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Exhibit 5
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INVESTMENT ADVISORY AGREEMENT
BETWEEN
INVESTMENT SERVICES FOR EDUCATION ASSOCIATIONS TRUST
AND
CADRE FINANCIAL SERVICES, INC.
DATED AS OF __________, 1997
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TABLE OF CONTENTS
Recitals....................................................................1
ARTICLE I
DELIVERY OF DOCUMENTS
Section 1.01 Documents Delivered...........................................1
ARTICLE II
APPOINTMENT, DUTIES AND
COMPENSATION AS ADVISER
Section 2.01 Appointment as Adviser....................................2
Section 2.02 Services and Duties as Adviser............................3
Section 2.03 Compensation as Adviser...................................3
ARTICLE III
LIMITATIONS OF LIABILITY
Section 3.01 Adviser's Liability Limitation............................4
Section 3.02 Fund's Liability Limitation...............................4
ARTICLE IV
DURATION AND TERMINATION
Section 4.01 Term of Agreement.........................................4
ARTICLE V
CONSULTATION AND RELIANCE
Section 5.01 Consultation with Counsel.................................6
Section 5.02 Reliance on Certificates..................................6
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ARTICLE VI
MISCELLANEOUS
Section 6.01 Certain Relationships.......................................6
Section 6.02 Certain Restrictions........................................7
Section 6.03 Third Parties...............................................7
Section 6.04 Amendments..................................................8
Section 6.05 Captions....................................................8
Section 6.06 Severability................................................8
Section 6.07 Binding Effect..............................................8
Section 6.08 Notices.....................................................9
Section 6.09 Entire Agreement............................................9
Section 6.10 Applicable Law..............................................9
Section 6.11 Enforcement and Waiver.....................................10
Section 6.12 Authorization..............................................10
Section 6.13 Counterparts...............................................10
Section 6.14 Books and Records .........................................10
Section 6.15 Effectiveness..............................................11
Execution....................................................................11
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INVESTMENT SERVICES FOR EDUCATION ASSOCIATIONS TRUST
INVESTMENT ADVISORY AGREEMENT
This Agreement, made as of the __th day of _________, 1997, by and
between Investment Services for Education Associations Trust, a Delaware
business trust (the "Fund"), and Cadre Financial Services Inc., a New York
corporation ("Cadre" or the "Adviser").
WHEREAS, The Fund desires to avail itself of the experience, resources,
advice and assistance of Cadre and to have Cadre undertake the duties and
responsibilities as investment adviser hereinafter set forth, on behalf and
subject to the supervision of the Board of Trustees of the Fund, as provided
herein; and
WHEREAS, Cadre is willing to undertake to render such investment
advisory services, subject to the supervision of the Board of Trustees, on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants hereinafter set forth and other good and valuable
consideration, the receipt of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I. DELIVERY OF DOCUMENTS
Section 1.01. Documents Delivered. Except as herein otherwise provided,
the Fund has delivered, or will cause to be delivered, to Cadre properly
certified or authenticated
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copies of each of the following documents and will deliver to it all future
amendments and supplements thereto, if any:
(a) Amended and Restated Agreement of Trust of the Fund dated
as of December 11, 1996, (such document, as presently in effect and as the same
may be amended from time to time, is herein called the "Declaration of Trust");
(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 Board of Trustees of the Fund
authorizing the appointment of Cadre as the Investment Adviser of the Fund and
approving the form of this Agreement;
(d) Prospectus of the Fund (such Prospectus in its present
form and as the same may be amended or supplemented from time to time, is herein
called the "Prospectus");
(e) Certified copy of the Administration Agreement, dated as
of ___________, 1997, between the Fund and Cadre Financial Services, Inc.; and
(f) A certificate of the Secretary of the Fund setting forth
the names and specimen signatures of the individuals authorized at the time of
delivery of such certificate to act on behalf of the Fund in connection with
matters arising hereunder.
ARTICLE II. APPOINTMENT, DUTIES AND COMPENSATION AS ADVISER
Section 2.01. Appointment as Adviser. The Fund hereby appoints Cadre as
the Adviser of the Fund on the terms and for the period set forth in this
Agreement, and Cadre
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hereby accepts such appointment and agrees to perform the services and duties
set forth in Section 2.02 hereof for the compensation provided in Section 2.03
hereof.
Section 2.02. Services and Duties as Adviser.
(a) The Adviser agrees, as more fully set forth herein, to act
as the investment adviser to the Fund with respect to the investment of its
assets. Subject to the direction and control of the Board of Trustees of the
Fund, the Adviser: (i) shall provide a continuous investment program for the
Fund, including investment research and management with respect to all
securities, investments, instruments and cash equivalents (collectively
"investment instruments") in the Fund; (ii) shall determine what investment
instruments shall be purchased, retained or sold by the Fund; and (iii) shall
arrange for the purchase and the sale of investment instruments held in the
portfolio of the Fund.
(b) In performing its duties hereunder, the Adviser shall act
in conformity with the Declaration of Trust, the By-Laws and the Prospectus of
the Fund and with the instructions, guidelines, procedures and directions of the
Board of Trustees and shall conform to, and comply with, all applicable federal
and state laws and regulations.
Section 2.03. Compensation as Adviser. For the services to be rendered
and the duties to be assumed by the Adviser pursuant to this Agreement, the Fund
will pay to the Adviser, and the Adviser agrees to accept, as full compensation
therefor, an annual investment advisory fee computed daily and payable monthly
and computed at annual rate of 15 basis points (0.15%) of the Fund's average
daily net assets.
ARTICLE III. LIMITATIONS OF LIABILITY
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Section 3.01 Adviser's Liability Limitation. 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 a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties under
this Agreement or for its reckless disregard of its obligations and duties under
this Agreement or for its willful or negligent failure to take reasonable
measures to restrict investments of the fund property to those permitted by the
Fund investment policy, provided, however, that this Section 3.01 shall not
limit the Adviser's liability to the Fund with respect to any breaches by it of
this Agreement.
Section 3.02. Fund's Liability Limitation. Reference is hereby made to
the Declaration of Trust which contains certain provisions limiting the
liability of the Board of Trustees, Shareholders, officers, employees and agents
of the Trust. The obligations of the Fund created hereunder are not personally
binding upon, nor shall resort be had to the property of, any of the Board of
Trustees, Shareholders, officers, employees or agents of the Fund, and only that
portion of the Fund property necessary to satisfy the obligations of the Fund
arising hereunder shall be bound or affected by the operation of this Agreement.
ARTICLE IV. DURATION AND TERMINATION
Section 4.01. Term of Agreement. Unless sooner terminated as provided
herein, this Agreement wil continue in effect until ___________, 1999.
Thereafter, if not terminated, this Agreement shall continue in effect for
successive annual periods, provided such
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continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Fund's Board of Trustees 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, and (b) by the Fund's Board of Trustees
or by vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated at any time,
without the payment of any penalty, by the Fund (by vote of the Fund's Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Fund), or by the Adviser, on 60 days' written notice. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment"" will have the same meaning as the meaning
of such terms in the Investment Company Act of 1940).
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ARTICLE V. CONSULTATION AND RELIANCE
Section 5.01. Consultation with Counsel. The Adviser may consult with
reputable and experienced legal counsel (who may be counsel to the Fund)
concerning any question that may arise with reference to its duties under this
Agreement, and the opinion of such counsel shall be full and complete protection
in respect of any action taken or omitted by the Adviser in good faith and in
accordance with such opinion provided such action meets the standards in Section
3.01.
Section 5.02. Reliance on Certificates. The Adviser shall not be liable
and subject to Section 3.01 shall be fully protected in relying upon any notice,
instrument, direction or other communication that the Adviser reasonably
believes (based on the most recent certificate of the Secretary of the Fund that
has been received by the Adviser pursuant to paragraph (f) of Section 1.01
hereof) to have been given by an individual who is authorized to act on behalf
of the Fund. The Fund agrees that it will supply the Adviser with certificates
of the type described in paragraph (f) of Section 1.01 hereof from time to time
as necessary to keep the information contained therein current, unless an
employee or an affiliate of the Adviser is a trustee or an officer of the Fund
in which case such certificates shall not be required by this Agreement.
ARTICLE VI. MISCELLANEOUS
Section 6.01. Certain Relationships. Nothing in this Agreement shall
prevent the Adviser or any officer, director or employee thereof from acting as
investment adviser or manager for any other person, firm, corporation or entity
and shall not in any way limit or
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restrict the Adviser or any of its directors, officers, partners or employees or
any of its affiliates' directors, officers, partners or employees from buying,
selling or trading any investment instruments for its or their own accounts or
the accounts of others (including without limitation other Funds) for whom it or
they may be acting; provided, however, that the Adviser expressly represents
that it will undertake no activities which in its judgment, will materially
adversely affect the performance of its obligations to the Fund under this
Agreement. Directors, officers, partners, employees and agents of the Advisor or
of affiliated persons of the Adviser may serve as officers, employees or agents
of the Fund.
Section 6.02. Certain Restrictions.
(a) Anything in this Agreement to the contrary notwithstanding,
the Adviser shall refrain from any action which would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the Fund
or its Shareholders or which would not be permitted by the Fund's Prospectus,
Declaration of Trust or By-Laws or by guidelines, procedures, or other
directions of the Fund's Board of Trustees.
(b) Without limiting the generality of the foregoing paragraph,
the Adviser shall not recommend, or arrange for, the purchase by the Fund of any
investment instrument which is not a permitted purchase or the purchase or
acquisition of which would constitute a violation of the investment restrictions
applicable to the Fund set forth in the Prospectus.
Section 6.03. Third Parties. When dealing with third parties on behalf
of the Fund in connection with the execution of investment transactions and
other matters, the Adviser shall include such recitals in written documents as
may be reasonably requested by the Fund pursuant to the provisions of the
Prospectus and Declaration of Trust regarding the limitation
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of liability of the Board of Trustees, Shareholders, officers, employees and
agents of the Fund to third parties.
Section 6.04. Amendments. This Agreement shall not be modified or
amended without the consent of each party hereto, which consent must be
evidenced by an instrument in writing executed by each party hereto, or by their
respective successors or permitted assigns.
Section 6.05. Captions. The captions in this Agreement are included for
convenience of reference only and shall in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
Section 6.06. Severability. If any provision of this Agreement shall be
held invalid under any applicable statute or regulation or by a decision of a
court of competent jurisdiction, such invalidity shall not affect any other
provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.
Section 6.07. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and, subject to Section 4.01,
their respective successors and permitted assigns.
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Section 6.08. Notices. Notices or consents of any kind required or
permitted under this Agreement shall be in writing and shall be deemed duly
delivered if delivered in person or if mailed by certified mail, return receipt
requested or telegraph, postage prepaid to the appropriate party as follows:
A. If to the Fund:
_________________________
_________________________
_________________________
with a copy to;
Xxxxxxx X. Xxxxxx, Esquire
Drinker Xxxxxx & Xxxxx
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
B. If to the Adviser:
Xxxxxxx X. Xxxxxxxx, Esq.
Cadre Financial Services, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
or at such other address or to the attention of such other individual as shall
be specified by the respective parties hereto by written notice hereunder.
Section 6.09. Entire Agreement. This Agreement, and the documents
delivered pursuant hereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof.
Section 6.10. Applicable Law. This Agreement shall be deemed to have
been executed in the State of Delaware and the substantive laws of the State of
Delaware shall
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govern the construction of this Agreement and the rights and remedies of the
respective parties hereto.
Section 6.11. Enforcement and Waiver. Each party hereto shall have the
right at all times to enforce the provisions of this Agreement in strict
accordance with the terms hereof, notwithstanding any conduct or custom on the
part of such party in refraining from so doing at any time or times. The failure
of a party hereto at any time or times to enforce its rights under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom in any way or manner contrary to specific provisions of
this Agreement or as having in any way or manner modified or waived the same.
All rights and remedies of the respective parties hereto are cumulative and
concurrent and the exercise of one right or remedy shall not be deemed a waiver
or release of any other right or remedy.
Section 6.12. Authorization. This Agreement has been duly authorized,
executed and delivered by the parties hereto and constitutes a legal, valid and
binding obligation of such parties, enforceable in accordance with its terms.
Each individual signatory hereto represents and warrants that he is duly
authorized to execute this Agreement on behalf of his organization.
Section 6.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute but one and the same instrument.
Section 6.14. Books and Records. In compliance with the requirements of
Rule 31a-3 of the Rules under the Investment Company Act of 1940, the Adviser
hereby agrees that all records which it maintains for the Fund are the property
of the Fund and further agrees to
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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 the
records required to be maintained by Rule 31a-1 of the Rules.
Section 6.15. Effectiveness. This Agreement shall take effect as of the
date first above written.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Advisory Agreement to be executed by their officers designated below as of the
day and year first above written and confirmed the day and year written below.
Investment Services for Education Associations Trust
by:____________________________
Cadre Financial Services, Inc.
by:___________________________
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