INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this day of , 1995, by and
between WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC., a Maryland
corporation, whose address is 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Fund") and WATERHOUSE ASSET MANAGEMENT, INC., a Delaware
corporation, whose address is 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Fund is an open-end, diversified management
investment company, registered under the Investment Company Act of
1940, as amended (the "1940 Act"), with distinct series of shares
each having its own investment objectives, policies and restrictions,
including the Fund's Money Market Portfolio, U.S. Government Portfolio
and Municipal Portfolio (each, a "Portfolio"), and including such
other Portfolios as may hereafter be offered by the Fund, all as more
fully described in the Fund's Registration Statement on Form N-lA
under the 1940 Act and the Securities Act of 1933, as amended (the
"Registration Statement"), as filed with the Securities and Exchange
Commission (the "Commission") relating to the Fund and shares of the
Fund's capital stock, and all amendments thereto;
WHEREAS, the Investment Manager is registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended; and
WHEREAS, the Fund and the Investment Manager desire to
enter into an agreement to provide for comprehensive management and
investment advisory services to each Portfolio upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, it is hereby agreed by and between
the parties hereto as follows:
1. Duties of Investment Manager. (a) The Fund hereby
employs the Investment Manager to act as the investment adviser for
each of the Portfolios and to manage the investment and reinvestment
of the assets of each Portfolio in accordance with the investment
objectives, policies and restrictions of each such Portfolio as the
same are set forth in the Registration Statement, and in accordance
with the requirements of the 1940 Act and all other applicable state
and federal laws, rules and regulations, subject to the supervision of
the Board of Directors of the Fund for the period and upon the terms
herein set forth. The investment of funds shall also be subject to
all applicable restrictions of the Articles of Incorporation and By-
laws of the Fund as may from time to time be in force. Without
limiting the generality of the foregoing, the Investment Manger
shall:
(i) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial
data, domestic, foreign or otherwise, whether affecting the economy
generally or a Portfolio specifically, and whether concerning the
individual issuers whose securities are included in a Portfolio or
the activities in which such issuers engage, or with respect to
securities which the Investment Manager considers desirable for
inclusion in a Portfolio;
(ii) determine which issuers and securities shall be
represented in a Portfolio and regularly report thereon to the Fund's
Board of Directors;
(iii) formulate and implement continuing programs for the
purchases and sales of securities of such issuers and lists of
approved investments for each Portfolio and regularly report thereon
to the Fund's Board of Directors;
(iv) make decisions with respect to and take, on behalf
of each Portfolio, all actions which appear necessary to carry into
effect such purchase and sale programs and supervisory functions
aforesaid, including the placing of orders for the purchase and sale
of securities for such Portfolio.
(b) The Investment Manager accepts such employment and
agrees during such period to render such services and to assume the
obligations herein set forth for the compensation herein provided.
The Investment Manager shall give each Portfolio the benefit of its
best judgment, efforts and facilities in rendering its services as an
investment manager. The Investment Manager shall for all purposes
herein provided be deemed to be an independent contractor 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 an
agent of the Fund. It is understood and agreed that the Investment
Manager, by separate agreements with the Fund, may also serve the
Fund in other capacities. It is further agreed that the Investment
Manager and its officers and directors are not prohibited from
engaging in any other business activity or from rendering services to
any other person, or from serving as partners, officers or directors
of any other firm or corporation, including other investment
companies, so long as its or their services hereunder are not
impaired thereby. It is further agreed that personnel of the
Investment Manager may invest in securities for their own account
pursuant to a code of ethics that sets forth all employees' fiduciary
responsibilities regarding the Fund, establishes procedures for
personal investing and restricts certain transactions.
(c) The Investment Manager shall keep any books and records
relevant to the provision of its investment advisory services to each
Portfolio and shall specifically maintain all books and records with
respect to each Portfolio's securities and portfolio transactions and
shall render to the Fund's Board of Directors such periodic and
special reports as the Board may reasonably request. The Investment
Manager agrees that all records which it maintains for the Fund are
the property of the Fund and it will surrender promptly to the Fund
any such records upon the Fund's request, provided however that the
Investment Manager may retain a copy of
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such records. The Investment Manager further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act any such
records kept by the Investment Manager in connection with investment
advisory services provided pursuant hereto.
(d) The Fund has delivered to the Investment Manager copies of
each of the following documents and will deliver to it all future
amendments and supplements thereto, if any:
(i) The Registration Statement; and
(ii) The Prospectus of the Fund (such Prospectus and the
related Statement of Additional Information of the Fund, as currently
in effect and as amended or supplemented from time to time, being
herein collectively called the "Prospectus").
(e) The Fund shall at all times keep the Investment Manager
fully informed with regard to the securities owned by each Portfolio,
its funds available or to become available for investment, and
generally as to the condition of its affairs. The Fund shall furnish
the Investment Manager with a copy of all financial statements and
each report prepared by certified public accountants with respect to
it, and with such other information with regard to its affairs as
the Investment Manager may from time to time reasonably request.
(f) Any investment program undertaken by the Investment
Manager pursuant to this Agreement, as well as any other activities
undertaken by the Investment Manager on behalf of any Portfolio
pursuant thereto, shall at all times be subject to any directives of
the Board of Directors.
2. Expenses. The Investment Manager shall pay all of its
expenses arising from the performance of its obligations under
Section 1 of this Agreement and shall pay any salaries, fees and
expenses of Fund directors or officers who are employees, officers or
directors of the Investment Manager.
The Investment Manager shall not be required to pay any other
expenses of the Fund or the Portfolios, including (a) the fees and
expenses of directors who are not "interested persons" of the Fund,
as defined by the 1940 Act, and travel and related expenses of the
directors for attendance at meetings; (b) the fees and expenses of the
custodian and transfer agent of the Fund or any pricing service,
including but not limited to fees and expenses relating to Fund
accounting, pricing of portfolio shares, and computation of net asset
value; (c) the fees and expenses of calculating yield and/or
performance of the Portfolios; (d) the charges and expenses of legal
counsel and independent accountants; (e) taxes and corporate fees
payable to governmental agencies; (f) the costs of share certificates
and of membership dues of any trade association of which the Fund is
a member; (g) reimbursement of each Portfolio's share of the
organization expenses of the Fund; (h) the fees and expenses involved
in registering and maintaining registration of the Fund and the
Portfolios shares with the Commission, blue sky
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service providers, registering the Fund as a broker or dealer and
qualifying the shares of the Portfolios (or applying for applicable
exemptions, as the case may be) under state securities laws
including the preparation and printing of the registration statements
and prospectuses for such purposes; (i) allocable communications
expenses with respect to investor services, expenses of shareholders'
and Board of Directors' meetings and preparing, printing and mailing
proxies, prospectuses and reports to shareholders; (j) costs of
acquiring and disposing of portfolio securities, including but not
limited to brokers' commissions, dealers' xxxx-ups and any issue or
transfer taxes chargeable in connection with the Portfolios'
transactions; (k) the cost of stock certificates representing shares
of the Portfolios, if any; (l) insurance expenses, including, but not
limited to, the cost of a fidelity bond, directors and officers
insurance and errors and omissions insurance; and (m) litigation and
indemnification expenses, expenses incurred in connection with
mergers, and other extraordinary expenses not incurred in the ordinary
course of the Portfolios' business.
3. Compensation. (a) For the services described in Section
1 hereof, the Fund, on behalf of each Portfolio, will pay to the
Investment Manager promptly after the end of each calendar month, an
investment management fee computed at the annual rate applicable to
such Portfolio set forth on Schedule A hereto. The fee as computed in
accordance with Schedule A shall be based upon the net assets of
each Portfolio as to which this Agreement is then effective. The
value of the net assets for each Portfolio shall be calculated in
accordance with the provisions of the Fund's Prospectus. For purposes
of this Agreement, on each day when net asset value is not
calculated, the net assets of any Portfolio shall be deemed to be the
net assets of such Portfolio as of the close of business on the last
day on which net asset value was determined. Except as hereinafter
set forth, compensation under this Agreement shall be calculated and
accrued daily and the amounts of the daily accruals shall be paid
monthly in arrears (i.e., the applicable annual fee rate divided by
365 as applied to each prior day's net assets in order to calculate
the daily accrual). 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 fees as set forth above.
(b) In the event the operating expenses of a Portfolio
including all management fees, for any fiscal year ending on a date
on which this Agreement is in effect exceed the expense limitation
applicable to such Portfolio imposed by the securities laws or
regulations thereunder of any state or jurisdiction in which the
Portfolio's shares are qualified for sale, as such limitations may be
raised or lowered from time to time, the Investment Manager shall
reduce its management fee to the extent of such excess and, if
required, pursuant to any such laws or regulations, will reimburse
the Portfolio for any annual operating expenses (after reductions of
all management fees) in excess of any expense limitation that may be
applicable; provided, however, there shall be excluded from such
expenses the amount of any interest, taxes, brokerage commission 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 and attributable to the
Portfolio. Such reduction, if any, shall be computed and accrued
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daily, shall be settled on a monthly basis and shall be based upon the
expense limitation applicable to the Portfolio as at the end of the
last business day of the month. Should two or more such expense
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 Manager's fee shall be applicable.
4. Brokerage. In managing the assets of each Portfolio,
the Investment Manager shall purchase securities from or through and
sell securities to or through such persons, brokers or dealers as the
Investment Manager shall deem appropriate in conformity with
applicable law and with the terms of the Registration Statement, and
as the Fund's Board of Directors may direct from time to time.
Without limiting the generality of the foregoing, the Investment
Manager will implement the Fund's policy of seeking the best execution
of orders, which includes best net prices, in effecting purchases and
sales of portfolio securities for the account of each Portfolio.
On occasions when the Investment Manager deems the purchase or
sale of securities to be in the best interest of one or more
Portfolios as well as other clients of the Investment Manager, the
Investment Manager, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by the Investment Manager in accordance with its policy for
aggregation of orders, as in effect from time to time, which has been
approved by the Fund's Board of Directors.
5. Interested Persons. No director, officer or employee of
the Fund shall receive from the Fund any salary or other compensation
as such director, officer or employee while he or she is at the same
time a director, officer or employee of the Investment Manager or any
affiliated person (as defined in the 1940 Act) thereof. The Investment
Manager shall authorize and permit any of its directors, officers and
employees who may be elected as directors or officers of the Fund to
serve in the capacities in which they are elected, subject to their
individual consent and to any limitations imposed by law. All services
to be furnished by the Investment Manager under this Agreement may be
furnished through the medium of any such directors, officers or
employees of the Investment Manager.
6. Limitation of Liability. Subject to Section 36 of the
1940 Act, the Investment Manager shall not be liable for any error of
judgment or mistake of law or for any loss suffered by any Portfolio
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 Investment Manager in the performance
of its obligations and duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
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7. Non-Exclusive Use of the Name "Waterhouse". The Fund
acknowledges that it adopted its name through the permission of the
Investment Manager. The Investment Manager hereby consents to the
non-exclusive use by the Fund of the name "Waterhouse" only so long
as the Investment Manager serves as the investment manager to one or
more Portfolios. The Fund covenants and agrees to protect, exonerate,
defend, indemnify and hold harmless the Investment Manager, its
officers, agents and employees from and against any and all costs,
losses, claims, damages or liabilities, joint or several, including
all legal expenses which may arise or have arisen out of the Fund's
use or misuse of the name "Waterhouse" or out of any breach of or
failure to comply with this paragraph.
Neither the Fund nor any Portfolio shall distribute or
circulate any prospectus, proxy statement, sales literature,
promotional material or other printed matter required to be filed with
the Securities and Exchange Commission under Section 24(b) of the 1940
Act which contains any reference to the Investment Manager or using
the name "Waterhouse" without the approval of the Investment Manager
and shall submit all such materials requiring approval of the
Investment Manager in draft form, allowing sufficient time for review
by the Investment Manager and its counsel prior to any deadline for
printing. If the Investment Manager or any successor to its business
shall cease to furnish services to all Portfolios under this Agreement
or similar contractual arrangement, the Fund:
(a) as promptly as practicable, will take all necessary
action to cause its Articles of Incorporation to be amended to
accomplish a change of name; and
(b) within 90 days after the termination of this Agreement
or such similar contractual arrangement, shall cease to use in any
other manner, including but not limited to use in any prospectus,
sales literature or promotional material, the name "Waterhouse" or any
name, xxxx or logotype derived from it or similar to it or indicating
that the Fund or any Portfolio is managed by or otherwise associated
with the Investment Manager.
8. Term of Agreement. This Agreement shall become effective
upon its execution by an authorized officer of the respective parties
hereto. This Agreement shall continue in effect with respect to each
Portfolio for a period of two (2) years from the date hereof, and
thereafter from year to year so long as such continuation is
specifically approved at least annually in conformity with the
requirements of the 1940 Act with regard to investment advisory
contracts; provided, however, that this Agreement may be terminated at
any time without the payment of any penalty, on behalf of any or all
of the Portfolios, by the Fund, by the Board or, with respect to any
Portfolio, by "vote of a majority of the outstanding voting
securities" (as defined in the 0000 Xxx) of that Portfolio, or by the
Investment Manager on not less than 60 days' written notice to the
other party. This Agreement shall terminate automatically in the
event of its "assignment" (as defined in the 1940 Act).
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Termination of this Agreement shall not affect the right of
the Investment Manager to receive payments on any unpaid balance of
the compensation described in Section 3 hereof earned prior to such
termination.
9. Amendments; Partial Invalidity. This Agreement may be
amended by mutual consent, but the consent of the Fund must be
obtained in conformity with the requirements of the 1940 Act. 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.
10. Notices. All notices or other communications hereunder
to either party shall be in writing and shall be deemed to be
received on the earlier of the date actually received or on the
fourth day after postmark if such notice is mailed first class postage
prepaid. Notice shall be addressed: (a) if to the Fund, to:
President, Waterhouse Investors Cash Management Fund, Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or (b) if to the Investment Manager,
to: President, Waterhouse Asset Management, Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other address as either party may
designate by written notice to the other. Notice shall also be deemed
sufficient if given by telex, telecopier, telegram or similar means
of same day delivery (with a confirming copy by mail as provided
herein).
11. Separate Portfolios. This Agreement shall be construed
to be made by the Fund as a separate agreement with respect to each
Portfolio, and under no circumstances shall the rights, obligations
or remedies with respect to a particular Portfolio be deemed to
constitute a right, obligation or remedy applicable to any other
Portfolio.
12. Entire Agreement: Governing Law. This Agreement
contains the entire agreement between the parties hereto and
supersedes all prior agreements, understandings and arrangements with
respect to the subject matter hereof. This Agreement shall be
construed in accordance with applicable federal law and the laws of
the State of New York. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon, either of the parties to do anything in
violation of any applicable laws or regulations.
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IN WITNESS WHEREOF, the Fund and the Investment Manager have caused
this Agreement to be executed as of the day and year first above written.
WATERHOUSE INVESTORS CASH
MANAGEMENT FUND, INC.
ATTEST: By: ___________________________
___________________________
WATERHOUSE ASSET MANAGEMENT, INC.
ATTEST: By: ___________________________
___________________________
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SCHEDULE A
Fees
For the services provided by the Investment Manager under the foregoing
agreement to each of the following Portfolios, the Investment Manager will
receive the following fees:
In the case of each of the Money Market Portfolio, the U.S. Government Portfolio
and the Municipal Portfolio an annual investment management fee, payable
monthly, on a graduated basis equal to .35 of 1% of the first $1 billion of
average daily net assets of each Portfolio, .34 of 1% of the next $1 billion,
and .33 of 1% of average daily net assets of each Portfolio over $2 billion.
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