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EX-99.b5.(a)
INVESTMENT MANAGEMENT AGREEMENT
(MONEY MARKET PORTFOLIO)
(GOVERNMENT SECURITIES PORTFOLIO)
AGREEMENT made this 4th day of January, 1996, 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 or intends to offer Shares in three
portfolios, the Money Market Portfolio, the Government Securities Portfolio and
the Tax-Exempt Portfolio; and
WHEREAS, the Fund desires to retain the Adviser under this Agreement to
render investment advisory and management services to the Money Market
Portfolio and the Government Securities Portfolio (the "Portfolios"), and the
Adviser is willing to render such services.
NOW THEREFORE, 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 Portfolios and to manage the investment and reinvestment of the assets
of the Fund in accordance with the investment objective and policies and
limitations for each of the Fund's Portfolios, 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. 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 all Portfolios the Adviser manages, 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 the average daily net assets of such Portfolios over $3
billion. The fee as computed above shall be allocated to each Portfolio based
upon the relative net assets of each Portfolio and shall be based only upon the
net assets of the Fund allocated to Portfolios for which this Agreement is then
in effect. 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.
4. 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.
5. 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 Prospectus 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 expense 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 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
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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 Fund for those Portfolios which the Adviser
manages in any fiscal year (including the Adviser's fee, but excluding
interest, taxes, fees payable to the Adviser under the administration,
shareholder services and distribution agreement with the Fund, fees incurred in
acquiring and disposing of portfolio securities, and, to the extent permitted,
extraordinary expenses) exceed 0.90% of the first $500 million of the combined
average daily net assets of such Portfolios, 0.80% of the next $500 million,
0.75% of the next $1 billion and 0.70% of average daily net assets of such
Portfolios over $2 billion, the Adviser will reduce its fee or reimburse the
Fund for any excess. The expense limitation guarantee shall be allocated to
each such Portfolio upon a fee reduction or reimbursement based upon the
relative average daily net assets of each such 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 2 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 for each Portfolio shall be calculated in accordance
with the provisions of the Fund's prospectus or at 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.
6. 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, directors, 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 trustee, officer or agent.
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7. 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.
8. This Agreement shall become effective with respect to each Portfolio
on the date hereof and shall remain in full force until December 1, 1996,
unless sooner terminated as hereinafter provided. This Agreement shall
continue in force from year to year thereafter with respect to each Portfolio,
but only as long as such continuance is specifically approved for each
Portfolio at least annually 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
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.
This Agreement may be terminated with respect to any Portfolio 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 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.
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
2 earned prior to such termination.
9. 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.
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10. 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.
11. All parties hereto are expressly put on notice of the Cash
Equivalent Fund Agreement and Declaration of Trust dated August 9, 1985 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 for such purpose.
12. This Agreement shall be construed in accordance with applicable
federal law and (except as to Section 9 hereof which shall be construed in
accordance with the laws of The Commonwealth of Massachusetts) the laws of the
State of Illinois.
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13. This Agreement is the entire contract between the parties relating to
the subject matter hereof and supersedes all prior agreements between the
parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed as of the day and year first above written.
CASH EQUIVALENT FUND
By: /s/ Xxxx X. Xxxxxx
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Title: Vice President
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ATTEST: /s/ Xxxxxx X. Xxxxxxx
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Title: Secretary
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XXXXXX FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Senior Vice President
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ATTEST: /s/ Xxxxx X. Xxxxxxxxxxx
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Title: Assistant Secretary
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