Sub-Item 77Q1(e): Exhibit
ADVISORY AGREEMENT
ADVISORY AGREEMENT made this 14th day of January, 2008
between TRUST FOR CREDIT UNIONS, a Massachusetts business
trust (the "Fund"), and XXXXXXX XXXXX ASSET MANAGEMENT,
L.P., a Delaware limited partnership (the "Adviser").
W I T N E S S E T H
WHEREAS, the Fund is an open-end, diversified
management investment company registered under the
Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund is authorized to issue units of
beneficial interest ("Units") in separate series with each
such series representing the interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Fund presently offers Units in three
series, i.e., the Money Market Portfolio, Ultra-Short
Duration Government Portfolio and Short Duration Portfolio
(collectively referred to herein as the "Portfolios"); and
WHEREAS, the Fund desires to retain the Adviser to
render investment advisory services to each of the
Portfolios as indicated below and the Adviser is willing to
so render services;
NOW, THEREFORE, in consideration of the premises and
mutual covenants hereinafter set forth, the parties hereto
agree as follows:
1. Appointment of Adviser. The Fund hereby appoints
the Adviser to act as investment adviser to each of the
Portfolios for the period and on the terms herein set
forth. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation
herein provided.
2. Delivery of Documents. The Fund has delivered to
the Adviser copies of each of the following documents:
(a) The Fund's Agreement and Declaration of
Trust dated as of September 24, 1987 as
amended and restated through December 1,
1987 and all amendments thereto (such
Agreement and Declaration of Trust, as
presently in effect and as amended from time
to time, is herein called the "Trust
Agreement"), copies of which are also on
file with the Secretary of The Commonwealth
of Massachusetts;
(b) The Fund's By-Laws and all amendments
thereto (such By-laws, as presently in
effect and as amended from time to time, are
herein called the "By-Laws");
(c) Certified resolutions of the Portfolios'
Unitholders and the Fund's Board of Trustees
approving the terms of this Agreement;
(d) The Fund's most recent prospectus and
statement of additional information with
respect to the Portfolios and any
supplements thereto (such prospectus and
statement of additional information, as
presently in effect and as amended,
supplemented and/or superseded from time to
time, are herein called the "Prospectus" and
"Additional Statement," respectively); and
(e) The Fund's Registration Statement, as
amended, with respect to the Portfolios
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 (such Registration
Statement, as presently in effect and as
amended from time to time, is herein called
the "Registration Statement").
The Fund agrees to promptly furnish the Adviser from time
to time with copies of all amendments of or supplements to
or otherwise current versions of any of the foregoing
documents not heretofore furnished.
3. Duties of Adviser.
(a) Subject to the general supervision of the
Fund's Board of Trustees, the Adviser shall
manage the investment operations of each of
the Portfolios and the composition of each
such Portfolio's assets, including the
purchase, retention and disposition thereof.
In this regard, the Adviser
(i) shall provide supervision of the
Portfolios' assets, furnish a
continuous investment program for the
Portfolios, determine from time to time
what investments or securities will be
purchased, retained or sold by the
Portfolios, and what portion of the
assets will be invested or held
uninvested as cash;
(ii) shall place orders pursuant to its
determinations either directly with the
issuer or with any broker, dealer or
other person who deals in the
securities in which the Portfolio in
question is active. In placing orders
with brokers, dealers or such other
persons the Adviser shall attempt to
obtain the best net price and the most
favorable execution of its orders.
When the execution and price offered by
two or more brokers, dealers or such
other persons are believed to be
comparable, the Adviser may, in its
discretion but subject to applicable
law, purchase and sell portfolio
securities to and from brokers, dealers
or such other persons who provide
brokerage or research services; and
(iii) may, on occasions when it deems the
purchase or sale of a security to be in
the best interests of a Portfolio as
well as its other customers (including
any other Portfolio or any other
investment company or advisory account
for which the Adviser acts as adviser),
aggregate, to the extent permitted by
applicable laws and regulations, the
securities to be sold or purchased in
order to obtain the best net price and
the most favorable execution. In such
event, allocation of the securities so
purchased or sold, as well as the
expenses incurred in the transaction,
will be made by the Adviser in the
manner it considers to be the most
equitable and consistent with its
fiduciary obligations to the Portfolio
and to such other customers.
(b) The Adviser, in the performance of its
duties hereunder, shall act in conformity
with the Trust Agreement, By-Laws,
Prospectus, Additional Statement and
Registration Statement and with the
instructions and directions of the Fund's
Board of Trustees, and will use its best
efforts to comply with and conform to the
requirements of the 1940 Act, the Investment
Advisers Act of 1940 and all other
applicable federal and state laws,
regulations and rulings.
(c) The Adviser shall render to the Fund's Board
of Trustees such periodic and special
reports as the Trustees may reasonably
request.
(d) The Adviser shall notify the Fund of any
change in the membership of the Adviser
within a reasonable time after such change.
(e) The services of the Adviser hereunder are
not deemed exclusive and the Adviser shall
be free to render similar services to others
so long as its services under this Agreement
are not impaired thereby.
(f) In performing its obligations under this
Agreement, the Adviser may, at its own
discretion, delegate any or all of its
discretionary investment, advisory and other
rights, powers and obligations hereunder to
any advisory affiliate of Xxxxxxx Xxxxx &
Co., without further written consent of the
Fund, provided that the Adviser shall always
remain liable to the Fund for its
obligations hereunder.
4. Expenses.
(a) During the term of this Agreement, the
Adviser will pay all costs incurred by it in
connection with the performance of its
duties under paragraph 3 hereof; provided,
however, that the Adviser shall not be
required to pay the cost (including taxes,
brokerage commissions and other transaction
costs, if any) of securities purchased for
each of the Portfolios.
(b) The Adviser may from time to time reduce its
fee or make payment to a Portfolio in order
to offset all or a portion of certain
expenses otherwise payable by such
Portfolio, provided that any such
arrangement does not jeopardize the
Portfolio's qualification as a regulated
investment company. Any such fee reduction
with respect to the Money Market Portfolio
will be agreed to in advance of the time
such fee would otherwise accrue, and any
such arrangement may be discontinued or
modified only with the express approval of
the Board of Trustees of the Fund.
5. Compensation.
(a) Subject to any reduction pursuant to
paragraph 4(b) hereof, for the services
provided and expenses assumed by the Adviser
pursuant to this Agreement with respect to
the Money Market Portfolio, the Fund will
pay to the Adviser as full compensation
therefor a monthly fee at the annual rate of
..20% of the first $300 million of the Money
Market Portfolio's average daily net assets
plus .15% of the Money Market Portfolio's
average daily net assets in excess of $300
million.
(b) Subject to any reduction pursuant to
paragraph 4(b) hereof, for the services
provided and expenses assumed by the Adviser
pursuant to this Agreement with respect to
the Ultra-Short Duration and Short Duration
Portfolio (collectively, the "Bond
Portfolios"), the Fund will pay to the
Adviser as full compensation therefor a
monthly fee at the annual rate of .18% of
the first $250 million of the Bond
Portfolios' aggregate average daily net
assets, plus .16% of the next $250 million
of the Bond Portfolios' aggregate average
daily net assets, plus .14% of the Bond
Portfolios' aggregate average daily net
assets in excess of $500 million.
(c) The fees set forth in paragraph 5(a) hereof
will be computed on the Money Market
Portfolio's average net assets on each day
and will be paid to the Adviser monthly.
(d) The fees set forth in paragraph 5(b) hereof
will be computed on the Bond Portfolios'
aggregate average net assets on each day and
will be paid to the Adviser monthly.
6. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser
agrees that all records which it maintains for the
Portfolios are the property of the Fund and it will
surrender promptly to the Fund any of such records upon the
Fund's request. The 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.
7. Indemnification.
(a) Subject to Section 36 of the 1940 Act to the
extent applicable, the Adviser shall not be
liable for any error in judgment or mistake
of law or for any loss suffered by the Fund
in connection with the matters to which this
Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross
negligence in the performance of its
obligations and duties under this Agreement,
or by reason of its reckless disregard of
its obligations and duties under this
Agreement.
(b) The Fund hereby agrees to indemnify and hold
harmless the Adviser, its officers, partners
and employees and each person, if any, who
controls the Adviser (collectively, the
"Indemnified Parties") against any and all
losses, claims, damages or liabilities,
joint or several, to which any such
Indemnified Party may become subject under
the 1933 Act, the Securities Exchange Act of
1934 (as amended), the 1940 Act or other
federal or state statutory law or
regulation, at common law or otherwise,
insofar as such losses, claims, damages or
liabilities (or actions in respect thereof)
arise out of or are based upon
(i) any untrue statement or alleged untrue
statement of a material fact or any
omission or alleged omission to state a
material fact required to be stated or
necessary to make the statements made
not misleading in (x) the Prospectus,
the Additional Statement or the
Registration Statement, (y) any
advertisement or sales literature
authorized by the Fund for use in the
offer and sale of Units of either
Portfolio, or (z) any application or
other document filed in connection with
the qualification of the Fund or Units
of either Portfolio under the Blue Sky
or securities laws of any jurisdiction,
except insofar as such losses, claims,
damages or liabilities (or actions in
respect thereof) arise out of or are
based upon any such untrue statement or
omission or alleged untrue statement or
omission either pertaining to a breach
of the Adviser's duties in connection
with this Agreement or made in reliance
upon and in conformity with information
furnished to the Fund by or on behalf
of the Adviser pertaining to or
originating with the Adviser for use in
connection with any document referred
to in clauses (x), (y), or (z), or
(ii) subject in each case to clause (i)
above, the Adviser acting under this
Agreement in accordance with its terms;
and the Fund will reimburse each Indemnified
Party for any legal or other expenses
incurred by such Indemnified Party in
connection with investigating or defending
any such loss, claim, damage, liability or
action.
(c) If the indemnification provided for in
paragraph 7(b) is available in accordance
with the terms of such paragraph but is for
any reason held by a court to be unavailable
from the Fund, then the Fund shall
contribute to the aggregate amount paid or
payable by the Fund and the Indemnified
Parties as a result of such losses, claims,
damages or liabilities (or actions in
respect thereof) in such proportion as is
appropriate to reflect (i) the relative
benefits received by the Fund and such
Indemnified Parties in connection with the
operations of the Fund, (ii) the relative
fault of the Fund and such Indemnified
Parties, and (iii) any other relevant
equitable considerations. The Fund and the
Adviser agree that it would not be just and
equitable if contribution pursuant to this
subparagraph (c) were determined by pro rata
allocation or any other method of allocation
which does not take into account the
equitable considerations referred to above
in this subparagraph (c). The aggregate
amount paid or payable as a result of the
losses, claims, damages or liabilities (or
actions in respect thereof) referred to
above in this subparagraph (c) shall be
deemed to include any legal or other
expenses incurred by the Fund and the
Indemnified Parties in connection with
investigating or defending any such loss,
claim, damage, liability or action. No
person guilty of fraudulent
misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who
was not guilty of such fraudulent
misrepresentation.
(d) It is understood, however, that nothing in
this paragraph 7 shall protect any
Indemnified Party against, or entitle any
Indemnified Party to indemnification against
or contribution with respect to, any
liability to the Fund or its Unitholders to
which such Indemnified Party is subject, by
reason of its willful misfeasance, bad faith
or gross negligence in the performance of
its duties, or by reason of any reckless
disregard of its obligations and duties,
under this Agreement or otherwise, to an
extent or in a manner inconsistent with
Section 17(i) of the 1940 Act.
8. Duration and Termination. This Agreement will
become effective with respect to a Portfolio on the date it
is approved by the Unitholders of the Portfolio in
accordance with the requirements of the 1940 Act or on such
later date following Unitholder approval as shall be agreed
upon by the Fund and the Adviser. Unless sooner
terminated, this Agreement will continue until March 31,
2009. Thereafter, if not terminated, this Agreement shall
continue in effect for successive annual periods, provided
such continuation is specifically approved at least
annually (a) by the vote of a majority of the Trustees of
the Fund who are not parties to this Agreement or
interested persons (as defined in the 0000 Xxx) of any such
party, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by a majority of the
Trustees of the Fund or by vote of a majority of the
outstanding Units (as defined with respect to voting
securities in the 1940 Act) representing interests in such
Portfolio; provided, however, that this Agreement may be
terminated by the Fund as to any Portfolio at any time,
without the payment of any penalty, by vote of a majority
of the Trustees of the Fund or by vote of a majority of the
outstanding Units (as so defined) representing interests in
the Portfolio on 60 days' written notice to the Adviser, or
by the Adviser at any time, without the payment of any
penalty, on 60 days' written notice to the Fund. This
Agreement will automatically and immediately terminate in
the event of its assignment (as defined in the 1940 Act).
9. Status of Adviser as 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 Fund's Board
of Trustees from time to time, have no authority to act for
or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
10. Amendment of Agreement. This Agreement may be
amended by mutual consent, provided that such amendment is
approved (a) by vote of a majority of those Trustees of the
Fund who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of
voting on such amendment, and (b) to the extent required by
the 1940 Act, by vote of a majority of the outstanding
Units (as defined with respect to voting securities in the
1940 Act) representing interests in each Portfolio affected
by such amendment. Any amendment to this Agreement shall
only be by written instrument which shall make specific
reference to this Agreement and which shall be signed by
the party against which enforcement of such change, waiver,
discharge or termination is sought.
11. Notices. Without limiting the other provisions
hereof, notices and other writings delivered or mailed
postage prepaid to the Fund, c/x Xxxxxxxx Financial
Services, Inc., 0000 Xxxxxxxxxxx Xxxxxx, XX, 00xx Xxxxx,
Xxxxxxxxxx, X.X. 00000, Attention: President, with copies
to Xxxxxx X. Xxxxx, Xxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 or to the Adviser, 00
Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxx Xxxxxx, or to such other address as the Fund or the
Adviser may hereafter specify by written notice to the most
recent address specified by the party to whom such notice
is addressed, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. Unitholder Liability. This Agreement is executed
by or on behalf of the Fund and the obligations hereunder
are not binding upon any of the Trustees, officers or
Unitholders of the Fund individually but are binding only
upon the particular Portfolio to which such obligations
pertain and the assets and property of such Portfolio.
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 construed in accordance with
applicable federal law and the laws of the Commonwealth of
Massachusetts and shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
successors, subject to paragraph 8 hereof. Anything herein
to the contrary notwithstanding, this Agreement shall not
be construed to require, or to impose any duty upon, either
of the parties to do anything in violation of any
applicable laws or regulations. Any provision in this
Agreement requiring compliance with any statute or
regulation shall mean such statute or regulation as amended
and in effect from time to time.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed as of the day and year first
above written.
ATTEST: TRUST FOR CREDIT UNIONS
/s/ Xxxx Xx Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
President
ATTEST: XXXXXXX SACHS ASSET MANAGEMENT, L.P.
By /s/ Xxxxx XxXxxxxx
Managing Principal
