SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
Contract made as of March 1, 1989, between PAINEWEBBER INCORPORATED
("PaineWebber"), a Delaware corporation registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended ("1934 Act") and as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act"),
and XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware
corporation registered as a broker/dealer under the 1934 Act and as an
investment adviser under the Advisers Act.
WHEREAS PaineWebber has entered into an Investment Advisory and
Administration Contract dated March 1, 1989 ("Advisory Contract") with
PaineWebber RMA Tax-Free Fund, Inc. ("Corporation"), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended ("1940 Act"), which intends to offer for public sale distinct series of
shares of common stock ("Series"), each corresponding to a distinct portfolio;
and
WHEREAS under the Advisory Contract PaineWebber has agreed to provide
certain investment advisory and administrative services to the Series as now
exist and as hereafter may be established; and
WHEREAS the Advisory Contract authorizes PaineWebber to delegate certain of
its duties as investment adviser and administrator under the Advisory Contract
to a sub-adviser or sub-administrator; and
WHEREAS PaineWebber wishes to retain Xxxxxxxx Xxxxxxxx as sub-adviser and
sub-administrator to provide certain investment advisory and administrative
services to PaineWebber and each Series, and Xxxxxxxx Xxxxxxxx is willing to
render such services as described herein upon the terms set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, it is agreed between the parties as follows:
1. Appointment. PaineWebber hereby appoints Xxxxxxxx Xxxxxxxx as its
sub-adviser and sub-administrator with respect to each Series and Xxxxxxxx
Xxxxxxxx accepts such appointment and agrees that it will furnish the services
set forth in paragraph 2 below.
2. Services and Duties of Xxxxxxxx Xxxxxxxx.
(a) Subject to the supervision of the Board of Directors ("Board") and
PaineWebber, Xxxxxxxx Xxxxxxxx will provide a continuous investment program for
each Series including investment research and management with respect to all
securities, investments and cash equivalents held in the portfolio of each
Series. Xxxxxxxx Xxxxxxxx will determine from time to time what securities and
other investments will be purchased, retained or sold by each Series.
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(b) Xxxxxxxx Xxxxxxxx agrees that in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution; provided that, on behalf of any Series, Xxxxxxxx Xxxxxxxx may, in its
discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Series with research, analysis, advice and similar
services, and Xxxxxxxx Xxxxxxxx may pay to those brokers and dealers, in return
for research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to Xxxxxxxx Xxxxxxxx' determining in good
faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of Xxxxxxxx Xxxxxxxx to
such Series and its other clients and that the total commissions or spreads paid
by such Series will be reasonable in relation to the benefits to such Series
over the long term. In no instance will portfolio securities be purchased from
or sold to PaineWebber, Xxxxxxxx Xxxxxxxx or any affiliated person thereof,
except in accordance with the federal securities laws and the rules and
regulations thereunder. Whenever Xxxxxxxx Xxxxxxxx simultaneously places orders
to purchase or sell the same security on behalf of a Series and one or more
other accounts advised by Xxxxxxxx Xxxxxxxx, such orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable to
each account. The Corporation recognizes that in some cases this procedure may
adversely affect the results obtained for a Series.
(c) Xxxxxxxx Xxxxxxxx will oversee the maintenance of all books and
records with respect to the securities transactions of each Series and will
furnish the Board with such periodic and special reports as PaineWebber or the
Board reasonably may request. In compliance with the requirements of Rule 31a-3
under the 1940 Act, Xxxxxxxx Xxxxxxxx hereby agrees that all records which it
maintains for the Corporation are the property of the Corporation, agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any records
which it maintains for the Corporation and which are required to be maintained
by Rule 31a-1 under the 1940 Act, and further agrees to surrender promptly to
the Corporation any records which it maintains for the Corporation upon request
by the Corporation.
(d) Xxxxxxxx Xxxxxxxx will oversee the computation of the net asset value
and net income of each Series as described in the currently effective
registration statement of the Corporation under the Securities Act of 1933, as
amended, and 1940 Act and any supplements thereto ("Registration Statement") or
as more frequently requested by PaineWebber or the Board.
(e) Xxxxxxxx Xxxxxxxx will assist in administering the affairs of the
Corporation and each Series, subject to the supervision of the Board and
PaineWebber, and further subject to the following understandings:
(i) Xxxxxxxx Xxxxxxxx will supervise all aspects of the operation
of the Corporation and each Series except as hereinafter set forth;
provided, however, that nothing herein contained shall be deemed to
relieve or deprive the Board of its responsibility for and control of
the conduct of affairs of the Corporation and each Series.
(ii) Xxxxxxxx Xxxxxxxx will provide the Corporation and each
Series with such administrative and clerical personnel (including
officers of the Corporation) as are reasonably deemed necessary or
advisable by the Board and PaineWebber and Xxxxxxxx Xxxxxxxx will pay
the salaries of all such personnel.
(iii) Xxxxxxxx Xxxxxxxx will provide the Corporation and each
Series with such administrative and clerical services as are
reasonably deemed necessary or advisable by the Board and PaineWebber,
including the maintenance of certain of the books and records of the
Corporation and each Series.
(iv) Xxxxxxxx Xxxxxxxx will arrange, but not pay for, the periodic
preparation, updating, filing and dissemination (as applicable) of the
Corporation's Registration Statement, proxy material, tax returns and
reports to shareholders of each Series, the Securities and Exchange
Commission and other appropriate federal or state regulatory
authorities.
(v) Xxxxxxxx Xxxxxxxx will provide the Corporation and each
Series with, or obtain for it, adequate office space and all necessary
office equipment and services, including telephone service, heat,
utilities, stationery supplies and similar items.
3. DUTIES RETAINED BY PAINEWEBBER. PaineWebber will continue to provide
to the Board and each Series the services described in subparagraphs 3(e), (f)
and (g) of the Advisory Contract.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Articles of
Incorporation, By-Laws and Registration Statement of the Corporation and with
the instructions and directions of the Board and PaineWebber, and will comply
with the requirements of the 1940 Act, the rules thereunder, and all other
applicable federal and state laws and regulations.
5. SERVICES NOT EXCLUSIVE. The services furnished by Xxxxxxxx Xxxxxxxx
hereunder are not to be deemed to be exclusive, and Xxxxxxxx Xxxxxxxx shall be
free to furnish similar services to others so long as its services under this
Contract are not impaired thereby. Nothing in this Contract shall limit or
restrict the right of any director, officer or employee of Xxxxxxxx Xxxxxxxx,
who may also be a director, officer or employee of the Corporation, to engage in
any other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature.
6. EXPENSES. During the term of this Contract, Xxxxxxxx Xxxxxxxx will
pay all expenses incurred by it in connection with its services under this
Contract.
7. COMPENSATION. For the services provided and expenses assumed by
Xxxxxxxx Xxxxxxxx pursuant to this Contract with respect to each Series,
PaineWebber will pay to Xxxxxxxx
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Xxxxxxxx a fee equal to 20% of the fee received by PaineWebber from the
Corporation pursuant to the Advisory Contract with respect to such Series, such
compensation to be paid monthly.
8. LIMITATION OF LIABILITY OF XXXXXXXX XXXXXXXX. Xxxxxxxx Xxxxxxxx will
not be liable for any error of judgment or mistake of law or for any loss
suffered by PaineWebber or the Corporation or the shareholders of any Series in
connection with the performance of this Contract, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations or
duties under this Contract. Any person, even though also an officer, director,
employee, or agent of Xxxxxxxx Xxxxxxxx, who may be or become an officer,
director, employee or agent of the Corporation shall be deemed, when rendering
services to any Series or the Corporation or acting with respect to any business
of such Series or the Corporation, to be rendering such services to or acting
solely for the Series or the Corporation and not as an officer, director,
employee, or agent or one under the control or direction of Xxxxxxxx Xxxxxxxx
even though paid by it.
9. Duration and Termination.
(a) This Contract will become effective upon the date hereabove written
provided that, with respect to any Series, this Contract shall not take effect
unless it has first been approved (i) by a vote of a majority of those directors
of the Corporation who are not parties to this Contract or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such approval, and (ii) by vote of a majority of that Series' outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract will
continue in effect for two years from the above written date. Thereafter, if
not terminated, this Contract will continue automatically for successive periods
of 12 months each, provided that such continuance is specifically approved at
least annually (i) by a vote of a majority of those directors of the Corporation
who are not parties to this Contract or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by the Board or with respect to any given Series by vote of a majority
of the outstanding voting securities of such Series.
(c) Notwithstanding the foregoing, with respect to any Series, this
Contract may be terminated by either party hereto at any time, without the
payment of any penalty, on sixty days' written notice to the other party; this
Contract also may be terminated at any time, without the payment of any penalty,
by vote of the Board or by vote of a majority of the outstanding voting
securities of such Series on sixty days' written notice to Xxxxxxxx Xxxxxxxx and
PaineWebber. Termination of this Contract with respect to any given Series
shall in no way affect the continued validity of this Contract or the
performance thereunder with respect to any other Series. This Contract will
automatically terminate in the event of its assignment and will automatically
terminate upon termination of the Advisory Contract.
10. AMENDMENT OF THIS CONTRACT. No provision of this Contract 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
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amendment of this Contract as to any given Series shall be effective until
approved by vote of a majority of such Series' outstanding voting securities.
11. GOVERNING LAW. This Contract shall be construed in accordance with
the laws of the State of Delaware and the 1940 Act. To the extent that the
applicable laws of the State of Delaware conflict with the applicable provisions
of the 1940 Act, the latter shall control.
12. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person"
and "assignment" shall have the same meaning as such terms have in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written
Attest: PAINEWEBBER INCORPORATED
/s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Attest: XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
s/ Xxxxx Xxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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