INVESTMENT ADVISORY AGREEMENT
THIS
INVESTMENT ADVISORY AGREEMENT (“Agreement”) is made and entered into as of this 6th day of December, 2018, by and between STARBOARD
INVESTMENT TRUST, a Delaware statutory trust (the “Trust”), and CoreCap Advisors, Inc., a Michigan corporation (the “Advisor”),
located at 00000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, on behalf of the series of the Method Fund Family enumerated in Appendix A hereof (such series, together with all other series subsequently established by the Trust and made
subject to this Agreement in accordance with the terms contained below, being herein referred to as a “Fund,” and collectively as the “Funds.”)
WHEREAS, The Trust is registered as an open-end management investment company under the Investment Company act of
1940, as amended (the “Act”); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in separate series, each having its own investment objective or
objectives, policies and limitations; and
WHEREAS, the Trust offers such shares in the series named on Appendix A hereto; and
WHEREAS, the Advisor is or soon will be registered as an investment advisor under the Investment Advisers Act of 1940, and engages or
will soon engage in the business of asset management; and
WHEREAS, the Trust desires to retain the Advisor to render investment advisory services to the Trust with respect to each Fund in the
manner and on the terms and conditions hereinafter set forth, and the Advisor is willing to furnish such services;
NOW, THEREFORE, the parties hereto agree as follows:
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1.
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APPOINTMENT OF THE ADVISOR
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The Trust appoints the Advisor as investment advisor to the Funds, each 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.
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OBLIGATIONS OF THE ADVISOR
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Subject to the supervision of the Trust’s Board of Trustees, the Advisor will provide a continuous investment program for the Funds.
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(a)
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Services. The Advisor agrees to perform the
following services for the Funds and Trust:
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i.
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Manage the investment and reinvestment of the assets of the Funds;
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ii.
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Continuously review, supervise, and administer the investment program of the Funds;
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iii.
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Determine, in its discretion, the securities to be purchased, retained, or sold (and implement those decisions) with respect to the Funds;
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iv.
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Provide the Funds and Trust with records concerning the Advisor’s activities under this Agreement which the Funds and Trust are required to
maintain;
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v.
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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.
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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 Funds’ objectives, policies, and limitations as set forth in the 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.
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(b)
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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)
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Fund Transactions. The Advisor is
authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for each 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 each Fund and its other clients and that the total commission paid by each Fund
will be reasonable in relation to the benefits to each 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)
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Books and Records. All books and records
prepared and maintained by the Advisor for the Funds and Trust under this Agreement shall be the property of the Funds and Trust and, upon request, the Advisor shall surrender to the Funds and Trust such of the books and records so
requested.
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(e)
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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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(f)
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Code of Ethics. The Advisor has adopted a
written code of ethics complying with the requirements of Rule 17j-l under the Act and will provide the Trust with a copy of the code and evidence of its adoption. Within forty-five (45) days of the last calendar quarter of each year
while this Agreement is in effect, the Advisor will provide to the Board of Trustees of the Trust a written report that describes any issues arising under the code of ethics since the last report to the Board of Trustees, including, but
not limited to, information about material violations of the code and sanctions imposed in response to the material violations; and which certifies that the Advisor has adopted procedures reasonably necessary to prevent “access persons”
(as that term is defined in Rule 17j-l) from violating the code.
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| 3. |
COMPENSATION
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The Trust will pay, or cause to be paid to, the Advisor and the Advisor will accept as full compensation an investment
advisory fee, based upon the average daily net assets of each Fund, computed at the end of each month and payable within five business days thereafter, according to the schedule attached hereto as Appendix A.
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4.
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STATUS OF ADVISOR
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The services of the Advisor to the Funds 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 Funds 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 each 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
Funds in any way or otherwise be deemed an agent of the Funds 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.
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RETENTION OF SUB-ADVISOR
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Subject to the Trust’s obtaining the initial and periodic approvals required under Section 15 of the Act, the Advisor may retain one
or more sub-advisors, at the Advisor’s own cost and expense, for the purpose of managing the investments of the assets of one or more Funds of the Trust. Retention of one or more sub-advisors shall in no way reduce the responsibilities or
obligations of the Advisor under this Agreement and the Advisor shall, subject to Section 6 of this Agreement, be responsible to the Trust for all acts or omissions of any sub-advisor in connection with the performance of the Advisor’s duties
hereunder.
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6.
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LIMITATION OF LIABILITY AND INDEMNIFICATION
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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 Funds 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.
Any liability of the Advisor to the Funds shall not automatically impart liability on the part of the Advisor to any other series of the Trust. The
Funds 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 Funds. 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.
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7.
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LIABILITY OF SHAREHOLDERS
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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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REPRESENTATIONS AND WARRANTIES
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(a)
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Advisor’s Representations. 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 Massachusetts 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)
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Trust’s Representations. 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 each 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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NOTICE OF CHANGE IN CONTROL
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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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DURATION AND TERMINATION
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This Agreement shall remain in effect for an initial term of two years from the date the Fund commences operations, 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)
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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 Funds;
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(b)
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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)
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The Advisor may, at any time and without the payment of any penalty, terminate this Agreement upon 60 calendar days’ written notice to the
Funds and Trust.
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(d)
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The terms of paragraph 5 of this Agreement shall survive the termination of this Agreement.
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AMENDMENT OR ASSIGNMENT OF AGREEMENT
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(a)
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Amendment. 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 Funds’ outstanding voting securities (as defined in the Investment Company Act of 1940).
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(b)
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Assignment. The parties agree that
assignment of this Agreement constitutes a material breach, and further that this Agreement shall terminate automatically and immediately in the event of its assignment.
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STRUCTURE OF AGREEMENT
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The Trust is entering into this Agreement solely on behalf of the Funds. 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 Funds; (ii) under no circumstances shall the Advisor have the right to set off claims relating to each 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 each Fund.
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MISCELLANEOUS
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(a)
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Headings. 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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(b)
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Use of Names. The Trust acknowledges that
all rights to the name “CoreCap” 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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(c)
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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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(d)
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Applicable Law. This Agreement shall be
construed in accordance with, and governed by, the laws of the State of Delaware.
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[Signatures on Following Page]
[Signature Page to Investment Advisory Agreement]
REPRESENTATION OF SIGNATORIES. Each of the undersigned expressly warrants and represents that they have full power and authority to sign this Agreement on behalf of the party indicated and that their signature will bind the party indicated to the terms
hereof.
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: Xxxx X. Honey
Title: Principal Executive Officer
CORECAP ADVISORS, INC.
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
Appendix A
COMPENSATION SCHEDULE
For the services delineated in this Agreement, the Advisor shall receive an investment advisory fee equal to an annualized rate of
the average daily net assets of each of the Funds as listed below. The fee shall be calculated as of the last business day of each month based upon the average daily net assets of each Fund determined in the manner described in the Funds’
Prospectus and Statement of Additional Information.
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FUND
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INVESTMENT ADVISORY FEE
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1. Method Smart Beta U.S. Sector Plus Fund
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1.00%
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2. Method Smart Beta Explorer Allocation Plus Fund
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1.00%
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