FORM OF
GOLF ASSOCIATED FUND
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is made as of ________ __, 1998,
between the Golf Associated Fund (the "Fund"), a business trust organized under
the laws of the Commonwealth of Massachusetts with its principal place of
business at 0000 Xxxxx Xxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx, 00000, and Golf
Investment Management, Inc., a Florida corporation (the "Adviser").
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Adviser provides investment advice and is registered with
the Securities and Exchange Commission (the "SEC") as an investment adviser
under the Investment Advisers Act of 1940, as amended; and
WHEREAS, The Fund desires to retain the Adviser to perform investment
advisory services for it and the Adviser is willing to perform such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints the Adviser, subject to the
direction and control of the Fund's Board of Trustees (the "Board"), to manage
the investment and reinvestment of Fund assets for the period and on the terms
set forth in this Agreement. The Adviser accepts such appointment and agrees to
render the services herein set forth for the compensation as set forth on
Schedule A. In the performance of its duties, the Adviser will act in the best
interests of the Fund and will comply with (a) applicable laws and regulations,
including, but not limited to, the 1940 Act, (b) the terms of this Agreement,
(c) the Fund's Declaration of Trust, By-Laws and currently effective
registration statement under the Securities Act of 1933, as amended, and the
1940 Act, and any amendments thereto, (d) the stated investment objective,
policies and restrictions of the Fund, and (e) such other guidelines as the
Board reasonably may establish.
2. DUTIES AS INVESTMENT ADVISER.
(a) Subject to the supervision of the Board, the Adviser will provide a
continuous investment program for the Fund, including investment research and
management with respect to all securities, investments and cash equivalents. The
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Fund. To carry out such decisions,
the Adviser hereby is authorized, as agent and attorney-in-fact for the Fund,
for the account of, at the risk of and in the name of the Fund, to place orders
and issue instructions with respect to those transactions of the Fund. The
Adviser will exercise full discretion and act for the Fund in the same manner
and with the same force and effect as such Fund itself might or could do with
respect to purchases, sales, or other transactions, as well as with respect to
all other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
(b) The Adviser will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or through other
brokers. In the selection of brokers and the placement of orders for the
purchase and sale of portfolio investments for the Fund, the Adviser shall use
its best efforts to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain the most favorable price and execution available, the
Adviser, bearing in mind the Fund's best interests at all times, shall consider
all factors it deems relevant, including by way of illustration, price, the size
of the transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction taking into account market prices and
trends, the reputation, experience and financial stability of the broker
involved and the quality of service rendered by the broker in other
transactions. Subject to such policies as the Board may determine, the Adviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of its having caused the
Fund to pay a broker that provides brokerage and research services to the
Adviser an amount of commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such broker, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Fund and to other clients of the Adviser as to which the Adviser exercises
investment discretion. In no instance will the Fund's portfolio securities be
purchased from or sold to the Adviser or any affiliated person of the Adviser.
The Fund agrees that any entity or person associated with the Adviser that is a
member of a national securities exchange is authorized to effect any transaction
on such exchange for the account of the Fund which is permitted by Section 11(a)
of the Securities Exchange Act of 1934, as amended, and the rules thereunder,
and the Fund has consented to the retention of compensation for such
transactions.
(c) The Adviser will report to the Board periodically all changes in
the Fund since the prior report, and also will keep the Board informed of
important developments affecting the Fund and the Adviser, and on its own
initiative, will provide the Board from time to time such information as the
Adviser may believe appropriate for this purpose, whether concerning the
individual companies whose securities are included in the Fund's holdings, the
industries in which they engage, or the economic, social or political conditions
prevailing in each country in which the Fund maintains investments. The Adviser
also will make available to the Board upon request any economic, statistical and
investment services normally available to institutional or other customers of
the Adviser.
(d) The Adviser may from time to time hire employees or independent
contractors to assist in the performance of the Adviser's duties hereunder, the
cost of hiring such employees and independent contractors to be borne and paid
by the Adviser. No obligation may be incurred on the Fund's behalf in any such
respect.
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(e) Any of the foregoing functions with respect to the Fund may be
delegated by the Adviser, at the Adviser's expense, to one or more appropriate
parties, including an affiliated party ("Subadvisers"), subject to such approval
by the Board and shareholders of the Fund as may be required by the 1940 Act. In
connection with any such delegation, the Adviser shall:
(i) oversee the performance of delegated functions by
any Subadviser and furnish the Fund with quarterly evaluations
and analyses concerning the performance of delegated
responsibilities by those parties;
(ii) if appropriate, allocate the portion of the
Fund's assets to be managed by a Subadviser and coordinate the
investment activities of the Subadvisers;
(iii) if appropriate, recommend changes in
Subadvisers or the addition of Subadvisers, subject to the
necessary approvals under the 1940 Act; and
(iv) be responsible for compensating the Subadvisers
in the manner specified in its advisory agreements with the
Subadvisers.
3. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are not to be deemed exclusive and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
4. BOOKS AND RECORDS.
(a) The Adviser shall maintain records for the Fund relating
to portfolio transactions and the placing and allocation of brokerage orders as
are required to be maintained by the Fund under Rule 31a-1 of the 1940 Act. The
Adviser shall prepare and maintain, or cause to be prepared and maintained, in
such form and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser pursuant
to this Agreement required to be prepared and maintained by the Fund pursuant to
the rules and regulations of any national, state or local government entity with
jurisdiction over the Fund, including the Internal Revenue Service.
(b) In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records that it maintains for
the Fund are the property of the Fund and further agrees to 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 3la-1 under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement. The Fund will bear all expenses not specifically assumed by the
Adviser incurred in its operations and the offering of its shares. Expenses
borne by the Fund will include the following: (a) brokerage commissions relating
to securities purchased or sold by the Fund or any losses incurred in connection
therewith; (b) fees payable to and expenses incurred on behalf of the Fund by
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the Adviser; (c) expenses of organizing the Fund; (d) filing fees and expenses
relating to the registration and qualification of the Fund's shares under
federal or state securities laws and maintaining such registrations and
qualifications; (e) distribution fees; (f) fees and salaries payable to the
members of the Board and officers who are not officers or employees of the
Adviser or interested persons (as defined in the 0000 Xxx) of any investment
adviser or distributor of the Fund; (g) taxes (including any income or franchise
taxes) and governmental fees; (h) costs of any liability, uncollectible items of
deposit and other insurance or fidelity bonds; (i) any costs, expenses or losses
arising out of any liability of or claim for damage or other relief asserted
against the Fund for violation of any law; (j) legal, accounting and auditing
expenses, including legal fees of special counsel for the independent trustees;
(k) charges of custodians, transfer agents and other agents; (l) costs of
preparing share certificates; (m) expenses of setting in type and printing
prospectuses and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy material; (n) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Fund; and (o) fees
and other expenses incurred in connection with membership in investment company
organizations.
The Fund may pay directly any expense incurred by it in its normal
operations and, if any such payment is consented to by the Adviser and
acknowledged as otherwise payable by the Adviser pursuant to this Agreement, the
Fund may reduce the fee payable to the Adviser pursuant to paragraph 7 hereof by
such amount. To the extent that such deductions exceed the fee payable to the
Adviser on any monthly payment date, such excess shall be carried forward and
deducted in the same manner from the fee payable on succeeding monthly payment
dates.
In addition, if the expenses borne by the Fund in any fiscal year
exceed the expense limitations voluntarily imposed by the Adviser, the Adviser
will reimburse the Fund for any excess up to the amount of the fee payable to it
during that fiscal year pursuant to paragraph 7 hereof.
6. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be
liable for any error of 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 the willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Any person, even though also an
officer, partner, employee, or agent of the Adviser, who may be or become an
officer, trustee, employee or agent of the Fund shall be deemed, when rendering
services to the Fund or acting in any business of the Fund, to be rendering such
services to or acting solely for the Fund and not as an officer, partner,
employee, or agent or one under the control or direction of the Adviser even
though paid by it.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Fund will pay the Adviser, effective from the
date of this Agreement, a fee that is computed daily and paid monthly from the
Fund's assets at the annual rates as percentages of its average daily net assets
as set forth in the attached Schedule A, which Schedule can be modified from
time to time to reflect changes in annual rates, subject to appropriate
approvals required by the 1940 Act. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from the
effective date to the end of the month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
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proportion that such period bears to the full month in which such effectiveness
or termination occurs.
8. DURATION AND TERMINATION. This Agreement shall become effective upon
its execution; provided, that this Agreement shall not take effect unless it
first has been approved (i) by a vote of the majority of those trustees of the
Fund who are not parties to this Agreement or interested persons of such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the Fund's outstanding voting securities. This
Agreement shall remain in full force and effect continuously thereafter until
terminated without the payment of any penalty as follows:
(a) By vote of a majority of its trustees, or by the
affirmative vote of a majority of the outstanding shares of the Fund, the Fund
may at any time terminate this Agreement by providing not more than 60 days'
written notice delivered or mailed by registered mail, postage prepaid, to the
Adviser at its principal offices; or
(b) This Agreement shall be approved for an initial period of
two years and at least annually thereafter by (i) the Trustees or the
shareholders of the Fund by the affirmative vote of a majority of its
outstanding shares, and (ii) a majority of the Trustees who are not interested
persons of the Fund or of the Adviser or of any subadviser, by vote cast in
person at a meeting called for the purpose of voting on such approval. If the
continuance of this Agreement is not approved at least annually after the
initial two-year period, then this Agreement shall automatically terminate at
the close of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such continuance,
whichever is later; provided, however, that if the continuance of this Agreement
is submitted to Fund shareholders for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the Adviser
may continue to serve hereunder in a manner consistent with the 1940 Act and the
rules and regulations thereunder; or
(c) The Adviser may at any time terminate this Agreement by
not less than 60 days' written notice delivered or mailed by registered mail,
postage prepaid, to the Fund; or
(d) This Agreement automatically and immediately will
terminate in the event of its assignment.
9. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective except, if required by law, by vote of the holders of a
majority of the Fund's outstanding voting securities.
10. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
conflicts of laws principles thereof, and in accordance with the 1940 Act. To
the extent that the applicable laws of the Commonwealth of Massachusetts
conflict with the applicable provisions of the 1940 Act, the latter shall
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control. The parties hereto submit to the non-exclusive jurisdiction of the
State of Florida.
11. DEFINITIONS. As used in this Agreement, the terms "majority of the
outstanding voting securities," ""interested person," and "assignment" shall
have the same meanings as such terms have in the 1940 Act.
12. SEVERABILITY. 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 binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
13. DECLARATION OF TRUST. The Adviser is hereby expressly put on notice
of the limitation of shareholder liability as set forth in the Fund's
Declaration of Trust and agrees that the obligations assumed by the Fund
pursuant to this Agreement shall be limited in all cases to the Fund and its
assets, and the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Fund. In addition, the Adviser shall
not seek satisfaction of any such obligations from the Trustees or any
individual Trustee.
14. 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Attest: GOLF ASSOCIATED FUND
By _____________________________ By: _____________________________
Attest: GOLF INVESTMENT MANAGEMENT, INC.
By _____________________________ By: _____________________________
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Schedule A
to the
Investment Advisory Agreement
between
Golf Associated Fund
and
Golf Investment Management, Inc.
Pursuant to section 1 of the Investment Advisory Agreement between the
Golf Associated Fund (the "Fund") and Golf Investment Management, Inc. (the
"Adviser"), the Fund hereby appoints the Adviser to manage the investment and
reinvestment of the Fund listed below. As compensation for such, the Fund shall
pay to the Adviser pursuant to section 7 of the Investment Advisory Agreement a
fee, computed daily and paid monthly, at the following annual rates as
percentages of the Fund's average daily net assets:
Advisory Fee as a % of
Average Daily Net
Assets Under Management
1.00%
Dated: ________________, 1998
