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, the limitations in the Act and of the Internal Revenue Code of
1986, as
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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 of a majority of the outstanding voting securities (as defined in the
Act) of the Fund.
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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 promotional,
shareholder servicing and other expenses as may be contemplated by one or
more effective plans pursuant to Rule 12b-1 under the
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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: /s/ Xxxxxxx X. Xxx
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Xxxxxxx X. Xxx, Esq.
Its: President
SURGEONS ASSET MANAGEMENT, LLC
By: /s/ Xxx Xxxxxxx
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Its: Comptroller
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