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INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the __ day of June, 1998 by and between Cadre
Institutional Investors Trust, a Delaware business trust (hereinafter called
the "Trust"), and Cadre Financial Services, Inc., a Delaware corporation
(hereinafter called the "Adviser"):
WHEREAS, the Trust engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act"); and the Adviser is registered as
an investment adviser under the Investment Advisers Act of 1940, and engages in
the business of acting as investment adviser; and
WHEREAS, the Trust desires to retain the Adviser to render
investment advisory with respect to certain series of the Trust and to provide
certain other services in the manner and on the terms and conditions
hereinafter set forth; and
WHEREAS, the Adviser desires to be retained to perform such
services on said terms and conditions:
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Trust and the Adviser agree as follows:
1. The Trust hereby retains the Adviser to act as
investment adviser to the series of the Trust identified in Schedule A of this
Agreement (each, a "Portfolio" and collectively, the "Portfolios") and, subject
to the supervision of the Board of Trustees of the Trust, to manage the
investment activities of the Portfolios and to provide certain other services
as hereinafter set forth.
Without limiting the generality of the foregoing, the Adviser shall:
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets, and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; continuously manage the
assets of the Portfolios in a manner consistent with the investment objectives,
policies and restrictions of each Portfolio and applicable laws and
regulations; determine the securities and commodities to be purchased, sold or
otherwise disposed of by the Portfolios and the timing of such purchases, sales
and dispositions; and take such further action, including the placing of
purchase and sale orders and the voting of securities on behalf of the
Portfolios, as the Adviser shall deem necessary or appropriate. The Adviser
shall furnish to or place at the disposal of the Trust such of the information,
evaluations, analyses and opinions formulated or obtained by the Adviser in
the discharge of its duties as the Trust may, from time to time, reasonably
request.
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2. The Adviser shall also provide such administrative
services as may be necessary in connection with the operations of the
Portfolios, and including without limitation: maintenance of the accounting
books and records of the Portfolios; valuation of the assets of the Portfolios;
calculation of the net asset values per share; maintenance of records regarding
the ownership of shares of the Portfolios; preparation and filing of tax
returns of the Portfolios; and preparation of materials for meetings of the
Board of Trustees of the Trust and meetings of shareholders and preparation of
regulatory reports and filings, insofar as the foregoing relate to the
Portfolios, and the distribution and filing of such materials.
3. The Adviser shall, at its own expense, maintain such
staff and employ or retain such personnel and consult with such other persons
as may be necessary to render the services required to be provided or furnished
by it pursuant to this this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Adviser shall be deemed to include
persons employed or otherwise retained by the Adviser to furnish statistical
and other factual data, advice regarding economic factors and trends,
information with respect to technical and scientific developments, and such
other information, advice and assistance as the Adviser may desire.
4. The Trust will, from time to time, furnish or
otherwise make available to the Adviser such financial reports, proxy
statements, policies and procedures and other information relating to the
business and affairs of the Trust as the Adviser may reasonably require in
order to discharge its duties and obligations hereunder.
5. The Adviser shall bear the cost of rendering the
services to be performed by it under this Agreement, and shall provide the
Trust with such office space, facilities, equipment, clerical help, and other
personnel and services as the Trust shall reasonably require in connection with
the operations of the Portfolios. The salaries of officers of the Trust, and
the fees and expenses of Trustees of the Trust, who are also directors,
officers or employees of the Adviser, or who are officers or employees of any
company affiliated with the Adviser, shall be paid and borne by the Adviser or
such affiliated company.
6. The Trust assumes and shall pay or cause to be paid
all expenses of the Trust and the Portfolios not expressly assumed by the
Adviser under this Agreement, including without limitation: any payments
pursuant to any plan of distribution adopted by the Trust; the fees, charges
and expenses of any registrar, custodian, accounting agent, administrator,
stock transfer and dividend disbursing agent; brokerage commissions; taxes;
registration costs of the Trust and its shares under federal and state
securities laws; the costs and expenses of engraving and printing stock
certificates; the costs and expenses of preparing, printing, including
typesetting, and distributing prospectuses and statements of additional
information of the Trust and the Portfolios and supplements thereto to the
Trust's shareholders; all expenses of shareholders and Trustees meetings and of
preparing, printing and mailing proxy statements and reports to shareholders;
fees and travel expenses of Trustees and members of any advisory board or
committee who are not also officers, directors or employees of the Adviser or
who are not officers or employees of any company affiliated with the Adviser;
all expenses incident to any dividend, withdrawal or redemption options;
charges and expenses of any outside service used
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for pricing of the Trust's shares; fees and expenses of legal counsel to the
Trust and its Trustees; fees and expenses of the Trust's independent
accountants; membership dues of industry associations; interest payable on
Trust borrowings; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Trust which inure to its benefit; and
extraordinary expenses (including but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto).
7. As full compensation for the services and facilities
furnished to the Trust and the expenses assumed by the Adviser under this
Agreement, each Portfolio shall pay to the Adviser a fee with respect to such
Portfolio, calculated in accordance with Schedule B hereto. This fee shall be
paid monthly. Subject to the provisions of paragraph 8 hereof, payment of the
Adviser's compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by paragraph 8
hereof.
8. In the event the operating expenses of a Portfolio,
including amounts payable to the Adviser pursuant to paragraph 7 hereof, for
any fiscal year ending on a date on which this Agreement is in effect, exceed
the expense limitation applicable to the Portfolio under any state securities
laws or regulations that may then be applicable to the Trust (as such
limitations may be raised or lowered, or as they may be waived upon application
of the Trust or the Adviser from time to time), the Adviser shall reduce its
fee to the extent of such excess and, if required pursuant to any such laws or
regulations, will reimburse the Portfolio for annual operating expenses in
excess of such expense limitation; provided, however, that there shall be
excluded from 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 relating thereto) paid or payable by the Trust or the
Portfolios to the extent permissible under applicable laws and regulations.
The amount of any such reduction in fee or reimbursement of expenses shall be
calculated and accrued daily and settled on a monthly basis, based upon the
expense limitation applicable as at the end of the last business day of the
month. 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.
For purposes of this provision, should any applicable expense
limitation be based upon the gross income of a Portfolio, such gross income
shall include, but not be limited to, interest on debt securities held by the
Portfolio accrued to and including the last day of the Portfolio's fiscal year,
and dividends declared on equity securities held by the Portfolio, the record
dates for which fall on or prior to the last day of such fiscal year, but shall
not include gains from the sale of securities.
9. The Adviser will use its best efforts in the
supervision and management of the investment activities of the Portfolios and
in providing services hereunder, but shall not be liable to the Trust, the
Portfolios or shareholders for any error in investment judgment, or in the
absence of willful misfeasance, bad faith, negligence or reckless disregard of
its obligations hereunder, for any mistake of law or for any act or omission by
the Adviser.
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10. Nothing contained in this Agreement shall prevent the
Adviser or any affiliated person of the Adviser from acting as investment
adviser or manager for any other person, firm or corporation and shall not in
any way bind or restrict the Adviser or any such affiliated person from buying,
selling or trading any securities or commodities for their own accounts or for
the account of others for whom they may be acting. Nothing in this Agreement
shall limit or restrict the right of any director, officer or employee of the
Adviser to engage in any other business or to devote his time and attention in
part to the management or other aspects of any other business whether of a
similar or dissimilar nature.
11. The Trust acknowledges and agrees, in accordance with
the provisions of Article VIII, Section 9 of the Trust's Declaration of Trust
dated June 27, 1995, as amended and restated June 30, 1997, that the name
"Cadre" and the Cadre logo and all rights to the use of such name or logo as
part of the name of the Trust and the Portfolios belong to the Adviser and
other affiliates of Ambac Financial Group, Inc.
12. This Agreement shall remain in effect as to each
Portfolio until June __, 2000, and shall continue in effect for each Portfolio
from year to year thereafter provided such continuance as to such Portfolio is
approved at least annually by the vote of a majority of the outstanding voting
securities of the Portfolio, as defined by the Act and the rules thereunder, or
by the Board of Trustees of the Trust; provided that in either event such
continuance is also approved by a majority of the Trustees of the Trust who are
not parties to this Agreement or "interested persons" (as defined in the Act)
of any such party (the "Independent Trustees"), by vote cast in person at a
meeting called for the purpose of voting on such approval; and provided,
however, that (a) the Trust may at any time, without payment of any penalty,
terminate this Agreement as to the Trust (or any Portfolio) upon sixty days
written notice to the Adviser, either by majority vote of the Trustees of the
Trust or by the vote of a majority of the outstanding voting securities of the
Trust (or such Portfolio) (as defined in the Act and the rules thereunder); (b)
this Agreement shall immediately terminate in the event of its assignment (to
the extent required by the Act and the rules thereunder) unless such automatic
termination shall be prevented by an exemptive order of the Securities and
Exchange Commission; and (c) the Adviser may terminate this Agreement as to the
Trust or any of the Portfolios without payment of penalty on sixty days written
notice to the Trust. The failure to approve a continuance of this Agreement as
to any Portfolio, or any termination of this Agreement as to any Portfolio,
shall not affect the continuation of the Agreement as to the Trust or any other
Portfolios which have approved a continuance and not terminated this Agreement.
13. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed post-paid, to the other party at
the principal office of such party.
14. This Agreement may be amended only by the written
agreement of the parties. Any amendment shall be required to be approved by
the Trustees of the Trust and by a majority of the Independent Trustees in
accordance with the provisions of Section 15(c) of the Act and the rules
thereunder. Any amendment shall also be required to be approved by a vote of
shareholders as, and to the extent, required by the Act and the rules
thereunder. Except as otherwise provided by the Act and the rules thereunder,
an amendment to this Agreement may be
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effected without the vote of shareholders: to reduce the fees payable hereunder
by any Portfolio; to amend Schedule A and Schedule B to reflect the addition of
a Portfolio which is newly formed and has not commenced it operations and the
fee initially payable hereunder by that Portfolio; to amend Schedule A and
Schedule B to reflect the deletion of a Portfolio; to supply any omission; to
cure, correct or supplement any ambiguous, defective of inconsistent provision
hereof; or if necessary, to conform this Agreement to the requirements of
applicable laws or regulations, but neither the Trust nor the Adviser shall be
liable for failing to do so.
15. This Agreement shall be construed in accordance with
the laws of the State of New York, without reference to conflict of law
principles, and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
16. The Trust represents that this Agreement has been
duly approved by the Trustees, including a majority of the Independent
Trustees, and by shareholders of the Liquid Asset Fund series of the Trust
(which is the sole series of the Trust operating as of the date hereof and is
expected to be the initial investor in the U.S. Government Money Market
Portfolio), in accordance with the requirements of the Act and the rules
thereunder.
17. The Trust and the Adviser agree that the obligations
of the Trust under this Agreement shall not be binding upon any of the members
of the Board of Trustees, shareholders, nominees, officers, employees or
agents, whether past, present or future, of the Trust, individually, but are
binding only upon the assets and property of the Portfolios, as provided in the
Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.
CADRE INSTITUTIONAL INVESTORS TRUST
By:
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Title:
Attest:
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Title:
CADRE FINANCIAL SERVICES, INC.
By:
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Title:
Attest:
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Title:
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SCHEDULE A
It is agreed by the parties hereto that the Adviser shall provide
services as set forth herein to the following Portfolios:
U.S. Government Money Market Portfolio
Money Market Portfolio
This Schedule A may be amended from time to time by the parties
hereto.
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SCHEDULE B
Fees
As full compensation for the services and facilities furnished to the
Trust and the expenses assumed by the Adviser under this Agreement, each of
U.S. Government Money Market Portfolio and Money Market Portfolio shall pay to
the Adviser monthly compensation calculated daily at the annual rate of 0.06%
of each such Portfolio's net assets. Such calculations shall be made by
applying 1/365th of the annual rate to the net assets of each Portfolio each
day determined as of the close of business on that day or the last previous
business day, if such day is not a business day. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day 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
fees as set forth above.
