Exhibit 23(d)(3)
FORM OF INVESTMENT ADVISORY AGREEMENT
This Agreement is made and entered into effective as of ____________ ___,
2005, by and between The Drake Funds Trust, a Delaware statutory trust (the
"Trust") on behalf of the Drake Global Bond Fund (Unhedged), a series of shares
of the Trust (the "Fund"), and Drake Capital Management, LLC, a Delaware limited
liability company (hereinafter referred to as the "Advisor").
WHEREAS, the Trust is an open-end management investment company, registered
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust has designated the Fund as a series of interests in the
Trust; and
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940 ("Advisers Act"), and engages in the business of
asset management; and
WHEREAS, the Trust desires to retain the Advisor to render certain
investment management services to the Fund, and the Advisor is willing to render
such services;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Obligations of Investment Advisor
(a) Services. The Advisor agrees to perform the following services (the
"Services") for the Trust:
(1) manage the investment and reinvestment of the assets of the Fund;
(2) continuously review, supervise, and administer the investment
program of the Fund;
(3) determine, in its discretion, the securities to be purchased,
retained or sold (and implement those decisions) with respect to the Fund;
(4) provide the Trust and the Fund with records concerning the
Advisor's activities under this Agreement which the Trust and the Fund are
required to maintain; and
(5) render regular reports to the Trust's trustees and officers
concerning the Advisor's discharge of the foregoing responsibilities.
The Advisor shall discharge the foregoing responsibilities subject to the
control of the trustees and officers of the Trust and in compliance with (i)
such policies as the trustees may from time to time establish; (ii) the Fund's
objectives, policies, and limitations as set forth in its prospectus
("Prospectus") and statement of additional information ("Statement of Additional
Information"), as the same may be amended from time to time; and (iii) with all
applicable laws and regulations. All Services to be furnished by the Advisor
under this Agreement may be furnished through the medium of any directors,
officers or employees of the Advisor or through such other parties as the
Advisor may determine from time to time.
(b) Expenses and Personnel. The Advisor agrees, at its own expense or at
the expense of one or more of its affiliates, to render the Services and to
provide the office space, furnishings, equipment and personnel as may be
reasonably required in the judgment of the trustees and officers of the Trust to
perform the Services on the terms and for the compensation provided herein. The
Advisor shall authorize and permit any of its officers, directors and employees,
who may be elected as trustees or officers of the Trust, to serve in the
capacities in which they are elected. Except to the extent expressly assumed by
the Advisor herein and except to the extent required by law to be paid by the
Advisor, the Trust shall pay all costs and expenses in connection with its
operation.
(c) Books and Records. All books and records prepared and maintained by the
Advisor for the Trust and the Fund under this Agreement shall be the property of
the Trust and the Fund and, upon request therefor, the Advisor shall surrender
to the Trust and the Fund such of the books and records so requested.
2. Fund Transactions. The Advisor is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio securities for
the Fund. With respect to brokerage selection, the Advisor shall seek to obtain
the best overall execution for fund transactions, which is a combination of
price, quality of execution and other factors. The Advisor may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Advisor with brokerage, research, analysis, advice and
similar services, and the Advisor may pay to these brokers and dealers, in
return for such services, a higher commission or spread than may be charged by
other brokers and dealers, provided that the Advisor determines in good faith
that such commission is reasonable in terms either of that particular
transaction or of the overall responsibility of the Advisor to the Fund and its
other clients and that the total commission paid by the Fund will be reasonable
in relation to the benefits to the Fund and its other clients over the
long-term. The Advisor will promptly communicate to the officers and the
trustees of the Trust such information relating to portfolio transactions as
they may reasonably request.
3. Compensation of the Advisor. The Fund will pay monthly to the Advisor an
investment advisory fee (the "Fee") equal to an annualized rate of 0.25% of the
average daily net assets of the Fund. The Fee shall be calculated as of the last
business day of each month based upon the average daily net assets of the Fund
determined in the manner described in the Fund's Prospectus and/or Statement of
Additional Information, and shall be paid to the Advisor by the Fund within five
(5) days after such calculation.
4. Status of Investment Advisor. The services of the Advisor to the Trust
and the Fund are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others so long as its services to the Trust and the
Fund are not impaired thereby. The Advisor shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Trust or the Fund
in any way or otherwise be deemed an agent of the Trust or the Fund. Nothing in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Advisor, who may also be a trustee, officer or employee of the
Trust, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
5. Permissible Interests. Trustees, agents, and stockholders of the Trust
are or may be interested in the Advisor (or any successor thereof) as managers
or members, or otherwise; and managers, officers, agents, and stockholders of
the Advisor are or may be interested in the Trust as trustees, stockholders or
otherwise; and the Advisor (or any successor) is or may be interested in the
Trust as a stockholder or otherwise.
6. Limits of Liability; Indemnification. The Advisor assumes no
responsibility under this Agreement other than to render the services called for
hereunder. The Advisor shall not be liable for any error of judgment or for any
loss suffered by the Trust or 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 receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in Section
36(b)(3) of the Act) or a loss resulting from willful misfeasance, bad faith or
gross negligence on its part in the performance of, or from reckless disregard
by it of, its obligations and duties under this Agreement. It is agreed that the
Advisor shall have no responsibility or liability for the accuracy or
completeness of the Trust's registration statement under the Act or the
Securities Act of 1933, as amended ("1933 Act"), except for information supplied
by the Advisor for inclusion therein. The Trust agrees to indemnify the Advisor
to the full extent permitted by the Trust's Declaration of Trust.
7. Term. This Agreement shall remain in effect for an initial term of one
year from the date hereof, and from year to year thereafter provided such
continuance is approved at least annually by the vote of a majority of the
trustees of the Trust who are not "interested persons" (as defined in the Act)
of the Trust, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; provided, however, that:
(a) the Trust may, at any time and without the payment of any penalty,
terminate this Agreement upon 60 days written notice of a decision to terminate
this Agreement by (i) the Trust's trustees; or (ii) the vote of a majority of
the outstanding voting securities of the Fund;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the rules promulgated thereunder);
(c) the Advisor may, at any time and without the payment of any penalty,
terminate this Agreement upon 60 days' written notice to the Trust and the Fund;
and
(d) the terms of paragraph 6 of this Agreement shall survive the
termination of this Agreement.
8. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against
which enforcement of the change, waiver, discharge or termination is sought, and
no amendment of this Agreement shall be effective until approved by vote of the
holders of a majority of the Fund's outstanding voting securities.
9. Applicable Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of Delaware without regard to the
principles of the conflict of laws or the choice of laws.
10. Representations and Warranties.
(a) Representations and Warranties of the Advisor. The Advisor hereby
represents and warrants to the Trust as follows: (i) the Advisor is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware and is fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder; and (ii) the
Advisor is registered as an investment advisor with the SEC under the Advisers
Act, and shall maintain such registration in effect at all times during the term
of this Agreement.
(b) Representations and Warranties of the Trust. The Trust hereby
represents and warrants to the Advisor as follows: (i) the Trust has been duly
organized as a statutory trust under the laws of the State of Delaware and is
authorized to enter into this Agreement and carry out its terms; (ii) the Trust
is registered as an investment company with the SEC under the Act; (iii) shares
of the Fund are (or will be) registered for offer and sale to the public under
the 1933 Act; and (iv) such registrations will be kept in effect during the term
of this Agreement.
11. Structure of Agreement. The Trust is entering into this Agreement
solely on behalf of the Fund. No breach of any term of this Agreement shall
create a right or obligation with respect to any series of the Trust other than
the Fund; (b) under no circumstances shall the Advisor have the right to set off
claims relating to the Fund by applying property of any other series of the
Trust; and (c) the business and contractual relationships created by this
Agreement, consideration for entering into this Agreement, and the consequences
of such relationship and consideration relate solely to the Trust and the Fund.
12. Use of Names. The Trust acknowledges that all rights to the names
"Drake Capital Management, LLC" and "Drake Management LLC" belong to the
Advisor, and that the Trust is being granted a limited license to use such words
in its name, the name of its series and the name of its classes of shares.
13. 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 and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
14. Notice. Notices of any kind to be given to the Trust hereunder by the
Advisor shall be in writing and shall be duly given if mailed or delivered to
The Drake Funds Trust at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx Xxxxxxxx, or to such other address or to such individual as
shall be so specified by the Trust to the Advisor. Notices of any kind to be
given to the Advisor hereunder by the Trust shall be in writing and shall be
duly given if mailed or delivered to Drake Management LLC, 000 Xxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx,
XX 00000, Attention: Xxxxxxx Xxxxxxxx, or at such other address or to such
individual as shall be so specified by the Advisor to the Trust. Notices shall
be effective upon delivery.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and the year first written above.
THE DRAKE FUNDS TRUST DRAKE CAPITAL MANAGEMENT, LLC
By: By:
--------------------------------- ------------------------------------
Xxxxxx Xxxxxxxx Xxxxxx Xxxxxxxx
President Chief Operating Officer
ATTEST: ATTEST:
------------------------------------- ----------------------------------------
Secretary Secretary
[Seal] [Seal]
