MANAGEMENT AGREEMENT
XXXX XXXXX INVESTMENT GRADE INCOME PORTFOLIO
This MANAGEMENT AGREEMENT ("Agreement"), made this 21st day of October,
1988, 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 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Corporation is registered with the Securities and Exchange
Commission as a series type, open-end diversified investment company under the
Investment Company Act of 1940 (the "1940 Act") and has registered shares of its
common stock 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 except
in accordance with the rules, regulations or orders 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 lla2-2(T)
thereunder, and the Fund hereby consents to the retention of compensation by
such entity or person for such transactions in accordance with Rule
lla2-2(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 operations of the Fund.
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(b) In compliance with the requirements of Rule 3la-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 3la-2
under the 1940 Act any such records required to be maintained by Rule 3la-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,
calculated 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
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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 of such month to such date of termination, and shall be calculated
upon 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
Corporation's Board of Directors. Each such payment shall be accompanied by a
report of the Fund 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 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, nor to 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 person", 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 as may be granted by
the Securities and Exchange Commission by any rule, regulation or order.
11. This Agreement will become effective October 21, 1988, provided
that it shall have been approved by the Corporation's Board of Directors and,
unless sooner terminated as provided for herein, shall 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
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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 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/ Xxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx, Xx.
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Attest: XXXX XXXXX FUND ADVISER, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
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