Exhibit 5.1
BURRIDGE FUNDS
BURRIDGE CAPITAL DEVELOPMENT FUND
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated the ____ day of December 1996, is made and entered
into by and between BURRIDGE FUNDS, a Massachusetts business trust (the "Trust")
on behalf of its series Burridge Capital Development Fund (the "Fund"), and THE
BURRIDGE GROUP LLC, a Delaware limited liability company (the "Adviser").
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as
manager and investment adviser to Burridge Capital Development Fund (the
"Fund"), a series of the Trust, for the period and on the terms herein set
forth. The Adviser accepts that appointment and agrees to provide the services
set forth in this Agreement, for the compensation herein provided.
2. SERVICES OF ADVISER.
(a) The Adviser shall manage the business and affairs of the Fund and
the investment and reinvestment of the assets of the Fund, subject to the
supervision of the board of trustees of the Trust, for the period and on the
terms set forth in this agreement. The Adviser shall give due consideration to
the investment policies and restrictions and the other statements concerning the
Fund in the Trust's Agreement and Declaration of Trust, bylaws and registration
statements under the 1940 Act and the Securities Act of 1933 (the "1933 Act"),
and to the provisions of the Internal Revenue Code applicable to the Trust as a
regulated investment company. The Adviser shall be deemed for all purposes to
be an independent contractor and not an agent of the Trust or the Fund, and
unless otherwise expressly provided or authorized, shall have no authority to
act or represent the Trust or the Fund in any way.
(b) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Adviser, although the Fund will pay the actual brokerage
commissions on portfolio transactions in accordance with Paragraph 4. In
executing portfolio transactions and selecting brokers or dealers, the Adviser
will use its best efforts to seek on behalf of the Fund the best overall terms
available for any transaction. The Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis).
(c) To the extent contemplated by the Trust's registration statement
under the 1933 Act, in evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Adviser
may also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Fund and/or other accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. Consistent with the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. and subject to seeking the
most favorable combination of net price and execution available, the Adviser may
consider sales of shares of the Fund as a
factor in the selection of broker-dealers to execute portfolio transactions for
the Fund. The Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised.
3. SERVICES OTHER THAN AS ADVISER. The Adviser (or an affiliate of the
Adviser) may act as broker for the Trust in connection with the purchase or sale
of securities by or to the Trust if and to the extent permitted by procedures
adopted from time to time by the board of trustees of the Trust. Such brokerage
services are not within the scope of the duties of the Adviser under this
agreement, and, within the limits permitted by law and the trustees, the Adviser
(or an affiliate of the Adviser) may receive brokerage commissions, fees or
other remuneration from the Trust for such services in addition to its fee for
services as Adviser. Within the limits permitted by law, the Adviser may
receive compensation from the Trust for other services performed by or for the
Trust which are not within the scope of the duties of the Adviser under this
agreement.
4. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its
own expense, office space to the Trust and all necessary office facilities,
equipment, and personnel for managing the assets of the Fund, providing
shareholder servicing and providing general administrative services to the Fund
and to the Trust. The Adviser shall also assume and pay all other expenses
incurred by it in connection with managing the assets of the Fund, all expenses
of marketing shares of the Fund, all compensation of trustees who are
"interested persons" of the Trust as defined in the Act and all expenses
incurred in connection with their services to the Trust.
5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall assume and pay all
other costs and expenses not specifically assumed by the Adviser, including, but
not limited to: all accounting, auditing and legal services, clerical and
statistical services, administrative costs; all costs attributable to
shareholder and investor services relating to the Fund (including, without
limitation, telephone and personnel expenses and the charges, if any, of third
parties performing such services); all expenses of maintaining the registration
of shares of the Fund under the 1933 Act and of qualifying and maintaining
qualification of shares of the Fund under the securities laws of such United
States jurisdictions as the Trust may from time to time reasonably designate;
all expenses of determining daily price computations and performing related
bookkeeping services; all charges of depositories, custodians, and other
agencies for the safekeeping and servicing of the Fund's cash, securities, and
other property and of the Trust's transfer, dividend disbursing, and redemption
agents and registrars, if any; insurance expenses; all expenses of publication
of notices and reports to the Trust's shareholders; all expenses of proxy
solicitations of the Trust or its board of trustees; all expenses of maintaining
the Trust's existence and maintaining the registration of the Trust under the
Act; all fees and expenses incurred in connection with the services to the Trust
of trustees who are not "interested persons" of the Trust as defined in the Act;
the compensation to the Adviser provided in Section 6 of this Agreement;
2
all taxes and fees payable to federal, state, or other governmental agencies,
domestic or foreign; all stamp or other transfer taxes; all interest charges;
and any extraordinary costs or expenses such as legal, accounting, or other
costs or expenses not incurred in the course of the Trust's ongoing operation.
In addition to the payment of the foregoing expenses the Trust shall also pay
all brokers' commissions and other portfolio transaction costs. Any expenses
borne by the Trust that are attributable solely to the organization, operation
or business of the Fund are charged against the Fund. Other expenses of the
Trust are allocated among its portfolios on a reasonable basis as determined by
the Trust's board of trustees.
6. COMPENSATION OF ADVISER. For the services to be rendered and the
charges and expenses to be assumed and to be paid by the Adviser hereunder, the
Trust shall pay out of Fund assets to the Adviser a fee, accrued daily and paid
monthly, at the annual rate of (i) 1.00% of the first $500 million of the Fund's
average daily net assets; (ii) 0.85% of the Fund's average daily net assets in
excess of $500 million; and (iii) 0.75% of the average daily net assets in
excess of $1 billion. The fee payable hereunder shall be reduced
proportionately during any month in which this agreement is not in effect for
the entire month. The fee for each calendar month or portion thereof shall be
payable on the first business day of the next month.
7. SERVICES OF ADVISER NOT EXCLUSIVE. The services of the Adviser to the
Trust hereunder are not exclusive, and the Adviser shall be free to render
similar services to others so long as its services under this agreement are not
impaired by such other activities.
8. LIABILITY OF ADVISER. The Adviser shall not be liable to the Trust or
its shareholders for any loss suffered by the Trust or its shareholders from or
as a consequence of any act or omission of the Adviser, or of any of the
directors, officers, employees, or agents of the Adviser, in connection with,
pursuant to or arising out of this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence on the part of the Adviser in the
performance of its duties or by reason of reckless disregard by the Adviser of
such obligations and duties under this Agreement.
9. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not
be binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the assets and property
of the Trust as provided in the Agreement and Declaration of Trust of the Trust.
10. USE OF ADVISER'S NAME. The Trust may use the name "Burridge Funds" or
any other name derived from the name "Burridge," only for so long as this
agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have succeeded
to the business of the Adviser as investment adviser. At such time as this
agreement or any extension, renewal or amendment hereof, or such other similar
agreement shall no longer be in effect, the Trust will (by amendment of its
Agreement and Declaration of Trust, if necessary) cease to use any name derived
from the name "Burridge," any name similar thereto or any other name indicating
that it is advised by or otherwise connected with the Adviser, or with any
organization which shall have succeeded to the Adviser's business as investment
adviser. The consent of the Adviser to the use of such
3
name by the Trust shall not prevent the Adviser's permitting any other
enterprise, including another investment company, to use such name or names.
11. DURATION AND RENEWAL.
(a) Unless terminated as provided in section 13, this agreement shall
continue in effect until December __, 1998, and thereafter from year to year
only so long as such continuance is specifically approved at least annually (a)
by a majority of those trustees who are not interested persons of the Trust or
of the Adviser, voting in person at a meeting called for the purpose of voting
on such approval, and (b) by either the board of trustees of the Trust or a vote
of the holders of a majority of the outstanding shares of the Fund (which term
as used throughout this agreement shall be construed in accordance with the
definition of "vote of a majority of the outstanding voting securities of a
company" in section 2(a)(42) of the 1940 Act).
(b) Any approval of this agreement by the holders of a majority of the
outstanding shares of the Fund shall be effective to continue this agreement
notwithstanding that it has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be required by any
other applicable law or otherwise.
12. TERMINATION. This agreement may be terminated at any time, without
payment of any penalty, by the board of trustees of the Trust, or by a vote of
the holders of a majority of the outstanding shares of the Fund, upon 60 days'
written notice to the Adviser. This agreement may be terminated by the Adviser
at any time upon 60 days' written notice to the Trust. This agreement shall
terminate automatically in the event of its assignment (as defined in section
2(a)(4) of the 1940 Act).
13. AMENDMENT. This agreement may not be amended without the affirmative
vote (a) of a majority of those trustees who are not "interested persons" (as
defined in Section 2(a)(19) of the 0000 Xxx) of the Trust and (b) of the holders
of a majority of the outstanding shares of the Fund.
14. GOVERNING LAW. The terms and provisions of this Agreement shall be
interpreted under and governed by the law of the State of Illinois.
15. NOTICES. Any notices and communications required hereunder shall be
in writing and shall be deemed given when delivered in person or when sent by
first-class, registered or certified mail to the Adviser at 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 and to the Fund at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, or at such address as either party may from time to
time specify by notice to the other.
4
Dated: December __, 1996
BURRIDGE FUNDS
_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: President
THE BURRIDGE GROUP LLC
_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman
5
