INVESTMENT ADVISORY AGREEMENT
between
RENAISSANCE CAPITAL GREENWICH FUNDS
and
RENAISSANCE CAPITAL CORPORATION
AGREEMENT made as of the ___ day of _______, 1997, by and between Renaissance
Capital Greenwich Funds, a Delaware business trust which may issue one or more
series of shares of beneficial interest (the "Trust"), and Renaissance Capital
Corporation, a Delaware corporation (the "Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services to the funds listed on Schedule A (each, a "Fund" and
collectively, the "Funds"), and the Adviser represents that it is willing and
possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) General. The Trust hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the
terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to furnish the services herein set
forth for the compensation herein provided.
(b) Employees of Affiliates. The Adviser may, in its discretion,
provide such services through its own employees or the
employees of one or more affiliated companies that are
qualified to act as an investment adviser to the Trust under
applicable laws; provided that (i) all persons, when providing
services hereunder, are functioning as part of an organized
group of persons, and (ii) such organized group of persons is
managed at all times by authorized officers of the Adviser.
(c) Sub-Advisers. It is understood and agreed that the Adviser
may from time to time employ or associate with such other
entities or persons as the Adviser believes appropriate to
assist in the performance of this Agreement with respect to a
particular Fund or Funds (each a "Sub-Adviser"), and that any
such Sub-Adviser shall have all of the rights and powers of
the Adviser set forth in this Agreement; provided that a Fund
shall not pay any additional compensation for any Sub-Adviser
and the Adviser shall be as fully responsible to the Trust for
the acts and omissions of the Sub-Adviser as it is for its own
acts and omissions; and provided further that the retention
of any Sub-Adviser shall be approved in advance by
(i) the Board of Trustees of the Trust and
(ii) the shareholders of the relevant Fund if required under
any applicable provisions of the 1940 Act. The Adviser
wil1 review, monitor and report to the Trust's Board of
Trustees regarding the performance and investment
procedures of any Sub-Adviser. In the event that the
services of any Sub-Adviser are terminated, the Adviser
may provide investment advisory services pursuant to this
Agreement to the Fund without a Sub-Adviser and without
further shareholder approval, to the extent consistent
with the 1940 Act. A Sub-Adviser may be an affiliate of
the Adviser.
2. Delivery of Documents. The Trust has delivered to the Adviser copies
of each of the following documents along with all amendments thereto through the
date hereof, and will promptly deliver to it all future amendments and
supplements thereto, if any:
(a) the Trust's Trust Instrument;
(b) the Bylaws of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of this Agreement;
(d) the Trust's Registration Statement under the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act, on Form
N-1A as filed with the Securities and Exchange Commission (the
"Commission");
(e) Notification of Registration of the Trust under the 1940
Act on Form N-8A as filed with the Commission; and
(f) the currently effective Prospectus and Statement of
Additional Information of the Funds.
3. Investment Advisory Services.
(a) Management of the Funds. The Adviser hereby undertakes to act
as investment adviser to the Funds. The Adviser shall
regularly provide investment advice to the Funds and
continuously supervise the investment and reinvestment of
cash, securities and other property composing the assets of
the Funds and, in furtherance thereof, shall:
(i) supervise all aspects of the operations of the Trust
and each Fund;
(ii) obtain and evaluate pertinent economic, statistical
and financial data, as well as other significant
events and developments, which affect the economy
generally, the Funds' investment programs, and the
issuers of securities included in the Funds'
portfolios and the industries in which they engage,
or which may relate to securities or other
investments which the Adviser may deem desirable for
inclusion in a Fund's portfolio;
(iii) determine which issuers and securities shall be
included in the portfolio of each Fund;
(iv) furnish a continuous investment program for each
Fund;
(v) in its discretion and without prior consultation with
the Trust, buy, sell, lend and otherwise trade any
stocks, bonds and other securities and investment
instruments on behalf of each Fund; and
(vi) take, on behalf of each Fund, all actions the Adviser
may deem necessary in order to carry into effect such
investment program and the Adviser's functions as
provided above, including the making of appropriate
periodic reports to the Trust's Board of Trustees.
(b) Covenants. The Adviser shall carry out its investment
advisory and supervisory responsibilities in a manner
consistent with the investment objectives, policies, and
restrictions provided in:
(i) each Fund's Prospectus and Statement of Additional
Information as revised and in effect from time to time;
(ii) the Trust's Trust Instrument, Bylaws or other governing
instruments, as amended from time to time;
(iii) the 1940 Act;
(iv) other applicable laws; and
(v) such other investment policies, procedures and/or
limitations as may be adopted by the Trust with respect to
a Fund and provided to the Adviser in writing. The Adviser
agrees to use reasonable efforts to manage each Fund so
that it will qualify, and continue to qualify, as a
regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended, and regulations
issued thereunder (the "Code"), except as may be authorized
to the contrary by the Trust's Board of Trustees. The
management of the Funds by the Adviser shall at all times
be subject to the review of the Trust's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Adviser
shall keep each Fund's books and records required to be
maintained by, or on behalf of, the Funds with respect to
advisory services rendered hereunder. The Adviser agrees that
all records which it maintains for a Fund are the property of
the Fund and it will promptly surrender any of such records to
the Fund upon the Fund's request. The Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records of the Fund required to be preserved
by such Rule.
(d) Reports, Evaluations and other Services. The Adviser shall
furnish reports, evaluations, information or analyses to the
Trust with respect to the Funds and in connection with the
Adviser's services hereunder as the Trust's Board of Trustees
may request from time to time or as the Adviser may otherwise
deem to be desirable. The Adviser shall make recommendations
to the Trust's Board of Trustees with respect to Trust
policies, and shall carry out such policies as are adopted by
the Board of Trustees. The Adviser shall, subject to review
by the Board of Trustees, furnish such other services as the
Adviser shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement.
(e) Purchase and Sale of Securities. The Adviser shall place all
orders for the purchase and sale of portfolio securities for
each Fund with brokers or dealers selected by the Adviser,
which may include brokers or dealers affiliated with the
Adviser to the extent permitted by the 1940 Act and the
Trust's policies and procedures applicable to the Funds. The
Adviser shall use its best efforts to seek to execute
portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the
most favorable to the Funds. In assessing the best overall
terms available for any transaction, the Adviser shall
consider 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, research services provided to the Adviser, and the
reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In no event
shall the Adviser be under any duty to obtain the lowest
commission or the best net price for any Fund on any
particular transaction, nor shall the Adviser be under any
duty to execute any order in a fashion either preferential to
any Fund relative to other accounts managed by the Adviser or
otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers
or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) to
the Adviser, the Funds and/or the other accounts over which
the Adviser exercises investment discretion. The Adviser is
authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser
determines in good faith that the total commission is
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 Adviser with respect to accounts over
which it exercises investment discretion. The Adviser shall
report to the Board of Trustees of the Trust regarding overall
commissions paid by the Funds and their reasonableness in
relation to the benefits to the Funds. Any transactions for
the Funds that are effected through an affiliated
broker-dealer on a national securities exchange of which such
broker-dealer is a member will be effected in accordance with
Section 11(a) of the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder. The
Funds hereby authorize any such broker or dealer to retain
commissions for effecting such transactions and to pay out of
such retained commissions any compensation due to others in
connection with effectuating those transactions.
(g) Aggregation of Securities Transactions. In executing
portfolio transactions for a Fund, the Adviser may, to the
extent permitted by applicable laws and regulations, but shall
not be obligated to, aggregate the securities to be sold or
purchased with those of other Funds or its other clients if,
in the Adviser's reasonable judgment, such aggregation
(i) will result in an overall economic benefit to the Fund,
taking into consideration the advantageous selling or
purchase price, brokerage commission and other expenses,
and trading requirements, and
(ii) is not inconsistent with the policies set forth in
the Trust's registration statement and the Fund's
Prospectus and Statement of Additional Information.
In such event, the Adviser will allocate the securities
so purchased or sold, and the expenses incurred in the
transaction, in an equitable manner, consistent with
its fiduciary obligations to the Fund and such other
clients.
4. Representations and Warranties.
(a) The Adviser hereby represents and warrants to the Trust as
follows:
(i) The Adviser is a corporation duly organized and in
good standing under the laws of the State of Delaware
and is fully authorized to enter into this Agreement
and carry out its duties and obligations hereunder.
(ii) The Adviser is registered as an investment adviser
with the Commission under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), and is
registered or licensed as an investment adviser under
the laws of all applicable jurisdictions. The Adviser
shall maintain such registrations or licenses in
effect at all times during the term of this
Agreement.
(iii) The Adviser at all times shall provide its best
judgment and effort to the Trust in carrying out the
Adviser's obligations hereunder.
(b) The Trust hereby represents and warrants to the Adviser as follows:
(i) The Trust has been duly organized as a business trust
under the laws of the State of Delaware and is
authorized to enter into this Agreement and carry out
its terms.
(ii) The Trust is registered as an investment company with
the Commission under the 1940 Act and shares of each
Fund are registered for offer and sale to the public
under the 1933 Act and all applicable state
securities laws where currently sold. Such
registrations will be kept in effect during the term
of this Agreement.
5. Compensation. As compensation for the services which the Adviser is
to provide or cause to be provided pursuant to Paragraph 3, each Fund shall pay
to the Adviser out of Fund assets an annual fee, computed and accrued daily and
paid in arrears on the first business day of every month, at the rate set forth
opposite each Fund's name on Schedule A, which shall be a percentage of the
average daily net assets of the Fund (computed in the manner set forth in the
Fund's most recent Prospectus and Statement of Additional Information)
determined as of the close of business on each business day throughout the
month. At the request of the Adviser, some or all of such fee shall be paid
directly to a Sub-Adviser. The fee for any partial month under this Agreement
shall be calculated on a proportionate basis.
6. Interested Persons. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the Trust are
or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and shareholders of the Adviser are or
may be or become similarly interested in the Trust.
7. Expenses. As between the Adviser and the Funds, the Funds will pay
for all their expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Funds shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other costs
in connection with the purchase or sale of securities and other investment
instruments, which the parties acknowledge might be higher than other brokers
would charge when a Fund utilizes a broker which provides brokerage and research
services to the Adviser as contemplated under Paragraph 3 above; (iii) fees and
expenses of the Trust's Trustees that are not employees of the Adviser; (iv)
legal and audit expenses; (v) administrator, custodian, pricing and bookkeeping,
registrar and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Funds' shares for distribution
under state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders, unless otherwise
required; (viii) all other expenses incidental to holding meetings of
shareholders, including proxy solicitations therefor, unless otherwise required;
(ix) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (x) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; (xi) insurance premiums for fidelity
bonds and other coverage to the extent approved by the Trust's Board of
Trustees; (xii) association membership dues authorized by the Trust's Board of
Trustees; and (xiii) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust is
a party (or to which the Funds' assets are subject) and any legal obligation for
which the Trust may have to provide indemnification to the Trust's Trustees and
officers.
8. Non-Exclusive Services; Limitation of Adviser's Liability. The
services of the Adviser to the Funds are not to be deemed exclusive and the
Adviser may render similar services to others and engage in other activities.
The Adviser and its affiliates may enter into other agreements with the Funds
and the Trust for providing additional services to the Funds and the Trust which
are not covered by this Agreement, and to receive additional compensation for
such services. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, or a breach of fiduciary duty with respect to receipt of
compensation, neither the Adviser nor any of its directors, officers,
shareholders, agents, or employees shall be liable or responsible to the Trust,
the Funds or to any shareholder of the Funds for any error of judgment or
mistake of law or for any act or omission in the course of, or connected with,
rendering services hereunder or for any loss suffered by the Trust, a Fund or
any shareholder of a Fund in connection with the performance of this Agreement.
9. Effective Date; Modifications; Termination. This Agreement shall
become effective on _______, 1997, provided that it shall have been approved by
a majority of the outstanding voting securities of each Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval.
(a) This Agreement shall continue in force until _____, 1999.
Thereafter, this Agreement shall continue in effect as to each
Fund for successive annual periods, provided such continuance
is specifically approved at least annually (i) by a vote of
the majority of the Trustees of the Trust 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 (ii) by a vote of the Board of Trustees
of the Trust or a majority of the outstanding voting shares of
the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those
Trustees of the Trust who are not interested persons of any
party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement with respect
to any particular Fund at any time on sixty (60) days' prior
written notice to the other, without payment of any penalty.
Such a termination by the Trust shall be effected as to any
Fund by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund.
This Agreement shall terminate automatically in the event of
its assignment.
10. Limitation of Liability of Trustees and Shareholders. The Adviser
acknowledges the following limitation of liability:
The terms "Renaissance Capital Greenwich Funds" and "Trustees" refer,
respectively, to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Trust Instrument,
to which reference is hereby made, such reference being inclusive of any and all
amendments thereto so filed or hereafter filed. The obligations of "Renaissance
Capital Greenwich Funds" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with the Trust or a Fund must look solely to the assets
of the Trust or Fund for the enforcement of any claims against the Trust or
Fund.
11. Non-Exclusive Use of the Name "Renaissance". The Trust acknowledges
that it adopted its name through the permission of the Adviser. The Adviser
hereby consents to the non-exclusive use by the Trust of the name "Renaissance"
only so long as the Adviser serves as the Funds' adviser.
If the Adviser or any successor to its business shall cease to furnish
services to the Funds under this Agreement or similar contractual arrangement,
the Trust:
(a) as promptly as practicable, will take all necessary action
to cause its Certificate of Trust to be amended to accomplish a change
of name; and
(b) within 90 days after the termination of this Agreement or
such similar contractual arrangement, shall cease to use in any other
manner, including but not limited to use in any prospectus, sales
literature or promotional material, the name "Renaissance" or any name,
xxxx or logotype derived from it or similar to it or indicating that
the Funds are managed by or otherwise associated with the Adviser.
12. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
13. Independent Contractor. The Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Trust from time to
time, have no authority to act for or represent a Fund in any way or otherwise
be deemed an agent of a Fund.
14. Structure of Agreement. The Trust is entering into this Agreement
on behalf of the respective Funds severally and not jointly. The
responsibilities and benefits set forth in this Agreement shall refer to each
Fund severally and not jointly. No Fund shall have any responsibility for any
obligation of any other Fund arising out of this Agreement. Without otherwise
limiting the generality of the foregoing:
(a) any breach of any term of this Agreement regarding the Trust
with respect to any one Fund shall not create a right or
obligation with respect to any other Fund;
(b) under no circumstances shall the Adviser have the right to set
off claims relating to a Fund by applying property of any
other Fund; and
(c) the business and contractual relationships created by this
Agreement, consideration for entering into this Agreement, and
the consequences of such relationship and consideration relate
solely to the Trust and the particular Fund to which such
relationship and consideration applies.
This Agreement is intended to govern only the relationships between the
Adviser, on the one hand, and the Trust and the Funds, on the other hand, and
(except as specifically provided above in this Paragraph 14) is not intended to
and shall not govern (i) the relationship between the Trust and any Fund or (ii)
the relationships among the respective Funds.
15. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
16. Severability. 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 and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
17. Notices. Notices of any kind to be given to the Trust hereunder by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxx; with a copy to Kramer, Levin, Naftalis & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxx-Xxxxxxxx, Esq., or at such other
address or to such individual as shall be so specified by the Trust to the
Adviser. Notices of any kind to be given to the Adviser hereunder by the Trust
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxx or at such other address or to such individual as shall be so
specified by the Adviser to the Trust. Notices shall be effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
RENAISSANCE CAPITAL RENAISSANCE CAPITAL CORPORATION
GREENWICH FUNDS
By: By:
Name: Name:
Title: Title:
KL2:175834.1
Schedule A
Name of Fund Fee*
1. The IPO Plus Aftermarket Fund 1.50%
--------------------
* As a percentage of average daily net assets. Note, however, that the
Adviser shall have the right, but not the obligation, to voluntarily
waive any portion of the advisory fee from time to time.
