ADVISORY AGREEMENT
AGREEMENT made as of the 5th day of November, 1997 by and between OCC
Cash Reserves, Inc., a Maryland corporation (the "Fund") and OpCap Advisors, a
Delaware general partnership (the "Advisor").
WHEREAS, the Fund is an open-end investment company registered with the
Securities and Exchange Commission (the "SEC") pursuant to the Investment
Company Act of 1940 (the "1940 Act");
WHEREAS, the Fund is organized in series form and each of the Primary,
Government, General Municipal, California Municipal and New York Municipal
Portfolios is a separately capitalized series ("Portfolio") of shares of common
stock to be issued by the Fund ("Shares") pursuant to the Fund's registration
statement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Fund and the Advisor agree as follows:
1. General Provisions
The Fund hereby employs the Advisor and the Advisor hereby undertakes
to act as the investment advisor of the Fund in connection with and for the
benefit of each Portfolio, including any Portfolio hereafter created, and to
perform for the Fund such other duties and functions in connection with each
Portfolio for the period and on such terms as are set forth in this Agreement.
The Advisor shall in all matters give to the Fund and its Board of Directors
(the "Directors") the benefit of its best judgment, effort, advice and
recommendations and shall at all times conform to and use its best efforts to
enable the Fund to conform to:
(a) The provisions of the 1940 Act and any rules or regulations
promulgated thereunder;
(b) Any other applicable provisions of state or federal law;
(c) The provisions of the Articles of Incorporation and By-Laws of
the Fund as amended from time to time;
(d) The policies and determinations of the Directors;
(e) The investment objectives, policies and investment
restrictions of each Portfolio as reflected in the
registration statement of the Fund under the 1940 Act or as
such objectives, policies and restrictions may from time to
time be amended; and
(f) The prospectus, if any, relating to each Portfolio in effect
from time to time.
The appropriate officers and employees of the Advisor shall be
available upon reasonable notice for consultation with any of the Directors or
officers with respect to any matters dealing with the Fund's business affairs,
including the valuation of any securities held by the Fund for the benefit of
any of its Portfolios that are either not registered for public sale or not
being traded on any securities market.
2. Investment Management
(a) The Advisor shall, subject to the direction and control by the
Directors, separately with respect to each Portfolio: (i) Regularly provide
investment advice and recommendations to the Fund with respect to investments,
investment policies and the purchase and sale of securities and other
investments; (ii) Supervise continuously and determine the securities and other
investments to be purchased or sold by the Fund and the portion, if any, of the
Fund's assets to be held uninvested; and (iii) Arrange for the purchase and sale
of securities and other investments by the Fund.
(b) The Advisor may obtain investment information, research or
assistance from any other person, firm or corporation to supplement, update or
otherwise improve its investment management services, including entering into
subadvisory agreements with other affiliated or unaffiliated registered
investment advisors in order to obtain specialized services, provided, however,
that the Fund shall not be required to pay any compensation other than as
provided by the terms of this Agreement and subject to the provisions of Section
5 hereof.
(c) So long as the Advisor shall have acted with due care and in good
faith, the Advisor shall not be liable to the Fund or its shareholders for any
error in judgment, mistake of law or any other act or omission in the course of
or connected with rendering services hereunder, including without limitation any
losses which may be sustained by the Fund or its shareholders as a result of the
purchase, retention, redemption or sale of any security or other investment by
the Fund irrespective of whether the determinations of the Advisor relative
thereto shall have been based, in whole or in part, upon the investigation,
research or recommendation of any other individual, firm or corporation believed
by the Advisor to be reliable. Nothing contained herein, however, shall be
construed to protect the Advisor against any liability to the Fund or its
shareholders arising out of the Advisor's willful misfeasance, bad faith or
gross negligence in the performance of its duties, or reckless disregard of its
obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the Advisor, any parent,
subsidiary or affiliate, or any director or officer thereof, from acting as
investment advisor for any other person, firm or corporation and shall not in
any way limit or restrict the Advisor or any of its directors, officers,
stockholders or employees from buying, selling or trading any securities or
commodities for its or their own account or for the accounts of others for whom
it or they may be acting, if such activities will not adversely affect or
otherwise impair the performance by the Advisor of its duties and obligations
under this Agreement.
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3. Other Duties of the Advisor
The Advisor shall provide and supervise all administrative and clerical
activities undertaken for the benefit of each Portfolio of the Fund and shall
provide effective corporate administration for the Fund, including (1) the
overseeing of accountants, legal counsel, custodians, transfer agents,
shareholder servicing agents and other parties performing services for the Fund,
(2) the preparation and filing of such reports related to the Fund or to any
Portfolio as shall be required by federal securities laws and by various state
"blue sky" laws, (3) the composition of periodic reports with respect to the
operations of each Portfolio for distribution to shareholders, (4) composition
of proxy materials for and the organization of meetings of the shareholders of
each Portfolio as required under applicable laws, and (5) continuous
distribution and redemption of the shares of each Portfolio and the continuous
servicing of shareholders of the Fund both directly and through appropriate
intermediaries.
The Advisor's duties under this Agreement will include preparation and
maintenance of separate books, records and other documents for each Portfolio,
as follows: (1) journals containing daily itemized records of all purchases and
sales and receipts and deliveries of securities, all receipts and disbursements
of cash and all other debits and credits, in the form required by Rule
31a-1(b)(1) under the 1940 Act; (2) general and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and expense accounts, in the form
required by Rules 31a-1(b)(2)(i) and (ii) under the 1940 Act; (3) a securities
record or ledger reflecting separately for each portfolio security as of the
trade date all "long" and "short" positions, if any, carried by the Fund for the
account of such Portfolio and showing the location of all such securities long
and the offsetting position to all such securities short, in the form required
by Rule 31a-1(b)(3) under the 1940 Act; (4) a record of all purchases or sales
of portfolio assets, in the form required by Rule 31a-1(b)(6) under the 1940
Act; and (5) a record of the proof of money balances in all ledger accounts
maintained pursuant to this Agreement, in the form required by Rule 31a-1(b)(8)
under the 1940 Act. The foregoing books and records shall be maintained by the
Advisor in accordance with and for the time periods specified by applicable
rules and regulations, including Rule 31a-2 under the 1940 Act. All such books
and records shall be the property of the Fund and upon request therefor the
Advisor shall surrender to the Fund such of the books and records as are
requested.
4. Allocation of Expenses
All expenses shall be paid by the Fund, allocated as appropriate to
each Portfolio, including but not limited to:
(a) the fee of the Advisor;
(b) interest expense, taxes and governmental fees;
(c) brokerage commissions (if any) and other expenses incurred in
acquiring or disposing of the Fund's portfolio securities and
other investments;
(d) insurance premiums for fidelity and other coverage requisite
to the Fund's operations;
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(e) fees of the Directors who are not interested persons of the
Fund, out-of-pocket travel expenses for all Directors and
other expenses incurred by the Fund in connection with
Directors' meetings;
(f) outside legal, accounting and audit expenses;
(g) custodian and dividend disbursing fees;
(h) transfer agent fees and other shareholder servicing expenses;
(i) expenses in connection with the issuance, offering, sale or
underwriting of securities issued by the Fund, including
preparation of stock certificates;
(j) fees and expenses incident to the registration or
qualification of the Fund's shares for sale with the SEC and
in various states and foreign jurisdictions;
(k) expenses of printing and mailing reports, notices and proxy
material to the shareholders of each Portfolio;
(l) all other expenses incidental to holding meetings of the
shareholders of each Portfolio including fees and expenses of
proxy solicitation;
(m) expenses of organizing the Fund and trade association dues and
fees;
(n) such extraordinary non-recurring expenses as may arise,
including litigation affecting the Fund and the obligation the
Fund may have to indemnify its officers and Directors with
respect thereto; and
(o) expenses incident to servicing Fund shareholders by
broker-dealers (including CIBC Xxxxxxxxxxx Corp.), banks and
other organizations and individuals.
The Advisor, in return for its fee, will bear all costs and expenses
incurred in connection with its investment management services to the Fund. The
Advisor will also bear the expense of its business management and other
management and supervisory duties and functions assumed by it under this
Agreement, but the Fund itself will bear the costs of the services managed and
supervised; e.g., the Advisor will arrange for and supervise, among other
services, the provision of outside audit, custodian and transfer agency services
to the Fund, but the Fund will pay for each of these provided services.
The Advisor at its expense will provide persons satisfactory to the
Directors to perform the duties of officers of the Fund.
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5. Compensation of the Advisor
(a) The Fund agrees to pay the Advisor, and the Advisor agrees to
accept as full compensation for the performance of all its functions and duties
to be performed hereunder, a fee based on the total net assets of each Portfolio
at the end of each business day at an annual rate of .50% of the first $100
million of average daily net assets, .45% of the next $200 million of average
daily net assets and .40% of average daily net assets in excess of $300 million
of each Portfolio. Determination of the net asset value of each Portfolio will
be made in accordance with the policies disclosed in the Fund's registration
statement under the 1940 Act. The fee is payable as of the close of business on
the last day of each calendar month and shall be made on the following business
day. The payment due on such day shall be computed by (1) adding together the
results of multiplying (i) the total net assets of each Portfolio on each day of
the month by (ii) the applicable daily fraction (based upon a 365-day year) of
the annual advisory fee percentage rate for such Portfolio and then (2) adding
together the total monthly amounts computed for each Portfolio.
(b) In the event that the operating expenses (net of any expense
offsets) of the Fund exceed 1%, including amounts payable to the Advisor
pursuant to subsection (a) hereof, but excluding the amount of any interest,
taxes, brokerage commissions and extraordinary expenses (including but not
limited to legal claims and liabilities and litigation costs and any
indemnification related thereto) paid or payable with respect to a Portfolio for
any fiscal year ending on a date during which this Agreement is in effect, the
Advisor will pay or refund for the account of that Portfolio any such excess
amount.
6. Duration
This Agreement will become effective with respect to each Portfolio of
the Fund upon approval by the Directors and by the shareholders of each
Portfolio. This Agreement will continue in effect for two years from the initial
effective date and thereafter (unless sooner terminated in accordance with this
Agreement) for successive periods of twelve months so long as each continuance
shall be specifically approved at least annually with respect to each Portfolio
by the vote of (1) a majority of those Directors who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval and (2) a majority of the
Directors or a majority of the outstanding voting securities of the respective
Portfolio. Such vote will be deemed to have continued this Agreement if it takes
place within 60 days of the Anniversary date of this Agreement.
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7. Termination
This agreement may be terminated with respect to one or more Portfolios
(i) by the Advisor at any time, without payment of any penalty, upon giving the
Fund ninety (90) days' written notice (which notice may be waived by the Fund);
or (ii) by the Fund at any time, without payment of any penalty, upon sixty (60)
days' written notice to the Advisor (which notice may be waived by the Advisor),
provided that such termination by the Fund shall be directed or approved by the
vote of the majority of all of the Directors or by the vote of a majority of the
outstanding voting securities of the Portfolio with respect to which notice of
termination has been given to the Advisor.
8. Amendment or Assignment
This Agreement may be amended with respect to a Portfolio only if such
amendment is specifically approved by (i) the vote of the outstanding voting
securities of such Portfolio and (ii) a majority of the Directors, including a
majority of those Directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, provided that this Agreement may be amended to add a
new series of Shares or delete an existing series of Shares without a vote of
the holders of Shares of any other Portfolio covered by this Agreement. This
Agreement shall automatically and immediately terminate in the event of its
assignment, as that term is defined in the 1940 Act and the rules thereunder.
9. Governing Law
This Agreement shall be interpreted in accordance with the laws of the
State of New York and the applicable provisions of the 1940 Act, other
securities laws, and the rules thereunder. To the extent that the applicable
laws of the State of New York, other securities laws or any of the provisions
herein. conflict with the applicable provisions of the 1940 Act, the latter
shall control.
10. Severability
If any provisions of this Agreement shall be held or made unenforceable
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
11. Definitions
As used in this Agreement, the terms "interested persons" and "vote of
a majority of the outstanding voting securities" shall have the respective
meanings set forth in Sections 2(a)(19) and 2(a)(42) of the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
OCC Cash Reserves, Inc.
By: /s/ Xxxxxxx Xxxxxx
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Attest: /s/ Xxxxxx Xxxxx Title: /s/ Secretary
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OpCap Advisors
By: /s/ Xxxxxxx X. Xxxxx
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Attest: /s/ Xxxxxx Xxxxx Title: /s/ President
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