INVESTMENT MANAGEMENT CONTRACT
THIS CONTRACT made effective as of the 1st day of September, 2006, by and
between Surgeons Asset Management, LLC (the "Manager"), a Delaware limited
liability company, and Surgeons Diversified Investment Fund (the "Trust"), an
Ohio business trust.
WHEREAS, the Trust is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"), and
is currently authorized to issue separate series of shares, each having its own
investment objective, policies and restrictions, all as more fully described in
the prospectus and the statement of additional information constituting parts of
the Trust's Registration Statement on Form N-1A filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, and the Act (the "Registration Statement"); and
WHEREAS, the Trust proposes to engage in the business of investing and
reinvesting the assets of each of its series in securities ("the portfolio
assets") of the type and in accordance with the limitations specified in the
Trust's Agreement and Declaration of Trust, as amended from time to time (the
"Declaration") and Registration Statement, and any representations made in its
prospectus and statement of additional information, all in such manner and to
such extent as may from time to time be authorized by the Trustees; and
WHEREAS, the Declaration established Surgeons Diversified Investment Fund (the
"Fund") as a series of the Trust, and the Fund wishes to employ the Manager to
manage the investment and reinvestment of the Fund's portfolio assets as above
specified and, without limiting the generality of the foregoing, to provide
management and other services specified below.
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Manager to supervise and direct the
investments of and for the Fund and as the Fund's agent and
attorney-in-fact. In providing the services and assuming the
obligations set forth herein, the Manager may, at its sole expense,
employ one or more subadvisers for the Fund. Any agreement between the
Manager and a subadviser shall be subject to the renewal, termination
and amendment provisions set forth herein. The Manager (directly or
through subadvisers) undertakes to provide the following services and
to assume the following obligations and shall have full discretionary
and exclusive power and authority to: establish, maintain and trade in
brokerage accounts for and in the name of the Fund, and to buy, sell
and trade in all stocks, bonds and other assets of the Fund. The
Manager hereby accepts such appointment and agrees to manage the
portfolio assets (or cause all subadvisers to manage the portfolio
assets) in a manner consistent with the investment objective, policies
and restrictions of the Fund and with applicable law.
2. Unless advised by the Trustees of the Trust of an objection, the
Manager (directly or through one or more subadvisers) may direct that
a portion of the brokerage commissions that may be generated by the
Fund be applied to payment for brokerage and research services.
Brokerage and research services furnished by brokers may include, but
are not limited to, written information and analyses concerning
specific securities, companies or sectors; market, financial and
economic studies and forecasts as well as discussions with research
personnel; financial publications; and statistic and pricing services
utilized in the investment management process. Brokerage and research
services obtained by the use of commissions arising from the Fund's
portfolio transactions may be used by the Manager (or a subadviser) in
its other investment activities. In selecting brokers and negotiating
commission rates, the Manager/subadviser(s) will take into account the
financial stability and reputation of brokerage firms and the
brokerage, execution and research services provided by such brokers.
The benefits which the Fund may receive from such services may not be
in direct proportion to the commissions generated by the Fund. The
Trust acknowledges that since commission rates are generally
negotiable, selecting brokers on the basis of considerations which are
not limited to applicable commission rates may result in higher
transaction costs that would otherwise be obtainable.
3. The Manager and/or the subadviser(s) may bunch orders for the Fund
with orders for the same security for other accounts managed by the
Manager, a subadviser or its affiliates. In such instances, the Fund
will be charged the average price per unit for the security in any
such transaction and will receive the average price of the security in
the bunched transaction. Complete records of such transactions will be
maintained by the Manager and the respective subadvisers and will be
made available to the Trust upon request.
4. The Manager shall report or shall cause the subadvisers to report to
the Board of Trustees at each meeting thereof all changes in the
portfolio assets since the prior report, and will also keep the
Trustees informed of important developments affecting the portfolio
assets, and on the Manager's own initiative will furnish the Trustees
from time to time with such information as the Manager may believe
appropriate for this purpose, or other information as the Trustees may
reasonably request, whether concerning the individual issuers whose
securities are included in the portfolio assets, the industries in
which they engage, or the conditions prevailing in the economy
generally. The Manager will also furnish the Trustees with such
statistical and analytical information with respect to the portfolio
assets as the Manager may believe appropriate or as the Trustees
reasonably may request. In making purchases and sales of the portfolio
assets, the Manager will bear in mind and will cause all subadvisers
to adhere to the policies set from time to time by the Board of
Trustees, as well as the limitations imposed by the Trust's
Declaration, and the Trust's Registration Statement, in each case as
amended from time to time,
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the limitations in the Act and of the Internal Revenue Code of 1986,
as amended, in respect of regulated investment companies and the
investment objective, policies, practices, and restrictions applicable
to the Fund or its portfolio assets.
5. The Manager shall not be liable for any mistake of judgment or in any
event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, the Manager
against any liability to the Fund or to its beneficial interest
holders to which the Manager would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of the Manager's reckless
disregard of its obligations and duties hereunder. It is understood
that the Manager and/or the subadvisers may perform various investment
advisory and managerial services for others, and the Trust agrees that
the Manager and all subadvisers may give advice and take action in the
performance of its or their duties with respect to others which may
differ from advice given or action taken with respect to the Fund.
Nothing contained herein shall in any way constitute a waiver or
limitation of any rights which the Fund or its shareholders may have
under common law, or any federal or state securities laws.
6. This Contract shall become effective on the date set forth above and
shall remain in effect for an initial term of two years and shall
continue in effect from year to year thereafter so long as its
continuance is specifically approved at least annually by the Board of
Trustees or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Fund, and, in either case,
by a vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Trust's Trustees who are
not parties to this Contract or interested persons, as defined in the
Act, of any party to this Contract, and provided further, however,
that if the continuation of this Contract is not approved, the Manager
may continue to render to the Fund the services described herein in
the manner and to the extent permitted by the Act and the rules and
regulations thereunder. Upon the effectiveness of this Contract, it
shall supersede all previous agreements between the parties covering
the subject matter hereof. This Contract may be terminated at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund, or
by a vote of the Board of Trustees on 60 days' written notice to the
Manager, or by the Manager on 60 days' written notice to the Trust.
7. This Contract shall not be amended unless such amendment is approved
by vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trust's Trustees who are not
parties to this Contract or interested persons, as defined in the Act,
of any party to this Contract (other than as Trustees of the Trust),
and, if required by law, by vote
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of a majority of the outstanding voting securities (as defined in the
Act) of the Fund.
8. This Contract may not be assigned by the Manager and shall terminate
automatically in the event of any assignment by the Manager. The term
"assignment" as used in this paragraph shall have the meaning ascribed
thereto by the Act and any regulations or interpretations of the
Commission thereunder.
9. If the Manager ceases to act as Manager to the Fund, or, in any event,
if the Manager so requests in writing, the Trust agrees to take all
necessary action to change the names of the Trust and the Fund to a
name not including the term "Surgeons." The Manager may from time to
time make available without charge to the Trust for its use such marks
or symbols owned by or licensed to the Manager (or its affiliates),
including marks or symbols containing the term "Surgeons," "The
American College of Surgeons," or any variation thereof, as the
Manager may consider appropriate. Any such marks or symbols so made
available will remain the property of the Manager (or its affiliates),
and it or they shall have the right, upon notice in writing, to
require the Trust to cease the use of such xxxx or symbol at any time.
10. The Fund shall pay the Manager an investment advisory fee equal to
1.00% per annum of the average daily net assets of the Fund. The
investment advisory fee will be paid monthly. The Manager's
compensation for the period from the date hereof through the last day
of the month of the effective date hereof will be prorated based on
the proportion that such period bears to the full month. The Manager
reserves the right to waive all or any part of its fee. In the event
of any termination of this Contract, the Manager's compensation will
be calculated on the basis of a period ending on the last day on which
this Contract is in effect, subject to proration based on the number
of days elapsed in the current period as a percentage of the total
number of days in such period. The Manager only will pay all fees with
respect to any subadviser, and the Trust shall not be obligated to any
subadviser in any manner with respect to the compensation of such
subadviser.
11. Unless otherwise agreed to in writing by the parties, the Fund shall
be responsible and hereby assumes the obligation for payment of all of
its expenses, including: (a) payment to the Manager of the fee
provided for in the foregoing paragraph; (b) custody, transfer and
dividend disbursing expenses; (c) fees of Trustees who are not
interested persons (as defined in Section 2(a)(19) of the Act); (d)
legal and auditing expenses; (e) clerical, accounting and other office
costs; (f) the cost of personnel providing services to the Fund; (g)
costs of printing the Fund's prospectuses and shareholder reports for
existing shareholders; (h) cost of maintenance of the Fund's corporate
existence; (i) interest charges, taxes, brokerage fees and
commissions; (j) costs of stationery and supplies; (k) expenses and
fees related to registration and filing with the Commission and with
state regulatory authorities; and (l) such
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promotional, shareholder servicing and other expenses as may be
contemplated by one or more effective plans pursuant to Rule 12b-1
under the Act or one or more effective non-Rule 12b-1 shareholder
servicing plans, in each case provided, however, that the Fund's
payment of such promotional, shareholder servicing and other expenses
shall be in the amounts, and in accordance with the procedures, set
forth in such plan or plans.
12. Except to the extent necessary to perform the Manager's obligations
hereunder, nothing herein shall be deemed to limit or restrict the
right of the Manager or its members, officers or employees to engage
in any other business or to devote time and attention to the
management of other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any
other individual or entity.
13. The validity of this Contract and the rights and liabilities of the
parties hereunder shall be determined in accordance with the laws of
the State of Ohio without regard to its conflict of laws provisions,
provided, however, that nothing herein shall be construed as being
inconsistent with the Act.
14. A copy of the Trust's Declaration is on file with the Secretary of the
State of Ohio, and notice is hereby given that this instrument is
executed on behalf of the Board of Trustees of the Trust and not
individually and that the obligations of this instrument are not
binding upon any of the Trustees, officers or shareholders
individually but are binding only upon the assets and property of the
Fund, and the Manager shall look only to the assets of the Fund for
the satisfaction of such obligations.
15. The Manager shall promptly notify the Trust of any change in the
ownership or control of the Manager.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed
as of the day and year first above written.
SURGEONS DIVERSIFIED INVESTMENT FUND
By:
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Xxxxxxx X. Xxx, Esq.
Its: President
SURGEONS ASSET MANAGEMENT, LLC
By:
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Its:
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