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Exhibit 5a
AMENDED AND RESTATED ADVISORY AGREEMENT
AGREEMENT made as of July 28, 1988 between MUNICIPAL FUND FOR
CALIFORNIA INVESTORS, INC., a Maryland corporation (the "Fund"), and PROVIDENT
INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation (the "Investment
Adviser"), registered as an investment adviser under the Investment Advisers Act
of 1940 and wholly-owned by Provident National Bank ("Provident").
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940;
WHEREAS, the Fund entered into an amended advisory agreement
made as of August 7, 1987 (the "Advisory Agreement") between the Fund and the
Investment Adviser for certain investment advisory and administrative services
to the Fund, which at such time offered shares in only one portfolio: the Fund's
California Money Fund Portfolio (the "Cal Money Portfolio");
WHEREAS, the Fund, as of the date hereof, now offers shares in
two portfolios: the Cal Money Portfolio, and the Fund's California Intermediate
Municipal Fund Portfolio (the "Cal Intermuni Portfolio") (the Cal Money
Portfolio and the Cal Intermuni Portfolio collectively referred to herein as the
"Portfolios" and each as a "Portfolio"); and
WHEREAS, the Fund desires to amend and restate in full the
Advisory Agreement to retain the Investment Adviser to render investment
advisory and administrative services to both the Cal Money Portfolio and the Cal
Intermuni Portfolio, and the Investment Adviser is willing to so render such
services;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto that the Advisory Agreement
is hereby amended and restated in full as follows:
1. Appointment. The Fund hereby appoints the Investment
Adviser to act as investment adviser to each of the Portfolios for the period
and on the terms set forth in this Agreement. The Investment Adviser accepts
such appointment and agrees to render the services herein set forth for the
compensation herein provided.
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2. Delivery of Documents. The Fund has furnished the
Investment Adviser copies property certified or authenticated of each of the
following:
a. Articles of Incorporation of the Fund (such Articles
of Incorporation, as presently in effect and as they shall from time to time be
amended or supplemented, herein called the "Articles of Incorporation");
b. Articles Supplementary as filed with the Maryland
State Department of Assessments and Taxation on November 24, 1982;
c. By-Laws of the Fund (such By-Laws, as presently in
effect and as they shall from time to time be amended, herein called the
"By-Laws");
d. Resolutions of the Board of Directors of the Fund
authorizing the appointment of the Investment Adviser and the execution and
delivery of this Agreement;
e. Registration Statement under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, on Form
N-1 (No. 2-79510) relating to each class of common stock of the Fund
(collectively, the "Shares"), and all amendments thereto;
f. Notification of Registration of the Fund under the
Investment Company Act of 1940, as amended, on Form N-BA as filed with the
Securities and Exchange Commission on September 24, 1982. and all amendments
thereto; and
g. Each Prospectus relating to either Portfolio of the
Fund in effect under the Securities Act of 1933 (such prospectuses and
supplements thereto. as presently in effect and as from time to time amended and
supplemented, herein called collectively, the "Prospectuses").
The Fund will furnish the Investment Adviser from time to time
with copies of all amendments of or supplements to the foregoing, if any.
3. Management. Subject to the supervision of the Board of
Directors of the Fund, the Investment Adviser will provide a continuous
investment program for the each of the Portfolios, including investment research
and management with respect to all securities, investments, cash and cash
equivalents in each Portfolio. The Investment Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Portfolio. The Investment Adviser will provide the services
rendered by it hereunder in
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accordance with each Portfolio's investment objective and policies as stated in
the Prospectuses. The Investment Adviser further agrees that it:
a. will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (herein called the
"Rules"), and will in addition conduct its activities under this Agreement in
accordance with regulations of the Board of Governors of the Federal Reserve
System pertaining to the investment advisory activities of bank holding
companies to the same extent as if such regulations were by their terms
applicable to the activities of the Investment Adviser;
b. will not invest its assets or the assets of any
accounts advised by it or by Provident in Shares, make loans for the purpose of
purchasing or carrying Shares, or make loans to the Portfolios;
c. will place orders pursuant to its investment
determinations for each Portfolio either directly with the issuer or with any
broker or dealer. In placing orders with brokers and dealers, the Investment
Adviser will attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are comparable, the Investment
Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who provide the Fund with research advice and other
services. In no instance will portfolio securities be purchased from or sold to
the Fund's principal underwriter, the Investment Advisor or any affiliated
person thereof, except to the extent permitted by the Securities and Exchange
Commission;
d. will, together with Provident, maintain all books and
records with respect to each Portfolio's securities transactions, keep each
Portfolio's books of account and will render to the Fund's Board of Directors
such periodic and special reports as the Board may request;
e. will compute the net asset value and the net income
for each Portfolio on each business day as described in the Prospectuses or as
more frequently requested by the Fund; and
f. will treat confidentially and as proprietary
information of the Fund all records and other information relative to the Fund
and prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund which approval shall not be unreasonably withheld and may not be
withheld where the Investment Adviser may
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be exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Fund.
4. Services Not Exclusive. The investment management services
rendered by the Investment Adviser hereunder are not to be deemed exclusive, and
the Investment Adviser shall be free to render similar services to others so
long as its services under this Agreement are not impaired thereby.
5. Sub-Advisory Agreement. Notwithstanding anything herein to
the contrary, this Agreement shall not be effective until the Investment Adviser
and Provident deliver to the Fund a duly executed copy of the Sub-Advisory
Agreement in substantially the form attached as Exhibit A hereto (the
"Sub-Advisory Agreement") pursuant to which Provident will provide the
Investment Adviser with certain investment advisory services on behalf of each
Portfolio. The Investment Adviser agrees to give the Fund prompt written notice
of any termination of or notice to terminate the Sub-Advisory Agreement by any
person other than the Fund.
6. Books and Records. In compliance with the requirements of
Rule 31a-3 of the Rules, the Investment Adviser hereby agrees that all records
which it maintains for each Portfolio are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request. The Investment Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 the records required to be maintained by Rule 31a-l of
the Rules.
7. Expenses. During the term of this Agreement, the Investment
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of (including brokerage commissions, if
any) securities purchased for each Portfolio.
In addition. if the expenses borne by a Portfolio in any
fiscal year exceed the applicable expense limitations imposed by the securities
regulations of any state in which the Shares are registered or qualified for
sale to the public, the Investment Adviser shall reimburse the Portfolio for
one-half of any excess up to the amount of the fees payable to it during such
fiscal year pursuant to paragraph B hereof; provided, however, that
notwithstanding the foregoing, the Investment Adviser shall reimburse the
Portfolio for one-half of such excess expenses regardless of the amount of fees
paid to it during such fiscal year to the extent that the securities regulations
of any state in which the Shares are registered or qualified for sale so
require.
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8. Compensation. For the services provided and the expenses
assumed pursuant to this Agreement, the Fund will pay the Investment Adviser and
the Investment Adviser will accept as full compensation therefor a fee, computed
daily and payable monthly, at an annual rate of .20% of the Portfolio's average
net assets.
9. Limitation of Liability of the Investment Adviser. Neither
Provident nor the Investment Adviser shall be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Adviser in the performance of its duties or from reckless
disregard by it of its obligation and duties under this Agreement.
Notwithstanding the foregoing, the Investment Adviser shall be liable to the
Fund for the acts and omissions of Provident to the extent that Provident is
liable to the Investment Adviser for such acts or omissions under the
Sub-Advisory Agreement between the Investment Adviser and Provident.
10. Duration and Termination. This Agreement, unless sooner
terminated as provided herein, shall continue until May 31, 1989. Thereafter, if
not terminated, this Agreement shall continue with respect to a Portfolio for
successive periods of 12 months each, provided such continuance is specifically
approved at least annually (a) by the vote of;a majority of those members of the
Board of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Board of Directors of the
Fund or by vote of a majority of the outstanding voting securities of the
Portfolio; provided, however. that this Agreement may be terminated with respect
to a Portfolio by the Fund at any time, without the payment of any penalty, by
the Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Portfolio on 60 days' written notice to the Investment
Adviser, or by the Investment Adviser at any time, without payment of any
penalty, on 90 days' written notice to the Fund. This Agreement will immediately
terminate in the event of its assignment and upon any termination of the
Sub-Advisory Agreement. (As used in this Agreement the terms "majority of the
outstanding voting securities," "interested person" and assignment shall have
the same meanings as such terms have in the Investment Company Act of 1940.)
11. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party
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against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of a majority of the Portfolio's outstanding voting securities.
12. Miscellaneous. The captions in this Agreement 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 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF. the parties hereto have caused this
instrument to be executed by their officers designated below to of the day and
year first above written.
MUNICIPAL FUND FOR CALIFORNIA
INVESTORS, INC.
Attest: (a Maryland corporation)
/s/ Xxxxxx X. Xxxxx By:/s/ G. Willing Pepper
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[seal]
PROVIDENT INSTITUTIONAL
MANAGEMENT CORPORATION
Attest:
/s/ Signature illegible By:/s/ Xxxxxx X. Xxxxx
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[Corporate Seal]
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