EXHIBIT 99.5
ADVISORY AGREEMENT
------------------
ADVISORY AGREEMENT made this 20th day of June, 1991 between TRUST FOR
CREDIT UNIONS, a Massachusetts business trust (the "Fund"), and XXXXXXX, XXXXX &
CO., a New York 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 the Money Market Portfolio and
the Government Securities Portfolio (such Portfolios (the "Current Portfolios")
together with all other portfolios subsequently established by the Fund and made
subject to this Agreement being herein collectively referred to as the
"Portfolios"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory services and certain administrative services to the Fund and each of
its Current 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.
----------------------
(a) The Fund hereby appoints the Adviser to act as investment adviser
and to provide certain administrative services to the Fund and
each of its Current Portfolios for the periods 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.
(b) In the event that the Fund establishes one or more portfolios
other than the Current Portfolios with respect to which it
desires to retain the Adviser to act as investment adviser
thereunder, it shall notify the Adviser in writing. If the
Adviser is willing to render such services under this Agreement
it shall notify the Fund in writing whereupon such portfolio
shall become a Portfolio hereunder and shall be subject to the
provisions of this Agreement to the same extent as the Current
Portfolios except to the extent that said provisions (including
those relating to the compensation payable by the Fund to the
Adviser) are modified with respect to such Portfolio in writing
by the Fund and the Adviser at the time.
2. Delivery of Documents. The Fund has delivered to the Adviser copies
---------------------
of each of the following documents:
(a) Agreement and Declaration of Trust of the Fund dated as of
September 24, 1987 together with Amended and Restated Agreement
and Declaration of Trust through December 1, 1987 and Amendment
No. 1 to such Amended and
Restated Agreement and Declaration of Trust dated as of April 20,
1988 (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) By-Laws of the Fund (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 Unitholders and the Trustees of the
Fund approving the terms of this Agreement;
(d) Amended and Restated Administration Agreement dated February 28,
1989 between the Fund and Xxxxxxxx Credit Union Financial
Services Limited Partnership ("CUFSLP") (such Agreement, as
presently in effect and as amended and/or superseded from time to
time, is herein called the "Administration Agreement");
(e) Distribution Agreement dated May 10, 1988, as amended by
Amendment No. 1 dated January 17, 1989 (the "Xxxxxxxx
Distribution Agreement"), between the Fund and Xxxxxxxx Financial
Services, Inc., and Distribution Agreement dated January 17, 1989
between the Adviser and the Fund (such Agreements, as presently
in effect and as amended and/or superseded from time to time, are
herein called the "Distribution Agreements");
(f) Custodian Agreement (including related fee schedule) dated May
10, 1988 between the Fund and State Street Bank and Trust Company
(such Agreement, as presently in effect and as amended and/or
superseded from time to time, is herein called the "Custodian
Agreement");
(g) Transfer Agency Agreement dated May 10, 1988 between the Fund and
the Adviser (such Agreement, as presently in effect and as
amended and/or superseded from time to time, is herein called the
"Transfer Agency Agreement");
(h) Prospectus and Statement of Additional Information of the Fund,
each dated October 31, 1990 (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
(i) Registration Statement, as amended, of the Fund 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") (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.
2
3. Duties of Adviser.
-----------------
(a) Subject to the general supervision of the Trustees of the Fund,
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 such
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 such Portfolio and to such other customers.
(b) In addition, the Adviser shall, subject to the general
supervision of the Trustees of the Fund, provide certain
administrative services to the Fund. In this regard, the Adviser
(i) shall, to the extent not provided by others pursuant to the
Administration Agreement or the Custodian Agreement (or the
Transfer Agency Agreement to the extent that a person other
than the Adviser is serving thereunder as the Fund's
transfer agent), provide supervision of all aspects of the
Fund's operations not referred to in paragraph 3(a) above;
(ii) shall, to the extent not provided pursuant to the
Administration Agreement, the Custodian Agreement or the
Transfer Agency Agreement, provide the Fund with personnel
to perform such executive, administrative and clerical
services as are reasonably necessary to provide effective
administration of the Fund;
3
(iii) shall, to the extent not provided pursuant to the
Administration Agreement, the Custodian Agreement or the
Transfer Agency Agreement, arrange for, at the Fund's
expense, (A) the preparation for the Fund of all required
tax returns, (B) the preparation and submission of reports
to existing Unitholders and (C) the periodic updating of
the Prospectus and the Additional Statement and the
preparation of reports filed with the Commission and other
regulatory authorities;
(iv) shall, to the extent not provided pursuant to the
Administration Agreement, the Custodian Agreement or the
Transfer Agency Agreement, provide the Fund with adequate
office space and all necessary office equipment and
services including telephone service, heat, utilities,
stationery supplies and similar items;
(v) shall, to the extent requested by the Trustees of the Fund,
negotiate changes to the terms and provisions of the
Administration Agreement, the Custodian Agreement and the
Xxxxxxxx Distribution Agreement; and
(vi) shall review and cause to be paid out of the assets of the
Fund bills or statements for services rendered to the Fund.
(c) 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 Trustees of the Fund, 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.
(d) The Adviser shall render to the Trustees of the
Fund such periodic and special reports as the Trustees may
reasonably request.
(e) The Adviser shall notify the Fund of any change in the membership
of the Adviser within a reasonable time after such change.
(f) 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.
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 and the cost of the
preparations, submissions, updatings and filings referred to in
paragraph 3(b)(iii). Except as provided in paragraph 4(b) and
(c), the Adviser will not be required to pay any expense related
to the Fund other than those specifically allocated to it in this
paragraph 4(a). In particular, but without limiting the
generality of the foregoing, the Adviser will not be required to
pay: (i) fees and expenses of any administrator of the Fund;
(ii) organization expenses of the Fund; (iii) fees and expenses
incurred by the Fund in connection with membership in investment
company organizations; (iv) payment for portfolio pricing
services to a pricing agent, if any; (v) legal, auditing or
accounting expenses (including an allocable
4
portion of the cost of the Adviser's employees rendering legal
and accounting services to the Fund); (vi) taxes or governmental
fees; (vii) the fees and expenses of the transfer agent of the
Fund; (viii) the cost of preparing stock certificates or any
other expenses, including clerical expenses of issue, redemption
or repurchase of Units of the Fund; (ix) the expenses of and fees
for registering or qualifying Units for sale and of maintaining
the registration of the Fund and registering the Fund as a broker
or a dealer; (x) the fees and expenses Trustees of the Fund who
are not affiliated with the Adviser; (xi) the cost of preparing
and distributing reports and notices to Unitholders, the
Commission and other regulatory authorities; (xii) the fees or
disbursements of custodians of the Fund's assets, including
expenses incurred in the performance of any obligations
enumerated by the Trust Agreement or By-Laws of the Fund insofar
as they govern agreements with any such custodian; or (xiii)
litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's
business.
(b) The Adviser agrees that if in any fiscal year the aggregate
expenses of any Portfolio (as defined under the securities
regulations of any state having jurisdiction over such Portfolio)
exceed the expense limitations of any such state, the Fund may
deduct from the fees to be paid hereunder, or the Adviser will
bear, that portion of the excess which bears the same relation to
the total of such excess as the Adviser's fee hereunder bears to
the total fees otherwise payable for the fiscal year by the Fund
pursuant to this Agreement and the administration agreement
between the Fund and its administrator with respect to such
Portfolio. Such deduction or payment, if any, will be estimated
and accrued daily and paid on a monthly basis.
(c) In addition to the foregoing, the Adviser may from time to time
further 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
Trustees of the Fund.
5. Compensation.
------------
(a) Subject to any reduction pursuant to paragraphs 4(b) or 4(c)
hereof, for all 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 average daily net assets of the Money Market Portfolio.
(b) Subject to any reduction pursuant to paragraphs 4(b) or 4(c)
hereof, for all services provided and expenses assumed by the
Adviser pursuant to this Agreement with respect to the Government
Securities Portfolio, the Fund will pay to the Adviser as full
compensation therefor a monthly fee at the annual rate of .25% of
the average daily net assets of the Government Securities
Portfolio.
(c) The foregoing fees will be computed on the average net assets on
each day and will be paid to the Adviser monthly.
5
6. Books and Records. The Adviser shall maintain all of the Fund's
-----------------
records (other than those maintained pursuant to the Administration Agreement,
the Custodian Agreement or the Transfer Agency Agreement). The Adviser agrees
that all records which it maintains for the Fund 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 of the Commission under the 1940 Act any such records as are required
to be maintained by Rule 31a-1 of the Commission 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 or the Transfer Agency
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 the Transfer
Agency Agreement, or by reason of its reckless disregard of its
obligations and duties under this Agreement or the Transfer
Agency 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 any Portfolio, or (z)
any application or other document filed in connection with
the qualification of the Fund or Units of any 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 any other agreement with the Fund 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 or any other agreement with the Fund in
accordance with their 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.
6
(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, the Transfer Agency
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 Current Portfolio on the date it is approved by the unitholder(s)
of the Portfolio in accordance with the requirements of the 1940 Act. This
Agreement will become effective with respect to any additional Portfolio on the
date of receipt by the Fund of notice from the Adviser in accordance with
paragraph 1(b) hereof that the Adviser is willing to serve as investment adviser
with respect to such Portfolio, provided that this Agreement (as supplemented by
the terms specified in any notice and agreement pursuant to paragraph 1(b)
hereof) shall have been approved by the unitholder(s) of such Portfolio in
accordance with the requirements of the 1940 Act. Unless sooner terminated,
this Agreement will continue until March 31, 1992. 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 the 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 the interests in the Portfolio affected thereby 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).
7
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 Trustees of the Fund
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) by vote of a
majority of the outstanding Units (as defined with respect to voting securities
in the 1940 Act) representing the 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, 0000 Xxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: President, with copy to Xxxxxx X.
Xxxxx, Xxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000 or to the Adviser, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000,
Attention: Xxxxxxx X. Xxxxx, 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 (except as to paragraph 12 hereof which shall be
construed in accordance with the laws of the Commonwealth of Massachusetts) the
laws of the State of Illinois 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
8
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/ Xxxxxxxx Xxxxxxxxx By /s/ Xxxxxxx X. Xxxxx
---------------------- -------------------------
President
ATTEST: XXXXXXX, XXXXX & CO.
/s/ Xxxxxxxx Xxxxxxxxx By /s/ Xxxx X. Xxxxx
---------------------- -------------------------
General Partner
9
