INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (this "Agreement") is made this
_____ day of __________, 2000 between Golden Gate Fund, Inc., a Maryland
corporation (the "Company"), and Xxxxxxx & Company, LLC, a California limited
liability company (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Company is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 (the "Act") as an open-end
management investment company consisting of one series, Golden Gate Fund (the
"Fund"); and
WHEREAS, the Company desires to retain the Adviser, which is an
investment adviser registered under the Investment Advisers Act of 1940, as the
investment adviser for the Fund.
NOW, THEREFORE, the Company and the Adviser do mutually promise and
agree as follows:
1. Employment. The Company hereby employs the Adviser to manage the
investment and reinvestment of the assets of the Fund for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
for the compensation herein provided and agrees during such period to render the
services and to assume the obligations herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and manage
the investment portfolio of the Fund, and, subject to such policies as the Board
of Directors of the Company may determine, direct the purchase and sale of
investment securities in the day to day management of the Fund. The Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Company in any way or otherwise be deemed an agent of
the Company. However, one or more members, officers or employees of the Adviser
may serve as directors and/or officers of the Company, but without compensation
or reimbursement of expenses for such services from the Company. Nothing herein
contained shall be deemed to require the Company to take any action contrary to
its Articles of Incorporation, as amended or supplemented, or any applicable
statute or regulation, or to relieve or deprive the Board of Directors of the
Company of its responsibility for and control of the affairs of the Company.
3. Expenses. The Adviser, at its own expense and without reimbursement
from the Company, shall furnish office space, and all necessary office
facilities, equipment and executive personnel for managing the investments of
the Fund. The Adviser shall not be required to pay any expenses of the Fund
except as provided herein if the total expenses borne by the Fund, including the
Adviser's fee and the fees paid to the Fund's administrator, but excluding all
federal, state and local taxes, interest, reimbursement payments to securities
lenders for dividend and interest payments on securities sold short, brokerage
commissions and extraordinary items, in any year exceed that percentage of the
average net asset value of the Fund for such year, as determined by valuations
made as of the close of each business day, which is the most restrictive
percentage provided by the state laws of the various states in which the Fund's
shares are qualified for sale or, if the states in which the Fund's shares are
qualified for sale impose no such restrictions, 1.95%. The expenses of the
Fund's operations borne by the Fund include by way of illustration and not
limitation, directors fees paid to those directors who are not officers of the
Company, the costs of preparing and printing registration statements required
under the Securities Act of 1933 and the Act (and amendments thereto), the
expense of registering its shares with the Securities and Exchange Commission
and in the various states, payments made pursuant to the Fund's Service and
Distribution Plan (pursuant to Rule 12b-1 under the Act), the printing and
distribution cost of prospectuses mailed to existing shareholders, the cost of
stock certificates (if any), director and officer liability insurance, reports
to shareholders, reports to government authorities and proxy statements,
interest charges, reimbursement payments to securities lenders for dividend and
interest payments on securities sold short, taxes, legal expenses, salaries of
administrative and clerical personnel, association membership dues, auditing and
accounting services, insurance premiums, brokerage and other expenses connected
with the execution of portfolio securities transactions, fees and expenses of
the custodian of the Fund's assets, expenses of calculating the net asset value
and repurchasing and redeeming shares, printing and mailing expenses, charges
and expenses of dividend disbursing agents, registrars and stock transfer agents
and the cost of keeping all necessary shareholder records and accounts.
The Company shall monitor the Fund's expense ratio on a monthly basis.
If the accrued amount of the expenses of the Fund exceeds the expense limitation
established herein, the Fund shall create an account receivable from the Adviser
in the amount of such excess. In such a situation the monthly payment of the
Adviser's fee will be reduced by the amount of such excess, subject to
adjustment month by month during the balance of the Company's fiscal year if
accrued expenses thereafter fall below the expense limitation.
4. Compensation of the Adviser. For the services to be rendered by the
Adviser hereunder, the Company through the Fund shall pay to the Adviser an
advisory fee, paid monthly, based on the average net assets of the Fund, as
determined by valuations made as of the close of each business day of the month.
The advisory fee shall be 1/12 of 1% (1.0% per annum) of such average net
assets. For any month in which this Agreement is not in effect for the entire
month, such fee shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee computed upon the average
net assets of the business days during which it is so in effect.
5. Ownership of Shares of the Fund. Except in connection with the
initial capitalization of the Company, the Adviser shall not take an ownership
position in the Fund, and shall not permit any of its members, officers or
employees to take a long or short position in the shares of the Fund, except for
the purchase of shares of the Fund for investment purposes at the same price as
that available to the public at the time of purchase.
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6. Exclusivity. The services of the Adviser to the Fund hereunder are
not to be deemed exclusive and the Adviser shall be free to furnish similar
services to others as long as the services hereunder are not impaired thereby.
Although the Adviser has agreed to permit the Fund and the Company to use the
name "Golden Gate", if they so desire, it is understood and agreed that the
Adviser reserves the right to use and to permit other persons, firms or
corporations, including investment companies, to use such name, and that the
Fund and the Company will not use such name if the Adviser ceases to be the
Fund's sole investment adviser. During the period that this Agreement is in
effect, the Adviser shall be the Fund's sole investment adviser.
7. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, the Adviser shall not be subject to liability to the Fund or to
any shareholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder, or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions. The Adviser may cause the Fund to pay a
broker-dealer which provides brokerage and research services, as such services
are defined in Section 28(e) of the Securities Exchange Act of 1934 (the
"Exchange Act"), to the Adviser a commission for effecting a securities
transaction in excess of the amount another broker-dealer would have charged for
effecting such transaction, if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of brokerage and
research services provided by the executing broker-dealer viewed in terms of
either that particular transaction or his overall responsibilities with respect
to the accounts as to which he exercises investment discretion (as defined in
Section 3(a)(35) of the Exchange Act).
9. Amendments. This Agreement may be amended by the mutual consent of
the parties; provided, however, that in no event may it be amended without the
approval of the Board of Directors of the Company in the manner required by the
Act, and, if required by the Act, by the vote of the majority of the outstanding
voting securities of the Fund, as defined in the Act.
10. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by the Board of Directors of the Company or by a
vote of the majority of the outstanding voting securities of the Fund, as
defined in the Act, upon giving written notice sixty (60) calendar days in
advance to the Adviser. This Agreement may be terminated by the Adviser at any
time upon giving written notice sixty (60) calendar days in advance to the
Company. This Agreement shall terminate automatically in the event of its
assignment (as defined in Section 2(a)(4) of the Act). Subject to prior
termination as hereinbefore provided, this Agreement shall continue in effect
for two (2) years from the date hereof and indefinitely thereafter, but only so
long as the continuance after such two (2) year period is specifically approved
annually by (i) the Board of Directors of the Company or by the vote of the
majority of the outstanding voting securities of the Fund (as defined in the
Act) and (ii) the Board of Directors of the Company in the manner required by
the Act, provided that any such approval may be made effective not more than
sixty (60) calendar days thereafter.
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IN WITNESS WHEREOF, the parties hereto have caused this Investment
Advisory Agreement to be executed on the day first above written.
XXXXXXX & COMPANY, LLC
(the "Adviser")
By:____________________________________
Name:_______________________________
Title:______________________________
GOLDEN GATE FUND, INC.
(the "Company")
By:____________________________________
Name:_______________________________
President
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