Investment Advisory Agreement
Xxxxxxx Municipal Fund, Inc.
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 Municipal Fund, Inc., a Maryland corporation
(the "Corporation"), both having their principal place of business at 0000
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx.
WHEREAS, the Corporation 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, offering
separate series ("Fund(s)"), as set forth in its Articles of Incorporation,
its Bylaws and its registration statements under the 1940 Act and the
Securities Act of 1933 (the "1933 Act"), as amended, and the Corporation
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 Corporation;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Corporation hereby employs the
Advisor to manage the investment and reinvestment of the Corporation assets,
subject to the control and direction of the Corporation's Board of
Directors, 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 herein provided. 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 Corporation in any way or otherwise be deemed an
agent of the Corporation.
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 the
Corporation's assets, subject to and in accordance with the investment
objectives and policies of each Fund, and any directions which the
Corporation's Board of Directors may issue from time to time. In pursuance
of the foregoing, the Advisor shall make all determinations with respect to
the investment of the Corporation's 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 Corporation's portfolio
securities shall be exercised. The Advisor shall render regular reports to
the Corporation's Board of Directors concerning the Corporation's investment
activities.
b. The Advisor shall, in the name of the Corporation, on behalf of
each Fund, place orders for the execution of portfolio transactions in
accordance with the policies with respect thereto set forth in the
Corporation's current registration statement under the 1940 Act and the 1933
Act. In connection with the placement of orders for the execution of
portfolio transactions the Advisor shall create and maintain all necessary
brokerage records of the Corporation 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
Corporation and shall be available for inspection and use by the SEC, the
Corporation or any person retained by the Corporation. 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
Corporation pursuant to this Agreement except such expenses as are
undertaken by the Corporation. In addition, the Advisor shall pay the
salaries and fees of all Directors and executive officers who are employees
of the Advisor or its affiliates ("Advisor Employees").
3. Expenses of each Fund. Each Fund shall pay all expenses other than
those expressly assumed by the Advisor. Expenses payable by the Fund shall
include, but are not limited to:
Fees to the Advisor as provided herein;
Legal and audit expenses;
Fees and expenses related to the registration and qualification of the
Corporation and its shares for distribution under federal and state
securities laws;
Expenses of the administrative services agent, transfer agent, registrar,
custodian, dividend disbursing agent and shareholder servicing agent;
Any telephone charges associated with shareholder servicing or the
maintenance of the Funds or Corporation;
Salaries, fees and expenses of Directors and executive officers of the
Corporation, other than Advisor Employees;
Taxes and corporate fees levied against the Corporation;
Brokerage commissions and other expenses associated with the purchase and
sale of portfolio securities for the Corporation;
Expenses, including interest, of borrowing money;
Expenses incidental to meetings of the Corporation's shareholders and the
maintenance of the Corporation's organizational existence;
Expenses of printing stock certificates representing shares of the
Corporation and expenses of preparing, printing and mailing notices, proxy
material, reports to regulatory bodies and reports to shareholders of the
Corporation;
Expenses of preparing and typesetting of prospectuses of the Corporation;
Expenses of printing and distributing prospectuses to shareholders of the
Corporation;
Association membership dues;
Insurance premiums for fidelity and other coverage;
Distribution Plan expenses, as permitted by Rule 12b-1 under the 1940 Act
and as approved by the Board; and
Such other legitimate Corporation expenses as the Board of Directors may
from time to time determine are properly chargeable to the Corporation.
4. Compensation of Advisor.
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.
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.
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
Corporation hereunder are not to be deemed exclusive, and the Advisor shall
be free to render similar services to others. It is understood that
Directors and officers of the Corporation 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
Corporation, and that the Advisor may become interested in the Corporation
as a shareholder or otherwise.
6. Use of Names. The Corporation shall not use the name of the Advisor
in any prospectus, sales literature or other material relating to the
Corporation 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
Corporation or any Corporation in any material relating to the Advisor in
any manner not approved prior thereto by the Corporation; provided, however,
that the Corporation 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 Corporation or to any shareholder of the Corporation 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 Corporation, 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
Corporation or by vote of a majority of the Corporation's Board of
Directors; and further provided that such continuance is also approved
annually by the vote of a majority of the Directors 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 Corporation's Board of Directors or by a vote of the
majority of the outstanding voting securities of the Corporation upon 60
days' prior written notice to the Advisor and by the Advisor upon 60 days'
prior written notice to the Corporation. This Agreement may be amended at
any time by the parties, subject to approval by the Corporation's Board of
Directors and, if required by applicable SEC rules and regulations, a vote
of a majority of the Corporation'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 Municipal Fund, Inc.
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 Municipal Fund, Inc.
Schedule A
As compensation pursuant to Section 4 of the Investment Advisory Agreement
between Xxxxxxx Asset management company, Inc. (the "Advisor") and Xxxxxxx
Municipal Fund, Inc. ("CMF") dated March 1, 1999, with respect to each CMF
Portfolio, the Advisor is entitled to receive from each Portfolio 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 the appropriate
Portfolio.
Xxxxxxx National Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
Xxxxxxx California Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
Xxxxxxx Maryland Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
Xxxxxxx Virginia Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
