Exhibit No. 4(a)
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of September 10, 1990, between PAINEWEBBER MANAGED
MUNICIPAL TRUST, a Massachusetts business trust ("Trust"), and PAINEWEBBER
INCORPORATED ("PaineWebber"), a Delaware corporation registered as a broker-
dealer under the Securities Exchange Act of 1934, as amended ("1934 Act"), and
as an investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS the Trust is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company, and offers
for public sale distinct series of shares of beneficial interest, each
corresponding to a distinct portfolio; and
WHEREAS the Trust's Board of Trustees ("Board") has established the
PaineWebber RMA California Municipal Money Fund and the PaineWebber RMA New York
Municipal Money Fund as series of shares of beneficial interest of the Trust
("Series"); and
WHEREAS the Trust desires to retain PaineWebber as investment adviser and
administrator to furnish certain administrative, investment advisory and
portfolio management services to the Series, and PaineWebber is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints PaineWebber as investment
adviser and administrator for each Series for the period and on the terms set
forth in this Contract. PaineWebber accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT ADVISER.
(a) Subject to the supervision of the Board, PaineWebber will provide a
continuous investment program for each Series, including investment research and
management with respect to all securities and investments and cash equivalents
in each Series. PaineWebber will determine from time to time what securities and
other investments will be purchased, retained or sold by each Series.
(b) PaineWebber agrees that in placing orders with brokers and dealers, it
will attempt to obtain the best net result in terms of price and execution;
provided that, on behalf of each Series, PaineWebber may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide the Series with research, analysis, advice and similar services, and
PaineWebber may pay to those brokers and dealers, in return for research and
analysis, a higher commission or spread than may be charged by other brokers and
dealers, subject to PaineWebber's determining in good faith that such commission
or spread is reasonable in terms either of the particular transaction or of the
overall responsibility of PaineWebber to such Series
and its other clients and that the total commissions or spreads paid by such
Series will be reasonable in relation to the benefits to such Series over the
long term. In no instance will portfolio securities be purchased from or sold
to PaineWebber, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder. Whenever
PaineWebber simultaneously places orders to purchase or sell the same security
on behalf of a Series and one or more other accounts advised by PaineWebber,
such orders will be allocated as to price and amount among all such accounts in
a manner believed to be equitable to each account. The Trust recognizes that in
some cases this procedure may adversely affect the results obtained for a
Series.
(c) PaineWebber will oversee the maintenance of all books and records with
respect to the securities transactions of each Series, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
PaineWebber hereby agrees that all records which it maintains for the Trust are
the property of the Trust, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Trust and which
are required to be maintained by Rule 31a-1 under the 1940 Act, and further
agrees to surrender promptly to the Trust any records which it maintains for the
Trust upon request by the Trust.
(d) PaineWebber will oversee the computation of the net asset value and
the net income of each Series as described in the currently effective
registration statement of the Trust under the Securities Act of 1933, as
amended, and the 1940 Act and any supplements thereto ("Registration Statement")
or as more frequently requested by the Board.
3. DUTIES AS ADMINISTRATOR. PaineWebber will administer the affairs of
each Series subject to the supervision of the Board and the following
understandings:
(a) PaineWebber will supervise all aspects of the operations of each
Series, including the oversight of transfer agency, custodial and accounting
services, except as hereinafter set forth; provided, however, that nothing
herein contained shall be deemed to relieve or deprive the Board of its
responsibility for and control of the conduct of the affairs of each Series.
(b) PaineWebber will provide each Series with such corporate,
administrative and clerical personnel (including officers of the Trust) and
services as are reasonably deemed necessary or advisable by the Board, including
the maintenance of certain books and records of each Series.
(c) PaineWebber will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of the Trust's Registration
Statement relating to the Series, proxy material, tax returns and required
reports with or to each Series' shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
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(d) PaineWebber will provide each Series with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
(e) PaineWebber will provide the Board on a regular basis with economic
and investment analyses and reports and make available to the Board upon request
any economic, statistical and investment services normally available to
institutional or other customers of PaineWebber.
(f) PaineWebber will hold itself available to receive orders for the
purchase of shares of each Series ("Shares") and will accept or reject such
orders on behalf of the Series in accordance with the Trust's Registration
Statement, and will transmit such orders as are so accepted to the appropriate
transfer agent as promptly as practicable; provided, however, that PaineWebber
is not obligated to sell any certain number of shares.
(g) PaineWebber will make itself available to receive requests for
redemption from holders of Shares and will transmit such redemption requests to
the Trust's transfer agent as promptly as possible.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, PaineWebber will act in conformity with the Declaration of Trust, By-
Laws and Registration Statement of the Trust and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. DELEGATION OF PAINEWEBBER'S DUTIES AS INVESTMENT ADVISER AND
ADMINISTRATOR. With respect to either or both Series, PaineWebber may enter
into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
a sub-adviser or sub-administrator in which PaineWebber delegates to such sub-
adviser or sub-administrator the performance of any or all of the services
specified in Paragraphs 2 and 3 of this Contract, provided that each Sub-
Advisory or Sub-Administration Contract imposes on the sub-adviser or sub-
administrator bound thereby all the duties and conditions to which PaineWebber
is subject with respect to the delegated services under Paragraphs 2, 3 and 4 of
this Contract, and further provided that each Sub-Advisory or Sub-Administration
Contract meets all requirements of the 1940 Act and rules thereunder.
6. SERVICES NOT EXCLUSIVE. The services furnished by PaineWebber
hereunder are not to be deemed exclusive and PaineWebber shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of PaineWebber, who may also be a
trustee, officer or employee of the Trust, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.
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7. EXPENSES.
(a) During the term of this Contract, each Series will bear all expenses,
not specifically assumed by PaineWebber, incurred in its operations and the
offering of its shares.
(b) Expenses borne by each Series will include but not be limited to the
following (or each Series' proportionate share of the following): (i) the cost
(including brokerage commissions and other transaction costs) of securities
purchased or sold by the Series and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Series by
PaineWebber under this Contract; (iii) expenses of organizing the Trust and any
Series; (iv) filing fees and expenses relating to the registration and
qualification of the Series' shares and the Trust under federal and/or state
securities laws and maintaining such registrations and qualifications; (v) fees
and salaries payable to the Trust's Trustees who are not interested persons of
the Trust or PaineWebber; (vi) all expenses incurred in connection with the
Trustees' services, including travel expenses; (vii) taxes (including any income
or franchise taxes) and governmental fees; (viii) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (ix) any
costs, expenses or losses arising out of a liability of or claim for damages or
other relief asserted against the Series for violation of any law; (x) legal,
accounting and auditing expenses, including legal fees of special counsel for
those Trustees of the Trust who are not interested persons of the Trust; (xi)
charges of custodians, transfer agents and other agents; (xii) costs of
preparing share certificates; (xiii) expenses of setting in type and printing
prospectuses and supplements thereto, statements of additional information and
supplements thereto, reports and proxy materials for existing shareholders;
(xiv) costs of mailing prospectuses and supplements thereto, statements of
additional information and supplements thereto, reports and proxy materials to
existing shareholders; (xv) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Trust is a party and the expenses the Trust may incur as a result of its legal
obligation to provide indemnification to its officers, Trustees, agents and
shareholders) incurred by the Trust or Series; (xvi) fees, voluntary assessments
and other expenses incurred in connection with membership in investment company
organizations; (xvii) costs of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xviii) the cost
of investment company literature and other publications provided by the Trust to
its Trustees and officers; and (xix) costs of mailing, stationery and
communications equipment.
(c) The Trust or Series may pay directly any expense incurred by it in its
normal operations and, if any such payment is consented to by PaineWebber and
acknowledged as otherwise payable by PaineWebber pursuant to this Contract, the
Series may reduce the fee payable to PaineWebber pursuant to Paragraph 8 hereof
by such amount. To the extent that such deductions exceed the fee payable to
PaineWebber on any monthly payment date, such excess shall be carried forward
and deducted in the same manner from the fee payable on succeeding monthly
payment dates.
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(d) PaineWebber will assume the cost of any compensation for services
provided to the Trust received by the officers of the Trust and by those
Trustees who are interested persons of the Trust.
(e) The payment or assumption by PaineWebber of any expense of the Trust
or a Series that PaineWebber is not required by this Contract to pay or assume
shall not obligate PaineWebber to pay or assume the same or any similar expense
of the Trust or a Series on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided and the expenses assumed pursuant to this
Contract, with respect to the Series identified below, the Trust will pay to
PaineWebber a fee from the assets of the appropriate Series, such fee to be
computed daily and paid monthly at the annual rate of such Series' average daily
net assets set forth below:
(i) PaineWebber RMA California Municipal Money Fund:
Up to $300 million of average daily net assets ...... 0.50%
In excess of $300 million up to $750 million ........ 0.44%
Over $750 million ................................... 0.36%
(ii) PaineWebber RMA New York Municipal Money Fund:
Up to $300 million of average daily net assets ...... 0.50%
In excess of $300 million up to $750 million ........ 0.44%
Over $750 million ................................... 0.36%
(b) The fee shall be computed daily and paid monthly to PaineWebber on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. LIMITATION OF LIABILITY OF PAINEWEBBER. PaineWebber shall not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Series or the Trust in connection with the matters to which this Contract
relates except 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 Contract. Any person,
even though also an officer, director, employee, or agent of PaineWebber, who
may be or become an officer, trustee, employee or agent of the Trust shall be
deemed, when rendering services to a Series or the Trust
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or acting with respect to any business of such Series or the Trust, to be
rendering such service to or acting solely for the Series or the Trust, and not
as an officer, director, employee, or agent or one under the control or
direction of PaineWebber even though paid by it.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The Trustees of the Trust and the shareholders of a Series shall not be liable
for any obligations of the Series or the Trust under this Contract, and
PaineWebber agrees that, in asserting any rights or claims under this Contract,
it shall look only to the assets and property of the Trust or the Series in
settlement of such right or claim, and not to such Trustees or shareholders.
11. DURATION AND TERMINATION.
(a) This Contract will become effective upon the date hereabove written
provided that, with respect to a Series, this Contract shall not take effect
unless it has first been approved (i) by a vote of a majority of those Trustees
of the Trust who are not parties to this Contract or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Series' outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract will
continue in effect for two years from the above written date. Thereafter, if
not terminated, this Contract will continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (i) by a vote of a majority of those Trustees of the Trust who
are not parties to this Contract or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or with respect to a Series by vote of a majority of the
outstanding voting securities of such Series.
(c) Notwithstanding the foregoing, with respect to either or both Series,
this Contract may be terminated at any time, without the payment of any penalty,
by vote of the Board or by a vote of a majority of the outstanding voting
securities of such Series on sixty days' written notice to PaineWebber or by
PaineWebber at any time, without the payment of any penalty, on sixty days'
written notice to the Trust. Termination of this Contract with respect to one
Series shall in no way affect the continued validity of this Contract or the
performance thereunder with respect to the other Series. This Contract will
automatically terminate in the event of its assignment.
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 of this Contract as to a
Series shall be effective until approved by vote of a majority of such Series'
outstanding voting securities.
13. GOVERNING LAW. This Contract shall be construed in accordance with
the laws of the State of Delaware and the 1940 Act, provided, however, that
Paragraph 10 above will be construed in accordance with the laws of the
Commonwealth of Massachusetts. To the extent
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that the applicable laws of the State of Delaware or the Commonwealth of
Massachusetts conflict with the applicable provisions of the 1940 Act, the
latter shall control.
14. 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. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment", "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is made less restrictive by a rule,
regulation or order of the Securities and Exchange Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: PAINEWEBBER MANAGED MUNICIPAL TRUST
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. X'Xxxxxxx
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Attest: PAINEWEBBER INCORPORATED
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
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