Exhibit 99.B5
INVESTMENT ADVISORY AGREEMENT
XXXXXXX TAX-FREE RESERVES
INVESTMENT ADVISORY AGREEMENT, made this 1st day of March, 1999, by
and between XXXXXXX ASSET MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Advisor"), and XXXXXXX TAX-FREE RESERVES, a Massachusetts business
trust created pursuant to a Declaration of Trust filed with the Secretary of
State of the Commonwealth of Massachusetts (the "Trust"), both having their
principal place of business at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx.
WHEREAS, the Trust is registered as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), for the purpose
of investing and reinvesting its assets in securities, and offering separate
series (the Fund(s)"), as set forth in its Declaration of Trust, its By-laws
and its registration statements under the 1940 Act and the Securities Act of
1933 (the "1933 Act"), as amended; and the Trust desires to avail itself of
the services, information, advice, assistance and facilities of an
investment advisor and to have an investment advisor perform for it various
investment advisory, research services and other management services; and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and is engaged in the business
of rendering management and investment advisory services to investment
companies and desires to provide such services to the Trust;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Trust hereby employs the Advisor to
manage the investment and reinvestment of the Trust assets, subject
to the control and direction of the Trust's Board of Trustees, for
the period and on the terms hereinafter set forth. The Advisor
hereby accepts such employment and agrees during such period to
render the services and to assume the obligations in return for the
compensation provided herein. The Advisor shall for all purposes
herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise),
have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Obligations of and Services to be Provided by the Advisor. The
Advisor undertakes to provide the following services and to assume
the following obligations:
a. The Advisor shall manage the investment and reinvestment
of each Fund's assets, subject to and in accordance with
the investment objectives and policies of each Fund and
any directions which the Trust's Board of Trustees may
issue from time to time. In pursuance of the foregoing,
the Advisor shall make all determinations with respect to
the investment of Fund assets and the purchase and sale of
portfolio securities and shall take such steps as may be
necessary to implement the same. Such determination and
services shall also include determining the manner in
which voting rights, rights to consent to corporate
action, any other rights pertaining to the Fund's
portfolio securities shall be exercised. The Advisor shall
render regular reports to the Trust's Board of Trustees
concerning the Trust's investment activities.
b. The Advisor shall, in the name of the Trust on behalf of
each Fund, place orders for the execution of the Trust's
portfolio transactions in accordance with the policies
with respect thereto set forth in the Trust's current
registration statement under the 1940 Act and the 1933
Act. In connection with the placement of orders for the
execution of the Trust's portfolio transactions the
Advisor shall create and maintain all necessary brokerage
records of the Trust in accordance with all applicable
laws, rules and regulations, including but not limited to
records required by Section 31(a) of the 1940 Act. All
records shall be the property of the Trust and shall be
available for inspection and use by the SEC, the Trust or
any person retained by the Trust. Where applicable, such
records shall be maintained by the Advisor for the periods
and the places required by Rule 31a-2 under the 1940 Act.
c. The Advisor shall bear its expenses of providing services
to the Trust pursuant to this Agreement except such
expenses as are undertaken by the Trust. In addition, the
Advisor shall pay the salaries and fees of all Trustees
and executive officers who are employees of the Advisor or
its affiliates ("Advisor Employees").
3. Expenses of The Trust. The Trust shall pay all expenses other than
those expressly assumed by the Advisor herein. Expenses payable by
the Trust shall include, but are not limited to:
a. Fees to the Advisor as provided herein;
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Trust and its shares for distribution
under federal and state securities laws;
d. Expenses of the administrative services agent, transfer
agent, registrar, custodian, dividend disbursing agent and
shareholder servicing agent;
e. Any telephone charges associated with shareholder
servicing or the maintenance of the Funds or Trust;
f. Salaries, fees and expenses of Trustees and executive
officers of the Trust, other than Advisor Employees;
g. Taxes and corporate fees levied against the Trust;
h. Brokerage commissions and other expenses associated with
the purchase and sale of portfolio securities for the
Trust;
i. Expenses, including interest, of borrowing money;
j. Expenses incidental to meetings of the Trust's
shareholders and the maintenance of the Trust's
organizational existence;
k. Expenses of printing stock certificates representing
shares of the Trust and expenses of preparing, printing
and mailing notices, proxy material, reports to regulatory
bodies and reports to shareholders of the Trust;
l. Expenses of preparing and typesetting of prospectuses of
the Trust;
m. Expenses of printing and distributing prospectuses to
shareholders of the Trust;
n. Association membership dues;
o. Insurance premiums for fidelity and other coverage;
p. Distribution Plan expenses, as permitted by Rule 12b-1
under the 1940 Act and as approved by the Board; and
q. Such other legitimate Trust expenses as the Board of
Trustees may from time to time determine are properly
chargeable to the Trust.
4. Compensation of Advisor.
a. As compensation for the services rendered and obligations
assumed hereunder by the Advisor, the Trust shall pay to
the Advisor within ten (10) days after the last day of
each calendar month a fee equal on an annualized basis as
shown on Schedule A. Any amendment to the Schedule
pertaining to any new or existing Fund shall not be deemed
to affect the interest of any other Fund and shall not
require the approval of the shareholders of any other Fund.
b. Such fee shall be computed and accrued daily. Upon
termination of this Agreement before the end of any
calendar month, the fee for such period shall be prorated.
For purposes of calculating the Advisor's fee, the daily
value of a Fund's net assets shall be computed by the same
method as the Fund uses to compute the value of its net
assets in connection with the determination of the net
asset value of its shares.
c. The Advisor reserves the right (i) to waive all or part
of its fee and assume expenses of a Fund and (ii) to make
payments to brokers and dealers in consideration of their
promotional or administrative services.
5. Activities of the Advisor. The services of the Advisor to the Trust
hereunder are not to be deemed exclusive, and the Advisor shall be
free to render similar services to others. It is understood that
Trustees and officers of the Trust are or may become interested in
the Advisor as stockholders, officers, or otherwise, and that
stockholders and officers of the Advisor are or may become
similarly interested in the Trust, and that the Advisor may become
interested in the Trust as a shareholder or otherwise.
6. Use of Names. The Trust shall not use the name of the Advisor in
any prospectus, sales literature or other material relating to the
Trust in any manner not approved prior thereto by the Advisor;
provided, however, that the Advisor shall approve all uses of its
name which merely refer in accurate terms to its appointment
hereunder or which are required by the SEC; and, provided, further,
that in no event shall such approval be unreasonably withheld. The
Advisor shall not use the name of the Trust or any Trust in any
material relating to the Advisor in any manner not approved prior
thereto by the Trust; provided, however, that the Trust shall
approve all uses of its name which merely refer in accurate terms
to the appointment of the Advisor hereunder or which are required
by the SEC; and, provide, further, that in no event shall such
approval be unreasonably withheld.
7. Liability of the Advisor. Absent willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be
subject to liability to the Trust or to any shareholder of the
Trust for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Force Majeure. The Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot, or failure of communication or power
supply. In the event of equipment breakdowns beyond its control,
the Advisor shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
9. Renewal, Termination and Amendment. This Agreement shall continue
in effect with respect to the Trust, unless sooner terminated as
hereinafter provided, through December 31, 1999, and indefinitely
thereafter if its continuance shall be specifically approved at
least annually by vote of the holders of a majority of the
outstanding voting securities of the Trust or by vote of a majority
of the Trust's Board of Trustees; and further provided that such
continuance is also approved annually by the vote of a majority of
the Trustees who are not parties to this Agreement or interested
persons of the Advisor, cast in person at a meeting called for the
purpose of voting on such approval, or as allowed by law. This
Agreement may be terminated at any time, without payment of any
penalty, by the Trust's Board of Trustees or by a vote of the
majority of the outstanding voting securities of the Trust upon 60
days' prior written notice to the Advisor and by the Advisor upon
60 days' prior written notice to the Trust. This Agreement may be
amended at any time by the parties, subject to approval by the
Trust's Board of Trustees and, if required by applicable SEC rules
and regulations, a vote of a majority of the Trust's outstanding
voting securities. This Agreement shall terminate automatically in
the event of its assignment. The terms "assignment" and "vote of a
majority of the outstanding voting securities" shall have the
meaning set forth for such terms in the 1940 Act.
10. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. Miscellaneous. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate
the purposes hereof. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of
Maryland. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
XXXXXXX TAX-FREE RESERVES
By: /s/ Xxx Xxxxxxxxxxx
Title: Treasurer
XXXXXXX ASSET MANAGEMENT COMPANY, INC.
By: /s/ Reno Martini
Title: Senior Vice President
Investment Advisory Agreement
Xxxxxxx Asset Management Company, Inc.
Xxxxxxx Tax-Free Reserves
Schedule A
As compensation pursuant to Section 4 of the Investment Advisory Agreement
between Xxxxxxx Asset Management Company, Inc. (the "Advisor") and Xxxxxxx
Tax-Free Reserves ("CTFR") dated March 1, 1999, the Advisor is entitled to
receive an annual advisory fee (the "Fee") as shown below. The Fee shall be
computed daily and payable monthly, based on the average daily net assets of
a Fund.
CTFR Money Market: 0.25% to $500 million
0.20% above $500 million
0.15% above $1 billion
CTFR Limited-Term: 0.60% to $500 million
0.50% above $500 million
0.40% above $1 billion
CTFR Long-Term: 0.60% to $500 million
0.50% above $500 million
0.40% above $1 billion
CTFR California Money Market: 0.50% to $500 million
0.45% above $500 million
0.40% above $1 billion
CTFR Vermont Municipal: 0.60% to $500 million
0.50% above $500 million
0.40% above $1 billion
