TEXAS TAX FREE PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 13th day of October, 1992, between Texas
Tax Free Portfolio, a New York trust (the "Trust"), and Boston
Management and Research, a Massachusetts business trust (the
"Adviser").
1. Duties of the Adviser. The Trust hereby employs the
Adviser to act as investment adviser for and to manage the
investment and reinvestment of the assets of the Trust and to
administer its affairs, subject to the supervision of the
Trustees of the Trust, for the period and on the terms set forth
in this Agreement.
The Adviser hereby accepts such employment, and undertakes
to afford to the Trust the advice and assistance of the Adviser's
organization in the choice of investments and in the purchase and
sale of securities for the Trust and to furnish for the use of
the Trust office space and all necessary office facilities,
equipment and personnel for servicing the investments of the
Trust and for administering its affairs and to pay the salaries
and fees of all officers and Trustees of the Trust who are
members of the Adviser's organization and all personnel of the
Adviser performing services relating to research and investment
activities. The Adviser shall for all purposes herein be deemed
to be an independent contractor and shall, except as otherwise
expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of
the Trust.
The Adviser shall provide the Trust with such investment
management and supervision as the Trust may from time to time
consider necessary for the proper supervision of the Trust. As
investment adviser to the Trust, the Adviser shall furnish
continuously an investment program and shall determine from time
to time what securities and other investments shall be acquired,
disposed of or exchanged and what portion of the Trust's assets
shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and
registration statement of the Trust under the Investment Company
Act of 1940, all as from time to time amended. Should the
Trustees of the Trust at any time, however, make any specific
determination as to investment policy for the Trust and notify
the Adviser thereof in writing, the Adviser shall be bound by
such determination for the period, if any, specified in such
notice or until similarly notified that such determination has
been revoked. The Adviser shall take, on behalf of the Trust,
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all actions which it deems necessary or desirable to implement
the investment policies of the Trust.
The Adviser shall place all orders for the purchase or sale
of portfolio securities for the account of the Trust either
directly with the issuer or with brokers or dealers selected by
the Adviser, and to that end the Adviser is authorized as the
agent of the Trust to give instructions to the custodian of the
Trust as to deliveries of securities and payment of cash for the
account of the Trust. In connection with the selection of such
brokers or dealers and the placing of such orders, the Adviser
shall use its best efforts to seek to execute security
transactions at prices which are advantageous to the Trust and
(when a disclosed commission is being charged) at reasonably
competitive commission rates. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers
may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to pay any broker or dealer who provides such
brokerage and research services a commission for executing a
security transaction which is in excess of the amount of
commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good
faith that such amount of commission is 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 overall responsibilities which the Adviser and
its affiliates have with respect to accounts over which they
exercise investment discretion. Subject to the requirement set
forth in the second sentence of this paragraph, the Adviser is
authorized to consider, as a factor in the selection of any
broker or dealer with whom purchase or sale orders may be placed,
the fact that such broker or dealer has sold or is selling shares
of any one or more investment companies sponsored by the Adviser
or its affiliates or shares of any other investment company
investing in the Trust.
2. Compensation of the Adviser. For the services,
payments and facilities to be furnished hereunder by the Adviser,
the Adviser shall be entitled to receive from the Trust, on a
daily basis, compensation is an amount equal to the aggregate of:
(a) a daily asset-based fee computed by applying the annual
asset rate applicable to that portion of the total daily net
assets of the Trust in each Category as indicated below:
Category Daily Net Assets Annual Asset Rate
1 up to $20 million 0.100%
2 $20 million but less than $40 million 0.200%
3 $40 million but less than $500 million 0.300%
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4 $500 million but less than $1 billion 0.275%
5 $1 billion but less than $1.5 billion 0.250%
6 $1.5 billion but less than $2 billion 0.225%
7 $2 billion but less than $3 billion 0.200%
8 $3 billion and over 0.175%, plus
(b) a daily income-based fee computed by applying the daily
income rate applicable to that portion of the total daily gross
income of the Trust (which portion shall bear the same
relationship to the total daily gross income on such day as that
portion of the total daily net assets of the Trust in the same
Category bears to the total daily net assets on such day) in each
Category as indicated below:
Category Daily Net Assets Daily Income Rate
1 up to $20 million 1.00%
2 $20 million but less than $40 million 2.00%
3 $40 million but less than $500 million 3.00%
4 $500 million but less than $1 billion 2.75%
5 $1 billion but less than $1.5 billion 2.50%
6 $1.5 billion but less than $2 billion 2.25%
7 $2 billion but less than $3 billion 2.00%
8 $3 billion and over 1.75%, plus
Such daily compensation shall be paid monthly in arrears on the
last business day of each month. The Trust's daily net assets
and gross income shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and
determinations of the Trustees of the Trust.
In case of initiation or termination of the Agreement during
any month with respect to the Trust, the fee for that month shall
be based on the number of calendar days during which it is in
effect.
The Adviser may, from time to time, waive all or a part of
the above compensation.
3. Allocation of Charges and Expenses. It is understood
that the Trust will pay all its expenses other than those
expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Trust shall include, without implied
limitation, (i) expenses of maintaining the Trust and continuing
its existence, (ii) registration of the Trust under the
Investment Company Act of 1940, (iii) commissions, fees and other
expenses connected with the acquisition, holding and disposition
of securities and other investments, (iv) auditing, accounting
and legal expenses, (v) taxes and interest, (vi) governmental
fees, (vii) expenses of issue, sale and redemption of Interests
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in the Trust, (viii) expenses of registering and qualifying the
Trust and Interests in the Trust under federal and state
securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such
purposes and for distributing the same to Holders and investors,
and fees and expenses of registering and maintaining
registrations of the Trust and the Trust's placement agent as
broker-dealer or agent under state securities laws, (ix) expenses
of reports and notices to Holders and of meetings of Holders and
proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses,
(xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to
the Trust (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and
records, and determination of net asset values, book capital
account balances and tax capital account balances), (xiv) fees,
expenses and disbursements of transfer agents, dividend
disbursing agents, Holder servicing agents and registrars for all
services to the Trust, (xv) expenses for servicing the accounts
of Holders, (xvi) any direct charges to Holders approved by the
Trustees of the Trust, (xvii) compensation and expenses of
Trustees of the Trust who are not members of the Adviser's
organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation,
proceedings and claims and the obligation of the Trust to
indemnify its Trustees, officers and Holders with respect
thereto.
4. Other Interests. It is understood that Trustees and
officers of the Trust and Holders of Interests in the Trust are
or may be or become interested in the Adviser as trustees,
shareholders or otherwise and that trustees, officers and
shareholders of the Adviser are or may be or become similarly
interested in the Trust, and that the Adviser may be or become
interested in the Trust as Holder or otherwise. It is also
understood that trustees, officers, employees and shareholders of
the Adviser may be or become interested (as directors, trustees,
officers, employees, shareholders or otherwise) in other
companies or entities (including, without limitation, other
investment companies) which the Adviser may organize, sponsor or
acquire, or with which it may merge or consolidate, and which may
include the words "Xxxxx Xxxxx" or "Boston Management and
Research" or any combination thereof as part of their name, and
that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or
relationships with such other companies or entities.
5. Limitation of Liability of the Adviser. The services
of the Adviser to the Trust are not to be deemed to be exclusive,
the Adviser being free to render services to others and engage in
other business activities. In the absence of willful
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misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any
Holder of Interests in the Trust for any act or omission in the
course of, or connected with, rendering services hereunder or for
any losses which may be sustained in the acquisition, holding or
disposition of any security or other investment.
6. Sub-Investment Advisers. The Adviser may employ one or
more sub-investment advisers from time to time to perform such of
the acts and services of the Adviser, including the selection of
brokers or dealers to execute the Trust's portfolio security
transactions, and upon such terms and conditions as may be agreed
upon between the Adviser and such investment adviser and approved
by the Trustees of the Trust.
7. Duration and Termination of this Agreement. This
Agreement shall become effective upon the date of its execution,
and, unless terminated as herein provided, shall remain in full
force and effect through and including February 28, 1994 and
shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 1994 is
specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Trust and (ii) by the vote of a majority
of those Trustees of the Trust who are not interested persons of
the Adviser or the Trust cast in person at a meeting called for
the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days'
prior written notice to the other, terminate this Agreement
without the payment of any penalty, by action of Trustees of the
Trust or the trustees of the Adviser, as the case may be, and the
Trust may, at any time upon such written notice to the Adviser,
terminate this Agreement by vote of a majority of the outstanding
voting securities of the Trust. This Agreement shall terminate
automatically in the event of its assignment.
8. Amendments of the Agreement. This Agreement may be
amended by a writing signed by both parties hereto, provided that
no amendment to this Agreement shall be effective until approved
(i) by the vote of a majority of those Trustees of the Trust who
are not interested persons of the Adviser or the Trust cast in
person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the outstanding
voting securities of the Trust.
9. Limitation of Liability. The Adviser expressly
acknowledges the provision in the Declaration of Trust of the
Trust (Section 5.2 and 5.6) limiting the personal liability of
the Trustees and officers of the Trust, and the Adviser hereby
agrees that it shall have recourse to the Trust for payment of
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claims or obligations as between the Trust and the Adviser
arising out of this Agreement and shall not seek satisfaction
from any Trustee or officer of the Trust.
10. Certain Definitions. The terms "assignment" and
"interested persons" when used herein shall have the respective
meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended subject, however, to such
exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a
majority of the outstanding voting securities" shall mean the
vote, at a meeting of Holders, of the lesser of (a) 67 per centum
or more of the Interests in the Trust present or represented by
proxy at the meeting if the Holders of more than 50 per centum of
the outstanding Interests in the Trust are present or represented
by proxy at the meeting, or (b) more than 50 per centum of the
outstanding Interests in the Trust. The terms "Holders" and
"Interests" when used herein shall have the respective meanings
specified in the Declaration of Trust of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
TEXAS TAX FREE PORTFOLIO BOSTON MANAGEMENT AND RESEARCH
By: /s/Xxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxx
President Vice President
and not individually
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