INTERIM ADVISORY AGREEMENT
ADVISORY AGREEMENT made this 16th day of April, 2017
between TRUST FOR CREDIT UNIONS, a Massachusetts business trust
(the "Fund"), and ALM First Financial Advisors, LLC (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 ("Shares") 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 Shares in three series,
i.e., the Government 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 November 25, 2014 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'
Shareholders 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amended, supplemented and/or superseded from time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 the Adviser, 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
Government 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 Government Money
Market Portfolio, the Fund will pay to the
Adviser as full compensation therefor a monthly
fee at the annual rate of .10% of the first $50
million of the Government Money Market
Portfolio's average daily net assets plus .05% of
the Government Money Market Portfolio's average
daily net assets in excess of $50 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 .12%
of the first $250 million of the Bond Portfolios'
aggregate average daily net assets, plus .10% of
the next $250 million of the Bond Portfolios'
aggregate average daily net assets, plus .07% of
the Bond Portfolios' aggregate average daily net
assets in excess of $500 million.
(c) During the term of this Agreement, any such
compensation payable to the Adviser shall be held
in an interest-bearing escrow account on behalf
of the Portfolios. If, during the term of this
Agreement, a new advisory agreement with the
Adviser is approved by a majority of a
Portfolio's outstanding voting securities, then
the amount held in the escrow account (plus
interest and income earned thereon and proceeds
thereof) shall be paid to the Adviser. If,
however, a new advisory agreement is not approved
by a majority of a Portfolio's outstanding voting
securities (as defined in the 1940 Act), then the
Adviser shall be entitled to the less of (i) any
costs incurred in performing this Agreement (plus
interest and income earned thereon and proceeds
thereof) or (ii) the total amount held in the
escrow account (plus interest and income earned
thereon and proceeds thereof).
(d) The fees set forth in paragraph 5(a) hereof will
be computed on the Government Money Market
Portfolio's average net assets on each day and
will be paid to the Adviser monthly.
(e) 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
Shares of either Portfolio, or (z) any
application or other document filed in
connection with the qualification of the
Fund or Shares 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
Shareholders 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. Unless sooner terminated,
this Agreement will continue with respect to a Portfolio until
the first of the following occurs: the effective date of a new
investment advisory agreement which has been approved by a vote
of a majority of the outstanding securities of such Portfolio or
the 151st calendar day following the date hereof. 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 Shares (as so defined) of a Portfolio on ten
(10) days' prior written notice to the Adviser, or by the
Adviser at any time, without the payment of any penalty, on at
least sixty (60) days' prior 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 Shares (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 Xxxxxxx X. Xxxxxx, Drinker
Xxxxxx & Xxxxx LLP, Xxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
XX 00000-0000 and Xxxxxx Xxxxxx, Xxxxx & Xxxxxxx, LLC, 000 Xxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 or to the
Adviser, ALM First Financial Advisors, LLC, 0000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, 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. Shareholder 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 Shareholders 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:/s/Xxxxxxxx Xxxxxxxx TRUST FOR CREDIT UNIONS
By /s/Xxx Xxxxxxx
President
ATTEST:/s/Xxxxx Xxxxxxx ALM FIRST FINANCIAL ADVISORS, LLC
By/s/Xxxxx More Xxxxxx
President
