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EX-99.5(a)
MANAGEMENT AGREEMENT
AGREEMENT made this 16th day of September, 1986, by and
between XXXXXXX XXXXX MUNICIPAL SERIES TRUST, a Massachusetts
business trust (hereinafter. referred to as the "Trust"), and
XXXXXXX XXXXX ASSET MANAGEMENT, INC., a Delaware corporation
(hereinafter referred to as the "Manager").
WITNESSETH:
WHEREAS, the Trust is engaged in business as a diversified
open-end investment company registered under the Investment
Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act"); and
WHEREAS, the Trustees of the Trust (the "Trustees") are
authorized to establish separate series relating to separate
portfolios of securities, each of which will offer a separate
class of shares; and
WHEREAS, the Trustees have established-and designated the
XXXXXXX XXXXX MUNICIPAL INCOME FUND (the "Fund") as the initial
series of the Trust; and
WHEREAS, the Manager is engaged principally in rendering
management and investment advisory services and is registered as
an investment adviser under the Investment Advisers Act of 1940;
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WHEREAS, the Trust desires to retain the Manager to render
management and investment advisory services to the Trust and Fund
in the manner and on the terms hereinafter set forth; and
WHEREAS, the Manager is willing to provide management and
investment advisory services to the Trust and the Fund on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, the Trust and the Manager hereby
agree as follows:
ARTICLE I
Duties of the Manager
The Trust hereby employs the Manager to act as an investment
manager and investment adviser of the Fund and to furnish, or
arrange for affiliates to furnish, the management and investment
advisory services described below, subject to policies of, review
by and overall control of the Trustees, for the period and on the
terms and conditions set forth in this Agreement. The Manager
hereby accepts such employment and agrees during such period, at
its own expense, to render,. or arrange for the rendering of, such
services and to assume the obligations herein set forth for the
compensation provided for herein. The Manager and its affiliates
shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or
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the Fund in any way or otherwise be deemed an agent of the Trust
or the Fund.
(a) Management Services. The Manager shall perform (or
arrange for the performance by affiliates of) the management and
administrative services necessary for the operation of the Trust
and the Fund including administering shareholder accounts and
handling shareholder relations. The Manager shall provide the
Trust and the Fund with office space, equipment and facilities and
such other services as the Manager, subject to review by the
Trustees, shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement. The
Manager shall also, on behalf of the Trust and the Fund, conduct
relations with custodians, depositories, transfer agents, dividend
disbursing agents, other shareholder service agents, accountants,
attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks, and such other persons in any such
other capacity deemed to be necessary or desirable. The Manager
shall generally monitor the Trust's and the Fund's compliance with
investment policies and restrictions as set forth in the currently
effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of
1933, as amended (the "Prospectus" and "Statement of Additional
Information", respectively). The Manager shall make reports to
the Trustees of its performance of obligations hereunder and
furnish advice and recommendations with respect to such other
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aspects of the business and affairs of the Trust and the Fund as
it shall determine to be desirable.
(b) Investment Advisory Services. The Manager shall provide
the Trust with such investment research, advice and supervision as
the latter may from time to time consider necessary for the proper
supervision of the assets of the Fund, shall furnish continuously
an investment program for the Fund and shall determine from time
to time which securities shall be purchased, sold or exchanged and
what portion of the assets of the Fund shall be held in the
various money market securities or cash, subject always to the
restrictions of the Declaration of Trust and By-Laws of the Trust,
as amended from time to time, the provisions of the Investment
Company Act and the statements relating to the Trust's investment
objectives, investment policies and investment restrictions, as
the same are set forth in the Prospectus and Statement of
Additional Information. The Manager shall also make decisions for
the Trust as to the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the
Trust's portfolio securities shall be exercised. Should the
Trustees at any time, however, make any definite determination as
to investment policy and notify the Manager thereof in writing,
the Manager 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 Manager shall take, on
behalf of the Fund, all actions which it deems necessary to
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implement the investment policies determined as provided above,
and in particular to place all orders for the purchase or sale of
portfolio securities for the Fund's account with brokers or
dealers selected by it, and to that end, the Manager is authorized
as the agent of the Trust to give instructions to the Custodian of
the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such
brokers or dealers and the-placing of such orders with respect to
assets of the Fund, the Manager is directed at all times to seek
to obtain execution and price within the policy guidelines
determined by the Trustees as set forth in the Prospectus and
Statement of Additional Information. Subject to this requirement
and the provisions of the Investment Company Act, the Securities
Exchange Act of 1934, as amended, and other applicable provisions
of law, the Manager may select brokers or dealers with which it or
the Trust is affiliated.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes and shall pay for
maintaining the staff and personnel necessary to perform its
obligations under this Agreement, and shall at its own expense
provide the office space, equipment and facilities which it is
obligated to provide under Article I hereof, and shall pay all
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compensation of officers of the Trust and all Trustees who are
affiliated persons of the Manager.
(b) The Trust. The Trust assumes and shall pay or cause to
be paid all other expenses of the Trust and the Fund (except for
the expenses incurred by the Distributor), including, without
limitation: redemption expenses, expenses of portfolio
transactions, expenses of registering shares under Federal and
state securities laws, pricing costs (including the daily
calculation of net asset value), expenses of printing shareholder
reports, prospectuses and statements of additional information,
Securities and Exchange Commission fees, interest, taxes, fees and
actual out-of-pocket expenses of Trustees who are not affiliated
persons of the Manager, fees for legal and auditing services,
litigation expenses, costs' of printing proxies and other expenses
related to shareholder meetings, and other expenses properly
payable by the Trust and the Fund. It is also understood that the
Trust will reimburse the manager for its costs in providing
accounting services to the Trust and the Fund. The Distributor
will pay certain of the expenses of the Fund incurred in
connection with the continuous offering of Fund shares.
ARTICLE III
Compensation of the Manager
(a) Investment Management Fee. For the services rendered,
the facilities furnished and expenses assumed by the Manager, the
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Trust shall pay to the Manager at the end of each calendar month a
fee based upon the average daily value of the net assets of the
Fund, as determined and computed in accordance with the
description of the determination of net asset value contained in
the Prospectus and Statement of Additional Information, at the
annual rate of 0.55 of 1.0% (.55%) of the average daily net assets
of the Fund, commencing on the day following effectiveness hereof.
If this Agreement becomes -effective subsequent to the first day of
a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the
calculation of the fee as set forth above. Subject to the
provisions of subsection (b) hereof, payment of the Manager's
compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by
subsection (b) hereof. During any period when the determination
of net asset value is suspended by the Trustees, the net asset
value of a share as of the last business day prior to such
suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is
again determined.
(b) Expense Limitations. In the event the operating
expenses of the Fund, including amounts payable to the Manager
pursuant to subsection (a) hereof, for any fiscal year ending on a
date on which this Agreement is in effect exceed the expense
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limitations applicable to the Fund imposed by applicable state
securities laws or regulations thereunder, as such limitations may
be raised or lowered from time to time, the Manager shall reduce
its management fee by the extent of such excess and, if required
pursuant to any such laws or regulations, will reimburse the Fund
in the amount of such excess; provided, however, to the extent
permitted by law, there shall be excluded from such expenses the
amount of any interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited to legal claims
and liabilities and litigation costs and any indemnification
related thereto) paid or payable by the Fund. Whenever the
expenses of the Fund exceed a pro rata portion of the applicable
annual expense limitations, the estimated amount of reimbursement
under such limitations shall be applicable as an offset against
the monthly payment of the fee due to the Manager. Should two or
more such expense limitations be applicable as at the end of the
last business day of the month, that expense limitation which
results in the largest reduction in the Manager's fee shall be
applicable.
ARTICLE IV
Limitation of Liability of the Management
The Manager shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or
for any act or omission in the management of the Trust and the
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Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As
used in this Article IV, the term "Manager" shall include any
affiliates of the manager performing services for the Trust or the
Fund contemplated hereby, and directors, officers and employees of
the Manager and such affiliates.
ARTICLE V
Activities of the Manager
The services of the Manager to the Trust and the Fund are not
to be deemed to be exclusive, and the Manager and any person
controlled by or under common control with the Manager .(for
purposes of Article V referred to as "affiliates") is free to
render services to others. It is understood that Trustees,
officers, employees and shareholders of the Trust and the Fund are
or may become interested in the Manager and its affiliates, as
directors, officers, employees and shareholders or otherwise, that
directors, officers, employees and shareholders of the Manager and
its affiliates are or may become similarly interested in the Trust
and the Fund, and that the Manager may become interested in the
Trust and the Fund as shareholder or otherwise.
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ARTICLE VI
Duration and Termination of this Contract
This Agreement shall become effective as of the date first
above written and shall remain in force until August 31, 1988 and
thereafter, but only so long as such continuance is specifically
approved at least annually by (i) the Trustees, or by the vote of
a majority of the outstanding voting securities of the Fund, and
(ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the
payment of any penalty, by the Trustees or by vote of a majority
of the outstanding voting securities of the Fund, or by the
Manager, on sixty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its
assignment.
ARTICLE VII
Amendment of this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by (i) the vote of a majority
of outstanding voting securities of the Fund, and (ii) a majority
of those Trustees who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
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ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting
securities", "assignment", "affiliated person" and "interested
person", when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission under the
Investment Company Act.
ARTICLE IX
Govern no Law
This Agreement shall be construed in accordance with laws of
the State of New York and the applicable provisions of the
Investment Company Act. To the extent that the laws of the State
of New York, as applicable to any of the provisions herein,
conflict with the applicable provisions of the Investment Company
Act, the latter shall control.
ARTICLE X
Personal Liability
The Declaration of Trust establishing Xxxxxxx Xxxxx Municipal
Series Trust, dated August 14, 1986, a copy of which, together
with all amendments thereto (the "Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts,
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provides that the name "Xxxxxxx Xxxxx Municipal Series Trust, IT
refers to the trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of Xxxxxxx Xxxxx Municipal
Series Trust shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of
any obligation or claim or otherwise in connection with the
affairs of said Xxxxxxx Xxxxx Municipal Series Trust, but the
"Trust Property" only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement of the date first above written.
MERRILL MUNICIPAL SERIES TRUST
By
XXXXXXX XXXXX ASSET MANAGEMENT, INC.
By
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