INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 1st day of November, 1995 by and
between AMBAC Treasurers Trust, a Delaware business trust
(hereinafter called the "Trust"), and AMBAC Investment Management,
Inc., a Delaware corporation (hereinafter called the "Adviser"):
WHEREAS, the Trust intends to engage in business as an
open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act");
and
WHEREAS, the Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940, and will engage
in the business of acting as investment adviser; and
WHEREAS, the Trust desires to retain the Adviser to
render investment advisory and certain other services in the
manner and on the terms and conditions hereinafter set forth; and
WHEREAS, the Adviser desires to be retained to perform
such services on said terms and conditions:
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants
hereinafter contained, the Trust and the Adviser agree as follows:
1. The Trust hereby retains the Adviser to act as
investment adviser of each of the series of the Trust (the
"Funds") and, subject to the supervision of the Board of Trustees
of the Trust, to manage the investment activities of the Funds and
to provide certain other services as hereinafter set forth.
Without limiting the generality of the foregoing, the Adviser
shall: obtain and evaluate such information and advice relating to
the economy, securities and commodities markets, and securities
and commodities as it deems necessary or useful to discharge its
duties hereunder; continuously manage the assets of the Funds in a
manner consistent with the investment objectives, policies and
restrictions of each Fund and applicable laws and regulations;
determine the securities and commodities to be purchased, sold or
otherwise disposed of by the Funds and the timing of such
purchases, sales and dispositions; and take such further action,
including the placing of purchase and sale orders and the voting
of securities on behalf of the Funds, as the Adviser shall deem
necessary or appropriate. The Adviser shall furnish to or place
at the disposal of the Trust such of the information, evaluations,
analyses and opinions formulated or obtained by the Adviser in the
discharge of its duties as the Trust may, from time to time,
reasonably request.
2. The Adviser shall assist in the selection of and
the negotiation of agreements with, and monitor the quality of
services provided by, the Trusts administrator, custodian,
transfer agent, and other organizations which may provide services
to the Trust (but the Trust shall pay the fees and expenses of the
administrator, custodian and transfer agent and such other
organizations and the Adviser shall not be responsible for the
acts or omissions of such service providers). The Adviser shall
also provide such additional management and administrative
services as may be required in connection with the business
affairs and operations of the Trust beyond those furnished by the
Trusts administrator.
3. The Adviser shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with
such other persons as may be necessary to render the services
required to be provided by the Adviser or furnished to the Trust
under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Adviser shall be deemed
to include persons employed or otherwise retained by the Adviser
to furnish statistical and other factual data, advice regarding
economic factors and trends, information with respect to technical
and scientific developments, and such other information, advice
and assistance as the Adviser may desire.
4. The Trust will, from time to time, furnish or
otherwise make available to the Adviser such financial reports,
proxy statements, policies and procedures and other information
relating to the business and affairs of the Trust as the Adviser
may reasonably require in order to discharge its duties and
obligations hereunder.
5. The Adviser shall bear the cost of rendering the
services to be performed by it under this Agreement, and shall
provide the Trust with such office space, facilities, equipment,
clerical help, and other personnel and services as the Trust shall
reasonably require in the conduct of its business. The Adviser
shall also bear the cost of telephone service, heat, light, power
and other utilities provided to the Trust. The salaries of
officers of the Trust, and the fees and expenses of Trustees of
the Trust, who are also directors, officers or employees of the
Adviser, or who are officers or employees of any company
affiliated with the Adviser, shall be paid and borne by the
Adviser or such affiliated company.
6. The Trust assumes and shall pay or cause to be
paid all expenses of the Trust not expressly assumed by the
Adviser under this Agreement, including without limitation: any
payments pursuant to any plan of distribution adopted by the
Trust; the fees, charges and expenses of any registrar, custodian,
accounting agent, administrator, stock transfer and dividend
disbursing agent; brokerage commissions; taxes; registration costs
of the Trust and its shares under federal and state securities
laws; the costs and expenses of engraving and printing stock
certificates; the costs and expenses of preparing, printing,
including typesetting, and distributing prospectuses and
statements of additional information of the Trust and the Funds
and supplements thereto to the Trusts shareholders; all expenses
of shareholders and Trustees meetings and of preparing, printing
and mailing proxy statements and reports to shareholders; fees and
travel expenses of Trustees and members of any advisory board or
committee who are not also officers, directors or employees of the
Adviser or who are not officers or employees of any company
affiliated with the Adviser; all expenses incident to any
dividend, withdrawal or redemption options; charges and expenses
of any outside service used for pricing of the Trusts shares;
fees and expenses of legal counsel to the Trust and its Trustees;
fees and expenses of the Trusts independent accountants;
membership dues of industry associations; interest payable on
Trust borrowings; postage; insurance premiums on property or
personnel (including officers and Trustees) of the Trust which
inure to its benefit; and extraordinary expenses (including but
not limited to, legal claims and liabilities and litigation costs
and any indemnification related thereto).
7. As full compensation for the services and
facilities furnished to the Trust and the expenses assumed by the
Adviser under this Agreement, each Fund shall pay to the Adviser a
fee with respect to each Fund, as calculated in accordance with
Schedule A hereto. This fee shall be paid monthly. Subject to the
provisions of paragraph 8 hereof, payment of the Advisers
compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by
paragraph 8 hereof.
8. In the event the operating expenses of a Fund
including amounts payable to the Adviser pursuant to paragraph 7
hereof, for any fiscal year ending on a date on which this
Agreement is in effect, exceed the expense limitation applicable
to the Fund under any state securities laws or regulations (as
such limitations may be raised or lowered or waived upon
application of the Trust or the Adviser from time to time), the
Adviser shall reduce its fee to the extent of such excess and, if
required pursuant to any such laws or regulations, will reimburse
the Fund for annual operating expenses in excess of such expense
limitation; provided, however, that there shall be excluded from
expenses the amount of any interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses (including but not
limited to legal claims and liabilities and litigation costs and
any indemnification relating thereto) paid or payable by the Fund
to the extent permissible under applicable laws and regulations.
The amount of any such reduction in fee or reimbursement of
expenses shall be calculated and accrued daily and settled on a
monthly basis, based upon the expense limitation applicable to the
Fund as at the end of the last business day of the month. Should
two or more such expense limitations be applicable as at the end
of the last business day of the month, that expense limitation
which results in the largest reduction in the Advisers fee shall
be applicable.
For purposes of this provision, should any applicable
expense limitation be based upon the gross income of a Fund, such
gross income shall include, but not be limited to, interest on
debt securities held by the Fund accrued to and including the last
day of the Funds fiscal year, and dividends declared on equity
securities held by the Fund, the record dates for which fall on or
prior to the last day of such fiscal year, but shall not include
gains from the sale of securities.
9. The Adviser will use its best efforts in the
supervision and management of the investment activities of the
Trust and in providing services hereunder, but shall not be liable
to the Trust or its Shareholders for any error in investment
judgment, or in the absence of willful misfeasance, bad faith,
negligence or reckless disregard of its obligations hereunder, for
any mistake of law or for any act or omission by the Adviser.
10. Nothing contained in this Agreement shall
prevent the Adviser or any affiliated person of the Adviser from
acting as investment adviser or manager for any other person, firm
or corporation and shall not in any way bind or restrict the
Adviser or any such affiliated person from buying, selling or
trading any securities or commodities for their own accounts or
for the account of others for whom they may be acting. Nothing in
this Agreement shall limit or restrict the right of any director,
officer or employee of the Adviser to engage in any other business
or to devote his time and attention in part to the management or
other aspects of any other business whether of a similar or
dissimilar nature.
11. The Trust acknowledges and agrees, in accordance
with the provisions of Article VIII, Section 9 of the Trusts
Declaration of Trust dated June 27, 1995, and the License
Agreement, dated _______, 1995, that the name "AMBAC" and the
AMBAC logo and all rights to the use of such name or logo as part
of the name of the Trust and the Funds belong to AMBAC Inc.
12. This Agreement shall remain in effect as to each
Fund until September 30, 1997 and shall continue in effect for
each Fund from year to year thereafter provided such continuance
as to such Fund is approved at least annually by the vote of a
majority of the outstanding voting securities of the Trust, as
defined by the Act and the rules thereunder, or by the Board of
Trustees of the Trust; provided that in either event such
continuance is also approved by a majority of the Trustees of the
Trust who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party (the
"Independent Trustees"), by vote cast in person at a meeting
called for the purpose of voting on such approval; and provided,
however, that (a) the Trust may at any time, without payment of
any penalty, terminate this Agreement as to the Trust (or any
Fund) upon sixty days written notice to the Adviser, either by
majority vote of the Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Trust (or
such Fund) (as defined in the Act and the rules thereunder); (b)
this Agreement shall immediately terminate in the event of its
assignment (to the extent required by the Act and the rules
thereunder) unless such automatic termination shall be prevented
by an exemptive order of the Securities and Exchange Commission;
and (c) the Adviser may terminate this Agreement as to the Trust
or any of the Funds without payment of penalty on sixty days
written notice to the Trust. The failure to approve a continuance
of this Agreement as to any Fund, or any termination of this
Agreement as to any Fund, shall not affect the continuation of the
Agreement as to the Trust or any other Funds which have approved a
continuance and not terminated this Agreement.
13. Any notice under this Agreement shall be given
in writing, addressed and delivered, or mailed post-paid, to the
other party at the principal office of such party.
14. This Agreement may be amended only by the
written agreement of the parties. Any amendment shall be required
to be approved by the Trustees of the Trust and by a majority of
the Independent Trustees in accordance with the provisions of
Section 15(c) of the Act and the rules thereunder. Any amendment
shall also be required to be approved by a vote of shareholders
as, and to the extent, required by the Act and the rules
thereunder, except that an amendment may be effected without the
vote of shareholders: to reduce the fees payable hereunder by any
Fund; to amend Schedule A to specify initially the fee payable
hereunder by any Fund which is formed after the date of this
Agreement; to supply any omission; to cure, correct or supplement
any ambiguous, defective of inconsistent provision hereof; or if
necessary, to conform this Agreement to the requirements of
applicable laws or regulations, but neither the Trust nor the
Adviser shall be liable for failing to do so.
15. This Agreement shall be construed in accordance
with the laws of the state of Connecticut and the applicable
provisions of the Act. To the extent the applicable law of the
State of Connecticut, or any of the provisions herein, conflict
with the applicable provisions of the Act, the latter shall
control.
16. The Trust represents that this Agreement has
been duly approved by the Trustees, including a majority of the
Independent Trustees, and shareholders of the Trust in accordance
with the requirements of the Act and the rules thereunder.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement on the day and year first above
written.
AMBAC TREASURERS TRUST
By: /s/ Illeligible
Illeligible
Attest:
/s/ Illeligible
Illeligible
AMBAC INVESTMENT MANAGEMENT,
INC.
By: /s/ Illeligible
Illeligible
Attest:
/s/ Illeligible
Illeligible
SCHEDULE A
As full compensation for the services and facilities
furnished to the Trust and the expenses assumed by the Adviser
under this Agreement, each of AMBAC U.S. Treasury Money Market
Fund and AMBAC U.S. Government Money Market Fund shall pay to the
Adviser monthly compensation calculated daily at the annual rate
of .15% of each such Funds net assets, and AMBAC Short-Term U.S.
Government Income Fund shall pay to the Adviser monthly
compensation calculated daily at the annual rate of .35% of its
net assets. Such calculations shall be made by applying 1/365th
of the annual rate to the Funds net assets each day determined as
of the close of business on that day or the last previous business
day. 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 that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above.
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