INVESTMENT ADVISORY AGREEMENT
ATTACHMENT A
This Investment Advisory Agreement (“Agreement”) is made and entered into
effective as of May 3, 2017 by and between QCI Asset Management, Inc., a New York corporation (the “Advisor”), and the Starboard Investment Trust (the “Trust”), a Delaware statutory trust, on behalf of the QCI Balanced Fund (the “Fund”), a series of
the Trust.
WHEREAS, the Trust
is registered as an open-end management investment company under the Investment Company Act of 1940;
WHEREAS, the Trust
has designated the Fund as a series of interests in the Trust;
WHEREAS, the
Advisor is registered as an investment advisor under the Investment Advisers Act of 1940, and engages in the business of asset management; and
WHEREAS, the Trust
desires to retain the Advisor to furnish investment management services to the Fund and the Advisor is willing to furnish such services;
NOW THEREFORE, in
consideration of the promises and mutual covenants herein contained, it is agreed between the parties hereto as follows:
1. |
Appointment. The Trust appoints the Advisor as
investment advisor to the Fund, a series of the Trust, for the period and on the terms set forth in this Agreement. The Advisor accepts such appointment and agrees to furnish the services set forth herein, for the compensation indicated
in Appendix A.
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2. |
Obligations of the Advisor. Subject to the supervision
of the Trust’s Board of Trustees, the Advisor will provide a continuous investment program for the Fund.
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(a) |
Services. The Advisor agrees to perform the following services for
the Fund and Trust:
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(i) |
Manage the investment and reinvestment of the assets of the Fund;
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(ii) |
Continuously review, supervise, and administer the investment program of the Fund;
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(iii) |
Determine, in its discretion, the securities to be purchased, retained, or sold (and implement those decisions) with respect to the Fund;
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(iv) |
Provide the Fund and Trust with records concerning the Advisor’s activities under this Agreement which the Fund and Trust are required to maintain;
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(v) |
Render regular reports to the Trust’s trustees and officers concerning the Advisor’s discharge of the foregoing responsibilities; and
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(vi) |
Perform such other services as agreed by the Advisor and the Trust from time to time.
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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 and 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 its 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.
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(c) |
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.
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(d) |
Books and Records. All books and records prepared and maintained by
the Advisor for the Fund and Trust under this Agreement shall be the property of the Fund and Trust and, upon request therefor, the Advisor shall surrender to the Fund and Trust such of the books and records so requested.
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(e) |
Compliance Procedures. The Advisor will, in accordance with Rule
206(4)-7 of the Investment Advisers Act of 1940, adopt and implement written policies and procedures reasonably designed to prevent violations of the Investment Advisers Act of 1940 and will provide the Trust with copies of such written
policies and procedures upon request.
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4. |
Status of Advisor. The services of the Advisor to the
Fund and Trust 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 Fund and Trust are not impaired thereby; provided, however, that without providing written
notice to the Trust’s Board of Trustees, the Advisor will not serve as investment advisor to any other registered investment company having a similar investment strategy to that of the Fund. 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 Fund or Trust. 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.
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5. |
Limitation 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 Fund or Trust 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 or a loss resulting from willful misfeasance, bad faith, or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by the Advisor 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 Investment Company Act of 1940 or the Securities Act of 1933, 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.
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Any liability of the Advisor to the Fund shall not automatically impart liability on
the part of the Advisor to any other series of the Trust. The Fund shall not be liable for the obligations of any other series of the Trust, nor shall any other series of the Trust be liable for the obligations of the Fund. The limitations of
liability provided under this section are not to be construed so as to provide for limitation of liability for any liability (including liability under U.S. federal securities laws that, under certain circumstances, impose liability even on persons
that act in good faith) to the extent (but only to the extent) that such limitation of liability would be in violation of applicable law, but will be construed so as to effectuate the applicable provisions of this section to the maximum extent
permitted by applicable law.
6. |
Liability of Shareholders. Notice is hereby given that,
as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust individually but are binding only upon the assets and property of the Trust and that the
shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as shareholders of private corporations for profit.
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7. |
Representations and Warranties.
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(a) |
The Advisor represents and warrants to the Trust as follows: (i) the Advisor is a limited liability company duly organized and in good standing under the laws
of the State of Maryland 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 Securities and Exchange Commission
under the Investment Advisers Act of 1940, and shall maintain such registration in effect at all times during the term of this Agreement.
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(b) |
The Trust 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 Securities and Exchange Commission under the Investment Company Act of 1940; (iii) shares of the Fund
are (or will be) registered for offer and sale to the public under the Securities Act of 1933; and (iv) such registrations will be kept in effect during the term of this Agreement.
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8. |
Notice of Change in Control. The Advisor is obligated to
notify the Trust if there is a change in control of the Advisor at least thirty days prior to the effective date of the change, or as soon as practicable in the event that thirty days’ notice is not possible.
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9. |
Duration and Termination. This Agreement shall remain in
effect for an initial term of two years 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 Investment Company Act of 1940) of the Trust, which vote must be cast in person at a meeting called for the purpose of voting on such approval; provided that:
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(a) |
The Trust may, at any time and without the payment of any penalty, terminate this Agreement upon 60 calendar 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;
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(b) |
This Agreement shall immediately terminate in the event of its assignment (within the meaning of the Investment Company Act of 1940 and the rules thereunder);
and
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(c) |
The Advisor may, at any time and without the payment of any penalty, terminate this Agreement upon 60 calendar days’ written notice to the Fund and Trust.
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(d) |
The terms of paragraph 5 of this Agreement shall survive the termination of this Agreement.
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10. |
Amendment of Agreement. No provision of this Agreement
may be changed, waived, discharged, or terminated orally, but only by a written instrument 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 until approved by vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the Investment Company Act of 1940).
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11. |
Applicable Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of Delaware.
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12. |
Structure of Agreement. The Trust is entering into this
Agreement solely on behalf of the Fund. Without limiting the generality of the foregoing: (i) 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; (ii)
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 (iii) 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 Fund.
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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.
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14. |
Use of Names. The Trust acknowledges that all rights to
the name “QCI Balanced Fund” belong to the Advisor, and 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.
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15. |
Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.
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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first above written.
By: /s/ Xxxxxxxxx X. Honey
Name: Xxxxxxxxx X. Honey
Title: President
QCI ASSET MANAGEMENT, INC.
By: /s/ H. Xxxxxx Xxxxx
Name: H. Xxxxxx Xxxxx
Title: CEO
APPENDIX
A
COMPENSATION SCHEDULE
(Amended September 6, 2018)
(Amended September 6, 2018)
For the services delineated in this Agreement, the Advisor shall receive an investment advisory fee equal to an annualized
rate of 0.72% 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
Statement of Additional Information.