the event this Agreement is terminated by either party or upon
written notice from the Manager at any time, the Fund hereby agrees that it will
eliminate from its corporate name any reference to the name of "Xxxx Xxxxx." The
Fund shall have the non-exclusive use of the name "Xxxx Xxxxx" in whole or in
part so long as this Agreement is effective or until such notice is given.
13. No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the Fund's outstanding voting
securities.
14. 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 binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX INCOME TRUST, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx, Xx.
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Attest: XXXX XXXXX FUND ADVISER, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
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