XXXXXX TAX-FREE INCOME TRUST
MANAGEMENT CONTRACT
Management Contract dated as of July 26, 1985, as most recently amended and
restated March 21, 2005 between XXXXXX TAX-FREE INCOME TRUST, a
Massachusetts business trust (the "Fund"), and XXXXXX INVESTMENT MANAGEMENT,
LLC, a Delaware limited liability company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed
as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an investment
program for the Fund, will determine what investments shall be purchased,
held, sold or exchanged by the Fund and what portion, if any, of the assets
of the Fund shall be held uninvested and shall, on behalf of the Fund, make
changes in the Fund's investments. Subject always to the control of the
Trustees of the Fund and except for the functions carried out by the
officers and personnel referred to in Section 1(d), the Manager will also
manage, supervise and conduct the other affairs and business of the Fund and
matters incidental thereto. In the performance of its duties, the Manager
will comply with the provisions of the Agreement and Declaration of Trust
and By-Laws of the Fund and its stated investment objectives, policies and
restrictions, and will use its best efforts to safeguard and promote the
welfare of the Fund and to comply with other policies which the Trustees may
from time to time determine and shall exercise the same care and diligence
expected of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by the Fund
as provided in Section 1(d), will furnish (1) all necessary investment and
management facilities, including salaries of personnel, required for it to
execute its duties faithfully; (2) suitable office space for the Fund; and
(3) administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the affairs of the Fund,
including determination of the Fund's net asset value, but excluding
shareholder accounting services. Except as otherwise provided in Section
1(d), the Manager will pay the compensation, if any, of the officers of the
Fund.
(c) The Manager, at its expense, shall place all orders for the purchase and
sale of portfolio investments for the Fund's account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers and
the placing of such orders, the Manager shall use its best efforts to obtain
for the Fund the most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. In using its best efforts to
obtain for the Fund the most favorable price and execution available, the
Manager, bearing in mind the Fund's best interests at all times, shall
consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the
security, the amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation, experience and
financial stability of the broker or dealer involved and the quality of
service rendered by the broker or dealer in other transactions. Subject to
such policies as the Trustees of the Fund may determine, the Manager shall
not be deemed to have acted unlawfully or to have breached any duty created
by this Contract or otherwise solely by reason of its having caused the Fund
to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction, if the Manager determines
in good faith that such amount of commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Fund and to other
clients of the Manager as to which the Manager exercises investment
discretion. The Manager agrees that in connection with purchases or sales
of portfolio investments for the Fund's account, neither the Manager nor any
officer, director, employee or agent of the Manager shall act as a principal
or receive any commission other than as provided in Section 3.
(d) The Fund will pay or reimburse the Manager for (i) the compensation of
the Vice Chairman and Treasurer of the Fund and of persons assisting him in
these offices, as determined from time to time by the Trustees of the Fund,
(ii) the compensation in whole or in part of such other officers of the Fund
and persons assisting them as may be determined from time to time by the
Trustees of the Fund, and (iii) the cost of suitable office space,
utilities, support services and equipment of the Vice Chairman and Treasurer
and persons assisting him and, as determined from time to time by the
Trustees of the Fund, all or a part of such cost attributable to the other
officers and persons assisting them whose compensation is paid in whole or
in part by the Fund. The Fund will pay the fees, if any, of the Trustees of
the Fund.
(e) The Manager shall pay all expenses incurred in connection with the
organization of the Fund and the initial public offering and sale of its
shares of beneficial interest, provided that upon the issuance and sale of
such shares to the public pursuant to the offering, and only in such event,
the Fund shall become liable for, and to the extent requested reimburse the
Manager for, registration fees payable to the Securities and Exchange
Commission and for an additional amount not exceeding $62,500 per series of
the Fund as its agreed share of such expenses.
(f) The Manager shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Manager, and in any person controlled
by or under common control with the Manager, and that the Manager and any
person controlled by or under common control with the Manager may have an
interest in the Fund. It is also understood that the Manager and any person
controlled by or under common control with the Manager have and may have
advisory, management, service or other contracts with other organizations
and persons, and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the
Manager pursuant to paragraphs (a), (b), (c) and (e) of Section 1, a fee,
computed and paid monthly at the following annual rates applicable to the
average net asset value of each series of the Fund (a "Series"): Xxxxxx
AMT-Free Insured Municipal Fund -- the lesser of (i) an annual rate of 0.50%
of the average net asset value of the Series or (ii) the following annual
rates: 0.60% of the first $500 million, 0.50% of the next $500 million;
0.45% of the next $500 million, 0.40% of the next $5 billion; 0.375% of the
next $5 billion, 0.355% of the next $5 billion; 0.34% of the next $5 billion
and 0.33% of any excess over $21.5 billion. Xxxxxx Tax-Free High Yield Fund
- the lesser of (i) an annual rate of 0.50% of the average net asset value
of the Series or (ii) the following annual rates: 0.60% of the first $500
million, 0.50% of the next $500 million, 0.45% of the next $500 million,
0.40% of the next $5 billion; 0.375% of the next $5 billion; 0.355% of the
next $5 billion; 0.34% of the next $5 billion and 0.33% of any excess over
$21.5 billion. Such fee computed with respect to the net asset value of
each of the Series shall be paid from the assets of such Series. Such
average net asset value of each Series shall be determined by taking an
average of all of the determinations of such net asset value during such
month at the close of business on each business day during such month while
this Contract is in effect. Such fee shall be payable for each month within
15 days after the close of such month and shall commence accruing as of the
date of the initial issuance of shares of the Fund to the public.
The fees payable to the Manager pursuant to this Section 3 shall be reduced
by any commissions, fees, brokerage or similar payments received by the
Manager or any affiliated person of the Manager in connection with the
purchase and sale of portfolio investments of the particular Series, less
any direct expenses approved by the Trustees incurred by the Manager or any
affiliated person of the Manager in connection with obtaining such payments.
In the event that expenses of the Fund or of any Series, if applicable, for
any fiscal year should exceed the expense limitation on investment company
expenses imposed by any statute or regulatory authority of any jurisdiction
in which shares of the Fund are qualified for offer or sale, the
compensation due the Manager for such fiscal year shall be reduced by the
amount of excess by a reduction or refund thereof. In the event that the
expenses of any Series exceed any expense limitation which the Manager may,
by written notice to the Fund, voluntarily declare to be effective subject
to such terms and conditions as the Manager may prescribe in such notice,
the compensation due the Manager shall be reduced, and, if necessary, the
Manager shall assume expenses of the Series to the extent required by the
terms and conditions of such expense limitation.
If the Manager shall serve for less than the whole of a quarter, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended as to any Series unless such amendment be approved at a meeting by
the affirmative vote of a majority of the outstanding shares of the Series,
and by the vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Trustees of the Fund who are
not interested persons of the Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain in
full force and effect as to each Series continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as
follows:
(a) Either party hereto may at any time terminate this Contract as to any
Series or as to the Fund as a whole by not more than sixty days' nor less
than thirty days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or
(b) If (i) the Trustees of the Fund or the shareholders by the affirmative
vote of a majority of the outstanding shares of the Series and (ii) a
majority of the Trustees of the Fund who are not interested persons of the
Fund or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically approve at least
annually the continuance of this Contract, then this Contract shall
automatically terminate as to the close of business on the second
anniversary of its execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is later; provided,
however, that if the continuance of this Contract is submitted to the
shareholders of a Series for their approval and such shareholders fail to
approve such continuance as provided herein, the Manager may continue to
serve hereunder in a manner consistent with the Investment Company Act of
1940 and the Rules and Regulations thereunder.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of
the outstanding shares of the one or more Series affected.
Termination of this Contract pursuant to this Section 5 will be without the
payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares of the Fund or the Series" means the affirmative
vote, at a duly called and held meeting of shareholders of the Fund or the
Series, as the case may be, (a) of the holders of 67% or more of the shares
of the Fund or the Series, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more than 50%
of the outstanding shares of the Fund or the Series, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or (b)
of the holders of more than 50% of the outstanding shares of the Fund or the
Series, as the case may be, entitled to vote at such meeting, whichever is
less.
For the purposes of this Contract, the terms "affiliated person", "control",
"interested person" and "assignment" shall have their respective meanings
defined in the Investment Company Act of 1940 (the "1940 Act") and the Rules
and Regulations thereunder, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the Rules and
Regulations thereunder; and the term "brokerage and research services" shall
have the meaning given in the Securities Exchange Act of 1934 and the Rules
and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Fund or
to any shareholder of the Fund, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. TERMINATION OF PRIOR CONTRACT.
This Contract shall become effective as of its date, and supersedes the
Management Contract dated July 1, 1999.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Fund
as Trustees and not individually and that the obligations of or arising out
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, XXXXXX TAX-FREE INCOME TRUST and XXXXXX INVESTMENT
MANAGEMENT, LLC have each caused this instrument to be signed in duplicate
in its behalf by an officer thereunto duly authorized, all as of the day and
year first above written.
XXXXXX TAX-FREE INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President, Associate Treasurer and
Principal Executive Officer
XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Managing Director
