EXHIBIT 5
BATTERY PARK FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
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This Agreement is made this 1st day of October, 1996, between Nomura
Corporate Research and Asset Management Inc., a Delaware corporation, having
its principal place of business in New York, New York (the "Adviser"), and
Battery Park Funds, Inc., a Maryland Corporation having its principal place
of business in New York, New York (the "Corporation").
WHEREAS the Corporation is an open-end management investment company as
that term is defined in the Investment Company Act of 1940, as amended, and
is registered as such with the Securities and Exchange Commission;
WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services and is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Corporation desires to retain the Adviser to render
investment advisory and management services to the Corporation in the manner
and on the terms hereinafter set forth; and
WHEREAS, the Adviser is willing to provide investment advisory and
management services to the Corporation on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby employs Adviser as Investment Adviser for
each of the portfolios ("Funds") of the Corporation which executes an exhibit
to this Agreement, and Adviser accepts the employment. Subject to the
supervision, policies of, review by, and overall control of the Directors of
the Corporation, Adviser shall provide a continuous investment program for
each of the Funds, including investment research and management with respect
to all securities, investments, cash and cash equivalents in the Funds.
Adviser will determine from time-to-time what securities and other assets
will be purchased, retained or sold by the Funds and will place the daily
orders for the purchase or sale of securities. Adviser will provide services
rendered by it under this Agreement in accordance with each Fund's
objectives, policies, and restrictions as stated in the prospectus and
resolutions of the Board of Directors.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have
no authority to act for or represent the Corporation on any of its Funds in
any way or otherwise be deemed an agent of the Corporation or any of its Funds.
2. Adviser will be guided by each of the Fund's investment objective
and policies and restrictions contained in the Articles of Incorporation and
By-Laws of the Corporation and as set forth in the Registration Statements
and exhibits as may be on file with the Securities and Exchange Commission.
3. The Adviser shall also make decisions for each Fund as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to a Fund's portfolio securities shall be exercised.
Should the Directors 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 Fund, 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
portfolio securities for each Fund's account with brokers or dealers selected
by it, and to that end, the Adviser is authorized as the agent of each Fund
to give instructions to the custodian of the Fund as to deliveries of
securities and payments of cash for the account of the Fund. In connection
with the selection of such brokers or dealers and the placing of such orders
with respect to assets of each Fund, the Adviser is directed at all times to
seek to obtain execution and price within the policy guidelines determined by
the Directors as set forth in the Prospectus. Subject to this requirement
and the provisions of the Investment Company Act of 1940 and the Securities
Exchange Act of 1934, each as amended, and other applicable provisions of
law, the Adviser may select brokers or dealers with which it or the
Corporation is affiliated.
4. Each Fund shall pay or cause to be paid all of its own expenses and
its allocable share of Corporation expenses, including, without limitation,
the expenses of organizing the Corporation and continuing its existence; fees
and expenses of Directors and officers of the Corporation; fees for
investment advisory services and administrative personnel and services;
expenses incurred in the distribution of its shares ("Shares"), including
expenses of administrative support services; fees and expenses of preparing
and printing its Registration Statements under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, and any amendments thereto;
expenses of registering and qualifying the Corporation, the Funds, and Shares
of the Funds under federal and state laws and regulations; expenses of
preparing, printing, and distributing prospectuses (and any amendments
thereto) to shareholders; interest expense, taxes, fees, and commissions of
every kind; expenses of issue (including cost of Share certificates),
purchase, repurchase, and redemption of Shares; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder
servicing agents, and registrars; printing and mailing costs, auditing,
accounting, and legal expenses; reports to shareholders and governmental
officers and commissions; expenses of meetings of Directors and shareholders
and proxy solicitations therefor; actual out of pocket expenses of Directors
who are not affiliated persons of the Adviser; insurance expenses;
association membership dues and such nonrecurring items as may arise,
including all losses and liabilities incurred in administering the
Corporation and the Funds, and other expenses that may be properly paid by a
Fund. Each Fund will also pay its allocable share of such extraordinary
expenses as may arise including expenses incurred in connection with
litigation, proceedings, and claims and the legal obligations of the
Corporation to indemnify its officers and Directors and agents with respect
thereto.
5. The Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement and shall
pay all compensation of officers of each Fund and all Directors of the
Corporation who are affiliated persons of the Adviser.
6. The Distributor will pay certain of the expenses of the Funds
incurred in connection with the continuous offering of Fund shares.
7. Each of the Funds shall pay to Adviser, for all services rendered
to each Fund by Adviser hereunder, the fees set forth in the exhibits
attached hereto.
8. The net asset value of each Fund's Shares as used herein will
be calculated to the nearest 1/10th of one cent.
9. In the event the operating expenses of a Fund, including amounts
payable to the Adviser pursuant to this Agreement, for any fiscal year ending
on a date on which this Agreement is in effect exceed the expense limitations
applicable to that Fund imposed by applicable securities laws or regulations
thereunder, as such limitations may be raised or lowered from time to time,
the Adviser shall reduce its investment advisory fee by the extent of such
excess and, if required pursuant to any such laws or regulations, will
reimburse the Fund in the amount of such excess; provided, however, to the
extent permitted by law, there shall be excluded from such expenses the
amount of any interest, taxes, brokerage commissions, distribution fees 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. Whenever the expenses of a Fund exceed a pro
rata portion of the applicable annual expense limitations, the estimated
amount of reimbursement under such limitations shall be applicable as an
offset against the monthly payment of the investment advisory fee due to the
Adviser. 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 Adviser's fee shall be applicable.
The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of
one or more of the Funds) to the extent that any Fund's expenses exceed such
lower expense limitation as the Adviser may, by notice to the Fund,
voluntarily declare to be effective.
10. This Agreement shall begin for each Fund as of the date of
execution of the applicable exhibit and shall continue in effect with respect
to each Fund presently set forth on an exhibit (and any subsequent Funds
added pursuant to an exhibit during the initial term of this Agreement) for
two years from the date of this Agreement set forth above and thereafter for
successive periods of one year, subject to the provisions for termination and
all of the other terms and conditions hereof if: such continuation shall be
specifically approved at least annually by the vote of a majority of the
Directors of the Corporation, including a majority of the Directors who are
not parties to this Agreement or interested persons of any such party cast in
person at a meeting called for that purpose; provided, however, that,
notwithstanding any provision of this Agreement, the Agreement may be
terminated at any time with respect to a Fund, without payment of any
penalty, by the Adviser, on one hundred twenty (120) days' written notice to
the Corporation. If a Fund is added after the first approval by the
Directors as described above, this Agreement will be effective as to that
Fund upon execution of the applicable exhibit and will continue in effect
until the next annual approval of this Agreement by the Directors and
thereafter for successive periods of one year, subject to approval as
described above.
11. Notwithstanding any provision in this Agreement, it may be
terminated at any time with respect to any Fund, without the payment of any
penalty, by the Directors of the Corporation or by a vote of the shareholders
of that Fund on sixty (60) days' written notice to Adviser.
12. The Corporation shall deliver to the Adviser, from time-to-time as
available, copies of the Corporation's Form X-0X, X-0X, Xxxxxxxxxx, Xxxxxxxxx
of Additional Information, Board resolutions approving this Agreement,
Articles of Incorporation, and By-Laws, and all amendments and supplements
thereto.
13. This Agreement may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser may employ
or contract with such other person, persons, corporation, or corporations
(including subadvisers approved by the Board of Directors and shareholders in
accordance with the provisions of the Act) at its own cost and expense as it
shall determine in order to assist it in carrying out this Agreement. In
addition, the Adviser is authorized, subject to prior approval of the Board
of Directors, to take into account the sale of shares of the Funds in
allocating purchase and sale orders for portfolio securities to brokers and
dealers (including brokers and dealers that are affiliated with the adviser,
any subadviser or the Funds' distributor) in compliance with applicable law.
In no instance, however, will a portfolio security be purchased from or sold
to the Adviser, any subadviser or the Funds' distributor or affiliated person
thereof except to the extent permitted by the Federal or state securities
laws.
14. Adviser will place orders for purchase and sale of portfolio
securities with issuers or broker-dealers and will attempt to obtain best
price or most favorable execution with respect to such orders. In placing
such orders, Adviser will consider the experience, skill, financial
responsibility and administrative efficiency of the broker-dealer involved,
and may select a broker-dealer on a basis other than the lowest commission
rate if deemed appropriate by the Adviser.
15. The Corporation recognizes that the Adviser or its affiliates may
serve in an investment advisory capacity with respect to entities in addition
to the Fund, and the Corporation hereby agrees that nothing in the Agreement
shall be deemed to preclude the Adviser or its affiliates from serving in
such capacity.
It is understood that Directors of the Corporation and officers,
employees and shareholders of the Corporation and any of its funds are or may
become interested in the Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers,
employees and shareholders of the Adviser and its affiliates are or may
become similarly interested in Funds of the Corporation, and that the Adviser
and directors, officers, employees, partners and shareholders of the
affiliates may become interested in Funds of the Corporation as shareholder
or otherwise.
16. In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the obligations or duties under this Agreement on
the part of Adviser, Adviser shall not be liable to the Corporation or to any
of the Funds or to any shareholder for any act or omission in the course of
or connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding, or sale of any security.
17. This Agreement may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Directors of the Corporation, including a majority of the
Directors who are not parties to this Agreement or interested persons of any
such party to this Agreement (other than as Directors of the Corporation)
cast in person at a meeting called for that purpose, and, where required by
Section 15(a)(2) of the Act, on behalf of a Fund by a majority of the
outstanding voting securities of such Fund as defined in Section 2(a)(42) of
the Act.
18. The Adviser acknowledges that all sales literature for
investment companies (such as the Corporation) are subject to strict
regulatory oversight. The Adviser agrees to submit any proposed sales
literature for the Corporation (or any Fund) or for itself or its affiliates
which mentions the Corporation (or any Fund) to the Corporation's distributor
for review and filing with the appropriate regulatory authorities prior to
the public release of any such sales literature, provided, however, that
nothing herein shall be construed so as to create any obligation or duty on
the part of the Adviser to produce sales literature for the Corporation (or
any Fund). The Corporation agrees to cause its distributor to promptly
review all such sales literature to ensure compliance with relevant
requirements, to promptly advise Adviser of any deficiencies contained in
such sales literature, to promptly file complying sales literature with the
relevant authorities, and to cause such sales literature to be distributed to
prospective investors in the Corporation.
19. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York.
20. In the event that any portion of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
21. This Agreement will become binding on the parties hereto upon their
execution of the attached exhibits to this Agreement.
EXHIBIT A
to the
Investment Advisory Agreement
BATTERY PARK HIGH YIELD FUND
The following provisions are hereby incorporated and made part of the
Investment Advisory Agreement dated October 1, 1996 between Battery Park
Funds, Inc. and Nomura Corporate Research and Asset Management Inc.
For all services rendered by Adviser hereunder, the above-named Fund of
the Corporation shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.65 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.65 of 1% applied to
the daily net assets of the Fund. The advisory fee so accrued shall be paid
to Adviser monthly.
If this Agreement becomes effective subsequent to the first day of a
month or shall terminate before the last 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 fee as set forth above. Payment of
the Adviser's compensation for the preceding month shall be made as promptly
as possible after completion of the calculation of the fee as set forth
above. During any period when the determination of net asset value is
suspended by the Directors, the average daily net asset value of a share as
of the last day prior to such suspension shall for this purpose be deemed to
be the average daily net asset value at the close of each succeeding day
until it is again determined.
In consideration of the mutual covenants set forth in the Investment
Advisory Agreement dated October 1, 1996 between Battery Park Funds, Inc. and
Nomura Corporate Research and Asset Management Inc., Battery Park Funds, Inc.
executes and delivers this Exhibit on behalf of the Fund set forth above.
Witness the due execution hereof this 1st day of October, 1996.
Attest: NOMURA CORPORATE RESEARCH
AND ASSET MANAGEMENT INC.
By:
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Xxxxxxx X. Xxxxxxx Xxxxxx Xxxxxx
Assistant Secretary President
Attest: BATTERY PARK FUNDS, INC.
By:
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Xxxxxxx X. Xxxxxxx Xxxxx Xxxxxx
Secretary Treasurer
