BT0128
Exhibit 5
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of October 28, 1992 by and between CAPITAL
APPRECIATION PORTFOLIO, a New York trust (herein called the "Portfolio"), and
BANKERS TRUST COMPANY (herein called the "Investment Adviser").
WHEREAS, the Portfolio is registered as an open-end
diversified management investment company under the Investment Company Act of
1940;
WHEREAS, the Portfolio desires to retain the Investment
Adviser to render investment advisory and other services, and the Investment
Adviser is willing to so render such services on the terms hereinafter set
forth;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Portfolio hereby appoints the Investment
Adviser to act as investment adviser to the Portfolio for the period and on the
terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. MANAGEMENT. Subject to the supervision of the Board of
Trustees of the Portfolio, the Investment Adviser will provide a continuous
investment program for the Portfolio, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in the Portfolio. The Investment Adviser will determine from time to
time what securities and other investments will be purchased, retained or sold
by the Portfolio. The Investment Adviser will provide the services rendered by
it hereunder in accordance with the Portfolio's investment objective(s) and
policies as stated in the Portfolio's then-current Registration Statement on
Form N-1A.
The Investment Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (herein called the
"Rules") and with the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940 (the "1940 Act") and the Investment
Advisers Act of 1940, all as amended, and will in addition conduct its
activities under this Agreement in accordance with regulations of the Board of
Governors of the Federal Reserve System pertaining to the investment advisory
activities of bank holding companies and their subsidiaries;
(b) will place orders pursuant to its investment
determinations for the Portfolio either directly with the issuer or with any
broker or dealer selected by it. In placing orders with brokers and dealers, the
Investment Adviser will use its reasonable best efforts to obtain the best net
price and the
most favorable execution of its orders, after taking into account all factors it
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. Consistent with this obligation,
the Investment Adviser may, to the extent permitted by law, purchase and sell
portfolio securities to and from brokers and dealers who provide brokerage and
research services (within the meaning of Section 28(e) of the Securities
Exchange Act of 1934) to or for the benefit of any fund and/or other accounts
over which the Investment Adviser or any of its affiliates exercises investment
discretion. Subject to the review of the Portfolio's Board of Trustees from time
to time with respect to the extent and continuation of the policy, the
Investment Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for effecting a securities
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Investment
Adviser determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of the Investment Adviser with respect to the accounts as to
which it exercises investment discretion; and
(c) will maintain books and records with respect to
the Portfolio's securities transactions and will render to the Portfolio's Board
of Trustees such periodic and special reports as the Board may request.
3. SERVICES NOT EXCLUSIVE. The investment management services
rendered by the Investment Adviser hereunder are not to be deemed exclusive, and
the Investment Adviser shall be free to render similar services to others so
long as its services under this Agreement are not impaired thereby.
4. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 of the Rules under the 1940 Act, the Investment Adviser hereby agrees
that all records which it maintains for the Portfolio are the property of the
Portfolio and further agrees to surrender promptly to the Portfolio any of such
records upon the Portfolio's request. The Investment Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act and to comply in full
with the requirements of Rule 204-2 under the Investment Advisers Act of 1940
pertaining to the maintenance of books and records.
5. EXPENSES. During the term of this Agreement, the Investment
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Portfolio.
In addition, if the expenses borne by the Portfolio in any
fiscal year of the Portfolio exceed the applicable expense limitations imposed
by the securities regulations of any state in which beneficial interests in the
Portfolio are registered or qualified for sale to the public, the Investment
Adviser shall reimburse the Portfolio for the excess expense to the extent
required by state law.
6. COMPENSATION. For the services provided and the expenses
assumed pursuant to this Agreement, the Portfolio will pay the Investment
Adviser and the Investment Adviser will accept as full compensation therefor a
fee, computed daily and payable monthly, in an amount equal to the rate of 0.65%
of the Portfolio's average daily net assets.
7. LIMITATION OF LIABILITY OF THE INVESTMENT ADVISER;
INDEMNIFICATION. (a) The Investment Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio in
connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
(b) Subject to the exceptions and limitations
contained in Section 7(c) below:
(i) the Investment Adviser (hereinafter
referred to as a "Covered Person") shall be indemnified by the Portfolio to the
fullest extent permitted by law, against liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved, as a party or otherwise, by virtue of
his being or having been the Investment Adviser of the Portfolio, and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to
a Covered Person:
(i) who shall have been adjudicated by a
court or body before which the proceeding was brought (A) to be liable to the
Portfolio or its investors by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office or (B) not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Portfolio; or
(ii) in the event of a settlement, unless
there has been a determination that such Covered Person did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(a) by the court or other body approving the
settlement; or
(b) by at least a majority of those Trustees who are
neither Interested Persons of the Portfolio nor are parties to the matter based
upon a review of readily available facts (as opposed to a full trial-type
inquiry); or
(c) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any investor in the Portfolio may, by
appropriate legal proceedings, challenge any such determination by the Trustees
or by independent counsel.
(d) The rights of indemnification herein provided may
be insured against by policies maintained by the Portfolio, shall be severable,
shall not be exclusive of or affect any other rights to which any Covered Person
may now or hereafter be entitled, shall continue as to a person who has ceased
to be a Covered Person and shall inure to the benefit of the successors and
assigns of such person. Nothing contained herein shall affect any rights to
indemnification to which Portfolio personnel and any other persons, other than a
Covered Person, may be entitled by contract or otherwise under law.
(e) Expenses in connection with the preparation and
presentation of a defense to any claim, suit or proceeding of the character
described in subsection (b) of this Section 7 may be paid by the Portfolio from
time to time prior to final disposition thereof, upon receipt of an undertaking
by or on behalf of such Covered Person that such amount will be paid over by him
to the Portfolio if it is ultimately determined that he is not entitled to
indemnification under this Section 7; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking or
(ii) the Portfolio shall be insured against losses arising out of any such
advance payments, or (iii) either a majority of the Trustees who are neither
Interested Persons of the Portfolio nor parties to the matter, or independent
legal counsel in a written opinion, shall have determined, based upon a review
of readily available facts as opposed to a trial-type inquiry or full
investigation, that there is reason to believe that such Covered Person will be
entitled to indemnification under this Section 7.
8. DURATION AND TERMINATION. This Agreement shall be effective
as to the Portfolio as of the date the Portfolio commences investment operations
after this Agreement shall have been approved by the Board of Trustees of the
Portfolio and the investor(s) in the Portfolio in the manner contemplated by
Section 15 of the 1940 Act and, unless sooner terminated as provided herein,
shall continue until the second anniversary of such date. Thereafter, if not
terminated, this Agreement shall continue in effect as to the Portfolio for
successive periods of 12 months each, provided such continuance is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Trustees of the Portfolio 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 (b) by the Board of Trustees of the
Portfolio by vote of a majority of the outstanding voting securities of the
Portfolio; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by the Board of
Trustees of the Portfolio, by vote of a majority of the outstanding voting
securities of the Portfolio on 60 days' written notice to the Investment
Adviser, or by the Investment Adviser as to the Portfolio at any time, without
payment of any penalty, on 90 days' written notice to the Portfolio. This
Agreement will immediately terminate in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meanings as such terms
have in the 1940 Act and the Rules and regulatory constructions thereunder.)
9. AMENDMENT OF THIS AGREEMENT. No material term of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment of a
material term of this Agreement shall be effective until approved by vote of a
majority of the Portfolio's outstanding voting securities.
10. (a) REPRESENTATIONS AND WARRANTIES. The Investment Adviser
hereby represents and warrants as follows:
(i) The Investment Adviser is exempt from
registration under the Investment Advisers Act of 1940;
(ii) The Investment Adviser has all
requisite authority to enter into, execute, deliver and perform its obligations
under, this Agreement;
(iii) This Agreement is legal, valid and
binding, and enforceable in accordance with its terms; and
(iv) The performance by the Investment
Adviser of its obligations under this Agreement does not conflict with any law
to which it is subject.
(b) COVENANTS. The Investment Adviser hereby
covenants and agrees that, so long as this Agreement shall remain in effect,
(i) The Investment Adviser shall remain
either exempt from, or registered under, the registration provisions of the
Investment Advisers Act of 1940; and
(ii) The performance by the Investment
Adviser of its obligations under this Agreement shall not conflict with any law
to which it is then subject.
11. NOTICES. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (a) to the Investment Adviser at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 or (b) to the Portfolio at 0 Xx. Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
12. WAIVER. With full knowledge of the circumstances and the
effect of its action, the Investment Adviser hereby waives any and all rights
which it may acquire in the future against the property of any investor in the
Portfolio,
other than beneficial interests in the Portfolio at their then net asset value,
which arise out of any action or inaction of the Portfolio under this Agreement.
13. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the laws of the State of New York, without reference to principles
of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
Attest:
CAPITAL APPRECIATION PORTFOLIO
By:
Xxxxxx X. Xxxxxxxx
President
Attest:
BANKERS TRUST COMPANY
By:
Xxxxxxx Xxxxxxxx
Managing Director
