EXHIBIT 5(b)
SUB-ADVISORY AND SUB-ADMINISTRATION AGREEMENT
Contract made as of April 13, 1995, between PAINEWEBBER INCORPORATED
('PaineWebber'), a Delaware corporation registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended ('1934 Act') and as an investment
adviser under the Investment Advisers Act of 1940, as amended ('Advisers Act'),
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSET MANAGEMENT INC. ('▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'), a Delaware
corporation registered as a broker-dealer under the 1934 Act and as an
investment adviser under the Advisers Act.
WHEREAS PaineWebber has entered into an Investment Advisory and
Administration Contract dated April 13, 1995 ('Advisory Contract') with
PaineWebber/▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Cash Reserve Fund, Inc. ('Fund'), an open-end
investment company registered under the Investment Company Act of 1940, as
amended ('1940 Act'), which offers for public sale distinct shares of common
stock; and
WHEREAS under the Advisory Contract PaineWebber has agreed to provide
certain investment advisory and administrative services to the Fund; and
WHEREAS the Advisory Contract authorizes PaineWebber to delegate certain of
its duties as investment adviser and administrator under the Advisory Contract
to a sub-adviser or sub-administrator; and
WHEREAS PaineWebber wishes to retain ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as sub-adviser and
sub-administrator to provide certain investment advisory an administrative
services to PaineWebber and the Fund and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is willing to render
such services as described herein upon the terms set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. PaineWebber hereby appoints ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as its
sub-adviser and sub-administrator with respect to the Fund and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ accepts such appointment and agrees that it will furnish the
services set forth in Paragraph 2.
2. Services and Duties of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(a) Subject to the supervision of the Board of Directors ('Board') and
PaineWebber, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide a continuous investment program
for the Fund, including investment research and management with respect to
all securities, investments and cash equivalents held in the portfolio of
the Fund. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will determine from time to time what
investments will be purchased, retained or sold by the Fund. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ will be responsible for placing purchase and sale orders for
investments and for other related transactions. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will
provide services under this agreement in accordance with the Fund's
investment objective, policies and restrictions as stated in the Fund's
Prospectuses.
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agrees that, in placing orders with brokers, it
will attempt to obtain the best net result in terms of price and execution;
provided that, on behalf of the Fund, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may, in its
discretion, effect securities transactions with brokers and dealers who
provide the Fund with research, analysis, advice and similar services, and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may pay to those brokers and dealers, in return for
brokerage and research services and analysis, a higher commission than may
be charged by other brokers and dealers, subject to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'
determining in good faith that such commission is reasonable in terms
either of the particular transaction or of the overall responsibility of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its affiliates to such Fund and its other clients and
that the total commissions paid by such Fund will be reasonable in relation
to the benefits to the Fund over the long term. In no instance will
portfolio securities be purchased from or sold to PaineWebber, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder, or any
applicable exemptive orders. Whenever ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ simultaneously
places orders to purchase or sell the same security on behalf of the Fund
and one or more other accounts advised by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, such orders
will be allocated as to price and amount among all such accounts in a
manner believed to be equitable to each account. The Fund recognizes that
in some cases this procedure may adversely affect the results obtained for
the Fund.
(c) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will oversee the maintenance of all books and
records with respect to the securities transactions of the Fund and will
furnish the Board with such periodic and special reports as PaineWebber or
the Board reasonably may request. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ hereby agrees that all
records which it maintains for the Fund are the property of the Fund,
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any records which it maintains for the Fund and which are required to
be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund
upon request by the Fund.
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(d) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will oversee the computation of the net asset
value and net income of the Fund as described in the currently effective
registration statement of the Fund under the Securities Act of 1933, as
amended, and 1940 Act and any supplements thereto ('Registration
Statement') or as more frequently requested by the Board.
(e) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will assist in administering the affairs of the
Fund, subject to the supervision of the Board and PaineWebber, and further
subject to the following understandings:
(i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will supervise all aspects of the operation
of the Fund except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the Board
of its responsibility for and control of the conduct of affairs of the
Fund.
(ii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide the Fund with such
administrative and clerical personnel (including officers of the Fund)
as are reasonably deemed necessary or advisable by the Board and
PaineWebber and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will pay the salaries of all such
personnel.
(iii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide the Fund with such
administrative and clerical services as are reasonably deemed necessary
or advisable by the Board and PaineWebber, including the maintenance of
certain of the books and records of the Fund.
(iv) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will arrange, but not pay for, the periodic
preparation, updating, filing and dissemination (as applicable) of the
Fund's Registration Statement, proxy material, tax returns and reports
to shareholders of the Fund, the Securities and Exchange Commission and
other appropriate federal or state regulatory authorities.
(v) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide the Fund with, or obtain for it,
adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and
similar items.
3. Duties Retained by PaineWebber. PaineWebber will continue to
provide to the Board and the Fund the services described in subparagraph
3(e) of the Advisory Contract.
4. Further Duties. In all matters relating to the performance of this
Contract, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will act in conformity with the Fund's Articles
of Incorporation, By-Laws and Registration Statement of the Fund and with
the written instructions and directions of the Board and PaineWebber, and
will comply with the requirements of the 1940 Act, the Investment Advisers
Act of 1940 ('Advisers Act'), the rules thereunder, and all other
applicable federal and state laws and regulations.
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5. Services Not Exclusive. The services furnished by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
hereunder are not to be deemed exclusive, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be
free to furnish similar services to others so long as its services under
this Contract are not impaired thereby. Nothing in this Contract shall
limit or restrict the right of any director, officer or employee of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who may also be a director, officer or employee of the
Fund, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
6. Expenses. During the term of this Contract, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will
pay all expenses incurred by it in connection with its services under this
Contract.
7. Compensation. For the services provided and the expenses assumed by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to this Contract with respect to the Fund,
PaineWebber will pay to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a fee equal to 20% of the fee
received by PaineWebber from the Fund pursuant to the Advisory Contract
with respect to the Fund, such compensation to be paid monthly.
8. Limitation of Liability. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its delegates will
not be liable for any error of judgment or mistake of law or for any loss
suffered by PaineWebber or the Fund or the shareholders of the Fund in
connection with the performance of this Contract, except a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Contract. Any person, even though also an
officer, director, employee, or agent of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who may be or
become an officer, director, employee or agent of the Fund shall be deemed,
when rendering services to the Fund or acting with respect to any business
of the Fund, to be rendering such services to or acting solely for the Fund
and not as an officer, director, employee, or agent or one under the
control or direction of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ even though paid by it.
9. Duration and Termination.
(a) This Contract will become effective upon the date first above
written, provided that, with respect to the Fund, this Contract shall not
take effect unless it has first been approved (i) by a vote of a majority
of those directors of the Fund who are not parties to this Contract or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by vote of a majority
of the Fund's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract will
continue in effect for two years from the above written date. Thereafter,
if not terminated, this Contract will
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continue automatically for successive periods of twelve months each,
provided that such continuance is specifically approved at least annually
(i) by a vote of a majority of those directors of the Fund who are not
parties to this Contract or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or, by vote of a majority of the outstanding voting
securities of the Fund.
(c) Notwithstanding the foregoing, with respect to the Fund, this
Contract may be terminated by any party hereto at any time, without the
payment of any penalty, on sixty days' written notice to the other party;
this Contract also may be terminated at any time, without the payment of
any penalty, by vote of the Board or by a vote of a majority of the
outstanding voting securities of the Fund on sixty days' written notice to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and PaineWebber. This Contract will terminate
automatically in the event of its assignment or upon termination of the
Advisory Contract.
10. Amendment of this Agreement. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought, and no amendment of this
Contract as to the Fund shall be effective until approved by vote of a
majority of the Fund's outstanding voting securities.
11. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Delaware without giving effect to the conflicts of
laws principles thereof and the 1940 Act. To the extent that the applicable
laws of the State of Delaware conflict with the applicable provisions of
the 1940 Act, the latter shall control.
12. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Contract shall
not be affected thereby. This Contract shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
As used in this Contract, the terms 'majority of the outstanding voting
securities,' 'affiliated person,' 'interested person,' 'assignment,'
'broker,' 'investment adviser,' 'net assets,' 'sale,' 'sell' and 'security'
shall have the same meaning as such terms have in the 1940 Act, subject to
such exemption as may be granted by the SEC by any rule, regulation or
order. Where the effect of a requirement of the federal securities laws
reflected in any provision of this Agreement is affected by a rule,
regulation or order of the SEC,
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whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
Attest: PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Managing Director
Attest: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSET
MANAGEMENT INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
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Title: Senior Vice President
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