Exhibit No. 4
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of April 1, 1990, between PAINEWEBBER CLASSIC
REGIONAL FINANCIAL FUND INC., a Maryland corporation ("Fund"), and XXXXXXXX
XXXXXXXX ASSET MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), 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.
WHEREAS the Fund is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
intends to offer for public sale distinct series of shares of common stock
("Series"), each corresponding to a distinct portfolio; and
WHEREAS the Fund desires to retain Xxxxxxxx Xxxxxxxx as investment
adviser and administrator to furnish certain administrative, investment advisory
and portfolio management services to the Fund and each Series as now exists and
as hereafter may be established, and Xxxxxxxx Xxxxxxxx is willing to furnish
such services;
NOW, THEREFORE, in consideration of the premises and mutual convenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Xxxxxxxx Xxxxxxxx as
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investment adviser and administrator of the Fund and each Series for the period
and on the terms set forth in this Contract. Xxxxxxxx Xxxxxxxx accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Duties as Investment Adviser.
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(a) Subject to the supervision of the Fund's Board of Directors
("Board"), Xxxxxxxx Xxxxxxxx will provide a continuous investment program for
each Series, including investment research and management with respect to all
securities and investments and cash equivalents in each Series. Xxxxxxxx
Xxxxxxxx will determine from time to time what securities and other investments
will be purchased, retained or sold by each Series.
(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 the Series over the long term. In no instance
will portfolio securities be purchased from or sold to 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 Fund recognizes that in
some cases this procedure may adversely affect the results obtained for the
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 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
Fund are the property of the Fund, agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any records which it maintains for the Fund and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Fund any records which it maintains
for the Fund upon request by the Fund.
(d) Xxxxxxxx Xxxxxxxx will oversee the computation of the net asset
value and the net income of each Series as described in the currently effective
registration statement of the Fund under the Securities Act of 1933, as amended,
and the 1940 Act and any supplements thereto ("Registration Statement") or as
more frequently requested by the Board.
(e) The Fund hereby authorizes Xxxxxxxx Xxxxxxxx and any entity or
person associated with Xxxxxxxx Xxxxxxxx which is a member of a national
securities exchange to effect any transaction on such exchange for the account
of any Series, which transaction is permitted by Section 11(a) of the 1934 Act
and Rule 11a2-2(T) thereunder, and the Fund hereby consents to the retention of
compensation by Xxxxxxxx Xxxxxxxx or person or entity associated with Xxxxxxxx
Xxxxxxxx for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
3. Duties as Administrator. Xxxxxxxx Xxxxxxxx will administer the
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affairs of the Fund and each Series subject to the supervision of the Board and
the following understandings:
(a) Xxxxxxxx Xxxxxxxx will supervise all aspects of the operations of
the Fund and each Series, including the oversight of transfer agency, custodial
and accounting services, 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 the affairs of the Fund and
each Series.
(b) Xxxxxxxx Xxxxxxxx will provide the Fund and each Series with such
corporate, administrative and clerical personnel (including officers of the
Fund) and services as are reasonably deemed necessary or advisable by the Board,
including the maintenance of certain books and records of the Fund and each
Series.
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(c) Xxxxxxxx Xxxxxxxx will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Fund's
Registration Statement, proxy material, tax returns and required reports to each
Series' shareholders and the Securities and Exchange Commission and other
appropriate federal or state regulatory authorities.
(d) Xxxxxxxx Xxxxxxxx will provide the Fund 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.
(e) Xxxxxxxx Xxxxxxxx will provide the Board on a regular basis with
economic and investment analyses and reports and make available to the Board
upon request any economic, statistical and investment services normally
available to institutional or other customers of Xxxxxxxx Xxxxxxxx.
4. Further Duties. In all matters relating to the performance of
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this Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Articles of
Incorporation, By-Laws and Registration Statement of the Fund and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. Delegation of Xxxxxxxx Xxxxxxxx' Duties as Investment Adviser and
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Administrator. With respect to any or all Series, Xxxxxxxx Xxxxxxxx may enter
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into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
a sub-adviser or sub-administrator in which Xxxxxxxx Xxxxxxxx delegates to such
sub-adviser or sub-administrator any or all its duties specified in Paragraph 2
and 3 of this Contract, provided that each Sub-adviser or sub-administrator
bound thereby all of the duties and conditions to which Xxxxxxxx Xxxxxxxx is
subject by Paragraph 2, 3 and 4 of this Contract, and further provided that each
Sub-Advisory or Sub-Administration Contract meets all of the requirements of the
1940 Act and rules thereunder.
6. Services Not Exclusive. The services furnished by Xxxxxxxx
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Xxxxxxxx hereunder are not to be deemed 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 Fund, 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.
7. Expenses.
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(a) During the term of this Contract, each Series will bear all
expenses, not specifically assumed by Xxxxxxxx Xxxxxxxx, incurred in its
operations and the offering of its shares.
(b) Expenses borne by each Series will include but not be limited to
the following (or each Series' proportionate share of the following): (i) the
cost (including brokerage commissions) of securities purchased or sold by the
Series and any losses incurred in connection
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therewith; (ii) fees payable to and expenses incurred on behalf of the Series by
Xxxxxxxx Xxxxxxxx under this Contract; (iii) expenses of organizing the Fund and
the Series; (iv) filing fees and expenses relating to the registration and
qualification of the Series' shares and the Fund under federal and/or state
securities laws and maintaining such registrations and qualifications; (v) fees
and salaries payable to the Fund's Directors and officers who are not interested
persons of the Fund or Xxxxxxxx Xxxxxxxx; (vi) all expenses incurred in
connection with the Directors' services, including travel expenses; (vii) taxes
(including any income or franchise taxes) and governmental fees; (viii) costs of
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (ix) any costs, expenses or losses arising out of a liability of or claim
for damages or other relief asserted against the Fund or Series for violation of
any law; (x) legal, accounting and auditing expenses, including legal fees of
special counsel for those Directors of the Fund who are not interested persons
of the Fund; (xi) charges of custodians, transfer agents and other agents; (xii)
costs of preparing share certificates; (xiii) expenses of setting in type and
printing prospectuses and supplements thereto, statements of additional
information and supplements thereto, reports and proxy materials for existing
shareholders; (xiv) costs of mailing prospectuses and supplements thereto,
statements of additional information and supplements thereto, reports and proxy
materials to existing shareholders; (xv) any extraordinary expenses (including
fees and disbursements of counsel, costs of actions, suits or proceedings to
which the Fund is a party and the expenses the Fund may incur as a result of its
legal obligation to provide indemnification to its officers, Directors, agents
and shareholders) incurred by the Fund or Series; (xvi) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xvii) costs of mailing and tabulating proxies
and costs of meetings of shareholders, the Board and any committees thereof;
(xviii) the cost of investment company literature and other publications
provided by the Fund to its Directors and officers; and (xix) costs of mailing,
stationery and communications equipment.
(c) The Fund or a Series may pay directly any expense incurred by it
in its normal operations and, if any such payment is consented to by Xxxxxxxx
Xxxxxxxx and acknowledged as otherwise payable by Xxxxxxxx Xxxxxxxx pursuant to
this Contract, the Series may reduce the fee payable to Xxxxxxxx Xxxxxxxx
pursuant to Paragraph 8 hereof by such amount. To the extent that such
deductions exceed the fee payable to Xxxxxxxx Xxxxxxxx on any monthly payment
date, such excess shall be carried forward and deducted in the same manner from
the fee payable on succeeding monthly payment dates.
(d) Xxxxxxxx Xxxxxxxx will assume the cost of any compensation for
services provided to the Fund received by the officers of the Fund and by those
Directors who are interested persons of the Fund.
(e) The payment or assumption by Xxxxxxxx Xxxxxxxx of any expense of
the Fund or a Series that Xxxxxxxx Xxxxxxxx is not required by this Contract to
pay or assume shall not obligate Xxxxxxxx Xxxxxxxx to pay or assume the same or
any similar expense of the Fund or a Series on any subsequent occasion.
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8. Compensation.
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(a) For the services provided and the expenses assumed pursuant to
this Contract, with respect to the Fund, the Fund will pay to Xxxxxxxx Xxxxxxxx
a fee, computed daily and paid monthly, at an annual rate of 0.70% of such
Series' average daily net assets.
(b) For the services provided and the expenses assumed pursuant to
this Contract with respect to any Series hereafter established, the Fund will
pay to Xxxxxxxx Xxxxxxxx from the assets of such Series a fee in an amount to be
agreed upon in a written fee agreement ("Fee Agreement") executed by the Fund on
behalf of such Series and by Xxxxxxxx Xxxxxxxx. All such Fee Agreements shall
provide that they are subject to all terms and conditions of this Contract.
(c) The fee shall be computed daily and paid monthly to Xxxxxxxx
Xxxxxxxx on or before the first business day of the next succeeding calendar
month.
(d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
9. Limitation of Liability of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx
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shall not be liable for any error of judgment or mistake of law or for any loss
suffered by any Series or the Fund in connection with the matters to which this
Contract relates 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 and 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 Fund shall
be deemed, when rendering services to any Series or the Fund or acting with
respect to any business of such Series or the Fund, to be rendering such service
to or acting solely for the Series or the Fund and not as an officer, director,
employee or agent or one under the control or direction of Xxxxxxxx Xxxxxxxx
even though paid by it.
10. Duration and Termination.
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(a) This Contract shall 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 Fund 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 shall
continue in effect for two years from the above written date. Thereafter, if
not terminated, this Contract shall continue automatically for successive
periods of twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of those
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Directors of the Fund 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 at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of such Series on sixty days' written notice to Xxxxxxxx Xxxxxxxx or
by Xxxxxxxx Xxxxxxxx at any time, without the payment of any penalty, on sixty
days' written notice to the Fund. 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.
11. Amendment of this Contract. No provision of this Contract may be
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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 Contract as to any
given Series shall be effective until approved by vote of a majority of such
Series' outstanding voting securities.
12. Governing Law. This Contract shall be construed in accordance
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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.
13. Miscellaneous. The captions in this Contract are included for
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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,"
"assignment", "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is relaxed by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
Attest: PAINEWEBBER CLASSIC REGIONAL
FINANCIAL FUND INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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Attest: XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxxxxx
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