\VKL 6.04.doc
INVESTMENT ADVISORY/ADMINISTRATION AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT, made as of May 31, 1997,
and amended June 1, 2004 (the "Agreement"), by and between XXX
XXXXXX SELECT SECTOR MUNICIPAL TRUST (the "Fund"), a
Massachusetts business trust, and XXX XXXXXX ASSET MANAGEMENT
(the "Adviser"), a Delaware corporation.
1. (a) Retention of Adviser by Fund.
(i) The Fund hereby employs the Adviser to act as the
investment adviser for and to manage the investment and
reinvestment of the assets of the Fund in accordance with the
Fund's investment objective and policies and limitations, and to
administer its affairs to the extent requested by, and subject to
the review and supervision of, the Board of Trustees of the Fund
for the period and upon the terms herein set forth. The
investment of funds shall be subject to all applicable
restrictions of applicable law and of the Declaration of Trust
and By-Laws of the Fund, and resolutions of the Board of Trustees
of the Fund as may from time to time be in force and delivered or
made available to the Adviser.
(ii) The Fund hereby employs the Adviser to act as the
administrator to the Fund for the purpose of furnishing the
services set forth in paragraph 2 below.
(b) Adviser's Acceptance of Employment. The Adviser accepts
such employment and agrees during such period to render such
services, to supply investment research and portfolio management
(including without limitation the selection of securities for the
Fund to purchase, hold or sell and the selection of brokers
through whom the Fund's portfolio transactions are executed, in
accordance with the policies adopted by the Fund and its Board of
Trustees), to administer the business affairs of the Fund, to
furnish offices and necessary facilities and equipment to the
Fund, to provide administrative services for the Fund, to render
periodic reports to the Board of Trustees of the Fund, and to
permit any of its officers or employees to serve without
compensation as trustees or officers of the Fund if elected to
such positions.
(c) Essential Personnel. For a period of one year commencing
on the effective date of this Agreement, the Adviser and the Fund
agree that the retention of (i) the chief executive officer,
president, chief financial officer and secretary of the Adviser
and (ii) each director, officer and employee of the Adviser or
any of its Affiliates (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act")) who serves as an officer of
the Fund (each person referred to in (i) or (ii) hereinafter
being referred to as an "Essential Person"), in his or her
current capacities, is in the best interest of the Fund and the
Fund's shareholders. In connection with the Adviser's acceptance
of employment hereunder, the Adviser hereby agrees and covenants
for itself and on behalf of its Affiliates that neither the
Adviser nor any of its Affiliates shall make any material or
significant personnel changes or replace or seek to replace any
Essential Person or cause to be replaced any Essential Person, in
each case without first informing the Board of Trustees of the
Fund in a timely manner. In addition, neither the Adviser nor
any Affiliate of the Adviser shall change or seek to change or
cause to be changed, in any material respect, the duties and
responsibilities of any Essential Person, in each case without
first informing the Board of Trustees of the Fund in a timely
manner.
(d) Independent Contractor. The Adviser shall be deemed to be
an independent contractor under this Agreement and, unless
otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund in any way or
otherwise be deemed as agent of the Fund.
(e) Non-Exclusive Agreement. The services of the Adviser to
the Fund under this Agreement are not to be deemed exclusive, and
the Adviser shall be free to render similar services or other
services to others so long as its services hereunder are not
impaired thereby.
2. Services and Duties as Administrator. Subject to the
supervision of the Fund's Board of Trustees (the "Board), the
Adviser, in its role as administrator, will:
(a) Prepare and assemble all reports required to be sent to the
Fund Shareholders, and arrange for the printing and
dissemination of such reports to Shareholders;
(b) Assemble all reports required to be filed with the
Securities and Exchange Commission (the "SEC") on Form N-SAR, or
such other form as the SEC may substitute for Form N-SAR, and
file such completed form with the SEC;
(c) Arrange for the dissemination to Shareholders of the Fund's
proxy materials and oversee the tabulation of proxies by the
Fund's transfer agent;
(d) Negotiate the terms and conditions under which custodian
services will be provided to the Fund and the fees to be paid by
the Fund to its custodian (which may or may not be an affiliate
of the Fund's investment adviser) in connection therewith;
(e) Negotiate the terms and conditions under which dividend
disbursing services will be provided to the Fund, and the fees to
be paid by the Fund in connection therewith; review the provision
of dividend disbursing services to the Fund;
(f) Determine the amounts available for distribution as
dividends and distributions to be paid by the Fund to its
Shareholders; prepare and arrange for the printing of dividend
notices to Shareholders; and provide the Fund's dividend
disbursing agent and custodian with such information as is
required for such parties to effect the payment of dividends and
distributions and to implement the Fund's dividend reinvestment
plan;
(g) Provide Shareholder services to holders or potential holders
of the Fund's securities including but not limited to responding
to Shareholder requests for information;
(h) Assist in providing to the Fund's independent accountants
such information as is necessary for such accountants to prepare
and file the Fund's federal income and excise tax returns and the
Fund's state and local tax returns;
(i) Monitoring compliance of the Fund's operations with the 1940
Act and with its investment policies and limitations as currently
in effect;
(j) In connection with the issuance of the Preferred Shares,
calculate, monitor and provide the rating agencies such asset
coverage and liquidity reports as the Board deems advisable with
respect to obtaining a rating on the Preferred Shares;
(k) Oversee the maintenance of the Fund's books and records
under Rule 31a-1 under the 1940 Act by the custodians and
accounting agent, as applicable; and
(l) Make such reports and recommendations to the Board as the
Board reasonable requests or deems appropriate.
3. Public Inquiries. The Fund and the Adviser agree that the
Adviser, in its role as administrator, will not be responsible
for replying to questions or requests for information concerning
the Fund from Shareholders, brokers or the public. The Fund will
inform the Adviser of the party or parties to whom any such
questions or requests should be directed, and the Adviser will
refer such questions and requests to such party or parties.
4. (a) Fee. For the services and facilities described in
Section 1, the Fund will pay to the Adviser at the end of each
calendar month an investment advisory/administration fee equal to
0.60% of the average daily managed assets of the Fund. For
purposes of determining such fee, average daily managed assets
shall mean the average daily value of the Fund, minus the sum of
accrued liabilities other than the aggregate amount of any
borrowings undertaken by the Fund.
(b) Determination of Net Asset Value. The net asset value of
the Fund shall be calculated as of the close of the New York
Stock Exchange on each day the Exchange is open for trading or
such other time or times as the trustees may determine in
accordance with the provisions of applicable law and the
Declaration of Trust and By-Laws of the Fund, and resolutions of
the Board of Trustees of the Fund as from time to time in force.
For the purpose of the foregoing computations, on each day when
net asset value is not calculated, the net asset value of a share
of beneficial interest of the Fund shall be deemed to be the net
asset value of such share as of the close of business of the last
day on which such calculation was made.
(c) Proration. For the month and year in which this Agreement
becomes effective or terminates, there shall be an appropriate
proration of the Adviser's fee on the basis of the number of days
that the Agreement is in effect during such month and year,
respectively.
5. Expenses. In addition to the fee of the Adviser, the
Fund shall assume and pay any expenses for services rendered by a
custodian for the safekeeping of the Fund's securities or other
property, for keeping its books of account, for any other charges
of the custodian and for calculating the net asset value of the
Fund as provided above. The Adviser shall not be required to
pay, and the Fund shall assume and pay, the charges and expenses
of its operations, including compensation of the trustees (other
than those who are interested persons of the Adviser and other
than those who are interested persons of the distributor of the
Fund but not of the Adviser, if the distributor has agreed to pay
such compensation), charges and expenses of independent
accountants, of legal counsel and of any transfer or dividend
disbursing agent, costs of acquiring and disposing of portfolio
securities, cost of listing shares on the New York Stock Exchange
or other exchange, interest (if any) on obligations incurred by
the Fund, costs of share certificates, membership dues in the
Investment Company Institute or any similar organization, costs
of reports and notices to shareholders, costs of registering
shares of the Fund under federal securities laws, miscellaneous
expenses and all taxes and fees to federal, state or other
governmental agencies on account of the registration of
securities issued by the Fund, filing of corporate documents or
otherwise. The Fund shall not pay or incur any obligation for
any management or administrative expenses for which the Fund
intends to seek reimbursement from the Adviser without first
obtaining the written approval of the Adviser. The Adviser shall
arrange, if desired by the Fund, for officers or employees of the
Adviser to serve, without compensation from the Fund, as
trustees, officers or agents of the Fund if duly elected or
appointed to such positions and subject to their individual
consent and to any limitations imposed by the law.
6. Interested Persons. Subject to applicable statutes and
regulations, it is understood that trustees, officers,
shareholders and agents of the Fund are or may be interested in
the Adviser as directors, officers, shareholders, agents or
otherwise and that the directors, officers, shareholders and
agents of the Adviser may be interested in the Fund as trustees,
officers, shareholders, agents or otherwise.
7. Compliance with the Fund's Governing Documents and Applicable
Laws. In all matters relating to the performance of this
Agreement, the Adviser will act in conformity with the
Declaration of Trust, By-Laws and registration statements of the
Fund and with the directions of the Board and Fund executive
officers and will conform to and comply with the requirements of
the 1940 Act and all other applicable federal or state laws and
regulations.
8. Liability. The Adviser shall not be liable for any
error of judgment or 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 willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the performance of
its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
9. (a) Term. This Agreement shall become effective on
the date hereof and shall remain in full force until May 31,
1999, unless sooner terminated as hereinafter provided. This
Agreement shall continue in force from year to year thereafter,
but only so long as such continuance is specifically approved at
least annually, in the manner required by the 1940 Act.
(b) Termination. This Agreement will automatically terminate
in the event of its assignment. This Agreement may be terminated
at any time without the payment of any penalty by the Fund or by
the Adviser on sixty (60) days written notice to the other party.
The Fund may effect termination by action of the Board of
Trustees or by vote of a majority of the outstanding shares of
stock of the Fund, accompanied by appropriate notice. This
Agreement may be terminated at any time without the payment of
any penalty and without advance notice by the Board of Trustees
or by vote of a majority of the outstanding shares of the Fund in
the event that it shall have been established by a court of
competent jurisdiction that the Adviser or any officer or
director of the Adviser has taken any action which results in a
breach of the covenants of the Adviser set forth herein.
(c) Payment upon Termination. Termination of this Agreement
shall not affect the right of the Adviser to receive payment on
any unpaid balance of the compensation described in Section 4
earned prior to such termination.
10. Severability. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder shall not thereby affected.
11. Notices. Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage prepaid, to
the other party at such address as such other party may designate
for the receipt of such notice.
12. Disclaimer. The Adviser acknowledges and agrees that,
as provided by Section 5.5 of the Declaration of Trust of the
Trust, the shareholders, trustees, officers, employees and other
agents of the Fund and the Fund shall not personally be bound by
or liable hereunder, nor shall resort be had to their private
property for the satisfaction of any obligation or claim
hereunder.
13. Governing Law. All questions concerning the validity,
meaning and effect of this Agreement shall be determined in
accordance with the laws (without giving effect to the conflict-
of-law principles thereof) of the State of Massachusetts
applicable to contracts made and to be performed in that state.
14. Name. In connection with its employment hereunder, the
Adviser hereby agrees and covenants not to change its name
without the prior consent of the Board of Trustees of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as amended on June 1, 2004.
XXX XXXXXX ASSET MANAGEMENT XXX XXXXXX SELECT SECTOR
MUNICIPAL TRUST
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxx X.
Xxxxxxx
By: ________________________________ By:
________________________________
Name: Xxxx X. Xxxxxxxx Name: Xxxxxx X.
Xxxxxxx
Title: Managing Director Title:
Executive Vice President and
Chief Executive
Officer
VKL 6.04
