INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 13th day of February, 2004 by and between Cadre
Institutional Investors Trust, a Delaware business trust (hereinafter called the
"Trust"), and PFM Asset Management LLC, a Delaware limited liability company
(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.
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 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 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).
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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.
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.
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11. The Trust acknowledges and agrees 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.
12. This Agreement shall remain in effect as to each Portfolio until
February 13, 2006, 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 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 its
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.
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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 Trust, 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.
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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: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Treasurer
Attest:
/s/ Xxxxxxx X. Xxxxxxxx
------------------------
Title: Secretary
PFM ASSET MANAGEMENT LLC
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
Attest:
/s/ Xxxxx X. Xxxxxxxxx
-----------------------
Title: Secretary
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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 the fees shall be as
follows:
U.S. Government Money Market Portfolio
The Trust shall pay to the Adviser monthly compensation calculated daily at the
annual rate of 0.06% of the net assets of the U.S. Government Money Market
Portfolio.
Money Market Portfolio
The Trust shall pay to the Adviser monthly compensation calculated daily based
on the net assets of the Money Market Portfolio as follows:
0 - 1.5 billion net assets 8 basis points per annum
1.5 - 2.0 billion net assets 7 1/2 basis points per annum
2.0 - 2.5 billion net assets 7 basis points per annum
2.5 - 3.0 billion net assets 6 1/2 basis points per annum
over 3 billion net assets 6 basis points per annum
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.
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