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Exhibit d(2)
INVESTMENT ADVISORY AGREEMENT
CITIFUNDS MULTI-STATE TAX FREE TRUST
INVESTMENT ADVISORY AGREEMENT, dated as of [DATE], by and between
CitiFunds Multi-State Tax Free Trust, a Massachusetts business trust (the
"Trust"), and SSB Citi Fund Management LLC, a registered investment adviser
("SSB Citi" or the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage the Adviser to provide certain
investment advisory services for the series of the Trust designated as
________________ ___________________ (the "Fund"), and the Adviser is willing to
provide such investment advisory services for the Fund on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Adviser. The Adviser shall provide the Fund with
such investment advice and supervision as the Trust may from time to time
consider necessary for the proper supervision of the Fund's investment
assets. SSB Citi shall act as the Adviser for the Fund and as such shall
furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what
portion of the assets of the Fund shall be held uninvested, subject always
to the restrictions of the Trust's Declaration of Trust, dated _________,
____, and By-laws, as each may be amended from time to time (respectively,
the "Declaration" and the "By-Laws"), to the provisions of the 1940 Act,
and to the then-current Prospectus and Statement of Additional Information
with respect to the Fund. The Adviser shall also make recommendations 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 Board of Trustees of the Trust at any time,
however, make any definite determination as to investment policy
applicable to the Fund 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determination has been revoked.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
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 the brokers or dealers selected by it, and to that end the
Adviser is authorized as the agent of the Trust 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, the Adviser is directed
to seek for the Fund in its best judgement, prompt execution in an
effective manner at the most favorable price. Subject to this requirement
of seeking the most favorable price, securities may be bought from or sold
to broker-dealers who have furnished statistical, research and other
information or services to the Adviser or the Fund, subject to any
applicable laws, rules and regulations. In making purchases or sales of
securities or other property for the account of the Fund, the Adviser may
deal with itself or with the Trustees of the Trust or the Trust's
principal underwriter or distributor, to the extent such actions are
permitted by the 1940 Act.
2. Allocation of Charges and Expenses. The Adviser shall furnish at
its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 1 above. It is
understood that the Trust will pay from the assets of the Fund all of its
own expenses allocable to the Fund including, without limitation,
compensation of Trustees not "affiliated" with the Adviser; governmental
fees; interest charges; taxes; membership dues in the Investment Company
Institute allocable to the Trust; fees and expenses of independent
auditors, of legal counsel and of any transfer agent, administrator,
distributor, shareholder servicing agent, registrar or dividend disbursing
agent of the Trust; expenses of distributing and redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and
mailing prospectuses, statements of additional information, shareholder
reports, notices, proxy statements and reports to governmental officers
and commissions and to shareholders of the Fund; expenses connected with
the execution, recording and settlement of portfolio security
transactions; insurance premiums; fees and expenses of the custodian for
all services to the Fund, including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the
net asset value of shares of the Fund; expenses of shareholder meetings;
and expenses relating to the issuance, registration and qualification of
shares of the Fund.
3. Compensation of the Adviser. For the services to be rendered, the
Trust shall pay to the Adviser from the assets of the Fund an investment
advisory fee computed and paid monthly at an annual rate equal to _____%
of the Fund's average daily net assets for the Fund's then-current fiscal
year. If SSB Citi serves as Adviser for less than the whole of any period
specified in this Section 3, the compensation to SSB Citi, as Adviser,
shall be prorated.
4. Covenants of the Adviser. The Adviser agrees that it will not
deal with itself, or with the Trustees of the Trust or the Trust's
principal underwriter or distributor, as principals in making purchases or
sales of securities or other property for the account of the Fund, except
as permitted by the 1940 Act, will not take a long or short position in
shares of the Fund except as permitted by the Declaration and By-Laws and
the then-current Prospectus and Statement of Additional Information
applicable to the Fund relative to the Adviser and its Directors and
officers.
5. Limitation of Liability of the Adviser. The 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 execution of
portfolio transactions for 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 Section 5, the term "Adviser" shall include Directors, officers and
employees of the Adviser as well as SSB Citi itself.
6. Activities of the Adviser. The services of the Adviser to the
Fund are not to be deemed to be exclusive, SSB Citi being free to render
investment advisory and/or other services to others. It is understood that
Trustees, officers, and shareholders of the Trust are or may be or may
become interested in the Adviser, as Directors, officers, employees, or
otherwise and that Directors, officers and employees of the Adviser are or
may become similarly interested in the Trust and that the Adviser may be
or may become interested in the Trust as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above
written and shall govern the relations between the parties hereto
thereafter, and shall remain in force until [DATE], on which date it will
terminate unless its continuance after [DATE] is "specifically approved at
least annually" (a) by the vote of a majority of the Trustees of the Trust
who are not "interested persons" of the Trust or of the Adviser at a
meeting specifically called for the purpose of voting on such approval,
and (b) by the Board of Trustees of the Trust or by "vote of a majority of
the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by the Adviser, in each case on not more than 60
days' nor less than 30 days' written notice to the other party. This Agreement
shall automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund.
The terms "specifically approved at least annually", "vote of a majority
of the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
The undersigned Trustee of the Trust has executed this Agreement not
individually, but as Trustee under the Trust's Declaration of Trust, dated [
DATE ], as amended, and the obligations of this Agreement are not binding upon
any of the Trustees or shareholders of the Trust individually, but bind only the
Trust estate.
CITIFUNDS MULTI-STATE
TAX FREE TRUST SSB CITI FUND MANAGEMENT LLC
By: -------------------------- By: --------------------------
Title: ----------------------- Title: -----------------------
