TENNESSEE TAX FREE PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 13th day of October, 1992, between Tennessee
Tax Free Portfolio, a New York trust (the "Trust"), and Boston Management
and Research, a Massachusetts business trust (the "Adviser").
1. Duties of the Adviser. The Trust hereby employs the
Adviser to act as investment adviser for and to manage the investment and
reinvestment of the assets of the Trust and to administer its affairs,
subject to the supervision of the Trustees of the Trust, for the period
and on the terms set forth in this Agreement.
The Adviser hereby accepts such employment, and undertakes to
afford to the Trust the advice and assistance of the Adviser's
organization in the choice of investments and in the purchase and sale of
securities for the Trust and to furnish for the use of the Trust office
space and all necessary office facilities, equipment and personnel for
servicing the investments of the Trust and for administering its affairs
and to pay the salaries and fees of all officers and Trustees of the Trust
who are members of the Adviser's organization and all personnel of the
Adviser performing services relating to research and investment
activities. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as otherwise expressly provided
or authorized, have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment
management and supervision as the Trust may from time to time consider
necessary for the proper supervision of the Trust. As investment adviser
to the Trust, the Adviser shall furnish continuously an investment program
and shall determine from time to time what securities and other
investments shall be acquired, disposed of or exchanged and what portion
of the Trust's assets shall be held uninvested, subject always to the
applicable restrictions of the Declaration of Trust, By-Laws and
registration statement of the Trust under the Investment Company Act of
1940, all as from time to time amended. Should the Trustees of the Trust
at any time, however, make any specific determination as to investment
policy for the Trust and notify the Adviser thereof in writing, the
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determination has been revoked.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 Adviser shall take, on behalf of the
Trust, all actions which it deems necessary or desirable to implement the
investment policies of the Trust.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the Trust either directly with the
issuer or with brokers or dealers selected by the Adviser, and to that end
the Adviser is authorized as the agent of the Trust to give instructions
to the custodian of the Trust as to deliveries of securities and payment
of cash for the account of the Trust. In connection with the selection of
such brokers or dealers and the placing of such orders, the Adviser shall
use its best efforts to seek to execute security transactions at prices
which are advantageous to the Trust and (when a disclosed commission is
being charged) at reasonably competitive commission rates. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to pay any broker or dealer who provides such brokerage and
research services a commission for executing a security transaction which
is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
overall responsibilities which the Adviser and its affiliates have with
respect to accounts over which they exercise investment discretion.
Subject to the requirement set forth in the second sentence of this
paragraph, the Adviser is authorized to consider, as a factor in the
selection of any broker or dealer with whom purchase or sale orders may be
placed, the fact that such broker or dealer has sold or is selling shares
of any one or more investment companies sponsored by the Adviser or its
affiliates or shares of any other investment company investing in the
Trust.
2. Compensation of the Adviser. For the services, payments
and facilities to be furnished hereunder by the Adviser, the Adviser shall
be entitled to receive from the Trust, on a daily basis, compensation is
an amount equal to the aggregate of:
(a) a daily asset-based fee computed by applying the annual
asset rate applicable to that portion of the total daily net assets of the
Trust in each Category as indicated below:
Category Daily Net Assets Annual Asset Rate
1 up to $20 million 0.100%
2 $20 million but less than $40 million 0.200%
3 $40 million but less than $500 million 0.300%
4 $500 million but less than $1 billion 0.275%
5 $1 billion but less than $1.5 billion 0.250%
6 $1.5 billion but less than $2 billion 0.225%
7 $2 billion but less than $3 billion 0.200%
8 $3 billion and over .175%, plus
(b) a daily income-based fee computed by applying the daily income
rate applicable to that portion of the total daily gross income of the
Trust (which portion shall bear the same relationship to the total daily
gross income on such day as that portion of the total daily net assets of
the Trust in the same Category bears to the total daily net assets on such
day) in each Category as indicated below:
Category Daily Net Assets Daily Income Rate
1 up to $20 million 1.00%
2 $20 million but less than $40 million 2.00%
3 $40 million but less than $500 million 3.00%
4 $500 million but less than $1 billion 2.75%
5 $1 billion but less than $1.5 billion 2.50%
6 $1.5 billion but less than $2 billion 2.25%
7 $2 billion but less than $3 billion 2.00%
8 $3 billion and over 1.75%, plus
Such daily compensation shall be paid monthly in arrears on the last
business day of each month. The Trust's daily net assets and gross income
shall be computed in accordance with the Declaration of Trust of the Trust
and any applicable votes and determinations of the Trustees of the Trust.
In case of initiation or termination of the Agreement during any
month with respect to the Trust, the fee for that month shall be based on
the number of calendar days during which it is in effect.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the
Trust will pay all its expenses other than those expressly stated to be
payable by the Adviser hereunder, which expenses payable by the Trust
shall include, without implied limitation, (i) expenses of maintaining the
Trust and continuing its existence, (ii) registration of the Trust under
the Investment Company Act of 1940, (iii) commissions, fees and other
expenses connected with the acquisition, holding and disposition of
securities and other investments, (iv) auditing, accounting and legal
expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of Interests in the Trust, (viii) expenses
of registering and qualifying the Trust and Interests in the Trust under
federal and state securities laws and of preparing and printing
registration statements or other offering statements or memoranda for such
purposes and for distributing the same to Holders and investors, and fees
and expenses of registering and maintaining registrations of the Trust and
the Trust's placement agent as broker-dealer or agent under state
securities laws, (ix) expenses of reports and notices to Holders and of
meetings of Holders and proxy solicitations therefor, (x) expenses of
reports to governmental officers and commissions, (xi) insurance expenses,
(xii) association membership dues, (xiii) fees, expenses and disbursements
of custodians and subcustodians for all services to the Trust (including
without limitation safekeeping of funds, securities and other investments,
keeping of books, accounts and records, and determination of net asset
values, book capital account balances and tax capital account balances),
(xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, Holder servicing agents and registrars for all services
to the Trust, (xv) expenses for servicing the accounts of Holders, (xvi)
any direct charges to Holders approved by the Trustees of the Trust,
(xvii) compensation and expenses of Trustees of the Trust who are not
members of the Adviser's organization, and (xviii) such non-recurring
items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Trust to
indemnify its Trustees, officers and Holders with respect thereto.
4. Other Interests. It is understood that Trustees and officers
of the Trust and Holders of Interests in the Trust are or may be or become
interested in the Adviser as trustees, shareholders or otherwise and that
trustees, officers and shareholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as Holder or otherwise. It is also understood
that trustees, officers, employees and shareholders of the Adviser may be
or become interested (as directors, trustees, officers, employees,
shareholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Adviser may
organize, sponsor or acquire, or with which it may merge or consolidate,
and which may include the words "Xxxxx Xxxxx" or "Boston Management and
Research" or any combination thereof as part of their name, and that the
Adviser or its subsidiaries or affiliates may enter into advisory or
management agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Adviser. The services of the
Adviser to the Trust are not to be deemed to be exclusive, the Adviser
being free to render services to others and engage in other business
activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of the Adviser, the Adviser shall not be subject to liability to the
Trust or to any Holder of Interests in the Trust for any act or omission
in the course of, or connected with, rendering services hereunder or for
any losses which may be sustained in the acquisition, holding or
disposition of any security or other investment.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms
and conditions as may be agreed upon between the Adviser and such
investment adviser and approved by the Trustees of the Trust.
7. Duration and Termination of this Agreement. This Agreement
shall become effective upon the date of its execution, and, unless
terminated as herein provided, shall remain in full force and effect
through and including February 28, 1994 and shall continue in full force
and effect indefinitely thereafter, but only so long as such continuance
after February 28, 1994 is specifically approved at least annually (i) by
the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Trust and (ii) by the vote of a
majority of those Trustees of the Trust who are not interested persons of
the Adviser or the Trust cast in person at a meeting called for the
purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Agreement without the payment
of any penalty, by action of Trustees of the Trust or the trustees of the
Adviser, as the case may be, and the Trust may, at any time upon such
written notice to the Adviser, terminate this Agreement by vote of a
majority of the outstanding voting securities of the Trust. This
Agreement shall terminate automatically in the event of its assignment.
8. Amendments of the Agreement. This Agreement may be amended by
a writing signed by both parties hereto, provided that no amendment to
this Agreement shall be effective until approved (i) by the vote of a
majority of those Trustees of the Trust who are not interested persons of
the Adviser or the Trust cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by vote of a majority of the
outstanding voting securities of the Trust.
9. Limitation of Liability. The Adviser expressly acknowledges
the provision in the Declaration of Trust of the Trust (Section 5.2 and
5.6) limiting the personal liability of the Trustees and officers of the
Trust, and the Adviser hereby agrees that it shall have recourse to the
Trust for payment of claims or obligations as between the Trust and the
Adviser arising out of this Agreement and shall not seek satisfaction from
any Trustee or officer of the Trust.
10. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in
the Investment Company Act of 1940 as now in effect or as hereafter
amended subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. The
term "vote of a majority of the outstanding voting securities" shall mean
the vote, at a meeting of Holders, of the lesser of (a) 67 per centum or
more of the Interests in the Trust present or represented by proxy at the
meeting if the Holders of more than 50 per centum of the outstanding
Interests in the Trust are present or represented by proxy at the meeting,
or (b) more than 50 per centum of the outstanding Interests in the Trust.
The terms "Holders" and "Interests" when used herein shall have the
respective meanings specified in the Declaration of Trust of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
TENNESSEE TAX FREE PORTFOLIO BOSTON MANAGEMENT AND RESEARCH
By: /s/Xxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxx
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President Vice President
and not individually
