COMMAND TAX-FREE FUND
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, made as of this _______ day of _____, 1987
between COMMAND TAX-FREE, a Massachusetts business trust (the "Fund"), and
PRUDENTIAL MUTUAL FUND MANAGEMENT, INC., a Delaware corporation (the
"Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund has been organized for the purpose of investing
its assets in securities and other investments and has retained an investment
adviser for this purpose and desires to avail itself of the facilities available
to the Administrator with respect to the administration of its day to day
business affairs, and the Administrator is willing to furnish such
administrative services on the terms and conditions hereinafter set forth:
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Administrator to administer its
business affairs, subject to the overall supervision of the Trustees
of the Fund for the period and on the terms set forth in this
Agreement. The Administrator hereby accepts such appointment and
agrees during such period to render the services herein described
and to assume the obligations set forth herein, for the compensation
herein provided.
2. Subject to the supervision of the Trustees of the Fund, the
Administrator shall administer the Fund's business affairs and, in
connection therewith, shall furnish the Fund with office facilities
and with ordinary clerical, bookkeeping and recordkeeping services
at such facilities; shall be responsible for the financial and
accounting records required to be maintained by the Fund (including
those being maintained by the Fund's custodian) other than those
being maintained by the Fund's investment adviser; and shall
authorize and permit any of its directors, officers and employees
who may be elected as Trustees or officers of the Fund to serve in
the capacities in which they are elected. All services to be
furnished by the Administrator under this Agreement may be furnished
through the medium of any such directors, officers or employees of
the Administrator.
In connection with the services rendered by the
Administrator under this Agreement, the Administrator will bear all
of the following expenses:
(a) the salaries and expenses of all personnel of the Fund and
the Administrator, except the fees and expenses of Trustees who are
not affiliated persons of the Administrator or the Fund's investment
adviser, and
(b) all expenses incurred by the Administrator or by the Fund
in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
The Fund assumes and will pay the expenses described below:
(a) the fees and expenses of the investment adviser or
expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets,
(b) the fees and expenses of Trustees who are not affiliated
persons of the Administrator or the Fund's investment adviser,
(c) the fees and expenses of the custodian which relate to (i)
the custodial function and the recordkeeping connected therewith,
(ii) the maintenance of the required accounting records of the Fund
not being maintained by the Administrator, (iii) the pricing of the
shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Trustees of the Fund, and (iv) for both mail and wire orders, the
cashiering function in connection with the issuance and redemption
of the Fund's shares,
(d) the fees and expenses of the Fund's transfer and dividend
disbursing agent, which may be the custodian, which relate to the
maintenance of each shareholder account,
(e) the charges and expense of legal counsel and independent
accountants for the Fund,
(f) brokers' commissions and any issue or transfer taxes
chargeable to the Fund in connection with its securities
transactions,
(g) all taxes and corporate fees payable by the Fund to
federal, state or other governmental agencies,
(h) the fees of any trade association of which the Fund may be
a member,
(i) the cost of certificates, if any, representing, and
non-negotiable share deposit receipts evidencing, shares of the
Fund,
(j) the cost of fidelity and errors and omissions insurance,
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(k) the fees and expenses involved in registering and
maintaining registrations of the Fund and of its shares with the
Securities and Exchange Commission, registering the Fund as a broker
or dealer and qualifying its shares under state securities laws,
including the preparation and printing of the Fund's registration
statements, prospectuses and statements of additional information
for filing under federal and state securities laws for such
purposes,
(l) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Trustees' meetings
and of preparing, printing and mailing reports to shareholders in
the amount necessary for distribution to the shareholders,
(m) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Fund's business, and
(n) any expenses assumed by the Fund pursuant to a Plan of
Distribution adopted in conformity with Rule 12b-1 under the 1940
Act.
3. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annual rate of .25% of 1% of the first
$500,000,000, .225 of 1% of the next $500,000,000 and .20 of 1% of
the excess over $1,000,000,000 of the average daily net assets of
the Fund. This fee will be computed daily and paid monthly.
In the event the expenses of the Fund for any fiscal
year (including the fees payable to the Administrator and the Fund's
investment adviser, if any, but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification
expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business) exceed the lowest applicable
annual expense limitation established pursuant to the statutes or
regulations of any jurisdictions in which shares of the Fund are
then qualified for offers and sales, the compensation payable to the
Administrator will be reduced by 80% of the amount of such excess.
If such expenses exceed such limitation after giving effect to the
reduction of the fees payable to the Administrator and the Fund's
investment adviser to zero, the Administrator will pay to the Fund
the amount of such expenses which exceed such limitation. Any
reduction in the fee payable or any payment by the Administrator to
the Fund shall be made monthly. Any such reductions or payments are
subject to readjustment during the Fund's fiscal year.
4. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder,
and specifically assumes no responsibilities for investment advice
or the investment or reinvestment of the Fund's assets.
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5. The Administrator shall not be liable for any error of
judgment or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on its part
in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
6. This Agreement shall continue in effect for a period of
more than two years from the date hereof only so long as such
continuance is specifically approved at least annually by the
Trustees of the Fund; provided, however, that this Agreement may be
terminated by the Fund at any time, without the payment of any
penalty, by the Trustees of the Fund or by vote of a majority of the
outstanding voting securities (ad defined in the 0000 Xxx) of the
Fund, or by the Administrator at any time, without the payment of
any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall be
automatically terminated in the event of its assignment (as defined
in the 1940 Act).
7. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may
also be a Trustee, officer or employee of the Fund to engage in any
other business or to devote his or her time and attention in part to
the management or other aspects of any business, whether of a
similar or a dissimilar nature, nor limit or restrict the right of
the Administrator to engage in any other business or to render
services of any kind to any other corporation, firm, individual or
association.
8. During the term of this Agreement, the Fund agrees to
furnish the Administrator at its principal office all prospectuses,
statements of additional information, proxy statements, reports to
shareholders, sales literature, or other material prepared for
distribution to shareholders of the Fund or the public, which refer
in any way to the Administrator, prior to use thereof and not to use
such material if the Administrator reasonably objects in writing
within five business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this
Agreement, the Fund will continue to furnish to the Administrator
copies of any of the above-mentioned materials which refer in any
way to the Administrator. The Fund shall furnish or otherwise make
available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
9. This agreement may be amended by mutual written consent.
10. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered
or mailed by registered mail, postage prepaid, (a) to the
Administrator at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Secretary; or (b) to the Fund at Xxx Xxxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: President.
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11. This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements, understandings
and arrangements with respect to the subject matter hereof.
12. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
13. The name "Command Tax-Free Fund" is the designation of the
Trustees under a Declaration of Trust dated _______, 1987, as
amended from time to time, and all persons dealing with the Fund
must look solely to the property of the Fund for the enforcement of
any claims against the Fund as neither the Trustees, officers,
agents or shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
14. All references to actions of or by Trustees herein shall
require action by the Trustees acting as a board or formally
constituted group and not individually.
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.
COMMAND TAX-FREE FUND
By: /s/ [ILLEGIBLE]
-------------------------
President
PRUDENTIAL MUTUAL FUND
MANAGEMENT, INC.
By: /s/ [ILLEGIBLE]
-------------------------
Exec. Vice President
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