MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of ________________, between the ▇▇▇▇▇▇▇▇
TAX-EXEMPT SERIES TRUST, a Massachusetts business trust (the "Fund") on behalf
of the CALIFORNIA QUALITY SERIES (the "Series"), and J. & ▇. ▇▇▇▇▇▇▇▇ & CO.
INCORPORATED, a Delaware corporation (the "Manager").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Duties of the Manager. The Manager shall manage the affairs of the
Series including, but not limited to, continuously providing the Series with
investment management, including investment research, advice and supervision,
determining which securities shall be purchased or sold by the Series, making
purchases and sales of securities on behalf of the Series and determining how
voting and other rights with respect to securities of each Series shall be
exercised, subject in each case to the control of the trustees of the Fund and
in accordance with the objectives, policies and principles set forth in the
Registration Statement and Prospectus of the Series and the requirements of the
Investment Company Act of 1940 (the "Act") and other applicable law. In
performing such duties, the Manager shall provide such office space, such
bookkeeping, accounting, internal legal, clerical, secretarial and
administrative services (exclusive of, and in addition to, any such services
provided by any others retained by the Series) and such executive and other
personnel as shall be necessary for the operations of the Series. The Series
understands that the Manager also acts as the manager of all of the investment
companies in the ▇▇▇▇▇▇▇▇ Group.
Subject to Section 36 of the Act, the Manager shall not be liable to the
Series 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 Series and
the performance of its duties under this Agreement 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 under this
Agreement.
2. Expenses. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1 and shall pay such Series'
proportional share or any salaries, fees and expenses of the trustees of the
Fund who are employees of the Manager or its affiliates. The Manager shall not
be required to pay any other expenses of the Series, including, but not limited
to, direct charges relating to the purchase and sale of portfolio securities,
interest charges, fees and expenses of independent attorneys and auditors, taxes
and governmental fees, cost of stock certificates and any other expenses
(including clerical expenses) of issue, sale, repurchase or redemption of
shares, expenses of registering and qualifying shares of the Series for sale
under federal and state securities laws, expenses of printing and distributing
reports, notices and proxy materials to existing shareholders, expenses of
corporate data processing and related services, shareholder recordkeeping and
shareholder account services, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses, expenses of annual and special shareholders'
meetings, fees and disbursements of transfer
agents and custodians, expenses of disbursing dividends and distributions, fees
payable under the Administration, Shareholder Service and Distribution Plan
between the Fund and service organizations, fees and expenses of trustees of the
Fund who are not employees of the Manager or its affiliates, membership dues in
the Investment Company Institute, insurance premiums and extraordinary expenses
such as litigation expenses.
3. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section 1, the
Series will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month, at an annual rate of 0.50% of the
Series' average daily net assets.
(b) If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Manager shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers (including the Manager or an affiliate of the Manager) as the Manager
shall deem appropriate in order to carry out the policy with respect to
allocation of portfolio transactions as set forth in the Registration Statement
and Prospectus(es) of the Series or as the trustees of the Fund may direct from
time to time. In providing the Series with investment management and
supervision, it is recognized that the Manager will seek the most favorable
price and execution, and, consistent with such policy, may give consideration to
the research, statistical and other services furnished by brokers or dealers to
the Manager for its use, to the general attitude of brokers or dealers toward
investment companies and their support of them, and to such other considerations
as the trustees of the Fund may direct or authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the
Series that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers who execute
brokerage transactions at a higher cost to the Series than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Series with such brokers, subject to
review by the trustees of the Series from time to time with respect to the
extent and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Manager in connection with its
services to other clients as well as the Series.
The placing of purchase and sale orders may be carried out by the Manager
or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the Series,
the Manager or any subsidiary of the Manager may, without material risk, arrange
to receive a soliciting dealer's fee or other underwriter's or dealer's discount
or commission, the Manager shall, unless otherwise directed by the trustees of
the Fund, obtain such fee, discount or commission and the amount thereof shall
be applied to reduce the compensation to be received by the Manager pursuant to
Section 3 hereof.
Nothing herein shall prohibit the trustees of the Fund from approving the
payment by the Series of additional compensation to others for consulting
services, supplemental research and security and economic analysis.
5. Term of Agreement. This Agreement shall continue in full force and
effect until _________________, and from year to year thereafter if such
continuance is approved in the manner required by the Act if the Manager shall
not have notified the Series in writing at least 60 days prior to such
___________ or prior to ____________ of any year thereafter that it does not
desire such continuance. This Agreement may be terminated at any time, without
payment of penalty by the Series, on 60 days' written notice to the Manager by
vote of the trustees of the Fund or by vote of a majority of the outstanding
voting securities of the Series (as defined by the Act). This Agreement will
automatically terminate in the event of its assignment (as defined by the Act).
6. Right of Manager In Corporate Name. The Manager and the Series each
agree that the word "▇▇▇▇▇▇▇▇", which comprises a component of the Series' name,
is a property right of the Manager. The Series agrees and consents that (i) it
will only use the word "▇▇▇▇▇▇▇▇" as a component of its corporate name and for
no other purpose, (ii) it will not purport to grant to any third party the right
to use the word "▇▇▇▇▇▇▇▇" for any purpose, (iii) the Manager or any corporate
affiliate of the Manager may use or grant to others the right to use the word
"▇▇▇▇▇▇▇▇", or any combination or abbreviation thereof, as all or a portion of a
corporate or business name or for any commercial purpose, including a grant of
such right to any other investment company, and at the request of the Manager,
the Series will take such action as may be required to provide its consent to
the use of the word "▇▇▇▇▇▇▇▇", or any combination or abbreviation thereof, by
the Manager or any corporate affiliate of the Manager, or by any person to whom
the Manager or an affiliate of the Manager shall have granted the right to such
use; and (iv) upon the termination of any management agreement into which the
Manager and the Series may enter, the Series shall, upon request by the Manager,
promptly take such action, at its own expense, as may be necessary to change its
corporate name to one not containing the word "▇▇▇▇▇▇▇▇" and following such
change, shall not use the word ▇▇▇▇▇▇▇▇, or any combination thereof, as a part
of its corporate name or for any other commercial purpose, and shall use its
best efforts to cause its officers, trustees and shareholders to take any and
all actions which the Manager may request to effect the foregoing and to
reconvey to the Manager any and all rights to such word.
7. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
(b) The Trustees of the Fund have authorized the execution of this
Agreement in their capacity as Trustees and not individually and the Manager
agrees that neither the shareholders nor the Trustees nor any officer, employee,
representative or agent of the Fund shall be personally liable upon, nor shall
resort be had to their private property for the satisfaction of, obligations
given, executed or delivered on behalf of or by the Fund, that the shareholders,
Trustees, officers, employees, representatives and agents of the
Fund shall not be personally liable hereunder, and that the Manager shall look
solely to the property of the Fund for the satisfaction of any claim hereunder.
IN WITNESS WHEREOF, the Fund on behalf of the Series and the Manager have
caused this Agreement to be executed by their duly authorized officers as of the
date first above written.
▇▇▇▇▇▇▇▇ TAX-EXEMPT SERIES TRUST
By_________________________________________
J. & ▇. ▇▇▇▇▇▇▇▇ & CO. INCORPORATED
By_________________________________________
