Exhibit 5(a)
XXXXXXX TAX FREE TARGET FUND
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
December 10, 1985
Xxxxxxx, Xxxxxxx & Xxxxx Ltd.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Investment Advisory Agreement
Dear Sirs:
Xxxxxxx Tax Free Target Fund (the "Fund") has been established as a
Massachusetts business trust to engage in the business of an investment company.
The shares of beneficial interest of the Fund are divided into separate series
("Portfolios"), each of which is established pursuant to a written instrument
executed by the Trustees of the Fund. Portfolios may be terminated, and
additional Portfolios established, from time to time by action of the Trustees.
The Fund has selected you to act as the sole investment adviser of the Fund and
to provide certain other services, as more fully set forth below, and you are
willing to act as such investment adviser and to perform such services under the
terms and conditions hereinafter set forth. Accordingly, the Fund agrees with
you as follows:
1. Delivery of Fund Documents. The Fund has furnished you with copies
properly certified or authenticated of each of the following:
(a) Declaration of Trust of the Fund, dated December 28, 1982, as
amended from time to time.
(b) By-Laws of the Fund as in effect on the date hereof.
(c) Resolutions of the Trustees selecting you as investment adviser and
approving the form of this Agreement.
(d) Written Instrument to Establish and Designate Separate Series of
Shares.
The Fund will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements to the foregoing, if any.
2. Name of Fund. The Fund may use the name "Xxxxxxx Tax Free Target Fund"
or any name derived from the name "Xxxxxxx, Xxxxxxx & Xxxxx" only for so long as
this Agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have succeeded
to your business as investment adviser. At such time as such an agreement shall
no longer be in effect, the Fund will (to the extent that it lawfully can) cease
to use such a name or any other name indicating that it is advised by or
otherwise connected with you or any organization which shall have so succeeded
to your business.
3. Advisory Services. You will regularly provide each Portfolio of the
Fund with investment research, advice and supervision and will furnish
continuously an investment program for each Portfolio consistent with the
investment objectives and policies of such Portfolio and of the Fund. You will
determine what securities shall be purchased for each Portfolio, what securities
shall be held or sold by each Portfolio, and what portion of each Portfolio's
assets shall be held uninvested, subject always to the provisions of the Fund's
Declaration of Trust and By-Laws and of the Investment Company Act of 1940, as
amended, and to the investment objectives, policies and restrictions of such
Portfolio and of the Fund, as each of the same shall be from time to time in
effect, and subject, further, to such policies and instructions as the Trustees
may from time to time establish. You shall advise and assist the officers of the
Fund in taking such steps as are necessary or appropriate to carry out the
decisions of the Trustees and the appropriate committees of the Trustees
regarding the conduct of the business of the Fund.
4. Allocation of Charges and Expenses. You will pay the compensation and
expenses of all officers and executive employees of the Fund and will make
available, without expense to the Fund, the services of such of your directors,
officers and employees as may duly be elected officers or Trustees of the Fund,
subject to their individual consent to serve and to any limitations imposed by
laws. You will pay the Fund's office rent and will provide investment advisory
research and statistical facilities and all clerical services relating to
research, statistical and investment work. You will not be required to pay any
expenses of the Fund other than those specifically allocated to you in this
paragraph 4. In particular but without limiting the generality of the foregoing,
you will not be required to pay: organization expenses of the Fund; clerical
salaries; fees and expenses incurred by the Fund in connection with membership
in investment company organizations; brokers' commissions; payment for portfolio
pricing services to a pricing agent, if any; legal, auditing or accounting
expenses; taxes or governmental fees; the fees and expenses of
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the transfer agent of the Fund; the cost of preparing share certificates or any
other expenses, including clerical expenses of issue, redemption or repurchase
of shares of the Fund; the expenses of and fees for registering or qualifying
securities for sale; the fees and expenses of Trustees of the Fund who are not
affiliated with you; the cost of preparing and distributing reports and notices
to shareholders; or the fees or disbursements of custodians of the Fund's
assets, including expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the Fund insofar as they
govern agreements with any such custodian. You shall not be required to pay
expenses, including clerical expenses, of offer, sale, underwriting and
distribution of the Fund's shares if and to the extent that such expenses (i)
are required to be borne by a principal underwriter which acts as the
distributor of the Fund's shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Fund shall have adopted a plan in conformity with Rule 12b-1 under the
Investment Company Act of 1940, as amended, providing that the Fund shall assume
some or all of such expenses. You shall be required to pay such of the foregoing
expenses as are not required to be paid by the principal underwriter or
permitted to be paid by the Fund pursuant to such a plan.
5. Compensation of the Adviser. For all services to be rendered and
payments made as provided in paragraphs 3 and 4 hereof, the Fund will pay you on
the last day of each month a fee equal to the sum of 1/20 of 1% of the average
daily net assets as defined below of all of the Portfolios of the Fund combined.
The "average daily net assets" of a Portfolio are defined as the average of the
values placed on the net assets of such Portfolio as of 4:00 p.m. (New York
time), on each day on which the net asset value of the Fund's Portfolios is
determined consistent with the provisions of Rule 22c-1 under the Investment
Company Act of 1940 or, if the Fund lawfully determines the value of the net
assets of a Portfolio as of some other time on each buiness day, as of such
time. The value of net assets of each Portfolio shall be determined pursuant to
the applicable provisions of the Declaration of Trust of the Fund. If, pursuant
to such provisions, the determination of net asset value is suspended for any
particular business day, then for the purposes of this paragraph 5, the value of
the net assets of each Portfolio of the Fund as last determined shall be deemed
to be the value of the net assets as of the close of the New York Stock
Exchange, or as of such other time as the value of the net assets of the Fund's
Portfolios may lawfully be determined, on that day. If the determination of the
net asset value of the shares of the Fund's Portfolios has been suspended
pursuant to the Declaration of Trust of the Fund for a period, including such
month, your compensation payable at
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the end of such month shall be computed on the basis of the value of the net
assets of the Portfolios of the Fund as last determined (whether during or prior
to such month). If the Fund determines the value of the net assets of its
Portfolios more than once on any day, the last such determination thereof on
that day shall be deemed to be the sole determination thereof on that day for
the purposes of this paragraph 5. You agree that your compensation for any
fiscal year shall be reduced by the amount, if any, by which the expenses of the
Fund for such fiscal year exceed the lowest applicable expense limitation
established pursuant to the statutes or regulations of any jurisdiction in which
the shares of the Fund may be qualified for offer and sale. You shall refund to
the Fund the amount of any reduction of your compensation pursuant to this
paragraph 5 as promptly as practicable after the end of such fiscal year,
provided that you will not be required to pay the Fund an amount greater than
the fee paid to you in respect of such year pursuant to this Agreement. As used
in this paragraph 5, "expenses" shall mean those expenses included in the
applicable expense limitation having the broadest specifications thereof, and
"expense limitation" means a limit on the maximum annual expenses which may be
incurred by an investment company determined (i) by multiplying a fixed
percentage by the average, or by multiplying more than one such percentage by
different specified amounts of the average, of the values of an investment
company's net assets for a fiscal year or (ii) by multiplying a fixed percentage
by an investment company's net investment income for a fiscal year. The words
"lowest applicable expense limitation" shall be construed to result in the
largest reduction of your compensation for any fiscal year of the Fund.
6. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither you nor any
of your directors, officers or employees will act as a principal or agent or
receive any commission. You or your agent shall arrange for the placing of all
orders for the purchase and sale of portfolio securities for the Fund's account
with brokers or dealers selected by you. In the selection of such brokers or
dealers and the placing of such orders, you are directed at all times to seek
for the Fund the most favorable execution and net price available. If any
occasion should arise in which you give any advice to clients of yours
concerning the shares of the Fund, you will act solely as investment counsel for
such clients and not in any way on behalf of the Fund. Your services to the Fund
pursuant to this Agreement are not to be deemed to be exclusive and it is
understood that you may render investment advice, management and other services
to others.
7. Limitation of Liability of Adviser. You shall not be liable for any
error of judgment or mistake of law or for any
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loss suffered by the Fund in connection with the matters to which this Agreement
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 Agreement. Any
person, even though also employed by you, who may be or become an employee of
and paid by the Fund shall be deemed, when acting within the scope of his
employment by the Fund, to be acting in such employment solely for the Fund and
not as your employee or agent.
8. Duration and Termination of this Agreement. This Agreement shall remain
in force with respect to each Portfolio until September 30, 1986 and from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually by the vote of a majority of the Trustees who are not
interested persons of you or of the Fund, cast in person at a meeting called for
the purpose of voting on such approval and by a vote of the Trustees or of a
majority of the outstanding voting securities of such Portfolio. This Agreement
may, on 60 days' written notice, be terminated with respect to any Portfolio at
any time without the payment of any penalty, by the Trustees, by vote of a
majority of the outstanding voting securities of such Portfolio, or by you. This
Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the Investment Company Act of 1940, as modified by Rule 18f-2
under the Act, (particularly the definitions of "interested person,"
"assignment" and "majority of the outstanding voting securities"), as from time
to time amended, shall be applied, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission by any rule, regulation or
order.
9. Amendment of this Agreement. No provisions 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 termination is sought, and no amendment of this Agreement shall be
effective with respect to any Portfolio until approved by vote of the holders of
a majority of the outstanding voting securities of such Portfolio and by the
Trustees, including a majority of the Trustees who are not interested persons of
you or of the Fund, cast in person at a meeting called for the purpose of voting
on such approval.
10. Miscellaneous. It is understood and expressly stipulated that
neither the holders of shares of the Fund nor the Trustees shall be personally
liable hereunder. 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
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otherwise affect their construction or effect. This Agreement 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 "Xxxxxxx Tax Free Target Fund" is the designation of the Trustees
for the time being under a Declaration of Trust dated December 28, 1982 and all
persons dealing with the Fund must look solely to the property of the Fund for
the enforcement of any claims against the Fund as neither the Trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Fund, whereupon this letter shall become a binding contract.
Yours truly very,
XXXXXXX TAX FREE TARGET FUND
By /s/ Xxxxx X. Xxx
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President
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX, XXXXXXX & XXXXX LTD.
By /s/ Xxxxxx Xxxxxx
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