EXHIBIT 6
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 12th day of October, 1992, by and between MUNIYIELD
PENNSYLVANIA FUND, a Massachusetts business trust (hereinafter referred to as
the "Fund"), and FUND ASSET MANAGEMENT, INC., a Delaware corporation
(hereinafter referred to as the "Investment Adviser").
W I T N E S S E T H:
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WHEREAS, the Fund is engaged in business as a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Adviser's Act of 1940; and
WHEREAS, the Fund desires to retain the Investment Adviser to provide
management and investment advisory services to the Fund in the manner and on the
terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to provide management and
investment advisory services to the Fund on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Investment Adviser hereby agree as
follows:
ARTICLE I
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Duties of the Investment Adviser
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The Fund hereby employs the Investment Adviser to act as manager and
investment adviser of the Fund and to furnish, or arrange for affiliates to
furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Board of
Trustees of the Fund, for the period and on the terms and conditions set forth
in this Agreement. The Investment Adviser hereby accepts such employment and
agrees during such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations herein set forth for
the compensation provided for herein. The Investment Adviser and its affiliates
shall for all purposes herein be deemed to be independent contractors and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Fund in any way or otherwise be deemed agents of the Fund.
(a) Investment Advisory Services. The Investment Adviser shall perform (or
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arrange for the performance by affiliates of) the management and
administrative services necessary for the operation of the Fund including
administering shareholder accounts and handling shareholder relations. The
Investment Adviser shall provide the Fund with office space, facilities,
equipment and necessary personnel and such other services as the Investment
Adviser, subject to review by the Board of Trustees, shall from time to
time determine to be necessary or useful to perform its obligations under
this Agreement. The Investment Adviser shall also, on behalf of the Fund,
conduct relations with custodians, depositories, transfer agents, pricing
agents, dividend disbursing agents, other shareholder servicing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such
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other capacity deemed to be necessary or desirable. The Investment Adviser
shall generally monitor the Fund's compliance with investment policies and
restrictions as set forth in filings made by the Fund under the Federal
securities laws. The Investment Adviser shall make reports to the Board of
Trustees of its performance of obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and
affairs of the Fund as it shall determine to be desirable.
(b) Investment Advisory Services. The Investment Adviser shall provide (or
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arrange for affiliates to provide) the Fund with such investment research,
advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the assets of the Fund, shall
furnish continuously an investment program for the Fund and shall determine
from time to time which securities shall be purchased, sold or exchanged
and what portion of the assets of the Fund shall be held in the various
securities in which the Fund invests, options, futures, options on futures
or cash, subject always to the restrictions of the Declaration of Trust and
By-Laws of the Fund, as amended from time to time, the provisions of the
Investment Company Act and the statements relating to the Fund's investment
objectives, investment policies and investment restrictions as the same are
set forth in filings made by the Fund under the Federal securities laws.
The Investment Adviser shall make decisions for the Fund as to foreign
currency matters and make determinations as to foreign exchange contracts,
foreign currency options, foreign currency futures and related options on
foreign currency futures. The Investment Adviser shall make decisions for
the Fund as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised. Should the Trustees at any time, however,
make any definite determination as to investment policy and notify the
Investment Adviser thereof in writing, the
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Investment 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 Investment Adviser shall take, on
behalf of the Fund, all actions which it deems necessary to implement the
investment policies determined as provided above, and in particular to
place all orders for the purchase or sale of portfolio securities for the
Fund's account with brokers or dealers selected by it, and to that end, the
Investment Adviser is authorized as the agent of the Fund to give
instructions to the Custodian of the Fund as to deliveries of securities
and payments of cash for the account of the Fund. In connection with the
selection of such brokers or dealers and the placing of such orders with
respect to assets of the Fund, the Investment Adviser is directed at all
times to seek to obtain execution and prices within the policy guidelines
determined by the Board of Trustees and set forth in filings made by the
Fund under the Federal securities laws. Subject to this requirement and the
provisions of the Investment Company Act, the Securities Exchange Act of
1934, as amended, and other applicable provisions of law, the Investment
Adviser may select brokers or dealers with which it or the Fund is
affiliated.
ARTICLE II
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Allocation of Charges and Expenses
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(a) The Investment Adviser. The Investment Adviser assumes and shall pay for
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maintaining the staff and personnel necessary to perform its obligations
under this Agreement, and shall at its own expense, provide the office
space, facilities, equipment and necessary personnel which it is obligated
to provide under Article I hereof, and shall pay all compensation of
officers of the Fund and all Trustees of the Fund who are affiliated
persons of the Investment Adviser.
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(b) The Fund. The Fund assumes and shall pay or cause to be paid all other
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expenses of the Fund including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports, prospectuses, charges of the custodian, any sub-
custodian and transfer agent, expenses of portfolio transactions,
Securities and Exchange Commission fees, expenses of registering the shares
under Federal, state and foreign laws, fees and actual out-of-pocket
expenses of Trustees who are not affiliated persons of the Investment
Adviser, accounting and pricing costs (including the daily calculation of
the net asset value), insurance, interest, brokerage costs, litigation and
other extraordinary or non-recurring expenses, and other expenses properly
payable by the Fund. It is also understood that the Fund will reimburse the
Investment Adviser for its costs in providing accounting services to the
Fund.
ARTICLE III
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Compensation of the Investment Adviser
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(a) Investment Advisory Fee. For the services rendered, the facilities
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furnished and expenses assumed by the Investment Adviser, the Fund shall
pay to the Investment Adviser at the end of each calendar month a fee based
upon the average weekly value of the net assets of the Fund at the annual
rate of 0.50 of 1.0% (0.50%) of the average weekly net assets of the Fund
(i.e., the average weekly value of the total assets of the Fund, minus the
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sun of accrued liabilities of the Fund and accumulated dividends on
outstanding preferred shares), commencing on the day following
effectiveness hereof. For purposes of this calculation, average weekly net
assets is determined at the end of each month on the basis of the average
net assets of the Fund for each week during the month. The assets for each
weekly period are determined by averaging the net assets at the last
business day of a week with the net assets at the last business day of the
prior week. It is understood that the liquidation preference of any
outstanding preferred shares (other
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than accumulated dividends) is not considered a liability in determining
the Fund's average weekly net assets. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last
day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of
the fee as set forth above. Subject to the provisions of subsection (b)
hereof, payment of the Investment Adviser's compensation for the preceding
month shall be made as promptly as possible after completion of the
computations contemplated by subsection (b) hereof. During any period when
the determination of net asset value is suspended by the Board of Trustees,
the average net asset value of a share for the last week prior to such
suspension shall for this purpose be deemed to be the net asset value at
the close of each succeeding week until it is again determined.
(b) Expense Limitations. In the event the operating expenses of the Fund,
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including amounts payable to the Investment Adviser pursuant to subsection
(a) hereof, for any fiscal year ending on a date on which this Agreement is
in effect exceed the expense limitations applicable to the Fund imposed by
applicable state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Investment
Adviser shall reduce its management and investment advisory fee by the
extent of such excess and, if required pursuant to any such laws or
regulations, will reimburse the Fund in the amount of such excess;
provided, however, to the extent permitted by law, there shall be excluded
from such expenses the amount of any interest, taxes, brokerage fees and
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Fund. Whenever the expenses of the Fund
exceed a pro rata portion of the applicable annual expense limitations, the
estimated amount of reimbursement under such limitations shall be
applicable as an offset against the monthly payment of the fee due
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to the Investment Adviser. Should two or more such expenses limitations be
applicable as at the end of the last business day of the month, that
expense limitation which results in the largest reduction in the Investment
Adviser's fee shall be applicable.
ARTICLE IV
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Limitation of Liability of the Investment Adviser
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The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Investment Adviser" shall include any affiliates of the
Investment Adviser performing services for the Fund contemplated hereby and
directors, officers and employees of the Investment Adviser and such affiliates.
ARTICLE V
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Activities of the Investment Adviser
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The services of the Investment Adviser to the Fund are not to be deemed to
be exclusive: the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purposes of this Article V
referred to as "affiliates") are free to render services to others. It is
understood that Trustees, officers, employees and shareholders of the Fund are
or may become interested in the Investment Adviser and its affiliates, as
directors, officers, employees, partners and shareholders or otherwise, and that
directors, officers, employees, partners and shareholders of the Investment
Adviser and its affiliates are or may become similarly interested in the Fund,
and that the Investment Adviser and directors, officers,
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employees, partners and shareholders of its affiliates may become interested in
the Fund as shareholder or otherwise.
ARTICLE VI
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Duration and Termination of this Agreement
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This Agreement shall become effective as of the date first above written
and shall remain in force until January 31, 1994 and thereafter, but only so
long as such continuance is specifically approved at least annually by (i) the
Board of Trustees of the Fund, or by the vote of a majority of the outstanding
voting securities of the Fund, and (ii) a majority of those Trustees 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.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund, or by the Investment Adviser, on sixty days'
written notice to the other party. This Agreement shall automatically terminate
in the event of its assignment.
ARTICLE VII
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Amendments of this Agreement
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This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Trustees 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.
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ARTICLE VIII
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Definitions of Certain Terms
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The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
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Governing Law
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This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
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Personal Liability
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The Declaration of Trust establishing MuniYield Pennsylvania Fund, dated
August 24, 1992, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "MuniYield Pennsylvania Fund" refers to
the Trustees under the Declaration collectively as Trustees, but not as
individuals of personally; and no Trustee, shareholder, officer, employee or
agent of the Fund shall be held to any personal liability, nor shall resort be
had to their private
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property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Fund, but the "Trust Property" only shall be
liable.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MUNIYIELD PENNSYLVANIA FUND
By ________________________________
(Authorized Signatory)
FUND ASSET MANAGEMENT, INC.
By ________________________________
(Authorized Signatory)
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of' the date first above written.
MUNIYIELD PENNSYLVANIA FUND
By ________________________________
(Authorized Signatory)
FUND ASSET MANAGEMENT, INC.
By ________________________________
(Authorized Signatory)
SUPPLEMENT TO INVESTMENT ADVISORY AGREEMENT
WITH
FUND ASSET MANAGEMENT
As of January 1, 1994 Fund Asset Management was reorganized as a limited
partnership, formally known as Fund Asset Management, L.P. ("FAM"). The general
partner of FAM is Princeton Services, Inc. and the limited partners are Fund
Asset Management, Inc. and Xxxxxxx Xxxxx & Co. Inc. Pursuant to Rule 202(a)(l)-
l under the Investment Advisers Act of 1940 and Rule 2a-6 under the Investment
Company Act of 1940 such reorganization did not constitute an assignment of this
investment advisory agreement since it did not involve a change of control or
management of the investment adviser. Pursuant to the requirements of Section
205 of the Investment Advisers Act of 1940, however, Fund Asset Management
hereby supplements this investment advisory agreement by undertaking to advise
you of any change in the membership of the partnership within a reasonable time
after any such change occurs.
By _________________________________________
Dated: January 3, 1994
