XXXXXX TAX-FREE INCOME TRUST
MANAGEMENT CONTRACT
Management Contract dated as of July 26, 1985, as amended
and restated as of November 20, 1996 between XXXXXX TAX-FREE
INCOME TRUST, a Massachusetts business trust (the "Fund"), and
XXXXXX INVESTMENT MANAGEMENT, INC., a Massachusetts corporation
(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 Tax-Free
Insured Fund -- 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 --
0.65% of the first $500 million, 0.55% of the next $500 million,
0.50% of the next $500 million, 0.45% of the next $5 billion;
0.425% of the next $5 billion; 0.405% of the next $5 billion;
0.39% of the next $5 billion and 0.38% 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"0 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, 1994.
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, INC. have each caused this instrument to
be signed in duplicate in its behalf by its President or a Vice
President thereunto duly authorized, all as of the day and year
first above written.
XXXXXX TAX-FREE INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
XXXXXX INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxxx X. Silver
---------------------------
Xxxxxx X. Silver
Senior Managing Director
