WAIVER AND REIMBURSEMENT AGREEMENT
Agreement ("Agreement") dated as of the 31st day of July, 2002 by
and among Excelsior Tax-Exempt Funds, Inc., a Maryland corporation and a
registered investment company under the Investment Company Act of 1940, as
amended ("Excelsior Tax-Exempt"), and United States Trust Company of New York, a
state-chartered bank and trust company ("United States Trust"), U.S. Trust
Company, a Connecticut state bank and trust company ("U.S. Trust" and together
with United States Trust, the "Advisers") and U.S. Trust Company, N.A., a
national bank ("U.S. Trust NA").
BACKGROUND
United States Trust and U.S. Trust serve as investment advisers
to each portfolio of Excelsior Tax-Exempt pursuant to an Investment Advisory
Agreement among the Advisers and Excelsior Tax-Exempt dated as of May 31, 2000.
U.S. Trust NA serves as sub-adviser to the California Tax-Exempt
Income Fund.
The parties to this Agreement wish to provide for an undertaking
by the Adviser to limit investment advisory or other fees or reimburse expenses
of each of the portfolios of Excelsior Tax-Exempt in order to improve the
performance of each such portfolio.
AGREEMENT
THEREFORE, in consideration of the foregoing, the parties
intending to be legally bound, hereby agree as follows:
The Advisers shall, from the date of this Agreement until March
31, 2003, waive all or a portion of their investment advisory fees and/or
reimburse expenses in amounts necessary so that after such waivers and/or
reimbursements, the maximum total operating expense ratios of the portfolios of
Excelsior Tax-Exempt shall not exceed the amounts set forth on Exhibit A hereto.
U.S. Trust NA shall, from the date of this Agreement until March
31, 2003, waive all or a portion of its investment sub-advisory fee and/or
reimburse expenses in amounts necessary so that after such waiver and/or
reimbursement, the maximum total operating expense ratio of the California
Tax-Exempt Income Fund shall not exceed the amounts set forth on Exhibit B
hereto.
The Advisers and U.S. Trust NA acknowledge and agree that they
shall not be entitled to collect on or make a claim for waived fees or
reimbursed expenses at any time in the future.
This Agreement shall be governed by and construed under the laws
of the State of New York, without regard to its conflict of law provisions. This
Agreement may be signed in counterparts.
This Agreement shall not be terminated before March 31, 2003 and
will renew automatically each fiscal year thereafter unless the Advisers and/or
U.S. Trust NA or Excelsior Tax-Exempt terminate(s) the Agreement by providing
written notice to each other party 60-days prior to the beginning of Excelsior
Tax-Exempt's next fiscal year.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
EXCELSIOR TAX-EXEMPT UNITED STATES TRUST COMPANY
FUNDS, INC. OF NEW YORK
By: __________________________________ By: _________________________________
Xxxxxxxxx X. Xxxxxx
President and Treasurer
U.S. TRUST COMPANY
By: _________________________________
W. Xxxxxxx Xxxxx
President and Chief Executive
Officer
U.S. TRUST COMPANY, N.A.
By: _________________________________
Xxxxxxx X. Xxxxxxx
President and Chief Executive
Officer
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Exhibit A
Excelsior Tax-Exempt Funds, Inc.
Name of Portfolio Total Annual Operating Expenses
----------------- -------------------------------
Tax-Exempt Money Fund 0.50%
New York Tax-Exempt Money Fund 0.60%
Intermediate-Term Tax-Exempt Fund 0.65%
Long-Term Tax-Exempt Fund 0.80%
California Tax-Exempt Income Fund 0.50%
New York Intermediate-Term Tax-Exempt Fund 0.80%
Short-Term Tax-Exempt Securities Fund 0.60%
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Exhibit B
Excelsior Tax-Exempt Funds, Inc.
Name of Portfolio Total Annual Operating Expenses
----------------- -------------------------------
California Tax-Exempt Income Fund 0.50%
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