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EXHIBIT 5(b)
SUB-ADVISORY AGREEMENT
AGREEMENT dated August 8, 1983, between PROVIDENT NATIONAL
BANK, a national banking association (herein called "Provident"), and PROVIDENT
INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation registered as an
investment adviser under the Investment Advisers Act of 1940 and wholly-owned
by Provident (herein called "PIMC").
WHEREAS, PIMC is the investment adviser to Municipal Fund for
New York Investors, Inc. (the "Fund"), an open-end, diversified, management
investment company registered under the Investment Company Act of 1940; and
WHEREAS, PIMC wishes to retain Provident to provide it with
investment research, administrative, and statistical services in connection
with PIMC's advisory activities on behalf of the Fund; and
WHEREAS, Provident is willing to provide such services to PIMC
upon the conditions and for the compensation set forth below;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. PIMC hereby appoints Provident its
sub-adviser as required by the Advisory Agreement between PIMC and the Fund
dated August 8, 1983 (such Agreement or the most recent successor advisory
agreement between such parties is referred to herein as the "Advisory
Agreement"). Provident accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. Sub-Advisory Services. Subject to the supervision of
the Board of Directors of the Fund, Provident, through its Trust Division and
on behalf of the Fund, will provide the Find investment research and credit
analysis concerning prospective and existing Fund investments, make
recommendations with respect to the Fund's continuous investment program,
supply PIMC computer facilities and operating personnel, and provide such
statistical services as PIMC may from time to time reasonably request.
Provident will provide the services rendered by it hereunder in accordance with
the Fund's investment objective, policies and restrictions as stated in the
Fund's prospectus, as presently in effect and as it may be amended or
supplemented from time to time. Provident further agrees that it:
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(a) will use the same skill and care in
providing such services as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;
(b) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (hereinafter
called the "Rules"), and will in addition conduct its activities under
this Agreement in accordance with the regulations of the Board of
Governors of the Federal Reserve System pertaining to the investment
advisory activities of bank holding companies to the same extent as if
such regulations were by their terms applicable to its activities
hereunder;
(c) will not invest its assets or assets of any
fiduciary account managed by it in shares of the Fund, make loans for
purposes of purchasing or carrying such shares, or make loans to the
Fund;
(d) will maintain or cause PIMC to maintain books
and records with respect to the Fund's securities transactions;
(e) will render to the Fund's Board of Directors
such periodic and special reports as the Board may request; and
(f) will maintain its policy and practice of
conducting its Trust Division independently of its Commercial
Division. In making investment recommendations for the Fund, Trust
Division personnel will not inquire or take into consideration whether
the issuer of securities proposed for purchase or sale for the Fund's
account are customers of the Commercial Division. In dealing with
commercial customers, the Commercial Division will not inquire or take
into consideration whether securities of those customers are held by
the Fund.
3. Services Not Exclusive. Provident's services
hereunder are not deemed to be exclusive, and Provident shall be free to render
similar services to others so long as its services under this Agreement are not
impaired thereby.
4. Books and Records. In compliance with the
requirements of Rule 31a-3 of the Rules, Provident hereby agrees that all
records which it maintains for the Fund are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. Provident further agrees to preserve, or cause PIMC to
preserve, for the periods prescribed by Rule 31a-2, the records required to be
maintained by Rule 31a-1 of the Rules.
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5. Expenses. During the term of this Agreement,
Provident will pay all expenses incurred by it in connection with its
activities under this Agreement.
6. Compensation. For the services which Provident will
render to PIMC under this Agreement, PIMC will pay to Provident a monthly fee
equal to 75% of each month's advisory fee received by PIMC from the Fund
pursuant to the Advisory Agreement between PIMC and the Fund. Notwithstanding
the foregoing, the fee payable to Provident shall be adjusted each quarter as
necessary to assure that PIMC has income from all sources before application of
Federal, State, or other income taxes of at least $22,500 during each quarter.
The sub-advisory fee shall be paid by PIMC to Provident at least quarterly.
7. Limitation on Liability. Provident will not be
liable for any error of judgment or mistake of law or for any loss suffered by
PIMC or by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations or duties under
this Agreement.
8. Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall continue until July 31, 1985.
Thereafter, if not terminated, this Agreement shall continue for successive
periods of 12 months each, provided, such continuance is specifically approved
at least annually (a) by the vote of a majority of those members of the Board
of Directors of the Fund who are not parties to this Agreement or interested
persons of the Fund or any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Board of Directors of
the Fund or by a vote of a majority of the outstanding voting securities of the
Fund, provided, however, that this Agreement may be terminated by the Fund at
any time, without the payment of any penalty, by the Board of Directors of the
Fund or by a vote of a majority of the outstanding voting securities of the
Fund, on 60 days' written notice to PIMC, and will be terminated upon any
termination of the Advisory Agreement between the Fund and PIMC. This
Agreement will also immediately terminate in the event of its assignment. (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the Investment Company Act of 1940.)
9. Amendment of this Agreement. No provision of this
Agreement 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
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termination is sought, and no amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the Fund's outstanding
voting securities.
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. If
any provision of this Agreement shall be held or make invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT NATIONAL BANK
Attest:
/s/ Xxxx X. Xxxxxx, Xx. By:
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Vice President & Secretary
PROVIDENT INSTITUTIONAL
[Corporate Seal] MANAGEMENT CORPORATION
Attest:
/s/ Xxxx X. Xxxxxx, Xx. By:
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Vice President & Secretary
[Corporate Seal]
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