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Ex-99.5
MANAGEMENT AGREEMENT
AGREEMENT made this 18th day of December, 1992, by and between
XXXXXXX XXXXX CALIFORNIA MUNICIPAL SERIES TRUST, a Massachusetts
business trust (hereinafter referred to as the "Trust"), and FUND
ASSET MANAGEMENT, INC., a Delaware corporation (hereinafter referred
to as the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an 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 separate classes
of shares; and
WHEREAS, the Trustees have established and designated the
XXXXXXX XXXXX CALIFORNIA INSURED MUNICIPAL BOND FUND (the "Fund") as
a 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; and
WHEREAS, the Trust desires to retain the Manager to render
management and investment advisory services to the Trust and the Fund
in the manner and on the terms hereinafter set forth; and
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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 independent contractors and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Trust or the Fund in any way or otherwise be deemed
agents 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
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and the Fund including administering shareholder accounts and
handling shareholder relations. The Manager shall provide the Trust
and 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
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
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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 Fund'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 Fund'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
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 this 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.
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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.
ARTICILE 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
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 paid 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,
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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 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 not
exceeding $500 million, 0.525 of 1.0% (.525%) of the average daily
net assets of the Fund exceeding $500 million but not exceeding $1.0
billion and 0.50 of 1.0% (.50%) of the average daily net assets of
the Fund exceeding $1.0 billion, commencing on the day following
effectiveness hereof.
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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 the part of the month that 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 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 that 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
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
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claims and liabilities and litigation costs and any indemnification
related thereto) paid or payable by the Trust with respect to 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 management fee due to the Manager.
Should two or more such expense limitations be applicable as of 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 Manager
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 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.
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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") are 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, and 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 a shareholder or
otherwise.
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 November 30, 1994 and
thereafter, but only for 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.
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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
Amendments 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.
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.
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ARTICLE IX
Governing 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 applicable laws of the State of
New York, or 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 California
Municipal Series Trust, dated March 20, 1985, 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,
provides that the name "Xxxxxxx Xxxxx California Municipal Series
Trust" 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 California
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 California Municipal Series Trust, but the
"Trust Property" only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
XXXXXXX XXXXX CALIFORNIA
MUNICIPAL SERIES TRUST
By /s/ XXXXXX XXXXXX
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Title:President
FUND ASSET MANAGEMENT,INC.
By /s/ XXXXXX X. XXXXXXX
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Title: Senior Vice President
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