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EXHIBIT 99.B5.(b)
INVESTMENT MANAGEMENT AGREEMENT (TAX-EXEMPT PORTFOLIO)
AGREEMENT made this 14th day of October, 1988, by and between
CASH EQUIVALENT FUND, a Massachusetts business trust (the
"Fund"), and XXXXXX FINANCIAL SERVICES, INC., a Delaware
corporation (the "Adviser").
WHEREAS, the Fund is an open-end, diversified management
investment company registered under the Investment Company Act of
1940, the shares of beneficial interest ("Shares") of which are
registered under the Securities Act of 1933.
WHEREAS, the Fund is authorized to issue Shares in separate
series with each such series representing the interests in a
separate portfolio of securities and other assets.
WHEREAS, the Fund currently offers Shares in three portfolios,
the "Money Market Portfolio," the "Government Securities
Portfolio" and the "Tax-Exempt Portfolio."
WHEREAS, the Fund desires at this time to retain the Adviser
under this Agreement to render investment advisory and management
services to the Tax-Exempt Portfolio, and the Adviser is willing
to render such services.
IN CONSIDERATION of the mutual covenants hereinafter contained,
it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment
adviser for the Tax-Exempt Portfolio or other Portfolios
hereunder and to manage the investment and reinvestment of the
assets of the Fund in accordance with applicable investment
objective and policies and limitations and to administer its
affairs to the extent requested by and subject to the 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 the Agreement and Declaration
of Trust and By-Laws of the Fund as may from time to time be in
force.
The Adviser accepts such employment and agrees during such period
to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and administrative services
for the Fund, to permit any of its officers or employees to serve
without compensation as trustees or officers of the Fund if
elected to such positions and to assume the obligations herein
set forth for the compensation herein provided. The Adviser
shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided
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or authorized, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
It is understood and agreed that the Adviser, by separate
agreements with the Fund, may also serve the Fund in other
capacities.
2. In the event that the Fund establishes one or more
portfolios other than the Tax-Exempt Portfolio with respect to
which it desires to retain the Adviser to render investment
advisory and management services hereunder, it shall notify the
Adviser in writing. If the Adviser is willing to render such
services it shall notify the Fund in writing whereupon such
portfolio or portfolios shall become subject to this Agreement.
The Tax-Exempt Portfolio, together with any other Fund portfolios
which may be established later and served by the Adviser under
this Agreement shall be herein referred to collectively as the
"Portfolios" and individually referred to as a "Portfolio." The
Money Market Portfolio and the Government Securities Portfolio
are not subject to this Agreement and are not considered to be
"Portfolios" hereunder.
3. 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 management fee computed at an annual rate of 0.22%
of the first $500 million of the combined average daily net
assets of the Portfolios, 0.20% of the next $500 million, 0.175%
of the next $1 billion, 0.16% of the next $1 billion and 0.15% of
combined average daily net assets over $3 billion. The fee as
computed above shall be allocated to each Portfolio based upon
the relative average daily net assets of each Portfolio managed
by the Adviser. For the month and year in which this Agreement
becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement
is in effect during the month and year, respectively. 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.
4. 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 in-the Agreement and Declaration of Trust of the Fund.
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
affiliated with the Adviser), charges and expenses of independent
auditors, of legal counsel, of any transfer or dividend
disbursing agent, any registrar of the Fund, costs of acquiring
and disposing of portfolio securities, interest, if any, on
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obligations incurred by the Fund, cost of Share certificates and
of reports, membership dues in the Investment Company Institute
or any similar organization, reports and notices to shareholders,
other like miscellaneous expenses and all taxes and fees payable
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 expenses for which the Fund intends
to seek reimbursement from the Adviser as herein provided 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 law.
If expenses borne by the Portfolios in any fiscal year (including
the Adviser's fee, but excluding interest, taxes, fees incurred
in acquiring and disposing of portfolio securities and, to the
extent permitted, extraordinary expenses) exceed 1 1/2% of
average daily net assets up to $30,000,000 and 1% of average
daily net assets over $30,000,000 of the Portfolios, the Adviser
will reduce its fee or reimburse the Fund for any excess. The
expense limitation guarantee shall be allocated to each Portfolio
upon a fee reduction or reimbursement based upon the relative
average daily net assets of each Portfolio. If for any month the
expenses of the Fund properly chargeable to the income account
shall exceed 1/12 of the percentage of average net assets
allowable as expenses, the payment to the Adviser for that month
shall be reduced and, if necessary, the Adviser shall make a
refund payment to the Fund so that the total net expense will not
exceed such percentage. As of the end of the Fund's fiscal year,
however, the foregoing computations and payments shall be
readjusted so that the aggregate compensation payable to the
Adviser for the year is equal to the percentage set forth in
Section 3 hereof of the average net asset values as determined as
described herein throughout the fiscal year, diminished to the
extent necessary so that the total of the aforementioned expense
items shall not exceed the expense limitation. The aggregate of
repayments, if any, by the Adviser to the Fund for the year shall
be the amount necessary to limit the said net expense to said
percentage.
The net asset value of each Portfolio shall be calculated as of
the close of the New York Stock Exchange on each day the Exchange
is open for trading or as of such other time or times as the
trustees may determine in accordance with the provisions of the
Investment Company Act of 1940. On each day when net asset value
is not calculated, the net asset value of a Share of a Portfolio
shall be deemed to be the net asset value of such a Share as of
the close of business on the last day on which such calculation
was made for the purpose of the foregoing computations.
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5. Subject to applicable statutes and regulations, it is
understood that trustees, officers or agents of the Fund are or
may be interested in the Adviser as officers, trustees, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as a director, officer or agent.
6. 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 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.
7. This Agreement shall become effective at 5:00 p.m. (CST) on
the date hereof and shall remain in full force until December 1,
1989, unless sooner terminated as hereinafter provided. This
Agreement shall continue in force from year to year thereafter,
but only as long as such continuance is specifically approved at
least annually for each Portfolio in the manner required by the
Investment Company Act of 1940 and the rules and regulations
thereunder; provided, however, that if the continuation of this
Agreement is not approved for a Portfolio, the Adviser may
continue to serve in such capacity for such Portfolio in the
manner and to the extent permitted by the Investment Company Act
of 1940 and the rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment
of any penalty with respect to any Portfolio by the Fund or by
the Adviser on sixty (60) days written notice to the other party.
The Fund may effect termination with respect to any Portfolio by
action of the Board of Trustees or by vote of a majority of the
outstanding voting securities of such Portfolio, accompanied by
appropriate notice.
This Agreement may be terminated at any time with respect to any
Portfolio without the payment of any penalty by the Board of
Trustees or by vote of a majority of the outstanding voting
securities of such Portfolio 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.
The terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder.
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Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation described in Section 3 earned prior to such
termination.
8. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
9. 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.
10. All parties hereto are expressly put on notice of the Cash
Equivalent Fund Agreement and Declaration of Trust and all
amendments thereto, all of which are on file with the Secretary
of The Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by its
representatives as such representatives and not individually, and
the obligations of the Fund hereunder are not binding upon any of
the Trustees, officers or shareholders of the Fund individually
but are binding upon only the assets and property of the Fund.
With respect to any claim by Adviser for recovery of that portion
of the investment management fee (or any other liability of the
Fund arising hereunder) allocated to a particular Portfolio,
whether in accordance with the express terms hereof or otherwise,
the Adviser shall have recourse solely against the assets of that
Portfolio to satisfy such claim and shall have no recourse
against the assets of any other portfolio of Fund (whether or not
a Portfolio hereunder) for such purpose.
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11. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 hereof which
shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) the laws of the State of Illinois.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed on the day and year first above written.
CASH EQUIVALENT FUND
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: President
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ATTEST:
/s/ Xxxxxx X. Xxxxxxx
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Title: Assistant Secretary
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XXXXXX FINANCIAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Sr. V. P.
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ATTEST:
/s/ Xxxxx X. Xxxxxxxxxxx
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Title: Assistant Secretary
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