EXHIBIT NO. 5
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of August 3, 1989, by and between
the CASH RESERVES PORTFOLIO, a New York trust (the "Portfolio"), and CITIBANK,
N.A., a national banking association ("Citibank" or the "Adviser").
WITNESSETH:
WHEREAS, the Portfolio is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act"); and
WHEREAS, the Portfolio wishes to engage the Adviser to provide certain
investment advisory services, and the Adviser is willing to provide such
investment advisory services to the Portfolio on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Adviser. The Adviser shall provide the Portfolio with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its investment assets. Citibank shall
act as the Adviser to the Portfolio and as such shall furnish continuously an
investment program and shall determine from time to time what securities shall
be purchased, sold or exchanged and what portion of the assets of the Portfolio
shall be held uninvested, subject always to the restrictions of the Portfolio's
Declaration of Trust, dated May 23, 1989, and By-laws, as each may be amended
from time to time (respectively, the "Declaration" and the "By-Laws"), to the
provisions of the 1940 Act and to the Portolio's then-current Registration
Statement under the 0000 Xxx. The Adviser shall also make recommendations as to
the manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the securities held by the Portfolio shall be
exercised. Should the Board of Trustees of the Portfolio at any time, however,
make any definite determination as to investment policy and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the
Portfolio, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders for
the purchase or sale of securities for the Portfolio's account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
In connection with the selection of such brokers or dealers and the placing of
such orders, the Adviser is directed to seek for the Portfolio in its best
judgment, prompt execution in an effective manner at the most favorable price.
Subject to this requirement of seeking the most favorable price, securities may
be bought from or sold to broker-dealers who have furnished statistical,
research and other information or services to the Adviser or the Portfolio,
subject to any applicable laws, rules and regulations. In making purchases or
sales of securities or other property for the account of the Portfolio the
Adviser may deal with itself or with the Trustees of the Portfolio or the
Portfolio's exclusive placing agent, to the extent such actions are permitted by
the 1940 Act.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. It is understood that the Portfolio will
pay all of its own expenses including, without limitation, compensation of
Trustees not "affiliated" with the Adviser; governmental fees; interest charges;
taxes; membership dues in the Investment Company Institute allocable to the
Portfolio; fees and expenses of independent auditors, of legal counsel and of
any transfer agent, administrator, registrar or dividend disbursing agent of the
Portfolio; expenses of preparing, printing and mailing reports, notices, proxy
statements and reports to governmental officers and commissions and to investors
in the Portfolio; expenses connected with the execution, recording and
settlement of security transactions; insurance premiums; fees and expenses of
the custodian for all services to the Portfolio, including safekeeping of funds
and securities and maintaining required books and accounts; expenses of
calculating the net asset value of the Portfolio; and expenses of meetings of
the Portfolio's investors.
3. Compensation of the Adviser. For the services to be rendered, the
Portfolio shall pay to the Adviser an investment advisory fee computed and paid
monthly at an annual rate equal to 0.15% of the Portfolio's average daily net
assets for its then-current fiscal year. If Citibank serves as Adviser for less
than the whole of any period specified in this Section 3, the compensation to
Citibank, as Adviser, shall be prorated.
4. Covenants of the Adviser. The Adviser agrees that it will not deal with
itself, or with the Trustees of the Portfolio or the Portfolio's exclusive
placing agent as principals in making purchases or sales of securities or other
property for the account of the Portfolio, except as permitted by the 1940 Act,
and will comply with all other provisions of the Portfolio's Declaration and
By-Laws and the then-current Registration Statement of the Portfolio under the
1940 Act relative to the Adviser and its Directors and officers.
5. Limitation of Liability of the Adviser. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of security transactions
for the Portfolio, except for wilful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. As used in this Section 5, the term "Adviser"
shall include Directors, officers and employees of the Adviser as well as the
corporation itself.
6. Activities of the Adviser. The services of the Adviser to the Portfolio
are not to be deemed to be exclusive, Citibank being free to render investment
advisory and/or other services to others. It is understood that Trustees and
officers of, and investors in the Portfolio are or may be or may become
interested in the Adviser, as Directors, officers, employees, or otherwise and
that Directors, officers and employees of the Adviser are or may become
similarly interested in the Portfolio and that the Adviser may be or may become
interested in the Portfolio as an investor or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written and shall
govern the relations between the parties hereto thereafter, and shall remain in
force until February 28, 1991 on which date it will terminate unless its
continuance after February 28, 1991 is "specifically approved at least annually"
(a) by the vote of a majority of the Trustees of the Portfolio who are not
"interested persons" of the Portfolio or of the Adviser at a meeting
specifically called for the purpose of voting on such approval, and (b) by the
Board of Trustees of the Portfolio or by "vote of a majority of the outstanding
voting securities" of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by the Adviser, in each case on not more than
60 days' nor less than 30 days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Portfolio.
The terms "specifically approved at least annually" vote of a majority of
the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CASH RESERVES PORTFOLIO
By /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
