EXHIBIT A
ADVISORY AGREEMENT
AGREEMENT made as of the day of , 1997 by and between OCC CASH RE-
SERVES, INC., a Maryland corporation (the "Fund") and OPCAP ADVISORS, a Dela-
ware general partnership (the "Advisor").
WHEREAS, the Fund is an open-end investment company registered with the Secu-
rities 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, Govern-
ment, General Municipal, California Municipal and New York Municipal Portfo-
lios 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 herein-
after 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 Advi-
sor shall in all matters give to the Fund and its Board of Directors (the "Di-
rectors") 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 promul-
gated 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.
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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 securi-
ties 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 im-
prove its investment management services, including entering into subadvisory
agreements with other affiliated or unaffiliated registered investment advi-
sors 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 invest-
ment by the Fund irrespective of whether the determinations of the Advisor
relative thereto shall have been based, in whole or in part, upon the investi-
gation, research or recommendation of any other individual, firm or corpora-
tion believed by the Advisor to be reliable. Nothing contained herein, howev-
er, 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 disre-
gard of its obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the Advisor, any parent, subsidi-
ary or affiliate, or any director or officer thereof, from acting as invest-
ment 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, stock-
holders or employees from buying, selling or trading any securities or commod-
ities 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
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or otherwise impair the performance by the Advisor of its duties and obliga-
tions under this Agreement.
3. Other Duties of the Advisor
The Advisor shall provide and supervise all administrative and clerical activ-
ities undertaken for the benefit of each Portfolio of the Fund and shall pro-
vide effective corporate administration for the Fund, including (1) the over-
seeing 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 opera-
tions 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 distribu-
tion and redemption of the shares of each Portfolio and the continuous servic-
ing of shareholders of the Fund both directly and through appropriate interme-
diaries.
The Advisor's duties under this Agreement will include preparation and mainte-
xxxxx 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 disburse-
ments 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 secu-
rities 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 re-
quired 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 Port-
folio, including but not limited to:
(a) the fee of the Advisor;
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(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;
(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 underwrit-
ing of securities issued by the Fund, including preparation of stock cer-
tificates;
(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 ju-
risdictions;
(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 liti-
gation affecting the Fund and the obligation the Fund may have to indem-
nify its officers and Directors with respect thereto; and
(o)expenses incident to servicing Fund shareholders by broker-dealers (in-
cluding Xxxxxxxxxxx & Co., Inc., an affiliate of the Advisor), 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 provi-
sion 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 mil-
lion 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 mil-
lion 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 registra-
tion statement under the 0000 Xxx. The fee is payable as of the close of busi-
ness 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 to-
gether 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 Port-
folio.
(b) In the event that the operating expenses of the Fund exceed 1%, including
amounts payable to the Advisor pursuant to subsection (a) hereof, but exclud-
ing the amount of any interest, taxes, brokerage commissions and extraordinary
expenses (including but not limited to legal claims and liabilities and liti-
gation costs and any indemnification related thereto) paid or payable with re-
spect 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 effec-
tive 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 Portfo-
lio 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 re-
spective 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.
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
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Fund at any time, without payment of any penalty, upon sixty (60) days' writ-
ten notice to the Advisor (which notice may be waived by the Advisor), pro-
vided 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 no-
xxxx 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 amend-
ment is specifically approved by (i) the vote of the outstanding voting secu-
rities of such Portfolio and (ii) a majority of the Directors, including a ma-
jority 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 thereun-
der.
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 con-
flict with the applicable provisions of the 1940 Act, the latter shall con-
trol.
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 ma-
jority of the outstanding voting securities" shall have the respective mean-
ings 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:_______________________________________
Title:____________________________________
Attest:
OpCap Advisors
By:_______________________________________
Title:____________________________________
Attest:
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