Exhibit 99.(g)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the 25th day of August, 2004, by and between THE
MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST, a Massachusetts business
trust (the "Trust"), and FUND ASSET MANAGEMENT, L.P., a Delaware limited
partnership (the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as a closed-end,
non-diversified, management investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Investment Adviser to provide
management and investment advisory services to the Trust in the manner and on
the terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to provide management and
investment advisory services to the Trust on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:
ARTICLE I.
Duties of the Investment Adviser
The Trust hereby employs the Investment Adviser to act as a manager and an
investment adviser of the Trust and to furnish, or arrange for its affiliates to
furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Board of
Trustees of the Trust, for the period and on the terms and conditions set forth
in this Agreement. The Investment Adviser hereby accepts such employment and
agrees during such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations herein set forth for
the compensation provided for herein. The Investment Adviser and its affiliates
for all purposes herein shall be deemed to be independent contractors and,
unless otherwise expressly provided or authorized, shall have no authority to
act for or represent the Trust in any way or otherwise be deemed agents of the
Trust.
(a) Management and Administrative Services. The Investment Adviser shall
perform, or arrange for its affiliates to perform, the management and
administrative services necessary for the operation of the Trust, including
administering shareholder accounts and handling shareholder relations. The
Investment Adviser shall provide the Trust with office space, facilities,
equipment and necessary personnel and such other services as the Investment
Adviser, subject to review by the Board of Trustees, from time to time shall
determine to be necessary or useful to perform its obligations under this
Agreement. The Investment Adviser, also on behalf of the Trust, shall conduct
relations with custodians, depositories, transfer agents, pricing agents,
dividend disbursing agents, other shareholder servicing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Investment Adviser generally shall monitor the Trust's
compliance with investment policies and restrictions as set forth in filings
made by the Trust under the federal securities laws. The Investment Adviser
shall make reports to the Board of Trustees of its performance of obligations
hereunder and furnish advice and recommendations with respect to such other
aspects of the business and affairs of the Trust as it shall determine to be
desirable.
It is specifically agreed that the Investment Adviser shall make available
appropriate personnel to serve as the Trust's "principal executive officer,"
"principal financial officer," and "chief compliance officer," and to serve in
such comparable positions as may be required under applicable law.
(b) Investment Advisory Services. The Investment Adviser shall provide, or
arrange for its affiliates to provide, the Trust with such investment research,
advice and supervision as the latter from time to time may consider necessary
for the proper supervision of the assets of the Trust, shall furnish
continuously an investment program for the Trust and shall determine from time
to time which securities shall be purchased, sold or exchanged and what portion
of the assets of the Trust shall be held in the various securities in which the
Trust invests, options, futures, options on futures or cash, subject always to
the restrictions of the Declaration of Trust and the By-Laws of the Trust, as
amended from time to time, the provisions of the Investment Company Act and
other applicable laws and the statements relating to the Trust's investment
objective, investment policies and investment restrictions as the same are set
forth in filings made by the Trust under the federal securities laws. The
Investment Adviser shall make decisions for the Trust as to the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the Trust's portfolio securities shall be exercised. Should the
Board of Trustees at any time, however, make any definite determination as to
investment policy and notify the Investment Adviser thereof in writing, the
Investment Adviser shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked. The Investment Adviser shall take, on behalf of the Trust, all
actions which it deems necessary to implement the investment policies determined
as provided above, and in particular to place all orders for the purchase or
sale of portfolio securities for the Trust's account with brokers or dealers
selected by it, and to that end, the Investment Adviser is authorized as the
agent of the Trust to give instructions to the custodian of the Trust as to
deliveries of securities and payments of cash for the account of the Trust. In
connection with the selection of such brokers or dealers and the placing of such
orders with respect to assets of the Trust, the Investment Adviser is directed
at all times to seek to obtain execution and prices within the policy guidelines
determined by the Board of Trustees and set forth in filings made by the Trust
under the federal securities laws. Subject to this requirement and the
provisions of the Investment Company Act, the Securities Exchange Act of 1934,
as amended, and other applicable provisions of law, the Investment Adviser may
select brokers or dealers with which it or the Trust is affiliated.
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(c) Affiliated Sub-Advisers. In carrying out its responsibilities
hereunder, the Investment Adviser may employ, retain or otherwise avail itself
of the services of other persons or entities including, without limitation,
affiliates of the Investment Adviser, on such terms as the Investment Adviser
shall determine to be necessary, desirable or appropriate. However, if the
Investment Adviser chooses to retain or avail itself of the services of another
person or entity to manage assets of the Trust, such other person or entity must
be (i) an affiliate of the Investment Adviser, (ii) retained at the Investment
Adviser's own cost and expense, and (iii) retained subject to the requirements
of Section 15 of the Investment Company Act. Retention of one or more affiliated
sub-advisers, or the employment or retention of other persons or entities to
perform services, shall in no way reduce the responsibilities or obligations of
the Investment Adviser under this Agreement and the Investment Adviser shall be
responsible for all acts and omissions of such affiliated sub-advisers, or other
persons or entities, in connection with the performance of the Investment
Adviser's duties hereunder.
(d) Notice Upon Change in Partners of the Investment Adviser. The
Investment Adviser is a limited partnership and its limited partner is Xxxxxxx
Xxxxx & Co., Inc. and its general partner is Princeton Services, Inc. The
Investment Adviser will notify the Trust of any change in the membership of the
partnership within a reasonable time after such change.
ARTICLE II.
Allocation of Charges and Expenses
(a) The Investment Adviser. The Investment Adviser shall provide the staff
and personnel necessary to perform its obligations under this Agreement, shall
assume and pay or cause to be paid all expenses incurred in connection with the
maintenance of such staff and personnel, and, at its own expense, shall provide
the office space, facilities, equipment and necessary personnel which it is
obligated to provide under Article I hereof. The Investment Adviser shall pay,
or cause affiliates to pay, compensation of all officers of the Trust and all
Trustees of the Trust who are affiliated persons of the Investment Adviser or
any sub-adviser, or an affiliate of the Investment Adviser or any sub-adviser.
(b) The Trust. The Trust assumes, and shall pay or cause to be paid, all
other expenses of the Trust including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports and prospectuses, charges of the custodian, any
sub-custodian and transfer agent, charges of any auction agent and broker
dealers in connection with preferred stock of the Trust, expenses of portfolio
transactions, Securities and Exchange Commission fees, expenses of registering
the shares of common stock and preferred stock under federal, state and foreign
laws, fees and actual out-of-pocket expenses of Trustees who are not affiliated
persons of the Investment Adviser or any sub-adviser, or of an affiliate of the
Investment Adviser or any sub-adviser, accounting and pricing costs (including
the daily calculation of the net asset value), insurance, interest, brokerage
costs, litigation and other extraordinary or non-recurring expenses, and other
expenses properly payable by the Trust. It also is understood that if the
Investment Adviser or any of its affiliates provide accounting services to the
Trust, the Trust will reimburse the Investment Adviser and its affiliates for
their costs in providing such accounting services to the Trust.
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ARTICLE III.
Compensation of the Investment Adviser
For the services rendered, the facilities furnished and the expenses
assumed by the Investment Adviser, the Trust shall pay to the Investment Adviser
at the end of each calendar month a fee based upon the average daily value of
the net assets of the Trust at the annual rate of 0.35 of 1.0% (0.35%) of the
average daily net assets of the Trust ("average daily net assets" means the
average daily value of the total assets of the Trust, including the amount
obtained from leverage and any proceeds from the issuance of preferred stock,
minus the sum of (i) accrued liabilities of the Trust, (ii) any accrued and
unpaid interest on outstanding borrowing and (iii) accumulated dividends on
shares of outstanding preferred stock), commencing on the day following
effectiveness hereof. For purposes of this calculation, average daily net assets
is determined at the end of each month on the basis of the average net assets of
the Trust for each day during the month. It is understood that the liquidation
preference of any outstanding preferred stock (other than accumulated dividends)
is not considered a liability in determining the Trust's average daily net
assets. 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 fee as set forth above. Payment of the
Investment Adviser's compensation for the preceding month shall be made as
promptly as possible after completion of the computations contemplated herein.
During any period when the determination of net asset value is suspended by the
Board of Trustees, the average net asset value of a share for the day prior to
such suspension shall for this purpose be deemed to be the net asset value of
each succeeding day until it is again determined.
ARTICLE IV.
Limitation of Liability of the Investment Adviser
The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Investment Adviser" shall include any affiliates of the
Investment Adviser performing services for the Trust contemplated hereby and
partners, directors, officers and employees of the Investment Adviser and of
such affiliates.
ARTICLE V.
Activities of the Investment Adviser
The services of the Investment Adviser to the Trust are not to be deemed
to be exclusive; the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purposes of this Article V
referred to as "affiliates") are free to render services to others. It is
understood that Trustees, officers, employees and shareholders of the Trust are
or may become interested in the Investment Adviser and its affiliates, as
directors,
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officers, employees, partners and shareholders or otherwise, and that directors,
officers, employees, partners and shareholders of the Investment Adviser and of
its affiliates are or may become similarly interested in the Trust, and that the
Investment Adviser and directors, officers, employees, partners and shareholders
of its affiliates may become interested in the Trust as shareholders or
otherwise.
ARTICLE VI.
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above written
and shall remain in force for a period of two years thereafter and thereafter
continue from year to year, but only so long as such continuance is specifically
approved at least annually by (i) the Board of Trustees of the Trust, or by the
vote of a majority of the outstanding voting securities of the Trust, and (ii) a
majority of those Trustees who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Trust, or by the Investment Adviser, on sixty (60)
days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment.
ARTICLE VII.
Amendment of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of the Board of Trustees of the Trust,
including a majority of those Trustees who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval and, where required by the Investment Company
Act, by the vote of a majority of the outstanding voting securities of the
Trust.
ARTICLE VIII.
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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ARTICLE IX.
Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
ARTICLE X.
Limitation of Liability
The names "The Massachusetts Health & Education Tax Exempt Trust" and
"Trustees of the Massachusetts Health & Education Tax Exempt Trust" refer,
respectively, to the Trust and the Trustees of the Trust, as trustees but not
individually or personally, acting from time to time under the Trust's Amended
and Restated Agreement and Declaration of Trust dated April 20, 1993, as
amended, which is hereby referred to and a copy of which is on file at the
office of the Secretary of the Commonwealth of Massachusetts and the principal
office of the Trust. The obligations of "The Massachusetts Health & Education
Tax Exempt Trust" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents of the Trust are made not individually, but
in such capacities, and are not binding upon any of the Trustees, holders of
shares of beneficial interest of the Trust or representatives of the Trustees
personally, but bind only the Trust assets, and all persons dealing with the
Trust must look solely to the Trust property for the enforcement of any claims
against the Trust.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
THE MASSACHUSETTS HEALTH & EDUCATION
TAX-EXEMPT TRUST
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman
FUND ASSET MANAGEMENT, L.P.
By: PRINCETON SERVICES, INC.,
General Partner
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Managing Director
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