Exhibit 5(b)
AARP/XXXXXXX FINANCIAL MANAGEMENT COMPANY
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
December 16, 1985
XXXXXXX, XXXXXXX & XXXXX LTD.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Subadvisory Agreement
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Dear Sirs:
We have entered into an Investment Management and Advisory Agreement (the
"Management Agreement") dated as of December 16, 1985, with the AARP Cash
Investments Funds (the "Fund"), pursuant to which we act as investment adviser
to and manager of the Fund. The shares of beneficial interests of the Fund may
be issued in separate series (the "Series"). Copies of the Management Agreement
have been previously furnished to you. In furtherance of such duties to the
Fund, and with the approval of the Fund, we wish to avail ourselves of your
investment management and advisory services. Accordingly, with the acceptance of
the Fund, we hereby agree with you as follows for the duration of this
Agreement:
1. You agree to perform on our behalf the services required by the
Management Agreement, and to furnish to us such other information, investment
recommendations, advice and management services, as we shall from time to time
reasonably request.
2. We agree to pay you, as compensation for the services to be rendered by
you hereunder, a monthly fee equal to the Monthly Subadvisory Fee for that month
less an amount equal to the unpaid portion, if any, of the Account Manager
Monthly Budget for the same month payable by you pursuant to the Subadvisory
Agreement dated November 30, 1984 between you and us (the "November Agreement")
relating to the AARP Income Trust, AARP Growth Trust and the AARP Insured Tax
Free Income Trust. The Monthly Subadvisory Fee shall mean the gross fees payable
to us in a given month by the Fund (excluding any Series which has terminated
its rights and obligations pursuant to Section 6 of this Agreement) under the
Management Agreement less the Monthly Member Services Fees (as defined in the
Member Services Agreement (the "Member Services Agreement"), dated February 18,
1985, as amended May 24, 1985, between you and AARP Financial Services Corp.)
for that month. If no Monthly Member Services Fees are payable to AARP Financial
Services Corp. and AARP Financial Services Corp. does not contribute one-half of
the Account Manager Monthly Budget, you will receive such gross fees less an
amount equal to the portion, if any, of the Account Manager Monthly Budget
remaining unpaid pursuant to the November Agreement. The Account Manager Monthly
Budget shall mean, with respect to a given month, the greater of (a) the costs
and expenses of the Account Manager (other than fees paid by the Account Manager
pursuant to this Agreement and the Member Services Agreement) actually incurred
in that month; and (b) one-twelfth of our annual budget (other than for amounts
to be paid by us pursuant to this Agreement and the Member Services Agreement)
most recently adopted by our Management Committee.
3. Your services to us are not to be deemed exclusive and you are free to
render similar services to others.
4. Nothing herein shall be construed as constituting you as agent of us or
of the Fund.
5. You shall not 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 willful misfeasance, bad faith
or gross negligence on your part in the performance of your duties or from
reckless disregard by you of your obligations and duties under this Agreement.
Any person, even though also employed by you, who may be or become an employee
of and paid by the Fund shall be deemed, when acting within the scope of his
employment by the Fund, to be acting in such employment solely for the Fund and
not as your employee or agent.
6. This Agreement shall become effective as of the date hereof and shall
remain in effect until August 31, 1986 and shall continue in effect thereafter
so long as such continuance is specifically approved at least annually by the
affirmative vote of (i) a majority of the members of the Trustees or Board of
Directors, as the
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case may be, of the Fund who are not interested persons of the Fund, you or us,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) the Trustees or Board of Directors, as the case may be, of the Fund or,
with respect to each Series of the Fund, the holders of a majority of the
outstanding voting securities of such Series of the Fund. In the event that
security holders of fewer than all of the Series of the Fund fail to approve
this Agreement in the manner described in the preceding sentence, this Agreement
shall remain in effect, but you shall not provide any services for the account
or receive any fees on account of such Series as fail so to approve this
Agreement. Our rights and obligations and any rights and obligations of the Fund
under this Agreement may nevertheless be terminated at any time, without
penalty, by us or by the Trustees or Board of Directors, as the case may be, of
the Fund or by vote of holders of a majority of the outstanding voting
securities of the Fund, or Series, with respect only to that Series, upon sixty
days' written notice delivered or sent by registered mail, postage prepaid, to
you, at your address given above or at any other address of which you shall have
notified us in writing or by you upon six months' such written notice to us and
to the Fund, and shall automatically be terminated in the event of its
assignment or the assignment of the Management Agreement to which the Fund is a
party provided that an assignment to a corporate successor to all or
substantially all of your business or to a wholly-owned subsidiary of such
corporate successor which does not result in a change of actual control or
management of your business shall not be deemed to be an assignment for the
purposes of this Agreement. Any such notice shall be deemed given when received
by the addressee.
7. This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by either party hereto. It may be amended by mutual
agreement, but only after authorization of such amendment by the affirmative
vote of (i) the holders of a majority of the outstanding voting securities of
each series of the Funds; and (ii) the Trustees or Board of Directors, as the
case may be, of the Fund, including a majority of the Trustees or directors of
the Fund who are not interested persons of the Fund, you or us, cast in person
at a meeting called for the purpose of voting on such approval.
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8. This Agreement shall be construed in accordance with the laws of the
State of New York, provided, however, that nothing herein shall be construed as
being inconsistent with the Investment Company Act of 1940, as amended. As used
herein the terms "interested persons", "assignment" and "vote of a majority of
the outstanding voting securities" shall have the meanings set forth in the
Investment Company Act of 1940, as amended.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
AARP/XXXXXXX FINANCIAL
MANAGEMENT COMPANY
By: XXXXXXX, XXXXXXX & XXXXX LTD.
A General Partner
By /s/Xxx X. Xxxxxxxx
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Title: Managing Director
The foregoing Agreement is
hereby accepted as of the
date first above written
XXXXXXX, XXXXXXX & XXXXX, LTD.
By /s/Xxx X. Xxxxxxxx
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Title: Managing Director
Accepted:
AARP CASH INVESTMENTS FUNDS
By: /s/Xxxxxx X. Xxxxxxx
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