LORD XXXXXX U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
(formerly LORD XXXXXX CASH RESERVE FUND, INC.)
MANAGEMENT AGREEMENT
AGREEMENT made as of this 14th day of October, 1981 by and
between LORD XXXXXX U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC., a
Maryland Corporation (hereinafter called the "Corporation"), and LORD, XXXXXX &
CO., a New York partnership (hereinafter called the "Investment Manager").
WHEREAS, the Corporation, desires to obtain the investment
management services of the Investment Manager and the Investment Manager is
willing to provide services of the nature desired upon the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
of other good and valuable consideration, receipt of which is hereby
acknowledged, it is agreed as follows:
1. The Corporation hereby employs the Investment Manager under
the terms and conditions of this Agreement, and the Investment Manager hereby
accepts such employment and agrees to perform supervisory functions of the
Corporation with respect to the investment and reinvestment of its property and
assets (whether or not held in trust or in the custody of a bank or trust
company subject to the Corporation's direction or control) including, without
limitation, the supervision of its investment portfolio and the recommendation
of investment policies and procedures within the
limitations set forth in the Corporation's Registration Statement on file with
the Securities and Exchange Commission under the Securities Act of 1933 and the
Investment Company Act of 1940, as amended (the "Act").
The Investment Manager agrees to maintain an adequate
organization of competent persons to perform the supervisory functions mentioned
herein.
All recommendations with respect to the investment portfolios
will be made to the Corporation's trading department which, with the approval of
authorized officers of the Corporation, will execute all trades in accordance
with the Corporation's investment procedures.
The Investment Manager reserves the right, in its discretion,
to purchase or otherwise obtain statistical information and services from other
sources, including affiliated persons of the Investment Manager.
Notwithstanding the provisions of this paragraph 1, the
investment policies and procedures and all other actions of the Corporation are,
and shall at all times be, subject to the control and direction of its Board of
Directors.
2. The Corporation agrees to pay the Investment Manager for
its services under this Agreement and for the expenses assumed, a management fee
computed and payable monthly at the annual rate of three quarters .50 of 1% of
the value of the Corporation's average daily net assets not in excess of
$250,000,000, .45 of 1%
of such assets not in excess of $500,000,000 and .40 of 1% of such assets in
excess of $500,000,000. The value of the net assets of the Corporation shall
include all assets held in trust or in custody of any bank, savings bank or
trust company for the Corporation, subject to its control or direction, and
shall be determined as provided in the Articles of Incorporation of the
Corporation. The fee shall be paid on the first day of each month for the
preceding month.
It is understood that any supplemental advisory or statistical services
which may be provided to the Corporation or to the Investment Manager from time
to time by independent broker-dealers or persons other than the Investment
Manager, for whatever reason, shall not reduce the amount of the fees payable to
the Investment Manager hereunder. It is recognized that such supplementary
advisory or statistical services may be useful to the Investment Manager and the
Corporation, but their value is indeterminable and is not to be considered a
substitute for the services provided by the Investment Manager hereunder.
3. It is understood that the services of the Investment
Manager are not deemed to be exclusive, and nothing in this Agreement shall
prevent the Investment Manager, or any officer, director, partner or employee
thereof, from providing similar services to other investment companies and other
clients (whether or not their investment objectives and policies are similar to
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those of the Corporation) or to engage in other activities. When other clients
of the Investment Manager desire to purchase or sell the same portfolio security
at the same time as the Corporation, it is understood that such purchases and
sales will be made as nearly as practicable on a pro rata basis in proportion to
the amounts desired to be purchased or sold by each client.
4. The Corporation will, at its own expense, furnish to the
Investment Manager periodic (but not less than semi-annually) statements of its
books of account, including balance sheets and earnings statements, and all
other information which may reasonably be required, from time to time, by the
Investment Manager, and will, at its own expense, at all times keep the
Investment Manager fully advised as to the cash, securities and other property
then comprising its assets, and furnish daily detailed price makeup sheets with
respect to its investment portfolio and shares of its capital stock.
5. The Investment Manager shall be under no obligation to pay
any fees, costs, expenses or other charges of the Corporation, except for the
compensation of its officers and directors who are affiliated with the
Investment Manager, sales and promotional costs, including the costs of printing
prospectuses used for offering shares other than to existing shareholders, rent
for its office space; and except for the ordinary and necessary office and
clerical expenses relating to research, statistical work
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and supervision of the Corporation's investment portfolio, to be performed by
the Investment Manager under paragraph 1 of this Agreement. The Corporation will
pay all other fees, cost, expenses or charges relating to its assets and
operations, including without limitation, office and clerical expenses not
relating to research, statistical work and supervision of the Corporation's
investment portfolio; fees and expenses of directors not affiliated with the
investment Manager, governmental fees; interest charges, taxes, association
membership dues; fees and charges for legal and auditing services (including
preparation of tax returns); fees and expenses of any custodians or trustees
with respect to custody of its assets; fees, charges and expenses of dividend
disbursing agents, registrars and transfer agents (including the cost of keeping
all necessary shareholder records and accounts, and handling any problems
relating thereto, and the expense of furnishing to all shareholders statements
of their accounts after every transaction, including the expense of mailing);
cost and expense of preparing, printing and mailing stock certificates,
prospectuses and reports, notices and proxy statements to shareholders and cost
of preparing reports to governmental agencies; brokerage fees and commissions of
every kind and expenses in connection with the execution of portfolio security
transactions (including the cost of any service or agency designed to facilitate
the purchase and sale of portfolio securities); insurance premiums;
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the cost of qualification and registration, of the Corporation and its shares
under federal, state and other securities laws; and any other fee, cost, expense
or charge of any kind not expressly assumed by the Investment Manager under this
Agreement.
Notwithstanding the above, the Investment Manager will pay
expenses of the Corporation in excess of 1/2 of 1% of average daily net assets
for the first 120 days following the effective date of the initial Registration
Statement of the Corporation filed with the Securities and Exchange Commission
under the Securities Act of 1933; thereafter, the Investment Manager may, but is
not required to, pay all or any portion of expenses of the Corporation not
expressly assumed by the Investment Manager under the Agreement. Any such
expenses paid by the Investment Manager which are not reimbursable by the
Investment Manager pursuant to state expense limitations described below shall
be paid back to the Investment Manager by the Corporation. Such repayment shall
be made as follows: for any month that the Corporation's ratio of operating
expenses to average net asses on an annualized basis is less than 8/10 of 1%,
the Corporation shall pay the Investment Manger an amount equal in dollars to
the difference in dollars between the expenses at the actual expense ratio and
those at a ratio of 8/10 of 1%; any such payments shall be made monthly and
shall continue until the amount of reimbursement is paid in full or until
September 30, 1988, whichever first occurs.
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Notwithstanding any other provision of this Agreement, if
expenses (including the management fee hereunder but excluding interest, taxes,
brokerage fees, and where permitted, extraordinary expenses) borne by the
Corporation in any fiscal year exceed expense limitations applicable to the
Corporation imposed by state securities administrators, as such limitations may
be lowered or raised from time to time, the Investment Manger will reimburse the
Corporation for any such excess.
If the Investment Manager pays for other expenses of the Corporation or
furnishes without charge to the Corporation services the cost of which is to be
borne by the Corporation under this Agreement, the Investment Manager shall not
be deemed to have waived its rights under this Agreement to have the Corporation
pay for such expenses or provide or pay for such services in the future.
6. The Investment Manager agrees that it shall observe and be
bound by all of the provisions of the Articles of Incorporation (including any
amendments thereto) of the Corporation which shall in any way limit or restrict
or prohibit or otherwise regulate any action by the Investment Manager.
7. The Investment Manager assumes no responsibility under this
Agreement and, having so acted, the Investment Manager shall not be held liable
or accountable for any mistakes of law or fact, or for any error or omission of
its officers, directors,
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partners or employees, or for any loss or damage arising or resulting therefrom
suffered by the Corporation or any of its stockholders, creditors, directors or
officers; provided however, that nothing herein shall be deemed to protect the
Investment Manager against any liability to the Corporation or to its
stockholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties hereunder, or by reason of the reckless disregard
of its obligations and duties hereunder. The Investment Manager shall not be
responsible for any action of the Board of Directors of the Corporation in
following or declining to follow any advice or recommendation of the Investment
Manager.
8. Neither this Agreement nor any other transaction between
the parties hereto pursuant to this Agreement shall be invalidated or in any way
affected by the fact that any or all of the directors, officers, stockholders,
or other representatives of the Corporation are or may be interested in the
Investment Manager, or any successor or assignee thereof, or that any or all of
the directors, officers, partners, or other representatives of the Investment
Manager are or may be interested in the Corporation, except as otherwise may be
provided in the Investment Company Act of 1940. The Investment Manager in acting
hereunder shall be an independent contractor and not any agent of the
Corporation.
9. This Agreement shall become effective upon the effective
date of the Registration Statement of the Corporation
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filed with the Securities and Exchange Commission under the Securities Act of
1933 on May 21, 1979, and continue in force until February 4, 1981, and is
renewable annually thereafter by specific approval of the Board of Directors of
the Corporation or by vote of a majority of the outstanding voting securities of
the Corporation; any such renewal shall be approved by the vote of a majority of
the directors who are not parties to this Agreement or interested persons of the
Investment Manager or of the Corporation, cast in person or at a meeting called
for the purpose of voting on such approval.
This Agreement may be terminated without penalty at any time
by the Corporation upon 60 days' written notice. This Agreement shall
automatically terminate in the event of its assignment. The terms "interested
persons", "assignment" and "vote of a majority of the outstanding voting
securities" shall have the same meaning as those terms are defined in the
Investment Company Act of 1940.
10. The Investment Manager reserves the right to grant the use
of the name "LORD XXXXXX" or "LORD, XXXXXX & CO.", or any derivative thereof, to
any other investment company or business enterprise. The Investment Manager
reserves the right to withdraw from the Corporation the use of the name "LORD
XXXXXX" and the use of its registered service xxxx; at such time of withdrawal
of the right to use the name "LORD XXXXXX", the Investment Manager agrees
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that the question of continuing this Agreement may be submitted to a vote of the
Corporation's shareholders. In the event of such withdrawal or the termination
of this Agreement, for any reason, the Corporation will, on the written request
of the Investment Manager, take such action as may be necessary to change its
name and eliminate all reference to the words "LORD XXXXXX" in any form, and
will no longer use such registered service xxxx.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and its corporate seal to be affixed
hereto, and the Investment Manager has caused this Agreement to be executed by
one of its partners all on the day and year first above written.
LORD XXXXXX CASH RESERVE FUND, INC.
By:/S/ XXXXXX X. XXXXXXXX
Chairman of the Board
/S/ XXXX X. XXXXX
Assistant Secretary
LORD, XXXXXX & CO.
By: /S/ XXXXXXX X. XXXXXX
A Partner
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