MANAGEMENT AGREEMENT
TO: MIDWEST GROUP FINANCIAL SERVICES, INC.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Dear Sirs:
Midwest Group Tax Free Trust (hereinafter referred to
as the "Trust") herewith confirms its agreement with you.
The Trust has been organized to engage in the business
of an investment company. The Royal Palm Florida Tax-Free
Money Fund (the "Fund") has been established as a series of
the Trust. You have been selected to act as the investment
adviser of the Fund and to provide certain other services,
as more fully set forth below, and you are willing to act as
such investment adviser and to perform such services under
the terms and conditions hereinafter set forth.
Accordingly, the Trust agrees with you as follows upon the
date of the execution of this Agreement.
1. ADVISORY SERVICES
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You will regularly provide the Fund with such
investment advice as you in your discretion deem advisable
and will furnish a continuous investment program for the
Fund consistent with its investment objectives and policies.
You will determine what securities shall be purchased for
the Fund, what portfolio securities shall be held or sold by
the Fund, and what portion of the Fund's assets shall be
held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same
shall be from time to time in effect, and subject further,
to such policies and instructions as the Board of Trustees
(the "Board") of the Trust may from time to time establish
and supply to you copies thereof. You will advise and
assist the officers of the Trust in taking such steps as are
necessary or appropriate to carry out the decisions of the
Board and the appropriate committees of the Board regarding
the conduct of the business of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES
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You will pay the compensation and expenses of any
persons rendering any services to the Fund who are officers,
directors, stockholders or employees of your corporation and
will make available, without expense to the Fund, the
services of such of your employees as may duly be elected
officers or trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed
by law.
Notwithstanding the foregoing, the Fund will pay the
compensation and expenses of the Chief Financial Officer of
the Trust. The compensation and expenses of any officers,
trustees and employees of the Trust who are not officers,
directors, employees or stockholders of your corporation
will be paid by the Fund.
You will pay all advertising and promotion expenses
incurred in connection with the sale or distribution of the
Fund's shares to the extent such expenses are not assumed by
the Fund under the Trust's Distribution Expense Plan. You
will reimburse the Trust's principal underwriter for any
expenses incurred by it in the performance of its
obligations under the Underwriting Agreement with the Trust.
The Fund will also be responsible for the payment of
all other operating expenses of the Fund, including fees and
expenses incurred by the Fund in connection with membership
in investment company organizations, brokerage fees and
commissions, legal, auditing and accounting expenses,
expenses of registering shares under federal and state
securities laws, insurance expenses, taxes or governmental
fees, fees and expenses of the custodian, transfer,
shareholder service and dividend disbursing agent and
accounting and pricing agent of the Fund, expenses including
clerical expenses of issue, sale, redemption or repurchase
of shares of the Fund, the fees and expenses of trustees of
the Trust who are not affiliated with you, the cost of
preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses
for delivery to the Fund's shareholders, the cost of
printing or preparing stock certificates or any other
documents, statements or reports to shareholders, expenses
of shareholders' meetings and proxy solicitations, such
extraordinary or non-recurring expenses as may arise,
including litigation to which the Fund may be a party and
indemnification of the Trust's officers and trustees with
respect thereto, or any other expense not specifically
described above incurred in the performance of the Fund's
obligations. All other expenses not assumed by you herein
incurred by the Fund in connection with the organization,
registration of shares and operations of the Fund will be
borne by the Fund.
3. COMPENSATION OF THE ADVISER
---------------------------
For all of the services to be rendered and payments
made as provided in this Agreement, the Fund will pay you as
of the last day of each month, a fee equal to the annual
rate of:
50/100 of 1% of the average value of the daily net
assets of the Fund up to $100,000,000; 45/100 of
1% of such assets from $100,000,000 to
$200,000,000; 40/100 of 1% of such assets from
$200,000,000 to and including $300,000,000 and
37.5/100 of 1% of such assets in excess of
$300,000,000.
The total fees payable during each of the first and
second halves of each fiscal year of the Trust shall not
exceed the semiannual total of the daily fee accruals
requested by you during the applicable six month period.
The average value of net assets shall be determined pursuant
to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If,
pursuant to such provisions, the determination of net asset
value of the Fund is suspended for any particular business
day, then for the purposes of this paragraph, the value of
the net assets of the Fund as last determined shall be
deemed to be the value of the net assets as of the close of
the business day, or as of such other time as the value of
the Fund's net assets may lawfully be determined, on that
day. If the determination of the net asset value of the
Fund's shares has been suspended for a period including such
month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net
assets of the Fund as last determined (whether during or
prior to such month).
You agree that your compensation during any fiscal year
shall be reduced by an amount, if any, which the expenses of
the Fund for such fiscal year exceed the lowest applicable
expenses limitation applicable to the Fund imposed by state
securities administrators in states where the Fund's shares
are qualified for sale, as such limitations may be lowered
or raised from time to time. The payment of your
compensation at the end of any month will be reduced or
postponed or, if necessary, a refund will be made to the
Fund at the end of such month, so that at no time will there
be any accrued but unpaid liability in excess of the above
expense limitation. You shall refund to the Fund at the
close of each year, the amount of any additional reduction
of your compensation pursuant to this paragraph, provided,
however, that you will not be required to pay the Fund an
amount greater than the fee paid to you by the Fund in
respect of such year pursuant to this Agreement. As used in
this paragraph "expenses" shall mean those expenses included
in the applicable expense limitation and "expense
limitation" means a limit on the maximum annual expenses
which may be incurred by an investment company or a series
of an investment company determined by multiplying a fixed
percentage by the average or multiplying more than one such
percentage by different specified amounts of the average of
the values of the daily net assets of the investment company
or the series for a fiscal year. The words "lowest expense
limitation" shall be construed to result in the largest
reduction of your compensation for any fiscal year of the
Trust.
Your compensation with respect to each additional
series of the Trust effectively registered for sale in a
public offering after the date of this Agreement shall be
determined by the Board, including a majority of the
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of you or of the Trust, and
approved pursuant to the provisions of Section 15 of the
Investment Company Act of 1940.
4. EXECUTION OF PURCHASE AND SALE ORDERS
-------------------------------------
In connection with purchases or sales of portfolio
securities for the account of the Fund, it is understood
that you will arrange for the placing of all orders for the
purchase and sale of portfolio securities for the Fund's
accounts with brokers or dealers selected by you, subject to
review of this selection by the Board from time to time.
You will be responsible for the negotiation and the
allocation of principal business and portfolio brokerage.
In the selection of such brokers or dealers and the placing
of such orders, you are directed at all times to seek for
the Fund the best qualitative execution, taking into account
such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability,
financial responsibility and responsiveness of the broker or
dealer and the brokerage and research services provided by
the broker or dealer.
You should generally seek favorable prices and
commission rates that are reasonable in relation to the
benefits received. In seeking best qualitative execution,
you are authorized to select brokers or dealers 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 Fund and/or the other accounts over which you
exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction
which is in excess of the amount of commission another
broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount
of the commission is reasonable in relation to the value of
the brokerage and research services provided by the
executing broker or dealer. The determination may be viewed
in terms of either a particular transaction or your overall
responsibilities with respect to the Fund and to accounts
over which you exercise investment discretion. The Trust
and you understand that, although the information may be
useful to the Trust and you, it is not possible to place a
dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to
determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits
to the Fund.
Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and
subject to seeking best qualitative execution, you may give
consideration to sales of shares of the Fund as a factor in
the selection of brokers and dealers to execute portfolio
transactions of the Fund.
If any occasion should arise in which you give any
advice to clients of yours concerning the shares of the
Fund, you will act solely as investment counsel for such
client and not in any way on behalf of the Trust. Your
services to the Fund pursuant to this Agreement are not to
be deemed to be exclusive and it is understood that you may
render investment advice, management and other services to
others.
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You (including your directors, officers, shareholders,
employees, control persons and affiliates of any thereof)
shall not be liable for any error of judgment or mistake of
law 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 your part in the performance of your duties or
from the reckless disregard by you of your obligations and
duties under this Agreement ("disabling conduct"). However,
you will not be indemnified for any liability unless (1) a
final decision is made on the merits by a court or other
body before whom the proceeding was brought that you were
not liable by reason of disabling conduct, or (2) in the
absence of such a decision, a reasonable determination is
made, based upon a review of the facts, that you were not
liable by reason of disabling conduct, by (a) the vote of a
majority of a quorum of trustees who are neither "interested
persons" of the Trust as defined in the Investment Company
Act of 1940 nor parties to the proceeding ("disinterested,
non-party trustees"), or (b) an independent legal counsel in
a written opinion. The Fund will advance attorneys' fees or
other expenses incurred by you in defending a proceeding,
upon the undertaking by or on behalf of you to repay the
advance unless it is ultimately determined that you are
entitled to indemnification, so long as you meet at least
one of the following as a condition to the advance: (1) you
shall provide a security for your undertaking, (2) the Fund
shall be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of the
disinterested, non-party trustees of the Trust, or an
independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason
to believe that you ultimately will be found entitled to
indemnification. Any person employed by you who may also be
or become an employee of the Trust shall be deemed, when
acting within the scope of his employment by the Trust, to
be acting in such employment solely for the Trust and not as
your employee or agent.
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall remain in force until January 30,
1994 and from year to year thereafter, subject to annual
approval by (i) the Board of the Trust or (ii) a vote of a
majority (as defined in the Investment Company Act of 1940)
of the outstanding voting securities of the Fund, provided
that in either event continuance is also approved by a
majority of the trustees who are not interested persons of
you or of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval.
If the shareholders of the Fund fail to approve the
Agreement in the manner set forth above, upon approval of
the Board, you may continue to serve or act in such capacity
for the Fund for the period of time (not exceeding one
hundred and twenty days after the termination of the
Agreement) pending required approval of the Agreement, of a
new agreement with you or a different adviser or other
definitive action; provided that the compensation to be paid
by the Fund to you will be equal to the lesser of your
actual costs incurred in furnishing investment advisory
services to the Fund or the amount you would have received
under this Agreement.
This Agreement may, on sixty days' written notice, be
terminated at any time without the payment of any penalty,
by the Board, by a vote of a majority of the outstanding
voting securities of the Fund or by you. This Agreement
shall automatically terminate in the event of its
assignment.
7. USE OF NAME
-----------
It is expressly understood that you may use the name
"Midwest..." and "Midwest Group" or any derivation thereof
in connection with another business enterprise, including
any registered investment company with which you are, or may
become associated, so long as such use is permitted under
the Investment Company Act of 1940 and other applicable law.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this
Agreement shall be effective until approved by vote of the
holders of a majority of the outstanding voting securities
of the Fund and by the Board, including a majority of the
trustees who are not interested persons of you or of the
Trust, cast in person at a meeting called for the purpose of
voting on such approval.
9. LIMITATION OF LIABILITY
-----------------------
The term "Midwest Group Tax Free Trust" means and
refers to the trustees from time to time serving under the
Trust's Declaration of Trust as the same may subsequently
thereto have been, or subsequently hereto be, amended. It
is expressly agreed that the obligations of the Fund
hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the
Trust, personally, but bind only the trust property of the
Fund, as provided in the Declaration of Trust of the Trust.
The execution and delivery of this Agreement have been
authorized by the trustees of the Trust and the shareholders
of the Fund and signed by the officers of the Trust, acting
as such, and neither such authorization by such trustees and
shareholders nor such execution and delivery by such
officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them
personally, but shall bind only the trust property of the
Fund as provided in the Trust's Declaration of Trust.
10. MISCELLANEOUS
-------------
The captions in this Agreement are included for
convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement may be
executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same Agreement.
If you are in agreement with the foregoing, please sign
the form of acceptance on the accompanying counterpart of
this letter and return such counterpart to the Trust,
whereupon this letter shall become a binding contract upon
the date thereof.
Yours very truly,
ATTEST: MIDWEST GROUP TAX FREE TRUST
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx
----------------------- By: ------------------------
Dated: November 1, 1992
Revised December 31, 1994
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATTEST: MIDWEST GROUP FINANCIAL SERVICES, INC.
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx
----------------------- By: --------------------------------
Dated: November 1, 1992
Revised December 31, 1994
