INVESTMENT CONSULTING AGREEMENT
The undersigned Mallard Fund, Inc., a Maryland corporation formed as an
Investment Company registered with the United States Securities and Exchange
Commission, hereafter referred to as "the Fund" and Cambridge Capital Advisors,
Inc. and Cambridge Associates, Inc., both Massachusetts corporations registered
with the United States Securities and Exchange Commission as investment
advisers, hereafter referred to collectively as "the Advisors" agree as follows:
1. INVESTMENT ADVICE TO THE FUND
The Fund hereby appoints the Advisors to monitor and provide investment advice
regarding any cash, securities, and other investments owned by the Fund
(referred to hereafter as the "Investment Assets").
2. DUTIES OF ADVISORS
The Advisors shall:
(a) Make recommendations to the Fund from time to time on investment
objectives, investment policies, investment management structures,
investments and cash management for the Investment Assets.
(b) Provide written reports on various topics related to investment and
financial management.
(c) Provide quarterly and annual investment performance measurement and
evaluation of investments of the Investment Assets.
In performing its obligations under this Agreement, the Advisors shall discharge
their duties and exercise their powers hereunder with the care, skill, prudence
and diligence that, under the circumstances then prevailing, a prudent person
acting in a like capacity would use. The Advisors shall only act in an advisory,
and not in a discretionary, capacity.
3. RESTRICTIONS ON THE ADVISORS AND EXCLUSIONS FROM SERVICES
The Advisors may not enter into any transaction on behalf of the Fund or bind
the Fund in any way.
The Advisors shall at no time have custody, possession, or control of any of the
Investment Assets or any cash, securities, or other assets of the Fund.
The Advisors shall not provide or otherwise be responsible for the provision of
legal counsel. The Fund shall obtain legal counsel as it deems necessary.
4. CONFIDENTIALITY
The Advisors shall regard as confidential all information concerning the affairs
of the Fund, but shall be permitted to disclose to third parties the fact that
the Advisors are performing advisory activities on the Fund's behalf. The Fund
and any of its affiliated parties shall regard as confidential all information
and recommendations furnished by the Advisors to the Fund subject to disclosure
as may be required by law.
5. SERVICES TO OTHER CLIENTS
The Advisors and their affiliates may act and continue to act as investment
advisors for others so long as their services under this Agreement are not
impaired thereby, and nothing in this Agreement shall in any way be deemed to
restrict the right of the Advisors or their affiliates to perform investment
advisory or other services for any other person or entity, and the performance
of such services for others shall not be deemed to violate or give rise to any
duty or obligation to the Fund.
6. FEES
The Advisors' compensation shall be determined as follows:
Annual fee
As full compensation for all services rendered and expenses assumed by the
Advisors hereunder, the Fund shall pay an Annual Fee based on total Investment
Assets and calculated as the sum of:
55 basis points (0.55%) of Alternative Assets (excluding Fund of
Funds assets)
30 basis points (0.30%) of Alternative Fund of Funds assets
10 basis points (0.10%) of Base Assets
Twenty-five percent (25%) of the Annual Fee as determined above shall be billed
and paid in arrears at the end of each quarter based on the market value of the
Marketable Investment Assets as reported by the various investment managers on
the last day of the most recently ended calendar quarter and the total amount
committed to Non-marketable Alternative Investment Assets on the last day of the
most recently ended calendar quarter.
"Non-marketable Alternative Assets," "Alternative Assets," "Fund of Funds,"
"Base Assets," and "Marketable Alternative Assets" shall have the definitions
provided in Exhibit A.
7. ASSIGNMENT
This Agreement shall automatically terminate without penalty in the event of its
assignment. Notwithstanding this paragraph, notice is hereby provided and the
Fund hereby agrees that certain research, data collection, and other services to
be provided under this Agreement may be based on information provided by
Cambridge Associates (UK) Limited ("CA-UK"). CA-UK is registered as an
investment advisor under the Investment Advisers Act of 1940 as amended and is
under common ownership and control with the Advisors.
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8. WARRANTY AND REPRESENTATIONS
The Advisors represent and warrant that they are registered investment advisors
under the Investment Advisers Act of 1940, as amended, and that such
registrations are currently effective and that they are eligible to serve as
investment advisers to the Fund. The Fund acknowledges receipt, at least 48
hours prior to entering into this Agreement, of a copy of Part II of the
Advisors' current filings with the Securities and Exchange Commission on Form
ADV. In all matters relating to the performance of this Agreement, the Advisers
will act in conformity with the Articles of Incorporation, by-laws, and
Registration Statement of the Fund and with the instructions and directions of
the Board of Directors and will comply with the requirements of the Investment
Company Act of 1940, the rules thereunder, and all other applicable federal and
state laws and regulations.
9. NOTICES
Except as otherwise expressly provided in this Agreement, whenever any notice is
required or permitted to be given under any provision of this Agreement, such
notice shall be in writing, shall be signed by or on behalf of the party giving
the notice and shall be mailed by first class mail or sent by courier or telefax
with confirmation of transmission to the other party at the address set forth
below or to such other address as a party may from time to time specify. Any
such notice shall be deemed duly given when delivered at such address.
10. EFFECTIVE PERIOD OF AGREEMENT AND TERMINATION
The initial term of this Agreement shall be from July 1, 1997 through June 30,
1998. Unless sooner terminated as provided herein, this Agreement will continue
in effect for one year. Thereafter, if not terminated, this Agreement will
continue automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i) by vote of
a majority of those Directors of the Fund, who are not parties to this agreement
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of the Fund. If this Agreement is
terminated, fees payable to the Advisors shall be adjusted on a pro rata basis.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund at
any time, without the payment of any penalty, by vote of the Board or by a vote
of a majority of the outstanding voting securities of the Fund on sixty days'
written notice to the Advisors or by the Advisors at any time on sixty days'
written notice to the Fund.
11. AMENDMENTS
Any amendments to this Agreement including the Exhibit shall be effective only
if in writing and signed by an authorized officer on behalf of the Advisors and
by an Authorized Signer of the Fund and such amendment is approved by a majority
of the Fund's outstanding voting securities.
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12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
Massachusetts law, without regard to its principles of conflicts of law, except
insofar as Massachusetts law is inconsistent with the Investment Company Act of
1940.
13. DEFINITIONS
As used in this Agreement, the terms "assignment," "interested person,"
"majority of outstanding voting securities," and "value" shall have the meanings
provided therefor in the Investment Company Act of 1940 and the rules and
regulations thereunder.
14. LIMITATION OF LIABILITY
Notwithstanding any other provision of this Agreement, nothing in this Agreement
shall be construed to limit any liability to the Fund or its shareholders to
which the Advisors would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of their duties, or by reason
of their reckless disregard of their obligations and duties under this
Agreement.
15. ENTIRE AGREEMENT
This Agreement, including the Exhibit attached hereto, constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, between
them regarding such subject matter. Any Exhibit attached to this Agreement, as
may be amended from time to time, shall be integral parts of this Agreement.
Notwithstanding any other provision of this Agreement, nothing in this Agreement
shall be construed to limit any liability to the Fund or its shareholders to
which the Advisors would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of their duties, or by reason
of their reckless disregard of their obligations and duties under this
Agreement.
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CAMBRIDGE CAPITAL ADVISORS, INC. THE MALLARD FUND, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------------- -----------------------------
Xxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxxx
Date: July 1, 1997 Date: __________________________
Address: One Winthrop Square Address: 000 XxXxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Phone: 000-000-0000 Phone:
Fax: 000-000-0000 Fax:
CAMBRIDGE ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx, Treasurer
Date: July 1, 1997
Address: Xxx Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
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EXHIBIT A
to
INVESTMENT ADVISORY AGREEMENT
between
CAMBRIDGE CAPITAL ADVISORS, INC. and CAMBRIDGE ASSOCIATES, INC.
and
THE MALLARD FUND, INC.
July 1, 1997
"ALTERNATIVE ASSETS" include any amounts invested in any of the following asset
classes:
MARKETABLE ALTERNATIVE ASSETS
-----------------------------
Hedge funds (defined to include any partnerships that invest
primarily in publicly-traded securities)
Fund of funds (defined as a general partnership or other type of
entity formed to invest in a diversified pool of marketable
alternative asset investment managers)
NON-MARKETABLE ALTERNATIVE ASSETS
---------------------------------
Any investment vehicle that invests in the following assets:
Domestic private equity (including leveraged buyouts, mezzanine
and restructuring funds)
International private equity
Distressed securities (defined as vehicles with greater than
one-year lockup features)
Fund of funds (defined as a general partnership or other type of
entity formed to invest in a diversified pool of non-marketable
alternative asset investment managers)
"BASE ASSETS" is equal to the total value of Investment Assets less the value of
Alternative Assets.
