EXHIBIT 99.5
XXXX XXXXXXX TAX-EXEMPT SERIES TRUST
INVESTMENT MANAGEMENT CONTRACT
DATED MAY 5, 1987
AS AMENDED: DECEMBER 19, 1989 SECTION 5 (SEE ATTACHED)
XXXX XXXXXXX TAX-EXEMPT SERIES TRUST
May 5, 1987
Xxxx Xxxxxxx Advisers, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Investment Management Contract
Dear Sirs:
Xxxx Xxxxxxx Tax-Exempt Series Trust (the "Trust") has been organized
as a business trust under the laws of the Commonwealth of Massachusetts to
engage in the business of an investment company. The Trust's shares of
beneficial interest may be classified into series, each series representing the
entire undivided interest in a separate portfolio of assets. As of the data
hereof, the Trust has three series of shares, the California Portfolio, the
Massachusetts Portfolio and the New York Portfolio (each, a "Fund" and,
collectively, the "Funds"), each with a separate portfolio of assets.
The Trustees of the Trust (the "Trustees") have selected you to provide
investment advice and management for the Trust and the Funds and to provide
certain other services, as more fully set forth below, and you are willing to
provide such advice, management and services under the terms and conditions
hereinafter set forth. Accordingly, the Trust agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with copies,
properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated March 24, 1987 (the
"Declaration of Trust").
(b) By-Laws of the Trust as in effect on the data hereof
(c) Resolutions of the Trustees selecting you as investment adviser for
the Trust and the Funds and approving the form of this Contract.
(d) Commitments, limitations and undertakings made by the Trust to
state "blue sky" authorities for the purpose of qualifying shares of
the Trust for sale in such states.
The Trust will furnish you from time to time with copies, properly certified or
otherwise authenticated, of all amendments of or supplements to the foregoing,
if any.
2. Investment Management Services. You will use your best efforts to
provide to each Fund continuing and suitable investment programs consistent with
the investment policies, objectives and restrictions of such Fund. In the
performance of your duties hereunder, subject always (x) to the provisions
contained in the documents delivered to you pursuant to Section 1 as each of the
same may from time to time be amended or supplemented and (y) to the limitations
set forth in the Registration Statement as in effect from time to time, under
the Securities Act of 1933, as amended, you will, at your expense:
(a) furnish each Fund with advice and recommendations consistent with
the investment policies, objectives and restrictions of such Fund, with
respect to the purchase, holding and disposition of portfolio assets,
including the purchase and sale of financial futures contracts;
(b) advise each Fund in connection with policy decisions to be made by
the Trustees or any committee thereof with respect to such Fund's
investments and, as requested, furnish such Fund with research,
economic and statistical data in connection with such Fund's
investments and investment policies;
(c) provide administration of the day-to-day investment operations of
each Fund;
(d) submit such reports relating to the valuation of each Fund's
securities as the Trustees may reasonably request;
(e) assist each Fund in any negotiations relating to its investments
with issuers, investment banking firms, securities brokers or dealers
and other institutions or investors;
(f) provide office space and office equipment and supplies, the use of
accounting equipment when required, and necessary executive, clerical
and secretarial personnel for the administration of the affairs of each
Fund;
(g) from time to time or at any time requested by the Trustees, make
reports to the Trust of your performance of the foregoing services and
furnish advice and recommendations with respect to other aspects of the
business and affairs of each Fund;
(h) maintain and preserve the records required by the Investment
Company Act of 1940, as amended, to be maintained and preserved by the
Trust on behalf of each Fund (you agree that such records are the
property of the Trust and will be surrendered to the Trust promptly
upon request therefor);
(i) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as you may
deem necessary or useful in the discharge of your duties hereunder;
(j) oversee, and use your best efforts to assure the performance of,
the activities and services of each custodian, transfer agent and other
similar agents retained by the Trust.
3. Expenses of the Funds. You will pay:
(a) the compensation and expenses of all officers and employees of the
Trust and the Funds, except as expressly paid by the Trust or the
Funds, either directly or by reimbursement of Xxxx Xxxxxxx Advisers,
Inc., pursuant to Section 4(j);
(b) the expenses of office rent, telephone and other utilities, office
furniture, equipment, supplies and other office expenses of the Trust
and the Funds;
(c) any other expenses incurred by you in connection with the
performance of your duties hereunder; and
(d) premiums for such insurance as may be agreed upon by you and the
Trustees.
4. Expenses of the Trust or the Funds Not Paid by You. You will not be
required to pay any expenses which this Contract does not expressly make payable
by you. In particular, and without limiting the generality of the foregoing but
subject to the provisions of Section 3, you will not be required to pay:
(a) any and all expenses, taxes and governmental fees incurred by the
Trust or any Fund prior to the effective date of the first registration
statement of the Trust under the Securities Act of 1933, as amended;
(b) without limiting the generality of the foregoing clause (a), the
expenses of organizing the Trust and the Funds (including without
limitation legal, accounting and auditing fees and expenses incurred in
connection with the matters referred to in this clause (b)), of
registering the Trust under the Investment Company Act of 1940, as
amended, and of initially registering the shares of the Trust under the
Securities Act of 1933, as amended, and of qualifying the shares for
sale under state securities laws for the initial offering and sale of
the shares;
(c) the compensation and expenses of Trustees who are not interested
persons (as used in this Contract, such term shall have the meaning
specified in the Investment Company Act of 1940, as amended) of you,
and of independent advisers, independent contractors, consultants,
managers and other unaffiliated agents employed by the Trust or the
Funds other than through you;
(d) legal, accounting and auditing fees and expenses of the Trust or
the Funds;
(e) the fees or disbursements of custodians and depositories of the
Trust's assets, transfer agents, disbursing agents, plan agents and
registrars;
(f) taxes and governmental fees assessed against the Trust's assets and
payable by the Trust;
(g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy material to shareholders of any Fund;
(h) brokers' commissions and underwriting fees;
(i) the expense of periodic calculations of the net asset value of the
shares of the Funds;
(j) with respect to each Fund, the compensation, in the form of salary,
fringe benefits and incentive compensation of the Fund's Chairman of
the Board and President, the Fund's Secretary and the Fund's Compliance
Officer who provide administrative and compliance services to the Fund,
the amount of such compensation to be paid by the Fund to be determined
from time to time by the Trustees who are not interested persons,
provided that such compensation paid by the Fund will not exceed in any
fiscal year 0.03 percent of the average daily net asset value of the
Fund during the year. Any such compensation to be paid by a Fund will
be accrued daily and, if paid by reimbursement of Xxxx Xxxxxxx
Advisers, Inc., will be paid quarterly or, if paid directly, will be
paid from time to time at intervals to be agreed upon by the Fund and
affected officers.
5. Compensation of the Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by you as herein provided, for
each Fund the Trust will pay you quarterly, based on the average daily net asset
value of such Fund for the preceding quarter, a fee as set forth below:
Net Asset Value Annual Rate
First $250,000,000 0.50%
Next $250,000,000 0.45%
Next $500,000,000 0.425%
Next $250,000,000 0.40%
Amount Over $1,250,000,000 0.30%
If in any fiscal year of a Fund, after excluding taxes, interest,
brokerage commissions and extraordinary expenses beyond your control but
including only so much of the fee calculated pursuant to the foregoing
provisions of this paragraph 5 as is attributable to such fiscal year, the
normal expenses of such Fund chargeable to its income account shall exceed the
sum of
(a) 1.5% of the first $30,000,000 of such Fund's daily average
net asset value, and
(b) 1.0% of the Fund's daily average net asset value in excess
of $30,000,000,
you will waive your fee payable under the foregoing provisions of this paragraph
5 to the extent of such excess, and you will reimburse such Fund for any amount
by which such excess exceeds such fee. The waiver and reimbursement contemplated
by the foregoing sentence shall be given effect by your paying such Fund an
amount equal to the amount of such waiver of reimbursement promptly after the
end of such fiscal year. You understand that, in connection with the
qualification of securities of the Trust for sale in certain states, the Trust
has agreed, and may find it desirable to agree in the future, that it will
secure the consent of the securities commissioners of certain states prior to
treating any expense as an extraordinary expense beyond your control within the
meaning of the foregoing sentence. Accordingly, you agree that no expense shall
be so treated without the consent of such commissioners. The net asset value of
the Funds shall be determined pursuant to the applicable provisions of the
Declaration of Trust of the Trust and applicable law.
6. Other Activities of the Adviser and Its Affiliates. Nothing herein
contained shall prevent you or any affiliate or associate of yours from engaging
in any other business or from acting as investment adviser or investment manager
for any other person or entity, whether or not having investment policies or
portfolios similar to those of any of the Funds; and it is specifically
understood that officers, directors, and employees of yours, of your
subsidiaries and those of your parent company, Xxxx Xxxxxxx Mutual Life
Insurance Company, may continue to engage in providing portfolio management
services and advice to other investment companies, whether or not registered, to
other investment advisory clients of yours, of your subsidiaries or of said
Insurance Company and to the said Insurance Company itself.
7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Trust neither you nor any
investment management subsidiary of yours, nor any of your or their directors,
officers or employees will act as principal or agent or receive any commission.
If any occasion should arise in which you advise persons concerning the shares
of the Trust, you will act solely on your own behalf and not in any way on
behalf of the Trust or the Massachusetts Portfolio.
8. No Partnership of Joint Venture. The Trust, the Funds and you are
not partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on any of them.
9. Name of Trust and Funds. The Trust and the Funds may use the name
"Xxxx Xxxxxxx" or any name derived from or similar to the name "Xxxx Xxxxxxx
Advisers, Inc." or "Xxxx Xxxxxxx Mutual Life Insurance Company" only for so long
as this Contract or any extension, renewal, or amendment hereof remains in
effect. At such time as such Contract shall no longer be in effect, the Trust
and the Funds will (to the extent they lawfully can) cease to use such a name or
any other name indicating that the Funds are advised or they are otherwise
connected with you. The Trust acknowledges that it has adopted the name "Xxxx
Xxxxxxx Tax-Exempt Series Trust" through permission of Xxxx Xxxxxxx Mutual Life
Insurance Company, a Massachusetts insurance company, and agrees that Xxxx
Xxxxxxx Mutual Life Insurance Company reserves to itself and any successor to
its business the right to grant the non-exclusive right to use the names "Xxxx
Xxxxxxx" or any similar name to any other corporation or entity, including but
not limited to any investment company of which Xxxx Xxxxxxx Mutual Life
Insurance Company or any subsidiary or affiliate thereof or any successor to the
business of any thereof shall be the investment adviser.
10. Limitation of Liability of Adviser. You shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust or the
Funds in connection with the matters to which this Contract relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on your
part in the performance of your duties or from reckless disregard by you of your
obligations and duties under this Contract. Any person, even though also
employed by you, who may be or become an employee of and paid by the Trust or
the Funds shall be deemed, when acting within the scope of his employment by the
Trust or the Funds, to be acting in such employment solely for the Trust or the
Funds and not as your employee or agent.
11. Duration and Termination of this Contract. This Contract shall
remain in force until the second anniversary of the date upon which this
Contract was executed by the parties hereto, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of you or
(other than as trustees) of the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) either (i) the Trustees or (ii)
with respect to each Fund, a majority of the outstanding voting securities of
each such Fund. This Contract may, on 60 days' written notice, be terminated at
any time by the Trustees without they payment of any penalty by the Trust or the
Funds by vote with respect to each Fund of a majority of the outstanding voting
securities of such Fund, or by you. Termination of this Contract with respect to
a Fund shall not be deemed to terminate or otherwise invalidate any provision of
any contract between you and any other series of the Trust. This Contract shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Section 11, the definitions contained in Section 2(a) of the
Investment Company Act of 1940, as amended (particularly the definitions of
"assignment", "interested person" and "voting security") shall be applied.
12. Amendment of This Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Contract shall be effective until approved
by (a) the Trustees, including a majority of the Trustees who are not interested
persons of you or (other than as trustees) of the Trust or any Fund, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
with respect to each Fund, a majority of the outstanding voting securities of
such Fund, as defined in the Investment Company Act of 1940, as amended,
provided that no approval shall be required pursuant to this clause (b) in
respect of any contract between you and the holders of outstanding voting
securities of any other series of the Trust.
13. Miscellaneous. The captions in this Contract 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
Contract 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 instrument. The name Xxxx Xxxxxxx Tax-Exempt Series Trust is
the designation of the Trustees under the Declaration of Trust, dated March 24,
1987, as amended from time to time. The Declaration of Trust has been filed with
the Secretary of State of the Commonwealth of Massachusetts. The obligations of
the Trust and the Funds are not personally binding upon, nor shall resort be had
to the private property of, an of the Trustees, shareholders, officers,
employees or agents of the Trust or the Funds, but only the Trust's property
shall be bound.
Yours very truly,
XXXX XXXXXXX TAX-EXEMPT SERIES TRUST
By: /s/X. X. Xxxxxx
-----------------------------------
Chairman of the Board and President
The foregoing Contract is
hereby agreed to as the date
hereof.
XXXX XXXXXXX ADVISERS, INC.
By: /s/X. X. Xxxxxx
----------------------------------
Vice Chairman of the Board,
President and Chief Executive Officer
AMENDMENT TO INVESTMENT MANAGEMENT CONTRACT
It is hereby agreed that the second paragraph of Section 5 of the
Investment Management Contract between the undersigned parties dated May 5, 1987
is deleted in its entirety and replaced by the following:
If the total of all ordinary business expenses of the Fund for any
fiscal year exceeds the lowest applicable percentage of average net assets or
income limitations prescribed in any state in which shares of the Fund are
qualified for sale, you shall waive your fee to the extent of such excess and
will reimburse the Fund for any amount by which such excess exceeds your fee.
The waiver and reimbursement contemplated by the foregoing sentence shall be
given effect by your paying the Fund an amount equal to the amount of such
waiver or reimbursement on the same schedule as the fund pays the Advisory fee,
provided that if at the end of the fiscal year, Fund expenses do not exceed the
annual expense limitations, the Fund will reimburse you for monies paid by you
or fees foregone during the course of the fiscal year.
Unless prescribed otherwise by state law, ordinary business expenses
shall be calculated excluding taxes, interest, brokerage commissions, and
extraordinary expenses beyond your control. You understand that, in connection
with the qualification of securities of the Fund for sale in certain states, the
Fund has agreed, and may find it desirable to agree in the future, that it will
secure the consent of the securities commissioners of certain states prior to
treating any expenses as an extraordinary expense beyond your control within the
meaning of the foregoing sentence. Accordingly, you agree that no expense shall
be so treated without the consent of such commissioners. The net asset value of
the Fund shall be determined pursuant to the provisions in the Declaration of
Trust and applicable law.
Executed this 19th day of December, 1989.
XXXX XXXXXXX TAX-EXEMPT SERIES TRUST
By: /s/Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Chairman and President
XXXX XXXXXXX ADVISERS, INC.
By: /s/Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
President and Chief Executive Officer
