INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, made this 25th day
of March, 1991, by and between Xxxx Xxxxx Tax-Free Income Fund, a Massachusetts
business trust (the "Trust"), and Xxxx Xxxxx Fund Adviser, Inc., a Maryland
corporation (the "Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and has
registered distinct series of shares of beneficial interest ("Series") for sale
to the public under the Securities Act of 1933 and various state securities
laws, each Series corresponding to a distinct portfolio; and
WHEREAS, the Trust wishes to retain the Adviser to provide investment
advisory, management, and administrative services to the Trust and each Series
as now exists and as hereafter may be established; and
WHEREAS, the Adviser is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Trust hereby appoints the Adviser as investment adviser and
manager of each Series for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Each Series shall at all times keep the Adviser fully informed with
regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs. It
shall furnish the Adviser with such other documents and information with regard
to its affairs as the Adviser may from time to time reasonably request.
3. (a) Subject to the supervision of the Trust's Board of Trustees, the
Adviser shall regularly provide each Series with investment research, advice,
management and supervision and shall furnish a continuous investment program for
each Series' portfolio of securities consistent with each Series' investment
goals and policies. The Adviser shall determine from time to time what
securities will be purchased, retained or sold by each Series, and shall
implement those decisions, all subject to the provisions of the Trust's
Declaration of Trust and By-laws, the 1940 Act, the applicable rules and
regulations of the Securities and Exchange Commission, and other applicable
federal and state law, as well as the investment goals and policies of each
Series. The Adviser will place orders pursuant to its investment determinations
for each Portfolio either directly with the issuer
or with any broker or dealer. In placing orders with brokers and dealers the
Adviser will attempt to obtain the best net price and the most favorable
execution of its orders; however, the Adviser may, in its discretion, purchase
and sell portfolio securities to and from brokers and dealers who provide the
Fund with research, analysis, advice and similar services, and the Adviser may
pay to these brokers, in return for research and analysis, a higher commission
or spread than may be charged by other brokers. In no instance will portfolio
securities be purchased from or sold to the Adviser, or any affiliated person
thereof except in accordance with the rules and regulations promulgated by the
Securities and Exchange Commission pursuant to the 0000 Xxx. The Adviser shall
also provide advice and recommendations with respect to other aspects of the
business and affairs of the Trust and each Series, and shall perform such other
functions of management and supervision as may be directed by the Board of
Trustees of the Trust.
(b) The Trust hereby authorizes any entity or person associated with
the Adviser which is a member of a national securities exchange to effect any
transaction on the exchange for the account of the Trust which is permitted by
Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Trust hereby consents to the retention of compensation by
such entity or person for such transactions in accordance with Rule 11a2-
2(T)(a)(2)(iv).
4. (a) The Adviser, at its expense, shall supply the Board of Trustees
and officers of the Trust with all statistical information and reports
reasonably required by them and reasonably available to the Adviser and shall
furnish the Trust with office facilities, including space, furniture and
equipment and all personnel reasonably necessary for the operation of the Trust
and each Series. The Adviser shall oversee the maintenance of all books and
records with respect to the Trust's and each Series' securities transactions and
the keeping of the Trust's and each Series' books of account in accordance with
all applicable federal and state laws and regulations. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
any records which it maintaines for the Trust or any Series are the property of
the Trust and further agrees to surrender promptly to the Trust any of such
records upon the Trust's request. The Adviser further agrees to arrange for the
preservation of the records required to be maintained by Rule 31a-1 under the
1940 Act for the periods prescribed by Rule 31a-2 under the 1940 Act. The
Adviser shall authorize and permit any of its directors, officers and employees,
who may be elected as directors or officers of the Trust, to serve in the
capacities in which they are elected.
(b) Other than as herein specifically indicated, the Adviser shall
not be responsible for the expenses of the Trust or any Series. Specifically,
the Adviser will not be responsible, except to the extent of the reasonable
compensation of employees of the Trust and each Series whose services may be
used by the Adviser hereunder, for any of the following expenses of the Trust
and each Series, which expenses shall be borne by the Trust and each Series:
advisory fees, distribution fees, interest, taxes, governmental fees, fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; the cost (including brokerage commissions
or charges, if any) of securities purchases or sold by any Series and any losses
incurred in connection therewith; fees of custodians, transfer agents,
registrars or other agents, legal expenses; expenses of preparing share
certificates; expenses relating to the redemption or repurchase of the each
Series' shares; expenses of registering and qualifying each Series' shares for
sale under applicable federal and state law and maintaining such registrations
and qualifications; expenses of preparing, setting in print, printing and
distributing prospectuses, proxy statements, reports, notices and dividends to
each Series' shareholders; cost of stationery; costs of stockholders' and other
meetings of the Trust and each Series; trustees fees; audit fees; traveling
expenses of officers, trustees and employees of the Trust and each Series, if
any; and the Trust's pro rata portion of premiums on any fidelity bond and other
insurance covering the Trust and its officers and trustees.
5. No trustee, officer or employee of the Trust and each Series shall
receive from the Trust any salary or other compensation as such trustee, officer
or employee while he is at the same time a director, officer or employee of the
Adviser or any affiliated company of the Adviser, This paragraph shall not apply
to directors, executive committee members, consultants and other persons who are
not regular members of the Adviser's or any affiliated company's staff.
6. As compensation for the services performed and the facilities
furnished and expenses assumed by the Adviser, including the services of any
consultants retained by the Adviser, each Series shall pay the Adviser as
promptly as possible after the last day of each month, a fee, computed daily, at
an annual rate of 0.55% of such Series' average daily net assets. The first
payment of the fee shall be made as promptly as possible at the end of the month
next succeeding the effective date of this Agreement, and shall constitute a
full payment of the fee due the Adviser for all services prior to that date. If
this Agreement is terminated as to any or all Series as of any date not the last
day of a month, such fee shall be paid as promptly as possible after such date
of termination, shall be based on the average daily net assets of such Series in
that period from the beginning of such month to such date of termination, and
shall be that proportion of such average daily net assets as the number of
business days in such period bears to the number of business days in such month.
The average daily net assets of each Series shall in all cases be based only on
business days and be computed as of the time of the regular close of business of
the New York Stock Exchange, or such other time as may be determined by the
Board of Trustees of the Trust. Each such payment shall be accompanied by
a report of the Trust and each Series prepared either by the Trust and each
Series or by a reputable form of independent accountants which shall show the
amount properly payable to the Adviser under this Agreement and the detailed
computation thereof.
7. The Adviser assumes no responsibility under this Agreement other
than to render the services called for hereunder in good faith, and shall not be
responsible for any action of the Board of Trustees of the Trust in following or
declining to follow any advice or recommendations of the Adviser; provided that
nothing in this Agreement shall protect the Adviser against any liability to the
Trust or its stockholders to which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence of the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder.
8. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser who may also be a trustee,
officer, or employee of the Trust or any Series, 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 nature or a dissimilar nature, nor
to limit or restrict the right of the Adviser to engage in any other business or
to render services of any kind, including investment advisory and management
services, to any other corporation, firm, individual or association.
9. As used in this Agreement, the term "net assets" shall have the
meaning ascribed to it in the Declaration of Trust of the Trust and the terms
"assignment", "interested person", and "majority of the outstanding voting
securities" shall have the meanings given to them by Section 2(a) of the 1940
Act, subject to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order.
10. Subject to the provisions of paragraphs 11 and 13 below, this
Agreement will remain in effect for one year from the date of its execution and
from year to year thereafter, provided that the Adviser does not notify the
Trust in writing at least sixty (60) days prior to the expiration date in any
year that it does not wish continuance of the Agreement for an additional year.
11. This Agreement shall terminate automatically in the event of its
assignment by the Adviser and shall not be assignable by the Trust without the
consent of the Adviser. This Agreement may also be terminated as to any Series
at any time, without the payment of any penalty, by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the Trust
by sixty (60) days' written
notice addressed to the Adviser at its principal place of business.
12. In the event this Agreement is terminated by either party or upon
written notice from the Adviser at any time, the Trust hereby agrees that it
will eliminate from its corporate name any reference to the name of "Xxxx
Xxxxx". The Trust shall have the non-exclusive use of the name "Xxxx Xxxxx" in
whole or in part so long as this Agreement is effective or until such notice is
given.
13. This Agreement shall continue in effect only so long as
specifically approved annually by vote of a majority of the trustees of the
Trust who are not parties to this Agreement or interested persons of such
parties, cast in personal at a meeting called for that purpose, and either by
vote of the holders of a majority of the outstanding voting securities of the
Trust or by majority vote of the Trust's Board of Trustees.
14. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust of the Trust and
agrees that obligations assumed by the Trust and each Series pursuant to this
Agreement shall be limited in all cases to the Series and its assets. The
Adviser agrees that it shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Trust, nor from the
Trustees or any individual Trustee of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX TAX-FREE INCOME FUND
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxx
Attest: XXXX XXXXX FUND ADVISER, INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxxx
